<PAGE>
- ----------------
MFS(R) BOND FUND
- ----------------
SEPTEMBER 1, 1999 AS AMENDED SEPTEMBER 22, 1999
[logo] M F S (R) STATEMENT OF ADDITIONAL
INVESTMENT MANAGEMENT INFORMATION
75 YEARS
WE INVENTED THE MUTUAL FUND(R)
A SERIES OF MFS SERIES TRUST IX
500 BOYLSTON STREET, BOSTON, MA 02116
(617) 954-5000
This Statement of Additional Information, as amended or supplemented from time
to time (the "SAI"), sets forth information which may be of interest to
investors but which is not necessarily included in the Fund's Prospectus dated
September 1, 1999. This SAI should be read in conjunction with the Prospectus.
The Fund's financial statements are incorporated into this SAI by reference to
the Fund's most recent Annual Report to shareholders. A copy of the Annual
Report accompanies this SAI. You may obtain a copy of the Fund's Prospectus and
Annual Report without charge by contacting MFS Service Center, Inc. (see back
cover of Part II of this SAI for address and phone number).
This SAI is divided into two Parts -- Part I and Part II. Part I contains
information that is particular to the Fund, while Part II contains information
that generally applies to each of the funds in the MFS Family of Funds (the "MFS
Funds"). Each Part of the SAI has a variety of appendices which can be found at
the end of Part I and Part II, respectively.
THIS SAI IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
MFB-13 8/99 1M 11/211/311/811
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
Part I of this SAI contains information that is particular to the Fund.
TABLE OF CONTENTS
Page
I Definitions .................................................... 3
II Management of the Fund ......................................... 3
The Fund ....................................................... 3
Trustees and Officers -- Identification and Background ......... 3
Trustees Compensation .......................................... 3
Affiliated Service Provider Compensation ....................... 3
III Sales Charges and Distribution Plan Payments ................... 3
Sales Charges .................................................. 3
Distribution Plan Payments .................................... 3
IV Portfolio Transactions and Brokerage Commissions ............... 3
V Share Ownership ................................................ 3
VI Performance Information ........................................ 3
VII Investment Techniques, Practices, Risks and Restrictions ....... 3
Investment Techniques, Practices and Risks ..................... 3
Investment Restrictions ........................................ 3
VIII Tax Considerations ............................................. 5
IX Independent Auditors and Financial Statements .................. 5
Appendix A -- Trustees and Officers -- Identification and
Background ................................................... A-1
Appendix B -- Trustee Compensation ............................. B-1
Appendix C -- Affiliated Service Provider Compensation ......... C-1
Appendix D -- Sales Charges and Distribution Plan Payments ..... D-1
Appendix E -- Portfolio Transactions and Brokerage Commissions . E-1
Appendix F -- Share Ownership .................................. F-1
Appendix G -- Performance Information .......................... G-1
<PAGE>
I DEFINITIONS
"Fund" - MFS Bond Fund, a diversified series of the Trust.
"Trust" - MFS Series Trust IX, a Massachusetts business trust organized in
1985. The Trust was known as MFS Fixed Income Trust prior to January 18,
1995, and as Massachusetts Financial Bond Fund prior to January 7, 1992.
"MFS" or the "Adviser" - Massachusetts Financial Services Company, a
Delaware corporation.
"MFD" - MFS Fund Distributors, Inc., a Delaware corporation.
"MFSC" - MFS Service Center, Inc., a Delaware corporation.
"Prospectus" - The Prospectus of the Fund, dated September 1, 1999, as
amended or supplemented from time to time.
II MANAGEMENT OF THE FUND
THE FUND
The Fund is a diversified series of the Trust. The Trust is an open-end
management investment company.
TRUSTEES AND OFFICERS - IDENTIFICATION AND BACKGROUND
The identification and background of the Trustees and officers of the
Trust are set forth in Appendix A of this Part I.
TRUSTEE COMPENSATION
Compensation paid to the non-interested Trustees and to Trustees who are
not officers of the Trust, for certain specified periods, is set forth in
Appendix B of this Part I.
AFFILIATED SERVICE PROVIDER COMPENSATION
Compensation paid by the Fund to its affiliated service providers -- to
MFS, for investment advisory and administrative services, and to MFSC, for
transfer agency services -- for certain specified periods is set forth in
Appendix C to this Part I.
III SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
SALES CHARGES
Sales charges paid in connection with the purchase and sale of Fund shares
for certain specified periods are set forth in Appendix D to this Part I,
together with the Fund's schedule of dealer reallowances.
DISTRIBUTION PLAN PAYMENTS
Payments made by the Fund under the Distribution Plan for its most recent
fiscal year end are set forth in Appendix D to this Part I.
IV PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Brokerage commissions paid by the Fund for certain specified periods, and
information concerning purchases by the Fund of securities issued by its
regular broker-dealers for its most recent fiscal year, are set forth in
Appendix E to this Part I.
Broker-dealers may be willing to furnish statistical, research and other
factual information or services ("Research") to the Adviser for no
consideration other than brokerage or underwriting commissions. Securities
may be bought or sold from time to time through such broker-dealers, on
behalf of the Fund. The Trustees (together with the Trustees of certain
other MFS funds) have directed the Adviser to allocate a total of $53,050
of commission business from certain MFS funds (including the Fund) to the
Pershing Division of Donaldson Lufkin & Jenrette as consideration for the
annual renewal of certain publications provided by Lipper Analytical
Securities Corporation (which provides information useful to the Trustees
in reviewing the relationship between the Fund and the Adviser).
V SHARE OWNERSHIP
Information concerning the ownership of Fund shares by Trustees and
officers of the Trust as a group, by investors who control the Fund, if
any, and by investors who own 5% or more of any class of Fund shares, if
any, is set forth in Appendix F to this Part I.
VI PERFORMANCE INFORMATION
Performance information, as quoted by the Fund in sales literature and
marketing materials, is set forth in Appendix G to this Part I.
VII INVESTMENT TECHNIQUES, PRACTICES, RISKS AND RESTRICTIONS
INVESTMENT TECHNIQUES, PRACTICES AND RISKS
The investment objective and principal investment policies of the Fund are
described in the Prospectus. In pursuing its investment objective and
principal investment policies, the Fund may engage in a number of
investment techniques and practices, which involve certain risks. These
investment techniques and practices, which may be changed without
shareholder approval unless indicated otherwise, are identified in
Appendix A to the Prospectus, and are more fully described, together with
their associated risks, in Part II of this SAI. The following percentage
limitations apply to these investment techniques and practices.
o Non-Dollar Denominated Non-Canadian Foreign Securities Exposure may
not exceed 10% of the Fund's net assets
o Lower Rated Bonds may not exceed 20% of the Fund's net assets.
o Lending of Portfolio Securities may not exceed 30% of the Fund's net
assets.
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions which cannot be changed
without the approval of the holders of a majority of the Fund's shares
(which, as used in this SAI, means the lesser of (i) more than 50% of the
outstanding shares of the Trust or a series or class, as applicable, or
(ii) 67% or more of the outstanding shares of the Trust or a series or
class, as applicable, present at a meeting at which holders of more than
50% of the outstanding shares of the Trust or a series or class, as
applicable, are represented in person or by proxy).
Terms used below (such as Options and Futures Contracts) are defined in
Part II of this SAI.
The Fund may not:
(1) borrow money in an amount in excess of 10% of its gross assets, and
then only as a temporary measure for extraordinary or emergency
purposes, or pledge, mortgage or hypothecate an amount of its
assets (taken at market value) in excess of 15% of its gross
assets, in each case taken at the lower of cost or market value and
subject to a 300% asset coverage requirement (for the purpose of
this restriction, collateral arrangements with respect to options,
Futures Contracts, Options on Futures Contracts, Forward Contracts
and options on foreign currencies and payments of initial and
variation margin in connection therewith are not considered a
pledge of assets);
(2) underwrite securities issued by other persons except insofar as the
Fund may technically be deemed an underwriter under the Securities
Act of 1933 in selling a portfolio security;
(3) concentrate its investments in any particular industry, but if it
is deemed appropriate for the achievement of its investment
objectives, the Fund may invest up to 25% of its assets (taken at
market value at the time of each investment) in securities of
issuers in any one industry;
(4) purchase or sell real estate (including limited partnership
interests but excluding securities of companies, such as real
estate investment trusts, which deal in real estate or interests
therein), or mineral leases, commodities or commodity contracts
(except options, Futures Contracts, Options on Futures Contracts,
Forward Contracts and options on foreign currencies) in the
ordinary course of its business. The Fund reserves the freedom of
action to hold and to sell real estate or mineral leases,
commodities or commodity contracts (including options, Futures
Contracts, Options on Futures Contracts, Forward Contracts and
options on foreign currencies) acquired as a result of the
ownership of securities. The Fund will not purchase securities for
the purpose of acquiring real estate or mineral leases, commodities
or commodity contracts (except options, Futures Contracts, Options
on Futures Contracts, Forward Contracts and options on foreign
currencies);
(5) make loans to other persons. For these purposes, the purchase of
short-term commercial paper, the purchase of a portion or all of an
issue of debt securities in accordance with its investment
objectives and policies, the lending of portfolio securities, or
the investment of the Fund's assets in repurchase agreements, shall
not be considered the making of a loan;
(6) purchase the securities of any issuer if such purchase, at the time
thereof, would cause more than 5% of its total assets (taken at
market value) to be invested in the securities of such issuer,
other than cash items and U.S. Government securities;
(7) purchase voting securities of any issuer if such purchase, at the
time thereof, would cause more than 10% of the outstanding voting
securities of such issuer to be held by the Fund; or purchase
securities of any issuer if such purchase at the time thereof would
cause more than 10% of any class of securities of such issuer to be
held by the Fund. For this purpose all indebtedness of an issuer
shall be deemed a single class and all preferred stock of an issuer
shall be deemed a single class;
(8) invest for the purpose of exercising control or management;
(9) purchase securities issued by any other registered investment
company except by purchase in the open market where no commission
or profit to a sponsor or dealer results from such purchase other
than the customary broker's commission, or except when such
purchase, though not made in the open market, is part of a plan of
merger or consolidation; provided, however, that the Fund shall not
purchase such securities if such purchase at the time thereof would
cause more than 10% of its total assets (taken at market value) to
be invested in the securities of such issuers; and, provided
further, that the Fund shall not purchase securities issued by any
open-end investment company;
(10) invest more than 5% of its assets in companies which, including
predecessors, have a record of less than three years' continuous
operation;
(11) Purchase or retain in its portfolio any securities issued by an
issuer any of whose officers, directors, trustees or security
holders is an officer or Trustee of the Trust, or is an officer or
Director of the Adviser, if after the purchase of the securities of
such issuer by the Fund one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or
both, of such issuer, and such persons owning more than 1/2 of 1%
of such shares or securities together own beneficially more than 5%
of such shares or securities, or both;
(12) purchase any securities or evidences of interest therein on margin,
except to make deposits on margin in connection with options,
Futures Contracts, Options on Futures Contracts, Forward Contracts
and options on foreign currencies, and except that the Fund may
obtain such short-term credit as may be necessary for the clearance
of purchases and sales of securities;
(13) sell any security which the Fund does not own unless by virtue of
its ownership of other securities the Fund has at the time of sale
a right to obtain securities without payment of further
consideration equivalent in kind and amount to the securities sold
and provided that if such right is conditional the sale is made
upon the same conditions;
(14) purchase or sell any put or call option or any combination thereof,
provided, that this shall not prevent the purchase, ownership,
holding or sale of warrants where the grantor of the warrants is
the issuer of the underlying securities or the writing, purchasing
and selling of puts, calls or combinations thereof with respect to
securities, Futures Contracts and foreign currencies; or
(15) invest in securities which are restricted as to disposition under
federal securities laws unless the Board of Trustees has determined
that such securities are liquid based upon trading markets for the
specific security, if more than 10% of the Fund's assets (taken at
market value) would be invested in such securities.
In addition, the Fund has the following non-fundamental policy which may
be changed without shareholder approval.
(1) The Fund will not invest 25% or more of the market value of its
total assets in securities of issuers in any one industry.
Except for fundamental investment restrictions No. 1 and 15, these
investment restrictions are adhered to at the time of purchase or
utilization of assets; a subsequent change in circumstances will not be
considered to result in a violation of policy.
VIII TAX CONSIDERATIONS
For a discussion of tax considerations, see Part II of this SAI.
IX INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent auditors, providing audit
services, tax services, and assistance and consultation with respect to
the preparation of filings with the Securities and Exchange Commission.
The Portfolio of Investments and the Statement of Assets and Liabilities
at April 30, 1999, the Statement of Operations for the year ended April
30, 1999, the Statement of Changes in Net Assets for the two years ended
April 30, 1999, the Notes to Financial Statements and the Report of the
Independent Auditors, each of which is included in the Annual Report to
Shareholders of the Fund, are incorporated by reference into this SAI in
reliance upon the report of Deloitte & Touche LLP, independent auditors,
given upon their authority as experts in accounting and auditing. A copy
of the Annual Report accompanies this SAI.
<PAGE>
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PART I - APPENDIX A
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TRUSTEES AND OFFICERS - IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust are listed below, together with
their principal occupations during the past five years. (Their titles may
have varied during that period.)
TRUSTEES
JEFFREY L. SHAMES,* Chairman and President (born 6/2/55)
Massachusetts Financial Services Company, Chairman and Chief Executive
Officer
RICHARD B. BAILEY* (born 9/14/26)
Private Investor; Massachusetts Financial Services Company, former
Chairman and Director (prior to September 30, 1991); Cambridge Bancorp,
Director; Cambridge Trust Company, Director
J. ATWOOD IVES (born 5/1/36)
Eastern Enterprises (diversified services company), Chairman, Trustee and
Chief Executive Officer
Address: 9 Riverside Road, Weston, Massachusetts
LAWRENCE T. PERERA (born 6/23/35)
Hemenway & Barnes (attorneys), Partner
Address: 60 State Street, Boston, Massachusetts
WILLIAM J. POORVU (born 4/10/35)
Harvard University Graduate School of Business Administration, Adjunct
Professor; CBL & Associates Properties, Inc. (real estate investment
trust), Director; The Baupost Fund (a registered investment company), Vice
Chairman and Trustee
Address: Harvard Business School, Soldiers Field Road, Cambridge,
Massachusetts
CHARLES W. SCHMIDT (born 3/18/28)
Private investor; IT Group, Inc. (diversified environmental services and
consulting), Director
Address: 30 Colpitts Road, Weston, Massachusetts
ARNOLD D. SCOTT* (born 12/16/42)
Massachusetts Financial Services Company, Senior Executive Vice President,
Secretary and Director
ELAINE R. SMITH (born 4/25/46)
Independent Consultant; Brigham and Women's Hospital, Executive Vice
President and Chief Operating Officer (from August 1990 to September 1992)
Address: Weston, Massachusetts
DAVID B. STONE (born 9/2/27)
North American Management Corp. (investment adviser), Chairman and
Director; Eastern Enterprises (diversified services company), Trustee
Address: 10 Post Office Square, Suite 300, Boston, Massachusetts
OFFICERS
JOAN S. BATCHELDER,* Vice President (born 4/12/44)
Massachusetts Financial Services Company, Senior Vice President
ROBERT J. MANNING,* Vice President (born 10/20/63)
Massachusetts Financial Services Company, Senior Vice President
BERNARD SCOZZAFAVA,* Vice President (born 1/28/61)
Massachusetts Financial Services Company, Vice President
JAMES T. SWANSON,* Vice President (born 6/12/49)
Massachusetts Financial Services Company, Senior Vice President
STEPHEN E. CAVAN,* Secretary and Clerk (born 11/6/53)
Massachusetts Financial Services Company, Senior Vice President, General
Counsel and Assistant Secretary
JAMES R. BORDEWICK, JR.,* Assistant Secretary (born
3/6/59)
Massachusetts Financial Services Company, Senior Vice President and
Associate General Counsel
W. THOMAS LONDON,* Treasurer (born 3/1/44)
Massachusetts Financial Services Company, Senior Vice President
JAMES O. YOST,* Assistant Treasurer (born 6/12/60)
Massachusetts Financial Services Company, Senior Vice President
ELLEN MOYNIHAN,* Assistant Treasurer (born 11/13/57)
Massachusetts Financial Services Company, Vice President (since September,
1996); Deloitte & Touche LLP, Senior Manager (until September 1996)
MARK E. BRADLEY,* Assistant Treasurer (born 11/23/59)
Massachusetts Financial Services Company, Vice President (since March,
1997); Putnam Investments, Vice President (from September 1994 until March
1997); Ernst & Young, Senior Tax Manager (until September 1994)
----------------
*" Interested persons" (as defined in the 1940 Act) of the Adviser, whose
address is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee and officer 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. Shames and Scott,
Directors of MFD, and Mr. Cavan, the Secretary of MFD, hold similar
positions with certain other MFS affiliates. Mr. Bailey is a Director of
Sun Life Assurance Company of Canada (U.S.), a subsidiary of Sun Life
Assurance Company of Canada.
<PAGE>
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PART I - APPENDIX B
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TRUSTEE COMPENSATION
The Fund pays the compensation of non-interested Trustees and of Trustees
who are not officers of the Trust, who currently receive a fee of $3,250 per
year plus $165 per meeting and $130 per committee meeting attended, together
with such Trustee's out-of-pocket expenses. In addition, the Trust has a
retirement plan for these Trustees as described under the caption
"Management of the Fund -- Trustee Retirement Plan" in Part II. The
Retirement Age under the plan is 73.
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION TABLE
.........................................................................................................................
RETIREMENT BENEFIT TOTAL TRUSTEE
TRUSTEE FEES ACCRUED AS PART ESTIMATED CREDITED FEES FROM FUND
TRUSTEE FROM FUND(1) OF FUND EXPENSES(1) YEARS OF SERVICE(2) AND FUND COMPLEX(3)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard B. Bailey $4,855 $1,528 8 $259,430
J. Atwood Ives 5,160 1,594 17 149,491
Lawrence T. Perera 4,855 2,277 26 129,371
William J. Poorvu 5,055 2,332 25 139,006
Charles W. Schmidt 4,785 2,287 20 129,301
Arnold D. Scott 0 0 N/A 0
Jeffrey L. Shames 0 0 N/A 0
David B. Stone 5,319 2,538 14 165,826
Elaine R. Smith 5,460 1,734 27 150,511
----------------
(1) For the fiscal year ended April 30, 1999.
(2) Based upon normal retirement age (73).
(3) Information provided is for calendar year 1998. All Trustees served as Trustees of 31 funds within the MFS Fund
complex (having aggregate net assets at December 31, 1998, of approximately $43.3 billion) except Mr. Bailey, who
served as Trustee of 74 funds within the MFS complex (having aggregate net assets at December 31, 1998 of
approximately $68.2 billion).
ESTIMATED ANNUAL BENEFITS PAYABLE BY FUND UPON RETIREMENT(4)
..................................................................................................................
<CAPTION>
YEARS OF SERVICE
AVERAGE
TRUSTEE FEES 3 5 7 10 OR MORE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$4,307 $646 $1,077 $1,507 $2,153
4,646 697 1,162 1,626 2,323
4,986 748 1,247 1,745 2,493
5,326 799 1,332 1,864 2,663
5,666 850 1,417 1,983 2,833
6,006 901 1,502 2,102 3,003
----------------
(4) Other funds in the MFS Fund complex provide similar retirement benefits to the Trustees.
</TABLE>
<PAGE>
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PART I - APPENDIX C
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<TABLE>
AFFILIATED SERVICE PROVIDER COMPENSATION
..............................................................................................................................
The Fund paid compensation to its affiliated service providers over the
specified periods as follows:
<CAPTION>
PAID TO MFS AMOUNT PAID TO MFS FOR PAID TO MFSC AMOUNT AGGREGATE
FISCAL YEAR FOR ADVISORY WAIVED ADMINISTRATIVE FOR TRANSFER WAIVED AMOUNT PAID TO
ENDED SERVICES BY MFS SERVICES AGENCY SERVICES BY MFSC MFS AND MFSC
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April 30, 1999 $4,287,243 N/A $137,774 $1,253,050 N/A $5,678,067
April 30, 1998 3,126,075 N/A 114,043 1,001,277 N/A 4,241,395
April 30, 1997 2,708,535 N/A 17,658* 1,005,437 N/A 3,731,630
--------------------
* From March 1, 1997, the commencement of the Master Administrative Service Agreement.
</TABLE>
<PAGE>
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PART I - APPENDIX D
- -----------------------
SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
<TABLE>
SALES CHARGES
........................................................................................................
The following sales charges were paid during the specified periods:
<CAPTION>
CLASS A INITIAL SALES CHARGES: CDSC PAID TO MFD ON:
RETAINED REALLOWED CLASS A CLASS B CLASS C
FISCAL YEAR END TOTAL BY MFD TO DEALERS SHARES SHARES SHARES
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April 30, 1999 $3,758,435 $532,733 $3,225,702 $16,106 $471,836 $40,323
April 30, 1998 1,379,824 219,661 1,160,163 36,715 293,972 6,331
April 30, 1997 1,100,791 134,341 966,450 38,472 245,479 5,977
DEALER REALLOWANCES
........................................................................................................
As shown above, MFD pays (or "reallows") a portion of the Class A initial sales charge to dealers. The
dealer reallowance as expressed as a percentage of the Class A shares' offering price is:
<CAPTION>
DEALER REALLOWANCE AS A
AMOUNT OF PURCHASE PERCENT OF OFFERING PRICE
-----------------------------------------------------------------------------------------------------
<S> <C>
Less than $100,000 4.00%
$100,000 but less than $250,000 3.20%
$250,000 but less than $500,000 2.25%
$500,000 but less than $1,000,000 1.70%
$1,000,000 or more None*
----------------
*A CDSC will apply to such purchase.
DISTRIBUTION PLAN PAYMENTS
.......................................................................................................
During the fiscal year ended April 30, 1999, the Fund made the following
Distribution Plan payments:
<CAPTION>
AMOUNT OF DISTRIBUTION AND SERVICE FEES:
CLASS OF SHARES PAID BY FUND RETAINED BY MFD PAID TO DEALERS
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares $2,425,515 $ 796,955 $1,628,560
Class B Shares 2,469,899 1,888,094 581,805
Class C Shares 670,705 31,952 638,753
Distribution plan payments retained by MFD are used to compensate MFD for commissions advanced by MFD to
dealers upon sale of Fund shares.
</TABLE>
<PAGE>
- -----------------------
PART I - APPENDIX E
- -----------------------
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
BROKERAGE COMMISSIONS
..........................................................................
The following brokerage commissions were paid by the Fund during the
specified time periods:
BROKERAGE COMMISSIONS
FISCAL YEAR END PAID BY FUND
----------------------------------------------------------------------------
April 30, 1999 $0
April 30, 1998 $0
April 30, 1997 $0
SECURITIES ISSUED BY REGULAR BROKER-DEALERS
..........................................................................
During the fiscal year ended April 30, 1999, the Fund purchased securities
issued by the following regular broker-dealers of the Fund, which had the
following values as of April 30, 1999:
VALUE OF SECURITIES
BROKER-DEALER AS OF APRIL 30, 1999
----------------------------------------------------------------------------
None
<PAGE>
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PART I - APPENDIX F
- -----------------------
SHARE OWNERSHIP
OWNERSHIP BY TRUSTEES AND OFFICERS
As of May 31, 1999, the Trustees and officers of the Trust as a group
owned less than 1% of any class of the Fund's shares, not including
707,219 Class I shares of the Fund (which represent approximately 100% of
the outstanding Class I shares of the Fund) owned of record by certain
employee benefit plans of MFS of which Messrs. Scott and Shames are
Trustees.
25% OR GREATER OWNERSHIP
The following table identifies those investors who own 25% or more of the
Fund's shares (all share classes taken together) as of May 31, 1999, and
are therefore presumed to control the Fund:
JURISDICTION
OF ORGANIZATION
NAME AND ADDRESS OF INVESTOR (IF A COMPANY) PERCENTAGE OWNERSHIP
----------------------------------------------------------------------------
None
5% OR GREATER OWNERSHIP OF SHARE CLASS
The following table identifies those investors who own 5% or more of any
class of the Fund's shares as of May 31, 1999:
NAME AND ADDRESS OF INVESTOR OWNERSHIP PERCENTAGE
............................................................................
MLPF&S for the Sole Benefit of its Customers 12.17% of Class B shares
Attn: Fund Administration 97CE7
4800 Deer Lake Drive E - 3rd Floor
Jacksonville, FL 32246-6484
............................................................................
MLPF&S for the Sole Benefit of its Customers 21.79% of Class C shares
Attn: Fund Administration 97C57
4800 Deer Lake Drive E - 3rd Floor
Jacksonville, FL 32246-6484
............................................................................
TRS MFS DEF Contribution Plan 34.24% of Class I shares
c/o Mark Leary
Mass Financial Services
500 Boylston Street - 19th Floor
Boston, MA 02116-3740
............................................................................
TRS MFS 401(k) Plan 7.65% of Class I shares
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
............................................................................
TRS of the MFS Pension Plan 58.11% of Class I shares
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
............................................................................
<PAGE>
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PART I - APPENDIX G
- -----------------------
PERFORMANCE INFORMATION
............................................................................
All performance quotations are as of April 30, 1999.
<TABLE>
<CAPTION>
AVERAGE ANNUAL ACTUAL 30-
TOTAL RETURNS DAY YIELD 30-DAY YIELD CURRENT
-------------------------------------- (INCLUDING (WITHOUT ANY DISTRIBUTION
1 YEAR 5 YEAR 10 YEAR WAIVERS) WAIVERS) RATE+
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares, with initial sales
charge (4.75%) (1.68)% 6.93% 8.48% 5.73% 5.73% 6.32%
Class A Shares, at net asset value 3.22 % 7.97% 9.01% N/A N/A N/A
Class B Shares, with CDSC (declining
over 6 years from 4% to 0%) (1.32)% 6.87% 8.55% N/A N/A N/A
Class B Shares, at net asset value 2.54 % 7.17% 8.55% 5.28% 5.28% 5.96%
Class C Shares, with CDSC (1% for
first year) 1.51 % 7.20% 8.59% N/A N/A N/A
Class C Shares, at net asset value 2.48 % 7.20% 8.59% 5.27% 5.27% 5.97%
Class I Shares, at net asset value 3.56 % 8.16% 9.10% 6.34% 6.34% 6.94%
----------------------
+Annualized, based upon the last distribution.
</TABLE>
The Fund commenced investment operations on May 8, 1974 with the offering
of class A shares and subsequently offered class B shares on September 7,
1993, class C shares on January 3, 1994, and class I shares on January 2,
1997. Class B and class C share performance include the performance of the
Fund's class A shares for periods prior to the offering of class B and
class C shares. This blended class B and class C share performance has
been adjusted to take into account the CDSC applicable to class B and
class C shares, rather than the initial sales charge (load) applicable to
class A shares. This blended performance has not been adjusted to take
into account differences in class specific operating expenses. Because
operating expenses of class B and C shares are higher than those of class
A shares, this blended class B and C share performance is higher than the
performance of class B and C shares would have been had class B and C
shares been offered for the entire period. If you would like the Fund's
current yield, contact the MFS Service Center at the toll free number set
forth on the back cover page of Part II of this SAI.
Class I share performance includes the performance of the Fund's class A
shares for periods prior to the offering of class I shares. Class I share
performance generally would have been higher than class A share
performance had class I shares been offered for the entire period, because
operating expenses (e.g., distribution and service fees) attributable to
class I shares are lower than those of class A shares. Class I share
performance has been adjusted to take into account the fact that class I
shares have no initial sales charge.
Performance results include any applicable expense subsidies and waivers,
which may cause the results to be more favorable.
<PAGE>
- ----------------------------
MFS(R) LIMITED MATURITY FUND
- ----------------------------
SEPTEMBER 1, 1999 AS AMENDED SEPTEMBER 22, 1999
[logo] M F S (R) STATEMENT OF ADDITIONAL
INVESTMENT MANAGEMENT INFORMATION
75 YEARS
WE INVENTED THE MUTUAL FUND(R)
A SERIES OF MFS SERIES TRUST IX
500 BOYLSTON STREET, BOSTON, MA 02116
(617) 954-5000
This Statement of Additional Information, as amended or supplemented from time
to time (the "SAI"), sets forth information which may be of interest to
investors but which is not necessarily included in the Fund's Prospectus dated
September 1, 1999. This SAI should be read in conjunction with the Prospectus.
The Fund's financial statements are incorporated into this SAI by reference to
the Fund's most recent Annual Report to shareholders. A copy of the Annual
Report accompanies this SAI. You may obtain a copy of the Fund's Prospectus and
Annual Report without charge by contacting MFS Service Center, Inc. (see back
cover of Part II of this SAI for address and phone number).
This SAI is divided into two Parts -- Part I and Part II. Part I contains
information that is particular to the Fund, while Part II contains information
that generally applies to each of the funds in the MFS Family of Funds (the "MFS
Funds"). Each Part of the SAI has a variety of appendices which can be found at
the end of Part I and Part II, respectively.
THIS SAI IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
MLM-13 8/99 1M 36/236/336/836
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
Part I of this SAI contains information that is particular to the Fund.
TABLE OF CONTENTS
Page
I Definitions .................................................... 3
II Management of the Fund ......................................... 3
The Fund ....................................................... 3
Trustees and Officers -- Identification and Background ......... 3
Trustees Compensation .......................................... 3
Affiliated Service Provider Compensation ....................... 3
III Sales Charges and Distribution Plan Payments ................... 3
Sales Charges .................................................. 3
Distribution Plan Payments .................................... 3
IV Portfolio Transactions and Brokerage Commissions ............... 3
V Share Ownership ................................................ 3
VI Performance Information ........................................ 3
VII Investment Techniques, Practices, Risks and Restrictions ....... 3
Investment Techniques, Practices and Risks ..................... 3
Investment Restrictions ........................................ 4
VIII Tax Considerations ............................................. 5
IX Independent Auditors and Financial Statements .................. 5
Appendix A -- Trustees and Officers -- Identification and
Background ................................................... A-1
Appendix B -- Trustee Compensation ............................. B-1
Appendix C -- Affiliated Service Provider Compensation ......... C-1
Appendix D -- Sales Charges and Distribution Plan Payments ..... D-1
Appendix E -- Portfolio Transactions and Brokerage Commissions . E-1
Appendix F -- Share Ownership .................................. F-1
Appendix G -- Performance Information .......................... G-1
<PAGE>
I DEFINITIONS
"Trust" - MFS Series Trust IX, a Massachusetts business trust organized in
1985. The Trust was known as MFS Fixed Income Trust prior to January 18,
1995, and as Massachusetts Financial Bond Fund prior to January 7, 1992.
"Fund" - MFS Limited Maturity Fund, a diversified series of the Trust. The
Fund was known as MFS Quality Limited Maturity Fund prior to August 3,
1992.
"MFS" or the "Adviser" - Massachusetts Financial Services Company, a
Delaware corporation.
"MFD" - MFS Fund Distributors, Inc., a Delaware corporation.
"MFSC" - MFS Service Center, Inc., a Delaware corporation.
"Prospectus" - The Prospectus of the Fund, dated September 1, 1999, as
amended or supplemented from time to time.
II MANAGEMENT OF THE FUND
THE FUND
The Fund is a diversified series of the Trust. The Trust is an open-end
management investment company.
TRUSTEES AND OFFICERS - IDENTIFICATION AND BACKGROUND
The identification and background of the Trustees and officers of the
Trust are set forth in Appendix A of this Part I.
TRUSTEE COMPENSATION
Compensation paid to the non-interested Trustees and to Trustees who are
not officers of the Trust, for certain specified periods, is set forth in
Appendix B of this Part I.
AFFILIATED SERVICE PROVIDER COMPENSATION
Compensation paid by the Fund to its affiliated service providers -- to
MFS, for investment advisory and administrative services, and to MFSC, for
transfer agency services -- for certain specified periods is set forth in
Appendix C to this Part I.
MFS had contractually agreed to bear expenses for the Fund, subject to
reimbursement by the Fund, such that the Fund's "Other Expenses" shall not
exceed more than 0.40% of the average daily net assets of the Fund during
a current fiscal year. The payments made by MFS on behalf of the Fund
under this arrangement are currently subject to reimbursement by the Fund
to MFS, and are being accomplished by the payment of an expense
reimbursement fee by the Fund to MFS. This fee is computed and paid
monthly at a percentage of the Fund's average daily net assets for its
current fiscal year, with a limitation that immediately after such payment
the Fund's "Other Expenses" will not exceed the percentage set forth for
that Fund. The obligation of MFS to bear the Fund's "Other Expenses"
pursuant to this arrangement, and the Fund's obligation to pay the
reimbursement fee to MFS, terminates on the earlier of the date on which
payments made by the series equal the prior payment of such reimbursable
expenses by MFS, or on February 28, 2002.
III SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
SALES CHARGES
Sales charges paid in connection with the purchase and sale of Fund shares
for certain specified periods are set forth in Appendix D to this Part I,
together with the Fund's schedule of dealer reallowances.
DISTRIBUTION PLAN PAYMENTS
Payments made by the Fund under the Distribution Plan for its most recent
fiscal year end are set forth in Appendix D to this Part I.
IV PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Brokerage commissions paid by the Fund for certain specified periods, and
information concerning purchases by the Fund of securities issued by its
regular broker-dealers for its most recent fiscal year, are set forth in
Appendix E to this Part I.
Broker-dealers may be willing to furnish statistical, research and other
factual information or services ("Research") to the Adviser for no
consideration other than brokerage or underwriting commissions. Securities
may be bought or sold from time to time through such broker-dealers, on
behalf of the Fund. The Trustees (together with the Trustees of certain
other MFS funds) have directed the Adviser to allocate a total of $53,050
of commission business from certain MFS funds (including the Fund) to the
Pershing Division of Donaldson Lufkin & Jenrette as consideration for the
annual renewal of certain publications provided by Lipper Analytical
Securities Corporation (which provides information useful to the Trustees
in reviewing the relationship between the Fund and the Adviser).
V SHARE OWNERSHIP
Information concerning the ownership of Fund shares by Trustees and
officers of the Trust as a group, by investors who control the Fund, if
any, and by investors who own 5% or more of any class of Fund shares, if
any, is set forth in Appendix F to this Part I.
VI PERFORMANCE INFORMATION
Performance information, as quoted by the Fund in sales literature and
marketing materials, is set forth in Appendix G to this Part I.
VII INVESTMENT TECHNIQUES, PRACTICES, RISKS AND RESTRICTIONS
INVESTMENT TECHNIQUES, PRACTICES AND RISKS
The investment objective and principal investment policies of the Fund are
described in the Prospectus. In pursuing its investment objective and
principal investment policies, the Fund may engage in a number of
investment techniques and practices, which involve certain risks. These
investment techniques and practices, which may be changed without
shareholder approval unless indicated otherwise, are identified in
Appendix A to the Prospectus, and are more fully described, together with
their associated risks, in Part II of this SAI. The following percentage
limitation applies to these investment techniques and practices.
o Lending of Portfolio Securities may not exceed 30% of the Fund's net
assets.
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions which cannot be changed
without the approval of the holders of a majority of the Fund's shares
(which, as used in this SAI, means the lesser of (i) more than 50% of the
outstanding shares of the Trust or a series or class, as applicable, or
(ii) 67% or more of the outstanding shares of the Trust or a series or
class, as applicable, present at a meeting at which holders of more than
50% of the outstanding shares of the Trust or a series or class, as
applicable, are represented in person or by proxy).
Terms used below (such as Options and Futures Contracts) are defined in
Part II of this SAI.
The Fund may not:
(1) borrow money in an amount in excess of 33 1/3% of its gross assets,
and then only as a temporary measure for extraordinary or emergency
purposes, or pledge, mortgage or hypothecate an amount of its assets
(taken at market value) in excess of 33 1/3% of its gross assets, in
each case taken at the lower of cost or market value and subject to
a 300% asset coverage requirement (for the purpose of this
restriction, collateral arrangements with respect to options,
Futures Contracts, Options on Futures Contracts, foreign currency,
forward foreign currency contracts and options on foreign currencies
and payments of initial and variation margin in connection therewith
are not considered a pledge of assets);
(2) underwrite securities issued by other persons except insofar as the
Fund may technically be deemed an underwriter under the Securities
Act of 1933 in selling a portfolio security.
(3) concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of its investment objectives,
the Fund may invest up to 25% of its assets (taken at market value
at the time of each investment), in securities of issuers in any one
industry;
(4) purchase or sell real estate (including limited partnership
interests but excluding securities of companies, such as real estate
investment trusts, which deal in real estate or interests therein),
or mineral leases, commodities or commodity contracts (except
options, Futures Contracts, Options on Futures Contracts, foreign
currency, forward foreign currency contracts and options on foreign
currencies) in the ordinary course of its business. The Fund
reserves the freedom of action to hold and to sell real estate or
mineral leases, commodities or commodity contracts (including
options, Futures Contracts, Options on Futures Contracts, foreign
currency, forward foreign currency contracts and options on foreign
currencies) acquired as a result of the ownership of securities. The
Fund will not purchase securities for the purpose of acquiring real
estate or mineral leases, commodities or commodity contracts (except
options, Futures Contracts, Options on Futures Contracts, foreign
currency, forward foreign currency contracts and options on foreign
currencies);
(5) make loans to other persons. For these purposes, the purchase of
short-term commercial paper, the purchase of a portion or all of an
issue of debt securities in accordance with its investment
objectives and policies, the lending of portfolio securities, or the
investment of the Fund's assets in repurchase agreements, shall not
be considered the making of a loan;
(6) invest for the purpose of exercising control or management;
(7) purchase any securities or evidences of interest therein on margin,
except to make deposits on margin in connection with options,
Futures Contracts, Options on Futures Contracts, foreign currency,
forward foreign currency contracts and options on foreign
currencies, and except that the Fund may obtain such short-term
credit as may be necessary for the clearance of purchases and sales
of securities;
(8) sell any security which the Fund does not own unless by virtue of
its ownership of other securities the Fund has at the time of sale a
right to obtain securities without payment of further consideration
equivalent in kind and amount to the securities sold and provided
that if such right is conditional the sale is made upon the same
conditions; or
(9) purchase or sell any put or call option or any combination thereof,
provided, that this shall not prevent the purchase, ownership,
holding or sale of warrants where the grantor of the warrants is the
issuer of the underlying securities or the writing, purchasing and
selling of puts, calls or combinations thereof with respect to
securities, Futures Contracts and foreign currencies.
In addition, the Fund has the following non-fundamental policies which
may be changed without shareholder approval.
(1) The Fund will not invest in illiquid investments, including
securities subject to legal or contractual restrictions on resale or
for which there is no readily available market (e.g., trading in the
security is suspended or, in the case of unaudited securities where
no market exists), unless the Board of Trustees has determined that
such securities are liquid based on trading markets for the specific
security, if more than 15% of the Fund's net assets (taken at market
value) would be invested in such securities. Repurchase agreements
maturing in more than seven days will be deemed to be illiquid for
purposes of the Fund's limitation on investment in illiquid
securities.
(2) Purchases of warrants will not exceed 5% of the Fund's net assets.
Included within that amount, but not exceeding 2% of the Fund's net
assets, may be warrants not listed on the New York or American Stock
Exchange.
(3) The Fund may not invest 25% or more of the market value of its total
assets in securities of issuers in any one industry.
STATE AND FEDERAL RESTRICTIONS: In order to comply with certain federal
and state statutes and regulatory policies, as a matter of operating
policy of the Fund, the Fund will not: (a) invest more than 5% of the
Fund's total assets at the time of investment in unsecured obligations of
issuers which, including predecessors, controlling persons, sponsoring
entities, general partners and guarantors, have a record of less than
three years' continuous business operation or relevant business
experience; (b) purchase voting securities of any issuer if such purchase,
at the time thereof, would cause more than 10% of the outstanding voting
securities of such issuer to be held by the Fund; (c) purchase or retain
in its portfolio any securities issued by an issuer any of whose officers,
directors, trustees or security holders is an officer or Trustee of the
Trust, or is an officer or Director of the Adviser if, after the purchase
of the securities of such issuer by the Fund, one or more of such persons
owns beneficially more than 1/2 of 1% of the shares or securities, or
both, of such issuer, and such persons owning more than 1/2 of 1% of such
shares or securities together own beneficially more than 5% of such shares
or securities, or both.
The investment policies described under "State and Federal Restrictions"
are not fundamental and may be changed without shareholder approval.
Except for investment restriction no. 1 and the Fund's non-fundamental
policy on investing in illiquid securities, these investment restrictions
are adhered to at the time of purchase or utilization of assets; a
subsequent change in circumstances will not be considered to result in a
violation of policy.
VIII TAX CONSIDERATIONS
For a discussion of tax considerations, see Part II of this SAI.
IX INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent auditors, providing audit
services, tax services, and assistance and consultation with respect to
the preparation of filings with the Securities and Exchange Commission.
The Portfolio of Investments and the Statement of Assets and Liabilities
at April 30, 1999, the Statement of Operations for the year ended April
30, 1999, the Statement of Changes in Net Assets for the two years ended
April 30, 1999, the Notes to Financial Statements and the Report of the
Independent Auditors, each of which is included in the Annual Report to
Shareholders of the Fund, are incorporated by reference into this SAI in
reliance upon the report of Deloitte & Touche LLP, independent auditors,
given upon their authority as experts in accounting and auditing. A copy
of the Annual Report accompanies this SAI.
<PAGE>
- -----------------------
PART I - APPENDIX A
- -----------------------
TRUSTEES AND OFFICERS - IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust are listed below, together with
their principal occupations during the past five years. (Their titles may
have varied during that period.)
TRUSTEES
JEFFREY L. SHAMES,* Chairman and President (born 6/2/55)
Massachusetts Financial Services Company, Chairman and Chief Executive
Officer
RICHARD B. BAILEY* (born 9/14/26)
Private Investor; Massachusetts Financial Services Company, former
Chairman and Director (prior to September 30, 1991); Cambridge Bancorp,
Director; Cambridge Trust Company, Director
J. ATWOOD IVES (born 5/1/36)
Eastern Enterprises (diversified services company), Chairman, Trustee and
Chief Executive Officer
Address: 9 Riverside Road, Weston, Massachusetts
LAWRENCE T. PERERA (born 6/23/35)
Hemenway & Barnes (attorneys), Partner
Address: 60 State Street, Boston, Massachusetts
WILLIAM J. POORVU (born 4/10/35)
Harvard University Graduate School of Business Administration, Adjunct
Professor; CBL & Associates Properties, Inc. (real estate investment
trust), Director; The Baupost Fund (a registered investment company), Vice
Chairman and Trustee
Address: Harvard Business School, Soldiers Field Road, Cambridge,
Massachusetts
CHARLES W. SCHMIDT (born 3/18/28)
Private investor; IT Group, Inc. (diversified environmental services and
consulting), Director
Address: 30 Colpitts Road, Weston, Massachusetts
ARNOLD D. SCOTT* (born 12/16/42)
Massachusetts Financial Services Company, Senior Executive Vice President,
Secretary and Director
ELAINE R. SMITH (born 4/25/46)
Independent Consultant; Brigham and Women's Hospital, Executive Vice
President and Chief Operating Officer (from August 1990 to September 1992)
Address: Weston, Massachusetts
DAVID B. STONE (born 9/2/27)
North American Management Corp. (investment adviser), Chairman and
Director; Eastern Enterprises (diversified
services company), Trustee
Address: 10 Post Office Square, Suite 300, Boston, Massachusetts
OFFICERS
JOAN S. BATCHELDER,* Vice President (born 4/12/44)
Massachusetts Financial Services Company, Senior Vice President
ROBERT J. MANNING,* Vice President (born 10/20/63)
Massachusetts Financial Services Company, Senior Vice President
BERNARD SCOZZAFAVA,* Vice President (born 1/28/61)
Massachusetts Financial Services Company, Vice President
JAMES T. SWANSON,* Vice President (born 6/12/49)
Massachusetts Financial Services Company, Senior Vice President
STEPHEN E. CAVAN,* Secretary and Clerk (born 11/6/53)
Massachusetts Financial Services Company, Senior Vice President, General
Counsel and Assistant Secretary
JAMES R. BORDEWICK, JR.,* Assistant Secretary (born
3/6/59)
Massachusetts Financial Services Company, Senior Vice President and
Associate General Counsel
W. THOMAS LONDON,* Treasurer (born 3/1/44)
Massachusetts Financial Services Company, Senior Vice President
JAMES O. YOST,* Assistant Treasurer (born 6/12/60)
Massachusetts Financial Services Company, Senior Vice President
ELLEN MOYNIHAN,* Assistant Treasurer (born 11/13/57)
Massachusetts Financial Services Company, Vice President (since September,
1996); Deloitte & Touche LLP, Senior Manager (until September 1996)
MARK E. BRADLEY,* Assistant Treasurer (born 11/23/59)
Massachusetts Financial Services Company, Vice President (since March,
1997); Putnam Investments, Vice President (from September 1994 until March
1997); Ernst & Young, Senior Tax Manager (until September 1994)
----------------
*" Interested persons" (as defined in the 1940 Act) of the Adviser, whose
address is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee and officer 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. Shames and Scott,
Directors of MFD, and Mr. Cavan, the Secretary of MFD, hold similar
positions with certain other MFS affiliates. Mr. Bailey is a Director of
Sun Life Assurance Company of Canada (U.S.), a subsidiary of Sun Life
Assurance Company of Canada.
<PAGE>
- -----------------------
PART I - APPENDIX B
- -----------------------
TRUSTEE COMPENSATION
The Fund pays the compensation of non-interested Trustees and of Trustees
who are not officers of the Trust, who currently receive a fee of $1,000 per
year plus $65 per meeting and $50 per committee meeting attended, together
with such Trustee's out-of-pocket expenses. In addition, the Trust has a
retirement plan for these Trustees as described under the caption
"Management of the Fund -- Trustee Retirement Plan" in Part II. The
Retirement Age under the plan is 73.
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION TABLE
........................................................................................................................
RETIREMENT BENEFIT TOTAL TRUSTEE
TRUSTEE FEES ACCRUED AS PART ESTIMATED CREDITED FEES FROM FUND
TRUSTEE FROM FUND(1) OF FUND EXPENSES(1) YEARS OF SERVICE(2) AND FUND COMPLEX(3)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard B. Bailey $1,945 $666 8 $259,430
J. Atwood Ives 2,130 699 17 149,491
Lawrence T. Perera 1,945 699 16 129,371
William J. Poorvu 2,045 718 16 139,006
Charles W. Schmidt 1,915 703 9 129,301
Arnold D. Scott 0 0 N/A 0
Jeffrey L. Shames 0 0 N/A 0
Elaine R. Smith 2,240 658 26 150,511
David B. Stone 2,247 790 9 165,826
----------------
(1) For the fiscal year ended April 30, 1999.
(2) Based upon normal retirement age (73).
(3) Information provided is for calendar year 1998. All Trustees served as Trustees of 31 funds within the MFS Fund
complex (having aggregate net assets at December 31, 1998, of approximately $43.3 billion) except Mr. Bailey, who
served as Trustee of 74 funds within the MFS complex (having aggregate net assets at December 31, 1998 of
approximately $68.2 billion).
ESTIMATED ANNUAL BENEFITS PAYABLE BY FUND UPON RETIREMENT(4)
.......................................................................................................................
<CAPTION>
YEARS OF SERVICE
AVERAGE
TRUSTEE FEES 3 5 7 10 OR MORE
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,723 $259 $431 $603 $ 862
1,873 281 468 656 937
2,023 303 506 708 1,011
2,172 326 543 760 1,086
2,322 348 580 813 1,161
2,471 371 618 865 1,236
----------------
(4) Other funds in the MFS Fund complex provide similar retirement benefits to the Trustees.
</TABLE>
<PAGE>
- -----------------------
PART I - APPENDIX C
- -----------------------
<TABLE>
AFFILIATED SERVICE PROVIDER COMPENSATION
...............................................................................................................................
The Fund paid compensation to its affiliated service providers over the specified periods as follows:
<CAPTION>
PAID TO MFS AMOUNT PAID TO MFS FOR PAID TO MFSC AMOUNT AGGREGATE
FISCAL YEAR FOR ADVISORY WAIVED ADMINISTRATIVE FOR TRANSFER WAIVED AMOUNT PAID TO
ENDED SERVICES BY MFS SERVICES AGENCY SERVICES BY MFSC MFS AND MFSC
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April 30, 1999 $748,001 $0 $23,442 $208,259 $0 $979,702
April 30, 1998 628,100 $0 22,192 195,360 $0 845,652
April 30, 1997 573,843 $0 3,750* 220,610 $0 798,203
--------------------
* From March 1, 1997, the commencement of the Master Administrative Service Agreement.
</TABLE>
<PAGE>
- ----------------------
PART I - APPENDIX D
- ----------------------
SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
<TABLE>
SALES CHARGES
......................................................................................................
The following sales charges were paid during the specified periods:
<CAPTION>
CLASS A INITIAL SALES CHARGES: CDSC PAID TO MFD ON:
RETAINED REALLOWED CLASS A CLASS B CLASS C
FISCAL YEAR END TOTAL BY MFD TO DEALERS SHARES SHARES SHARES
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April 30, 1999 $596,562 $69,462 $527,100 $18,710 $108,658 $13,747
April 30, 1998 424,152 45,875 378,277 9,603 92,222 21,936
April 30, 1997 569,152 57,812 511,340 19,436 60,596 13,740
DEALER REALLOWANCES
......................................................................................................
As shown above, MFD pays (or "reallows") a portion of the Class A initial sales charge to dealers. The
dealer reallowance as expressed as a percentage of the Class A shares' offering price is:
<CAPTION>
DEALER REALLOWANCE AS A
AMOUNT OF PURCHASE PERCENT OF OFFERING PRICE
-----------------------------------------------------------------------------------------------------
<S> <C>
Less than $50,000 2.25%
$50,000 but less than $100,000 2.00%
$100,000 but less than $250,000 1.75%
$250,000 but less than $500,000 1.50%
$500,000 but less than $1,000,000 1.25%
$1,000,000 or more None*
----------------
*A CDSC will apply to such purchase.
DISTRIBUTION PLAN PAYMENTS
......................................................................................................
During the fiscal year ended April 30, 1999, the Fund made the following Distribution Plan payments:
<CAPTION>
AMOUNT OF DISTRIBUTION AND SERVICE FEES:
CLASS OF SHARES PAID BY FUND RETAINED BY MFD PAID TO DEALERS
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares $174,249 $ 16,205 $158,044
Class B Shares 425,430 351,261 74,169
Class C Shares 225,422 97 225,325
Distribution plan payments retained by MFD are used to compensate MFD for commissions advanced by MFD to
dealers upon sale of Fund shares.
</TABLE>
<PAGE>
- -----------------------
PART I - APPENDIX E
- -----------------------
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
BROKERAGE COMMISSIONS
..........................................................................
The following brokerage commissions were paid by the Fund during the
specified time periods:
BROKERAGE COMMISSIONS
FISCAL YEAR END PAID BY FUND
----------------------------------------------------------------------------
April 30, 1999 $0
April 30, 1998 $0
April 30, 1997 $0
SECURITIES ISSUED BY REGULAR BROKER-DEALERS
..........................................................................
During the fiscal year ended April 30, 1999, the Fund purchased securities
issued by the following regular broker-dealers of the Fund, which had the
following values as of April 30, 1999:
VALUE OF SECURITIES
BROKER-DEALER AS OF APRIL 30, 1999
----------------------------------------------------------------------------
None
<PAGE>
- -----------------------
PART I - APPENDIX F
- -----------------------
SHARE OWNERSHIP
OWNERSHIP BY TRUSTEES AND OFFICERS
As of May 31, 1999, the Trustees and officers of the Trust as a group
owned less than 1% of any class of the Fund's shares, not including
212,850 Class I shares of the Fund (which represent approximately 99.99%
of the outstanding Class I shares of the Fund) owned of record by certain
employee benefit plans of MFS of which Messrs. Scott and Shames are
Trustees.
25% OR GREATER OWNERSHIP
The following table identifies those investors who own 25% or more of the
Fund's shares (all share classes taken together) as of May 31, 1999, and
are therefore presumed to control the Fund:
JURISDICTION
OF ORGANIZATION
NAME AND ADDRESS OF INVESTOR (IF A COMPANY) PERCENTAGE OWNERSHIP
----------------------------------------------------------------------------
None
5% OR GREATER OWNERSHIP OF SHARE CLASS
The following table identifies those investors who own 5% or more of any
class of the Fund's shares as of May 31, 1999:
NAME AND ADDRESS OF INVESTOR OWNERSHIP PERCENTAGE
..........................................................................
MLPF&S for the Sole Benefit of its Customers 8.55% of Class A shares
Attn: Fund Administration
4800 Deer Lake Drive E - 3rd Floor
Jacksonville, FL 32246-6484
..........................................................................
MLPF&S for the Sole Benefit of its Customers 13.57% of Class B shares
Attn: Fund Administration
4800 Deer Lake Drive E - 3rd Floor
Jacksonville, FL 32246-6484
..........................................................................
MLPF&S for the Sole Benefit of its Customers 9.56% of Class C shares
Attn: Fund Administration
4800 Deer Lake Drive E - 3rd Floor
Jacksonville, FL 32246-6484
..........................................................................
TRS MFS DEF Contribution Plan 99.99% of Class I shares
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
..........................................................................
<PAGE>
- -----------------------
PART I - APPENDIX G
- -----------------------
PERFORMANCE INFORMATION
..........................................................................
All performance quotations are as of April 30, 1999.
<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURNS ACTUAL 30-
-------------------------------------- DAY YIELD 30-DAY YIELD CURRENT
LIFE OF (INCLUDING (WITHOUT ANY DISTRIBUTION
1 YEAR 5 YEAR FUND* WAIVERS) WAIVERS) RATE+
--------------------------------------------------------------------------------------
Class A Shares, with initial sales
<S> <C> <C> <C> <C> <C> <C>
charge (2.50%) 1.65% 5.39% 5.36% N/A 5.34% 5.45%
Class A Shares, at net asset value 4.26% 5.93% 5.73% N/A N/A N/A
Class B Shares, with CDSC (declining
over 6 years from 4% to 0%) (0.45)% 4.71% 5.03% N/A N/A N/A
Class B Shares, at net asset value 3.48% 5.03% 5.03% N/A 4.59% 4.78%
Class C Shares, with CDSC (1% for
first year) 2.25% 5.01% 5.10% N/A N/A N/A
Class C Shares, at net asset value 3.23% 5.01% 5.10% N/A 4.58% 4.76%
Class I Shares, at net asset value 4.28% 5.94% 5.75% N/A 5.60% 5.75%
----------------------
* From the commencement of the fund's investment operations on February 26, 1992.
+ Annualized, based upon the last distribution.
</TABLE>
The Fund commenced investment operations on February 26, 1992 with the
offering of class A shares and subsequently offered class B shares on
September 7, 1993, class C shares on July 1, 1994, and class I shares on
January 2, 1997. Class B and class C share performance include the
performance of the Fund's class A shares for periods prior to the offering
of class B and class C shares. This blended class B and class C share
performance has been adjusted to take into account the CDSC applicable to
class B and class C shares, rather than the initial sales charge (load)
applicable to class A shares. This blended performance has not been
adjusted to take into account differences in class specific operating
expenses. Because operating expenses of class B and C shares are higher
than those of class A shares, this blended class B and C share performance
is higher than the performance of class B and C shares would have been had
class B and C shares been offered for the entire period. If you would like
the Fund's current yield, contact the MFS Service Center at the toll free
number set forth on the back cover page of Part II of this SAI.
Class I share performance includes the performance of the Fund's class A
shares for periods prior to the offering of class I shares. Class I share
performance generally would have been higher than class A share
performance had class I shares been offered for the entire period, because
operating expenses (e.g., distribution and service fees) attributable to
class I shares are lower than those of class A shares. Class I share
performance has been adjusted to take into account the fact that class I
shares have no initial sales charge.
Performance results include any applicable expense subsidies and waivers,
which may cause the results to be more favorable.
<PAGE>
- --------------------------------------
MFS(R) MUNICIPAL LIMITED MATURITY FUND
- --------------------------------------
SEPTEMBER 1, 1999 AS AMENDED SEPTEMBER 22, 1999
[logo] M F S (R) STATEMENT OF ADDITIONAL
INVESTMENT MANAGEMENT INFORMATION
75 YEARS
WE INVENTED THE MUTUAL FUND(R)
A SERIES OF MFS SERIES TRUST IX
500 BOYLSTON STREET, BOSTON, MA 02116
(617) 954-5000
This Statement of Additional Information, as amended or supplemented from time
to time (the "SAI"), sets forth information which may be of interest to
investors but which is not necessarily included in the Fund's Prospectus dated
September 1, 1999. This SAI should be read in conjunction with the Prospectus.
The Fund's financial statements are incorporated into this SAI by reference to
the Fund's most recent Annual Report to shareholders. A copy of the Annual
Report accompanies this SAI. You may obtain a copy of the Fund's Prospectus and
Annual Report without charge by contacting MFS Service Center, Inc. (see back
cover of Part II of this SAI for address and phone number).
This SAI is divided into two Parts -- Part I and Part II. Part I contains
information that is particular to the Fund, while Part II contains information
that generally applies to each of the funds in the MFS Family of Funds (the "MFS
Funds"). Each Part of the SAI has a variety of appendices which can be found at
the end of Part I and Part II, respectively.
THIS SAI IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
MML-13 8/99 1M 37/237/337
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
Part I of this SAI contains information that is particular to the Fund.
TABLE OF CONTENTS
Page
I Definitions .................................................... 3
II Management of the Fund ......................................... 3
The Fund ....................................................... 3
Trustees and Officers -- Identification and Background ......... 3
Trustees Compensation .......................................... 3
Affiliated Service Provider Compensation ....................... 3
III Sales Charges and Distribution Plan Payments ................... 3
Sales Charges .................................................. 3
Distribution Plan Payments .................................... 3
IV Portfolio Transactions and Brokerage Commissions ............... 3
V Share Ownership ................................................ 3
VI Performance Information ........................................ 3
VII Investment Techniques, Practices, Risks and Restrictions ....... 3
Investment Techniques, Practices and Risks ..................... 3
Investment Restrictions ........................................ 3
VIII Tax Considerations ............................................. 5
IX Independent Auditors and Financial Statements .................. 5
Appendix A -- Trustees and Officers -- Identification and
Background ................................................... A-1
Appendix B -- Trustee Compensation ............................. B-1
Appendix C -- Affiliated Service Provider Compensation ......... C-1
Appendix D -- Sales Charges and Distribution Plan Payments ..... D-1
Appendix E -- Portfolio Transactions and Brokerage Commissions . E-1
Appendix F -- Share Ownership .................................. F-1
Appendix G -- Performance Information .......................... G-1
<PAGE>
I DEFINITIONS
"Trust" - MFS Series Trust IX, a Massachusetts business trust organized in
1985. The Trust was known as MFS Fixed Income Trust prior to January 18,
1995, and as Massachusetts Financial Bond Fund until its name was changed
on January 7, 1992.
"Fund" - MFS Municipal Limited Maturity Fund, a diversified series of the
Trust. The Fund is the successor to MFS Municipal Limited Maturity Fund
(formerly known as MFS Tax-Free Limited Maturity Fund until its name was
changed on August 3, 1992) which was reorganized as a series of the Trust
on September 7, 1993.
"MFS" or the "Adviser" - Massachusetts Financial Services Company, a
Delaware corporation.
"MFD" - MFS Fund Distributors, Inc., a Delaware corporation.
"MFSC" - MFS Service Center, Inc., a Delaware corporation.
"Prospectus" - The Prospectus of the Fund, dated September 1, 1999, as
amended or supplemented from time to time.
II MANAGEMENT OF THE FUND
THE FUND
The Fund is a diversified series of the Trust. The Trust is an open-end
management investment company.
TRUSTEES AND OFFICERS - IDENTIFICATION AND BACKGROUND
The identification and background of the Trustees and officers of the
Trust are set forth in Appendix A of this Part I.
TRUSTEE COMPENSATION
Compensation paid to the non-interested Trustees and to Trustees who are
not officers of the Trust, for certain specified periods, is set forth in
Appendix B of this Part I.
AFFILIATED SERVICE PROVIDER COMPENSATION
Compensation paid by the Fund to its affiliated service providers -- to
MFS, for investment advisory and administrative services, and to MFSC, for
transfer agency services -- for certain specified periods is set forth in
Appendix C to this Part I.
MFS had contractually agreed to bear expenses for the series, subject to
reimbursement by the series, such that the series' "Other Expenses" shall
not exceed more than 0.40% of the average daily net assets of the series
during a current fiscal year. The payments made by MFS on behalf of the
series under this arrangement are currently subject to reimbursement by
the series to MFS, and are being accomplished by the payment of an expense
reimbursement fee by the series to MFS. This fee is computed and paid
monthly at a percentage of the series' average daily net assets for its
current fiscal year, with a limitation that immediately after such payment
the series' "Other Expenses" will not exceed the percentage set forth
above for that series. The obligation of MFS to bear a series' "Other
Expenses" pursuant to this arrangement, and the series' obligation to pay
the reimbursement fee to MFS, terminates on February 28, 2002.
III SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
SALES CHARGES
Sales charges paid in connection with the purchase and sale of Fund shares
for certain specified periods are set forth in Appendix D to this Part I,
together with the Fund's schedule of dealer reallowances.
DISTRIBUTION PLAN PAYMENTS
Payments made by the Fund under the Distribution Plan for its most recent
fiscal year end are set forth in Appendix D to this Part I.
IV PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Brokerage commissions paid by the Fund for certain specified periods, and
information concerning purchases by the Fund of securities issued by its
regular broker-dealers for its most recent fiscal year, are set forth in
Appendix E to this Part I.
Broker-dealers may be willing to furnish statistical, research and other
factual information or services ("Research") to the Adviser for no
consideration other than brokerage or underwriting commissions. Securities
may be bought or sold from time to time through such broker-dealers, on
behalf of the Fund. The Trustees (together with the Trustees of certain
other MFS funds) have directed the Adviser to allocate a total of $53,050
of commission business from certain MFS funds (including the Fund) to the
Pershing Division of Donaldson Lufkin & Jenrette as consideration for the
annual renewal of certain publications provided by Lipper Analytical
Securities Corporation (which provides information useful to the Trustees
in reviewing the relationship between the Fund and the Adviser.)
V SHARE OWNERSHIP
Information concerning the ownership of Fund shares by Trustees and
officers of the Trust as a group, by investors who control the Fund, if
any, and by investors who own 5% or more of any class of Fund shares, if
any, is set forth in Appendix F to this Part I.
VI PERFORMANCE INFORMATION
Performance information, as quoted by the Fund in sales literature and
marketing materials, is set forth in Appendix G to this Part I.
VII INVESTMENT TECHNIQUES, PRACTICES, RISKS AND RESTRICTIONS
INVESTMENT TECHNIQUES, PRACTICES AND RISKS
The investment objective and principal investment policies of the Fund are
described in the Prospectus. In pursuing its investment objective and
principal investment policies, the Fund may engage in a number of
investment techniques and practices, which involve certain risks. These
investment techniques and practices, which may be changed without
shareholder approval unless indicated otherwise, are identified in
Appendix A to the Prospectus, and are more fully described, together with
their associated risks, in Part II of this SAI. The following percentage
limitations apply to these investment techniques and practices.
o The Fund may not lend more than 30% of its net assets.
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions which cannot be changed
without the approval of the holders of a majority of the Fund's shares
(which, as used in this SAI, means the lesser of (i) more than 50% of the
outstanding shares of the Trust or a series or class, as applicable, or
(ii) 67% or more of the outstanding shares of the Trust or a series or
class, as applicable, present at a meeting at which holders of more than
50% of the outstanding shares of the Trust or a series or class, as
applicable, are represented in person or by proxy).
Terms used below (such as Options and Futures Contracts) are defined in
Part II of this SAI.
The Fund may not:
(1) borrow money in an amount in excess of 33 1/3% of its gross assets,
and then only as a temporary measure for extraordinary or emergency
purposes, or pledge, mortgage or hypothecate an amount of its assets
(taken at market value) in excess of 33 1/3% of its gross assets, in
each case taken at the lower of cost or market value and subject to
a 300% asset coverage requirement (for the purpose of this
restriction, collateral arrangements with respect to options,
Futures Contracts, Options on Futures Contracts, foreign currency,
forward foreign currency contracts and options on foreign currencies
and payments of initial and variation margin in connection therewith
are not considered a pledge of assets);
(2) underwrite securities issued by other persons except insofar as the
Fund may technically be deemed an underwriter under the Securities
Act of 1933 in selling a portfolio security;
(3) concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of its investment objectives,
the Fund may invest up to 25% of its assets (taken at market value
at the time of each investment) in securities of issuers in any one
industry;
(4) purchase or sell real estate (including limited partnership
interests but excluding Municipal Bonds secured by real estate or
interests therein), or mineral leases, commodities or commodity
contracts (except options, Futures Contracts, Options on Futures
Contracts, foreign currency, forward foreign currency contracts and
options on foreign currencies) in the ordinary course of its
business. The Fund reserves the freedom of action to hold and to
sell real estate or mineral leases, commodities or commodity
contracts (including options, Futures Contracts, Options on Futures
Contracts, foreign currency, forward foreign currency contracts and
options on foreign currencies) acquired as a result of the ownership
of securities;
(5) make loans to other persons except through the lending of the Fund's
portfolio securities in accordance with, and to the extent permitted
by, its investment objectives and policies, and except further that
the Fund may enter into repurchase agreements. For these purposes
the purchase of commercial paper or all or a portion of an issue of
debt securities which are part of an issue to the public shall not
be considered the making of a loan;
(6) purchase any securities or evidences of interest therein on margin,
except to make deposits on margin in connection with options,
Futures Contracts, Options on Futures Contracts, foreign currency,
forward foreign currency contracts and options on foreign
currencies, and except that the Fund may obtain such short-term
credit as may be necessary for the clearance of purchases and sales
of securities; or
(7) sell any securities which the Fund does not own unless by virtue of
its ownership of other securities the Fund has at the time of sale a
right to obtain securities without payment of further consideration
equivalent in kind and amount to the securities sold and provided
that if such right is conditional the sale is made upon the same
conditions.
In addition, the Fund has the following non-fundamental policies which
may be changed without shareholder approval.
(1) The Fund will not invest in illiquid investments, including
securities subject to legal or contractual restrictions on resale or
for which there is no readily available market (e.g., trading in the
security is suspended, or, in the case of unlisted securities, where
no market exists) if more than 15% of the Fund's net assets (taken
at market value) would be invested in such securities. Repurchase
agreements maturing in more than seven days will be deemed to be
illiquid for purposes of the Fund's limitation on investment in
illiquid securities. Securities that are not registered under the
Securities Act of 1933, as amended, and sold in reliance on Rule
144A thereunder, but are determined to be liquid by the Trust's
Board of Trustees (or its delegate), will not be subject to this 15%
limitation.
(2) In addition, purchases of warrants will not exceed 5% of the Fund's
net assets. Included within that amount, but not exceeding 2% of the
Fund's net assets, may be warrants not listed on the New York or
American Stock Exchange.
(3) In addition, the Fund may not invest 25% or more of the market value
of its total assets in securities of issuers in any one industry.
Except with respect to Investment Restriction (1) and the Fund's policy on
investing in illiquid securities, these investment restrictions are
adhered to at the time of purchase or utilization of assets; a subsequent
change in circumstances will not be considered to result in a violation of
policy.
For the purposes of the Fund's investment restrictions (including those
listed below), the issuer of a tax-exempt security is deemed to be the
entity (public or private) ultimately responsible for the payment of the
principal of and interest on the security.
STATE AND FEDERAL RESTRICTIONS: In order to comply with certain federal
and state statutes and regulatory policies, as a matter of operating
policy of the Fund, the Fund will not: (a) invest more than 5% of its
total assets at the time of investment in unsecured obligations of issuers
which, including predecessors, controlling persons, sponsoring entities,
general partners and guarantors, have a record of less than three years'
continuous business operation or relevant business experience; (b)
purchase voting securities of any issuer if such purchase, at the time
thereof, would cause more than 10% of the outstanding voting securities of
such issuer to be held by the Fund; (c) purchase or retain in its
portfolio any securities issued by an issuer any of whose officers,
directors, trustees or security holders is an officer or Trustee of the
Trust, or is an officer or Director of the Adviser, if after the purchase
of the securities of such issuer by the Fund one or more of such persons
owns beneficially more than 1/2 of 1% of the shares or securities, or
both, of such issuer, and such persons owning more than 1/2 of 1% of such
shares or securities together own beneficially more than 5% of such shares
or securities, or both; (d) invest for the purpose of exercising control
or management; or (e) purchase or sell any put or call option or any
combination thereof, provided, that this shall not prevent the purchase,
ownership, holding or sale of warrants where the grantor of the warrants
is the issuer of the underlying securities or the writing, purchasing and
selling of puts, calls or combinations thereof with respect to securities,
commodities, Futures Contracts and foreign currencies.
The investment policies described under "State and Federal Restrictions"
are not fundamental and may be changed without shareholder approval.
VIII TAX CONSIDERATIONS
For a discussion of tax considerations, see Part II of this SAI.
IX INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent auditors, providing audit
services, tax services, and assistance and consultation with respect to
the preparation of filings with the Securities and Exchange Commission.
The Portfolio of Investments and the Statement of Assets and Liabilities
at April 30, 1999, the Statement of Operations for the year ended April
30, 1999, the Statement of Changes in Net Assets for the years ended April
30, 1998 and April 30, 1999, the Notes to Financial Statements and the
Report of the Independent Auditors, each of which is included in the
Annual Report to Shareholders of the Fund, are incorporated by reference
into this SAI in reliance upon the report of Deloitte & Touche LLP,
independent auditors, given upon their authority as experts in accounting
and auditing. A copy of the Annual Report accompanies this SAI.
<PAGE>
- -----------------------
PART I - APPENDIX A
- -----------------------
TRUSTEES AND OFFICERS - IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust are listed below, together with
their principal occupations during the past five years. (Their titles may
have varied during that period.)
TRUSTEES
JEFFREY L. SHAMES,* Chairman and President (born 6/2/55)
Massachusetts Financial Services Company, Chairman and Chief Executive
Officer
RICHARD B. BAILEY* (born 9/14/26)
Private Investor; Massachusetts Financial Services Company, former
Chairman and Director (prior to September 30, 1991); Cambridge Bancorp,
Director; Cambridge Trust Company, Director
J. ATWOOD IVES (born 5/1/36)
Eastern Enterprises (diversified services company), Chairman, Trustee and
Chief Executive Officer
Address: 9 Riverside Road, Weston, Massachusetts
LAWRENCE T. PERERA (born 6/23/35)
Hemenway & Barnes (attorneys), Partner
Address: 60 State Street, Boston, Massachusetts
WILLIAM J. POORVU (born 4/10/35)
Harvard University Graduate School of Business Administration, Adjunct
Professor; CBL & Associates Properties, Inc. (real estate investment
trust), Director; The Baupost Fund (a registered investment company), Vice
Chairman and Trustee
Address: Harvard Business School, Soldiers Field Road, Cambridge,
Massachusetts
CHARLES W. SCHMIDT (born 3/18/28)
Private investor; IT Group, Inc. (diversified environmental services and
consulting) Director
Address: 30 Colpitts Road, Weston, Massachusetts
ARNOLD D. SCOTT* (born 12/16/42)
Massachusetts Financial Services Company, Senior Executive Vice President,
Secretary and Director
ELAINE R. SMITH (born 4/25/46)
Independent consultant; Brigham and Women's Hospital, Executive Vice
President and Chief Operating Officer (from August 1990 to September 1992)
Address: Weston, Massachusetts
DAVID B. STONE (born 9/2/27)
North American Management Corp. (Investment Adviser),
Chairman and Director; Eastern Enterprises, (diversified
services company) Trustee
Address: 10 Post Office Square, Suite 300, Boston,
Massachusetts
OFFICERS
W. THOMAS LONDON,* Treasurer (born 3/1/44)
Massachusetts Financial Services Company, Senior Vice
President
JAMES O. YOST,* Assistant Treasurer (born 6/12/60)
Massachusetts Financial Services Company, Senior Vice
President
ELLEN MOYNIHAN,* Assistant Treasurer (born 11/13/57)
Massachusetts Financial Services Company, Vice President (since September,
1996); Deloitte & Touche LLP, Senior Manager (until September 1996)
MARK E. BRADLEY,* Assistant Treasurer (born 11/23/59)
Massachusetts Financial Services Company, Vice President (since March,
1997); Putnam Investments, Vice President (from September 1994 until March
1997); Ernst & Young, Senior Tax Manager (until September 1994)
STEPHEN E. CAVAN,* Secretary and Clerk
(born 11/6/53)
Massachusetts Financial Services Company, Senior Vice President, General
Counsel and Assistant Secretary
JAMES R. BORDEWICK, JR.,* Assistant Secretary (born 3/6/59)
Massachusetts Financial Services Company, Senior Vice President and
Associate General Counsel
GEOFFREY L. KURINSKY,* Vice President (born 7/7/53)
Massachusetts Financial Services Company, Senior Vice President
----------------
*" Interested persons" (as defined in the 1940 Act) of the Adviser, whose
address is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee and officer 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. Shames and Scott,
Directors of MFD, and Mr. Cavan, the Secretary of MFD, hold similar
positions with certain other MFS affiliates. Mr. Bailey is a Director of
Sun Life Assurance Company of Canada (U.S.), a subsidiary of Sun Life
Assurance Company of Canada.
<PAGE>
- -----------------------
PART I - APPENDIX B
- -----------------------
TRUSTEE COMPENSATION
The Fund pays the compensation of non-interested Trustees and of Trustees
who are not officers of the Trust, who currently receive a fee of $500 per
year plus $35 per meeting and $30 per committee meeting attended, together
with such Trustee's out-of-pocket expenses. In addition, the Trust has a
retirement plan for these Trustees as described under the caption
"Management of the Fund -- Trustee Retirement Plan" in Part II. The
Retirement Age under the plan is 73.
<TABLE>
<CAPTION>
TRUSTEE COMPENSATION TABLE
...........................................................................................................................
RETIREMENT BENEFIT TOTAL TRUSTEE
TRUSTEE FEES ACCRUED AS PART ESTIMATED CREDITED FEES FROM FUND
TRUSTEE FROM FUND(1) OF FUND EXPENSES(1) YEARS OF SERVICE(2) AND FUND COMPLEX(3)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard B. Bailey $748 $300 8 $259,430
J. Atwood Ives 803 314 17 149,491
Lawrence T. Perera 748 321 16 129,371
William J. Poorvu 788 328 16 139,006
Charles W. Schmidt 738 324 9 129,301
Arnold D. Scott 0 0 N/A 0
Jeffrey L. Shames 0 0 N/A 0
Elaine R. Smith 863 354 27 150,511
David B. Stone 852 362 9 165,826
----------------
(1) For the fiscal year ending April 30, 1999.
(2) Based upon normal retirement age (73).
(3) Information provided is for calendar year 1998. All Trustees served as Trustees of 31 funds within the MFS fund
complex (having aggregate net assets at December 31, 1998, of approximately $43.3 billion) except Mr. Bailey, who
served as Trustee of 74 funds within the MFS complex (having aggregate net assets at December 31, 1998 of
approximately $68.2 billion).
ESTIMATED ANNUAL BENEFITS PAYABLE BY FUND UPON RETIREMENT(4)
....................................................................................................................
<CAPTION>
YEARS OF SERVICE
AVERAGE
TRUSTEE FEES 3 5 7 10 OR MORE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$664 $100 $166 $232 $332
721 108 180 252 361
778 117 195 272 389
835 125 209 292 418
892 134 223 312 446
949 142 237 332 475
----------------
(4) Other funds in the MFS Fund complex provide similar retirement benefits to the Trustees.
</TABLE>
<PAGE>
- -----------------------
PART I - APPENDIX C
- -----------------------
<TABLE>
AFFILIATED SERVICE PROVIDER COMPENSATION
..............................................................................................................................
The Fund paid compensation to its affiliated service providers over the
specified periods as follows:
<CAPTION>
PAID TO MFS AMOUNT PAID TO MFS FOR PAID TO MFSC AMOUNT AGGREGATE
FISCAL YEAR FOR ADVISORY WAIVED ADMINISTRATIVE FOR TRANSFER WAIVED AMOUNT PAID TO
ENDED SERVICES BY MFS SERVICES AGENCY SERVICES BY MFSC MFS AND MFSC
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April 30, 1999 $158,958 $52,954 $6,560 $59,007 $0 $224,525
April 30, 1998 153,657 40,574 6,876 60,554 0 $221,087
April 30, 1997 226,043 0 1,298* 85,323 0 312,664
--------------------
*From March 1, 1997, the commencement of the Master Administrative Service Agreement.
</TABLE>
<PAGE>
- -----------------------
PART I - APPENDIX D
- -----------------------
SALES CHARGES AND DISTRIBUTION PLAN PAYMENTS
<TABLE>
SALES CHARGES
............................................................................................................
The following sales charges were paid during the specified periods:
<CAPTION>
CLASS A INITIAL SALES CHARGES: CDSC PAID TO MFD ON:
RETAINED REALLOWED CLASS A CLASS B CLASS C
FISCAL YEAR END TOTAL BY MFD TO DEALERS SHARES SHARES SHARES
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
April 30, 1999 $79,215 $9,677 $69,538 $41,564 $26,996 $7,543
April 30, 1998 73,475 6,681 66,794 4 22,607 2,729
April 30, 1997 73,327 5,862 67,465 121 35,651 1,032
DEALER REALLOWANCES
..........................................................................
As shown above, MFD pays (or "reallows") a portion of the Class A initial sales charge to dealers. The dealer
reallowance as expressed as a percentage of the Class A shares' offering price is:
<CAPTION>
DEALER REALLOWANCE AS A
AMOUNT OF PURCHASE PERCENT OF OFFERING PRICE
-----------------------------------------------------------------------------------------------------------
<S> <C>
Less than $50,000 2.25%
$50,000 but less than $100,000 2.00%
$100,000 but less than $250,000 1.75%
$250,000 but less than $500,000 1.50%
$500,000 but less than $1,000,000 1.25%
$1,000,000 or more See Below*
----------------
* A CDSC will apply to such purchases.
DISTRIBUTION PLAN PAYMENTS
.........................................................................................................
During the fiscal year ended April 30, 1999, the Fund made the following Distribution Plan payments:
<CAPTION>
AMOUNT OF DISTRIBUTION AND SERVICE FEES:
CLASS OF SHARES PAID BY FUND RETAINED BY MFD PAID TO DEALERS
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Shares $61,811 $ 7,480 $54,331
Class B Shares 72,524 58,656 13,868
Class C Shares 39,861 14 39,847
Distribution plan payments retained by MFD are used to compensate MFD for commissions advanced by MFD to
dealers upon sale of fund shares.
</TABLE>
<PAGE>
- -----------------------
PART I - APPENDIX E
- -----------------------
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
BROKERAGE COMMISSIONS
..........................................................................
The following brokerage commissions were paid by the Fund during the
specified time periods:
BROKERAGE COMMISSIONS
FISCAL YEAR END PAID BY FUND
----------------------------------------------------------------------------
April 30, 1999 $ 0
April 30, 1998 $ 0
April 30, 1997 $ 0
SECURITIES ISSUED BY REGULAR BROKER-DEALERS
..........................................................................
During the fiscal year ended April 30, 1999, the Fund purchased securities
issued by the following regular broker-dealers of the Fund, which had the
following values as of April 30, 1999:
VALUE OF SECURITIES
BROKER-DEALER AS OF APRIL 30, 1999
----------------------------------------------------------------------------
None Not Applicable
<PAGE>
- -----------------------
PART I - APPENDIX F
- -----------------------
SHARE OWNERSHIP
OWNERSHIP BY TRUSTEES AND OFFICERS
As of May 31, 1999, the Trustees and officers of the Trust as a group
owned less than 1% of any class of the Fund's shares.
25% OR GREATER OWNERSHIP
The following table identifies those investors who own 25% or more of the
Fund's shares (all share classes taken together) as of May 31, 1999, and
are therefore presumed to control the Fund:
JURISDICTION
OF ORGANIZATION
NAME AND ADDRESS OF INVESTOR (IF A COMPANY) PERCENTAGE OWNERSHIP
----------------------------------------------------------------------------
None
5% OR GREATER OWNERSHIP OF SHARE CLASS
The following table identifies those investors who own 5% or more of any
class of the Fund's shares as of May 31, 1999:
NAME AND ADDRESS OF INVESTOR OWNERSHIP PERCENTAGE
..........................................................................
MLPF&S For the Sole Benefit of Its Customers 8.71% of Class A shares
Attn: Fund Administration 979H2
4800 Deer Lake Drive E. - 3rd Floor
Jacksonville, FL 32246-6484
..........................................................................
MLPF&S For the Sole Benefit of Its Customers 24.96% of Class B shares
Attn: Fund Administration 97CE6
4800 Deer Lake Drive E. - 3rd Floor
Jacksonville, FL 32246-6484
..........................................................................
Robert G Peachey Jr 5.16% of Class B shares
Mary Katherine Peachey
JT Ten WROS
1463 S Clarks Circle
Castle Rock CO 80104-9559
..........................................................................
BHC Securities, Inc. 9.24% of Class C shares
FAO 18229273
Attn: Mutual Funds
One Commerce Square
2005 Market Street Suite 1200
Philadelphia PA 19103-7084
..........................................................................
Dean Witter FBO 8.55% of Class C shares
Joseph R. Norris &
PO Box 250
New York NY 10008-0250
..........................................................................
Michael W Moore & Chris L Moore 6.74% of Class C shares
JT Ten Ros
4151 Normandy Ave
Dallas TX 75205-2037
..........................................................................
Donaldson Lufkin Jenrette Securities Corp Inc. 6.11% of Class C shares
PO Box 2052
Jersey City NJ 07303-2052
..........................................................................
NFSC FEBO # C1B-335150 5.65% of Class C shares
Jennifer H Lobo
1 Palmer Sq E Ste 530
Princeton NJ 08542-3718
..........................................................................
MLPF&S For the Sole Benefit of Its Customers 16.56% of Class C shares
Attn Fund Administration 97JUO
4800 Deer Lake Dr E 3rd Fl
Jacksonville FL 32246-6484
<PAGE>
- -----------------------
PART I - APPENDIX G
- -----------------------
<TABLE>
PERFORMANCE INFORMATION
..............................................................................................................................
All performance quotations are as of April 30, 1999.
<CAPTION>
ACTUAL
AVERAGE ANNUAL TAX EQUIVALENT TAX EQUIVALENT
TOTAL RETURNS ACTUAL 30- 30-DAY YIELD 30-DAY YIELD
--------------------------- DAY YIELD (INCLUDING (WITHOUT ANY CURRENT
10 YEARS/ (INCLUDING 30-DAY YIELD ANY WAIVERS) WAIVERS) DISTRIBUTI
LIFE OF ANY (WITHOUT ANY --------------- ------------------ ON
1 YEAR 5 YEARS FUND* WAIVERS) WAIVERS) TAX BRACKETS: TAX BRACKETS: RATE+
-------------------------------------------------------------------------------------------------------
28% 31% 28% 31%
-------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares, with
initial sales charge
(2.50%) 2.04% 3.84% 4.35% 3.13% 2.98% 4.35% 4.54% 4.14% 4.32% 3.69%
Class A Shares, at net
asset value 4.65% 4.37% 4.72% N/A N/A N/A N/A N/A N/A N/A
Class B Shares, with
CDSC (declining over
6 years from
4% to 0%) (0.15)% 3.21% 2.71% N/A N/A N/A N/A N/A N/A N/A
Class B Shares, at net
asset value 3.85% 3.56% 2.86% 2.39% 2.24% 3.32% 3.46% 3.11% 3.25% 3.02%
Class C Shares, with
CDSC (1% for first
year) 2.77% N/A 3.58% N/A N/A N/A N/A N/A N/A N/A
Class C Shares, at net
asset value 3.77% N/A 3.58% 2.38% 2.23% 3.31% 3.45% 3.10% 3.23% 2.94%
----------------------
* From the commencement of the fund's investment operations on March 17, 1992.
+ Annualized, based upon the last distribution.
</TABLE>
The Fund commenced investment operations on March 17, 1992 with the
offering of class A shares and subsequently offered class B shares on
September 7, 1993 and class C shares on July 1, 1994. Class B and class C
share performance include the performance of the Fund's class A shares for
periods prior to the offering of class B and class C shares. This blended
class B and class C share performance has been adjusted to take into
account the CDSC applicable to class B and class C shares, rather than the
initial sales charge (load) applicable to class A shares. This blended
performance has not been adjusted to take into account differences in
class specific operating expenses. Because operating expenses of class B
and C shares are higher than those of class A shares, this blended class B
and C share performance is higher than the performance of class B and C
shares would have been had class B and C shares been offered for the
entire period. If you would like the Fund's current yield, contact the MFS
Service Center at the toll free number set forth on the back cover page of
Part II of this SAI.
Performance results include any applicable expense subsidies and waivers,
which may cause the results to be more favorable.
