<PAGE>
As filed with the Securities and Exchange Commission on July 28, 1995
1933 Act File No. 2-92915
1940 Act File No. 811-4096
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 28
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 29
MFS MUNICIPAL SERIES TRUST
(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)
|X| on July 29, 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 on behalf of all of its series
for its fiscal year ended March 31, 1995 on May 25, 1995.
================================================================================
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS MUNICIPAL INCOME 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-1A)
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
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 Objective *
and Policies
(b),(c) Investment Objective 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
<PAGE>
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
(c) Management of the Fund - Investment *
Adviser
(d) Management of the Fund - Investment *
Adviser; Back Cover Page
(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; Investment
Objective and Policies - Portfolio
Trading
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
<PAGE>
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
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; Shareholder Services
(e) Information Concerning Shares of *
the Fund - Distribution Plans;
Information Concerning Shares of
the Fund - Purchases; Expense
Summary
(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; Shareholder Services
(b),(c),(d) Information Concerning Shares of *
the Fund - Redemptions and
Repurchases
9 * *
<PAGE>
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
10 (a),(b) * Front Cover Page
11 * Front Cover Page
12 * Definitions
13 (a),(b),(c) * Investment Techniques
(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) * *
<PAGE>
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
(h) * Management of the Fund -
Custodian; Independent
Accountants and Financial
Statements; Back Cover
Page
(i) * Management of the Fund -
Shareholder Servicing
Agent
17 (a),(b),(c),(d) * Portfolio Transactions and
Brokerage Commissions
(e) * *
18 (a) * Description of Shares,
Voting Rights and
Liabilities
(b) * *
19 (a) Information Concerning Shares Shareholder Services
of the Fund - Purchases;
Shareholder Services
(b) Information Concerning Shares Determination of Net
of the Fund - Net Asset Value; Asset Value; Performance
Information Concerning Shares Information; Management
of the Fund - Purchases of the Fund- Distributor
(c) * *
20 * Tax Status
21 (a),(b) * Management of the Fund -
Distributor; Distribution
Plans
(c) * *
<PAGE>
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
22 (a) * *
(b) * Determination of Net Asset
Value; Performance
Information
23 * Independent Accountants
and Financial Statements
- -----------------------------
* Not Applicable
** Contained in Annual Report
<PAGE>
PROSPECTUS
August 1, 1995
Class A Shares of
Beneficial Interest
Class B Shares of
MFS(R) MUNICIPAL Beneficial Interest
INCOME FUND Class C Shares of
(A member of the MFS Family of Funds(R)) Beneficial Interest
- -------------------------------------------------------------------------------
Page
----
1. Expense Summary ....................................................... 2
2. The Fund .............................................................. 3
3. Condensed Financial Information ....................................... 4
4. Investment Objective and Policies ..................................... 5
5. Investment Techniques ................................................. 9
6. Management of the Fund ................................................12
7. Information Concerning Shares of the Fund .............................13
Purchases ........................................................13
Exchanges ........................................................19
Redemptions and Repurchases ......................................20
Distribution Plans ...............................................22
Distributions ....................................................24
Tax Status .......................................................24
Net Asset Value ..................................................25
Description of Shares, Voting Rights and Liabilities .............25
Performance Information ..........................................25
8. Shareholder Services ..................................................26
Appendix A ............................................................29
Appendix B ............................................................32
Appendix C ............................................................34
Appendix D ............................................................35
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.
MFS MUNICIPAL INCOME FUND 500 Boylston Street, Boston, MA 02116 (617) 954-5000
The investment objective of MFS Municipal Income Fund (the "Fund") is to provide
as high a level of current income exempt from federal income taxes as is
considered consistent with prudent investing while seeking protection of
shareholders' capital. The Fund is a diversified series of MFS Municipal Series
Trust (the "Trust"), an open-end management investment company. THE FUND MAY
INVEST UP TO ONE-THIRD OF ITS ASSETS IN LOWER RATED BONDS, COMMONLY KNOWN AS
"JUNK BONDS," THAT ENTAIL GREATER RISKS, INCLUDING DEFAULT RISKS, THAN THOSE
FOUND IN HIGHER RATED SECURITIES. INVESTORS SHOULD CAREFULLY CONSIDER THESE
RISKS BEFORE INVESTING (see "Investment Objective and Policies"). The minimum
initial investment generally is $1,000 per account (see "Purchases").
The Fund's investment adviser and distributor are Massachusetts Financial
Services Company ("MFS") 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 Trust and
the Fund that a prospective investor ought to know before investing. The Trust,
on behalf of the Fund, has filed with the Securities and Exchange Commission
(the "SEC") a Statement of Additional Information, dated August 1, 1995, which
contains more detailed information about the Trust and the Fund and is
incorporated into this Prospectus by reference. See page 28 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>
1. EXPENSE SUMMARY
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES:
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
Maximum Initial Sales Charge Imposed on Purchases of Fund Shares (as a
percentage of offering price) ....................................... 4.75% 0.00% 0.00%
Maximum Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) ............... See Below<F1> 4.00% 0.00%
ANNUAL OPERATING EXPENSES OF THE FUND (AS A PERCENTAGE OF AVERAGE NET ASSETS):
Management Fees ....................................................... 0.77% 0.77% 0.77%
Rule 12b-1 Fees (after fee reduction) ................................. 0.25%<F2> 1.00%<F3> 1.00%<F3>
Other Expenses ........................................................ 0.31% 0.38% 0.31%
---- ---- ----
Total Operating Expenses (after fee reduction) ..................... 1.33%<F4> 2.15% 2.08%
- ----------
<FN>
<F1> Purchases of $1 million or more are not subject to an initial sales charge; however, a contingent deferred sales charge (a
"CDSC") of 1% will be imposed on such purchases in the event of certain redemption transactions within 12 months following
such purchases (see "Purchases" below).
<F2> 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 the Class A shares (see "Distribution
Plans" below). The Fund's distributor is currently waiving payment of 0.10% of the amount payable under the Class A
Distribution Plan (see "Distribution Plans" below). 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.
<F3> The Fund has adopted separate Distribution Plans for its Class B and its Class C shares in accordance with Rule 12b-1 under
the 1940 Act, which provide that it will pay distribution/service fees aggregating up to (but not necessarily all of) 1.00%
per annum of the average daily net assets attributable to the Class B shares under the Class B Distribution Plan and the
Class C shares under the Class C Distribution Plan (see "Distribution Plans" below). After a substantial period of time,
distribution expenses paid under these Plans, together with any CDSC payable upon redemption of Class B shares, may total
more than the maximum sales charge that would have been permissible if imposed entirely as an initial sales charge.
<F4> Absent any fee waiver "Total Operating Expenses" for Class A shares would have been 1.43%.
</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 (b) redemption at
the end of each of the time periods indicated (unless otherwise noted):
<TABLE>
<CAPTION>
PERIOD CLASS A CLASS B CLASS C
------ ------- --------------------- -------
<S> <C> <C> <C> <C>
<F1>
1 year .......................................... $ 60 $ 62 $ 22 $ 21
3 years ......................................... 88 97 67 65
5 years ......................................... 117 135 115 112
10 years ......................................... 200 227<F2> 227<F2> 241
- ----------
<FN>
<F1> Assumes no redemption.
<F2> 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. More complete descriptions of the following Fund
expenses are set forth in the following sections of the Prospectus: (i) varying
sales charges on share purchases -- "Purchases"; (ii) varying CDSCs --
"Purchases"; (iii) management fees -- "Management of the Fund -- 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 a diversified series of the Trust, an open-end management investment
company which was organized as a business trust under the laws of The
Commonwealth of Massachusetts in 1984. The Trust presently consists of 19 series
of shares, each of which represents a portfolio with separate investment
policies. Shares of the Fund are continuously sold to the public and the Fund
buys securities for its portfolio. Three 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 (or a CDSC in the case of certain purchases of $1
million or more) and subject to a Distribution Plan providing for an annual
distribution fee 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 fee 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. Class C shares are
offered at net asset value without an initial sales charge or a CDSC but subject
to a Distribution Plan providing for an annual distribution fee and service fee
which are equal to the Class B annual distribution fee and service fee. Class C
shares do not convert to any other class of shares of the Fund.
The Trust's Board of Trustees provides broad supervision over the affairs of the
Fund. A majority of the Trustees are not affiliated with the Adviser. The
Adviser is responsible for the management of the Fund's assets and the officers
of the Trust are responsible for the Fund's operations. The Adviser manages the
portfolio from day to day in accordance with the Fund's investment objective and
policies. The selection of investments and the way they are managed depend on
the conditions and trends in the economy and the financial marketplaces. The
Fund also offers to buy back (redeem) its shares from its shareholders at any
time at net asset value, less any applicable CDSC.
<PAGE>
3. CONDENSED FINANCIAL INFORMATION
The following per share information has been audited for at least the latest
five fiscal years of the Fund and should be read in conjunction with 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 the Fund's independent auditors, as experts in
accounting and auditing. The Fund's current independent auditors are Deloitte &
Touche LLP.
FINANCIAL HIGHLIGHTS
CLASS A, CLASS B AND CLASS C SHARES
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
YEAR ENDED MARCH 31, NOVEMBER 30, YEAR ENDED MARCH 31, NOVEMBER 30,
1995 1994<F1> 1993<F2> 1995 1994<F1> 1993
---- ----- ------ ---- ----- ----
CLASS A CLASS B
----------------------------------------------------------------------------------------------
PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C> <C>
Net asset value -- beginning
of period .................. $ 8.56 $ 8.99 $ 9.15 $ 8.56 $ 8.99 $ 8.73
------ ------ ------ ------ ------ ------
Income from investment
operations<F4>
--
Net investment income .... $ 0.50 $ 0.15 $ 0.12 $ 0.44 $ 0.14 $ 0.42
Net realized and
unrealized gain (loss)
on investments .......... 0.02 (0.51) (0.16) -- (0.51) 0.42
------ ------ ------ ------ ------ ------
Total from investment
operations ............ $ 0.52 $(0.36) $(0.04) $ 0.44 $(0.37) $ 0.84
------ ------ ------ ------ ------ ------
Less distributions declared
to shareholders --
From net investment income $(0.52) $(0.02) $(0.11) $(0.43) $(0.01) $(0.45)
In excess of net
investment income ....... -- -- (0.01) -- -- (0.03)
From net realized gain on
investments ............. -- (0.01) -- -- (0.01) (0.10)
In excess of net realized
gain on investments ..... -- <F6> (0.04) -- -- (0.04) --
------ ------ ------ ------ ------ ------
Total distributions
declared to
shareholders .......... $(0.52) $(0.07) $(0.12) $(0.43) $(0.06) $(0.58)
------ ------ ------ ------ ------ ------
Net asset value -- end of
period .................... $ 8.56 $ 8.56 $ 8.99 $ 8.57 $ 8.56 $ 8.99
====== ====== ====== ====== ====== ======
TOTAL RETURN<F5> .............. 6.33% (7.90)%<F3> (1.80)%<F3> 5.32% (8.97)%<F3> 9.95%
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA:
Expenses ................. 1.13% 1.07%<F3> 0.76%<F3> 2.16% 2.24% 2.11%
Net investment income .... 6.20% 5.31%<F3> 4.94%<F3> 5.15% 4.74%<F3> 4.92%
PORTFOLIO TURNOVER ......... 25% 9% 30% 25% 9% 30%
NET ASSETS AT END OF PERIOD
(000 OMITTED) ............. $25,270 $5,595 $ 461 $412,965 $479,478 $518,179
<FN>
<F1> For the four-month period ended March 31, 1994.
<F2> For the period from the commencement of offering of Class A shares, September 7, 1993, to November 30, 1993.
<F3> Annualized.
<F4> Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
<F5> Total returns for Class A shares do not include the applicable sales charge. If the charge had been included, the results
would have been lower.
<F6> Distributions in excess of net realized gains were less than $0.01 per share.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
CLASS A, CLASS B AND CLASS C SHARES
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, YEAR ENDED MARCH 31,
1992 1991 1990 1989 1988 1987<F4> 1995 1994<F1>
---- ---- ---- ---- ---- ------- ---- -------
CLASS B CLASS C
----------------------------------------------------------------------- ---------------------------
PER SHARE DATA (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD):
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value --
beginning of period ... $ 8.50 $ 8.25 $ 8.41 $ 8.11 $ 7.67 $ 8.47 $ 8.56 $ 9.07
------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations<F3> --
Net investment income . $ 0.47 $ 0.49 $ 0.49 $ 0.51 $ 0.50 $ 0.38 $ 0.44 $ 0.09
Net realized and
unrealized gain
(loss) on
investments ......... 0.26 0.25 (0.15) 0.30 0.43 (0.83) 0.01 (0.59)
------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations ........ $ 0.73 $ 0.74 $ 0.34 $ 0.81 $ 0.93 $(0.45) $ 0.45 $(0.50)
------ ------ ------ ------ ------ ------ ------ ------
Less distributions
declared to
shareholders --
From net investment
income ............. $(0.48) $(0.49) $(0.50) $(0.51) $(0.49) $(0.35) $(0.44) $(0.01)
In excess of net
investment income .. -- -- -- -- -- -- -- --
From paid-in capital $(0.02) -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Total distributions
declared to
shareholders ..... $(0.50) $(0.49) $(0.50) $(0.51) $(0.49) $(0.35) $(0.44) $(0.01)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value --
end of period ........ $ 8.73 $ 8.50 $ 8.25 $ 8.41 $ 8.11 $ 7.67 $ 8.57 $ 8.56
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN .......... 8.82% 9.21% 4.18% 10.24% 12.53% (5.79)%<F2> 5.39% (19.42)%<F2>
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA:
Expenses ............ 2.03% 2.04% 2.05% 2.07% 2.09% 2.03%<F2> 2.09% 2.18%<F2>
Net investment income 5.50% 5.82% 5.99% 6.09% 6.38% 6.00%<F2> 5.23%<F2> 4.62%<F2>
PORTFOLIO TURNOVER .... 52% 73% 91% 127% 171% 138% 25% 9%
NET ASSETS AT END OF
PERIOD (000 OMITTED) . $449,949 $409,084 $379,239 $343,887 $244,825 $183,935 $10,936 $6,393
<FN>
<F1> For the period from the commencement of offering of Class C shares, January 3, 1994, to March 31, 1994.
<F2> Annualized.
<F3> Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
<F4> For the period from the commencement of investment operations, December 29, 1986, to November 30, 1987.
</TABLE>
4. INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks to provide as high a level of current income exempt from federal
income taxes as is considered consistent with prudent investing and protection
of shareholders' capital. As a matter of fundamental policy, the Fund seeks to
achieve its investment objective by investing primarily (i.e., at least 80% of
its assets under normal circumstances) in debt securities issued by or on behalf
of states, territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies or instrumentalities, the
interest on which is exempt from federal income tax ("Municipal Bonds" or
"tax-exempt securities").
Under normal market conditions, substantially all of the Fund's assets will be
invested in:
(i) tax-exempt securities which are rated AAA, AA or A by Standard &
Poor's Ratings Group ("S&P"), or by Fitch Investors Service, Inc.
("Fitch") or are rated Aaa, Aa or A by Moody's Investors Service,
Inc. ("Moody's");
(ii) notes of issuers having an issue of outstanding Municipal Bonds rated
AAA, AA or A by S&P or by Fitch or Aaa, Aa or A by Moody's or which
are guaranteed by the U.S. Government;
(iii) obligations issued or guaranteed by the U.S. Government or its
agencies, authorities or instrumentalities;
(iv) commercial paper, obligations of banks (including certificates of
deposit, bankers' acceptances and repurchase agreements) with $1
billion or more of assets, and cash; and/or
(v) tax-exempt securities which are not rated or which are rated lower
than the three highest grades of S&P, Fitch or Moody's, provided that
not more than one-third of the total assets of the Fund will be
invested in such securities.
Interest income from the investments described in paragraphs (iii) and (iv)
above may be taxable to shareholders as ordinary income. In addition, the Fund
may purchase municipal obligations the interest on which may be subject to an
alternative minimum tax (for purposes of this Prospectus, the interest thereon
is nonetheless considered to be tax-exempt). For a description of ratings of
S&P, Fitch and Moody's of Municipal Bonds, see Appendix A to this Prospectus.
See Appendix B for a description of U.S. Government obligations and short-term
investments. For a comparison of yields on Municipal Bonds and taxable
securities, see the Taxable Equivalent Yield Table in Appendix C to this
Prospectus. For a chart indicating the composition of the bond portion of the
Fund's portfolio for its fiscal year ended March 31, 1995, with the debt
securities separated into rating categories, see Appendix D to this Prospectus
(see "Investment Objective and Policies -- Risk Factors of Lower Rated
Securities" below for a description of the risks involved in investing in these
lower rated fixed income securities).
Although higher quality tax-exempt securities held by the Fund may produce lower
yields, they are generally more marketable.
The securities in which the Fund may invest also include zero coupon bonds (see
"Investment Techniques -- Zero Coupon Bonds" below) and securities purchased on
a "when-issued" or on a "forward delivery" basis (see "Investment Techniques --
When Issued Securities" below). The Fund may also invest in variable and
floating rate obligations and inverse floating rate obligations (see "Investment
Techniques -- Variable and Floating Rate Obligations" and "-- Inverse Floating
Rate Obligations" below). In addition, the Fund may write covered call and put
options and purchase call and put options, including warrants, on fixed income
securities, primarily for hedging purposes and also in an effort to increase
current income (see "Investment Techniques -- Options" below). The Fund may also
purchase and sell interest rate futures contracts on fixed income securities and
indexes of such securities and may write and purchase options thereon for
hedging purposes and for non-hedging purposes, subject to applicable law (see
"Investment Techniques -- Futures Contracts and Options on Futures Contracts"
below). Gains recognized from options and futures transactions engaged in by the
Fund are taxable income to shareholders.
From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on Municipal Bonds (see "Tax Status" below for the effect of current
federal tax law on this exemption).
There is no formula as to the percentage of assets that may be invested in any
one type of security. Cash, short-term obligations, repurchase agreements or
other forms of debt securities are held to provide a reserve for future
purchases of securities. Subject to tax requirements, 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.
ADDITIONAL INFORMATION AS TO INVESTMENT OBJECTIVE AND POLICIES
FIXED INCOME SECURITIES -- When and if available, the Fund may purchase fixed
income securities at a discount from face value. However, the Fund does not
intend to hold such securities to maturity for the purpose of achieving
potential capital gains, unless current yields on these securities remain
attractive.
CHARACTERISTICS OF MUNICIPAL BONDS -- The Fund may invest its assets in a
relatively high percentage of Municipal Bonds issued by entities having similar
characteristics. The issuers may pay their interest obligations from revenue of
similar projects such as multi-family housing, nursing homes, electric utility
systems, hospitals or life care facilities. This may make the Fund more
susceptible to similar economic, political or regulatory occurrences. As the
similarity in issuers increases, the potential for fluctuation of the net asset
value of the Fund's shares also increases. The Fund will only invest in
securities of issuers which it believes will make timely payments of interest
and principal.
The Fund may invest more than 25% of its assets in industrial revenue bonds
(referred to under current tax law as private activity bonds), and also may
invest more than 25% of its assets in revenue bonds issued for housing,
including multi-family housing, health care facilities or electric utilities, at
times when the relative value of issues of such a type is considered, in the
judgment of the Adviser, to be more favorable than that of other available types
of issues, taking into consideration the particular restrictions on investment
flexibility arising from the investment objective of the Fund of providing
current income exempt from federal income taxes. Therefore, investors should
also be aware of the risks which these investments may entail. Industrial
revenue bonds are issued by various state and local agencies to finance various
projects.
If a revenue bond is secured by payments generated from a project, and the
revenue bond is also secured by a lien on the real estate comprising the
project, foreclosure by the indenture trustee on the lien for the benefit of the
bondholders creates additional risks associated with owning real estate,
including environmental risks.
Housing revenue bonds typically are issued by a state, county or local housing
authority and are secured only by the revenues of mortgages originated by the
authority using the proceeds of the bond issue. Because of the impossibility of
precisely predicting demand for mortgages from the proceeds of such an issue,
there is a risk that the proceeds of the issue will be in excess of demand,
which would result in early retirement of the bonds by the issuer. Moreover,
such housing revenue bonds depend for their repayment upon the cash flow from
the underlying mortgages, which cannot be precisely predicted when the bonds are
issued. Any difference in the actual cash flow from such mortgages from the
assumed cash flow could have an adverse impact upon the ability of the issuer to
make scheduled payments of principal and interest on the bonds, or could result
in early retirement of the bonds. Additionally, such bonds depend in part for
scheduled payments of principal and interest upon reserve funds established from
the proceeds of the bonds, assuming certain rates of return on investment of
such reserve funds. If the assumed rates of return are not realized because of
changes in interest rate levels or for other reasons, the actual cash flow for
scheduled payments of principal and interest on the bonds may be inadequate. The
financing of multi-family housing projects is affected by a variety of factors,
including satisfactory completion of construction within cost constraints, the
achievement and maintainance of a sufficient level of occupancy, sound
management of the developments, timely and adequate increases in rents to cover
increases in operating expenses, including taxes, utility rates and maintenance
costs, changes in applicable laws and governmental regulations and social and
economic trends.
The Fund may invest in municipal lease securities. These are undivided interests
in a portion of an obligation in the form of a lease or installment purchase
which is issued by state and local governments to acquire equipment and
facilities. Municipal leases frequently have special risks not normally
associated with general obligation or revenue bonds. Leases and installment
purchase or conditional sale contracts (which normally provide for title to the
leased asset to pass eventually to the governmental issuer) have evolved as a
means for governmental issuers to acquire property and equipment without meeting
the constitutional and statutory requirements for the issuance of debt. The
debt-issuance limitations are deemed to be inapplicable because of the inclusion
in many leases or contracts of "non-appropriation" clauses that provide that the
governmental issuer has no obligation to make future payments under the lease or
contract unless money is appropriated for such purpose by the appropriate
legislative body on a yearly or other periodic basis. Although the obligations
will be secured by the leased equipment or facilities, the disposition of the
property in the event of non-appropriation or foreclosure might, in some cases,
prove difficult. In light of these concerns, the Fund has adopted and follows
procedures for determining whether municipal lease securities purchased by the
Fund are illiquid and thus subject to the Fund's limitation on investing not
more than 15% of its net assets in illiquid investments, or liquid and thus not
subject to such limitation. The procedures require that a number of factors be
used in evaluating the liquidity of a municipal lease security, including the
frequency of trades and quotes for the security, the number of dealers willing
to purchase or sell the security and the number of other potential purchasers,
the willingness of dealers to undertake to make a market in the security, the
nature of the marketplace in which the security trades, the credit quality of
the security and other factors which the Adviser may deem relevant. There are,
of course, variations in the security of municipal lease securities, both within
a particular classification and between classifications, depending on numerous
factors.
Electric utilities face problems in financing large construction programs in an
inflationary period, cost increases and delay occasioned by environmental
considerations (particularly with respect to nuclear facilities), difficulty in
obtaining fuel at reasonable prices, the cost of competing fuel sources,
difficulty in obtaining sufficient rate increases and other regulatory problems,
the effect of energy conservation and difficulty of the capital market to absorb
utility debt.
Health care facilities include life care facilities, nursing homes and
hospitals. Life care facilities are alternative forms of long-term housing for
the elderly which offer residents the independence of condominium life style
and, if needed, the comprehensive care of nursing home services. Bonds to
finance these facilities have been issued by various state industrial
development authorities. Since the bonds are secured only by the revenues of
each facility and not by state or local government tax payments, they are
subject to a wide variety of risks. Primarily, the projects must maintain
adequate occupancy levels to be able to provide revenues adequate to maintain
debt service payments. Moreover, in the case of life care facilities, since a
portion of housing, medical care and other services may be financed by an
initial deposit, there may be risk if the facility does not maintain adequate
financial reserves to secure estimated actuarial liabilities. The ability of
management to accurately forecast inflationary cost pressures weighs importantly
in this process. The facilities may also be affected by regulatory cost
restrictions applied to health care delivery in general, particularly state
regulations or changes in Medicare and Medicaid payments or qualifications, or
restrictions imposed by medical insurance companies. They may also face
competition from alternative health care or conventional housing facilities in
the private or public sector. Hospital bond ratings are often based on
feasibility studies which contain projections of expenses, revenues and
occupancy levels. A hospital's gross receipts and net income available to
service its debt are influenced by demand for hospital services, the ability of
the hospital to provide the services required, management capabilities, economic
developments in the service area, efforts by insurers and government agencies to
limit rates and expenses, confidence in the hospital, service area economic
developments, competition, availability and expense of malpractice insurance,
Medicaid and Medicare funding, and possible federal legislation limiting the
rates of increase of hospital charges.
The Fund may also invest in bonds for industrial and other projects, such as
sewage or solid waste disposal or hazardous waste treatment facilities.
Financing for such projects will be subject to inflation and other general
economic factors as well as construction risks including labor problems,
difficulties with construction sites and the ability of contractors to meet
specifications in a timely manner. Because some of the materials, processes and
wastes involved in these projects may include hazardous components, there are
risks associated with their production, handling and disposal.
RESTRICTED SECURITIES -- The Fund may also purchase securities that are not
registered under the Securities Act of 1933 (the "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 Trust's Board of Trustees determines, based upon a continuing
review of the trading markets for a specific Rule 144A security, whether such
security is liquid and thus not subject to the Fund's limitations on investing
not more than 15% of its net assets in illiquid investments. 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 decreasing the level of liquidity in a 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 presents
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,
judgment may at times play a greater role in valuing these securities than in
the case of unrestricted securities.
RISK FACTORS REGARDING LOWER RATED SECURITIES -- The Fund may invest to a
limited extent in lower rated fixed income securities or comparable unrated
securities. Investments in fixed income securities offering the high current
income sought by the Fund, while generally providing greater income and
opportunity for gain than investments in higher rated securities, usually entail
greater risk of principal and income (including the possibility of default or
bankruptcy of the issuers of such securities), and involve greater volatility of
price (especially during periods of economic uncertainty or change) than
investments in higher rated securities and because yields may vary over time, no
specified level of income can ever be assured. In particular, securities rated
lower than Baa by Moody's or BBB by S&P or Fitch or comparable unrated
securities (commonly known as "junk bonds") are considered speculative. These
lower rated high yielding fixed income securities generally tend to reflect
economic changes (and the outlook for economic growth), short-term corporate and
industry developments and the market's perception of their credit quality
(especially during times of adverse publicity) to a greater extent than higher
rated securities which react primarily to fluctuations in the general level of
interest rates (although these lower rated fixed income securities are also
affected by changes in interest rates). In the past, economic downturns or an
increase in interest rates have under certain circumstances caused a higher
incidence of default by the issuers of these securities and may do so in the
future, especially in the case of highly leveraged issuers. During certain
periods, the higher yields on the Fund's lower rated high yielding fixed income
securities are paid primarily because of the increased risk of loss of principal
and income, arising from such factors as the heightened possibility of default
or bankruptcy of the issuers of such securities. Due to the fixed income
payments of these securities, the Fund may continue to earn the same level of
interest income while its net asset value declines due to portfolio losses,
which could result in an increase in the Fund's yield despite the actual loss of
principal. The prices for these securities may be affected by legislative and
regulatory developments. Changes in the value of securities subsequent to their
acquisition will not affect cash income or yield to maturity to the Fund but
will be reflected in the net asset value of shares of the Fund. The market for
these lower rated fixed income securities may be less liquid than the market for
investment grade fixed income securities. Furthermore, the liquidity of these
lower rated securities may be affected by the market's perception of their
credit quality. Therefore, the Adviser's judgment may at times play a greater
role in valuing these securities than in the case of investment grade fixed
income securities, and it also may be more difficult during times of certain
adverse market conditions to sell these lower rated securities at their fair
value to meet redemption requests or to respond to changes in the market. No
minimum rating standard is required by the Fund. To the extent the Fund invests
in these lower rated fixed income securities, the achievement of its investment
objective may be more dependent on the Adviser's own credit analysis than in the
case of a fund investing in higher quality bonds. While the Adviser may refer to
ratings issued by established credit rating agencies, it is not a policy of the
Fund to rely exclusively on ratings issued by these agencies, but rather to
supplement such ratings with the Adviser's own independent and ongoing review of
credit quality.
The Fund may also invest in fixed income securities rated Baa by Moody's or BBB
by S&P or Fitch and comparable unrated securities. These securities, while
normally exhibiting adequate protection parameters, may have speculative
characteristics and changes in economic conditions and other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher grade fixed income securities.
ADDITIONAL RISK FACTORS -- The net asset value of the shares of an open-end
investment company which may invest in fixed income securities changes as the
general levels of interest rates fluctuate. When interest rates decline, the
value of a fixed income portfolio can be expected to rise. Conversely, when
interest rates rise, the value of a fixed income portfolio can be expected to
decline.
Although changes in the value of securities subsequent to their acquisition are
reflected in the net asset value of shares of the Fund, such changes will not
affect the income received by the Fund from such securities. However, the
dividends paid by the Fund, if any, will increase or decrease in relation to the
income received by the Fund from its investments, which would in any case be
reduced by the Fund's expenses before it is distributed to shareholders.
In addition, the use of options, futures contracts and options on futures
contracts (see "Investment Techniques" below) may result in the loss of
principal, particularly where such instruments are traded for other than hedging
purposes (e.g., to enhance current yield).
SHORT-TERM INVESTMENTS FOR DEFENSIVE PURPOSES -- During periods of unusual
market conditions when the Adviser believes that investing for defensive
purposes is appropriate, or in order to meet anticipated redemption requests, up
to 50% of the assets of the Fund may be invested in cash or cash equivalents
including, but not limited to, obligations of banks (including certificates of
deposit, bankers' acceptances and repurchase agreements) with assets of $1
billion or more, commercial paper, short-term notes, obligations issued or
guaranteed by the U.S. Government or any of its agencies, authorities or
instrumentalities and related repurchase agreements. U.S. Government securities
also include interests in trusts or other entities representing interests in
obligations that are issued or guaranteed by the U.S. Government, its agencies,
authorities or instrumentalities. See Appendix B to this Prospectus for a
description of U.S. Government obligations and certain short-term investments.
5. INVESTMENT TECHNIQUES
LENDING OF SECURITIES: The Fund may make loans of its portfolio securities. Such
loans will usually be made only to member banks of the Federal Reserve System
and member firms (and subsidiaries thereof) of the New York Stock Exchange (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 continue to collect the equivalent of the interest on the
securities loaned and would also receive either interest (through investment of
cash collateral) or a fee (if the collateral is U S. Government securities). For
additional information, see the Statement of Additional Information.
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 them 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 which are intended to minimize any such
risk.
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 obligations will
be delivered to the Fund at a future date usually beyond customary settlement
time. It is expected that, under normal circumstances, the Fund will take
delivery of such securities. In general, the Fund does not pay for the
securities until received and does not start earning interest on the obligations
until the contractual settlement date. While awaiting delivery of the
obligations purchased on such bases, the Fund will establish a segregated
account consisting of cash, short-term money market instruments or high quality
debt securities equal to the amount of the commitments to purchase "when-issued"
securities. For additional information, see the Statement of Additional
Information.
ZERO COUPON BONDS: The Fund may invest in zero coupon bonds. Zero coupon bonds
are debt obligations which are issued or purchased at a significant discount
from face value. The discount approximates the total amount of interest the
bonds will accrue and compound over the period until maturity or the first
interest payment date at a rate of interest reflecting the market rate of the
security at the time of issuance. Zero coupon bonds do not require the periodic
payment of interest. Such investments benefit the issuer by mitigating its need
for cash to meet debt service, but also require a higher rate of return to
attract investors who are willing to defer receipt of such cash. Such
investments may experience greater volatility in market value due to changes in
interest rates than debt obligations which make regular payments of interest.
The Fund will accrue income on such investments for tax and accounting purposes,
as required, which is distributable to shareholders and which, because no cash
is received at the time of accrual, may require the liquidation of other
portfolio securities to satisfy the Fund's distribution obligations.
VARIABLE AND FLOATING RATE OBLIGATIONS: The Fund may invest in variable and
floating rate obligations. The interest rates payable on certain securities in
which the Fund may invest are not fixed and may fluctuate based upon changes in
market rates. Variable rate obligations have an interest rate which is adjusted
at predesignated periods and interest on floating rate obligations is adjusted
whenever there is a change in the market rate of interest on which the interest
rate payable is based. For additional information concerning variable and
floating rate obligations, see the Statement of Additional Information.
INVERSE FLOATING RATE OBLIGATIONS: The Fund may invest in so called "inverse
floating rate obligations" or "residual interest" bonds, or other obligations or
certificates relating thereto structured to have similar features. Such
obligations generally have floating or variable interest rates that move in the
opposite direction of short-term interest rates and generally increase or
decrease in value in response to changes in short-term interest rates at a rate
which is a multiple (typically two) of the rate at which fixed-rate long-term
tax-exempt securities increase or decrease in response to such changes. As a
result, such obligations have the effect of providing investment leverage and
may be more volatile than long-term fixed-rate tax-exempt obligations. For
additional information, see the Statement of Additional Information.
INDEXED SECURITIES: The Fund may invest in indexed securities whose value is
linked to foreign currencies, interest rates, commodities, indices or other
financial indicators. Most indexed securities are short-term to intermediate-
term fixed-income securities whose values at maturity or interest rates rise or
fall according to the change in one or more specified underlying instruments.
Indexed securities may be positively or negatively indexed (i.e., their value
may increase or decrease if the underlying instrument appreciates), and may have
return characteristics similar to direct investments in the underlying
instrument or to one or more options on the underlying instrument. Indexed
securities may be more volatile than the underlying instrument itself.
TRANSACTIONS IN OPTIONS AND FUTURES: The Fund may enter into transactions in
options and futures on a variety of instruments and indexes, in order to protect
against declines in the value of portfolio securities or increases in the cost
of securities or other assets to be acquired and, subject to applicable law, to
increase the Fund's gross income. The types of instruments to be purchased and
sold by the Fund are described in the Statement of Additional Information, which
should be read in conjunction with the following section. In addition, the
Statement of Additional Information contains a further discussion of the nature
of the transactions which may be entered into and the risks associated
therewith.
OPTIONS
OPTIONS ON SECURITIES -- The Fund may write (sell) covered call and put options
and purchase call and put options on fixed income securities. The Fund will
write options on such securities for the purpose of increasing its return on
such securities and/or protect the values 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 the portfolio
security underlying the option, or the increased cost of portfolio securities to
be acquired. In contrast, however, if the price of the underlying security moves
adversely to the Fund's position, the option may be exercised and the Fund will
be required to purchase or sell the underlying security at a disadvantageous
price, 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.
By writing a call option on a security, the Fund limits its opportunity to
profit from any increase in the market value of the underlying security, since
the holder will usually exercise the call option when the market value of the
underlying security exceeds the exercise price of the call. However, the Fund
retains the risk of depreciation in value of securities on which it has written
call options.
The Fund may also purchase put or call options in anticipation of market
fluctuations which may adversely affect the value of its portfolio or the prices
of securities that the Fund wants to purchase at a later date. In the event that
the expected market fluctuations 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 premium paid for a put or call option plus any
transaction costs will reduce the benefit, if any, realized by the Fund upon
exercise or liquidation of the option, and, unless the price of the underlying
security changes sufficiently, the option may expire without value to the Fund.
In addition, the Fund may purchase warrants on fixed income securities. A
warrant on a fixed income security is a long-dated call option conveying to the
holder of the warrant the right, but not the obligation, to purchase a fixed
income security of a specific description from the issuer on a certain date or
dates (the exercise date) at a fixed exercise price.
In certain instances, the Fund may enter into options on Treasury securities
which may be referred to as "reset" options or "adjustable strike" options.
These options provide for periodic adjustment of the strike price and may also
provide for the periodic adjustment of the premium during the term of the
option.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
FUTURES CONTRACTS -- The Fund may enter into interest rate futures contracts on
fixed income securities and indexes of such securities. (Unless otherwise
specified, such futures contracts are referred to as "Futures Contracts.") The
Fund will utilize Futures Contracts for hedging and non-hedging purposes,
subject to applicable law. Purchases or sales of Futures Contracts for hedging
purposes are used to hedge against the effects of interest rate changes on the
Fund's current or intended investment in fixed income securities. In the event
that an anticipated decrease in the value of portfolio securities occurs as a
result of a general increase in interest rates, the adverse effects of such
changes may be offset, in whole or part, by gains on the sale of Futures
Contracts. Conversely, the increased cost of portfolio securities to be
acquired, caused by a general decline in interest rates, may be offset, in whole
or part, by gains on Futures Contracts purchased by the Fund. The Fund will
incur brokerage fees when it purchases and sells Futures Contracts, and it will
be required to make and maintain margin deposits.
OPTIONS ON FUTURES CONTRACTS -- The Fund may purchase and write options on
Futures Contracts. (Unless otherwise specified, options on Futures Contracts are
referred to as "Options on Futures Contracts.") Such investment strategies will
be used for hedging and non-hedging purposes, subject to applicable law. Put and
call Options on Futures Contracts may be traded by the Fund 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 portfolio of the Fund 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. The writing of such
options, 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.
RISKS OF TRANSACTIONS IN FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS AND
OPTIONS: Although the Fund may enter into certain transactions in Futures
Contracts, Options on Futures Contracts and options for hedging purposes, such
transactions do involve certain risks. For example, a lack of correlation
between the 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. "Cross hedging"
transactions may involve greater correlation risks. 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. As noted, the Fund may also enter into
Futures Contracts, Options on Futures Contracts and options for other than
hedging purposes (subject to applicable law), including speculative
transactions, which involve greater risk. In particular, in entering into such
transactions, the Fund may experience losses which are not offset by gains on
other portfolio positions, thereby reducing its gross income. In addition, the
markets for such instruments may be extremely volatile from time to time, as
discussed in the Statement of Additional Information, which could increase the
risks incurred by the Fund in entering into such transactions.
Transactions in options may be entered into on U.S. exchanges regulated by the
SEC and in the over-the-counter market. Futures Contracts and Options on Futures
Contracts may be entered into on U.S. exchanges regulated by the Commodity
Futures Trading Commission (the "CFTC"). The risks related to transactions in
options, Futures Contracts, Options on Futures Contracts and Forward Contracts
entered into by the Fund are set forth in greater detail in the Statement of
Additional Information, which should be reviewed in conjunction with the
foregoing discussion.
PORTFOLIO TRADING
The Fund intends to manage its portfolio by buying and selling securities to
help attain its investment objective. This may result in increases or decreases
in the Fund's current income available for distribution to the Fund's
shareholders and in the holding by the Fund of debt securities which sell at
moderate to substantial premiums or discounts from face value. The Fund will
engage in portfolio trading if it believes a transaction, net of costs
(including custodian charges), will help in attaining its investment objective
(see "Portfolio Transactions and Brokerage Commissions" in the Statement of
Additional Information).
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 other investment company 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 trading, see the Statement
of Additional Information.
----------------
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 be changed without
shareholder approval unless indicated otherwise (see "Investment Restrictions"
in the Statement of Additional Information). 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.
6. MANAGEMENT OF THE FUND
Investment Adviser -- MFS manages the Fund pursuant to an Investment Advisory
Agreement dated September 1, 1993 (the "Advisory Agreement"). The Adviser
provides the Fund with overall investment advisory and administrative services,
as well as general office facilities. David B. Smith, an Assistant Vice
President of the Trust and a Vice President of the Adviser, is the Fund's
portfolio manager. Mr. Smith became the portfolio manager of the Fund in April,
1993. Mr. Smith joined the Adviser in 1988 as a Senior Treasury Analyst. Subject
to such policies as the Trustees may determine, the Adviser makes investment
decisions for the Fund. For its services and facilities, the Adviser receives a
management fee, computed and paid monthly, in an amount equal to 0.30% of the
Fund's average daily net assets plus 6.43% of its gross income for its
then-current fiscal year.
For the year ended March 31, 1995, the investment advisory fees received under
the Advisory Agreement were $3,545,246 (of which $1,390,697 was based on average
daily net assets and $2,154,549 on gross income), equal to, on an annualized
basis, 0.77% 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
Institutional Trust, MFS Variable Insurance Trust, MFS Union Standard Trust,
MFS/Sun Life Series Trust, Sun Growth Variable Annuity Fund, Inc. 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 various 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 the MFS organization were
approximately $37.2 billion on behalf of approximately 1.7 million investor
accounts as of June 30, 1995. As of such date, the MFS organization managed
approximately $13.8 billion of assets invested in equity securities and
approximately $19.6 billion of assets invested in fixed income securities.
Approximately $3.0 billion of the assets managed by MFS are invested in
securities of foreign issuers and non-U.S. dollar denominated securities of U.S.
issuers. 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 D. McNeil and John R. Gardner. Mr. Brodkin is the Chairman, Mr.
Shames is the President 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 and
President of the Trust. Cynthia M. Brown, Robert A. Dennis, David R. King,
Geoffrey L. Schechter, David B. Smith, 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 Trust.
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.
7. 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.
The Fund offers three 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<F1> 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 $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<F2>
- ------------
<FN>
<F1> Because of rounding in the calculation of offering price, actual sales charges may be more or less than those calculated
using the percentages above.
<F2> A CDSC may apply in certain circumstances. MFD will pay a commission on purchases of $1 million or more.
</TABLE>
No sales charge is payable at the time of purchase of Class A shares on
investments of $1 million or more. However, a CDSC shall 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 that 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 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 4% 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 be reduced is set forth in the Statement of Additional Information.
In addition, MFD will pay a commission 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 be sold at their net asset value to the officers
of the Trust, 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 trust, 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 the 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 and their spouses, or to any
trust, pension, profit-sharing or other retirement plan for the sole benefit of
such employee or representative, and to clients of 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 redemption 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 may be
sold at their 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 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 his or her 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 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 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 a percentage of the lesser of the original
purchase price or redemption proceeds as follows:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
-------------- ---------------
First ...................................................... 4%
Second ..................................................... 4%
Third ...................................................... 3%
Fourth ..................................................... 3%
Fifth ...................................................... 2%
Sixth ...................................................... 1%
Seventh and following ...................................... 0%
For Class B shares purchased prior to January 1, 1993, the Fund imposes a CDSC
as a percentage of the lesser of the original purchase price or redemption
proceeds as follows:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
-------------- --------------
First ...................................................... 6%
Second ..................................................... 5%
Third ...................................................... 4%
Fourth ..................................................... 3%
Fifth ...................................................... 2%
Sixth ...................................................... 1%
Seventh and following ...................................... 0%
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.
WAIVER OF 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 section 401(a), 401(k) 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 qualified under section 401(a) of the Code (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
of the Fund will also be waived upon redemptions by: (i) officers of the Trust,
(ii) any of the subsidiary companies of Sun Life, (iii) eligible Directors,
officers, employees (including retired and former 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 which
has a dealer agreement with MFD, by certain family members of any such employee
or representative and his or her spouse, by any trust, pension, profit-sharing
or other retirement plan for the sole benefit of such employee or
representative, and by clients of 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 any Class A shares) 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 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 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 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. 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 that remain outstanding
for approximately eight years will convert to Class A shares of the Fund. 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
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 conversion will not
constitute a taxable event for federal tax purposes. There can be no assurance
that such 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.
CLASS C SHARES: Class C shares are offered at net asset value without an initial
sales charge or a CDSC. Class C shares do not convert to any other class of
shares of the Fund. The maximum investment in Class C shares that may be made is
$5,000,000 per transaction.
Class C shares are not currently available for purchase by any retirement plan
qualified under section 401(a) or 403(b) of the Code if the retirement plan
and/or the sponsoring organization subscribe to the MFS FUNDamental 401(k) Plan
or another similar 401(a) or 403(b) recordkeeping program made available by MFS
Service Center, Inc.
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.
Although all MFS Funds are generally available as an investment choice for
tax-deferred retirement programs such as an IRA, municipal bond funds, such as
the Fund, may not be suitable for inclusion in such programs due to their
tax-exempt nature. A shareholder should consult his or her financial or tax
adviser regarding any such investment. Any minimums may be changed at any time
at the discretion of MFD. The Fund reserves the right to cease offering its
shares for sale 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
recordkeeping 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, Class B and Class C shares. From
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 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. From time to
time, MFD may make expense reimbursements for special training of a dealer's
registered representatives in group meetings or to help pay the expenses of
sales contests. 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. 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 for shares of the same class of any of the
other MFS Funds (if available for sale) at net asset value. In addition, Class C
shares may be exchanged for shares of the MFS Money Market Fund at net asset
value. 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 MFS Service Center, Inc.) or all the
shares in the account. If the 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" below. 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 fluctuate,
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 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 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 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 a 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 instructions 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" will 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 by the Shareholder Servicing Agent in "good order," 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 the
Exchange is restricted or to the extent otherwise permitted by the 1940 Act if
an emergency exists.
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
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 ON THE SAME DAY
BEFORE MFD CLOSES FOR BUSINESS, THE SHAREHOLDER WILL RECEIVE THE NET ASSET VALUE
CALCULATED ON THAT DAY.
D. REDEMPTION BY CHECK -- Only Class A and Class C shares may be redeemed by
check. A shareholder owning Class A or Class C shares of the Fund may elect to
have a special account with State Street Bank and Trust Company (the "Bank") for
the purpose of redeeming Class A or Class C shares from his or her account by
check. The Bank will provide each Class A and Class C shareholder, upon request,
with forms of checks drawn on the Bank. Only shareholders having accounts in
which no share certificates have been issued will be permitted to redeem shares
by check. Checks may be made payable in any amount not less than $500.
Shareholders wishing to avail themselves of this redemption by check privilege
should so request on their Account Application, must execute signature cards
(for additional information, see the Account Application) with signature
guaranteed in the manner set forth under the caption "Signature Guarantee"
below, and must return any Class A and/or Class C share certificates issued to
them. Additional documentation will be required from corporations, partnerships,
fiduciaries or other such institutional investors. All checks must be signed by
the shareholder(s) of record exactly as the account is registered before the
Bank will honor them. The shareholders of joint accounts may authorize each
shareholder to redeem by check. The check may not draw on monthly dividends
which have been declared but not distributed. SHAREHOLDERS WHO PURCHASE CLASS A
OR CLASS C SHARES BY CHECK (INCLUDING CERTIFIED CHECKS OR CASHIER'S CHECKS) MAY
WRITE CHECKS AGAINST THOSE SHARES ONLY AFTER THEY HAVE BEEN ON THE FUND'S BOOKS
FOR 15 DAYS. WHEN SUCH A CHECK IS PRESENTED TO THE BANK FOR PAYMENT, A
SUFFICIENT NUMBER OF FULL AND FRACTIONAL SHARES WILL BE REDEEMED TO COVER THE
AMOUNT OF THE CHECK, ANY APPLICABLE CDSC (IN THE CASE OF CLASS A SHARES) AND THE
AMOUNT OF ANY INCOME TAX REQUIRED TO BE WITHHELD. IF THE AMOUNT OF THE CHECK
PLUS ANY APPLICABLE CDSC AND THE AMOUNT OF ANY INCOME TAX REQUIRED TO BE
WITHHELD IS GREATER THAN THE VALUE OF THE CLASS A OR CLASS C SHARES HELD IN THE
SHAREHOLDER'S ACCOUNT, THE CHECK WILL BE RETURNED UNPAID, AND THE SHAREHOLDER
MAY BE SUBJECT TO EXTRA CHARGES. TO AVOID DISHONOR OF CHECKS DUE TO FLUCTUATION
IN ACCOUNT VALUE, SHAREHOLDERS ARE ADVISED AGAINST REDEEMING ALL OR MOST OF
THEIR ACCOUNT BY CHECK. Checks should not be used to close a Fund account
because when the check is written, the shareholder will not know the exact total
value of the account on the day the check clears. There is presently no charge
to the shareholder for the maintenance of this special account or for the
clearance of any checks, but the Fund and the Bank reserve the right to impose
such charges or to modify or terminate the redemption by check privilege at any
time.
SIGNATURE GUARANTEE: In order to protect shareholders against fraud to the
greatest extent possible, 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.
GENERAL: Shareholders of the Fund 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 such fund are available for sale) at net asset value
(with a credit for any CDSC paid) 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 securities
(instead of cash) from the Fund's portfolio. The 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 and 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.
CONTINGENT DEFERRED SALES CHARGE -- Investments ("Direct Purchases") in Class A
and Class B shares 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 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 made
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, Class B and
Class C 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% per annum of the average daily net assets attributable
to Class A shares in order that MFD may pay expenses on behalf of the Fund
related to the distribution and servicing of 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
Fund's average daily net assets attributable to Class A shares that are owned by
investors for whom such 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. MFD will 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 Trust. MFD, however, is currently waiving this 0.10% per annum distribution
fee, but may terminate this waiver and commence receiving this fee at any time
in its discretion without notice to shareholders. 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 a 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 may 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 such 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 relating
to Class B shares (see "Redemptions and Repurchases"), which do not reduce the
distribution fee. MFD will pay commissions to dealers of 3.75% of the purchase
price of 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 a 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 13th month following
the purchase. 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 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 to 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 agreements with MFD will receive agency transaction and service fees
that are the same as commissions and service fees to dealers.
CLASS C DISTRIBUTION PLAN. The Class C Distribution Plan provides that the Fund
will pay MFD a distribution fee of up to 0.75% per annum of the Fund's average
daily net assets attributable to Class C 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 C shares (which MFD in turn pays 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 daily
net assets attributable to Class C Shares owned by investors for whom that
securities dealer is the holder or dealer of record). The distribution/service
fees attributable to Class C shares are designed to permit an investor to
purchase such shares through a broker-dealer without the assessment of an
initial sales charge or a CDSC while allowing MFD to compensate broker-dealers
in connection with the sale of such shares.
The service fee is intended to be additional consideration for all personal
services and/or account maintenance services rendered with respect to Class C
shares. MFD or its affiliates are entitled to retain all service fees payable
under the Class C Distribution Plan with respect to accounts for which there is
no dealer of record 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 to MFD under the Class C
Distribution Plan is to compensate MFD for its distribution services to the
Fund. Distribution payments under the Plan will be used by MFD to pay securities
dealers a distribution fee in an amount equal on an annual basis to 0.75% of the
Fund's average daily net assets attributable to Class C shares owned by
investors for whom that securities dealer is the holder or dealer of record.
(Therefore, the total amount of distribution/service fees paid to a dealer on an
annual basis is 1.00% of the Fund's average daily net assets attributable to
Class C shares owned by investors for whom the securities dealer is the holder
or dealer of record.) MFD also pays 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 compensation of personnel and all costs of travel,
office expense and equipment. 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. Certain
banks and other financial institutions that have agency agreements with MFD will
receive agency transaction and service fees that are the same as distribution
and service fees to dealers. Fees payable under the Class C Distribution Plan
are charged to, and therefore reduce, income allocated to Class C shares.
DISTRIBUTIONS
The Fund intends to declare daily and pay to its shareholders substantially all
of its net investment income as dividends on a monthly basis. Dividends
generally are distributed on the first business day of the following month. The
Fund may make one or more distributions during the calendar year to its
shareholders from 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 paid. See "Tax Status" and "Shareholder Services --
Distribution Options" below. 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. Distributions paid by the Fund
with respect to Class A shares will generally be greater than those paid with
respect to Class B and Class C shares because expenses attributable to Class B
and Class C shares will generally be higher.
TAX STATUS
The Fund is treated as an entity separate from the other series of the Trust for
federal income tax purposes. 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.
The Fund expects that the dividends paid to shareholders from interest on
Municipal Obligations will be exempt from federal income tax because the Fund
intends to satisfy certain requirements of the Code. One such requirement is
that at the close of each quarter of its taxable year, at least 50% of the value
of the Fund's total assets consist of obligations whose interest is exempt from
federal income tax. Distributions of income from capital gains, from investments
in taxable securities, and from certain other transactions (including options
and futures transactions) will be taxable to the shareholders, whether
distributed in cash or in additional shares. Also, certain Fund distributions
may be subject to state and local income taxes, depending on the nature of the
distribution and the residence of the shareholder. Residents of certain states
may be subject to an intangibles tax or a personal property tax on all or a
portion of the value of their Fund shares. Investors should consult with their
tax advisers in this regard.
Interest on indebtedness incurred by shareholders to purchase or carry shares of
the Fund will not be deductible for federal income tax purposes. Exempt-
interest dividends are taken into account in calculating the amount of social
security and railroad retirement benefits that may be subject to federal income
tax. Certain distributions of exempt-interest dividends may also be a tax
preference item for purposes of the federal individual and corporate alternative
minimum tax. All exempt-interest dividends may increase a corporate
shareholder's alternative minimum tax liability. Entities or persons who are
"substantial users" (or persons related to "substantial users") of the
facilities financed by certain private activity bonds should consult their tax
advisers before purchasing shares of the Fund.
Shortly after the end of each calendar year, each shareholder will be sent a
statement setting forth the federal income tax status of all dividends and
distributions for that calendar year, including the portion, if any, taxable as
ordinary income, the portion, if any, 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), the portion exempt from federal income
taxes as "exempt-interest dividends," the portion, if any, that is a tax
preference item under the federal alternative minimum tax, and the amount, if
any, of federal income tax withheld.
Fund distributions of net capital gains and net short-term capital gains will
reduce the Fund's net asset value per share. Shareholders who buy shares shortly
before the Fund makes a distribution of net capital gains or net short-term
capital gains 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 taxable
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 treaty.
The Fund is also required in certain circumstances to apply backup withholding
at a rate 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 been subject to
30% withholding. 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 shares of the Fund is determined
each day during which the Exchange is open for trading. This determination is
made once 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 Fund's assets attributable to the class and dividing the difference by
the number of shares of the class outstanding. Assets in the Fund's portfolio
are valued on the basis of their current values or otherwise at their fair
values, as described in the Statement of Additional Information. The net asset
value 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.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund has three classes of shares, entitled Class A, Class B and Class C
Shares of Beneficial Interest (without par value). The Trust presently has 19
series of shares and 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 shares 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 its class of
shares, but will otherwise vote together with all other classes of shares of the
series on all other matters. The Trust does not intend to hold annual
shareholder meetings. The 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
that Fund with each other class share, subject to the liabilities of that class.
Shares have no pre-emptive or conversion rights (except as set forth above 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 Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a business 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 (e.g., fidelity bonding and errors and omissions insurance)
existed and the Trust itself was unable to meet its obligations.
PERFORMANCE INFORMATION
From time to time, the Fund will provide yield, tax-equivalent yield, current
distribution rate and 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 the Lipper Analytical Services, Inc. and Wiesenberger
Investment Companies Service. Any yield and tax-equivalent yield quotations are
based on the annualized net investment income per share of each class over a
30-day period stated as a percent of the maximum public offering price on the
last day of that period. The yield calculation for Class B shares assumes no
CDSC is paid. The current distribution rate for each class is generally based
upon the total amount of dividends per share paid by the Fund to shareholders of
that class during the past 12 months and is computed by dividing the amount of
such dividends by the maximum public offering price of that class at the end of
such period. Current distribution rate calculations for Class B shares assume no
CDSC is paid. The current distribution rate differs from the yield calculation
because it may include distributions to shareholders from sources other than
dividends and interest, such as premium income from option writing, short-term
capital gains, and return of invested capital, and is calculated over a
different period of time. Total rate of return quotations reflect the average
annual percentage change over stated periods in the value of an investment in a
class of shares 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 (and reinvested dividends for
periods prior to October 1, 1989) due to the sales charge or the deduction of a
CDSC, and which will thus be higher. All performance quotations are based on
historical performance and are not intended to indicate future performance.
Yield and tax-equivalent yield reflect only net portfolio income allocable to a
class as of a stated time and current distribution rate reflects only the rate
of distributions paid by the Fund over a stated period of time, while total rate
of return reflects all components of investment return over a stated period of
time. 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 yield, tax-equivalent yield,
current distribution rate and total rate of return, see the Statement of
Additional Information. For further information about the Fund's performance for
the fiscal year ended March 31, 1995, please see the Fund's Annual Report. A
copy of the Annual Report may be obtained 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.
8. 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 reportable dividends and distributions for that year (see "Tax
Status").
DISTRIBUTION OPTIONS -- The following options are available to all accounts
(except Systematic Withdrawal Plan accounts described below) 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 last business day of the month. 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 in a sufficient amount of time before the
payment 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
$100,000 or more of Class A shares of the Fund alone or in combination with
Class B or Class C shares of the Fund or any of the classes of other MFS Funds
or MFS Fixed Fund (a bank collective investment 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 any classes of shares 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
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 SWP redemptions 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 exchange their shares for the same class of shares of
the other MFS Funds (and, in the case of Class C shares, for shares of MFS Money
Market Fund) under 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. 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 and 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 -- Except as noted under "Purchases--Class C
Shares," 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 other corporate 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 August 1, 1995 contains
more detailed information about the Trust and the Fund, including information
related to (i) investment policies and restrictions, including the purchase and
sale of options, Futures Contracts and Options on Futures Contracts, (ii) the
Trustees, officers and investment adviser, (iii) portfolio trading, (iv) the
Fund's shares, including rights and liabilities of shareholders, (v) tax status
of dividends and distributions, (vi) the Class A, Class B and Class C
Distribution Plans, (vii) the method used to calculate performance quotations
and (viii) various services and privileges provided by the Fund for the benefit
of its shareholders, including additional information with respect to the
exchange privilege.
<PAGE>
APPENDIX A
DESCRIPTION OF BOND RATINGS
The ratings of Moody's, S&P and Fitch represent their opinions as to the quality
of various debt instruments. It should be emphasized, however, that ratings are
not absolute standards of quality. Consequently, debt instruments with the same
maturity, coupon and rating may have different yields while debt instruments of
the same maturity and coupon with different ratings may have the same yield.
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or their may be other elements present
which make the long-term risk appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has
been suspended or withdrawn, it may be for reasons unrelated to the quality of
the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or
issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
STANDARD & POOR'S RATINGS GROUP
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity
to pay interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated categories.
BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The BB rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BBB- rating.
B: Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied BB or BB- rating.
CCC: Debt rated CCC has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In
the event of adverse business, financial, or economic conditions, it is not
likely to have the capacity to pay interest and repay principal. The CCC
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied B or B- rating.
CC: The rating CC is typically applied to debt subordinated to senior
debt that is assigned an actual or implied CCC rating.
C: The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may be
used to cover a situation where a bankruptcy petition has been filed, but
debt service payments are continued.
CI: The rating CI is reserved for income bonds on which no interest is
being paid.
D: Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date due
even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The D rating also
will be used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not
rate a particular type of obligation as a matter of policy.
FITCH INVESTORS SERVICE, INC.
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeble
events.
AA: Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated AAA. Because bonds rated in the
AAA and AA categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated F-1+.
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings
of these bonds will fall below investment grade is higher than for bonds
with higher ratings.
BB: Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified which could
assist the obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited
margin of safety and the need for reasonable business and economic activity
throughout the life of the issue.
CCC: Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C: Bonds are in imminent default in payment of interest or principal.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus
and minus signs, however, are not used in the AAA category.
NR: Indicates that Fitch does not rate the specific issue.
CONDITIONAL: A conditional rating is premised on the successful completion
of a project or the occurrence of a specific event.
SUSPENDED: A rating is suspended when Fitch deems the amount of
information available from the issuer to be inadequate for rating
purposes.
WITHDRAWN: A rating will be withdrawn when an issue matures or is called or
refinanced, and, at Fitch's discretion, when an issuer fails to furnish
proper and timely information.
FITCHALERT: Ratings are placed on FitchAlert to notify investors of an
occurrence that is likely to result in a rating change and the likely
direction of such change. These are designated as "Positive," indicating a
potential upgrade, "Negative," for potential downgrade, or "Evolving," where
ratings may be lowered. FitchAlert is relatively short-term, and should be
resolved within 12 months.
<PAGE>
APPENDIX B
DESCRIPTION OF OBLIGATIONS ISSUED OR GUARANTEED BY THE
U.S. GOVERNMENT AND ITS AGENCIES, AUTHORITIES OR INSTRUMENTALITIES
U.S. GOVERNMENT OBLIGATIONS -- are issued by the U.S. Treasury and include
bills, certificates of indebtedness, notes and bonds. Agencies and
instrumentalities of the U.S. Government are established under the authority of
an act of Congress and include, but are not limited to, the Tennessee Valley
Authority, the Bank for Cooperatives, the Farmers Home Administration, Federal
Home Loan Banks, Federal Intermediate Credit Banks and Federal Land Banks, as
well as those listed below.
FEDERAL FARM CREDIT CONSOLIDATED SYSTEMWIDE NOTES AND BONDS -- are bonds issued
by a cooperatively owned nationwide system of banks and associations supervised
by the Farm Credit Administration. These bonds are not guaranteed by the U.S.
Government.
MARITIME ADMINISTRATION BONDS -- are bonds issued by the Department of
Transportation of the U.S. Government.
FHA DEBENTURES -- are debentures issued by the Federal Housing Administration
of the U.S. Government and are fully and unconditionally guaranteed by the
U.S. Government.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA") CERTIFICATES -- are
mortgage-backed securities, with timely payment guaranteed by the full faith and
credit of the U.S. Government, which represent a partial ownership interest in a
pool of mortgage loans issued by lenders such as mortgage bankers, commercial
banks and savings and loan associations. Each mortgage loan included in the pool
is also insured or guaranteed by the Federal Housing Administration, the
Veterans Administration or the Farmers Home Administration.
FEDERAL HOME LOAN MORTGAGE CORPORATION BONDS -- are bonds issued and guaranteed
by the Federal Home Loan Mortgage Corporation and are not guaranteed by the U.S.
Government.
FEDERAL HOME LOAN BANK BONDS -- are bonds issued by the Federal Home Loan Bank
System and are not guaranteed by the U.S.Government.
FINANCING CORPORATION BONDS AND NOTES -- are bonds and notes issued and
guaranteed by the Financing Corporation and are not guaranteed by the U.S.
Government.
FEDERAL NATIONAL MORTGAGE ASSOCIATION BONDS -- are bonds issued and guaranteed
by the Federal National Mortgage Association ("FNMA") and are not guaranteed
by the U.S. Government.
RESOLUTION FUNDING CORPORATION BONDS AND NOTES -- are bonds and notes issued
and guaranteed by the Resolution Funding Corporation and are not guaranteed by
the U.S. Government.
STUDENT LOAN MARKETING ASSOCIATION DEBENTURES -- are debentures backed by the
Student Loan Marketing Association ("SLMA") and are not guaranteed by the U.S.
Government.
TENNESSEE VALLEY AUTHORITY BONDS AND NOTES -- are bonds and notes issued and
guaranteed by the Tennessee Valley Authority.
Some of the foregoing obligations, such as Treasury bills and GNMA pass-through
certificates, are supported by the full faith and credit of the U.S. Government;
others, such as securities of FNMA, by the right of the issuer to borrow from
the U.S. Treasury; still others, such as bonds issued by SLMA, are supported
only by the credit of the instrumentality. No assurance can be given that the
U.S. Government will provide financial support to instrumentalities sponsored by
the U.S. Government as it is not obligated by law, in certain instances, to do
so.
Although this list includes a description of the primary types of U.S.
Government agency, authorities or instrumentality obligations in which the Fund
intends to invest, the Fund may invest in obligations of U.S. Government
agencies or instrumentalities other than those listed above.
<PAGE>
DESCRIPTION OF SHORT-TERM INVESTMENTS OTHER THAN
U.S. GOVERNMENT OBLIGATIONS
CERTIFICATES OF DEPOSIT -- are certificates issued against funds deposited in a
bank (including eligible foreign branches of U.S. banks), are for a definite
period of time, earn a specified rate of return and are normally negotiable.
BANKERS' ACCEPTANCES -- are marketable short-term credit instruments used to
finance the import, export, transfer or storage of goods. They are termed
"accepted" when a bank guarantees their payment at maturity.
COMMERCIAL PAPER -- refers to promissory notes issued by corporations in order
to finance their short-term credit needs.
CORPORATE OBLIGATIONS -- include bonds and notes issued by corporations in order
to finance long-term credit needs.
A-1 AND P-1 COMMERCIAL PAPER RATINGS
DESCRIPTION OF S&P AND MOODY'S HIGHEST COMMERCIAL PAPER RATINGS:
The rating "A" is the highest commercial paper rating assigned by S&P, and
issues so rated are regarded as having the greatest capacity for timely payment.
Issues in the "A" category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. The A-1 designation indicates that the
degree of safety regarding timely payment is either overwhelming or very strong.
Those A-1 issues determined to possess overwhelming safety characteristics will
be denoted with a plus (+) sign designation.
The rating P-1 is the highest commercial paper rating assigned by Moody's.
Issuers rated P-1 have a superior ability for repayment. P-1 repayment capacity
will normally be evidenced by the following characteristics: (1) leading market
positions in well established industries; (2) high rates of return on funds
employed; (3) conservative capitalization structure with moderate reliance on
debt and ample asset protection; (4) broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and (5) well established
access to a range of financial markets and assured sources of alternate
liquidity.
<PAGE>
APPENDIX C
TAXABLE EQUIVALENT YIELD TABLE
(UNDER FEDERAL INCOME TAX LAW AND RATES FOR 1995)
The table below shows the approximate taxable bond yields which are equivalent
to tax-exempt bond yields from 3% to 9% under federal income tax laws that apply
to 1995. (Such yields may differ under the laws applicable to subsequent years.)
Separate calculations, showing the applicable taxable income brackets, are
provided for investors who file joint returns and for those investors who file
individual returns.
While it is expected that a substantial portion of the interest income
distributed to the Fund's shareholders will be exempt from federal income taxes,
portions of such distributions from time to time may be subject to federal
income taxes or a federal alternative minimum tax.
<TABLE>
<CAPTION>
TAXABLE INCOME<F1> INCOME TAX-EXEMPT YIELD
- ------------------------------------------- TAX --------------------------------
SINGLE JOINT BRACKET
------ ----- ------ 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%
1995 1995 ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23,350 $ 0 - 39,000 15.0% 3.53% 4.71% 5.88% 7.06% 8.24% 9.41%
$ 23,350 - 56,550 $ 39,000 - 94,250 28.0% 4.17% 5.56% 6.94% 8.33% 9.72% 11.11%
$ 56,550 - 117,950 $ 94,250 - 143,600 31.0% 4.35% 5.80% 7.25% 8.70% 10.14% 11.59%
$117,950 - 256,500 $143,600 - 256,500 36.0% 4.69% 6.25% 7.81% 9.38% 10.94% 12.50%
$256,500 & Over $256,500 & Over 39.6% 4.97% 6.62% 8.28% 9.93% 11.59% 13.25%
<FN>
<F1> Net amount subject to Federal personal income tax after deductions and exemptions.
</TABLE>
<PAGE>
APPENDIX D
MFS MUNICIPAL INCOME FUND
PORTFOLIO COMPOSITION CHART
FOR THE FISCAL YEAR ENDED MARCH 31, 1995
The table below shows the percentages of the Fund's assets at March 31, 1995,
invested in bonds assigned to the various rating categories by S&P, Moody's
(provided only for bonds not rated by S&P) and Fitch (provided only for bonds
not rated by S&P or Moody's) and in unrated bonds determined by MFS to be of
comparable quality.
<TABLE>
<CAPTION>
UNRATED
BONDS OF
COMPARABLE
RATING S&P MOODY'S FITCH QUALITY TOTAL
------ --- ------- ----- --------------- -----
<S> <C> <C> <C> <C> <C>
AAA/Aaa 27.47% -- -- 0.28% 27.75%
AA/Aa 18.02 -- -- -- 18.02
A/A 24.30 -- -- -- 24.30
BBB/Baa 7.84 -- -- 1.52 9.36
BB/Ba 9.87 -- -- 4.57 14.44
B/B -- -- 5.16 5.16
CCC/Caa -- -- 0.42 0.42
CC/Ca
C/C
Default 0.55 0.55
------ ------ ------
Total: 87.50% -- -- 12.50% 100.00%
</TABLE>
The chart does not necessarily indicate what the composition the Fund's
portfolio will be in subsequent years. Rather, the Fund's investment objective,
policies and restrictions indicate the extent to which the Fund may purchase
securities in the various categories.
<PAGE>
[Logo] MFS(SM)
THE FIRST NAME IN MUTUAL FUNDS
Investment Adviser
Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116 MFS(R) MUNICIPAL INCOME FUND
(617) 954-5000
PROSPECTUS
Distributor August 1, 1995
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 02116
[Logo] MFS(SM)
THE FIRST NAME IN MUTUAL FUNDS
MFS(R) MUNICIPAL INCOME FUND
500 Boylston Street
Boston, MA 02116
MM1-1 8/95/44.5M 02/204/302
<PAGE>
[Logo: MFS (SM)]
THE FIRST NAME IN MUTUAL FUNDS
MFS(R) MUNICIPAL STATEMENT OF
INCOME FUND ADDITIONAL INFORMATION
(A member of the MFS Family of Funds(R)) August 1, 1995
- --------------------------------------------------------------------------------
Page
----
1. Definitions ................................................... 2
2. Investment Techniques ......................................... 2
3. Investment Restrictions ....................................... 8
4. Management of the Fund ........................................ 9
Trustees ................................................... 9
Officers ................................................... 10
Investment Adviser ......................................... 10
Custodian .................................................. 11
Shareholder Servicing Agent ................................ 11
Distributor ................................................ 12
5. Portfolio Transactions and Brokerage Commissions .............. 12
6. Shareholder Services .......................................... 13
Investment and Withdrawal Programs ......................... 13
Exchange Privilege ......................................... 15
Tax-Deferred Retirement Plans .............................. 16
7. Tax Status .................................................... 16
8. Determination of Net Asset Value; Performance Information ..... 17
9. Distribution Plans ............................................ 20
10. Description of Shares, Voting Rights and Liabilities .......... 22
11. Independent Accountants and Financial Statements .............. 22
Appendix A .................................................... 23
MFS MUNICIPAL INCOME FUND
A Series of MFS Municipal Series Trust
500 Boylston Street, Boston, Massachusetts 02116
(617) 954-5000
This Statement of Additional Information sets forth information which may be of
interest to investors but which is not necessarily included in the Fund's
Prospectus, dated August 1, 1995. This Statement of Additional Information
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 STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A
CURRENT PROSPECTUS.
<PAGE>
1. DEFINITIONS
"Fund" MFS(R) Municipal Income Fund, a series of MFS
Municipal Series Trust (the "Trust"), a
Massachusetts business trust. The Trust was
previously known as "MFS Multi-State Municipal Bond
Trust" until its name was changed to MFS Municipal
Series Trust on August 27, 1993. On August 3, 1992,
the Trust changed its name from "MFS Managed Multi-
State Municipal Bond Trust." The Trust was known as
"MFS Managed Multi-State Tax- Exempt Trust" until
its name was changed effective August 12, 1988. The
MFS Municipal Income Fund is the successor to MFS
Lifetime Municipal Bond Fund, which was reorganized
as a series of the Trust on September 7, 1993.
"MFS" or the "Adviser" Massachusetts Financial Services Company, a Delaware
corporation.
"MFD" MFS Fund Distributors, Inc., a Delaware corporation.
"Prospectus" The Prospectus, dated August 1, 1995, of the Fund.
2. INVESTMENT TECHNIQUES
The investment policies and techniques are described in the Prospectus. In
addition, certain of the Fund's investment policies are described in greater
detail below.
LENDING OF SECURITIES
The Fund may seek to increase its income by lending portfolio securities. Such
loans will usually be made only to member banks of the Federal Reserve System
and to member firms (and subsidiaries thereof) of the New York Stock Exchange
(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 or dividends 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 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 make securities
loans, it is not intended that the value of the securities loaned would exceed
20% of the value of the Fund's total assets.
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 the General Statement of Policy of the Securities and Exchange
Commission (the "SEC") concerning such purchases. Since that policy currently
recommends 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 sufficient 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 intends 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 is necessary
to sell the "when-issued" or "forward delivery" securities before delivery, it
may incur a loss because of market fluctuations since the time the commitment to
purchase such securities was made. When the time comes to pay for "when-issued"
or "forward delivery" securities, the Fund will meet its obligations from the
then-available cash flow on the sale of securities, or, although it would not
normally expect to do so, from the sale of the "when-issued" or "forward
delivery" securities themselves (which may have a value greater or less than the
Fund's payment obligation).
REPURCHASE AGREEMENTS
As described in the Prospectus, the Fund may enter into repurchase agreements
with sellers who are member firms (or subsidiaries thereof) of 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, including accrued
interest, 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 the seller's creditworthiness
on an ongoing basis. Moreover, under such agreements, the value, including
accrued interest, 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.
VARIABLE AND FLOATING RATE OBLIGATIONS
Investments in floating or variable rate securities normally will involve
industrial development or revenue bonds which provide that the rate of interest
is set as a specific percentage of a designated base rate, such as rates on
Treasury Bonds or Bills or the prime rate at a major commercial bank, and that a
bondholder can demand payment of the obligations on short notice at par plus
accrued interest, which amount may be more or less than the amount the
bondholder paid for them. While there is usually no established secondary market
for issues of this type of security, the dealer that sells an issue of such
securities frequently will also offer to repurchase such securities at any time,
at a repurchase price which varies and may be more or less than the amount the
bondholder paid for them.
The maturity of floating or variable rate obligations (including participation
interests therein) is deemed to be the longer of (i) the notice period required
before the Fund is entitled to receive payment of the obligation upon demand or
(ii) the period remaining until the obligation's next interest rate adjustment.
If not redeemed by the Fund through the demand feature, the obligations mature
on a specified date which may range up to 30 years from the date of issuance.
INVERSE FLOATING RATE OBLIGATIONS
The Fund may invest in so called "inverse floating rate obligations" or
"residual interest" bonds or certificates structured to have similar features.
In creating such an obligation, a municipality issues a certain amount of debt
and pays a fixed interest rate. A portion of the debt is issued as variable rate
short-term obligations, the interest rate of which is reset at short intervals,
typically ranging from 35 days to one year. The other half of the debt is issued
as inverse floating rate obligations, the interest rate of which is calculated
based on the difference between the entire amount of interest paid by the issuer
on all of the debt and the interest paid on the short-term obligation. Under
usual circumstances, the holder of the inverse floating rate obligation can
generally purchase an equal principal amount of the short-term obligation and
link the two obligations in order to create long-term fixed-rate bonds. Because
the interest rate on the inverse floating rate obligation is determined by
subtracting the short-term rate from a fixed amount, the interest rate will
decrease as the short-term rate increases and will increase as the short-term
rate decreases. The magnitude of increases and decreases in the market value of
inverse floating rate obligations may be approximately twice as large (or more
if the inverse instrument is issued in principal amount greater than the
principal amount of the short-term piece) as the comparable change in the market
value of an equal principal amount of long-term bonds which bear interest at the
rate paid by the issuer and have similar credit quality, redemption and maturity
provisions.
INDEXED SECURITIES
The Fund may purchase securities whose prices are indexed to the prices of other
securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity or coupon
rate is determined by reference to a specific instrument or statistic. Gold-
indexed securities, for example, typically provide for a maturity value that
depends on the price of gold, resulting in a security whose price tends to rise
and fall together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determind by reference to the values of one or more specified
foreign currencies, and may offer higher yields than U.S. dollar-denominated
securities of equivalent issuers. Currency-indexed securities may be positively
or negatively indexed; that is, their maturity value may increase when the
specified currency value increases, resulting in a security that performs
similarly to a foreign-denominated instrument, or their maturity value may
decline when foreign currencies increase, resulting in a security whose price
characteristics are similar to a put on the underlying currency.
Currency-indexed securities may also have prices that depend on the values of a
number of different foreign currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they are
indexed, and may also be influenced by interest rate changes in the U.S. and
abroad. At the same time, indexed securities are subject to the credit risks
associated with the issuer of the security, and their values may decline
substantially if the issuer's creditworthiness deteriorates. Recent issuers of
indexed securities have included banks, corporations, and certain U.S.
government agencies.
OPTIONS
OPTIONS ON SECURITIES -- As noted in the Prospectus, the Fund may write covered
call and put options and purchase call and put options on fixed income
securities. Call and put options written by the Fund may be covered in the
manner set forth below.
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 that
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 the 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, short-term money market instruments or high quality debt
securities in a segregated account with its custodian. A put option written by
the Fund is "covered" if the Fund maintains cash, short-term money market
instruments or high quality debt 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 is equal to or greater than the exercise price of
the put written or where the exercise price of the put held is less than the
exercise price of the put written if the difference is maintained by the Fund in
cash, short-term money market instruments or high quality debt 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 counter party with which, the
option is traded, and applicable laws and regulations. If the writer's
obligation is not so covered, it is subject to the risk of the full change in
value of the underlying security from the time the option is written until
exercise.
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, short-term money market
instruments or high quality debt 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 cash or 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 repurchase 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 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. Buy-and-write transactions using in-the-money
call options may be used when it is expected that the price of the underlying
security will decline moderately during the option period. Buy-and-write
transactions using out-of-the-money call options may be used when it is expected
that the premiums received from writing the call option plus the appreciation in
the market price of the underlying security up to the exercise price will be
greater than the appreciation in the price of the underlying security alone. 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. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the Fund's gain will be limited to the premium
received, less related transaction costs. If the market price of the underlying
security declines or otherwise is below the exercise price, the Fund may elect
to close the position or retain the option until it is exercised, at which time
the Fund will be required to take delivery of the security at the exercise
price; the Fund's return will be the premium received from the put option minus
the amount by which the market price of the security is below the exercise
price, which could result in a loss. Out-of-the-money, at-the-money and
in-the-money put options may be used by the Fund in the same market environments
that call options are used in equivalent buy-and-write transactions.
The Fund may also write combinations of put and call options on the same
security, known as "straddles," with the same exercise price and expiration
date. 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 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 the security remains stable and neither the
call nor the put is exercised. In those instances 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 not
be undertaken by the Fund solely for hedging purposes, 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 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 may purchase options for hedging purposes or to increase its return.
Put options may be purchased to hedge against a decline in the value of
portfolio securities. If such decline occurs, the put options will permit the
Fund to sell the 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 by 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 increase
occurs, the call option will permit the Fund to purchase the securities at the
exercise price, or to close out the options at a profit. The premium paid for
the call 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 rises sufficiently, the option may expire worthless to the
Fund.
In certain instances, the Fund may enter into options on Treasury securities
which provide for periodic adjustment of the strike price and may also provide
for the periodic adjustment of the premium during the term of each such option.
Like other types of options, these transactions, which may be referred to as
"reset" options or "adjustable strike options," grant the purchaser the right to
purchase (in the case of a "call") or sell (in the case of a "put") a specified
type and series of U.S. Treasury security at any time up to a stated expiration
date (or, in certain instances, on such date). In contrast to other types of
options, however, the price at which the underlying security may be purchased or
sold under a "reset" option is determined at various intervals during the term
of the option, and such price fluctuates from interval to interval based on
changes in the market value of the underlying security. As a result, the strike
price of a "reset" option, at the time of exercise, may be less advantageous to
the Fund than if the strike price had been fixed at the initiation of the
option. In addition, the premium paid for the purchase of the option may be
determined at the termination, rather than the initiation, of the option. If the
premium is paid at termination, the Fund assumes the risk that (i) the premium
may be less than the premium which would otherwise have been received at the
initiation of the option because of such factors as the volatility in yield of
the underlying Treasury security over the term of the option and adjustments
made to the strike price of the option, and (ii) the option purchaser may
default on its obligation to pay the premium at the termination of the option.
The Fund may also purchase warrants on fixed income securities. A warrant on a
fixed income security is a long-term call option that provides the holder with
the right, but not the obligation, to purchase from the seller of the warrant a
fixed income security with a specified par value, coupon and maturity at a fixed
exercise price on a specified date or between specified dates. Typically, the
fixed income securities that are deliverable pursuant to the warrant will be
noncallable securities. Warrants may be issued as entirely separate securities
or they may be attached to, but subsequently detachable from, a fixed income
security of the same issuer.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
FUTURES CONTRACTS -- As noted in the Prospectus, the Fund may enter into
interest rate futures contracts on fixed income securities and indexes on such
securities. (Unless otherwise specified, interest rate futures contracts are
referred to as "Futures Contracts.") Such investment strategies will be used for
hedging purposes and for non-hedging purposes, subject to applicable law.
A Futures Contract is a bilateral agreement providing for the purchase and sale
of a specified type and amount of a financial instrument, 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 in the majority of cases provides for a
specified settlement date on which, in the case of interest rate 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."
Interest rate futures contracts may be purchased or sold to attempt to protect
against the effects of interest rate changes on the Fund's current or intended
investments in fixed income securities. For example, if the Fund owned long-term
bonds and interest rates were expected to increase, the Fund might enter into
interest rate futures contracts for the sale of debt securities. Such a sale
would have much the same effect as selling some of the long-term bonds in the
Fund's portfolio. If interest rates did increase, the value of the debt
securities in the portfolio would decline, but the value of the Fund's interest
rate futures contracts would increase at approximately the same rate, thereby
keeping the net asset value of the Fund from declining as much as it otherwise
would have.
Similarly, if interest rates were expected to decline, interest rate futures
contracts may be purchased to hedge in anticipation of subsequent purchases of
long-term bonds at higher prices. Since the fluctuations in the value of the
interest rate futures contracts should be similar to that of long-term bonds,
the Fund could protect itself against the effects of the anticipated rise in the
value of long-term bonds without actually buying them until the necessary cash
became available or the market had stabilized. At that time, the interest rate
futures contracts could be liquidated and the Fund's cash reserves could then be
used to buy long-term bonds on the cash market. The Fund could accomplish
similar results by selling bonds with long maturities and investing in bonds
with short maturities when interest rates are expected to increase. However,
since the futures market is more liquid than the cash market, the use of
interest rate futures contracts as a hedging technique allows the Fund to hedge
its interest rate risk without having to sell its portfolio securities.
OPTIONS ON FUTURES CONTRACTS -- As noted in the Prospectus, the Fund may
purchase and write options to buy or sell futures contracts in which it may
invest ("Options on Futures Contracts"). Such investment strategies will be used
for hedging purposes and for non-hedging purposes, subject to applicable law.
An Option on a Futures Contract provides the holder with the right to enter into
a "long" position in the underlying Futures Contract, in the case of a call
option, or a "short" position in the underlying Futures Contract, in the case of
a put option, at a fixed exercise price up to a stated expiration date or, in
the case of certain options, on such date. Upon exercise of the option by the
holder, the contract market clearinghouse establishes a corresponding short
position for the writer of the option, in the case of a call option, or a
corresponding long position in the case of a put option. In the event that an
option is exercised, the parties will be subject to all the risks associated
with the trading of Futures Contracts, such as payment of initial and variation
margin deposits. In addition, the writer of an Option on a Futures Contract,
unlike the holder, is subject to initial and variation margin requirements on
the option position.
A position in an Option on a Futures Contract may be terminated by the purchaser
or seller prior to expiration by effecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's profit
or loss on the transaction.
Options on Futures Contracts that are written or purchased by the Fund on U.S.
exchanges are traded on the same contract market as the underlying Futures
Contract, and, like Futures Contracts, are subject to regulation by the
Commodity Futures Trading Commission (the "CFTC") and the performance guarantee
of the exchange clearinghouse. In addition, Options on Futures Contracts may be
traded on foreign exchanges.
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 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 or
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, short-term money market
instruments or high quality debt securities in an amount equal to the value of
the security 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 is equal to or greater than the
exercise price of the put written or where the exercise price of the put held is
less than the exercise price of the put written if the difference is maintained
by the Fund in cash, short-term money market instruments or high quality debt
securities in a segregated account with its custodian. Put and call Options on
Futures Contracts may also be covered in such other manner as may be in
accordance with the rules of the exchange on 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 writing of a call option on a Futures Contract for hedging purposes
constitutes 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 constitutes 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 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 the 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 purchase Options on Futures Contracts for hedging purposes instead
of 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.
RISK FACTORS IN OPTIONS AND FUTURES TRANSACTIONS
RISK OF 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 Options on Futures
Contracts depends on the degree to which price movements in the underlying
instrument correlate with price movements in the relevant portion of the Fund's
portfolio. In the case of futures and options based on fixed income securities,
the portfolio securities which are being hedged may not be the same type of
obligation underlying such contract. As a result, the correlation probably will
not be exact. Consequently, the Fund bears the risk that the price of the
portfolio securities being hedged will not move in the same amount or direction
as the underlying obligation. It is possible that there may be a negative
correlation between the obligation underlying an option or Futures Contract in
which the Fund has a position and the portfolio securities the Fund is
attempting to hedge, which could result in a loss on both the portfolio and the
hedging instrument.
The trading of Futures Contracts and options for hedging purposes entails the
additional risk of imperfect correlation between movements in the futures or
option price and the price of the underlying 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 the options and futures. In this
regard, trading by speculators in options and futures has in the past
occasionally resulted in market distortions, which may be difficult or
impossible to predict, particularly near the expiration of such contracts.
The trading of Options on Futures Contracts also entails the risk that changes
in the value of the underlying Futures Contract will not be fully reflected in
the value of the option. The risk of imperfect correlation, however, generally
tends to diminish as the maturity date of the Futures Contract or expiration
date of the option approaches.
Further, with respect to options on securities 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. This could increase
the extent of any loss suffered by the Fund in connection with such
transactions.
In writing a covered call option on a security 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 instrument. For example, where the Fund covers a call option
written on a Futures Contract through segregation of securities, such securities
may not match the instrument underlying the Futures Contract, and the Fund may
not be fully covered. As a result, the Fund could be subject to risk of loss in
the event of adverse market movements.
The writing of options on securities or Options on Futures Contracts constitutes
only a partial hedge against fluctuations in the value of the Fund's portfolio.
When the Fund writes an option, it will receive premium income in return for the
holder's purchase of the right to acquire or dispose of the underlying
obligation. In the event that the price of such obligation does not rise
sufficiently above the exercise price of the option, in the case of a call, or
fall below the exercise price, in the case of a put, the option will not be
exercised and the Fund will retain the amount of the premium, less related
transaction costs, which will constitute a partial hedge against any decline
that may have occurred in the Fund's portfolio holdings or any increase in the
cost of the instruments to be acquired.
Where the price of the underlying obligation moves sufficiently in favor of the
holder to warrant exercise of the option, however, and the option is exercised,
the Fund will incur a loss which may only be partially offset by the amount of
the premium it received. Moreover, by writing an option, the Fund may be
required to forgo the benefits which might otherwise have been obtained from an
increase in the value of portfolio securities or other assets or a decline in
the value of securities or assets to be acquired.
In the event of the occurrence of any of the foregoing adverse market events,
the Fund's overall return may be lower than if it had not engaged in the hedging
transactions.
It should also be noted that the Fund may enter transactions in Futures
Contracts and Options on Futures Contracts not only for hedging purposes, but
also for non-hedging purposes intended to increase portfolio returns. Non-
hedging transactions in such investments involve greater risks and may result in
losses which may not be offset by increases in the value of portfolio securities
or declines in the cost of securities to be acquired. The Fund will only write
covered options, such that cash or securities necessary to satisfy an option
exercise will be segregated at all times, unless the option is covered in such
other manner as may be in accordance with the rules of the exchange on which the
option is traded and applicable laws and regulations. Nevertheless, 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. Such transactions, therefore,
create an opportunity for increased return by providing the Fund with two
simultaneous premiums on the same security, but involve additional risk, since
the Fund may have an option exercised against it regardless of whether the price
of the security increases or decreases.
RISK OF A 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
into. While the Fund will enter into options or futures positions only if there
appears to be a liquid secondary market therefor, 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 has insufficient cash
available to meet margin requirements, it will be necessary to liquidate
portfolio securities or other assets at a time when it is 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 portfolio,
and could result in trading losses.
The liquidity of a secondary market in a Futures Contract or option thereon may
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. Once the daily limit has been reached in the
contract, no trades may be entered into at a price beyond the limit, thus
preventing the liquidation of open futures or option positions and requiring
traders to make additional margin deposits. Prices have in the past moved the
daily limit on a number of consecutive trading days.
The trading of Futures Contracts and options is also subject to the risk of
trading halts, suspensions, exchange or clearinghouse equipment failures,
government intervention, insolvency of a brokerage firm or clearinghouse 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 or forward 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 enters into such transactions for hedging purposes, 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 or other
assets held by the Fund or decreases in the prices of securities or other assets
the Fund intends to acquire. Where the Fund enters into such transactions for
other than 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 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). Further, the 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.
RISKS 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 security, index, currency or Futures Contract.
RISKS OF TRANSACTIONS NOT CONDUCTED ON U.S. EXCHANGES. Unlike transactions
entered into by the Fund in Futures Contracts and exchange-traded options,
over-the-counter options on securities are not traded on contract markets
regulated by the CFTC or (with the exception of certain foreign currency
options) the SEC. To the contrary, such instruments are traded through financial
institutions acting as market-makers, although foreign currency options are also
traded on certain national securities exchanges, such as the Philadelphia Stock
Exchange and the Chicago Board Options Exchange, subject to SEC regulation. In
an over-the-counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there are no daily
price fluctuation limits, and adverse market movements could therefore continue
to an unlimited extent over a period of time. Although the purchaser of an
option cannot lose more than the amount of the premium plus related transaction
costs, this entire amount could be lost. Moreover, the option writer could lose
amounts substantially in excess of their initial investments, due to the margin
and collateral requirements associated with such positions.
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 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 guarantee of an
exchange clearinghouse, and the Fund will therefore be subject to the risk of
default by, or the bankruptcy of, the financial institution serving as its
counterparty. One or more of such institutions also may decide to discontinue
their role as market-makers in a particular currency or security, thereby
restricting the Fund's ability to enter into desired hedging transactions. The
Fund will enter into an over-the-counter transaction only with parties whose
creditworthiness has been reviewed and found satisfactory by the Adviser.
POLICIES ON THE USE OF FUTURES AND OPTIONS ON FUTURES CONTRACTS. 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 of
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 or securities 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 is unleveraged.
The staff of the SEC has taken the position that purchased over-the-counter
options and assets used to cover written over-the-counter options are illiquid
and, therefore, together with other illiquid securities held by a Fund, cannot
exceed 15% of the Fund's assets (the "SEC illiquidity ceiling"). Although the
Adviser disagrees with this position, the Adviser intends to limit the Fund's
writing of over-the-counter options in accordance with the following procedure.
Except as provided below, the Fund intends to write over-the-counter options
only with primary U.S. Government securities dealers recognized as such by the
Federal Reserve Bank of New York. Also, the contracts the Fund has in place with
such primary dealers provide that the Fund has the absolute right to repurchase
an option it writes at any time at a price which represents the fair market
value, as determined in good faith through negotiation between the parties, but
which in no event will exceed a price determined pursuant to a formula in the
contract. Although the specific formula may vary between contracts with
different primary dealers, the formula generally is based on a multiple of the
premium received by the Fund for writing the option, plus the amount, if any of
the option's intrinsic value (i.e., the amount that the option is in-the-money).
The formula may also include a factor to account for the difference between the
price of the security and the strike price of the option if the option is
written out-of-the-money. The Fund will treat all or a portion of the formula
as illiquid for purposes of the SEC illiquidity ceiling test imposed by the SEC
staff. The Fund may also write over-the-counter options with non-primary
dealers, including foreign dealers (where applicable), and will treat the assets
used to cover these options as illiquid for purposes of such SEC illiquidity
ceiling test.
3. INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions which cannot be changed without
the approval of the holders of a majority of the Fund's shares (which, as used
in this Statement of Additional Information, means the lesser of (i) more than
50% of the outstanding shares of the Trust or a series or class, as applicable,
or (ii) 67% or more of the outstanding shares of the Trust or a series or class,
as applicable, present at a meeting if holders of more than 50% of the
outstanding shares of the Trust or a series or class, as applicable, are
represented in person or by proxy). Except for Investment Restriction (1), these
investment restrictions and policies 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.
The Fund may not:
(1) Borrow money in an amount in excess of 33 1/3% of its total assets, and
then only as a temporary measure for extraordinary or emergency purposes, or
pledge, mortgage or hypothecate an amount of its assets (taken at market
value) in excess of 15% of its total assets, in each case taken at the lower
of cost or market value. For the purpose of this restriction, collateral
arrangements with respect to options, Futures Contracts, Options on Futures
Contracts, Forward Contracts and options on foreign currencies, and payments
of initial and variation margin in connection therewith are not considered a
pledge of assets.
(2) Underwrite securities issued by other persons except insofar as the
Fund may technically be deemed an underwriter under the Securities Act of 1933
in selling a portfolio security.
(3) Invest more than 25% of its total assets (taken at market value) in any
one industry; provided, however, that there is no limitation in respect to
investments in obligations issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.
(4) Purchase or retain 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 and securities secured by real
estate), or mineral leases, commodities or commodity contracts (except
contracts for the future or forward delivery of securities or foreign
currencies and related options, and except Futures Contracts and Options on
Futures Contracts) in the ordinary course of its business. The Fund reserves
the freedom of action to hold and to sell real estate or mineral leases,
commodities or commodity contracts acquired as a result of the ownership of
securities.
(5) Make loans to other persons except by the purchase of obligations in
which the Fund is authorized to invest and by entering into repurchase
agreements; provided that the Fund may lend its portfolio securities
representing not in excess of 30% of its total assets (taken at market value).
Not more than 10% of the Fund's total assets (taken at market value) will be
subject to repurchase agreements maturing in more than seven days. For these
purposes the purchase of all or a portion of an issue of debt securities shall
not be considered the making of a loan.
(6) Purchase the securities of any issuer if such purchase, at the time
thereof, would cause more than 5% of its total assets (taken at market value)
to be invested in the securities of such issuer, other than securities issued
or guaranteed by the United States, any state or political subdivision
thereof, or any political subdivision of any such state, or any agency or
instrumentality of the United States, any state or political subdivision
thereof, or any political subdivision of any such state.
(7) Purchase securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities) if
such purchase, at the time thereof, would cause the Fund to hold more than 10%
of any class of securities of such issuer. 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 in companies for the purpose of exercising control or
management.
(9) Purchase or retain in its portfolio any securities issued by an issuer
any of whose officers, directors, trustees or security holders is an officer
or Trustee of the Fund, or is a member, partner, 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.
(10) 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 the Fund may make
margin deposits in connection with Futures Contracts, Options on Futures
Contracts, options, Forward Contracts or options on foreign currencies.
(11) Sell any security which the Fund does not own unless by virtue of its
ownership of other securities it 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 equivalent conditions.
(12) Purchase securities issued by any other registered investment company
or investment trust 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 will not purchase such securities if such purchase at
the time thereof would cause more than 10% of its total assets (taken at
market value) to be invested in the securities of such issuers; and, provided
further, that the Fund will not purchase securities issued by an open-end
investment company.
(13) Write, purchase or sell any put or call option or any combination
thereof, provided that this shall not prevent the Fund from writing,
purchasing and selling puts, calls or combinations thereof with respect to
securities and indexes of securities or foreign currencies or Futures
Contracts; and further provided that this shall not prevent the Fund from
purchasing, owning, holding or selling contracts for the future delivery of
fixed income securities.
(14) Issue any senior security (as that term is defined in the Investment
Company Act of 1940 (the "1940 Act")), if such issuance is specifically
prohibited by the 1940 Act or the rules and regulations promulgated
thereunder. For the purpose of this restriction, collateral arrangements with
respect to options, Futures Contracts and Options on Futures Contracts and
collateral arrangements with respect to initial and variation margins are not
deemed to be the issuance of a senior security.
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 Trust 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 net assets (taken
at market value) would be so invested.
For the purposes of the Fund's investment restrictions, the issuer of a
tax-exempt security is deemed to be the entity (public or private) ultimately
responsible for the payment of the principal of and interest on the security.
OTHER OPERATING POLICY
In order to comply with certain state statutes, the Fund will not, as a matter
of operating policy, pledge, mortgage or hypothecate its portfolio securities if
the percentage of securities so pledged, mortgaged or hypothecated would exceed
33 1/3%.
This operating policy is not fundamental and may be changed without shareholder
approval.
4. MANAGEMENT OF THE FUND
The Board of Trustees of the Trust provides broad supervision over the affairs
of the Fund. The Adviser manages the portfolio of the Fund from day to day in
accordance with the Fund's investment objective and policies. The officers of
the Trust are responsible for the operations of the Fund. The Trustees and
officers of the Trust are listed below, together with their principal
occupations during the past five years. (Their titles may have varied during
that period.) Asterisks indicate those Trustees and officers who are "interested
persons" (as defined in the 1940 Act) of the Adviser. Unless otherwise indicated
below, the address of each Trustee and officer is 500 Boylston Street, Boston,
Massachusetts 02116.
TRUSTEES
A. KEITH BRODKIN*, Chairman and President
Massachusetts Financial Services Company, Chairman
RICHARD B. BAILEY*
Private Investor; Massachusetts Financial Services Company, former Chairman
(prior to September 30, 1991)
MARSHALL N. COHAN
Private Investor
Address: 2524 Bedford Mews Drive, Wellington, Florida
LAWRENCE H. COHN, M.D.,
Brigham and Women's Hospital, Chief of Cardiac Surgery; Harvard Medical
School, Professor of Surgery
Address: 75 Francis Street, Boston, Massachusetts
THE HON. SIR J. DAVID GIBBONS, KBE
Edmund Gibbons Limited, Chief Executive Officer; The Bank of N.T. Butterfield
& Son Ltd., Chairman
Address: 21 Reid Street, Hamilton, Bermuda
ABBY M. O'NEILL
Private Investor; Rockefeller Financial Services, Inc. (investment advisers),
Director
Address: 30 Rockefeller Plaza, Room 5600, New York, New York
WALTER E. ROBB, III
Benchmark Advisors, Inc. (corporate financial consultants), President and
Treasurer
Address: 110 Broad Street, Boston, Massachusetts
ARNOLD D. SCOTT*
Massachusetts Financial Services Company, Senior Executive Vice President and
Secretary
JEFFREY L. SHAMES*
Massachusetts Financial Services Company, President
J. DALE SHERRATT
Insight Resources, Inc. (acquisition planning specialists), President
Address: One Liberty Square, Boston, Massachusetts
WARD SMITH
NACCO Industries (holding company), Chairman (prior to June 1994); Sundstrand
Corporation (diversified mechanical manufacturer), Director; Society
Corporation (bank holding company), Director (prior to April 1992); Society
National Bank (commercial bank), Director (prior to April 1992)
Address: 5875 Landerbrook Drive, Mayfield Heights, Ohio
OFFICERS
CYNTHIA M. BROWN*, Vice President
Massachusetts Financial Services Company, Senior Vice President
ROBERT A. DENNIS*, Vice President
Massachusetts Financial Services Company, Senior Vice President
DAVID R. KING*, Vice President
Massachusetts Financial Services Company, Vice President
GEOFFREY L. SHECHTER*, Vice President
Massachusetts Financial Services Company, Vice President (since June, 1993);
Liberty Mutual Insurance Company, Senior Investment Analyst (prior to June,
1993)
DAVID B. SMITH*, Vice President
Massachusetts Financial Services Company, Vice President
W. THOMAS LONDON*, Treasurer
Massachusetts Financial Services Company, Senior Vice President and Assistant
Treasurer
STEPHEN E. CAVAN*, Secretary and Clerk
Massachusetts Financial Services Company, Senior Vice President, General
Counsel and Assistant Secretary
JAMES O. YOST*, Assistant Treasurer
Massachusetts Financial Services Company, Vice President
JAMES R. BORDEWICK, JR.*, Assistant Secretary
Massachusetts Financial Services Company, Vice President and Associate General
Counsel
- ----------
*"Interested persons" (as defined in the 1940 Act) of the Adviser, whose address
is 500 Boylston Street, Boston, Massachusetts 02116.
Each Trustee and officer holds comparable positions with certain affiliates of
MFS or with certain other funds of which MFS or a subsidiary is the investment
adviser or distributor. 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 and Mr. Bailey (who
currently receive a fee of $1,250 per year plus $225 per meeting and committee
meeting attended, together with such Trustee's out-of-pocket expenses) and has
adopted a retirement plan for non-interested Trustees and Mr. Bailey. Under this
plan, a Trustee will retire upon reaching age 75 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 75 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 Trust for the interested Trustees except Mr.
Bailey. The Fund will accrue its allocable share of compensation expenses each
year to cover current years service and amortize past service cost.
Set forth in Appendix A hereto is certain information concerning the cash
compensation paid to non-interested Trustees and Mr. Bailey and benefits
accrued, and estimated benefits payable, under the retirement plan.
As of March 31, 1995, the Trustees and officers, as a group, owned less than 1%
of the outstanding shares of the Fund. As of March 31, 1995, Merrill Lynch
Pierce Fenner & Smith Inc., P.O. Box 45286, Jacksonville, FL owned 18.19%, 6.14%
and 17.54% of the outstanding Class A, Class B and Class C shares of the Fund,
respectively, and Womack Construction Co., Inc., P.O. Box 1750, Cartersville,
GA, owned 5.21% of the outstanding Class C shares of the Fund.
The Declaration of Trust provides that the Trust 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 Trust, unless,
as to liabilities to the Trust 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 Trust. In
the case of settlement, such indemnification will not be provided unless it has
been determined pursuant to the Declaration of Trust, that such officers or
Trustees have not engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.
INVESTMENT ADVISER
MFS, together with its predecessor organizations, has 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.
In March 1995, MFS formed an alliance with Foreign & Colonial Management Ltd.
("Foreign & Colonial"). Foreign & Colonial is a subsidiary of two of the worlds
oldest financial services institutions, the London-based Foreign & Colonial
Investment Trust PLC, which pioneered the idea of investment management in 1868,
and HYPO-BANK (Bayerische Hypotheken-und Wechsel-Bank AG) of Munich, the oldest
publicly listed bank in Germany, founded in 1835. As a result of this alliance,
MFS will have access to the extensive international equity investment expertise
of Foreign & Colonial, which may enhance MFS" own global equity research and
management capabilities.
MFS manages the assets of the Fund pursuant to an Investment Advisory Agreement
with the Fund dated as of September 1, 1993 (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 an annual management fee,
computed and paid monthly, in an amount equal to the sum of 0.30% of the Fund's
average daily net assets plus 6.43% of its gross income.
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 reductions and reimbursements in response
to any amendment or rescission of the various state requirements.
For the Fund's fiscal year ended March 31, 1995, MFS received $3,545,246 (of
which $1,390,697 was based on average daily net assets and $2,154,549 on gross
income) under the Advisory Agreement.
For the four months ended March 31, 1994, MFS received $1,301,038 (of which
$527,310 was based on average daily net assets and $773,728 on gross income)
under the Advisory Agreement.
For the Fund's fiscal year ended November 30, 1993, MFS (and its predecessor,
Lifetime Advisers, Inc., a Delaware corporation and a wholly owned subsidiary of
MFS, which served as the Fund's investment adviser until September 7, 1993),
received in aggregate $3,751,548 (of which $1,497,081 was based on average daily
net assets and $2,254,467 on gross income) under their advisory agreements with
the Fund.
The Fund pays all of its expenses (other than those assumed by the Adviser or
MFD) including: Trustees 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 and servicing shareholder accounts;
expenses of preparing, printing and mailing share certificates, periodic
reports, notices and proxy statements to shareholders and 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 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 are borne by the Fund except that the Fund's Distribution Agreement
with MFD requires MFD to pay for prospectuses that are to be used for sales
purposes. Expenses of the Trust which are not attributable to a specific series
are allocated among the series in a manner believed by management of the Trust
to be fair and equitable. 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" below.
MFS pays the compensation of the Trust'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 its portfolio
transactions and, in general, administering its affairs (with the exception of
the services, facilities and personnel provided by the Shareholder Servicing
Agent or the Custodian, see below).
The Advisory Agreement with the Fund will remain in effect until August 1, 1996,
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 (as defined under "Investment
Restrictions") 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 provides that if MFS ceases to
serve as the Adviser to the Fund, the Fund will change its name so as to delete
the term "MFS" and that MFS may render services to others and may permit other
fund clients to use the term "MFS" in their names. The Advisory Agreement also
provides that neither the Adviser 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 safekeeping 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 and public offering price 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 of the Custodian and may deal with the Custodian as principal in
securities transactions. The Custodian also serves as the dividend and
distribution disbursing agent of the Fund. The Custodian has contracted with the
Adviser for the Adviser to perform certain accounting functions related to
options transactions for which the Adviser receives remuneration on a cost
basis.
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 Agent Agreement with the Trust, dated August 1, 1985, as
amended (the "Agency Agreement"). The Shareholder Servicing Agent's
responsibilities under the Agency Agreement include administering and performing
transfer agent functions and the keeping of records in connection with the
issuance, transfer and redemption of each class of shares of the Fund. For these
services, the Shareholder Servicing Agent will receive a fee based on the net
assets of each class 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. For the
fiscal year ended March 31, 1995, the Fund paid to the Shareholder Servicing
Agent fees of $1,005,420 under its Agency Agreement. State Street Bank and Trust
Company, the dividend and distribution disbursing agent for 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 the distributor for the
continuous offering of shares of the Fund pursuant to a Distribution Agreement
dated as of January 1, 1995 (the "Distribution Agreement"). Prior to January 1,
1995, MFS Financial Services, Inc. ("FSI"), another wholly owned subsidiary of
MFS, was the Fund's distributor. Where this Statement of Additional Information
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 predecessor in interest to MFD.
CLASS A SHARES: MFD acts as agent in selling Class A shares of the Fund to
dealers. The public offering price of the 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 a Class A share
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" in this Statement
of Additional Information). 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 circumstances 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 difference
between the total amount invested and the sum of (a) the net proceeds to the
Fund and (b) the dealer commission, is the commission paid to the distributor.
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 4% and MFD retains approximately 3/4 of 1% of the public offering price.
In addition, MFD pays a commission to dealers who initiate and are responsible
for purchases of $1 million or more as described in the Prospectus.
CLASS B SHARES AND CLASS C SHARES: As the distributor of the Fund, MFD acts as
agent in selling Class B and Class C shares of the Fund to dealers. The public
offering price of Class B and Class C 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 the placement of orders
to benefit themselves by a price change. On occasion, MFD may obtain brokers
loans from various banks, including the custodian banks 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.
For the fiscal year ended March 31, 1995, MFD and dealers and certain other
financial institutions received sales charges of $9,957 and $73,783,
respectively (as their concession on gross sales charges of $83,740), for
selling Class A shares of the Fund. The Fund received $2,259,669 representing
the aggregate net asset value of such shares.
During the period December 1, 1993 through March 31, 1994, MFD and dealers and
certain other financial institutions received sales charges of $5,248 and
$54,106, respectively (as their concession on gross sales charges of $59,354),
for selling Class A shares of the Fund. The Fund received $4,946,545
representing the aggregate net asset value of such shares. During the period
September 7, 1993 through November 30, 1993, MFD and dealers and certain other
financial institutions received $2,642 and $11,354, respectively (as their
concession on gross sales charges of $13,996), for selling Class A shares of the
Fund. The Fund received $315,369 representing the aggregate net asset value of
such shares.
During the fiscal year ended March 31, 1995, the period December 1, 1993 through
March 31, 1994, and the fiscal year ended November 30, 1993, the contingent
deferred sales charge ("CDSC") imposed on redemption of Class B shares was
$708,357, $318,928 and $774,549, respectively.
The Distribution Agreement will remain in effect until August 1, 1996 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
Trust's shares (as defined in "Investment Restrictions") and, in either case, by
a majority of the Trustees who are not parties to such 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
employees of the Adviser, who are appointed and supervised by its senior
officers. Changes in the Fund's investments are reviewed by the Board of
Trustees. The Fund's portfolio manager may serve other clients of the Adviser or
any subsidiary of MFS 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 level of their brokerage
commissions. In the case of securities, such as government securities, which are
principally 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, better prices are available elsewhere. In the case of securities
purchased from underwriters, the cost of such securities generally includes a
fixed underwriting commission or concession. Securities firms or futures
commission merchants may receive brokerage commissions on transactions involving
options, Futures Contracts and Options on Futures Contracts and the purchase and
sale of underlying securities upon exercise of options. The brokerage
commissions associated with buying and selling options may be proportionately
higher than those associated with general securities transactions. 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.
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 purchasing or selling securities, and the
availability 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 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. Securities may be bought or sold
through such broker-dealers, but at present, unless otherwise directed by the
Fund, a commission higher than one charged elsewhere will not be paid to such a
firm solely because it provided Research to the Adviser. The Trustees (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 & 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 which will be paid as a result of such Research because a
substantial number of transactions will be 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 such services, the
brokerage commissions paid by the Fund will exceed those that might otherwise be
paid, 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 Fund's fiscal year ended March 31, 1995, fiscal period December 1, 1993
through March 31, 1994 and fiscal year ended November 30, 1993, no brokerage
commissions were paid on total transactions (other than U.S. Government
securities, purchased options transactions and short-term obligations) of
$271,673,393, $100,927,261 and $353,659,502, respectively.
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 MFS or any subsidiary of MFS. 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, it is believed that the Fund's 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 programs 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 $100,000 or more of Class A shares of the Fund
alone or in combination with all classes of other MFS Funds or MFS Fixed 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 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 that shareholder's new investment,
together with the current offering price value of all the holdings of all
classes of shares of that shareholder in the MFS Funds or MFS Fixed Fund reaches
a discount level (see "Purchases" in the Prospectus for the sales charges on
quantity purchases). For example, if a shareholder owns shares with a current
offering price of $75,000 and purchases an additional $25,000 of Class A shares
of the Fund, the sales charge for the $25,000 purchase would be at the rate of
4% (the rate applicable to single transactions of $100,000). 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 the same class of shares 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. For federal
income tax purposes, distributions invested under the Distribution Investment
Program will be treated as if received by the shareholder in cash and then used
to purchase the applicable fund shares.
SYSTEMATIC WITHDRAWAL PLAN: A shareholder may direct the Shareholder Servicing
Agent to send him (or anyone he designates) regular periodic payments based upon
the value of his account. Each payment under a Systematic Withdrawal Plan
("SWP") must be at least $100, except 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 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 $5,000 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
may deposit into the account additional shares of the Fund, change the payee or
change the 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 in the Fund may be made at
any time either 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 of its members may be treated as a
single purchaser and, under the Right of Accumulation (but not the 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, or
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 exchange their shares for the same class of shares of other
MFS Funds (if available for sale) (and, in the case of Class C shares, for
shares of MFS Money Market Fund) under the Automatic Exchange Plan. The
Automatic Exchange Plan provides for automatic exchange of funds from the
shareholder's account in that 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 effective on the seventh day of each month or of every third
month, depending on whether monthly or quarterly exchange 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 exchange. Additional payments made to a shareholder's
account in such MFS Fund 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 exchange 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 the 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 holders of shares of MFS Money Market Fund, MFS Government
Money Market Fund and Class A shares of MFS Cash Reserve Fund, in the case where
such 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 within 12 months
of the initial purchase for certain Class A shares, a CDSC will be imposed upon
redemption. Although redemptions and repurchases of shares are taxable events, a
reinvestment within a certain 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 advisor for further information.
EXCHANGE PRIVILEGE -- Subject to the requirements set forth below, some or all
of the shares in an account 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 other MFS Fund (if available for sale) at net asset value. In addition,
Class C shares may be exchanged for shares of MFS Money Market Fund at net asset
value. Exchanges will be made 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 MFS Service Center, Inc.) 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 on any business day prior to the close of regular
trading on the Exchange, the exchange usually will occur on that day if all of
the requirements and restrictions set forth above have been complied with at
that time. However, payment of the redemption proceeds by the Fund, and thus the
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 its
shareholders. Investment dealers which have satisfied criteria established by
the Shareholder Servicing Agent may also communicate a shareholder's Exchange
Request 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 MFS Fund before making any exchange.
Shareholders of the other MFS Funds (except holders of 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 Fund,
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 -- Except as noted below, 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 nonprofit 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.
Third party administrative services, available for some corporate plans, may
limit or delay the processing of transactions. 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. An investor should consult with his tax
adviser before establishing any of the tax-deferred retirement plans described
above.
Class C shares are not currently available for purchase by any retirement plan
qualified under Internal Revenue Code section 401(a) or 403(b) if the
retiremenet plan and/or the sponsoring organization subscribe to the MFS
FUNDamental 401(k) Plan or another similar 401(a) or 403(b) recordkeeping
program made available by MFS Service Center, Inc.
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 (as a percentage of the Fund's overall income
and of its tax-exempt income), 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. 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.
The portion of the Fund's distribution of net investment income that is
attributable to interest from tax-exempt securities will be designated by the
Fund as an "exempt-interest dividend" under the Code and will generally be
exempt from federal income tax in the hands of shareholders so long as at least
50% of the total value of the Fund's assets consists of tax-exempt securities at
the close of each quarter of the Fund's taxable year. Distributions of
tax-exempt interest earned from certain securities may, however, be treated as
an item of tax preference for shareholders under the federal alternative minimum
tax, and all exempt-interest dividends may increase a corporate shareholder's
alternative minimum tax. The percentage of income designated as tax-exempt will
be applied uniformly to all distributions by the Fund of net investment income
made during each fiscal year and may differ from the percentage of distributions
actually attributable to tax-exempt interest for any particular month.
Shareholders are required to report exempt-interest dividends received from the
Fund on their federal income tax returns.
The Fund may also recognize some net investment income that is not tax-exempt,
as well as capital gains and losses as a result of the disposition of securities
and from certain options and futures transactions. Shareholders of the Fund will
have to pay federal income taxes and except as noted any state or local taxes on
the non-exempt interest dividends and capital gain distributions they receive
from the Fund, whether paid in cash or additional shares. Because the Fund
expects to earn primarily tax-exempt interest income, it is expected that no
Fund dividends will qualify for the dividends received deduction for
corporations. Distributions of net capital gains (i.e., the excess of the net
long-term capital gains over net short-term capital losses), whether paid in
cash or 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 to shareholders of record in such a month 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 of net capital gains or net short-term capital
gains 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 in the Fund shortly before the record date of any such
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.
Interest on indebtedness incurred by shareholders to purchase or carry shares of
the Fund will not be deductible for federal income tax purposes. Exempt-
interest dividends are taken into account in calculating the amount of social
security and railroad retirement benefits that may be subject to federal income
tax. Entities or persons who are "substantial users" (or persons related to
"substantial users") of facilities financed by certain private activity bonds
should consult their tax advisers before purchasing shares of the Fund.
"Substantial user" is defined generally as including a "nonexempt person" who
regularly uses in trade or business a part of a facility financed from the
proceeds of certain private activity bonds.
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 disallowed to the extent of any exempt-interest dividends
received with respect to those shares. If not disallowed, any such loss will be
treated as 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
without payment of an additional sales charge (including purchases by exchange
or by reinvestment) of Class A shares of the Fund or of another MFS Fund (or any
other shares of an MFS Fund generally sold subject to a sales charge).
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. The
Fund's investment in zero coupon bonds, deferred interest 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 and Futures 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 and Futures Contracts to the extent necessary to
meet the requirements of Subchapter M of the Code.
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 any 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 at a rate 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.
Distributions of the Fund that are derived from interest on obligations of the
U.S. Government and certain of its agencies and instrumentalities (but generally
not from capital gains realized upon the disposition of such obligations) may be
exempt from state and local taxes in certain states. The Fund intends to advise
shareholders of the extent, if any, to which its distributions consist of such
interest. Shareholders are urged to consult their tax advisers regarding the
possible exclusion of such portion of their dividends for state and local income
tax purposes as well as regarding the tax consequences of an investment in the
Fund.
The exemption of exempt-interest dividends for federal income tax purposes does
not necessarily result in exemption under the tax laws of any state or local
taxing authority. Some states do exempt from tax that portion of the
exempt-interest dividends which represents interest received by a regulated
investment company on its holdings of securities of that state and its political
subdivisions and instrumentalities. Therefore, the Fund will report annually to
its shareholders the percentage of interest income earned by the Fund during the
preceding year on Municipal Bonds and will indicate, on a state-by-state basis
only, the source of such income.
8. DETERMINATION OF NET ASSET VALUE; PERFORMANCE INFORMATION
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 Statement
of Additional Information, 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. 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 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. Debt securities (other than
short-term obligations) in the Fund's portfolio are valued on the basis of
valuations furnished by a pricing service which utilizes both dealer-supplied
valuations and electronic data processing techniques which take into account
appropriate factors such as institutional-sized trading in similar groups of
securities, yields, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data, without exclusive reliance upon quoted
prices or exchange or over-the-counter prices, since such valuations are
believed to reflect more accurately the fair value of such securities. Short-
term obligations, if any, in the Fund's portfolio are valued at amortized cost,
which constitutes fair value as determined by the Board of Trustees. Short-term
securities with a remaining maturity in excess of 60 days will be valued based
upon dealer supplied valuations. Portfolio securities and over-the-counter
options for which there are no quotations or valuations are valued at fair value
as determined in good faith by or at the direction of the Board of Trustees. A
share's net asset value is effective for orders received by the dealer prior to
its calculation and received by MFD, in its capacity as the Fund's distributor,
prior to the close of the business day.
PERFORMANCE INFORMATION
TOTAL 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 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 sales charge (4.75% maximum) 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 sales
charge, other sales charge or CDSC. The average annual total rate of return for
Class B shares, reflecting the CDSC, for the one-year and five-year periods
ended March 31, 1995 and for the period from December 29, 1986 (the Fund's
commencement of investment operations) to March 31, 1995 was 1.32%, 6.38% and
6.12%, respectively. The average annual total rates of return for Class B
shares, not giving effect to the CDSC, for the one-year and five-year periods
and for the period from December 29, 1986 (the Fund's commencement of investment
operations) to March 31, 1995 was 5.32%, 6.69% and 6.12%, respectively. The
Fund's average annual total rate of return for Class A shares, reflecting the
deduction of the initial sales charge, for the one-year period ended March 31,
1995 and for the period September 7, 1993 through March 31, 1995 was 1.24% and
- -1.19%, respectively. The Fund's average annual total rate of return for Class A
shares, not giving effect to the initial sales charge, for the one-year period
ended March 31, 1995 and for the period September 7, 1993 through March 31, 1995
was 6.33% and 1.97%, respectively. The Fund's average annual total rate of
return for Class C shares for the year ended March 31, 1995 and for the period
January 3, 1994 through March 31, 1995 was 5.39% and 0.46%, respectively. The
total rates of return represent a limited time frame and may not be indicative
of future performance.
PERFORMANCE RESULTS --
The performance results below, based on an assumed initial investment of $10,000
in Class B shares, cover the period from December 29, 1986 through December 31,
1994. It has been assumed that dividend and capital gain distributions were
reinvested in additional shares. Any performance results or total rate of return
quotation provided by the Fund should not be considered as representative of the
performance of the Fund in the future since the net asset value 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 and account balance information
may be obtained by calling 1-800-MFS-TALK (637-8255).
MFS MUNICIPAL INCOME FUND - CLASS B
-----------------------------------
DIRECT CAP GAIN DIVIDEND TOTAL
YEAR ENDED INVESTMENT REINVESTMENT REINVESTMENT VALUE
---------- ---------- ------------ ------------ -----
December 31, 1986* $10,000 $ 0 $ 0 $10,000
December 31, 1987 9,102 0 465 9,567
December 31, 1988 9,657 0 1,145 10,802
December 31, 1989 9,929 0 1,874 11,803
December 31, 1990 9,681 0 2,541 12,222
December 31, 1991 10,153 33 3,430 13,616
December 31, 1992 10,247 204 4,238 14,689
December 31, 1993 10,743 214 5,335 16,292
December 31, 1994 9,681 193 5,554 15,428
- ------------
* For the period from the commencement of investment operations, December 29,
1986, through December 31, 1986.
EXPLANATORY NOTES: The results shown in the above table take into account the
annual Rule 12b-1 fees but not the CDSC. No adjustment has been made for any
income taxes payable by shareholders.
YIELD: Any yield quotation for a class of shares of the Fund is based on the
annualized net investment income per share of that class over a 30-day period.
The yield for a class of shares of the Fund is calculated by dividing the net
investment income per share allocated to that class earned during the period by
the public offering price per share of that class on the last day of that
period. The resulting figure is then annualized. Net investment income per share
of a class is determined by dividing (i) the dividends and interest allocated to
that class during the period, minus accrued expenses for the period, by (ii) the
average number of shares of that class entitled to receive dividends during the
period multiplied by the public offering price per share on the last day of the
period. The Fund's yield calculations for Class A shares assume a maximum sales
charge of 4.75%. The Fund's yield calculations for Class B shares assume no CDSC
is paid.
The yield calculation for Class A, Class B and Class C shares for the 30-day
period ended March 31, 1995 was 5.49%, 4.79% and 4.87%, respectively.
TAX-EQUIVALENT YIELD: The tax-equivalent yield for the Fund is calculated by
determining the rate of return that would have to be achieved on a fully taxable
investment to produce the after-tax equivalent of that yield. In calculating
tax-equivalent yields the Fund assumes certain federal tax brackets for
shareholders and does not take into account state taxes. The Fund's tax
equivalent yield for Class A, Class B and Class C shares for the 30-day period
ended March 31, 1995 was 7.63%, 6.65% and 6.76%, respectively (assuming a
tax-bracket of 28%), and 7.96%, 6.94% and 7.06%, respectively (assuming a tax
bracket of 31%).
CURRENT DISTRIBUTION RATE: Yield, which is calculated according to a formula
prescribed by the SEC, is not indicative of the amounts which were or will be
paid to the Fund's shareholders. Amounts paid to shareholders of each class are
reflected in the quoted "current distribution rate" for that class. The current
distribution rate for a class is computed by dividing the total amount of
dividends per share paid by the Fund to shareholders of that class during the
past 12 months by the maximum public offering price of that class at the end of
such period. Under certain circumstances, such as when there has been a change
in the amount of dividend payout, or a fundamental change in investment
policies, it might be appropriate to annualize the dividends paid over the
period such policies were in effect, rather than using the dividends during the
past 12 months. The current distribution rate differs from the yield computation
because it may include distributions to shareholders from sources other than
dividends and interest, such as premium income from option writing, short-term
capital gains and return of invested capital, and is calculated over a different
period of time. The Fund's current distribution rate calculation for Class A
shares assumes a maximum sales charge of 4.75%. The Fund's current distribution
rate calculation for Class B shares assumes no CDSC is paid. The current
distribution rate for Class A, Class B and Class C shares of the Fund for the
12-month period ended March 31, 1995 was 5.77%, 5.00% and 5.07%, respectively.
GENERAL: 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 Saloman Bros. Indices, 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.
From time to time, the Fund also may discuss or quote its current portfolio
manager as well as other investment personnel, including such persons' views on:
the economy; securities markets; portfolio securities and their issuers;
investment philosophies, strategies, techniques and criteria used in the
selection of securities to be purchased or sold for the Fund; the Fund's
portfolio holdings; the investment research and analysis process; the
formulation and evaluation of investment recommendations; and the assessment and
evaluation of credit, interest rate, market and economic risks.
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 open-end
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 in cash.
- -- 1976 -- MFS(R) Municipal Bond Fund is among the first municipal bond funds
established.
- -- 1979 -- Spectrum becomes the first combination fixed/variable annuity with no
initial sales charge.
- -- 1981 -- MFS(R) World Governments Fund is established as America's first
globally diversified fixed income mutual fund.
- -- 1984 -- MFS(R) Municipal High Income Fund is the first mutual fund to seek
high tax-free income from lower-rated municipal securities.
- -- 1986 -- MFS(R) Managed Sectors Fund becomes the first mutual fund to target
and shift investments among industry sectors for shareholders.
- -- 1986 -- MFS(R) Municipal Income Trust is the first closed-end, high-yield
municipal bond fund traded on the New York Stock Exchange.
- -- 1987 -- MFS(R) Multimarket Income Trust is the first-closed-end, multimarket
high income fund listed on the New York Stock Exchange.
- -- 1989 -- MFS(R) Regatta becomes America's first non-qualified market-value-
adjusted fixed/variable annuity.
- -- 1990 -- MFS(R) World Total Return Fund is the first global balanced fund.
- -- 1993 -- MFS(R) 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(R) 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. DISTRIBUTION PLANS
The Trustees have adopted a Distribution Plan for each of Class A, Class B and
Class C shares (the "Distribution Plans") 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 each Distribution Plan would benefit the Fund and
the respective class of shareholders. The Distribution Plans are 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.
CLASS A DISTRIBUTION PLAN: The Distribution Plan relating to Class A shares (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 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 will 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% of the distribution/service fee but may terminate this waiver and commence
receiving this fee at any time in its discretion without notice to shareholders.
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 a 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.
For the year ended March 31, 1995, the Fund did not incur any expenses under the
Class A Distribution Plan since payments under the Plan commenced on a date
after the fiscal year end.
The Class A Distribution Plan will remain in effect until August 1, 1996, 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. 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 shares (as defined in "Investment Restrictions") and may
not be materially amended in any case without a vote 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 Class B Distribution Plan relating to Class B
shares (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 and will pay
MFD a service fee 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 or record).
This service fee is intended to be additional considertion for all personal
services and/or account maintenance services rendered by the dealer with respect
to Class B shares. MFD will also advance to dealers the first year service fee
at a rate equal to 0.25% per annum 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. 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 a service fee equal to 0.25% of the purchase
price). Dealers will become eligible for additional service fees with respect to
such shares in the 13 months 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 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 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, of personnel, travel, office expenses and
equipment. The Class B Distribution Plan also provides that MFD will receive all
CDSCs. (See "Distribution Plan" and "Purchases" in the Prospectus.)
For the year ended March 31, 1995, the Fund incurred expenses of $4,444,656
(equal to, on an annualized basis, 1.0% of its average daily net assets
attributable to Class B shares), relating to the distribution and servicing of
its Class B shares, of which MFD retained $68,521 and securities dealers of the
Fund and certain banks and other financial institutions received $4,376,135.
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.
The Class B Distribution Plan will remain in effect until August 1, 1996 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
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.
CLASS C DISTRIBUTION PLAN: The Distribution Plan relating to Class C shares (the
"Class C Distribution Plan") provides that the Fund will pay MFD a distribution
fee of up to 0.75% per annum of the Fund's average daily net assets attributable
to Class C 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 C 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 daily net assets attributable to
Class C shares owned by investors for whom that securities dealer is the holder
or dealer of record).
The distribution/service fees attributable to Class C shares are designed to
permit an investor to purchase such shares through a broker-dealer without the
assessment of an initial sales charge or a CDSC while allowing MFD to compensate
broker-dealers in connection with the sale of such shares.
The 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 C shares. MFD or its affiliates are entitled to retain all service fees
payable under the Class C Distribution Plan with respect to accounts for which
there is no dealer of record 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 to MFD under the Class C Distribution
Plan is to compensate MFD for its distribution services to the Fund.
Distribution payments under the Plan will be used by MFD to pay securities
dealers a distribution fee in an amount equal on an annual basis to 0.75% of the
Fund's average daily net assets attributable to Class C shares owned by
investors for whom securities dealer is the holder or dealer of record.
(Therefore, the total amount of distribution/service fees paid to a dealer on an
annual basis is 1.00% of the Fund's average daily net assets attributable to
Class C shares owned by investors for whom the securities dealer is the holder
or dealer of record.) MFD also pays 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 compensation of personnel and all costs of travel,
office expense and equipment. 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. Certain
banks and other financial institutions that have agency agreements with MFD will
receive agency transaction and service fees that are the same as distribution
and service fees to dealers. Fees payable under the Class C Distribution Plan
are charged to, and therefore reduce, income allocated to Class C shares.
For the year ended March 31, 1995, the Fund incurred expenses of $95,149 (equal
to, on an annualized basis, 1.0% of its average daily net assets attributable to
Class C shares), relating to the distribution and servicing of its Class C
shares, of which MFD retained $4,741 and securities dealers of the Fund and
certain banks and other financial institutions received $90,408.
In accordance with the Rule, all agreements relating to the Class C 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 C Distribution Plan or
in any agreement related to such Plan ("Class C Distribution Plan Qualified
Trustees"). The Class C Distribution Plan further provides that the selection
and nomination of Class C Distribution Plan Qualified Trustees shall be
committed to the discretion of the non-interested Trustees then in office.
The Class C Distribution Plan will remain in effect until August 1, 1996 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
Class C Distribution Plan Qualified Trustees. The Class C 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 C Distribution Plan may be
terminated at any time by vote of a majority of the Class C Distribution Plan
Qualified Trustees or by vote of the holders of a majority of the Class C shares
of the Fund (as defined in "Investment Restrictions" above). The Class C
Distribution Plan may not be amended to increase materially the amount of
permitted distribution expenses without the approval of Class C shareholders and
may not be materially amended in any case without a vote of the majority of both
the Trustees and the Class C Distribution Plan Qualified Trustees. No Trustee
who is not an interested person of the Fund has any financial interest in the
Class C Distribution Plan or in any related agreement.
10. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust'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 Trustees have currently
authorized shares of the Fund and 18 other 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 three classes of shares of the Fund (Class A, Class B and Class C
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 are entitled to share pro rata in the net
assets of the Fund allocable to such class available for distribution to
shareholders. The Trust reserves the right to create and issue additional series
or 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, shareholders
have under certain circumstances the right to remove one or more Trustees in
accordance with the provisions of Section 16(c) of the 1940 Act. No material
amendment may be made to the Declaration of Trust without the affirmative vote
of a majority of the Trust's shares (as defined in "Investment Restrictions") or
by an instrument in writing without a meeting, signed by a majority of Trustees
and consented to by the holders of not less than a majority of the shares
outstanding and entitled to vote. Shares have no pre-emptive or conversion
rights (except as described in "Purchases -- Conversion of Class B Shares" in
the Prospectus). Shares are fully paid and non-assessable. The Trust may enter
into a merger or consolidation, or sell all or substantially all of its assets
(or all or substantially all of the assets belonging to any series of the
Trust), if approved by the vote of the holders of two-thirds of the Trust's
outstanding shares voting as a single class, or of the affected series of the
Trust, as the case may be, except that if the Trustees of the Trust recommend
such merger, consolidation or sale, the approval by vote of the holders of a
majority of the Trust's or the affected series' outstanding shares (as defined
in "Investment Restrictions") will be sufficient. The Trust or any series of the
Trust may also be terminated (i) upon liquidation and distribution of its
assets, if approved by the vote of the holders of two-thirds of its outstanding
shares, or (ii) by the Trustees by written notice to the shareholders of the
Trust or the affected series. If not so terminated, the Trust will continue
indefinitely.
The Trust 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 Trust and provides for indemnification
and reimbursement of expenses out of Trust property for any shareholder held
personally liable for the obligations of the Trust. The Declaration of Trust
also provides that it shall maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its shareholders, Trustees, officers, employees and agents covering
possible tort or 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 Trust itself was unable to
meet its obligations.
The Declaration of Trust further provides that obligations of the Trust are not
binding upon the Trustees individually but only upon the property of the Trust
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.
11. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent auditors, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the SEC.
The Portfolio of Investments at March 31, 1995 the Statement of Assets and
Liabilities at March 31, 1995 the Statement of Operations for the year ended
March 31, 1995 the Statement of Changes in Net Assets for each of the two years
in the period ended March 31, 1995 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 Statement of
Additional Information and have been so incorporated in reliance upon the report
of Deloitte & Touche LLP, independent auditors, as experts in accounting and
auditing. A copy of the Annual Report accompanies this Statement of Additional
Information.
<PAGE>
APPENDIX A
<TABLE>
COMPENSATION TABLE
<CAPTION>
RETIREMENT BENEFIT ESTIMATED TOTAL TRUSTEE FEES
TRUSTEE FEES ACCRUED AS PART OF FUND CREDITED YEARS OF FROM FUND AND
TRUSTEE FROM FUND<F1> EXPENSE<F1> SERVICE<F2> FUND COMPLEX<F3>
------- ---------------- --------------------------- --------------------- ----------------------
<S> <C> <C> <C> <C>
Marshall N. Cohan ............ $3,950 $1,514 14 $147,274
J. David Gibbons ............. 3,500 1,095 13 132,024
Walter E. Robb, III .......... 3,950 1,730 15 147,274
Richard B. Bailey ............ 3,275 525 10 226,221
Ward Smith ................... 3,950 417 13 147,274
Abby M. O'Neill .............. 3,275 339 10 125,924
Dr. Lawrence Cohn ............ 3,500 175 18 133,524
J. Dale Sherratt ............. 3,950 197 20 147,274
- ------------
<FN>
<F1> For fiscal year ended March 31, 1995.
<F2> Based on normal retirement age of 75.
<F3> For calendar year ended 1994. All Trustees served as Trustee of 36 funds within the MFS Fund complex (having aggregate net
assets at December 31, 1994, of approximately $9,746,460,756) 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).
</FN>
</TABLE>
ESTIMATED ANNUAL BENEFITS PAYABLE BY FUND UPON RETIREMENT<F4>
YEARS OF SERVICE
AVERAGE ----------------------------------------------------------
TRUSTEE FEES 3 5 7 10 OR MORE
---------------------------------------------------------------------------
$2,950 $443 $ 738 $1,033 $1,475
3,230 485 808 1,131 1,615
3,510 527 878 1,229 1,755
3,790 569 948 1,327 1,895
4,070 611 1,018 1,425 2,035
4,350 653 1,088 1,523 2,175
<F4> Other funds in the MFS Fund complex provide similar retirement benefits to
the Trustees.
<PAGE>
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
MFS[R]
MUNICIPAL
INCOME FUND
500 BOYLSTON STREET
BOSTON, MA 02116
[Logo: MFS (SM)]
THE FIRST NAME IN MUTUAL FUNDS MMI-13-8/95/500 02/202/302
<PAGE>
MFS
THE FIRST NAME IN MUTUAL FUNDS
ANNUAL REPORT FOR
YEAR ENDED
MARCH 31, 1995
MFS(R) MUNICIPAL INCOME FUND
<PAGE>
<TABLE>
<CAPTION>
MFS(R) MUNICIPAL INCOME FUND
<S> <C>
TRUSTEES CUSTODIAN
A. Keith Brodkin* - Chairman and President State Street Bank and Trust Company
Richard B. Bailey* - Private Investor; AUDITORS
Former Chairman and Director (until 1991), Deloitte & Touche LLP
Massachusetts Financial Services Company
INVESTOR INFORMATION
Marshall N. Cohan - Private Investor For MFS stock and bond market outlooks,
call toll free: 1-800-637-4458 anytime from
Lawrence H. Cohn, M.D. - Chief of Cardiac Surgery, Brigham a touch-tone telephone.
and Women's Hospital; Professor of
Surgery, Harvard Medical School For information on MFS mutual funds,
call your financial adviser or, for an
The Hon. Sir J. David Gibbons, KBE - Chief information kit, call toll free:
Executive Officer, Edmund Gibbons Ltd.; 1-800-637-2929 any business day from
Chairman, Bank of N.T. Butterfield & Son Ltd. 9 a.m. to 5 p.m. Eastern time (or leave
a message anytime).
Abby M. O'Neill - Private Investor;
Director, Rockefeller Financial Services, Inc. INVESTOR SERVICE
(Investment Advisers) MFS Service Center, Inc.
P.O. Box 2281
Walter E. Robb, III - President and Treasurer, Boston, MA 02107-9906
Benchmark Advisors, Inc. (Corporate Financial
Consultants) For general information, call toll free:
1-800-225-2606 any business day from
Arnold D. Scott* - Senior Executive Vice President 8 a.m. to 8 p.m. Eastern time.
and Secretary, Massachusetts Financial Services
Company For service to speech- or hearing-impaired,
call toll free: 1-800-637-6576 any business
Jeffrey L. Shames* - President and Chief Equity day from 9 a.m. to 5 p.m. Eastern time.
Officer, Massachusetts Financial Services Company (To use this service, your phone must be
equipped with a Telecommunications
J. Dale Sherratt - President, Insight Resources, Inc. Device for the Deaf.)
(Acquisition Planning Specialists)
For share prices, account balances and
Ward Smith - Former Chairman (until 1994), exchanges, call toll free: 1-800-MFS-TALK
NACCO Industries; Director, Sundstrand (1-800-637-8255) anytime from a touch-tone
Corporation telephone.
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116-3741
PORTFOLIO MANAGER
David B. Smith* TOP-RATED SERVICE
MFS was rated first when
TREASURER securities firms evaluated the
W. Thomas London* quality of service they receive
from 40 mutual fund companies.
ASSISTANT TREASURER MFS got high marks for answering
James O. Yost* calls quickly, processing trans-
actions accurately and sending
SECRETARY statements out on time.
Stephen E. Cavan* (Source: 1994 DALBAR Survey)
ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Cover photo: Through their wide range of
investments, MFS mutual funds help you
*Affiliated with the Investment Adviser share in America's growth.
</TABLE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the fiscal year ended March 31, 1995, Class A shares of the Fund provided
a total return of +6.33%, Class B shares +5.32%, and Class C shares +5.39%
(including the reinvestment of distributions but excluding the effects of any
sales charges). These results underperformed the +7.43% return for the Lehman
Brothers Municipal Bond Index, an unmanaged index of national municipal bond
investments rated Baa or higher. Over the period, the Fund's holdings of
primarily premium coupon bonds provided below-average sensitivity to changing
interest rates. While this benefited the Fund during the first eight months of
the fiscal year when interest rates were rising, it detracted from performance
over the latter four months of the period when interest rates changed course and
began falling. A discussion of the Fund's performance and our outlook for the
months ahead may be found in the Portfolio Performance and Strategy section
below.
Economic Environment
The economic expansion, entering its fifth year, gained firmer underpinnings in
1994 as employers significantly stepped up hiring levels. Increased employment,
stronger capital spending by businesses, and strengthening overseas economies
resulted in 4.1% real (adjusted for inflation) gross domestic product growth
last year. Interest rates rose substantially over the past year, which should
help restrain, but not curtail, the economic expansion. Based on sound economic
fundamentals both here and abroad, we expect the business expansion to continue
well into 1995. However, recent data, including a March rise in the unemployment
rate and the first decline in industrial production in six months, indicate the
increased likelihood of a deceleration in the economy.
Despite a stonger economy, inflation at the consumer level has remained
relatively benign at 2.7% in 1994, the fourth straight year of 3.0% or less. Due
to a prolonged period of below-trend-line growth and continued pressure on
corporations to emphasize effective cost controls, wage growth and unit labor
costs have remained subdued. However, as the economy has exhibited continuing
strength, various industrial commodity prices have been rising substantially
faster than consumer prices. Nevertheless, businesses have had difficulty
passing these price increases on to the consumer. With the economy continuing to
expand, we expect some upward movement in inflation from below 3% to the 3 1/2%
range.
Municipal Bond Market
Municipal bond investors experienced unusual volatility during the fiscal year
ended March 31, 1995, with long-term yields rising 100 basis points through
mid-November, then retracing to finish the fiscal year unchanged. The municipal
bond market was battered during the first half of the fiscal year by a
combination of rising inflationary fears spurred by strong economic growth, and
heavy selling by tax-exempt mutual funds. However, the market began to improve
in December, when inflation fears subsided and market participants began to
focus on the reduced supply of municipal bonds. During 1994, new-issue supply
declined 44% from 1993's record level, and was down an additional 46% during the
first three months of this year. This reduction in supply, combined with
historically heavy bond calls and redemptions, should result in an unprecedented
two consecutive years of fewer bonds outstanding.
We believe municipals continue to represent good value based on our forecast
of stable to lower long-term interest rates, and that they should provide
attractive after-tax returns relative to alternative fixed-income investments.
Portfolio Performance and Strategy
During the past 12 months, the Fund was able to increase its dividend rate by
capturing additional yield available in the non-rated sector of the market
versus lower investment-grade bonds, and by emphasizing investment-grade bonds
with structures resulting in greater-income characteristics. Over the period, we
added to the Fund's holdings in noncallable bonds, reduced its exposure to
HUD-guaranteed housing bonds, and reduced our holdings in Denver Airport,
capturing a large gain in that position. Our exposure to corporate-guaranteed
airport bonds elsewhere increased slightly during the period, as we endeavored
to capture the cyclical improvement currently being experienced by the major
airlines.
Recent credit developments involving municipalities and the changing
environment for electric utilities and hospitals clearly demonstrate the
importance of fundamental credit analysis. We will continue to search for
relative values in these sectors and look for opportunities to reduce our
exposure to declining credits where appropriate. We will be placing increased
emphasis on improving the call protection of the Fund while, hopefully,
minimizing any adverse effects this may have on distributable income.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
- ------------------ ------------------
A 1-1/2" x 1-5/8" photo A 1-1/2" x 1-5/8" photo
of A. Keith Brodkin, of Dvid B. Smith,
Chairman and President Portfolio Mnager.
- ------------------ ------------------
/s/A. Keith Brodkin /s/David B. Smith
- ------------------- ------------------
A. Keith Brodkin David B. Smith
Chairman and President Portfolio Manager
April 17, 1995
OBJECTIVE AND POLICIES
The Fund's investment objective is to provide as high a level of current income
exempt from federal income taxes as is considered consistent with prudent
investing and protection of shareholders' capital.
The Fund seeks to achieve its investment objective by investing primarily in
debt securities issued by or on behalf of states, territories and possessions of
the United States and the District of Columbia and their political subdivisions,
agencies or instrumentalities, the interest on which is exempt from federal
income tax.
TAX FORM SUMMARY
In January 1995, shareholders were mailed a Tax Form Summary reporting the
federal tax status of all distributions paid during the calendar year 1994.
PERFORMANCE
The information below illustrates the historical performance of MFS Municipal
Income Fund Class B shares in comparison to various market indicators. Class B
share results in the graph do not reflect the deduction of any contingent
deferred sales charge (CDSC) since the CDSC is not applicable after a six-year
period. Benchmark comparisons are unmanaged and do not reflect any fees or
expenses. You cannot invest in an index. All results reflect the reinvestment of
all dividends and capital gains.
Class A shares were offered effective September 7, 1993. Information on Class A
share performance appears on the next page.
Class C shares were offered effective January 3, 1994. Information on Class C
share performance appears on the next page.
<PAGE>
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(For the Period from January 1, 1987 to March 31, 1995)
Page 3
Line graph representing the growth of a $10,000 investment for the period from
January 1, 1987 to March 31, 1995. The graph is scaled from $7,500 to $20,000 in
$2,500 segments. The years are marked from 1987 to 1995. There are three lines
drawn to scale. One is a solid line representing MFS Municipal Income Fund
(Class B), a second line of short dashes represents the Lehman Brothers
Municipal Bond Index, and a third line of long dashes represents the Consumer
Price Index.
MFS Municipal Income Fund (Class B) $16,332
Lehman Brothers Municipal Bond Index $18,491
Consumer Price Index $13,698
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
Life of Class
through
1 Year 3 Years 5 Years 3/31/95
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Municipal Income Fund (Class A) including
4.75% sales charge +1.24% -- -- -1.19%<F1>
- --------------------------------------------------------------------------------------------------------------
MFS Municipal Income Fund (Class A) at net
asset value +6.33% -- -- +1.97%<F1>
- --------------------------------------------------------------------------------------------------------------
MFS Municipal Income Fund (Class B) with CDSC<F5> +1.32% +5.27% +6.38% +6.12%<F2>
- --------------------------------------------------------------------------------------------------------------
MFS Municipal Income Fund (Class B) without CDSC +5.32% +6.16% +6.69% +6.12%<F2>
- --------------------------------------------------------------------------------------------------------------
MFS Municipal Income Fund (Class C) +5.39% -- -- +0.46%<F3>
- --------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +7.43% +7.34% +8.24% +7.74%<F4>
- --------------------------------------------------------------------------------------------------------------
Consumer Price Index<F6> +2.85% +2.82% +3.30% +3.89%<F4>
- --------------------------------------------------------------------------------------------------------------
All results are historical and, therefore, are not an indication of future results. The principal value and
income return of an investment in a mutual fund will vary with changes in market conditions, and shares, when
redeemed, may be worth more or less than their original cost. Class C shares have no initial sales charge or
CDSC but, along with Class B shares, have higher annual fees and expenses than Class A shares.
<FN>
<F1>For the period from the commencement of offering of Class A shares, September 7, 1993 to March 31, 1995.
<F2>For the period from the commencement of offering of Class B shares, December 29, 1986 to March 31, 1995.
<F3>For the period from the commencement of offering of Class C shares, January 3, 1994 to March 31, 1995.
<F4>Benchmark comparisons begin on January 1, 1987.
<F5>These returns reflect the applicable CDSC of 4%, 3% and 2% for the 1-, 3- and 5-year periods, respectively,
and 0% for the period commencing December 29, 1986.
<F6>The Consumer Price Index is a popular measure of change in prices.
</TABLE>
<PAGE>
PORTFOLIO OF INVESTMENTS - March 31, 1995
Municipal Bonds - 99.7%
- ------------------------------------------------------------------------------
S&P
Bond
Rating Principal Amount
(Unaudited) Issuer (000 Omitted) Value
- ------------------------------------------------------------------------------
Student Loan Revenue - 1.3%
AAA Pennsylvania Higher Education Assistance
Agency, 9.24s, 2026* $ 5,500 $ 5,798,760
- ------------------------------------------------------------------------------
General Obligation - 10.3%
NR Arlington, TX, Independent School
Refunding Rev., PSF, 0s, 2007 $ 3,070 $ 1,562,017
A+ Commonwealth of Massachusetts, 7s, 2007 2,590 2,834,704
AA+ Harris County, TX, Certificates of
Obligation (Astrodome Improvements
Project), 8.1s, 2008 1,385 1,523,431
A- New York, NY, 8.2s, 2003 5,000 5,610,450
A- New York, NY, 7.5s, 2008 1,350 1,423,927
A- New York, NY, 6.25s, 2009 3,400 3,258,866
A- New York, NY, 8.25s, 2010 2,335 2,559,533
A- New York, NY, 8s, 2018 30 32,343
AAA Northwest Texas, Independent School
District, AMBAC, 0s, 2011 3,000 1,133,400
AA State of Texas, 7.625s, 2018 14,405 15,703,754
AA State of Wisconsin, 8.1s, 2018 7,115 7,773,991
AA State of Wisconsin, 7.6s, 2020 2,865 2,998,309
-----------
$ 46,414,725
- ------------------------------------------------------------------------------
State and Local Appropriation - 3.2%
A+ Indianapolis, IN, Local Public
Improvement Bond Bank, 6.75s, 2020 $ 1,000 $ 1,019,460
BBB+ New York Dormitory Authority Rev. (City
University), 7.5s, 2010 2,500 2,800,700
BBB+ New York Medical Care Facility,
Financial Agency Rev., 8.875s, 2007 770 843,374
BBB+ New York Medical Care Facility,
Financial Agency Rev., 7.875s, 2008 745 814,427
BBB+ New York Medical Care Facility,
Financial Agency Rev., 7.875s, 2020 2,580 2,808,072
BBB+ New York Medical Care Facility,
Financial Agency Rev., 7.5s, 2021 540 581,678
BBB New York Urban Development Corp. (State
Facilities), 7.5s, 2011 2,500 2,694,550
AAA Philadelphia, PA, Regional Port
Authority Lease Rev., MBIA, MVRIC,
8.87s, 2020* 2,500 2,539,125
-----------
$ 14,101,386
- ------------------------------------------------------------------------------
Refunded and Special Obligation - 20.3%
AAA Adams County, CO, Single Family Mortgage
Rev., 8.875s, 2011 $ 2,510 $ 3,235,315
NR Chapel Hill, NC, Parking Facilities Rev.
(Rosemary Street Project), 8.125s, 2013 960 1,113,801
NR Chapel Hill, NC, Parking Facilities Rev.
(Rosemary Street Project), 8.25s, 2023 1,000 1,166,270
AAA Commonwealth of Massachusetts, 7.5s, 2007 1,990 2,262,173
A+ Commonwealth of Massachusetts, 7.5s, 2007 2,010 2,284,907
NR Dayton, OH, Special Facilities Rev.
(Emery Air Freight), "A", 12.5s, 2009 1,000 1,176,010
AAA Henrico County, VA, Industrial
Development Authority Rev., 7.34s, 2027* 5,000 4,770,900
NR Illinois Education and Facilities
Authority, 8.75s, 2015 1,440 1,493,338
NR Illinois Education and Facilities
Authority, 8.75s, 2015 60 62,119
AA Intermountain Power Agency, UT, Power
Supply Rev., 7s, 2021 5,000 5,467,900
AAA Los Angeles, CA, Convention & Exhibition
Center Authority, Certficates of
Participation, 7.375s, 2018 $ 2,000 2,220,300
NR Massachusetts Health & Education
Facilities Authority Rev. (Suffolk
University), 8s, 2010 1,000 1,141,650
NR Massachusetts Health & Education
Facilities Authority Rev. (Youville
Hospital), 9.1s, 2015 915 966,834
AAA Massachusetts Water Resources Authority,
7.625s, 2014 3,200 3,616,480
AAA New York Local Government Assistance
Corp., 7.25s, 2018 2,750 3,107,473
A- New York, NY, Pre-Refunded, "A", 8.25s,
2010 2,165 2,562,472
A- New York, NY, Pre-Refunded, "A", 8.25s,
2018 2,970 3,459,307
AAA New York Medical Care Facility,
Financial Agency Rev., 8.875s, 2007 680 756,670
AAA New York Medical Care Facility,
Financial Agency Rev., 7.875s, 2008 670 771,458
BBB+ New York Medical Care Facility,
Financial Agency Rev., 7.75s, 2020 1,030 1,169,278
AAA New York Medical Care Facility,
Financial Agency Rev., 7.875s, 2020 3,565 4,104,848
AAA New York Medical Care Facility,
Financial Agency Rev., 7.75s, 2021 1,460 1,665,042
NR New York Urban Development Corp.
(Correctional Facilities), 7.75s, 2014 5,000 5,663,100
NR New York Urban Development Corp Rev.,
7.3s, 2008 2,340 2,670,548
A- Pennsylvania Industrial Development
Authority Rev., 7s, 2011 7,000 7,784,210
AAA Philadelphia, PA, Municipal Authority
Rev., 7s, 2004 2,000 2,245,380
NR Texas Turnpike Authority Rev. (Houston
Ship Channel Bridge), 0s, 2020 3,000 3,979,920
AAA Washington County, PA, Authority Lease
Rev., 7.45s, 2018 1,200 1,360,645
AAA Washington Public Power Supply System
Rev., Nuclear Project #1, 14.375s, 2001 1,000 1,345,870
AAA Washington Public Power Supply System
Rev., Nuclear Project #1, 7.25s, 2015 3,350 3,694,480
AAA Washington Public Power Supply System
Rev., Nuclear Project #2, 7.375s, 2012 5,355 6,003,222
AA Washington Public Power Supply System
Rev., Nuclear Project #3, 7.25s, 2015 5,000 5,514,150
BBB+ West Virginia Water Development
Authority, 8.625s, 2028 1,000 1,134,490
BBB+ West Virginia Water Development Authority,
8.125s, 2029 1,000 1,118,340
-----------
$ 91,088,900
- --------------------------------------------------------------------------------
Single Family Housing Revenue - 9.2%
AAA Berkeley, Brookes, & Fayette Counties,
WV, MBIA, 0s, 2016 $ 14,000 $ 1,415,540
AAA Chicago, IL, Residential Mortgage Rev.,
0s, 2009 7,000 2,495,360
BB Cook County, IL, Single Family Housing,
0s, 2015 14,745 1,625,637
NR De Kalb, IL, Single Family Mortgage
Rev., 7.45s, 2009 280 295,898
NR Delaware Housing Authority Rev., 9.125s,
2018 915 953,192
BB Harris County, TX, Housing Finance
Corp., 9.625s, 2003 285 285,043
BB Harris County, TX, Housing Finance
Corp., 9.875s, 2014 505 505,080
A+ Illinois Housing Development Agency, 0s,
2016 8,785 954,841
AAA Kentucky Housing Corp., Housing Rev.,
FHA, 7.45s, 2023 6,280 6,610,453
AAA Louisiana Housing Finance Agency, Single
Family Mortgage Rev., FGIC, 9.375s, 2015 310 320,628
AA+ Minnesota Housing Finance Agency, 9s, 2018 4,655 4,806,427
NR Mississippi Home Corp., Single Family
Rev., 7.1s, 2023 870 899,388
A+ New Hampshire Housing Finance Authority,
7.2s, 2010 7,000 7,346,990
A+ New Hampshire Housing Finance Authority,
8.625s, 2013 755 789,172
A+ Tennessee Housing Development Agency,
8.25s, 2020 1,880 1,974,620
A+ Tennessee Housing Development Agency,
8.125s, 2021 2,145 2,241,868
AA Utah Housing Finance Agency, 8.625s, 2019 1,750 1,820,962
AA Utah Housing Finance Agency, 9.125s, 2019 195 203,470
AA Utah Housing Finance Agency, 9.25s, 2019 135 145,089
A+ West Virginia Housing Development Fund,
7.85s, 2014 5,470 5,733,763
-----------
$ 41,423,421
- ------------------------------------------------------------------------------
Multi-Family Housing Revenue - 3.1%
BBB Colorado Housing Finance Authority,
8.3s, 2023 $ 2,750 $ 2,896,768
NR Maryland Community Development
Administration, 8.5s, 2028 3,000 3,125,670
A+ Pennsylvania Housing Finance Agency,
7.6s, 2013 1,000 1,073,540
AA- Vermont Housing Finance Agency, 8.375s,
2020 2,760 2,878,762
A Wisconsin Housing & Economic Development
Authority, 7.2s, 2013 4,000 4,134,200
-----------
$ 14,108,940
- ------------------------------------------------------------------------------
Insured Health Care Revenue - 3.1%
AAA Clermont County, OH, Hospital Facilities
Rev. (Mercy Health System), AMBAC,
MVRIC, 9.991s, 2021* $ 1,500 $ 1,626,135
AAA Colorado Health Facilities Authority
Rev. (PSL Health Systems), FSA, 7.25s,
2016 2,000 2,157,780
AAA Fredericksburg, VA, Industrial
Development Authority, Hospital
Facilities Rev., FGIC, INFLOS, 8.759s, 2023* 1,500 1,597,785
AAA Jefferson County, KY, Hospital Rev.
(Alliant Health
System), INFLOS, MBIA, 8.38s, 2014* 1,500 1,572,945
AAA Mississippi Hospital Equipment &
Facilities Authority Rev. (Rush
Medical Foundation), Connie Lee, 6.7s, 2018 1,000 1,027,200
AAA Rio Grande Valley, TX, Health Facilities
Development Corp., MBIA, Short Rites,
7.72s, 2015*# 2,800 2,841,749
AAA Tulsa, OK, Industrial Authority,
Hospital Rev. (St. John's Medical
Center), MBIA, 0s, 2006 6,430 3,283,929
-----------
$ 14,107,523
- ------------------------------------------------------------------------------
Health Care Revenue - 4.6%
NR Bell County, TX, Health Facilities
Development Corp. (Advanced Living
Technology), 10.5s, 2018 $ 2,000 $ 1,840,000
BBB- Bell County, TX, Health Facilities
Development Corp. (Kings Daughters
Hospital), 9.25s, 2008 1,720 1,901,649
BBB Colorado Health Facilities Authority
Rev. (Rocky
Mountain Adventist), 6.625s, 2013 1,000 955,600
NR Fulton County, GA, Residential Care
Facilities, Elderly Authority Rev.
(Lenbrook Square Foundation), 9.75s, 2017 480 497,045
NR Gadsden County, FL, Industrial
Development Authority (RHA/FLA
Properties), 10.45s, 2018 1,970 2,022,699
Health Care Revenue - continued
NR Louisiana Public Facilities Authority
(Southwest Medical Center), 11s, 2006 $ 1,655 $ 992,328
A Massachusetts Health & Educational
Facilities Rev., 6.875s, 2022 6,000 6,050,880
BBB+ New York Medical Care Facilities Agency,
Mental Health Services, 7.75s, 2020 1,025 1,102,336
NR Philadelphia, PA, Industrial Development
Authority, 10.25s, 2018 1,980 2,042,747
NR Philadelphia, PA, Industrial Development
Authority, 10.25s, 2018 1,485 1,529,535
A Torrance, CA, Hospital Rev., 6.875s, 2015 1,815 1,863,242
-----------
$ 20,798,061
- ------------------------------------------------------------------------------
Electric and Gas Utility Revenue - 9.8%
AAA Austin, TX, Utilities System Rev.,
AMBAC, 0s, 2010 $ 7,500 $ 2,944,875
NR Chelan County, WA, Public Utility
District #1,
Consolidated Rev., 9.3s, 2062 4,450 4,911,020
AAA Georgia Municipal Electric Authority,
MBIA, 6.375s, 2016* 2,000 2,085,240
NR Midland, MI, Environmental Development
Authority, Pollution Control Rev. (Midland
Cogeneration), 9.5s, 2009 2,000 2,139,000
NR Montana Board of Investment Resources
Recovery Rev. (Yellowstone Energy),
7s, 2019 3,000 2,798,910
AAA Municipal Electric Authority, GA,
Special Obligation, MBIA, 6.5s, 2020 7,350 7,712,796
A- North Carolina Eastern Municipal Power
Agency, 7s, 2007 3,250 3,443,277
AAA Texas Municipal Power Agency Rev., 0s,
2011 5,930 2,220,192
AAA Texas Municipal Power Agency Rev., 0s,
2013 6,000 1,957,320
AAA Texas Municipal Power Agency Rev., 0s,
2014 10,435 3,203,023
AA Washington Public Power Supply System
Rev., Nuclear Project #1, 0s, 2003 2,000 1,246,560
AA Washington Public Power Supply System
Rev., Nuclear Project #1, 7s, 2011 4,050 4,228,564
AA Washington Public Power Supply System
Rev., Nuclear Project #3, 0s, 2004 4,885 2,849,469
AAA Washington Public Power Supply Systems,
Series "A", BIGI, 0s, 2013 4,000 1,288,120
AAA Washington Public Power Supply Systems,
Series "A", BIGI, 0s, 2014 3,350 1,013,777
-----------
$ 44,042,143
- ------------------------------------------------------------------------------
Water and Sewer Utility Revenue - 3.8%
AAA Contra Costa, CA, Water District Rev.,
MBIA, 5.5s, 2019 $ 4,000 $ 3,687,080
AAA Harris County, TX, Flood Control
District, FGIC, 0s, 2010 3,545 1,408,534
A Massachusetts Water Resources Authority,
6.5s, 2019 7,495 7,881,442
AAA Salt Lake County, UT, Water Conservancy
District Rev., AMBAC, 0s, 2008 2,100 946,176
AAA Salt Lake County, UT, Water Conservancy
District Rev., AMBAC, 0s, 2009 3,800 1,604,816
A- Union County, NJ, Utilities Authority
Solid Waste, 7.2s, 2014 1,500 1,520,160
-----------
$ 17,048,208
- ------------------------------------------------------------------------------
Turnpike Revenue - 3.4%
NR Massachusetts Industrial Finance Agency,
Tunnel Rev. (Mass. Turnpike), 9s, 2020 $ 2,900 $ 3,121,328
AA- Michigan Trunk Line, Series "A", 5.5s,
2021 5,000 4,626,700
AA- Michigan Trunk Line, Series "B", 5.5s,
2021 3,000 2,776,020
A New Jersey Turnpike Authority, Turnpike
Rev., 6.5s, 2016 1,450 1,531,591
NR San Joaquin Hills, CA, Transportation
Corridor Agency, Toll Road Rev., 0s,
2005 1,800 852,462
NR San Joaquin Hills, CA, Transportation
Corridor Agency, Toll Road Rev., 0s,
2009 6,750 2,320,650
-----------
$ 15,228,751
- ------------------------------------------------------------------------------
Airport and Port Revenue - 13.4%
BB+ Chicago, IL, O'Hare International
Airport, Special Facilities Rev.
(AMR), 7.875s, 2025 $ 3,500 $ 3,608,430
BB Chicago, IL, O'Hare International
Airport, Special
Facilities Rev. (United Airlines), 8.4s,
2018 2,025 2,151,907
BB Chicago, IL, O'Hare International
Airport, Special Facilities Rev.
(United Airlines), 8.85s, 2018 2,950 3,269,573
BB Chicago, IL, O'Hare International
Airport, Special
Facilities Rev. (United Airlines), 8.85s,
2018 6,535 7,242,936
NR Cleveland, OH, Airport, Special
Facilities Rev. (Continental Airlines),
9s, 2019 5,300 5,318,391
AAA Connecticut Airport Rev., FGIC, 7.65s, 2012 1,000 1,130,670
BB+ Dallas-Fort Worth, TX, International
Airport Facilities (AMR), 7.5s, 2025 5,000 5,056,000
BB Denver, CO, City & County Airport Rev.,
8.75s, 2023 4,750 5,234,785
AAA Hawaii Airport Systems Rev., FGIC, 7.5s,
2020 5,350 5,751,945
BB Kenton County, KY, Airport Board Special
Facilities (Delta Airlines), 7.5s, 2020 1,000 1,018,640
AAA Metropolitan Washington District of
Columbia Airports Authority, FGIC,
7.25s, 2010 4,000 4,324,480
NR St. Augustine, FL, Airport Authority
(Grumman Repair Facility), 11s, 2004 500 536,500
BB+ Tulsa, OK, Municipal Airport Trust Rev.
(AMR), 7.375s, 2020 12,000 12,132,360
A+ Virginia Port Authority, 8.2s, 2008 3,000 3,316,080
-----------
$ 60,092,697
- ------------------------------------------------------------------------------
Industrial Revenue (Corporate Guarantee) - 7.2%
BBB Brazos River Authority, TX, Pollution
Control Rev. (Texas Utilities), 9.875s, 2017 $ 8,890 $ 9,770,910
BBB Brazos River Authority, TX, Pollution
Control Rev. (Texas Utilities), 9.25s, 2018 1,000 1,090,620
A+ Burke County, GA, Pollution Control Rev.
(Georgia Power Co./Vogtle Project),
9.375s, 2017 2,650 2,945,582
NR Burns Harbor, IN, Solid Waste Disposal
Facilities Rev. (Bethlehem Steel), 8s,
2024 3,000 3,065,460
A Charleston County, SC, Resource Recovery
Rev. (Foster Wheeler), 9.25s, 2010 3,200 3,523,840
AA- Chicago, IL, Gas Supply Rev. (People's
Gas), 8.1s, 2020 2,000 2,230,820
A- Erie County, PA (International Paper),
7.875s, 2016 1,200 1,289,148
A- Matagorda County, TX, Pollution Control
Rev. (Central Power & Light), 7.875s,
2016 1,500 1,582,485
NR Port of New Orleans, LA (Avondale
Industries), 8.5s, 2014 2,000 2,088,560
BB- Port of New Orleans, LA (Continental
Grain Co.), 7.5s, 2013 1,000 1,015,170
NR San Joaquin Hills, CA, Transportation
Corridor Agency, 0s, 2004 3,000 1,534,050
BBB West Side Calhoun County, TX, Navigation
District, 8.2s, 2021 2,000 2,196,880
-----------
$ 32,333,525
- ------------------------------------------------------------------------------
Universities - 0.4%
AA- Michigan State University Rev., 5.5s,
2022 $ 2,000 $ 1,821,340
- ------------------------------------------------------------------------------
Miscellaneous Revenue - 6.6%
NR Atlanta, GA, Downtown Development Authority,
11.5s, 2015**++ $ 1,055 $ 316,548
NR Bristol, CT, Resource Recovery
Facilities, 6.5s, 2014## 8,000 7,624,560
NR Crystal City, TX, Lease Obligations, 10.5s,
2008+ 1,252 1,197,172
BBB- Greater Detroit, MI, Resource Recovery
Authority, 9.25s, 2008 2,130 2,224,785
AAA Illinois Dedicated Tax, Civic Center,
AMBAC, 0s, 2016 5,000 1,285,100
NR Martha's Vineyard, MA, Land Bank,
8.125s, 2011 1,900 1,929,698
NR Maryland Energy Financing Administration
(Solid Waste), 9s, 2016 4,000 3,995,480
NR Massachusetts Health & Education
Facilities Authority Rev. (Learning
Center for Deaf Children), 9.25s, 2014 1,000 1,069,290
NR Pittsylvania County, VA, Industrial
Development Authority Rev., 7.5s, 2014 6,000 6,072,780
NR Retema, TX, Special Facilities Rev.
(Retema Park Racetrack Project), 8.75s, 2018 4,000 3,899,400
-----------
$ 29,614,813
- ------------------------------------------------------------------------------
Total Municipal Bonds $448,023,193
- ------------------------------------------------------------------------------
Total Investments (Identified Cost, $420,651,437) $448,023,193
Other Assets, Less Liabilities - 0.3% 1,148,279
- ------------------------------------------------------------------------------
Net Assets - 100.0% $449,171,472
- ------------------------------------------------------------------------------
+Restricted security.
++Security valued by or at the direction of the Trustees.
*Inverse floating rate security.
**Non-income producing security - in default.
#Indexed security.
##When-issued security. At March 31, 1995, the Fund had sufficient cash and/or
securities at least equal to the value of the when-issued security.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
- ------------------------------------------------------------------------------
March 31, 1995
- ------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $420,651,437) $448,023,193
Cash 56,499
Receivable for investments sold 2,492,940
Receivable for Fund shares sold 237,809
Interest receivable 8,910,475
Other assets 6,957
------------
Total assets $459,727,873
------------
Liabilities:
Distributions payable $ 877,910
Payable for when-issued investments purchased 8,000,000
Payable for Fund shares reacquired 1,461,848
Payable to affiliates -
Management fee 9,525
Shareholder servicing agent fee 2,650
Distribution fee 11,662
Accrued expenses and other liabilities 192,806
------------
Total liabilities $ 10,556,401
------------
Net assets $449,171,472
------------
Net assets consist of:
Paid-in capital $433,004,620
Unrealized appreciation on investments 27,371,756
Accumulated net realized loss on investments (10,520,735)
Accumulated distributions in excess of net investment income (684,169)
------------
Total $449,171,472
------------
Shares of beneficial interest outstanding 52,435,142
------------
Class A shares:
Net asset value and redemption price per share
(net assets of $25,270,127 / 2,952,479 shares of beneficial
interest outstanding) $8.56
----
Offering price per share (100/95.25) $8.99
----
Class B shares:
Net asset value, offering price, and redemption price per
share (net assets of $412,965,394 / 48,206,602 shares of
beneficial interest outstanding) $8.57
----
Class C shares:
Net asset value, offering price, and redemption price per
share (net assets of $10,935,951 / 1,276,061 shares of
beneficial interest outstanding) $8.57
----
On sales of $100,000 or more, the offering price of Class A shares is reduced. A
contingent deferred sales charge may be imposed on redemptions of Class A and
Class B shares.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statement of Operations
- ------------------------------------------------------------------------------
Year Ended March 31, 1995
- ------------------------------------------------------------------------------
Net investment income:
Interest income $33,848,466
----------
Expenses -
Management fee $ 3,545,246
Trustees' compensation 40,748
Shareholder servicing agent fee (Class A) 13,323
Shareholder servicing agent fee (Class B) 977,825
Shareholder servicing agent fee (Class C) 14,272
Distribution and service fee (Class B) 4,444,656
Distribution and service fee (Class C) 95,149
Custodian fee 173,858
Printing 84,123
Auditing fees 60,684
Postage 43,309
Legal fees 26,048
Miscellaneous 373,477
----------
Total expenses $ 9,892,718
----------
Net investment income $23,955,748
----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $(9,519,481)
Futures contracts 723,362
----------
Net realized loss on investments $(8,796,119)
----------
Change in unrealized appreciation (depreciation) -
Investments $ 8,378,273
Futures contracts (151,563)
----------
Net unrealized gain on investments $ 8,226,710
----------
Net realized and unrealized loss on investments $ (569,409)
----------
Increase in net assets from operations $23,386,339
----------
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended Four Months Ended Year Ended
March 31, 1995 March 31, 1994 November 30, 1993
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase in net assets:
From operations -
Net investment income $ 23,955,748 $ 8,135,114 $ 24,569,248
Net realized gain (loss) on investments (8,796,119) (1,579,438) 2,174,746
Net unrealized gain (loss) on investments 8,226,710 (21,759,776) 19,852,443
----------- ----------- -----------
Increase (decrease) in net assets from operations $ 23,386,339 $(15,204,100) $ 46,596,437
----------- ----------- -----------
Distributions declared to shareholders -
From net investment income (Class A) (551,579) (24,388) (2,142)
From net investment income (Class B) (22,598,713) (6,513,043) (25,152,570)
From net investment income (Class C) (491,715) (36,953) --
In excess of net investment income (Class A) -- (444) (150)
In excess of net investment income (Class B) -- (1,488,102) (1,560,580)
In excess of net investment income (Class C) -- (1,021) --
From net realized gain on investments -- (320,243) (5,237,004)
In excess of net realized gain on investments (2,000) (1,230,985) --
----------- ---------- ----------
Total distributions declared to shareholders (23,644,007) (9,615,179) (31,952,446)
----------- ---------- ----------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 63,201,308 $ 31,229,236 $118,919,014
Net asset value of shares issued to
shareholders in reinvestment of
distributions 12,855,706 5,241,616 18,199,816
Cost of shares reacquired (118,093,995) (38,825,729) (83,071,056)
----------- ----------- -----------
Increase (decrease) in net assets from
Fund share transactions (42,036,981) (2,354,877) $ 54,047,774
----------- --------- -----------
Total increase (decrease) in net assets (42,294,649) (27,174,156) $ 68,691,765
Net assets:
At beginning of period 491,466,121 518,640,277 449,948,512
----------- ----------- -----------
At end of period (including accumulated
distributions in excess of net investment
income of $(684,169), $(1,489,567) and $(1,560,730),
respectively) $449,171,472 $491,466,121 $518,640,277
----------- ----------- -----------
See notes to financial statements
</TABLE>
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights
- -----------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
March 31, November 30, March 31, November 30,
- ----------------------------------------------------------------------- ------------ ------------- ------------
1995 1994<F1> 1993<F2> 1995 1994<F1> 1993
- ------------------------------------------------------------------------------------------------------------------------
Class A Class B
- ------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 8.56 $ 8.99 $ 9.15 $ 8.56 $ 8.99 $ 8.73
Income from investment operations<F4>
Net investment income $ 0.50 $ 0.15 $ 0.12 $ 0.44 $ 0.14 $ 0.42
Net realized and unrealized gain (loss)
on investments 0.02 (0.51) (0.16) -- (0.51) 0.42
---- ----- ----- ------ ----- ----
Total from investment operations $ 0.52 $(0.36) $(0.04) $ 0.44 $(0.37) $ 0.84
---- ---- ---- ---- ---- ----
Less distributions declared to shareholders --
From net investment income $(0.52) $(0.02) $(0.11) $(0.43) $(0.01) $(0.45)
In excess of net investment income -- -- (0.01) -- -- (0.03)
From net realized gain on investments -- (0.01) -- -- (0.01) (0.10)
In excess of net realized gain on investments --<F6> (0.04) -- -- (0.04) --
---- ---- ---- ---- ---- ----
Total distributions declared to shareholders $(0.52) $(0.07) $(0.12) $(0.43) $(0.06) $(0.58)
---- ---- ---- ---- ---- ----
Net asset value - end of period $ 8.56 $ 8.56 $ 8.99 $ 8.57 $ 8.56 $ 8.99
====== ====== ====== ====== ====== ======
Total Return<F5> 6.33% (7.90)%<F3> (1.80)%<F3> 5.32% (8.97)%<F3> 9.95%
Ratios (to average net assets)/Supplemental data:
Expenses 1.13% 1.07%<F3> 0.76%<F3> 2.16% 2.24%<F3> 2.11%
Net investment income 6.20% 5.31%<F3> 4.94%<F3> 5.15% 4.74%<F3> 4.92%
Portfolio turnover 25% 9% 30% 25% 9% 30%
Net assets at end of period (000 omitted) $25,270 $5,595 $ 461 $412,965 $479,478 $518,179
<FN>
<F1>For the four-month period ended March 31, 1994.
<F2>For the period from the commencement of offering of Class A shares, September 7, 1993 to November 30, 1993.
<F3>Annualized.
<F4>Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
<F5>Total returns for Class A shares do not include the applicable sales charge. If the charge had been
included, the results would have been lower.
<F6>Distributions in excess of net realized gains were less than $0.01 per share.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights - continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended
Year Ended November 30, March 31,
- ------------------------------------------------------------------------------------------------------- --------------------
1992 1991 1990 1989 1988 1987<F4> 1995 1994<F1>
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Class C
- -----------------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $ 8.50 $ 8.25 $ 8.41 $ 8.11 $ 7.67 $ 8.47 $ 8.56 $ 9.07
------- ------ ------- ------- ------- ------- ------ --------
Income from investment operations<F3> -
Net investment income $ 0.47 $ 0.49 $ 0.49 $ 0.51 $ 0.50 $ 0.38 $ 0.44 $ 0.09
Net realized and unrealized gain (loss)
on investments 0.26 0.25 (0.15) 0.30 0.43 (0.83) 0.01 (0.59)
---- ---- ----- ---- ---- ----- ---- -----
Total from investment operations $ 0.73 $ 0.74 $ 0.34 $ 0.81 $ 0.93 $ (0.45) $ 0.45 $ (0.50)
------- ------ ------- ------- ------- ------- ------ --------
Less distributions declared to shareholders -
From net investment income $ (0.48) $(0.49) $ (0.50) $ (0.51) $ (0.49) $(0.35) $ (0.44) $ (0.01)
In excess of net investment income -- -- -- -- -- -- -- --
From paid-in capital (0.02) -- -- -- -- -- -- --
------- ------ ------- ------- ------- ------- ------ --------
Total distributions declared
to shareholders $ (0.50) $(0.49) $ (0.50) $ (0.51) $ (0.49) $ (0.35) $(0.44) $ (0.01)
------- ------ ------- ------- ------- ------- ------ --------
Net asset value - end of period $ 8.73 $ 8.50 $ 8.25 $ 8.41 $ 8.11 $ 7.67 $ 8.57 $ 8.56
Total return 8.82% 9.21% 4.18% 10.24% 12.53% (5.79)%<F2> 5.39% (19.42)%<F2>
==== ==== ==== ===== ===== ===== ==== ======
Ratios (to average net assets)/
Supplemental data:
Expenses 2.03% 2.04% 2.05% 2.07% 2.09% 2.03%<F2> 2.09% 2.18%<F2>
Net investment income 5.50% 5.82% 5.99% 6.09% 6.38% 6.00%<F2> 5.23% 4.62%<F2>
Portfolio turnover 52% 73% 91% 127% 171% 138% 25% 9%
Net assets at end of period
(000 omitted) $449,949 $409,084 $379,239 $343,887 $244,825 $183,935 $10,936 $ 6,393
<F1>For the period from the commencement of offering of Class C shares, January 3, 1994 to March 31, 1994.
<F2>Annualized.
<F3>Per share data for the periods subsequent to November 30, 1993 are based on average shares outstanding.
<F4>For the period from the commencement of investment operations, December 29, 1986 to November 30, 1987.
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization
MFS Municipal Income Fund (the Fund) is a diversified series of MFS Municipal
Series Trust (the Trust). The Trust is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended, as
an open-end management investment company. During 1993 the Fund changed its year
end from November 30 to March 31.
(2) Significant Accounting Policies
Investment Valuations - Debt securities (other than short-term obligations which
mature in 60 days or less), including listed issues and forward contracts, are
valued on the basis of valuations furnished by dealers or by a pricing service
with consideration to factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data, without exclusive reliance upon
exchange or over-the-counter prices. Short-term obligations, which mature in 60
days or less, are valued at amortized cost, which approximates value. Futures
contracts, options and options on futures contracts listed on commodities
exchanges are valued at closing settlement prices. Over-the-counter options are
valued by brokers through the use of a pricing model which takes into account
closing bond valuations, implied volatility and short-term repurchase rates.
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 Trustees.
Repurchase Agreements - The Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser has determined are creditworthy.
Each repurchase agreement is recorded at cost. The Fund requires that the
securities purchased in a repurchase transaction be transferred to the custodian
in a manner sufficient to enable the Fund to obtain those securities in the
event of a default under the repurchase agreement. The Fund monitors, on a daily
basis, the value of the securities transferred to ensure that the value,
including accrued interest, of the securities under each repurchase agreement is
greater than amounts owed to the Fund under each such repurchase agreement.
Written Options - The Fund may write covered call or put options for which
premiums are received and are recorded as liabilities, and are subsequently
adjusted to the current value of the options written. Premiums received from
writing options which expire are treated as realized gains. Premiums received
from writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. If a put option is exercised, the premium reduces the cost basis of the
security purchased by the Fund. The Fund, as writer of an option, may have no
control over whether the underlying security may be sold (call) or purchased
(put) and, as a result, bears the market risk of an unfavorable change in the
price of the securities underlying the written option. In general, written call
options may serve as a partial hedge against decreases in value in the
underlying securities to the extent of the premium received. Written options may
also be used as a part of an income-producing strategy reflecting the view of
the Fund's management on the direction of interest rates.
Futures Contracts - The Fund may enter into financial futures contracts for the
delayed delivery of securities at a fixed price on a future date. In entering
such contracts, the Fund is required to deposit either in cash or securities an
amount equal to a certain percentage of the contract amount. Subsequent payments
are made or received by the Fund each day, depending on the daily fluctuations
in the value of the underlying security, and are recorded for financial
statement purposes as unrealized gains or losses by the Fund. The Fund's
investment in financial futures contracts is designed to hedge against
anticipated future changes in interest rates or securities prices or for
non-hedging purposes. For example, interest rate futures may be used in
modifying the duration of the portfolio without incurring the additional
transaction costs involved in buying and selling the underlying securities.
Should interest rates or securities prices move unexpectedly, the Fund may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss.
Security Loans - The Fund may lend its securities to member banks of the Federal
Reserve System and to member firms of the New York Stock Exchange or
subsidiaries thereof. The loans are collateralized at all times by cash or
securities with a market value at least equal to the market value of securities
loaned. As with other extensions of credit, the Fund may bear the risk of delay
in recovery or even loss of rights in the collateral should the borrower of the
securities fail financially. The Fund receives compensation for lending its
securities in the form of fees or from all or a portion of the income from
investment of the collateral. The Fund would also continue to earn income on the
securities loaned. At March 31, 1995, the Fund had no securities on loan.
Investment Transactions and Income - Investment transactions are recorded on the
trade date. Interest income is recorded on the accrual basis. All premium and
original issue discount are amortized or accreted for both financial statement
and tax reporting purposes as required by federal income tax regulations.
Interest payments received in additional securities are recorded on the
ex-interest date in an amount equal to the value of the security on such date.
The Fund uses the effective interest method for reporting interest income on
payment-in-kind (PIK) bonds, whereby interest income on PIK bonds is recorded
ratably by the Fund at a constant yield to maturity. Legal fees and other
related expenses incurred to preserve and protect the value of a security owned
are added to the cost of the security; other legal fees are expensed. Capital
infusions, which are generally non-recurring, incurred to protect or enhance the
value of high-yield debt securities, are reported as an addition to the cost
basis of the security. Costs that are incurred to negotiate the terms or
conditions of capital infusions or that are expected to result in a plan of
reorganization are considered workout expenses and are reported as realized
losses. Ongoing costs incurred to protect or enhance an investment, or costs
incurred to pursue other claims or legal actions, are reported as operating
expenses.
Tax Matters and Distributions - The Fund's policy is to comply with the
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies and to distribute to shareholders all of its net taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. The Fund files a tax
return annually using tax accounting methods required under provisions of the
Code which may differ from generally accepted accounting principles, the basis
on which these financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial statements
may differ from that reported on the Fund's tax return and, consequently, the
character of distributions to shareholders reported in the financial highlights
may differ from that reported to shareholders on Form 1099-DIV. Distributions to
shareholders are recorded on the ex-dividend date.
Distributions paid by the Fund from net interest received on tax-exempt
municipal bonds are not includable by shareholders as gross income for federal
income tax purposes because the Fund intends to meet certain requirements of the
Code applicable to regulated investment companies, which will enable the Fund to
pay exempt-interest dividends. That portion of such interest, if any, earned on
private activity bonds issued after August 7, 1986, may be considered a tax
preference item to shareholders.
The Fund distinguishes between distributions on a tax basis and a financial
reporting basis and requires that only distributions in excess of tax basis
earnings and profits are reported in the financial statements as a return of
capital. Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains. During the year ended March 31, 1995, $491,631 and $26 were reclassified
from accumulated undistributed net realized gain on investments and paid-in
capital, respectively, to accumulated net investment income due to differences
between book and tax accounting. This change had no effect on the net assets or
net asset value per share.
Multiple Classes of Shares of Beneficial Interest - The Fund offers Class A,
Class B and Class C shares. Class A and Class C shares were first offered to the
public on September 7, 1993 and January 3, 1994, respectively. The three classes
of shares differ in their respective shareholder servicing agent, distribution
and service fees. Shareholders of each class also bear certain expenses that
pertain only to that particular class. All shareholders bear the common expenses
of the Fund pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared separately for
each class. No class has preferential dividend rights; differences in per share
dividend rates are generally due to differences in separate class expenses,
including distribution and shareholder service fees.
(3) Transactions with Affiliates
Investment Adviser - The Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. Prior to
September 1, 1993, Lifetime Advisors, Inc. (LAI), a wholly owned subsidiary of
MFS, was the investment adviser for the Fund. The management fee, computed daily
and paid monthly at an effective annual rate of 0.30% of average daily net
assets and 6.43% of investment income, amounted to $3,545,246 for the year ended
March 31, 1995.
The Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of the Fund, all of whom receive remuneration
for their services to the Fund from MFS. Certain of the officers and Trustees of
the Fund are officers or directors of LAI, MFS, MFS Fund Distributors, Inc.
(MFD) and MFS Service Center, Inc. (MFSC). The Fund has an unfunded defined
benefit plan for all its independent Trustees. Included in Trustees'
compensation is a net periodic pension expense of $11,398 for the year ended
March 31, 1995.
Distributor - MFD, a wholly owned subsidiary of MFS, as distributor, received
$9,957 as its portion of the sales charge on sales of Class A shares of the
Fund. The Trustees have adopted separate distribution plans for Class A, Class B
and Class C shares pursuant to Rule 12b-1 of the Investment Company Act of 1940
as follows:
The Class A Distribution Plan provides that the Fund will pay MFD up to 0.35%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of the Fund related to the
distribution and servicing of its shares. These expenses include a service fee
to each securities dealer that enters 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 which are attributable to that securities dealer, a distribution fee to
MFD of up to 0.10% per annum of the Fund's average daily net assets attributable
to Class A shares, commissions to dealers and payments to MFD wholesalers for
sales at or above a certain dollar level, and other such distribution-related
expenses that are approved by the Fund. Payments will commence under the
distribution plan on such date that the net assets of the Fund attributable to
Class A shares first equals or exceeds $40 million.
The Class B and Class C Distribution Plans provide that the Fund will pay MFD a
monthly distribution fee, equal to 0.75% per annum, and a quarterly service fee
of up to 0.25% per annum, of the Fund's average daily net assets attributable to
Class B and Class C shares. MFD will pay to securities dealers that enter into a
sales agreement with MFD, all or a portion of the service fee attributable to
Class B and Class C shares, and will pay to such securities dealers all of the
distribution fee attributable to Class C shares. The service fee is intended to
be additional consideration for services rendered by the dealer with respect to
Class B and Class C shares. Fees incurred under the distribution plans during
the year ended March 31, 1995 were 1.00% of average daily net assets
attributable to Class B and Class C shares on an annualized basis and amounted
to $4,444,656 and $95,149, respectively (of which MFD retained $68,521 and
$4,741, respectively).
A contingent deferred sales charge is imposed on shareholder redemptions of
Class A shares, on purchases of $1 million or more, in the event of a
shareholder redemption within twelve months following the share purchase. A
contingent deferred sales charge is imposed on shareholder redemptions of Class
B shares in the event of a shareholder redemption within six years of purchase.
MFD receives all contingent deferred sales charges. Contingent deferred sales
charges imposed during the year ended March 31, 1995 were $708,357 for Class B
shares.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earned
$13,323, $977,825 and $14,272 for Class A, Class B and Class C shares,
respectively, for its services as shareholder servicing agent. The fee is
calculated as a percentage of the average daily net assets of each class of
shares at an effective annual rate of up to 0.15%, up to 0.22% and up to 0.15%
attributable to Class A, Class B and Class C shares, respectively.
(4) Portfolio Securities
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions and short-term obligations, aggregated
$116,193,500 and $155,479,893, respectively.
The cost and unrealized appreciation or depreciation in value of the investments
owned by the Fund, as computed on a federal income tax basis, are as follows:
Aggregate cost $420,651,437
-------------
Gross unrealized appreciation $ 29,459,510
Gross unrealized depreciation (2,087,754)
-------------
Net unrealized appreciation $ 27,371,756
-------------
At March 31, 1995, the Fund, for federal income tax purposes, had a capital loss
carryforward of ($7,934,343), which may be applied against any net taxable
realized gains of each succeeding year until the earlier of its utilization or
expiration on March 31, 2002 ($1,415,952) and March 31, 2003 ($6,518,391).
(5) Shares of Beneficial Interest
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).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Class A Shares
Year Ended Year Ended Period Ended
March 31, 1995 March 31, 1994<F1> November 30, 1993<F2>
------------------------- ----------------------------- ---------------------------
Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 2,767,565 $ 23,341,811 766,727 $ 6,792,015 51,270 $ 466,122
Shares issued to
shareholders in
reinvestment of
distributions 17,884 151,011 1,368 12,126 134 1,211
Shares reacquired (486,722) (4,100,978) (165,634) (1,507,352) (113) (1,021)
--------- ----------- -------- ------------ ------ ------------
Net increase 2,298,727 $ 19,391,844 602,461 $ 5,296,789 51,291 $ 466,312
========= ============ ======= ============ ====== ============
<CAPTION>
Class B Shares
Year Ended Year Ended Year Ended
March 31, 1995 March 31, 1994<F1> November 30, 1993
------------------------- ----------------------------- --------------------------------
Shares Amount Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 3,236,637 $ 27,296,462 1,771,398 $ 16,008,151 13,299,141 $118,452,892
Shares issued to
shareholders in
reinvestment of
distributions 1,465,533 12,377,112 581,143 5,207,213 2,056,699 18,198,605
Shares reacquired (12,503,667) (105,578,609) (3,964,973) (35,578,939) (9,277,213) (83,070,035)
---------- ------------ ---------- ----------- ---------- ------------
Net increase (decrease) (7,801,497) $(65,905,035) (1,612,432) $(14,363,575) 6,078,627 $ 53,581,462
========== ============ ========== ============ ========= ============
<CAPTION>
Class C Shares
Year Ended Year Ended
March 31, 1995 March 31, 1994<F3>
------------------------- -----------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,490,674 $ 12,563,035 940,881 $ 8,429,070
Shares issued to
shareholders in
reinvestment of
distributions 38,763 327,583 2,564 22,277
Shares reacquired (999,873) (8,414,408) (196,948) (1,739,438)
------- ------------ ------- ---------
Net increase 529,564 $ 4,476,210 746,497 $ 6,711,909
======= ========== ======= ============
<FN>
<F1>For the four months ended March 31, 1994.
<F2>For the period from the commencement of offering of Class A shares, September 7, 1993 to November 30, 1993.
<F3>For the period from the commencement of offering of Class C shares, January 3, 1994 to March 31, 1994.
</TABLE>
(6) Line of Credit
The Fund entered into an agreement which enables it to participate with other
funds managed by MFS, or an affiliate of MFS, in an unsecured line of credit
with a bank which permits borrowings up to $350 million, collectively.
Borrowings may be made to temporarily finance the repurchase of Fund shares.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the bank's base rate. In addition, a commitment fee, based on the average daily
unused portion of the line of credit, is allocated among the participating funds
at the end of each quarter. The commitment fee allocated to the Fund for the
year ended March 31, 1995 was $7,371.
(7) Financial Instruments
The Fund invests in indexed securities whose value may be linked to interest
rates, commodities, indices or other financial indicators. Indexed securities
are fixed-income securities whose proceeds at maturity (principal-indexed
securities) or interest rates (coupon-indexed securities) rise and fall
according to the change in one or more specified underlying instruments. Indexed
securities may be more volatile than the underlying instrument itself. The
following is a summary of such securities held at March 31, 1995:
Coupon-Indexed Securities
Principal Unrealized
Description Index (000 Omitted) Value Appreciation
- ------------------------------------------------------------------------------
Rio Grande Valley, TX,
Health Facilities
Development Corp.,
7.72s, 2015 J.J. Kenny $2,800 $2,841,749 $74,985
-------
(8) Restricted Securities
The Fund may invest not more than 15% of its total assets in securities which
are subject to legal or contractual restrictions on resale. At March 31, 1995,
the Fund owned the following restricted security (constituting 0.27% of net
assets) which may not be publicly sold without registration under the Securities
Act of 1933. The Fund does not have the right to demand that such security be
registered. The value of this security is determined by valuations supplied by a
pricing service or brokers. This security may be offered to "qualified
institutional buyers" under Rule 144A of the 1933 Act.
Date of Par Amount
Description Acquisition (000 Omitted) Cost Value
- --------------------------------------------------------------------------
Crystal City, TX,
Lease Obligations,
10.5s, 2008 5/25/88 $1,252 $948,056 $1,197,172
----------
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Municipal Series Trust and Shareholders of MFS Municipal
Income Fund: We have audited the accompanying statement of assets and
liabilities, including the portfolio of investments, of MFS Municipal Income
Fund (one of the series constituting MFS Municipal Series Trust) as of March 31,
1995, the related statement of operations for the year then ended, the statement
of changes in net assets for the year ended March 31, 1995, the four months
ended March 31, 1994 and the year ended November 30, 1993, and the financial
highlights for the year ended March 31, 1995, the four months ended March 31,
1994 and each of the years in the seven-year period ended November 30, 1993.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at
March 31, 1995 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS Municipal Income
Fund at March 31, 1995, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 5, 1995
---------------------------------------------
This report is prepared for the general information of shareholders. It is
authorized for distribution to prospective investors only when preceded or
accompanied by a current prospectus.
<PAGE>
MFS MUNICIPAL
INCOME FUND
500 Boylston Street
Boston, MA 02116
MFS(SM)
THE FIRST NAME IN MUTUAL FUNDS
Bulk Rate
U.S. Postage
P A I D
Permit #55638
Boston, MA
MMI-2 5/95 21.5M 02/202/302
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS INCLUDED IN PART A:
MFS MUNICIPAL INCOME FUND
For the period from commencement of investment operations on
December 29, 1986 to March 31, 1995:
Financial Highlights
FINANCIAL STATEMENTS INCLUDED IN PART B:
MFS MUNICIPAL INCOME FUND
At March 31, 1995:
Portfolio of Investments*
Statement of Assets and Liabilities*
For the year ended November 30, 1993, the four-month period
ended March 31, 1994 and for the year ended March 31, 1995:
Statement of Changes in Net Assets*
For the year ended March 31, 1995:
Statement of Operations*
- ----------------------------
* Incorporated herein by reference to the Funds' Annual Report to
Shareholders dated March 31, 1995 which was filed with the Securities and
Exchange Commission ("SEC") on May 25, 1995.
(B) EXHIBITS
1 Amended and Restated Declaration of Trust, dated February 3,
1995. (1)
2 Amended and Restated By-Laws, dated December 14, 1994. (1)
3 Not Applicable.
4 Form of Share Certificate for Class A, B and C Shares; filed
herewith.
5 (a) Investment Advisory Agreement, dated August 24, 1984 for
all series other than Arkansas, California, Florida,
Louisiana, Mississippi, Pennsylvania, Texas, Washington,
and MFS Municipal Income Fund; filed herewith.
(b) Investment Advisory Agreement, dated February 1, 1992, for
the MFS Arkansas Municipal Bond Fund; filed herewith.
(c) Investment Advisory Agreement, dated February 1, 1992, for
the MFS Florida Municipal Bond Fund; filed herewith.
(d) Investment Advisory Agreement, dated February 1, 1992, for
the MFS Texas Municipal Bond Fund; filed herewith.
(e) Investment Advisory Agreement, dated August 1, 1992, for the
MFS Mississippi Municipal Bond Fund; filed herewith.
(f) Investment Advisory Agreement, dated August 1, 1992, for the
MFS Washington Municipal Bond Fund; filed herewith.
(g) Investment Advisory Agreement, dated February 1, 1993, for
MFS Louisiana Municipal Bond Fund; filed herewith.
(h) Investment Advisory Agreement, dated February 1, 1993, for
MFS Pennsylvania Municipal Bond Fund; filed herewith.
(i) Investment Advisory Agreement, dated September 1, 1993, for
MFS California Municipal Bond Fund; filed herewith.
(j) Investment Advisory Agreement, dated September 1, 1993, for
the MFS Municipal Income Fund; filed herewith.
6 (a) Amended and Restated Distribution Agreement for the MFS
Municipal Series Trust, dated January 1, 1995. (1)
(b) Form of Dealer Agreement between MFS Financial Services,
Inc. and a dealer, dated December 28, 1994, and form of
Mutual Fund Agreement between MFS Financial Services, Inc.
and a bank or NASD affiliate, dated December 28, 1994. (1)
7 Retirement Plan for Non-Interested Person Trustees, dated
January 1, 1991; filed herewith.
8 (a) Custodian Agreement, dated June 15, 1988; filed herewith.
(b) Amendment to Custodian Agreement, dated June 15, 1988; filed
herewith.
(c) Amendment to Custodian Agreement, dated August 9, 1989;
filed herewith.
(d) Amendment to Custodian Agreement, dated October 1, 1989;
filed herewith.
(e) Amendment No. 3 to the Custodian Agreement, dated October 9,
1991; filed herewith.
9 (a) Shareholder Servicing Agent Agreement, dated August 1,
1985; filed herewith.
(b) Amendment to Shareholder Servicing Agreement, dated December
28, 1993. (2)
(c) Exchange Privilege Agreement, dated September 1, 1993; filed
herewith.
(d) Loan Agreement by and among The Banks Named Therein, The MFS
Funds Named Therein, and The First National Bank of Boston
as Agent, dated February 21, 1995. (3)
(e) Dividend Disbursing Agency Agreement, dated February 1,
1986; filed herewith.
10 24e-2 Opinion of Counsel. (2)
11 Consent of Deloitte & Touche LLP - MFS Municipal Income
Fund; filed herewith.
12 Not Applicable.
13 Investment Representation Letter; filed herewith.
14 Not Applicable.
15 (a) Amended and Restated Distribution Plan for Class A
shares and Plan of Distribution for Class B shares for MFS
Alabama Municipal Bond Fund; filed herewith.
(b) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS Arkansas
Municipal Bond Fund; filed herewith.
(c) Distribution Plan for Class A shares, Plan of Distribution
for Class B shares and Plan of Distribution for Class C
shares for MFS California Municipal Bond Fund; filed
herewith.
(d) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS Florida
Municipal Bond Fund; filed herewith.
(e) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS Georgia
Municipal Bond Fund; filed herewith.
(f) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS
Louisiana Municipal Bond Fund; filed herewith.
(g) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS Maryland
Municipal Bond Fund; filed herewith.
(h) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS
Massachusetts Municipal Bond Fund; filed herewith.
(i) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS
Mississippi Municipal Bond Fund; filed herewith.
(j) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS New York
Municipal Bond Fund; filed herewith.
(k) Amended and Restated Distribution Plan for Class A shares,
Plan of Distribution for Class B shares and Plan of
Distribution for Class C shares for MFS North Carolina
Municipal Bond Fund; filed herewith.
(l) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS
Pennsylvania Municipal Bond Fund; filed herewith.
(m) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS South
Carolina Municipal Bond Fund; filed herewith.
(n) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS
Tennessee Municipal Bond Fund; filed herewith.
(o) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS Texas
Municipal Bond Fund; filed herewith.
(p) Amended and Restated Distribution Plan for Class A shares,
Plan of Distribution for Class B shares and Plan of
Distribution for Class C shares for MFS Virginia Municipal
Bond Fund; filed herewith.
(q) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS
Washington Municipal Bond Fund; filed herewith.
(r) Amended and Restated Distribution Plan for Class A shares
and Plan of Distribution for Class B shares for MFS West
Virginia Municipal Bond Fund; filed herewith.
(s) Distribution Plan for Class A shares, Plan of Distribution
for Class B shares and Plan of Distribution for Class C
shares for MFS Municipal Income Fund; filed herewith.
16 Schedule of Computation for Performance Quotations - Average
Annual Total Rate of Return, Aggregate Total Rate of Return,
Distribution Rate, Tax-Equivalent Yield and Yield. (1)
17 Financial Data Schedules for each class of shares of the
Fund; filed herewith.
18 Not Applicable.
Power of Attorney, dated August 11, 1994. (2)
- -----------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 26 filed with the
SEC on February 22, 1995.
(2) Incorporated by reference to Post-Effective Amendment No. 27 filed with the
SEC on May 31, 1995.
(3) Incorporated by reference to Post-Effective Amendment No. 8 on Form N-2 for
MFS Municipal Income Trust (File No. 811-4841) filed with the SEC on
February 28, 1995.
<PAGE>
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
(As of June 30, 1995)
CLASS A SHARES
Shares of Beneficial Interest Alabama Series 1,453
(without par value) Arkansas Series 3,645
California Series 4,381
Florida Series 1,736
Georgia Series 1,783
Louisiana Series 435
Maryland Series 4,316
Massachusetts Series 5,073
Mississippi Series 2,072
New York Series 3,229
North Carolina Series 10,365
Pennsylvania Series 650
South Carolina Series 3,765
Tennessee Series 2,520
Texas Series 403
Virginia Series 10,282
Washington Series 525
West Virginia Series 3,233
MFS Municipal Income Fund 1,819
CLASS B SHARES
Shares of Beneficial Interest Alabama Series 124
(without par value) Arkansas Series 216
California Series 602
Florida Series 301
Georgia Series 310
Louisiana Series 99
Maryland Series 408
Massachusetts Series 266
Mississippi Series 274
New York Series 988
North Carolina Series 882
Pennsylvania Series 1,112
South Carolina Series 430
Tennessee Series 238
Texas Series 62
Virginia Series 664
Washington Series 90
West Virginia Series 375
MFS Municipal Income Fund 11,706
CLASS C SHARES
Shares of Beneficial Interest California Series 71
(without par value) North Carolina Series 164
Virginia Series 106
MFS Municipal Income Fund 369
ITEM 27. INDEMNIFICATION
Reference is hereby made to (a) Article V of Registrant's Declaration
of Trust, filed as an Exhibit to Post-Effective Amendment No. 26 to its
Registration Statement; (b) Section 4 of the Distribution Agreement between
Registrant and MFS Fund Distributors, Inc., filed as an Exhibit to
Post-Effective Amendment No. 26; and (c) the undertaking of the Registrant
regarding indemnification set forth in its Registration Statement as initially
filed.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser and distributor will be insured under an errors
and omissions liability insurance policy. The Registrant and its officers are
also insured under the fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
MFS serves as investment adviser to the following open-end Funds
comprising the MFS Family of Funds: Massachusetts Investors Trust, Massachusetts
Investors Growth Stock Funds, MFS Growth Opportunities Funds, MFS Government
Securities Funds, MFS Government Mortgage Funds, MFS Government Limited Maturity
Funds, MFS Series Trust I (which has three series: MFS Managed Sectors Funds,
MFS Cash Reserve Funds and MFS World Asset Allocation Funds), MFS Series Trust
II (which has four series: MFS Emerging Growth Funds, MFS Capital Growth Funds,
MFS Intermediate Income Funds and MFS Gold & Natural Resources Funds), MFS
Series Trust III (which has two series: MFS High Income Funds and MFS Municipal
High Income Funds), MFS Series Trust IV (which has four series: MFS Money Market
Funds, MFS Government Money Market Funds, MFS Municipal Bond Funds and MFS OTC
Funds), MFS Series Trust V (which has two series: MFS Total Return Funds and MFS
Research Funds), MFS Series Trust VI (which has three series: MFS World Total
Return Funds, MFS Utilities Funds and MFS World Equity Funds), MFS Series Trust
VII (which has two series: MFS World Governments Funds and MFS Value Funds), MFS
Series Trust VIII (which has two series: MFS Strategic Income Funds and MFS
World Growth Funds), MFS Municipal Series Trust (which has 19 series: MFS
Alabama Municipal Bond Funds, MFS Arkansas Municipal Bond Funds, MFS California
Municipal Bond Funds, MFS Florida Municipal Bond Funds, MFS Georgia Municipal
Bond Funds, MFS Louisiana Municipal Bond Funds, MFS Maryland Municipal Bond
Funds, MFS Massachusetts Municipal Bond Funds, MFS Mississippi Municipal Bond
Funds, MFS New York Municipal Bond Funds, MFS North Carolina Municipal Bond
Funds, MFS Pennsylvania Municipal Bond Funds, MFS South Carolina Municipal Bond
Funds, MFS Tennessee Municipal Bond Funds, MFS Texas Municipal Bond Funds, MFS
Virginia Municipal Bond Funds, MFS Washington Municipal Bond Funds, MFS West
Virginia Municipal Bond Funds and MFS Municipal Income Funds) and MFS Series
Trust IX (which has three series: MFS Bond Funds, MFS Limited Maturity Funds and
MFS Municipal Limited Maturity Funds) (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 Funds, 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 Funds, MFS
International Funds-U.S. Emerging Growth Funds, MFS International
Funds-International Governments Funds and MFS International Funds-Charter Income
Funds) (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 Funds, MFS Meridian Charter Income Funds, MFS
Meridian Global Government Funds, MFS Meridian U.S. Emerging Growth Funds, MFS
Meridian Global Equity Funds, MFS Meridian Limited Maturity Funds, MFS Meridian
World Growth Funds, MFS Meridian Money Market Funds and MFS Meridian U.S. Equity
Funds (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 International (U.K.), Ltd. ("MIL-UK"), a private limited company
registered with the Registrar of Companies for England and Wales whose current
address is 4 John Carpenter Street, London ED4Y 0NH, is involved primarily in
marketing and investment research activities with respect to private clients and
the MIL Funds and the MFS Meridian Funds.
MFS Funds 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 FUNDS
MFS GROWTH OPPORTUNITIES FUNDS
MFS GOVERNMENT SECURITIES FUNDS
MFS GOVERNMENT MORTGAGE FUNDS
MFS SERIES TRUST I
MFS SERIES TRUST V
MFS GOVERNMENT LIMITED MATURITY FUNDS
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 Chairman, Arnold D. Scott and
Jeffrey L. Shames are Directors, Ziad Malek, Senior Vice President of MFS, is
the President, Thomas J. Cashman, Jr., a Senior Vice President of MFS, is a
Senior 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, Vice President and an Assistant Clerk, Robert T.
Burns is an Assistant Clerk and James E. Russell is the Treasurer.
MIL-UK
A. Keith Brodkin, Arnold D. Scott, Jeffrey L. Shames, and James R.
Bordewick, Jr., are Directors, Stephen E. Cavan is a Director and the Secretary,
Ziad Malek is the President, James E. Russell is the Treasurer, and Robert T.
Burns is the Assistant Secretary.
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. DISTRIBUTORS
(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 Services 500 Boylston Street
Company (investment adviser) Boston, MA 02116
MFS Fund Distributors, Inc. 500 Boylston Street
(principal underwriter) Boston, MA 02116
State Street Bank and State Street South
Trust 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) The Registrant undertakes to furnish each person to whom a
prospectus of a series of the Registrant is delivered with a copy
of that series' latest annual report to shareholders upon request
and without charge.
<PAGE>
SIGNATURES
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 26th day of July, 1995.
MFS MUNICIPAL SERIES TRUST
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 July 26,
1995.
SIGNATURE TITLE
/s/ A. KEITH BRODKIN* Chairman, President
----------------------- (Principal Executive Officer)
A. Keith Brodkin and Trustee
/s/ W. THOMAS LONDON* Treasurer
----------------------- (Principal Financial Officer
W. Thomas London and Principal Accounting Officer)
/s/ RICHARD B. BAILEY* Trustee
-----------------------
Richard B. Bailey
/s/ MARSHALL N. COHAN* Trustee
-----------------------
Marshall N. Cohan
/s/ LAWRENCE H. COHN* Trustee
-----------------------
Lawrence H. Cohn
/s/ SIR J. DAVID GIBBONS* Trustee
-----------------------
Sir J. David Gibbons
<PAGE>
/s/ ABBY M. O'NEILL* Trustee
-----------------------
Abby M. O'Neill
/s/ WALTER E. ROBB, III* Trustee
-----------------------
Walter E. Robb, III
/s/ ARNOLD D. SCOTT* Trustee
-----------------------
Arnold D. Scott
/s/ JEFFREY L. SHAMES* Trustee
-----------------------
Jeffrey L. Shames
/s/ J. DALE SHERRATT* Trustee
-----------------------
J. Dale Sherratt
/s/ WARD SMITH* Trustee
-----------------------
Ward Smith
*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 August 11, 1994 and filed
with the Securities and Exchange
Commission on May 31, 1995 with
Post-Effective Amendment No. 27.
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
4 Form of Share Certificate for Class A, B and C Shares.
5 (a) Investment Advisory Agreement, dated August 24, 1984 for all
series other than Arkansas, California, Florida, Louisiana,
Mississippi, Pennsylvania, Texas, Washington, and MFS
Municipal Income Fund.
(b) Investment Advisory Agreement, dated February 1, 1992, for
the MFS Arkansas Municipal Bond Fund.
(c) Investment Advisory Agreement, dated February 1, 1992, for
the MFS Florida Municipal Bond Fund.
(d) Investment Advisory Agreement, dated February 1, 1992, for
the MFS Texas Municipal Bond Fund.
(e) Investment Advisory Agreement, dated August 1, 1992, for the
MFS Mississippi Municipal Bond Fund.
(f) Investment Advisory Agreement, dated August 1, 1992, for the
MFS Washington Municipal Bond Fund.
(g) Investment Advisory Agreement, dated February 1, 1993, for
MFS Louisiana Municipal Bond Fund.
(h) Investment Advisory Agreement, dated February 1, 1993, for
MFS Pennsylvania Municipal Bond Fund.
(i) Investment Advisory Agreement, dated September 1, 1993, for
MFS California Municipal Bond Fund.
<PAGE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
(j) Investment Advisory Agreement, dated September 1, 1993, for
the MFS Municipal Income Fund.
7 Retirement Plan for Non-Interested Person Trustees, dated
January 1, 1991.
8 (a) Custodian Agreement, dated June 15, 1988.
(b) Amendment to Custodian Agreement, dated June 15, 1988.
(c) Amendment to Custodian Agreement, dated August 9, 1989.
(d) Amendment to Custodian Agreement, dated October 1, 1989.
(e) Amendment No. 3 to the Custodian Agreement, dated October 9,
1991.
9 (a) Shareholder Servicing Agent Agreement, dated August 1, 1985.
(c) Exchange Privilege Agreement, dated September 1, 1993.
(e) Dividend Disbursing Agency Agreement, dated February 1, 1986.
11 Consent of Deloitte & Touche LLP - MFS Municipal Income Fund.
13 Investment Representation Letter.
15 (a) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Alabama
Municipal Bond Fund.
(b) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Arkansas
Municipal Bond Fund.
<PAGE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
(c) Distribution Plan for Class A shares, Plan of Distribution
for Class B shares and Plan of Distribution for Class C
shares for MFS California Municipal Bond Fund.
(d) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Florida
Municipal Bond Fund.
(e) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Georgia
Municipal Bond Fund.
(f) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Louisiana
Municipal Bond Fund.
(g) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Maryland
Municipal Bond Fund.
(h) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Massachusetts
Municipal Bond Fund.
(i) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Mississippi
Municipal Bond Fund.
(j) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS New York
Municipal Bond Fund.
(k) Amended and Restated Distribution Plan for Class A shares,
Plan of Distribution for Class B shares and Plan of
Distribution for Class C shares for MFS North Carolina
Municipal Bond Fund.
(l) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Pennsylvania
Municipal Bond Fund.
<PAGE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
(m) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS South
Carolina Municipal Bond Fund.
(n) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Tennessee
Municipal Bond Fund.
(o) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Texas
Municipal Bond Fund.
(p) Amended and Restated Distribution Plan for Class A shares,
Plan of Distribution for Class B shares and Plan of
Distribution for Class C shares for MFS Virginia Municipal
Bond Fund.
(q) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS Washington
Municipal Bond Fund.
(r) Amended and Restated Distribution Plan for Class A shares and
Plan of Distribution for Class B shares for MFS West Virginia
Municipal Bond Fund.
(s) Distribution Plan for Class A shares, Plan of Distribution
for Class B shares and Plan of Distribution for Class C
shares for MFS Municipal Income Fund.
17 Financial Data Schedules for each class of shares of the Fund.
EXHIBIT 4
SHARE CERTIFICATE
[FUND NAME]
ORGANIZED AS A BUSINESS TRUST UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
SEE REVERSE FOR
CERTAIN DEFINITIONS
THIS CERTIFIES THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST WITHOUT
PAR VALUE, OF THE TRUST OR SERIES OF THE TRUST IDENTIFIED ABOVE,
transferable only on the books of the Trust, by the holder hereof, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed. The aforesaid holder is entitled to require the Trust to purchase all
or any part of the Shares represented by this Certificate at net asset value,
all as more fully set forth on the reverse of this Certificate. This Certificate
is not valid until countersigned by the Transfer Agent.
IN WITNESS WHEREOF, the said Trust has caused this Certificate to be
signed by its duly authorized officer and its seal to be hereunto affixed.
Dated:
COUNTERSIGNED
MFS Service Center, Inc.
(Boston, MA) Transfer Agent
CHAIRMAN
SEAL
TREASURER BY:_____________________
AUTHORIZED SIGNATURE
157136
CERTIFICATE NO. SHARES
ACCOUNT NO. ALPHA CODE DEALER NO. CHAIRMAN
TRADE DATE: CONFIRM DATE ____________
CHANGE NOTICE: IF THE ABOVE INFORMATION IS INCORRECT OR
MISSING, PLEASE PRINT THE CORRECT INFORMATION BELOW, AND
RETURN TO:
MFS SERVICE CENTER, INC.
P.O. BOX 2281
BOSTON, MA 02107-9906
_______________________________________
_______________________________________
_______________________________________
_______________________________________
IDENT. OR SOC. SEC. NO.:_______________
THE REGISTERED HOLDER OF THIS CERTIFICATE IS ENTITLED TO ALL THE RIGHTS,
INTEREST AND PRIVILEGES OF A SHAREHOLDER AS PROVIDED BY THE DECLARATION OF TRUST
AND BY-LAWS OF THE TRUST, AS AMENDED, WHICH ARE INCORPORATED BY REFERENCE
HEREIN. IN PARTICULAR THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
TRANSFERABLE BY THE HOLDER, IN PERSON OR BY HIS DULY AUTHORIZED ATTORNEY, BUT
ONLY ON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED AND WHEN THE TRANSFER IS
MADE ON THE BOOKS OF THE TRUST.
THE HOLDER OF THIS CERTIFICATE, AS PROVIDED IN SAID DECLARATION OF TRUST
AND BY-LAWS, AS AMENDED, SHALL NOT IN ANY WISE BE PERSONALLY LIABLE FOR ANY
DEBT, OBLIGATION OR ACT OF TRUST.
<PAGE>
ANY SHAREHOLDER DESIRING TO DISPOSE OF HIS SHARES MAY DEPOSIT HIS
CERTIFICATE, DULY ENDORSED IN BLANK OR ACCOMPANIED BY AN INSTRUMENT OR TRANSFER
EXECUTED IN BLANK, AT THE OFFICE OF MFS SERVICE CENTER, INC. OR ANY SUCCESSOR
TRANSFER AGENT OF THE TRUST, TOGETHER WITH AN IRREVOCABLE OFFER IN WRITING TO
SELL THE SHARES REPRESENTED THEREBY AT THE NET ASSET VALUE THEREOF AND THE TRUST
WILL THEREAFTER PURCHASE SAID SHARES FOR CASH AT NET ASSET VALUE. THE
COMPUTATION OF NET ASSET VALUE, THE LIMITATIONS UPON THE DATE OF PAYMENT AND
PROVISIONS DEALING WITH SUSPENSION OF THIS RIGHT IN CERTAIN EMERGENCIES ARE
FULLY DESCRIBED IN SAID DECLARATION OF TRUST AND BY-LAWS, AS AMENDED.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
THE SIGNATURE(S) MUST BE GUARANTEED IN ACCORDANCE WITH A CURRENT
PROSPECTUS OF THE TRUST.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT/TRANSFER MIN ACT - ____ Custodian ____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common under Uniform Gift/Transfer to Minors
Act_________________________________________
(State)
Additional abbreviations may also be used though no in the above list.
</TABLE>
FOR VALUE RECEIVED, _________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
Shares of Beneficial Interest represented by the within Certificate, and do
hereby irrevocably constitute and appoint
________________________________________________________________________________
________________________________________________________________________________
Attorney to transfer the said shares on the books of the within-named Trust with
full power of substitution in the premises.
Dated, _________________________
------------------------------
Owner
------------------------------
Signature of Co-Owner, if any
IMPORTANT BEFORE SIGNING, READ AND COMPLY CAREFULLY
WITH NOTICE PRINTED ABOVE.
Signature(s) guaranteed by:
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EXHIBIT 5(a)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of this 24th day of August, 1984, by and
between MFS MANAGED MULTI-STATE TAX-EXEMPT TRUST, a Massachusetts business trust
(the "Trust"), and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware
corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940 divided into separate series of shares; and
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:
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 supervision of its funds. The Adviser shall act as
Adviser to the Trust and as such shall furnish continuously an investment
program for each series of the Trust and shall determine from time to time what
securities shall be purchased, sold or exchanged and what portion of the assets
of each series of the Trust shall be held uninvested, subject always to the
restrictions of its Declaration of Trust, dated August 23, 1984, as amended, and
By-Laws, as amended, as each may be further amended from time to time
(respectively, the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940, and the Rules, Regulations and orders
thereunder, and to the Trust's then-current Prospectus. 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 portfolio securities
of each series of the Trust 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. Subject to this requirement of seeking the most favorable price,
securities may be bought from or sold to broker dealers who have furnished
statistical, research and other information or services to the Adviser.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of each
series of the Trust and maintaining the Trust's organization, and investment
advisory facilities and executive and supervisory personnel for managing the
investments and effecting the portfolio transactions for each series of the
Trust. The Adviser shall arrange, if desired by the Trust, for Directors,
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 or dividend disbursing agent of the
Trust; expenses of repurchasing and redeeming shares and servicing shareholder
accounts; expenses of preparing, printing and mailing stock certificates,
shareholder reports, notices, proxy statements and reports to governmental
officers and commissions; brokerage and other expenses connected with the
execution, recording and settlement of portfolio security transactions;
insurance premiums; fees and expenses of the custodian for all services to the
Trust, including safekeeping of funds and securities and maintaining required
books and accounts; expenses of calculating the net asset value of shares of
each series of the Trust; expenses of shareholder meetings; expenses relating to
the issuance, registration and qualification of shares of each series of the
Trust and the preparation, printing and mailing of prospectuses for such
purposes (except to the extent that any Distribution Agreement or Selling Agency
Agreement to which the Trust is a party provides that another party is to pay
some or all of such expenses); and all such expenses to be allocated among the
respective series of the Trust as provided in Section 6.9 of the Declaration.
3. Compensation of the Adviser. For each series of the Trust for which
the Adviser renders services or provides facilities, the Trust shall pay to the
Adviser an investment advisory fee computed and paid monthly at an annual rate
equal to 0.55% of the average daily net assets attributable to such series on an
annualized basis for the Trust's then-current fiscal year. In addition, the
Adviser agrees to pay the expenses attributable to each series of the Trust
described in Section 2 hereof (except for fees payable by the Trust with respect
to any series thereof under the Distribution Agreement dated August ___, 1984,
between the Trust and Massachusetts Financial Services Company (the
"distribution fees"), until December 31, 1995, and to pay the expenses after
August 23, 1984 relating to the organization of the Trust, all subject to
reimbursement by the Trust. To accomplish the reimbursement of expenses of each
series advanced by the Adviser, the Trust shall pay the Adviser out of the
assets of such series an expense reimbursement fee, in addition to the
investment advisory fee and distribution fees payable with respect to such
series, such expense reimbursement fee to be computed and paid monthly at the
annual rate of 0.70% of the average daily net assets of such series for its
then-current fiscal year until February 28, 1986, and thereafter at the annual
rate of 0.95% of the average daily net assets of such series for its
then-current fiscal year; provided, that such expense reimbursement payment
shall be made only to the extent that immediately after any such payment the
Adviser would not be obligated to reimburse any amount to the Trust pursuant to
Section 4 hereof. The first payment of the expense reimbursement fee payable
with respect to each series shall be made by the Trust on February 28, 1985. The
obligation of the Trust to make payments of the expense reimbursement fee
payable by the Trust with respect to any series shall terminate on the earlier
of the date on which the total of the payments of such fee made by the Trust
equal the prior payment by the Adviser of reimbursable expenses attributable to
such series or December 31, 1995. If the Adviser shall serve as the investment
adviser to any series of the Trust for less than the whole of any period
specified in this Section 3, the compensation (including the expense
reimbursement) payable to the Adviser with respect to that series shall be
prorated.
4. Expense Limitation. Within 30 days following the close of any fiscal
year of the Trust, the Adviser shall pay to the Trust a sum equal to the amount,
if any, by which the aggregate expenses, exclusive of interest, taxes, brokerage
commissions and extraordinary expenses, incurred by the Trust during that fiscal
year with respect to each series exceed the Maximum Percentage in effect from
time to time during such fiscal year of the average daily net assets of such
series during that fiscal year. As used herein, the term "Maximum Percentage"
shall mean .95% during the period ending six months after the date of the
Prospectus, 1.25% thereafter until February 28, 1986 and 1.50% thereafter. This
obligation of the Adviser to reimburse the Trust for expenses may be amended or
terminated at any time by the Adviser without the consent of the Trust by
written notice from the Adviser to the Trust.
5. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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 any series of the Trust
except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and the By-Laws and the then-current Prospectus of
the Trust relative to the Adviser and its Directors and officers.
6. Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution and management of
the Trust, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its duties and
obligations hereunder. As used in this Section 6, the term "Adviser" shall
include Directors, officers and employees of the Adviser as well as that
corporation itself.
7. Activities of the Adviser. The services of the Adviser to the Trust
are not deemed to be exclusive, the Adviser being free to render investment
advisory and/or other services to others. The Adviser may permit other fund
clients to use the initials "MFS" in their names. The Trust agrees that if the
Adviser shall for any reason no longer serve as the Adviser to any one or more
series of the Trust, the Trust will immediately cease to use in connection with
such series the initials "MFS" and will, if requested by the Adviser, change its
name so as to delete the initials "MFS." It is understood that the 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 become similarly interested in
the Trust, and that the Adviser may be or become interested in the Trust as a
shareholder or otherwise.
8. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to each series of the Trust until December 1, 1985
on which date it will terminate with respect to any series unless its
continuance after December 1, 1985 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of such series.
This Agreement may be terminated as to any one or more series of the
Trust at any time without the payment of any penalty by the Trustees or by "vote
of a majority of the outstanding voting securities" of such series, or by the
Adviser, in each case on not more than sixty days' nor less than thirty days'
written notice to the other party. This Agreement shall automatically terminate
in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of each series of the
Trust affected thereby. The terms "specifically approved at least annually,"
"vote of a majority of the outstanding voting securities", "assignment,"
"affiliated person," and "interested persons," when used in this Agreement,
shall have the respective meanings specified in, and shall be construed in a
manner consistent with, the Investment Company Act of 1940, and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
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,
thereto duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MANAGED MULTI-STATE
TAX-EXEMPT TRUST
By: RICHARD B. BAILEY
Richard B. Bailey
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: H. ALDEN JOHNSON, JR.
H. Alden Johnson, Jr.
President
EXHIBIT 5(B)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of February,
1992, by and between MFS MANAGED MULTI-STATE MUNICIPAL BOND TRUST, a
Massachusetts business trust (the "Trust"), on behalf of the Arkansas Series of
the Trust (the "Arkansas Series"), and Massachusetts Financial Services Company,
a Delaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under
the Investment Company Act of 1940 divided into separate series of shares; and
WHEREAS, the Adviser is willing to provide business management services
to the Trust with respect to the Arkansas Series 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:
1. DUTIES OF THE ADVISER. The Adviser shall provide the Arkansas Series
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper supervision of its funds. The Adviser shall
act as Adviser to the Arkansas Series and as such shall furnish continuously an
investment program for the Arkansas Series and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of the
assets of the Arkansas Series shall be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust, dated August 23, 1984, as
amended, and By-Laws, as amended, as each may be further amended from time to
time (respectively, the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Rules,
Regulations and orders thereunder, and to the Arkansas Series' then-current
Prospectus. 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 portfolio securities of the Arkansas Series 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 Arkansas Series, 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 Arkansas Series' account with brokers or
dealers selected by it, and to that end the Adviser is authorized as the agent
of the Arkansas Series to give instructions to the Custodian of the Trust as to
deliveries of securities and payments of cash for the account of the Arkansas
Series. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser is directed to seek for the Arkansas Series
execution at the best available price. Subject to this requirement of seeking
the best available price, securities may be bought from or sold to broker
dealers who have furnished statistical, research and other information or
services to the Adviser.
2. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Arkansas Series and maintaining its organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of the Arkansas Series. The Adviser
shall arrange, if desired by the Arkansas Series, for directors, 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
Arkansas Series 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 Arkansas Series; fees and expenses of independent auditors, of
legal counsel and of any transfer agent, registrar or dividend disbursing agent
of the Arkansas Series; expenses of servicing shareholder accounts; 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 custodian for all services to the Trust on behalf of the
Arkansas Series, including safekeeping of funds and securities and maintaining
required books and accounts; expenses of calculating the net asset value of
shares of the Arkansas Series; expenses of shareholder meetings; expenses
relating to the issuance, registration and qualification of shares of the
Arkansas Series and the preparation, printing and mailing of prospectuses for
such purposes (except to the extent that any Distribution Agreement to which the
Trust is a party provides that another party is to pay some or all of such
expenses); and all such expenses to be allocated among the respective series of
the Trust as provided in Section 6.9 of the Declaration.
3. COMPENSATION OF THE ADVISER. The Arkansas Series shall pay to the
Adviser an investment advisory fee computed and paid monthly in an amount equal
to 0.55% of the average daily net assets attributable to such Series on an
annualized basis for the Trust's then-current fiscal year. In addition, the
Adviser agrees to pay the expenses attributable to the Arkansas Series described
in Section 2 hereof (except for distribution fees payable by the Arkansas Series
under the Plan of Distribution adopted pursuant to Rule 12b-1 under the 1940
Act, dated as of February 1, 1992, as amended from time to time, of such Series
(the "Distribution Fees")), until December 31, 2001, and to pay the expenses
relating to the organization of the Arkansas Series, all subject to
reimbursement by the Arkansas Series. To accomplish the reimbursement of
expenses of the Arkansas Series advanced by the Adviser, the Trust shall pay the
Adviser out of the assets of such Series an expense reimbursement fee, in
addition to the investment advisory fee and Distribution Fees payable with
respect to such Series, such expense reimbursement fee to be computed and paid
monthly at the annual rate of 0.40% of the average daily net assets of such
Series for its then-current year. The first payment of the expense reimbursement
fee payable with respect to the Arkansas Series shall be made by the Trust on
February 28, 1993. The obligation of the Trust to make payments of the expense
reimbursement fee payable by the Trust with respect to the Arkansas Series shall
terminate on the earlier of the date on which the total of the payments of such
fee made by the Trust equal the prior payment by the Adviser of reimbursable
expenses attributable to the Arkansas Series or December 31, 2001. If the
Adviser shall serve as the investment adviser to the Arkansas Series for less
than the whole of any period specified in this Section 3, the compensation
(including the expense reimbursement) payable to the Adviser with respect to the
Arkansas Series shall be prorated.
This obligation of the Adviser to reimburse the Trust for expenses may
be amended or terminated at any time by the Adviser without the consent of the
Trust by written notice from the Adviser to the Trust.
4. COVENANTS OF THE ADVISER. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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, as amended, and the Rules, Regulations or orders
thereunder, will not take a long or short position in the shares of the Trust
except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and the By-Laws and the then-current Prospectus of
the Trust relative to the Adviser and its Directors and officers.
5. 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 duties and
obligations hereunder. As used in this Section 5, the term "Adviser" shall
include Directors, officers and employees of the Adviser as well as that
corporation itself.
6. ACTIVITIES OF THE ADVISER. The services of the Adviser to the Trust
are not deemed to be exclusive, the Adviser being free to render investment
advisory and/or other services to others. The Adviser may permit other fund
clients to use the initials "MFS" in their names. The Trust agrees that if the
Adviser shall for any reason no longer serve as the investment adviser to the
Trust, the Trust will change its name so as to delete the initials "MFS". It is
understood that the 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
become similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise.
7. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to the Arkansas Series until December 1, 1993 on
which date it will terminate with respect to the Arkansas Series unless its
continuance after December 1, 1993 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Arkansas Series.
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, in each case on not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Arkansas
Series.
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities" of the Arkansas Series,
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the Investment Company Act of 1940, as
amended, and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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,
thereunder duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MANAGED MULTI-STATE
MUNICIPAL BOND TRUST on behalf
of the Arkansas Series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
EXHIBIT 5(c)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of February,
1992, by and between MFS MANAGED MULTI-STATE MUNICIPAL BOND TRUST, a
Massachusetts business trust (the "Trust"), on behalf of the Florida Series of
the Trust (the "Florida Series"), and Massachusetts Financial Services Company,
a Delaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under
the Investment Company Act of 1940 divided into separate series of shares; and
WHEREAS, the Adviser is willing to provide business management services
to the Trust with respect to the Florida Series 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:
1. DUTIES OF THE ADVISER. The Adviser shall provide the Florida Series
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper supervision of its funds. The Adviser shall
act as Adviser to the Florida Series and as such shall furnish continuously an
investment program for the Florida Series and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of the
assets of the Florida Series shall be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust, dated August 23, 1984, as
amended, and By-Laws, as amended, as each may be further amended from time to
time (respectively, the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Rules,
Regulations and Orders thereunder, and to the Florida Series' then-current
Prospectus. 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 portfolio securities of the Florida Series 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 Florida Series, 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 Florida Series' account with brokers or dealers selected by
it, and to that end the Adviser is authorized as the agent of the Florida Series
to give instructions to the Custodian of the Trust as to deliveries of
securities and payments of cash for the account of the Florida Series. In
connection with the selection of such brokers or dealers and the placing of such
orders, the Adviser is directed to seek for the Florida Series execution at the
best available price. Subject to this requirement of seeking the best available
price, securities may be bought from or sold to broker dealers who have
furnished statistical, research and other information or services to the
Adviser.
2. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Florida Series and maintaining its organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of the Florida Series. The Adviser
shall arrange, if desired by the Florida Series, for directors, 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 Florida
Series 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 Florida Series; fees and expenses of independent auditors, of
legal counsel and of any transfer agent, registrar or dividend disbursing agent
of the Florida Series; expenses of servicing shareholder accounts; 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 custodian for all services to the Trust on behalf of the Florida
Series, including safekeeping of funds and securities and maintaining required
books and accounts; expenses of calculating the net asset value of shares of the
Florida Series; expenses of shareholder meetings; expenses relating to the
issuance, registration and qualification of shares of the Florida Series and the
preparation, printing and mailing of prospectuses for such purposes (except to
the extent that any Distribution Agreement to which the Trust is a party
provides that another party is to pay some or all of such expenses); and all
such expenses to be allocated among the respective series of the Trust as
provided in Section 6.9 of the Declaration.
3. COMPENSATION OF THE ADVISER. The Florida Series shall pay to the
Adviser an investment advisory fee computed and paid monthly in an amount equal
to .55% of the average daily net assets attributable to such Series on an
annualized basis for the Trust's then-current fiscal year.
In addition, the Adviser agrees to pay the expenses attributable to the
Florida Series described in Section 2 hereof (except for distribution fees
payable by the Florida Series under the Plan of Distribution adopted pursuant to
Rule 12b-1 under the 1940 Act, dated as of February 1, 1992, as amended from
time to time, of such Series (the "Distribution Fees")), until December 31,
2001, and to pay the expenses relating to the organization of the Florida
Series, all subject to reimbursement by the Florida Series. To accomplish the
reimbursement of expenses of the Florida Series advanced by the Adviser, the
Trust shall pay the Adviser out of the assets of such Series an expense
reimbursement fee, in addition to the investment advisory fee and Distribution
Fees payable with respect to such Series, such expense reimbursement fee to be
computed and paid monthly at the annual rate of 0.40% of the average daily net
assets of such Series for its then-current year. The first payment of the
expense reimbursement fee payable with respect to the Florida Series shall be
made by the Trust on February 28, 1993. The obligation of the Trust to make
payments of the expense reimbursement fee payable by the Trust with respect to
the Florida Series shall terminate on the earlier of the date on which the total
of the payments of such fee made by the Trust equal the prior payment by the
Adviser of reimbursable expenses attributable to the Florida Series or December
31, 2001. If the Adviser shall serve as the investment adviser to the Florida
Series for less than the whole of any period specified in this Section 3, the
compensation (including the expense reimbursement) payable to the Adviser with
respect to the Florida Series shall be prorated.
This obligation of the Adviser to reimburse the Trust for expenses may
be amended or terminated at any time by the Adviser without the consent of the
Trust by written notice from the Adviser to the Trust.
4. COVENANTS OF THE ADVISER. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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, as amended, and the Rules, Regulations or orders
thereunder, will not take a long or short position in the shares of the Trust
except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and the By-Laws and the then-current Prospectus of
the Trust relative to the Adviser and its Directors and officers.
5. 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 duties and
obligations hereunder. As used in this Section 5, the term "Adviser" shall
include Directors, officers and employees of the Adviser as well as the
corporation itself.
6. ACTIVITIES OF THE ADVISER. The services of the Adviser to the Trust
are not deemed to be exclusive, the Adviser being free to render investment
advisory and/or other services to others. The Adviser may permit other fund
clients to use the initials "MFS" in their names. The Trust agrees that if the
Adviser shall for any reason no longer serve as the investment adviser to the
Trust, the Trust will change its name so as to delete the initials "MFS". It is
understood that the 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
become similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise.
7. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to the Florida Series until December 1, 1993 on
which date it will terminate with respect to the Florida Series unless its
continuance after December 1, 1993 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Florida Series.
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, in each case on not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Florida Series.
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities" of the Florida Series,
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the Investment Company Act of 1940, as
amended, and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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,
thereunder duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MANAGED MULTI-STATE
MUNICIPAL BOND TRUST on behalf
of the Florida Series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
EXHIBIT 5(D)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of February,
1992, by and between MFS MANAGED MULTI-STATE MUNICIPAL BOND TRUST, a
Massachusetts business trust (the "Trust"), on behalf of the Texas Series of the
Trust (the "Texas Series"), and Massachusetts Financial Services Company, a
Delaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under
the Investment Company Act of 1940 divided into separate series of shares; and
WHEREAS, the Adviser is willing to provide business management services
to the Trust with respect to the Texas Series 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:
1. DUTIES OF THE ADVISER. The Adviser shall provide the Texas Series
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper supervision of its funds. The Adviser shall
act as Adviser to the Texas Series and as such shall furnish continuously an
investment program for the Texas Series and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of the
assets of the Texas Series shall be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust, dated August 23, 1984, as
amended, and By-Laws, as amended, as each may be further amended from time to
time (respectively, the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940 (the "1940 Act"), and the Rules, Regulations and
orders thereunder, and to the Texas Series' then-current Prospectus. 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 portfolio
securities of the Texas Series 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 Texas Series, 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 Texas Series' account with brokers or dealers selected by it, and to
that end the Adviser is authorized as the agent of the Texas Series to give
instructions to the Custodian of the Trust as to deliveries of securities and
payments of cash for the account of the Texas Series. In connection with the
selection of such brokers or dealers and the placing of such orders, the Adviser
is directed to seek for the Texas Series execution at the best available price.
Subject to this requirement of seeking the best available price, securities may
be bought from or sold to broker dealers who have furnished statistical,
research and other information or services to the Adviser.
2. ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Texas Series and maintaining its organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of the Texas Series. The Adviser shall
arrange, if desired by the Texas Series, for directors, 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 Texas Series
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
Texas Series; fees and expenses of independent auditors, of legal counsel and of
any transfer agent, registrar or dividend disbursing agent of the Texas Series;
expenses of servicing shareholder accounts; 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 custodian for all
services to the Trust on behalf of the Texas Series, including safekeeping of
funds and securities and maintaining required books and accounts; expenses of
calculating the net asset value of shares of the Texas Series; expenses of
shareholder meetings; expenses relating to the issuance, registration and
qualification of shares of the Texas Series and the preparation, printing and
mailing of prospectuses for such purposes (except to the extent that any
Distribution Agreement to which the Trust is a party provides that another party
is to pay some or all of such expenses); and all such expenses to be allocated
among the respective series of the Trust as provided in Section 6.9 of the
Declaration.
3. COMPENSATION OF THE ADVISER. The Texas Series shall pay to the
Adviser an investment advisory fee computed and paid monthly in an amount equal
to 0.55% of the average daily net assets attributable to such Series on an
annualized basis for the Trust's then-current fiscal year. In addition, the
Adviser agrees to pay the expenses attributable to the Texas Series described in
Section 2 hereof (except for distribution fees payable by the Texas Series under
the Plan of Distribution adopted pursuant to Rule 12b-1 under the 1940 Act,
dated as of February 1, 1992, as amended from time to time, of such Series (the
"Distribution Fees")), until December 31, 2001, and to pay the expenses relating
to the organization of the Texas Series, all subject to reimbursement by the
Texas Series. To accomplish the reimbursement of expenses of the Texas Series
advanced by the Adviser, the Trust shall pay the Adviser out of the assets of
such Series an expense reimbursement fee, in addition to the investment advisory
fee and Distribution Fees payable with respect to such Series, such expense
reimbursement fee to be computed and paid monthly at the annual rate of 0.40% of
the average daily net assets of such Series for its then-current year. The first
payment of the expense reimbursement fee payable with respect to the Texas
Series shall be made by the Trust on February 28, 1993. The obligation of the
Trust to make payments of the expense reimbursement fee payable by the Trust
with respect to the Texas Series shall terminate on the earlier of the date on
which the total of the payments of such fee made by the Trust equal the prior
payment by the Adviser of reimbursable expenses attributable to the Texas Series
or December 31, 2001. If the Adviser shall serve as the investment adviser to
the Texas Series for less than the whole of any period specified in this Section
3, the compensation (including the expense reimbursement) payable to the Adviser
with respect to the Texas Series shall be prorated.
This obligation of the Adviser to reimburse the Trust for expenses may
be amended or terminated at any time by the Adviser without the consent of the
Trust by written notice from the Adviser to the Trust.
4. COVENANTS OF THE ADVISER. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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, as amended, and the Rules, Regulations or orders
thereunder, will not take a long or short position in the shares of the Trust
except as permitted by the Declaration, and will comply with all other
provisions of the Declaration and the By-Laws and the then-current Prospectus of
the Trust relative to the Adviser and its Directors and officers.
5. 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 duties and
obligations hereunder. As used in this Section 5, the term "Adviser" shall
include Directors, officers and employees of the Adviser as well as that
corporation itself.
6. ACTIVITIES OF THE ADVISER. The services of the Adviser to the Trust
are not deemed to be exclusive, the Adviser being free to render investment
advisory and/or other services to others. The Adviser may permit other fund
clients to use the initials "MFS" in their names. The Trust agrees that if the
Adviser shall for any reason no longer serve as the investment adviser to the
Trust, the Trust will change its name so as to delete the initials "MFS". It is
understood that the 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
become similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise.
7. DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to the Texas Series until December 1, 1993 on which
date it will terminate with respect to the Texas Series unless its continuance
after December 1, 1993 is "specifically approved at least annually" (i) by the
vote of a majority of the 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 Board of Trustees of the Trust, or
by "vote of a majority of the outstanding voting securities" of the Texas
Series.
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, in each case on not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Texas Series.
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities" of the Texas Series,
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the Investment Company Act of 1940, as
amended, and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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,
thereunder duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MANAGED MULTI-STATE
MUNICIPAL BOND TRUST on behalf
of the Texas Series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
EXHIBIT 5(e)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of August, 1992, by and
between MFS MISSISSIPPI MUNICIPAL BOND FUND (the "Fund"), a portfolio of MFS
Multi-State Municipal Bond Trust (the "Trust"), a Massachusetts business trust,
and Massachusetts Financial Services Company, a Delaware corporation (the
"Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940 divided into separate portfolios of shares; and
WHEREAS, the Adviser is willing to provide business management services to the
Trust with respect to the Mississippi Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
1. Duties of the Adviser. The Adviser shall provide the Mississippi
Fund with such investment advice and supervision as the latter may from time to
time consider necessary for the proper supervision of its funds. The Adviser
shall act as Adviser to the Mississippi Fund and as such shall furnish
continuously an investment program for the Mississippi Fund and shall determine
from time to time what securities shall be purchased, sold or exchanged and what
portion of the assets of the Mississippi Fund shall be held uninvested, subject
always to the restrictions of the Trust's Declaration of Trust, dated August 23,
1984, as amended, and By-Laws, as amended, as each may be further amended from
time to time (respectively, the "Declaration" and "By-Laws"), to the provisions
of the Investment Company Act of 1940, as amended (the "1940 Act"), and the
Rules, Regulations and orders thereunder, and to the Mississippi Fund's
then-current Prospectus. 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 fund securities of the Mississippi Fund 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 Mississippi Fund, all
actions which it deems necessary to implement the investment policies determined
as provided above, and in particular to place all orders for the purchase or
sale of fund securities for the Mississippi Fund's account with brokers or
dealers selected by it, and to that end the Adviser is authorized as the agent
of the Mississippi Fund to give instructions to the Custodian of the Trust as to
deliveries of securities and payments of cash for the account of the Mississippi
Fund. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser is directed to seek for the Mississippi Fund
execution at the best available price. Subject to this requirement of seeking
the best available price, securities may be bought from or sold to broker
dealers who have furnished statistical, research and other information or
services to the Adviser.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Mississippi Fund and maintaining its organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of the Mississippi Fund. The Adviser
shall arrange, if desired by the Mississippi Fund, for directors, 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
Mississippi Fund 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 Mississippi Fund; fees and expenses of independent auditors, of
legal counsel and of any transfer agent, registrar or dividend disbursing agent
of the Mississippi Fund; expenses of servicing shareholder accounts; 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 custodian for all services to the Trust on behalf of the
Mississippi Fund, including safekeeping of funds and securities and maintaining
required books and accounts; expenses of calculating the net asset value of
shares of the Mississippi Fund; expenses of shareholder meetings; expenses
relating to the issuance, registration and qualification of shares of the
Mississippi Fund and the preparation, printing and mailing of prospectuses for
such purposes (except to the extent that any Distribution Agreement to which the
Trust is a party provides that another party is to pay some or all of such
expenses); and all such expenses to be allocated among the respective portfolios
of the Trust as provided in Section 6.9 of the Declaration.
3. Compensation of the Adviser. The Mississippi Fund shall pay to the
Adviser an investment advisory fee computed and paid monthly in an amount equal
to 0.55% of the average daily net assets attributable to such Fund on an
annualized basis for the Trust's then-current fiscal year. In addition, the
Adviser agrees to pay the expenses attributable to the Mississippi Fund
described in Section 2 hereof (except for distribution fees payable by the
Mississippi Fund under the Plan of Distribution adopted pursuant to Rule 12b-1
under the 1940 Act, dated as of August 1, 1992, as amended from time to time, of
such Fund (the "Distribution Fees")), until December 31, 2001, and to pay the
expenses relating to the organization of the Mississippi Fund, all subject to
reimbursement by the Mississippi Fund. To accomplish the reimbursement of
expenses of the Mississippi Fund advanced by the Adviser, the Trust shall pay
the Adviser out of the assets of such Fund an expense reimbursement fee, in
addition to the investment advisory fee and Distribution Fees payable with
respect to such Fund, such expense reimbursement fee to be computed and paid
monthly at the annual rate of 0.40% of the average daily net assets of such Fund
for its then-current year. The obligation of the Trust to make payments of the
expense reimbursement fee payable by the Trust with respect to the Mississippi
Fund shall terminate on the earlier of the date on which the total of the
payments of such fee made by the Trust equal the prior payment by the Adviser of
reimbursable expenses attributable to the Mississippi Fund or December 31, 2001.
If the Adviser shall serve as the investment adviser to the Mississippi Fund for
less than the whole of any period specified in this Section 3, the compensation
(including the expense reimbursement) payable to the Adviser with respect to the
Mississippi Fund will be prorated.
This obligation of the Adviser to reimburse the Trust for expenses may
be amended or terminated at any time by the Adviser without the consent of the
Trust by written notice from the Adviser to the Trust.
4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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, as amended, and the Rules, Regulations or orders
thereunder, will not take a long or short position in the shares of the
Mississippi Fund except as permitted by the Declaration, and will comply with
all other provisions of the Declaration and the By-Laws and the then-current
Prospectus of the Trust relative to the Adviser and its Directors and officers.
5. 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 Mississippi Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its duties and obligations hereunder. As used in this Section 5, the term
"Adviser" shall include Directors, officers and employees of the Adviser as well
as that corporation itself.
6. Activities of the Adviser. The services of the Adviser to the
Mississippi Fund are not to be deemed to be exclusive, the Adviser being free to
render investment advisory and/or other services to others. The Adviser may
permit other fund clients to use the initials "MFS" in their names. The Trust
agrees that if the Adviser shall for any reason no longer serve as the
investment adviser to the Mississippi Fund, the Mississippi Fund will change its
name so as to delete the initials "MFS". It is understood that Trustees,
officers, and shareholders of the Mississippi Fund 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 become
similarly interested in the Mississippi Fund, and that the Adviser may be or
become interested in the Mississippi Fund as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to the Mississippi Fund until December 1, 1993 on
which date it will terminate with respect to the Mississippi Fund unless its
continuance after December 1, 1993 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Mississippi Fund.
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, in each case on not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Mississippi
Fund.
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities" of the Mississippi Fund,
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the Investment Company Act of 1940, as
amended, and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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,
thereunder duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MULTI-STATE MUNICIPAL
BOND TRUST on behalf of the MFS
Mississippi Municipal Bond Fund
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
EXHIBIT 5(f)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of August, 1992, by and
between MFS WASHINGTON MUNICIPAL BOND FUND (the Fund"), a portfolio of MFS
Multi-State Municipal Bond Trust (the "Trust"), a Massachusetts business trust,
and Massachusetts Financial Services Company, a Delaware corporation (the
"Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940 divided into separate portfolios of shares; and
WHEREAS, the Adviser is willing to provide business management services to the
Trust with respect to the Washington Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
1. Duties of the Adviser. The Adviser shall provide the Washington Fund
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper supervision of its funds. The Adviser shall
act as Adviser to the Washington Fund and as such shall furnish continuously an
investment program for the Washington Fund and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of the
assets of the Washington Fund shall be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust, dated August 23, 1984, as
amended, and By-Laws, as amended, as each may be further amended from time to
time (respectively, the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Rules,
Regulations and orders thereunder, and to the Washington Fund's then-current
Prospectus. 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 fund securities of the Washington Fund 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 Washington Fund, all actions which it deems
necessary to implement the investment policies determined as provided above, and
in particular to place all orders for the purchase or sale of fund securities
for the Washington Fund's account with brokers or dealers selected by it, and to
that end the Adviser is authorized as the agent of the Washington Fund to give
instructions to the Custodian of the Trust as to deliveries of securities and
payments of cash for the account of the Washington Fund. In connection with the
selection of such brokers or dealers and the placing of such orders, the Adviser
is directed to seek for the Washington Fund execution at the best available
price. Subject to this requirement of seeking the best available price,
securities may be bought from or sold to broker dealers who have furnished
statistical, research and other information or services to the Adviser.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Washington Fund and maintaining its organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of the Washington Fund. The Adviser
shall arrange, if desired by the Washington Fund, for directors, 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
Washington Fund 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 Washington Fund; fees and expenses of independent auditors, of
legal counsel and of any transfer agent, registrar or dividend disbursing agent
of the Washington Fund; expenses of servicing shareholder accounts; 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 custodian for all services to the Trust on behalf of the
Washington Fund, including safekeeping of funds and securities and maintaining
required books and accounts; expenses of calculating the net asset value of
shares of the Washington Fund; expenses of shareholder meetings; expenses
relating to the issuance, registration and qualification of shares of the
Washington Fund and the preparation, printing and mailing of prospectuses for
such purposes (except to the extent that any Distribution Agreement to which the
Trust is a party provides that another party is to pay some or all of such
expenses); and all such expenses to be allocated among the respective portfolios
of the Trust as provided in Section 6.9 of the Declaration.
3. Compensation of the Adviser. The Washington Fund shall pay to the
Adviser an investment advisory fee computed and paid monthly in an amount equal
to 0.55% of the average daily net assets attributable to such Fund on an
annualized basis for the Trust's then-current fiscal year. In addition, the
Adviser agrees to pay the expenses attributable to the Washington Fund described
in Section 2 hereof (except for distribution fees payable by the Washington Fund
under the Plan of Distribution adopted pursuant to Rule 12b-1 under the 1940
Act, dated as of August 1, 1992, as amended from time to time, of such Fund (the
"Distribution Fees")), until December 31, 2001, and to pay the expenses relating
to the organization of the Washington Fund, all subject to reimbursement by the
Washington Fund. To accomplish the reimbursement of expenses of the Washington
Fund advanced by the Adviser, the Trust shall pay the Adviser out of the assets
of such Fund an expense reimbursement fee, in addition to the investment
advisory fee and Distribution Fees payable with respect to such Fund, such
expense reimbursement fee to be computed and paid monthly at the annual rate of
0.40% of the average daily net assets of such Fund for its then-current year.
The obligation of the Trust to make payments of the expense reimbursement fee
payable by the Trust with respect to the Washington Fund shall terminate on the
earlier of the date on which the total of the payments of such fee made by the
Trust equal the prior payment by the Adviser of reimbursable expenses
attributable to the Washington Fund or December 31, 2001. If the Adviser shall
serve as the investment adviser to the Washington Fund for less than the whole
of any period specified in this Section 3, the compensation (including the
expense reimbursement) payable to the Adviser with respect to the Washington
Fund shall be prorated.
This obligation of the Adviser to reimburse the Trust for expenses may
be amended or terminated at any time by the Adviser without the consent of the
Trust by written notice from the Adviser to the Trust.
4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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, as amended, and the Rules, Regulations or orders
thereunder, will not take a long or short position in the shares of the
Washington Fund except as permitted by the Declaration, and will comply with all
other provisions of the Declaration and the By-Laws and the then-current
Prospectus of the Trust relative to the Adviser and its Directors and officers.
5. 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 Washington Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its duties and obligations hereunder. As used in this Section 5, the term
"Adviser" shall include Directors, officers and employees of the Adviser as well
as that corporation itself.
6. Activities of the Adviser. The services of the Adviser to the
Washington Fund are not to be deemed to be exclusive, the Adviser being free to
render investment advisory and/or other services to others. The Adviser may
permit other fund clients to use the initials "MFS" in their names. The
Washington Fund agrees that if the Adviser shall for any reason no longer serve
as the investment adviser to the Washington Fund, the Washington Fund will
change its name so as to delete the initials "MFS". It is understood that
Trustees, officers, and shareholders of the Washington Fund 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
become similarly interested in the Washington Fund, and that the Adviser may be
or become interested in the Washington Fund as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to the Washington Fund until December 1, 1993 on
which date it will terminate with respect to the Washington Fund unless its
continuance after December 1, 1993 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Washington Fund.
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, in each case on not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Washington
Fund.
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities" of the Washington Fund,
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the Investment Company Act of 1940, as
amended, and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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,
thereunder duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MULTI-STATE MUNICIPAL
BOND TRUST on behalf of the
MFS Washington Municipal Bond Fund
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
EXHIBIT 5(g)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of February, 1993, by and
between MFS LOUISIANA MUNICIPAL BOND FUND (the "Louisiana Fund"), a portfolio of
MFS Multi-State Municipal Bond Trust (the "Trust"), a Massachusetts business
trust, and Massachusetts Financial Services Company, a Delaware corporation (the
"Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940 divided into separate portfolios of shares; and
WHEREAS, the Adviser is willing to provide business management services to the
Trust with respect to the Louisiana Fund on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
1. Duties of the Adviser. The Adviser shall provide the Louisiana Fund
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper supervision of its funds. The Adviser shall
act as Adviser to the Louisiana Fund and as such shall furnish continuously an
investment program for the Louisiana Fund and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of the
assets of the Louisiana Fund shall be held uninvested, subject always to the
restrictions of the Trust's Declaration of Trust, dated August 23, 1984, as
amended, and By-Laws, as amended, as each may be further amended from time to
time (respectively, the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Rules,
Regulations and orders thereunder, and to the Louisiana Fund's then-current
Prospectus. 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 fund securities of the Louisiana Fund 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 Louisiana Fund, all actions which it deems
necessary to implement the investment policies determined as provided above, and
in particular to place all orders for the purchase or sale of fund securities
for the Louisiana Fund's account with brokers or dealers selected by it, and to
that end the Adviser is authorized as the agent of the Louisiana Fund to give
instructions to the Custodian of the Trust as to deliveries of securities and
payments of cash for the account of the Louisiana Fund. In connection with the
selection of such brokers or dealers and the placing of such orders, the Adviser
is directed to seek for the Louisiana Fund execution at the best available
price. Subject to this requirement of seeking the best available price,
securities may be bought from or sold to broker dealers who have furnished
statistical, research and other information or services to the Adviser.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Louisiana Fund and maintaining its organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of the Louisiana Fund. The Adviser
shall arrange, if desired by the Louisiana Fund, for directors, 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
Louisiana Fund 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 Louisiana Fund; fees and expenses of independent auditors, of
legal counsel and of any transfer agent, registrar or dividend disbursing agent
of the Louisiana Fund; expenses of servicing shareholder accounts; 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 custodian for all services to the Trust on behalf of the
Louisiana Fund, including safekeeping of funds and securities and maintaining
required books and accounts; expenses of calculating the net asset value of
shares of the Louisiana Fund; expenses of shareholder meetings; expenses
relating to the issuance, registration and qualification of shares of the
Louisiana Fund and the preparation, printing and mailing of prospectuses for
such purposes (except to the extent that any Distribution Agreement to which the
Trust is a party provides that another party is to pay some or all of such
expenses); and all such expenses to be allocated among the respective portfolios
of the Trust as provided in Section 6.9 of the Declaration.
3. Compensation of the Adviser. The Louisiana Fund shall pay to the
Adviser an investment advisory fee computed and paid monthly in an amount equal
to 0.55% of the average daily net assets attributable to such Fund on an
annualized basis for the Trust's then-current fiscal year. In addition, the
Adviser agrees to pay the expenses attributable to the Louisiana Fund described
in Section 2 hereof (except for distribution fees payable by the Louisiana Fund
under the Plan of Distribution adopted pursuant to Rule 12b-1 under the 1940
Act, dated as of February 1, 1993, as amended from time to time, of such Fund
(the "Distribution Fees")), until December 31, 2002, and to pay the expenses
relating to the organization of the Louisiana Fund, all subject to reimbursement
by the Louisiana Fund. To accomplish the reimbursement of expenses of the
Louisiana Fund advanced by the Adviser, the Trust shall pay the Adviser out of
the assets of such Fund an expense reimbursement fee, in addition to the
investment advisory fee and Distribution Fees payable with respect to such Fund,
such expense reimbursement fee to be computed and paid monthly at the annual
rate of 0.40% of the average daily net assets of such Fund for its then-current
year. The obligation of the Trust to make payments of the expense reimbursement
fee payable by the Trust with respect to the Louisiana Fund shall terminate on
the earlier of the date on which the total of the payments of such fee made by
the Trust equal the prior payment by the Adviser of reimbursable expenses
attributable to the Louisiana Fund or December 31, 2002. If the Adviser shall
serve as the investment adviser to the Louisiana Fund for less than the whole of
any period specified in this Section 3, the compensation (including the expense
reimbursement) payable to the Adviser with respect to the Louisiana Fund will be
prorated.
This obligation of the Adviser to reimburse the Trust for expenses may
be amended or terminated at any time by the Adviser without the consent of the
Trust by written notice from the Adviser to the Trust.
4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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, as amended, and the Rules, Regulations or orders
thereunder, will not take a long or short position in the shares of the
Louisiana Fund except as permitted by the Declaration, and will comply with all
other provisions of the Declaration and the By-Laws and the then-current
Prospectus of the Trust relative to the Adviser and its Directors and officers.
5. 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 Louisiana Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its duties and obligations hereunder. As used in this Section 5, the term
"Adviser" shall include Directors, officers and employees of the Adviser as well
as that corporation itself.
6. Activities of the Adviser. The services of the Adviser to the
Louisiana Fund are not to be deemed to be exclusive, the Adviser being free to
render investment advisory and/or other services to others. The Adviser may
permit other fund clients to use the initials "MFS" in their names. The
Louisiana Fund agrees that if the Adviser shall for any reason no longer serve
as the investment adviser to the Louisiana Fund, the Louisiana Fund will change
its name so as to delete the initials "MFS". It is understood that Trustees,
officers, and shareholders of the Louisiana Fund 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 become
similarly interested in the Louisiana Fund, and that the Adviser may be or
become interested in the Louisiana Fund as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to the Louisiana Fund until February 1, 1995 on
which date it will terminate with respect to the Louisiana Fund unless its
continuance after February 1, 1995 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Louisiana Fund.
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, in each case on not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Louisiana Fund.
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities" of the Louisiana Fund,
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the Investment Company Act of 1940, as
amended, and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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,
thereunder duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MULTI-STATE MUNICIPAL
BOND TRUST on behalf of the
MFS Louisiana Municipal Bond Fund
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
EXHIBIT 5(h)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of February, 1993, by and
between MFS PENNSYLVANIA MUNICIPAL BOND FUND (the "Pennsylvania Fund"), a
portfolio of MFS Multi-State Municipal Bond Trust (the "Trust"), a Massachusetts
business trust, and Massachusetts Financial Services Company, a Delaware
corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940 divided into separate portfolios of shares; and
WHEREAS, the Adviser is willing to provide business management services to the
Trust with respect to the Pennsylvania Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
1. Duties of the Adviser. The Adviser shall provide the Pennsylvania
Fund with such investment advice and supervision as the latter may from time to
time consider necessary for the proper supervision of its funds. The Adviser
shall act as Adviser to the Pennsylvania Fund and as such shall furnish
continuously an investment program for the Pennsylvania Fund and shall determine
from time to time what securities shall be purchased, sold or exchanged and what
portion of the assets of the Pennsylvania Fund shall be held uninvested, subject
always to the restrictions of the Trust's Declaration of Trust, dated August 23,
1984, as amended, and By-Laws, as amended, as each may be further amended from
time to time (respectively, the "Declaration" and "By-Laws"), to the provisions
of the Investment Company Act of 1940, as amended (the "1940 Act"), and the
Rules, Regulations and orders thereunder, and to the Pennsylvania Fund's
then-current Prospectus. 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 fund securities of the Pennsylvania Fund 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 Pennsylvania Fund, all
actions which it deems necessary to implement the investment policies determined
as provided above, and in particular to place all orders for the purchase or
sale of fund securities for the Pennsylvania Fund's account with brokers or
dealers selected by it, and to that end the Adviser is authorized as the agent
of the Pennsylvania Fund to give instructions to the Custodian of the Trust as
to deliveries of securities and payments of cash for the account of the
Pennsylvania Fund. In connection with the selection of such brokers or dealers
and the placing of such orders, the Adviser is directed to seek for the
Pennsylvania Fund execution at the best available price. Subject to this
requirement of seeking the best available price, securities may be bought from
or sold to broker dealers who have furnished statistical, research and other
information or services to the Adviser.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Pennsylvania Fund and maintaining its organization, and investment advisory
facilities and executive and supervisory personnel for managing the investments
and effecting the portfolio transactions of the Pennsylvania Fund. The Adviser
shall arrange, if desired by the Pennsylvania Fund, for directors, 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
Pennsylvania Fund 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 Pennsylvania Fund; fees and expenses of
independent auditors, of legal counsel and of any transfer agent, registrar or
dividend disbursing agent of the Pennsylvania Fund; expenses of servicing
shareholder accounts; 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 custodian for all services to the
Trust on behalf of the Pennsylvania Fund, including safekeeping of funds and
securities and maintaining required books and accounts; expenses of calculating
the net asset value of shares of the Pennsylvania Fund; expenses of shareholder
meetings; expenses relating to the issuance, registration and qualification of
shares of the Pennsylvania Fund and the preparation, printing and mailing of
prospectuses for such purposes (except to the extent that any Distribution
Agreement to which the Trust is a party provides that another party is to pay
some or all of such expenses); and all such expenses to be allocated among the
respective portfolios of the Trust as provided in Section 6.9 of the
Declaration.
3. Compensation of the Adviser. The Pennsylvania Fund shall pay to the
Adviser an investment advisory fee computed and paid monthly in an amount equal
to 0.55% of the average daily net assets attributable to such Fund on an
annualized basis for the Trust's then-current fiscal year. In addition, the
Adviser agrees to pay the expenses attributable to the Pennsylvania Fund
described in Section 2 hereof (except for distribution fees payable by the
Pennsylvania Fund under the Plan of Distribution adopted pursuant to Rule 12b-1
under the 1940 Act, dated as of February 1, 1993, as amended from time to time,
of such Fund (the "Distribution Fees")), until December 31, 2002, and to pay the
expenses relating to the organization of the Pennsylvania Fund, all subject to
reimbursement by the Pennsylvania Fund. To accomplish the reimbursement of
expenses of the Pennsylvania Fund advanced by the Adviser, the Trust shall pay
the Adviser out of the assets of such Fund an expense reimbursement fee, in
addition to the investment advisory fee and Distribution Fees payable with
respect to such Fund, such expense reimbursement fee to be computed and paid
monthly at the annual rate of 0.40% of the average daily net assets of such Fund
for its then-current year. The obligation of the Trust to make payments of the
expense reimbursement fee payable by the Trust with respect to the Pennsylvania
Fund shall terminate on the earlier of the date on which the total of the
payments of such fee made by the Trust equal the prior payment by the Adviser of
reimbursable expenses attributable to the Pennsylvania Fund or December 31,
2002. If the Adviser shall serve as the investment adviser to the Pennsylvania
Fund for less than the whole of any period specified in this Section 3, the
compensation (including the expense reimbursement) payable to the Adviser with
respect to the Pennsylvania Fund shall be prorated.
This obligation of the Adviser to reimburse the Trust for expenses may
be amended or terminated at any time by the Adviser without the consent of the
Trust by written notice from the Adviser to the Trust.
4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, 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, as amended, and the Rules, Regulations or orders
thereunder, will not take a long or short position in the shares of the
Pennsylvania Fund except as permitted by the Declaration, and will comply with
all other provisions of the Declaration and the By-Laws and the then-current
Prospectus of the Trust relative to the Adviser and its Directors and officers.
5. 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 Pennsylvania Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its duties and obligations hereunder. As used in this Section 5, the term
"Adviser" shall include Directors, officers and employees of the Adviser as well
as that corporation itself.
6. Activities of the Adviser. The services of the Adviser to the
Pennsylvania Fund are not to be deemed to be exclusive, the Adviser being free
to render investment advisory and/or other services to others. The Adviser may
permit other fund clients to use the initials "MFS" in their names. The
Pennsylvania Fund agrees that if the Adviser shall for any reason no longer
serve as the investment adviser to the Pennsylvania Fund, the Pennsylvania Fund
will change its name so as to delete the initials "MFS". It is understood that
the Trustees, officers, and shareholders of the Pennsylvania Fund 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
become similarly interested in the Pennsylvania Fund, and that the Adviser may
be or become interested in the Pennsylvania Fund as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force with respect to the Pennsylvania Fund until February 1, 1995 on
which date it will terminate with respect to the Pennsylvania Fund unless its
continuance after February 1, 1995 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Pennsylvania Fund.
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, in each case on not more than sixty
days' nor less than thirty days' written notice to the other party. This
Agreement shall automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Pennsylvania
Fund.
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities" of the Pennsylvania Fund,
"assignment," "affiliated person," and "interested persons," when used in this
Agreement, shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the Investment Company Act of 1940, as
amended, and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
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,
thereunder duly authorized, all as of the day and year first above written. The
undersigned Trustee of the Trust has executed this Agreement not individually,
but as Trustee under the Declaration and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Trust, individually,
but bind only the Trust estate.
MFS MULTI-STATE MUNICIPAL
BOND TRUST on behalf of the
MFS Pennsylvania Municipal Bond Fund
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
EXHIBIT 5(i)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of September, 1993, by
and between MFS MUNICIPAL SERIES TRUST, a Massachusetts business trust (the
"Trust"), on behalf of the MFS CALIFORNIA MUNICIPAL BOND FUND (the "Fund"), a
series of the Trust, and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware
corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is an open-end investment company registered under the
Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide business management and investment
advisory services to the Fund with respect to the Fund on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
Article 1. Duties of the Adviser. The Adviser shall provide the Fund with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of the funds of the Fund. The Adviser shall
act as Adviser to the Fund and as such shall furnish continuously an investment
program for the Fund and shall determine from time to time what securities shall
be purchased, sold or exchanged and what portion of the assets of the Fund shall
be held uninvested, subject always to the restrictions of the Trust's
Declaration of Trust, dated August 23, 1984, as amended, and By-Laws, as
amended, as each may be further amended from time to time (respectively, the
"Declaration" and "By-Laws"), to the provisions of the Investment Company Act of
1940, and the Rules, Regulations and orders thereunder, and to the then-current
Prospectus for the Fund. 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 portfolio securities of the Fund 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 a notice or until similarly notified that such determination
has been revoked. The Adviser shall take, on behalf of the Fund, all actions
which it deems necessary to implement the investment policies determined as
provided above, and in particular to place all orders for the purchase or sale
of portfolio securities for the account of the Fund with brokers or dealers
selected by it, and to that end the Adviser is authorized as the agent of the
Fund to give instructions to the Custodian of the Fund as to deliveries of
securities and payments of cash for the account of the Fund. In connection with
the selection of such brokers or dealers and the placing of such orders, the
Adviser is directed to seek execution at the most favorable price. Subject to
this requirement of seeking the most favorable price, securities may be bought
from or sold to broker dealers who have furnished statistical, research and
other information or services to the Adviser.
Article 2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investment of the
Fund and maintaining its organization, and investment advisory facilities and
executive and supervisory personnel for managing the investments and effecting
the portfolio transactions for the Fund. The Adviser shall arrange, if desired
by the Trust, for Directors, 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 Fund 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 Fund; fees and expenses of
independent auditors, of legal counsel and of any transfer agent, registrar or
dividend disbursing agent of the Fund; expenses of repurchasing and redeeming
shares and servicing shareholder accounts; expenses of preparing, printing and
mailing share certificates, shareholders' 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 custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of shares of the Fund; expenses of shareholders' 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
(except to the extent of any Distribution Agreement to which the Trust is a
party provides that another party is to pay some or all of such expenses).
Article 3. Compensation of the Adviser. For the services to be rendered and the
facilities to be provided, the Fund shall pay to the Adviser an investment
advisory fee computed and paid monthly at the annual rate equal to 0.55% of the
Fund's average daily net assets on an annualized basis for the Fund's
then-current fiscal year. In addition, the Adviser agrees to pay the Fund's
expenses in Article 2 hereof (except for fees payable by the Fund under the
Distribution Agreement, dated as of April 10, 1985, by and between the Fund's
predecessor, MFS California Municipal Bond Fund, and Massachusetts Financial
Services Company (the "distribution fees")), until December 31, 1996, and to pay
the expenses after April 9, 1985 relating to the organization of the Fund, all
subject to reimbursement by the Fund. To accomplish the reimbursement of
expenses advanced by the Adviser, the Fund shall pay the Adviser out of the
Fund's assets of an expense reimbursement fee in addition to the investment
advisory fee and distribution fees payable, such expense reimbursement fee to be
computed and paid monthly at the annual rate equal to 0.70% of the Fund's
average daily net assets for its then-current fiscal year until November 30,
1986, and thereafter at an annual rate equal to 0.95% of the Fund average daily
net assets for its then-current fiscal-year; provided, that such expense
reimbursement payment shall be made only to the extent that immediately after
any such payment the Adviser would not be obligated to reimburse any amount to
the Fund pursuant to Article 4 hereof. The first payment of the expense
reimbursement fee shall be made by the Fund on November 30, 1985. The obligation
of the Fund to make payment of the expense reimbursement fee shall terminate on
the earlier of the date on which the total of the payments of such fee made by
the Fund equal the prior payment by the Adviser of the Fund's reimbursable
expenses attributable to the Fund or December 31, 1995. If the Adviser shall
serve as the investment adviser to the Fund for less than the whole of any
period specified in this Article 3, the compensation (including the expense
reimbursement) payable to the Adviser will be prorated.
Article 4. Expense Limitation. Within 30 days following the close of any fiscal
year of the Fund, the Adviser shall pay to the Fund a sum equal to the amount,
if any, by which the aggregate expenses, exclusive of interest, taxes, brokerage
commissions and extraordinary expenses, incurred by the Fund during that fiscal
year exceed the Maximum Percentage in effect from time to time during such
fiscal year. As used herein, the term "Maximum Percentage" shall mean .95%
during the period ending November 30, 1985, and 1.25% thereafter until November
30, 1986 and 1.50% thereafter. Notwithstanding the foregoing, the Adviser agrees
that the Maximum Percentage will at all times be limited so that the aggregate
expenses of the Fund subject to reimbursement by the Adviser as set forth above
shall not exceed 2% of the first $10,000,000 of the Fund's average daily net
assets, 1 1/2% of the next $20,000,000 of such average daily net assets and 1%
of such average daily net assets in excess of $30,000,000; this limitation shall
be in effect for so long as required as a condition to continued qualification
of shares of the Fund for sale in California, and shall be deemed to be amended
from time to time without necessity for further action if and to the extent that
expense limitations imposed under California are amended. This obligation of the
Adviser to reimburse the Fund for expenses may be amended or terminated at any
time by the Adviser without consent of the Fund by written notice from the
Adviser to the Fund.
Article 5. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the principal underwriter, if
any, for the Trust as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders thereunder,
will not take a long or short position in the shares of the Fund except as
permitted by the Declaration, and will comply with all other provisions of the
Declaration and the By-Laws and the then-current Prospectus for the Fund
relative to the Adviser and its Directors and officers.
Article 6. Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution and management of
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its duties and
obligations hereunder. As used in this Article 6, the term "Adviser" shall
include Directors, officers and employees of the Adviser as well as that
corporation itself.
Article 7. Activities of the Adviser. The services of the Adviser to the Fund
are not to be deemed exclusive, the Adviser being free to render investment
advisory and/or other services to others. The Adviser may permit other fund
clients to use the initials "MFS" in their names. The Fund agrees that if the
Adviser shall for any reason no longer serve as the Adviser to the Fund, the
Fund will immediately change its name so as to delete the initials "MFS". It is
understood that the 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
become similarly interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
Article 8. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force until August 1, 1995 on which date it will terminate unless its
continuance after August 1, 1995 is "specifically approved at least annually"
(i) by a the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of the majority of the outstanding voting
securities" of the Fund.
This Agreement may be terminated at any time without the payment of any penalty
by the Trustees or by "vote of a majority of the outstanding voting securities"
of the Fund, or by the Adviser, in each case on not more than sixty days' nor
less than thirty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."
This Agreement may be amended only if such amendment is approved by "vote of a
majority of the outstanding voting securities" of the Fund.
The terms "specifically approved at least annually," "vote of a majority of the
outstanding voting securities", "assignment," "affiliated person," and
"interested person," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
Investment Company Act of 1940 and the Rules and Regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered in their names and on their behalf by the undersigned, thereunto duly
authorized, and their respective seals to be hereto affixed, all as of the day
and year first written above. The undersigned Trustee of the Trust has executed
this Agreement not individually, but as Trustee under the Declaration and the
obligations of this Agreement are not binding upon any of the Trustees or
shareholders of the Trust, individually, but bind only the trust estate
applicable to the Fund.
MFS MUNICIPAL SERIES TRUST on
behalf of MFS CALIFORNIA
MUNICIPAL BOND FUND
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
EXHIBIT 5(j)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of the 1st day of September, 1993, by
and between MFS MUNICIPAL SERIES TRUST, a Massachusetts business trust (the
"Trust"), on behalf of MFS MUNICIPAL INCOME FUND (the "Fund") a series of 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; and
WHEREAS, the Adviser is willing to provide business management services to the
Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
Article 1. Duties of the Adviser. The Adviser shall provide the Fund with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its funds. The Adviser shall act as
Adviser to the Fund 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 Fund shall be held
uninvested, subject always to the restrictions of the Declaration of Trust of
the Trust, dated August 23, 1984, and By-Laws, each as amended from time to time
(respectively, the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940, and the Rules, Regulations and orders
thereunder, and to the Fund's then-current Prospectus and Statement of
Additional Information. The Adviser 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 Fund'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 Fund, all actions which it deems necessary
to implement the investment policies determined as provided above, and in
particular to place all orders for the purchase or sale of portfolio securities
for the Fund's account with brokers or dealers selected by it, and to that end,
the Adviser is authorized as the agent of the Fund to give instructions to the
Custodian of the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed to seek for the
Fund execution at the most reasonable price by responsible brokerage firms of
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 Fund to pay a broker or dealer an amount of commission another broker
or dealer would have charged for effecting that transaction, if the Adviser
determined in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Fund and to other clients
of the Adviser as to which the Adviser exercises investment discretion.
Article 2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Fund and maintaining its organization, and investment advisory facilities and
executive and supervisory personnel for managing the investments and effecting
the portfolio transactions of the Fund. The Adviser shall arrange, if desired by
the Trust, for Directors, 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 Fund 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 Fund; fees and expenses of
independent auditors, of legal counsel and of any transfer agent, registrar or
dividend disbursing agent of the Fund; expenses of repurchasing and redeeming
shares and servicing shareholder accounts; expenses of preparing, printing and
mailing stock certificates, shareholder reports, notices, proxy statements and
reports to governmental officers and commissions; brokerage and other expenses
connected with the execution, recording and settlement of portfolio security
transactions; insurance premiums; fees and expenses of the custodian for all
services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of shares of the Fund; expenses of shareholders' 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
(except to the extent that any Distribution Agreement to which the Trust is a
party on behalf of the Fund provides that another party is to pay some or all of
such expenses).
Article 3. Compensation of the Adviser. For the services to be rendered and the
facilities provided, the Fund shall pay to the Adviser an investment advisory
fee computed and paid monthly at a rate equal to 0.30% of the Fund's average
daily net assets plus 6.43% of the Fund's gross income (i.e., income other than
from the sale of securities, short-term gains from options and futures
transactions and premium income from options written) for its then-current
fiscal year. Payment of the foregoing fee is subject to the provision that
within 30 days following the close of any fiscal year of the Fund, the Adviser
will pay to the Fund a sum equal to the amount by which the aggregate expenses
of the Trust, but excluding interest, taxes, brokerage commissions and
extraordinary expenses, incurred during such fiscal year exceed the sum of (a) 2
1/2% of the first $30 million of the Fund's average daily net assets, (b) 2% of
the next $70 million of the Fund's average daily net assets, and (c) 1 1/2% of
the remaining average daily net assets of the Fund. The obligation of the
Adviser to reimburse the Fund for expenses incurred during any year may be
terminated or revised at any time by the Adviser without the consent of the Fund
by notice in writing from the Adviser to the Fund. If the Adviser shall serve
for less than the whole of any period specified in this Section 3, the
compensation (including the expense reimbursement) payable to the Adviser with
respect to the Fund will be prorated.
Article 4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust's principal
underwriter, if any, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders thereunder,
will not take a long or short position in the shares of the Fund except as
permitted by the Declaration, and will comply with all other provisions of the
Declaration and the By-Laws and the then-current Prospectus and Statement of
Additional Information of the Fund relative to the Adviser and its Directors and
officers.
Article 5. Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution and management of
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties and obligations hereunder. As used in this Article 5,
the term "Adviser" shall include Directors, officers and employees of the
Adviser as well as that corporation itself.
Article 6. Activities of the Adviser. The services of the Adviser to the Fund
are not deemed to be exclusive, the Adviser being free to render investment
advisory and/or other services to others. The Adviser may permit other fund
clients to use the initials "MFS" in its name. The Fund agrees that if the
Adviser shall for any reason no longer serve as the Adviser for the Fund, the
Fund will change their names so as to delete the initials "MFS". It is
understood that the 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
become similarly interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
Article 7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective on the date first above written and shall
govern the relations between the parties hereto thereafter, and shall remain in
force until August 1, 1995 on which date it will terminate unless its
continuance after August 1, 1995 is "specifically approved at least annually"
(i) by the vote of a majority of the 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 Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Fund.
This Agreement may be terminated at any time without the payment of any penalty
by the Trustees or by "vote of a majority of the outstanding voting securities"
of the Fund, or by the Adviser, in each case on not more than sixty days' nor
less than thirty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment."
This Agreement may be amended only if such agreement is approved by "vote of a
majority of the outstanding voting securities" of the Fund.
The terms "specifically approved at least annually," "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person," and
"interested person," when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
Investment Company Act of 1940 and the Rules and Regulations promulgated
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
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, thereunto
duly authorized, and their respective seals to be hereto affixed, all as of the
day and year first written above. The undersigned Trustee of the Trust has
executed this Agreement not individually, but as Trustee under the Declaration
and the obligations of this Agreement are not binding upon any of the Trustees
or shareholders of the Trust, individually, but bind only the trust estate
applicable to the Fund.
MFS MUNICIPAL SERIES TRUST on
behalf of MFS MUNICIPAL INCOME
FUND
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
EXHIBIT 7
MFS MULTI-STATE MUNICIPAL BOND TRUST
RETIREMENT PLAN FOR NON-INTERESTED PERSON TRUSTEES
MFS Multi-State Municipal Bond Trust (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 ss.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 ss.3(g).
Normal Retirement Date: December 31 of the Plan Year in which an
Independent Trustee attains age 75 or December 31, 1992.
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 3%
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 39%.
(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 (S)3,
benefits payable under this (S)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").
<PAGE>
EXHIBIT 8(a)
CUSTODIAN CONTRACT
BETWEEN
MFS MANAGED MULTI-STATE TAX-EXEMPT TRUST
AND
STATE STREET BANK AND TRUST COMPANY
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
1. Employment of Custodian and Property to be Held By It................................................ 1
2. Duties of the Custodian with Respect to Property of the Trust Held by the Custodian.................. 2
2.1. Holding Securities......................................................................... 2
2.2. Delivery of Securities..................................................................... 2
2.3. Registration of Securities................................................................. 6
2.4. Bank Accounts.............................................................................. 6
2.5. Payments for Shares........................................................................ 7
2.6. Investment and Availability of Federal Trusts.............................................. 7
2.7. Collection of Income....................................................................... 7
2.8. Payment of Trust Monies.................................................................... 8
2.9. Liability for Payment in Advance of Receipt of Securities Purchased........................ 10
2.10. Payments for Repurchases or Redemptions of Shares of the Trust............................. 10
2.11. Appointment of Agents...................................................................... 11
2.12. Deposit of Trust Assets in Securities System............................................... 11
2.12A. Trust Assets Held in the Custodian's Direct Paper System................................... 13
2.13. Segregated Account......................................................................... 14
2.14. Ownership Certificates for Tax Purposes.................................................... 15
2.15. Proxies.................................................................................... 15
2.16. Communications Relating to Trust Portfolio Securities...................................... 16
2.17. Proper Instructions........................................................................ 16
2.18. Actions Permitted Without Express Authority................................................ 17
2.19. Evidence of Authority...................................................................... 17
3. Duties of the Custodian with Respect to the Books of Account and Calculation of Net
Asset Value and Net Income.......................................................................... 18
4. Records.............................................................................................. 18
5. Opinion of Trust's Independent Accountants .......................................................... 19
6. Reports to Trust by Independent Public Accountants................................................... 19
7. Compensation of Custodian............................................................................ 19
8. Responsibility of Custodian.......................................................................... 19
9. Effective Period, Termination and Amendment.......................................................... 20
10. Successor Custodian.................................................................................. 22
11. Interpretive and Additional Provisions............................................................... 23
12. Additional Funds..................................................................................... 23
13. Massachusetts Law to Apply........................................................................... 23
14. Prior Contracts...................................................................................... 23
</TABLE>
<PAGE>
CUSTODIAN CONTRACT
This Contract between MFS Managed Multi-State Tax-Exempt Trust, a
business trust organized and existing under the laws of Massachusetts, having
its principal place of business at 200 Berkeley Street, Boston, Massachusetts,
hereinafter called the "Trust", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian".
WITNESSETH:
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust intends to offer shares in twelve series, the
Georgia Series, Maryland Series, Massachusetts Series, Michigan Series,
Minnesota Series, New York Series, New Jersey Series, North Carolina Series,
Ohio Series, South Carolina Series, Virginia Series and West Virginia Series
(Such series together with all other series subsequently established by the
Trust and made subject to this Contract in accordance with paragraph 12, being
herein referred to as the "Portfolio(s)");
NOW therefor, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It. The Trust
hereby employs the Custodian as the custodian of the assets of the Portfolios of
the Trust pursuant to the provisions of the Declaration of Trust. The Trust, on
behalf of the Portfolios, agrees to deliver to the Custodian all securities and
cash of the Portfolios, and all payments of income, payments of principal or
capital distributions received by it with respect to all securities owned by the
Portfolios from time to time, and the cash consideration received by it for such
new or treasury shares of beneficial interest of the Trust representing
interests in the Portfolios ("Shares") as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Portfolio and not delivered to the Custodian. Upon
receipt of "Proper Instructions" (within the meaning of Section 2.17), the
Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, but only in accordance with an applicable
vote by the Board of Trustees of the Trust on behalf of the applicable
Portfolio(s), and provided that the Custodian shall have no more or less
responsibility or liability to the Trust on account of any actions or omissions
of any sub-custodian so employed than any such sub-custodian has to the
Custodian.
2. Duties of the Custodian with Respect to Property of the Trust Held
By the Custodian.
2.1. Holding Securities. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash property, including all
securities owned by such Portfolio, other than (a) securities which are
maintained pursuant to Section 2.12 in a clearing agency which acts as a
securities depository or in a book-entry system authorized by the U.S.
Department of the Treasury, collectively referred to herein as a "Securities
System"; and (b) commercial paper of an issuer for which State Street Bank and
Trust Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian pursuant
to Section 2.12.A.
2.2. Delivery of Securities. The Custodian shall release and deliver
securities owned by a Portfolio held by the Custodian or in a Securities System
account of the Custodian or in the Custodian's Direct Paper book entry system
account ("Direct Paper System Account") only upon receipt of Proper Instructions
from the Trust on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered
into by the Portfolio;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name
of any agent appointed pursuant to Section 2.11 or into the
name or nominee name of any sub-custodian appointed
pursuant to Article l; or for exchange for a different
number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities
are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts
or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities
made by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by the
Custodian and the Trust on behalf of the Portfolio, which
may be in the form of cash or obligations issued by the
United States government, its agencies or
instrumentalities, except that in connection with any loans
for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities owned
by the Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings
by the Trust requiring a pledge of assets by the Trust, but
only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio of the Trust;
13) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection
with transactions by the Portfolio of the Trust;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Trust, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time
to time in the currently effective prospectus and statement
of additional information of the Trust related to the
Portfolio ("Prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon
receipt of, in addition to Proper Instructions from the
Trust on behalf of the applicable Portfolio, a certified
copy of a resolution of the Board of Trustees or of the
Executive Committee signed by an officer of the Trust and
certified by the Secretary or an Assistant Secretary,
setting forth the purpose for which such delivery is to be
made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery
of such securities shall be made.
2.3. Registration of Securities. Securities held by the Custodian
(other than bearer securities) shall be registered in the name of the Portfolio
or in the name of any nominee of the Trust on behalf of the Portfolio of any
nominee of the Custodian which nominee shall be assigned exclusively to the
Portfolio, unless the Trust has authorized in writing the appointment of a
nominee to be used in common with other registered investment companies having
the same investment adviser as the Portfolio, or in the name or nominee name of
any agent appointed pursuant to Section 2.11 or in the name or nominee name of
any sub-custodian appointed pursuant to Article 1. All securities accepted by
the Custodian on behalf of the Portfolio under the terms of this Contract shall
be in "street name" or other good delivery form.
2.4. Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts (the "Portfolio's Account or Accounts") in the
name of each Portfolio of the Trust, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall hold in such
Account or Accounts, subject to the provisions hereof, all cash received by it
from or for the Account of the Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in accordance with Rule 17f-3
under the Investment Company Act of 1940. Funds held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; provided, however, that every
such bank or trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall on behalf of
each applicable Portfolio be approved by vote of majority of the Board of
Trustees of the Trust. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only in that
capacity.
2.5. Payments for Shares. The Custodian shall receive from the
distributor for the Shares or from the Transfer Agent of the Trust and deposit
into the Portfolio's Account such payments as are received for Shares of that
Portfolio issued or sold from time to time by the Trust. The Custodian will
provide timely notification to the Trust on behalf of each such Portfolio and
the Transfer Agent of any receipt by it of payments for Shares of such
Portfolio.
2.6. Investment and Availability of Federal Trusts. Upon mutual
agreement between the Trust on behalf of each applicable Portfolio and the
Custodian, the Custodian shall, upon the receipt of Proper Instructions from the
Trust on behalf of a Portfolio, 1) Invest in such instruments as may be set
forth in such instruments as may be set forth in such instructions on the same
day as received all federal funds received after a time agreed upon between the
Custodian and the Trust; and 2) Make federal funds available to such Portfolio
as of specified times agreed upon from time to time by the Trust and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
2.7. Collection of Income. The Custodian shall collect on a
timely basis all income and other payments with respect to registered securities
held hereunder to which each Portfolio shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on a timely
basis all income and other payments with respect to bearer securities if, on the
date of payment by the issuer, such securities are held by the Custodian or its
agent thereof and shall credit such income, as collected, to such Portfolio's
custodian account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due each Portfolio on
securities loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Trust. The Custodian will have no duty or responsibility
in connection therewith, other than to provide the Trust with such information
or data as may be necessary to assist the Trust in arranging for the timely
delivery to the Custodian of the income to which the Portfolio is properly
entitled.
2.8. Payment of Trust Monies. Upon receipt of Proper Instructions
from the Trust on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall pay out
monies of a Portfolio in the following cases only:
1) Upon the purchase of securities for the account of the
Portfolio but only (a) against the delivery of such
securities to the Custodian (or any bank, banking firm
or trust company doing business in the United States or
abroad which is qualified under the Investment Company
Act of 1940, as amended, to act as a custodian and has
been designated by the Custodian as its agent for this
purpose) registered in the name of the Portfolio or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b)
in the case of a purchase effected through a Securities
System, in accordance with the conditions set forth in
Section 2.12 hereof; or (c) in the case of a purchase
involving the Direct Paper System, in accordance with
the conditions set forth in Section 2.12A; or (d) in the
case of repurchase agreements entered into between the
Trust on behalf of the Portfolio and the Custodian, or
another bank, or a broker-dealer which is a member of
NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt
evidencing purchase by the Portfolio of securities owned
by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities
from the Portfolio;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in
Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by
the Portfolio, including but not limited to the
following payments for the account of the Portfolio:
interest, taxes, management, accounting, transfer agent
and legal fees, and operating expenses of the Trust
whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the
Portfolio declared pursuant to the governing documents
of the Trust;
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For any other proper purpose, but only upon receipt of,
in addition to Proper Instructions from the Trust on
behalf of the Portfolio, a certified copy of a
resolution of the Board of Trustees or of the Executive
Committee of the Trust signed by an officer of the Trust
and certified by its Secretary or an Assistant
Secretary, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to whom
such payment is to be made.
2.9. Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase of securities for
the account of a Portfolio is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from the
Trust on behalf of such Portfolio to so pay in advance, the Custodian shall be
absolutely liable to the Trust for such securities to the same extent as if the
securities had been received by the Custodian, except that in the case of
repurchase agreements entered into by the Trust on behalf of a Portfolio with a
bank which is a member of the Federal Reserve System, the Custodian may transfer
funds to the account of such bank prior to the receipt of written evidence that
the securities subject to such repurchase agreement have been transferred by
book-entry into a segregated non-proprietary account of the Custodian maintained
with the Federal Reserve Bank of Boston or of the safekeeping receipt, provided
that such securities have in fact been so transferred by book-entry.
2.10. Payments for Repurchases or Redemptions of Shares of the
Trust. From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the Board of
Trustees of the Trust pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of a Portfolio, the Custodian shall honor checks drawn
on the Custodian by a holder of Shares, which checks have been furnished by the
Trust to the holder of Shares, when presented to the Custodian in accordance
with such procedures and controls as are mutually agreed upon from time to time
between the Trust and the Custodian.
2.11. Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such of the
provisions of this Article 2 as the Custodian may from time to time direct;
provided, however, that the appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities hereunder.
2.12. Deposit of Trust Assets in Securities Systems. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a
clearing agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies, collectively referred to herein as
"Securities System" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and subject to
the following provisions:
1) The Custodian may keep securities of the Portfolio in
a Securities System provided that such securities are
represented in an account ("Custodian's Account") of
the Custodian in the Securities System which shall not
include any assets of the Custodian other than assets
held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to
securities of the Portfolio which are maintained in a
Securities System shall identify by book-entry those
securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for
the account of the Portfolio upon (i) receipt of
advice from the Securities System that such securities
have been transferred to the Custodian's Account, and
(ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the
account of the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon
(i) receipt of advice from the Securities System that
payment for such securities has been transferred to
the Custodian's Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
transfer and payment for the account of the Portfolio.
Copies of all advices from the Securities System of
transfers of securities for the account of the
Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the Custodian and be provided to
the Trust at its request. Upon request, the Custodian
shall furnish the Trust on behalf of the Portfolio
confirmation of each transfer to or from the account
of the Portfolio in the form of a written advice or
notice and shall furnish to the Portfolio copies of
daily transaction sheets reflecting each day's
transactions in the Securities System for the account
of the Portfolio.
4) The Custodian shall provide the Trust for the
Portfolio with any report obtained by the Custodian on
the Securities System's accounting system, internal
accounting control and procedures for safeguarding
securities deposited in the Securities System;
5) The Custodian shall have received from the Trust on
behalf of the Portfolio the initial or annual
certificate, as the case may be, required by Article 9
hereof;
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Trust for the benefit of the Portfolio for any loss or
damage to the Portfolio resulting from use of the
Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the
Securities System; at the election of the Trust, it
shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the
Securities System or any other person which the
Custodian may have as a consequence of any such loss
or damage if and to the extent that the Trust has not
been made whole for any such loss or damage.
2.12A. Trust Assets Held in the Custodian's Direct Paper System.
The Custodian may deposit and/or maintain securities owned by a Portfolio in the
Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct
Paper System will be effected in the absence of Proper
Instructions from the Trust on behalf of the
Portfolio;
2) The Custodian may keep securities of the Portfolio in
the Direct Paper System only if such securities are
represented in an account ("Account") of the Custodian
in the Direct Paper System which shall not include any
assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to
securities of the Portfolio which are maintained in
the Direct Paper System shall identify by book-entry
those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for
the account of the Portfolio upon the making of an
entry on the records of the Custodian to reflect such
payment and transfer of securities to the account of
the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon the making
of an entry on the records of the Custodian to reflect
such transfer and receipt of payment for the account
of the Portfolio;
5) The Custodian shall furnish the Trust on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written
advice or notice, of Direct Paper on the next business
day following such transfer and shall furnish to the
Trust on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction
in the Securities System for the account of the
Portfolio;
6) The Custodian shall provide the Trust on behalf of the
Portfolio with any report on its system of internal
accounting control as the Trust may reasonably request
from time to time;
2.13. Segregated Account. The Custodian shall upon receipt
of Proper Instructions from the Trust on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf of
such Portfolio, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Section 2.12 hereof, (i) in accordance with the provisions of any
agreement among the Trust on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Trust, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased or sold by
the Portfolio, (iii) for the purpose of compliance by the Portfolio with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in the case of
clause (iv), upon receipt of, in addition to Proper Instructions from the Trust
on behalf of the applicable Portfolio, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an officer of the
Trust and certified by the Secretary or an Assistant Secretary, setting forth
the purpose or purposes of such segregated account and declaring such purposes
to be proper corporate purposes.
2.14. Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to securities of each Portfolio held by it and in connection with
transfers of securities.
2.15. Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting materials
and all notices relating to such securities.
2.16. Communications Relating to Trust Portfolio Securities.
The Custodian shall transmit promptly to the Trust for each Portfolio all
written information (including, without limitation, pendency of calls and
maturities of securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Trust on behalf of
the Portfolio and the maturity of futures contracts purchased or sold by the
Portfolio) received by the Custodian from issuers of the securities being held
for the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information received by the
Custodian from issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any tender offer, exchange
offer or any other similar transaction, the Portfolio shall notify the Custodian
at least three business days prior to the date on which the Custodian is to take
such action.
2.17. Proper Instructions. Proper Instructions as used
throughout this Article 2 means a writing signed or initialed by one or more
person or persons as the Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction or type
of transaction involved, including a specific statement of the purpose for which
such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Trust shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Trustees of the Trust
accompanied by a detailed description of procedures approved by the Board of
Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolio's assets.
2.18. Actions Permitted without Express Authority. The
Custodian may in its discretion, without express authority from the Trust on
behalf of each applicable Portfolio:
1) Make payments to itself or others for minor
expenses of handling securities or other similar
items relating to its duties under this Contract,
provided that all such payments shall be accounted
for to the Trust on behalf of the Portfolio;
2) Surrender securities in temporary form for
securities in definitive form;
3) Endorse for collection, in the name of the
Portfolio, checks, drafts and other negotiable
instruments; and
4) In general, attend to all non-discretionary
details in connection with the sale, exchange,
substitution, purchase, transfer and other
dealings with the securities and property of the
Portfolio except as otherwise directed by the
Board of Trustees of the Trust.
2.19. Evidence of Authority. The Custodian shall be protected
in acting upon any instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been properly
executed by or on behalf of the Trust. The Custodian may receive and accept a
certified copy of a vote of the Board of Trustees of the Trust as conclusive
evidence (a) of the authority of any person to act in accordance with such vote
or (b) of any determination or of any action by the Board of Trustees pursuant
to the Declaration of Trust as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of written
notice to the contrary.
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income. The Custodian shall cooperate
with and supply necessary information to the entity or entities appointed by the
Board of Trustees of the Trust to keep the books of account of each Portfolio
and/or compute the net asset value per share of the outstanding shares of each
Portfolio or, if directed in writing to do so by the Trust on behalf of the
Portfolio, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate daily the
net income of the Portfolio as described in the Trust's currently effective
prospectus related to such Portfolio and shall advise the Trust and the Transfer
Agent daily of the total amounts of such net income and, if instructed in
writing by an officer of the Trust to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various components.
The calculations of the net asset value per share and the daily income of each
Portfolio shall be made at the time or times described from time to time in the
Trust's currently effective prospectus related to such Portfolio.
4. Records. The Custodian shall, with respect to each Portfolio, create
and maintain all records relating to its activities and obligations under this
Contract in such manner as will meet the obligations of the Trust under the
Investment Company Act of 1940, with particular attention to Section 31 thereof
and Rules 31a-1 and 31a-2 thereunder, applicable federal and state tax laws and
any other law or administrative rules or procedures which may be applicable to
the Trust. All such records shall be the property of the Trust and shall at all
times during the regular business hours of the Custodian be open for inspection
by duly authorized officers, employees or agents of the Trust and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Trust's request, supply the Trust with a tabulation of securities owned by the
Trust and held by the Custodian and shall, when requested to do so by the Trust
and for such compensation as shall be agreed upon between the Trust and the
Custodian, include certificate numbers in such tabulations.
5. Opinion of Trust's Independent Accountant. The Custodian shall take
all reasonable action, as the Trust on behalf of each applicable Portfolio may
from time to time request, to obtain from year to year favorable opinions from
the Trust's independent accountants with respect to its activities hereunder in
connection with the preparation of the Trust's Form N-lA, and Form N-SAR or
other annual reports to the Securities and Exchange Commission and with respect
to any other requirements of such Commission.
6. Reports to Trust by Independent Public Accountants. The Custodian
shall provide the Trust on behalf of each of the Portfolios, at such times as
the Trust may reasonably require, with reports by independent public accountants
on the accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian under this Contract; such
reports, which shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Trust to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, shall so state.
7. Compensation of Custodian. The Custodian shall be entitled to
reasonable compensation for its services and expenses as Custodian, as agreed
upon from time to time between the Trust on behalf of each applicable Portfolio
and the Custodian.
8. Responsibility of Custodian. So long as and to the extent that it is
in the exercise of reasonable care, the Custodian shall not be responsible for
the title, validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract and shall be held
harmless in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed by the
proper party or parties. The Custodian shall be held to the exercise of
reasonable care in carrying out the provisions of this Contract, and shall be
indemnified by the Trust for any action taken or omitted by it in the proper
execution of instructions from the Trust. It shall be entitled to rely on and
may act upon advice of counsel for the Trust on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
Notwithstanding the foregoing, the responsibility of the Custodian with respect
to redemptions effected by check shall be in accordance with a separate
agreement entered into between the Custodian and the Trust.
The Trust on behalf of a Portfolio agrees to indemnify and hold
harmless the Custodian and its nominee from and against all taxes, charges,
expenses, assessments, claims and liabilities (including counsel fees) incurred
or assessed against it or its nominee in connection with the performance of this
Contract, except such as may arise from it or its nominee's own negligent
action, negligent failure to act or willful misconduct.
The Custodian is authorized to charge any account of the applicable
Portfolio for such items and its fees. To secure any such authorized charges and
any advances of cash or securities made by the Custodian to or for the benefit
of a Portfolio for any purpose which results in the Portfolio incurring an
overdraft at the end of any business day or for extraordinary or emergency
purposes during any business day, the Trust on behalf of the Portfolio hereby
grants to the Custodian a security interest in and pledges to the Custodian
securities held for it by the Custodian, in an amount not to exceed five percent
of the applicable Portfolio's gross assets, the specific securities to be
designated in writing from time to time by the Trust on behalf of the Portfolio
or its investment adviser (the "Pledged Securities"). Should the Trust on behalf
of the Portfolio fail to repay promptly any advances of cash or securities, the
Custodian shall be entitled to use available cash and to dispose of the Pledged
Securities as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment. This Contract shall
become effective as of its execution, shall continue in full force and effect
until terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than thirty (30) days after the date
of such delivery or mailing; provided, however that the Custodian shall not with
respect to a Portfolio act under Section 2.12 hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees of the Trust have approved the initial use of a particular
Securities System by such Portfolio and the receipt of an annual certificate of
the Secretary or an Assistant Secretary that the Board of Trustees has reviewed
the use by such Portfolio of such Securities System, as required in each case by
Rule 17f-4 under the Investment Company Act of 1940, as amended and that the
Custodian shall not act under Section 2.12.A hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Trustees has approved the initial use of the Direct Paper System by such
Portfolio and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Trustees has reviewed the use by such
Portfolio of the Direct Paper System; provided further, however, (a) that the
Trust shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust, and (b) that the Trust on behalf of one or more of the Portfolios may at
any time by action of its Board of Trustees (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian or upon the happening of a like event
at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.
10. Successor Custodian. If a successor custodian for the assets of one
or more of the Portfolios shall be appointed by the Board of Trustees of the
Trust, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities of each applicable Portfolio then held by it hereunder
and shall transfer to an account of the successor custodian all of the
securities of each such Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian on behalf of each
applicable Portfolio and all instruments held by the Custodian relative thereto
and all other property held by it under this Contract on behalf of each
applicable Portfolio and to transfer to an account of such successor custodian
all of the securities of each such Portfolio held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions. In connection with the
operation of this Contract, the Custodian and the Trust on behalf of each of the
Portfolios may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Trust. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
12. Additional Funds. In the event that the Trust establishes one or
more series of Shares in addition to the Georgia Series, Maryland Series,
Massachusetts Series, Michigan Series, Minnesota Series, New York Series, New
Jersey Series, North Carolina Series, Ohio Series, South Carolina Series,
Virginia Series and West Virginia Series with respect to which it desires to
have the Custodian render services as custodian under the terms hereof, it shall
so notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio hereunder.
13. Massachusetts Law to Apply. This Contract shall be construed and
the provisions thereof interpreted under and in accordance with laws of The
Commonwealth of Massachusetts.
14. Prior Contracts. This Contract supersedes and terminates, as of the
date hereof, the existing custodian contract between the Trust on behalf of each
of the Portfolios and the Custodian. Any reference to the custodian contract
between the Trust and the Custodian in documents executed prior to the date
hereof shall be deemed to refer to this Contract.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 15th day of June, 1988.
ATTEST MFS MANAGED MULTI-STATE
TAX-EXEMPT TRUST
D. M. JAFFE By: RICHARD B. BAILEY
D. M. Jaffe Richard B. Bailey
ATTEST STATE STREET BANK &
TRUST COMPANY
J. FARREL By: PHYLLIS A. SCHROEDER
J. Farrel Phyllis A. Schroeder
Assistant Secretary Vice President
EXHIBIT 8(b)
AMENDMENT TO CUSTODIAN CONTRACT
Amendment to Custodian Contract between MFS Managed Multi-State
Tax-Exempt Trust, a business trust organized and existing under the laws of
Massachusetts, having a principal place of business at 200 Berkeley Street,
Boston, MA 02116 (hereinafter called the "Fund"), and State Street Bank and
Trust Company, a Massachusetts trust company, having its principal place of
business at 225 Franklin Street, Boston, Massachusetts 02110 (hereinafter called
the "Custodian").
WHEREAS: The Fund and the Custodian are parties to a Custodian Contract
dated June 15, l988 (the "Custodian Contract") ;
WHEREAS: The Fund desires that the Custodian issue a letter of credit
(the "Letter of Credit") on behalf of the Fund for the benefit of ICI Mutual
Insurance Company (the "Company") in accordance with the Continuing Letter of
Credit and Security Agreement and that the Fund's obligations to the Custodian
with respect to the Letter of Credit shall be fully collateralized at all times
while the Letter of Credit is outstanding by, among other things, segregated
assets of the Fund equal to 125% of the face amount to the amount of the Letter
of Credit;
WHEREAS: The Custodian Contract provides for the establishment of
segregated accounts for proper Fund purposes upon Proper Instructions (as
defined in the Custodian Contract); and
WHEREAS: The Fund and the Custodian desire to establish a segregated
account to hold the collateral for the Fund's obligations to the Custodian with
respect to the Letter of Credit and to amend the Custodian Contract to provide
for the establishment and maintenance thereof;
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto hereby amend the Custodian
Contract as follows:
1. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Custodian Contract.
2. The Fund hereby instructs the Custodian to establish and maintain
a segregated account (the "Letter of Credit Custody Account") for
and in behalf of the Fund as contemplated by Section 2.13(iv) for
the purpose of collateralizing the Fund's obligations under this
Amendment to the Custodian Contract.
3. The Fund shall deposit with the Custodian and the Custodian shall
hold in the Letter of Credit Custody Account cash, U.S.
government securities and other high-grade debt securities owned
by the Fund acceptable to the Custodian (collectively "Collateral
Securities") equal to 125% of the face amount to the amount which
the Company may draw under the Letter of Credit. Upon receipt of
such Collateral Securities in the Letter of Credit Custody
Account, the Custodian shall issue the Letter of Credit to the
Company.
4. The fund hereby grants to the Custodian a security interest in
the Collateral Securities from time to time in the Letter of
Credit Custody Account (the "Collateral") to secure the
performance of the Fund's obligations to the Custodian with
respect to the Letter of Credit, including, without limitation,
under Section 5-114(3) of the Uniform Commercial Code. The Fund
shall register the pledge of Collateral and execute and deliver
to the Custodian such powers and instruments of assignment as may
be requested by the Custodian to evidence and perfect the limited
interest in the Collateral granted hereby.
5. The Collateral Securities in the Letter of Credit Custody Account
may be substituted or exchanged (including substitutions or
exchanges which increase or decrease the aggregate value of the
Collateral) only pursuant to Proper Instructions from the Fund
after the Fund notifies the Custodian of the contemplated
substitution or exchange and the Custodian agrees that such
substitution or exchange is acceptable to the Custodian.
6. Upon any payment made pursuant to the Letter of Credit by the
Custodian to the Company, after notice to the company, the
Custodian may withdraw from the Letter of Credit Custody Account
Collateral Securities in an amount equal in value to the amount
actually so paid. The Custodian shall have with respect to the
Collateral so withdrawn all of the rights of a secured creditor
under the Uniform Commercial Code as adopted in the Commonwealth
of Massachusetts at the time of such withdrawal and all other
rights granted or permitted to it under law.
7. The Custodian will transfer upon receipt all income earned on the
Collateral to the Fund custody account unless the Custodian
receives Proper Instructions from the Fund to the contrary.
8. Upon the drawing by the Company of all amounts which may become
payable to it under the Letter of Credit and the withdrawal of
all Collateral Securities with respect thereto by the Custodian
pursuant to Section 6 hereof, or upon the termination of the
Letter of Credit by the Fund with the written consent of the
Company, the Custodian shall transfer any Collateral Securities
then remaining in the Letter of Credit Custody Account to another
fund custody account.
9. Collateral held in the Letter of Credit Custody Account shall be
released only in accordance with the provisions of this Amendment
to Custodian Contract. The Collateral shall at all times until
withdrawn pursuant to Section 6 hereof remain the property of the
Fund, subject only to the extent of the interest granted herein
to the Custodian.
10. Notwithstanding any other termination of the Custodian Contract,
the Custodian Contract shall remain in full force and effect with
respect to the Letter of Credit Custody Account until transfer of
all Collateral Securities pursuant to Section 8 hereof.
11. The Custodian shall be entitled to reasonable compensation for
its issuance of the Letter of Credit and for its services in
connection with the Letter of Credit Custody Account as agreed
upon from time to time between the Fund and the Custodian.
12. The Custodian Contract as amended hereby, shall be governed by,
and construed and interpreted under, the laws of the Commonwealth
of Massachusetts.
13. The parties agree to execute and deliver all such further
documents and instruments and to take such further action as may
be required to carry out the purposes of the Custodian Contract,
as amended hereby.
14. Except as provided in this Amendment to Custody Contract, the
Custodian Contract shall remain in full force and effect, without
amendment or modification, and all applicable provisions of the
Custodian Contract, as amended hereby, including, without
limitation, Section 8 thereof, shall govern the Letter of Credit
Custody Account and the rights and obligations of the Fund and
the Custodian under this Amendment to Custodian Contract. No
provision of this Amendment to Custodian Contract shall be deemed
to constitute a waiver of any rights of the Custodian under the
Custodian Contract or under law.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to
Custodian Contract to be executed in its name and behalf by its duly authorized
representatives and its seal to be hereunder affixed as of the 15th day of June,
1988.
ATTEST:
By: D. M. JAFFE By: W. T. LONDON
------------------------- --------------------------
D. M. Jaffe W. T. London
Treasurer
ATTEST: STATE STREET BANK &
TRUST COMPANY
By: K. M. KNEELAND (? ILLEGIBLE) By: (ILLEGIBLE)
---------------------------- --------------------------
K. M. Kneeland (?illegible) (illegible)
Assistant Secretary Vice President
EXHIBIT 8(c)
MFS MANAGED MULTI-STATE MUNICIPAL BOND TRUST
Certificate of Assistant Secretary
The undersigned Assistant Secretary of MFS Managed Multi-State Municipal Bond
Trust, being a Massachusetts business trust (the "Trust"), hereby certifies that
the following is a true and complete copy of the vote adopted by the Board of
Trustees of the Trust on August 9, 1989, and that such vote remains in full
force and effect on the date hereof:
VOTED: To approve the amendment to the Custodian Agreement between the Trust
and State Street Bank and Trust Company, substantially in the form
attached hereto.
IN WITNESS WHEREOF, I have hereby set my hand this 22nd day of November, 1989.
JOAN R. GULINELLO
Joan R. Gulinello
Assistant Secretary
<PAGE>
Delegation of Certain Custodian Duties to MFS
The Custodian may delegate to Massachusetts Financial Services Company
("MFS") the performance of any or all of its duties hereunder relating to (i)
accounting for investments in currency and for financial instruments (including,
without limitation, options contracts, futures contracts, options on futures
contracts, options on foreign currency and forward foreign currency exchange
contracts) and (ii) federal and state regulatory compliance. The Custodian shall
compensate MFS for the performance of such duties at such fee or fees as MFS
shall determine to be equal to MFS's cost for performing such duties (the "MFS
Fees"). Following its payment of the MFS Fees to MFS, the Custodian shall
recover the amount of the MFS Fees from the Trust on such terms as the Custodian
and the Trust shall agree. MFS assumes responsibility for all duties delegated
to it by the Custodian pursuant to this Section 15, and the Custodian may rely
on MFS for the accuracy and correctness of the accounting information provided
by MFS to the Custodian pursuant to this Section 15.
EXHIBIT 8(d)
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made as of this 1st day of October, 1989 by and between State
Street Bank and Trust Company (the "Custodian") and MFS Managed Multi-State
Municipal Bond Trust (the "Trust").
WHEREAS, the Custodian and the Trust are parties to a Custodian
Contract dated June 15, 1988 (the "Custodian Contract) which governs the terms
and conditions under which the Custodian maintains custody of the securities and
other assets of the Trust;
WHEREAS, the Custodian may delegate to Massachusetts Financial Services
Company ("MFS") the performance of certain duties the Custodian would otherwise
be obligated to perform pursuant to the Custodian Agreement;
WHEREAS, the Trust agrees to any such delegation of certain Custodian
duties;
NOW THEREFORE, the Custodian and the Trust hereby amend the terms of
the Custodian Contract and mutually agree to the following:
1) Add new Section 15 which shall read as follows:
15) Delegation of Certain Custodian Duties to MFS.
The Custodian may delegate to MFS the performance of any or all
of its duties hereunder relating to (i) accounting for investments in currency
and for financial instruments (including, without limitation, options,
contracts, futures contracts, options on futures contracts, options on foreign
currency and forward foreign currency exchange contracts) and (ii) federal and
state regulatory compliance. The Custodian shall compensate MFS for the
performance of such duties at such fee or fees as MFS shall determine to be
equal to MFS's cost for performing such duties (the "MFS Fees"). Following its
payment of the MFS Fees to MFS, the Custodian shall recover the amount of the
MFS Fees and from the Trust on such terms as the Custodian and the Trust shall
agree. MFS assumes responsibility for all duties delegated to it by the
Custodian pursuant to this Section 15, and the Custodian may rely on MFS for the
accuracy and correctness of the accounting information provided by MFS to the
Custodian pursuant to this Section 15.
IN WITNESS WHEREOF, each of the parties hereto have caused this
instrument to be executed in its name and on its behalf by a duly authorized
representative as of the aforementioned day and year.
ATTEST MFS MANAGED MULTI-STATE
MUNICIPAL BOND TRUST
JOAN R. GULINELLO By: A. KEITH BRODKIN
---------------------- ---------------------------
Joan R. Gulinello A. Keith Brodkin
ATTEST STATE STREET BANK &
TRUST COMPANY
MARK MORGAN (? ILLEGIBLE) By: PHYLLIS A. SCHROEDER
------------------------- ---------------------------
Mark Morgan (? illegible) Phyllis A. Schroeder
Assistant Secretary Vice President
EXHIBIT 8(e)
AMENDMENT
The Custodian Contract dated June 15, 1988 between MFS Managed
Multi-State Municipal Bond Trust (referred to herein as the "Trust") and State
Street Bank and Trust Company (the "Custodian") is hereby amended as follows:
I. Section 2.1 is amended to read as follows:
"Holding Securities. The Custodian shall hold and physically
segregate for the account of the Trust all non-cash property, including all
securities owned by the Trust, other than (a) securities which are maintained
pursuant to Section 2.12 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System" and (b)
commercial paper of an issuer for which State Street Bank and Trust Company acts
as issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.12A.
II. Section 2.2 is amended to read, in relevant part as follows:
"Delivery of Securities. The Custodian shall release and deliver
securities owned by the Trust held by the Custodian or in a Securities System
account of the Custodian or in the Custodian's Direct Paper book entry system
account ("Direct Paper System Account") only upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, and only in following cases:
1) . . . .
.
.
.
15) . . . ."
III. Section 2.8(1) is amended to read in relevant part as follows:
"Payment of Trust Monies. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Trust in the following cases only:
1) Upon the purchase of securities, options, futures
contracts or options on futures contracts for the
account of the Trust but only (a) against the
delivery of such securities or evidence of title to
such options, futures contracts or options on futures
contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the United
States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as
a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name
of the Trust or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in
accordance with the conditions set forth in Section
2.12 hereof or (c) in the case of a purchase
involving the Direct Paper System, in accordance with
the conditions set forth in Section 2.12A; or (d) in
the case of repurchase agreements entered into
between the Trust and the Custodian, or another bank,
or a broker-dealer which is a member of NASD, (i)
against delivery of the securities either in
certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the
receipt evidencing purchase by the Trust of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to
repurchase such securities from the Trust or (e) for
transfer to a time deposit account of the Trust in
any bank, whether domestic or foreign; such transfer
may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to
Proper Instructions from the Trust as defined in
Section 2.17;"
IV. Following Section 2.12 there is inserted a new Section 2.12.A to
read as follows:
2.12.A "Trust Assets Held in the Custodian's Direct Paper
System. The Custodian may deposit and/or maintain securities owned by the Trust
in the Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct
Paper System will be effected in the absence of
Proper Instructions;
2) The Custodian may keep securities of the Trust in
the Direct Paper System only if such securities are
represented in an account ("Account") of the
Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to
securities of the Trust which are maintained in the
Direct Paper System shall identify by book-entry
those securities belonging to the Trust;
4) The Custodian shall pay for securities purchased
for the account of the Trust upon the making of an
entry on the records of the Custodian to reflect
such payment and transfer of securities to the
account of the Trust. The Custodian shall transfer
securities sold for the account of the Trust upon
the making of an entry on the records of the
Custodian to reflect such transfer and receipt of
payment for the account of the Trust:
5) The Custodian shall furnish the Trust confirmation
of each transfer to or from the account of the
Trust, in the form of a written advice or notice,
of Direct Paper on the next business day following
such transfer and shall furnish to the Trust copies
of daily transaction sheets reflecting each day's
transaction in the Securities System for the
account of the Trust;
6) The Custodian shall provide the Trust with any
report on its system of internal accounting control
as the Trust may reasonably request from time to
time."
V. Section 9 is hereby amended to read as follows:
"Effective Period, Termination and Amendment. This Contract
shall become effective as of its execution, shall continue in full force and
effect until terminated as hereinafter provided, may be amended at any time by
mutual agreement of the parties hereto and may be terminated by either party by
an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than thirty (30) days after
the date of such delivery or mailing; provided, however that the Custodian shall
not act under Section 2.12 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees of the Trust has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by the Trust of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended and that the Custodian shall not act under
Section 2.12A hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has approved the
initial use of the Direct Paper System and the receipt of an annual certificate
of the Secretary or an Assistant Secretary that the Board of Trustees has
reviewed the use by the Trust of the Direct Paper System; provided further,
however, that the Trust shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and further provided, that the Trust may at any
time by action of its Board of Trustees (i) substitute another bank or trust
company for the Custodian by giving notice as described above to the Custodian,
or (ii) immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the
Custodian such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements."
Except as otherwise expressly amended and modified herein, the
provisions of the Custodian Contract shall remain in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed in its name and on its behalf by its duly authorized
representatives and its Seal to be hereto affixed as of the 9th day of October,
1991.
ATTEST: MFS MANAGED MULTI-STATE
MUNICIPAL BOND TRUST
JOAN R. GULINELLO By: W. T. LONDON
------------------------- --------------------
Joan R. Gulinello W. T. London
Assistant Secretary Treasurer
ATTEST: STATE STREET BANK &
TRUST COMPANY
JOE KENNALLY By: JOHN HENRICH
------------------------ --------------------
Joe Kennally John Henrich
Assistant Secretary Vice President
EXHIBIT 9(a)
MFS MANAGED MULTI-STATE TAX-EXEMPT TRUST
200 BERKELEY STREET
BOSTON, MASSACHUSETTS 02116
August 1, 1985
Massachusetts Financial Service Center, Inc.
200 Berkeley Street
Boston, Massachusetts 02116
SHAREHOLDER SERVICING AGENT AGREEMENT
Dear Sirs:
MFS Managed Multi-State Tax-Exempt Trust (the "Fund") is an open-end
registered investment company consisting of separate series of shares. The Fund
has selected you to act as the Shareholder Servicing Agent and you hereby agree
to act as such Agent and perform the duties and functions thereof in the manner
and on the conditions hereinafter set forth. Accordingly, the Fund hereby agrees
with you as follows:
1. The Facility. You represent that you have the necessary computer
equipment, software and other office equipment ("Facility") adequate to perform
the services contemplated hereby as well as for other investment companies (such
investment companies, together with the Fund, are herein collectively referred
to as the "MFS Funds") for which Massachusetts Financial Services Company
("MFS") acts as investment adviser. The Facility is presently located at 50 Milk
Street, Boston, Massachusetts, and is to be dedicated solely to the performance
of services for the MFS Funds, provided that the Facility may be utilized to
perform services for others with the prior written permission of the MFS Funds.
2. Name. Unless otherwise directed in writing by MFS, you shall perform
the services contemplated hereby under the name "Massachusetts Financial Service
Center, Inc.", which name, any similar names and any logos of which shall remain
the property and under the control of MFS. Upon termination of this Agreement,
you shall cease to use such name or any similar name within a reasonable period
of time.
3. Services to be Performed. As Shareholder Servicing Agent ("Agent"),
you shall be responsible for administering and performing transfer and dividend
and distribution disbursing and plan agent functions in connection with the
issuance, transfer and redemption of the shares of beneficial interest
("Shares"). The details of the operating standards and procedures to be followed
by you shall be determined from time to time by agreement between you and the
Fund.
4. Standard of Service. As Agent for the Fund, you agree to provide
service equal to or better than that provided by you or others furnishing
shareholder services to other open-end investment companies ("Standard") at a
fee comparable to the fee paid you for your services hereunder. The Standard
shall include at least the following:
(a) Prompt reconciliation of any differences as to the number of
outstanding shares between various Facility records or between
Facility records and records of an MFS Fund's Custodian;
(b) Prompt processing of shareholder correspondence and of other
matters requiring action by you;
(c) Prompt clearance of any daily volume backlog;
(d) Providing innovative services and technological improvements;
(e) Meeting the requirements of any governmental authority having
jurisdiction over you or the Fund; and
(f) Prompt reconciliation of all bank accounts under your control
belonging to the Fund or MFS.
If any MFS Fund serviced by you is reasonably of the view that the
service provided by you does not meet the Standard, it shall give you written
notice specifying the particulars, and you then shall have 120 days in which to
restore the service so that it meets the Standard, except that such period shall
be 180 days with respect to meeting that portion of the Standard described above
in item (d) of this paragraph 4. If at the end of such period the Fund remains
reasonably of the view that the service provided by you, in the particulars
specified, does not meet the Standard, then the MFS Fund or Funds having a
majority of the accounts for which you are then Agent may, by appropriate action
(including the concurrence of a majority of the Trustees or Directors, as the
case may be, of such MFS Fund or Funds who are not interested persons of MFS),
elect to terminate this Agreement for cause as to all such Funds upon 90 days
notice to you. Upon termination hereof, the Fund shall pay you such compensation
as may be due to you as of the date of such termination, and shall likewise
reimburse you for any costs, expenses, and disbursements reasonably incurred by
you to such date in the performance of your duties hereunder.
5. Purchase of Facility. In the event that notice of termination of
this Agreement has been given pursuant to the provisions of paragraph 14 hereof,
for cause as defined in paragraph 4 hereof, the MFS Funds have the right, but
shall not be required (a) to purchase the Facility and assume the unexpired
portion of any leases of equipment or real estate relating to the Facility from
you at a price equal to your unrecovered acquisition value (as supported by the
schedules and records used in determining monthly billings) of the machinery,
equipment, software, furniture, fixtures and leasehold improvements included in
the Facility, and (b) to negotiate with persons then employed by you in the
operation of the Facility and to hire all of them in connection with the
purchase of the Facility from you by the MFS Funds. You agree to release each
such employee from any contractual obligations such person may have to you that
may interfere with such person's being hired at such time by the MFS Funds and
agree not to interfere with the negotiation and hiring of any such persons at
such time. In the event that the MFS Funds have given notice of termination of
this Agreement pursuant to the provisions of paragraph 14 hereof for reasons
other than cause as defined in paragraph 4 hereof, the MFS Funds shall purchase
the Facility under the terms and conditions set forth in subsections (a) and (b)
of this paragraph 5.
You shall effect the transfer of the Facility pursuant to this
paragraph 5 upon the termination date specified in the notice, or at such other
time as shall be agreed upon by the parties hereto.
6. Rights in Data and Confidentiality. You agree that all records,
data, files, input materials, reports, forms and other data received, computed
or stored in the performance of this Agreement are the exclusive property of the
Fund and that all such records and other data shall be furnished without
additional charge, except for actual processing costs, to the Fund in machine
readable as well as printed form immediately upon termination of this Agreement
or at the Fund's request. You shall safeguard and maintain the confidentiality
of the Fund's data and information supplied to you by the Fund and you shall not
transfer or disclose the Fund's data to any third party without the Fund's prior
written consent unless compelled to do so by order of a court or regulatory
authority.
7. Fees. The fee per Fund shareholder account for your shareholder
services hereunder shall not be in excess of such amount as shall be agreed in
writing between us. Such fee shall be payable in monthly installments of
one-twelfth of the annual fee. Such fee shall be subject to review at least
annually and fixed by the parties in good faith negotiation on the basis of a
statement of the expenses of the Facility prepared by you, which either you or
the Fund may require to be certified by a major accounting firm acceptable to
the parties. The party or parties requesting such certification shall bear all
expenses thereof. In addition to the foregoing fee, you will be reimbursed by
the Fund for out-of-pocket expenses reasonably incurred by you on behalf of the
Fund, including but not limited to expenses for stationery (including business
forms and checks), postage, telephone and telegraph line and toll charges, and
premiums for negotiable instrument insurance and similar items.
8. Record Keeping. You will maintain records in a form acceptable to
the Fund and in compliance with the rules and regulation of the Securities and
Exchange Commission, including, but not limited to, records required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder, which at all times will be the property of the Fund and will be
available for inspection and use by the Fund.
9. Duty of Care and Indemnification. You will at all times act in good
faith in performing your duties hereunder. You will not be liable or responsible
for delays or errors by reason of circumstances beyond your control, including
acts of civil or military authority, national emergencies, labor difficulties,
fire, mechanical breakdown beyond your control, flood or catastrophe, acts of
God, insurrection, war, riots or failure beyond your control of transportation,
communication or power supply. The Fund will indemnify you against and hold you
harmless from any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any claim,
demand, action or suit not resulting from your bad faith or negligence, and
arising out of, or in connection with, your duties on behalf of the Fund
hereunder. In addition, the Fund will indemnify you against and hold you
harmless from any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any claim,
demand, action or suit as a result of your acting in accordance with any
instructions reasonably believed by you to have been executed or orally
communicated by any person duly authorized by the Fund or its Principal
Underwriter, or as a result of acting in accordance with written or oral advice
reasonably believed by you to have been given by counsel for the Fund, or as a
result of acting in accordance with any instrument or share certificate
reasonably believed by you to have been genuine and signed, countersigned or
executed by any person or persons authorized to sign, countersign or execute the
same (unless contributed to by your gross negligence or bad faith). In any case
in which the Fund may be asked to indemnify you or hold you harmless, the Fund
shall be advised of all pertinent facts concerning the situation in question and
you will use reasonable care to identify and notify the Fund promptly concerning
any situation which presents or appears likely to present a claim for
indemnification against the Fund. The Fund shall have the option to defend you
against any claim which may be the subject of this indemnification, and in the
event that the Fund so elects such defense shall be conducted by counsel chosen
by the Fund and satisfactory to you and it will so notify you, and thereupon the
Fund shall take over complete defense of the claim and you shall sustain no
further legal or other expenses in such situation for which you seek
indemnification under this paragraph, except the expense of any additional
counsel retained by you. You will in no case confess any claim or make any
compromise in any case in which the Fund will be asked to indemnify you except
with the Fund's prior written consent. The obligations of the parties hereto
under this paragraph shall survive the termination of this Agreement.
If any officer of the Fund shall no longer be vested with authority to
sign for the Fund, written notice thereof shall forthwith be given to you by the
Fund and until receipt of such notice by it, you shall be fully indemnified and
held harmless by the Fund in recognizing and acting upon certificates or other
instruments bearing the signatures or facsimile signatures of such officer.
10. Insurance. You will notify the Fund should any of your insurance
coverage, as set forth on Exhibit A hereto, be changed for any reason, such
notification to include the date of change and reason or reasons therefor.
11. Notices. All notices or other communications hereunder shall be in
writing and shall be deemed sufficient if mailed to either party at the
addresses set forth in this Agreement, or at such other addresses as the parties
hereto may designate by notice to each other.
12. Further Assurances. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
13. Use of a Sub- or Co-Transfer Agent. Notwithstanding any other
provision of this Agreement, it is expressly understood and agreed that you are
authorized in the performance of your duties hereunder to employ, from time to
time, one or more Sub-Transfer Agents and/or Co-Transfer Agents.
14. Termination. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing, which, except in the case of termination, shall be signed by the party
against which enforcement of such change waiver or discharge is sought. Except
as otherwise provided in paragraph 4 hereof, this Agreement shall continue
indefinitely until terminated by 90 days' written notice given by the Fund to
you or by you to the Fund, provided that the Fund may terminate this Agreement
upon 15 days' written notice of termination and election of the right to
purchase the Facility pursuant to the provisions of paragraph 5 hereof. Upon
termination hereof, the Fund shall pay you such compensation as may be due to
you as of the date of such termination, and shall likewise reimburse you for any
costs, expenses, and disbursements reasonably incurred by you to such date in
the performance of your duties hereunder. You agree to cooperate with the Fund
and provide all necessary assistance in effectuating an orderly transition upon
termination of this Agreement.
15. Successor. In the event that in connection with termination a
successor to any of your duties or responsibilities hereunder is designated by
the Fund by written notice to you, you will, promptly upon such termination and
at the expense of the Fund, transfer to such successor a certified list of the
shareholders of the Fund (with name, address and tax identification or Social
Security number) an historical record of the account of each shareholder and the
status thereof, and all other relevant books, records, correspondence, and other
data established or maintained by you under this Agreement in form reasonably
acceptable to the Fund (if such form differs from the form in which you have
maintained the same, the Fund shall pay any expenses associated with
transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from your
cognizant personnel in the establishment of books, records and other data by
such successor.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the Commonwealth of Massachusetts.
The captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which taken together shall constitute one and the same instrument. This
Agreement has been executed on behalf of the Fund by the undersigned not
individually, but in the capacity indicated, and the obligations of this
Agreement are not binding upon any of the Trustees or shareholders of the Fund
individually, but bind only the trust estate.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying two counterparts of this letter and return such
counterparts to the Fund whereupon this letter shall become a binding contract
among the Fund, you and MFS, MFS having already executed this letter.
Very truly yours,
MFS MANAGED MULTI-STATE
TAX-EXEMPT TRUST
By: RICHARD B. BAILEY
Richard B. Bailey
Title: Chairman
The foregoing is hereby accepted as of the date thereof.
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: H. ALDEN JOHNSON, JR.
H. Alden Johnson, Jr.
Title: President
The foregoing is hereby accepted as of the date thereof.
MASSACHUSETTS FINANCIAL
SERVICE CENTER, INC.
By: BRUCE C. AVERY
Bruce C. Avery
Title: President
EXHIBIT 9(c)
EXCHANGE PRIVILEGE AGREEMENT
AGREEMENT, dated as of September 1, 1993 by and among each of the
Trusts (including any series thereof) listed below (collectively, the "Funds")
and MFS Financial Services, Inc. ("FSI").
WITNESSETH THAT:
WHEREAS, pursuant to the terms of a distribution agreement by and
between each Trust and FSI, FSI has the exclusive right to arrange for the sale
of shares of each class of each Fund at the net asset value used in determining
the public offering price on which orders for shares were based, but subject to
the exceptions therein set forth or referred to;
WHEREAS, the Funds have differing investment objectives as set out in
their offering prospectuses and consider it appropriate to make available to
existing and future shareholders of the Funds the opportunity to implement
changes in their investment objective through the acquisition, without sales
charge or reinitiating the time period used in calculating the amount of
contingent deferred sales charge assessable upon redemption, of the shares of a
class of any one or more of the Funds by use of the proceeds of redemption of
shares of the same class of any other Fund (herein referred to in various
grammatical forms of the word "exchange"), subject to reasonable conditions
designed to limit expense and administrative inconvenience or imposed in the
best interest of the other shareholders of any of the Funds;
WHEREAS, while MFS Money Market Fund, MFS Government Money Market Fund
and MFS Cash Reserve Fund (the "Money Market Funds") offer their respective
shares (Class A shares only in the case of MFS Cash Reserve Fund), to the public
without sales charge, each recognizes the utility of permitting its shares
acquired through an exchange from Class A of another Fund to be reexchanged for
shares of Class A of any other Fund, subject to the restrictions hereinafter set
forth;
WHEREAS, while certain Funds offer their respective Class A shares at a
sales charge less than that of the other Funds, each recognizes the utility of
permitting its Class A shares acquired through an exchange from Class A of
another Fund (except the Money Market Funds) or otherwise to be reexchanged for
shares of Class A of any other Fund, subject to the restrictions hereinafter set
forth; and
WHEREAS, FSI currently acts as the distributor of each of the Funds;
NOW, THEREFORE, the parties hereto agree as follows:
1. (a). During the term of this Agreement, shares of each class of a
Fund may, subject to the restrictions hereinafter set forth, be offered by FSI
as agent at net asset value to shareholders of the same class (e.g. Class A for
Class A, Class B for Class B, etc.) of each of the other Funds, who wish to
apply the proceeds of redemption of shares of the same class of any such Fund,
provided that either the net asset value of the shares to be redeemed in the
exchange is at least $1,000 ($50 in the case of accounts 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 MFS
Service Center, Inc.) or such other amount or amounts as from time to time
described in the current Prospectuses of the Funds or all the shares owned by
the shareholder in a particular class are to be redeemed. FSI may specify the
manner in which such shareholders may accept its offer to arrange for the sale
of such shares at net asset value (each such acceptance is hereinafter referred
to as an "Exchange Request").
1. (b) For the purpose of calculating any applicable contingent
deferred sales charge upon redemption of shares acquired in an exchange, the
purchase of shares acquired in one or more exchanges will be deemed to have
occurred at the time of the original purchase of the exchanged shares (prior to
their exchange).
1. (c) Shares of the Money Market Funds (Class A shares only in the
case of MFS Cash Reserve Fund) may be exchanged for Class A shares of any other
Fund in accordance with paragraph 1(a) hereof, but only if they have been
acquired by an exchange effected in accordance with paragraph 1(a) hereof from
Class A of another Fund (except the Money Market Funds) or in the form of
dividends on Money Market Fund shares (Class A shares only in the case of MFS
Cash Reserve Fund) reinvested on and after June 1, 1992. Shares of the Money
Market Funds (Class A shares only in the case of MFS Cash Reserve Fund) acquired
through direct purchase or in the form of dividends on such shares reinvested
prior to June 1, 1992 may not be exchanged for shares of another Fund.
2. FSI shall process all exchanges in the usual manner as though they
were unrelated purchases and sales. FSI may charge the shareholder a reasonable
amount for its services in effecting the exchange. FSI shall report daily to the
Funds concerning all exchanges made pursuant to this Agreement. FSI will not
seek reimbursement from the Funds for any expenses incurred by it in connection
with any such purchases.
3. Each of the Funds may, by written notice to each of the other Funds
and FSI, terminate its exchange offer provided by this Agreement and require FSI
and the other Funds to terminate the exchange offer in respect of the shares of
the Fund so giving notice. FSI may by written notice to any Fund terminate its
services in effecting such exchanges on behalf of such Fund. The exchange offers
with respect to shares of a Fund made by FSI to the shareholders of the other
Funds pursuant to this Agreement shall in any event be terminated effective upon
the termination of the services of FSI as distributor of the shares of such
Fund.
4. Nothing in this Agreement shall modify or reduce the obligations of
a Fund or FSI contained in the distribution agreement, if any, between FSI and
such Fund as the same may from time to time be modified or amended.
5. To the extent that a Fund's current Prospectus contains provisions
that are inconsistent with the terms of this Agreement, the terms of the
Prospectus shall be controlling.
6. This Agreement hereby supercedes all prior or contemporaneous
agreements between the parties hereto relating to the subject matter hereof.
7. The terms of this Agreement shall become effective as of the date
first above written.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written and caused their seals to be affixed by their
representatives thereunto duly authorized.
MFS SERIES TRUST I ON BEHALF OF:
MFS MANAGED SECTORS FUND
MFS CASH RESERVE FUND
MFS SERIES TRUST II ON BEHALF OF:
MFS EMERGING GROWTH FUND
MFS CAPITAL GROWTH FUND
MFS GOLD & NATURAL RESOURCES FUND
MFS INTERMEDIATE INCOME FUND
MFS SERIES TRUST III ON BEHALF OF:
MFS HIGH INCOME FUND
MFS MUNICIPAL HIGH INCOME FUND
MFS SERIES TRUST IV ON BEHALF OF:
MFS MONEY MARKET FUND
MFS GOVERNMENT MONEY MARKET FUND
MFS MUNICIPAL BOND FUND
MFS SERIES TRUST V ON BEHALF OF:
MFS RESEARCH FUND
MFS TOTAL RETURN FUND
MFS SERIES TRUST VI ON BEHALF OF:
MFS UTILITIES FUND
MFS WORLD TOTAL RETURN FUND
MFS WORLD EQUITY FUND
MFS SERIES TRUST VII ON BEHALF OF:
MFS VALUE FUND
MFS WORLD GOVERNMENTS FUND
MFS SERIES TRUST VIII ON BEHALF OF:
MFS INCOME & OPPORTUNITY FUND
MFS WORLD GROWTH FUND
MFS FIXED INCOME TRUST ON BEHALF OF:
MFS BOND FUND
MFS LIMITED MATURITY FUND
MFS MUNICIPAL LIMITED MATURITY FUND
MFS MUNICIPAL SERIES TRUST ON BEHALF OF:
MFS CALIFORNIA MUNICIPAL BOND FUND
MFS ALABAMA MUNICIPAL BOND FUND
MFS ARKANSAS 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
MFS MUNICIPAL INCOME FUND
MFS GROWTH OPPORTUNITIES FUND
MFS GOVERNMENT MORTGAGE FUND
MFS GOVERNMENT SECURITIES FUND
MASSACHUSETTS INVESTORS GROWTH
STOCK FUND
MFS GOVERNMENT LIMITED MATURITY FUND
MASSACHUSETTS INVESTORS TRUST
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
MFS FINANCIAL SERVICES, INC.
By: WILLIAM W. SCOTT, JR.
William W. Scott, Jr.
President
* The above-signed Trustee of each of the above-mentioned Trusts has executed
this Agreement not individually, but as Trustee under each respective
Declaration of Trust, as amended from time to time, and the obligations of
this Agreement are not binding upon any of the Trustees or shareholders of
each such Trust, individually, but bind only the Trust estate of each such
Trust.
EXHIBIT 9(e)
Massachusetts Investors Trust
Massachusetts Investors Growth Stock Fund
Massachusetts Total Return Trust
Massachusetts Capital Development Fund
Massachusetts Financial Development Fund
Massachusetts Financial Bond Fund
Massachusetts Cash Management Trust
MFS Managed Municipal Bond Trust
Massachusetts Financial High Income Trust
Municipal Working Capital Trust
Massachusetts Financial International Trust
Massachusetts Financial Emerging Growth Trust
Massachusetts Financial Special Fund
MFS Managed High Yield Municipal Bond Trust
MFS Government Guaranteed Securities Trust
MFS Managed Multi-State Tax-Exempt Trust
MFS/Sun Life Series Trust
MFS Managed California Tax-Exempt Trust
Trust for Thrift Institutions
MFS Government Securities High Yield Trust
200 Berkeley Street
Boston, Massachusetts 02116
February 1, 1986
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Dividend Disbursing Agency Agreement
Dear Sirs:
Each of the above-listed funds (individually, the "Fund") is an
open-end registered investment company organized as a Massachusetts business
trust. Each Fund separately has selected you to act as its Dividend Disbursing
Agent and you hereby agree to act as such Agent and perform the duties and
functions thereof in the manner and on the conditions hereinafter set forth.
Accordingly, each Fund individually hereby agrees with you as follows:
1. Services to be Performed. As Dividend Disbursing Agent ("Agent"),
you shall be responsible for performing dividend and distribution disbursing
agent functions with regard to the Fund's shares of beneficial interest
("Shares"). The details of the operating standards and procedures to be followed
by you shall be determined from time to time by agreement between you and the
Fund.
2. Standard of Service. As Agent for the Fund, you agree to provide
service equal to at least that provided by you or others furnishing dividend and
distribution disbursing services to other open-end investment companies
("Standard") at a fee, as may be agreed to from time to time, comparable to the
fee paid you for your services hereunder. The Standard shall include at least
the following:
(a) Prompt processing of all matters requiring action by you;
(b) Prompt clearance of any daily volume backlog;
(c) Providing innovative services and technological improvements;
(d) Meeting the requirements of any governmental authority
having jurisdiction over you or the Fund; and
(e) Prompt reconciliation of all bank accounts under your
control belonging to the Fund.
If the Fund is reasonably of the view that the service provided by you does not
meet the Standard, it shall give you written notice specifying the particulars,
and you then shall have 120 days in which to restore the service so that it
meets the Standard, except that such period shall be 180 days with respect to
meeting that portion of the Standard described above in item (c) of this
paragraph 2. If at the end of such period the Fund remains reasonably of the
view that the service provided by you in the particulars specified, does not
meet the Standard, then the Fund may, by appropriate action, elect to terminate
this Agreement for cause upon 90 days notice to you. Upon termination hereof,
the Fund shall pay you such compensation as may be due to you as of the date of
such termination, and shall likewise reimburse you for any costs, expenses, and
disbursements reasonably incurred by you to such date in the performance of your
duties hereunder.
3. Rights in Data and Confidentiality. You agree that all records,
data, files, input materials, reports, forms and other data received, computed
or stored in the performance of this Agreement are the exclusive property of the
Fund and that all such records and other data shall be furnished without
additional charge, except for actual processing costs, to the Fund in machine
readable as well as printed form immediately upon termination of this Agreement
or at the Fund's request. You shall safeguard and maintain the confidentiality
of the Fund's data and information supplied to you by the Fund and you shall not
transfer or disclose the Fund's data to any third party without the Fund's prior
written consent unless compelled to do so by order of a court or regulatory
authority.
4. Fees. The fee, based upon check clearance and reconciliation work
performed hereunder, shall not be in excess of such amount as shall be agreed in
writing between us. Such fee shall be payable in monthly installments. Such fee
shall be subject to review at least annually and fixed by the parties in good
faith negotiation on the basis of a statement of your expenses, which either you
or the Fund may require to be certified by a major accounting firm acceptable to
the parties. The party requesting such certification shall bear all expenses
thereof. In addition to the foregoing fee, you will be reimbursed by the Fund
for out-of-pocket expenses reasonably incurred by you on behalf of the Fund,
including but not limited to expenses for stationery, postage, telephone and
telegraph line and toll charges and similar items.
5. Record Keeping. You will maintain records in a form acceptable to
the Fund and in compliance with the rules and regulations of the Securities and
Exchange Commission, including, but not limited to, records required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder, which at all times will be the property of the Fund and will be
available for inspection and use by the Fund or the Fund's transfer agent.
6. Duty of Care and Indemnification. You will at all times act in good
faith in performing your duties hereunder. You will not be liable or responsible
for delays or errors by reason of circumstances beyond your control, including
acts of civil or military authority, national emergencies, labor difficulties,
fire, mechanical breakdown beyond your control, flood or catastrophe, acts of
God, insurrection, war, riots or failure beyond your control of transportation,
communication or power supply. The Fund will indemnify you against and hold you
harmless from any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any claim,
demand, action or suit not resulting from your bad faith or negligence, and
arising out of, or in connection with, your duties on behalf of the Fund
hereunder. In addition, the Fund will indemnify you against and hold you
harmless from any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any claim,
demand, action or suit as a result of your acting in accordance with any
instructions reasonably believed by you to have been given executed or orally
communicated by any person duly authorized by the Fund or as a result of acting
in accordance with written or oral advice reasonable believed by you to have
been given by counsel for the Fund, or as a result of acting in accordance with
any instrument or share certificate reasonably believed by you to have been
genuine and signed, countersigned or executed by any person or persons
authorized to sign, countersign or execute the same (unless contributed to by
your gross negligence or bad faith). In any case in which the Fund may be asked
to indemnify you or hold you harmless, the Fund shall be advised of all
pertinent facts concerning the situation in question and you will use reasonable
care to identify and notify the Fund promptly concerning any situation which
presents or appears likely to present a claim for indemnification against the
Fund. The Fund shall have the option to defend you against any claim which may
be the subject of this indemnification, and in the event that the Fund so elects
such defense shall be conducted by counsel chosen by the Fund and satisfactory
to you and it will so notify you, and thereupon the Fund shall take over
complete defense of the claim and you shall sustain no further legal or other
expenses in such situation for which you seek indemnification under this
paragraph, except the expense of any additional counsel retained by you. You
will in no case confess any claim or make any compromise in any case in which
the Fund will be asked to indemnify you except with the Fund's prior written
consent. The obligations of the parties hereto under this paragraph shall
survive the termination of this Agreement.
7. Insurance. You will notify the Fund should any of your insurance
coverage, as set forth on Exhibit A hereto, be changed for any reason, such
notification to include the date of change and reason or reasons therefor.
8. Notices. All notices or other communications hereunder shall be in
writing and shall be deemed sufficient if mailed to either party at the
addresses set forth in this Agreement, or at such other addresses as the parties
hereto may designate by notice to each other.
9. Further Assurances. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
10. Use of a Sub-Dividend Disbursing Agent. Notwithstanding any other
provision of this Agreement, it is expressly understood and agreed that you are
authorized in the performance of your duties hereunder to employ one or more
Sub-Dividend Disbursing Agents.
11. Termination. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing, which, except in the case of termination, shall be signed by the party
against which enforcement of such change waiver or discharge is sought. Except
as otherwise provided in paragraph 2 hereof, this Agreement shall continue
indefinitely until terminated by 90 days' written notice given by the Fund to
you or by you to the Fund. Upon termination hereof, the Fund shall pay you such
compensation as may be due to you as of the date of such termination, and shall
likewise reimburse you for any costs, expenses, and disbursements reasonably
incurred by you to such date in the performance of your duties hereunder. You
agree to cooperate with the Fund and provide all necessary assistance in
effectuating an orderly transition upon termination of this Agreement.
12. Successor. In the event that in connection with termination a
successor to any of your duties or responsibilities hereunder is designated by
the Fund by written notice to you, you will, promptly upon such termination and
at the expense of the Fund, transfer to such successor an historical record of
dividends and disbursements and all other relevant books, records,
correspondence, and other data established or maintained by you under this
Agreement in form reasonably acceptable to the Fund (if such form differs from
the form in which you have maintained the same, the Fund shall pay any expenses
associated with transferring the same to such form), and will cooperate in the
transfer of such duties and responsibilities, including provision for assistance
from your cognizant personnel in the establishment of books, records and other
data by such successor.
13. Miscellaneous. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the Commonwealth of Massachusetts.
The captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. This
Agreement has been executed on behalf of the Fund by the undersigned not
individually, but in the capacity indicated, and the obligations of this
Agreement are not binding upon any of the Trustees or shareholders of the Fund
individually, but bind only the trust estate.
If you are in agreement with the foregoing, please sign the form of
acceptance on this letter and the accompanying counterpart of this letter and
return such counterpart to the Fund whereupon this letter shall become a binding
contract between the Fund and you, the Fund having already executed this letter
and its counterpart.
Very truly yours,
Massachusetts Investors Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Investors Growth Stock Fund By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Total Return Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Capital Development Fund By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Financial Development Fund By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Financial Bond Fund By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Cash Management Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
MFS Managed Municipal Bond Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Financial High Income Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Municipal Working Capital Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Financial International Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Financial Emerging Growth Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Massachusetts Financial Special Fund By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
MFS Managed High Yield Municipal Bond Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
MFS Government Guaranteed Securities Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
MFS Managed Multi-State Tax-Exempt Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
MFS/Sun Life Series Trust By: JOHN D. MCNEIL
----------------------------
John D. McNeil
Chairman
MFS Managed California Tax-Exempt Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Trust for Thrift Institutions By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
MFS Government Securities High Yield Trust By: RICHARD B. BAILEY
----------------------------
Richard B. Bailey
Chairman
Attest: DANIEL M. JAFFE
--------------------------------
Daniel M. Jaffe
The foregoing is hereby accepted as of the date thereof.
STATE STREET BANK AND
TRUST COMPANY
By: ILLEGIBLE
---------------------------
Illegible
EXHIBIT 11
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective
Amendment No. 28 to Registration Statement No. 2-92915 of MFS Municipal Series
Trust on behalf of MFS Municipal Income Fund ("MMI"), of our report dated May 5,
1995 appearing in the annual report to shareholders of MMI for the year ended
March 31, 1995, and to the references to us under the headings "Condensed
Financial Information" in the MMI Prospectus and "Independent Accountants and
Financial Statements" in the MMI Statement of Additional Information, which are
part of such Registration Statement.
DELOITTE & TOUCHE, LLP
Deloitte & Touche, LLP
Boston, Massachusetts
July 26, 1995
EXHIBIT 13
MASSACHUSETTS FINANCIAL SERVICES COMPANY
200 BERKELEY STREET O BOSTON O MASSACHUSETTS 02116
617 O 423-3500
G. DUNCAN FRASER, JR. October 1, 1984
Executive Vice President
Treasurer
MFS Managed Multi-State
Tax-Exempt Trust
200 Berkeley Street
Boston, MA 02116
Gentlemen:
In connection with our purchase of 2,099.7375 shares of each of the
five Series of MFS Managed Multi-State Tax-Exempt Trust Shares of Beneficial
Interest for a cash consideration of $9.525 per share, this will confirm that we
are buying such shares for investment for our own account only, and not with a
view to reselling or otherwise distributing them.
Very truly yours,
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: G. DUNCAN FRASER, JR.
---------------------------------
G. Duncan Fraser, Jr.
Treasurer
<PAGE>
EXHIBIT 15(a)
MFS MUNICIPAL SERIES TRUST
MFS ALABAMA MUNICIPAL BOND 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 MFS ALABAMA MUNICIPAL BOND FUND (the
"Fund), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 24th day of August, 1984, amended and restated the 10th day of April,
1991, amended and restated the 27th day of August, 1993 and amended this 14th
day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS ALABAMA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS ALABAMA MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(b)
MFS MUNICIPAL SERIES TRUST
MFS ARKANSAS MUNICIPAL BOND 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 MFS ARKANSAS MUNICIPAL BOND FUND (the
"Fund), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 1st day of February, 1992, amended and restated the 27th day of
August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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 at such time as may be determined by the
Board of Trustees from time to time, in their discretion (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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS ARKANSAS MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS ARKANSAS MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th 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 Trust 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 Rules; and
WHEREAS, the Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Plan for the Fund as a plan for distribution 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, 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), and equipment, and of distributing
prospectuses to prospective shareholders (including printing, delivery and
mailing costs, but excluding typesetting).
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 dealers 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(c)
MFS MUNICIPAL SERIES TRUST
MFS CALIFORNIA MUNICIPAL BOND FUND
DISTRIBUTION PLAN
DISTRIBUTION PLAN with respect to the shares of beneficial interest to be
designated "CLASS A" of the MFS CALIFORNIA MUNICIPAL BOND FUND (the "Fund), a
series of MFS Municipal Series Trust (the "Trust"), a business trust organized
and existing under the laws of The Commonwealth of Massachusetts, dated the 1st
day of September, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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, the Trust intends 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 Distribution Plan (the "Plan") as a plan of distribution pursuant to
such Rule; and
WHEREAS, the Trust 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 Trust 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. 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
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 to
the extent specified in the Distribution Agreement in providing the services
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 Trust on behalf of 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 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.
7. 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 vote of a majority of the
Trustees who are not "interested persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS CALIFORNIA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS CALIFORNIA MUNICPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th 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 Trust 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 Rules; and
WHEREAS, the Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Plan for the Fund as a plan for distribution 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, 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), and equipment, and of distributing
prospectuses to prospective shareholders (including printing, delivery and
mailing costs, but excluding typesetting).
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 dealers 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 Trust 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 Trust 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 Trust 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.
<PAGE>
MFS MUNICIPAL BOND FUND
MFS CALIFORNIA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest
to be designated "CLASS C" of MFS California Municipal Bond Fund (the "Fund"), a
series of MFS Municipal Bond Fund (the "Trust") a Massachusetts business trust,
dated December 28, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust intends to distribute the shares of beneficial
interest (without par value) of the Fund designated Class C 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust in a manner specified in 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 Trust 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 Trust recognizes and agrees that the Distributor may (but
is not required to) 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 Trust, 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 C
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust 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 any
commissions payable to Dealers (including any ongoing maintenance commissions),
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 (but is not required to)
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 not to exceed 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 to Dealers on behalf of the Fund or retain
them in accordance with this paragraph.
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 Class C, 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 Trust 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 Trust 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 Class C 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 Class C.
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 1940 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 Trust 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.
<PAGE>
EXHIBIT 15(d)
MFS MUNICIPAL SERIES TRUST
MFS FLORIDA MUNICIPAL BOND 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 MFS FLORIDA MUNICIPAL BOND FUND (the
"Fund), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 1st day of February, 1992, amended and restated the 27th day of
August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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 at such time as may be determined by the
Board of Trustees from time to time, in their discretion (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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS FLORIDA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS FLORIDA MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th 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 Trust 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 Rules; and
WHEREAS, the Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Plan for the Fund as a plan for distribution 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, 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), and equipment, and of distributing
prospectuses to prospective shareholders (including printing, delivery and
mailing costs, but excluding typesetting).
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 dealers 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(e)
MFS MUNICIPAL SERIES TRUST
MFS GEORGIA MUNICIPAL BOND 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 MFS GEORGIA MUNICIPAL BOND FUND (the
"Fund), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 24th day of August, 1984, amended and restated the 10th day of April,
1991, amended and restated the 27th day of August, 1993 and amended this 14th
day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS GEORGIA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS GEORGIA MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th 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 Trust 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 Rules; and
WHEREAS, the Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Plan for the Fund as a plan for distribution 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, 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), and equipment, and of distributing
prospectuses to prospective shareholders (including printing, delivery and
mailing costs, but excluding typesetting).
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 dealers 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(f)
MFS MUNICIPAL SERIES TRUST
MFS LOUISIANA MUNICIPAL BOND 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 MFS LOUISIANA MUNICIPAL BOND FUND
(the "Fund), a series of MFS Municipal Series Trust (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 1st day of February, 1992, amended and restated the
27th day of August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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 on such date or dates as may be determined
by the Board of Trustees from time to time in their discretion (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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS LOUISIANA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS LOUISIANA MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th 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 Trust 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 Rules; and
WHEREAS, the Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Plan for the Fund as a plan for distribution 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, 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), and equipment, and of distributing
prospectuses to prospective shareholders (including printing, delivery and
mailing costs, but excluding typesetting).
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 dealers 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(g)
MFS MUNICIPAL SERIES TRUST
MFS MARYLAND MUNICIPAL BOND 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 MFS MARYLAND MUNICIPAL BOND FUND (the
"Fund), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 24th day of August, 1984, amended and restated the 10th day of April,
1991, amended and restated the 27th day of August, 1993 and amended this 14th
day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS MARYLAND MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS MARYLAND MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(h)
MFS MUNICIPAL SERIES TRUST
MFS MASSACHUSETTS MUNICIPAL BOND 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 MFS MASSACHUSETTS MUNICIPAL BOND FUND
(the "Fund), a series of MFS Municipal Series Trust (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated 27th day of March, 1985, amended and restated the 27th day
of August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS MASSACHUSETTS MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS MASSACHUSETTS MUNICIPAL BOND FUND (the "Fund"), a
series of MFS Municipal Series Trust (the "Trust") a Massachusetts business
trust, dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(I)
MFS MUNICIPAL SERIES TRUST
MFS MISSISSIPPI MUNICIPAL BOND 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 MFS MISSISSIPPI MUNICIPAL BOND FUND
(the "Fund), a series of MFS Municipal Series Trust (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 1st day of August, 1993, amended and restated the 27th
day of August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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 at such time as may be determined by the
Board of Trustees from time to time, in their discretion (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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS MISSISSIPPI MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS MISSISSIPPI MUNICIPAL BOND FUND (the "Fund"), a
series of MFS Municipal Series Trust (the "Trust") a Massachusetts business
trust, dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the
"Distribution Agreement") (in a form approved by the Board of Trustees of the
Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(j)
MFS MUNICIPAL SERIES TRUST
MFS NEW YORK MUNICIPAL BOND 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 MFS NEW YORK MUNICIPAL BOND FUND (the
"Fund"), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 24th day of August, 1984, amended and restated the 10th day of April,
1991, amended and restated the 27th day of August, 1993 and amended this 14th
day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS NEW YORK MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS NEW YORK MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(k)
MFS MUNICIPAL SERIES TRUST
MFS NORTH CAROLINA MUNICIPAL BOND 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 MFS NORTH CAROLINA MUNICIPAL BOND
FUND (the "Fund"), a series of MFS Municipal Series Trust (the "Trust"), a
business trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 24th day of August, 1984, amended and restated the 10th
day of April, 1991, amended and restated the 27th day of August, 1993 and
amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS NORTH CAROLINA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS NORTH CAROLINA MUNICIPAL BOND FUND (the "Fund"), a
series of MFS Municipal Series Trust (the "Trust") a Massachusetts business
trust, dated September 1, 1993 and amended this 14th day of Decebmer, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
MFS MUNICIPAL BOND FUND
MFS NORTH CAROLINA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS C" of MFS North Carolina Municipal Bond Fund (the "Fund"), a
series of MFS Municipal Bond Fund (the "Trust") a Massachusetts business trust,
dated December 28, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust intends to distribute the shares of beneficial interest
(without par value) of the Fund designated Class C 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust in a
manner specified in 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 Trust 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 Trust recognizes and agrees that the Distributor may (but is not
required to) 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 Trust, 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 C
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust 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 any
commissions payable to Dealers (including any ongoing maintenance commissions),
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 (but is not required to)
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 not to exceed 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 to Dealers on behalf of the Fund or retain
them in accordance with this paragraph.
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 Class C, 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 Trust 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 Trust 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 Class C 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 Class C.
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 1940 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 Trust 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.
<PAGE>
EXHIBIT 15(l)
MFS MUNICIPAL SERIES TRUST
MFS PENNSYLVANIA MUNICIPAL BOND 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 MFS PENNSYLVANIA MUNICIPAL BOND FUND
(the "Fund"), a series of MFS Municipal Series Trust (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 1st day of February, 1992, amended and restated the
27th day of August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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 when the value of the Fund's net assets
attributable to the Shares first equals or exceeds $50 million (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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS PENNSYLVANIA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS PENNSYLVANIA BOND FUND (the "Fund"), a series of MFS
Municipal Series Trust (the "Trust") a Massachusetts business trust, dated
September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(m)
MFS MUNICIPAL SERIES TRUST
MFS SOUTH CAROLINA MUNICIPAL BOND 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 MFS SOUTH CAROLINA MUNICIPAL BOND
FUND (the "Fund"), a series of MFS Municipal Series Trust (the "Trust"), a
business trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 24th day of August, 1984, amended and restated the 10th
day of April, 1991, amended and restated the 27th day of August, 1993 and
amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS SOUTH CAROLINA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS SOUTH CAROLINA MUNICIPAL BOND FUND (the "Fund"), a
series of MFS Municipal Series Trust (the "Trust") a Massachusetts business
trust, dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(n)
MFS MUNICIPAL SERIES TRUST
MFS TENNESSEE MUNICIPAL BOND 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 MFS TENNESSEE MUNICIPAL BOND FUND
(the "Fund"), a series of MFS Municipal Series Trust (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 24th day of August, 1984, amended and restated the 10th
day of April, 1991, amended and restated the 27th day of August, 1993 and
amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS TENNESSEE MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS TENNESSEE MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(o)
MFS MUNICIPAL SERIES TRUST
MFS TEXAS MUNICIPAL BOND 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 MFS TEXAS MUNICIPAL BOND FUND (the
"Fund"), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 1st day of February, 1992, amended and restated the 27th day of
August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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 at such time as may be determined by the
Board of Trustees from time to time, in their discretion (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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS TEXAS MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS TEXAS MUNICIPAL BOND FUND (the "Fund"), a series of
MFS Municipal Series Trust (the "Trust") a Massachusetts business trust, dated
September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(p)
MFS MUNICIPAL SERIES TRUST
MFS VIRGINIA MUNICIPAL BOND 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 MFS VIRGINIA MUNICIPAL BOND FUND (the
"Fund"), a series of MFS Municipal Series Trust (the "Trust"), a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
dated the 24th day of August, 1984, amended and restated the 10th day of April,
1991, amended and restated the 27th day of August, 1993 and amended this 14th
day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS VIRGINIA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS VIRGINIA MUNICIPAL BOND FUND (the "Fund"), a series
of MFS Municipal Series Trust (the "Trust") a Massachusetts business trust,
dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
MFS MUNICIPAL BOND FUND
MFS VIRGINIA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS C" of MFS Virginia Municipal Bond Fund (the "Fund"), a series
of MFS Municipal Bond Fund (the "Trust") a Massachusetts business trust, dated
December 28, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust intends to distribute the shares of beneficial interest
(without par value) of the Fund designated Class C 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust in a
manner specified in 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 Trust 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 Trust recognizes and agrees that the Distributor may (but is not
required to) 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 Trust, 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 C
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust 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 any
commissions payable to Dealers (including any ongoing maintenance commissions),
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 (but is not required to)
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 not to exceed 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 to Dealers on behalf of the Fund or retain
them in accordance with this paragraph.
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 Class C, 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 Trust 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 Trust 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 Class C 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 Class C.
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 1940 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 Trust 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.
<PAGE>
EXHIBIT 15(q)
MFS MUNICIPAL SERIES TRUST
MFS WASHINGTON MUNICIPAL BOND 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 MFS WASHINGTON MUNICIPAL BOND FUND
(the "Fund"), a series of MFS Municipal Series Trust (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 1st day of August, 1992, amended and restated the 27th
day of August, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Trust 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. 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 at such time as may be determined by the
Board of Trustees from time to time, in their discretion (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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS WASHINGTON MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS WASHINGTON MUNICIPAL BOND FUND (the "Fund"), a
series of MFS Municipal Series Trust (the "Trust") a Massachusetts business
trust, dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(r)
MFS MUNICIPAL SERIES TRUST
MFS WEST VIRGINIA MUNICIPAL BOND 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 MFS WEST VIRGINIA MUNICIPAL BOND FUND
(the "Fund"), a series of MFS Municipal Series Trust (the "Trust"), a business
trust organized and existing under the laws of The Commonwealth of
Massachusetts, dated the 24th day of August, 1984, amended and restated the 10th
day of April, 1991, amended and restated the 27th day of August, 1993 and
amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust, including the Qualifying
Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust 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 Trust 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 Distributor,
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 Trust 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. 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.
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 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 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 Trust on behalf of 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 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.
7. This Plan shall become effective upon approval by a vote of the Board
of Trustees and vote of a majority of the Trustees who are not "interested
persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS WEST VIRGINIA MUNICIPAL BOND FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS WEST VIRGINIA MUNICIPAL BOND FUND (the "Fund"), a
series of MFS Municipal Series Trust (the "Trust") a Massachusetts business
trust, dated September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
EXHIBIT 15(s)
MFS MUNICIPAL SERIES TRUST
MFS MUNICIPAL INCOME FUND
DISTRIBUTION PLAN
DISTRIBUTION PLAN with respect to the shares of beneficial interest to be
designated "CLASS A" of the MFS MUNICIPAL INCOME FUND (the "Fund"), a series of
MFS Municipal Series Trust (the "Trust"), a business trust organized and
existing under the laws of The Commonwealth of Massachusetts, dated the 1st day
of September, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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, the Trust intends 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 Distribution Plan (the "Plan") as a plan of distribution pursuant to
such Rule; and
WHEREAS, the Trust 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 Trust 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. 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 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 to the
extent specified in the Distribution Agreement in providing the services
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 Trust on behalf of 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 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.
7. 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 vote of a majority of the
Trustees who are not "interested persons" of the Trust 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 Trust.
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 Trust 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.
<PAGE>
MFS MUNICIPAL SERIES TRUST
MFS MUNICIPAL INCOME FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS B" of MFS MUNICIPAL INCOME FUND (the "Fund"), a series of MFS
Municipal Series Trust (the "Trust") a Massachusetts business trust, dated
September 1, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust 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 Trust desires for MFS Fund Distributors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust 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 Trust 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust 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 Trust 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.
<PAGE>
MFS MUNICIPAL BOND FUND
MFS MUNICIPAL INCOME FUND
PLAN OF DISTRIBUTION
PLAN OF DISTRIBUTION with respect to the shares of beneficial interest to be
designated "CLASS C" of MFS Municipal Income Fund (the "Fund"), a series of MFS
Municipal Bond Fund (the "Trust") a Massachusetts business trust, dated December
28, 1993 and amended this 14th day of December, 1994.
WITNESSETH:
WHEREAS, the Trust 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 Trust intends to distribute the shares of beneficial interest
(without par value) of the Fund designated Class C 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 Trust desires for MFS Fund Distritutors, Inc., a Delaware
corporation ("MFD"), to provide certain distribution services for the Fund (the
"Distributor"); and
WHEREAS, the Trust has entered into a distribution agreement (the "Distribution
Agreement") (in a form approved by the Board of Trustees of the Trust in a
manner specified in 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 Trust 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 Trust recognizes and agrees that the Distributor may (but is not
required to) 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 Trust, 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 C
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust 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 any
commissions payable to Dealers (including any ongoing maintenance commissions),
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 (but is not required to)
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 not to exceed 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 to Dealers on behalf of the Fund or retain
them in accordance with this paragraph.
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 Class C, 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 Trust 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 Trust 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 Class C 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 Class C.
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 1940 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 Trust 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.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF MFS MUNICIPAL
INCOME FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 23
<NAME> MFS MUNICIPAL INCOME FUND CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 420,651,437
<INVESTMENTS-AT-VALUE> 448,023,193
<RECEIVABLES> 11,641,224
<ASSETS-OTHER> 6,957
<OTHER-ITEMS-ASSETS> 56,499
<TOTAL-ASSETS> 459,727,873
<PAYABLE-FOR-SECURITIES> 8,000,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,556,401
<TOTAL-LIABILITIES> 10,556,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 433,004,620
<SHARES-COMMON-STOCK> 2,952,479
<SHARES-COMMON-PRIOR> 653,752
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 684,169
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 10,520,735
<ACCUM-APPREC-OR-DEPREC> 27,371,756
<NET-ASSETS> (449,171,472)
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 33,848,466
<OTHER-INCOME> 0
<EXPENSES-NET> 9,892,718
<NET-INVESTMENT-INCOME> (23,955,748)
<REALIZED-GAINS-CURRENT> (8,796,119)
<APPREC-INCREASE-CURRENT> 8,226,710
<NET-CHANGE-FROM-OPS> 23,386,339
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (551,579)
<DISTRIBUTIONS-OF-GAINS> (2,000)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,767,565
<NUMBER-OF-SHARES-REDEEMED> 486,722
<SHARES-REINVESTED> 17,884
<NET-CHANGE-IN-ASSETS> (42,294,649)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 1,489,567
<OVERDIST-NET-GAINS-PRIOR> 1,230,985
<GROSS-ADVISORY-FEES> 3,545,246
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,892,718
<AVERAGE-NET-ASSETS> 462,893,820
<PER-SHARE-NAV-BEGIN> 8.56
<PER-SHARE-NII> 0.50
<PER-SHARE-GAIN-APPREC> 0.02
<PER-SHARE-DIVIDEND> (0.52)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 8.56
<EXPENSE-RATIO> 1.13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF MUNICIPAL INCOME
FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 23
<NAME> MUNICIPAL INCOME FUND CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 420,651,437
<INVESTMENTS-AT-VALUE> 448,023,193
<RECEIVABLES> 11,641,224
<ASSETS-OTHER> 6,957
<OTHER-ITEMS-ASSETS> 56,499
<TOTAL-ASSETS> 459,727,873
<PAYABLE-FOR-SECURITIES> 8,000,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,556,401
<TOTAL-LIABILITIES> 10,556,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 433,004,620
<SHARES-COMMON-STOCK> 48,206,602
<SHARES-COMMON-PRIOR> 56,008,099
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 684,169
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 10,520,735
<ACCUM-APPREC-OR-DEPREC> 27,371,756
<NET-ASSETS> (449,171,472)
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 33,848,466
<OTHER-INCOME> 0
<EXPENSES-NET> 9,892,718
<NET-INVESTMENT-INCOME> (23,955,748)
<REALIZED-GAINS-CURRENT> (8,796,119)
<APPREC-INCREASE-CURRENT> 8,226,710
<NET-CHANGE-FROM-OPS> 23,386,339
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (22,598,713)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,236,637
<NUMBER-OF-SHARES-REDEEMED> 12,503,667
<SHARES-REINVESTED> 1,465,533
<NET-CHANGE-IN-ASSETS> (42,294,649)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 1,489,567
<OVERDIST-NET-GAINS-PRIOR> 1,230,985
<GROSS-ADVISORY-FEES> 3,545,246
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,892,718
<AVERAGE-NET-ASSETS> 462,893,820
<PER-SHARE-NAV-BEGIN> 8.56
<PER-SHARE-NII> 0.44
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.43)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 8.57
<EXPENSE-RATIO> 2.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS OF MFS MUNICIPAL
INCOME FUND AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 23
<NAME> MUNICIPAL INCOME FUND CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 420,651,437
<INVESTMENTS-AT-VALUE> 448,023,193
<RECEIVABLES> 11,641,224
<ASSETS-OTHER> 6,957
<OTHER-ITEMS-ASSETS> 56,499
<TOTAL-ASSETS> 459,727,873
<PAYABLE-FOR-SECURITIES> 8,000,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,556,401
<TOTAL-LIABILITIES> 10,556,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 433,004,620
<SHARES-COMMON-STOCK> 1,276,061
<SHARES-COMMON-PRIOR> 746,497
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 684,169
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 10,520,735
<ACCUM-APPREC-OR-DEPREC> 27,371,756
<NET-ASSETS> (449,171,472)
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 33,848,466
<OTHER-INCOME> 0
<EXPENSES-NET> 9,892,718
<NET-INVESTMENT-INCOME> (23,955,748)
<REALIZED-GAINS-CURRENT> (8,796,119)
<APPREC-INCREASE-CURRENT> 8,226,710
<NET-CHANGE-FROM-OPS> 23,386,339
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (491,715)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,490,674
<NUMBER-OF-SHARES-REDEEMED> 999,873
<SHARES-REINVESTED> 38,763
<NET-CHANGE-IN-ASSETS> (42,294,649)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 1,489,567
<OVERDIST-NET-GAINS-PRIOR> 1,230,985
<GROSS-ADVISORY-FEES> 3,545,246
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,892,718
<AVERAGE-NET-ASSETS> 462,893,820
<PER-SHARE-NAV-BEGIN> 8.56
<PER-SHARE-NII> 0.44
<PER-SHARE-GAIN-APPREC> 0.01
<PER-SHARE-DIVIDEND> (0.44)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 8.57
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
