As filed with the Securities and Exchange Commission
on March 30, 1995
1933 Act File No. 2-14677
1940 Act File No. 811-859
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 59
AND
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 20
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
(Exact Name of Registrant as Specified in Charter)
500 Boylston Street, Boston, Massachusetts 02116
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: 617-954-5000
Stephen E. Cavan, Massachusetts Financial Services Company,
500 Boylston Street, Boston, Massachusetts 02116
(Name and Address of Agent for Service)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
It is proposed that this filing will become effective (check
appropriate box)
* immediately upon filing pursuant to paragraph (b)
* on March 30, 1995 pursuant to paragraph (b)
* 60 days after filing pursuant to paragraph (a)(i)
* on [date] pursuant to paragraph (a)(i)
* 75 days after filing pursuant to paragraph (a)(ii)
* on [date] pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
* this post-effective amendment designates a new effective
date for a previously filed post-effective amendment
Pursuant to Rule 24f-2, the Registrant has registered an
indefinite number of its Shares of Beneficial Interest, (without
par value), under the Securities Act of 1933. The Registrant filed
a Rule 24f-2 Notice for its fiscal year ended November 30, 1994 on
January 30, 1995.
CALCULATION OF
REGISTRATION FEE
N
u
m
b
e
r
P
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o
p
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e
d
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o
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Title
of
secur
ities
b
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n
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a
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r
e
g
a
t
e
A
m
o
u
n
t
o
f
being
regis
tered
r
e
g
i
s
t
e
r
e
d
p
r
i
c
e
p
e
r
s
h
a
r
e
o
f
f
e
r
i
n
g
p
r
i
c
e
r
e
g
i
s
t
r
a
t
i
o
n
f
e
e
Share
s of
Benef
icial
Inter
est
(with
out
par
value
)
5
,
5
2
9
,
4
5
0
$
9
.
7
7
$
2
9
0
,
0
0
0
$
1
0
0
Registrant elects to calculate the maximum aggregate offering
price pursuant to Rule 24e-2. 16,973,660 shares were redeemed
during the fiscal year ended November 30, 1994. 11,473,893 shares
were used for reductions pursuant to paragraph (c) of Rule 24f-2
during the current fiscal year. 5,499,767 shares is the amount of
redeemed shares used for reduction in this Amendment. Pursuant to
Rule 457(d) under the Securities Act of 1933, the maximum public
offering price of $9.77 per share on March 20, 1995 is the price
used as the basis for calculating the registration fee. While no
fee is required for the 11,473,893 shares, Registrant has elected
to register, for $100, an additional $290,000 of shares (29,683
shares at $9.77 per share).
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
CROSS REFERENCE SHEET
(Pursuant to Rule 404 showing location in Prospectus and/or
Statement of Additional Information of the responses to the Items
in Parts A and B of Form N-1 A)
ITEM NUMBER STATEMENT OF
ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
CAPTION
1 (a),(b) Front Cover Page *
2 (a) Expense Summary *
(b), (c) * *
3 (a) Condensed Financial Information
*
(b) * *
(c) Information Concerning Shares
*
of the Fund - Performance
Information
(d) Condensed Financial Information
*
4 (a) The Fund; Investment Objectives
*
and Policies
(b),(c) Investment Objectives and *
Policies
5 (a) The Fund; Management of the *
Fund - Investment Adviser
(b) Front Cover Page; Management *
of the Fund - Investment
Adviser; Back Cover Page
(c), (d) Management of the Fund - Investment
*
Adviser
(e) Management of the Fund - Shareholder
*
Servicing Agent; Back Cover Page
(f) Expense Summary; Condensed *
Financial Information
(g) Information Concerning Shares
*
of the Fund - Purchases
ITEM NUMBER STATEMENT
OF ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
CAPTION
5A (a), (b), (c) ** **
6 (a) Information Concerning Shares
*
of the Fund - Description of
Shares, Voting Rights and
Liabilities, Information Concerning
Shares of the Fund - Redemptions
and Repurchases; Information
Concerning Shares of the Fund -
Purchases; Information Concerning
Shares of the Fund - Exchanges
(b), (c), (d) * *
(e) Shareholder Services *
(f) Information Concerning Shares
*
of the Fund - Distributions;
Shareholder Services -
Distribution Options
(g) Information Concerning Shares
*
of the Fund - Tax Status;
Information Concerning Shares
of the Fund - Distributions
7 (a) Front Cover Page; Management *
of the Fund - Distributor;
Back Cover Page
(b) Information Concerning Shares
*
of the Fund - Purchases;
Information Concerning Shares
of the Fund - Net Asset Value
(c) Information Concerning Shares
*
of the Fund - Purchases;
Information Concerning Shares
of the Fund - Exchanges;
Shareholder Services
(d) Front Cover Page; Information
*
Concerning Shares of the Fund -
Purchases
(e) Information Concerning Shares
*
of the Fund - Distribution Plans;
Expense Summary
ITEM NUMBER STATEMENT
OF ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
CAPTION
(f) Information Concerning Shares
*
of the Fund - Distribution Plans
8 (a) Information Concerning Shares
*
of the Fund - Redemptions and
Repurchases; Information
Concerning Shares of the Fund -
Purchases
(b), (c), (d) Information Concerning Shares
*
of the Fund - Redemptions and
Repurchases
9 * *
ITEM NUMBER STATEMENT
OF ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
CAPTION
10 (a), (b) * Front Cover
Page
11 * Front Cover
Page
12 * Definitions
13 (a), (b), (c) * Investment
Objectives; Policies and
Restrictions
(d) * *
14 (a), (b) * Management of
the Fund -
Trustees and
Officers
(c) * Management of
the Fund -
Trustees and
Officers;
Appendix A
15 (a) * *
(b), (c) * Management of
the Fund -
Trustees and
Officers
16 (a) Management of the Fund - Management of
the Fund -
Investment Adviser Investment
Adviser; Management
of the Fund -
Trustees and Officers
(b) Management of the Fund - Management of
the Fund -
Investment Adviser Investment
Adviser
(c) * *
(d) * Management of
the Fund-
Investment
Adviser
(e) * Portfolio
Transactions and Brokerage
Commissions
(f) Information Concerning Shares Distribution
Plans
of the Fund - Distribution Plans
(g) * *
(h) * Management of
the Fund- Custodian;
Independent
Accountants and
Financial
Statements; Back Cover Page
(i) * Management of
the Fund - Shareholder
Servicing
Agent
ITEM NUMBER STATEMENT
OF ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
CAPTION
17 (a), (b), (c), * Portfolio
Transactions and Brokerage
(d), (e) Commissions
18 (a) Information Concerning Shares Description of
Shares, Voting Rights and
of the Fund - Description of
Liabilities
Shares, Voting Rights and
Liabilities
(b) * *
19 (a) Information Concerning Shares Shareholder
Services
of the Fund - Purchases;
Shareholder Services
(b) Information Concerning Shares Management of
the Fund - Distributor;
of the Fund - Net Asset Determination
of Net Asset Value
Value; Information Concerning
and Performance - Net Asset Value
Shares of the Fund - Purchases
(c) * *
20 * Tax Status
21 (a), (b) * Management of
the Fund - Distributor;
Distribution
Plans
(c) * *
22 (a) * *
(b) * Determination
of Net Asset Value and
Performance
23 * Independent
Accountants and Financial
Statements
_____________________________
* Not Applicable
** Contained in Annual Report
<TABLE>
<S> <C>
MASSACHUSETTS INVESTORS PROSPECTUS
GROWTH STOCK FUND April 1,
1995
(A member of the MFS Family of Funds(R)) Class A
Shares of Beneficial Interest
Organized November 22, 1932 Class B
Shares of Beneficial Interest
</TABLE>
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
PAGE
- ----
<S> <C>
<C>
1. Expense
Summary...........................................................
.......... 2
2. The
Fund..............................................................
.............. 3
3. Condensed Financial
Information.....................................................
4
4. Investment Objective and
Policies................................................... 4
5. Management of the
Fund..............................................................
9
6. Information Concerning Shares of the
Fund........................................... 10
Purchases.........................................................
............... 10
Exchanges.........................................................
............... 16
Redemptions and
Repurchases......................................................
16
Distribution
Plans.............................................................
.. 18
Distributions.....................................................
............... 20
Tax
Status............................................................
........... 20
Net Asset
Value.............................................................
..... 20
Description of Shares, Voting Rights and
Liabilities............................. 21
Performance
Information.......................................................
... 21
7. Shareholder
Services..........................................................
...... 21
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
500 Boylston Street, Boston, Massachusetts 02116 (617) 954-
5000
The investment objective of Massachusetts Investors Growth Stock
Fund (the
"Fund") is to provide long-term growth of capital and future
income rather than
current income (see "Investment Objective and Policies"). The
minimum initial
investment is generally $1,000 per account (see "Purchases").
The Fund's investment adviser and distributor are Massachusetts
Financial
Services Company ("MFS" or the "Adviser") and MFS Fund
Distributors, Inc.
("MFD"), respectively, both of which are located at 500 Boylston
Street, Boston,
Massachusetts 02116.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED
BY, ANY BANK AND THE SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
This Prospectus sets forth concisely the information concerning
the Fund that a
prospective investor ought to know before investing. The Fund has
filed with the
Securities and Exchange Commission (the "SEC") a Statement of
Additional
Information, dated April 1, 1995, which contains more detailed
information about
the Fund and is incorporated into this Prospectus by reference.
See page 23 for
a further description of the information set forth in the
Statement of
Additional Information. A copy of the Statement of Additional
Information may be
obtained without charge by contacting the Shareholder Servicing
Agent (see back
cover for address and phone number).
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE
REFERENCE.
<PAGE> 2
1. EXPENSE SUMMARY
<TABLE>
<CAPTION>
CLASS
SHAREHOLDER TRANSACTION EXPENSES:
CLASS A B
- -----------------------------------------------------------------
- ---------- ----
<S>
<C> <C>
Maximum Initial Sales Charge Imposed on Purchases of Fund
Shares (as a percentage of offering price)................
5.75% 0.00%
Maximum Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds, as
applicable)...............................................
See Below1 4.00%
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS)2:
Management Fees.............................................
0.31% 0.31%
Rule 12b-1 Fees (after applicable fee reduction)............
0.23%3 1.00%4
Other Expenses..............................................
0.22% 0.31%
Total Operating Expenses....................................
0.76% 1.62%
</TABLE>
- ---------------
1 Purchases of $1 million or more are not subject to an initial
sales charge;
however, a contingent deferred sales charge ("CDSC") of 1% will
be imposed on
such purchases in the event of certain redemption transactions
within 12
months following such purchases (see "Purchases").
2 For Class A and Class B shares, percentages are based on fees
incurred during
the fiscal year ended November 30, 1994.
3 The Fund has adopted a Distribution Plan for its Class A shares
in accordance
with Rule 12b-1 under the Investment Company Act of 1940, as
amended (the
"1940 Act"), which provides that it will pay
distribution/service fees
aggregating up to (but not necessarily all of) 0.35% per annum
of the average
daily net assets attributable to Class A shares (see
"Distribution Plans.")
Currently, 0.10% of the distribution fee is being waived. After
a substantial
period of time, distribution expenses paid under this plan,
together with the
initial sales charge, may total more than the maximum sales
charge that would
have been permissible if imposed entirely as an initial sales
charge.
4 The Fund has adopted a Distribution Plan for its Class B shares
in accordance
with Rule 12b-1 under the 1940 Act, which provides that it will
pay
distribution/service fees aggregating up to 1.00% per annum of
the average
daily net assets attributable to Class B shares (see
"Distribution Plans").
After a substantial period of time, distribution expenses paid
under this
plan, together with any CDSC, may total more than the maximum
sales charge
that would have been permissible if imposed entirely as an
initial sales
charge.
EXAMPLE OF EXPENSES
An investor would pay the following dollar amounts of expenses on
a $1,000
investment in the Fund, assuming (a) 5% annual return and (b)
redemption at the
end of each of the time periods indicated (unless otherwise
noted):
<TABLE>
<CAPTION>
PERIOD
CLASS A CLASS B
----------------------------------------------------- ---
- ---- -------------
<S> <C>
<C> <C>
(1)
1 year.............................................. $
65 $ 56 $ 16
3 years.............................................
80 81 51
5 years.............................................
97 108 88
10 Years.............................................
146 169(2) 169(2)
</TABLE>
- ---------------
(1) Assumes no redemption.
(2) Class B shares convert to Class A shares approximately eight
years after
purchase; therefore, years nine and ten reflect Class A
expenses.
2
<PAGE> 3
The purpose of the expense table above is to assist investors in
understanding
the various costs and expenses that a shareholder of the Fund will
bear directly
or indirectly. More complete descriptions of the following
expenses of the Fund
are set forth in the following sections of this Prospectus: (i)
varying sales
charges on share purchases -- "Purchases"; (ii) varying CDSCs --
"Purchases";
(iii) management fees -- "Investment Adviser"; and (iv) Rule 12b-1
(i.e.,
distribution plan) fees -- "Distribution Plans."
THE "EXAMPLE" SET FORTH ABOVE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST
OR FUTURE EXPENSES OF THE FUND; ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN
THOSE SHOWN.
2. THE FUND
The Fund is an open-end, diversified management investment company
which was
organized as a business trust under the laws of The Commonwealth
of
Massachusetts in 1985. The Fund is the successor to the business
of
Massachusetts Investors Growth Stock Fund, Inc. (the "Trust"),
incorporated in
Massachusetts in 1958 to continue the business of a Delaware
corporation
organized in 1932. All references in this Prospectus to the Fund's
past
activities are intended to include those of the Trust, unless the
context
indicates otherwise. Shares of the Fund are sold continuously to
the public and
the Fund uses the proceeds to buy securities (common stocks and
other
instruments) for its portfolio. Two classes of shares of the Fund
currently are
offered to the general public. Class A shares are offered at net
asset value
plus an initial sales charge (a CDSC in the case of certain
purchases of $1
million or more) and subject to a Distribution Plan providing for
an annual
distribution and service fee. Class B shares are offered at net
asset value
without an initial sales charge but subject to a CDSC and a
Distribution Plan
providing for an annual distribution and service fee which are
greater than the
Class A distribution fee and service fee; Class B shares will
convert to Class A
shares approximately eight years after purchase.
The Fund's Board of Trustees provides broad supervision over its
affairs. MFS is
responsible for the management of the Fund's assets and the
officers of the Fund
are responsible for its operations. The Adviser manages the
portfolio from day
to day in accordance with the Fund's investment objective. The
selection of
investments and the way they are managed depend on the conditions
and trends in
the economy and the financial marketplace. The Fund also offers to
buy back
(redeem) its shares from its shareholders at any time at net asset
value less
any applicable CDSC.
3
<PAGE> 4
3. CONDENSED FINANCIAL INFORMATION
The following information should be read in conjunction with the
financial
statements included in the Fund's Annual Report to shareholders
which are
incorporated by reference into the Statement of Additional
Information in
reliance upon the report of Deloitte & Touche LLP, independent
certified public
accountants, as experts in accounting and auditing.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR
ENDED NOVEMBER 30,
----------------------------------------------------
- ---------------------------------------------------------------
CLASS A
CLASS B
-----------------
- ------------------
1994 1993 1992 1991 1990
1989 1988 1987 1986 1985 1994 1993+
------ ------- ------ ------ -------- -
- ----- ------ ------- ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C> <C> <C>
PER SHARE
DATA (FOR A
SHARE
OUTSTANDING
THROUGHOUT
EACH
PERIOD):
Net asset
value -- beginning
of period... $12.97 $ 12.15 $10.87 $ 8.48 $ 10.70 $
8.39 $ 9.05 $ 9.69 $10.68 $10.04 $ 12.93 $ 12.91
------ ------- ------ ------ -------- -
- ----- ------ ------- ------ ------ ------- -------
Income from
investment
operations --
Net
investment
income
(loss).... $(0.01) $ (0.01)++ $(0.03) $ 0.01 $ 0.05 $
0.09 $ 0.12 $ 0.18 $ 0.20 $ 0.28 $ (0.09) $ (0.01)
Net realized
and
unrealized
gain
(loss) on
investments... (0.49) 1.55 2.07 2.93 (1.02)
3.14 0.64 (0.68) 1.99 2.10 (0.50) 0.03
------ ------- ------ ------ -------- -
- ----- ------ ------- ------ ------ ------- -------
Total from
investment
operations... $(0.50) $ 1.54 $ 2.04 $ 2.94 $ (0.97) $
3.23 $ 0.76 $ (0.50) $ 2.19 $ 2.38 $ (0.59) $ 0.02
------ ------- ------ ------ -------- -
- ----- ------ ------- ------ ------ ------- -------
Less
distributions
declared to
shareholders --
From net
investment
income.... $ -- $ -- $ -- $(0.03) $ (0.05)
$(0.08) $(0.15) $ (0.14) $(0.20) $(0.28) $ -- $ --
From
realized
gains..... (1.99) (0.72) (0.76) (0.52) (1.20)
(0.84) (1.27) -- (2.98) (1.46) (1.99) --
------ ------- ------ ------ -------- -
- ----- ------ ------- ------ ------ ------- -------
Total
distributions
declared
to
shareholders... $(1.99) $ (0.72) $(0.76) $(0.55) $ (1.25)
$(0.92) $(1.42) $ (0.14) $(3.18) $(1.74) $ (1.99) $ (0.00)
------ ------- ------ ------ -------- -
- ----- ------ ------- ------ ------ ------- -------
Net asset
value -- end
of period... $10.48 $ 12.97 $12.15 $10.87 $ 8.48
$10.70 $ 8.39 $ 9.05 $ 9.69 $10.68 $ 10.35 $ 12.93
======= ======== ======= ======= ==========
======= ======= ======== ======= ======= ======== ========
Total
return#..... (5.00)% 13.43% 19.35% 36.56% (10.27)%
42.14% 8.21% (5.57)% 20.30% 23.52% (5.82)% 0.70 %*
RATIOS (TO
AVERAGE NET
ASSETS)/SUPPLEMENTAL
DATA:
Expenses.... 0.72%++ 0.71% 0.67 % 0.63% 0.53%
0.54% 0.58% 0.50 % 0.50% 0.56% 1.60% 1.49 %*
Net
investment
income
(loss).... (0.06)% (0.19)% (0.24)% 0.14% 0.55 %
0.91% 1.27% 1.60% 1.62% 2.47% (0.87)% (0.99)%*
PORTFOLIO
TURNOVER.... 56% 52% 16 % 39% 44%
32% 75% 66% 77% 66% 56% 52 %
NET ASSETS AT
END OF
PERIOD
($000,000'S)... 977 1,132 1,070 950 749
907 735 774 899 878 9 2
</TABLE>
* Annualized.
+ For the period from date of issue of Class B shares, September
7, 1993 to
November 30, 1993.
++ The distributor did not impose a portion of its fee for the
period indicated.
If this fee had been incurred by the Fund the ratios of
expenses and net
investment loss to average net assets would have been 0.82% and
(0.16)%,
respectively. The net investment loss per share would have been
$(0.03).
# Total returns for Class A shares do not include the applicable
sales charge
(except for reinvested dividends prior to March 1, 1991). If
the sales charge
had been included, the results would have been lower.
4. INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE -- The Fund's investment objective is to
provide long-term
growth of capital and future income rather than current income.
Any investment
involves risk and there can be no assurance that the Fund will
achieve its
investment objective; the Fund's name does not imply any assurance
that an
investor's capital will increase.
INVESTMENT POLICIES -- The Fund's policy is to keep its assets
invested, except
for working cash balances, in the common stocks, or securities
convertible into
common stocks, of companies believed to possess better than
average prospects
for long-
4
<PAGE> 5
term growth. This policy is fundamental and may not be changed
without a
shareholder vote. Emphasis is placed on the selection of
progressive,
well-managed companies.
Since shares of the Fund represent an investment in securities
with fluctuating
market prices, shareholders should understand that the value of
shares of the
Fund will vary as the aggregate value of the Fund's portfolio
securities
increases or decreases. Moreover, any dividends paid by the Fund
will increase
or decrease in relation to the income received by the Fund from
its investments.
FOREIGN SECURITIES: The Fund may invest up to 50% (and generally
expects to
invest between 10% and 30%) of its total assets in foreign
securities (not
including American Depositary Receipts). Investing in securities
of foreign
issuers generally involves risks not ordinarily associated with
investing in
securities of domestic issuers. These include changes in currency
rates,
exchange control regulations, governmental administration or
economic or
monetary policy (in the United States or abroad) or circumstances
in dealings
between nations. Costs may be incurred in connection with
conversions between
various currencies. Special considerations may also include more
limited
information about foreign issuers, higher brokerage costs,
different accounting
standards and thinner trading markets. Foreign securities markets
may also be
less liquid, more volatile and less subject to government
supervision than in
the United States. Investments in foreign countries could be
affected by other
factors including expropriation, confiscatory taxation and
potential
difficulties in enforcing contractual obligations and could be
subject to
extended settlement periods. The Fund may hold foreign currency
received in
connection with investments in foreign securities when, in the
judgment of the
Adviser, it would be beneficial to convert such currency into U.S.
dollars at a
later date, based on anticipated changes in the relevant exchange
rate. The Fund
may also hold foreign currency in anticipation of purchasing
foreign securities.
See the Statement of Additional Information for further discussion
of foreign
securities and the holding of foreign currency, as well as the
associated risks.
EMERGING MARKET SECURITIES: The Fund may invest in countries or
regions with
relatively low gross national product per capita compared to the
world's major
economies, and in countries or regions with the potential for
rapid economic
growth (emerging markets). Emerging markets will include any
country not listed
by the Organization for Economic Cooperation and Development
("OECD") or
determined by the Adviser to be an emerging market as defined
above. The Fund
may invest in securities of: (i) companies the principal
securities trading
market for which is an emerging market country; (ii) companies
organized under
the laws of, and with a principal office in, an emerging market
country; (iii)
companies whose principal activities are located in emerging
market countries;
(iv) companies traded in any market that derive 50% or more of
their total
revenue from either goods or services produced in an emerging
market or sold in
an emerging market or; (v) emerging market governments or any of
their political
subdivisions, agencies, authorities or instrumentalities.
In addition to the general risks of investing in foreign
securities, investments
in emerging markets involve special risks. Securities of many
issuers in
emerging markets may be less liquid and more volatile than
securities of
comparable domestic issuers. These securities may be considered
speculative and,
while generally offering higher income and the potential for
capital
appreciation, may present significantly greater risk. Emerging
markets may have
different clearance and settlement procedures, and in certain
markets there have
been times when settlements have been unable to keep pace with the
volume of
securities transactions, making it difficult to conduct such
transactions.
Delays in settlement could result in temporary periods when a
portion of the
assets of the Fund is uninvested and no return is earned thereon.
The inability
of the Fund to make intended security purchases due to settlement
problems could
cause the Fund to miss attractive investment opportunities.
Inability to dispose
of portfolio securities due to settlement problems could result in
losses to the
Fund due to subsequent declines in values of the portfolio
securities or, if the
Fund has entered into a contract to sell the security, possible
liability to the
purchaser. Certain markets may require payment for securities
before delivery.
Certain emerging markets may require governmental approval for the
repatriation
of investment income, capital or the proceeds of sales of
securities by foreign
investors. In addition, if a deterioration occurs in an emerging
market's
balance of payments or for other reasons, a country could impose
temporary
restrictions on foreign capital remittances. The Fund could be
adversely
affected
5
<PAGE> 6
by delays in, or a refusal to grant, any required governmental
approval for
repatriation of capital, as well as by the application to the Fund
of any
restrictions on investments.
Investment in certain foreign emerging market debt obligations may
be restricted
or controlled to varying degrees. These restrictions or controls
may at times
preclude investment in certain foreign emerging market debt
obligations and
increase the expenses of the Fund.
AMERICAN DEPOSITARY RECEIPTS: The Fund may invest in American
Depositary
Receipts ("ADRs"), which are certificates issued by a U.S.
depository (usually a
bank) and represent a specified quantity of shares of an
underlying non-U.S.
stock on deposit with a custodian bank as collateral. Because ADRs
trade on
United States securities exchanges, the Adviser does not treat
them as foreign
securities. However, they are subject to many of the risks of
foreign
securities, such as changes in exchange rates and more limited
information about
foreign issuers.
REPURCHASE AGREEMENTS: The Fund may enter into repurchase
agreements in order
to earn additional income on available cash or as a temporary
defensive measure.
Under a repurchase agreement, the Fund acquires securities subject
to the
seller's agreement to repurchase at a specified time and price. If
the seller
becomes subject to a proceeding under the bankruptcy laws or its
assets are
otherwise subject to a stay order, the Fund's right to liquidate
the securities
may be restricted (during which time the value of the securities
could decline).
As discussed in the Statement of Additional Information, the Fund
has adopted
certain procedures intended to minimize any risk.
LENDING OF SECURITIES: The Fund may seek to increase its income
by lending
portfolio securities. Such loans will usually be made only to
member firms (and
subsidiaries thereof) of the New York Stock Exchange and to member
banks of the
Federal Reserve System, and would be required to be secured
continuously by
collateral in cash, cash equivalents or U.S. Government Securities
maintained on
a current basis at an amount at least equal to the market value of
the
securities loaned. The Fund will continue to collect the
equivalent of interest
on the securities loaned and will also receive either interest
(through
investment of cash collateral) or a fee (if the collateral is U.S.
Government
securities).
"WHEN-ISSUED" SECURITIES: In order to help ensure the
availability of suitable
securities for its portfolio, the Fund may purchase securities on
a "when
issued" or on a "forward delivery" basis, which means that the
securities will
be delivered to the Fund at a future date usually beyond customary
settlement
time. The Fund does not pay for such securities until received and
does not
start earning interest on the securities until the contractual
settlement date.
In order to invest its assets immediately, while awaiting delivery
of securities
purchased on such bases, the Fund will normally invest in cash,
short-term money
market instruments or high quality debt securities. See the
Statement of
Additional Information for a further discussion of the nature of
such
transactions and risks associated therewith.
RESTRICTED SECURITIES: The Fund may also purchase securities that
are not
registered under the Securities Act of 1933 ("1933 Act")
("restricted
securities"), including those that can be offered and sold to
"qualified
institutional buyers" under Rule 144A under the 1933 Act ("Rule
144A
securities"). The Fund's Board of Trustees determines, based upon
a continuing
review of the trading markets for a specific Rule 144A security,
whether such
security is illiquid and thus subject to the Fund's limitations on
investing not
more than 15% of its net assets in illiquid investments, or liquid
and thus not
subject to such limitation. The Board of Trustees has adopted
guidelines and
delegated to MFS the daily function of determining and monitoring
the liquidity
of Rule 144A securities. The Board, however, will retain
sufficient oversight
and be ultimately responsible for the determinations. The Board
will carefully
monitor the Fund's investments in Rule 144A securities, focusing
on such
important factors, among others, as valuation, liquidity and
availability of
information. This investment practice could have the effect of
increasing the
level of illiquidity in the Fund to the extent that qualified
institutional
buyers become for a time uninterested in purchasing Rule 144A
securities held in
the Fund's portfolio. Subject to the Fund's 15% limitation on
investments in
illiquid investments, the Fund may also invest in restricted
securities that may
not be sold under Rule 144A, which represents certain risks. As a
result, the
Fund might not be able to sell these securities when the Adviser
wishes to do
so, or might have to sell them at less than fair value. In
addition, market
quotations are less readily available. Therefore, the judgment of
the Adviser
may at times play a greater role in valuing these securities than
in the case of
unrestricted securities.
6
<PAGE> 7
OPTIONS ON SECURITIES: The Fund may write (sell) covered put and
call options
on securities and purchase put and call options on securities. The
Fund will
write such options for the purpose of increasing its return and/or
to protect
the value of its portfolio. In particular, where the Fund writes
an option which
expires unexercised or is closed out by the Fund at a profit, it
will retain the
premium paid for the option, which will increase its gross income
and will
offset in part the reduced value of a portfolio security in
connection with
which the option may have been written or the increased cost of
portfolio
securities to be acquired. In contrast, however, if the price of
the security
underlying the option moves adversely to the Fund's position, the
option may be
exercised and the Fund will be required to purchase or sell the
security at a
disadvantageous price, resulting in losses which may only be
partially offset by
the amount of the premium. The Fund may also write combinations of
put and call
options on the same security, known as "straddles." Such
transactions can
generate additional premium income but also present increased
risk.
The Fund may purchase put or call options in anticipation of
declines in the
value of portfolio securities or increases in the value of
securities to be
acquired. In the event that such declines or increases occur, the
Fund may be
able to offset the resulting adverse effect on its portfolio, in
whole or in
part, through the options purchased. The risk assumed by the Fund
in connection
with such transactions is limited to the amount of the premium and
related
transaction costs associated with the option, although the Fund
may be required
to forfeit such amounts in the event that the prices of securities
underlying
the options do not move in the direction or to the extent
anticipated.
The Fund may also enter into options on the yield "spread," or
yield
differential, between two securities, a transaction referred to as
a "yield
curve" option, for hedging and non-hedging (an effort to increase
current
income) purposes. In contrast to other types of options, a yield
curve option is
based on the difference between the yields of designated
securities rather than
the actual prices of the individual securities, and is settled
through cash
payments. Accordingly, a yield curve option is profitable to the
holder if this
differential widens (in the case of a call) or narrows (in the
case of a put),
regardless of whether the yields of the underlying securities
increase or
decrease. Yield curve options written by the Fund will be covered
as described
in the Statement of Additional Information. The trading of yield
curve options
is subject to all the risks associated with trading other types of
options, as
discussed below under "Risk Factors" and in the Statement of
Additional
Information. In addition, such options present risks of loss even
if the yield
on one of the underlying securities remains constant if the spread
moves in a
direction or to an extent which was not anticipated.
OPTIONS ON STOCK INDICES: The Fund may write (sell) covered call
and put
options and purchase call and put options on stock indices. The
Fund may write
options on stock indices for the purpose of increasing its gross
income and to
protect its portfolio against declines in the value of securities
it owns or
increases in the value of securities to be acquired. When the Fund
writes an
option on a stock index, and the value of the index moves
adversely to the
holder's position, the option will not be exercised, and the Fund
will either
close out the option at a profit or allow it to expire
unexercised. The Fund
will thereby retain the amount of the premium, which will increase
its gross
income and offset part of the reduced value of portfolio
securities or the
increased cost of securities to be acquired. Such transactions,
however, will
constitute only partial hedges against adverse price fluctuations,
since any
such fluctuations will be offset only to the extent of the premium
received by
the Fund for the writing of the option. In addition, if the value
of an
underlying index moves adversely to the Fund's option position,
the option may
be exercised, and the Fund will experience a loss which may only
be partially
offset by the amount of the premium received.
The Fund may also purchase put or call options on stock indices in
order to
hedge its investments against a decline in value or to attempt to
reduce the
risk of missing a market or industry segment advance. The Fund's
possible loss
in either case will be limited to the premium paid for the option,
plus related
transaction costs.
OPTIONS ON FOREIGN CURRENCIES: The Fund may purchase and write
options on
foreign currencies ("Options on Foreign Currencies") for the
purpose of
protecting against declines in the dollar value of portfolio
securities and
against increases in the dollar cost of securities to be acquired.
As in the
case of other types of options, however, the writing of an Option
on Foreign
Currency will constitute only a partial hedge, up to the amount of
the premium
received, and the Fund may be required to purchase or sell foreign
currencies at
disadvantageous exchange rates, thereby incurring losses. The
purchase of an
Option on Foreign Currency may constitute an effective hedge
against
fluctuations in exchange rates although, in the event of rate
7
<PAGE> 8
movements adverse to the Fund's position, it may forfeit the
entire amount of
the premium paid for the option plus related transaction costs.
The Fund may
also be required or elect to receive delivery of the foreign
currencies
underlying Options on Foreign Currencies into which it has
entered. Under
certain circumstances, such as where the Adviser believes that the
applicable
exchange rate is unfavorable at the time the currencies are
received or the
Adviser anticipates, for any other reason, that the exchange rate
will improve,
the Fund may hold such currencies for an indefinite period of
time. See the
Statement of Additional Information for information on the risks
associated with
holding foreign currency.
FUTURES CONTRACTS: The Fund may enter into stock index and
foreign currency
futures contracts (collectively "Futures Contracts"). Such
transactions will be
entered into for hedging purposes, in order to protect the Fund's
current or
intended investments from the effects of changes in exchange rates
or declines
in the stock market, as well as for non-hedging purposes, to the
extent
permitted by applicable law. The Fund will incur brokerage fees
when it
purchases and sells Futures Contracts, and will be required to
maintain margin
deposits. In addition, Futures Contracts entail risks. Although
the Adviser
believes that use of such contracts will benefit the Fund, if its
investment
judgment about the general direction of exchange rates or the
stock market is
incorrect, the Fund's overall performance may be poorer than if it
had not
entered into any such contract and the Fund may realize a loss.
The Fund will
not enter into any Futures Contract if immediately thereafter the
value of
securities and other underlying obligations, all such Futures
Contracts would
exceed 50% of the value of its total assets.
OPTIONS ON FUTURES CONTRACTS: The Fund may purchase and write
options on
Futures Contracts ("Options on Futures Contracts") in order to
protect against
declines in the values of portfolio securities or against
increases in the cost
of securities to be acquired. Purchases of Options on Futures
Contracts may
present less risk in hedging the Fund's portfolio than the
purchase or sale of
the underlying Futures Contracts since the potential loss is
limited to the
amount of the premium plus related transaction costs, although it
may be
necessary to exercise the option to realize any profit, which
results in the
establishment of a futures position. The writing of Options on
Futures
Contracts, however, does not present less risk than the trading of
Futures
Contracts and will constitute only a partial hedge, up to the
amount of the
premium received. In addition, if an option is exercised, the Fund
may suffer a
loss on the transaction. The Fund may also purchase and write
Options on Futures
Contracts for non-hedging purposes, to the extent permitted by
applicable law.
FORWARD CONTRACTS: The Fund may enter into forward foreign
currency exchange
contracts for the purchase or sale of a fixed quantity of a
foreign currency at
a future date ("Forward Contracts"). The Fund may enter into
Forward Contracts
for hedging purposes as well as for non-hedging purposes (i.e.,
speculative
purposes). By entering into transactions in Forward Contracts for
hedging
purposes, the Fund may be required to forego the benefits of
advantageous
changes in exchange rates and, in the case of Forward Contracts
entered into for
non-hedging purposes, the Fund may sustain losses which will
reduce its gross
income. Such transactions, therefore, are considered speculative.
Forward
Contracts are traded over-the-counter and not on organized
commodities or
securities exchanges. As a result, Forward Contracts operate in a
manner
distinct from exchange-traded instruments, and their use involves
certain risks
beyond those associated with transactions in Futures Contracts or
options traded
on exchanges. The Fund may be required or elect to receive
delivery of the
foreign currencies underlying Forward Contracts into which it has
entered. Under
certain circumstances, such as where the Adviser believes that the
applicable
exchange rate is unfavorable at the time the currencies are
received or the
Adviser anticipates, for any other reason, that the exchange rate
will improve,
the Fund may hold such currencies for an indefinite period of
time. The Fund may
also enter into a Forward Contract on one currency to hedge
against risk of loss
arising from fluctuations in the value of a second currency
(referred to as a
"cross hedge") if, in the judgment of the Adviser, a reasonable
degree of
correlation can be expected between movements in the values of the
two
currencies. The Fund has established procedures consistent with
statements of
the Securities and Exchange Commission (the "SEC") and its staff
regarding the
use of Forward Contracts by registered investment companies, which
require use
of segregated assets or "cover" in connection with the purchase
and sale of such
contracts. See the Statement of Additional Information for
information on the
risks associated with holding foreign currency.
RISKS OF OPTIONS AND FUTURES: Although the Fund will enter into
Futures
Contracts, Options on Futures Contracts, Forward Contracts,
Options on Foreign
Currencies and other option transactions in part for hedging
purposes, such
transactions
8
<PAGE> 9
nevertheless involve risks. For example, a lack of correlation
between the index
or instrument underlying an option or Futures Contract and the
assets being
hedged, or unexpected adverse price movements, could render the
Fund's hedging
strategy unsuccessful and could result in losses. The Fund also
may enter into
transactions in such investments for other than hedging purposes,
to the extent
permitted by applicable law, which involves greater risk and may
result in
losses. In addition, there can be no assurance that a liquid
secondary market
will exist for any contract purchased or sold, and the Fund may be
required to
maintain a position until exercise or expiration, which could
result in losses.
The Fund may also be required or may elect to receive delivery of
the foreign
currencies underlying Forward Contracts, which may involve certain
risks.
Further, Forward Contracts and Options on Foreign Currencies
entail particular
risks related to conditions affecting the underlying currency.
Over-the-counter
transactions in options on securities, Options on Foreign
Currencies and Forward
Contracts also involve risks arising from the lack of an organized
exchange
trading environment. Transactions in Futures Contracts, Options on
Futures
Contracts, Forward Contracts Options on Foreign Currencies and
other options are
subject to other risks as well.
See the Statement of Additional Information which includes a
discussion of the
risks related to transactions in options, Futures Contracts,
Options on Futures
Contracts, Options on Foreign Currencies and Forward Contracts.
PORTFOLIO TRADING: While it is not generally the Fund's policy to
invest or
trade for short-term profits, the Fund may dispose of a portfolio
security
whenever the Adviser is of the opinion that that security no
longer has an
appropriate appreciation potential or when another security
appears to offer
relatively greater appreciation potential. Portfolio changes are
made without
regard to the length of time a security has been held, or whether
a sale would
result in a profit or loss, subject to tax restrictions for
qualification as a
regulated investment company. Therefore, the rate of portfolio
turnover is not a
limiting factor when a change in the portfolio is otherwise
appropriate.
The primary consideration in placing portfolio security
transactions with
broker-dealers for execution is to obtain, and maintain the
availability of,
execution at the most favorable prices and in the most effective
manner
possible. Consistent with the foregoing primary consideration, the
Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
(the "NASD")
and such other policies as the Trustees may determine, the Adviser
may consider
sales of shares of the Fund and of the other investment clients of
MFD, as a
factor in the selection of broker-dealers to execute the Fund's
portfolio
transactions. From time to time, the Adviser may direct certain
portfolio
transactions to broker-dealer firms which, in turn, have agreed to
pay a portion
of the Fund's operating expenses (e.g., fees charged by the
custodian of the
Fund's assets). For a further discussion of portfolio
transactions, see
"Portfolio Transactions and Brokerage Commissions" in the
Statement of
Additional Information.
------------------------
The policies described above are not fundamental except for the
one policy
specifically noted as fundamental, and may be changed without
shareholder
approval. The Statement of Additional Information includes a
discussion of other
investment policies and a listing of specific investment
restrictions which
govern the Fund's investment policies. The specific investment
restrictions
listed in the Statement of Additional Information may not be
changed without
shareholder approval.
The Fund's investment limitations, policies and rating standards
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.
5. MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Adviser manages the Fund pursuant to an
Investment
Advisory Agreement dated July 19, 1985 (the "Advisory Agreement").
The Adviser
provides the Fund with overall investment advisory and
administrative services,
as well as general office facilities. George F. Bennett, Jr., a
Senior Vice
President of the Adviser, has been the Fund's portfolio manager
since July of
1993. Mr. Bennett has been employed by the Adviser since 1969.
Subject to such
policies as the Trustees may determine, the Adviser makes
investment decisions
for the Fund. For these services and facilities, the Adviser
receives a
management fee, computed and paid monthly, in an amount equal to
0.5% of the
first $200 million of the Fund's average daily net assets, 0.4% of
the next $300
million of the Fund's average daily net assets and 0.2% of its
average daily
assets in excess of $500 million, in each case on an annualized
basis for the
Fund's current fiscal year. For the fiscal year ended November 30,
1994,
9
<PAGE> 10
MFS received management fees under the Advisory Agreement of
$3,277,285,
equivalent on an annualized basis to 0.31% of the Fund's average
daily net
assets.
MFS also serves as investment adviser to each of the other funds
in the MFS
Family of Funds (the "MFS Funds"), and to MFS(R) Municipal Income
Trust, MFS
Multimarket Income Trust, MFS Government Markets Income Trust, MFS
Intermediate
Income Trust, MFS Charter Income Trust, MFS Special Value Trust,
MFS Union
Standard Trust, MFS Institutional Trust, MFS Variable Insurance
Trust, Sun
Growth Variable Annuity Fund, Inc., MFS/Sun Life Series Trust and
seven variable
accounts, each of which is a registered investment company
established by Sun
Life Assurance Company of Canada (U.S.) ("Sun Life of Canada
(U.S.)") in
connection with the sale of Compass-2 and Compass-3 combination
fixed/variable
annuity contracts. MFS and its wholly owned subsidiary, MFS Asset
Management,
Inc., provide investment advice to substantial private clients.
MFS is America's oldest mutual fund organization. MFS and its
predecessor
organizations have a history of money management dating from 1924
and the
founding of the first mutual fund in the United States,
Massachusetts Investors
Trust. Net assets under the management of MFS were approximately
$34.5 billion
on behalf of over 1.6 million investor accounts as of February 28,
1995. MFS is
a wholly owned subsidiary of Sun Life of Canada (U.S.), which in
turn is a
wholly owned subsidiary of Sun Life Assurance Company of Canada
("Sun Life").
The Directors of MFS are A. Keith Brodkin, Jeffrey L. Shames,
Arnold D. Scott,
John R. Gardner and John D. McNeil. Mr. Brodkin is the Chairman of
MFS, Mr.
Shames is the President of MFS and Mr. Scott is the Secretary and
a Senior
Executive Vice President of MFS; Messrs. McNeil and Gardner are
the Chairman and
President, respectively, of Sun Life. Sun Life, a mutual life
insurance company,
is one of the largest international life insurance companies and
has been
operating in the United States since 1895, establishing a
headquarters office
here in 1973. The executive officers of MFS report to the Chairman
of Sun Life.
A. Keith Brodkin, the Chairman and a Director of MFS, is the
Chairman, President
and a Trustee of the Fund. W. Thomas London, Stephen E. Cavan,
James R.
Bordewick, Jr. and James O. Yost, all of whom are officers of MFS,
are officers
of the Fund.
DISTRIBUTOR -- MFD, a wholly owned subsidiary of MFS, is the
distributor of
shares of the Fund and also serves as distributor for each of the
other MFS
Funds.
SHAREHOLDER SERVICING AGENT -- MFS Service Center, Inc. (the
"Shareholder
Servicing Agent"), a wholly owned subsidiary of MFS, performs
transfer agency,
certain dividend disbursing agency and other services for the
Fund.
6. INFORMATION CONCERNING SHARES OF THE FUND
PURCHASES
Shares of the Fund may be purchased at the public offering price
through any
securities dealer, certain banks and other financial institutions
having selling
agreements with MFD. Non-securities dealer financial institutions
will receive
transaction fees that are the same as commission fees to dealers.
Securities
dealers and other financial institutions may also charge their
customers fees
relating to investments in the Fund.
10
<PAGE> 11
The Fund offers two classes of shares which bear sales charges and
distribution
fees in different forms and amounts:
CLASS A SHARES: Class A shares are offered at net asset value
plus an initial
sales charge (or CDSC in the case of certain purchases of $1
million or more) as
follows:
- ------------------------------------------------------------------
- --------------
<TABLE>
<CAPTION>
SALES CHARGE* AS
PERCENTAGE OF
- --------------------------------- DEALER ALLOWANCE
NET AMOUNT AS A PERCENTAGE
AMOUNT OF PURCHASE
OFFERING PRICE INVESTED OF OFFERING PRICE
<S>
<C> <C> <C>
Less than $50,000................................................
5.75% 6.10% 5.00%
$50,000 but less than $100,000...................................
4.75 4.99 4.00
$100,000 but less than $250,000..................................
4.00 4.17 3.20
$250,000 but less than $500,000..................................
2.95 3.04 2.25
$500,000 but less than $1,000,000................................
2.20 2.25 1.70
$1,000,000 or more...............................................
None** None** See Below**
</TABLE>
- ------------------------------------------------------------------
- --------------
* Because of rounding in the calculation of offering price,
actual sales
charges may be more or less than those calculated using the
percentages
above.
** A CDSC may apply in certain instances. MFD will pay a
commission on purchases
of $1 million or more.
No sales charge is payable at the time of purchase of Class A
shares on
investments of $1 million or more. However, a CDSC may be imposed
on such
investments in the event of a share redemption within 12 months
following the
share purchase, at the rate of 1% on the lesser of the value of
the shares
redeemed (exclusive of reinvested dividends and capital gain
distributions) or
the total cost of such shares.
In determining whether a CDSC on such Class A shares is payable,
and, if so, the
amount of the charge, it is assumed that shares not subject to the
CDSC are the
first redeemed followed by other shares held for the longest
period of time. All
investments made during a calendar month, regardless of when
during the month
the investment occurred, will age one month on the last day of the
month and
each subsequent month. Except as noted below, the CDSC on Class A
shares will be
waived in the case of: (i) exchanges (except that if the shares
acquired by
exchange were then redeemed within 12 months of the initial
purchase (other than
in connection with subsequent exchanges to other MFS Funds), the
charge would
not be waived); (ii) distributions to participants from a
retirement plan
qualified under section 401(a) of the Internal Revenue Code of
1986, as amended
(the "Code") (a "Retirement Plan"), due to: (a) a loan from the
plan (repayments
of loans, however, will constitute new sales for purposes of
assessing the
CDSC); (b) "financial hardship" of the participant in the plan, as
that term is
defined in Treasury Regulation Section 1.401(k)-1(d)(2), as
amended from time to
time; or (c) the death of a participant in such a plan; (iii)
distributions from
a 403(b) plan or an Individual Retirement Account ("IRA"), due to
death,
disability or attainment of age 59 1/2; (iv) tax-free returns of
excess
contributions to an IRA; (v) distributions by other employee
benefit plans to
pay benefits; and (vi) certain involuntary redemptions and
redemptions in
connection with certain automatic withdrawals from a qualified
Retirement Plan.
The CDSC on Class A shares will not be waived, however, if the
Retirement Plan
withdraws from the Fund except if the Retirement Plan has invested
its assets in
Class A shares of one or more of the MFS Funds for more than 10
years from the
later to occur of (i) January 1, 1993 or (ii) the date such
Retirement Plan
first invests its assets in Class A shares of one or more of the
MFS Funds, the
CDSC on Class A shares will be waived in the case of a redemption
of all of the
Retirement Plan's shares (including shares of any other class) in
all MFS Funds
(i.e., all the assets of the Retirement Plan invested in the MFS
Funds are
withdrawn), unless, immediately prior to the redemption, the
aggregate amount
invested by the Retirement Plan in Class A shares of the MFS Funds
(excluding
the reinvestment of distributions) during the prior four-year
period equals 50%
or more of the total value of the Retirement Plan's assets in the
MFS Funds, in
which case the CDSC will not be waived. The CDSC on Class A shares
will be
waived upon redemption by a Retirement Plan where the redemption
proceeds are
used to pay expenses of the Retirement Plan or certain expenses of
participants
under the Retirement Plan (e.g., participant account fees),
provided that the
Retirement Plan's sponsor subscribes to the MFS Fundamental 401(k)
Plan SM or
another similar recordkeeping system made available by the
Shareholder Servicing
Agent. The CDSC on Class A shares will be waived upon the transfer
of
registration
11
<PAGE> 12
from shares held by a Retirement Plan through a single account
maintained by the
Shareholder Servicing Agent to multiple Class A share accounts
maintained by the
Shareholder Servicing Agent on behalf of individual participants
in the
Retirement Plan, provided that the Retirement Plan's sponsor
subscribes to the
MFS Fundamental 401(k) Plan SM or another similar recordkeeping
system made
available by the Shareholder Servicing Agent. Any applicable CDSC
will be
deferred upon an exchange of Class A shares of the Fund for units
of
participation of the MFS Fixed Fund (a bank collective investment
fund) (the
"Units"), and the CDSC will be deducted from the redemption
proceeds when such
Units are subsequently redeemed (assuming the CDSC is then
payable). No CDSC
will be assessed upon an exchange of Units for Class A shares of
the Fund. For
purposes of calculating the CDSC payable upon redemption of Class
A shares of
the Fund or Units acquired pursuant to one or more exchanges, the
period during
which the Units are held will be aggregated with the period during
which the
Class A shares are held. MFD shall receive all CDSCs which it
intends to apply
for the benefit of the Fund.
MFD allows discounts to dealers (which are alike for all dealers)
from the
applicable public offering price, as shown in the above table. In
the case of
the maximum sales charge, the dealer retains 5% and MFD retains
approximately
3/4 of 1% of the public offering price. The sales charge may vary
depending on
the number of shares of the Fund as well as certain MFS Funds and
other funds
owned or being purchased, the existence of an agreement to
purchase additional
shares during a 13-month period (or 36-month period for purchases
of $1 million
or more) or other special purchase programs. A description of the
Right of
Accumulation, Letter of Intent and Group Purchases privileges by
which the sales
charge may also be reduced is set forth in the Statement of
Additional
Information. In addition, MFD pays commissions to dealers who
initiate and are
responsible for purchases of $1 million or more as follows: 1.00%
on sales up to
$5 million; plus 0.25% on the amount in excess of $5 million.
Purchases of $1
million or more for each shareholder account will be aggregated
over a 12-month
period (commencing from the date of the first such purchase) for
purposes of
determining the level of commissions to be paid during that period
with respect
to such account.
Class A shares of the Fund may also be sold at their net asset
value to the
officers of the Fund, to any of the subsidiary companies of Sun
Life, to
eligible Directors, officers, employees (including retired
employees) and agents
of MFS, Sun Life or any of their subsidiary companies, to any
fund, pension,
profit-sharing or any other benefit plan for such persons, to any
trustees and
retired trustees of any investment company for which MFD serves as
distributor
or principal underwriter, and to certain family members of such
individuals and
their spouses, provided such shares will not be resold except to
the Fund. Class
A shares of the Fund may be sold at net asset value to any
employee, partner,
officer or trustee of any sub-adviser to any MFS Fund and to
certain family
members of such individuals and their spouses, or to any trust,
pension,
profit-sharing or other retirement plan for the sole benefit of
such employee or
representative, provided such shares will not be resold except to
the Fund.
Class A shares of the Fund may also be sold at their net asset
value to any
employee or registered representative of any dealer or other
financial
institution which has a sales agreement with MFD or its
affiliates, to certain
family members of such employees or representatives or other
financial
institution, and their spouses, or to any trust, pension, profit-
sharing or
other retirement plan for the sole benefit of such employee or
representative,
as well as to clients of the MFS Asset Management, Inc.
Class A shares may be sold at net asset value, subject to
appropriate
documentation, through a dealer where the amount invested
represents redemption
proceeds from a registered open-end management investment company
not
distributed or managed by MFD or its affiliates if: (i) the
redeemed shares were
subject to an initial sales charge or a deferred sales charge
(whether or not
actually imposed); (ii) such redemption has occurred no more than
90 days prior
to the purchase of Class A shares of the Fund; and (iii) the Fund,
MFD or its
affiliates have not agreed with such company or its affiliates,
formally or
informally, to sell Class A shares at net asset value or provide
any other
incentive with respect to such redmeption and sale. Class A shares
of the Fund
may also be sold at net asset value where the amount invested
represents
redemption proceeds from the MFS Fixed Fund. In addition, Class A
shares of the
Fund may be sold at net asset value in connection with the
acquisition or
liquidation of the assets of other investment companies or
personal holding
companies. Insurance company separate accounts may purchase Class
A shares of
the Fund at their net asset value. Class A shares of the Fund may
be purchased
at net asset value by retirement plans whose third party
administrators have
entered into an administrative services agreement with MFD or one
or more of its
affiliates to perform certain administrative services, subject to
certain
operational requirements specified from time to time by MFD or one
or more of
12
<PAGE> 13
its affiliates. Class A shares of the Fund may be purchased at net
asset value
through certain broker-dealers and other financial institutions
which have
entered into an agreement with MFD which includes a requirement
that such shares
be sold for the benefit of clients participating in a "wrap
account" or a
similar program under which such clients pay a fee to such broker-
dealer or
other financial institution.
Class A shares of the Fund may be purchased at net asset value by
certain
retirement plans subject to the Employee Retirement Income
Security Act of 1974,
as amended, subject to the following:
(i) The sponsoring organization must demonstrate to the
satisfaction of MFD
that either (a) the employer has at least 25 employees or (b)
the aggregate
purchases by the retirement plan of Class A shares of the MFS
Funds will be
in an amount of at least $250,000 within a reasonable period
of time, as
determined by MFD in its sole discretion; and
(ii) a CDSC of 1% will be imposed on such purchases in the
event of certain
redemption transactions within 12 months following such
purchases.
Dealers who initiate and are responsible for purchases of Class A
shares of the
Fund in this manner will be paid a commission by MFD, as follows:
1.00% on sales
up to $5 million, plus 0.25% on the amount in excess of $5
million; provided,
however, that MFD may pay a commission, on sales in excess of $5
million to
certain retirement plans, of 1.00% to certain dealers which, at
MFD's
invitation, enter into an agreement with MFD in which the dealer
agrees to
return any commission paid to it on the sale (or on a pro rata
portion thereof)
if the shareholder redeems its shares within a period of time
after purchase as
specified by MFD. Purchases of $1 million or more for each
shareholder account
will be aggregated over a 12-month period (commencing from the
date of the first
such purchase) for purposes of determining the level of
commissions to be paid
during that period with respect to such account.
Class A shares of the Fund may be purchased at net asset value by
retirement
plans qualified under section 401(k) of the Code through certain
broker-dealers
and other financial institutions which have entered into an
agreement with MFD
which includes certain minimum size qualifications for such
retirement plans and
provides that the broker-dealer or other financial institution
will perform
certain administrative services with respect to the plan's
account. Class A
shares of the Fund may be sold at net asset value through the
automatic
reinvestment of Class A and Class B periodic distributions which
constitute
required withdrawals from qualified retirement plans. Furthermore,
Class A
shares of the Fund may be sold at net asset value through the
automatic
reinvestment of distributions of dividends and capital gains of
Class A shares
of other MFS Funds pursuant to the Distribution Investment Program
(see
"Shareholder Services" in the Statement of Additional
Information).
CLASS B SHARES: Class B shares are offered at net asset value
without an
initial sales charge but subject to a CDSC as follows:
<TABLE>
<CAPTION>
YEAR OF REDEMPTION
CONTINGENT DEFERRED
AFTER PURCHASE
SALES CHARGE
---------------------------------------------------
- -------------------
<S>
<C>
First..............................................
4 %
Second.............................................
4 %
Third..............................................
3 %
Fourth.............................................
3 %
Fifth..............................................
2 %
Sixth..............................................
1 %
Seventh and following..............................
0 %
</TABLE>
For Class B shares purchased prior to January 1, 1993, the Fund
imposes a CDSC
as a percentage of redemption proceeds as follows:
<TABLE>
<CAPTION>
YEAR OF REDEMPTION
CONTINGENT DEFERRED
AFTER PURCHASE
SALES CHARGE
---------------------------------------------------
- -------------------
<S>
<C>
First..............................................
6 %
Second.............................................
5 %
Third..............................................
4 %
Fourth.............................................
3 %
Fifth..............................................
2 %
Sixth..............................................
1 %
Seventh and following..............................
0 %
</TABLE>
13
<PAGE> 14
No CDSC is paid upon an exchange of shares. For purposes of
calculating the CDSC
upon redemption of shares acquired in an exchange, the purchase of
shares
acquired in one or more exchanges is deemed to have occurred at
the time of the
original purchase of the exchanged shares. See "Redemptions and
Repurchases -- Contingent Deferred Sales Charge" for further
discussion of the
CDSC.
The CDSC on Class B shares will be waived upon the death or
disability (as
defined in section 72(m)(7) of the Code) of any investor, provided
the account
is registered (i) in the case of a deceased individual, solely in
the deceased
individual's name, (ii) in the case of a disabled individual,
solely or jointly
in the disabled individual's name or (iii) in the name of a living
trust for the
benefit of the deceased or disabled individual. The CDSC on Class
B shares will
also be waived in the case of redemptions of shares of the Fund
pursuant to a
systematic withdrawal plan. In addition, the CDSC on Class B
shares will be
waived in the case of distributions from an IRA, SAR-SEP or any
other retirement
plan qualified under sections 401(a) or 403(b) of the Code, due to
death or
disability, or in the case of required minimum distributions from
any such
Retirement Plan due to attainment of age 70 1/2. The CDSC on Class
B shares will
be waived in the case of distributions from a Retirement Plan due
to (i) returns
of excess contribution to the plan, (ii) retirement of a
participant in the
plan, (iii) a loan from the plan (repayments of loans, however,
will constitute
new sales for purposes of assessing the CDSC), (iv) "financial
hardship" of the
participant in the plan, as that term is defined in Treasury
Regulation Section
1.401(k)-1(d)(2), as amended from time to time, and (v)
termination of
employment of the participant in the plan (excluding, however, a
partial or
other termination of the plan). The CDSC on Class B shares will
also be waived
upon redemption by (i) officers of the Fund, (ii) any of the
subsidiary
companies of Sun Life, (iii) eligible Directors, officers,
employees (including
retired employees) and agents of MFS, Sun Life or any of their
subsidiary
companies, (iv) any trust, pension, profit-sharing or any other
benefit plan for
such persons, (v) any trustees and retired trustees of any
investment company
for which MFD serves as distributor or principal underwriter, and
(vi) certain
family members of such individuals and their spouses, provided in
each case that
the shares will not be resold except to the Fund. The CDSC on
Class B shares
will also be waived in the case of redemptions by any employee or
registered
representative of any dealer or other financial institution which
has a sales
agreement with MFD, by certain family members of such employee or
representative
and their spouses, by any trust, pension, profit-sharing or other
retirement
plan for the sole benefit of such employee or representative and
by clients of
the MFS Asset Management, Inc. A Retirement Plan that has invested
its assets in
Class B shares of one or more of the MFS Funds for more than 10
years from the
later to occur of (i) January 1, 1993 or (ii) the date the
Retirement Plan first
invests its assets in Class B shares of one or more of the funds
in the MFS
Funds will have the CDSC on Class B shares waived in the case of a
redemption of
all the Retirement Plan's shares (including shares of any other
class) in all
MFS Funds (i.e., all the assets of the Retirement Plan invested in
the MFS Funds
are withdrawn), except that if, immediately prior to the
redemption, the
aggregate amount invested by the Retirement Plan in Class B shares
of the MFS
Funds (excluding the reinvestment of distributions) during the
prior four year
period equals 50% or more of the total value of the Retirement
Plan's assets in
the MFS Funds, then the CDSC will not be waived. The CDSC on Class
B shares will
be waived upon redemption by a Retirement Plan where the
redemption proceeds are
used to pay expenses of the Retirement Plan or certain expenses of
participants
under the Retirement Plan (e.g., participant accounts fees),
provided that the
Retirement Plan's sponsor subscribes to the MFS Fundamental 401(k)
Plansm or
another similar recordkeeping system made available by the
Shareholder Servicing
Agent. The CDSC on Class B shares will be waived upon the transfer
of
registration from shares held by a Retirement Plan through a
single account
maintained by the Shareholder Servicing Agent to multiple Class B
share accounts
provided that the Retirement Plan's sponsor subscribes to the MFS
Fundamental
401(k) Plansm or another similar recordkeeping system made
available by the
Shareholder Servicing Agent. The CDSC on Class B shares may also
be waived in
connection with the acquisition or liquidation of the assets of
other investment
companies or personal holding companies.
CONVERSION OF CLASS B SHARES: Class B shares of the Fund will
convert to Class
A shares of the Fund approximately eight years after the purchase
date. Shares
purchased through the reinvestment of distributions paid in
respect of Class B
shares will be treated as Class B shares for purposes of the
payment of the
distribution and service fees under the Distribution Plan
applicable to Class B
shares. However, for purposes of conversion to Class A shares, all
shares in a
shareholder's account that were purchased through the reinvestment
of dividends
and distributions paid in respect of Class B shares (and which
have not
14
<PAGE> 15
converted to Class A shares as provided in the following sentence)
will be held
in a separate sub-account. Each time any Class B shares in the
shareholder's
account (other than those in the sub-account) convert to Class A
shares, a
portion of the Class B shares then in the sub-account will also
convert to Class
A shares. The portion will be determined by the ratio that the
shareholder's
Class B shares not acquired through reinvestment of dividends and
distributions
that are converting to Class A shares bear to the shareholder's
total Class B
shares not acquired through reinvestment. The conversion of Class
B shares to
Class A shares is subject to the continuing availability of a
ruling from the
Internal Revenue Service or an opinion of counsel that such
conversions will not
constitute a taxable event for federal tax purposes. There can be
no assurance
that such a ruling or opinion will be available, and the
conversion of Class B
shares to Class A shares will not occur if such ruling or opinion
is not
available. In such event, Class B shares would continue to be
subject to higher
expenses than Class A shares for an indefinite period.
GENERAL: Except as described below, the minimum initial
investment is $1,000
per account and the minimum additional investment is $50 per
account. Accounts
being established for monthly automatic investments and under
payroll savings
programs and tax-deferred retirement programs (other than IRAs)
involving the
submission of investments by means of group remittal statements
are subject to a
$50 minimum on initial and additional investments per account. The
minimum
initial investment for IRAs is $250 per account and the minimum
additional
investment is $50 per account. Accounts being established for
participation in
the Automatic Exchange Plan are subject to a $50 minimum on
initial and
additional investments per account. There are also other limited
exceptions to
these minimums for certain tax-deferred retirement programs. Any
minimums may be
changed at any time at the discretion of MFD. The Fund reserves
the right to
cease offering its shares at any time.
For shareholders who elect to participate in certain investment
programs (e.g.,
the Automatic Investment Plan) or other shareholder services, MFD
or its
affiliates may either (i) give a gift of nominal value, such as a
hand-held
calculator, or (ii) make a nominal charitable contribution on
their behalf.
A shareholder whose shares are held in the name of, or controlled
by, an
investment dealer might not receive many of the privileges and
services from the
Fund (such as Right of Accumulation, Letter of Intent and certain
record-keeping
services) that the Fund ordinarily provides.
Purchases and exchanges should be made for investment purposes
only. The Fund
and MFD each reserve the right to reject any specific purchase
order or to
restrict purchases by a particular purchaser (or group of related
purchasers).
The Fund or MFD may reject or restrict any purchases by a
particular purchaser
or group, for example, when such purchase is contrary to the best
interests of
the Fund's other shareholders or otherwise would disrupt the
management of the
Fund.
MFD may enter into an agreement with shareholders who intend to
make exchanges
among certain classes of certain MFS Funds (as determined by MFD)
which follow a
timing pattern, and with individuals or entities acting on such
shareholders'
behalf (collectively, "market timers"), setting forth the terms,
procedures and
restrictions with respect to such exchanges. In the absence of
such an
agreement, it is the policy of the Fund and MFD to reject or
restrict purchases
by market timers if (i) more than two exchange purchases are
effected in a timed
account in the same calendar quarter or (ii) a purchase would
result in shares
being held in timed accounts by market timers representing more
than (x) one
percent of the Fund's net assets or (y) specified dollar amounts
in the case of
certain MFS Funds which may include the Fund and which may change
from time to
time. The Fund and MFD each reserve the right to request market
timers to redeem
their shares at net asset value, less any applicable CDSC, if
either of these
restrictions is violated.
Securities dealers and other financial institutions may receive
different
compensation with respect to sales of Class A and Class B shares.
In some
instances, promotional incentives to dealers may be offered only
to certain
dealers who have sold or may sell significant amounts of Fund
shares. For time
to time, MFD may pay dealers 100% of the applicable sales charge
on sales of
Class A shares of certain specified MFS Funds sold by such dealer
during a
specified sales period. In addition, MFD or its affiliates may,
from time to
time, pay dealers an additional commission equal to 0.50% of the
net asset value
of all of the Class B shares of certain specified MFS Funds sold
by such dealer
during a specified sales period. In addition, from time to time
MFD, at its
expense, may provide additional commissions, compensation or
promotional
incentives ("concessions") to dealers which sell
15
<PAGE> 16
shares of the Fund. The staff of the SEC has indicated that
dealers who receive
more than 90% of the sales charge may be considered underwriters.
Such
concessions provided by MFD may include financial assistance to
dealers in
connection with preapproved conferences or seminars, sales or
training programs
for invited registered representatives, payment for travel
expenses, including
lodging, incurred by registered representatives and members of
their families or
other invited guests to various locations for such seminars or
training
programs, seminars for the public, advertising and sales campaigns
regarding one
or more MFS Funds, and/or other dealer-sponsored events. In some
instances,
these concessions may be offered to dealers or only to certain
dealers who have
sold or may sell, during specified periods, certain minimum
amounts of shares of
the Fund. Other concessions may be offered to the extent not
prohibited by the
laws of any state or any self-regulatory agency, such as the NASD.
The Glass-Steagall Act prohibits national banks from engaging in
the business of
underwriting, selling or distributing securities. Although the
scope of the
prohibition has not been clearly defined, MFD believes that such
Act should not
preclude banks from entering into agency agreements with MFD (as
described
above). If, however, a bank were prohibited from so acting, the
Trustees would
consider what actions if any, would be necessary to continue to
provide
efficient and effective shareholder services. It is not expected
that
shareholders would suffer any adverse financial consequence as a
result of these
occurrences. In addition, state securities laws on this issue may
differ from
the interpretation of federal law expressed herein and banks and
financial
institutions may be required to register as broker-dealers
pursuant to state
law.
EXCHANGES
Subject to the requirements set forth below, some or all of the
shares in an
account with the Fund for which payment has been received by the
Fund (i.e., an
established account) may be exchanged at net asset value for
shares of the same
class of any of the other MFS Funds (if available for sale).
Shares of one class
may not be exchanged for shares of any other class. Exchanges will
be made only
after instructions in writing or by telephone (an "Exchange
Request") are
received for an established account by the Shareholder Servicing
Agent in proper
form (i.e., if in writing -- signed by the record owner(s) exactly
as the shares
are registered; if by telephone -- proper account identification
is given by the
dealer or shareholder of record) and each exchange must involve
either shares
having an aggregate value of at least $1,000 ($50 in the case of
retirement plan
participants whose sponsoring organizations subscribe to the MFS
FUNDamental
401(k) Plan or another similar 401(k) recordkeeping system made
available by the
Shareholder Servicing Agent) or all the shares in the account. If
an Exchange
Request is received by the Shareholder Servicing Agent on any
business day prior
to the close of regular trading on the Exchange, the exchange
usually will occur
on that day if all the requirements set forth above have been
complied with at
that time. No more than five exchanges may be made in any one
Exchange Request
by telephone. Additional information concerning this exchange
privilege and
prospectuses for any of the other MFS Funds may be obtained from
investment
dealers or the Shareholder Servicing Agent. A shareholder should
read the
prospectus of the other MFS Fund and consider the differences in
objectives and
policies before making any exchange. For federal and (generally)
state income
tax purposes, an exchange is treated as a sale of the shares
exchanged and,
therefore, an exchange could result in a gain or loss to the
shareholder making
the exchange. Exchanges by telephone are automatically available
to most
non-retirement plan accounts and certain retirement plan accounts.
For further
information regarding exchanges by telephone see "Redemptions By
Telephone." The
exchange privilege (or any aspect of it) may be changed or
discontinued and is
subject to certain limitations, including certain restrictions on
purchases by
market timers. Special procedures, privileges and restrictions
with respect to
exchanges may apply to market timers who enter into an agreement
with MFD, as
set forth in such agreement (see "Purchases").
REDEMPTIONS AND REPURCHASES
A shareholder may withdraw all or any portion of the amount in his
account on
any date on which the Fund is open for business by redeeming
shares at their net
asset value or by selling such shares to the Fund through a dealer
(a
repurchase). Since the net asset value of shares of the account
fluctuates,
redemptions or repurchases, which are taxable transactions, are
likely to result
in gains or losses to the shareholder. When a shareholder
withdraws an amount
from his account, the shareholder is deemed to have tendered for
redemption a
sufficient number of full and fractional shares in his account to
cover the
amount withdrawn. The
16
<PAGE> 17
proceeds of a redemption or repurchase will normally be available
within seven
days, except for shares purchased or received in exchange for
shares purchased
by check (including certified checks or cashier's checks); payment
of redemption
proceeds may be delayed for up to 15 days from the purchase date
in an effort to
assure that such check has cleared. Payment of redemption proceeds
may be
delayed for up to seven days from the redemption date if the Fund
determines
that such a delay would be in the best interest of all its
shareholders.
A. REDEMPTION BY MAIL -- Each shareholder has the right to redeem
all or any
portion of the shares in his account by mailing or delivering to
the Shareholder
Servicing Agent (see back cover for address) a stock power with a
written
request for redemption, or letter of instruction, together with
his share
certificates (if any were issued) all in "good order" for
transfer. "Good order"
generally means that the stock power, written request for
redemption, letter of
instruction or certificate must be endorsed by the record owner(s)
exactly as
the shares are registered and the signature(s) must be guaranteed
in the manner
set forth below under the caption "Signature Guarantee." In
addition, in some
cases, "good order" may require the furnishing of additional
documents. The
Shareholder Servicing Agent may make certain de minimis exceptions
to the above
requirements for redemption. Within seven days after receipt of a
redemption
request in "good order" by the Shareholder Servicing Agent, the
Fund will make
payment in cash of the net asset value of the shares next
determined after such
redemption request was received, reduced by the amount of any
applicable CDSC
described above and the amount of any income tax required to be
withheld, except
during any period in which the right of redemption is suspended or
date of
payment is postponed because the Exchange is closed or trading on
such Exchange
is restricted, or, to the extent otherwise permitted by the 1940
Act, if an
emergency exists (see "Tax Status").
B. REDEMPTION BY TELEPHONE -- Each shareholder may redeem an
amount from his
account by telephoning the Shareholder Servicing Agent toll-free
at (800)
225-2606. Shareholders wishing to avail themselves of this
telephone redemption
privilege must so elect on their Account Application, designate
thereon a
commercial bank and account number to receive the proceeds of such
redemption,
and sign the Account Application Form with the signature(s)
guaranteed in the
manner set forth below under the caption "Signature Guarantee."
The proceeds of
such a redemption, reduced by the amount of any applicable CDSC
described above
and the amount of any income tax required to be withheld, are
mailed by check to
the designated account, without charge. As a special service,
investors may
arrange to have proceeds in excess of $1,000 wired in federal
funds to the
designated account. If a telephone redemption request is received
by the
Shareholder Servicing Agent by the close of regular trading on the
Exchange on
any business day, shares will be redeemed at the closing net asset
value of the
Fund on that day. Subject to the conditions described in this
section, proceeds
of a redemption are normally mailed or wired on the next business
day following
the date of receipt of the order for redemption. The Shareholder
Servicing Agent
will not be responsible for any losses resulting from unauthorized
telephone
transactions if it follows reasonable procedures designed to
verify the identity
of the caller. The Shareholder Servicing Agent will request
personal or other
information from the caller, and will normally also record calls.
Shareholders
should verify the accuracy of confirmation statements immediately
after their
receipt.
C. REPURCHASE THROUGH A DEALER -- If a shareholder desires to
sell his shares
at their net asset value through his securities dealer (a
repurchase), the
shareholder can place a repurchase order with his dealer, who may
charge the
shareholder a fee. IF THE DEALER RECEIVES THE SHAREHOLDER'S ORDER
PRIOR TO THE
CLOSE OF REGULAR TRADING ON THE EXCHANGE AND COMMUNICATES IT TO
MFD BEFORE THE
CLOSE OF BUSINESS ON THE SAME DAY THE SHAREHOLDER WILL RECEIVE THE
NET ASSET
VALUE CALCULATED ON THAT DAY.
GENERAL: Shareholders of the Fund who have redeemed their shares
have a
one-time right to reinvest the redemption proceeds at net asset
value (with a
credit for any CDSC paid) in the same class of shares of any of
the MFS Funds
(if shares of such Fund are available for sale) within 90 days of
the redemption
pursuant to the Reinstatement Privilege. If the shares credited
for any CDSC
paid are then redeemed within six years of the initial purchase in
the case of
Class B shares, or within 12 months of the initial purchase for
certain Class A
share purchases, a CDSC will be imposed upon redemption. Such
purchases under
the Reinstatement Privilege are subject to all limitations in the
Statement of
Additional Information regarding this privilege.
Subject to the Fund's compliance with applicable regulations, the
Fund has
reserved the right to pay the redemption or repurchase price of
shares of the
Fund, either totally or partially, by a distribution in kind of
portfolio
securities (instead of cash). The
17
<PAGE> 18
securities so distributed would be valued at the same amount as
that assigned to
them in calculating the net asset value for the shares being sold.
If a
shareholder received a distribution in kind, the shareholder could
incur
brokerage or transaction charges in converting the securities to
cash.
Due to the relatively high cost of maintaining small accounts, the
Fund reserves
the right to redeem shares in any account for their then-current
value (which
will be promptly paid to the shareholder) if at any time the total
investment in
such account drops below $500 because of redemptions, except in
the case of
accounts established for monthly automatic investments, certain
payroll savings
programs, Automatic Exchange Plan accounts and tax-deferred
retirement plans,
for which there is a lower minimum investment requirement (see
"Purchases").
Shareholders will be notified that the value of their account is
less than the
minimum investment requirement and allowed 60 days to make an
additional
investment before the redemption is processed. No CDSC will be
imposed with
respect to such involuntary redemptions.
SIGNATURE GUARANTEE: In order to protect shareholders to the
greatest extent
possible against fraud, the Fund requires in certain instances as
indicated
above that the shareholder's signature be guaranteed. In these
cases the
shareholder's signature must be guaranteed by an eligible bank,
broker, dealer,
credit union, national securities exchange, registered securities
association,
clearing agency or savings association. Signature guarantees shall
be accepted
in accordance with policies established by the Shareholder
Servicing Agent.
CONTINGENT DEFERRED SALES CHARGE -- Investments ("Direct
Purchases") will be
subject to a CDSC for a period of 12 months (in the case of
purchases of $1
million or more of Class A shares) or six years (in the case of
purchases of
Class B shares). Purchases of Class A shares made during a
calendar month,
regardless of when during the month the investment occurred, will
age one month
on the last day of the month and each subsequent month. Class B
shares purchased
on or after January 1, 1993 will be aggregated on a calendar month
basis -- all
transactions made during a calendar month, regardless of when
during the month
they have occurred, will age one year at the close of business on
the last day
of such month in the following calendar year and each subsequent
year. For Class
B shares of the Fund purchased prior to January 1, 1993,
transactions will be
aggregated on a calendar year basis -- all transactions made
during a calendar
year, regardless of when during the year they have occurred, will
age one year
at the close of business on December 31 of that year and each
subsequent year.
At the time of a redemption, the amount by which the value of a
shareholder's
account for a particular class represented by Direct Purchases
exceeds the sum
of the six calendar year aggregations (12 months in the case of
purchases of $1
million or more of Class A shares) of Direct Purchases may be
redeemed without
charge ("Free Amount"). Moreover, no CDSC is ever assessed on
additional shares
acquired through the automatic reinvestment of dividends or
capital gain
distributions ("Reinvested Shares").
Therefore, at the time of redemption of shares of a particular
class, (i) any
Free Amount is not subject to the CDSC, and (ii) the amount of the
redemption
equal to the then-current value of Reinvested Shares is not
subject to the CDSC,
but (iii) any amount of the redemption in excess of the aggregate
of the
then-current value of Reinvested Shares and the Free Amount is
subject to a
CDSC. The CDSC will first be applied against the amount of Direct
Purchases
which will result in any such charge being imposed at the lowest
possible rate.
The CDSC to be imposed upon redemptions will be calculated as set
forth in
"Purchases" above.
The applicability of a CDSC will be unaffected by exchanges or
transfers of
registration, except that, with respect to transfers of
registration to an IRA
rollover account, the CDSC will be waived if the shares being
reregistered would
have been eligible for a CDSC waiver had they been redeemed.
DISTRIBUTION PLANS
The Trustees have adopted separate distribution plans for Class A
and Class B
shares pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder (the
"Rule"), after having concluded that there is a reasonable
likelihood that the
plans would benefit the Fund and its shareholders.
CLASS A DISTRIBUTION PLAN. The Class A Distribution Plan
provides that the
Fund will pay MFD a distribution/service fee aggregating up to
(but not
necessarily all of) 0.35% of the average daily net assets
attributable to Class
A shares annually in order that MFD may pay expenses on behalf of
the Fund
related to the distribution and servicing of Class A shares. The
expenses
18
<PAGE> 19
to be paid by MFD on behalf of the Fund include a service fee to
securities
dealers which enter into a sales agreement with MFD of up to 0.25%
per annum of
the Fund's average daily net assets attributable to Class A shares
that are
owned by investors for whom the securities dealer is the holder or
dealer of
record. This fee is intended to be partial consideration for all
personal
services and/or account maintenance services rendered by the
dealer with respect
to Class A shares. MFD may from time to time reduce the amount of
the service
fee paid for shares sold prior to a certain date. Currently, the
service fee is
reduced to 0.15% for shares sold prior to March 1, 1991. MFD may
also retain a
distribution fee of 0.10% per annum of the Fund's average daily
net assets
attributable to Class A shares as partial consideration for
services performed
and expenses incurred in the performance of MFD's obligations
under its
distribution agreement with the Fund. MFD, however, is currently
waiving this
0.10% distribution fee and will not accept payment of this fee in
the future
unless it first obtains the approval of the Fund's Board of
Trustees. In
addition, to the extent that the aggregate of the foregoing fees
does not exceed
0.35% per annum of the average daily net assets of the Fund
attributable to
Class A shares, the Fund is permitted to pay other distribution-
related
expenses, including commissions to dealers and payments to
wholesalers employed
by MFD for sales at or above a certain dollar level. Fees payable
under the
Class A Distribution Plan are charged to, and therefore reduce,
income allocated
to Class A shares. Service fees may be reduced for a securities
dealer that is
the holder or dealer of record for an investor who owns shares of
the Fund
having an aggregate net asset value at or above a certain dollar
level. Dealers
may from time to time be required to meet certain criteria in
order to receive
service fees. MFD or its affiliates are entitled to retain all
service fees
payable under the Class A Distribution Plan for which there is no
dealer of
record or for which qualification standards have not been met as
partial
consideration for personal services and/or account maintenance
services
performed by MFD or its affiliates for shareholder accounts.
Certain banks and
other financial institutions that have agency agreements with MFD
will receive
service fees that are the same as service fees to dealers.
CLASS B DISTRIBUTION PLAN. The Class B Distribution Plan
provides that the
Fund will pay MFD a daily distribution fee equal on an annual
basis to 0.75% of
the Fund's average daily net assets attributable to Class B shares
and will pay
MFD a service fee of up to 0.25% per annum of the Fund's average
daily net
assets attributable to Class B shares (which MFD will in turn pay
to securities
dealers which enter into a sales agreement with MFD at a rate of
up to 0.25% per
annum of the Fund's average daily net assets attributable to Class
B shares
owned by investors for whom that securities dealer is the holder
or dealer of
record). This service fee is intended to be additional
consideration for all
personal services and/or account maintenance services rendered by
the dealer
with respect to Class B shares. Fees payable under the Class B
Distribution Plan
are charged to, and therefore reduce, income allocated to Class B
shares. The
Class B Distribution Plan also provides that MFD will receive all
CDSCs
attributable to Class B shares (see "Redemptions and Repurchases
of Shares"
above), which do not reduce the distribution fee. MFD will pay
commissions to
dealers of 3.75% of the purchase price of Class B shares purchased
through
dealers. MFD will also advance to dealers the first year service
fee at a rate
equal to 0.25% of the purchase price of such shares and as
compensation
therefor, MFD may retain the service fee paid by the Fund with
respect to such
shares for the first year after purchase. Therefore, the total
amount paid to a
dealer upon the sale of shares is 4.00% of the purchase price of
the shares
(commission rate of 3.75% plus service fee equal to 0.25% of the
purchase
price). Dealers will become eligible for additional service fees
with respect to
such shares commencing in the thirteenth month following purchase.
Dealers may
from time to time be required to meet certain criteria in order to
receive
service fees. MFD or its affiliates shall be entitled to retain
all service fees
payable under the Class B Distribution Plan with respect to
accounts for which
there is no dealer of record or for which qualification standards
have not been
met as partial consideration for personal services and/or account
maintenance
services performed by MFD or its affiliates for shareholder
accounts. The
purpose of the distribution payments of MFD under the Class B
Distribution Plan
is to compensate MFD for its distribution services to the Fund.
Since MFD's
compensation is not directly tied to its expenses, the amount of
compensation
received by MFD during any year may be more or less than its
actual expenses.
For this reason, this type of distribution fee arrangement is
characterized by
the staff of the SEC as being of the "compensation" variety.
However, the Fund
is not liable for any expenses incurred by MFD in excess of the
amount of
compensation it receives. The expenses incurred by MFD, including
commissions to
dealers, are likely to be greater than the distribution fees for
the next
several years, but thereafter such expenses may be less than the
amount of the
distribution fees. Certain banks and other financial institutions
that have
agency
19
<PAGE> 20
agreements with MFD will receive agency transaction and service
fees that are
the same as commissions and service fees to dealers.
DISTRIBUTIONS
The Fund intends to pay substantially all of its net investment
income to its
shareholders as dividends on an annual basis. In determining the
net investment
income available for distributions, the Fund may rely on
projections of its
anticipated net investment income over a longer term, rather than
its actual net
investment income for the period. The Fund may make one or more
distributions
during the calendar year to its shareholders from any long-term
capital gains,
and may also make one or more distributions during the calendar
year to its
shareholders from short-term capital gains. Shareholders may elect
to receive
dividends and capital gain distributions in either cash or
additional shares of
the same class with respect to which a distribution is made. See
"Tax Status"
and "Shareholder Services -- Distribution Options" below.
Distributions paid by
the Fund with respect to Class A shares will generally be greater
than those
paid with respect to Class B shares because expenses attributable
to Class B
shares will generally be higher.
TAX STATUS
In order to minimize the taxes the Fund would otherwise be
required to pay, the
Fund intends to qualify each year as a "regulated investment
company" under
Subchapter M of the Code, and to make distributions to its
shareholders in
accordance with the timing requirements imposed by the Code. It is
expected that
the Fund will not be required to pay entity level federal income
or excise
taxes, although foreign-source income received by the Fund may be
subject to
foreign withholding taxes. Shareholders of the Fund normally will
have to pay
federal income taxes (and any state or local taxes) on the
dividends and capital
gain distributions they receive from the Fund, whether paid in
cash or
additional shares. A portion of the dividends received from the
Fund (but none
of the Fund's capital gain distributions) may qualify for the
dividends-received
deduction for corporations.
A statement setting forth the federal income tax status of all
dividends and
distributions for each calendar year, including the portion
taxable as ordinary
income, the portion taxable as long-term capital gain, the
portion, if any,
representing a return of capital (which is free of current taxes
but results in
a basis reduction), and the amount, if any, of federal income tax
withheld will
be sent to each shareholder promptly after the end of such year.
Fund distributions will reduce the Fund's net asset value per
share.
Shareholders who buy shares shortly before the Fund makes a
distribution may
thus pay the full price for the shares and then effectively
receive a portion of
the purchase price back as a taxable distribution.
The Fund intends to withhold U.S. federal income tax at a rate of
30% on
dividends and certain other payments that are subject to such
withholding and
that are made to persons who are neither citizens nor residents of
the U.S.,
regardless of whether a lower rate may be permitted under an
applicable law or
treaty. The Fund is also required in certain circumstances to
apply backup
withholding of 31% on taxable dividends and redemption proceeds
paid to any
shareholder (including a shareholder who is neither a citizen nor
a resident of
the U.S.) who does not furnish to the Fund certain information and
certifications or who is otherwise subject to backup withholding.
However,
backup withholding will not be applied to payments which have had
30%
withholding taken. Prospective shareholders should read the
Account Application
for information regarding backup withholding of federal income tax
and should
consult their own tax advisers as to the tax consequences of an
investment in
the Fund.
NET ASSET VALUE
The net asset value per share of each class of the Fund is
determined each day
during which the Exchange is open for trading. This determination
is made once
each day as of the close of regular trading on the Exchange by
deducting the
amount of the liabilities attributable to the class from the value
of the assets
attributable to that class and dividing the difference by the
number of shares
of the class outstanding. Values of equity securities in the
Fund's portfolio
are determined on the basis of their market values while values of
other assets
in the Fund's portfolio are determined on the basis of their fair
values, as
described in the Statement of Additional Information. The net
asset value per
share of each class of shares is effective for orders received by
the dealer
prior to its calculation and received by MFD prior to the close of
that business
day.
20
<PAGE> 21
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund has two classes of shares, entitled Class A and Class B
Shares of
Beneficial Interest (without par value). The Fund has reserved the
right to
create and issue additional classes and series of shares, in which
case each
class of shares of a series would participate equally in the
earnings, dividends
and assets attributable to that class of that particular series.
Shareholders
are entitled to one vote for each share held and shares of each
series would be
entitled to vote separately to approve investment advisory
agreements or changes
in investment restrictions, but shares of all series would vote
together in the
election of Trustees and selection of accountants. Additionally,
each class of
shares of a series will vote separately on any material increases
in the fees
under its Distribution Plan or on any other matter that affects
solely that
class of shares, but will otherwise vote together with all other
classes of
shares of the series on all other matters. The Fund does not
intend to hold
annual shareholder meetings. The Fund's Declaration of Trust
provides that a
Trustee may be removed from office in certain instances (see
"Description of
Shares, Voting Rights and Liabilities" in the Statement of
Additional
Information).
Each share of a class of the Fund represents an equal
proportionate interest in
the Fund with each other class share, subject to the liabilities
of the
particular class. Shares have no pre-emptive or conversion rights
(except as set
forth in "Purchases -- Conversion of Class B Shares"). Shares are
fully paid and
non-assessable. Should the Fund be liquidated, shareholders of
each class are
entitled to share pro rata in the net assets attributable to that
class
available for distribution to shareholders. Shares will remain on
deposit with
the Shareholder Servicing Agent and certificates will not be
issued except in
connection with pledges and assignments and in certain other
limited
circumstances.
The Fund is an entity of the type commonly known as a
"Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust may,
under certain
circumstances, be held personally liable as partners for its
obligations.
However, the risk of a shareholder incurring financial loss on
account of
shareholder liability is limited to circumstances in which both
inadequate
insurance existed (e.g., fidelity bonding and omission insurance)
and the Fund
itself was unable to meet its obligations.
PERFORMANCE INFORMATION
From time to time, the Fund will provide total rate of return
quotations for
each class of shares and may also quote fund rankings in the
relevant fund
category from various sources, such as Lipper Analytical Services,
Inc. and
Wiesenberger Investment Companies Service. Total rate of return
quotations will
reflect the average annual percentage change over stated periods
in the value of
an investment in a class of the Fund made at the maximum public
offering price
of the shares of that class with all distributions reinvested and
which, if
quoted for periods of six years or less, will give effect to the
imposition of
the CDSC assessed upon redemptions of the Fund's Class B shares.
Such total rate
of return quotations may be accompanied by quotations which do not
reflect the
reduction in value of the initial investment due to the sales
charge or the
deduction of a CDSC, and which will thus be higher. Total rate of
return
reflects all components of investment return over a stated period
of time. The
Fund's total rate of return quotations are based on historical
performance and
are not intended to indicate future performance. The Fund's
quotations may from
time to time be used in advertisements, shareholder reports or
other
communications to shareholders. For a discussion of the manner in
which the Fund
will calculate its total rate of return, see the Statement of
Additional
Information. For further information about the Fund's performance
for the fiscal
year ended November 30, 1994, please see the Fund's Annual Report.
A copy of the
Annual Report may be obtained without charge by contacting the
Shareholder
Servicing Agent (see back cover for address and phone number). In
addition to
information provided in shareholder reports, the Fund may, in its
discretion,
from time to time, make a list of all or a portion of its holdings
available to
investors upon request.
7. SHAREHOLDER SERVICES
Shareholders with questions concerning the shareholder services
described below
or concerning other aspects of the Fund should contact the
Shareholder Servicing
Agent (see back cover for address and phone number).
ACCOUNT AND CONFIRMATION STATEMENTS -- Each shareholder will
receive
confirmation statements showing the transaction activity in his
account. At the
end of each calendar year, each shareholder will receive
information regarding
the tax status of all reportable dividends and distributions for
that year (see
"Tax Status").
21
<PAGE> 22
DISTRIBUTION OPTIONS -- The following options are available to all
accounts
(except Systematic Withdrawal Plan accounts) and may be changed as
often as
desired by notifying the Shareholder Servicing Agent:
-- Dividends and capital gain distributions reinvested in
additional shares.
This option will be assigned if no other option is
specified;
-- Dividends in cash; capital gain distributions reinvested in
additional
shares;
-- Dividends and capital gain distributions in cash.
Reinvestments (net of any tax withholding) will be made in
additional full and
fractional shares of the same class of shares at the net asset
value in effect
at the close of business on the record date. Dividends and capital
gain
distributions in amounts less than $10 will automatically be
reinvested in
additional shares of the Fund. If a shareholder has elected to
receive dividends
and/or capital gain distributions in cash and the postal or other
delivery
service is unable to deliver checks to the shareholder's address
of record, such
shareholder's distribution option will automatically be converted
to having all
dividends and other distributions reinvested in additional shares.
Any request
to change a distribution option must be received by the
Shareholder Servicing
Agent by the record date for a dividend or distribution in order
to be effective
for that dividend or distribution. No interest will accrue on
amounts
represented by uncashed distribution or redemption checks.
INVESTMENT AND WITHDRAWAL PROGRAMS -- For the convenience of
shareholders, the
Fund makes available the following programs designed to enable
shareholders to
add to their investment in an account with the Fund or withdraw
from it with a
minimum of paper work. The programs involve no extra charge to
shareholders
(other than a sales charge in the case of certain Class A share
purchases) and
may be changed or discontinued at any time by a shareholder or the
Fund.
LETTER OF INTENT: If a shareholder (other than a group
purchaser as
described in the Statement of Additional Information) anticipates
purchasing
$50,000 or more of Class A shares of the Fund alone or in
combination with
shares of any class of other MFS Funds or MFS Fixed Fund within a
13-month
period (or 36-month period for purchases of $1 million or more),
the shareholder
may obtain such shares at the same reduced sales charge as though
the total
quantity were invested in one lump sum, subject to escrow
agreements and the
appointment of an attorney for redemptions from the escrow amount
if the
intended purchases are not completed, by completing the Letter of
Intent section
of the Account Application.
RIGHT OF ACCUMULATION: A shareholder qualifies for cumulative
quantity
discounts on purchases of Class A shares when his new investment,
together with
the current offering price value of all holdings of all classes of
all Funds of
that shareholder in the MFS Funds or MFS Fixed Fund (a bank
collective
investment fund), reaches a discount level.
DISTRIBUTION INVESTMENT PROGRAM: Shares of a particular class
of the Fund
may be sold at net asset value (and without any applicable CDSC)
through the
automatic reinvestment of dividend and capital gain distributions
from the same
class of another MFS Fund. Furthermore, distributions made by the
Fund may be
automatically invested at net asset value (and without any
applicable CDSC) in
shares of the same class of another MFS Fund, if shares of such
Fund are
available for sale.
SYSTEMATIC WITHDRAWAL PLAN: A shareholder may direct the
Shareholder
Servicing Agent to send him (or anyone he designates) regular
periodic payments,
as designated on the Account Application and based upon the value
of his
account. Each payment under a Systematic Withdrawal Plan (a "SWP")
must be at
least $100, except in certain limited circumstances. The aggregate
withdrawals
of Class B shares in any year pursuant to a SWP will not be
subject to a CDSC
and are generally limited to 10% of the value of the account at
the time of the
establishment of the SWP. The CDSC will not be waived in the case
of a SWP
redemption of Class A shares which are subject to a CDSC.
DOLLAR COST AVERAGING PROGRAMS --
AUTOMATIC INVESTMENT PLAN: Cash investments of $50 or more
may be made
through a shareholder's checking account twice monthly, monthly or
quarterly.
Required forms are available from the Shareholder Servicing Agent
or investment
dealers.
AUTOMATIC EXCHANGE PLAN: Shareholders having account balances
of at least
$5,000 in any MFS Fund may participate in the Automatic Exchange
Plan, a dollar
cost averaging program. The Automatic Exchange Plan provides for
automatic
monthly or
22
<PAGE> 23
quarterly exchanges of funds from the shareholder's account in a
MFS Fund for
investment in the same class of shares of other MFS Funds selected
by the
shareholder. Under the Automatic Exchange Plan, exchanges of at
least $50 each
may be made to up to four different funds. A shareholder should
consider the
objectives and policies of a fund and review its prospectus before
electing to
exchange money into such fund through the Automatic Exchange Plan.
No
transaction fee is imposed in connection with exchange
transactions under the
Automatic Exchange Plan. However, exchanges of shares of MFS Money
Market Fund,
MFS Government Money Market Fund or Class A shares of MFS Cash
Reserve Fund will
be subject to any applicable sales charge. For federal and
(generally) state
income tax purposes, an exchange is treated as a sale of the
shares exchanged
and, therefore, could result in a capital gain or loss to the
shareholder making
the exchange. See the Statement of Additional Information for
further
information concerning the Automatic Exchange Plan. Investors
should consult
their tax advisers for information regarding the potential capital
gain and loss
consequences of transactions under the Automatic Exchange Plan.
Because a dollar cost averaging program involves periodic
purchases of shares
regardless of fluctuating share offering prices, a shareholder
should consider
his financial ability to continue his purchases through periods of
low price
levels. Maintaining a dollar cost averaging program concurrently
with a
withdrawal program could be disadvantageous because of the sales
charges
included in share purchases in the case of Class A shares, and
because of the
assessment of the CDSC for certain share redemptions in the case
of Class A
shares.
TAX-DEFERRED RETIREMENT PLANS -- Shares of the Fund may be
purchased by all
types of tax-deferred retirement plans, including IRAs, SEP-IRA
plans, 401(k)
plans, 403(b) plans and certain other qualified pension and
profit-sharing
plans. Investors should consult with their tax advisers before
establishing any
of the tax-deferred retirement plans described above.
------------------------
The Fund's Statement of Additional Information, dated April 1,
1995, contains
more detailed information about the Fund, including, but not
limited to,
information related to (i) investment objective policies and
restrictions, (ii)
its Trustees, officers and investment adviser, (iii) portfolio
transactions and
brokerage commissions, (iv) the Class A and Class B Distribution
Plans, (v) the
method used to calculate total rate of return quotations of the
Fund and (vi)
various services and privileges provided by the Fund for the
benefit of its
shareholders, including additional information with respect to the
exchange
privilege.
23
<PAGE> 24
[MFS LOGO]
THE FIRST NAME IN MUTUAL
FUNDS
Investment Adviser
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116
(617) 954-5000 MASSACHUSETTS INVESTORS
GROWTH STOCK FUND
Distributor
MFS Fund Distributors, Inc. Prospectus
500 Boylston Street April 1, 1995
Boston, MA 02116
(617) 954-5000
Custodian and Dividend Disbursing Agent
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
Shareholder Servicing Agent
MFS Service Center, Inc.
500 Boylston Street
Boston, MA 02116
Toll-free: (800) 225-2606
Mailing Address:
P.O. Box 2281
Boston, MA 02107-9906
Independent Accountants
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
[MFS LOGO]
THE FIRST NAME IN MUTUAL FUNDS
MASSACHUSETTS INVESTORS
GROWTH STOCK FUND
500 Boylston Street
Boston, MA 02116 MIG-4/95 137.5M 13/213
MASSACHUSETTS INVESTORS
STATEMENT OF
GROWTH STOCK FUND
ADDITIONAL
INFORMATION
(A member of the MFS Family of Funds(R))
April 1, 1995
- ------------------------------------------------------------------
- ------------
Page
- ----
1.
Definitions.......................................................
.................... 2
2. The
Fund..............................................................
................ 2
3. Investment Objective, Policies and
Restrictions....................................... 2
4. Management of the
Fund..............................................................
.. 10
Trustees..........................................................
.................... 10
Officers..........................................................
.................... 11
Investment
Adviser...........................................................
......... 12
Custodian.........................................................
.................... 12
Shareholder Servicing
Agent...........................................................
13
Distributor.......................................................
.................... 13
5. Portfolio Transactions and Brokerage
Commissions...................................... 14
6. Shareholder
Services..........................................................
........ 15
Investment and Withdrawal
Programs.................................................... 15
Exchange
Privilege.........................................................
........... 17
Tax-Deferred Retirement
Plans.........................................................
18
7. Tax
Status............................................................
................ 18
8. Determination of Net Asset Value and
Performance...................................... 19
9. Description of Shares, Voting Rights and
Liabilities.................................. 21
10. Distribution
Plans.............................................................
....... 22
11. Independent Accountants and Financial
Statements...................................... 24
Appendix
A.................................................................
........... 25
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
500 Boylston Street, Boston, Massachusetts 02116
(617) 954-5000
This Statement of Additional Information (the "SAI") sets forth
information
which may be of interest to investors but which is not necessarily
included in
the Fund's Prospectus, dated April 1, 1995. This SAI should be
read in
conjunction with the Prospectus, a copy of which may be obtained
without
charge by contacting the Shareholder Servicing Agent (see back
cover for
address and phone number).
This SAI is NOT a prospectus and is authorized for distribution to
prospective
investors only if preceded or accompanied by a current prospectus.
1. DEFINITIONS
"Fund" -- Massachusetts Investors
Growth Stock Fund, a
Massachusetts business
trust.
"MFS" or the "Adviser" -- Massachusetts Financial
Services Company, a
Delaware corporation.
"MFD" -- MFS Fund Distributors,
Inc., a Delaware
corporation.
"Prospectus" -- The Prospectus, dated
April 1, 1995, of the
Fund.
2. THE FUND
The predecessor of the Fund-- Massachusetts Investors Growth Stock
Fund, Inc.
(the "Trust")-- was incorporated under the laws of Massachusetts
in 1958 to
continue the business of a Delaware corporation organized in 1932.
The Fund
was reorganized as a trust on July 29, 1985. All references in
this Statement
of Additional Information to the Fund's past activities are
intended to
include those of the Trust, unless the context indicates
otherwise.
3. INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
Investment Objective: The Fund's investment objective is to
provide long-term
growth of capital and future income rather than current income.
Any investment
involves risk and there can be no assurance that the Fund will
achieve its
investment objective; the Fund's name does not imply any assurance
that an
investor's capital will increase.
Investment Policies: The Fund's policy is to keep its assets
invested, except
for working cash balances, in the common stocks, or securities
convertible
into common stocks, of companies believed to possess better than
average
prospects for long-term growth. This is a fundamental policy and
may not be
changed without a shareholder vote. Emphasis is placed on the
selection of
progressive, well-managed companies.
Since shares of the Fund represent an investment in securities
with
fluctuating market prices, shareholders should understand that the
value of
shares of the Fund will vary as the aggregate value of the Fund's
portfolio
securities increases or decreases. Moreover, any dividends paid by
the Fund
will increase or decrease in relation to the income received by
the Fund from
its investments.
Foreign Securities: The Fund may invest up to 50% (and generally
expects to
invest between 10% and 30%) of its total assets in foreign
securities (not
including American Depositary Receipts discussed below). As
discussed in the
Prospectus, investing in foreign securities generally represents a
greater
degree of risk than investing in domestic securities, due to
possible exchange
rate fluctuations, less publicly available information, more
volatile markets,
less securities regulation, less favorable tax provisions, war or
expropriation. As a result of its investments in foreign
securities, the Fund
may receive interest or dividend payments, or the proceeds of the
sale or
redemption of such securities, in the foreign currencies in which
such
securities are denominated. Under certain circumstances, such as
where the
Adviser believes that the applicable exchange rate is unfavorable
at the time
the currencies are received or the Adviser anticipates, for any
other reason,
that the exchange rate will improve, the Fund may hold such
currencies for an
indefinite period of time. While the holding of currencies will
permit the
Fund to take advantage of favorable movements in the applicable
exchange rate,
this strategy also exposes the Fund to risk of loss if exchange
rates move in
a direction adverse to the Fund's position. Such losses could
reduce any
profits or increase any losses sustained by the Fund from the sale
or
redemption of securities and could reduce the dollar value of
interest or
dividend payments received.
American Depositary Receipts: The Fund may invest in American
Depositary
Receipts ("ADRs") which are certificates issued by a U.S.
depository (usually
a bank) and represent a specified quantity of shares of an
underlying non-U.S.
stock on deposit with a custodian bank as collateral. ADRs may be
sponsored or
unsponsored. A sponsored ADR is issued by a depository which has
an exclusive
relationship with the issuer of the underlying security. An
unsponsored ADR
may be issued by any number of U.S. depositories. The Fund may
invest in
either type of ADR. Although the U.S. investor holds a substitute
receipt of
ownership rather than direct stock certificates, the use of the
depository
receipts in the United States can reduce costs and delays as well
as potential
currency exchange and other difficulties. The Fund may purchase
securities in
local markets and direct delivery of these ordinary shares to the
local
depository of an ADR agent bank in the foreign country.
Simultaneously, the
ADR agents create a certificate which settles at the Fund's
custodian in five
days. The Fund may also execute trades on the U.S. markets using
existing
ADRs. A foreign issuer of the security underlying an ADR is
generally not
subject to the same reporting requirements in the United States as
a domestic
issuer. Accordingly the information available to a U.S. investor
will be
limited to the information the foreign issuer is required to
disclose in its
own country and the market value of an ADR may not reflect
undisclosed
material information concerning the issuer of the underlying
security. ADRs
may also be subject to exchange rate risks if the underlying
foreign
securities are denominated in foreign currency.
Repurchase Agreements: The Fund may enter into repurchase
agreements with
sellers who are member firms (or a subsidiary thereof) of the New
York Stock
Exchange (the "Exchange"), members of the Federal Reserve System,
recognized
primary U.S. Government securities dealers or institutions which
the Adviser
has determined to be of comparable creditworthiness. The
securities that the
Fund purchases and holds through its agent are U.S. Government
securities, the
values of which are equal to or greater than the repurchase price
agreed to be
paid by the seller. The repurchase price may be higher than the
purchase
price, the difference being income to the Fund, or the purchase
and repurchase
prices may be the same, with interest
at a standard rate due to the Fund together with the repurchase
price on
repurchase. In either case, the income to the Fund is unrelated to
the
interest rate on the U.S. Government securities.
The repurchase agreement provides that in the event the seller
fails to pay
the price agreed upon on the agreed upon delivery date or upon
demand, as the
case may be, the Fund will have the right to liquidate the
securities. If at
the time the Fund is contractually entitled to exercise its right
to liquidate
the securities, the seller is subject to a proceeding under the
bankruptcy
laws or its assets are otherwise subject to a stay order, the
Fund's exercise
of its right to liquidate the securities may be delayed and result
in certain
losses and costs to the Fund. The Fund has adopted and follows
procedures
which are intended to minimize the risks of repurchase agreements.
For
example, the Fund only enters into repurchase agreements after the
Adviser has
determined that the seller is creditworthy, and the Adviser
monitors that
seller's creditworthiness on an ongoing basis. Moreover, under
such
agreements, the value of the securities (which are marked to
market every
business day) is required to be greater than the repurchase price,
and the
Fund has the right to make margin calls at any time if the value
of the
securities falls below the agreed upon margin.
"When-Issued" Securities: The Fund may purchase securities on a
"when-issued"
or on a "forward delivery" basis. It is expected that, under
normal
circumstances, the Fund will take delivery of such securities.
When the Fund
commits to purchase a security on a "when-issued" or on a "forward
delivery"
basis, it will set up procedures consistent with policies
promulgated by the
Securities and Exchange Commission (the "SEC") policies concerning
such
purchases. Since those policies currently recommend that an amount
of the
Fund's assets equal to the amount of the purchase be held aside or
segregated
to be used to pay for the commitment, the Fund will always have
cash,
short-term money market instruments or high quality debt
securities to cover
any commitments or to limit any potential risk. However, although
the Fund
does not intend to make such purchases for speculative purposes
and the Fund
does intend to adhere to the provisions of SEC policies, purchases
of
securities on such bases may involve more risk than other types of
purchases.
For example, the Fund may have to sell assets which have been set
aside in
order to meet redemptions. Also, if the Fund determines it
necessary to sell
the "when-issued" or "forward delivery" securities before
delivery, the Fund
may incur a loss because of market fluctuations since the time the
commitment
to purchase such securities was made.
Securities Lending: The Fund may seek to increase its income by
lending fixed
income portfolio securities. Such loans will usually be made only
to member
banks of the Federal Reserve System and to member firms (or
subsidiaries
thereof) of the Exchange and would be required to be secured
continuously by
collateral in cash, cash equivalents, or U.S. Government
securities maintained
on a current basis at an amount at least equal to the market value
of the
securities loaned. The Fund would have the right to call a loan
and obtain the
securities loaned at any time on customary industry settlement
notice (which
will usually not exceed five days). During the existence of a
loan, the Fund
would continue to receive the equivalent of the interest paid by
the issuer on
the securities loaned and would also receive compensation based on
investment
of the collateral. The Fund would not, however, have the right to
vote any
securities having voting rights during the existence of the loan,
but would
call the loan in anticipation of an important vote to be taken
among holders
of the securities or of the giving or withholding of their consent
on a
material matter affecting the investment. As with other extensions
of credit,
there are risks of delay in recovery or even loss of rights in the
collateral
should the borrower of the securities fail financially. However,
the loans
would be made only to firms deemed by the Adviser to be of good
standing, and
when, in the judgment of the Adviser, the consideration which
could be earned
currently from securities loans of this type justifies the
attendant risk. If
the Adviser determines to lend securities, it is not intended that
the value
of the securities loaned would exceed 30% of the value of the
Fund's total
assets. The Fund did not lend any of its portfolio securities
during its
fiscal year ended November 30, 1994.
Options on Securities: The Fund may write (sell) covered call and
put options
on securities and purchase call and put options on securities. The
Fund may
write options on securities for the purpose of increasing its
return on such
securities and for hedging purposes.
A call option written by the Fund is covered if the Fund owns the
security
underlying the call or has an absolute and immediate right to
acquire such
security without additional cash consideration (or for additional
cash
consideration held in a segregated account by its custodian) upon
conversion
or exchange of other securities held in its portfolio. A call
option is also
covered if a Fund holds a call on the same security and in the
same principal
amount as the call written where the exercise price of the call
held (a) is
equal to or less than the exercise price of the call written or
(b) is greater
than the exercise price of the call written if the difference is
maintained by
the Fund in cash or high grade government securities in a
segregated account
with its custodian. A put option written by the Fund is covered if
the Fund
maintains cash or high grade government securities with a value
equal to the
exercise price in a segregated account with its custodian, or else
holds a put
on the same security and in the same principal amount as the put
written where
the exercise price of the put held (i) is equal to or greater than
the
exercise price of the put written or (ii) is less than the
exercise price of
the put written if the difference is maintained by the Fund in
cash or high
grade government securities in a segregated account with its
custodian. Put
and call options written by the Fund may also be covered in such
other manner
as may be in accordance with the requirements of the exchange on
which, or the
counterparty with which, the option is traded, and applicable laws
and
regulations.
Effecting a closing transaction in the case of a written call
option will
permit the Fund to write another call option on the underlying
security with
either a different exercise price or expiration date or both, or
in the case
of a written put option will permit the Fund to write another put
option to
the extent that the exercise price thereof is secured by deposited
cash or
short-term
securities. Such transactions permit the Fund to generate
additional premium
income, which will partially offset declines in the value of
portfolio
securities or increases in the cost of securities to be acquired.
Also,
effecting a closing transaction will permit the proceeds from the
concurrent
sale of any securities subject to the option to be used for other
investments
of the Fund, provided that another option on such security is not
written. If
the Fund desires to sell a particular security from its portfolio
on which it
has written a call option, it will effect a closing transaction in
connection
with the option prior to or concurrent with the sale of the
security.
The Fund will realize a profit from a closing transaction if the
premium paid
in connection with the closing of an option written by the Fund is
less than
the premium received from writing the option, or if the premium
received in
connection with the closing of an option purchased by the Fund is
more than
the premium paid for the original purchase. Conversely, the Fund
will suffer a
loss if the premium paid or received in connection with a closing
transaction
is more or less, respectively, than the premium received or paid
in
establishing the option position. Because increases in the market
price of a
call option will generally reflect increases in the market price
of the
underlying security, any loss resulting from the closing out of a
call option
previously written by the Fund is likely to be offset in whole or
in part by
appreciation of the underlying security owned by the Fund.
The Fund may write options in connection with buy-and-write
transactions; that
is, the Fund may purchase a security and then write a call option
against that
security. The exercise price of the call option the Fund
determines to write
will depend upon the expected price movement of the underlying
security. The
exercise price of a call option may be below ("in-the-money"),
equal to
("at-the-money") or above ("out-of-the-money") the current value
of the
underlying security at the time the option is written. If the call
options are
exercised in such transactions, the Fund's maximum gain will be
the premium
received by it for writing the option, adjusted upwards or
downwards by the
difference between the Fund's purchase price of the security and
the exercise
price, less related transaction costs. If the options are not
exercised and
the price of the underlying security declines, the amount of such
decline will
be offset in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of
risk/return
characteristics to buy-and-write transactions. Put options could
be used by
the Fund in the same market environments that call options would
be used in
equivalent buy-and-write transactions.
The Fund may write combinations of put and call options on the
same security,
a practice known as a "straddle." By writing a straddle, the Fund
undertakes a
simultaneous obligation to sell and purchase the same security in
the event
that one of the options is exercised. If the price of the security
subsequently rises sufficiently above the exercise price to cover
the amount
of the premium and transaction costs, the call will likely be
exercised and
the Fund will be required to sell the underlying security at a
below market
price. This loss may be offset, however, in whole or in part, by
the premiums
received on the writing of the two options. Conversely, if the
price of the
security declines by a sufficient amount, the put will likely be
exercised.
The writing of straddles will likely be effective, therefore, only
where the
price of a security remains stable and neither the call nor the
put is
exercised. In an instance where one of the options is exercised,
the loss on
the purchase or sale of the underlying security may exceed the
amount of the
premiums received.
By writing a call option, the Fund limits its opportunity to
profit from any
increase in the market value of the underlying security above the
exercise
price of the option. By writing a put option, the Fund assumes the
risk that
it may be required to purchase the underlying security for an
exercise price
above its then current market value, resulting in a capital loss
unless the
security subsequently appreciates in value. The writing of options
on
securities will be undertaken by the Fund for purposes in addition
to hedging,
and could involve certain risks which are not present in the case
of hedging
transactions. Moreover, even where options are written for hedging
purposes,
such transactions will constitute only a partial hedge against
declines in the
value of portfolio securities or against increases in the value of
securities
to be acquired, up to the amount of the premium.
The Fund also may purchase put and call options on securities. Put
options
also purchased to hedge against a decline in the value of
securities held in
the Fund's portfolio. If such a decline occurs, the put options
will permit
the Fund to sell the underlying securities at the exercise price,
or to close
out the options at a profit. By using put options in this way, the
Fund will
reduce any profit it might otherwise have realized in the
underlying security
by the amount of the premium paid for the put option and related
transaction
costs. The Fund may purchase call options to hedge against an
increase in the
price of securities that the Fund anticipates purchasing in the
future. If
such an increase occurs, the call option will permit the Fund to
purchase the
securities at the exercise price or to close out the option at a
profit. The
premium paid for a call or put option plus any transaction costs
will reduce
the benefit, if any, realized by the Fund upon exercise of the
option, and,
unless the price of the underlying security rose or declined
sufficiently, the
option may expire worthless to the Fund.
Options on Stock Indices: The Fund may write (sell) covered call
and put
options on stock indices and purchase call and put options on
stock indexes
for the purpose of increasing its gross income and to protect its
portfolio
against declines in the value of securities it owns or increases
in the value
of securities to be acquired.
The Fund may cover call options on stock indices by owning
securities whose
price changes, in the opinion of the Adviser, are expected to be
similar to
those of the index, or by having an absolute and immediate right
to acquire
such securities without additional cash consideration (or for
additional cash
consideration held in a segregated account by its custodian) upon
conversion
or exchange of other securities in its portfolio.
Nevertheless, where the Fund covers a call option on a stock index
through
ownership of securities, such securities may not match the
composition of the
index and, in that event, the Fund will not be fully covered and
could be
subject to risk of loss in the event of adverse changes in the
value of the
index. A Fund may also cover call options on stock indices by
holding a call
on the same index and in the same principal amount as the call
written where
the exercise price of the call held (a) is equal to or less than
the exercise
price of the call written or (b) is greater than the exercise
price of the
call written if the difference is maintained by the Fund in cash
or high grade
government securities in a segregated account with its custodian.
The Fund may
cover put options on stock indices by maintaining cash or high
grade
government securities with a value equal to the exercise price in
a segregated
account with its custodian, or else by holding a put on the same
stock index
and in the same principal amount as the put written where the
exercise price
of the put held (a) is equal to or greater than the exercise price
of the put
written or (b) is less than the exercise price of the put written
if the
difference is maintained by the Fund in cash or high grade
government
securities in a segregated account with its custodian. Put and
call options on
stock indices written by the Fund may also be covered in such
other manner as
may be in accordance with the rules of the exchange on which, or
the
counterparty with which, the option is traded, and applicable laws
and
regulations.
The Fund will receive a premium from writing a put or call option,
which
increases the Fund's gross income in the event the option expires
unexercised
or is closed out at a profit. If the value of an index on which
the Fund has
written a call option falls or remains the same, the Fund will
realize a
profit in the form of the premium received (less transaction
costs) that could
offset all or a portion of any decline in the value of the
securities it owns.
If the value of the index rises, however, the Fund will realize a
loss in its
call option position, which will reduce the benefit of any
unrealized
appreciation in the Fund's stock investments. By writing a put
option, the
Fund assumes the risk of a decline in the index. To the extent
that the price
changes of securities owned by a Fund correlate with changes in
the value of
the index, writing covered put options on indices will increase
the Fund's
losses in the event of a market decline, although such losses will
be offset
in part by the premium received for writing the option.
The purchase of call options on stock indices may be used by the
Fund to
attempt to reduce the risk of missing a broad market advance, or
an advance in
an industry or market segment, at a time when the Fund holds
uninvested cash
or short-term debt securities awaiting investment. When purchasing
call
options for this purpose, the Fund will also bear the risk of
losing all or a
portion of the premium paid, and related transaction costs, if the
value of
the index does not rise. The purchase of call options on stock
indices when
the Fund is substantially fully invested is a form of leverage, up
to the
amount of the premium and related transaction costs, and involves
risks of
loss and of increased volatility similar to those involved in
purchasing calls
on securities the Fund owns.
The Fund also may purchase put options on stock indices to hedge
its
investments against a decline in value. By purchasing a put option
on a stock
index, the Fund will seek to offset a decline in the value of
securities it
owns through appreciation of the put option. If the value of the
Fund's
investments does not decline as anticipated, or if the value of
the option
does not increase, the Fund's loss will be limited to the premium
paid for the
option, plus related transaction costs. The success of this
strategy will
largely depend on the accuracy of the correlation between the
changes in value
of the index and the changes in value of the Fund's security
holdings.
Options on Foreign Currencies: The Fund may purchase and write put
and call
options on foreign currencies ("Options on Foreign Currencies")
for the
purpose of protecting against declines in the dollar value of
foreign
portfolio securities and against increases in the dollar cost of
foreign
securities to be acquired. For example, a decline in the dollar
value of a
foreign currency in which portfolio securities are denominated
will reduce the
dollar value of such securities, even if their value in the
foreign currency
remains constant. In order to protect against such diminutions in
the value of
portfolio securities, the Fund may purchase put Options on the
Foreign
Currency. If the value of the currency did decline, the Fund would
have the
right to sell such currency for a fixed amount in dollars and
would thereby
offset, in whole or in part, the adverse effect on its portfolio
which
otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in
which securities
to be acquired are denominated is projected, thereby increasing
the cost of
such securities, the Fund may purchase call options thereon. The
purchase of
such options could offset, at least partially, the effects of the
adverse
movements in exchange rates. As in the case of other types of
options,
however, the benefit to the Fund deriving from purchases of
Options on Foreign
Currencies would be reduced by the amount of the premium and
related
transaction costs. In addition, where currency exchange rates do
not move in
the direction or to the extent anticipated, the Fund could sustain
losses on
transactions in Options on Foreign Currencies which would require
it to forego
a portion or all of the benefits of advantageous changes in such
rates.
The Fund may write Options on Foreign Currencies for the same
types of hedging
purposes. For example, where the Fund anticipates a decline in the
dollar
value of foreign-denominated securities due to adverse
fluctuations in
exchange rates it may, instead of purchasing a put option, write a
call option
on the relevant currency. If the expected decline occurred, the
option would
most likely not be exercised, and the diminution in value of
portfolio
securities would be offset by the amount of the premium received
less related
transaction costs. As in the case of other types of options,
therefore, the
writing of Options on Foreign Currencies will constitute only a
partial hedge.
Futures Contracts: The Fund may enter into stock index and foreign
currency
futures contracts ("Futures Contracts"). A Futures Contract is a
bilateral
agreement providing for the purchase and sale of a specified type
and amount
of a financial
instrument, or foreign currency, or for the making and acceptance
of a cash
settlement, at a stated time in the future for a fixed price. By
its terms, a
Futures Contract provides for a specified settlement date on
which, in the
case of the majority of foreign currency futures contracts, the
currency or
the contract are delivered by the seller and paid for by the
purchaser, or on
which, in the case of stock index futures contracts and certain
foreign
currency futures contracts, the difference between the price at
which the
contract was entered into and the contract's closing value is
settled between
the purchaser and seller in cash. Futures contracts differ from
options in
that they are bilateral agreements, with both the purchaser and
the seller
equally obligated to complete the transaction. Futures Contracts
call for
settlement only on the expiration date and cannot be "exercised"
at any other
time during their term.
The purchase or sale of a Futures Contract differs from the
purchase or sale
of a security or the purchase of an option in that no purchase
price is paid
or received. Instead, an amount of cash or cash equivalents, which
varies but
may be as low as 5% or less of the value of the contract, must be
deposited
with the broker as "initial margin." Subsequent payments to and
from the
broker, referred to as "variation margin," are made on a daily
basis as the
value of the index or instrument underlying the Futures Contract
fluctuates,
making positions in the Futures Contract more or less valuable --
a process
known as "marking to the market."
Purchases or sales of stock index futures contracts may be used to
attempt to
protect a Fund's current or intended stock investments from broad
fluctuations
in stock prices. For example, a Fund may sell stock index futures
contracts in
anticipation of or during a market decline to attempt to offset
the decrease
in market value of the Fund's securities portfolio that might
otherwise
result. If such decline occurs, the loss in value of portfolio
securities may
be offset, in whole or part, by gains on the futures position.
When a Fund is
not fully invested in the securities market and anticipates a
significant
market advance, it may purchase stock index futures contracts in
order to gain
rapid market exposure that may, in part or entirely, offset
increases in the
cost of securities that the Fund intends to purchase. As such
purchases are
made, the corresponding positions in stock index futures contracts
will be
closed out. In a substantial majority of these transactions, the
Fund will
purchase such securities upon termination of the futures position,
but under
unusual market conditions, a long futures position may be
terminated without a
related purchase of securities.
As noted in the Prospectus, a Fund may purchase and sell foreign
currency
futures contracts for hedging purposes, to attempt to protect its
current or
intended investments from fluctuations in currency exchange rates.
Such
fluctuations could reduce the dollar value of portfolio securities
denominated
in foreign currencies, or increase the cost of foreign-denominated
securities
to be acquired, even if the value of such securities in the
currencies in
which they are denominated remains constant. A Fund may sell
futures contracts
on a foreign currency, for example, where it holds securities
denominated in
such currency and it anticipates a decline in the value of such
currency
relative to the dollar. In the event such decline occurs, the
resulting
adverse effect on the value of foreign-denominated securities may
be offset,
in whole or in part, by gains on the futures contracts.
Conversely, a Fund could protect against a rise in the dollar cost
of foreign
denominated securities to be acquired by purchasing futures
contracts on the
relevant currency, which could offset, in whole or in part, the
increased cost
of such securities resulting from a rise in the dollar value of
the underlying
currencies. Where a Fund purchases futures contracts under such
circumstances,
however, and the prices of securities to be acquired instead
decline, the Fund
will sustain losses on its futures position which could reduce or
eliminate
the benefits of the reduced cost of portfolio securities to be
acquired. The
Fund may also enter into Futures Contracts for non-hedging
purposes, to the
extent permitted by applicable law.
Options on Futures Contracts: The Fund may write or purchase
options to buy or
sell Futures Contracts ("Options on Futures Contracts"). The
writing of a call
Option on a Futures Contract may constitute a partial hedge
against declining
prices of the securities or other instruments required to be
delivered under
the terms of the Futures Contract. If the futures price at
expiration of the
option is below the exercise price, the Fund will retain the full
amount of
the option premium, less related transaction costs, which provides
a partial
hedge against any decline that may have occurred in the Fund's
portfolio
holdings. The writing of a put Option on a Futures Contract may
constitute a
partial hedge against increasing prices of the securities or other
instruments
required to be delivered under the terms of the Futures Contract.
If the
futures price at expiration of the option is higher than the
exercise price,
the Fund will retain the full amount of the option premium, less
related
transaction costs, which provides a partial hedge against any
increase in the
price of securities which the Fund intends to purchase. If a put
or call
option the Fund has written is exercised, the Fund will incur a
loss which
will be reduced by the amount of the premium it receives.
Depending on the
degree of correlation between changes in the value of its
portfolio securities
and changes in the value of its futures positions, the Fund's
losses from
existing Options on Futures Contracts may to some extent be
reduced or
increased by changes in the value of portfolio securities.
The Fund may cover the writing of call Options on Futures
Contracts (a)
through purchases of the underlying Futures Contract, (b) through
ownership of
the instrument, or instruments included in the index, underlying
the Futures
Contract, or (c) through the holding of a call on the same Futures
Contract
and in the same principal amount as the call written where the
exercise price
of the call held (i) is equal to or less than the exercise price
of the call
written or (ii) is greater than the exercise price of the call
written if the
difference is maintained by the Fund in cash and high grade
government
securities in a segregated account with its custodian. The Fund
may cover the
writing of put Options on Futures Contracts (a) through sales of
the
underlying Futures Contract, (b) through segregation of
cash or cash equivalents in an amount equal to the value of the
security or
index underlying the Futures Contract, or (c) through the holding
of a put on
the same Futures Contract and in the same principal amount as the
put written
where the exercise price of the put held (i) is equal to or
greater than the
exercise price of the put written or (ii) is less than the
exercise price of
the put written if the difference is maintained by the Fund in
cash or high
grade government securities in a segregated account with its
custodian. Put
and Call Options on Futures Contracts written by the Fund may also
be covered
in such other manner as may be in accordance with the rules of the
exchange on
which, or the counterparty with which, the option is traded, and
applicable
laws and regulations. Upon the exercise of a call Option on a
Futures Contract
written by the Fund, the Fund will be required to sell the
underlying Futures
Contract which, if the Fund has covered its obligation through the
purchase of
such Contract, will serve to liquidate its futures position.
Similarly, where
a put Option on a Futures Contract written by the Fund is
exercised, the Fund
will be required to purchase the underlying Futures Contract
which, if the
Fund has covered its obligation through the sale of such Contract,
will close
out its futures position.
The Fund may purchase Options on Futures Contracts for hedging
purposes as an
alternative to purchasing or selling the underlying Futures
Contracts. For
example, where a decrease in the value of portfolio securities is
anticipated
as a result of a projected market-wide decline or changes in
interest or
exchange rates, the Fund could, in lieu of selling Futures
Contracts, purchase
put options thereon. In the event that such decrease occurs, it
may be offset,
in whole or part, by a profit on the option. Conversely, where it
is projected
that the value of securities to be acquired by the Fund will
increase prior to
acquisition, due to a market advance or changes in interest or
exchange rates,
the Fund could purchase call Options on Futures Contracts, rather
than
purchasing the underlying Futures Contracts. The Fund may also
enter into
Options on Futures Contracts for non-hedging purposes, to the
extent permitted
by applicable law.
In order to assure that the Fund will not be deemed to be a
"commodity pool"
for purposes of the Commodity Exchange Act, regulations of the
Commodities
Futures Trading Commission (the "CFTC") require that the Fund
enter into
transactions in Futures Contracts and Options on Futures Contracts
only (i)
for bona fide hedging purposes (as defined in CFTC regulations),
or (ii) for
non-hedging purposes, provided that the aggregate initial margin
and premiums
on such non-hedging positions does not exceed 5% of the
liquidation value of
the Trust's assets. In addition, the Fund must comply with the
requirements of
various state securities laws in connection with such
transactions.
Forward Contracts: The Fund may enter into forward foreign
currency exchange
contracts for the purchase or sale of a specific currency at a
future date at
a price set at the time of the contract (a "Forward Contract").
The Fund may
enter into Forward Contracts for hedging purposes as well as for
non-hedging
purposes. The Fund may also enter into Forward Contracts for
"cross-hedging"
as noted in the Prospectus. Transactions in Forward Contracts
entered into for
hedging purposes will include forward purchases or sales of
foreign currencies
for the purpose of protecting the dollar value of securities
denominated in a
foreign currency or protecting the dollar equivalent of interest
or dividends
to be paid on such securities. By entering into such transactions,
however,
the Fund may be required to forego the benefits of advantageous
changes in
exchange rates. The Fund may also enter into transactions in
Forward Contracts
for other than hedging purposes which presents greater profit
potential but
also involves increased risk. For example, if the Adviser believes
that the
value of a particular foreign currency will increase or decrease
relative to
the value of the U.S. dollar, the Fund may purchase or sell such
currency,
respectively, through a Forward Contract. If the expected changes
in the value
of the currency occur, the Fund will realize profits which will
increase its
gross income. Where exchange rates do not move in the direction or
to the
extent anticipated, however, the Fund may sustain losses which
will reduce its
gross income. Such transactions, therefore, will be considered
speculative.
The Fund has established procedures consistent with statements by
the SEC and
its staff regarding the use of Forward Contracts by registered
investment
companies, which require the use of segregated assets or "cover"
in connection
with the purchase and sale of such contracts. In those instances
in which the
Fund satisfies this requirement through segregation of assets, it
will
maintain, in a segregated account, cash, cash equivalents or high
grade debt
securities, which will be marked to market on a daily basis, in an
amount
equal to the value of its commitments under Forward Contracts.
Risk Factors:
Imperfect Correlation of Hedging Instruments with the Fund's
Portfolio -- The
Fund's ability effectively to hedge all or a portion of its
portfolio through
transactions in options, Futures Contracts, and Forward Contracts
will depend
on the degree to which price movements in the underlying index or
instrument
correlate with price movements in the relevant portion of the
Fund's
portfolio. Because the securities in the Fund's portfolio will
most likely not
be the same as those securities underlying a stock index, the
correlation
between movements in the portfolio and in the securities
underlying the index
will not be perfect. The trading of Futures Contracts and options
entails the
additional risk of imperfect correlation between movements in the
futures or
option price and the price of the underlying index or obligation.
The
anticipated spread between the prices may be distorted due to the
differences
in the nature of the markets, such as differences in margin
requirements, the
liquidity of such markets and the participation of speculators in
such
markets. In this regard, trading by speculators in options and
Futures
Contracts has in the past occasionally resulted in market
distortions, which
may be difficult or impossible to predict, particularly near the
expiration of
such contracts. It should be noted that Futures Contracts or
options based
upon a narrower index of securities, such as those of a particular
industry
group, may present greater
risk than options or Futures Contracts based on a broad market
index, because
a narrower index is more susceptible to rapid and extreme
fluctuations as a
result of changes in the value of a small number of securities.
The trading of
Options on Futures Contracts also entails the risk that changes in
the value
of the underlying Futures Contracts will not be fully reflected in
the value
of the option. Further, with respect to options on securities,
options on
stock indices and Options on Futures Contracts, the Fund is
subject to the
risk of market movements between the time that the option is
exercised and the
time of performance thereunder. In writing a covered call option
on a
security, index or Futures Contract, the Fund also incurs the risk
that
changes in the value of the instruments used to cover the position
will not
correlate closely with changes in the value of the option or
underlying index
or instrument.
The Fund will invest in a hedging instrument only if, in the
judgment of its
Adviser, there would be expected to be a sufficient degree of
correlation
between movements in the value of the instrument and movements in
the value of
the relevant portion of the Fund's portfolio for such hedge to be
effective.
There can be no assurance that the Adviser's judgment will be
accurate.
It should also be noted that the Fund may purchase and sell
options, Futures
Contracts, Options on Futures Contracts and Forward Contracts not
only for
hedging purposes, but also for non-hedging purposes, to the extent
permitted
by applicable law, including for the purpose of increasing its
return on
portfolio securities. As a result, in the event of adverse market
movements,
the Fund might be subject to losses, which would not be offset by
increases in
the value of portfolio securities or declines in the cost of
securities to be
acquired. In addition, the method of covering an option employed
by the Fund
may not fully protect it against risk of loss and, in any event,
the Fund
could suffer losses on the option position which might not be
offset by
corresponding portfolio gains.
With respect to the writing of straddles on securities, the Fund
incurs the
risk that the price of the underlying security will not remain
stable, that
one of the options written will be exercised and that the
resulting loss will
not be offset by the amount of the premiums received.
Potential Lack of a Liquid Secondary Market -- Prior to exercise
or
expiration, a futures or option position can only be terminated by
entering
into a closing purchase or sale transaction. This requires a
secondary market
for such instruments on the exchange on which the initial
transaction was
entered. While the Fund will enter into options or futures
positions only if
there appears to be a liquid secondary market, there can be no
assurance that
such a market will exist for any particular contracts at any
specific time. In
that event, it may not be possible to close out a position held by
the Fund,
and the Fund could be required to purchase or sell the instrument
underlying
an option, make or receive a cash settlement or meet ongoing
variation margin
requirements. Under such circumstances, if the Fund had
insufficient cash
available to meet margin requirements, it might be necessary to
liquidate
portfolio securities at a time when it would be disadvantageous to
do so. The
inability to close out options and futures positions, therefore,
could have an
adverse impact on the Fund's ability effectively to hedge its
portfolios, and
could result in trading losses. The liquidity of a secondary
market in a
Futures Contract or options thereon may also be adversely affected
by "daily
price fluctuation limits," established by exchanges, which limit
the amount of
fluctuation in the price of a contract during a single trading
day. The
trading of Futures Contracts and options is also subject to the
risk of
trading halts, suspensions, exchange or clearing house equipment
failures,
government intervention, insolvency of a brokerage firm or
clearing house or
other disruptions of normal trading activity, which could at times
make it
difficult or impossible to liquidate existing positions or to
recover excess
variation margin payments.
Margin -- Because of low initial margin deposits made upon the
opening of a
futures position and the writing of an option, such transactions
involve
substantial leverage. As a result, relatively small movements in
the price of
the contract can result in substantial unrealized gains or losses.
Where the
Fund engages in the purchase or sale of Options, Futures
Contracts, Options on
Futures Contracts and Forward Contracts for hedging purposes,
however, any
losses incurred in connection therewith should, if the hedging
strategy is
successful, be offset, in whole or in part, by increases in the
value of
securities held by the Fund or decreases in the prices of
securities the Fund
intends to acquire. Where the Fund enters into transactions on
such
instruments for non-hedging purposes, the margin requirements
associated with
such transactions could expose the Fund to greater risk.
Trading and Position Limits -- The exchanges on which Futures
Contracts and
options are traded may impose limitations governing the maximum
number of
positions on the same side of the market and involving the same
underlying
instrument which may be held by a single investor, whether acting
alone or in
concert with others (regardless of whether such contracts are held
on the same
or different exchanges or held or written in one or more accounts
or through
one or more brokers). In addition, the Commodity Futures Trading
Commission
("CFTC") and the various contract markets have established limits
referred to
as "speculative position limits" on the maximum net long or net
short position
which any person may hold or control in a particular futures or
option
contract. An exchange may order the liquidation of positions found
to be in
violation of these limits and it may impose other sanctions or
restrictions.
The Adviser does not believe that these trading and position
limits will have
any adverse impact on the strategies for hedging the portfolio of
the Fund.
Risk of Options on Futures Contracts -- The amount of risk the
Fund assumes
when it purchases an Option on a Futures Contract is the premium
paid for the
option, plus related transaction costs. In order to profit from an
option
purchased, however, it may be necessary to exercise the option and
to
liquidate the underlying Futures Contract, subject to the risks of
the
availability of a liquid offset market described herein. The
writer of an
Option on a Futures Contract is subject to the risks
of commodity futures trading, including the requirement of initial
and
variation margin payments, as well as the additional risk that
movements in
the price of the option may not correlate with movements in the
price of the
underlying index or Futures Contract.
Additional Risks of Transactions Not Conducted on Exchanges --
Transactions in
Forward Contracts are subject to all of the correlation, liquidity
and other
risks outlined above. In addition, such transactions are subject
to the risk
of governmental actions affecting trading in or the prices of
currencies
underlying such contracts, which could restrict or eliminate
trading and could
have a substantial adverse effect on the value of positions held
by the Fund.
In addition, the value of such positions could be adversely
affected by a
number of other complex political and economic factors applicable
to the
countries issuing the underlying currencies. Further, unlike
trading in most
other types of instruments, there is no systematic reporting of
last sale
information with respect to the foreign currencies underlying
contracts
thereon. As a result, the available information on which trading
systems will
be based may not be as complete as the comparable data on which
the Fund makes
investment and trading decisions in connection with other
transactions.
Moreover, because the foreign currency market is a global, twenty-
four hour
market, events could occur on that market which would not be
reflected in the
forward markets until the following day, thereby preventing the
Fund from
responding to such events in a timely manner. Settlements of
exercises of
Forward Contracts generally must occur within the country issuing
the
underlying currency, which in turn requires traders to accept or
make delivery
of such currencies in conformity with any United States or foreign
restrictions and regulations regarding the maintenance of foreign
banking
relationships, fees, taxes or other charges.
Forward Contracts, and over-the-counter options on securities, are
not traded
on exchanges regulated by the CFTC or the SEC, but through
financial
institutions acting as market-makers. In an over-the-counter
trading
environment, many of the protections afforded to exchange
participants will
not be available. In addition, over-the-counter transactions can
only be
entered into with a financial institution willing to take the
opposite side,
as principal, of the Fund's position unless the institution acts
as broker and
is able to find another counterparty willing to enter into the
transaction
with the Fund. Where no such counterparty is available, it will
not be
possible to enter into a desired transaction. There also may be no
liquid
secondary market in the trading of over-the-counter contracts, and
the Fund
could be required to retain options purchased or written, or
Forward Contracts
entered into, until exercise, expiration or maturity. This in turn
could limit
the Fund's ability to profit from open positions or to reduce
losses
experienced, and could result in greater losses. Further, over-
the-counter
transactions are not subject to the performance guarantee of an
exchange
clearing house, and the Fund will therefore be subject to the risk
of default
by, or the bankruptcy of, the financial institution serving as its
counterparty.
While Forward Contracts are not presently subject to regulation by
the CFTC,
the CFTC may in the future assert or be granted authority to
regulate such
instruments. In such event, the Fund's ability to utilize Forward
Contracts in
the manner set forth above could be restricted.
Restrictions on the Use of Options and Futures: In order to assure
that the
Fund will not be deemed to be a "commodity pool" for purposes of
the Commodity
Exchange Act, regulations of the CFTC require that the Fund enter
into
transactions in Futures Contracts and options on Futures Contracts
only (i)
for bona fide hedging purposes (as defined in CFTC regulations),
or (ii) for
non-hedging purposes, provided that the aggregate initial margin
and premiums
on such non-hedging positions does not exceed 5% of the
liquidation value of
the Fund's assets. In addition, the Fund must comply with the
requirements
various state securities laws in connection with such
transactions.
The Fund has adopted the additional restriction that it will not
enter into a
Futures Contract if, immediately thereafter, the value of
securities and other
obligations underlying all such Futures Contracts would exceed 50%
of the
value of the Fund's total assets. Moreover, the Fund will not
purchase put and
call options if, as a result, more than 5% of its total assets
would be
invested in such options.
When the Fund purchases a Futures Contract, an amount of cash and
cash
equivalents will be deposited in a segregated account with the
Fund's
custodian so that the amount so segregated will at all times equal
the value
of the Futures Contract, thereby insuring that the use of such
Futures
Contract is unleveraged.
Investment Restrictions: The Fund has adopted the following
restrictions which
cannot be changed without the approval of the holders of a
majority of its
shares (which, as used in this Statement of Additional
Information, means the
lesser of (i) more than 50% of the outstanding shares of the Fund
(or a class,
as applicable) or (ii) 67% or more of its outstanding shares of
the Fund (or a
class, as applicable) present at a meeting if holders of more than
50% of the
outstanding shares of the Fund (or a class, as applicable) are
represented at
such meeting in person or by proxy):
The Fund may not:
(1) borrow amounts in excess of 10% of its gross assets, and
then only as
a temporary measure for extraordinary or emergency purposes, and
subject to
a 300% asset coverage requirement, or pledge, mortgage or
hypothecate an
amount of its assets taken at market value which would exceed
15% of its
gross assets, in each case taken at cost. For the purpose of
this
restriction, collateral arrangements with respect to options,
Futures
Contracts, Options on Futures Contracts, Forward Contracts, 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 investments in any particular industry, but if
it is
deemed appropriate for the attainment of the Fund's investment
objective, up
to 25% of the Fund's assets, at market value at the time of each
investment,
may be invested 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), mineral
leases,
commodities or commodity contracts (except for options, Futures
Contracts,
Options on Futures Contracts and Forward Contracts) in the
ordinary course
of its business. The Fund reserves the freedom of action to hold
and to sell
real estate, mineral leases, commodities or commodity contracts
acquired as
a result of the ownership of securities. The Fund will not
purchase
securities for the purpose of acquiring real estate, mineral
leases,
commodities or commodity contracts; (except for options, Futures
Contracts,
Options on Futures Contracts and Forward Contracts);
(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 the Fund's total assets,
taken at
market value, to be invested in the securities of such issuer,
other than
U.S. Government securities;
(7) 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 the securities of any
registered
investment company if such purchase at the time thereof would
cause more
than 10% of the Fund's total assets, taken at market value, to
be invested
in the securities of such issuer; and provided, further, that
the Fund shall
not purchase securities issued by any open-end investment
company;
(10) purchase or retain any securities of an issuer any of
whose officers,
directors, trustees or security holders is an officer or Trustee
of the
Fund, or is a member, 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, all taken at market value, 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, all taken at
market
value;
(11) purchase any securities or evidences of interest therein
on margin,
except that the Fund may obtain such short-term credit as may be
necessary
for the clearance of purchases and sales of securities and
except that the
Fund may make margin deposits in connection with options,
Futures Contracts,
Options on Futures Contracts and Forward Contracts;
(12) 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;
(13) 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, indexes of
securities,
foreign currencies and Futures Contracts; or
(14) invest more than 5% of its assets in companies which,
including
predecessors, have a record of less than three years' continuous
operation.
As a non-fundamental policy, the Fund will not knowingly invest in
securities
which are subject to legal or contractual restrictions on resale
(other than
repurchase agreements), unless the Board of Trustees of the Fund
has
determined that such securities are liquid based upon trading
markets for the
specific security, if, as a result thereof, more than 15% of the
Fund's total
assets (taken at market value) would be so invested.
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.
4. MANAGEMENT OF THE FUND
The Board of Trustees provides broad supervision over the affairs
of the Fund.
The Adviser is responsible for the investment management, and the
officers of
the Fund are responsible for its operations. The Trustees and
officers are
listed below, together with their principal occupations during the
past five
years. (Their titles may have varied during that period.)
Trustees
A. KEITH BRODKIN,* Chairman and President
Massachusetts Financial Services Company, Chairman
RICHARD B. BAILEY*
Private investor; Massachusetts Financial Services Company, former
Chairman
and Director (until September 30, 1991)
PETER G. HARWOOD
Loomis, Sayles & Co., Inc., (investment counsel firm) Financial
Vice President
Treasurer and Director (retired October 1988)
Address: 211 Lindsay Pond Road, Concord, Massachusetts
J. ATWOOD IVES
Eastern Enterprises (diversified holding company), Chairman and
Chief
Executive Officer (since December 1991); General Cinema
Corporation, Vice
Chairman and Chief Financial Officer (until December 1991); The
Neiman
Marcus Group, Inc., Vice Chairman and Chief Financial Officer
(from August
1987 to December 1991); United States Filter Corporation,
Director
Address: 9 Riverside Road, Weston, Massachusetts
LAWRENCE T. PERERA
Hemenway & Barnes (attorneys), Partner
Address: 60 State Street, Boston, Massachusetts
WILLIAM J. POORVU
Harvard University Graduate School of Business Administration,
Adjunct
Professor; CBL & Associates Properties, Inc. (a real estate
investment
trust), Director; The Baupost Fund (a registered investment
company), Vice
Chairman (since November 1993), Chairman and Trustee (from June
1990 until
November 1993)
Address: Harvard Business School, Soldiers Field Road, Cambridge,
Massachusetts
CHARLES W. SCHMIDT
Private investor; Raytheon Company (diversified electronics
manufacturer),
Senior Vice President and Group Executive (until December 1990);
OHM
Corporation, Director; The Boston Company, Director; Boston Safe
Deposit and
Trust Company, Director
Address: 30 Colpitts Road, Weston, Massachusetts
ARNOLD D. SCOTT*
Massachusetts Financial Services Company, Senior Executive Vice
President and
Secretary
JEFFREY L. SHAMES*
Massachusetts Financial Services Company, President
ELAINE R. SMITH
Independent Consultant; Brigham and Women's Hospital, Executive
Vice President
and Chief Operating Officer (from August 1990 to September
1992); Ernst &
Young (accountants), Consultant (from February to July 1990)
Address: Weston, Massachusetts
DAVID B. STONE
North American Management Corp. (investment advisers), Chairman
Address: 10 Post Office Square, Suite 300, Boston, Massachusetts
Officers
W. THOMAS LONDON,* Treasurer
Massachusetts Financial Services Company, Senior Vice President
STEPHEN E. CAVAN,* Secretary and Clerk
Massachusetts Financial Services Company, Senior Vice President,
Assistant
Secretary and General Counsel
JAMES R. BORDEWICK, JR.,* Assistant Secretary
Massachusetts Financial Services Company, Vice President and
Associate General
Counsel (since September 1990) associated with major law firm
(prior to
August 1990)
JAMES O. YOST,* Assistant Treasurer
Massachusetts Financial Services Company, Vice President
- ---------------
* "Interested persons" (as defined in the Investment Company Act
of 1940, as
amended (the "1940 Act")) of the Adviser, whose address is 500
Boylston
Street, Boston, Massachusetts 02116.
Each Trustee and officer holds comparable positions with certain
MFS
affiliates or with certain other funds of which MFS or a
subsidiary of MFS is
the investment adviser or distributor. Mr. Brodkin, the Chairman
of MFD,
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.) ("Sun Life
of Canada
(U.S.)"), the corporate parent of MFS.
The Fund pays the compensation of non-interested Trustees (who
currently
receive a fee of $2,500 per year plus $100 per committee meeting
and $135 for
attendance at each meeting, plus certain out-of-pocket expenses,
as incurred)
and has adopted a retirement plan for non-interested Trustees.
Under this
plan, a Trustee will retire upon reaching age 73 and if the
Trustee has
completed at least five years of service, he would be entitled to
annual
payments during his lifetime of up to 50% of such Trustee's
average annual
compensation (based on the three years prior to his retirement)
depending on
his length of service. A Trustee may also retire prior to age 73
and receive
reduced payments if he has completed at least five years of
service. Under the
plan, a Trustee (or his beneficiaries) will also receive benefits
for a period
of time in the event the Trustee is disabled or dies. These
benefits will also
be based on the Trustee's average annual compensation and length
of service.
There is no retirement plan provided by the Fund for the
interested Trustees.
The Fund will accrue compensation expenses each year to cover
current year's
service and amortize past service cost.
Set forth in Appendix A hereto is certain information concerning
cash
compensation paid to non-interested Trustees and benefits accrued,
and
estimated benefits payable, under the retirement plan. As of
February 28,
1995, all Trustees and officers as a group owned less than 1% of
the
outstanding shares of the Fund.
As of February 28, 1995, Mike Lawless TTEE, Kerlan-Jobe Orthopedic
Clinic, 301
John St., Manhattan Beach, CA 90266-6655 was the record owner of
approximately
5.63% of the outstanding Class B shares of the Fund.
The Fund's Declaration of Trust provides that it will indemnify
its Trustees
and officers against liabilities and expenses incurred in
connection with
litigation in which they may be involved because of their offices
with the
Fund, unless, as to liabilities to the Fund or its shareholders,
it is finally
adjudicated that they engaged in willful misfeasance, bad faith,
gross
negligence or reckless disregard of the duties involved in their
offices, or
with respect to any matter, unless it is adjudicated that they did
not act in
good faith in the reasonable belief that their actions were in the
best
interest of the Fund. In the case of settlement, such
indemnification will not
be provided unless it has been determined by a court or other body
approving
the settlement or other disposition or by a reasonable
determination based
upon a review of readily available facts by vote of a majority of
disinterested Trustees or in a written opinion of independent
counsel, that
such officers or Trustees have not engaged in willful misfeasance,
bad faith,
gross negligence or reckless disregard of their duties.
Investment Adviser
MFS and its predecessor organizations have a history of money
management
dating from 1924. MFS is a wholly owned subsidiary of Sun Life of
Canada
(U.S.) which in turn is a wholly owned subsidiary of Sun Life
Assurance
Company of Canada ("Sun Life").
The Adviser manages the Fund pursuant to an Investment Advisory
Agreement
dated July 19, 1985 (the "Advisory Agreement"). The Adviser
provides the Fund
with overall investment advisory and administrative services, as
well as
general office facilities. Subject to such policies as the
Trustees may
determine, the Adviser makes investment decisions for the Fund.
For these
services and facilities, the Adviser receives a management fee
computed and
paid monthly at an annual rate equivalent to 0.5% of the first
$200 million of
the Fund's average daily net assets for the Fund's current fiscal
year, 0.4%
of the next $300 million of the Fund's average daily net assets
for the Fund's
current fiscal year and 0.2% of its average daily net assets for
the Fund's
current fiscal year in excess of $500 million, in each case on an
annualized
basis.
Under the Advisory Agreement, MFS received management fees of
$3,277,285,
$3,338,147 and $3,191,804 for the fiscal years ended November 30,
1994, 1993
and 1992, respectively. In order to comply with the expense
limitations of
certain state securities commissions, the Adviser will reduce its
management
fee or otherwise reimburse the Fund for any expenses, exclusive of
interest,
taxes and brokerage commissions, incurred by the Fund in any
fiscal year to
the extent such expenses exceed the most restrictive of such state
expense
limitations. The Adviser will make appropriate adjustments to such
reimbursements in response to any amendment or rescission of the
various state
requirements.
The Advisory Agreement provides that the compensation of the
Adviser will be
reduced by an annual sum representing the Fund's share of the fair
value of
the use of office furniture, furnishings and equipment purchased
over the
years with funds furnished by the Fund and Massachusetts Investors
Trust as
part of shared expenses. The total annual use value of this
property for the
period ending November 30, 1994, has been determined pursuant to a
formula
devised by an independent appraiser to be $124,379, and the
calculation for
this determination has been approved by the Trustees who are not
officers of
the Adviser. This amount and amounts so determined and approved in
subsequent
years will be credited 24% to the Fund and 76% to Massachusetts
Investors
Trust, being the average of their proportionate contributions to
shared
expenses over the ten years ended December 31, 1968.
The Fund pays all of its expenses (other than those assumed by MFS
or MFD),
including: Trustee fees discussed above; governmental fees;
interest charges;
taxes; membership dues in the Investment Company Institute
allocable to the
Fund; fees and expenses of independent auditors, of legal counsel,
and of any
transfer agent, registrar or dividend disbursing agent of the
Fund; expenses
of repurchasing and redeeming shares; expenses of preparing,
printing and
mailing share certificates, shareholder reports, notices, proxy
statements and
reports to governmental officers and commissions; brokerage and
other expenses
connected with the execution, recording and settlement of
portfolio security
transactions; insurance premiums; fees and expenses of State
Street Bank and
Trust Company, the Fund's custodian, for all services to the Fund,
including
safekeeping of funds and securities and maintaining required books
and
accounts; expenses of calculating the net asset value of the
Fund's shares;
and expenses of shareholder meetings. Expenses relating to the
issuance,
registration and qualification of shares of the Fund and the
preparation,
printing and mailing of prospectuses for such purposes are borne
by the Fund
except that its Distribution Agreement with MFD requires MFD to
pay for
prospectuses that are to be used for sales purposes and for the
qualification
of the Fund's shares for sale in the various states. For a list of
the Fund's
expenses, including the compensation paid to the Trustees who are
not officers
of MFS, during its fiscal year ended November 30, 1994, see
"Financial
Statements -- Statement of Operations" in the Annual Report.
Payment by the
Fund of brokerage commissions for brokerage and research services
of value to
the Adviser in serving its clients is discussed under the caption
"Portfolio
Transactions and Brokerage Commissions."
MFS pays the compensation of the Fund's officers and of any
Trustee who is an
officer of MFS. The Adviser also furnishes at its own expense all
necessary
administrative services, including office space, equipment,
clerical
personnel, investment advisory facilities, and all executive and
supervisory
personnel necessary for managing the Fund's investments, effecting
the Fund's
portfolio transactions and, in general, administering the Fund's
affairs.
The Advisory Agreement will remain in effect until August 1, 1995,
and will
continue in effect thereafter only if such continuance is
specifically
approved at least annually by the Board of Trustees or by vote of
a majority
of the Fund's outstanding voting securities and, in either case,
by a majority
of the Trustees who are not parties to the Advisory Agreement or
interested
persons of any such party. The Advisory Agreement terminates
automatically if
it is assigned and may be terminated without penalty by vote of a
majority of
the Fund's outstanding voting securities or by either party on not
more than
60 days' nor less than 30 days' written notice. The Advisory
Agreement further
provides that MFS may render services to others and that neither
MFS nor its
personnel shall be liable for any error of judgment or mistake of
law or for
any loss arising out of any investment or for any act or omission
in the
execution and management of the Fund, except for willful
misfeasance, bad
faith or gross negligence in the performance of its or their
duties or by
reason of reckless disregard of its or their obligations and
duties under the
Advisory Agreement.
Custodian
State Street Bank and Trust Company (the "Custodian") is the
custodian of the
Fund's assets. The Custodian's responsibilities include safe-
keeping and
controlling the Fund's cash and securities, handling the receipt
and delivery
of securities, determining income and collecting interest and
dividends on the
Fund's
investments, maintaining books of original entry for portfolio and
fund
accounting and other required books and accounts, and calculating
the daily
net asset value of each class of shares of the Fund. The Custodian
does not
determine the investment policies of the Fund or decide which
securities the
Fund will buy or sell. The Fund may, however, invest in
securities, including
repurchase agreements, issued by the Custodian and may deal with
the Custodian
as principal in securities transactions. The Custodian also acts
as the
dividend disbursing agent of the Fund.
Shareholder Servicing Agent
MFS Service Center, Inc. (the "Shareholder Servicing Agent"), a
wholly owned
subsidiary of MFS, is the Fund's shareholder servicing agent,
pursuant to a
Shareholder Servicing Agreement, dated August 1, 1985 (the "Agency
Agreement"), with the Fund. The Shareholder Servicing Agent's
responsibilities
under the Agency Agreement include administering and performing
transfer agent
functions and keeping records in connection with the issuance,
transfer and
redemption of each class of the shares of the Fund. For these
services, the
Shareholder Servicing Agent will receive a fee based on the net
assets of each
class of shares of the Fund, computed and paid monthly. In
addition, the
Shareholder Servicing Agent will be reimbursed by the Fund for
certain
expenses incurred by the Shareholder Servicing Agent on behalf of
the Fund.
State Street Bank and Trust Company, the dividend disbursing agent
of the
Fund, has contracted with the Shareholder Servicing Agent to
administer and
perform certain dividend and distribution disbursing functions for
the Fund.
Distributor
MFD, a wholly owned subsidiary of MFS, serves as distributor for
the
continuous offering of shares of the Fund pursuant to a
Distribution
Agreement, dated January 1, 1995 (the "Distribution Agreement"),
with the
Fund. Prior to January 1, 1995, MFS Financial Services, Inc.
("FSI"), another
wholly owned subsidiary of MFS, was the Fund's distributor. Where
this SAI
refers to MFD in relation to the receipt or payment of money with
respect to a
period or periods prior to January 1, 1995, such reference shall
be deemed to
include FSI as the predecessor in interest to MFD.
Class A shares: MFD acts as agent in selling shares of the Fund to
dealers.
The public offering price of Class A shares of the Fund is their
net asset
value next computed after the sale plus a sales charge which
varies based upon
the quantity purchased. The public offering price of Class A
shares of the
Fund is calculated by dividing the net asset value of a Class A
share by the
difference (expressed as a decimal) between 100% and the sales
charge
percentage of offering price applicable to the purchase (see
"Purchases" in
the Prospectus). The sales charge scale set forth in the
Prospectus applies to
purchases of Class A shares of the Fund alone or in combination
with shares of
all classes of certain other funds in the MFS Family of Funds (the
"MFS
Funds") and other funds (as noted under Right of Accumulation) by
any person,
including members of a family unit (e.g., husband, wife and minor
children)
and bona fide trustees, and also applies to purchases made under
the Right of
Accumulation or a Letter of Intent (see "Investment and Withdrawal
Programs"
below). A group might qualify to obtain quantity sales charge
discounts (see
"Investment and Withdrawal Programs" in this Statement of
Additional
Information).
Class A shares of the Fund may be sold at their net asset value to
certain
persons and in certain instances, as described in the Prospectus.
Such sales
are made without a sales charge to promote good will with
employees and others
with whom MFS, MFD and/or the Fund have business relationships,
and because
the sales effort, if any, involved in making such sales is
negligible.
MFD allows discounts to dealers (which are alike for all dealers)
from the
applicable public offering price of the Class A shares. Dealer
allowances
expressed as a percentage of offering price for all offering
prices are set
forth in the Prospectus (see "Purchases" in the Prospectus). The
commission
paid to the underwriter is the difference between the total amount
invested
and the sum of (a) the net proceeds to the Fund and (b) the dealer
commission.
Because of rounding in the computation of offering price, the
portion of the
sales charge paid to the distributor may vary and the total sales
charge may
be more or less than the sales charge calculated using the sales
charge
expressed as a percentage of offering price or as a percentage of
the net
amount invested as listed in the Prospectus. In the case of the
maximum sales
charge, the dealer retains 5% and MFD, on behalf of the Fund,
retains
approximately 3/4 of 1% of the public offering price. MFD pays
commissions to
dealers who initiate and are responsible for purchases of $1
million or more
as described in the Prospectus.
Class B Shares: MFD acts as agent in selling Class B shares of the
Fund to
dealers. The public offering price of Class B shares is their net
asset value
next computed after the sale (see "Purchases" in the Prospectus).
General: Neither MFD nor dealers are permitted to delay placing
orders to
benefit themselves by a price change. On occasion, MFD may obtain
brokers
loans from various banks, including the custodian bank for the MFS
Funds, to
facilitate the settlement of sales of shares of the Fund to
dealers. MFD may
benefit from its temporary holding of funds paid to it by
investment dealers
for the purchase of Fund shares.
During the Fund's fiscal year ended November 30, 1994, MFD
received sales
charges of $57,130 and dealers received sales charges of $366,448
(as their
concession on gross sales charges of $423,578) for selling Class A
shares of
the Fund; the Fund received $38,782,131 representing the aggregate
net asset
value of such shares. During the Fund's fiscal year ended November
30, 1993,
MFD received sales charges of $65,741 and dealers received sales
charges of
$377,623 (as their concession on gross sales charges of $443,364)
for selling
Class A shares of the Fund; the Fund received $39,927,804
representing the
aggregate net asset value of such shares. During the Fund's fiscal
year ended
November 30, 1992, MFD received sales charges of $95,632 and
dealers received
sales charges of $534,981 (as their concession on gross sales
charges of $630,613) for selling Class A shares of the Fund; the
Fund received
$49,638,096 representing the aggregate net asset value of such
shares.
During the Fund's fiscal year ended November 30, 1994, the CDSC
imposed on
redemption of Class A and Class B shares was $299 and $11,593,
respectively.
During the period September 7, 1993 through November 30, 1993, the
CDSC
imposed on redemption of Class B shares was $417.
The Distribution Agreement will remain in effect until August 1,
1995 and will
continue in effect thereafter only if such continuance is
specifically
approved at least annually by the Board of Trustees or by vote of
a majority
of the Fund's shares (as defined in "Investment Restrictions")
and, in either
case, by a majority of the Trustees who are not parties to the
Distribution
Agreement or interested persons of any such party. The
Distribution Agreement
terminates automatically if it is assigned and may be terminated
without
penalty by either party on not more than 60 days' nor less than 30
days'
notice.
5. PORTFOLIO TRANSACTIONS AND
BROKERAGE COMMISSIONS
Specific decisions to purchase or sell securities for the Fund are
made by the
Fund's portfolio manager who is an employee of the Adviser and who
is
appointed and supervised by its senior officers. Changes in the
Fund's
investments are reviewed by the Board of Trustees. The portfolio
manager may
serve other clients of the Adviser or any subsidiary of the
Adviser in a
similar capacity.
The primary consideration in placing portfolio security
transactions with
broker-dealers for execution is to obtain, and maintain the
availability of,
execution at the most favorable prices and in the most effective
manner
possible. The Adviser attempts to achieve this result by selecting
broker-dealers to execute portfolio transactions on behalf of the
Fund and
other clients of the Adviser on the basis of their professional
capability,
the value and quality of their brokerage services and the general
level of
their brokerage commissions. In the case of securities traded in
the
over-the-counter market (where no stated commissions are paid but
the prices
include a dealer's markup or markdown), the Adviser normally seeks
to deal
directly with the primary market makers, unless in its opinion,
best execution
is available elsewhere. In the case of securities purchased from
underwriters,
the cost of such securities generally includes a fixed
underwriting commission
or concession. From time to time soliciting dealer fees are
available to the
Adviser on the tender of the Fund's portfolio securities in so-
called tender
or exchange offers. Such soliciting dealer fees are in effect
recaptured for
the Fund by the Adviser. At present no other recapture
arrangements are in
effect.
Consistent with the foregoing primary consideration, the Rules of
Fair
Practice of the National Association of Securities Dealers, Inc.
(the "NASD")
and such other policies as the Trustees may determine, the Adviser
may
consider sales of shares of the Fund and of the other investment
company
clients of MFD as a factor in the selection of broker-dealers to
execute the
Fund's portfolio transactions.
Under the Advisory Agreement and as permitted by Section 28(e) of
the
Securities Exchange Act of 1934, the Adviser may cause the Fund to
pay a
broker-dealer which provides brokerage and research services to
the Adviser an
amount of commission for effecting a securities transaction for
the Fund in
excess of the amount other broker-dealers would have charged for
the
transaction if the Adviser determines in good faith that the
greater
commission is reasonable in relation to the value of the brokerage
and
research services provided by the executing broker-dealer viewed
in terms of
either a particular transaction or the Adviser's overall
responsibilities to
the Fund or to its other clients. Not all of such services are
useful or of
value in advising the Fund.
The term "brokerage and research services" includes advice as to
the value of
securities, the advisability of investing in, purchasing, or
selling
securities, and the availability of securities or of purchasers or
sellers of
securities; furnishing analyses and reports concerning issues,
industries,
securities, economic factors and trends, portfolio strategy and
the
performance of accounts; and effecting securities transactions and
performing
functions incidental thereto such as clearance and settlement.
Although commissions paid on every transaction will, in the
judgment of the
Adviser, be reasonable in relation to the value of the brokerage
services
provided, commissions exceeding those which another broker might
charge may be
paid to broker-dealers who were selected to execute transactions
on behalf of
the Fund and the Adviser's other clients in part for providing
advice as to
the availability of securities or of purchasers or sellers of
securities and
services in effecting securities transactions and performing
functions
incidental thereto such as clearance and settlement.
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 and
securities
may be bought or sold through such broker-dealers. The Trustees of
the Fund
(together with the Trustees of the other MFS Funds) have directed
the Adviser
to allocate a total of $20,000 of commission business from the MFS
Funds to
the Pershing Division of Donaldson, Lufkin and Jenrette as
consideration for
the annual renewal of the Lipper Directors' Analytical Data
Service (which
provides information useful to the Trustees in reviewing the
relationship
between the Fund and the Adviser).
The Adviser's investment management personnel attempt to evaluate
the quality
of Research provided by brokers. Results of this effort are
sometimes used by
the Adviser as a consideration in the selection of brokers to
execute
portfolio transactions. However, the Adviser is unable to quantify
the amount
of commissions set forth below which were paid as a result of such
Research
because a substantial number of transactions were effected through
brokers
which provide Research but which were selected principally because
of their
execution capabilities.
The management fee that the Fund pays to the Adviser will not be
reduced as a
consequence of the Adviser's receipt of brokerage and research
services. To
the extent the Fund's portfolio transactions are used to obtain
brokerage and
research services, the brokerage commissions paid by the Fund will
exceed
those that might otherwise be paid for such portfolio transactions
or for such
portfolio transactions and research by an amount which cannot be
presently
determined. Such services would be useful and of value to the
Adviser in
serving both the Fund and other clients and, conversely, such
services
obtained by the placement of brokerage business of other clients
would be
useful to the Adviser in carrying out its obligations to the Fund.
While such
services are not expected to reduce the expenses of the Adviser,
the Adviser
would, through use of the services, avoid the additional expenses
which would
be incurred if it should attempt to develop comparable information
through its
own staff.
For the fiscal year ended November 30, 1994, the Fund paid total
brokerage
commissions of $1,258,201 on total transactions (other than short-
term
obligations and U.S. Government Securities) of $1,173,694,214. For
the fiscal
year ended November 30, 1993, the Fund paid total brokerage
commissions of
$2,000,511, on total transactions (other than short-term
obligations and U.S.
Government securities) of $1,267,484,516. For the fiscal year
ended November
30, 1992, the Fund paid total brokerage commissions of $609,047 on
total
transactions (other than short-term obligations and U.S.
Government
securities) of $321,472,071.
In certain instances there may be securities which are suitable
for the Fund's
portfolio as well as for that of one or more of the other clients
of the
Adviser or any subsidiary of the Adviser. Investment decisions for
the Fund
and for such other clients are made with a view to achieving their
respective
investment objectives. It may develop that a particular security
is bought or
sold for only one client even though it might be held by, or
bought or sold
for, other clients. Likewise, a particular security may be bought
for one or
more clients when one or more other clients are selling that same
security.
Some simultaneous transactions are inevitable when several clients
receive
investment advice from the same investment adviser, particularly
when the same
security is suitable for the investment objectives of more than
one client.
When two or more clients are simultaneously engaged in the
purchase or sale of
the same security, the securities are allocated among clients in a
manner
believed to be equitable to each. It is recognized that in some
cases this
system could have a detrimental effect on the price or volume of
the security
as far as the Fund is concerned. In other cases, however, the Fund
believes
that its ability to participate in volume transactions will
produce better
executions for the Fund.
6. SHAREHOLDER SERVICES
Investment and Withdrawal Programs -- The Fund makes available the
following
programs designed to enable shareholders to add to their
investment or
withdraw from it with a minimum of paper work. These are described
below and,
in certain cases, in the Prospectus. The programs involve no extra
charge to
shareholders (other than a sales charge in the case of certain
Class A share
purchases) and may be changed or discontinued at any time by a
shareholder or
the Fund.
Letter of Intent: If a shareholder (other than a group purchaser
described
below) anticipates purchasing $50,000 or more of Class A shares of
the Fund
alone or in combination with shares of all classes of other MFS
Funds or MFS
Fixed Income Fund (a bank collective investment fund) within a 13-
month period
(or 36-month period, in the case of purchases of $1 million or
more), the
shareholder may obtain Class A shares of the Fund at the same
reduced sales
charge as though the total quantity were invested in one lump sum
by
completing the Letter of Intent section of the Fund's Account
Application, or
filing a separate Letter of Intent application (available from the
Shareholder
Servicing Agent) within 90 days of the commencement of purchases.
Subject to
acceptance by MFD and the conditions mentioned below, each
purchase will be
made at a public offering price applicable to a single transaction
of the
dollar amount specified in the Letter of Intent application. The
shareholder
or his dealer must inform MFD that the Letter of Intent is in
effect each time
shares are purchased. The shareholder makes no commitment to
purchase
additional shares, but if his purchases within 13-months (or 36-
months, in the
case of purchases of $1 million or more), plus the value of shares
credited
toward completion of the Letter of Intent do not total the sum
specified, he
will pay the increased amount of the sales charge as described
below.
Instructions for issuance of shares in the name of a person other
than the
person signing the Letter of Intent application must be
accompanied by a
written statement from the dealer stating that the shares were
paid for by the
person signing such Letter. Neither income dividends nor capital
gain
distributions taken in additional shares will apply toward the
completion of
the Letter of Intent. Dividends and distributions of other MFS
Funds
automatically reinvested in shares of the Fund pursuant to the
Distribution
Investment Program will also not apply toward completion of the
Letter of
Intent.
Out of the shareholder's initial purchase (or subsequent purchases
if
necessary), 5% of the dollar amount specified in the Letter of
Intent
application shall be held in escrow by the Shareholder Servicing
Agent in the
form of shares registered in the shareholder's name. All income
dividends and
capital gain distributions on escrowed shares will be paid to the
shareholder
or to his order. When the minimum investment so specified is
completed (either
prior to or by the end of the 13-month period or 36-month period,
as
applicable), the shareholder will be notified and the escrowed
shares will be
released.
If the intended investment is not completed, the Shareholder
Servicing Agent
will redeem an appropriate number of the escrowed shares in order
to realize
such difference. Shares remaining after any such redemption will
be released
by the Shareholder Servicing Agent. By completing and signing the
Account
Application or separate Letter of Intent application, the
shareholder
irrevocably appoints the Shareholder Servicing Agent his attorney
to surrender
for redemption any or all escrowed shares with full power of
substitution in
the premises.
Right of Accumulation: A shareholder qualifies for cumulative
quantity
discounts on the purchase of Class A shares when his new
investment, together
with the current offering price value of all holdings of all
classes of shares
of that shareholder in the MFS Funds or MFS Fixed Income Fund (a
bank
collective investment fund)reaches a discount level. See
"Purchases" in the
Prospectus for the sales charges on quantity discounts. For
example, if a
shareholder owns shares valued at $37,500 and purchases an
additional $12,500
of Class A shares of the Fund, the sales charge for the $12,500
purchase would
be at the rate of 4.75% (the rate applicable to single
transactions of
$50,000). A shareholder must provide the Shareholder Servicing
Agent (or his
investment dealer must provide MFD) with information to verify
that the
quantity sales charge discount is applicable at the time the
investment is
made.
Distribution Investment Program: Distributions of dividends and
capital gains
made by the Fund with respect to a particular class of shares may
be
automatically invested in shares of the same class of one of the
other MFS
Funds, if shares of the fund are available for sale. Such
investments will be
subject to additional purchase minimums. Distributions will be
invested at net
asset value (exclusive of any sales charge) and not subject to any
CDSC.
Distributions will be invested at the close of business on the
payable date
for the distribution. A shareholder considering the Distribution
Investment
Program should obtain and read the prospectus of the other fund
and consider
the differences in objectives and policies before making any
investment.
Systematic Withdrawal Plan: A shareholder may direct the
Shareholder Servicing
Agent to send him (or anyone he designates) regular periodic
payments, as
designated on the Account Application and based upon the value of
his account.
Each payment under a Systematic Withdrawal Plan ("SWP") must be at
least $100,
except in certain limited circumstances. The aggregate withdrawals
of Class B
shares in any year pursuant to a SWP generally are limited to 10%
of the value
of the account at the time of the establishment of the SWP. SWP
payments are
drawn from the proceeds of share redemptions (which would be a
return of
principal and, if reflecting a gain, would be taxable).
Redemptions of Class B
shares will be made in the following order: (i) any "Free Amount";
(ii) to the
extent necessary, any "Reinvested Shares"; and (iii) to the extent
necessary,
the "Direct Purchase" subject to the lowest CDSC (as such terms
are defined in
"Contingent Deferred Sales Charge" in the Prospectus). The CDSC
will be waived
in the case of redemptions of Class B shares pursuant to a SWP,
but will not
be waived in the case of SWP redemptions of Class A shares which
are subject
to a CDSC. To the extent that redemptions for such periodic
withdrawals exceed
dividend income reinvested in the account, such redemptions will
reduce and
may eventually exhaust the number of shares in the shareholder's
account. All
dividend and capital gain distributions for an account with a SWP
will be
reinvested in additional full and fractional shares of the Fund at
the net
asset value in effect at the close of business on the record date
for such
distributions. To initiate this service, shares having an
aggregate value of
at least $10,000 either must be held on deposit by, or
certificates for such
shares must be deposited with, the Shareholder Servicing Agent.
With respect
to Class A shares, maintaining a withdrawal plan concurrently with
an
investment program would be disadvantageous because of the sales
charges
included in share purchases and the imposition of a CDSC on
certain
redemptions. The shareholder by written instruction to the
Shareholder
Servicing Agent may deposit into the account additional shares of
the Fund,
change the payee or change the dollar amount of each payment. The
Shareholder
Servicing Agent may charge the account for services rendered and
expenses
incurred beyond those normally assumed by the Fund with respect to
the
liquidation of shares. No charge is currently assessed against the
account,
but one could be instituted by the Shareholder Servicing Agent on
60 days'
notice in writing to the shareholder in the event that the Fund
ceases to
assume the cost of these services. The Fund may terminate any SWP
for an
account if the value of the account falls below $5,000 as a result
of share
redemptions (other than as a result of a SWP) or an exchange of
shares of the
Fund for shares of another MFS Fund. Any SWP may be terminated at
any time by
either the shareholder or the Fund.
Invest by Mail: Additional investments of $50 or more may be made
at any time
by mailing a check payable to the Fund directly to the Shareholder
Servicing
Agent. The shareholder's account number and the name of his
investment dealer
must be included with each investment.
Group Purchases: A bona fide group and all its members may be
treated as a
single purchaser and, under the Right of Accumulation (but not a
Letter of
Intent) obtain quantity sales charge discounts on the purchase of
Class A
shares if the group (1) gives its endorsement or authorization to
the
investment program so it may be used by the investment dealer to
facilitate
solicitation of the membership, thus effecting economies of sales
effort; (2)
has been in existence for at least six months and has a legitimate
purpose
other than to purchase mutual fund shares at a discount; (3) is
not a group of
individuals whose sole organizational nexus is as credit
cardholders of a
company, policyholders of an insurance company, customers of a
bank or
broker-dealer, clients of an investment adviser or other similar
groups; and
(4) agrees to provide certification of membership of those members
investing
money in the MFS Funds upon the request of MFD.
Automatic Exchange Plan: Shareholders having account balances of
at least
$5,000 in any MFS Fund may participate in the Automatic Exchange
Plan. The
Automatic Exchange Plan provides for automatic exchanges of funds
from the
shareholder's account in an MFS Fund for investment in the same
class of
shares of other MFS Funds selected by the shareholder provided
such shares are
available for sale. Under the Automatic Exchange Plan, exchanges
of at least
$50 each may be made to up to four different funds effective on
the seventh
day of each month or of every third month, depending whether
monthly or
quarterly exchanges are elected by the shareholder. If the seventh
day of the
month is not a business day, the transaction will be processed on
the next
business day. Generally, the initial
exchange will occur after receipt and processing by the
Shareholder Servicing
Agent of an application in good order. Exchanges will continue to
be made from
a shareholder's account in any MFS Fund, as long as the balance of
the account
is sufficient to complete the exchanges. Additional payments made
to a
shareholder's account will extend the period that exchanges will
continue to
be made under the Automatic Exchange Plan. However, if additional
payments are
added to an account subject to the Automatic Exchange Plan shortly
before an
exchange is scheduled, such funds may not be available for
exchanges until the
following month; therefore, care should be used to avoid
inadvertently
terminating the Automatic Exchange Plan through exhaustion of the
account
balance.
No transaction fee for exchanges will be charged in connection
with the
Automatic Exchange Plan. However, exchanges of shares of MFS Money
Market
Fund, MFS Government Money Market Fund and Class A shares of MFS
Cash Reserve
Fund will be subject to any applicable sales charge. Changes in
amounts to be
exchanged to each fund, the funds to which exchanges are to be
made and the
timing of exchanges (monthly or quarterly), or termination of a
shareholder's
participation in the Automatic Exchange Plan will be made after
instructions
in writing or by telephone (an "Exchange Change Request") are
received by the
Shareholder Servicing Agent in proper form (i.e., if in writing --
signed by
the record owner(s) exactly as shares are registered; if by
telephone --
proper account identification is given by the dealer or
shareholder of
record). Each Exchange Change Request (other than termination of
participation
in the program) must involve at least $50. Generally, if an
Exchange Change
Request is received by telephone or in writing before the close of
business on
the last business day of a month, the Exchange Change Request will
be
effective for the following month's exchange.
A shareholder's right to make additional investments in any of the
MFS Funds,
to make exchanges of shares from one MFS Fund to another and to
withdraw from
an MFS Fund, as well as a shareholder's other rights and
privileges are not
affected by a shareholder's participation in the Automatic
Exchange Plan.
The Automatic Exchange Plan is part of the Exchange Privilege. For
additional
information regarding the Automatic Exchange Plan, including the
treatment of
any CDSC, see "Exchange Privilege" below.
Reinstatement Privilege: Shareholders of the Fund and shareholders
of the
other MFS Funds (except MFS Money Market Fund, MFS Government
Money Market
Fund and holders of Class A shares of MFS Cash Reserve Fund in the
case where
the shares are acquired through direct purchase or reinvested
dividends) who
have redeemed their shares have a one-time right to reinvest the
redemption
proceeds in the same class of shares of any of the MFS Funds (if
shares of the
fund are available for sale) at net asset value (without a sales
charge) and,
if applicable, with credit for any CDSC paid. In the case of
proceeds
reinvested in shares of MFS Money Market Fund, MFS Government
Money Market
Fund and Class A shares of MFS Cash Reserve Fund, the shareholder
has the
right to exchange the acquired shares for shares of another MFS
Fund at net
asset value pursuant to the exchange privilege described below.
Such a
reinvestment must be made within 90 days of the redemption and is
limited to
the amount of the redemption proceeds. If the shares credited for
any CDSC
paid are then redeemed within six years of the initial purchase in
the case of
Class B shares or 12 months of the initial purchase in the case of
certain
Class A shares, a CDSC will be imposed upon redemption. Although
redemptions
and repurchases of shares are taxable events, a reinvestment
within such
90-day period of time in the same fund may be considered a "wash
sale" and may
result in the inability to recognize currently all or a portion of
any loss
realized on the original redemption for federal income tax
purposes. Please
see your tax adviser for further information.
Exchange Privilege: Subject to the requirements set forth below,
some or all
of the shares of the same class in an account with the Fund for
which payment
has been received by the Fund (i.e., an established account) may
be exchanged
for shares of the same class of any of the other MFS Funds (if
available for
sale) at net asset value. Exchanges will be made only after
instructions in
writing or by telephone (an "Exchange Request") are received for
an
established account by the Shareholder Servicing Agent.
Each Exchange Request must be in proper form (i.e., if in writing
- -- signed by
the record owner(s) exactly as the shares are registered; if by
telephone --
proper account identification is given by the dealer or
shareholder of
record), and each exchange must involve either shares having an
aggregate
value of at least $1,000 ($50 in the case of retirement plan
participants
whose sponsoring organizations subscribe to the MFS FUNDamental
401(k) Plan or
another similar 401(k) recordkeeping system made available by the
Shareholder
Servicing Agent) or all the shares in the account. Each exchange
involves the
redemption of the shares of the Fund to be exchanged and the
purchase at net
asset value (i.e., without a sales charge) of shares of the same
class of the
other MFS Fund. Any gain or loss on the redemption of the shares
exchanged is
reportable on the shareholder's federal income tax return, unless
both the
shares received and the shares surrendered in the exchange are
held in a
tax-deferred retirement plan or other tax-exempt account. No more
than five
exchanges may be made in any one Exchange Request by telephone. If
an Exchange
Request is received by the Shareholder Servicing Agent prior to
the close of
regular trading on the Exchange, the exchange usually will occur
on that day
if all of the requirements set forth above have been complied with
at that
time. However, payment of the redemption proceeds by the Fund, and
thus
purchase of shares of the other MFS Fund, may be delayed for up to
seven days
if the Fund determines that such a delay would be in the best
interest of all
of its shareholders. Investment dealers which have satisfied
criteria
established by MFD may also communicate a shareholder's exchange
instruction
to MFD by facsimile subject to the requirements set forth above.
No CDSC is imposed on exchanges among the MFS Funds, although
liability for
the CDSC is carried forward to the exchanged shares. For purposes
of
calculating the CDSC upon
redemption of shares acquired in an exchange, the purchase of
shares acquired
in one or more exchanges is deemed to have occurred at the time of
the
original purchase of the exchanged shares.
Additional information with respect to any of the MFS Funds,
including a copy
of its current prospectus, may be obtained from investment dealers
or the
Shareholder Servicing Agent. A shareholder considering an exchange
should
obtain and read the prospectus of the other fund and consider the
differences
in objectives and policies before making any exchange.
Shareholders in the
other MFS Funds (except shares of MFS Money Market Fund, MFS
Government Money
Market Fund and Class A shares of MFS Cash Reserve Fund, acquired
through
direct purchase and dividends reinvested prior to June 1, 1992)
have the right
to exchange their shares for shares of the MFS Funds, subject to
the
conditions, if any, set forth in their respective prospectuses. In
addition,
unitholders of the MFS Fixed Fund have the right to exchange their
units
(except units acquired through direct purchases) for shares of the
Fund,
subject to the conditions, if any, imposed upon such unitholders
by the MFS
Fixed Fund.
Any state income tax advantages for investment in shares of each
state-specific series of MFS Municipal Series Trust may only
benefit residents
of such states. Investors should consult with their own tax
advisers to be
sure this is an appropriate investment, based on their residency
and each
state's income tax laws.
The exchange privilege (or any aspect of it) may be changed or
discontinued
and is subject to certain limitations (see "Purchases" in the
Prospectus).
Tax-Deferred Retirement Plans: Shares of the Fund may be purchased
by all
types of tax-deferred retirement plans. MFD makes available
through investment
dealers plans and/or custody agreements for the following:
Individual Retirement Accounts (IRAs) (for individuals and their
non-employed spouses who desire to make limited contributions to
a
tax-deferred retirement program and, if eligible, to receive a
federal
income tax deduction for amounts contributed);
Simplified Employee Pension (SEP-IRA) Plans;
Retirement Plans Qualified under Section 401(k) of the Internal
Revenue Code
of 1986, as amended;
403(b) Plans (deferred compensation arrangements for employees
of public
school systems and certain non-profit organizations); and
Certain other qualified pension and profit-sharing plans.
The plan documents provided by MFD designate a trustee or
custodian (unless
another trustee or custodian is designated by the individual or
group
establishing the plan) and contain specific information about the
plans. Each
plan provides that dividends and distributions will be reinvested
automatically. For further details with respect to any plan,
including fees
charged by the trustee, custodian or MFD, tax consequences and
redemption
information, see the specific documents for that plan. Plan
documents other
than those provided by MFD may be used to establish any of the
plans described
above. Third party administrative services, available for some
corporate
plans, may limit or delay the processing of transactions.
Investors should consult with their tax advisers before
establishing any of
the tax-deferred retirement plans described above.
7. TAX STATUS
The Fund has elected to be treated and intends to qualify each
year as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code
of 1986, as amended (the "Code"), by meeting all applicable
requirements of
Subchapter M, including requirements as to the nature of the
Fund's gross
income, the amount of Fund distributions, and the composition and
holding
period of the Fund's portfolio assets. Because the Fund intends to
distribute
all of its net investment income and net realized capital gains to
shareholders in accordance with the timing requirements imposed by
the Code,
it is not expected that the Fund will be required to pay any
federal income or
excise taxes, although the Fund's foreign-source income may be
subject to
foreign withholding taxes. If the Fund should fail to qualify as a
"regulated
investment company" in any year, the Fund would incur a regular
corporate
federal income tax upon its taxable income and Fund distributions
would
generally be taxable as ordinary dividend income to shareholders.
Shareholders of the Fund normally will have to pay federal income
taxes, and
any state and local taxes, on the dividends and capital gain
distributions
they receive from the Fund. Dividends from income, including
certain foreign
currency gains, and any distributions from net short-term capital
gains,
whether received in cash or reinvested in additional shares, are
taxable to
shareholders as ordinary income for federal income tax purposes. A
portion of
the Fund's ordinary income dividends (but none of its capital
gains) is
eligible for the dividends-received deduction for corporations if
the
recipient otherwise qualifies for that deduction with respect to
its holding
of Fund shares. Availability of the deduction for particular
shareholders is
subject to certain limitations, and deducted amounts may be
subject to the
alternative minimum tax or result in certain basis adjustments.
Distributions
of net capital gains (i.e., the excess of the net long-term
capital gains over
the short-term capital losses), whether received in cash or
invested in
additional shares, are taxable to the Fund's shareholders as long-
term capital
gains for federal income tax purposes regardless of how long they
have owned
shares in the Fund. Fund dividends declared in October, November
or December
and paid the following January, will be taxable to shareholders as
if received
on December 31 of the year in which they are declared.
Any dividend or distribution will have the effect of reducing the
per share
net asset value of shares in the Fund by the amount of the
dividend or
distribution. Shareholders purchasing shares shortly before the
record date of
any distribution may thus pay
the full price for the shares and then effectively receive a
portion of the
purchase price back as a taxable distribution.
The Fund's current dividend and accounting policies will affect
the amount,
timing, and character of distributions to shareholders, and may,
under certain
circumstances, make an economic return of capital taxable to
shareholders. In
general, any gain or loss realized upon a taxable disposition of
shares of the
Fund by a shareholder that holds such shares as a capital asset
will be
treated as long-term capital gain or loss if the shares have been
held for
more than twelve months and otherwise as a short-term capital gain
or loss.
However, any loss realized upon a disposition of shares in the
Fund held for
six months or less will be treated as a long-term capital loss to
the extent
of any distributions of net capital gain made with respect to
those shares.
Any loss realized upon a redemption of shares may also be
disallowed under
rules relating to wash sales. Gain may be increased (or loss
reduced) upon a
redemption of Class A shares of the Fund within ninety days after
their
purchase followed by any purchase (including purchases by exchange
or by
reinvestment) of the Fund or of another MFS Fund (or any other
shares of an
MFS Fund generally sold subject to a sales charge) without payment
of an
additional sales charge of Class A shares.
The Fund's investment in zero coupon bonds and certain securities
purchased at
a market discount will cause it to realize income prior to the
receipt of cash
payments with respect to those securities. In order to distribute
this income
and avoid a tax on the Fund, the Fund may be required to liquidate
portfolio
securities that it might otherwise have continued to hold,
potentially
resulting in additional taxable gain or loss to the Fund.
The Fund's transactions in options, Futures Contracts, and Forward
Contracts
will be subject to special tax rules that may affect the amount,
timing, and
character of Fund income and distributions to shareholders. For
example,
certain positions held by the Fund on the last business day of
each taxable
year will be marked to market (i.e., treated as if closed out) on
such day,
and any gain or loss associated with the positions will be treated
as 60%
long-term and 40% short-term capital gain or loss. Certain
positions held by
the Fund that substantially diminish its risk of loss with respect
to other
positions in its portfolio may constitute "straddles," and may be
subject to
special tax rules that would cause deferral of Fund losses,
adjustments in the
holding periods of Fund securities, and conversion of short-term
into
long-term capital losses. Certain tax elections exist for
straddles that may
alter the effects of these rules. The Fund will limit its
activities in
options, Futures Contracts, and Forward Contracts to the extent
necessary to
meet the requirements of Subchapter M of the Code.
Special tax considerations apply with respect to foreign
investments of the
Fund. Foreign exchange gains and losses realized by the Fund will
generally be
treated as ordinary income and losses. The holding of foreign
currencies for
non-hedging purposes and investment by the Fund in certain
"passive foreign
investment companies" may be limited in order to avoid a tax on
the Fund. The
Fund may elect to mark to market any investments in "passive
foreign
investment companies" on the last day of each year. This election
may cause
the Fund to recognize income prior to the receipt of cash payments
with
respect to those investments; in order to distribute this income
and avoid a
tax on the Fund, the Fund may be required to liquidate portfolio
securities
that it might otherwise have continued to hold.
Investment income received by the Fund from sources within foreign
countries
may be subject to foreign income taxes withheld at the source; the
Fund does
not expect to be able to pass through to shareholders foreign tax
credits with
respect to such foreign taxes. The United States has entered into
tax treaties
with many foreign countries that may entitle the Fund to a reduced
rate of tax
or an exemption from tax on such income; the Fund intends to
qualify for
treaty reduced rates where available. It is impossible to
determine the
effective rate of foreign tax in advance since the amount of the
Fund's assets
to be invested within various countries is not known.
Dividends and certain other payments to persons who are not
citizens or
residents of the United States or U.S. entities ("Non-U.S.
Persons") are
generally subject to U.S. tax withholding at a rate of 30%. The
Fund intends
to withhold U.S. federal income tax at the rate of 30% on taxable
dividends
and other payments to Non-U.S. Persons that are subject to such
withholding,
regardless of whether a lower treaty rate may be permitted. Any
amounts
overwithheld may be recovered by such persons by filing a claim
for refund
with the U.S. Internal Revenue Service within the time period
appropriate to
such claims.
The Fund is also required in certain circumstances to apply backup
withholding
of 31% on taxable dividends and redemption proceeds paid to any
shareholder
who does not furnish to the Fund certain information and
certifications or who
is otherwise subject to backup withholding. Backup withholding
will not,
however, be applied to payments that have been subject to 30%
withholding.
Distributions received from the Fund by Non-U.S. Persons may also
be subject
to tax under the laws of their own jurisdiction.
As long as it qualifies as a regulated investment company under
the Code, the
Fund will not be required to pay Massachusetts income or excise
taxes.
8. DETERMINATION OF NET ASSET VALUE
AND PERFORMANCE
Net Asset Value
The net asset value per share of each class of the Fund is
determined each day
during which the Exchange is open for trading. As of the date of
this SAI, the
Exchange is open for trading every weekday except for the
following holidays
(or the days on which they are observed New Year's Day,
Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and
Christmas Day.) This determination is made once during each such
day as of the
close of regular trading on the Exchange by deducting the amount
of the
liabilities attributable to the class from the value of the assets
attributable to the class and dividing the difference by the
number of shares
of the class outstanding. Forward Contracts will be valued using a
pricing
model taking into consideration market data from an external
pricing source.
Use of the pricing services has been approved by the Fund's Board
of Trustees.
All other securities, futures contracts and options in the Fund's
portfolio
(other than short-term obligations) for which the principal market
is one or
more securities or commodities exchanges (whether domestic or
foreign) will be
valued at the last reported sale price or at the settlement price
prior to the
determination (or if there has been no current sale, at the
closing bid price)
on the primary exchange on which such securities, futures
contracts or options
are traded; but if a securities exchange is not the principal
market for
securities, such securities will, if market quotations are readily
available,
be valued at current bid prices, unless such securities are
reported on the
NASDAQ system, in which case they are valued at the last sale
price or, if no
sales occurred during the day, at the last quoted bid price.
Short-term
obligations with a remaining maturity in excess of 60 days will be
valued upon
dealer supplied valuations. Other short-term obligations are
valued at
amortized cost, which constitutes fair value as determined by the
Board of
Trustees. Portfolio securities for which there are no such
quotations or
valuations are valued at fair value as determined in good faith by
or at the
direction of the Board of Trustees.
Performance Information
Total Rate of Return: The Fund will calculate its total rate of
return for
each class of shares for certain periods by determining the
average annual
compounded rates of return over those periods that would cause an
investment
of $1,000 (made with all distributions reinvested and reflecting
the CDSC or
the maximum public offering price) to reach the value of that
investment at
the end of the periods. The Fund may also calculate (i) a total
rate of
return, which is not reduced with respect to Class B shares by the
CDSC (4%
maximum for shares purchased on and after September 1, 1993) and
therefore may
result in a higher rate of return, (ii) a total rate of return
assuming an
initial account value of $1,000, which will result in a higher
rate of return
with respect to Class A shares since the value of the initial
account will not
be reduced by the maximum sales charge (currently 5.75%) and/or
(iii) total
rates of return which represent aggregate performance over a
period or
year-by-year performance, and which may or may not reflect the
effect of the
maximum or other sales charge or CDSC. The Fund's average annual
total rate of
return for Class A shares, reflecting the initial investment at
the current
maximum public offering price for the one-year, five-year and ten-
year periods
ended November 30, 1994 was, respectively, -10.45%, 8.25% and
12.43%. The
Fund's average annual total rate of return for Class A shares not
giving
effect to the sales charge on the initial investment for the one-
year,
five-year and ten-year periods ended November 30, 1994 was,
respectively,
- -5.00%, 9.54% and 13.10%. The Fund's average annual total rate of
return for
Class B shares, reflecting the CDSC, for the one-year period ended
November
30, 1994 and for the period September 7, 1993 to November 30, 1994
was -9.08%
and -7.24%, respectively. The Fund's average annual total rate of
return for
Class B shares, not giving effect to the CDSC, for the one-year
period ended
November 30, 1994 and for the period September 7, 1993 to November
30, 1994
was -5.82% and -4.64%, respectively.
Performance Results: The performance results for Class A shares
below, based
on an assumed initial investment of $10,000 in Class A shares,
cover the
period from January 1, 1985 through December 31, 1994. It has been
assumed
that dividends and capital gain distributions were reinvested in
additional
shares. These performance results, as well as any total rate of
return
quotations provided by the Fund, should not be considered as
representative of
the performance of the Fund in the future since the net asset
value and public
offering price of shares of the Fund will vary based not only on
the type,
quality and maturities of the securities held in the Fund's
portfolio, but
also on changes in the current value of such securities and on
changes in the
expenses of the Fund. These factors and possible differences in
the methods
used to calculate total rates of return should be considered when
comparing
the total rate of return of the Fund to total rates of return
published for
other investment companies or other investment vehicles. Total
rate of return
reflects the performance of both principal and income. Current net
asset value
of shares and account balance information may be obtained by
calling
1-800-MFS-TALK (637-8255).
Massachusetts Investors Growth Stock Fund
Value of
Year Ended Value of Reinvested Value of
December Initial $10,000 Capital Gain Reinvested Total
31 Investment Distributions Dividends Value
- ---------- --------------- ------------- ---------- -------
1985 8,730 2,110 510 11,350
1986 7,398 4,776 594 12,768
1987 6,700 6,082 732 13,514
1988 6,222 6,995 851 14,068
1989 7,421 10,494 1,179 19,094
1990 6,622 10,418 1,149 18,189
1991 9,161 16,119 1,588 26,868
1992 9,177 17,832 1,591 28,600
1993 8,934 22,253 1,549 32,736
1994 7,484 21,752 1,297 30,533
Explanatory notes: The results in the table assume that the
initial investment
on January 1, 1985 has been reduced by the current maximum
applicable sales
charge of 5.75%. No adjustment has been made for any income taxes
payable by
shareholders.
From time to time the Fund may, as appropriate, quote Fund
rankings or reprint
all or a portion of evaluations of fund performance and operations
appearing
in various independent publications, including but not limited to
the
following: Money, Fortune, U.S. News and World Report, Kiplinger's
Personal
Finance, The Wall Street Journal, Barron's, Investors Business
Daily,
Newsweek, Financial World, Financial Planning, Investment Advisor,
USA Today,
Pensions and Investments, SmartMoney, Forbes, Global Finance,
Registered
Representative, Institutional Investor, the Investment Company
Institute,
Johnson's Charts, Morningstar, Lipper Analytical Services, Inc.,
CDA
Wiesenberger, Shearson Lehman and Salomon Bros. Indi-
ces, Ibbotson, Business Week, Lowry Associates, Media General,
Investment
Company Data, The New York Times, Your Money, Strangers Investment
Advisor,
Financial Planning on Wall Street, Standard and Poor's, Individual
Investor,
The 100 Best Mutual Funds You Can Buy, by Gordon K. Williamson,
Consumer Price
Index, and Sanford C. Bernstein & Co. Fund performance may also be
compared to
the performance of other mutual funds tracked by financial or
business
publications or periodicals.
The Fund may also quote evaluations mentioned in independent radio
or
television broadcasts.
From time to time the Fund may use charts and graphs to illustrate
the past
performance of various indices such as those mentioned above and
illustrations
using hypothetical rates of return to illustrate the effects of
compounding
and tax-deferral.
The Fund may advertise examples of the effects of periodic
investment plans,
including the principle of dollar cost averaging. In such a
program, an
investor invests a fixed dollar amount in a fund at periodic
intervals,
thereby purchasing fewer shares when prices are high and more
shares when
prices are low. While such a strategy does not assure a profit or
guard
against a loss in a declining market, the investor's average cost
per share
can be lower than if fixed numbers of shares are purchased at the
same
intervals.
MFS Firsts: MFS has a long history of innovations.
-- 1924 -- Massachusetts Investors Trust is established as the
first mutual
fund in America.
-- 1924 -- Massachusetts Investors Trust is the first mutual
fund to make
full public disclosure of its operations in shareholder
reports.
-- 1932 -- One of the first internal research departments is
established to
provide in-house analytical capability for an investment
management
firm.
-- 1933 -- Massachusetts Investors Trust is the first mutual
fund to
register under the Securities Act of 1933. ("Truth in
Securities Act" or
"Full Disclosure Act".)
-- 1936 -- Massachusetts Investors Trust is the first mutual
fund to allow
shareholders to take capital gain distributions either in
additional
shares or cash.
-- 1976 -- MFS Municipal Bond Fund is among the first municipal
bond funds
established.
-- 1977 -- Spectrum becomes the first combination
fixed/variable annuity
with no initial sales charge.
-- 1981 -- MFS World Governments Fund is established as
America's first
globally diversified fixed-income mutual fund.
-- 1984 -- MFS Municipal High Income Fund is the first open-end
mutual fund
to seek high tax-free income from lower-rated municipal
securities.
-- 1986 -- MFS Managed Sectors Fund becomes the first mutual
fund to target
and shift investments among industry sectors for
shareholders.
-- 1986 -- MFS Municipal Income Trust is the first closed-end,
high-yield
municipal bond fund traded on the New York Stock Exchange.
-- 1987 -- MFS Multimarket Income Trust is the first closed-
end,
multimarket high income fund listed on the New York Stock
Exchange.
-- 1989 -- MFS Regatta becomes America's first non-qualified
market-value-adjusted fixed/variable annuity.
-- 1990 -- MFS World Total Return Fund is the first global
balanced fund.
-- 1993 -- MFS World Growth Fund is the first global emerging
markets fund
to offer the expertise of two sub-advisers.
-- 1993 -- MFS becomes money manager of MFS Union Standard
Trust, the first
trust to invest in companies deemed to be union-friendly by
an advisory
board of senior labor officials, senior managers of
companies with
significant labor contracts, academics and other national
labor leaders
or experts.
9. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund's Declaration of Trust permits the Trustees to issue an
unlimited
number of full and fractional Shares of Beneficial Interest
(without par
value) of one or more separate series and to divide or combine the
shares of
any series into a greater or lesser number of shares without
thereby changing
the proportionate beneficial interests in that series. The
Declaration of
Trust further authorizes the Trustees to classify or reclassify
any series of
shares into one or more classes. Pursuant thereto, the Trustees
have
authorized the issuance of two classes of shares of the Fund,
Class A shares
and Class B shares. Each share of a class of the Fund represents
an equal
proportionate interest in the assets of the Fund allocable to that
class. Upon
liquidation of the Fund, shareholders of each class of the Fund
are entitled
to share pro rata in the Fund's net assets allocable to such class
available
for distribution to shareholders. The Fund reserves the right to
create and
issue a number of series and additional classes of shares, in
which case the
shares of each class of a series would participate equally in the
earnings,
dividends and assets allocable to that class of the particular
series.
Shareholders are entitled to one vote for each share held and may
vote in the
election of Trustees and on other matters submitted to meetings of
shareholders. Although Trustees are not elected annually by the
shareholders,
the Declaration of Trust provides that a Trustee may be removed
from office at
a meeting of shareholders by a vote of two-thirds of the
outstanding shares of
the Fund. A meeting of shareholders will be called
upon the request of shareholders of record holding in the
aggregate not less
than 10% of the outstanding voting securities of the Fund. No
material
amendment may be made to the Fund's Declaration of Trust without
the
affirmative vote of a majority of the Fund's outstanding shares
(as defined in
"Investment Restrictions"). The Fund may be terminated (i) upon
the merger or
consolidation of the Fund with another organization or upon the
sale of all or
substantially all of its assets, if approved by the vote of the
holders of
two-thirds of the Fund's outstanding shares, except that if the
Trustees
recommend such merger, consolidation or sale, the approval by vote
of the
holders of a majority of the Fund's outstanding shares will be
sufficient, or
(ii) upon liquidation and distribution of the assets of the Fund,
if approved
by the vote of the holders of two-thirds of the outstanding shares
of the
Fund, or (iii) by the Trustees by written notice to its
shareholders. If not
so terminated the Fund will continue indefinitely.
The Fund is an entity of the type commonly known as a
"Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust may,
under
certain circumstances, be held personally liable as partners for
its
obligations. However, the Declaration of Trust contains an express
disclaimer
of shareholder liability for acts or obligations of the Fund and
provides for
indemnification and reimbursement of expenses out of the Fund
property for any
shareholder held personally liable for the obligations of the
Fund. The
Declaration of Trust also provides that the Fund shall maintain
appropriate
insurance (for example, fidelity bonding and errors and omissions
insurance)
for the protection of the Fund, its shareholders, Trustees,
officers,
employees and agents covering possible tort and other liabilities.
Thus, the
risk of a shareholder incurring financial loss on account of
shareholder
liability is limited to circumstances in which both inadequate
insurance
existed and the Fund itself was unable to meet its obligations.
The Declaration of Trust further provides that obligations of the
Fund are not
binding upon the Trustees individually but only upon the property
of the Fund
and that the Trustees will not be liable for any action or failure
to act, but
nothing in the Declaration of Trust protects a Trustee against any
liability
to which he would otherwise be subject by reason of willful
misfeasance, bad
faith, gross negligence, or reckless disregard of the duties
involved in the
conduct of his office.
10. DISTRIBUTION PLANS
Class A Distribution Plan: The Trustees have adopted a
Distribution Plan
relating to Class A shares (the "Class A Distribution Plan")
pursuant to
Section 12(b) of the 1940 Act and Rule 12b-1 thereunder (the
"Rule") after
having concluded that there is a reasonable likelihood that the
Class A
Distribution Plan would benefit the Fund and its Class A
shareholders. The
Class A Distribution Plan is designed to promote sales, thereby
increasing the
net assets of the Fund. Such an increase may reduce the expense
ratio to the
extent the Fund's fixed costs are spread over a larger net asset
base. Also,
an increase in net assets may lessen the adverse effects that
could result
were the Fund required to liquidate portfolio securities to meet
redemptions.
There is, however, no assurance that the net assets of the Fund
will increase
or that the other benefits referred to above will be realized.
The Class A Distribution Plan provides that the Fund will pay MFD
up to (but
not necessarily all of) an aggregate of 0.35% per annum of the
average daily
net assets attributable to the Class A shares annually in order
that MFD may
pay expenses on behalf of the Fund related to the distribution and
servicing
of its Class A shares. The expenses to be paid by MFD on behalf of
the Fund
include a service fee to securities dealers which enter into a
sales agreement
with MFD of up to 0.25% per annum of the portion of the Fund's
average daily
net assets attributable to the Class A shares owned by investors
for whom that
securities dealer is the holder or dealer of record. These
payments are
partial consideration for personal services and/or account
maintenance
performed by such dealers with respect to Class A shares. MFD may
from time to
time reduce the amount of the service fee paid for shares sold
prior to a
certain date. Currently the service fee is reduced to 0.15% per
annum for
shares sold prior to March 1, 1991. MFD may also retain a
distribution fee of
0.10% per annum of the Fund's average daily net assets
attributable to Class A
shares as partial consideration for services performed and
expenses incurred
in the performance of MFD's obligations as to Class A shares under
the
Distribution Agreement with the Fund. MFD, however, is currently
waiving this
0.10% per annum distribution fee and will not accept payment of
this fee in
the future unless it first obtains the approval of the Fund's
Board of
Trustees. Any remaining funds may be used to pay for other
distribution
related expenses as described in the Prospectus. Service fees may
be reduced
for a securities dealer that is the holder or dealer of record for
an investor
who owns shares of the Fund having an aggregate net asset value at
or above a
certain dollar level. No service fee will be paid (i) to any
securities dealer
who is the holder or dealer of record for investors who own Class
A shares
having an aggregate net asset value less than $750,000, or such
other amount
as may be determined from time to time by MFD (MFD, however, may
waive this
minimum amount requirement from time to time if the dealer
satisfies certain
criteria), or (ii) to any insurance company which has entered into
an
agreement with the Fund and MFD that permits such insurance
company to
purchase shares from the Fund at their net asset value in
connection with
annuity agreements issued in connection with the insurance
company's separate
accounts. Dealers may from time to time be required to meet
certain other
criteria in order to receive service fees. MFD or its affiliates
are entitled
to retain all service fees payable under the Class A Distribution
Plan for
which there is no dealer of record or for which qualification
standards have
not been met as partial consideration for personal services and/or
account
maintenance services performed by MFD or its affiliates for
shareholder
accounts. Certain banks and other financial institutions that have
agency
agreements with MFD will receive agency transaction and service
fees that are
the same as commissions and service fees to dealers. During the
fiscal year
ended November 30, 1994, the Fund incurred expenses of $2,986,881
(equal to
0.29% of its average daily net assets) relating to the
distribution of its
Class A shares, of
which MFD waived $1,042,249 (0.10% of its average daily net assets
attributable to Class A shares) and securities dealers of the Fund
and certain
banks and other financial institutions received $1,944,632 (0.19%
of its
average daily net assets attributable to Class A shares), and MFD
retained
$577,538 (0.06% of its average daily net assets attributable to
Class A
shares).
The Class A Distribution Plan will remain in effect until August
1, 1995, and
will continue in effect thereafter only if such continuance is
specifically
approved at least annually by vote of both the Trustees and a
majority of the
Trustees who are not "interested persons" or financially
interested parties to
the Plan ("Class A Distribution Plan Qualified Trustees"). The
Class A
Distribution Plan requires that the Fund and MFD each shall
provide to the
Trustees, and the Trustees shall review, at least quarterly, a
written report
of the amounts expended (and purposes therefor) under such Plan.
The Class A
Distribution Plan may be terminated at any time by vote of a
majority of the
Class A Distribution Plan Qualified Trustees or by vote of the
holders of a
majority of the Fund's Class A shares (as defined in "Investment
Restrictions"). Agreements under the Class A Distribution Plan
must be in
writing, will be terminated automatically if assigned, and may be
terminated
at any time without payment of any penalty, by vote of a majority
of the Class
A Distribution Plan Qualified Trustees or by vote of the holders
of a majority
of the Fund's Class A shares (as defined in "Investment
Restrictions"). The
Class A Distribution Plan may not be amended to increase
materially the amount
of permitted distribution expenses without the approval of a
majority of the
Fund's Class A shareholders (as defined in "Investment
Restrictions") and may
not be materially amended in any case without a vote of the
Trustees and a
majority of the Class A Distribution Plan Qualified Trustees. No
Trustee who
is not an "interested person" has any financial interest in the
Class A
Distribution Plan or in any related agreement.
Class B Distribution Plan: The Trustees of the Fund have adopted a
Distribution Plan relating to Class B shares (the "Class B
Distribution Plan")
pursuant to Section 12(b) of the 1940 Act and the Rule, after
having concluded
that there was a reasonable likelihood that the Class B
Distribution Plan
would benefit the Fund and its Class B shareholders. The Class B
Distribution
Plan is designed to promote sales, thereby increasing the net
assets of the
Fund. Such an increase may reduce the expense ratio to the extent
the Fund's
fixed costs are spread over a larger net asset base. Also, an
increase in net
assets may lessen the adverse effects that could result were the
Fund required
to liquidate portfolio securities to meet redemptions. There is,
however, no
assurance that the net assets of the Fund will increase or that
the other
benefits referred to above will be realized.
The Class B Distribution Plan provides that the Fund shall pay
MFD, as the
Fund's distributor for its Class B shares, a daily distribution
fee equal on
an annual basis to 0.75% of the Fund's average daily net assets
attributable
to Class B shares and will pay MFD a service fee of up to 0.25%
per annum of
the Fund's average daily net assets attributable to Class B shares
(which MFD
will in turn pay to securities dealers which enter into a sales
agreement with
MFD at a rate of up to 0.25% per annum of the Fund's average daily
net assets
attributable to Class B shares owned by investors for whom that
securities
dealer is the holder or dealer of record). This service fee is
intended to be
additional consideration for all personal services and/or account
maintenance
services rendered by the dealer with respect to Class B shares.
MFD will
advance to dealers the first-year service fee at a rate equal to
0.25% of the
amount invested. As compensation therefor, MFD may retain the
service fee paid
by the Fund with respect to such shares for the first year after
purchase.
Dealers will become eligible for additional service fees with
respect to such
shares commencing in the thirteenth month following purchase.
Except in the
case of the first year service fee, no service fee will be paid to
any
securities dealer who is the holder or dealer of record for
investors who own
Class B shares having an aggregate net asset value of less than
$750,000 or
such other amount as may be determined from time to time by MFD.
MFD, however,
may waive this minimum amount requirement from time to time if the
dealer
satisfies certain criteria. Dealers may from time to time be
required to meet
certain other criteria in order to receive service fees. MFD or
its affiliates
are entitled to retain all service fees payable under the Class B
Distribution
Plan for which there is no dealer of record or for which
qualification
standards have not been met as partial consideration for personal
services
and/or account maintenance services performed by MFD or its
affiliates for
shareholder accounts.
The purpose of distribution payments to MFD under the Class B
Distribution
Plan is to compensate MFD for its distribution services to the
Fund. MFD pays
commissions to dealers as well as expenses of printing
prospectuses and
reports used for sales purposes, expenses with respect to the
preparation and
printing of sales literature and other distribution related
expenses,
including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel office
expenses and
equipment. The Class B Distribution Plan also provides that MFD
will receive
all CDSCs attributable to Class B Shares (see "Distribution Plans"
and
"Purchases" in the Prospectus).
In accordance with the Rule, all agreements relating to the Class
B
Distribution Plan entered into between the Fund or MFD and other
organizations
must be approved by the Board of Trustees, including a majority of
the
Trustees who are not "interested persons" (as defined in the 1940
Act) and who
have no direct or indirect financial interest in the operation of
the Class B
Distribution Plan or in any agreement related to such Plan ("Class
B
Distribution Plan Qualified Trustees"). The Class B Distribution
Plan further
provides that the selection and nomination of Class B Distribution
Plan
Qualified Trustees shall be committed to the discretion of the
non-interested
Trustees then in office. During the fiscal year ended November 30,
1994, the
Fund incurred expenses of $73,994 (equal to 1.00% of its average
daily net
assets) relating to the distribution and servicing of its Class B
shares, of
which MFD received $55,914 (0.75% of its average daily net assets
attributable
to Class B shares) and securities dealers of the Fund and certain
banks
and other financial institutions received $18,080 (0.25% of its
average daily
net assets attributable to Class B shares).
The Class B Distribution Plan will remain in effect until August
1, 1995, and
will continue in effect thereafter only if such continuance is
specifically
approved at least annually by vote of the Trustees and a majority
of the Class
B Distribution Plan Qualified Trustees. The Class B Distribution
Plan requires
that the Fund and MFD shall provide to the Trustees, and the
Trustees shall
review, at least quarterly, a written report of the amounts
expended (and
purposes therefor) under such Plan. The Class B Distribution Plan
may be
terminated at any time by vote of a majority of the Class B
Distribution Plan
Qualified Trustees or by vote of the holders of a majority of the
Class B
shares of the Fund (as defined in "Investment Restrictions"
above). The Class
B Distribution Plan may not be amended to increase materially the
amount of
permitted distribution expenses without the approval of Class B
shareholders
and may not be materially amended in any case without a vote of
the majority
of both the Trustees and the Class B Distribution Plan Qualified
Trustees. No
Trustee who is not an interested person of the Fund has any
financial interest
in the Class B Distribution Plan or in any related agreement.
11. INDEPENDENT ACCOUNTANTS AND
FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent certified public
accountants.
The Portfolio of Investments at November 30, 1994, the Statement
of Assets and
Liabilities at November 30, 1994, the Statement of Operations for
the year
ended November 30, 1994, the Statement of Changes in Net Assets
for each of
the years in the two year period ended November 30, 1994, the
Financial
Highlights for each of the years in the ten year period ended
November 30,
1994, the Notes to Financial Statements and the Independent
Auditors' Report,
each of which is included in the Annual Report to shareholders of
the Fund,
are incorporated by reference into this SAI and have been so
incorporated in
reliance upon the report of Deloitte & Touche LLP, independent
certified
public accountants, as experts in accounting and auditing. A copy
of the
Annual Report accompanies this SAI.
APPENDIX A
TRUSTEE COMPENSATION TABLE
Retirement Benefit Total Trustee
Trustee
Fees Accrued as Estimated Fees from
from
part of Fund Credited Years Fund and
Trustee Fund(1)
Expense(1) of Service(2) Fund Complex(3)
- ----------------------------------------------------- ----------
- -- ------------------ -------------- ---------------
Richard B. Bailey.................................... $5,193
$1,074 8 $ 226,221
Lawrence T. Perera................................... 5,093
2,864 23 96,592
William Poorvu....................................... 5,388
2,848 23 106,482
Charles W. Schmidt................................... 5,193
2,702 16 98,397
David B. Stone....................................... 5,453
2,485 14 104,007
Elaine R. Smith...................................... 5,193
1,045 27 98,397
J. Atwood Ives....................................... 5,553
1,037 17 106,482
Peter G. Harwood..................................... 5,553
546 5 105,812
- ---------------
(1) For fiscal year ended November 30, 1994.
(2) Based on normal retirement age of 73.
(3) Information provided is for calendar year 1994. All Trustees
served as
Trustees of 20 funds within the MFS fund complex (having
aggregate net
assets at December 31, 1994, of approximately
$14,727,659,069) except Mr.
Bailey, who served as Trustee of 56 funds within the MFS fund
complex
(having aggregate net assets at December 31, 1994, of
approximately
$24,474,119,825).
Estimated Annual Benefits Payable by fund upon
Retirement(4)
Years of Service
Average -----
- --------------------------------------
Trustee
10 or
Fees 3
5 7 more
- ------ ----
- ------ ------ ------
$4,600 ................................................ $690
$1,150 $1,610 $2,300
4,900 ................................................ 735
1,225 1,715 2,450
5,200 ................................................ 780
1,300 1,820 2,600
5,500 ................................................ 825
1,375 1,925 2,750
5,800 ................................................ 870
1,450 2,030 2,900
6,100 ................................................ 915
1,525 2,135 3,050
- ---------------
(4) Other funds in the MFS fund complex provide similar retirement
benefits to
the Trustees.
Investment Adviser
Massachusetts Financial Services Company
500 Boylston Street, Boston, MA 02116
(617) 954-5000
Distributor
MFS Fund Distributors, Inc.
500 Boylston Street, Boston, MA 02116
(617) 954-5000
Custodian and Dividend Disbursing Agent
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
Shareholder Servicing Agent
MFS Service Center, Inc.
500 Boylston Street, Boston, MA 02116
Toll free: (800) 225-2606
Mailing Address:
P.O. Box 2281, Boston, MA 02107-9906
Independent Accountants
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110
Massachusetts
Investors Growth
Stock Fund
500 Boylston Street
Boston, MA 02116
MIG-13
4/95 500 13/213
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements Included in Part A:
For the ten years ended November 30, 1994:
Financial Highlights
Financial Statements Included in Part B:
At November 30, 1994:
Portfolio of Investments*
Statement of Assets and Liabilities*
For the two years ended November 30, 1994:
Statement of Changes in Net Assets*
For the year ended November 30, 1994:
Statement of Operations*
____________________
* Incorporated herein by reference to the Fund's Annual Report
to Shareholders dated November 30, 1994, filed with the SEC
on January 27, 1995.
(b) Exhibits
1 Amended & Restated Declaration of
Trust, dated January 19, 1995; filed
herewith.
2 Amended & Restated By-Laws, dated
December 21, 1994; filed herewith.
3 Not Applicable.
4 (a) Form of Share Certificate. (3)
(b) Form of Share Certificate - Class A
Shares. (8)
(c) Form of Share Certificate - Class B
Shares. (8)
(d) Form of Share Certificate - Class C
Shares. (8)
5 (a) Investment Advisory Agreement, dated
July 19,1985. (5)
6 (a) Distribution Agreement, dated January
1, 1995; filed herewith.
(b) Dealer Agreement between MFS Fund
Distributors, Inc. ("MFD"), and a
dealer dated December 28, 1994 and the
Mutual Fund Agreement between MFD and a
bank or NASD affiliate, dated December
28, 1994. (10)
7 Retirement Plan for Non-Interested
Person Trustees; filed herewith.
8 (a) Custodian Agreement between the Trust
and State Street Bank and Trust
Company, dated May 24,1988. (2)
(b) Amendment No.1 to Custodian Agreement,
dated May 24, 1988. (5)
(c) Amendment No. 2 to Custodian Agreement,
dated September 20,1989. (1)
(d) Amendment No. 3 to Custodian Agreement,
dated December 28,1990. (6)
(e) Amendment No. 4 to Custodian Agreement,
dated September 17, 1991. (6)
9 (a) Shareholder Servicing Agent Agreement,
dated August 1, 1985.(4)
(b) Amendment to Shareholder Servicing
Agent Agreement, dated December 31,
1992. (7)
(c) Amendment to Shareholder Servicing
Agent Agreement dated September 7,
1993. (8)
(d) Form of Amendment to Shareholder
Servicing Agent Agreement. (8)
(e) Exchange Privilege Agreement, dated
September 1, 1993. (9)
(f) Loan Agreement by and among the Banks
named therein, the MFS Funds named
therein, and The First National Bank of
Boston, dated as of February 21, 1995.
(11)
(g) Dividend Disbursing Agency Agreement,
dated February 1, 1986. (5)
10 Consent and Opinion of Counsel; filed
herewith.
11 Consent of Deloitte & Touche; filed
herewith.
12 Not Applicable.
13 Investment Representation Letter.
14 (a) Forms for Individual Retirement Account
Disclosure Statement as currently in
effect. (5)
(b) Forms for MFS 403(b) Custodial Account
Agreement as currently in effect. (5)
(c) Forms for MFS Prototype Paired Defined
Contribution Plans and Trust Agreement
as currently in effect. (5)
15 (a) Amended & Restated Distribution Plan
for Class A Shares, dated December 21,
1994; filed herewith.
(b) Amended & Restated Distribution Plan
for Class B Shares, dated December 21,
1994; filed herewith.
(c) Form of Distribution Plan for Class C
Shares, dated December 28, 1993. (8)
16 Schedule of Computation for Performance
Quotations - Average Annual Total
Return; filed herewith.
17 Financial Data Schedules for each
class; filed herewith.
Power of Attorney, dated September 21, 1994;
filed herewith.
___________________________
(1) Incorporated by reference to Post-Effective Amendment No. 52
filed with the SEC on January 29, 1990.
(2) Incorporated by reference to Post-Effective Amendment No. 51
filed we SEC on January 27, 1989.
(3) Incorporated by reference to Post-Effective Amendment No. 48
filed with the SEC on January 27, 1986.
(4) Incorporated by reference to Post-Effective Amendment No. 47
filed with the SEC on July 29, 1985.
(5) Incorporated by reference to Post-Effective Amendment No 53
filed with the SEC on January 28 1991.
(6) Incorporated by reference to Post-Effective Amendment No 54
filed with the SEC on March 27 1992.
(7) Incorporated by reference to Post-Effective Amendment No. 56
filed with the SEC on June 2, 1993.
(8) Incorporated by reference to Post-Effective Amendment No. 57
filed with the SEC on October 29, 1993.
(9) Incorporated by reference to Post-Effective Amendment No. 58
filed with the SEC on January 28, 1994.
(10) Incorporated by reference to MFS Municipal Series Trust (File
Nos. 2-92915 and 811-4096) Post-Effective Amendment No. 26
filed with the SEC on February 22, 1995.
(11) Incorporated by reference to Amendment No. 8 on Form N-2 for
MFS Municipal Income Trust (File No. 811-4841) filed with the
SEC on February 28, 1995.
Item 25. Persons Controlled by or under Common Control with
Registrant
Not applicable.
Item 26. Number of Holders of Securities
(1) (2)
Title of Class Number of Record
Holders
Class A Shares of Beneficial Interest 38,361
(without part value) (as of February
28, 1995)
Class B Shares of Beneficial Interest 1,864
(without part value) (as of February
28, 1995)
Item 27. Indemnification
Reference is hereby made to (a) Article V of
Registrant s Declaration of Trust, filed herewith as Exhibit 1 to
this Post-Effective Amendment No. 59 to the Registrant's
Registration Statement on Form N-1A and (b) Section 4 of the
Distribution Agreement between the Fund and MFS Fund Distributors,
Inc., filed herewith as Exhibit 6(a) to this Post-Effective
Amendment No. 59 to the Registrant's Registration Statement on
Form N-1A.
The Trustees and officers of the Registrant and the
personnel of the Registrant's investment adviser and principal
underwriter are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured
under the fidelity bond required by Rule 179-1 under the
Investment Company Act of 1940.
Item 28. Business and Other Connections of Investment
Adviser
Massachusetts Financial Services Company ("MFS")
serves as investment adviser to the following open-end funds
comprising the MFS Family of Funds: Massachusetts Investors
Trust, Massachusetts Investors Growth Stock Fund, MFS Growth
Opportunities Fund, MFS Government Securities Fund, MFS Government
Mortgage Fund, MFS Government Limited Maturity Fund, MFS Series
Trust I (which has three series: MFS Managed Sectors Fund, MFS
Cash Reserve Fund and MFS World Asset Allocation Fund), MFS Series
Trust II (which has four series: MFS Emerging Growth Fund, MFS
Capital Growth Fund, MFS Intermediate Income Fund and MFS Gold &
Natural Resources Fund), MFS Series Trust III (which has two
series: MFS High Income Fund and MFS Municipal High Income Fund),
MFS Series Trust IV (which has four series: MFS Money Market Fund,
MFS Government Money Market Fund, MFS Municipal Bond Fund and MFS
OTC Fund), MFS Series Trust V (which has two series: MFS Total
Return Fund and MFS Research Fund), MFS Series Trust VI (which has
three series: MFS World Total Return Fund, MFS Utilities Fund and
MFS World Equity Fund), MFS Series Trust VII (which has two
series: MFS World Governments Fund and MFS Value Fund), MFS Series
Trust VIII (which has two series: MFS Strategic Income Fund and
MFS World Growth Fund), MFS Municipal Series Trust (which has 19
series: MFS Alabama Municipal Bond Fund, MFS Arkansas Municipal
Bond Fund, MFS California Municipal Bond Fund, MFS Florida
Municipal Bond Fund, MFS Georgia Municipal Bond Fund, MFS
Louisiana Municipal Bond Fund, MFS Maryland Municipal Bond Fund,
MFS Massachusetts Municipal Bond Fund, MFS Mississippi Municipal
Bond Fund, MFS New York Municipal Bond Fund, MFS North Carolina
Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS
South Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond
Fund, MFS Texas Municipal Bond Fund, MFS Virginia Municipal Bond
Fund, MFS Washington Municipal Bond Fund, MFS West Virginia
Municipal Bond Fund and MFS Municipal Income Fund) and MFS Series
Trust IX (which has three series: MFS Bond Fund, MFS Limited
Maturity Fund and MFS Municipal Limited Maturity Fund) (the "MFS
Funds"). The principal business address of each of the
aforementioned funds is 500 Boylston Street, Boston, Massachusetts
02116.
MFS also serves as investment adviser of the following
no-load, open-end funds: MFS Institutional Trust ("MFSIT") (which
has two series), MFS Variable Insurance Trust ("MVI") (which has
twelve series) and MFS Union Standard Trust ("UST") (which has two
series). The principal business address of each of the
aforementioned funds is 500 Boylston Street, Boston, Massachusetts
02116.
In addition, MFS serves as investment adviser to the
following closed-end funds: MFS Municipal Income Trust, MFS
Multimarket Income Trust, MFS Government Markets Income Trust, MFS
Intermediate Income Trust, MFS Charter Income Trust and MFS
Special Value Trust (the "MFS Closed-End Funds"). The principal
business address of each of the aforementioned funds is 500
Boylston Street, Boston, Massachusetts 02116.
Lastly, MFS serves as investment adviser to MFS/Sun
Life Series Trust ("MFS/SL"), Sun Growth Variable Annuity Fund,
Inc. ("SGVAF"), Money Market Variable Account, High Yield Variable
Account, Capital Appreciation Variable Account, Government
Securities Variable Account, World Governments Variable Account,
Total Return Variable Account and Managed Sectors Variable
Account. The principal business address of each is One Sun Life
Executive Park, Wellesley Hills, Massachusetts 02181.
MFS International Ltd. ("MIL"), a limited liability
company organized under the laws of the Republic of Ireland and a
subsidiary of MFS, whose principal business address is 41-45 St.
Stephen's Green, Dublin 2, Ireland, serves as investment adviser
to and distributor for MFS International Funds (which has four
portfolios: MFS International Funds-U.S. Equity Fund, MFS
International Funds-U.S. Emerging Growth Fund, MFS International
Funds-International Governments Fund
and MFS International Fund-Charter Income Fund) (the "MIL
Funds"). The MIL Funds are organized in Luxembourg and qualify as
an undertaking for collective investments in transferable
securities (UCITS). The principal business address of the MIL
Funds is 47, Boulevard Royal, L-2449 Luxembourg.
MIL also serves as investment adviser to and
distributor for MFS Meridian U.S. Government Bond Fund, MFS
Meridian Charter Income Fund, MFS Meridian Global Government Fund,
MFS Meridian U.S. Emerging Growth Fund, MFS Meridian Global Equity
Fund, MFS Meridian Limited Maturity Fund, MFS Meridian World
Growth Fund, MFS Meridian Money Market Fund and MFS Meridian U.S.
Equity Fund (collectively the "MFS Meridian Funds"). Each of the
MFS Meridian Funds is organized as an exempt company under the
laws of the Cayman Islands. The principal business address of
each of the MFS Meridian Funds is P.O. Box 309, Grand Cayman,
Cayman Islands, British West Indies.
MFS Fund Distributors, Inc. ("MFD"), a wholly owned
subsidiary of MFS, serves as distributor for the MFS Funds, MVI,
UST and MFSIT.
Clarendon Insurance Agency, Inc. ("CIAI"), a wholly
owned subsidiary of MFS, serves as distributor for certain life
insurance and annuity contracts issued by Sun Life Assurance
Company of Canada (U.S.).
MFS Service Center, Inc. ("MFSC"), a wholly owned
subsidiary of MFS, serves as shareholder servicing agent to the
MFS Funds, the MFS Closed-End Funds, MFS Institutional Trust, MFS
Variable Insurance Trust and MFS Union Standard Trust.
MFS Asset Management, Inc. ("AMI"), a wholly owned
subsidiary of MFS, provides investment advice to substantial
private clients.
MFS Retirement Services, Inc. ("RSI"), a wholly owned
subsidiary of MFS, markets MFS products to retirement plans and
provides administrative and record keeping services for retirement
plans.
MFS
The Directors of MFS are A. Keith Brodkin, Jeffrey L.
Shames, Arnold D. Scott, John R. Gardner and John D. McNeil. Mr.
Brodkin is the Chairman, Mr. Shames is the President, Mr. Scott is
a Senior Executive Vice President and Secretary, James E. Russell
is a Senior Vice President and the Treasurer, Stephen E. Cavan is
a Senior Vice President, General Counsel and an Assistant
Secretary, and Robert T. Burns is a Vice President and an
Assistant Secretary of MFS.
Massachusetts Investors Trust
Massachusetts Investors Growth Stock Fund
MFS Growth Opportunities Fund
MFS Government Securities Fund
MFS Government Mortgage Fund
MFS Series Trust I
MFS Series Trust V
MFS Government Limited Maturity Fund
MFS Series Trust VI
A. Keith Brodkin is the Chairman and President,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost, Vice President of MFS, is Assistant
Treasurer, James R. Bordewick, Jr., Vice President and Associate
General Counsel of MFS, is Assistant Secretary.
MFS Series Trust II
A. Keith Brodkin is the Chairman and President, Leslie
J. Nanberg, Senior Vice President of MFS, is a Vice President,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost is Assistant Treasurer, and James R.
Bordewick, Jr., is Assistant Secretary.
MFS Government Markets Income Trust
MFS Intermediate Income Trust
A. Keith Brodkin is the Chairman and President,
Patricia A. Zlotin, Executive Vice President of MFS and Leslie J.
Nanberg, Senior Vice President of MFS, are Vice Presidents,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost is Assistant Treasurer, and James R.
Bordewick, Jr., is the Assistant Secretary.
MFS Series Trust III
A. Keith Brodkin is the Chairman and President, James
T. Swanson, Robert J. Manning, Cynthia M. Brown and Joan S.
Batchelder, Senior Vice Presidents of MFS, Bernard Scozzafava,
Vice President of MFS, and Matthew Fontaine, Assistant Vice
President of MFS, are Vice Presidents, Sheila Burns-Magnan and
Daniel E. McManus, Assistant Vice Presidents of MFS, are Assistant
Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas
London is the Treasurer, James O. Yost is Assistant Treasurer, and
James R. Bordewick, Jr., is Assistant Secretary.
MFS Series Trust IV
MFS Series Trust IX
A. Keith Brodkin is the Chairman and President, Robert
A. Dennis and Geoffrey L. Kurinsky, Senior Vice Presidents of MFS,
are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas
London is the Treasurer, James O. Yost is Assistant Treasurer and
James R. Bordewick, Jr., is Assistant Secretary.
MFS Series Trust VII
A. Keith Brodkin is the Chairman and President, Leslie
J. Nanberg and Stephen C. Bryant, Senior Vice Presidents of MFS,
are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas
London is the Treasurer, James O. Yost is Assistant Treasurer and
James R. Bordewick, Jr., is Assistant Secretary.
MFS Series Trust VIII
A. Keith Brodkin is the Chairman and President,
Jeffrey L. Shames, Leslie J. Nanberg, Patricia A. Zlotin, James T.
Swanson and John D. Laupheimer, Jr., Vice President of MFS, are
Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas
London is the Treasurer, James O. Yost is Assistant Treasurer and
James R. Bordewick, Jr., is Assistant Secretary.
MFS Municipal Series Trust
A. Keith Brodkin is the Chairman and President,
Cynthia M. Brown and Robert A. Dennis are Vice Presidents, David
B. Smith, Geoffrey L. Schechter and David R. King, Vice Presidents
of MFS, are Vice Presidents, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James O. Yost is Assistant
Treasurer and James R. Bordewick, Jr., is Assistant Secretary.
MFS Variable Insurance Trust
MFS Institutional Trust
A. Keith Brodkin is the Chairman and President,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost is the Assistant Treasurer and James R.
Bordewick, Jr., is the Assistant Secretary.
MFS Union Standard Trust
A. Keith Brodkin is the Chairman and President,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost and Karen C. Jordan are Assistant
Treasurers and James R. Bordewick, Jr., is the Assistant
Secretary.
MFS Municipal Income Trust
A. Keith Brodkin is the Chairman and President,
Cynthia M. Brown and Robert J. Manning are Vice Presidents,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost, is Assistant Treasurer and James R.
Bordewick, Jr., is Assistant Secretary.
MFS Multimarket Income Trust
MFS Charter Income Trust
A. Keith Brodkin is the Chairman and President,
Patricia A. Zlotin, Leslie J. Nanberg and James T. Swanson are
Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas
London is the Treasurer, James O. Yost, Vice President of MFS, is
Assistant Treasurer and James R. Bordewick, Jr., is Assistant
Secretary.
MFS Special Value Trust
A. Keith Brodkin is the Chairman and President,
Jeffrey L. Shames, Patricia A. Zlotin and Robert J. Manning are
Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas
London is the Treasurer, and James O. Yost, is Assistant Treasurer
and James R. Bordewick, Jr., is Assistant Secretary.
SGVAF
W. Thomas London is the Treasurer.
MIL
A. Keith Brodkin is a Director and the President,
Arnold D. Scott, Jeffrey L. Shames are Directors, Ziad Malek,
Senior Vice President of MFS, is a Senior Vice President and
Managing Director, Thomas J. Cashman, Jr., a Vice President of
MFS, is a Senior Vice President, Stanley T. Kwok is a Vice
President, Anthony F. Clarizio is an Assistant Vice President,
Stephen E. Cavan is a Director, Senior Vice President and
the Clerk, James R. Bordewick, Jr. is a Director, Senior Vice
President and an Assistant Clerk, Robert T. Burns is an Assistant
Clerk and James E. Russell is the Treasurer.
MIL Funds
A. Keith Brodkin is the Chairman, President and a
Director, Arnold D. Scott and Jeffrey L. Shames are Directors,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James O. Yost is the Assistant Treasurer and James R.
Bordewick, Jr., is the Assistant Secretary, and Ziad Malek is a
Senior Vice President.
MFS Meridian Funds
A. Keith Brodkin is the Chairman, President and a
Director, Arnold D. Scott and Jeffrey L. Shames are Directors,
Stephen E. Cavan is the Secretary, W. Thomas London is the
Treasurer, James R. Bordewick, Jr., is the Assistant Secretary and
Ziad Malek is a Senior Vice President.
MFD
A. Keith Brodkin is the Chairman, Arnold D. Scott and
Jeffrey L. Shames are Directors, William W. Scott, Jr., an
Executive Vice President of MFS, is the President, Stephen E.
Cavan is the Secretary, Robert T. Burns is the Assistant
Secretary, and James E. Russell is the Treasurer.
CIAI
A. Keith Brodkin is the Chairman, Arnold D. Scott and
Jeffrey L. Shames are Directors, Cynthia Orcott is President,
Bruce C. Avery, Executive Vice President of MFS, is the Vice
President, James E. Russell is the Treasurer, Stephen E. Cavan is
the Secretary, and Robert T. Burns is the Assistant Secretary.
MFSC
A. Keith Brodkin is the Chairman, Arnold D. Scott and
Jeffrey L. Shames are Directors, Joseph A. Recomendes, Senior Vice
President of MFS, is the President, James E. Russell is the
Treasurer, Stephen E. Cavan is the Secretary, and Robert T. Burns
is the Assistant Secretary.
AMI
A. Keith Brodkin is the Chairman and a Director,
Jeffrey L. Shames, Leslie J. Nanberg and Arnold D. Scott are
Directors, Thomas J. Cashman is the President and a Director,
James E. Russell is the Treasurer and Robert T. Burns is the
Secretary.
RSI
William W. Scott, Jr., Joseph A. Recomendes and Bruce
C. Avery are Directors, Arnold D. Scott is the Chairman, Douglas
C. Grip, a Senior Vice President of MFS, is the President, James
E. Russell is the Treasurer, Stephen E. Cavan is the Secretary,
Robert T. Burns is the Assistant Secretary and Henry A. Shea is an
Executive Vice President.
In addition, the following persons, Directors or
officers of MFS, have the affiliations indicated:
A. Keith Brodkin Director, Sun Life
Assurance Company of
Canada (U.S.), One Sun
Life Executive Park,
Wellesley Hills,
Massachusetts
Director, Sun Life
Insurance and Annuity
Company of New York, 67
Broad Street, New York,
New York
John R. Gardner President and a Director,
Sun Life Assurance Company
of Canada, Sun Life
Centre, 150 King Street
West, Toronto, Ontario,
Canada (Mr. Gardner is
also an officer and/or
Director of various
subsidiaries and
affiliates of Sun Life)
John D. McNeil Chairman, Sun Life
Assurance Company of
Canada, Sun Life Centre,
150 King Street West,
Toronto, Ontario, Canada
(Mr. McNeil is also an
officer and/or Director of
various subsidiaries and
affiliates of Sun Life)
Item 29. Principal Underwriters
(a) Reference is hereby made to Item 28 above.
(b) Reference is hereby made to Item 28 above.
(c) Not Applicable.
Item 30. Location of Accounts and Records
The accounts and records of the Registrant are
located, in whole or in part, at the office of the Registrant and
the following locations:
NAME ADDRESS
Massachusetts Financial 500 Boylston Street
Services Company (investment Boston, MA 02116
(adviser)
MFS Fund Distributors, Inc. 500 Boylston Street
(principal underwriter) Boston, MA 02116
State Street Bank and Trust State Street South
Company (custodian) 5 - West
North Quincy, MA 02171
MFS Service Center, Inc. 500 Boylston Street
(transfer agent) Boston, MA 02116
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of its latest annual
report to shareholders upon request and without charge.
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
1 Amended & Restated Declaration of Trust, dated
January 19, 1995.
2 Amended & Restated By-Laws, dated December 21,
1994.
6 (a) Distribution Agreement, dated January 1, 1995.
7 Retirement Plan for Non-Interested Person
Trustees.
10 Consent and Opinion of Counsel.
11 Consent of Deloitte & Touche.
15 (a) Amended & Restated Distribution Plan for Class A
Shares, dated December 21,1994.
(b) Amended & Restated Distribution Plan for Class B
Shares, dated December 21, 1994.
16 Schedule of Computation for Performance
Quotations - Average Annual Total Return.
27 Financial Data Schedules.
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant certifies
that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Boston
and The Commonwealth of Massachusetts on the 27th day of March,
1995.
MASSACHUSETTS
INVESTORS
GROWTH STOCK FUND
By: JAMES R.
BORDEWICK, JR.
Name: James R.
Bordewick, Jr.
Title: Assistant
Secretary
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to its Registration Statement has
been signed below by the following persons in the capacities
indicated on March 27, 1995.
SIGNATURE TITLE
A. KEITH BRODKIN* Chairman, President
(Principal
A. Keith Brodkin Executive Officer)
and Trustee
W. THOMAS LONDON* Treasurer
(Principal Financial
W. Thomas London Officer and
Principal Accounting
Officer)
RICHARD B. BAILEY* Trustee
Richard B. Bailey
PETER G. HARWOOD* Trustee
Peter G. Harwood
J. ATWOOD IVES* Trustee
J. Atwood Ives
LAWRENCE T. PERERA* Trustee
Lawrence T. Perera
WILLIAM J. POORVU* Trustee
William J. Poorvu
CHARLES W. SCHMIDT* Trustee
Charles W. Schmidt
ARNOLD D. SCOTT* Trustee
Arnold D. Scott
JEFFREY L. SHAMES* Trustee
Jeffrey L. Shames
ELAINE R. SMITH* Trustee
Elaine R. Smith
DAVID B. STONE* Trustee
David B. Stone
* By: JAMES R.
BORDEWICK, JR.
Name: James R.
Bordewick, Jr.
as Attorney-
in-fact
Executed by
James R. Bordewick, Jr.
on behalf of
those indicated pursuant
to a Power of
Attorney dated
September 21,
1994; filed herewith.
POWER OF ATTORNEY
Massachusetts Investors Growth Stock Fund
The undersigned, Trustees and officers of Massachusetts
Investors Growth Stock Fund (the Registrant), hereby severally
constitute and appoint A. Keith Brodkin, W. Thomas London, Stephen
E. Cavan and James R. Bordewick, Jr., and each of them singly, as
true and lawful attorneys, with full power to them and each of
them to sign for each of the undersigned, in the names of, and in
the capacities indicated below, any Registration Statement and any
and all amendments thereto and to file the same with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission for the purpose of registering
the Registrant as a management investment company under the
Investment Company Act of 1940 and/or the shares issued by the
Registrant under the Securities Act of 1933 granting unto our said
attorneys, and each of them, acting alone, full power and
authority to do and perform each and every act and thing requisite
or necessary or desirable to be done in the premises, as fully to
all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys or any of
them may lawfully do or cause to be done by virtue thereof.
In WITNESS WHEREOF, the undersigned have hereunto set their
hand on this 21st day of September, 1994.
Signatures
Title(s)
A. KEITH BRODKIN Chairman of the
Board; Trustee; and
A. Keith Brodkin Principal
Executive Officer
RICHARD B. BAILEY Trustee
Richard B. Bailey
PETER G. HARWOOD Trustee
Peter G. Harwood
J. ATWOOD IVES Trustee
J. Atwood Ives
LAWRENCE T. PERERA Trustee
Lawrence T. Perera
WILLIAM J. POORVU Trustee
William J. Poorvu
CHARLES W. SCHMIDT Trustee
Charles W. Schmidt
ARNOLD D. SCOTT Trustee
Arnold D. Scott
JEFFREY L. SHAMES Trustee
Jeffrey L. Shames
ELAINE R. SMITH Trustee
Elaine R. Smith
DAVID B. STONE Trustee
David B. Stone
W. THOMAS LONDON Principal
Financial and
W. Thomas London Accounting
Officer
EX-99.1
[DESCRIPTION] AMENDED & RESTATED DECLARATION OF TRUST
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
_____________________
AMENDED AND RESTATED
DECLARATION OF TRUST
JANUARY 18, 1995
TABLE OF CONTENTS
PAGE
ARTICLE I -- Name and Definitions
Section 1.1 Name
1
Section 1.2 Definitions
2
ARTICLE II -- Trustees
Section 2.1 Number of Trustees
3
Section 2.2 Term of Office of Trustees
3
Section 2.3 Resignation and Appointment of Trustees
4
Section 2.4 Vacancies
5
Section 2.5 Delegation of Power to Other Trustees
5
ARTICLE III -- Powers of Trustees
Section 3.1 General
5
Section 3.2 Investments
6
Section 3.3 Legal Title
7
Section 3.4 Issuance and Repurchase of Securities
7
Section 3.5 Borrowing Money; Lending Trust Property
7
Section 3.6 Delegation; Committees
8
Section 3.7 Collection and Payment
8
Section 3.8 Expenses
8
Section 3.9 Manner of Acting; By-Laws
8
Section 3.10 Miscellaneous Powers
8
Section 3.11 Principal Transactions
9
Section 3.12 Trustees and Officers as Shareholders
10
ARTICLE IV -- Investment Adviser, Distributor and Transfer Agent
Section 4.1 Investment Adviser
10
Section 4.2 Distributor
11
Section 4.3 Transfer Agent
11
Section 4.4 Parties to Contract
11
TABLE OF CONTENTS (Continued)
PAGE
ARTICLE V -- Limitations of Liability of Shareholders, Trustees
and Others
Section 5.1 No Personal Liability of Shareholders, Trustees,
etc. 12
Section 5.2 Non-Liability of Trustees, etc.
12
Section 5.3 Mandatory Indemnification
13
Section 5.4 No Bond Required of Trustees
14
Section 5.5 No Duty of Investigation; Notice in Trust
Instruments, etc. 15
Section 5.6 Reliance on Experts, etc.
15
ARTICLE VI -- Shares of Beneficial Interest
Section 6.1 Beneficial Interest
15
Section 6.2 Rights of Shareholders
16
Section 6.3 Trust only
16
Section 6.4 Issuance of Shares
16
Section 6.5 Register of Shares
17
Section 6.6 Transfer of Shares
17
Section 6.7 Notices
17
Section 6.8 Voting Powers
18
Section 6.9 Series Designation
18
Section 6.10 Class Designation
21
ARTICLE VII -- Redemptions
Section 7.1 Redemption of Shares
21
Section 7.2 Price
21
Section 7.3 Payment
21
Section 7.4 Effect of Suspension of Determination of Net
Asset Value 22
Section 7.5 Redemption of Shares in Order to Qualify as
Regulated
Investment Company; Disclosure of Holding
22
Section 7.6 Suspension of Right of Redemption
22
ARTICLE VIII -- Determination of Net Asset Value, Net Income
and Distributions
23
ARTICLE IX -- Duration; Termination of Trust; Amendment; Mergers,
etc.
Section 9.1 Duration
23
Section 9.2 Termination of Trust
24
Section 9.3 Amendment Procedure
25
Section 9.4 Merger, Consolidation and Sale of Assets
26
Section 9.5 Incorporation, Reorganization
26
Section 9.6 Incorporation or Reorganization of Series
27
ARTICLE X -- Reports to Shareholders and Shareholder
Communications 27
ARTICLE XI -- Miscellaneous
Section 11.1 Filing
28
Section 11.2 Governing Law
28
Section 11.3 Counterparts
28
Section 11.4 Reliance by Third Parties
28
Section 11.5 Provisions in Conflict with Law or
Regulations 29
ANNEX A
30
SIGNATURE PAGE
31
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
500 Boylston Street
Boston, Massachusetts 02116
AMENDED AND RESTATED DECLARATION OF TRUST, made as of this
18th day of January, 1995 by the Trustees hereunder.
WHEREAS, the Trust was established pursuant to a Declaration
of Trust dated March 4, 1985 for the investment and reinvestment
of funds contributed thereto; and
WHEREAS, the Trustees desire that the beneficial interest in
the trust assets continue to be divided into transferable Shares
of Beneficial Interest (without par value) issued in one or more
series, as hereinafter provided; and
WHEREAS, the Declaration of Trust has been, from time to
time, amended in accordance with the provisions of the
Declaration; and
WHEREAS, the Trustees now desire further to amend and to
restate the Declaration of Trust and hereby certify, as provided
in Section 11.1 of the Declaration, that this Amended and Restated
Declaration of Trust has been further amended and restated in
accordance with the provisions of the Declaration;
NOW THEREFORE, the Trustees hereby confirm that all money
and property contributed to the trust established hereunder shall
be held and managed in trust for the benefit of holders, from time
to time, of the Shares of Beneficial Interest (without par value)
issued hereunder and subject to the provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 - Name. The name of the trust created hereby is
the Massachusetts Investors Growth Stock Fund.
Section 1.2 - Definitions. Wherever they are used herein,
the following terms have the following respective meanings:
(a) "By-Laws" means the By-Laws referred to in Section 3.9
hereof, as from time to time amended.
(b) "Commission" has the meaning given that term in the 1940
Act.
(c) "Declaration" means this Declaration of Trust as amended
from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof," "herein," and "hereunder" shall be deemed
to refer to this Declaration rather than the article or section in
which such words appear.
(d) "Distributor" means the party, other than the Trust, to
the contract described in Section 4.2 hereof.
(e) "Interested Person" has the meaning given that term in
the 1940 Act.
(f) "Investment Adviser" means a party furnishing services
to the Trust pursuant to any contract described in Section 4.1
hereof.
(g) "Majority Shareholder Vote" has the same meaning as the
phrase "vote of a majority of the outstanding voting securities"
as defined in the 1940 Act, except that such term may be used
herein with respect to the Shares of the Trust as a whole or the
Shares of any particular series, as the context may require.
(h) "1940 Act" means the Investment Company Act of 1940 and
the Rules and Regulations thereunder, as amended from time to
time.
(i) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other
entities, whether or not legal entities, and governments and
agencies and political subdivisions thereof, whether domestic or
foreign.
(j) "Shareholder" means a record owner of outstanding
Shares.
(k) "Shares" means the Shares of Beneficial Interest into
which the beneficial interest in the Trust shall be divided from
time to time or, when used in relation to any particular series or
Shares established by the Trustees pursuant to Section 6.9 hereof,
equal proportionate transferable units into which such series of
Shares shall be divided from time to time. The term "Shares"
includes fractions of Shares as well as whole Shares.
(l) "Transfer Agent" means the party, other than the Trust,
to a contract described in Section 4.3 hereof.
(m) "Trust" means the trust created hereby.
(n) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for
the account of the Trust or the Trustees, including, without
limitation, any and all property allocated or belonging to any
series of Shares pursuant to Section 6.9 hereof.
(o) "Trustees" means the persons who signed the Declaration,
so long as they shall continue in office in accordance with the
terms hereof, and all other persons who may from time to time be
duly elected or appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and reference herein to a
Trustee or the Trustees shall refer to such person or persons in
their capacity as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1 - Number of Trustees. The number of Trustees
shall be such number as shall be fixed from time to time by a
written instrument signed by a majority of the Trustees, provided,
however, that the number of Trustees, shall in no event be less
than three (3) nor more than fifteen (15).
Section 2.2 - Term of Office of Trustees. Subject to the
provisions of Section 16(a) of the 1940 Act, the Trustees shall
hold office during the lifetime of this Trust and until its
termination as hereinafter provided; except:
(a) that any Trustee may resign his trust (without need for
prior or subsequent accounting) by an instrument in writing signed
by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified
therein;
(b) that any Trustee may be removed (provided the aggregate
number of Trustees after such removal shall not be less than the
number required by Section 2.1 hereof) with cause, at any time by
written instrument, signed by at least two-thirds of the remaining
Trustees, specifying the date when such removal shall become
effective;
(c) that any Trustee who requests in writing to be retired
or who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and
(d) a Trustee may be removed at any meeting of Shareholders
by a vote of two-thirds of the outstanding Shares.
Upon the resignation or removal of a Trustee, or his
otherwise ceasing to be a Trustee, he shall execute and deliver
such documents as the remaining Trustees shall require for the
purpose of conveying to the Trust or the remaining Trustees any
Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal
representative shall execute and deliver on his behalf such
documents as the remaining Trustees shall require as provided in
the preceding sentence.
Section 2.3 - Resignation and Appointment of Trustees. In
case of the declination, death, resignation, retirement, removal
or inability of any of the Trustees, or in case a vacancy shall,
by reason of an increase in number, or for any other reason exist,
the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit. Such
appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office. Any such appointment shall
not become effective, however, until the person named in the
written instrument of appointment shall have accepted in writing
such appointment and agreed in writing to be bound by the terms of
the Declaration. Within twelve months of such appointment, the
Trustees shall cause notice of such appointment to be mailed to
each Shareholder at his address as recorded on the books of the
Trustees. An appointment of a Trustee may be made by the Trustees
then in office and notice thereof mailed to Shareholders as
aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. The
power of appointment is subject to the provisions of Section 16(a)
of the 1940 Act.
Section 2.4 - Vacancies. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or
any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this
Declaration. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided in Section 2.3,
the Trustees in office, regardless of their number, shall have all
the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by the Declaration. A written
instrument certifying the existence of such vacancy signed by a
majority of the Trustees shall be conclusive evidence of the
existence of such vacancy.
Section 2.5 - Delegation of Power to Other Trustees. Any
Trustee may, by power of attorney, delegate his power for a period
not exceeding six months at any one time to any other Trustee or
Trustees; provided that in no case shall less than two Trustees
personally exercise the powers granted to the Trustees under the
Declaration except as herein otherwise expressly provided.
ARTICLE III
POWERS OF TRUSTEES
Section 3.1 - General. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business
of the Trust to the same extent as if the Trustees were the sole
owners of the Trust Property and business in their own right, but
with such powers of delegation as may be permitted by the
Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all
of its branches and maintain offices both within and without The
Commonwealth of Massachusetts, in any and all states of the United
States of America, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions,
agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and
execute all such instruments as the Trustees deem necessary,
proper or desirable in order to promote the interests of the Trust
although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the
provisions of the Declaration, the presumption shall be in favor
of a grant of power to the Trustees.
The enumeration of any specific power herein shall not be
construed as limiting the aforesaid power. Such powers of the
Trustees may be exercised without the order of or resort to any
court.
Section 3.2 - Investments.
(a) The Trustees shall have the power:
(i) to conduct, operate and carry on the business of an
investment company;
(ii) to subscribe for, invest in, reinvest in,
purchase or otherwise acquire, own, hold, pledge, sell, assign,
transfer, exchange, distribute, lend or otherwise deal in or
dispose of U.S. and foreign currencies, any form of gold and other
precious metals, commodity contracts, contracts for the future
acquisition or delivery of fixed income or other securities, and
securities of every nature and kind, including, without
limitation, all types of bonds, debentures, stocks, negotiable or
non-negotiable instruments, obligations, evidences of
indebtedness, certificates of deposit or indebtedness, commercial
paper, repurchase agreements, bankers' acceptances, and other
securities of any kind, issued, created, guaranteed or sponsored
by any and all Persons, including, without limitation, states,
territories and possessions of the United States and the District
of Columbia and any political subdivision, agency or
instrumentality of any such Person, or by the U.S. Government, any
foreign government, any political subdivision or any agency or
instrumentality of the U.S. Government, any foreign government or
any political subdivision of any foreign government, or any
international instrumentality, or by any bank or savings
institution, or by any corporation or organization organized under
the laws of the United States or of any state, territory or
possession thereof, or by any corporation or organization
organized under any foreign law, or in "when issued" contracts for
any such securities, to retain Trust assets in cash and from time
to time change the investments of the assets of the Trust; and to
exercise any and all rights, powers and privileges of ownership or
interest in respect of any and all such investments of every kind
and description, including, without limitation, the right to
consent and otherwise act with respect thereto, with power to
designate one or more persons, firms, associations or corporations
to exercise any of said rights, powers and privileges in respect
of any of said instruments; and
(iii) to carry on any other business in connection
with or incidental to any of the foregoing powers, to do
everything necessary, suitable or proper for the accomplishment of
any purpose or the attainment of any object or the furtherance of
any power hereinbefore set forth, and to do every other act or
thing incidental or appurtenant to or connected with the aforesaid
purposes, objects or powers.
(b) The Trustees shall not be limited to investing in
obligations maturing before the possible termination of the Trust,
nor shall the Trustees be limited by any law limiting the
investments which may be made by fiduciaries.
Section 3.3 - Legal Title. Legal title to all the Trust
Property shall be vested in the Trustees as joint tenants except
that the Trustees shall have power to cause legal title to any
Trust Property to be held by or in the name of one or more of the
Trustees, or in the name of the Trust, or in the name of any other
Person or nominee, on such terms as the Trustees may determine.
The right, title and interest of the Trustees in the Trust
Property shall vest automatically in each Person who may hereafter
become a Trustee. Upon the resignation, removal or death of a
Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered.
Section 3.4 - Issuance and Repurchase of Securities. The
Trustees shall have the power to issue, sell, repurchase, redeem,
retire, cancel, acquire, hold, resell, reissue, dispose of,
transfer, and otherwise deal in Shares and, subject to the
provisions set forth in Articles VII, VIII and IX and Section 6.9
hereof, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds of the Trust or
other Trust Property whether capital or surplus or otherwise, to
the full extent now or hereafter permitted by laws of The
Commonwealth of Massachusetts governing business corporations.
Section 3.5 - Borrowing Money; Lending Trust Property. The
Trustees shall have power to borrow money or otherwise obtain
credit and to secure the same by mortgaging, pledging or otherwise
subjecting as security the Trust Property, to endorse, guarantee,
or undertake the performance of any obligation, contract or
engagement of any other Person and to lend Trust Property.
Section 3.6 - Delegation; Committees. The Trustees shall
have power to delegate from time to time to such of their number
or to officers, employees or agents of the Trust the doing of such
things and the execution of such instruments either in the name of
the Trust or the names of the Trustees or otherwise as the
Trustees may deem expedient.
Section 3.7 - Collection and Payment. Subject to Section
6.9 hereof, the Trustees shall have power to collect all property
due to the Trust; to pay all claims, including taxes, against the
Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security
interest securing any obligations, by virtue of which any property
is owed to the Trust; and to enter into releases, agreements and
other instruments.
Section 3.8 - Expenses. Subject to Section 6.9 hereof, the
Trustees shall have the power to incur and pay any expenses which
in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of the Declaration, and to pay
reasonable compensation from the funds of the Trust to themselves
as Trustees. The Trustees shall fix the compensation of all
officers, employees and Trustees.
Section 3.9 - Manner of Acting; By-Laws. Except as
otherwise provided herein or in the By-Laws, any action to be
taken by the Trustees may be taken by a majority of the Trustees
present at a meeting of Trustees (a quorum being present),
including any meeting held by means of a conference telephone
circuit or similar communications equipment by means of which all
persons participating in the meeting can hear each other, or by
written consents of all the Trustees. The Trustees may adopt By-
Laws not inconsistent with this Declaration to provide for the
conduct of the business of the Trust and may amend or repeal such
By-Laws to the extent such power is not reserved to the
Shareholders.
Section 3.10 - Miscellaneous Powers. The Trustees shall
have the power to:
(a) employ or contract with such Persons as the Trustees may
deem desirable for the transaction of the business of the Trust;
(b) enter into joint ventures, partnerships and any other
combinations or associations;
(c) remove Trustees or fill vacancies in or add to their
number, elect and remove such officers and appoint and terminate
such agents or employees as they consider appropriate, and appoint
from their own number, and terminate, any one or more committees
which may exercise some or all of the power and authority of the
Trustees as the Trustees may determine;
(d) purchase, and pay for out of Trust Property, insurance
policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, distributors, selected dealers or
independent contractors of the Trust against all claims arising by
reason of holding any such position or by reason of any action
taken or omitted by any such Person in such capacity, whether or
not constituting negligence, or whether or not the Trust would
have the power to indemnify such Person against such liability;
(e) establish pension, profit-sharing, Share purchase, and
other retirement, incentive and benefit plans for any Trustees,
officers, employees or agents of the Trust;
(f) to the extent permitted by law, indemnify any person
with whom the Trust has dealings, including the Investment
Adviser, Distributor, Transfer Agent, and any dealer, to such
extent as the Trustees shall determine;
(g) determine and change the fiscal year of the Trust and
the method by which its accounts shall be kept; and
(h) adopt a seal for the Trust, provided, that the absence
of such seal shall not impair the validity of any instrument
executed on behalf of the Trust.
Section 3.11 - Principal Transactions. Except in
transactions permitted by the 1940 Act, or any order of exemption
issued by the Commission, the Trustees shall not, on behalf of the
Trust, buy any securities (other than Shares) from or sell any
securities (other than Shares) to, or lend any assets of the Trust
to, any Trustee or officer of the Trust or any firm of which any
such Trustee or officer is a member acting as principal, or have
any such dealings with the Investment Adviser, Distributor, or
Transfer Agent or with any Interested Person of such Person; but
the Trust may employ any such Person, or firm or company in which
such Person is an Interested Person, as broker, legal counsel,
registrar, transfer agent, dividend disbursing agent or custodian
upon customary terms.
Section 3.12 - Trustees and Officers as Shareholders.
Except as hereinafter provided, no officer, Trustee or member of
the Advisory Board of the Trust, and no member, partner, officer,
director or trustee of the Investment Adviser or of the
Distributor and no Investment Adviser or Distributor of the Trust,
shall take long or short positions in the securities issued by the
Trust. The foregoing provision shall not prevent:
(a) The Distributor from purchasing Shares from the Trust if
such purchases are limited (except for reasonable allowances for
clerical errors, delays and errors of transmission and
cancellation of orders) to purchases for the purpose of filling
orders for Shares received by the Distributor and provided that
orders to purchase from the Trust are entered with the Trust or
the Custodian promptly upon receipt by the Distributor of purchase
orders for Shares, unless the Distributor is otherwise instructed
by its customers;
(b) The Distributor from purchasing Shares as agent for the
account of the Trust;
(c) The purchase from the Trust or from the Distributor of
Shares by any officer, Trustee or member of the Advisory Board of
the Trust or by any member, partner, officer, director or trustee
of the Investment Adviser or of the Distributor at a price not
lower than the net asset value of the Shares at the moment of such
purchase, provided that any such sales are only to be made
pursuant to a uniform offer described in the Trust's current
prospectus; or
(d) The Investment Adviser, the Distributor or any of their
officers, partners, directors or trustees from purchasing Shares
prior to the effective date of the Registration Statement relating
to the Shares under the Securities Act of 1933, as amended.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR AND TRANSFER AGENT
Section 4.1 - Investment Adviser. Subject to a Majority
Shareholder Vote of the Shares of each series affected thereby,
the Trustees may in their discretion from time to time enter into
one or more investment advisory or management contracts whereby a
party to such contract shall undertake to furnish the Trust such
management, investment advisory, statistical and research
facilities and services, promotional activities, and such other
facilities and services, if any, with respect to one or more
series of Shares, as the Trustees shall from time to time consider
desirable and all upon such terms and conditions as the Trustees
may in their discretion determine.
Notwithstanding any provision of the Declaration, the Trustees may
delegate to the Investment Adviser authority (subject to such
general or specific instructions as the Trustees may from time to
time adopt) to effect purchases, sales, loans or exchanges of
assets of the Trust on behalf of the Trustees or may authorize any
officer, employee or Trustee to effect such purchases, sales,
loans or exchanges pursuant to recommendations of the Investment
Adviser (and all without further action by the Trustees). Any
such purchases, sales, loans or exchanges shall be deemed to have
been authorized by all the Trustees.
Section 4.2 - Distributor. The Trustees may in their
discretion from time to time enter into a contract, providing for
the sale of Shares whereby the Trust may either agree to sell the
Shares to the other party to the contract or appoint such other
party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as the Trustees may
in their discretion determine not inconsistent with the provisions
of this Article IV or the By-Laws; and such contract may also
provide for the repurchase or sale of Shares by such other party
as principal or as agent of the Trust and may provide that such
other party may enter into selected dealer agreements with
registered securities dealers to further the purpose of the
distribution or repurchase of the Shares.
Section 4.3 - Transfer Agent. The Trustees may in their
discretion from time to time enter into a transfer agency and
shareholder service contract or contracts whereby the other party
or parties to such contract or contracts shall undertake to
furnish transfer agency and/or shareholder services. The contract
or contracts shall have such terms and conditions as the Trustees
may in their discretion determine not inconsistent with the
Declaration or the By-Laws. Such services may be provided by one
or more Persons.
Section 4.4 - Parties to Contract. Any contract of the
character described in Sections 4.1, 4.2 or 4.3 of this Article IV
or any custodian contract, as described in the By-Laws, may be
entered into with any Person, although one or more of the Trustees
or officers of the Trust may be an officer, partner, director,
trustee, shareholder, or member of such other party to the
contract, and no such contract shall be invalidated or rendered
voidable by reason of the existence of any such relationship; nor
shall any Person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust
under or by reason of said contract or accountable for any profit
realized directly or indirectly therefrom, provided that the
contract when entered into was not inconsistent with the
provisions of this Article IV or the
By-Laws. The same Person may be the other party to contracts
entered into pursuant to Sections 4.1, 4.2 and 4.3 above or
custodian contracts, and any individual may be financially
interested or otherwise affiliated with Persons who are parties to
any or all of the contracts mentioned in this Section 4.4.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 5.1 - No Personal Liability of Shareholders,
Trustees, etc. No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with Trust
Property or the acts, obligations or affairs of the Trust. No
Trustee, officer, employee or agent of the Trust shall be subject
to any personal liability whatsoever to any Person, other than the
Trust or its Shareholders, in connection with Trust Property or
the affairs of the Trust, save only that arising from bad faith,
willful misfeasance, gross negligence or reckless disregard for
his duty to such Person; and all such Persons shall look solely to
the Trust Property for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any
Shareholder, Trustee, officer, employee, or agent, as such, of the
Trust, is made a party to any suit or proceeding to enforce any
such liability, he shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and hold each
Shareholder harmless from and against all claims and liabilities
to which such Shareholder may become subject by reason of his
being or having been a Shareholder, and shall reimburse such
Shareholder for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability. The rights
accruing to a Shareholder under this Section 5.1 shall not exclude
any other right to which such Shareholder may be lawfully
entitled, nor shall anything herein contained restrict the right
of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided
herein. Notwithstanding any other provision of this Declaration
to the contrary, no Trust Property shall be used to indemnify or
reimburse any Shareholder of any Shares of any series other than
Trust Property allocated or belonging to such series.
Section 5.2 - Non-Liability of Trustees, etc. No Trustee,
officer, employee or agent of the Trust shall be liable to the
Trust, its Shareholders, or to any Shareholder, Trustee, officer,
employee, or agent thereof for any action or failure to act
(including without limitation the failure to compel in any way any
former or acting Trustee to redress any breach of trust) except
for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties.
Section 5.3 - Mandatory Indemnification.
(a) Subject to the exceptions and limitations contained in
paragraph (b) below:
(i) every person who is or has been a Trustee or officer
of the Trust shall be indemnified by the Trust against all
liability and against all expenses reasonably incurred or paid by
him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid
or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal, administrative or other, including
appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties and
other liabilities.
(b) No indemnification shall be provided hereunder to a
Trustee or officer:
(i) against any liability to the Trust or the
Shareholders by reason of a final adjudication by the court or
other body before which the proceeding was brought that he engaged
in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall
have been finally adjudicated not to have acted in good faith in
the reasonable belief that his action was in the best interest of
the Trust; or
(iii) in the event of a settlement involving a payment
by a Trustee or officer or other disposition not involving a final
adjudication as provided in paragraph (b)(i) or (b)(ii) above
resulting in a payment by a Trustee or officer, unless there has
been either a determination that such Trustee or officer did not
engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office by the court or other body approving the settlement or
other disposition or by a reasonable determination, based upon a
review of readily available facts (as opposed to a full trial-type
inquiry) that he did not engage in such conduct:
(A) by vote of a majority of the Disinterested
Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in
office act on the matter); or
(B) by written opinion of independent legal counsel.
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be
severable, shall not affect any other rights to which any Trustee
or officer may now or hereafter be entitled, shall continue as to
a Person who has ceased to be such Trustee or officer and shall
inure to the benefit of the heirs, executors and administrators of
such Person. Nothing contained herein shall affect any rights to
indemnification to which personnel other than Trustees and
officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to
any claim, action, suit, or proceeding of the character described
in paragraph (a) of this Section 5.3 shall be advanced by the
Trust prior to final disposition thereof upon receipt of an
undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he is not entitled to
indemnification under this Section 5.3, provided that either:
(i) such undertaking is secured by a surety bond or some
other appropriate security or the Trust shall be insured against
losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter) or an independent legal
counsel in a written opinion, shall determine, based upon a review
of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 5.3, a "Disinterested Trustee" is
one (i) who is not an "Interested Person" of the Trust (including
anyone who has been exempted from being an "Interested Person" by
any rule, regulation or order of the Commission), and (ii) against
whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is
then or had been pending.
Section 5.4 - No Bond Required of Trustees. No Trustee
shall be obligated to give any bond or other security for the
performance of any of his duties hereunder.
Section 5.5 - No Duty of Investigation; Notice in Trust
Instruments, etc. No purchaser, lender, Transfer Agent or other
Person dealing with the Trustees or any officer, employee or agent
of the Trust shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees
or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or
on the order of the Trustees or of said officer, employee or
agent. Every obligation, contract, instrument, certificate,
Share, other security of the Trust or undertaking, and every other
act or thing whatsoever executed in connection with the Trust
shall be conclusively presumed to have been executed or done by
the executors thereof only in their capacity as Trustees under the
Declaration or in their capacity as officers, employees or agents
of the Trust. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or undertaking
made or issued by the Trustees shall recite that the same is
executed or made by them not individually, but as Trustees under
the Declaration, and that the obligations of any such instrument
are not binding upon any of the Trustees or Shareholders
individually, but bind only the Trust estate, and may contain any
further recital which they or he may deem appropriate, but the
omission of such recital shall not operate to bind any of the
Trustees or Shareholders individually. The Trustees shall at all
times maintain insurance for the protection of the Trust Property,
the Trust's Shareholders, Trustees, officers, employees and agents
in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees
in their sole judgment shall deem advisable.
Section 5.6 - Reliance on Experts, etc. Each Trustee and
officer or employee of the Trust shall, in the performance of his
duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in
good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the
Trust by any of its officers or employees or by the Investment
Adviser, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers or other experts or consultants selected
with reasonable care by the Trustees, officers or employees of the
Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1 - Beneficial Interest. The interest of the
beneficiaries hereunder shall be divided into transferable Shares
of Beneficial Interest (without par value) which shall be divided
into one or more series or classes as provided in Sections 6.9 and
6.10 hereof. The number of
Shares authorized hereunder is unlimited. All Shares issued
hereunder including, without limitation, Shares issued in
connection with a dividend in Shares or a split of Shares, shall
be fully paid and non-assessable.
Section 6.2 - Rights of Shareholders. The ownership of the
Trust Property of every description and the right to conduct any
business hereinbefore described are vested exclusively in the
Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and
they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can
they be called upon to assume any losses of the Trust or suffer an
assessment of any kind by virtue of their ownership of Shares.
The Shares shall be personal property giving only the rights
specifically set forth in the Declaration. The Shares shall not
entitle the holder to preference, preemptive, appraisal,
conversion or exchange rights, except as the Trustees may
determine with respect to any series or class of Shares.
Section 6.3 - Trust Only. It is the intention of the
Trustees to create only the relationship of Trustee and
beneficiary between the Trustees and each Shareholder from time to
time. It is not the intention of the Trustees to create a general
partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than
a trust. Nothing in the Declaration shall be construed to make
the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
Section 6.4 - Issuance of Shares. The Trustees, in their
discretion may, from time to time without vote of the
Shareholders, issue Shares, in addition to the then issued and
outstanding Shares and Shares held in the treasury, to such party
or parties and for such amount and type of consideration,
including cash or property, at such time or times, and on such
terms as the Trustees may deem best, and may in such manner
acquire other assets (including the acquisition of assets subject
to, and in connection with the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the
Trustees may issue fractional Shares. The Trustees may from time
to time divide or combine the Shares of any series into a greater
or lesser number without thereby changing their proportionate
beneficial interests in Trust Property allocated or belonging to
such series. Contributions to the Trust may be accepted for, and
Shares shall be redeemed as, whole Shares and/or 1/1,000ths of a
Share or integral multiples thereof.
Section 6.5 - Register of Shares. A register shall be kept
at the principal office of the Trust or at an office of the
Transfer Agent which shall contain the names and addresses of the
Shareholders and the number of Shares held by them respectively
and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of the Shares and who shall
be entitled to receive dividends or distributions or otherwise to
exercise or enjoy the rights of Shareholders. No Shareholder
shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the
By-Laws provided, until he has given his address to the Transfer
Agent or such other officer or agent of the Trustees as shall keep
the said register for entry thereon. It is not contemplated that
certificates will be issued for the Shares; however, the Trustees,
in their discretion, may authorize the issuance of Share
certificates and promulgate appropriate rules and regulations as
to their use.
Section 6.6 - Transfer of Shares. Shares shall be
transferable on the records of the Trust only by the record holder
thereof or by his agent thereunto duly authorized in writing, upon
delivery to the Trustees or the Transfer Agent of a duly executed
instrument of transfer, together with any certificate or
certificates (if issued) for such Shares and such evidence of the
genuineness of each such execution and authorization and of other
matters as may reasonably be required. Upon such delivery the
transfer shall be recorded on the register of the Trust. Until
such record is made, the Shareholder of record shall be deemed to
be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any
officer, employee or agent of the Trust shall be affected by any
notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of
the death, bankruptcy, or incompetence of any Shareholder, or
otherwise by operation of law, shall be recorded on the register
of Shares as the holder of such Shares upon production of the
proper evidence thereof to the Trustees or the Transfer Agent; but
until such record is made, the Shareholder of record shall be
deemed to be the holder of such Shares for all purposes hereunder
and neither the Trustees nor any Transfer Agent or registrar nor
any officer or agent of the Trust shall be affected by any notice
of such death, bankruptcy or incompetence, or other operation of
law.
Section 6.7 - Notices. Any and all notices to which any
Shareholder may be entitled and any and all communications shall
be deemed duly served or given if mailed, postage prepaid,
addressed to any Shareholder of record at his last known address
as recorded on the register of the Trust.
Section 6.8 - Voting Powers. The Shareholders shall have
power to vote only (i) for the removal of Trustees as provided in
Section 2.2 hereof, (ii) with respect to any investment advisory
or management contract as provided in Section 4.1 hereof, (iii)
with respect to termination of the Trust as provided in Section
9.2 hereof, (iv) with respect to any amendment of this Declaration
to the extent and as provided in Section 9.3 hereof, (v) with
respect to any merger, consolidation or sale of assets as provided
in Sections 9.4 and 9.6 hereof, (vi) with respect to incorporation
of the Trust or any series to the extent and as provided in
Sections 9.5 and 9.6 hereof, (vii) to the same extent as the
stockholders of a Massachusetts business corporation as to whether
or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf
of the Trust or the Shareholders, and (viii) with respect to such
additional matters relating to the Trust as may be required by the
Declaration, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each whole Share
shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote, except that Shares held in the
treasury of the Trust shall not be voted. There shall be no
cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and
may take any action required by law, the Declaration or the By-
Laws to be taken by Shareholders. The By-Laws may include further
provisions for Shareholder votes and meetings and related matters.
Section 6.9 - Series Designation. Shares of the Trust may
be divided into series, the number and relative rights, privileges
and preferences of which shall be established and designated by
the Trustees, in their discretion, in accordance with the terms of
this Section 6.9. The Trustees may from time to time exercise
their power to authorize the division of Shares into one or more
series by establishing and designating one or more series of
Shares upon and subject to the following provisions:
(a) All Shares shall be identical except that there may
be such variations as shall be fixed and determined by the
Trustees between different series as to purchase price, right of
redemption and the price, terms and manner of redemption, and
special and relative rights as to dividends and on liquidation.
(b) The number of authorized Shares and the number of
Shares of each series that may be issued shall be unlimited. The
Trustees may classify or reclassify any unissued Shares or any
Shares previously issued and reacquired of any series into one or
more series that may be
established and designated from time to time. The Trustees may
hold as treasury shares (of the same or some other series),
reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any series reacquired by the
Trust at their discretion from time to time.
(c) All consideration received by the Trust for the
issue or sale of Shares of a particular series, together with all
assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, shall irrevocably
belong to that series for all purposes, subject only to the rights
of creditors of such series, and shall be so recorded upon the
books of account of the Trust. In the event that there are any
assets, income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any
particular series, the Trustees shall allocate them among any one
or more of the series established and designated from time to time
in such a manner and on such basis as they, in their sole
discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of
all series for all purposes. No holder of Shares of any
particular series shall have any claim on or right to any assets
allocated or belonging to any other series of Shares.
(d) The assets belonging to each particular series shall
be charged with the liabilities of the Trust in respect of that
series and all expenses, costs, charges and reserves attributable
to that series, and any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily
identifiable as belonging to any particular series shall be
allocated and charged by the Trustees to and among any one or more
of the series established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion
deem fair and equitable. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all series for all
purposes. The Trustees shall have full discretion to the extent
not inconsistent with the 1940 Act, to determine which items shall
be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon
the Shareholders. Under no circumstances shall the assets
allocated or belonging to any particular series be charged with
liabilities attributable to any other series. All Persons who
have extended credit which has been allocated to a particular
series, or who have a claim or contract which has been allocated
to any particular series, shall look only to the assets of that
particular series for payment of such credit, claim or contract.
(e) The power of the Trustees to invest and reinvest the
Trust Property allocated or belonging to any particular series
shall be governed by Section 3.2 hereof unless otherwise provided
in the instrument of the Trustees establishing such series which
is hereinafter described.
(f) Each Share of a series shall represent a
beneficial interest in the net assets allocated or belonging to
such series only, and such interest shall not extend to the assets
of the Trust generally. Dividends and distributions on Shares of
a particular series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise, pursuant
to a standing resolution or resolutions adopted only once or with
such frequency as the Trustees may determine, to the holders of
Shares of that series, only from such of the income and capital
gains, accrued or realized, from the assets belonging to that
series, as the Trustees may determine, after providing for actual
and accrued liabilities belonging to that series. All dividends
and distributions on Shares of a particular series shall be
distributed pro rata to the holders of that series in proportion
to the number of Shares of that series held by such holders at the
date and time of record established for the payment of such
dividends or distributions. Shares of any particular series of
the Trust may be redeemed solely out of Trust Property allocated
or belonging to that series. Upon liquidation or termination of a
series of the Trust, Shareholders of such series shall be entitled
to receive a pro rata share of the net assets of such series only.
A Shareholder of a particular series of the Trust shall not be
entitled to participate in a derivative or class action on behalf
of any other series or the Shareholders of any other series of the
Trust.
(g) Notwithstanding any provision hereof to the
contrary, on any matter submitted to a vote of the Shareholders of
the Trust, all Shares then entitled to vote shall be voted in the
aggregate, except that (i) when required by the 1940 Act to be
voted by individual series, Shares shall not be voted in the
aggregate, and (ii) when the Trustees have determined that the
matter affects only the interests of Shareholders of one or more
series, only Shareholders of such series shall be entitled to vote
thereon.
(h) The establishment and designation of any series of
Shares shall be effective upon the execution by a majority of the
then Trustees of an instrument setting forth such establishment
and designation and the relative rights and preferences of such
series, or as otherwise provided in such instrument. At any time
that there are no Shares outstanding of any particular series
previously established and designated, the Trustees may by an
instrument executed by a majority of their number abolish that
series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of
an amendment to this Declaration.
Section 6.10 - Class Designation. The Trustees may, in
their discretion, authorize the division of Shares of the Trust
(or any series of the Trust) into one or more classes. All Shares
of a class shall be identical with each other and with the Shares
of each other class of the Trust or the same series of the Trust
(as applicable), except for such variations between classes as may
be approved by the Board of Trustees and permitted by the 1940 Act
or pursuant to any exemptive order issued by the Securities and
Exchange Commission. The classes of Shares established pursuant
to this Section 6.10 and existing as of the date hereof are set
forth in Annex A hereto.
ARTICLE VII
REDEMPTIONS
Section 7.1 - Redemption of Shares. All Shares of the Trust
shall be redeemable, at the redemption price determined in the
manner set out in this Declaration. Redeemed Shares may be resold
by the Trust.
The Trust shall redeem the Shares at the price determined as
hereinafter set forth, upon the appropriately verified written
application of the record holder thereof (or upon such other form
of request as the Trustees may determine) at such office or agency
as may be designated from time to time for that purpose in the
Trust's then effective prospectus under the Securities Act of
1933. The Trustees may from time to time specify additional
conditions, not inconsistent with the 1940 Act, regarding the
redemption of Shares in the Trust's then effective prospectus
under the Securities Act of 1933.
Section 7.2 - Price. Shares shall be redeemed at their net
asset value determined as set forth in Article VIII hereof as of
such time as the Trustees shall have theretofore prescribed by
resolution. In the absence of such resolution, the redemption
price of Shares deposited shall be the net asset value of such
Shares next determined as set forth in Article VIII hereof after
receipt of such application.
Section 7.3 - Payment. Payment of the redemption price of
Shares of any series shall be made in cash or in property out of
the assets of such series to the Shareholder of record at such
time and in the manner, not inconsistent with the 1940 Act or
other applicable laws, as may be specified from time to time in
the Trust's then effective prospectus under the Securities Act of
1933, subject to the provisions of Section 7.4 hereof.
Section 7.4 - Effect of Suspension of Determination of Net
Asset Value. If, pursuant to Section 7.6 hereof, the Trustees
shall declare a suspension of the determination of net asset
value, the rights of Shareholders (including those who shall have
applied for redemption pursuant to Section 7.1 hereof but who
shall not yet have received payment) to have Shares redeemed and
paid for by the Trust shall be suspended until the termination of
such suspension is declared. Any record holder who shall have his
redemption right so suspended may, during the period of such
suspension, by appropriate written notice of revocation at the
office or agency where application was made, revoke any
application for redemption not honored and withdraw any
certificates on deposits. The redemption price of Shares for
which redemption applications have not been revoked shall be the
net asset value of such Shares next determined as set forth in
Article VIII after the termination of such suspension, and payment
shall be made within seven days after the date upon which the
application was made plus the period after such applications
during which the determination of net asset value was suspended.
Section 7.5 - Redemption of Shares in Order to Qualify as
Regulated Investment Company; Disclosure of Holding. If the
Trustees shall, at any time and in good faith, be of the opinion
that direct or indirect ownership of Shares or other securities of
the Trust has or may become concentrated in any Person to an
extent which would disqualify the Trust or any series of the Trust
as a regulated investment company under the Internal Revenue Code,
as amended, then the Trustees shall have the power by lot or other
means deemed equitable by them (i) to call for redemption by any
such Person a number, or principal amount, of Shares or other
securities of the Trust sufficient to maintain or bring the direct
or indirect ownership of Shares or other securities of the Trust
into conformity with the requirements for such qualification and
(ii) to refuse to transfer or issue Shares or other securities of
the Trust to any Person whose acquisition of the Shares or other
securities of the Trust in question would result in such
disqualification. The redemption shall be effected at the
redemption price and in the manner provided in Section 7.1 hereof.
The holders of Shares or other securities of the Trust shall
upon demand disclose to the Trustees in writing such information
with respect to direct and indirect ownership of Shares or other
securities of the Trust as the Trustees deem necessary to comply
with the provisions of the Internal Revenue Code, or to comply
with the requirements of any other taxing authority.
Section 7.6 - Suspension of Right of Redemption. The Trust
may declare a suspension of the right of redemption or postpone
the date of payment or redemption for the whole or any part of any
period (i) during which the New York Stock Exchange is closed
other than customary
weekend and holiday closings, (ii) during which trading on the New
York Stock Exchange is restricted, (iii) during which an emergency
exists as a result of which disposal by the Trust of securities
owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net
assets, or (iv) during any other period when the Commission may
for the protection of security holders of the Trust by order
permit suspension of the right of redemption or postponement of
the date of payment or redemption; provided that applicable rules
and regulations of the Commission shall govern as to whether the
conditions prescribed in (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust shall
specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter
there shall be no right of redemption or payment on redemption
until the Trust shall declare the suspension at an end, except
that the suspension shall terminate in any event on the first day
on which said stock exchange shall have reopened or the period
specified in (ii) or (iii) shall have expired (as to which in the
absence of an official ruling by the Commission, the determination
of the Trust shall be conclusive). In the case of a suspension of
the right of redemption, a Shareholder may either withdraw his
request for redemption or receive payment based on the net asset
value existing after the termination of the suspension as provided
in Section 7.4 hereof.
ARTICLE VIII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
Subject to Section 6.9 hereof, the Trustees, in their
absolute discretion, may prescribe and shall set forth in the By-
Laws or in a duly adopted vote of the Trustees such bases and
times for determining the per Share net asset value of the Shares
of any series, or net income attributable to the Shares of any
series, or the declaration and payment of dividends and
distributions on the Shares of any series, as they may deem
necessary or desirable.
ARTICLE IX
DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.
Section 9.1 - Duration. The Trust shall continue without
limitation of time but subject to the provisions of this Article
IX.
Section 9.2 - Termination of Trust.
(a) The Trust may be terminated (i) by a Majority
Shareholder Vote of the holder of its Shares, or (ii) by the
Trustees by written notice to the Shareholders. Any series of the
Trust may be terminated (i) by the affirmative vote of the holders
of not less than two-thirds of the Shares outstanding and entitled
to vote of that series, or (ii) by the Trustees by written notice
to the Shareholders of that series. Upon the termination of the
Trust or any series of the Trust:
(i) The Trust or series of the Trust shall carry on no
business except for the purpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the
affairs of the Trust or series of the Trust and all the powers of
the Trustees under this Declaration shall continue until the
affairs of the Trust or series of the Trust shall have been wound
up, including the power to fulfill or discharge the contracts of
the Trust or series of the Trust, collect its assets, sell,
convey, assign, exchange, transfer or otherwise dispose of all or
any part of the remaining Trust Property or Trust Property of the
series to one or more persons at public or private sale for
consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its
liabilities, and to do all other acts appropriate to liquidate its
business; provided, that any sale, conveyance, assignment,
exchange, transfer or other disposition of all or substantially
all the Trust Property shall require Shareholder approval in
accordance with Section 9.4 hereof, and any sale, conveyance,
assignment, exchange, transfer or other disposition of all or
substantially all of the Trust Property allocated or belonging to
any series shall require the approval of the Shareholders of such
series as provided in Section 9.6 hereof; and
(iii) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary for
their protection, the Trustees may distribute the remaining Trust
Property or Trust Property of the series, in cash or in kind or
partly in cash and partly in kind, among the Shareholders of the
Trust or the series according to their respective rights.
(b) After termination of the Trust or series and
distribution to the Shareholders of the Trust or series as herein
provided, a majority of the Trustees shall execute and lodge among
the records of the Trust an instrument in writing setting forth
the fact of such termination, and the
Trustees shall thereupon be discharged from all further
liabilities and duties hereunder with respect to the Trust or
series, and the rights and interests of all Shareholders of the
Trust or series shall thereupon cease.
Section 9.3 - Amendment Procedure.
(a) This Declaration may be amended by a Majority
Shareholder Vote of the Shareholders of the Trust or by any
instrument in writing, without a meeting, signed by a majority of
the Trustees and consented to by the holders of not less than a
majority of the Shares of the Trust. The Trustees may also amend
this Declaration without the vote or consent of Shareholders to
designate series in accordance with Section 6.9 hereof, to change
the name of the Trust, to supply any omission, to cure, correct or
supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary or advisable to conform this
Declaration to the requirements of applicable federal laws or
regulations or the requirements of the regulated investment
company provisions of the Internal Revenue Code, as amended, but
the Trustees shall not be liable for failing so to do.
(b) No amendment which the Trustees shall have determined
shall affect the rights, privileges or interests of holders of a
particular series of Shares, but not the rights, privileges or
interests of holders of Shares of the Trust generally, may be made
except with the vote or consent by a Majority Shareholder Vote of
such series.
(c) Notwithstanding any other provision hereof, no amendment
may be made under this Section 9.3 which would change any rights
with respect to the Shares, or any series or class of Shares, by
reducing the amount payable thereon upon liquidation of the Trust
or by diminishing or eliminating any voting rights pertaining
thereto, except with a Majority Shareholder Vote of Shares or
series of Shares. Nothing contained in this Declaration shall
permit the amendment of this Declaration to impair the exemption
from personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or to permit assessments upon
Shareholders.
(d) A certificate signed by a majority of the Trustees
setting forth an amendment and reciting that it was duly adopted
by the Shareholders or by the Trustees as aforesaid or a copy of
the Declaration, as amended, and executed by a majority of the
Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
(e) Notwithstanding any other provision hereof, until such
time as a Registration Statement under the Securities Act of 1933,
as amended, covering the first public offering of securities of
the Trust shall have become effective, this Declaration may be
amended in any respect by the affirmative vote of a majority of
the Trustees or by an instrument signed by a majority of the
Trustees.
Section 9.4 - Merger, Consolidation and Sale of Assets. The
Trust may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or
exchange all or substantially all of the Trust Property, including
its good will, upon such terms and conditions and for such
consideration when and as authorized at any meeting of
Shareholders called for such purpose by the Majority Shareholder
Vote of the Trust, or by an instrument or instruments in writing
without a meeting, consented to by the Majority Shareholder Vote
of the Trust; provided, however, that if such merger,
consolidation, sale, lease or exchange is recommended by the
Trustees, the vote or written consent of the holders of a majority
of Shares outstanding shall be sufficient authorization; and any
such merger, consolidation, sale, lease or exchange shall be
deemed for all purposes to have been accomplished under and
pursuant to the statutes of The Commonwealth of Massachusetts.
Nothing contained herein shall be construed as requiring approval
of Shareholders for any sale of assets in the ordinary course of
the business of the Trust.
Section 9.5 - Incorporation and Reorganization. With the
approval of the holders of a majority of the Shares outstanding
and entitled to vote, the Trustees may cause to be organized or
assist in organizing a corporation or corporations under the laws
of any jurisdiction, or any other trust, unit investment trust,
partnership, association or other organization to take over all of
the Trust Property or to carry on any business in which the Trust
shall directly or indirectly have any interest, and to sell,
convey and transfer the Trust Property to any such corporation,
trust, partnership, association or organization in exchange for
the shares or securities thereof or otherwise, and to lend money
to, subscribe for the shares or securities of, and enter into any
contracts with any such corporation, trust, partnership,
association or organization in which the Trust holds or is about
to acquire shares or any other interest. Subject to Section 9.4
hereof, the Trustees may also cause a merger or consolidation
between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization
if and to the extent permitted by law. Nothing contained in this
Section 9.5 shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing
one or more corporations, trusts, partnerships, associations or
other organizations and selling, conveying or transferring a
portion of the Trust Property to such organization or entities.
Section 9.6 - Incorporation or Reorganization of Series.
With the approval of a Majority Shareholder Vote of any series,
the Trustees may sell, lease or exchange all of the Trust Property
allocated or belonging to that series, or cause to be organized or
assist in organizing a corporation or corporations under the laws
of any other jurisdiction, or any other trust, unit investment
trust, partnership, association or other organization, to take
over all of the Trust Property allocated or belonging to that
series and to sell, convey and transfer such Trust Property to any
such corporation, trust, unit investment trust, partnership,
association, or other organization in exchange for the shares or
securities thereof or otherwise.
ARTICLE X
REPORTS TO SHAREHOLDERS AND SHAREHOLDER COMMUNICATIONS
The Trustees shall at least semi-annually submit to the
Shareholders a written financial report of the transactions of the
Trust, including financial statements which shall at least
annually be certified by independent public accountants.
Whenever ten or more Shareholders of record who have been
such for at least six months preceding the date of application,
and who hold in the aggregate either Shares having a net asset
value of at least $25,000 or at least l% of the Shares
outstanding, whichever is less, shall apply to the Trustees in
writing, stating that they wish to communicate with other
Shareholders with a view to obtaining signatures to a request for
a meeting of Shareholders for the purpose of removing one or more
Trustees pursuant to Section 2.2 hereof and accompany such
application with a form of communication and request which they
wish to transmit, the Trustees shall within five business days
after receipt of such application either:
(a) afford to such applicants access to a list of the names
and addresses of all Shareholders as recorded on the books of the
Trust; or
(b) inform such applicants as to the approximate number of
Shareholders of record, and the approximate cost of mailing to
them the proposed communication and form of request. If the
Trustees elect to follow the course specified in (b) above, the
Trustees, upon the written request of such applicants, accompanied
by a tender of the material to be mailed and of the reasonable
expenses of mailing, shall, with reasonable promptness, mail such
material to all Shareholders of record, unless within five
business days after such tender the Trustees mail to such
applicants and file with the Commission, together with a copy of
the material to be mailed, a written statement
signed by at least a majority of the Trustees to the effect that
in their opinion either such material contains untrue statements
of fact or omits to state facts necessary to make the statements
contained therein not misleading, or would be in violation of
applicable law, and specifying the basis of such opinion.
ARTICLE XI
MISCELLANEOUS
Section 11.1 - Filing. This Declaration, as amended, and
any subsequent amendment hereto shall be filed in the office of
the Secretary of The Commonwealth of Massachusetts and in such
other place or places as may be required under the laws of The
Commonwealth of Massachusetts and may also be filed or recorded in
such other places as the Trustees deem appropriate. Each
amendment so filed shall be accompanied by a certificate signed
and acknowledged by a Trustee stating that such action was duly
taken in a manner provided herein, and unless such amendment or
such certificate sets forth some later time for the effectiveness
of such amendment, such amendment shall be effective upon its
filing. A restated Declaration, integrating into a single
instrument all of the provisions of the Declaration which are then
in effect and operative, may be executed from time to time by a
majority of the Trustees and shall, upon filing with the Secretary
of The Commonwealth of Massachusetts, be conclusive evidence of
all amendments contained therein and may thereafter be referred to
in lieu of the original Declaration and the various amendments
thereto.
Section 11.2 - Governing Law. This Declaration is executed
by the Trustees and delivered in The Commonwealth of Massachusetts
and with reference to the laws thereof, and the rights of all
parties and the validity and construction of every provision
hereof shall be subject to and construed according to the laws of
said Commonwealth.
Section 11.3 - Counterparts. This Declaration may be
simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts,
together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
Section 11.4 - Reliance by Third Parties. Any certificate
executed by an individual who, according to the records of the
Trust appears to be a Trustee hereunder, certifying to: (i) the
number or identity of Trustees or Shareholders, (ii) the due
authorization of the execution of any instrument or writing, (iii)
the form of any vote passed at a meeting of Trustees or
Shareholders,
(iv) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the
requirements of this Declaration, (v) the form of any By-Laws
adopted by or the identity of any officers elected by the
Trustees, or (vi) the existence of any fact or facts which in any
manner relate to the affairs of the Trust, shall be conclusive
evidence as to the matters so certified in favor of any Person
dealing with the Trustees and their successors.
Section 11.5 - Provisions in Conflict with Law or
Regulations.
(a) The provisions of the Declaration are severable, and if
the Trustees shall determine, with the advice of counsel, that any
of such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code, as
amended, or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a
part of the Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of
the Declaration or render invalid or improper any action taken or
omitted prior to such determination.
(b) If any provision of the Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in
any other jurisdiction or any other provision of the Declaration
in any jurisdiction.
ANNEX A
Pursuant to Section 6.10 of the Declaration of Trust, the
Trustees have divided the shares of Massachusetts Investors Growth
Stock Fund (the "Trust"), to create two classes of shares, within
the meaning of Section 6.10, as follows:
1. The two classes of shares are designated "Class A Shares"
and "Class B Shares";
2. Class A Shares and Class B Shares shall be entitled to
all the rights and preferences accorded to shares under
the Declaration;
3. The purchase price of Class A Shares and Class B Shares,
the method of determination of the net asset value of
Class A Shares and Class B Shares, the price, terms and
manner of redemption of Class A Shares and Class B
Shares, any conversion feature of the Class B Shares, and
the relative dividend rights of holders of Class A Shares
and Class B Shares shall be established by the Trustees
of the Trust in accordance with the Declaration and shall
be set forth in the current prospectus and statement of
additional information of the Trust or any series
thereof, as amended from time to time, contained in the
Trust's registration statement under the Securities Act
of 1933, as amended.
4. Class A Shares and Class B Shares shall vote together as
a single class except that Shares of a class may vote
separately on matters affecting only that class and
Shares of a class not affected by a matter will not vote
on that matter.
5. A class of Shares of the Trust may be terminated by the
Trustees by written notice to the Shareholders of the
class.
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 18th day of January, 1995.
A. KEITH BRODKIN CHARLES W. SCHMIDT
A. Keith Brodkin Charles W. Schmidt
76 Farm Road 63 Claypit
Hill Road
Sherborn, MA 01770 Wayland, MA
01778
RICHARD B. BAILEY ARNOLD D. SCOTT
Richard B. Bailey Arnold D. Scott
63 Atlantic Avenue 20 Rowes
Wharf
Boston, MA 02110 Boston, MA 02110
PETER G. HARWOOD JEFFREY L. SHAMES
Peter G. Harwood Jeffrey L. Shames
211 Lindsay Pond Road 60 Brookside Road
Concord, MA 01742 Needham, MA
02192
J. ATWOOD IVES ELAINE R. SMITH
J. Atwood Ives Elaine R. Smith
1 Bennington Road 75 Scotch Pine
Road
Lexington, MA 02173 Weston, MA 02193
LAWRENCE T. PERERA DAVID B. STONE
Lawrence T. Perera David B.
Stone
18 Marlborough Street 50 Delano Road
Boston, MA 02116 Marion, MA 02736
WILLIAM J. POORVU
William J. Poorvu
975 Memorial Drive
Cambridge, MA 02138
[TEXT]
EX-99.2
[DESCRIPTION] AMENDED & RESTATED BYLAWS
AMENDED AND RESTATED
BY-LAWS
OF
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
DECEMBER 21,
1994
AMENDED AND RESTATED
BY-LAWS
OF
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
ARTICLE I
DEFINITIONS
The terms "Commission", "Declaration", "Distributor",
"Investment Adviser", "Majority Shareholder Vote", "1940 Act",
"Shareholder", "Shares", "Transfer Agent", "Trust", "Trust
Property" and "Trustees" have the respective meanings given them
in the Declaration of Trust of Massachusetts Investors Growth
Stock Fund, dated March 4, 1985 as amended from time to time.
ARTICLE II
OFFICES
SECTION 1. PRINCIPAL OFFICE. Until changed by the
Trustees, the principal office of the Trust in The Commonwealth of
Massachusetts shall be in the City of Boston, County of Suffolk.
SECTION 2. OTHER OFFICES. The Trust may have offices in
such other places without as well as within the Commonwealth as
the Trustees may from time to time determine.
ARTICLE III
SHAREHOLDERS
SECTION 1. MEETINGS. Meetings of the Shareholders may be
called at any time by a majority of the Trustees and shall be
called by any Trustee upon written request of Shareholders holding
in the aggregate not less than ten percent (10%) of the
outstanding Shares of the Trust having voting rights, if
shareholders of all series are required under the Declaration to
vote in the aggregate and not by individual series at such
meeting, or of any series or class if shareholders of such series
or class are entitled under the Declaration to vote by individual
series or class, such request specifying the purpose or purposes
for which such meeting is to be called. Any such meeting shall
be held within or without The Commonwealth of Massachusetts on
such day and at such time as the Trustees shall designate.
SECTION 2. NOTICE OF MEETINGS. Notice of all meetings of
Shareholders, stating the time, place and purposes of the meeting,
shall be given by the Trustees by mail to each Shareholder
entitled to vote at such meeting at his address as recorded on the
register of the Trust, mailed at least (ten) 10 days and not more
than (sixty) 60 days before the meeting. Only the business stated
in the notice of the meeting shall be considered at such meeting.
Any adjourned meeting may be held as adjourned without further
notice. No notice need be given to any Shareholder who shall have
failed to inform the Trust of his current address or if a written
waiver of notice, executed before or after the meeting by the
Shareholder or his attorney thereunto authorized, is filed with
the records of the meeting.
SECTION 3. RECORD DATE FOR MEETINGS. For the purpose of
determining the Shareholders who are entitled to notice of and to
vote at any meeting, or to participate in any distribution, or for
the purpose of any other action, the Trustees may from time to
time close the transfer books for such period, not exceeding
thirty (30) days, as the Trustees may determine; or without
closing the transfer books the Trustees may fix a date not more
than sixty (60) days prior to the date of any meeting of
Shareholders or distribution or other action as a record date for
the determination of the persons to be treated as Shareholders of
record for such purpose.
SECTION 4. PROXIES. At any meeting of Shareholders, any
holder of Shares entitled to vote thereat may vote by proxy,
provided that no proxy shall be voted at any meeting unless it
shall have been placed on file with the Clerk, or with such other
officer or agent of the Trust as the Clerk may direct, for
verification prior to the time at which such vote shall be taken.
Pursuant to a vote of a majority of the Trustees, proxies may be
solicited in the name of one or more Trustees or one or more of
the officers of the Trust. When any Share is held jointly by
several persons, any one of them may vote at any meeting in person
or by proxy in respect of such Share, but if more than one of them
shall be present at such meeting in person or by proxy, and such
joint owners or their proxies so present disagree as to any vote
to be cast, such vote shall not be received in respect of such
Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to
its exercise, and the burden of proving invalidity shall rest on
the challenger. The placing of a Shareholder's name on a proxy
pursuant to telephonic or electronically transmitted instructions
obtained pursuant to procedures reasonably designed to verify that
such instructions have been authorized by such Shareholder shall
constitute execution of such proxy by or on behalf of such
Shareholder. If the holder of any such Share is a minor or a
person of unsound mind, and subject to guardianship or to the
legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote may
be given in person or by proxy. Any copy, facsimile
telecommunication or other reliable reproduction of a proxy may be
substituted for or used in lieu of the original proxy for any and
all purposes for which the original proxy could be used, provided
that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original proxy or
the portion thereof to be returned by the Shareholder.
SECTION 5. QUORUM, ADJOURNMENT AND REQUIRED VOTE. A
majority of outstanding Shares entitled to vote shall constitute a
quorum at any meeting of Shareholders, except that where any
provision of law, the Declaration or these By-laws permits or
requires that holders of any series or class shall vote as a
series or class, then a majority of the aggregate number of Shares
of that series or class entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that series
or class. In the absence of a quorum, a majority of outstanding
Shares entitled to vote present in person or by proxy, or, where
any provision of law, the Declaration or these By-laws permits or
requires that holders of any series or class shall vote as a
series or class, a majority of outstanding Shares of that series
or class entitled to vote present in person or by proxy, may
adjourn the meeting from time to time until a quorum shall be
present. Only Shareholders of record shall be entitled to vote on
any matter. Each full Share shall be entitled to one vote and
fractional Shares shall be entitled to a vote of such fraction.
Except as otherwise provided any provision of law, the Declaration
or these By-laws, Shares representing a majority of the votes cast
shall decide any matter (i.e., abstentions and broker non-votes
shall not be counted) and a plurality shall elect a Trustee,
provided that where any provision of law, the Declaration or these
By-Laws permits or requires that holders of any series or class
shall vote as a series or class, then a majority of the Shares of
that series or class cast on the matter shall decide the matter
(i.e., abstentions and broker non-votes shall not be counted)
insofar as that series or class is concerned.
SECTION 6. INSPECTION OF RECORDS. The records of the Trust
shall be open to inspection by Shareholders to the same extent as
is permitted shareholders of a Massachusetts business corporation.
SECTION 7. ACTION WITHOUT MEETING. Any action which may be
taken by Shareholders may be taken without a meeting if a majority
of Shareholders entitled to vote on the matter (or such larger
proportion thereof as shall be required by law, the Declaration or
these By-Laws for approval of such matter) consent to the action
in writing and the written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for
all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
SECTION 1. MEETINGS OF THE TRUSTEES. The Trustees may in
their discretion provide for regular or stated meetings of the
Trustees. Notice of regular or stated meetings need not be given.
Meetings of the Trustees other than regular or stated meetings
shall be held whenever called by the Chairman or by any one of the
Trustees at the time being in office. Notice of the time and
place of each meeting other than regular or stated meetings shall
be given by the Secretary or an Assistant Secretary, or the Clerk
or an Assistant Clerk or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days
before the meeting, or shall be telegraphed, cabled, or wirelessed
or sent by facsimile or other electronic means to each Trustee at
his business address, or personally delivered to him at least one
day before the meeting. Such notice may, however, be waived by
any Trustee. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto
or at its commencement the lack of notice to him. A notice or
waiver of notice need not specify the purpose of any meeting.
Except as provided by law the Trustees may meet by means of a
telephone conference circuit or similar communications equipment
by means of which all persons participating in the meeting can
hear each other, which telephone conference meeting shall be
deemed to have been held at a place designated by the Trustees at
the meeting. Participation in a telephone conference meeting
shall constitute presence in person at such meeting. Any action
required or permitted to be taken at any meeting of the Trustees
may be taken by the Trustees without a meeting if all the Trustees
consent to the action in writing and the written consents are
filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.
SECTION 2. QUORUM AND MANNER OF ACTING. A majority of the
Trustees shall be present at any regular or special meeting of the
Trustees in order to constitute a quorum for the transaction of
business at such meeting and (except as otherwise required by law,
the Declaration or these By-Laws) the act of a majority of the
Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a
quorum, a majority of the Trustees present may adjourn the meeting
from time to time until a quorum shall be present. Notice of an
adjourned meeting need not be given.
ARTICLE V
COMMITTEES AND ADVISORY BOARD
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. The Trustees by
vote of a majority of all the Trustees may elect from their own
number an Executive Committee to consist of not less than three
(3) Trustees to hold office at the pleasure of the Trustees which
shall have the power to conduct the current and ordinary business
of the Trust while the Trustees are not in session, including the
purchase and sale of securities and the designation of securities
to be delivered upon redemption of Shares of the Trust, and such
other powers of the Trustees as the Trustees may, from time to
time, delegate to the Executive Committee except those powers
which by law, the Declaration or these By-Laws they are prohibited
from delegating. The Trustees may also elect from their own
number other Committees from time to time, the number composing
such Committees, the powers conferred upon the same (subject to
the same limitations as with respect to the Executive Committee)
and the term of membership on such Committees to be determined by
the Trustees. The Trustees may designate a chairman of any such
Committee. In the absence of such designation a Committee may
elect its own Chairman.
SECTION 2. MEETING, QUORUM AND MANNER OF ACTING. The
Trustees may:
(i) provide for stated meetings of any Committee,
(ii) specify the manner of calling and notice
required for special meetings of any Committee,
(iii) specify the number of members of a Committee
required to constitute a quorum and the number
of members of a Committee required to exercise
specified powers delegated to such Committee,
(iv) authorize the making of decisions to exercise
specified powers by written assent of the
requisite number of members of a Committee
without a meeting, and
(v) authorize the members of a Committee to meet by
means of a telephone conference circuit.
Each Committee shall keep regular minutes of its meetings
and records of decisions taken without a meeting and cause them to
be recorded in a book designated for that purpose and kept in the
office of the Trust.
SECTION 3. ADVISORY BOARD. The Trustees may appoint an
Advisory Board to consist in the first instance of not less than
three (3) members. Members of such Advisory Board shall not be
Trustees or officers and need not be Shareholders. A member of
such Advisory Board shall hold office for such period as the
Trustees may by resolution provide. Any member of such board may
resign therefrom by a written instrument signed by him which shall
take effect upon delivery to the Trustees. The Advisory Board
shall have no legal powers and shall not perform the functions of
Trustees in any manner, such Advisory Board being intended merely
to act in an advisory capacity. Such Advisory Board shall meet at
such times and upon such notice as the Trustees may by resolution
provide.
ARTICLE VI
OFFICERS
SECTION 1. GENERAL PROVISIONS. The officers of the Trust
shall be a Chairman, a President, a Treasurer and a Clerk, who
shall be elected by the Trustees. The Trustees may elect or
appoint such other officers or agents as the business of the Trust
may require, including one or more Vice Presidents, a Secretary
and one or more Assistant Secretaries, one or more Assistant
Treasurers, and one or more Assistant Clerks. The Trustees may
delegate to any officer or Committee the power to appoint any
subordinate officers or agents.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except as
otherwise provided by law, the Declaration or these By-Laws, the
Chairman, the President, the Treasurer and the Clerk shall hold
office until his resignation has been accepted by the Trustees or
until his respective successor shall have been duly elected and
qualified, and all other officers shall hold office at the
pleasure of the Trustees. Any two or more offices may be held by
the same person. Any officer may be, but none need be, a Trustee
or Shareholder.
SECTION 3. REMOVAL. The Trustees, at any regular or
special meeting of the Trustees, may remove any officer with or
without cause by a vote of a majority of the Trustees. Any
officer or agent appointed by any officer or Committee may be
removed with or without cause by such appointing officer or
Committee.
SECTION 4. POWERS AND DUTIES OF THE CHAIRMAN. The Chairman
may call meetings of the Trustees and of any Committee thereof
when he deems it necessary and shall preside at all meetings of
the Shareholders. Subject to the control of the Trustees and any
Committees of the Trustees, the Chairman shall at all times
exercise a general supervision and direction over the affairs of
the Trust. The Chairman shall have the power to employ attorneys
and counsel for the Trust and to employ such subordinate officers,
agents, clerks and employees as he may find necessary to transact
the business of the Trust. The Chairman shall also have the power
to grant, issue, execute or sign such powers of attorney, proxies
or other documents as may be deemed advisable or necessary in
furtherance of the interests of the Trust. The Chairman shall
have such other powers and duties as, from time to time, may be
conferred upon or assigned to him by the Trustees.
SECTION 5. POWERS AND DUTIES OF THE PRESIDENT. In the
absence or disability of the Chairman, the President shall perform
all the duties and may exercise any of the powers of the Chairman,
subject to the control of the Trustees. The President shall
perform such other duties as may be assigned to him from time to
time by the Trustees or the Chairman.
SECTION 6. POWERS AND DUTIES OF VICE PRESIDENTS. In the
absence or disability of the President, the Vice President or, if
there be more than one Vice President, any Vice President
designated by the Trustees shall perform all the duties and may
exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such
other duties as may be assigned to him from time to time by the
Trustees or the President.
SECTION 7. POWERS AND DUTIES OF THE TREASURER. The
Treasurer shall be the principal financial and accounting officer
of the Trust. The Treasurer shall deliver all funds of the Trust
which may come into his hands to such custodian as the Trustees
may employ pursuant to Article X hereof. The Treasurer shall
render a statement of condition of the finances of the Trust to
the Trustees as often as they shall require the same and shall in
general perform all the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him
by the Trustees. The Treasurer shall give a bond for the faithful
discharge of his duties, if required to do so by the Trustees, in
such sum and with such surety or sureties as the Trustees shall
require.
SECTION 8. POWERS AND DUTIES OF THE CLERK. The Clerk shall
keep the minutes of all meetings of the Shareholders in proper
books provided for that purpose; he shall have custody of the
seal of the Trust; he shall have charge of the Share transfer
books, lists and records unless the same are in the charge of the
Transfer Agent. He or the Secretary shall attend to the giving
and serving of all notices by the Trust in accordance with the
provisions of these By-Laws and as required by law; and subject
to these By-Laws, he shall in general perform all duties incident
to the office of Clerk and such other duties as from time to time
may be assigned to him by the Trustees.
SECTION 9. POWERS AND DUTIES OF THE SECRETARY. The
Secretary, if any, shall keep the minutes of all meetings of the
Trustees. He shall perform such other duties and have such other
powers in addition to those specified in these By-Laws as the
Trustees shall from time to time designate. If there be no
Secretary or Assistant Secretary, the Clerk shall perform the
duties of Secretary.
SECTION 10. POWERS AND DUTIES OF ASSISTANT TREASURERS. In
the absence or disability of the Treasurer, any Assistant
Treasurer designated by the Trustees shall perform all the duties,
and may exercise any of the powers, of the Treasurer. Each
Assistant Treasurer shall perform such other duties as from time
to time may be assigned to him by the Trustees. Each Assistant
Treasurer shall give a bond for the faithful discharge of his
duties, if required to do so by the Trustees, in such sum and with
such surety or sureties as the Trustees shall require.
SECTION 11. POWERS AND DUTIES OF ASSISTANT CLERKS. In the
absence or disability of the Clerk, any Assistant Clerk designated
by the Trustees shall perform all the duties, and may exercise any
of the powers, of the Clerk. The Assistant Clerks shall perform
such other duties as from time to time may be assigned to them by
the Trustees.
SECTION 12. POWERS AND DUTIES OF ASSISTANT SECRETARIES. In
the absence or disability of the Secretary, any Assistant
Secretary designated by the Trustees shall perform all of the
duties, and may exercise any of the powers, of the Secretary. The
Assistant Secretaries shall perform such other duties as from time
to time may be assigned to them by the Trustees.
SECTION 13. COMPENSATION OF OFFICERS AND TRUSTEES AND
MEMBERS OF THE ADVISORY BOARD. Subject to any applicable law or
provision of the Declaration, the compensation of the officers and
Trustees and members of the Advisory Board shall be fixed from
time to time by the Trustees or, in the case of officers, by any
Committee or officer upon whom such power may be conferred by the
Trustees. No officer shall be prevented from receiving such
compensation as such officer by reason of the fact that he is also
a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of
December in each year and shall end on the last day of November in
that year, provided, however, that the Trustees may from time to
time change the fiscal year.
ARTICLE VIII
SEAL
The Trustees shall adopt a seal which shall be in such form
and shall have such inscription thereon as the Trustees may from
time to time prescribe.
ARTICLE IX
WAIVERS OF NOTICE
Whenever any notice is required to be given by law, the
Declaration or these By-Laws, a waiver thereof in writing, signed
by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent
thereto. A notice shall be deemed to have been telegraphed,
cabled or wirelessed or sent by facsimile or other electronic
means for the purposes of these By-Laws when it has been delivered
to a representative of any telegraph, cable or wireless company
with instruction that it be telegraphed, cabled or wirelessed or
when a confirmation of such facsimile having been sent, or a
confirmation that such electronic means has sent the notice being
transmitted, is generated. Any notice shall be deemed to be given
at the time when the same shall be mailed, telegraphed, cabled or
wirelessed or when sent by facsimile or other electronic means.
ARTICLE X
CUSTODIAN
SECTION 1. APPOINTMENT AND DUTIES. The Trustees shall at
all times employ a bank or trust company having a capital, surplus
and undivided profits of at least five million dollars
($5,000,000.00) as custodian with authority as its agent, but
subject to such restrictions, limitations and other requirements,
if any, as may be contained in the Declaration, these By-Laws and
the 1940 Act:
(i) to hold the securities owned by the Trust and
deliver the same upon written order;
(ii) to receive and issue receipts for any monies due
to the Trust and deposit the same in its own
banking department or elsewhere as the Trustees
may direct;
(iii) to disburse such funds upon orders or vouchers;
(iv) if authorized by the Trustees, to keep the books
and accounts of the Trust and furnish clerical
and accounting services; and
(v) if authorized to do so by the Trustees, to
compute the net income of the Trust;
all upon such basis of compensation as may be agreed upon between
the Trustees and the custodian. If so directed by a Majority
Shareholder Vote, the custodian shall deliver and pay over all
Trust Property held by it as specified in such vote.
The Trustees may also authorize the custodian to employ one
or more sub-custodians from time to time to perform such of the
acts and services of the custodian and upon such terms and
conditions as may be agreed upon between the custodian and such
sub-custodian and approved by the Trustees, provided that in every
case such sub-custodian shall be a bank or trust company organized
under the laws of the United States or one of the states thereof
and having capital, surplus and undivided profits of at least five
million dollars ($5,000,000.00) or such foreign banks and
securities depositories as meet the requirements of applicable
provisions of the 1940 Act or the rules and regulations
thereunder.
SECTION 2. CENTRAL CERTIFICATE SYSTEM. Subject to such
rules, regulations and orders as the Commission may adopt, the
Trustees may direct the custodian to deposit all or any part of
the securities owned by the Trust in a system for the central
handling of securities established by a national securities
exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such
other person as may be permitted by the Commission, or otherwise
in accordance with the 1940 Act, pursuant to which system all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical
delivery of such securities, provided that all such deposits shall
be subject to withdrawal only upon the order of the Trust or its
custodian.
SECTION 3. ACCEPTANCE OF RECEIPTS IN LIEU OF CERTIFICATES.
Subject to such rules, regulations and orders as the Commission
may adopt, the Trustees may direct the custodian to accept written
receipts or other written evidences indicating purchases of
securities held in book-entry form in the Federal Reserve System
in accordance with regulations promulgated by the Board of
Governors of the Federal Reserve System and the local Federal
Reserve Banks in lieu of receipt of certificates representing such
securities.
SECTION 4. PROVISIONS OF CUSTODIAN CONTRACT. The substance
of the following provisions shall apply to the employment of a
custodian pursuant to this Article X and to any contract entered
into with the custodian so employed:
(i) The Trustees shall cause to be delivered to the
custodian all securities owned by the Trust or
to which it may become entitled, and shall order
the same to be delivered by the custodian only
upon completion of a sale, exchange, transfer,
pledge, or other disposition thereof, and upon
receipt by the custodian of the consideration
therefor or a certificate of deposit or a
receipt of an issuer or of its Transfer Agent,
all as the Trustees may generally or from time
to time require or approve, or to a successor
custodian; and the Trustees shall cause all
funds owned by the Trust or to which it may
become entitled to be paid to the custodian, and
shall order the same disbursed only for
investment against delivery of the securities
acquired, or in payment of expenses, including
management compensation, and liabilities of the
Trust, including distributions to Shareholders,
or to a successor custodian; provided, however,
that nothing herein shall prevent the custodian
from paying for securities before such
securities are received by the custodian or the
custodian from delivering securities prior to
receiving payment therefor in accordance with
the payment and delivery customs of the market
in which such securities are being purchased or
sold .
(ii) In case of the resignation, removal or inability
to serve of any such custodian, the Trust shall
promptly appoint another bank or trust company
meeting the requirements of this Article X as
successor custodian. The agreement with the
custodian shall provide that the retiring
custodian shall, upon receipt of notice of such
appointment, deliver the funds and property of
the Trust in its possession to and only to such
successor, and that pending appointment of a
successor custodian, or a vote of the
Shareholders to function without a custodian,
the custodian shall not deliver funds and
property of the Trust to the Trust, but may
deliver all or any part of them to a bank or
trust company doing business in Boston,
Massachusetts, of its own selection, having an
aggregate capital, surplus and undivided profits
(as shown in its last published report) of at
least $5,000,000, as the property of the Trust
to be held under terms similar to those on which
they were held by the retiring custodian.
ARTICLE XI
SALE OF SHARES OF THE TRUST
The Trustees may from time to time issue and sell or cause
to be issued and sold Shares for cash or other property, which
shall in every case be paid or delivered to the Custodian as agent
of the Trust before the delivery of any certificate for such
shares. The Shares, including additional Shares which may have
been repurchased by the Trust (herein sometimes referred to as
"treasury shares"), may not be sold at a price less than the net
asset value thereof (as defined in Article XII hereof) determined
by or on behalf of the Trustees next after the sale is made or at
some later time after such sale.
No Shares need be offered to existing Shareholders before
being offered to others. No Shares shall be sold by the Trust
(although Shares previously contracted to be sold may be issued
upon payment therefor) during any period when the determination of
net asset value is suspended by declaration of the Trustees
pursuant to the provisions of Article XII hereof. In connection
with the acquisition by merger or otherwise of all or
substantially all the assets of an investment company (whether a
regulated or private investment company or a personal holding
company), the Trustees may issue or cause to be issued Shares and
accept in payment therefor such assets valued at not more than
market value thereof in lieu of cash, notwithstanding that the
federal income tax basis to the Trust of any assets so acquired
may be less than the market value, provided that such assets are
of the character in which the Trustees are permitted to invest the
funds of the Trust.
The Trustees, in their sole discretion, may cause the Trust
to redeem all of the Shares of the Trust held by any Shareholder
if the value of such Shares is less than a minimum amount
established from time to time by the Trustees.
ARTICLE XII
NET ASSET VALUE OF SHARES
The term "net asset value" per Share of any class or series
of Shares shall mean: (i) the value of all assets of that series
or class; (ii) less total liabilities of such series or class;
(iii) divided by the number of Shares of such series or class
outstanding, in each case at the time of such determination, all
as determine by or under the direction of the Trustees. Such
value shall be determined on such days and at such time as the
Trustees may determine. Such determination shall be made with
respect to securities for which market quotations are readily
available, at the market value of such securities; and with
respect to other securities and assets, at the fair value as
determined in good faith by or pursuant to the direction of the
Trustees, provided, however, that the Trustees, without
shareholder approval, may alter the method of appraising portfolio
securities insofar as permitted under the 1940 Act, and the rules,
regulations and interpretations thereof promulgated or issued by
the Securities and Exchange Commission or insofar as permitted by
any order of the Securities and Exchange commission. The Trustees
may delegate any powers and duties under this Article XII with
respect to appraisal of assets and liabilities. At any time the
Trustees may cause the value per share last determined to be
determined again in a similar manner and may fix the time when
such predetermined value shall become effective.
ARTICLE XIII
DIVIDENDS AND DISTRIBUTIONS
SECTION 1. LIMITATIONS ON DISTRIBUTIONS. The total of
distributions to Shareholders of a particular series or class paid
in respect of any one fiscal year, subject to the exceptions noted
below, shall, when and as declared by the Trustees, be
approximately equal to the sum of:
(i) the net income, exclusive of the profits or
losses realized upon the sale of securities or
other property, of such series or class for such
fiscal year, determined in accordance with
generally accepted accounting principles (which,
if the Trustees so determine, may be adjusted
for net amounts included as such accrued net
income in the price of Shares of such series or
class issued or repurchased), but if the net
income of such series or class exceeds the
amount distributed by less than one cent per
share outstanding at the record date for the
final dividend, the excess shall be treated as
distributable income of such series or class for
the following fiscal year; and
(ii) in the discretion of the Trustees, an additional
amount which shall not substantially exceed the
excess of profits over losses on sales of
securities or other property allocated or
belonging to such series or class for such
fiscal year.
The decision of the Trustees as to what, in accordance with
generally accepted accounting principles, is income and what is
principal shall be final, and except as specifically provided
herein the decision of the Trustees as to what expenses and
charges of the Trust shall be charged against principal and what
against income shall be final, all subject to any applicable
provisions of the 1940 Act and rules, regulations and orders of
the Commission promulgated thereunder. For the purposes of the
limitation imposed by this Section 1, Shares issued pursuant to
Section 2 of this Article XIII shall be valued at the amount of
cash which the Shareholders would have received if they had
elected to receive cash in lieu of such Shares.
Inasmuch as the computation of net income and gains for
federal income tax purposes may vary from the computation thereof
on the books, the above provisions shall be interpreted to give to
the Trustees the power in their discretion to distribute for any
fiscal year as ordinary dividends and as capital gains
distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes. Any
payment made to Shareholders pursuant to clause (ii) of this
Section 1 shall be accompanied by a written statement showing the
source or sources of such payment, and the basis of computation
thereof.
SECTION 2. DISTRIBUTIONS PAYABLE IN CASH OR SHARES. The
Trustees shall have power, to the fullest extent permitted by the
laws of The Commonwealth of Massachusetts but subject to the
limitation as to cash distributions imposed by Section 1 of this
Article XIII, at any time or from time to time to declare and
cause to be paid distributions payable at the election of any
Shareholder of any series or class (whether exercised before or
after the declaration of the distribution) either in cash or in
Shares of such series, provided that the sum of:
(i) the cash distribution actually paid to any
Shareholder, and
(ii) the net asset value of the Shares which that
Shareholder elects to receive, in effect at such
time at or after the election as the Trustees
may specify, shall not exceed the full amount of
cash to which that Shareholder would be entitled
if he elected to receive only cash.
In the case of a distribution payable in cash or Shares at the
election of a Shareholder, the Trustees may prescribe whether a
Shareholder, failing to express his election before a given time
shall be deemed to have elected to take Shares rather than cash,
or to take cash rather then Shares, or to take Shares with cash
adjustment of fractions.
The Trustees, in their sole discretion, may cause the Trust
to require that all distributions payable to a shareholder in
amounts less than such amount or amounts determined from time to
time by the Trustees be reinvested in additional shares of the
Trust rather than paid in cash, unless a shareholder who, after
notification that his distributions will be reinvested in
additional shares in accordance with the preceding phrase, elects
to receive such distributions in cash. Where a shareholder has
elected to receive distributions in cash and the postal or other
delivery service is unable to deliver checks to the shareholder's
address of record, the Trustees, in their sole discretion, may
cause the Trust to require that such Shareholder's distribution
option will be converted to having all distributions reinvested in
additional shares.
SECTION 3. STOCK DIVIDENDS. Anything in these By-Laws to
the contrary notwithstanding, the Trustees may at any time declare
and distribute pro rata among the Shareholders of any series or
class a "stock dividend" out of either authorized but unissued
Shares of such series or class or treasury Shares of such series
or class or both.
ARTICLE XIV
DERIVATIVE CLAIMS
No Shareholder shall have the right to bring or maintain any
court action, proceeding or claim on behalf of the Trust or any
series or class thereof without first making demand on the
Trustees requesting the Trustees to bring or maintain such action,
proceeding or claim. Such demand shall be excused only when the
plaintiff makes a specific showing that irreparable injury to the
Trust or any series or class thereof would otherwise result. Such
demand shall be mailed to the Clerk of the Trust at the Trust's
principal office and shall set forth in reasonable detail the
nature of the proposed court action, proceeding or claim and the
essential facts relied upon by the Shareholder to support the
allegations made in the demand. The Trustees shall consider such
demand within 45 days of its receipt by the Trust. In their sole
discretion, the Trustees may submit the matter to a vote of
Shareholders of the Trust or any series or class thereof, as
appropriate. Any decision by the Trustees to bring, maintain or
settle (or not to bring, maintain or settle) such court action,
proceeding or claim, or to submit the matter to a vote of
Shareholders, shall be made by the Trustees in their business
judgment and shall be binding upon the Shareholders. Any decision
by the Trustees to bring or maintain a court action, proceeding or
suit on behalf of the Trust or any series or class thereof shall
be subject to the right of the Shareholders under Article VI,
Section 6.8 of the Declaration to vote on whether or not such
court action, proceeding or suit should or should not be brought
or maintained.
ARTICLE XV
AMENDMENTS
These By-Laws, or any of them, may be altered, amended or
repealed, restated, or new By-Laws may be adopted:
(i) by Majority Shareholder Vote, or
(ii) by the Trustees,
provided, however, that no By-Law may be amended, adopted or
repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration or these By-Laws, a
vote of the Shareholders.
[TEXT]
EX-99.6A
[DESCRIPTION] DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, made this first day of January,
1995, by and between MASSACHUSETTS INVESTORS GROWTH STOCK FUND, a
Massachusetts business trust (the "Trust"), and MFS FUND
DISTRIBUTORS, INC., a Delaware corporation (the "Distributor");
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties hereto agree as
follows:
1. The Trust grants to the Distributor the right, as agent
of the Trust, to sell Shares of Beneficial Interest, without par
value, of the Trust (the "Shares") upon the terms herein below set
forth during the term of this Agreement. While this Agreement is
in force, the Distributor agrees to use its best efforts to find
purchasers for Shares.
The Distributor shall have the right, as agent of the
Trust, to order from the Trust the Shares needed, but not more
than the Shares needed (except for clerical errors and errors of
transmission) to fill unconditional orders for Shares placed with
the Distributor by dealers, banks or other financial institutions
or investors as set forth in the current Prospectus and Statement
of Additional Information (collectively, the "Prospectus")
relating to the Shares. The price which shall be paid to the
Trust for the Shares so purchased shall be the net asset value
used in determining the public offering price on which such orders
were based. The Distributor shall notify the Custodian of the
Trust, at the end of each business day, or as soon thereafter as
the orders placed with it have been compiled, of the number of
Shares and the prices thereof which have been ordered through the
Distributor since the end of the previous day.
The right granted to the Distributor to place orders for
Shares with the Trust shall be exclusive, except that said
exclusive right shall not apply to Shares issued in the event that
an investment company (whether a regulated or private investment
company or a personal holding company) is merged or consolidated
with the Trust or in the event that the Trust acquires by purchase
or otherwise, all (or substantially all) the assets or the
outstanding shares of any such company; nor shall it apply to
Shares issued by the Trust as a stock dividend or a stock split.
The exclusive right to place orders for Shares granted to the
Distributor may be waived by the Distributor by notice to the
Trust in writing, either unconditionally or subject to such
conditions and limitations as may be set forth in the notice to
the Trust. The Trust hereby acknowledges that the Distributor may
render distribution and other services to other parties, including
other investment companies. In connection with its duties
hereunder, the Distributor shall also arrange for computation of
performance statistics with respect to the Trust and arrange for
publication of current price information in newspapers and other
publications.
2. The Shares may be sold through the Distributor to
dealers, banks and other financial institutions having sales
agreements with the Distributor, upon the following terms and
conditions:
The public offering price, i.e., the price per Share at
which the Distributor or dealers, banks or other financial
institutions purchasing Shares through the Distributor may sell
Shares to the public, shall be the public offering price as set
forth in the current Prospectus relating to the Shares, including
a sales charge (where applicable) not to exceed the amount
permitted by Article III, Section 26 of the National Association
of Securities Dealers, Inc.'s Rule of Fair Practice, as amended
from time to time. The Distributor shall retain the sales charge
(where applicable) less any applicable dealer or comparable
discount. If the resulting public offering price does not come
out to an even cent, the public offering price shall be adjusted
to the nearer cent. In addition, the Trust agrees that the
Distributor may impose certain contingent deferred sales charges
(where applicable) in connection with the redemption of Shares,
not to exceed 6% of the net asset value of Shares, and the
Distributor shall retain (or receive from the Trust, as the case
may be) all such contingent deferred sales charges.
The Distributor may place orders for Shares at the net
asset value for such Shares (as established pursuant to paragraph
l above) on behalf of such purchasers and under such circumstances
as the Prospectus describes, provided that such sales comply with
Rule 22d-1 under the Investment Company Act of 1940 or any
exemptive order granted by the Securities and Exchange Commission.
The Distributor may also place orders for Shares at net asset
value on behalf of persons reinvesting the proceeds of the
redemption or resale of Shares or shares of other investment
companies for which the Distributor acts as Distributor or as
otherwise provided in the current Prospectus.
The net asset value of Shares shall be determined by the
Trust or by an agent of the Trust, as of the close of regular
trading of the New York Stock Exchange on each business day on
which said Exchange is open, in accordance with the method set
forth in the governing instruments (as hereinafter defined) of the
Trust. The Trust may also cause the net asset value to be
determined in substantially the same manner or estimated in such
manner and as of such other hour or hours as may from time to time
be agreed upon in writing by the Trust and Distributor. The Trust
shall have the right to suspend the sale of Shares if, because of
some extraordinary condition, the New York Stock Exchange shall be
closed, or if conditions obtaining during the hours when the
Exchange is open render such action advisable, or for any other
reasons deemed adequate by the Trust.
3. The Trust agrees that it will, from time to time, take
all necessary action to register the offering and sale of Shares
under the Securities Act of l933, as amended (the "Act"), and
applicable state securities laws.
The Distributor shall be an independent contractor and
neither the Distributor nor any of its directors, officers or
employees as such, is or shall be an employee of the Trust. It is
understood that Trustees, officers and shareholders of the Trust
are or may become interested in the Distributor, as Directors,
officers and employees, or otherwise and that Directors, officers
and employees of the Distributor are or may become similarly
interested in the Trust and that the Distributor may be or become
interested in the Trust as a shareholder or otherwise. The
Distributor is responsible for its own conduct and the employment,
control and conduct of its agents and employees and for injury to
such agents or employees or to others through its agents or
employees. The Distributor assumes full responsibility for its
agents and employees under applicable statutes and agrees to pay
all employer taxes thereunder.
4. The Distributor covenants and agrees that, in selling
Shares, it will use its best efforts in all respects duly to
conform with the requirements of all state and federal laws and
the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD") relating to the sale of
Shares, and will indemnify and hold harmless the Trust and each of
its Trustees and officers and each person, if any, who controls
the Trust within the meaning of Section 15 of the Act, against any
loss, liability, damages, claim or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith), arising by reason of any
person's acquiring any Shares, which may be based upon the Act or
any other statute or common law, on account of any wrongful act of
the Distributor or any of its employees (including any failure to
conform with any requirement of any state or federal law or the
Rules of Fair Practice of the NASD relating to the sale of Shares)
or on the ground that the registration statement or Prospectus as
from time to time amended and supplemented, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, unless any such act, statement
or omission was made in reliance upon information furnished to the
Distributor by or on behalf of the Trust, provided, however, that
in no case (i) is the indemnity of the Distributor in favor of any
person indemnified to be deemed to protect the Trust or any such
person against any liability to which the Trust or any such person
would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its or his duties
or by reason of its or his reckless disregard of its obligations
and duties under this Agreement, or (ii) is the Distributor to be
liable under its indemnity agreement contained in this paragraph
with respect to any claim made against the Trust or any person
indemnified unless the Trust or such person, as the case may be,
shall have notified the Distributor in writing within a reasonable
time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon
the Trust or upon such person (or after the Trust or such person
shall have received notice of such service on any designated
agent), but failure to notify the Distributor of any such claim
shall not relieve it from any liability which it may have to the
Trust or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this
paragraph. The Distributor shall be entitled to participate, at
its own expense, in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability,
but, if the Distributor elects to assume the defense, such defense
shall be conducted by counsel chosen by it and satisfactory to the
Trust, or to its officers or Trustees, or to any controlling
person or persons, defendant or defendants in the suit. In the
event that the Distributor elects to assume the defense of any
such suit and retain such counsel, the Trust or such officers or
Trustees or controlling person or persons, defendant or defendants
in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case the Distributor does not
elect to assume the defense of any such suit, it shall reimburse
the Trust and such officers and Trustees or controlling person or
persons, defendant or defendants in such suit, for the reasonable
fees and expenses of any counsel retained by them. The
Distributor agrees promptly to notify the Trust of the
commencement of any litigation or proceedings against it in
connection with the issue and sale of any Shares.
Neither the Distributor nor any other person is
authorized to give any information or to make any representation
on behalf of the Trust, other than those contained in the
registration statement or Prospectus filed with the Securities and
Exchange Commission under the Act (as said registration statement
or Prospectus may be amended or supplemented from time to time),
covering the Shares or other than those contained in periodic
reports to shareholders of the Trust.
5. The Trust will pay, or cause to be paid -
(i) all costs and expenses of the Trust, including
fees and disbursements of its counsel, in connection with the
preparation and filing of any required registration statement or
Prospectus under the Act covering Shares and all amendments and
supplements thereto and any notices regarding the registration of
shares, and preparing and mailing to shareholders Prospectuses,
statements and confirmations and periodic reports (including the
expense of setting up in type any such registration statement,
Prospectus or periodic report);
(ii) the expenses (including auditing expenses) of
qualification of the Shares for sale, and, if necessary or
advisable in connection therewith, of qualifying the Trust as a
dealer or broker, in such states as shall be selected by the
Distributor and the fees payable to each such state with respect
to shares sold and for continuing the qualification therein until
the Distributor notifies the Trust that it does not wish such
qualification continued;
(iii) the cost of preparing temporary or
permanent certificates for Shares;
(iv) all fees and disbursements of the transfer
agent of the Trust;
(v) the cost and expenses of delivering to the
Distributor at its office in Boston, Massachusetts, all Shares
sold through it as Distributor hereunder; and
(vi) all the federal and state issue and/or transfer
taxes payable upon the issue by or (in the case of treasury
Shares) transfer from the Trust of any and all Shares purchased
through the Distributor hereunder.
The Distributor agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the
expense (other than the cost of mailing to shareholders of the
Trust of printing and distributing any copies thereof which are to
be used in connection with the offering of Shares to dealers,
banks or other financial institutions or investors. The
Distributor further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by
the Distributor or furnished by it for use by dealers, banks or
other financial institutions in connection with the offering of
the Shares for sale to the public and expenses of advertising in
connection with such offering. The Distributor will also bear the
expense of sending confirmations and statements to dealers, banks
and other financial institutions having sales agreements with the
Distributor. Nothing in this paragraph 5 shall be deemed to
prohibit or conflict with any payment by the Trust to the
Distributor pursuant to any Distribution Plan adopted as in effect
pursuant to Rule 12b-1 under the Investment Company Act of 1940.
6. The Trust hereby authorizes the Distributor to
repurchase, upon the terms and conditions set forth in written
instructions given by the Trust to the Distributor from time to
time, as agent of the Trust and for its account, such Shares as
may be offered for sale to the Trust from time to time; provided
the Distributor shall have the right, as stated above in paragraph
2 of this Agreement, to retain (or to receive from the Trust, as
the case may be) a deferred sales charge not to exceed 6% of the
net asset value of the Shares so repurchased.
(a) The Distributor shall notify in writing the
Custodian of the Trust, at the end of each business day, or as
soon thereafter as the repurchases have been compiled, of the
number of Shares repurchased for the account of the Trust since
the last previous report, together with the prices at which such
repurchases were made, and upon the request of any Officer or
Trustee of the Trust shall furnish similar information with
respect to all repurchases made up to the time of the request on
any day.
(b) The Trust reserves the right to suspend or
revoke the foregoing authorization at any time. Unless otherwise
stated, any such suspension or revocation shall be effective
forthwith upon receipt of notice thereof by an officer of the
Distributor, by telegraph or by written notice from the Trust. In
the event that the authorization of the Distributor is, by the
terms of such notice, suspended for more than twenty-four hours or
until further notice, the authorization given by this paragraph 6
shall not be revived except by action of a majority of the members
of the Board of Trustees of the Trust.
(c) The Distributor shall have the right to
terminate the operation of this paragraph 6 upon giving to the
Trust thirty days' written notice thereof.
(d) The Trust agrees to authorize and direct the
Custodian to pay, for the account of the Trust, the purchase price
of any Shares so repurchased against delivery of the certificates,
if any, in proper form for transfer to the Trust or for
cancellation by the Trust.
(e) The Distributor shall receive no commission in
respect of any repurchase of Shares under the foregoing
authorization and appointment as agent, except in connection with
contingent deferred sales charge as provided in the current
Prospectus relating to the Shares.
(f) The Trust agrees to reimburse the Distributor,
from time to time upon demand, for any reasonable expenses
incurred in connection with the repurchase of Shares pursuant to
this paragraph 6.
7. If, at any time during the existence of this Agreement,
the Trust shall deem it necessary or advisable in the best
interests of the Trust that any amendment of this Agreement be
made in order to comply with the recommendations or requirements
of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under Massachusetts, any
state or federal tax laws, it shall notify the Distributor of the
form of amendment which it deems necessary or advisable and the
reasons therefore. If the Distributor declines to assent to such
amendment, the Trust may terminate this Agreement forthwith by
written notice to the Distributor without payment of any penalty.
If, at any time during the existence of this Agreement, upon
request by the Distributor, the Trust fails (after a reasonable
time) to make any changes in its governing instruments or in its
methods of doing business which are necessary in order to comply
with any requirements of federal or state laws or regulations,
laws or regulations of the Securities and Exchange Commission or
of a national securities association of which the Distributor is
or may be a member, relating to the sale of Shares, the
Distributor may terminate this Agreement forthwith by written
notice to the Trust without payment of any penalty.
8. The Distributor agrees that it will not take any long or
short positions in the Shares except as permitted by paragraphs l
and 6 hereof. Whenever used in this Agreement, the term
"governing instruments" shall mean the Declaration of Trust and
the By-Laws of the Trust, as from time to time amended.
9. This Agreement shall become effective on January 1, 1995
and shall continue in force until August 1, 1996 on which date it
will terminate unless its continuance after August 1, 1996, is
specifically approved at least annually (i) by the vote of a
majority of the Board of Trustees of the Trust who are not
interested persons of the Trust or of the Distributor at a meeting
specifically called for the purpose of voting on such approval,
and (ii) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of that Fund. The
aforesaid requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a
manner consistent with the Investment Company Act of l940 and the
Rules and Regulations thereunder.
This Agreement may be terminated as to any Fund at any time
by either party without payment of any penalty on not more than
sixty days' or less than thirty days' written notice to the other
party.
l0. This Agreement shall automatically terminate in the
event of its assignment.
11. The terms "vote of a majority of the outstanding voting
securities", "interested person" and "assignment" shall have the
respective meanings specified in the Investment Company Act of
l940 and the Rules and Regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
12. This Agreement shall be governed by the laws of The
Commonwealth of Massachusetts.
13. A copy of the Declaration of
Trust of the Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts. The Distributor acknowledges that
the obligations of or arising out of this instrument are not
binding upon any of the Trust's trustees, officers, employees,
agents or shareholders individually, but are binding solely upon
the assets and property of the Trust. If this instrument is
executed by the Trust on behalf of one or more series of the
Trust, the Distributor further acknowledges that the assets and
liabilities of each series of the Trust are separate and distinct
and that the obligations of or arising out of this instrument are
binding solely upon the assets or property of the series on whose
behalf the Trust has executed this instrument. If the Trust has
executed this instrument on behalf of more than one series of the
Trust, the Distributor also agrees that the obligations of each
series hereunder shall be several and not joint, in accordance
with its proportionate interest hereunder, and the Distributor
agrees not to proceed against any series for the obligations of
another series.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above.
MASSACHUSETTS INVESTORS
GROWTH
STOCK FUND
By: W. THOMAS LONDON
W. Thomas London as
officer
and not individually
MFS FUND DISTRIBUTORS, INC.
By: WILLIAM W. SCOTT, JR.
William W. Scott, Jr.
President
EX-99.7
[DESCRIPTION] RETIREMENT PLAN FOR NON-INTERESTED TRUSTEES
[TEXT]
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
RETIREMENT PLAN FOR NON-INTERESTED PERSON TRUSTEES
Massachusetts Investors Growth Stock Fund (the "Fund") has
adopted this Retirement Plan for Non-Interested Person Trustees
(the "Plan"). The Plan has been established for the purpose of
providing certain benefits to eligible Independent Trustees of the
Fund, or their beneficiaries, after termination of the Independent
Trustees' services as such.
1. DEFINITIONS
The following terms shall have the following meanings:
Accrued Benefit: A benefit which is equal to the Normal
Retirement Benefit calculated using an Independent
Trustee's Years of Service and Annual Compensation as of
the determination date.
Actuarial Equivalent: A benefit equal in value, based
on (a) an interest rate equal to the immediate annuity
rate published by the Pension Guaranty Corporation for
the January of the Plan Year of calculation and (b) the
1983 Individual Annuity Mortality Tables for Males.
Annual Compensation: The average of the total
compensation (retainer and meeting fees) received by an
Independent Trustee during each of the last three Plan
Years preceding his termination of services as such for
which he served either as an Independent Trustee or a
Nonaffiliated Trustee for the entire year; provided,
that if an Independent Trustee served as an Independent
Trustee and/or a Nonaffiliated Trustee for fewer than
three full Plan Years prior to his termination of
services, there shall be taken into account his
annualized compensation for the one or more most recent
partial Plan Years (if any) for which he served as an
Independent Trustee or a Nonaffiliated Trustee that,
when aggregated with his full Plan Years, does not
exceed three Plan Years.
Disability: Disability as defined in 22(e)(3) of the
Internal Revenue Code of 1986, as amended.
Independent Trustee: A Trustee of the Fund who is not
an "interested person" (as defined in Section 2(a)(19)
of the Investment Company Act of 1940, as amended) of
the Fund, Lifetime Advisers, Inc. ("Lifetime"),
Massachusetts Financial Services Company ("MFS") or MFS
Financial Services, Inc. ("FSI").
Nonaffiliated Trustee: A Trustee of the Fund who has no
material business or professional relationship with the
Fund, Lifetime, MFS or FSI and who is subject to being
declared an "interested person" solely by reason of his
relationship with the Fund, Lifetime, MFS or FSI during
the two most recently completed fiscal years of the
Fund.
Normal Retirement Benefit: An annual benefit at Normal
Retirement Date equal to 5% of an Independent Trustee's
Annual Compensation multiplied by the Independent
Trustee's whole Years of Service, up to a maximum of ten
Years of Service, payable in the Normal Form of Benefit,
as defined in 3(g).
Normal Retirement Date: December 31 of the Plan Year in
which an Independent Trustee attains age 73.
Plan Year: January 1 through December 31.
Retirement: Termination of service of an Independent
Trustee after having completed at least Five Years of
Service and having attained age 62, other than: (1) any
termination by reason of death; (ii) any termination by
reason of Disability, provided that any Independent
Trustee who suffers a Disability and who has otherwise
satisfied the requirements for Retirement shall have the
right to elect whether his termination is by reason of
Retirement or by reason of Disability; or (iii) any
termination resulting from the Independent Trustee's
willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct
of the office of Independent Trustee ("Misconduct").
Year of Service: A Plan Year during which an
Independent Trustee completed at least six months of
service as either a Nonaffiliated Trustee or an
Independent Trustee.
2. ELIGIBILITY
No Trustee of the Fund shall be eligible to participate
in the Plan or be entitled to any rights or benefits hereunder
until the Trustee becomes an Independent Trustee. Each individual
who completes any service as an Independent Trustee on or after
the Effective Date of this Plan, and who so elects in such manner
as the Committee determines from time to time, will be eligible to
participate in the Plan.
3. RETIREMENT DATE; AMOUNT OF BENEFIT
(a) Retirement. Each Independent Trustee shall retire
on that Independent Trustee's Normal Retirement
Date, if he has not previously ceased to perform
services as an Independent Trustee. Each retired
Independent Trustee is referred to as a "Retired
Trustee".
(b) Normal Retirement Benefit. Upon an Independent
Trustee's Retirement on his Normal Retirement Date,
the Independent Trustee shall receive, commencing on
his Normal Retirement Date, his Normal Retirement
Benefit.
(c) Early Retirement Benefit. Upon an Independent
Trustee's Retirement prior to his Normal Retirement
Date, the Independent Trustee shall receive an Early
Retirement Benefit commencing on the Independent
Trustee's date of Retirement. The benefit payable
on an Independent Trustee's early Retirement shall
be his Accrued Benefit reduced by 5% for every year
that payment of an Early Retirement Benefit precedes
that Trustee's Normal Retirement Date.
(d) Deferred Termination Benefit. If an Independent
Trustee's service as such terminates, other than (i)
termination as a result of his Misconduct or (ii)
termination that constitutes termination by reason
of his Retirement, Disability or death, after he has
completed at least five Years of Service, he shall
receive, commencing on the date he attains age 62,
his Accrued Benefit reduced by 55%.
(e) Disability Benefit. If an Independent Trustee's
service as such terminates by reason of his
Disability and, if the Independent Trustee is
eligible for Retirement, he elects that his
termination be treated as being by reason of
Disability, he shall receive his Accrued Benefit
paid for the one hundred twenty (120) months
immediately following the month in which his service
so terminates. In the event the Independent Trustee
dies before he has received one hundred twenty (120)
payments, monthly payments in the same amount shall
be paid to his beneficiary until the number of
payments to the Independent Trustee plus the number
of payments to the beneficiary equal one hundred
twenty (120) payments.
(f) Death Benefit. Each Independent Trustee who elects
to participate in this Plan shall designate a
beneficiary in such form as the Committee approves
from time to time to receive any benefits payable
under this Plan in the event of his death. In the
event there is no validly designated beneficiary in
existence on the date of an Independent Trustee's
death, his beneficiary shall be his surviving
spouse, if any, or if none, his estate. The
beneficiary of an Independent Trustee who dies
during service, and with respect to whom benefit
payments have not commenced, shall be entitled to
that Independent Trustee's Accrued Benefit paid for
the one hundred twenty (120) months immediately
following death.
(g) Form of Benefit. Except as otherwise provided in
this 3, benefits payable under this 3 shall be
payable in the form of a monthly annuity for the
life of the Independent Trustee, and, if the
Independent Trustee dies before he has received one
hundred twenty (120) payments, monthly payments in
the same amount shall be payable to his beneficiary
until the number of payments to the Independent
Trustee plus the number of payments to the
beneficiary equal one hundred twenty (120) payments
(the "Normal Form of Benefit"). However,
notwithstanding any other provision of this Section
3 to the contrary, if an Independent Trustee's
beneficiary is entitled to payments under this Plan
upon the Independent Trustee's death, then (i) if
the Independent Trustee's beneficiary is his estate,
the lump sum Actuarial Equivalent present value of
those payments shall be paid to the estate in a
single lump sum as soon as administratively
reasonable following the Independent Trustee's
death, and (ii) if the Independent Trustee's
beneficiary is other than his estate, the Committee
in its sole discretion may direct that the Actuarial
Equivalent value of those payments be paid in such
form other than the Normal Form of Benefit
(including without limitation a lump sum) as it
determines.
4. PAYMENT OF BENEFIT; ALLOCATION OF COSTS
The Fund is responsible for the payment of the benefits,
as well as all expenses of administration of the Plan, including
without limitation all accounting, legal and actuarial fees and
expenses. The obligations of the Fund to pay such benefits and
expenses will not be secured or funded in any manner, and the
obligations will not have any preference over the lawful claims of
the Fund's creditors and shareholders. The Fund shall be under no
obligation to segregate any assets for the purpose of providing
retirement benefits pursuant to this Plan, and to the extent that
any Independent Trustee or beneficiary acquires a right to receive
a benefit under the Plan, such right shall be limited to that of a
recipient of an unfunded, unsecured promise to pay amounts in the
future and such person's position with respect to such amounts
shall be that of a general unsecured creditor of the Fund. To the
extent that the Fund consists of one or more separate portfolios,
costs and expenses will be allocated among the portfolios by the
Board of Trustees of the Fund (the "Board") in a manner that is
determined by the Board to be fair and equitable under the
circumstances.
5. ADMINISTRATION
(a) The Committee. Any question involving entitlement
to payments under or the interpretation or
administration of the Plan will be referred to a
committee (the "Committee") of Independent Trustees
designated by the Board. Except as otherwise
provided herein, the Committee will make all
interpretations and determinations necessary or
desirable for the Plan's administration, and such
interpretations and determinations will be final and
conclusive.
(b) Powers of the Committee. The Committee will
represent and act on behalf of the Fund in respect
of the Plan and, subject to the other provisions of
the Plan, the Committee may adopt, amend or repeal
by-laws or other regulations, relating to the
administration of the Plan, the conduct of the
Committee's affairs, its rights or powers or the
rights or powers of its members or of the Board.
The Committee will report to the Board from time to
time on its activities in respect of the Plan. The
Committee or persons designated by it will cause
such records to be kept as may be necessary for the
administration of the Plan.
6. MISCELLANEOUS PROVISIONS
(a) Rights Not Assignable. The right to receive any
payment under the Plan may not be transferred,
assigned, pledged or otherwise alienated.
(b) Amendment, etc. The Committee, with the concurrence
of the Board, may at any time amend or terminate the
Plan or waive any provision of the Plan, provided
that no amendment, termination or waiver will impair
the rights of an Independent Trustee to receive upon
Retirement the payments which would have been made
to that Independent Trustee had there been no such
amendment, termination or waiver (based upon that
Independent Trustee's Years of Service to the date
of such amendment, termination or waiver) or the
rights of a former Independent Trustee or Retired
Trustee to receive any benefit due under the Plan,
without the consent of such present or former
Independent Trustee or Retired Trustee, as the case
may be. A present or former Independent Trustee or
Retired Trustee may elect to waive receipt of his
benefit by so advising the Committee.
Notwithstanding any provision of this Plan to the
contrary, however, in the event of the sale of all
or substantially all of the assets of the Fund, the
liquidation or dissolution of the Fund, or any
merger or other similar reorganization of the Fund
that the Fund does not survive:
(i) if although the Fund does not survive there is a
surviving entity, all rights and benefits
(including without limitation those of Retired
Trustees) under the Plan shall cease upon
consummation of such transaction, unless, and
only to the extent that, the board of trustees
(or other similar governing body) of the
surviving entity agrees to assume the Plan and/or
to provide any such rights or benefits; and
(ii) if there is no surviving entity, the Board shall
have the right to take specific action to
terminate the Plan and/or to cause any or all
rights and benefits (including without limitation
those of Retired Trustees) under the Plan to
cease as of the date of such event but, in the
absence of any such specific action, the lump sum
Actuarial Equivalent present value of the Accrued
Benefit of each present or former Independent
Trustee or Retired Trustee (or beneficiary
thereof) who on the date of liquidation is
receiving or entitled to receive a benefit under
the Plan or would be entitled to receive a
benefit under the Plan based on his actual or
deemed termination of service as of the date of
such liquidation shall be paid to such person.
(c) No Right to Re-election. Nothing in the Plan will
create any obligation on the part of the Board to
nominate any Independent Trustee for re-election.
(d) Vacancies. Although the Board will retain the right
to increase or decrease its size, it shall be the
general policy of the Board to replace each person
who ceases to serve as an Independent Trustee by
selecting a new Independent Trustee from candidates
duly proposed.
(e) Consulting. Each Retired Trustee may render such
services for the Fund, for such compensation, as may
be agreed upon from time to time by such Trustee and
the Board of the Fund.
(f) Construction. Whenever any masculine terminology is
used in this Plan, it shall be taken to include the
feminine, unless the context otherwise indicates.
The titles and headings included herein are for
convenience only and shall not be construed as in
any way affecting or modifying the text of this
Plan, which text shall control. This Plan shall be
construed and regulated in accordance with the laws
of The Commonwealth of Massachusetts, except to the
extent such state law is preempted by federal law.
(g) Effective Date. This Plan will become effective on
January 1, 1991 (the "Effective Date").
EX-99.10
[DESCRIPTION] CONSENT AND OPINION OF COUNSEL
[TEXT]
March 29, 1995
Massachusetts Investors Growth Stock Fund
500 Boylston Street
Boston, MA 02116
Re: Post-Effective Amendment No. 59 to Registration
Statement on Form N-1A (File No. 2-14677) (the
Registration Statement)
Gentlemen:
I am Senior Counsel of Massachusetts Financial Services
Company, which serves as investment adviser to Massachusetts
Investors Growth Stock Fund (the "Fund") and the Assistant
Secretary Pro Tempore of the Fund. I am admitted to practice law
in The Commonwealth of Massachusetts. The Fund was created under
a written Declaration of Trust dated March 4, 1985, and executed
and delivered in Boston, Massachusetts, as amended and restated
January 18, 1995 (the "Declaration of Trust"). The beneficial
interest thereunder is represented by transferable shares without
par value. The Trustees have the powers set forth in the
Declaration of Trust, subject to the terms, provisions and
conditions therein provided.
I am of the opinion that the legal requirements have been
complied with in the creation of the Fund, and that said
Declaration of Trust is legal and valid.
Under Article III, Section 3.4 and Article VI, Section 6.4
of the Declaration of Trust, the Trustees are empowered, in their
discretion, from time to time to issue shares of the Fund for
such amount and type of consideration, at such time or times and
on such terms as the Trustees may deem best. Under Article VI,
Section 6.1, it is provided that the number of Shares of
Beneficial Interest (without par value) (Shares) authorized to
be issued under the Declaration of Trust is unlimited.
By vote adopted on January 18, 1995, the Trustees of the
Fund determined to sell to the public the authorized but unissued
shares of beneficial interest of the Fund for cash at a price
which will net the Fund (before taxes) not less than the net
asset value thereof, as defined in the Fund's By-Laws, determined
next after the sale is made or at some later time after such
sale.
The Fund is about to register under the Securities Act of
1933, as amended, 5,529,450 shares of beneficial interest by
Post-Effective Amendment No. 59 to the Funds Registration
Statement. W. Thomas London, Treasurer of the Fund, has
certified that the Fund received cash consideration for the
issuance of each of the Shares of the Fund sold during the Funds
fiscal year ended November 30, 1994, including the 11,473,893
Shares which were sold in reliance upon Rule 24f-2 of the General
Rules and Regulations under the Investment Company Act of 1940,
as amended, at a price which netted the Fund (before taxes) not
less than the net asset value per share, as defined in the Funds
Declaration of Trust, determined next after the sale was made.
I am of the opinion that all necessary Fund action precedent
to the issue of the Shares of the Fund, comprising the shares
covered by Post-Effective Amendment No. 59 to the Registration
Statement has been duly taken, and that all such shares may
legally and validly be issued for cash, and when sold will be
fully paid and nonassessable by the Fund upon receipt by the Fund
or its agent of consideration thereof in accordance with the
terms described in the Registration Statement, subject to
compliance with the Securities Act of 1933, the Investment
Company Act of 1940 and applicable state laws regulating the sale
of securities.
I consent to your filing this opinion with the Securities
and Exchange Commission as an exhibit to Post-Effective Amendment
No. 59 to the Registration Statement.
Very truly yours,
JAMES F. DESMARAIS
James F. DesMarais
Assistant
Secretary Pro Tempore
JFD/bjn
EX99.11
[TEXT]
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference in this Post-
Effective Amendment No. 59 to Registration Statement No.2-14677 of
Massachusetts Investors Growth Stock Fund of our report dated
January 3, 1995, appearing in the annual report to shareholders
for the year ended November 30, 1994, of Massachusetts Investors
Growth Stock Fund, and to the references to us under the headings
Condensed Financial Information in the Prospectus and
Independent Accountants and Financial Statements in the
Statement of Additional Information, which are part of such
Registration Statement.
DELOITTE & TOUCHE
Deloitte & Touche
LLP
Boston,
Massachusetts
March 27, 1995
EX-99.15A
[TEXT]
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
AMENDED AND RESTATED DISTRIBUTION PLAN
AMENDED AND RESTATED DISTRIBUTION PLAN with respect to the shares
of beneficial interest to be designated "Class A" of the
Massachusetts Investors Growth Stock Fund (the "Fund"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 19th day of December, 1990, amended and
restated the 1st day of August, 1993 and amended this 21st day of
December, 1994.
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end management
investment company and is registered under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, a plan of distribution pursuant to Rule 12b-1 of the Act
was previously adopted and approved by the Trustees of the Fund,
including the Qualifying Trustees (as defined below), and by the
shareholders of the Fund; and
WHEREAS, the Fund intends to continue to distribute the Shares of
Beneficial Interest (without par value) of the Fund designated
Class A Shares (the "Shares") in part in accordance with Rule 12b-
1 under the Act ("Rule 12b-1"), and desires to adopt this amended
and restated Distribution Plan (the "Plan") as a plan of
distribution pursuant to such Rule; and
WHEREAS, the Fund has entered into a distribution agreement (the
"Distribution Agreement") in a form approved by the Board of
Trustees of the Trust (the "Board of Trustees") in the manner
specified in Rule 12b-1, with MFS Fund Distributors, Inc., a
Delaware corporation, as distributor (the "Distributor"), whereby
the Distributor provides facilities and personnel and renders
services to the Fund in connection with the offering and
distribution of the Shares; and
WHEREAS, the Fund recognizes and agrees that the Distributor will
enter into agreements ("Dealer Agreements") with various
securities dealers and other financial intermediaries ("Dealers")
pursuant to which the Dealers will act as dealers of the Shares in
connection with the offering of Shares; and
WHEREAS, the Distribution Agreement provides that a sales charge
may be paid by investors who purchase Shares and that the
Distributor and Dealers will receive such sales charge as partial
compensation for their services in connection with sale of Shares;
and
WHEREAS, the Board of Trustees, in considering whether the Fund
should adopt and implement this Plan, has evaluated such
information as it deemed necessary to an informed determination as
to whether this Plan should be adopted and implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use assets of the Fund for such
purposes, and has determined that there is a reasonable likelihood
that the adoption and implementation of this Plan will benefit the
Fund and its Class A shareholders;
NOW, THEREFORE, the Board of Trustees hereby adopts this Plan for
the Fund as a plan of distribution relating to the Shares in
accordance with Rule 12b-1 under the Act, on the following terms
and conditions:
1. As specified in the Distribution Agreement, the
Distributor shall provide facilities, personnel and a program with
respect to the offering and sale of Shares to prospective
shareholders. Among other things, the Distributor shall be
responsible for all expenses of printing (excluding typesetting)
and distributing prospectuses to prospective shareholders and
providing such other related services as are reasonably necessary
in connection therewith.
2. The Distributor shall bear all distribution-related
expenses to the extent specified in the Distribution Agreement in
providing the services described in Section 1, including without
limitation, the compensation of personnel necessary to provide
such services and all costs of travel, office expenses (including
rent and overhead), equipment, printing, delivery and mailing
costs.
3. As partial consideration for the services performed
and expenses incurred in the performance of its obligations under
the Distribution Agreement, the Fund shall pay the Distributor a
distribution fee periodically at a rate of 0.10% per annum of the
average daily net assets of the Fund attributable to the Shares.
Such payments shall commence following shareholder approval of the
plan but only upon notification by the Distributor to the Fund of
the commencement of the Plan (the "Commencement Date").
4. As partial consideration for the personal services
and/or account maintenance services performed by each Dealer in
the performance of its obligations under its Dealer Agreement, the
Fund shall on or after the Commencement Date pay each Dealer a
service fee periodically at a rate not to exceed 0.25% per annum
of the portion of the average daily net assets of the Fund that is
represented by Shares that are owned by investors for whom such
Dealer is the holder or dealer of record. The Distributor may
from time to time reduce the amount of the service fee paid to a
Dealer for Shares sold prior to certain date.
5. In addition to fees payable pursuant to Sections 3
and 4 hereof, the expenses permitted to be paid by the Fund
pursuant to this Plan on or after the Commencement Date shall
include other distribution related expenses. These other
distribution related expenses may include, but are not limited to,
a dealer commission and a payment to wholesalers employed by the
Distributor on net asset value purchases at or above a certain
dollar level.
The aggregate amount of fees and expenses paid pursuant
to Sections 3 and 4 hereof and this Section 5 shall not exceed
0.35% per annum of the average daily net assets of the Fund
attributable to the Shares. No fees shall be paid pursuant to
Section 4 hereof or this Section 5 to any insurance company which
has entered into an agreement with the Fund and the Distributor
that permits such insurance company to purchase Shares from the
Fund at their net asset value in connection with annuity
agreements issued in connection with the insurance company's
separate accounts. That portion of the Fund's average daily net
assets on which fees payable under Section 4 hereof and this
Section 5 are calculated may be subject to certain minimum amount
requirements as may be determined, and additional or different
dealer or wholesaler qualification standards that may be
established, from time to time by the Distributor. The
Distributor shall be entitled to be paid any fees payable under
Section 4 hereof or this Section 5 with respect to accounts for
which no Dealer of record exists or qualification standards have
not been met as partial consideration for personal services and/or
account maintenance services provided by the Distributor to the
Shares. The fees and expenses payable pursuant to Section 4 and
this Section 5 may from time to time be paid by the Fund to the
Distributor and the Distributor will then pay these expenses on
behalf of the Fund.
6. Nothing herein contained shall be deemed to require
the Fund to take any action contrary to its Declaration of Trust
or By-Laws or any applicable statutory or regulatory requirement
to which it is subject or by which it is bound, or to relieve or
deprive the Board of Trustees of the responsibility for and
control of the conduct of the affairs of the Fund.
7. This Plan shall become effective upon (a) approval
by a vote of at least a "majority of outstanding voting
securities" of the Shares, and (b) approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not
"interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any
of the agreements related to the Plan (the "Qualified Trustees"),
such votes to be cast in person at a meeting called for the
purpose of voting on this Plan.
8. This Plan shall continue in effect indefinitely;
provided, however, that such continuance is subject to annual
approval by a vote of the Board of Trustees and a majority of the
Qualified Trustees, such votes to be cast in person at a meeting
called for the purpose of voting on continuance of this Plan. If
such annual approval is not obtained, this Plan shall expire 12
months after the effective date of the last approval.
9. This Plan may be amended at any time by the Board
of Trustees; provided that (a) any amendment to increase
materially the amount to be spent for the services described
herein shall be effective only upon approval by a vote of a
"majority of the outstanding voting securities" of the Shares and
(b) any material amendment of this Plan shall be effective only
upon approval by a vote of the Board of Trustees and a majority of
the Qualified Trustees, such votes to be cast in person at a
meeting called for the purpose of voting on such amendment. This
Plan may be terminated at any time by vote of a majority of the
Qualified Trustees or by a vote of a "majority of the outstanding
voting securities" of the Shares.
10. The Distributor shall provide the Board of
Trustees, and the Board of Trustees shall review, at least
quarterly, a written report of the amounts expended under the Plan
and the purposes for which such expenditures were made.
11. While this Plan is in effect, the selection and
nomination of Qualified Trustees shall be committed to the
discretion of the Trustees who are not "interested persons" of the
Fund.
12. For the purposes of this Plan, the terms
"interested person" and "majority of the outstanding voting
securities" are used as defined in the Act. In addition, for
purposes of determining the fees payable to Dealers and
wholesalers, the value of the Share's net assets shall be computed
in the manner specified in the Fund's then current prospectus for
computation of the net asset value of the Shares.
13. The Fund shall preserve copies of this Plan, and
each agreement related hereto and each report referred to in
Section 10 hereof (collectively the "Records") for a period of six
years from the end of the fiscal year in which such Record was
made and each such Record shall be kept in an easily accessible
place for the first two years of said record keeping.
14. This Plan shall be construed in accordance with the
laws of The Commonwealth of Massachusetts and the applicable
provisions of the Act.
15. If any provision of this Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of the Plan shall not be affected thereby.
EX-99.15B
[TEXT]
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial
interest to be designated "Class B" of Massachusetts Investors
Growth Stock (the "Fund"), a Massachusetts business trust, dated
September 1, 1993 and amended this 21st day of December, 1994.
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end
management investment company and is registered under the
Investment Company Act of 1940, as amended (collectively with the
rules and regulations promulgated thereunder, the "1940 Act"); and
WHEREAS, the Fund intends to distribute the shares of
beneficial interest (without par value) of the Fund designated
Class B Shares (the "Shares") in accordance with Rule 12b-1 under
the 1940 Act ("Rule 12b-1"), and desires to adopt this
Distribution Plan (the "Plan") as a plan of distribution pursuant
to such Rule; and
WHEREAS, the Fund desires for MFS Fund Distributors, Inc., a
Delaware corporation ("MFD"), to provide certain distribution
services for the Fund (the "Distributor"); and
WHEREAS, the Fund has entered into a distribution agreement
(the "Distribution Agreement") (in a form approved by the Board of
Trustees of the Fund in a manner specified in such Rule 12b-1)
with the Distributor, whereby the Distributor will provide
facilities and personnel and render services to the Fund in
connection with the offering and distribution of the Shares (the
"Distribution Agreement"); and
WHEREAS, the Fund recognizes and agrees that (a) the
Distributor may retain the services of firms or individuals to act
as dealers (the "Dealers") of the Shares in connection with the
offering of Shares, and (b) the Distributor may make payments for
such services to the Dealers out of the fee paid to the
Distributor hereunder, any deferred sales charges imposed by the
Distributor in connection with the repurchase of Shares, its
profits or any other source available to it; and
WHEREAS, the Fund recognizes and agrees that the Distributor
may impose certain deferred sales charges in connection with the
repurchase of Shares by the Fund, and the Distributor may retain
(or receive from the Fund, as the case may be) all such deferred
sales charges; and
WHEREAS, the Board of Trustees of the Fund, in considering
whether the Fund should adopt and implement this Plan, has
evaluated such information as it deemed necessary to an informed
determination as to whether this Plan should be adopted and
implemented and has considered such pertinent factors as it deemed
necessary to form the basis for a decision to use assets of the
Fund for such purposes, and has determined that there is a
reasonable likelihood that the adoption and implementation of this
Plan will benefit the Fund and its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Fund hereby
adopts this Plan for the Fund as a plan for distribution relating
to the Shares in accordance with Rule 12b-1, on the following
terms and conditions:
1. As specified in the Distribution Agreement, the
Distributor shall provide facilities, personnel and a program with
respect to the offering and sale of Shares. Among other things,
the Distributor shall be responsible for commissions payable to
Dealers, all expenses of printing (excluding typesetting) and
distributing prospectuses to prospective shareholders and
providing such other related services as are reasonably necessary
in connection therewith.
2. The Distributor shall bear all distribution-related
expenses to the extent specified in the Distribution Agreement in
providing the services described in paragraph 1, including without
limitation, the compensation of personnel necessary to provide
such services and all costs of travel, office expenses (including
rent and overhead), equipment, printing, delivery and mailing
costs.
3. It is understood that the Distributor may impose certain
deferred sales charges in connection with the repurchase of Shares
by the Fund and the Distributor may retain (or receive from the
Fund, as the case may be) all such deferred sales charges. As
additional consideration for all services performed and expenses
incurred in the performance of its obligations under the
Distribution Agreement, the Fund shall pay the Distributor a
distribution fee periodically at a rate of 0.75% per annum of the
Fund's average daily net assets attributable to the Shares.
4. As partial consideration for the personal services and/or
account maintenance services performed by each Dealer in the
performance of its obligations under its dealer agreement with the
Distributor, the Fund shall pay each Dealer a service fee
periodically at a rate not to exceed 0.25% per annum of the
portion of the average daily net assets of the Fund that is
represented by Shares that are owned by investors for whom such
Dealer is the holder or dealer of record. That portion of the
Fund's average daily net assets on which the fees payable under
this paragraph 4 hereof are calculated may be subject to certain
minimum amount requirements as may be determined, and additional
or different dealer qualification standards that may be
established from time to time, by the Distributor. The
Distributor shall be entitled to be paid any fees payable under
this paragraph 4 hereof with respect to Shares for which no Dealer
of record exists or qualification standards have not been met as
partial consideration for personal services and/or account
maintenance services provided by the Distributor to the Shares.
The service fee payable pursuant to this paragraph 4 may from time
to time be paid by the Fund to the Distributor and the Distributor
will then pay these fees on behalf of the Fund.
5. The Fund understands that agreements between the
Distributor and the Dealers may provide for payment of commissions
to Dealers in connection with the sales of Shares and may provide
for a portion (which may be all or substantially all) of the fees
payable by the Fund to the Distributor under the Distribution
Agreement to be paid by the Distributor to the Dealers in
consideration of the Dealer's services as a dealer of the Shares.
Except as described in paragraph 4, nothing in this Plan shall be
construed as requiring the Fund to make any payment to any Dealer
or to have any obligations to any Dealer in connection with
services as a dealer of the Shares. The Distributor shall agree
and undertake that any agreement entered into between the
Distributor and any Dealer shall provide that, except as provided
in paragraph 4, such Dealer shall look solely to the Distributor
for compensation for its services thereunder and that in no event
shall such Dealer seek any payment from the Fund.
6. The Fund shall pay all fees and expenses of any
independent auditor, legal counsel, investment adviser,
administrator, transfer agent, custodian, shareholder servicing
agent, registrar or dividend disbursing agent of the Fund;
expenses of distributing and redeeming Shares and servicing
shareholder accounts; expenses of preparing, printing and mailing
prospectuses, shareholder reports, notices, proxy statements and
reports to governmental officers and commissions and to
shareholders of the Fund, except that the Distributor shall be
responsible for the distribution-related expenses as provided in
paragraphs 1 and 2 hereof.
7. Nothing herein contained shall be deemed to require the
Trust to take any action contrary to its Declaration of Trust or
By-Laws or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or
deprive the Board of Trustees of the responsibility for and
control of the conduct of the affairs of the Fund.
8. This Plan shall become effective upon (a) approval by a
vote of at least a "majority of the outstanding voting securities"
of the Shares, and (b) approval by a vote of the Board of Trustees
and a vote of a majority of the Trustees who are not "interested
persons" of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreement related
to the Plan (the "Qualified Trustees"), such votes to be cast in
person at a meeting called for the purpose of voting on this Plan.
9. This Plan shall continue in effect indefinitely; provided
that such continuance is "specifically approved at least annually"
by a vote of both a majority of the Trustees of the Fund and a
majority of the Qualified Trustees. If such annual approval is
not obtained, this Plan shall expire 12 months after the effective
date of the last approval.
10. This Plan may be amended at any time by the Board of
Trustees; provided that this Plan may not be amended to increase
materially the amount of permitted expenses hereunder without the
approval of holders of a "majority of the outstanding voting
securities" of the Shares and may not be materially amended in any
case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Plan may be terminated at any time by a
vote of a majority of the Qualified Trustees or by a vote of the
holders of a "majority of the outstanding voting securities" of
the Shares.
11. The Fund and the Distributor shall provide the Board of
Trustees, and the Board of Trustees shall review, at least
quarterly, a written report of the amounts expended under this
Plan and the purposes for which such expenditures were made.
12. While this Plan is in effect, the selection and
nomination of Qualified Trustees shall be committed to the
discretion of the Trustees who are not "interested persons" of the
Trust.
13. For the purposes of this Plan, the terms "interested
persons", "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in
the Act. In addition, for purposes of determining the fees
payable to the Distributor hereunder, the value of the Fund's net
assets shall be computed in the manner specified in the Fund's
then-current prospectus and statement of additional information
for computation of the net asset value of the Shares of the Fund.
14. The Fund shall preserve copies of this Plan, and each
agreement related hereto and each report referred to in paragraph
11 hereof (collectively, the "Records") for a period of six years
from the end of the fiscal year in which such Record was made and
each such record shall be kept in an easily accessible place for
the first two years of said record-keeping.
15. This Plan shall be construed in accordance with the laws
of The Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act.
16. If any provision of this Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of the Plan shall not be affected thereby.
EX-99.16
[TEXT]
TOTAL RATE OF RETURN CALCULATION
Formula
P(1 + T)n = ERV
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value
EX-27.1
[DESCRIPTION] FINANCIAL DATA SCHEDULE -- CLASS A
[TEXT]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF MASSACHUSETTS INVESTORS GROWTH
STOCK FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
<TABLE>
<S> <C>
[FISCAL-YEAR-END] NOV-30-1994
[INVESTMENTS-AT-COST] 778,959,814
[INVESTMENTS-AT-VALUE] 993,562,290
[RECEIVABLES] 9,938,017
[ASSETS-OTHER]
14,958
[OTHER-ITEMS-ASSETS]
377,927
[TOTAL-ASSETS]
1,003,893,192
[PAYABLE-FOR-SECURITIES]
15,876,292
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,300,887
[TOTAL-LIABILITIES]
17,177,179
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 671,268,899
[SHARES-COMMON-STOCK] 93,272,283
[SHARES-COMMON-PRIOR] 87,306,636
[ACCUMULATED-NII-CURRENT]
(50,843)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 100,892,641
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 214,605,316
[NET-ASSETS] 986,716,013
[DIVIDEND-INCOME]
4,358,864
[INTEREST-INCOME] 2,516,072
[OTHER-INCOME] 0
[EXPENSES-NET] 7,599,877
[NET-INVESTMENT-INCOME] (724,941)
[REALIZED-GAINS-CURRENT] 101,534,996
[APPREC-INCREASE-CURRENT]
(153,476,898)
[NET-CHANGE-FROM-OPS]
(52,666,843)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS]
(173,544,772)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 9,138,166
[NUMBER-OF-SHARES-REDEEMED] (15,368,839)
[SHARES-REINVESTED]
12,196,320
[NET-CHANGE-IN-ASSETS]
(147,543,605)
[ACCUMULATED-NII-PRIOR]
4,517,967
[ACCUMULATED-GAINS-PRIOR]
171,598,657
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,277,285
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 8,642,126
[AVERAGE-NET-ASSETS]
1,023,720,418
[PER-SHARE-NAV-BEGIN]
12.97
[PER-SHARE-NII]
(0.01)
[PER-SHARE-GAIN-APPREC] (0.49)
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] (1.99)
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 10.48
[EXPENSE-RATIO] 0.72
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
EX-27.2
[DESCRIPTION] FINANCIAL DATA SCHEDULE -- CLASS B
[TEXT]
[ARTICLE] 6
[LEGEND]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF MASSACHUSETTS INVESTORS GROWTH
STOCK FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
[/LEGEND]
[SERIES]
[NUMBER] 1
</TABLE>
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] NOV-30-1994
[PERIOD-END] NOV-30-1994
[INVESTMENTS-AT-COST] 778,959,814
[INVESTMENTS-AT-VALUE] 993,562,290
[RECEIVABLES] 9,938,017
[ASSETS-OTHER]
14,958
[OTHER-ITEMS-ASSETS]
377,927
[TOTAL-ASSETS]
1,003,893,192
[PAYABLE-FOR-SECURITIES]
15,876,292
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,300,887
[TOTAL-LIABILITIES]
17,177,179
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 671,268,899
[SHARES-COMMON-STOCK] 899,356
[SHARES-COMMON-PRIOR] 138,556
[ACCUMULATED-NII-CURRENT]
(50,843)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 100,892,641
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 214,605,316
[NET-ASSETS] 986,716,013
[DIVIDEND-INCOME]
4,358,864
[INTEREST-INCOME] 2,516,072
[OTHER-INCOME] 0
[EXPENSES-NET] 7,599,877
[NET-INVESTMENT-INCOME] (724,941)
[REALIZED-GAINS-CURRENT] 101,534,996
[APPREC-INCREASE-CURRENT]
(153,476,898)
[NET-CHANGE-FROM-OPS]
(52,666,843)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS]
(311,145)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 2,335,727
[NUMBER-OF-SHARES-REDEEMED] (1,604,821)
[SHARES-REINVESTED] 29,894
[NET-CHANGE-IN-ASSETS]
(147,543,605)
[ACCUMULATED-NII-PRIOR]
4,517,967
[ACCUMULATED-GAINS-PRIOR]
171,598,657
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,277,285
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 8,642,126
[AVERAGE-NET-ASSETS]
1,023,720,418
[PER-SHARE-NAV-BEGIN]
12.93
[PER-SHARE-NII]
(0.09)
[PER-SHARE-GAIN-APPREC] (0.05)
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] (1.99)
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 10.35
[EXPENSE-RATIO] 1.60
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
