<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MASSACHUSETTS INVESTORS TRUST
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No Fee required
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
MASSACHUSETTS INVESTORS TRUST
NOTICE OF BALLOT SOLICITATION
To the Shareholders of
MASSACHUSETTS INVESTORS TRUST:
There is enclosed a PROXY STATEMENT and a FORM OF BALLOT on which you may
assent or dissent to the new Investment Advisory Agreement between
Massachusetts Financial Services Company and Massachusetts Investors Trust
(the "Fund").
ITEM 1. To approve a new Investment Advisory Agreement between
Massachusetts Financial Services Company ("MFS") and the Fund.
YOUR TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF ITEM 1.
Only shareholders of record as of August 24, 1998 will be entitled to vote.
STEPHEN E. CAVAN, Secretary
September 4, 1998
YOUR VOTE IS IMPORTANT. SHAREHOLDERS ARE URGED TO READ THE INSTRUCTIONS AS TO
SIGNATURES ON THE ENCLOSED BALLOT, AND, AFTER EXECUTING IT, TO MAIL IT AT THEIR
EARLIEST CONVENIENCE IN THE ACCOMPANYING BUSINESS REPLY ENVELOPE.
<PAGE>
PROXY STATEMENT
In connection with the proposal to approve the new Investment Advisory
Agreement between Massachusetts Financial Services Company, a Delaware
corporation ("MFS" or the "Adviser"), and Massachusetts Investors Trust (the
"Fund"), the Trustees have, pursuant to the Fund's Declaration of Trust dated
March 21, 1924, as amended (the "Declaration of Trust"), signed and deposited
with State Street Bank and Trust Company of Boston, Massachusetts, the
depository under the Declaration of Trust, written instruments fixing the
close of business on August 24, 1998 as the record date for determining the
number of shares outstanding and the holders thereof entitled to vote.
Shareholders may vote by executing ballots and filing them with the Fund's
transfer agent, MFS Service Center, Inc. ("MFSC"), 500 Boylston Street,
Boston, Massachusetts 02116, as set forth below.
The new Investment Advisory Agreement, as described in Item 1, will be
considered approved at the close of business: (a) on October 15, 1998, if the
written assents by the holders of a majority of the outstanding shares on
August 24, 1998 shall have been filed with and certified by MFSC on or before
October 15, 1998; or (b) on the second business day after the day upon which
such assents shall have been so filed with and certified by MFSC if such date
is later than October 15, 1998. For this purpose, a business day shall be any
day when MFSC is open for business. The proposal will be considered not to be
approved if such assents are not so filed and certified by January 31, 1999.
A meeting of shareholders is not being held in connection with this
solicitation of ballots. At the close of business on August 24, 1998 (the
"Record Date"), there were outstanding 497,835,617 shares of the Fund held by
approximately 479,768 shareholders. Shares of each class of the Fund vote
together on the proposal and each share shall be entitled to one vote. Any
shareholder may, in a writing filed by him, revoke his assent or dissent,
provided that his revocation is filed with MFSC on or before the close of
business on the date on which MFSC certifies that ballots signed by the record
holders of a majority of the outstanding shares approving the proposal have
been filed with it. The mailing address of the Fund and MFSC is 500 Boylston
Street, Boston, Massachusetts 02116. This proxy statement and the accompanying
ballot are being mailed to shareholders on or about September 4, 1998.
Passage of the proposal being considered will occur only if a sufficient
number of ballots assent to the proposal. Except as provided below, ballots
not limited to the contrary will be counted as assenting to the proposal set
forth in Item 1. If a ballot is properly executed and returned accompanied by
instructions to withhold authority to vote (sometimes called a broker "non-
vote" (that is, a ballot from a broker or nominee indicating that this person
has not received instructions from the beneficial owner or other person
entitled to vote shares on a particular matter with respect to which the
broker or nominee does not have discretionary power)), or is marked with an
abstention (collectively, "abstentions"), it will not constitute a ballot
"for" or "against" a matter and will be disregarded in determining the
"ballots cast" on an issue. Therefore, abstentions will have the same effect
as a ballot "against" the proposal.
FOR A FREE COPY OF THE FUND'S ANNUAL REPORT DATED DECEMBER 31, 1997, AND ITS
SEMI-ANNUAL REPORT DATED JUNE 30, 1998, WRITE OR CALL MFS SERVICE CENTER,
INC., AT 500 BOYLSTON STREET, BOSTON, MASSACHUSETTS 02116 OR AT (800)
225-2606.
ITEM 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN MASSACHUSETTS
FINANCIAL SERVICES COMPANY AND THE FUND
GENERAL
The Board of Trustees is proposing that shareholders approve a new Investment
Advisory Agreement (the "New Agreement") with MFS, the effect of which would
be to increase the rate of compensation payable by the Fund to MFS for its
services as the Fund's investment adviser. The management fee payable by the
Fund has not changed since 1976. If approved by the shareholders, the
management fee payable under the New Agreement will still remain well below
the average advisory fee among a group of comparable growth and income funds.
The Trustees believe that the rate of compensation under the New Agreement is
reasonable in light of comparative fee information, the Fund's investment
performance, MFS' expenses and profitability in managing the Fund and the
nature, quality and scope of services provided by MFS to the Fund.
Ballots not limited to the contrary will be counted in favor of the new
Investment Advisory Agreement.
BACKGROUND
The Fund has retained MFS to provide it with investment management services
pursuant to an Investment Advisory Agreement dated May 20, 1982 (the "Current
Agreement"). MFS or its predecessors have been the Fund's investment adviser
since the Fund's inception in 1924. The Current Agreement was most recently
approved by the Board of Trustees, including a majority of the Trustees who
are not "interested persons," as defined in the Investment Company Act of
1940, as amended (the "1940 Act") (collectively, the "Independent Trustees"),
on June 17, 1998 and by shareholders on May 19, 1982. Ballots were last
solicited from shareholders of the Fund on August 4, 1994 for the purpose of
appointing Trustees, ratifying auditors and making certain amendments to the
Fund's Declaration of Trust. The New Agreement was approved by the Board of
Trustees, including a majority of the Independent Trustees, on July 15, 1998,
subject to shareholder approval.
Pursuant to the Current Agreement, MFS provides the Fund with overall
investment management services, as well as general office facilities. Subject
to such policies as the Board of Trustees may determine, MFS makes investment
decisions for the Fund. For its services and facilities, MFS currently
receives an annual management fee under the Current Agreement, computed and
paid monthly, equal to a percentage of the average daily net assets and gross
income of the Fund, calculated in accordance with the table presented below:
AVERAGE DAILY NET ASSETS ($ MILLION) GROSS INCOME ($ MILLION)
- ----------------------------------------- -------------------------------------
CURRENT PROPOSED CURRENT PROPOSED
APPLICABLE APPLICABLE APPLICABLE APPLICABLE
UP TO AND ANNUAL ANNUAL UP TO AND ANNUAL ANNUAL
OVER INCLUDING RATE RATE OVER INCLUDING RATE RATE
- ---- --------- ---- ---- ---- --------- ---- ----
$ 0 $200 0.30% 0.33% $ 0 $ 6 6.67% 0%
$200 $500 0.24% 0.33% $ 6 $15 5.33% 0%
$500 0.12% 0.33% $15 2.67% 0%
For the fiscal year ended December 31, 1997, MFS received management fees
under the Current Agreement of $8,764,265 equivalent on an annualized basis to
0.19% of the Fund's average daily net assets (the "Current Effective Fee").
Shareholders of the Fund are being asked to approve the New Agreement,
pursuant to which the gross income component of the investment management fee
paid by the Fund to MFS would be eliminated and the investment management fee
paid to MFS by the Fund would be calculated at the rate of 0.33% of the
average daily net assets of the Fund (the "Proposed Fee"). This fee change is
the only material difference between the Current Agreement and the New
Agreement. If approved by shareholders, the New Agreement will become
effective on November 1, 1998. If the amendments are not approved by
shareholders, the Current Agreement will continue in effect in its present
form, subject to the continuation and termination provisions contained therein
and described below. A description of the New Agreement and the services
provided by MFS thereunder is set forth below. See "Description of the New
Agreement" below.
In approving the New Agreement and recommending its approval by shareholders,
the Trustees considered the best interests of the shareholders of the Fund,
and took into account all such factors as they deemed relevant. See "Review
Process of the Board of Trustees" below.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE FUND
APPROVE THE NEW AGREEMENT.
RATIONALE FOR THE PROPOSAL
At the request of MFS, the Board of Trustees discussed approval of the New
Agreement at meetings held on April 7, 1998, May 20, 1998, June 17, 1998 and
July 15, 1998. In addition, the Independent Trustees also discussed approval
of the New Agreement with their independent counsel at a meeting held on April
23, 1998. In evaluating the New Agreement, the Board of Trustees requested and
received substantial information from MFS to assist in their deliberations.
The Trustees utilized reports sourced by Lipper Analytical Services, Inc.
("Lipper"), a nationally recognized, independent service that monitors mutual
fund expenses and performance, and significant amounts of information
furnished by MFS. The Trustees reviewed these materials and considered various
matters, discussed below, in determining the reasonableness and fairness of
the proposed increase in the management fee payable by the Fund and reached
the following conclusions:
o The Trustees considered the management fees paid by comparable funds
available to investors. The Trustees concluded that the current fee rate is
substantially below average for comparable funds in the Lipper Growth &
Income category and the Trustees unanimously recommend that it be raised,
recognizing that the Proposed Fee will remain well below the average for
comparable funds. The Trustees believe the Proposed Fee is in the best
interests of the shareholders of the Fund and is reasonable in light of the
comparative fee information, the Fund's performance, MFS' expenses and
profitability in managing the Fund and the nature, quality and scope of
services provided by the Adviser to the Fund.
o In today's highly complex investment world, the Trustees and MFS both
believe an increased fee will help MFS remain competitive in attracting,
retaining and motivating the top quality investment personnel and other key
personnel necessary to manage the Fund and provide new and innovative
services to an expanded shareholder base.
o The Trustees considered today's ever-expanding securities markets, which
operate continuously around the globe. The Trustees believe that additional
resources will help MFS maintain state-of-the-art computer systems, access
information and analyze strategies using the most sophisticated tools and
methodologies. The Trustees also believe that additional resources are
needed to administer the Fund by virtue of its size and the growing
complexities of portfolio transactions domestically and internationally.
o The Trustees considered the fact that the majority of funds having similar
investment objectives do not have a gross income component to their
investment management fee and concluded that a management fee based solely
on the average daily net assets of the Fund is a more appropriate method of
compensation and in the shareholders' best interests.
The Trustees reached these conclusions after careful discussion and analysis
and believe that they have carefully and thoroughly examined the questions and
alternatives. In recommending that the shareholders of the Fund approve the
New Agreement, the Independent Trustees have considered what they believe to
be the best interests of the shareholders of the Fund. In so doing the
Independent Trustees were advised by independent counsel, retained by the
Independent Trustees and paid by the Fund, as to the nature of the matters to
be considered and the standards to be used in reaching their decision.
REVIEW PROCESS OF THE BOARD OF TRUSTEES
In reaching its decision, the Board of Trustees examined and weighed many
factors, including the following principal factors: (1) the nature, quality
and extent of the services rendered and the results achieved by MFS in the
areas of investment management (including investment performance comparisons
with other mutual funds and certain indices) and administrative services; (2)
changes in the mutual fund industry that have affected the Fund; (3) the
payments received by MFS and its affiliates from all sources involving both
the Fund and the other investment companies advised by MFS; (4) extensive
financial, personnel and structural information as to MFS' organization,
including the costs borne by, and profitability of, MFS and its affiliates in
providing service of all types to the Fund and to the other investment
companies advised by MFS; (5) the organizational capabilities, financial
condition and future capital requirements of MFS; (6) an analysis of the
proposed fee rate changes; (7) information concerning the Fund's expense ratio
on both an existing and pro forma basis; (8) information as to the management
fees paid by the other funds advised by MFS; (9) competitive industry fee
structures and expense ratios including, specifically, the relationship of the
proposed management fee rates to those typically paid by funds with similar
investment objectives; and (10) a comparison of the overall profitability of
MFS to the profitability of certain other investment advisers, including MFS'
profitability with respect to the Fund. The Trustees gave equal weight to each
of these factors. Certain of these factors are discussed in more detail below.
PORTFOLIO PERFORMANCE. The Board of Trustees determined that MFS has provided
high quality services with respect to the Fund. In particular, the Trustees
reviewed the performance for Class A shares of the Fund (as representative of
the Fund as a whole) against their Lipper peer group and noted that the Fund
was ranked by Lipper 116th out of 620 comparable funds, 9th out of 394
comparable funds and 27th out of 242 comparable funds for the one, three and
five year periods, respectively, ending December 31, 1997. The Trustees also
noted that for the ten-year period ended December 31, 1997, the Fund was
ranked 13th by Lipper out of 136 comparable mutual funds ranked by Lipper.
During this same period, the Fund had an aggregate total return of 417.79% as
compared to a return of 336.23% for the Lipper Growth and Income Fund Average.
The Board of Trustees also determined that the Fund's absolute performance and
performance relative to comparable mutual funds and indices would not have
been materially affected if the proposed increased advisory fees had been in
effect throughout 1995, 1996 and 1997.
The Fund's average annual total return performance in comparison with the
annualized total return performances of the Lipper Growth and Income Fund
Average and the S&P 500 Index is set forth below:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
ENDED ENDED ENDED ENDED
12/31/97 12/31/97 12/31/97 12/31/97
-------- -------- -------- --------
Lipper Growth and Income Fund
Average ........................ 27.05% 26.63% 17.58% 15.72%
Standard & Poor's 500 Index ...... 33.36% 31.15% 20.27% 18.05%
Massachusetts Investors Trust
Class A ........................ 31.69% 32.20% 20.27% 17.87%
Class B ........................ 30.75% 31.17% 19.43%(1) 17.46%(1)
Class C ........................ 30.76% 31.48%(2) 19.87%(2) 17.68%(2)
Class I ........................ 33.30% 32.33%(3) 20.34%(3) 17.91%(3)
- ----------
(1) Class B share performance includes the performance of the Fund's Class A
shares for periods prior to the inception of offering of Class B shares on
September 7, 1993. Sales charges, expenses and expense ratios, and
therefore performance, for Class A and Class B shares differ. Class B
share performance has not been adjusted to reflect differences in
operating expenses (e.g., Rule 12b-1 fees), which generally are lower for
Class A shares.
(2) Class C share performance includes the performance of the Fund's Class A
shares for periods prior to the inception of offering of Class C shares on
July 2, 1996. Sales charges, expenses and expense ratios, and therefore
performance, for Class A and Class C shares differ. Class C share
performance has not been adjusted to reflect differences in operating
expenses (e.g., Rule 12b-1 fees), which generally are lower for Class A
shares.
(3) Class I share performance includes the performance of the Fund's Class A
shares for the periods prior to the commencement of offering of Class I
shares on January 2, 1997. Sales charges, expenses and expense ratios, and
therefore performance for Class I and A shares differ. Class I share
performance has not been adjusted to reflect differences in operating
expenses (e.g., Rule 12b-1 fees), which generally are lower for Class I
shares.
The S&P 500 Index is unmanaged, assumes reinvestment of estimated dividends
and does not reflect fees and expenses. Investors may not invest directly in
an index. The Lipper Growth and Income Fund Average and the Fund's performance
assume reinvestment of capital gains and dividends and do not reflect the
deduction of sale charges.
The Trustees also considered the nature, quality and extent of the investment
advisory services rendered by MFS to the Fund as well as the background of the
portfolio managers and other executive personnel of MFS. MFS provided insights
on the competition it faces in attracting top quality personnel and the
Trustees reviewed MFS' recent additions of portfolio managers, analysts and
others involved in research and quantitative analysis.
The Trustees reviewed the 74-year performance history of the Fund under MFS
and the fact that MFS and its predecessors have been the sole investment
adviser to the Fund since 1924. The Trustees gave substantial weight to that
history and the historical importance of continuity through the many market
cycles during this period.
CHANGES IN THE MUTUAL FUND INDUSTRY. The Board of Trustees considered the
effect of changes in the mutual fund industry since the Fund's last management
fee increase in 1976. Among these changes, the Trustees considered the
increasing globalization of the economy and its impact on the management of
the Fund. The Trustees also considered the increased competitiveness in the
mutual fund industry that has resulted from the growth in the total assets
under management and in the number of funds offered.
ACTUAL AND PRO FORMA MANAGEMENT FEES AND EXPENSES. The Board of Trustees
considered the effect of the proposed management fee increase on the Fund's
fee rates and annual expense ratios (which include the management fee and all
other operating expenses incurred by the Fund). The table set forth below
under "Effect of an Increase in the Management Fee" provides comparative data
for the year ended December 31, 1997, assuming that the proposed fee increase
had been in effect throughout the year.
COSTS OF PROVIDING SERVICE AND PROFITABILITY. The Board of Trustees reviewed
information concerning profitability of MFS' investment advisory and other
activities and its financial condition based on results from 1995 through
1997. The information considered by the Trustees included operating profit
margin information for MFS' investment company business alone (i.e., excluding
results of its affiliates) and on a consolidated basis both before and after
MFS' net expenditures for marketing. The Trustees also reviewed profitability
data for 1995, 1996 and 1997 for MFS on a fund-by-fund basis. In addition,
such data were reviewed on a pro forma basis assuming that the proposed
management fee increase had been in effect throughout 1995, 1996 and 1997. In
assessing this information, the Trustees considered the fact that the size of
the Fund results in certain economies of scale to the Adviser. The Trustees
recognized that the growth of assets under management by the Adviser would
have positive effects on the Adviser's profitability even without the proposed
fee increase; however, the Trustees also considered the fact that the proposed
fee increase would enhance the Adviser's ability to attract and retain highly
qualified investment and administrative professionals in a competitive
investment management environment, and thus address the expectations of the
Trustees regarding the performance of the Fund that only such professionals
can satisfy.
Certain assumptions and methods of allocation utilized by the Adviser in
preparing fund-by-fund data were reviewed by the Trustees. While the Adviser
believes that the methods of allocation used were reasonable, there are
limitations inherent in allocating costs to multiple individual advisory
products served by an organization such as the Adviser's where each of the
advisory products draws on, and benefits from, the pooled research of the
organization.
COMPARISONS WITH OTHER FUNDS. The Board of Trustees considered the management
fees paid by other funds with similar investment objectives. In addition to
comparing the proposed management fee, the Board of Trustees also considered
the comparability of operating expense ratios with ratios of these other
investment companies. Notwithstanding that under the proposal the Fund's
management fee and, accordingly, its operating expense ratios would increase,
the Trustees believe that the management fee and expense ratios would remain
well below industry average. Based upon the data reported in Lipper Directors'
Analytical Data -- First Edition 1998, the Fund's Current Effective Fee of
0.19% in 1997 was well below the 0.66% average management fee of the 543
investment companies with a similar investment objective, and on a pro forma
basis giving effect to the Proposed Fee, its ratio of management fee to
average net assets of 0.33% would also have been well below average.
EFFECT OF AN INCREASE IN THE MANAGEMENT FEE
The effect of the proposed increase in the Fund's management fee from the
Current Effective Fee of 0.19% to the Proposed Fee of 0.33% per annum is
illustrated below. For the fiscal year ended December 31, 1997, this
information illustrates the amount the Fund paid to MFS under the Current
Effective Fee, and the amount the Fund would have paid to MFS had the Proposed
Fee been in effect for the entire period.
YEAR ENDED DECEMBER 31, 1997
% OF AVERAGE
MANAGEMENT FEE DAILY NET ASSETS AMOUNT OF FEE % CHANGE
- -------------- ---------------- ------------- --------
Current Effective Fee 0.19% $ 8,764,265
Proposed Fee 0.33% $15,053,779
Difference 0.14% $ 6,289,514 71.8%
In addition to its provision of investment management services to the Fund,
MFS also acts as the Fund's administrator and provides administrative services
to the Fund for which it received an administrative services fee from the Fund
of $292,240 (equivalent on an annualized basis to 0.01% of the Fund's average
daily net assets) for the period March 1, 1997 (commencement of Administration
Agreement) to December 31, 1997. For fiscal year 1998, the Fund will pay MFS a
fee calculated as a percentage of the average daily net assets of the Fund at
a maximum annual rate of 0.015% for these services. MFSC, a wholly owned
subsidiary of MFS, provides shareholder agency services to the Fund for which
it received a fee from the Fund of $5,895,601 (equivalent on an annualized
basis to 0.13% of the Fund's average daily net assets) for the year ended
December 31, 1997. For fiscal year 1998, the Fund will pay MFSC a fee
calculated as a percentage of the average daily net assets of the Fund at an
effective annual rate of 0.1125% for these services.
Shown below is a chart of the expenses and fees the Fund incurred during its
fiscal year ended December 31, 1997 (except with respect to Class A shares
which have been adjusted to reflect an increase in the distribution fee, see
footnote (2) to the "Expense Summary" below), together with pro forma fees the
Fund would have paid had the proposed management fee of 0.33% per annum been
in effect the entire period.
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
---------------------- ---------------------- ---------------------- --------------------
PRO PRO PRO PRO
CURRENT FORMA CURRENT FORMA CURRENT FORMA CURRENT FORMA
------- ----- ------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Initial Sales Charge Imposed
on Purchases of Fund Shares (as a
percentage of offering price) ..... 5.75% 5.75% None None None None None None
Maximum Contingent Deferred Sales
Charge (as a percentage of original
purchase price or redemption See See
proceeds, as applicable) .......... Below(1) Below(1) 4.00% 4.00% 1.00% 1.00% None None
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
---------------------- ---------------------- ---------------------- --------------------
PRO PRO PRO PRO
CURRENT FORMA CURRENT FORMA CURRENT FORMA CURRENT FORMA
------- ----- ------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees ..................... 0.19% 0.33% 0.19% 0.33% 0.19% 0.33% 0.19% 0.33%
Rule 12b-1 Fees ..................... 0.35%(2) 0.35%(2) 1.00%(3) 1.00%(3) 1.00%(3) 1.00%(3) None None
Other Expenses(4) ................... 0.22% 0.22% 0.22% 0.22% 0.22% 0.22% 0.22% 0.22%
Total Operating Expenses ............ 0.76% 0.90% 1.41% 1.55% 1.41% 1.55% 0.41% 0.55%
- ----------
(1) Purchases of $1 million or more and certain purchases by retirement plans 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.
(2) The Fund has adopted a Distribution Plan for its shares in accordance with Rule 12b-1 under the 1940 Act (the "Distribution
Plan"), 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. The 0.25% per annum service fee is reduced to 0.15% per
annum for shares purchased prior to January 2, 1991. The fee has been adjusted to reflect an increase to the distribution fee
of 0.025% per annum (effective June 1, 1998). Distribution expenses paid under the Plan, together with the initial sales
charge, may cause long-term shareholders to pay more than the maximum sales charge that would have been permissible if
imposed entirely as an initial sales charge.
(3) The Fund's Distribution Plan 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 and Class C shares, respectively. Distribution expenses paid under the
Distribution Plan, with respect to Class B or Class C shares, together with any CDSC, may cause long-term shareholders to pay
more than the maximum sales charge that would have been permissible if imposed entirely as an initial sales charge.
(4) The Fund has an expense offset arrangement which reduces the Fund's custodian fee based upon the amount of cash maintained by
the Fund with its custodian and dividend disbursing agent, and may enter into other such arrangements and directed brokerage
arrangements (which would also have the effect of reducing the Fund's expenses). "Other Expenses" do not take into account
any such arrangements.
</TABLE>
EXAMPLE OF EXPENSES
An investor would pay the following dollar amounts of expenses on a $1,000
investment in the Fund, assuming (a) a 5% annual return and, unless otherwise
noted, (b) redemption at the end of each of the time periods indicated:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------- ---------------------- ---------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Current Effective Fee ............... $65 $80 $ 97 $146
Proposed Fee ........................ $66 $85 $104 $162
CLASS B SHARES (1) (1) (1) (1)
Current Effective Fee ............... $54 $14 $75 $45 $ 97 $77 $151(2) $151(2)
Proposed Fee ........................ $56 $16 $79 $49 $104 $84 $166 $166
CLASS C SHARES
Current Effective Fee ............... $24 $14 $45 $45 $ 77 $77 $169 $169
Proposed Fee ........................ $26 $16 $49 $49 $ 84 $84 $185 $185
CLASS I SHARES
Current Effective Fee ............... $ 4 $13 $ 23 $ 52
Proposed Fee ........................ $ 6 $18 $ 31 $ 69
- ----------
(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.
</TABLE>
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.
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.
FEES OF SIMILAR MFS FUNDS
MFS also acts as the investment adviser to several registered investment
companies having similar investment objectives to that of the Fund.
The table in Appendix A sets forth the name of each investment company managed
by MFS having similar investment objectives to the Fund that primarily invest
in equity securities, the annual rate of compensation (i.e., the fee MFS is
paid for its services as investment adviser to such funds) and the net assets
of such fund as of June 30, 1998.
FEES OF SIMILAR COMPETITIVE FUNDS
The Proposed Fee of 0.33% is significantly lower than the Lipper Growth and
Income Fund Average of 0.66%. Moreover, the pro forma total expense ratio for
Class A would have been in the fourth quartile of growth and income funds as
tracked by Lipper, or more than 75% of funds with similar investment
objectives will still have total expense ratios in their most recent fiscal
year higher than that of the Fund's after reflecting the Proposed Fee.
INVESTMENT ADVISER
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 this Fund, the first mutual fund in the United States. Net assets
under the management of the MFS organization were approximately $87.7 billion
on behalf of over 3.3 million investor accounts as of June 30, 1998. MFS is a
subsidiary of Sun Life Assurance Company of Canada (U.S.) Financial Services
Holdings, Inc. ("Sun Life of Canada (U.S.)") which in turn is an indirect
wholly owned subsidiary of Sun Life Assurance Company of Canada ("Sun Life").
The Directors of MFS are John W. Ballen, Thomas J. Cashman, Joseph Dello
Russo, John D. McNeil, Kevin R. Parke, Arnold D. Scott, William W. Scott, Jr.,
Jeffrey L. Shames and Donald A. Stewart. Mr. Shames is the Chairman and Chief
Executive Officer of MFS, Mr. Ballen is the President and the Chief Investment
Officer of MFS, Mr. Cashman is the President of MFS Institutional Advisors,
Inc., MFS' institutional investment management subsidiary, Mr. Dello Russo is
the Chief Financial Officer and an Executive Vice President of MFS, Mr. Parke
is the Chief Equity Officer, Director of Equity Research and an Executive Vice
President of MFS, Mr. Arnold Scott is the Secretary and a Senior Executive
Vice President of MFS and Mr. William Scott is the President of MFS Fund
Distributors, Inc., the distributor of MFS Funds. Messrs. McNeil and Stewart
are the Chairman and the President, respectively, of Sun Life. The address of
Messrs. Ballen, Cashman, Dello Russo, Parke, Arnold Scott, William Scott and
Shames is 500 Boylston Street, Boston, Massachusetts 02116. The address of
Messrs. McNeil and Stewart is 150 King Street West, Toronto, Canada M5H 1J9.
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.
James R. Bordewick, Jr., Stephen E. Cavan, W. Thomas London, James O. Yost,
Ellen M. Moynihan and Mark E. Bradley, all of whom are officers of MFS, are
also officers of the Trust. As of August 24, 1998, no officer or Trustee of
the Fund owned beneficially greater than 1% of the outstanding shares of the
Fund. As of such date, the officers and Trustees of the Fund in the aggregate
owned beneficially less than 1% of the outstanding shares of the Fund.
MFS also serves as investment adviser to over 150 other funds, including the
MFS Family of Funds (the "MFS Funds"), MFS 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 Institutional Trust, MFS Variable Insurance Trust, MFS/Sun Life Series
Trust, and seven variable accounts, each of which is a registered investment
company established by Sun Life of Canada (U.S.) in connection with the sales
of various fixed/variable annuity contracts. MFS and its wholly owned
subsidiary, MFS Institutional Advisors, Inc., also provide investment advice
to a large number of private clients.
In certain instances there may be securities which are suitable for the Fund's
portfolio as well as for portfolios of other clients of MFS. Some simultaneous
transactions are inevitable when several clients receive investment advice
from MFS, particularly when the same security is suitable for more than one
client. While in some cases this arrangement could have a detrimental effect
on the price or availability of the security as far as the Fund is concerned,
in other cases, however, it may produce increased investment opportunities for
the Fund.
Broker-dealers may be willing to furnish statistical, research and other
factual information or services to MFS for no consideration other than
brokerage or underwriting commissions. Securities may be bought or sold from
time to time through such broker-dealers on behalf of the Fund.
For the current fiscal year, the Board of Trustees (together with the Boards
of Trustees of the other MFS Funds) have directed MFS to allocate a total of
$54,160 of commission business from the Fund and the MFS Funds to the Pershing
Division of Donaldson, Lufkin and Jenrette as consideration for the annual
renewal of certain publications provided by Lipper (which provides information
useful to the Board of Trustees in reviewing the relationship between the Fund
and MFS).
The address of MFS and MFS Fund Distributors, Inc. ("MFD"), the Fund's
principal underwriter, is 500 Boylston Street, Boston, Massachusetts 02116.
DESCRIPTION OF THE NEW AGREEMENT
As noted above, the Current Agreement and the New Agreement are identical
except that the New Agreement eliminates the gross income component to the
investment management fee and provides for the payment by the Fund to MFS of a
management fee based solely on the Fund's average daily net assets at the rate
of 0.33% per annum, rather than the current effective fee of 0.19% per annum
(the New Agreement also has a new commencement date and termination date).
Under the New Agreement, MFS provides portfolio management services for the
Fund, including investment research, advice and supervision of Fund assets.
The Fund pays its expenses (other than those assumed by MFS or MFD),
including: investment advisory and administrative services; 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 the Fund's custodian and transfer agent, for
all services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of shares of the Fund; 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, the
Fund's principal underwriter, requires MFD to pay for prospectuses that are to
be used for sales purposes.
MFS pays the compensation of the Trust's officers who are affiliated with MFS
and any Trustee who is an officer of MFS. The Adviser also furnishes at its
own expense all necessary portfolio management services, including office
space, equipment, clerical personnel, investment advisory facilities, and all
executive and supervisory personnel necessary for managing the Fund's
investments and effecting transactions in its portfolio securities.
The New Agreement provides that in the absence of willful misfeasance, bad
faith or gross negligence, MFS shall not be liable for any act or omission in
the course of, or in connection with, the rendering of its services
thereunder.
The New Agreement, if approved, will remain in effect pursuant to its terms
until August 1, 2000 (for the Current Agreement, this date is August 1, 1999),
and thereafter for successive one-year periods if and so long as such
continuation is specifically approved at least annually by (a) the Board of
Trustees or (b) the affirmative vote of more than fifty percent (50%) of the
outstanding shares of the Fund (a "Majority Vote"), provided that in either
event the continuation also is approved by a majority of the Independent
Trustees by a vote cast in person at a meeting called for the purpose of
voting on such approval. The New Agreement is terminable, without penalty, by
the Board of Trustees, by a Majority Vote of the Fund's shareholders or by
MFS, in each case on not more than sixty nor less than thirty days' written
notice to the other party and to the Fund. The New Agreement terminates
automatically in the event of its assignment (as defined in the 1940 Act).
The description of the New Agreement is qualified in its entirety by reference
to the New Agreement which is attached as Appendix B to this proxy statement.
REQUIRED VOTE
Approval of the New Agreement requires a Majority Vote of the Trust's
shareholders (as defined above).
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
APPROVAL OF THE NEW AGREEMENT.
SUBMISSION OF CERTAIN PROPOSALS
Proposals of shareholders which are intended to be presented in a proxy
statement for a future solicitation of ballots must be received by the Fund a
reasonable amount of time prior to the Fund's solicitation of ballots.
ADDITIONAL INFORMATION
As of the Record Date, Merrill Lynch Pierce Fenner & Smith, Inc., 4800 Deer
Lake Drive, Jacksonville, Florida, for the sole benefit of its customers, held
54,571,626 shares of the Fund (10.96% of the outstanding shares) as holder of
record, but not beneficially.
The information contained in this proxy statement relating to MFS has been
furnished by MFS.
Ballot solicitations will be made primarily by mail, but ballot solicitations
also may be made by telephone, telegraph, electronic means or personal
interviews conducted by officers of the Fund, MFS, MFD and/or MFSC. In
addition, Shareholder Communications Corporation has been retained to assist
in the solicitation of ballots, at an estimated cost of $475,000 (depending on
the extent of services provided). The costs of the ballot solicitation and
expenses incurred in connection with the preparation, printing and mailing of
this proxy statement and its enclosures will be borne by MFS and not by the
Fund. MFS will reimburse banks, brokers and other persons holding the Fund's
shares registered in their names or in the names of their nominees, for their
expenses incurred in sending proxy material to and obtaining proxies from the
beneficial owners of such shares.
IT IS IMPORTANT THAT BALLOTS BE RETURNED PROMPTLY
September 4, 1998 MASSACHUSETTS INVESTORS TRUST
<PAGE>
APPENDIX A
<TABLE>
SIMILAR INVESTMENT COMPANIES ADVISED BY MFS
<CAPTION>
FEES
NET ASSETS ANNUAL RATE OF WAIVED OR
NAME OF FUND INVESTMENT OBJECTIVE AS OF 6/30/98 COMPENSATION REDUCED TO
- ------------ -------------------- ------------- ------------ ----------
<S> <C> <C> <C> <C>
Conservative Growth Series Long-term Capital Growth $1,601,456,358 0.55% N/A
MFS Union Standard Equity Fund Long-term Capital Growth $ 97,579,486 0.65% N/A
MFS Research Growth and Income Long-term Growth of Capital,
Fund Current Income and Growth 0.65% of first $500M
of Income $ 159,695,833 0.55% in excess of $500M N/A
Research Growth and Income Series Long-term Growth of Capital,
Current Income and Growth
of Income $ 21,575,889 0.75% N/A
MFS Equity Income Fund Income and Capital
Appreciation $ 27,602,720 0.60% N/A
Equity Income Series Income and Capital
Appreciation $ 1,806,453 0.75% N/A
MFS Growth with Income Series Current Income and Long-term
Growth of Capital and
Income $ 145,486,534 0.75% N/A
</TABLE>
<PAGE>
APPENDIX B
[FORM OF]
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made this 1st day of November, 1998 by and between
MASSACHUSETTS INVESTORS TRUST, a voluntary association having transferable
shares, organized and existing under the laws of the Commonwealth of
Massachusetts (the "Trust"), and Massachusetts Financial Services Company, a
Delaware corporation (the "Adviser"):
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940;
WHEREAS, the Adviser is willing to provide business management services to the
Trust on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
ARTICLE 1: Duties of the Adviser. The Adviser shall provide the Trust with
such investment advice and supervision as the latter may from time to time
consider necessary for the proper management of its funds. The Adviser shall
act as Adviser to the Trust and as such shall furnish continuously an
investment program and shall determine from time to time what securities shall
be purchased, sold or exchanged and what portion of the assets of the Trust
shall be held uninvested, subject always to the restrictions of its Indenture
of Trust dated March 21, 1924, as amended from time to time, and to the
provisions of the Investment Company Act of 1940. The Adviser shall also make
recommendations as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Trust's portfolio
securities shall be exercised. Should the Trustees at any time, however, make
any definite determination as to investment policy and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Adviser shall take, on behalf of the
Trust, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders
for the purchase or sale of portfolio securities for the Trust's account with
brokers or dealers selected by it, and to that end the Adviser is authorized
as the agent of the Trust to give instructions to the Custodian of the Trust
as to deliveries of securities and payments of cash for the account of the
Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser is directed to seek for the Trust
execution at the most favorable price by responsible brokerage firms at
reasonably competitive commission rates. In fulfilling this requirement the
Adviser shall not be deemed to have acted unlawfully or to have breached any
duty, created by this Agreement or otherwise, solely by reason of its having
caused the Trust to pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction, if
the Adviser determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the Adviser's overall responsibilities with respect to the
Trust and to other clients of the Adviser as to which the Adviser exercises
investment discretion.
ARTICLE 2: Allocation of Charges and Expenses. The Adviser shall furnish at
its own expense all necessary administrative services, office space, equipment
and clerical personnel, and investment advisory facilities and executive and
supervisory personnel for managing the investments, effecting the portfolio
transactions and in general administering the affairs of the Trust. The
Adviser shall arrange, if desired by the Trust, for officers and employees of
the Adviser to serve as Trustees, officers or agents of the Trust if duly
elected or appointed to such positions and subject to their individual consent
and to any limitations imposed by law. It is understood that the Trust will
pay all of its own expenses including, without limitation, compensation of
Trustees not affiliated with the Adviser, governmental fees, interest charges,
taxes, membership dues in the Investment Company Institute allocable to the
Trust, fees and expenses of independent auditors, of legal counsel and of any
transfer agent, registrar and dividend disbursing agent of the Trust, expenses
of repurchasing and redeeming shares, expenses of preparing, printing and
mailing stock certificates, prospectuses, shareholders' reports, notices,
proxy statements and reports to governmental officers and commissions,
brokerage and other expenses connected with the execution of portfolio
security transactions, insurance premiums, fees and expenses of the custodian
for all services to the Trust, including safekeeping of funds and securities,
keeping of books and accounts and calculation of the net asset value of shares
of the Trust, expenses of solicitation of shareholders assents, and expenses
relating to the issuance, registration and qualification of shares of the
Trust.
ARTICLE 3: Compensation of the Adviser. For the services to be rendered and
the facilities to be furnished as provided in Articles 1 and 2 above, the
Trust shall pay to the Adviser an investment advisory fee computed and paid
monthly at a rate equal to 0.33% of the Trust's average daily net assets on an
annualized basis. If the Adviser shall serve for less than the whole of any
period specified in this Article 3, the compensation to the Adviser shall be
prorated.
ARTICLE 4: Brokerage Offset Account. The Adviser hereby assumes the
responsibility of Massachusetts Financial Services, Inc. ("MFS") for carrying
out the terms of Article 4 of the Investment Advisory Agreement dated December
10, 1971 between the Trust and MFS to the extent set forth below. Pursuant
thereto, MFS agreed that prior to or promptly following December 10, 1971, it
would apply, through a subsidiary or affiliate (the "affiliate"), for
membership on the Philadelphia Stock Exchange and/or for the status of
approved non-member on the Pacific Coast Stock Exchange. Said agreement shall
continue in full force and effect.
(a) In the event that any such application is granted, the Adviser, to the
extent permitted by the rules of such exchange or exchanges, shall
credit against the management fees of the Trust a portion of the "net
profits" of the affiliate computed in the manner described below. Such
"net profits" of the affiliate shall be offset in the appropriate
amount against the management fee owed to the Adviser by the Trust at
any time or from time to time in the three months immediately
succeeding the end of the affiliate's fiscal year.
(b) During each fiscal year of the affiliate, gross revenues of the
affiliate from brokerage transactions** for the portfolios of the
Trust and the Fund, or attributable thereto, will be credited to an
Offset Account for the Trust and the Fund. The Offset Account will be
charged with all of the direct expenses of each such transaction,
including applicable clearing fees, transfer taxes, exchange fees, or
other fees and a share of the expenses of the affiliate's operations
prorated on the basis of the affiliate's gross brokerage revenues from
brokerage transactions for the portfolios of the Trust and the Fund,
compared to the affiliate's gross revenues from all sources. The
expenses to be so prorated will include rent, depreciation of
depreciable capital assets over their useful lives, interest
attributable to the affiliate's operations, salaries for personnel to
the extent they are engaged in the operations of the affiliate
including its recordkeeping and accounting and other direct expenses
and costs incurred in connection with the affiliate's operations. In
addition, in lieu of the affiliate's indirect expenses, such as
general overhead, executive supervision and general administration,
there will be charged to the Offset Account an amount equal to twenty
per cent of the gross revenues credited to the Offset Account. Other
adjustments customary to a brokerage operation may be made to the
Offset Account. After deducting expenses as set forth above from the
gross commissions attributed to the Offset Account, there shall be
deducted an amount attributed to State and Federal income taxes, the
sum to be deducted for this purpose to be computed as if the Offset
Account were a Massachusetts business corporation required to file
separate Massachusetts and Federal income tax returns. The balance in
the account after the above deductions will be considered "net
profits" of the Offset Account.
- ----------
** As used in this Article, the term "brokerage transaction" shall mean any
purchase or sale of securities in connection with which a commission is paid
to a broker-dealer acting as broker or agent and the terms "brokerage
commissions" and "brokerage revenues" shall mean those commissions and
(c) The net profits of the Offset Account shall be divided between the
Trust and the Fund in proportion to the total dollar amount of all
portfolio transactions, other than transactions in government
securities and short-term corporate notes, of the Trust and the Fund
during the period for which the net profits are computed.
(d) With respect to each fiscal year of the affiliate, all net profits of
the Offset Account shall be offset against the management fees of the
Trust and the Fund to the extent earned.
(e) Following the end of the affiliate's fiscal year, the Adviser and the
affiliate shall furnish to the Trust a financial statement for the
Offset Account and an opinion with respect thereto by an independent
public accountant.
(f) The Adviser is hereby expressly authorized, subject to the primary
requirement of obtaining for the Trust the most favorable execution
and price, to direct to itself or its affiliate such brokerage
transactions of the Trust as it shall in its sole discretion determine
appropriate, except that in no event shall the Adviser or its
affiliate execute portfolio transactions with the Trust on a principal
basis, except as permitted by the Investment Company Act of 1940 and
the Rules, Regulations or orders thereunder.
ARTICLE 5: Shareholder Approval. The Adviser agrees that, while this
Agreement is in effect, it will not permit (i) attribution of any value to
this Agreement in computing the value of the Adviser's stock, or (ii) sales of
stock by the Adviser or its shareholders at prices in excess of value
(excluding attribution of any value to the Agreement), without, in either
case, first obtaining the favorable vote of a majority of the outstanding
voting securities of the Trust.
The Trust agrees that upon notification by the Adviser that it intends to
engage in attribution of value or sales as described above, which would
require approval by shareholders of the Trust under this Agreement, it will
submit the question of approval or disapproval of such action to its
shareholders as promptly as practicable after receipt of such notice.
ARTICLE 6: Covenants of the Adviser. The Adviser agrees that it will not
deal with itself, or with the Trustees of the Trust or the Underwriter as
principals in making purchases or sales of securities or other property for
the account of the Trust, except as permitted by the Investment Company Act of
1940 and the Rules, Regulations or orders thereunder, will not take a long or
short position in the shares of the Trust except as provided by the Indenture
of Trust and will comply with all other provisions of the Indenture of Trust
relative to the Adviser and its officers and directors.
ARTICLE 7: Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution and management
of the Trust, except for willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder. As used in this Article 7, the term
"Adviser" shall include directors, officers and employees of the Adviser as
well as the corporation itself.
ARTICLE 8: Activities of the Adviser. The services of the Adviser to the
Trust are not to be deemed to be exclusive, the Adviser being free to render
services to others. It is understood that Trustees, officers, and shareholders
of the Trust are or may be or become interested in the Adviser as directors,
officers, employees or otherwise, and that directors, officers and employees
of the Adviser are or may be or become similarly interested in the Trust, and
that the Adviser may be or become interested in the Trust as a shareholder or
otherwise.
ARTICLE 9: Duration and Termination of this Agreement. This Agreement shall
become effective upon its execution and shall govern the relationship between
the parties hereto thereafter, and shall remain in force until August 1, 2000
on which date it will terminate unless its continuance after August 1, 2000 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 Adviser at a meeting specifically called for the purpose of voting on
such approval, and (ii) by the Trustees or by vote of a majority of the
outstanding voting securities of the Trust. 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
1940 and the Rules and Regulations thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by vote of a majority of the outstanding voting
securities of the Trust, or by the Adviser, on not more than sixty days' nor
less than thirty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person," and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act of 1940 and the Rules and Regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission under said Act, and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934 and Rules
and Regulations thereunder.
ARTICLE 10: Amendment of This Agreement. This Agreement may be amended only
by vote of a majority of the outstanding voting securities of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned
officers thereunto duly authorized, all as of the day and year first above
written. The undersigned officer of the Fund has executed this Agreement not
individually, but as an officer of the Fund under the Declaration and the
obligations of this Agreement are not binding upon any of the Trustees,
officers or shareholders of the Fund, individually, but bind only the trust
estate.
MASSACHUSETTS INVESTORS TRUST
By: ---------------------------------
James R. Bordewick, Jr.
Assistant Secretary
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: ---------------------------------
Arnold D. Scott
Senior Executive Vice President
<PAGE>
MIT-14 9/98 679.5M
575736
<PAGE>
[FORM OF BALLOT]
[logo] M F S(R)
INVESTMENT MANAGEMENT
We invented the mutual fund(R)
MFS FUNDS
500 BOYLSTON STREET
BOSTON, MA 02116
THIS BALLOT IS SOLICITED BY AND ON BEHALF OF THE BOARD OF TRUSTEES OF
MASSACHUSETTS INVESTORS TRUST
THE UNDERSIGNED SHAREHOLDER, REVOKING ALL PRIOR BALLOTS, DIRECTS THAT HIS SHARES
ARE TO BE COUNTED IN REGARD TO THE ITEM SET FORTH IN THE ACCOMPANYING PROXY
STATEMENT, WHICH HAS BEEN RECEIVED BY THE UNDERSIGNED, IN ACCORDANCE WITH THE
SPECIFICATIONS MADE BELOW, IF ANY. IF NO SPECIFICATION IS MADE, THE SHARES
REPRESENTED BY THIS BALLOT SHALL BE COUNTED AS ASSENTING TO THE PROPOSAL SET
FORTH IN ITEM 1. PLEASE SIGN AND RETURN AS SOON AS POSSIBLE BUT IN ANY EVENT BY
OCTOBER 15, 1998.
[OPTIONS FOR SUBMITTING PROXY
1. Return the attached ballot using the enclosed
envelope.
2. Fax this executed ballot to 1-800-733-1885.]
[ACCOUNT]
[SHARES]
[CONTROL NUMBER]
<TABLE>
<CAPTION>
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: MASSINV KEEP THIS PORTION FOR YOUR RECORDS
- ---------------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS BALLOT IS VALID ONLY WHEN SIGNED AND DATED.
- ---------------------------------------------------------------------------------------------------------------------------------
PLEASE VOTE AND SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
Please sign this ballot exactly as your name appears. Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or her title.
<S> <C> <C> <C>
Vote On Proposal For Against Abstain
1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY AND MASSACHUSETTS INVESTORS TRUST.
Please be sure to sign and date this Ballot.
- ------------------------------------------ ------------------------------------------
| |
- ------------------------------------------ ------------------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature [Joint Owners] Date
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
revenues which are attributable to brokerage transactions.
