<PAGE>
As filed with the Securities and Exchange Commission on June 26, 1997
1933 Act File No. 33-7638
1940 Act File No. 811-4777
================================================================================
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. 30
MFS SERIES TRUST I
(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 1, 1997 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, with respect to the fiscal
year ended August 31, 1996 on October 28, 1996 and will file a Rule 24f-2 Notice
on behalf of all series with respect to the fiscal year ended August 31, 1997 on
or before October 31, 1997.
===============================================================================
<PAGE>
MFS(R) CONVERTIBLE SECURITIES FUND
MFS(R) BLUE CHIP FUND
MFS(R) NEW DISCOVERY FUND
MFS(R) SCIENCE AND TECHNOLOGY FUND
MFS(R) RESEARCH INTERNATIONAL FUND
SERIES OF MFS SERIES TRUST I
(the "Funds")
Supplement to the January 1, 1997 Prospectus
The following information should be read in conjunction with the Funds'
Prospectus and Statement of Additional Information dated January 1, 1997 and
contains financial information and other changes with respect to the MFS(R)
Convertible Securities Fund, MFS(R) Blue Chip Fund, MFS(R) New Discovery Fund,
MFS(R) Science and Technology Fund and MFS(R) Research International Fund.
Annual Operating Expenses (as a percentage of average net assets):
CLASS A SHARES
SCIENCE
CONVERTIBLE BLUE NEW AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND FUND
Management Fees (after
fee reduction)(1)........ 0.00% 0.00% 0.00% 0.00% 0.00%
Rule 12b-1 Fees (after
fee reduction)(2)........ 0.00% 0.00% 0.00% 0.00% 0.00%
Other Expenses (after
fee reduction)(4) (5).... 1.50% 1.50% 1.50% 1.50% 1.75%
Total Operating Expenses
(after fee reduction)(4). 1.50% 1.50% 1.50% 1.50% 1.75%
CLASS B SHARES
SCIENCE
CONVERTIBLE BLUE NEW AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND FUND
Management Fees (after
fee reduction)(1)........ 0.00% 0.00% 0.00% 0.00% 0.00%
Rule 12b-1 Fees(3)..........1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses (after
fee reduction)(4)(5)..... 1.50% 1.50% 1.50% 1.50% 1.75%
Total Operating Expenses
(after fee reduction)(4). 2.50% 2.50% 2.50% 2.50% 2.75%
<PAGE>
CLASS C SHARES
SCIENCE
CONVERTIBLE BLUE NEW AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND FUND
Management Fees (after
fee reduction)(1)........ 0.00% 0.00% 0.00% 0.00% 0.00%
Rule 12b-1 Fees(3)......... 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses (after
fee reduction)(4)(5)..... 1.50% 1.50% 1.50% 1.50% 1.75%
Total Operating Expenses
(after fee reduction)(4). 2.50% 2.50% 2.50% 2.50% 2.75%
- ---------------------------
(1) The Adviser is currently waiving its right to receive management fees from
each Fund. Absent this waiver, "Management Fees" would be as follows:
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND FUND
0.65% 0.65% 0.75% 0.75% 1.00%
(2) Each Fund has adopted a distribution plan for its shares in accordance with
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act") (the "Distribution Plan"), which provides that it will pay
distribution/service fees aggregating up to (but not necessarily all of)
0.50% per annum of the average daily net assets attributable to Class A
shares. Distribution and service fees under the Distribution Plan, with
respect to Class A shares, are currently being waived on a voluntary basis
and, while they may be imposed at the discretion of MFD at any time, MFD
currently intends to waive these fees during the Funds' current fiscal
year. Distribution expenses paid under the Plan, together with the initial
sales charge, may cause long-term shareholders to pay more than the maximum
sales charge that would have been permissible if imposed entirely as an
initial sales charge. See "Distribution Plan" below.
(3) Each Fund's Distribution Plan provides 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 Class B and
Class C shares, respectively. Distribution expenses paid under the
Distribution Plan with respect to Class B or Class C shares, together with
any CDSC payable upon redemption of Class B and Class C shares, may cause
long-term shareholders to pay more than the maximum sales charge that would
have been permissible if imposed entirely as an initial sales charge.
See "Distribution Plan" below.
(4) "Other Expenses" are based on estimates of payments to be made during each
Fund's current fiscal year. The Adviser is bearing certain expenses of each
Fund, subject to reimbursement by the Funds such that "Other Expenses" do
not exceed with respect to each Fund, other than the Research International
Fund, 1.50% per annum, and with respect to the Research International Fund,
1.75% per annum, of each such Fund's average daily net assets during the
current fiscal year and each fiscal year through August 31, 2006. These
arrangements may be changed or terminated by the Adviser at any time.
Otherwise, "Other Expenses," expressed as a percentage of average daily net
assets, would be as follows:
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND FUND
Class A........ 11.50% 11.63% 4.19% 3.72% 3.79%
Class B........ 11.50% 11.63% 4.19% 3.72% 3.79%
Class C........ 11.50% 11.63% 4.19% 3.72% 3.79%
<PAGE>
Absent any fee waivers and reductions, "Total Operating Expenses" for each Fund
would be as follows:
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND FUND
Class A........ 12.65% 12.78% 5.44% 4.97% 5.29%
Class B........ 13.15% 13.28% 5.94% 5.47% 5.79%
Class C........ 13.15% 13.28% 5.94% 5.47% 5.79%
(5) Each Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
Example of Expenses
An investor would pay the following dollar amounts of expenses on a $1,000
investment in each Fund, assuming (a) a 5% annual return and, unless otherwise
noted, (b) redemption at the end of each of the time periods indicated.
CLASS A SHARES
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
PERIOD FUND FUND FUND FUND FUND
1 year........ $ 62 $ 62 $ 62 $ 62 $ 62
3 years....... 93 93 93 93 93
CLASS B SHARES
(ASSUMES REDEMPTION)
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
PERIOD FUND FUND FUND FUND FUND
1 year........ $ 65 $ 65 $ 65 $ 65 $ 65
3 years....... 108 108 108 108 108
CLASS B SHARES
(ASSUMES NO REDEMPTION)
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
PERIOD FUND FUND FUND FUND FUND
1 year........ $ 25 $ 25 $ 25 $ 25 $ 25
3 years....... 78 78 78 78 78
CLASS C SHARES
(ASSUMES REDEMPTION)
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
PERIOD FUND FUND FUND FUND FUND
1 year........ $ 35 $ 35 $ 35 $ 35 $ 35
3 years....... 78 78 78 78 78
<PAGE>
CLASS C SHARES
(ASSUMES NO REDEMPTION)
CONVERTIBLE BLUE NEW SCIENCE AND RESEARCH
SECURITIES CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
PERIOD FUND FUND FUND FUND FUND
1 year........ $ 25 $ 25 $ 25 $ 25 $ 25
3 years....... 78 78 78 78 78
The purpose of the expense table above is to assist investors in inderstanding
the various costs and expenses that a shareholder of each Fund will bear
directly or indirectly.
The "Example" set forth above should not be considered a representation of past
or future expenses of a Fund; actual expenses may be greater or less than those
shown.
CONDENSED FINANCIAL INFORMATION
The following information should be read in conjunction with the financial
statements (which have not been audited) included in the July 1, 1997 Supplement
to the Statement of Additional Information.
Financial Highlights (Unaudited)
MFS(R) Convertible Securities Fund
MFS(R) Blue Chip Fund
MFS(R) New Discovery Fund
MFS(R) Science and Technology Fund
MFS(R) Research International Fund
Period Ended February 28, 1997*
Per share data (for a share outstanding throughout the period):
PERIOD ENDED
CONVERTIBLE SECURITIES FUND FEBRUARY 28, 1997*
CLASS A
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income### $ --
Net realized and unrealized gain on investments 0.15
Total from investment operations $ 0.15
Net asset value - end of period $10.15
Total return## 1.50%***
Ratios (to average net assets)/Supplemental data###:
Expenses 1.50%**
Net investment income 2.20%**
Portfolio turnover 23%
Average commission rate $0.0481
Net assets at end of period (000 omitted) $511
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** Annualized.
***Not annualized.
# Per share data for periods is based on average shares outstanding.
## 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.
<PAGE>
###The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.50% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment income $ --
Ratios (to average net assets):
Expenses 12.63%**
Net investment loss (8.93)%**
PERIOD ENDED
BLUE CHIP FUND FEBRUARY 28, 1997*
CLASS A
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income### $ 0.01
Net realized and unrealized gain on investments 0.42
Total from investment operations $ 0.43
Net asset value - end of period $10.43
Total return## 4.30%***
Ratios (to average net assets)/Supplemental data###:
Expenses 1.50%**
Net investment income 0.95%**
Portfolio turnover 6%
Average commission rate $0.0366
Net assets at end of period (000 omitted) $457
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** Annualized.
***Not annualized.
# Per share data for periods is based on average shares outstanding.
## 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.
###The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.50% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment income $(0.16)
Ratios (to average net assets):
Expenses 12.76%**
Net investment loss (10.31)%**
<PAGE>
PERIOD ENDED
NEW DISCOVERY FUND FEBRUARY 28, 1997*
CLASS A
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income### $ 0.19
Net realized and unrealized loss on investments (0.10)
Total from investment operations $ 0.09
Net asset value - end of period $10.09
Total return## 0.90%***
Ratios (to average net assets)/Supplemental data###:
Expenses 1.50%**
Net investment income 13.90%**
Portfolio turnover 327%
Average commission rate $0.0268
Net assets at end of period (000 omitted) $377
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** Annualized.
***Not annualized.
# Per share data for periods is based on average shares outstanding.
## 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.
###The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.50% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment income $ 0.14
Ratios (to average net assets):
Expenses 5.42%**
Net investment income 9.98%**
<PAGE>
PERIOD ENDED
SCIENCE AND TECHNOLOGY FUND FEBRUARY 28, 1997*
CLASS A
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income### $ 0.38
Net realized and unrealized loss on investments (0.29)
Total from investment operations $ 0.09
Net asset value - end of period $10.09
Total return## 0.80%***
Ratios (to average net assets)/Supplemental data###:
Expenses 1.50%**
Net investment income 30.63%**
Portfolio turnover 716%
Average commission rate $0.0268
Net assets at end of period (000 omitted) $580
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** Annualized.
***Not annualized.
# Per share data for periods is based on average shares outstanding.
## 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.
###The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.50% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment loss $0.34
Ratios (to average net assets):
Expenses 4.95%**
Net investment income 27.18%**
<PAGE>
PERIOD ENDED
RESEARCH INTERNATIONAL FUND FEBRUARY 28, 1997*
CLASS A
(UNAUDITED)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income### $ --
Net realized and unrealized loss on investments (0.15)
Total from investment operations $(0.15)
Net asset value - end of period $ 9.85
Total return## (1.50)%***
Ratios (to average net assets)/Supplemental data###:
Expenses 1.75%**
Net investment income 0.21%**
Portfolio turnover 176%
Average commission rate $0.0193
Net assets at end of period (000 omitted) $1,385
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** Annualized.
***Not annualized.
# Per share data for periods is based on average shares outstanding.
## 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.
###The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.75% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment loss $(0.05)
Ratios (to average net assets):
Expenses 5.27%**
Net investment loss (3.56)%**
The date of this Supplement is July 1, 1997.
<PAGE>
The Prospectus dated January 1, 1997 for MFS Equity Income Fund, MFS Core Growth
Fund, MFS Strategic Growth Fund (formerly MFS Aggressive Growth Fund), MFS
Special Opportunities Fund, MFS Convertible Securities Fund, MFS Blue Chip Fund,
MFS New Discovery Fund, MFS Science and Technology Fund and MFS Research
International Fund (the "Funds") filed by the Registrant pursuant to Rule 497
under the Securities Act of 1933, as amended, with the Securities and Exchange
Commission via EDGAR on December 30, 1996, is incorporated by reference in this
Post-Effective Amendment No. 28.
<PAGE>
MFS(R) CONVERTIBLE SECURITIES FUND
MFS(R) BLUE CHIP FUND
MFS(R) NEW DISCOVERY FUND
MFS(R) SCIENCE AND TECHNOLOGY FUND
MFS(R) RESEARCH INTERNATIONAL FUND
A SERIES OF MFS SERIES TRUST I
(the "Funds")
Supplement to the January 1, 1997 Statement of Additional Information
MANAGEMENT OF THE TRUST
As of May 31, 1997, entities beneficially owning 5% or more of Class A shares
and Class I shares of the Registrant's outstanding shares of each series as
follows:
% OF
SHARES
SERIES OWNER AND ADDRESS OWNED
MFS Convertible Securities Fund MFS Fund Distributors, Inc. 99.34%
c/o Massachusetts Financial Services Co.
Class A Shares Attn: Thomas B. Hastings
500 Boylston Street - 20th Floor
Boston, MA 02116-3740
Class I Shares MFS Defined Contribution Plan 99.73%
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MFS Blue Chip Fund MFS Fund Distributors, Inc. 88.21%
c/o Massachusetts Financial Services Co.
Class A Shares Attn: Thomas B. Hastings
500 Boylston Street - 20th Floor
Boston, MA 02116-3740
Class I Shares MFS Defined Contribution Plan 99.94%
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MFS New Discovery Fund The First National Bank of Boston, 53.68%
Trustee for IRA R/O Ned L. Rigsbee
Class A Shares 10 Nash Street
Westboro, MA 01581-3607
Brian E. Stack & Margaret R. Stack, 26.26%
JTWROS
c/o Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
Mary Ann Russell and Michael R. 5.38%
Russell, JTWROS
c/o Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
Class I Shares MFS Defined Contribution Plan 99.99%
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
- --------------------------------------------------------------------------------
<PAGE>
% OF
SHARES
SERIES OWNER AND ADDRESS OWNED
MFS Science and Technology Fund The First National Bank of Boston, 32.37%
Trustee for
Class A Shares IRA R/O Ned L. Rigsbee
10 Nash Street
Westboro, MA 01581-3607
John David Davenport, Trustee 23.15%
The John David Davenport 1994 Revocable
Trust, c/o Arnold D. Scott -
Massachusetts Financial Services
500 Boylston Street - 24th Floor
Boston, MA 02116-3740
Robert J. Manning and Donna Manning, 8.84%
JTWROS c/o Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
Maura A. Shaughnessy 6.43%
c/o Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
Joan S. Batchelder 15.94%
c/o Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
Class I Shares MFS Defined Contribution Plan 99.99%
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MFS Research International Fund MFS Fund Distributors, Inc. 64.36%
c/o Massachusetts Financial Services Co.
Class A Shares Attn: Thomas B. Hastings
500 Boylston Street - 20th Floor
Boston, MA 02116-3740
Barry R. Zlotin and Patricia Zlotin, 10.91%
JTWROS
c/o Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
John David Davenport, Trustee 13.01%
The John David Davenport 1994 Revocable Trust
c/o Arnold D. Scott
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
Class I Shares MFS Defined Contribution Plan 99.98%
c/o Mark Leary
Massachusetts Financial Services
500 Boylston Street
Boston, MA 02116-3740
- --------------------------------------------------------------------------------
<PAGE>
DETERMINATION OF NET ASSET VALUE; PERFORMANCE INFORMATION
Performance quotations for Class A shares and Class I shares for the following
Funds for the period ended February 28, 1997 are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Actual
30-Day 30-Day
Yield Yield
Average Annual Total Returns(1) (Including (Without
1 Year 5 Years Life of Fund(2) Any Waivers) Any Waivers))
MFS Convertible Securities Fund
Class A Shares with sales charge -- -- -3.33% -0.17% -3.05%
Class A Shares without sales charge -- -- 1.50% N/A N/A
Class I Shares -- -- 1.40% -0.18% -2.70%
MFS Blue Chip Fund
Class A Shares with sales charge -- -- -0.67% -- --
Class A Shares without sales charge -- -- 4.30% N/A N/A
Class I Shares -- -- 4.30% -- --
MFS New Discovery Fund
Class A Shares with sales charge -- -- -3.91% -- --
Class A Shares without sales charge -- -- 0.90% N/A N/A
Class I Shares -- -- 0.90% -- --
MFS Science and Technology Fund
Class A Shares with sales charge -- -- -4.00% -- --
Class A Shares without sales charge -- -- 0.80% N/A N/A
Class I Shares -- -- 0.70% -- --
MFS Research International Fund
Class A Shares with sales charge -- -- -6.19% -- --
Class A Shares without sales charge -- -- -1.50% N/A N/A
Class I Shares -- -- -1.50% -- --
</TABLE>
(1) Total rate of return figures would have been lower if certain fee waivers
were not in place.
(2) From commencement of offering of Class A shares and Class I shares on
January 2, 1997.
FINANCIAL STATEMENTS
The unaudited Semiannual Report, consisting of the Portfolio of Investments at
February 28, 1997, the Statement of Assets and Liabilities at February 28, 1997,
the Statement of Operations for the period from the commencement of investment
operations on January 2, 1997 to February 28, 1997, Statement of Changes in Net
Assets for the period from commencement of investment operations on January 2,
1997 to February 28, 1997, and the Notes to the financial statements are
incorporated herein by reference to the Semiannual Report to shareholders filed
with the SEC on May 2, 1997.
The date of this Supplement is July 1, 1997.
<PAGE>
MFS(R) EQUITY INCOME FUND
MFS(R) CORE GROWTH FUND
MFS(R) SPECIAL OPPORTUNITIES FUND
MFS(R) CONVERTIBLE SECURITIES FUND
MFS(R) BLUE CHIP FUND
MFS(R) NEW DISCOVERY FUND
MFS(R) SCIENCE AND TECHNOLOGY FUND
MFS(R) RESEARCH INTERNATIONAL FUND
Supplement to the January 1, 1997 Prospectus
and Statement of Additional Information
The following information should be read in conjunction with the Funds'
Prospectus and Statement of Additional Information ("SAI"), dated January 1,
1997, as supplemented, and contains a description of Class I shares.
Class I shares are available for purchase only by certain investors as
described under the caption "Eligible Purchasers" below.
EXPENSE SUMMARY
<TABLE>
<S> <C> <C> <C> <C>
Class I
EQUITY CORE SPECIAL CONVERTIBLE
INCOME GROWTH OPPORTUNITIES SECURITIES
FUND FUND FUND FUND
Shareholder Transaction Expenses:
Maximum Initial Sales Charge Imposed
on Purchases of Fund Shares (as a
percentage of offering price)......... None None None None
Maximum Contingent Deferred Sales
Charge (as a percentage of original
purchase price or redemption proceeds,
as applicable)........................ None None None None
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
SCIENCE
BLUE NEW AND RESEARCH
CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND
Shareholder Transaction Expenses:
Maximum Initial Sales Charge Imposed
on Purchases of Fund Shares (as a
percentage of offering price)......... None None None None
Maximum Contingent Deferred Sales
Charge (as a percentage of original
purchase price or redemption proceeds,
as applicable)........................ None None None None
</TABLE>
<TABLE>
<S> <C> <C> <C>
EQUITY CORE SPECIAL CONVERTIBLE
INCOME GROWTH OPPORTUNITIES SECURITIES
FUND FUND FUND FUND
Annual Operating Expenses (as a percentage of average net assets):
Management Fees (after fee
reduction)(1)......................... 0.00% 0.00% 0.00% 0.00%
Rule 12b-1 Fees.......................... None None None None
Other Expenses (after fee
reduction)(2) (3)..................... 1.50% 1.50% 1.50% 1.50%
Total Operating Expenses (after
fee reduction)(3)..................... 1.50% 1.50% 1.50% 1.50%
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SCIENCE
BLUE NEW AND RESEARCH
CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND
Annual Operating Expenses (as a percentage of average net assets):
Management Fees (after fee
reduction)(1)........................ 0.00% 0.00% 0.00% 0.00%
Rule 12b-1 Fees......................... None None None None
Other Expenses (after fee
reduction)(2) (3).................... 1.50% 1.50% 1.50% 1.75%
Total Operating Expenses (after
fee reduction)(3).................... 1.50% 1.50% 1.50% 1.75%
</TABLE>
............................
(1) The Adviser is currently waiving its right to receive management fees from
each Fund. Absent this waiver, "Management Fees" would be as follows:
EQUITY CORE SPECIAL CONVERTIBLE
INCOME GROWTH OPPORTUNITIES SECURITIES
FUND FUND FUND FUND
0.75% 0.75% 0.75% 0.65%
SCIENCE
BLUE NEW AND RESEARCH
CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND
0.65% 0.75% 0.75% 1.00%
(2) Each Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under "Other Expenses."
(3) "Other Expenses" for the Equity Income Fund, the Core Growth Fund, the
Special Opportunities Fund, the Convertible Securities Fund, the Blue Chip
Fund, the New Discovery Fund, the Science and Technology Fund and the
Research International Fund are based on estimates of payments to be made
during each such Fund's current fiscal year. The Adviser has agreed to bear
each Fund's expenses, subject to reimbursement by the Fund, such that
"Other Expenses" do not exceed with respect to each Fund, other than the
Research International Fund, 1.50% per annum and with respect to the
Research International Fund, 1.75% per annum, of each Fund's average daily
net assets during the current fiscal year. These arrangements may be
changed or terminated by the Adviser at any time. Otherwise, "Other
Expenses" expressed as a percentage of average daily net assets for each
Fund would be as follows:
EQUITY CORE SPECIAL CONVERTIBLE
INCOME GROWTH OPPORTUNITIES SECURITIES
FUND FUND FUND FUND
4.00% 2.78% 0.98% 11.50%
SCIENCE
BLUE NEW AND RESEARCH
CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND
11.63% 4.19% 3.72% 3.79%
<PAGE>
Absent any fee waivers and expense reductions, "Total Operating Expenses" for
each Fund would be as follows:
EQUITY CORE SPECIAL CONVERTIBLE
INCOME GROWTH OPPORTUNITIES SECURITIES
FUND FUND FUND FUND
4.75% 3.53% 1.73% 12.15%
SCIENCE
BLUE NEW AND RESEARCH
CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
FUND FUND FUND FUND
12.28% 4.94% 4.47% 4.79%
Example of Expenses
An investor would pay the following dollar amounts of expenses on a
$1,000 investment in Class I shares of each Fund, assuming (a) a 5% annual
return and (b) redemption at the end of each of the time periods indicated:
<TABLE>
<S> <C> <C> <C> <C>
EQUITY CORE SPECIAL CONVERTIBLE
INCOME GROWTH OPPORTUNITIES SECURITIES
PERIOD FUND FUND FUND FUND
1 year......... $15 $15 $15 $15
3 years........ 47 47 47 47
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
SCIENCE
BLUE NEW AND RESEARCH
CHIP DISCOVERY TECHNOLOGY INTERNATIONAL
PERIOD FUND FUND FUND FUND
1 year......... $15 $15 $15 $15
3 years........ 47 47 47 47
</TABLE>
The purpose of the expense table above is to assist investors in
understanding the various costs and expenses that a shareholder of the Funds
will bear directly or indirectly. A more complete description of each Fund's
management fee is set forth under the caption "Management of the Funds" in the
Prospectus.
The "Example" set forth above should not be considered a representation
of past or future expenses of the Funds; actual expenses may be greater or less
than those shown.
CONDENSED FINANCIAL INFORMATION
The following information has not been audited and should be read in
conjunction with the financial statements included in the Funds' Semiannual
Report to shareholders which are incorporated by reference into the SAI.
<PAGE>
Financial Highlights (Unaudited)
Class I Shares
PERIOD ENDED
EQUITY INCOME FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $12.21
Income from investment operations# -
Net investment income** $ 0.03
Net realized and unrealized gain
on investments and foreign currency transactions 0.66
Total from investment operations $ 0.69
Less distributions declared to shareholders -
From net investment income $ --
From net realized gain (loss) on investments --
Total distributions declared to shareholders $ --
Net asset value - end of period $12.90
Total return 6.35%####
Ratios (to average net assets)/Supplemental data**:
Expenses## 1.50%###
Net investment income 1.37%###
Portfolio turnover 66%
Average commission rate $0.0334
Net assets at end of period (000 omitted) $ 598
- --------------------------
* For the period from the commencement of offering of Class I shares, January
2, 1997 to February 28, 1997.
# Per share data is based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly. The reduction of expenses by fees paid indirectly, as a
percentage of net assets, amounted to:
### Annualized.
####Not annualized.
(0.04)%###
** The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.50% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment loss $(0.04)
Ratios (to average net assets):
Expenses## 4.74%###
Net investment loss (1.87)%###
<PAGE>
PERIOD ENDED
CORE GROWTH FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $12.99
Income from investment operations# -
Net investment loss** $ --
Net realized and unrealized gain
on investments and foreign currency transactions 0.57
Total from investment operations $ 0.57
Less distributions declared to shareholders -
From net realized gain (loss) on investments $ --
Total distributions declared to shareholders $ --
Net asset value - end of period $13.56
Total return 5.78%####
Ratios (to average net assets)/Supplemental data**:
Expenses## 1.50%###
Net investment loss (0.18)%###
Portfolio turnover 175%
Average commission rate $0.0356
Net assets at end of period (000 omitted) $ 1,017
- --------------------------
* For the period from the commencement of offering of Class I shares, January
2, 1997 to February 28, 1997.
# Per share data is based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly. The reduction of expenses by fees paid indirectly, as a
percentage of net assets, amounted to:
### Annualized.
####Not annualized.
(0.04)%###
** The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.50% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment loss $(0.05)
Ratios (to average net assets):
Expenses## 3.51%###
Net investment loss (2.19)%###
<PAGE>
PERIOD ENDED
SPECIAL OPPORTUNITIES FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $11.38
Income from investment operations# -
Net investment income** $ 0.04
Net realized and unrealized gain
on investments and foreign currency transactions 0.19
Total from investment operations $ 0.23
Less distributions declared to shareholders -
From net investment income $ --
From net realized gain (loss) on investments --
Total distributions declared to shareholders $ --
Net asset value - end of period $11.61
Total return 2.66%####
Ratios (to average net assets)/Supplemental data**:
Expenses## 0.88%###
Net investment income 1.34%###
Portfolio turnover 89%
Average commission rate $0.0440
Net assets at end of period (000 omitted) $ 1,789
- --------------------------
* For the period from the commencement of offering of Class I shares, January
2, 1997 to February 28, 1997.
# Per share data is based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid
indirectly. The reduction of expenses by fees paid indirectly, as a
percentage of net assets, amounted to:
### Annualized.
####Not annualized.
(0.04)%###
** The investment adviser voluntarily agreed to maintain the expenses of
the Fund at not more than 1.50% of the Fund's average daily net assets.
The investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these
arrangements, the net investment income per share and the ratios would
have been:
Net investment income $0.01
Ratios (to average net assets):
Expenses## 1.72%###
Net investment income 0.50%###
<PAGE>
PERIOD ENDED
CONVERTIBLE SECURITIES FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income** $ 0.03
Net realized and unrealized gain on investments 0.11
Total from investment operations $ 0.14
Net asset value - end of period $10.14
Total return 1.40%###
Ratios (to average net assets)/Supplemental data**:
Expenses 1.50%##
Net investment income 2.18%##
Portfolio turnover 23%
Average commission rate $0.0481
Net assets at end of period (000 omitted) $ 43
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** The investment adviser voluntarily agreed to maintain the expenses of the
Fund at not more than 1.50% of the Fund's average daily net assets. The
investment adviser did not impose its management fee for the period indicated
and paid some of the other expenses. Absent these arrangements, the net
investment income per share and the ratios would have been:
# Per share data for periods is based on average shares outstanding.
## Annualized.
###Not annualized.
Net investment loss $(0.13)
Ratios (to average net assets):
Expenses 12.13%##
Net investment loss (8.45)%##
PERIOD ENDED
BLUE CHIP FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income** $ 0.01
Net realized and unrealized gain
on investments 0.42
Total from investment operations $ 0.43
Net asset value - end of period $10.43
Total return 4.30%###
Ratios (to average net assets)/Supplemental data**:
Expenses 1.50%##
Net investment income 0.94%##
Portfolio turnover 6%
Average commission rate $0.0366
Net assets at end of period (000 omitted) $ 172
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** The investment adviser voluntarily agreed to maintain the expenses of the
Fund at not more than 1.50% of the Fund's average daily net assets. The
investment adviser did not impose its management fee for the period
indicated and paid some of the other expenses. Absent these arrangements,
the net investment income per share and the ratios would have been:
<PAGE>
# Per share data for periods is based on average shares outstanding.
## Annualized.
###Not annualized.
Net investment loss $(0.16)
Ratios (to average net assets):
Expenses 12.27%##
Net investment loss (9.83)%##
PERIOD ENDED
NEW DISCOVERY FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income** $ 0.20
Net realized and unrealized loss
on investments (0.11)
Total from investment operations $ 0.09
Net asset value - end of period $10.09
Total return 0.90%###
Ratios (to average net assets)/Supplemental data**:
Expenses 1.50%##
Net investment income 12.79%##
Portfolio turnover 327%
Average commission rate $0.0268
Net assets at end of period (000 omitted) $ 1,379
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** The investment adviser voluntarily agreed to maintain the expenses of the
Fund at not more than 1.50% of the Fund's average daily net assets. The
investment adviser did not impose its management fee for the period indicated
and paid some of the other expenses. Absent these arrangements, the net
investment income per share and the ratios would have been:
# Per share data for periods is based on average shares outstanding.
## Annualized.
###Not annualized.
Net investment income $0.15
Ratios (to average net assets):
Expenses 4.92%##
Net investment income 9.37%##
<PAGE>
PERIOD ENDED
SCIENCE AND TECHNOLOGY FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income** $ 0.46
Net realized and unrealized loss
on investments (0.37)
Total from investment operations $ 0.09
Net asset value - end of period $10.09
Total return 0.70%###
Ratios (to average net assets)/Supplemental data**:
Expenses 1.50%##
Net investment income 29.42%##
Portfolio turnover 716%
Average commission rate $0.0268
Net assets at end of period (000 omitted) $ 1,531
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** The investment adviser voluntarily agreed to maintain the expenses of the
Fund at not more than 1.50% of the Fund's average daily net assets. The
investment adviser did not impose its management fee for the period indicated
and paid ome of the other expenses. Absent these arrangements, the net
investment income per share and the ratios would have been:
# Per share data for periods is based on average shares outstanding.
## Annualized.
###Not annualized.
Net investment income $0.42
Ratios (to average net assets):
Expenses 4.45%##
Net investment income 26.47%##
PERIOD ENDED
RESEARCH INTERNATIONAL FUND FEBRUARY 28, 1997*
(Unaudited)
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00
Income from investment operations# -
Net investment income** $ --
Net realized and unrealized loss
on investments (0.15)
Total from investment operations $(0.15)
Net asset value - end of period $ 9.85
Total return (1.50)%###
Ratios (to average net assets)/Supplemental data**:
Expenses 1.75%##
Net investment income 0.17%##
Portfolio turnover 176%
Average commission rate $ 0.0193
Net assets at end of period (000 omitted) $ 577
- --------------------------
* For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
** The investment adviser voluntarily agreed to maintain the expenses of the
Fund at not more than 1.75% of the Fund's average daily net assets. The
investment adviser did not impose its management
<PAGE>
fee for the period indicated and paid some of the other expenses. Absent
these arrangements, the net investment income per share and the ratios would
have been:
# Per share data for periods is based on average shares outstanding.
## Annualized.
###Not annualized.
Net investment loss $(0.05)
Ratios (to average net assets):
Expenses## 4.77%##
Net investment loss (3.10)%##
ELIGIBLE PURCHASERS
Class I shares are available for purchase only by the following purchasers
("Eligible Purchasers"):
(i) certain retirement plans established for the benefit of employees of
Massachusetts Financial Services Company ("MFS"), the Fund's investment
adviser, and employees of MFS' affiliates; and
(ii) any fund distributed by MFS Fund Distributors, Inc. ("MFD"), the Fund's
distributor, if the fund seeks to achieve its investment objective by
investing primarily in shares of the Fund and other funds distributed by
MFD.
In no event will the Fund, MFS, MFD or any of their affiliates pay any
sales commissions or compensation to any third party in connection with the sale
of Class I shares; the payment of any such sales commission or compensation
would, under the Fund's policies, disqualify the purchaser as an eligible
investor of Class I shares.
SHARE CLASSES OFFERED BY THE FUNDS
While each Fund has four classes of shares (Class A, Class B, Class C
and Class I shares), Class A and Class I shares are the only classes presently
available for sale. Class I shares are available for purchase only by Eligible
Purchasers, as defined above, and are described in this Supplement. Class A
shares, Class B shares and Class C shares are described in the Funds'
Prospectus. Class A shares are available for purchase by certain retirement
plans established for the benefit of employees of MFS and by such employees and
certain of their family members who are residents of The Commonwealth of
Massachusetts, and members of the governing boards of the various funds
sponsored by MFS.
Class A shares are offered at net asset value plus an initial sales
charge up to a maximum of 4.75% of the offering price (or a contingent deferred
sales charge (a "CDSC") upon redemption of 1.00% during the first year in the
case of purchases of $1 million or more and certain purchases by retirement
plans), and are subject to an annual distribution fee and service fee up to a
maximum of 0.50% per annum. Class B shares are offered at net asset value
without an initial sales charge but are subject to a CDSC upon redemption
(declining from 4.00% during the first year to 0% after six years) and an annual
distribution fee and service fee up to a maximum of 1.00% per annum; Class B
shares convert to Class A shares approximately eight years after purchase. Class
C shares are offered at net asset value without an initial sales charge but are
subject to a CDSC upon redemption of 1.00% during the first year and an annual
distribution fee and service fee up to a maximum of 1.00% per annum. Class I
shares are offered at net asset value without an initial sales charge or CDSC
and are not subject to a distribution or service fee. Class C and Class I shares
do not convert to any other class of shares of the Funds.
OTHER INFORMATION
Eligible Purchasers may purchase Class I shares only directly through
MFD. Eligible Purchasers may exchange Class I shares of a Fund for Class I
shares of any other MFS Fund available for purchase by such Eligible Purchasers
at their net asset value (if available for sale), and may exchange Class I
shares of a Fund for shares of the MFS Money Market Fund (if available for
sale), and may redeem Class I shares of a Fund at net asset value. Distributions
paid by a Fund with respect to Class I shares generally will be greater than
<PAGE>
those paid with respect to Class A shares, Class B shares and Class C shares
because expenses attributable to Class A shares, Class B shares and Class C
shares generally will be higher.
Subject to termination or revision at the sole discretion of MFS, MFS
has agreed to bear each Fund's expenses such that each Fund's "Other Expenses"
which are defined to include all Fund expenses except for management fees,
taxes, extraordinary expenses, brokerage and termination costs, do not exceed
with respect to each Fund, other than the Research International Fund, 1.50% per
annum, and with respect to Research International Fund, 1.75% per annum, of each
of the Funds' average daily net assets (the "Maximum Percentage") with respect
to Class I shares. The obligation of MFS to bear these expenses terminates on
the last day of the Fund's fiscal year in which the Fund's "Other Expenses" are
less than or equal to the Maximum Percentage. The payments made by MFS on behalf
of each Fund under this arrangement are subject to reimbursement by each Fund to
MFS, which will be accomplished by the payment of an expense reimbursement fee
by each Fund to MFS computed and paid monthly at a percentage of its average
daily net assets for each Fund's current fiscal year, with a limitation that
immediately after such payment each Fund's "Other Expenses" will not exceed the
Maximum Percentage. This expense reimbursement by each Fund to MFS terminates on
the earlier of the date on which payments made by a Fund equal the prior payment
of such reimbursable expenses by MFS or August 31, 2006.
The date of this Supplement is July 1, 1997
<PAGE>
The Statement of Additional Information dated January 1, 1997 for MFS Equity
Income Fund, MFS Core Growth Fund, MFS Strategic Growth Fund (formerly MFS
Aggressive Growth Fund), MFS Special Opportunities Fund, MFS Convertible
Securities Fund, MFS Blue Chip Fund, MFS New Discovery Fund, MFS Science and
Technology Fund and MFS Research International Fund (the "Funds") filed by the
Registrant pursuant to Rule 497 under the Securities Act of 1933, as amended,
with the Securities and Exchange Commission via EDGAR on December 30, 1996, is
incorporated by reference in this Post-Effective Amendment No. 28.
<PAGE>
<PAGE>
[LOGO] MFS(SM)
INVESTMENT MANAGEMENT
SEMIANNUAL REPORT
FEBRUARY 28, 1997
- --------------------------------------------------------------------------------
MFS(R) CORE GROWTH FUND
MFS(R) EQUITY INCOME FUND
MFS(R) SPECIAL OPPORTUNITIES FUND
MFS(R) BLUE CHIP FUND
MFS(R) CONVERTIBLE SECURITIES FUND
MFS(R) NEW DISCOVERY FUND
MFS(R) RESEARCH INTERNATIONAL FUND
MFS(R) SCIENCE AND TECHNOLOGY FUND
<PAGE>
<TABLE>
<CAPTION>
MFS(R) INCUBATOR FUNDS
MFS(R) CORE GROWTH FUND MFS(R) CONVERTIBLE SECURITIES FUND
MFS(R) EQUITY INCOME FUND MFS(R) NEW DISCOVERY FUND
MFS(R) SPECIAL OPPORTUNITIES FUND MFS(R) RESEARCH INTERNATIONAL FUND
MFS(R) BLUE CHIP FUND MFS(R) SCIENCE AND TECHNOLOGY FUND
<S> <C>
TRUSTEES INVESTMENT ADVISER
A. Keith Brodkin* - Chairman and President Massachusetts Financial Services Company
500 Boylston Street
Richard B. Bailey* - Private Investor; Boston, MA 02116-3741
Former Chairman and Director (until 1991),
Massachusetts Financial Services Company; Director, Cambridge DISTRIBUTOR
Bancorp; Director, Cambridge Trust Company MFS Fund Distributors, Inc.
500 Boylston Street
Marshall N. Cohan - Private Investor Boston, MA 02116-3741
Lawrence H. Cohn, M.D. - Chief of Cardiac Surgery, TREASURER
Brigham and Women's Hospital; Professor of Surgery, Harvard W. Thomas London*
Medical School
ASSISTANT TREASURER
The Hon. Sir J. David Gibbons, KBE - Chief Executive James O. Yost*
Officer, Edmund Gibbons Ltd.; Chairman, Bank of
N.T. Butterfield & Son Ltd. SECRETARY
Stephen E. Cavan*
Abby M. O'Neill - Private Investor; Director, Rockefeller
Financial Services, Inc. (investment advisers) ASSISTANT SECRETARY
James R. Bordewick, Jr.*
Walter E. Robb, III - President and Treasurer, Benchmark
Advisors, Inc. (corporate financial consultants); President, World Wide Web
Benchmark Consulting Group, Inc. (office services); www.mfs.com
Trustee, Landmark Funds (mutual funds)
INVESTOR INFORMATION
Arnold D. Scott* - Senior Executive Vice President, For MFS stock and bond market outlooks, call toll free:
Director and Secretary, Massachusetts Financial Services 1-800-637-4458 anytime from a touch-tone telephone.
Company
For information on MFS mutual funds, call your financial
Jeffrey L. Shames* - President and Director, Massachusetts adviser or, for an information kit, call toll free:
Financial Services Company 1-800-637-2929 any business day from 9 a.m. to 5 p.m.
Eastern time (or leave a message anytime).
J. Dale Sherratt - President, Insight Resources, Inc.
(acquisition planning specialists) INVESTOR SERVICE
MFS Service Center, Inc.
Ward Smith - Former Chairman (until 1994), NACCO Industries; P.O. Box 2281
Director, Sundstrand Corporation Boston, MA 02107-9906
PORTFOLIO MANAGERS* For general information, call toll free: 1-800-225-2606
Irfan Ali any business day from 8 a.m. to 8 p.m. Eastern time.
John F. Brennan, Jr.
Mitchell D. Dynan For service to speech- or hearing-impaired, call toll free:
Judith Noelle Lamb 1-800-637-6576 any business day from 9 a.m. to 5 p.m.
John D. Laupheimer, Jr. Eastern time. (To use this service, your phone must be
Robert J. Manning equipped with a Telecommunications Device for the Deaf.)
Lisa B. Nurme
Kevin R. Parke For share prices, account balances, and exchanges, call toll
Stephen Pesek free: 1-800-MFS-TALK (1-800-637-8255) anytime from a
Brian E. Stack touch-tone telephone.
CUSTODIAN
State Street Bank and Trust Company
*Affiliated with the Investment Adviser
</TABLE>
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholders:
After more than six years of expansion, the U.S. economy appears to be
experiencing another year of moderate growth in 1997, although a few signs
point to the possibility of a modest rise in inflation during the year. On the
positive side, the pattern of moderate growth and inflation set over the past
few years now seems fairly well entrenched in the economy and, short of a
major international or domestic crisis, appears to have enough momentum to
remain on track for some time. Also, gains in such important sectors as
housing, automobiles, industrial production, and exports indicate a fair
amount of underlying strength in the economy. However, some reason for caution
can be seen in the continuing high levels of consumer debt and rising personal
bankruptcies, as well as in the ongoing tightness in labor markets, which
could add some inflationary pressures to the economy. Given these somewhat
conflicting indicators, we expect real (inflation-adjusted) growth to revolve
around 2% in 1997, which would represent a modest decline from 1996.
We continue to urge U.S. equity investors to lower their expectations for
1997 and to point out that the impressive gains of the past two years are not
sustainable. Just as the slowdown in corporate earnings growth and increases
in interest rates in 1996 raised some near-term concerns, further interest
rate increases and an acceleration of inflation could negatively affect the
stock market in 1997. However, to the extent that some slowdown in earnings
means that the economy is not overheating, this could be beneficial for the
equity market in the long run. Also, we believe many of the technology-driven
productivity gains that U.S. companies have made in recent years will continue
to enhance corporate America's competitiveness and profitability. Therefore,
while we have some near-term concerns, we remain reasonably positive about the
long-term viability of the equity market.
In the bond markets, conflicting signals over the strength of the economy
have created near-term volatility, while comments by Federal Reserve Board
Chairman Alan Greenspan late in 1996 and earlier this year created some
uncertainty about the Federal Reserve's next move. However, we expect the Fed
to maintain its anti-inflationary stance should signs of more rapid economic
growth and, particularly, of higher inflation resurface. While inflationary
forces largely remained in check in 1996, the continued strength in the labor
market means that a pickup in inflation is still possible. At the same time,
the U.S. budget deficit continues to decline and, as a percentage of gross
domestic product, is now less than 2%, which we consider a positive
development for the bond markets. Although interest rates may move higher over
the coming months, we believe that, at current levels, fixed-income markets
remain equitably valued.
We appreciate your support and welcome any questions or comments you may
have.
Respectfully,
/s/ A. Keith Brodkin
A. Keith Brodkin
Chairman and President
March 14, 1997
<PAGE>
PORTFOLIO MANAGERS' OVERVIEWS
MFS CORE GROWTH FUND
For the six months ended February 28, 1997, Class A shares of the Fund
provided a total return of 24.12% and Class I shares returned 24.30%. These
returns, which assume the reinvestment of distributions but exclude the
effects of any sales charges, compare to a 22.50% return for the Standard &
Poor's 500 Composite Index (the S&P 500), a popular, unmanaged index of common
stock performance.
Four general themes best describe the Fund's current holdings, which are
built from the bottom up based on individual stock selection. First, the Fund
seeks companies with high unit sales growth, which supports above-average
revenue growth. The second theme pertains to companies that we believe could
exhibit accelerated earnings growth driven by new product cycles and/or
acquisitions. Third, the Fund seeks companies that are able to control their
own destiny via internal changes such as cost cutting or consolidation. This
encompasses companies with the potential to make higher-than-average levels of
incremental internal investment. Finally, the Fund seeks companies that, in
our opinion, have the potential to benefit from a fundamental mismatch in the
balance between supply and demand.
/s/ John D. Laupheimer, Jr. /s/ Stephen Pesek
----------------------------- ----------------------------
John D. Laupheimer, Jr. Stephen Pesek
Portfolio Manager Portfolio Manager
MFS EQUITY INCOME FUND
For the six months ended February 28, 1997, Class A shares of the Fund
provided a total return of 20.26% and Class I shares returned 20.16%. These
returns, which assume the reinvestment of distributions but exclude the
effects of any sales charges, compare to a 22.50% return for the S&P 500.
The Fund's top holdings were in the financial services, utilities,
industrial goods and services, and energy sectors. Within financial services,
the Fund has increased its weighting in insurance stocks, an industry in which
companies are aggressively reshaping their business portfolios. The Fund has
reduced its exposure to gas pipelines, after a strong performance in 1996.
Currently, the Fund's utility holdings are concentrated in gas distribution
companies, high-quality, low-cost electric utilities, and well-positioned
local and long-distance telephone companies. The Fund has maintained exposure
to the commercial jet building cycle; however, some profits have been taken in
this sector, a strong contributor to performance in 1996. Energy holdings
remain focused in both international and domestic companies, which are seeing
improved returns despite being in lagging businesses, especially refining,
where we believe a slow recovery is underway.
The Fund continues to seek holdings in companies that we anticipate will
provide attractive dividend yields and reasonable valuations, characteristics
that we believe could provide protection against price declines in a volatile
market.
/s/ Lisa B. Nurme
--------------------------------
Lisa B. Nurme
Portfolio Manager
MFS SPECIAL OPPORTUNITIES FUND
For the six months ended February 28, 1997, Class A shares of the Fund
provided a total return of 12.59% and Class I shares returned 12.78%. These
returns, which assume the reinvestment of distributions but exclude the
effects of any sales charges, compare to a 22.50% return for the S&P 500.
The Fund continues to have the majority of its assets in common stocks
because we have found few interesting opportunities in the distressed and
high-yield markets. The Fund's holdings can be separated as follows: one-third
in equities of companies that have emerged from bankruptcy, such as Anacomp;
one-third in leveraged-company equities, such as Maxxam; and one-third in
companies that we feel have significant earnings power and that trade at a
substantial discount to their anticipated long-term growth rates, such as Tyco
International. The Fund has also benefited from being invested in companies
that have been taken over. Two recent examples include Loral and Eljer
Industries. The Fund will continue its value-oriented style of investing and
will patiently wait for the markets to present what we feel are more
interesting opportunities over time.
/s/ John F. Brennan, Jr. /s/ Robert J. Manning
-------------------------------- ----------------------------
John F. Brennan, Jr. Robert J. Manning
Portfolio Manager Portfolio Manager
MFS BLUE CHIP FUND
The Fund commenced operations on January 2, 1997 and, from that date through
February 28, 1997, provided a total return of 4.30%. This return, which
assumes the reinvestment of distributions but excludes the effects of any
sales charges, compares to a 7.08% return for the S&P 500 for the same period.
The investment strategy of the Fund is predicated on the assumption that
the U.S. economy will grow slowly during 1997 and that interest rates will
remain fairly stable. Given the longevity of the current economic recovery and
the high levels of consumer debt, we believe that the economic risks are on
the downside. During the second half of 1997, investors could become
increasingly concerned about slower growth or a recession during 1998. If this
scenario unfolds, then interest rates could move downward. The Fund is
positioned to anticipate this potential change in perception, with the bulk of
its investments in companies that we believe can sustain double-digit earnings
growth in this type of environment. Earnings ultimately drive stock prices,
and investors will bid up prices of companies that can achieve above-average
earnings growth.
The Fund's current industry weightings reflect a fairly defensive posture
that is consistent with this economic scenario. While sector allocations have
been made, the Fund's holdings are diverse and spread across many industries.
For example, the Fund is significantly underweighted in the basic materials,
auto, and housing sectors. Conversely, it is overweighted in consumer staples
and health care. Industrial goods are overweighted but skewed toward aerospace
and defense companies that, we believe, should perform relatively well in a
slow-growth economy. Similarly, the retail weighting is greater than the
market's, but two-thirds of this is in supermarkets and drug stores. The
financial services weighting is close to that of the S&P 500, with an emphasis
on high-quality regional banks and insurance companies. The weightings in the
energy and utilities and communications sectors also approximate those of the
market. While we believe these holdings offer modest price appreciation, they
are viewed as the ballast in the portfolio. Emphasis has also been placed on
companies that have significant recurring revenue streams and participate in
dynamic, high-growth markets. Examples are First Data, IKON, and DST Systems.
For the same reasons, the bulk of the Fund's technology investments are in the
software industry.
/s/ Mitchell D. Dynan
------------------------------
Mitchell D. Dynan
Portfolio Manager
MFS CONVERTIBLE SECURITIES FUND
The Fund commenced operations on January 2, 1997 and from that date through
February 28, 1997, provided a total return of 1.50%. This return, which
assumes the reinvestment of distributions but excludes the effects of any
sales charges, compares to a 2.53% return for the Merrill Lynch All
Convertibles Index, an unmanaged index of 509 convertible securities, and a
2.60% return for the average convertible securities fund for the same period
as tracked by Lipper Analytical Services, an independent firm that monitors
mutual fund performance.
The Fund has taken an extremely defensive posture to preserve capital due
to what we feel are the stock market's current high valuation and its
increased volatility. Convertible securities comprise 88% of the portfolio
versus the required 65% minimum. Increased demand for the convertible asset
class has led to a more expensive convertible securities market, as
illustrated by the aggressive pricing of new issues. In response, the
portfolio is skewed toward convertibles that are technically cheap (i.e.,
those whose price movements correlate well with the upward price movements in
the underlying common stock) and that have above-average yield.
The Fund's overall strategy is to invest in companies that are benefiting
from one or more of the following trends: industry consolidation, market
dominance, or cost containment. Performance was favorably impacted by
overweightings in industrial goods and services companies such as Browning
Ferris and U.S. Filter; consumer staples such as Dole Foods; retailers such as
Saks Fifth Avenue and K-Mart; financial services companies such as Conseco,
NationsBank, and Finova; and technology companies such as Baan and Xilinx.
Performance has been hindered by basic materials companies such as RMI
Titanium and Titanium Metals and, to a lesser extent, by energy companies such
as Enron Oil & Gas and Devon Energy. A value-oriented approach will continue
to be used to evaluate company fundamentals and technical aspects of
convertible securities.
/s/ Judith Noelle Lamb
----------------------------
Judith Noelle Lamb
Portfolio Manager
MFS NEW DISCOVERY FUND
The Fund commenced operations on January 2, 1997 and, from that date through
February 28, 1997, provided a total return of 0.90%. This return, which
assumes the reinvestment of distributions but excludes the effects of any
sales charges, compares to a -0.48% return for the Russell 2000 Total Return
Index, an index comprised of 2,000 of the smallest U.S.-domiciled company
common stocks that are traded on the New York Stock Exchange, the American
Stock Exchange, and NASDAQ.
The Fund maintains significant weightings in technology, health services,
financial services, and lodging -- sectors that we believe will experience
sustainable earnings growth well in excess of that of the overall economy. The
Fund's favorable performance versus the Russell 2000 Index reflects the
exceptional strength shown by its financial services and lodging holdings. The
former, such as Franklin Resources and Reliastar Financial, are experiencing
strong asset and earnings growth, as individuals both in the United States and
abroad are paying increased attention to building retirement assets. The
portfolio has also seen strong gains in the shares of several operators of
high-end hotel chains, such as Renaissance Hotels and Wyndham Hotels. These
companies are experiencing rapid earnings growth, reflecting strong industry
supply/demand fundamentals. Due to the sell-off of technology shares early in
1997, these stocks have hindered the Fund's performance. However, we remain
convinced that the technology sector offers the single best secular growth
opportunity in our economy, and our holdings are concentrated in companies
that we believe are well positioned and attractively valued. As a result, we
expect holdings such as Cadence Design Systems to contribute materially to the
Fund's future performance.
The Fund will continue to seek what we feel are attractively valued,
emerging growth companies that can provide exceptional long-term returns. Of
late, the performance of larger-company shares has significantly outpaced that
of smaller-company stocks. Additionally, growing worries about inflationary
pressures have prompted an ongoing sell-off in many high-quality emerging
growth stocks that we would, heretofore, have considered overpriced. As a result
of these factors, we are encountering a greater number of what we see as
attractive investment opportunities, and we remain optimistic about the Fund's
future prospects.
/s/ Brian E. Stack
------------------------------
Brian E. Stack
Portfolio Manager
MFS RESEARCH INTERNATIONAL FUND
The Fund commenced operations on January 2, 1997 and, from that date through
February 28, 1997, provided a total return of -1.50%. This return, which
assumes the reinvestment of distributions but excludes the effects of any
sales charges, compares to a -1.87% return for the Morgan Stanley Capital
International EAFE (Europe, Australia, Far East) Index, an unmanaged index of
international stocks.
The top five sectors in the Fund are technology (15.8% of assets),
financial services (15.7%), utilities and communications (10.9%), retailing
(10.2%), and industrial goods and services (10.0%).
The three top holdings in the Fund, which uses a bottom-up, fundamental
approach to investing, are in the technology sector with Sony, Canon, and TDK
Corporation. We believe Sony's new digital product launches and strong product
pipeline offer the company significant opportunities, while management's
compensation is directly tied to the company's performance. Also, through
major distributors in Europe and Japan, Sony Pictures' new management team
will soon be able to capitalize on the 3,400 movie titles it has in its motion
picture bank. As a result, we anticipate that operating profits could grow at
an average of over 20% over the next couple of years.
Canon's underlying operating growth should be at 12% in the coming year.
We feel that the company's valuation is currently cheap for a quality growth
company. TDK has strong proprietary technology in a number of high-growth
component markets. We expect these products to continue providing strong
earnings growth over the next couple of years.
Our top holding in the utilities and communications sector is PowerGen, a
British electric utility. There is currently strong industry demand and
availability at PowerGen's plants. As a result, production should be higher
than expected, and market share should be around 20% to 21%. Several of our
top holdings are also in the retail sector. Companies such as ASDA, Kwik-Fit,
and Storehouse all offer what we believe is good earnings potential at
reasonable valuations. Within the financial services sector, several banks and
insurance companies in Hong Kong, Great Britain, France, and Japan have
demonstrated good earnings growth, which, coupled with substantial cost
savings, is yielding excellent results.
/s/ Kevin R. Parke
------------------------------
Kevin R. Parke
Director of Research
The committee of MFS equity research analysts is responsible for the day-to-
day management of the Fund under the general supervision of Mr. Parke.
MFS SCIENCE AND TECHNOLOGY FUND
The Fund commenced operations on January 2, 1997 and, from that date through
February 28, 1997, provided a total return of 0.80%. This return, which
assumes the reinvestment of distributions but excludes the effects of any
sales charges, compares to a 1.47% return over the same period for the NASDAQ-
OTC Index, an unmanaged index of common stocks traded on NASDAQ. The Fund's
performance during this period also compares to a -1.05% return for the
average technology fund as tracked by CDA/Wiesenberger, an independent firm
that reports mutual fund performance.
The Fund's holdings are focused in the computer software, networking,
computer services, and semiconductor sectors. We believe that the long-term
outlook for these sectors is highly favorable due to several key factors, such
as growth in unit shipments of personal computers, increases in computing
power, new products, and expansion of international markets. The Fund seeks
companies that are fast growing, have market share leadership, and have a
defensible strategic position. Top holdings include Computer Associates,
Synopsis, and Intel. All three dominate their respective market segments, are
highly profitable, and have recently introduced new products that could
potentially accelerate growth.
The Fund's performance is significantly impacted by the performance of its
industry sectors. Year to date, the stocks in this area have been extremely
volatile. Fund performance has been negatively affected by market declines in
the software and networking sectors. The Fund has, however, used its cash
position to purchase stocks whose prices have come down due to market
volatility but which, we believe, have substantial prospects for appreciation.
/s/ Irfan Ali
---------------------------------
Irfan Ali
Portfolio Manager
PORTFOLIO MANAGERS' PROFILES
IRFAN ALI joined MFS in 1993 as an industry specialist. A graduate of Harvard
College and the Harvard University Graduate School of Business Administration,
he was named Assistant Vice President in 1996 and Vice President in 1997.
JOHN F. BRENNAN has been a member of the MFS investment staff since 1985. A
graduate of the University of Rhode Island and Stanford University's Graduate
School of Business Administration, he began his career at MFS as an industry
specialist and was promoted to Assistant Vice President - Investments in 1987.
He was named Vice President - Investments in 1988 and Senior Vice President in
1995.
MITCHELL D. DYNAN joined the MFS Research Department in 1986. A graduate of
Tufts University, he was named Assistant Vice President - Investments in 1987
and Vice President - Investments in 1988. Mr. Dynan became Portfolio Manager
of Massachusetts Investors Trust in 1995.
JUDITH NOELLE LAMB is a Vice President of MFS and a member of the portfolio
management team of MFS Total Return Fund. She specializes in convertible
securities. Ms. Lamb joined MFS in 1992 as a research analyst. She is a
graduate of New York University and the New York University Graduate School of
Business.
ROBERT J. MANNING began his career at MFS in 1984 as a research analyst in the
High Yield Bond Department. A graduate of the University of Lowell and Boston
College's Graduate School of Management, he was named Vice President -
Investments in 1988 and Senior Vice President in 1993.
LISA B. NURME joined MFS in 1987 as a research analyst. She was named
Investment Officer in 1990, Assistant Vice President - Investments in 1991,
and Vice President - Investments in 1992. Ms. Nurme is a graduate of the
University of North Carolina.
KEVIN R. PARKE joined the MFS Research Department in 1985 as an industry
specialist. He was named Assistant Vice President - Investments in 1987, Vice
President - Investments and Portfolio Manager of MFS(R) Capital Growth Fund in
1988, Portfolio Manager of Massachusetts Investors Trust in 1991, Senior Vice
President in 1993, and Director of Equity Research in 1995. Mr. Parke is a
graduate of Lehigh University and the Harvard University Graduate School of
Business Administration.
STEPHEN PESEK joined MFS as a research analyst in 1994 and was that year named
Vice President - Investments. He is a graduate of the University of
Pennsylvania and Columbia University.
BRIAN E. STACK joined the MFS Research Department as Vice President -
Investments in 1993. A graduate of Boston College and the Darden School of
Business of the University of Virginia, he has worked as an equity analyst
since 1987. Mr. Stack has served as Portfolio Manager of MFS Institutional
Emerging Equities Fund since January 1996.
INVESTMENT OBJECTIVES AND POLICIES
Currently, each Fund only offers Class A and Class I shares, which are
available for purchase at net asset value only by certain retirement plans
established for the benefit of employees of MFS and its affiliates and certain
of their family members who are also residents of the Commonwealth of
Massachusetts as well as members of the governing boards of the various Funds
sponsored by MFS.
MFS CORE GROWTH FUND
The objective of the Fund is capital appreciation. Under normal market
conditions, the Fund invests at least 65% of its total assets in equity
securities of well-known and established companies that have above-average
growth potential. The Fund may also invest up to 35% of its total assets in
equity securities of companies in the developing stages of their life cycles
that offer the potential for accelerated earnings or revenue growth (emerging
growth companies).
MFS EQUITY INCOME FUND
The primary objective of the Fund is reasonable income. In selecting
investments, the Fund also considers the potential for capital appreciation.
Under normal market conditions, the Fund invests at least 65% of its total
assets in income producing equity securities. The Fund may also invest up to
35% of its total assets in fixed-income securities, including up to 20% in
fixed-income securities rated "BB" or lower by Standard & Poor's Rating Group
or Fitch Investors Service, Inc., or "Ba" or lower by Moody's Investors
Service, Inc.
MFS SPECIAL OPPORTUNITIES FUND
The objective of the Fund is capital appreciation. Under normal market
conditions, the Fund invests substantially all of its assets in equity and
fixed-income securities that represent uncommon value by having the potential
for significant capital appreciation over a period of 12 months or longer.
MFS BLUE CHIP FUND
The objective of the Fund is capital appreciation. The Fund invests, under
normal market conditions, at least 65% of its total assets in equity
securities of well-known, stable and established companies that the Fund's
managers believe have above-average capital appreciation potential, and may
invest up to 35% of its total assets in other securities (including emerging
growth companies) offering an opportunity for capital appreciation.
MFS CONVERTIBLE SECURITIES FUND
The objective of the Fund is high total return through a combination of
current income and capital appreciation. The Fund invests, under normal market
conditions, at least 65% of its total assets in convertible securities, and
may invest up to 35% in nonconvertible corporate and U.S. government fixed-
income securities, equity securities, and money market instruments. The Fund
may engage in short sales.
MFS NEW DISCOVERY FUND
The objective of the Fund is capital appreciation. The Fund invests, under
normal market conditions, at least 65% of its total assets in equity
securities of companies of any size that the Fund's managers believe offer
superior prospects for growth, and emphasizes companies in the developing
stages of their life cycle that offer the potential for accelerated earnings
or revenue growth (emerging growth companies). The Fund may also invest up to
35% of its total assets in other securities offering an opportunity for
capital appreciation. The Fund may engage in short sales.
MFS RESEARCH INTERNATIONAL FUND
The objective of the Fund is capital appreciation. The Fund invests, under
normal market conditions, at least 65% of its total assets in equity
securities of companies whose principal activities are located outside the
United States, and may invest up to 35% of its total assets in other
securities offering an opportunity for capital appreciation.
MFS SCIENCE AND TECHNOLOGY FUND
The objective of the Fund is capital appreciation. The Fund invests, under
normal market conditions, at least 65% of its total assets in equity
securities of companies that the Fund's managers expect to benefit from
scientific and technological advances and improvements, including companies in
the developing stages of their life cycle that offer the potential for
accelerated earnings or revenue growth (emerging growth companies). The Fund
may also invest up to 35% of its total assets in other securities offering an
opportunity for capital appreciation. The Fund may engage in short sales.
PERFORMANCE SUMMARY
Because mutual funds like MFS Core Growth Fund, MFS Equity Income Fund and MFS
Special Opportunities Fund are designed for investors with long-term goals, we
have provided cumulative results as well as the average annual total returns
for Class A and Class I shares for the applicable time periods.
AVERAGE ANNUAL AND CUMULATIVE TOTAL RATES OF RETURN FOR PERIODS ENDED FEBRUARY
28, 1997
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
MFS CORE GROWTH FUND 6 Months 1 Year Life of Fund*
<S> <C> <C> <C>
Cumulative Total Return +24.12% +40.40% +53.03%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +40.40% +44.36%
- -----------------------------------------------------------------------------------------------------------------------------------
SEC Results -- +33.77% +38.41%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +24.30% +40.61% +53.27%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +40.61% +44.55%
- -----------------------------------------------------------------------------------------------------------------------------------
SEC Results -- +33.97% +38.59%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the Fund's operations, January 2,
1996 to February 28, 1997.
<TABLE>
<CAPTION>
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
MFS EQUITY INCOME FUND 6 Months 1 Year Life of Fund*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +20.26% +28.50% +33.12%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +28.50% +28.00%
- -----------------------------------------------------------------------------------------------------------------------------------
SEC Results -- +22.36% +22.73%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
6 Months 1 Year Life of Fund*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +20.16% +28.40% +33.02%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +28.40% +27.92%
- -----------------------------------------------------------------------------------------------------------------------------------
SEC Results -- +22.26% +22.64%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CLASS A INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
MFS SPECIAL OPPORTUNITY FUND 6 Months 1 Year Life of Fund*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +12.59% +22.39% +27.90%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +22.39% +23.66%
- -----------------------------------------------------------------------------------------------------------------------------------
SEC Results -- +16.59% +18.56%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
CLASS I INVESTMENT RESULTS
(net asset value change including reinvested distributions)
<TABLE>
<CAPTION>
6 Months 1 Year Life of Fund*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return +12.78% +28.60% +28.12%
- -----------------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return -- +28.60% +23.84%
- -----------------------------------------------------------------------------------------------------------------------------------
SEC Results -- +16.79% +18.73%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from the commencement of the Fund's investment operations,
January 2, 1996 to February 28, 1997.
All results represent past performance and are not an indication of future
results. Investment return and principal value will fluctuate, and shares,
when redeemed, may be worth more or less than their original cost. Past
performance is no guarantee of future results.
SEC results include the maximum 4.75% sales charge.
Class I share results include the performance and operating expenses (e.g.,
Rule 12b-1 fees) of Class A shares for periods prior to the commencement of
offering of Class I shares. Because operating expenses attributable to Class A
shares are greater than those of Class I shares, Class I share performance
would have been higher had Class I shares been outstanding during the entire
period. The Class A share performance included in the Class I share
performance has been adjusted to reflect the fact that Class I shares have no
initial sales load.
Performance results reflect any applicable expense subsidies and waivers,
without which the results would have been less favorable. Current subsidies
and waivers may be discontinued at any time.
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS CORE GROWTH FUND
Stocks - 80.0%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 73.8%
Aerospace - 3.1%
Allied Signal, Inc. 200 $ 14,450
Goodrich (B.F.) Co. 350 14,219
Thiokol Corp. 200 11,150
United Technologies Corp. 200 15,050
----------
$ 54,869
- ----------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.7%
Compass Bancshares, Inc. 75 $ 3,347
Norwest Corp. 200 9,950
----------
$ 13,297
- ----------------------------------------------------------------------------------------------
Business Machines - 1.4%
HMT Technology Corp.* 500 $ 9,563
Sun Microsystems, Inc.* 500 15,437
----------
$ 25,000
- ----------------------------------------------------------------------------------------------
Business Machines - Peripherals - 0.7%
Seagate Technology 250 $ 11,813
- ----------------------------------------------------------------------------------------------
Business Services - 3.1%
Administaff, Inc.* 100 $ 2,388
Computer Sciences Corp. 250 16,875
CUC International, Inc. 400 9,550
Ikon Office Solutions, Inc. 400 16,500
Loewen Group, Inc. 260 8,385
Nu Skin Asia Pacific, Inc.* 100 2,912
----------
$ 56,610
- ----------------------------------------------------------------------------------------------
Cellular Telephones - 0.3%
Telephone & Data Systems, Inc. 150 $ 6,000
- ----------------------------------------------------------------------------------------------
Chemicals - 2.2%
Air Products & Chemicals, Inc. 150 $ 11,119
Betzdearborn, Inc. 300 19,462
Praxair, Inc. 200 9,725
----------
$ 40,306
- ----------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 1.1%
Electronic Arts, Inc.* 200 $ 6,250
First Data Corp. 200 7,325
Spectrum Holobyte, Inc.* 700 5,775
----------
$ 19,350
- ----------------------------------------------------------------------------------------------
Computer Software - Systems - 5.6%
BMC Software, Inc.* 780 $ 33,394
Cadence Design Systems, Inc.* 350 12,906
Compaq Computer Corp. 200 15,850
Compuware Corp. 300 18,675
Oracle Systems Corp.* 200 7,850
USCS International, Inc.* 300 6,225
Xionics Document Technologies* 400 6,800
----------
$ 101,700
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 6.8%
Colgate-Palmolive Co. 100 $ 10,350
Philip Morris Cos., Inc. 210 28,376
Schweitzer-Mauduit International, Inc. 200 6,825
Tyco International Ltd. 1,275 75,225
United States Rentals, Inc.* 100 1,900
----------
$ 122,676
- ----------------------------------------------------------------------------------------------
Electronics - 3.8%
Altera Corp.* 275 $ 12,478
Analog Devices, Inc.* 100 2,325
Atmel Corp. 425 15,884
Intel Corp. 100 14,188
Kulicke & Soffa Industries, Inc.* 500 13,250
Xilinx, Inc.* 250 11,281
----------
$ 69,406
- ----------------------------------------------------------------------------------------------
Entertainment - 0.6%
ITT Corp.* 200 $ 11,300
- ----------------------------------------------------------------------------------------------
Financial Institutions - 3.0%
Beneficial Corp. 100 $ 6,913
Federal Home Loan Mortgage Corp. 400 11,900
Federal National Mortgage Assn. 350 14,000
Finova Group, Inc. 100 7,637
Franklin Resources, Inc. 100 5,850
Student Loan Corp. 200 8,075
----------
$ 54,375
- ----------------------------------------------------------------------------------------------
Food and Beverage Products - 4.3%
Earthgrains Co. 175 $ 9,581
Hershey Foods Corp. 400 18,250
Hudson Foods, Inc. 600 10,500
PepsiCo, Inc. 500 16,438
Smith's Food & Drug Centers, Inc. 700 23,012
----------
$ 77,781
- ----------------------------------------------------------------------------------------------
Forest and Paper Products - 1.3%
Kimberly-Clark Corp. 75 $ 7,950
Unisource Worldwide, Inc. 737 15,846
----------
$ 23,796
- ----------------------------------------------------------------------------------------------
Insurance - 4.3%
Chubb Corp. 300 $ 17,587
Conseco, Inc. 400 15,700
ITT Hartford Group, Inc. 100 7,500
PennCorp Financial Group, Inc. 400 14,000
Reliastar Financial Corp. 200 12,400
Travelers Group, Inc. 200 10,725
----------
$ 77,912
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 3.1%
Bristol-Myers Squibb Co. 250 $ 32,625
Mentor Corp. 600 14,925
Zoll Medical Corp.* 800 8,600
----------
$ 56,150
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 6.7%
AmeriSource Health Corp.* 200 $ 10,075
Cardinal Health, Inc. 150 9,225
HBO & Co. 225 12,966
HealthSouth Corp.* 150 6,038
Safeguard Health Enterprises, Inc. 450 6,637
St. Jude Medical, Inc. 500 19,750
Tenet Healthcare Corp. 800 21,700
Trigon Healthcare, Inc.* 100 1,788
United Healthcare Corp. 300 14,962
Vivra, Inc.* 600 17,850
----------
$ 120,991
- ----------------------------------------------------------------------------------------------
Oil Services - 1.6%
Baker Hughes, Inc. 200 $ 7,100
Camco International, Inc. 200 7,725
Diamond Offshore Drilling, Inc.* 125 7,375
Input/Output, Inc.* 300 6,413
----------
$ 28,613
- ----------------------------------------------------------------------------------------------
Photographic Products - 1.0%
Eastman Kodak Co. 200 $ 17,925
- ----------------------------------------------------------------------------------------------
Railroads - 0.7%
Burlington Northern Santa Fe Railway Co. 75 $ 6,244
Wisconsin Central Transportation Corp.* 200 7,175
----------
$ 13,419
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 5.0%
Coldwater Creek, Inc.* 100 $ 1,838
HFS, Inc.* 360 24,660
Hilton Hotels Corp. 350 8,794
Host Marriott Corp.* 700 12,600
Prime Hospitality Corp.* 500 8,250
Promus Hotel Corp.* 100 3,537
Renaissance Hotel Group NV* 500 14,812
Servico, Inc.* 350 6,737
Wyndham Hotel Corp.* 350 9,844
----------
$ 91,072
- ----------------------------------------------------------------------------------------------
Stores - 8.7%
American Stores Co. 300 $ 13,425
Ann Taylor Stores Corp.* 600 12,000
CVS Corp. 350 16,187
Hollywood Entertainment Corp.* 500 12,000
Longs Drug Stores Corp. 500 12,688
Office Depot, Inc.* 400 7,600
Rite-Aid Corp. 1,100 46,337
Staples, Inc.* 1,675 36,222
----------
$ 156,459
- ----------------------------------------------------------------------------------------------
Supermarkets - 2.2%
Kroger Co.* 300 $ 15,900
Safeway, Inc.* 500 24,062
----------
$ 39,962
- ----------------------------------------------------------------------------------------------
Telecommunications - 1.6%
Cable Design Technologies Corp. 550 $ 14,575
Lucent Technologies, Inc. 250 13,469
----------
$ 28,044
- ----------------------------------------------------------------------------------------------
Utilities - Gas - 0.5%
National Fuel Gas Co. 200 $ 8,600
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 0.4%
MCI Communications Corp. 225 $ 8,044
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $1,335,470
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 6.2%
Canada - 1.0%
Canadian National Railway Co. (Railroads) 200 $ 7,275
Philip Environmental, Inc. (Business Services) 650 10,644
----------
$ 17,919
- ----------------------------------------------------------------------------------------------
Ireland - 0.8%
Elan Corp. PLC, ADR (Medical and Health Products)* 450 $ 15,581
- ----------------------------------------------------------------------------------------------
Sweden - 0.8%
Astra AB, "A", ADR (Medical and Health Products) 200 $ 9,625
Astra AB, "B", ADR (Pharmaceuticals) 100 4,674
----------
$ 14,299
- ----------------------------------------------------------------------------------------------
Switzerland - 1.9%
Logitech International (Electrical Equipment)* 100 $ 17,023
Novartis AG (Pharmaceuticals) 15 17,151
----------
$ 34,174
- ----------------------------------------------------------------------------------------------
United Kingdom - 1.7%
Danka Business Systems, ADR (Business Services) 250 $ 10,469
Grand Metropolitan (Food and Beverage Products) 1,300 9,644
SmithKline-Beecham PLC, ADR (Medical and Health
Products) 150 11,137
----------
$ 31,250
- ----------------------------------------------------------------------------------------------
Total Foreign Stocks $ 113,223
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $1,377,962) $1,448,693
- ----------------------------------------------------------------------------------------------
Warrant - 0.1%
- ----------------------------------------------------------------------------------------------
Ciba Specialty Chemicals AG* (Identified Cost, $0) 15 $ 950
- ----------------------------------------------------------------------------------------------
<CAPTION>
Short-Term Obligation - 21.0%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank, due 3/03/97, at Amortized Cost $ 380 $ 379,888
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $1,757,850) $1,829,531
Other Assets, Less Liabilities - (1.1)% (19,585)
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $1,809,946
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS EQUITY INCOME FUND
Stocks - 85.3%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
U.S. Stocks - 78.1%
Aerospace - 5.1%
<S> <C> <C>
General Dynamics Corp. 140 $ 9,415
Goodrich (B.F.) Co. 300 12,187
United Technologies Corp. 360 27,090
--------
$ 48,692
- ----------------------------------------------------------------------------------------------
Automotive - 1.7%
Ford Motor Co. 170 $ 5,589
TRW, Inc. 200 10,475
--------
$ 16,064
- ----------------------------------------------------------------------------------------------
Banks and Credit Companies - 7.7%
Bank of Boston Corp. 120 $ 9,045
Chase Manhattan Corp. 90 9,011
First Commerce Corp. 250 10,375
First Hawaiian, Inc. 300 9,975
Fleet/Norstar Financial Group, Inc. 200 12,200
National City Corp. 250 12,625
PNC Bank Corp. 230 9,746
--------
$ 72,977
- ----------------------------------------------------------------------------------------------
Business Machines - 0.1%
Digital Equipment Corp.* 30 $ 983
- ----------------------------------------------------------------------------------------------
Chemicals - 6.3%
Air Products & Chemicals, Inc. 200 $ 14,825
Betzdearborn, Inc. 270 17,516
Dexter Corp. 500 14,750
Ferro Corp. 420 13,230
--------
$ 60,321
- ----------------------------------------------------------------------------------------------
Construction Services - 1.1%
Martin Marietta Materials, Inc. 400 $ 10,550
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 4.5%
American Brands, Inc. 140 $ 7,368
Colgate-Palmolive Co. 80 8,280
Philip Morris Cos., Inc. 130 17,566
Sherwin Williams Co. 180 10,102
--------
$ 43,316
- ----------------------------------------------------------------------------------------------
Electrical Equipment - 2.9%
Cooper Industries, Inc. 220 $ 9,735
General Electric Co. 100 10,288
Hubbell, Inc. 190 8,051
--------
$ 28,074
- ----------------------------------------------------------------------------------------------
Financial Institutions - 1.3%
Union Planters Corp. 280 $ 12,530
- ----------------------------------------------------------------------------------------------
Food and Beverage Products - 4.1%
General Mills, Inc. 100 $ 6,525
Heinz (H.J.) Co. 250 10,406
Hormel Foods Corp. 400 10,500
PepsiCo, Inc. 350 11,506
--------
$ 38,937
- ----------------------------------------------------------------------------------------------
Forest and Paper Products - 1.1%
Unisource Worldwide, Inc. 500 $ 10,750
- ----------------------------------------------------------------------------------------------
Insurance - 4.4%
Allstate Corp. 140 $ 8,873
Chubb Corp. 200 11,725
CIGNA Corp. 70 10,701
Torchmark Corp. 180 10,597
--------
$ 41,896
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 3.0%
Bristol-Myers Squibb Co. 100 $ 13,050
Pharmacia & Upjohn, Inc. 230 8,481
Rhone-Poulenc Rorer, Inc. 100 7,100
--------
$ 28,631
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.9%
United Healthcare Corp. 170 $ 8,479
- ----------------------------------------------------------------------------------------------
Metals and Minerals - 0.8%
Century Aluminum Co. 480 $ 7,920
- ----------------------------------------------------------------------------------------------
Oils - 5.2%
Atlantic Richfield Co. 60 $ 7,500
Exxon Corp. 110 10,986
Mobil Corp. 100 12,275
Texaco, Inc. 100 9,887
USX-Marathon Group 350 9,319
--------
$ 49,967
- ----------------------------------------------------------------------------------------------
Photographic Products - 1.4%
Eastman Kodak Co. 150 $ 13,444
- ----------------------------------------------------------------------------------------------
Pollution Control - 0.7%
WMX Technologies, Inc. 200 $ 6,325
- ----------------------------------------------------------------------------------------------
Printing and Publishing - 0.4%
Gannett Co., Inc. 50 $ 3,988
- ----------------------------------------------------------------------------------------------
Real Estate Investment Trusts - 5.4%
Boykin Lodging Co.* 170 $ 3,740
Brandywine Reality Trust 400 8,250
Golf Trust America, Inc.* 450 10,912
Hospitality Properties Trust 280 9,065
Storage Trust Reality 330 8,869
TriNet Corporate Realty Trust, Inc. 300 10,238
--------
$ 51,074
- ----------------------------------------------------------------------------------------------
Stores - 2.0%
Rite-Aid Corp. 230 $ 9,689
Smith's Food & Drug Centers, Inc. 300 9,863
--------
$ 19,552
- ----------------------------------------------------------------------------------------------
Supermarkets - 1.1%
Kroger Co.* 200 $ 10,600
- ----------------------------------------------------------------------------------------------
Utilities - Electric - 5.3%
Carolina Power & Light Co. 100 $ 3,713
Cinergy Corp. 270 9,315
Dominion Resources, Inc. 250 10,063
FPL Group, Inc. 140 6,370
Pinnacle West Capital Corp. 280 8,750
Public Service Co. of Colorado 100 3,900
Sierra Pacific Resources 280 8,190
--------
$ 50,301
- ----------------------------------------------------------------------------------------------
Utilities - Gas - 6.8%
Brooklyn Union Gas Co. 280 $ 7,980
Energen Corp. 300 9,000
KN Energy, Inc. 230 9,085
National Fuel Gas Co. 250 10,750
Oneok, Inc. 300 8,550
PanEnergy Corp. 180 7,672
UGI Corp. 480 11,940
--------
$ 64,977
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 4.8%
GTE Corp. 280 $ 13,090
MCI Communications Corp. 300 10,725
Pacific Telesis Group 250 10,187
Sprint Corp. 250 11,375
--------
$ 45,377
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $745,725
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 7.2%
Canada - 1.3%
Canadian National Railway Co. (Railroads) 340 $ 12,368
- ----------------------------------------------------------------------------------------------
France - 1.1%
Elf Aquitaine, ADR (Oils) 220 $ 10,560
- ----------------------------------------------------------------------------------------------
Switzerland - 1.2%
Novartis AG (Pharmaceuticals)* 10 $ 11,434
- ----------------------------------------------------------------------------------------------
United Kingdom - 3.6%
British Petroleum PLC, ADR (Oils) 110 $ 14,561
Grand Metropolitan (Food and Beverage Products) 1,300 9,645
SmithKline-Beecham PLC, ADR (Medical and Health
Products) 140 10,395
--------
$ 34,601
- ----------------------------------------------------------------------------------------------
Total Foreign Stocks $ 68,963
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $721,896) $814,688
- ----------------------------------------------------------------------------------------------
Warrant - 0.1%
- ----------------------------------------------------------------------------------------------
Ciba Specialty Chemicals AG* (Identified Cost, $0) 10 $ 633
- ----------------------------------------------------------------------------------------------
<CAPTION>
Convertible Bonds - 1.5%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
North American Vaccine, Inc., 6.5s, 2003## $ 8 $ 8,080
Robbins & Myers, Inc., 6.5s, 2003 5 5,875
- ----------------------------------------------------------------------------------------------
Total Convertible Bonds (Identified Cost, $13,440) $ 13,955
- ----------------------------------------------------------------------------------------------
<CAPTION>
Preferred Stock - 1.1%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Germany - 1.1%
Henkel KGaA (Consumer Goods and Services) (Identified
Cost, $8,995) 200 $ 10,670
- ----------------------------------------------------------------------------------------------
Convertible Preferred Stocks - 9.9%
- ----------------------------------------------------------------------------------------------
Aerospace - 0.8%
Loral Space & Communications Corp., 6s, 2006## 150 $ 7,725
- ----------------------------------------------------------------------------------------------
Financial Institutions - 1.9%
Finova Finance Trust, 5.5s, 2016 160 $ 9,240
Penncorp Financial Group, Inc., $3.50## 160 9,440
--------
$ 18,680
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 1.0%
McKesson Financing Trust, $2.50, 2027## 180 $ 9,518
- ----------------------------------------------------------------------------------------------
Metals and Minerals - 0.9%
Timet Capital Trust, "I", 6.625s, 2026## 170 $ 8,245
- ----------------------------------------------------------------------------------------------
Oils - 1.9%
Tosco Financing Trust, 5.75s## 160 $ 8,540
Unocal Capital Trust Corp., 6.25s, 2026 171 9,597
--------
$ 18,137
- ----------------------------------------------------------------------------------------------
Pollution Control - 1.1%
Browning-Ferris Industries, Inc., ACES, 7.25% 320 $ 10,280
- ----------------------------------------------------------------------------------------------
Utilities - Gas - 2.4%
Enron Corp., 6.25s 400 $ 8,350
Williams Cos., Inc., $3.50## 50 5,131
--------
$ 13,481
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 0.9%
Salomon, Inc., DECS (Cincinnati Bell, Inc.), 6.25s, 2001 140 $ 8,575
- ----------------------------------------------------------------------------------------------
Total Convertible Preferred Stocks (Identified Cost,
$89,424) $ 94,641
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $833,755) $934,587
Other Assets, Less Liabilities - 2.1% 20,395
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $954,982
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
##SEC Rule 144A Restriction.
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS SPECIAL OPPORTUNITIES FUND
Stocks - 86.4%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 78.1%
Advertising - 0.3%
Outdoor Systems, Inc.* 400 $ 12,000
- ----------------------------------------------------------------------------------------------
Aerospace - 3.4%
Allied Signal, Inc. 460 $ 33,235
B.E. Aerospace, Inc.* 1,400 33,950
Goodrich (B.F.) Co. 550 22,344
Thiokol Corp. 500 27,875
----------
$ 117,404
- ----------------------------------------------------------------------------------------------
Agricultural Products - 0.5%
AGCO Corp. 600 $ 17,025
- ----------------------------------------------------------------------------------------------
Automotive - 1.6%
Exide Corp. 2,500 $ 49,062
Ford Motor Co. 200 6,575
----------
$ 55,637
- ----------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.6%
Wells Fargo & Co. 66 $ 20,081
- ----------------------------------------------------------------------------------------------
Building - 4.7%
Newport News Shipbuilding, Inc. 900 $ 13,950
Nortek, Inc.* 3,000 72,000
Walter Industries, Inc.* 5,000 75,937
----------
$ 161,887
- ----------------------------------------------------------------------------------------------
Business Machines - 0.5%
Sun Microsystems, Inc.* 600 $ 18,525
- ----------------------------------------------------------------------------------------------
Business Machines - Peripherals - 0.5%
Seagate Technology* 400 $ 18,900
- ----------------------------------------------------------------------------------------------
Business Services - 1.2%
ADT Ltd.* 1,405 $ 30,559
Canon, Inc. 115 12,017
----------
$ 42,576
- ----------------------------------------------------------------------------------------------
Cellular Telephones - 0.7%
Telephone & Data Systems, Inc. 600 $ 24,000
- ----------------------------------------------------------------------------------------------
Chemicals - 3.3%
Betzdearborn, Inc. 127 $ 8,239
Dexter Corp. 600 17,700
Ferro Corp. 400 12,600
NL Industries, Inc. 6,500 73,938
----------
$ 112,477
- ----------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 0.3%
TDK Corp. 130 $ 8,775
- ----------------------------------------------------------------------------------------------
Computer Software - Systems - 1.8%
Cerner Corp.* 900 $ 13,725
Compaq Computer Corp.* 300 23,775
Sybase, Inc.* 1,600 26,200
----------
$ 63,700
- ----------------------------------------------------------------------------------------------
Conglomerates - 2.8%
Insilco Corp.* 1,300 $ 47,450
MAXXAM, Inc.* 1,000 48,125
----------
$ 95,575
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 7.8%
Darling International, Inc.* 2,300 $ 56,063
Philip Morris Cos., Inc. 290 39,186
Silgan Holdings, Inc.* 100 2,550
Thermadyne Industries Holdings Corp.* 2,000 55,750
Tyco International Ltd. 1,300 76,700
Westpoint Stevens, Inc.* 1,100 37,950
----------
$ 268,199
- ----------------------------------------------------------------------------------------------
Containers - 3.6%
Atlantis Plastics, Inc.* 5,000 $ 43,750
Gaylord Container Corp.* 10,000 63,750
Jefferson Smurfit Corp.* 600 8,175
Stone Container Corp. 600 7,800
----------
$ 123,475
- ----------------------------------------------------------------------------------------------
Electronics - 0.8%
Atmel Corp.* 300 $ 11,213
Intel Corp. 80 11,350
Sony Corp. 50 3,600
----------
$ 26,163
- ----------------------------------------------------------------------------------------------
Entertainment - 3.0%
Casino America, Inc.* 1,100 $ 3,369
Chancellor Broadcast Corp., "A"* 400 10,900
Cox Radio, Inc.* 300 5,737
EZ Communications, Inc.* 280 11,830
Harrah's Entertainment, Inc.* 2,100 38,850
Harveys Casino Resorts 200 3,100
ITT Corp.* 140 7,910
LIN Television Corp.* 350 14,525
Showboat, Inc. 400 8,200
----------
$ 104,421
- ----------------------------------------------------------------------------------------------
Financial Institutions - 1.3%
Federal Home Loan Mortgage Corp. 760 $ 22,610
Union Planters Corp. 460 20,585
----------
$ 43,195
- ----------------------------------------------------------------------------------------------
Food and Beverage Products - 1.8%
Dr. Pepper Bottling Holdings, Inc. 2,400 $ 37,350
Smith's Food & Drug Centers, Inc. 720 23,670
----------
$ 61,020
- ----------------------------------------------------------------------------------------------
Forest and Paper Products - 0.3%
Kimberly-Clark Corp. 45 $ 4,770
Unisource Worldwide, Inc. 280 6,020
----------
$ 10,790
- ----------------------------------------------------------------------------------------------
Insurance - 3.8%
Chubb Corp. 400 $ 23,450
Integon Corp. 2,800 36,050
ITT Hartford Group, Inc. 150 11,250
PennCorp Financial Group, Inc. 800 28,000
PMI Group, Inc. 170 9,307
Reliastar Financial Corp. 150 9,300
Safeco Corp. 300 12,525
----------
$ 129,882
- ----------------------------------------------------------------------------------------------
Machinery - 0.7%
Greenfield Industries, Inc. 400 $ 8,750
Stewart & Stevenson Services, Inc. 600 15,675
----------
$ 24,425
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 1.4%
Pharmacia & Upjohn, Inc. 580 $ 21,387
Rhone-Poulenc Rorer, Inc. 300 21,300
Uromed Corp.* 900 7,313
----------
$ 50,000
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 2.2%
AmeriSource Health Corp.* 200 $ 10,075
Cardinal Health, Inc. 300 18,450
Pacificare Health Systems, Inc.* 100 8,375
Quorum Health Group, Inc.* 100 3,137
St. Jude Medical, Inc.* 900 35,550
Trigon Healthcare, Inc.* 100 1,788
----------
$ 77,375
- ----------------------------------------------------------------------------------------------
Metals and Minerals - 1.6%
Commonwealth Aluminum Corp. 3,000 $ 54,000
- ----------------------------------------------------------------------------------------------
Oil Services - 0.1%
Tidewater, Inc. 100 $ 4,300
- ----------------------------------------------------------------------------------------------
Oils - 0.4%
Texaco, Inc. 140 $ 13,843
- ----------------------------------------------------------------------------------------------
Photographic Products - 1.5%
Anacomp, Inc.* 3,725 $ 43,769
Eastman Kodak Co. 70 6,274
----------
$ 50,043
- ----------------------------------------------------------------------------------------------
Railroads - 1.4%
Burlington Northern Santa Fe Railway Co. 300 $ 24,975
Wisconsin Central Transportation Corp.* 680 24,395
----------
$ 49,370
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 6.4%
Apple South, Inc. 500 $ 6,750
Applebee's International, Inc. 100 2,525
Hilton Hotels Corp. 1,580 39,697
Host Marriott Corp.* 1,210 21,780
La Quinta Inns, Inc. 600 11,850
Prime Hospitality Corp.* 1,700 28,050
Promus Hotel Corp.* 2,400 84,900
Servico* 1,400 26,950
----------
$ 222,502
- ----------------------------------------------------------------------------------------------
Special Products and Services - 1.5%
IMO Industries, Inc.* 17,000 $ 53,125
- ----------------------------------------------------------------------------------------------
Stores - 4.5%
Ann Taylor Stores Corp.* 300 $ 6,000
Carson Pirie Scott & Co.* 1,800 49,050
Gantos, Inc.* 15,000 32,812
Gymboree Corp.* 500 12,313
Rite-Aid Corp. 850 35,806
Trans World Entertainment Corp.* 1,800 18,900
----------
$ 154,881
- ----------------------------------------------------------------------------------------------
Supermarkets - 2.7%
Ingles Markets, Inc. 3,900 $ 58,500
Vons Cos., Inc.* 500 34,062
----------
$ 92,562
- ----------------------------------------------------------------------------------------------
Telecommunications - 6.2%
Cabletron Systems, Inc.* 500 $ 15,000
Cellular Communications International* 2,600 73,450
Echostar Communications Corp.* 1,500 34,125
Granite Broadcasting Corp.* 3,800 36,575
HSN, Inc.* 1,775 45,706
Lucent Technologies, Inc. 200 10,775
----------
$ 215,631
- ----------------------------------------------------------------------------------------------
Utilities - Electric - 1.4%
El Paso Electric Co.* 6,800 $ 47,600
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 1.5%
MCI Communications Corp. 1,460 $ 52,195
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $2,697,559
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 8.3%
Canada - 1.4%
Gulf Canada Resources Ltd. (Oil Services)* 7,000 $ 49,000
- ----------------------------------------------------------------------------------------------
Hong Kong - 0.8%
Liu Chong Hing Bank (Banks and Credit Companies) 1,000 $ 1,899
Semi-Tech (Global) Ltd. (Electronics)* 21,000 24,409
----------
$ 26,308
- ----------------------------------------------------------------------------------------------
Japan - 0.2%
Sony Corp. (Electronics) 100 $ 7,221
- ----------------------------------------------------------------------------------------------
New Zealand - 1.0%
Tranz Rail Holdings Ltd., ADR (Railroads)* 2,000 $ 35,500
- ----------------------------------------------------------------------------------------------
Portugal - 0.3%
Banco Totta E Acores (Financial Institutions) 800 $ 11,903
- ----------------------------------------------------------------------------------------------
South Korea - 0.3%
Korea Mobile Telecommunications, ADR
(Telecommunications) 900 $ 11,138
- ----------------------------------------------------------------------------------------------
Switzerland - 0.8%
Novartis AG (Pharmaceuticals)* 25 $ 28,586
- ----------------------------------------------------------------------------------------------
United Kingdom - 3.5%
ASDA Group PLC (Retail) 11,000 $ 20,032
British Petroleum PLC, ADR (Oils) 100 13,238
Central European Media Enterprises Ltd.
(Entertainment)* 600 20,250
Central Transport Rental Group PLC, ADR (Special
Products and Services)* 11,188 4,195
Comcast UK Cable Partners Ltd. (Telecommunications)* 500 5,875
News Corp. Ltd., ADR (Entertainment) 2,900 51,837
Storehouse PLC (Retail) 2,200 9,829
----------
$ 125,256
- ----------------------------------------------------------------------------------------------
Total Foreign Stocks $ 294,912
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $2,881,788) $2,992,471
- ----------------------------------------------------------------------------------------------
Warrant
- ----------------------------------------------------------------------------------------------
Ciba Specialty Chemicals AG (Chemicals)* (Identified Cost, $0) 21 $ 1,329
- ----------------------------------------------------------------------------------------------
<CAPTION>
Bonds - 2.3%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Entertainment - 0.4%
Marvel Holdings, Inc., 0s, 1998** $ 80 $ 13,601
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.1%
Unilab Corp., 11s, 2006 $ 5 $ 3,550
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 1.7%
Harrah's Jazz Co., 14.25s, 2001** $ 75 $ 35,250
Santa Fe Hotel, Inc., 11s, 2000 35 24,500
----------
$ 59,750
- ----------------------------------------------------------------------------------------------
Telecommunications - 0.1%
Mobilemedia Communications, Inc., 9.375s, 2007 $ 10 $ 1,950
- ----------------------------------------------------------------------------------------------
Total Bonds (Identified Cost, $105,299) $ 78,851
- ----------------------------------------------------------------------------------------------
<CAPTION>
Preferred Stocks - 1.5%
- ----------------------------------------------------------------------------------------------
Shares
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Harvard Industries, Inc. (Automotive) 1,100 $ 4,675
Renaissance Cosmetics, Inc. (Consumer Goods and Services)##* 1 87
Renaissance Cosmetics, Inc. (Consumer Goods and Services)+* 20 20,000
Supermarkets General Holdings Corp. (Supermarkets)* 1,100 27,500
- ----------------------------------------------------------------------------------------------
Total Preferred Stocks (Identified Cost, $58,000) $ 52,262
- ----------------------------------------------------------------------------------------------
Equity Option - 1.2%
- ----------------------------------------------------------------------------------------------
Standard & Poor Index 500 Put (Identified Cost, $44,118) 6 $ 40,500
- ----------------------------------------------------------------------------------------------
<CAPTION>
Short-Term Obligation - 8.1%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank, due 3/03/97, at Amortized Cost $ 280 $ 279,918
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $3,369,123) $3,445,331
- ----------------------------------------------------------------------------------------------
<CAPTION>
Short Sells - (2.0)%
- ----------------------------------------------------------------------------------------------
Shares
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Jayhawk Acceptance Corp.* (2,700) $ (6,412)
Olympic Financial Ltd.* (4,800) (52,800)
Station Casinos, Inc. (1,100) (10,313)
- ----------------------------------------------------------------------------------------------
Total Short Sells (Identified Cost, $(66,341)) $ (69,525)
- ----------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 2.5% $ 78,973
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $3,454,779
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
**Non-income producing security in default.
+Restricted security.
##SEC Rule 144A Restriction.
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS BLUE CHIP FUND
Stocks - 99.6%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 97.3%
Aerospace - 6.3%
General Dynamics Corp. 100 $ 6,725
Goodrich (B.F.) Co. 200 8,125
Lockheed Martin Corp. 120 10,620
McDonnell-Douglas Corp. 130 8,255
United Technologies Corp. 80 6,020
--------
$ 39,745
- ----------------------------------------------------------------------------------------------
Apparel and Textiles - 1.0%
Nike, Inc., "B" 90 $ 6,469
- ----------------------------------------------------------------------------------------------
Banks and Credit Companies - 4.8%
Chase Manhattan Corp. 60 $ 6,007
Corestates Financial Corp. 110 5,789
First Bank Systems, Inc. 80 6,280
National City Corp. 120 6,060
Norwest Corp. 120 5,970
--------
$ 30,106
- ----------------------------------------------------------------------------------------------
Business Machines - 2.6%
International Business Machines Corp. 70 $ 10,062
Sun Microsystems, Inc.* 210 6,484
--------
$ 16,546
- ----------------------------------------------------------------------------------------------
Business Services - 2.4%
DST Systems, Inc.* 280 $ 9,205
Ikon Office Solutions, Inc. 140 5,775
--------
$ 14,980
- ----------------------------------------------------------------------------------------------
Cellular Telephones - 1.0%
AirTouch Communications, Inc.* 220 $ 5,995
- ----------------------------------------------------------------------------------------------
Chemicals - 3.4%
Air Products & Chemicals, Inc. 100 $ 7,413
du Pont (E.I.) de Nemours & Co., Inc. 70 7,507
Praxair, Inc. 130 6,321
--------
$ 21,241
- ----------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 3.3%
First Data Corp. 250 $ 9,156
Microsoft Corp.* 120 11,700
--------
$ 20,856
- ----------------------------------------------------------------------------------------------
Computer Software - Systems - 3.9%
BMC Software, Inc.* 150 $ 6,422
Computer Associates International, Inc. 210 9,135
Oracle Systems Corp.* 230 9,027
--------
$ 24,584
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 12.4%
Avon Products, Inc. 100 $ 5,825
Colgate-Palmolive Co. 90 9,315
Gillette Co. 100 7,912
Philip Morris Cos., Inc. 100 13,512
Procter & Gamble Co. 70 8,409
Service Corp. International 300 8,700
Sherwin Williams Co. 100 5,613
Tupperware Corp. 100 4,475
Tyco International Ltd. 150 8,850
UST, Inc. 160 4,940
--------
$ 77,551
- ----------------------------------------------------------------------------------------------
Electrical Equipment - 3.0%
General Electric Co. 130 $ 13,374
Honeywell, Inc. 80 5,690
--------
$ 19,064
- ----------------------------------------------------------------------------------------------
Electronics - 1.7%
Intel Corp. 75 $ 10,641
- ----------------------------------------------------------------------------------------------
Financial Institutions - 3.1%
Beneficial Corp. 90 $ 6,221
Federal Home Loan Mortgage Corp. 200 5,950
State Street Boston Corp. 90 7,234
--------
$ 19,405
- ----------------------------------------------------------------------------------------------
Food and Beverage Products - 4.6%
CPC International, Inc. 80 $ 6,730
Hershey Foods Corp. 230 10,494
McCormick & Co., Inc. 230 5,434
PepsiCo, Inc. 190 6,246
--------
$ 28,904
- ----------------------------------------------------------------------------------------------
Forest and Paper Products - 1.0%
Kimberly-Clark Corp. 60 $ 6,360
- ----------------------------------------------------------------------------------------------
Insurance - 7.0%
Allstate Corp. 140 $ 8,872
CIGNA Corp. 40 6,115
ITT Hartford Group, Inc. 120 9,000
MBIA, Inc. 90 8,786
Progressive Corp. - Ohio 80 5,290
Transamerica Corp. 70 6,134
--------
$ 44,197
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 11.0%
American Home Products Corp. 120 $ 7,680
Bristol-Myers Squibb Co. 120 15,660
Johnson & Johnson 220 12,678
Lilly (Eli) & Co. 80 6,990
Merck & Co., Inc. 100 9,200
Pfizer, Inc. 130 11,911
Rhone-Poulenc Rorer, Inc. 70 4,970
--------
$ 69,089
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 2.3%
Cardinal Health, Inc. 100 $ 6,150
United Healthcare Corp. 160 7,980
--------
$ 14,130
- ----------------------------------------------------------------------------------------------
Oil Services - 0.8%
Schlumberger Ltd. 50 $ 5,031
- ----------------------------------------------------------------------------------------------
Oils - 6.4%
Chevron Corp. 50 $ 3,225
Exxon Corp. 110 10,986
Mobil Corp. 70 8,592
Phillips Petroleum Co. 140 5,793
Texaco, Inc. 60 5,932
Union Pacific Resources Group, Inc. 220 5,363
--------
$ 39,891
- ----------------------------------------------------------------------------------------------
Railroads - 1.3%
Burlington Northern Santa Fe Railway Co. 100 $ 8,325
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 1.0%
HFS, Inc.* 90 $ 6,165
- ----------------------------------------------------------------------------------------------
Stores - 2.6%
Rite-Aid Corp. 240 $ 10,110
Staples, Inc.* 300 6,488
--------
$ 16,598
- ----------------------------------------------------------------------------------------------
Supermarkets - 2.5%
Kroger Co.* 120 $ 6,360
Safeway, Inc.* 200 9,625
--------
$ 15,985
- ----------------------------------------------------------------------------------------------
Utilities - Electric - 4.2%
CMS Energy Corp. 160 $ 5,240
GPU, Inc. 160 5,600
Illinova Corp. 200 5,000
Pinnacle West Capital Corp. 170 5,313
Public Service Co. of New Mexico* 300 5,512
--------
$ 26,665
- ----------------------------------------------------------------------------------------------
Utilities - Gas - 1.7%
Pacific Enterprises 180 $ 5,490
PanEnergy Corp. 120 5,115
--------
$ 10,605
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 2.0%
GTE Corp. 130 $ 6,078
SBC Communications, Inc. 110 6,325
--------
$ 12,403
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $611,531
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 2.3%
Sweden - 0.9%
Astra AB, Free Shares, "B" ADR (Pharmaceuticals) 120 $ 5,609
- ----------------------------------------------------------------------------------------------
United Kingdom - 1.4%
British Petroleum PLC, ADR (Oils) 65 $ 8,604
- ----------------------------------------------------------------------------------------------
Total Foreign Stocks $ 14,213
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $602,664) $625,744
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $602,664) $625,744
Other Assets, Less Liabilities - 0.4% 2,371
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $628,115
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS CONVERTIBLE SECURITIES FUND
Stocks - 13.6%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 12.7%
Aerospace - 0.7%
United Technologies Corp. 50 $ 3,763
- ----------------------------------------------------------------------------------------------
Building - 0.3%
Newport News Shipbuilding, Inc. 100 $ 1,550
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 1.1%
Colgate-Palmolive Co. 30 $ 3,105
Gillette Co. 35 2,769
--------
$ 5,874
- ----------------------------------------------------------------------------------------------
Electrical Equipment - 0.4%
General Electric Co. 20 $ 2,058
- ----------------------------------------------------------------------------------------------
Electronics - 0.9%
Intel Corp. 10 $ 1,419
Sony Corp. 50 3,600
--------
$ 5,019
- ----------------------------------------------------------------------------------------------
Financial Institutions - 2.2%
Liberty Property 100 $ 2,375
Merrill Lynch & Co., Inc. 250 9,594
--------
$ 11,969
- ----------------------------------------------------------------------------------------------
Insurance - 0.2%
Providian Corp. 25 $ 1,397
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 1.3%
Baxter International, Inc. 25 $ 1,150
Bristol-Myers Squibb Co. 25 3,262
Pharmacia & Upjohn, Inc. 75 2,766
--------
$ 7,178
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 0.3%
St. Jude Medical, Inc. 50 $ 1,975
- ----------------------------------------------------------------------------------------------
Oil Services - 0.3%
Diamond Offshore Drilling, Inc.* 25 $ 1,475
- ----------------------------------------------------------------------------------------------
Oils - 0.6%
Devon Energy Corp. 100 $ 3,125
- ----------------------------------------------------------------------------------------------
Pollution Control - 0.9%
United States Filter Corp.* 150 $ 5,250
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 1.1%
Hilton Hotels Corp. 100 $ 2,512
Prime Hospitality Corp.* 100 1,650
Wendys International, Inc. 100 2,075
--------
$ 6,237
- ----------------------------------------------------------------------------------------------
Special Products and Services - 0.7%
Stanley Works 100 $ 3,825
- ----------------------------------------------------------------------------------------------
Stores - 0.5%
Home Depot, Inc. 50 $ 2,725
- ----------------------------------------------------------------------------------------------
Telecommunications - 1.2%
Cincinnati Bell, Inc. 25 $ 1,550
Lucent Technologies, Inc. 100 5,387
--------
$ 6,937
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $ 70,357
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 0.9%
Portugal - 0.3%
Banco Totta E Acores (Financial Institutions) 100 $ 1,488
- ----------------------------------------------------------------------------------------------
Switzerland - 0.6%
Novartis AG (Pharmaceuticals)* 3 $ 3,430
- ----------------------------------------------------------------------------------------------
Total Foreign Stocks $ 4,918
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $75,567) $ 75,275
- ----------------------------------------------------------------------------------------------
Warrant
- ----------------------------------------------------------------------------------------------
Ciba Specialty Chemicals AG* (Identified Cost, $0) 3 $ 190
- ----------------------------------------------------------------------------------------------
<CAPTION>
Convertible Bonds - 30.9%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace - 1.2%
Hexcel Corp., 7s, 2003 $ 5 $ 6,931
- ----------------------------------------------------------------------------------------------
Apparel and Textiles - 1.8%
Nine West Group, Inc., 5.5s, 2003## $ 10 $ 10,050
- ----------------------------------------------------------------------------------------------
Building - 1.9%
Continental Homes Holding Corp., 6.875s, 2002 $ 10 $ 10,738
- ----------------------------------------------------------------------------------------------
Business Machines - 0.9%
HMT Technology Corp., 5.75s, 2004*## $ 5 $ 5,138
- ----------------------------------------------------------------------------------------------
Business Services - 1.6%
Protection One Alarm Monitoring, 6.75s, 2003 $ 9 $ 8,606
- ----------------------------------------------------------------------------------------------
Computer Software - Systems - 5.1%
Adaptec, Inc., 4.75s, 2004## $ 8 $ 8,000
Apple Computer, Inc., 6s, 2001## 10 8,475
Baan Co. NV, 4.5s, 2001## 10 11,825
--------
$ 28,300
- ----------------------------------------------------------------------------------------------
Electronics - 2.0%
Xilinx, Inc., 5.25s, 2002## $ 10 $ 10,975
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 1.0%
North American Vaccine, Inc., 6.5s, 2003## $ 5 $ 5,050
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 3.2%
FPA Med Management, Inc., 6.5s, 2001## $ 5 $ 5,537
Healthsource, Inc., 5s, 2003 2 1,960
Vivra, Inc., 5s, 2001 10 10,325
--------
$ 17,822
- ----------------------------------------------------------------------------------------------
Oil Services - 0.9%
Diamond Offshore Drilling, Inc., 3.75s, 2007 $ 5 $ 4,863
- ----------------------------------------------------------------------------------------------
Pollution Control - 4.0%
Sanifill, Inc., 5s, 2006 $ 5 $ 6,994
United States Filter Corp., 6s, 2005 5 9,775
USA Waste Services, Inc., 4s, 2002 5 5,212
--------
$ 21,981
- ----------------------------------------------------------------------------------------------
Real Estate - 0.5%
AC International Finance Ltd., 0.5s, 2002## $ 3 $ 3,034
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 0.9%
Hilton Hotels Corp., 5s, 2006 $ 5 $ 5,094
- ----------------------------------------------------------------------------------------------
Special Products and Services - 1.7%
Corporate Express, Inc., 4.5s, 2000 $ 10 $ 9,300
- ----------------------------------------------------------------------------------------------
Stores - 4.2%
Home Depot, Inc., 3.25s, 2001 $ 5 $ 5,037
Office Depot, Inc., 0s, 2008 5 2,950
Saks Holdings, Inc., 5.5s, 2006 15 15,169
--------
$ 23,156
- ----------------------------------------------------------------------------------------------
Total Convertible Bonds (Identified Cost, $166,571) $171,038
- ----------------------------------------------------------------------------------------------
<CAPTION>
Convertible Preferred Stocks - 54.6%
- ----------------------------------------------------------------------------------------------
Shares
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace - 0.9%
Loral Space & Communications Corp., 6s, 2006## 100 $ 5,150
- ----------------------------------------------------------------------------------------------
Business Services - 1.7%
Ikon Office Solutions, Inc., $5.04, 1998 100 $ 9,350
- ----------------------------------------------------------------------------------------------
Computer Software - Systems - 0.5%
Wang Labs, 6.5s, 2049## 50 $ 2,631
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 1.1%
Corning - Delaware LP, 6s, 2049 100 $ 6,238
- ----------------------------------------------------------------------------------------------
Entertainment - 5.0%
American Radio Systems Corp., 7s, 2049## 325 $ 16,575
Golden Books Financing Trust, 8.75s, 2016## 200 10,150
Royal Caribbean Cruises Ltd., 7.25s, 2049 20 1,097
--------
$ 27,822
- ----------------------------------------------------------------------------------------------
Financial Institutions - 15.7%
Advanta Corp., Depository Shares 50 $ 1,962
Finova Finance Trust, 5.5s, 2016 300 17,325
Greenfield Capital Trust, 6s, 2016 250 10,500
Insignia Financing, "I", 6.5s, 2016## 200 10,050
Jefferson-Pilot Corp., NationsBank (ACES), 2000 100 10,775
Merrill Lynch, STRYPES, 6.5s, 1998 150 10,275
Owens-Corning Capital LLC, 6.5s, 2049## 275 15,400
Tosco Financing Trust, 5.75s## 200 10,675
--------
$ 86,962
- ----------------------------------------------------------------------------------------------
Food and Beverages - 3.6%
Dole Food, TRACES, 7s, 1999 525 $ 20,081
- ----------------------------------------------------------------------------------------------
Forest and Paper Products - 1.7%
International Paper Capital Trust, 5.25s, 2025 200 $ 9,400
- ----------------------------------------------------------------------------------------------
Insurance - 4.5%
Conseco, Inc., 7s, 2000 75 $ 10,462
Frontier Financing Trust, 6.25s, 2026## 100 5,550
SunAmerica, Inc., PERCS 150 6,319
SunAmerica, Inc., $3.10, 1998 25 2,528
--------
$ 24,859
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 1.0%
McKesson Financing Trust, $2.50, 2027## 100 $ 5,288
- ----------------------------------------------------------------------------------------------
Metals and Minerals - 1.8%
Timet Capital Trust, "I", 6.625s, 2026## 200 $ 9,700
- ----------------------------------------------------------------------------------------------
Oils - 0.5%
Atlantic Richfield Co., LYONDELL, 9.01%, 1997 120 $ 2,745
- ----------------------------------------------------------------------------------------------
Pollution Control - 3.5%
Browning-Ferris Industries, Inc., ACES, 7.25% 600 $ 19,275
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 4.0%
Hilton Hotels Corp., 8s, 1999 100 $ 2,375
Host Marriott Financial Trust, 6.75s, 2026## 300 17,325
Wendys Financial, "I", 5s, 2026 50 2,600
--------
$ 22,300
- ----------------------------------------------------------------------------------------------
Steel - 1.9%
Alaska Steel Holding Corp., 7s 200 $ 6,575
USX Corp., 6.75s, 2000 200 3,750
--------
$ 10,325
- ----------------------------------------------------------------------------------------------
Stores - 1.5%
Ann Taylor Finance Trust, $4.25, 8.5s, 2016## 50 $ 2,950
K-Mart Financing, "I", 7.75%, 2016 100 5,475
--------
$ 8,425
- ----------------------------------------------------------------------------------------------
Utilities - Gas - 0.9%
Enron Corp., 6.25s 250 $ 5,219
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 4.8%
Salomon, Inc., DECS (Cincinnati Bell, Inc.), 7.625s, 1999 500 $ 16,000
Salomon, Inc., DECS (Cincinnati Bell, Inc.), 6.25s, 2001 175 10,719
--------
$ 26,719
- ----------------------------------------------------------------------------------------------
Total Convertible Preferred Stocks (Identified Cost, $299,380) $302,489
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $541,518) $548,992
Short Sells - (0.6)%
- ----------------------------------------------------------------------------------------------
Apple Computer* (Proceeds, $(3,468)) (190) $ (3,088)
- ----------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.5% $ 8,282
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $554,186
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
##SEC Rule 144A Restriction.
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS NEW DISCOVERY FUND
Stocks - 92.0%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 91.6%
Advertising - 0.2%
Universal Outdoor Holdings, Inc.* 100 $ 2,700
VDI Media 200 1,400
----------
$ 4,100
- ----------------------------------------------------------------------------------------------
Agricultural Products - 0.5%
AGCO Corp. 300 $ 8,513
- ----------------------------------------------------------------------------------------------
Banks and Credit Companies - 0.3%
TCF Financial Corp. 100 $ 4,538
- ----------------------------------------------------------------------------------------------
Building - 1.1%
Newport News Shipbuilding, Inc. 1,200 $ 18,600
- ----------------------------------------------------------------------------------------------
Business Machines - 4.9%
Affiliated Computer Services, Inc. 4,200 $ 86,625
- ----------------------------------------------------------------------------------------------
Business Services - 12.8%
AccuStaff, Inc.* 800 $ 16,600
Administaff, Inc.* 100 2,388
ADT Ltd.* 1,200 26,100
America Online, Inc.* 100 3,750
Bisys Group, Inc.* 300 9,375
Ceridian Corp.* 150 5,869
Claremont Technology Group, Inc.* 500 10,562
Computer Sciences Corp. 100 6,750
Data Processing Corp.* 1,000 19,625
DST Systems, Inc.* 550 18,081
Fine Host Corp.* 600 15,750
Fiserv, Inc.* 550 18,012
Interim Services, Inc.* 500 18,875
May and Speh, Inc.* 1,000 9,000
Moneygram Payment Systems, Inc.* 800 10,400
PMT Services, Inc.* 899 11,575
Sabre Group Holding, Inc.* 500 14,125
Technology Solutions Co. 200 5,925
Walsh International, Inc.* 300 2,513
----------
$ 225,275
- ----------------------------------------------------------------------------------------------
Chemicals - 1.3%
Betzdearborn, Inc. 350 $ 22,706
- ----------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 1.7%
Apex PC Solutions, Inc.* 1,100 $ 10,175
Spectrum Holobyte, Inc.* 800 6,600
TDK Corp. 200 13,500
----------
$ 30,275
- ----------------------------------------------------------------------------------------------
Computer Software - Systems - 16.6%
Acxiom Corp.* 200 $ 3,050
Adobe Systems, Inc. 400 14,600
American Business Information, Inc.* 500 9,625
BMC Software, Inc.* 200 8,562
Cadence Design Systems, Inc.* 600 22,125
Computer Associates International, Inc. 400 17,400
Compuware Corp. 400 24,900
Control Data Systems, Inc.* 1,050 15,750
Cooper & Chyan Technology, Inc.* 400 12,275
Intelligroup, Inc.* 2,400 30,600
Metromail Corp.* 300 5,213
Premier Research Worldwide Ltd.* 100 2,213
Pure Atria Corp.* 900 17,269
Quickturn Design Systems, Inc.* 500 7,969
Sierra Semi Conductor Corp.* 800 12,800
Simulation Sciences, Inc.* 1,100 14,850
Sterling Software, Inc.* 500 14,312
Synopsys, Inc.* 1,000 35,687
USCS International, Inc.* 900 18,675
Xionics Document Technologies * 250 4,250
----------
$ 292,125
- ----------------------------------------------------------------------------------------------
Construction Services - 0.6%
Martin Marietta Materials, Inc. 400 $ 10,550
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 1.1%
Alternative Resources Corp.* 700 $ 10,762
Meta Group, Inc.* 300 7,125
United States Rentals, Inc.* 100 1,900
----------
$ 19,787
- ----------------------------------------------------------------------------------------------
Electrical Equipment - 0.5%
Belden, Inc. 250 $ 8,906
- ----------------------------------------------------------------------------------------------
Electronics - 6.4%
Actel Corp.* 400 $ 7,800
Analog Devices, Inc.* 1,500 34,875
Atmel Corp. 250 9,344
Burr Brown 250 8,187
CFM Technologies, Inc.* 100 4,000
GaSonics International Corp.* 450 7,538
Kulicke & Soffa Industries, Inc.* 300 7,950
Lattice Semiconductor Corp.* 200 9,550
Microchip Technology, Inc.* 200 7,475
Photronic, Inc.* 200 6,900
Ultratech Stepper, Inc.* 300 7,837
----------
$ 111,456
- ----------------------------------------------------------------------------------------------
Entertainment - 4.1%
Clear Channel Communications, Inc.* 400 $ 19,150
Cox Radio, Inc.* 650 12,431
Emmis Broadcasting Corp.* 250 8,625
EZ Communications, Inc.* 300 12,675
Jacor Communications, Inc., "A"* 400 11,775
Midway Games, Inc.* 500 7,813
----------
$ 72,469
- ----------------------------------------------------------------------------------------------
Financial Institutions - 6.8%
BA Merchants Services, Inc.* 200 $ 3,100
Financial Federal Corp.* 400 7,550
Franklin Resources, Inc. 600 35,100
Kilroy Realty Corp.* 100 2,625
PHH Corp. 1,250 59,844
Quick & Reilly Group, Inc. 300 10,500
----------
$ 118,719
- ----------------------------------------------------------------------------------------------
Food and Beverage Products - 2.7%
Earthgrains Co. 400 $ 21,900
Smith's Food & Drug Centers, Inc. 650 21,369
Suiza Foods Corp.* 200 5,025
----------
$ 48,294
- ----------------------------------------------------------------------------------------------
Insurance - 3.1%
Compdent Corp.* 550 $ 16,569
PennCorp Financial Group, Inc. 200 7,000
Reliastar Financial Corp. 350 21,700
Security Connecticut Corp. 200 9,300
----------
$ 54,569
- ----------------------------------------------------------------------------------------------
Machinery - 1.0%
Greenfield Industries, Inc. 500 $ 10,937
Special Devices, Inc.* 400 7,200
----------
$ 18,137
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 1.0%
Mentor Corp. 300 $ 7,463
Zoll Medical Corp.* 900 9,675
----------
$ 17,138
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 9.0%
Apache Med Systems, Inc.* 1,700 $ 11,475
HCIA, Inc.* 600 20,550
Health Management Associates, Inc. 500 13,250
HealthSource, Inc.* 200 4,175
HealthSouth Corp.* 400 16,100
Horizon/CMS Healthcare Corp.* 1,300 21,287
IDX Systems Corp.* 300 9,450
Lincare Holdings, Inc. 200 8,625
Physician Sales and Service, Inc.* 100 1,525
Quorum Health Group, Inc.* 100 3,138
Safeguard Health Enterprises, Inc. 400 5,900
St. Jude Medical, Inc. 300 11,850
Trigon Healthcare, Inc.* 100 1,788
Vivra, Inc.* 1,000 29,750
----------
$ 158,863
- ----------------------------------------------------------------------------------------------
Metals and Minerals - 0.7%
Titanium Metals Corp.* 150 $ 4,106
Transaction System Architects, Inc. 300 7,800
----------
$ 11,906
- ----------------------------------------------------------------------------------------------
Oil Services - 2.1%
Camco International, Inc. 200 $ 7,725
Cooper Cameron Corp.* 120 7,860
Global Industries, Inc.* 400 7,300
National Oilwell, Inc.* 150 4,612
Weatherford Enterra, Inc.* 300 9,000
----------
$ 36,497
- ----------------------------------------------------------------------------------------------
Pollution Control - 0.6%
USA Waste Services, Inc.* 300 $ 10,800
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 4.9%
Applebee's International, Inc. 100 $ 2,525
Coldwater Creek, Inc.* 500 9,187
Doubletree Corp.* 500 20,875
HFS, Inc.* 400 27,400
Prime Hospitality Corp.* 600 9,900
Promus Hotel Corp.* 100 3,538
Renaissance Hotel Group NV* 400 11,850
----------
$ 85,275
- ----------------------------------------------------------------------------------------------
Stores - 4.1%
Ann Taylor Stores Corp.* 300 $ 6,000
Gymboree Corp. 350 8,619
Hollywood Entertainment Corp.* 900 21,600
Linens N'Things, Inc.* 500 10,750
Micro Warehouse, Inc.* 100 1,437
Petco Animal Supplies, Inc.* 300 8,287
Rite-Aid Corp. 350 14,744
----------
$ 71,437
- ----------------------------------------------------------------------------------------------
Telecommunications - 3.1%
Ascend Communications, Inc.* 750 $ 39,187
Cable Design Technologies Corp. 300 7,950
Glenayre Technologies, Inc.* 500 6,625
----------
$ 53,762
- ----------------------------------------------------------------------------------------------
Utilities - Gas - 0.4%
Energy Ventures, Inc. 150 $ 7,650
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $1,608,972
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 0.4%
United Kingdom - 0.4%
SELECT Software Tools, ADR (Computer Software - Systems)* 500 $ 7,000
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $1,621,305) $1,615,972
- ----------------------------------------------------------------------------------------------
<CAPTION>
Short-Term Obligation - 3.7%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank, due 3/03/97, at Amortized Cost $ 65 $ 64,981
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $1,686,286) $ 1,680,953
Other Assets, Less Liabilities - 4.3% 75,393
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $ 1,756,346
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS RESEARCH INTERNATIONAL FUND
Stocks - 94.6%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 5.7%
Agricultural Products - 0.9%
AGCO Corp. 620 $ 17,592
- ----------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 2.2%
TDK Corp. 640 $ 43,200
- ----------------------------------------------------------------------------------------------
Medical and Health Products - 1.5%
Pharmacia & Upjohn, Inc. 555 $ 20,466
Rhone-Poulenc Rorer, Inc. 119 8,449
----------
$ 28,915
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 1.1%
MCI Communications Corp. 625 $ 22,344
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $ 112,051
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 88.9%
Australia - 1.3%
Q.B.E. Insurance Group Ltd. (Insurance) 5,042 $ 25,269
- ----------------------------------------------------------------------------------------------
Brazil - 3.7%
ABB AB (Aerospace) 281 $ 31,393
Jusco Co. (Real Estate Investment Trusts) 1,000 28,353
Telecomunicacoes Brasileiras SA, ADR
(Telecommunications) 142 13,774
----------
$ 73,520
- ----------------------------------------------------------------------------------------------
Canada - 1.0%
Canadian National Railway Co. (Railroads) 533 $ 19,388
- ----------------------------------------------------------------------------------------------
Chile - 0.7%
Chilectra SA, ADR (Utilities - Electric) 206 $ 13,338
- ----------------------------------------------------------------------------------------------
Finland - 2.0%
Huhtamaki Oy Group (Food Products) 740 $ 34,752
TT Tieto Oy (Computer Software - Systems) 50 4,288
----------
$ 39,040
- ----------------------------------------------------------------------------------------------
France - 6.2%
Assurance Generale de France (Agricultural
Products)## 196 $ 6,904
Elf Aquitaine SA (Oils) 253 24,224
Michelin (C.G.D.E.), "B" (Tire and Rubber) 226 14,167
Rhone-Poulenc SA (Pharmaceuticals)* 733 25,755
TV Francaise (Entertainment) 120 11,131
TOTAL SA (Oils)* 220 17,567
Union des Assurances Federales SA (Insurance) 180 21,599
----------
$ 121,347
- ----------------------------------------------------------------------------------------------
Germany - 2.4%
Adidas AG (Stores) 366 $ 35,038
Hoechst AG (Chemicals) 288 12,223
----------
$ 47,261
- ----------------------------------------------------------------------------------------------
Greece - 1.1%
Hellenic Telecommunication Organization SA
(Telecommunications) 460 $ 10,086
Papastratos Cigarettes SA (Consumer Goods and Services) 620 12,305
----------
$ 22,391
- ----------------------------------------------------------------------------------------------
Hong Kong - 9.5%
Asia Satellite Telecommunications Holdings Ltd.
(Telecommunications)* 9,000 $ 23,712
Dah Sing Financial Group (Banks and Credit
Companies) 3,800 15,901
Giordano International Ltd. (Retail) 8,000 5,683
Great Eagle Holdings Co. (Food and Beverage Products) 7,000 26,262
Hong Kong Electric Holdings Ltd. (Utilities - Electric) 7,000 24,228
Hysan Development Co. (Real Estate) 4,000 13,793
Li & Fung Ltd. (Stores) 36,000 29,291
Liu Chong Hing Bank (Banks and Credit Companies) 4,000 7,594
Peregrine Investment Holdings (Finance) 3,000 5,482
Wharf Holdings Ltd. (Real Estate) 5,000 22,214
Wing Hang Bank Ltd. (Banks and Credit Companies) 2,500 11,365
----------
$ 185,525
- ----------------------------------------------------------------------------------------------
Indonesia - 0.7%
Semen Gresik (Building Materials) 4,500 $ 13,288
- ----------------------------------------------------------------------------------------------
Ireland - 1.1%
Allied Irish Banks (Banks and Credit Companies) 3,026 $ 21,709
- ----------------------------------------------------------------------------------------------
Italy - 3.2%
Gucci Group NV (Apparel and Textiles) 284 $ 18,354
Industrie Natuzzi S.p.A., ADR (Consumer Goods and
Services) 824 16,995
Instituto Nazionale delle Assicurazioni (Insurance) 7,865 10,279
Telecom Italia S.p.A. (Telecommunications) 11,645 17,801
----------
$ 63,429
- ----------------------------------------------------------------------------------------------
Japan - 16.8%
Bank of Tokyo - Mitsubishi (Banks and Credit
Companies) 1,000 $ 16,415
Bridgestone Corp. (Tire and Rubber) 1,000 17,908
Canon, Inc. (Office Equipment) 2,000 41,784
DDI Corp. (Telecommunications) 3 18,082
East Japan Railway Co. (Railroads) 2 8,523
Hirose Electric Co. (Electronics) 100 5,605
Keyence Corp. (Electronics) 100 12,187
Kinki Coca-Cola Bottling Co. (Beverages) 1,000 12,021
Kirin Beverage Corp. (Beverages) 2,000 27,193
Matsushita Electric Industrial Co. (Electrical Equipment) 1,000 15,420
Nippon Telephone & Telegraph Co. (Utilities -
Telecommunications) 2 14,243
Nitto Denko Corp. (Industrials) 2,000 26,695
Omron Corp. (Electronics) 1,000 15,752
Osaka Sanso Kogyo Ltd. (Chemicals) 2,000 5,372
Sony Corp. (Electronics) 700 50,547
Takeda Chemical Industries (Chemicals) 1,000 20,063
Ushio, Inc. (Electronics) 2,000 22,550
----------
$ 330,360
- ----------------------------------------------------------------------------------------------
Malaysia - 0.4%
Petronas Gas Berhad (Gas)## 2,000 $ 7,292
- ----------------------------------------------------------------------------------------------
Netherlands - 3.3%
ASM Lithography Holding NV (Electronics)## 290 $ 19,321
Ahrend Groep NV (Furniture and Home Appliances) 240 13,609
Royal Dutch Petroleum Co. (Oils) 126 21,841
Stork NV (Machinery) 270 11,081
----------
$ 65,852
- ----------------------------------------------------------------------------------------------
Norway - 0.6%
Orkla Asa (Consumer Goods and Services) 149 $ 11,938
- ----------------------------------------------------------------------------------------------
Peru - 1.1%
Telefonica del Peru SA, ADR (Utilities - Telephone) 1,008 $ 22,176
- ----------------------------------------------------------------------------------------------
Philippines - 1.0%
Alsons Cement Corp. (Building Materials)## 39,500 $ 10,213
Ayala Corp. (Real Estate) 8,300 9,468
----------
$ 19,681
- ----------------------------------------------------------------------------------------------
Portugal - 0.8%
Banco Totta E Acores (Financial Institutions) 1,075 $ 15,995
- ----------------------------------------------------------------------------------------------
Singapore - 2.5%
City Developments Ltd. (Real Estate) 2,000 $ 19,789
Hong Leong Finance Ltd. (Finance)+ 3,000 11,579
Mandarin Oriental International Ltd. (Restaurants
and Lodging) 13,000 17,680
----------
$ 49,048
- ----------------------------------------------------------------------------------------------
South Korea - 1.7%
Korea Electric Power Corp., ADR (Utilities - Electric) 598 $ 10,764
Korea Mobile Telecommunications, ADR
(Telecommunications)* 1,781 22,040
----------
$ 32,804
- ----------------------------------------------------------------------------------------------
Spain - 3.4%
Acerinox SA (Iron and Steel) 61 $ 8,484
Cubiertas y Mzov SA (Engineering - Construction) 181 17,818
Repsol SA (Oils) 590 22,450
Telefonica de Espana (Utilities - Telephone) 760 17,510
----------
$ 66,262
- ----------------------------------------------------------------------------------------------
Sweden - 3.3%
Astra AB (Pharmaceuticals) 475 $ 22,770
Nobel Biocare AB (Medical and Health Products) 995 17,754
Sparbanken Sverige AB (Banks and Credit Companies) 1,211 23,865
----------
$ 64,389
- ----------------------------------------------------------------------------------------------
Switzerland - 3.2%
Kuoni Reisen Holdings AG (Transportation) 4 $ 10,526
Logitech International (Electrical Equipment) 81 13,788
Nestle AG (Food and Beverage Products) 9 9,803
Novartis AG (Pharmaceuticals)* 25 28,586
----------
$ 62,703
- ----------------------------------------------------------------------------------------------
United Kingdom - 17.3%
ASDA Group PLC (Retail) 17,701 $ 32,236
British Aerospace PLC (Aerospace) 1,696 35,265
British Petroleum PLC (Oils) 2,012 22,308
Capital Radio PLC (Broadcasting) 971 8,945
Carlton Communications PLC (Broadcasting) 1,200 10,214
Grand Metropolitan (Food and Beverage Products) 2,750 20,402
Inchcape PLC (Automotive) 2,327 10,092
Jarvis Hotels PLC (Restaurants and Lodging)+ 12,322 35,561
Kwik-Fit Holdings PLC (Automotive) 8,744 32,221
Lloyds TSB Group PLC (Banks and Credit Companies) 2,030 16,880
Pace Micro Technology (Electronics) 7,096 10,413
PowerGen PLC (Utilities - Electric) 3,992 40,225
Reuters Holdings PLC, ADR (Printing and Publishing) 140 8,977
Smith (W.H.) Group PLC (Retail) 1,445 10,720
Storehouse PLC (Retail) 7,150 31,943
Wimpey (Geo.) PLC (Construction Services) 5,290 12,162
----------
$ 338,564
- ----------------------------------------------------------------------------------------------
Venezuela - 0.6%
Compania Anonima Nacional Telefonos de Venezuela, ADR
(Telecommunications)* 369 $ 11,716
- ----------------------------------------------------------------------------------------------
Total Foreign Stocks $1,744,285
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $1,898,775) $1,856,336
- ----------------------------------------------------------------------------------------------
Warrant - 0.1%
- ----------------------------------------------------------------------------------------------
Ciba Specialty Chemicals AG* (Identified Cost, $0) 23 $ 1,456
- ----------------------------------------------------------------------------------------------
Preferred Stocks - 2.7%
- ----------------------------------------------------------------------------------------------
Germany - 2.7%
Sap AG (Computer Software - Systems) 148 $ 22,853
Henkel KGaA (Consumer Goods and Services) 578 30,836
- ----------------------------------------------------------------------------------------------
Total Preferred Stocks (Identified Cost, $49,659) $ 53,689
- ----------------------------------------------------------------------------------------------
<CAPTION>
Short-Term Obligation - 8.4%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank, due 3/03/97, at Amortized Cost $ 165 $ 164,952
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $2,113,386) $2,076,433
Other Assets, Less Liabilities - (5.8)% (114,610)
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $1,961,823
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
+Restricted Security.
##SEC Rule 144A Restriction.
</TABLE>
See notes to financial statements
<PAGE>
PORTFOLIO OF INVESTMENTS (UNAUDITED) - February 28, 1997
<TABLE>
<CAPTION>
MFS SCIENCE AND TECHNOLOGY FUND
Stocks - 77.2%
- ----------------------------------------------------------------------------------------------
Issuer Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Stocks - 76.8%
Advertising - 0.1%
Universal Outdoor Holdings, Inc.* 100 $ 2,700
- ----------------------------------------------------------------------------------------------
Business Machines - 5.0%
Affiliated Computer Services, Inc.* 3,000 $ 61,875
International Business Machines Corp. 20 2,875
Sun Microsystems, Inc.* 1,320 40,755
----------
$ 105,505
- ----------------------------------------------------------------------------------------------
Business Services - 6.7%
AccuStaff, Inc.* 1,980 $ 41,085
ADT Ltd.* 940 20,445
Claremont Technology Group, Inc.* 920 19,435
CUC International, Inc.* 1,160 27,695
Data Processing Corp.* 500 9,813
Ikon Office Solutions, Inc. 565 23,306
----------
$ 141,779
- ----------------------------------------------------------------------------------------------
Computer Software - Personal Computers - 7.0%
Activision, Inc.* 2,100 $ 28,087
Dell Computer Corp.* 230 16,359
Electronic Arts, Inc.* 710 22,188
First Data Corp. 780 28,567
Microsoft Corp.* 200 19,500
Spectrum Holobyte, Inc.* 3,900 32,175
----------
$ 146,876
- ----------------------------------------------------------------------------------------------
Computer Software - Services - 0.8%
Ingram Micro, Inc.* 750 $ 17,062
- ----------------------------------------------------------------------------------------------
Computer Software - Systems - 27.4%
Adobe Systems, Inc. 970 $ 35,405
BMC Software, Inc.* 1,560 66,787
Cadence Design Systems, Inc.* 1,760 64,900
Compaq Computer Corp.* 530 42,003
Computer Associates International, Inc. 1,905 82,867
Compuware Corp.* 930 57,893
Cooper & Chyan Technology, Inc.* 905 27,772
Oracle Systems Corp.* 1,590 62,408
Peoplesoft, Inc.* 310 12,361
Pure Atria Corp.* 1,900 36,456
Silicon Graphics, Inc.* 330 7,961
Sybase, Inc.* 380 6,223
Synopsys, Inc.* 2,110 75,301
----------
$ 578,337
- ----------------------------------------------------------------------------------------------
Consumer Goods and Services - 0.1%
Silgan Holdings, Inc.* 100 $ 2,550
- ----------------------------------------------------------------------------------------------
Electronics - 4.7%
Atmel Corp.* 440 $ 16,445
Intel Corp. 515 73,066
Xilinx, Inc.* 200 9,025
----------
$ 98,536
- ----------------------------------------------------------------------------------------------
Entertainment - 0.9%
Midway Games, Inc.* 1,160 $ 18,125
- ----------------------------------------------------------------------------------------------
U.S. Stocks - continued
Medical and Health Products - 2.7%
Bristol-Myers Squibb Co. 260 $ 33,930
North American Vaccine, Inc.* 470 10,634
Pharmacia & Upjohn, Inc. 340 12,537
----------
$ 57,101
- ----------------------------------------------------------------------------------------------
Medical and Health Technology and Services - 8.1%
HBO & Co. 955 $ 55,032
Oxford Health Plans, Inc.* 370 20,627
Pacificare Health Systems, Inc.* 250 20,937
Trigon Healthcare, Inc.* 100 1,788
United Healthcare Corp. 1,240 61,845
Vivra, Inc.* 350 10,413
----------
$ 170,642
- ----------------------------------------------------------------------------------------------
Restaurants and Lodging - 0.4%
Renaissance Hotel Group NV* 300 $ 8,888
- ----------------------------------------------------------------------------------------------
Stores - 1.2%
Office Depot, Inc.* 850 $ 16,150
Rite-Aid Corp. 200 8,425
----------
$ 24,575
- ----------------------------------------------------------------------------------------------
Telecommunications - 10.2%
ADC Telecommunications, Inc.* 250 $ 6,750
Ascend Communications, Inc.* 815 42,584
Cabletron Systems, Inc.* 1,760 52,800
Cisco Systems, Inc.* 1,305 72,590
Lucent Technologies, Inc. 760 40,945
----------
$ 215,669
- ----------------------------------------------------------------------------------------------
Utilities - Telephone - 1.5%
MCI Communications Corp. 910 $ 32,532
- ----------------------------------------------------------------------------------------------
Total U.S. Stocks $1,620,877
- ----------------------------------------------------------------------------------------------
Foreign Stocks - 0.4%
United Kingdom - 0.4%
SELECT Software Tools, ADR (Computer Software - Systems)* 600 $ 8,400
- ----------------------------------------------------------------------------------------------
Total Stocks (Identified Cost, $1,666,296) $1,629,277
- ----------------------------------------------------------------------------------------------
Preferred Stock - 0.6%
- ----------------------------------------------------------------------------------------------
Germany - 0.6%
Sap AG (Computer Software - Systems) (Identified Cost, $12,820) 85 $ 13,125
- ----------------------------------------------------------------------------------------------
<CAPTION>
Short-Term Obligation - 24.7%
- ----------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Bank, due 3/03/97, at Amortized Cost $ 520 $ 519,847
- ----------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $2,198,963) $2,162,249
Other Assets, Less Liabilities - (2.5)% (51,833)
- ----------------------------------------------------------------------------------------------
Net Assets - 100.0% $2,110,416
- ----------------------------------------------------------------------------------------------
*Non-income producing security.
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (Unaudited)
- --------------------------------------------------------------------------------
Core Equity Special
Growth Income Opportunities
February 28, 1997 Fund Fund Fund
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost,
$1,757,850,
$833,755 and $3,369,123,
respectively) $1,829,531 $934,587 $3,445,331
Cash 885 6,612 904
Deposits with brokers for securities
sold short -- -- 66,341
Receive for Fund shares sold -- 2,673 --
Receivable for investments sold 44,957 11,311 139,730
Interest and dividends receivable 827 2,520 2,171
Deferred organization expenses 1,670 1,670 1,670
Other assets -- -- 4,362
---------- -------- ----------
Total assets $1,877,870 $959,373 $3,660,509
---------- -------- ----------
Liabilities:
Securities sold short, at value
(proceeds, $0, $0 and $66,341,
respectively) $ -- $ -- $ 69,525
Payable for investments purchased 66,178 2,681 131,912
Payable for Fund shares reacquired -- -- 4,293
Accrued expenses and other liabilities 1,746 1,710 --
---------- -------- ----------
Total liabilities $ 67,924 $ 4,391 $ 205,730
---------- -------- ----------
Net assets $1,809,946 $954,982 $3,454,779
========== ======== ==========
Net assets consist of:
Paid-in capital $1,631,814 $808,171 $3,181,500
Unrealized appreciation on investments
and translation of assets and
liabilities in foreign currencies 71,676 100,832 72,046
Accumulated undistributed net realized
gain on investments and
foreign currency transactions 108,021 44,051 194,802
Accumulated undistributed net
investment income (loss)
(1,565) 1,928 6,431
---------- -------- ----------
Total $1,809,946 $954,982 $3,454,779
========== ======== ==========
Shares of beneficial interest
outstanding:
Class A 58,526 27,624 143,624
Class I 75,010 46,379 154,087
---------- -------- ----------
Total shares of beneficial interest
outstanding 133,536 74,003 297,711
========== ======== ==========
Net assets:
Class A $ 792,523 $356,622 $1,665,613
Class I 1,017,423 598,360 1,789,166
---------- -------- ----------
Total net assets $1,809,946 $954,982 $3,454,779
========== ======== ==========
Class A shares:
Net asset value and redemption price
per share
(net assets / shares of beneficial
interest outstanding) $13.54 $12.91 $11.60
====== ====== ======
Class I shares:
Net asset value and redemption price
per share
(net assets / shares of beneficial
interest outstanding) $13.56 $12.90 $11.61
====== ====== ======
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Assets and Liabilities (Unaudited) - continued
- --------------------------------------------------------------------------------
Blue Convertible New
Chip Securities Discovery
February 28, 1997 Fund Fund Fund
- --------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost,
$602,664, $541,518 and
$1,686,286, respectively) $625,744 $548,992 $1,680,953
Cash 5,991 311 4,923
Deposits with brokers for securities
sold short -- 3,468 --
Receivable for Fund shares sold -- -- --
Receivable for investments sold -- 9,610 111,264
Interest and dividends receivable 1,113 2,417 18,821
Deferred organization expenses -- -- --
Other assets -- -- --
-------- -------- ----------
Total assets $632,848 $564,798 $1,815,961
-------- -------- ----------
Liabilities:
Securities sold short, at value
(proceeds, $0, $3,468 and $0,
respectively) $ -- $ 3,088 $ --
Payable for investments purchased 4,707 -- 59,542
Payable for Fund shares reacquired -- -- --
Accrued expenses and other liabilities 26 7,524 73
-------- -------- ----------
Total liabilities $ 4,733 $ 10,612 $ 59,615
-------- -------- ----------
Net assets $628,115 $554,186 $1,756,346
======== ======== ==========
Net assets consist of:
Paid-in capital $603,679 $546,260 $1,742,008
Unrealized appreciation (depreciation)
on investments and
translation of assets and liabilities
in foreign currencies 23,080 7,854 (5,333)
Accumulated undistributed net realized
gain (loss) on
investments and foreign currency
transactions 476 (1,800) (14,789)
Accumulated undistributed net investment
income 880 1,872 34,460
-------- -------- ----------
Total $628,115 $554,186 $1,756,346
======== ======== ==========
Shares of beneficial interest outstanding:
Class A 43,773 50,353 37,384
Class I 16,448 4,271 136,603
-------- -------- ----------
Total shares of beneficial interest
outstanding 60,221 54,624 173,987
======== ======== ==========
Net assets:
Class A $456,567 $510,877 $ 377,387
Class I 171,548 43,309 1,378,959
-------- -------- ----------
Total net assets $628,115 $554,186 $1,756,346
======== ======== ==========
Class A shares:
Net asset value and redemption price per
share
(net assets / shares of beneficial
interest outstanding) $10.43 $10.15 $10.09
====== ====== ======
Class I shares:
Net asset value and redemption price per
share
(net assets / shares of beneficial
interest outstanding) $10.43 $10.14 $10.09
====== ====== ======
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Assets and Liabilities (Unaudited) - continued
- ----------------------------------------------------------------------------
Research Science and
International Technology
February 28, 1997 Fund Fund
- ----------------------------------------------------------------------------
Assets:
Investments, at value (identified cost,
$2,113,386 and $2,198,963, respectively) $2,076,433 $2,162,249
Cash 4,867 4,653
Receivable for Fund shares sold -- --
Receivable for investments sold 5,455 8,267
Interest and dividends receivable 2,103 28,056
Deferred organization expenses -- --
Other assets -- 250
---------- ----------
Total assets $2,088,858 $2,203,475
---------- ----------
Liabilities:
Payable for investments purchased $ 126,955 $ 92,981
Payable for Fund shares reacquired -- --
Accrued expenses and other liabilities 80 78
---------- ----------
Total liabilities $ 127,035 $ 93,059
---------- ----------
Net assets $1,961,823 $2,110,416
========== ==========
Net assets consist of:
Paid-in capital $1,988,844 $2,101,702
Unrealized depreciation on investments and
translation of assets and
liabilities in foreign currencies (37,172) (36,712)
Accumulated undistributed net realized
gain (loss) on investments and
foreign currency transactions 9,629 (43,675)
Accumulated undistributed net investment
income 522 89,101
---------- ----------
Total $1,961,823 $2,110,416
========== ==========
Shares of beneficial interest outstanding:
Class A 140,561 57,447
Class I 58,601 151,769
---------- ----------
Total shares of beneficial interest
outstanding 199,162 209,216
========== ==========
Net assets:
Class A $1,384,566 $ 579,551
Class I 577,257 1,530,865
---------- ----------
Total net assets $1,961,823 $2,110,416
========== ==========
Class A shares:
Net asset value and redemption price per
share
(net assets / shares of beneficial
interest outstanding) $ 9.85 $10.09
====== ======
Class I shares:
Net asset value and redemption price per
share
(net assets / shares of beneficial
interest outstanding) $ 9.85 $10.09
====== ======
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Operations (Unaudited)
- --------------------------------------------------------------------------------
Core Equity Special
Growth Income Opportunities
Six Months Ended February 28, 1997 Fund Fund Fund
- --------------------------------------------------------------------------------
Net investment income:
Income -
Dividends $ 3,010 $ 10,972 $ 7,162
Interest 3,399 1,228 9,413
-------- --------- ---------
Total investment income $ 6,409 $ 12,200 $ 16,575
-------- --------- ---------
Expenses -
Management fee $ 3,971 $ 2,799 $ 9,558
Shareholder servicing agent fee -
common 693 482 1,546
Distribution and service fee - Class A 1,880 1,410 4,998
Registration fees 6,181 6,335 3,221
Auditing fees 3,001 3,001 3,003
Custodian fee 2,253 2,036 1,833
Printing 607 238 746
Postage 144 76 378
Legal fees 1,574 928 78
Amortization of organization expenses 215 215 215
Miscellaneous -- 74 1,248
--------- -------- --------
Total expenses $ 20,519 $ 17,594 $ 26,824
Fees paid indirectly (188) (150) (534)
Reduction of expenses by investment
adviser (12,370) (11,846) (15,080)
--------- -------- --------
Net expenses $ 7,961 $ 5,598 $ 11,210
--------- -------- --------
Net investment income (loss) $ (1,552) $ 6,602 $ 5,365
--------- -------- --------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 148,054 $ 50,317 $258,732
Foreign currency transactions (14) 12 (32)
--------- -------- --------
Net realized gain on investments
and foreign currency transactions $ 148,040 $ 50,329 $258,700
--------- -------- --------
Change in unrealized appreciation on
investments and translation of assets
and liabilities in foreign currencies $ 53,726 $ 74,863 $ 30,864
--------- -------- --------
Net realized and unrealized gain
on investments and foreign
currency $ 201,766 $125,192 $289,564
--------- -------- --------
Increase in net assets from
operations $ 200,214 $131,794 $294,929
========= ======== ========
See notes to financial statements
<PAGE>
Statements of Operations (Unaudited) - continued
- --------------------------------------------------------------------------------
Blue Convertible New
Chip Securities Discovery
Period Ended February 28, 1997* Fund Fund Fund
- --------------------------------------------------------------------------------
Net investment income:
Income -
Dividends $ 1,509 $ 1,695 $ 33,712
Interest 771 1,462 4,733
-------- -------- ---------
Total investment income $ 2,280 $ 3,157 $ 38,445
-------- -------- ---------
Expenses -
Management fee $ 595 $ 546 $ 1,956
Shareholder servicing agent fee -
common 121 111 344
Distribution and service fee - Class A 334 394 256
Registration fees 6,000 5,000 6,000
Auditing fees 3,000 3,000 3,000
Printing 400 400 400
Custodian fee 200 200 200
Postage 10 10 5
Legal fees 986 986 986
Miscellaneous 104 98 147
-------- -------- ---------
Total expenses $ 11,750 $ 10,745 $ 13,294
Reduction of expenses by investment
adviser (10,350) (9,460) (9,308)
-------- -------- ---------
Net expenses $ 1,400 $ 1,285 $ 3,986
-------- -------- ---------
Net investment income $ 880 $ 1,872 $ 34,460
-------- -------- ---------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 457 $ (1,805) $ (14,789)
Foreign currency transactions 19 5 --
-------- -------- ---------
Net realized gain (loss) on
investments and foreign currency
transactions $ 476 $ (1,800) $ (14,789)
-------- -------- ---------
Change in unrealized appreciation
(depreciation) on investments and
translation of assets and liabilities
in foreign currencies $ 23,080 $ 7,854 $ (5,333)
-------- -------- ---------
Net realized and unrealized gain
(loss) on investments and foreign
currency $ 23,556 $ 6,054 $ (20,122)
-------- -------- ---------
Increase in net assets from
operations $ 24,436 $ 7,926 $ 14,338
======== ======== =========
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Operations (Unaudited) - continued
- --------------------------------------------------------------------------
Research Science and
International Technology
Period Ended February 28, 1997* Fund Fund
- --------------------------------------------------------------------------
Net investment income:
Income -
Dividends $ 2,245 $ 88,647
Interest 2,279 4,961
-------- --------
Total investment income $ 4,524 $ 93,608
-------- --------
Expenses -
Management fee $ 2,614 $ 2,215
Shareholder servicing agent fee - common 346 390
Distribution and service fee - Class A 884 310
Registration fees 5,000 6,000
Auditing fees 3,000 3,000
Printing 400 400
Custodian fee 200 200
Postage 10 14
Legal fees 986 986
Miscellaneous 151 152
-------- --------
Total expenses $ 13,591 $ 13,667
Reduction of expenses by investment
adviser (9,589) (9,160)
-------- --------
Net expenses $ 4,002 $ 4,507
-------- --------
Net investment income $ 522 $ 89,101
-------- --------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) -
Investment transactions $ 9,231 $(43,666)
Foreign currency transactions 398 (9)
-------- --------
Net realized gain (loss) on
investments and foreign currency
transactions $ 9,629 $(43,675)
-------- --------
Change in unrealized depreciation on
investments and translation of assets
and liabilities in foreign currencies $(37,172) $(36,712)
-------- --------
Net realized and unrealized loss on
investments and foreign
currency $(27,543) $(80,387)
-------- --------
Increase (decrease) in net assets
from operations $(27,021) $ 8,714
======== ========
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
Six Months
Ended
February 28,
1997 Period Ended
Core Growth Fund (Unaudited) August 31, 1996*
- -----------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment loss $ (1,552) $ (362)
Net realized gain on investments and
foreign currency
transactions 148,040 66,889
Net unrealized gain on investments and
foreign currency
translation 53,726 17,950
---------- --------
Increase in net assets from operations $ 200,214 $ 84,477
---------- --------
Distributions declared to shareholders -
From net investment income - Class A $ -- $ --
From net realized gain on investments -
Class A (106,559) --
---------- --------
Total distributions declared to
shareholders $ (106,559) $ --
---------- --------
Fund shares (principal) transactions -
Net proceeds from sale of shares $1,217,508 $605,756
Net asset value of shares issued to
shareholders in
reinvestment of distributions 106,552 --
Cost of shares reacquired (293,919) (4,083)
---------- --------
Increase in net assets from Fund share
transactions $1,030,141 $601,673
---------- --------
Total increase in net assets $1,123,796 $686,150
Net assets:
At beginning of period 686,150 --
---------- --------
At end of period (including accumulated
net investment loss
of $1,565 and $13, respectively) $1,809,946 $686,150
========== ========
*For the period from the commencement of investment operations, January 2,
1996 to August 31, 1996.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Changes in Net Assets - continued
- -------------------------------------------------------------------------------
Six Months
Ended
February 28, 1997 Period Ended
Equity Income Fund (Unaudited) August 31, 1996*
- -------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment income $ 6,602 $ 4,878
Net realized gain on investments and
foreign currency
transactions 50,329 7,246
Net unrealized gain on investments and
foreign currency
translation 74,863 25,969
-------- --------
Increase in net assets from operations $131,794 $ 38,093
-------- --------
Distributions declared to shareholders -
From net investment income - Class A $ (9,552) $ --
From net realized gain on investments -
Class A (13,524) --
-------- --------
Total distributions declared to
shareholders $(23,076) $ --
-------- --------
Fund share (principal) transactions -
Net proceeds from sale of shares $347,213 $449,397
Net asset value of shares issued to
shareholders in
reinvestment of distributions 23,074 --
Cost of shares reacquired (1,403) (10,110)
-------- --------
Increase in net assets from Fund share
transactions $368,884 $439,287
-------- --------
Total increase in net assets $477,602 $477,380
Net assets:
At beginning of period 477,380 --
-------- --------
At end of period (including accumulated
undistributed net
investment income of $1,928 and $4,878,
respectively) $954,982 $477,380
======== ========
*For the period from the commencement of investment operations, January 2,
1996 to August 31, 1996.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Changes in Net Assets - continued
- -------------------------------------------------------------------------------
Six Months
Ended
February 28, 1997 Period Ended
Special Opportunities Fund (Unaudited) August 31, 1996*
- -----------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment income $ 5,365 $ 10,016
Net realized gain on investments and
foreign currency
transactions 258,700 168,487
Net unrealized gain on investments and
foreign currency
translation 30,864 41,182
---------- ----------
Increase in net assets from operations $ 294,929 $ 219,685
---------- ----------
Distributions declared to shareholders -
From net investment income - Class A $ (8,950) $ --
From net realized gain on investments -
Class A (232,385) --
---------- ----------
Total distributions declared to
shareholders $ (241,335) $ --
---------- ----------
Fund share (principal) transactions -
Net proceeds from sale of shares $ 949,135 $2,038,964
Net asset value of shares issued to
shareholders in
reinvestment of distributions 241,330 --
Cost of shares reacquired (47,915) (14)
---------- ----------
Increase in net assets from Fund share
transactions $1,142,550 $2,038,950
---------- ----------
Total increase in net assets $1,196,144 $2,258,635
Net assets:
At beginning of period 2,258,635 --
---------- ----------
At end of period (including accumulated
undistributed net
investment income of $6,431 and $10,016,
respectively) $3,454,779 $2,258,635
========== ==========
*For the period from the commencement of investment operations, January 2,
1996 to August 31, 1996.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Statements of Changes in Net Assets (Unaudited) - continued
- --------------------------------------------------------------------------------
Blue Convertible New
Chip Securities Discovery
Period Ended February 28, 1997* Fund Fund Fund
- --------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment income $ 880 $ 1,872 $ 34,460
Net realized gain (loss) on
investments and foreign currency
transactions 476 (1,800) (14,789)
Net unrealized gain (loss) on
investments and foreign currency
translation 23,080 7,854 (5,333)
-------- -------- ----------
Increase in net assets from
operations $ 24,436 $ 7,926 $ 14,338
-------- -------- ----------
Fund share (principal) transactions -
Net proceeds from sale of shares $604,990 $547,061 $1,742,009
Cost of shares reacquired (1,311) (801) (1)
-------- -------- ----------
Increase in net assets from Fund
share transactions $603,679 $546,260 $1,742,008
-------- -------- ----------
Total increase in net assets $628,115 $554,186 $1,756,346
Net assets:
At beginning of period -- -- --
-------- -------- ----------
At end of period (including
accumulated undistributed net
investment income of $880, $1,872
and $34,460, respectively) $628,115 $554,186 $1,756,346
======== ======== ==========
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
See notes to financial statements
- --------------------------------------------------------------------------
Research Science and
International Technology
Period Ended February 28, 1997* Fund Fund
- ----------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment income $ 522 $ 89,101
Net realized gain (loss) on investments
and foreign currency transactions 9,629 (43,675)
Net unrealized loss on investments and
foreign currency translation (37,172) (36,712)
---------- ----------
Increase (decrease) in net assets from
operations $ (27,021) $ 8,714
---------- ----------
Fund share (principal) transactions -
Net proceeds from sale of shares $1,989,004 $2,101,703
Cost of shares reacquired (160) (1)
---------- ----------
Increase in net assets from Fund share
transactions $1,988,844 $2,101,702
---------- ----------
Total increase in net assets $1,961,823 $2,110,416
Net assets:
At beginning of period -- --
---------- ----------
At end of period (including accumulated
undistributed net investment
income of $522 and $89,101,
respectively) $1,961,823 $2,110,416
========== ==========
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------
Six Months Ended Period Ended Period Ended
Core Growth Fund February 28, 1997 August 31, 1996* February 28, 1997**
- -----------------------------------------------------------------------------------------------------------------------
Class A Class I
- -----------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C>
Net asset value - beginning of period $ 12.33 $ 10.00 $ 12.99
------- ------- -------
Income from investment operations# -
Net investment loss(S) $ (0.02) $ (0.01) $ --
Net realized and unrealized gain on investments and
foreign currency transactions 2.91 2.34 0.57
------- ------- -------
Total from investment operations $ 2.89 $ 2.33 $ 0.57
------- ------- -------
Less distributions declared to shareholders -
From net realized gain on investments $ (1.68) $ -- $ --
------- ------- -------
Total distributions declared to shareholders $ (1.68) $ -- $ --
------- ------- -------
Net asset value - end of period $ 13.54 $ 12.33 $ 13.56
======= ======= =======
Total return(+) 24.12%++ 23.30%++ 5.78%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.50%+ 1.50%+ 1.50%+
Net investment loss (0.34)%+ (0.11)%+ (0.18)%+
Portfolio turnover 175% 204% 175%
Average commission rate $0.0356 $0.0411 $0.0356
Net assets at end of period (000 omitted) $ 793 $ 686 $ 1,017
* For the period from the commencement of investment operations, January 2, 1996 to August 31, 1996.
** For the period from the commencement of offering of Class I shares, January 2, 1997 to February 28, 1997.
+ Annualized.
++ Not annualized.
# Per share data is based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid indirectly. The reduction of expenses by
fees paid indirectly, as a percentage of net assets, amounted to:
(0.04)%+ (0.02)%+ (0.04)%+
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the Funds at not more than 1.50% of each Fund's
average daily net assets. The investment adviser did not impose a portion of its management fee for the periods
indicated. If this fee had been incurred by the Fund, the net investment income per share and the ratios would have been:
Net investment income $ (0.16) $(0.18) $ (0.05)
Ratios (to average net assets):
Expenses## 4.01%+ 4.28%+ 3.51%+
Net investment loss (2.85)%+ (2.34)%+ (2.19)%+
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights (Unaudited) - continued
- ------------------------------------------------------------------------------------------------------------------------
Six Months Ended Period Ended Period Ended
Equity Income Fund February 28, 1997 August 31, 1996* February 28, 1997**
- ------------------------------------------------------------------------------------------------------------------------
Class A Class I
- ------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C>
Net asset value - beginning of period $ 11.07 $ 10.00 $ 12.21
------- ------- -------
Income from investment operations# -
Net investment income(S) $ 0.12 $ 0.13 $ 0.03
Net realized and unrealized gain on investments and
foreign currency transactions 2.10 0.94 0.66
------- ------- -------
Total from investment operations $ 2.22 $ 1.07 $ 0.69
------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.16) $ -- $ --
From net realized gain (loss) on investments (0.22) -- --
------- ------- -------
Total distributions declared to shareholders $ (0.38) $ -- $ --
------- ------- -------
Net asset value - end of period $ 12.91 $ 11.07 $ 12.90
======= ======= =======
Total return(+) 20.26%++ 10.70%++ 6.35%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.50%+ 1.50%+ 1.50%+
Net investment income 1.90%+ 1.83%+ 1.37%+
Portfolio turnover 66% 56% 66%
Average commission rate $0.0334 $0.0331 $0.0334
Net assets at end of period (000 omitted) $ 357 $ 477 $ 598
* For the period from the commencement of investment operations, January 2, 1996 to August 31, 1996.
** For the period from the commencement of offering of Class I shares, January 2, 1997 to February 28, 1997.
+ Annualized.
++ Not annualized.
# Per share data is based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid indirectly. The reduction of expenses by fees
paid indirectly, as a percentage of net assets, amounted to:
(0.04)%+ (0.03)%+ (0.04)%+
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the Funds at not more than 1.50% of each
Fund's average daily net assets. The investment adviser did not impose a portion of its management fee for the
periods indicated. If this fee had been incurred by the Fund, the net investment income per share and the
ratios would have been:
Net investment income $(0.11) $(0.06) $(0.04)
Ratios (to average net assets):
Expenses## 5.23%+ 4.67%+ 4.74%+
Net investment loss (1.83)%+ (0.78)%+ (1.87)%+
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Financial Highlights (Unaudited) - continued
- ------------------------------------------------------------------------------------------------------------------------
Six Months Ended Period Ended Period Ended
Special Opportunities Fund February 28, 1997 August 31, 1996* February 28, 1997**
- ------------------------------------------------------------------------------------------------------------------------
Class A Class I
- ------------------------------------------------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
<S> <C> <C> <C>
Net asset value - beginning of period $ 11.36 $ 10.00 $ 11.38
------- ------- -------
Income from investment operations# -
Net investment income(S) $ 0.01 $ 0.06 $ 0.04
Net realized and unrealized gain on investments and
foreign currency transactions 1.40 1.30 0.19
------- ------- -------
Total from investment operations $ 1.41 $ 1.36 $ 0.23
------- ------- -------
Less distributions declared to shareholders -
From net investment income $ (0.04) $ -- $ --
From net realized gain (loss) on investments (1.13) -- --
------- ------- -------
Total distributions declared to shareholders $ (1.17) $ -- $ --
------- ------- -------
Net asset value - end of period $ 11.60 $ 11.36 $ 11.61
======= ======= =======
Total return(+) 12.59%++ 13.60%++ 2.66%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 0.88%+ 1.50%+ 0.88%+
Net investment income 0.17%+ 0.78%+ 1.34%+
Portfolio turnover 89% 108% 89%
Average commission rate $0.0440 $0.0361 $0.0440
Net assets at end of period (000 omitted) $ 1,666 $ 2,259 $ 1,789
* For the period from the commencement of investment operations, January 2, 1996 to August 31, 1996.
** For the period from the commencement of offering of Class I shares, January 2, 1997 to February 28, 1997.
+ Annualized.
++ Not annualized.
# Per share data is based on average shares outstanding.
## The Fund's expenses are calculated without reduction for fees paid indirectly. The reduction of expenses by fees
paid indirectly, as a percentage of net assets, amounted to:
(0.04)%+ (0.02)%+ (0.04)%+
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the Funds at not more than 1.50% of each
Fund's average daily net assets. The investment adviser did not impose a portion of its management fee for the
periods indicated. If this fee had been incurred by the Fund, the net investment income per share and the
ratios would have been:
Net investment income $(0.07) $(0.01) $ 0.01
Ratios (to average net assets):
Expenses## 2.21%+ 2.97%+ 1.72%+
Net investment income (loss) (1.16)%+ (0.16)%+ 0.50%+
</TABLE>
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights (Unaudited) - continued
- --------------------------------------------------------------------------------
Blue Chip Fund Period Ended February 28, 1997*
- --------------------------------------------------------------------------------
Class A Class I
- --------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00 $10.00
------ ------
Income from investment operations# -
Net investment income(S) $ 0.01 $ 0.01
Net realized and unrealized gain on investments 0.42 0.42
------ ------
Total from investment operations $ 0.43 $ 0.43
------ ------
Net asset value - end of period $10.43 $10.43
====== ======
Total return(+) 4.30%++ 4.30%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.50%+ 1.50%+
Net investment income 0.95%+ 0.94%+
Portfolio turnover 6% 6%
Average commission rate $0.0366 $0.0366
Net assets at end of period (000 omitted) $457 $172
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
+Annualized.
++Not annualized.
#Per share data for periods is based on average shares outstanding.
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the
Funds at not more than 1.50% of each Fund's average daily net assets. The
investment adviser did not impose a portion of its management fee for the
periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $(0.16) $(0.16)
Ratios (to average net assets):
Expenses 12.76%+ 12.27%+
Net investment loss (10.31)%+ (9.83)%+
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights (Unaudited) - continued
- --------------------------------------------------------------------------------
Convertible Securities Fund Period Ended February 28, 1997*
- --------------------------------------------------------------------------------
Class A Class I
- --------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00 $10.00
------ ------
Income from investment operations# -
Net investment income(S) $ -- $ 0.03
Net realized and unrealized gain on investments 0.15 0.11
------ ------
Total from investment operations $ 0.15 $ 0.14
------ ------
Net asset value - end of period $10.15 $10.14
====== ======
Total return(+) 1.50%++ 1.40%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.50%+ 1.50%+
Net investment income 2.20%+ 2.18%+
Portfolio turnover 23% 23%
Average commission rate $0.0481 $0.0481
Net assets at end of period (000
omitted) $511 $43
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
+Annualized.
++Not annualized.
#Per share data for periods is based on average shares outstanding.
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the
Funds at not more than 1.50% of each Fund's average daily net assets. The
investment adviser did not impose a portion of its management fee for the
periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $ -- $(0.13)
Ratios (to average net assets):
Expenses 12.63%+ 12.13%+
Net investment loss (8.93)%+ (8.45)%+
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights (Unaudited) - continued
- --------------------------------------------------------------------------------
New Discovery Fund Period Ended February 28, 1997*
- --------------------------------------------------------------------------------
Class A Class I
- --------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00 $10.00
------ ------
Income from investment operations# -
Net investment income(S) $ 0.19 $ 0.20
Net realized and unrealized loss on investments (0.10) (0.11)
------ ------
Total from investment operations $ 0.09 $ 0.09
------ ------
Net asset value - end of period $10.09 $10.09
====== ======
Total return(+) 0.90%++ 0.90%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.50%+ 1.50%+
Net investment income 13.90%+ 12.79%+
Portfolio turnover 327% 327%
Average commission rate $0.0268 $0.0268
Net assets at end of period (000 omitted) $377 $1,379
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
+Annualized.
++Not annualized.
#Per share data for periods is based on average shares outstanding.
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the
Funds at not more than 1.50% of each Fund's average daily net assets. The
investment adviser did not impose a portion of its management fee for the
periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.14 $ 0.15
Ratios (to average net assets):
Expenses 5.42%+ 4.92%+
Net investment income 9.98%+ 9.37%+
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights (Unaudited) - continued
- --------------------------------------------------------------------------------
Research International Fund Period Ended February 28, 1997*
- --------------------------------------------------------------------------------
Class A Class I
- --------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00 $10.00
------ ------
Income from investment operations# -
Net investment income(S) $ -- $ --
Net realized and unrealized loss on investments (0.15) (0.15)
------ ------
Total from investment operations $(0.15) $(0.15)
------ ------
Net asset value - end of period $ 9.85 $ 9.85
====== ======
Total return(+) (1.50)%++ (1.50)%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.50%+ 1.50%+
Net investment income 0.21%+ 0.17%+
Portfolio turnover 176% 176%
Average commission rate $0.0193 $0.0193
Net assets at end of period (000
omitted) $1,385 $577
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
+Annualized.
++Not annualized.
#Per share data for periods is based on average shares outstanding.
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the
Funds at not more than 1.50% of each Fund's average daily net assets. The
investment adviser did not impose a portion of its management fee for the
periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $(0.05) $(0.05)
Ratios (to average net assets):
Expenses 5.27%+ 4.77%+
Net investment loss (3.56)%+ (3.10)%+
See notes to financial statements
<PAGE>
FINANCIAL STATEMENTS - continued
Financial Highlights (Unaudited) - continued
- --------------------------------------------------------------------------------
Science and Technology Fund Period Ended February 28, 1997*
- --------------------------------------------------------------------------------
Class A Class I
- --------------------------------------------------------------------------------
Per share data (for a share outstanding throughout each period):
Net asset value - beginning of period $10.00 $10.00
------ ------
Income from investment operations# -
Net investment income(S) $ 0.38 $ 0.46
Net realized and unrealized loss on investments (0.29) (0.37)
------ ------
Total from investment operations $ 0.09 $ 0.09
------ ------
Net asset value - end of period $10.09 $10.09
====== ======
Total return(+) 0.80%++ 0.70%++
Ratios (to average net assets)/Supplemental data(S):
Expenses 1.50%+ 1.50%+
Net investment income 30.63%+ 29.42%+
Portfolio turnover 716% 716%
Average commission rate $0.0268 $0.0268
Net assets at end of period (000
omitted) $580 $1,531
*For the period from the commencement of investment operations, January 2,
1997 to February 28, 1997.
+Annualized.
++Not annualized.
#Per share data for periods is based on average shares outstanding.
(+)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.
(S)The investment adviser voluntarily agreed to maintain the expenses of the
Funds at not more than 1.50% of each Fund's average daily net assets. The
investment adviser did not impose a portion of its management fee for the
periods indicated. If this fee had been incurred by the Fund, the net
investment income per share and the ratios would have been:
Net investment income $ 0.34 $ 0.42
Ratios (to average net assets):
Expenses 4.95%+ 4.45%+
Net investment income 27.18%+ 26.47%+
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) Business and Organization
MFS Series Trust I (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. The Trust presently consists of eight
Funds, as follows: MFS Cash Reserve Fund, MFS Managed Sectors Fund, MFS World
Asset Allocation Fund, MFS Aggressive Growth Fund, MFS Research Growth and
Income Fund, MFS Core Growth Fund* (the Core Growth Fund), MFS Equity Income
Fund* (the Equity Income Fund), MFS Special Opportunities Fund* (the Special
Opportunities Fund), MFS Blue Chip Fund* (the Blue Chip Fund), MFS Convertible
Securities Fund* (the Convertible Securities Fund), MFS New Discovery Fund* (the
New Discovery Fund), MFS Research International Fund* (the Research
International Fund) and MFS Science and Technology Fund* (the Science and
Technology Fund). Each Fund, except MFS Managed Sectors Fund, MFS World Asset
Allocation Fund and the MFS Special Opportunities Fund is diversified.
The Funds denoted with an asterisk (*) above are included within these financial
statements.
(2) Significant Accounting Policies
General -- The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Valuations -- Equity securities listed on securities exchanges or
reported through the NASDAQ system are valued at last sale prices. Unlisted
equity securities or listed equity securities for which last sale prices are not
available are valued at last quoted bid prices. Debt securities (other than
short-term obligations which mature in 60 days of 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.
Investments in foreign securities are vulnerable to the effects of changes in
the relative values of the local currency and the U.S. dollar and to the effects
of changes in each country's legal, political and economic environment.
Short-term obligations, which mature in 60 days or less, are valued at amortized
cost, which approximates market 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.
Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investments, income and expenses are converted into U.S.
dollars based upon currency exchange rates prevailing on the respective dates of
such transactions. Gains and losses attributable to foreign currency exchange
rates on sales of securities are recorded for financial statement purposes as
net realized gains and losses on investments. Gains and losses attributable to
foreign exchange rate movements on income and expenses are recorded for
financial statement purposes as foreign currency transaction gains and losses.
That portion of both realized and unrealized gain and losses on investments that
result from fluctuations in foreign currency exchange rates is not separately
disclosed.
Deferred Organization Expenses -- Costs incurred by each Fund in connection with
its organization have been deferred and are being amortized on a straight-line
basis over a five-year period beginning on the date of commencement of
operations of each Fund.
Forward Foreign Currency Exchange Contracts -- Each Fund may enter into forward
foreign currency exchange contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of a foreign currency relative to the U.S. dollar. Each Fund will enter into
forward contracts for hedging purposes as well as for non-hedging purposes. For
hedging purposes, each Fund may enter into contracts to deliver or receive
foreign currency they will receive from or require for their normal investment
activities. The Funds may also use contracts in a manner intended to protect
foreign currency-denominated securities from declines in value due to
unfavorable exchange rate movements. For non-hedging purposes, each Fund may
enter into contracts with the intent of changing the relative exposure of each
Fund's portfolio of securities to different currencies to take advantage of
anticipated changes. The forward foreign currency exchange contracts are
adjusted by the daily exchange rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized until the
contract settlement date.
Written Options -- Each 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 each Fund. Each Fund, as writer of an option, may have no
control over whether the underlying securities 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 part of an income producing strategy reflecting the view of the
Fund's management on the direction of interest rates.
Short Sales -- The Special Opportunities Fund, the Convertible Securities Fund,
the New Discovery Fund and the Science and Technology Fund may enter into short
sales. A short sale transaction involves selling a security which a Fund does
not own with the intent of purchasing it later at a lower price. A fund will
realize a gain if the security price decreases and a loss if the security price
increases between the date of the short sale and the date on which the Fund must
replace the borrowed security. Possible losses from short sales can be greater
than losses from the actual purchase of a security. The amount of any gain will
be decreased, and the amount of any loss increased, by the amount of the
premium, dividends or interest a Fund may be required to pay in connection with
a short sale. Whenever a Fund engages in short sales, its custodian segregates
cash or U.S. Government securities in an amount that, when combined with the
amount of collateral deposited with the broker in connection with the short
sale, at least equals the current market value of the security sold short.
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 financial statement
and tax reporting purposes as required by federal income tax regulations.
Dividend income is recorded on the ex-dividend date for dividends received in
cash. Dividend payments received in additional securities are recorded on the
ex-dividend date in an amount equal to the value of the security on such date.
The Special Opportunities Fund and the Convertible Securities Fund can invest up
to 100% of its portfolio in high-yield securities rated below investment grade.
Investments in high-yield securities involve greater degrees of credit and
market risk than investments in higher-rated securities, and tend to be more
sensitive to economic conditions.
These Funds use 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 Funds 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 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.
Fees Paid Indirectly -- Each Fund's custodian bank calculates its fee based on
each Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by each
Fund. This amount is shown as a reduction of expenses on the Statement of
Operations.
Tax Matters and Distributions -- Each 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 taxable
income, including any net realized gain on investments. Accordingly, no
provision for federal income or excise tax is provided. Each 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 each 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. Foreign taxes
have been provided for on interest and dividend income earned on foreign
investments in accordance with the applicable country's tax rates and to the
extent unrecoverable are recorded as a reduction of investment income.
Distributions to shareholders are recorded on the ex-dividend date.
Each 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 tax 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.
Multiple Classes of Shares of Beneficial Interest -- The Funds offer Class A and
Class I shares. The two classes of shares differ in their respective shareholder
servicing agent, distribution and service fees. All shareholders bear the common
expenses of the Fund pro rata based on 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.
(3) Transactions with Affiliates
Investment Adviser -- Each Fund has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
advisory and administrative services, and general office facilities. The
management fee is computed daily and paid monthly at an effective annual rate of
0.65% of average daily net assets for the Blue Chip Fund and the Convertible
Securities Fund, at an annual rate of 0.75% of average daily net assets for the
Core Growth Fund, the Equity Income Fund, the New Discovery Fund, the Science
and Technology Fund, and the Special Opportunities Fund, and at an annual rate
of 1.00% of average daily net assets for the Research International Fund. For
the period ended February 28, 1997, the investment adviser did not impose any of
its fee, which is reflected as a reduction of expenses in the Statement of
Operations.
Under a temporary expense reimbursement agreement with MFS, MFS has voluntarily
agreed to pay all of each Fund's operating expenses exclusive of management,
distribution and service fees. Each Fund in turn will pay MFS an expense
reimbursement fee not greater than 1.50% of average daily net assets of its
Class A shares. To the extent that the expense reimbursement fee exceeds each
Fund's actual expenses, the excess will be applied to amounts paid by MFS in
prior years. At February 28, 1997, the aggregate unreimbursed expenses owed to
MFS by each Fund amounted to:
<TABLE>
<CAPTION>
Core Equity Blue Convertible New Research Science and
Growth Income Chip Securities Discovery International Technology
Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$(5,825) $(7,156) $(9,300) $(8,410) $(6,752) $(5,744) $(6,244)
</TABLE>
Each Fund pays no compensation directly to its Trustees who are officers of the
investment adviser, or to officers of each Fund, all of whom receive
remuneration for their services to each Fund from MFS. Certain of the officers
and Trustees of each Fund are officers or directors of MFS, MFS Fund
Distributors, Inc. (MFD) and MFS Service Center, Inc. (MFSC). The Trustees are
currently not receiving any payments for their services to each Fund.
Distributor -- MFD, a wholly owned subsidiary of MFS, as distributor, did not
receive any sales charges on sales on Class A shares of each Fund for the period
ended February 28, 1997.
The Trustees have adopted a distribution plan for Class A shares pursuant to
Rule 12b-1 of the Investment Company Act of 1940 as follows:
The Class A distribution plan provides that each Fund will pay MFD up to 0.50%
per annum of its average daily net assets attributable to Class A shares in
order that MFD may pay expenses on behalf of each 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 each 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 0.25% per annum of each 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 each Fund. Distribution and
service fees under the Class A distribution plan are currently being waived.
Purchases over $1 million of Class A shares and certain purchases into
retirement plans are subject to a contingent deferred sales charge in the event
of a shareholder redemption within 12 months following such purchase. There were
no contingent deferred sales charges imposed during the period ended February
28, 1997 on Class A shares of each Fund.
Shareholder Servicing Agent -- MFSC, a wholly owned subsidiary of MFS, earns a
fee for its services as shareholder serving agent. The fee is calculated as a
percentage of the average daily net assets of each Fund at an effective annual
rate of 0.13%. Prior to January 1, 1997, the fee was calculated as a percentage
of the average daily net assets of Class A at an effective annual rate of up to
0.15%. MFSC is currently waiving its fee for an indefinite period.
(4) Portfolio Securities
Purchases and sales of investments, other than purchased option transactions,
U.S. government and short-term obligations, were as follows:
<TABLE>
<CAPTION>
Core Equity Special Blue
Growth Income Opportunities Chip
Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases $2,325,915 $ 810,785 $2,795,370 $ 625,899
========== ========== ========== ==========
Sales $1,664,515 $ 476,074 $2,184,663 $ 23,691
========== ========== ========== ==========
<CAPTION>
Convertible New Research Science and
Securities Discovery International Technology
Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases $ 624,195 $4,632,587 $2,147,829 $8,829,159
========== ========== ========== ==========
Sales $ 84,338 $2,996,493 $2,081,625 $7,106,378
========== ========== ========== ==========
</TABLE>
The cost and unrealized appreciation or depreciation in value of the investments
owned by each Fund, as computed on a federal income tax basis, are as follows:
<TABLE>
<CAPTION>
Core Equity Special Blue
Growth Income Opportunities Chip
Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate cost $1,757,850 $ 833,755 $3,435,464 $ 602,664
========== ========== ========== ==========
Gross unrealized appreciation $ 98,521 $ 105,128 $ 296,986 $ 32,791
Gross unrealized depreciation (26,840) (4,296) (223,962) (9,711)
---------- ---------- ---------- ----------
Net unrealized appreciation $ 71,681 $ 100,832 $ 73,024 $ 23,080
========== ========== ========== ==========
<CAPTION>
Convertible New Research Science and
Securities Discovery International Technology
Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate cost $ 541,518 $1,686,286 $2,113,386 $2,198,963
========== ========== ========== ==========
Gross unrealized appreciation $ 21,890 $ 69,639 $ 40,098 $ 40,952
Gross unrealized depreciation (14,036) (74,972) (77,051) (77,664)
---------- ---------- ---------- ----------
Net unrealized appreciation
(depreciation) $ 7,854 $ (5,333) $ (36,953) $ (36,712)
========== ========== ========== ==========
</TABLE>
(5) Shares of Beneficial Interest
Each 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
Period Ended February 28, 1997
---------------------------------------------------------------------------------------------
Core Growth Fund Equity Income Fund Special Opportunities Fund
---------------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 51,112 $ 686,975 19,146 $ 226,214 79,367 $ 925,741
Shares issued to
shareholders in
reinvestment of
distributions 8,292 106,552 1,898 23,074 21,567 241,330
Shares transferred
to Class I (33,596) (430,367) (36,420) (441,769) (154,886) (1,750,208)
Shares reacquired (22,944) (293,919) (125) (1,403) (1,251) (15,361)
------ ---------- ------ ---------- ------ ----------
Net increase
(decrease) 2,864 $ 69,241 (15,501) $ (193,884) (55,203) $ (598,498)
====== ========== ====== ========== ====== ==========
<CAPTION>
Class I Shares
Period Ended February 28, 1997
---------------------------------------------------------------------------------------------
Core Growth Fund Equity Income Fund Special Opportunities Fund
---------------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 41,414 $ 530,533 9,959 $ 120,999 2,069 $ 23,394
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- -- -- --
Shares transferred
from Class A 33,596 430,367 36,420 441,769 154,886 1,750,208
Shares reacquired -- -- -- -- (2,868) (32,554)
------ ---------- ------ ---------- ------- ----------
Net increase 75,010 $ 960,900 46,379 $ 562,768 154,087 $1,741,048
====== ========== ====== ========== ======= ==========
<CAPTION>
Class A Shares
Period Ended August 31, 1996*
---------------------------------------------------------------------------------------------
Core Growth Fund Equity Income Fund Special Opportunities Fund
---------------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 56,000 $ 605,756 44,072 $ 449,397 198,828 $2,038,964
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- -- -- --
Shares reacquired (338) (4,083) (947) (10,110) (1) (14)
------ ---------- ------ ---------- ------- ----------
Net increase 55,662 $ 601,673 43,125 $ 439,287 198,827 $2,038,950
====== ========== ====== ========== ======= ==========
*For the period from the commencement of investment operations, January 2, 1996 to August 31, 1996.
<CAPTION>
Class A Shares
Period Ended February 28, 1997**
---------------------------------------------------------------------------------------------
Blue Chip Fund Convertible Securities Fund New Discovery Fund
---------------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 43,894 $ 440,505 50,431 $ 504,346 37,384 $ 375,933
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- -- -- --
Shares reacquired (121) (1,301) (78) (801) -- (1)
------ ---------- ------ ---------- ------ ----------
Net increase 43,773 $ 439,204 50,353 $ 503,545 37,384 $ 375,932
====== ========== ====== ========== ====== ==========
<CAPTION>
Class A Shares
Period Ended February 28, 1997**
------------------------------------------------------------
Research International Fund Science and Technology Fund
------------------------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 140,576 $1,402,992 57,447 $ 583,734
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- --
Shares reacquired (15) (150) -- (1)
------- ---------- ------ ----------
Net increase 140,561 $1,402,842 57,447 $ 583,733
======= ========== ====== ==========
<CAPTION>
Class I Shares
Period Ended February 28, 1997**
---------------------------------------------------------------------------------------------
Blue Chip Fund Convertible Securities Fund New Discovery Fund
---------------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 16,449 $ 164,485 4,271 $ 42,715 136,603 $ 1,366,076
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- -- -- --
Shares reacquired (1) (10) -- -- -- --
------ ---------- ----- --------- ------- -----------
Net increase 16,448 $ 164,475 4,271 $ 42,715 136,603 $ 1,366,076
====== ========== ===== ========= ======= ===========
<CAPTION>
Class I Shares
Period Ended February 28, 1997**
------------------------------------------------------------
Research International Fund Science and Technology Fund
------------------------------------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 58,602 $ 586,012 151,769 $1,517,969
Shares issued to
shareholders in
reinvestment of
distributions -- -- -- --
Shares reacquired (1) (10) -- --
------ ---------- ------- ----------
Net increase 58,601 $ 586,002 151,769 $1,517,969
====== ========== ======= ==========
**For the period from the commencement of investment operations, January 2, 1997
to February 28, 1997.
</TABLE>
(6) Line of Credit
Each Fund entered into an agreement which enables it to participate with other
funds managed by MFS in an unsecured line of credit with a bank which permits
borrowings up to $400 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 each Fund for the period ended February
28, 1997, were as follows:
<TABLE>
<CAPTION>
Core Equity Special Blue Convertible New Research Science and
Growth Income Opportunities Chip Securities Discovery International Technology
Fund Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1 $ 1 $ 4 $ -- $ 1 $ -- $ 1 $ 1
</TABLE>
(7) Restricted Securities
Each Fund may invest not more than 15% of its net assets in securities which are
subject to legal or contractual restrictions on resale. At February 28, 1997,
the Research International Fund and the Special Opportunities Fund owned the
following restricted securities (consisting of 2.4% and 0.6% of their net
assets, respectively). Each Fund does not have the right to demand that such
securities be registered. The value of these securities is determined by
valuations supplied by a pricing service of brokers or, if not available, in
good faith by or at the direction of the Trustees.
<TABLE>
<CAPTION>
Date of
Fund/Description Acquisition Shares Cost Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS RESEARCH INTERNATIONAL FUND
Hong Leong Finance Ltd. 1/7/97-2/26/97 3,000 $11,940 $11,579
Jarvis Hotels PLC 1/7/97-2/26/97 12,322 $33,892 $35,561
-------
$47,140
MFS SPECIAL OPPORTUNITIES FUND
Renaissance Cosmetics, Inc. 8/8/96 20 $20,000 $20,000
</TABLE>
--------------------------------------------
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(R) CORE GROWTH FUND
MFS(R) EQUITY INCOME FUND
MFS(R) SPECIAL OPPORTUNITIES FUND
MFS(R) BLUE CHIP FUND
MFS(R) CONVERTIBLE SECURITIES FUND
MFS(R) NEW DISCOVERY FUND
MFS(R) RESEARCH INTERNATIONAL FUND
MFS(R) SCIENCE AND TECHNOLOGY FUND
500 Boylston Street
Boston, MA 02116-3741
[LOGO] M F S(SM)
INVESTMENT MANAGEMENT
We invented the mutual fund(SM)
(C)1997 MFS Fund Distributors, Inc., 500 Boylston, Street Boston, MA 02116-3741
INC-3-2/97/715
<PAGE>
PART C
Item 24. Financial Statements and Exhibits
MFS Blue Chip Fund, MFS New Discovery Fund, MFS Convertible Securities
Fund, MFS Research International Fund and MFS Science and Technology
Fund
(a) Financial Statements Included in Parts A and B:
Included in Part A of this Registration Statement:
For the period ended February 28, 1997:
Financial Highlights (Unaudited)
Included in Part B of this Registration Statement:
At February 28, 1997:
Portfolio of Investments*
Statement of Assets and Liabilities (Unaudited)*
For the period ended February 28, 1997:
Statement of Changes in Net Assets (Unaudited)*
For the period ended February 28, 1997:
Statement of Operations (Unaudited)*
* Incorporated by reference to the the Funds' Unaudited Semiannual Report to
Shareholders dated February 28, 1997, filed with the SEC via EDGAR on May
2, 1997.
(b) Exhibits:
1 (a) Amended and Restated Declaration of Trust,
dated January 6, 1995. (5)
(b) Amendment to Declaration of Trust, dated
October 12, 1995. (6)
(c) Amendment to Declaration of Trust, dated
February 21, 1996. (7)
(d) Amendment to Declaration of Trust, dated
June 12, 1996. (8)
(e) Amendment to Declaration of Trust, dated
October 9, 1996. (9)
<PAGE>
(f) Amendment to Declaration of Trust, dated
December 19, 1996 to redesignate Class P
Shares as Class I Shares; filed herewith.
(g) Amendment to Declaration of Trust, dated
April 9, 1997 to redesignate MFS Aggressive
Growth Fund as MFS Strategic Growth Fund;
filed herewith.
2 Amended and Restated By-Laws dated December
14, 1994. (5)
3 Not Applicable.
4 Form of Share Certificate for Classes of
shares. (8)
5 (a) Investment Advisory Agreement for MFS(R)
Cash Reserve Fund, dated September 1,
1993. (6)
(b) Investment Advisory Agreement for MFS(R)
Managed Sectors Fund, dated September
1, 1993. (6)
(c) Investment Advisory Agreement for MFS(R)
World Asset Allocation Fund, dated June 2,
1994. (6)
(d) Investment Advisory Agreement for MFS(R)
Equity Income Fund, dated January 2,
1996. (7)
(e) Amendment to Investment Advisory Agreement
for MFS(R) Research Growth and Income Fund,
dated January 2, 1997; filed herewith.
(f) Investment Advisory Agreement for MFS(R)
Core Growth Fund, dated January 2, 1996.(6)
(g) Investment Advisory Agreement for MFS(R)
Aggressive Growth Fund, dated January
2, 1996. (6)
(h) Investment Advisory Agreement for MFS(R)
Special Opportunities Fund, dated
January 2, 1996. (6)
(i) Investment Advisory Agreement for MFS(R)
Convertible Securities Fund, dated January
2, 1997; filed herewith.
(j) Investment Advisory Agreement for MFS(R)
Blue Chip Fund, dated January 2, 1997;
filed herewith.
(k) Investment Advisory Agreement for MFS(R)
New Discovery Fund, dated January 2, 1997;
filed herewith.
<PAGE>
(l) Investment Advisory Agreement for MFS(R)
Science and Technology Fund, dated January
2, 1997; filed herewith.
(m) Investment Advisory Agreement for MFS(R)
Research International Fund, dated January
2, 1997; filed herewith.
(n) Sub-Advisory Agreement for MFS(R) Research
International Fund by and between
Massachusetts Financial Services Company
and Foreign & Colonial Management Ltd.
dated January 2, 1997; filed herewith.
(o) Sub-Advisory Agreement for MFS(R) Research
International Fund by and between Foreign &
Colonial Management Ltd. and Foreign &
Colonial Emerging Markets Limited, dated
January 2, 1997; filed herewith.
6 (a) Distribution Agreement, dated January 1,
1995. (5)
(b) Dealer Agreement between MFS Fund
Distributors, Inc., ("MFD") and a dealer
and the Mutual Fund Agreement between MFD
and a bank or NASD affiliate, as amended
on April 11, 1997. (12)
7 Retirement Plan for Non-Interested Person
Trustees, dated January 1, 1991. (6)
8 (a) Custodian Agreement, dated January 28,
1988. (6)
(b) Amendment No. 1 to the Custodian Agreement,
dated February 29, 1988 and October 1,
1989, respectively. (6)
(c) Amendment No. 2 to the Custodian Agreement,
dated October 9, 1991. (6)
(d) Custodian Agreement between Investors Bank
& Trust and MFS(R) World Asset Allocation
Fund dated June 2, 1994. (6)
9 (a) Shareholder Servicing Agent Agreement,
dated September 10, 1986. (6)
(b) Amendment to Shareholder Servicing Agent
Agreement to amend fee schedule, dated
January 1, 1997; filed herewith.
(c) Exchange Privilege Agreement, dated
September 1, 1995 as amended and restated
through and including January 1, 1997. (10)
<PAGE>
(d) Loan Agreement by and among the Banks
named therein, the MFS Borrowers and The
First National Bank of Boston dated as of
February 21, 1995. (3)
(e) Third Amendment dated February 14, 1997 to
Loan Agreement dated February 21, 1995 by
and among the Banks named therein and The
First National Bank of Boston; filed
herewith.
(f) Dividend Disbursing Agent Agreement dated
September 10, 1986. (6)
(g) Master Administrative Services Agreement
dated March 1, 1997. (11)
10 Consent and Opinion of Counsel filed with
the Registrant's Rule 24f-2 Notice for the
fiscal year ended August 31, 1996 on
October 28, 1996.
11 Not Applicable.
12 Not Applicable.
13 Not Applicable.
14 (a) Forms for Individual Retirement Account
Disclosure Statement as currently in
effect. (4)
(b) Forms for MFS 403(b) Custodial Account
Agreement as currently in effect. (4)
(c) Forms for MFS Prototype Paired Defined
Contribution Plans as Trust Agreement as
currently in effect. (4)
15 Master Distribution Plan pursuant to Rule
12b-1 under the Investment Company Act of
1940 effective January 1, 1997 and amended
thereto on April 10, 1997. (13)
16 Schedule for Computation of Performance
Quotations - Yield Calculation, Average
Annual and Aggregate Total Return and
Current Distribution Rate. (1)
17 Financial Data Schedules for Class A Shares
and Class I Shares for MFS Blue Chip Fund,
MFS New Discovery Fund, MFS Convertible
Securities Fund, MFS Research International
Fund and MFS Science and Technology Fund;
filed herewith.
18 Plan pursuant to Rule 18f-3(d) under the
Investment Company Act of 1940. (8)
<PAGE>
Power of Attorney, dated August 11, 1994. (6)
(1) Incorporated by reference to MFS Municipal Series Trust (File Nos. 2-92915
and 811-4096) Post-Effective Amendment No. 26 filed with the SEC via EDGAR
on February 22, 1995.
(2) Incorporated by reference to MFS Municipal Series Trust (File Nos. 2-92915
and 811-4096) Post-Effective Amendment No. 28 filed with the SEC via EDGAR
on July 28, 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 via
EDGAR on February 28, 1995.
(4) Incorporated by reference to MFS Series Trust IX (File Nos. 2-50409 and
811-2464) Post-Effective Amendment No. 32 filed with the SEC via EDGAR on
August 28, 1995.
(5) Incorporated by reference to the Registrant's Post-Effective Amendment No.
20 filed with the SEC via EDGAR on March 30, 1995.
6) Incorporated by reference to the Registrant's Post-Effective Amendment No.
21 filed with the SEC via EDGAR on October 17, 1995.
(7) Incorporated by reference to Registrant's Post-Effective Amendment No. 23
filed with the SEC via EDGAR on March 29, 1996.
(8) Incorporated by reference to Registrant's Post-Effective Amendment No. 25
filed with the SEC via EDGAR on August 27, 1996.
(9) Incorporated by reference to Registrant's Post-Effective Amendment No. 26
filed with the SEC via EDGAR on October 15, 1996.
(10) Incorporated by reference to MFS Series Trust VIII (File Nos. 33-37972 and
811-5262) Post-Effective Amendment No. 13 filed with the SEC via EDGAR on
February 27, 1997.
(11) Incorporated by reference to MFS/Sun Life Series Trust (File Nos. 2-83616
and 811-3732) Post-Effective Amendment No. 19 filed with the SEC via EDGAR
on March 18, 1997.
(12) Incorporated by reference to MFS Series Trust III (File Nos. 2-60491 and
811-2794) Post-Effective Amendment No. 24 filed with the SEC via EDGAR on
May 29, 1997.
(13) Incorporated by reference to MFS Government Limited Maturity Fund (File
Nos. 2-96738 and 811-4253) Post-Effective Amendment No. 18 filed with the
SEC via EDGAR on April 29, 1997.
Item 25. Persons Controlled by or under Common Control with Registrant
Not applicable.
Item 26. Number of Holders of Securities
For MFS Managed Sectors Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 21,279
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 12,693
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 2
(without par value) (as of May 31, 1997)
<PAGE>
For MFS Cash Reserve Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 3,395
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 23,607
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 862
(without par value) (as of May 31, 1997)
For MFS World Asset Allocation Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 7,667
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 10,125
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 1,948
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 3
(without par value) (as of May 31, 1997)
For MFS Equity Income Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 14
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 3
(without par value) (as of May 31, 1997)
<PAGE>
For MFS Research Growth and Income Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 37
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 4
(without par value) (as of May 31, 1997)
For MFS Core Growth Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 39
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 3
(without par value) (as of May 31, 1997)
For MFS Aggressive Growth Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 511
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 199
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 37,904
(without par value) (as of May 31, 1997)
<PAGE>
Class I Shares of Beneficial Interest 3
(without par value) (as of May 31, 1997)
For MFS Special Opportunities Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 28
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 3
(without par value) (as of May 31, 1997)
MFS(R) Convertible Securities Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 9
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 4
(without par value) (as of May 31, 1997)
MFS(R) Blue Chip Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 22
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
<PAGE>
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 4
(without par value) (as of May 31, 1997)
MFS(R) New Discovery Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 28
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 4
(without par value) (as of May 31, 1997)
MFS(R) Science and Technology Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 33
(without par value) (as of May 31, 1997)
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 4
(without par value) (as of May 31, 1997)
MFS(R) Research International Fund
(1) (2)
Title of Class Number of Record Holders
Class A Shares of Beneficial Interest 37
(without par value) (as of May 31, 1997)
<PAGE>
Class B Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class C Shares of Beneficial Interest 0
(without par value) (as of May 31, 1997)
Class I Shares of Beneficial Interest 4
(without par value) (as of May 31, 1997)
Item 27. Indemnification
Reference is hereby made to (a) Article V of the Trust's
Declaration of Trust, incorporated by reference to the Registrant's
Post-Effective Amendment No. 20 filed with the SEC via EDGAR on March 30, 1995
and (b) Section 8 of the Shareholder Servicing Agent Agreement, incorporated by
reference to Registrant's Post-Effective Amendment No. 21 filed with the SEC via
EDGAR on October 17, 1995.
The Trustees and officers of the Registrant and the personnel
of the Registrant's investment adviser and principal underwriter are insured
under an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940, as amended.
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 Fund, MFS Growth Opportunities Fund, MFS
Government Securities Fund, MFS Government Limited Maturity Fund, The MFS Series
Trust (which has one series: MFS Aggressive Small Cap Equity Fund), MFS Series
Trust I (which has thirteen series: MFS Managed Sectors Fund, MFS Cash Reserve
Fund, MFS World Asset Allocation Fund, MFS Aggressive Growth Fund, MFS Research
Growth and Income Fund, MFS Core Growth Fund, MFS Equity Income Fund, MFS
Special Opportunities Fund, MFS Convertible Securities Fund, MFS Blue Chip Fund,
MFS New Discovery Fund, MFS Science and Technology Fund and MFS Research
International Fund), MFS Series Trust II (which has four series: MFS Emerging
Growth Fund, MFS Capital Growth Fund, MFS Intermediate Income Fund and MFS Gold
& Natural Resources Fund), MFS Series Trust III (which has two series: MFS High
Income Fund and MFS Municipal High Income Fund), MFS Series Trust IV (which has
four series: MFS Money Market Fund, MFS Government Money Market Fund, MFS
Municipal Bond Fund and MFS OTC Fund), MFS Series Trust V (which has two series:
MFS Total Return Fund and MFS Research Fund), MFS Series Trust VI (which has
three series: MFS World Total Return Fund, MFS Utilities Fund and MFS World
Equity Fund), MFS Series Trust VII (which has two series: MFS World Governments
Fund and MFS Value Fund), MFS Series Trust VIII (which has two series: MFS
Strategic Income Fund and MFS World Growth Fund), MFS Series Trust IX (which has
three series: MFS Bond Fund, MFS Limited Maturity Fund and MFS Municipal Limited
Maturity Fund), MFS Series Trust X (which has four series: MFS Government
Mortgage Fund, MFS/Foreign & Colonial Emerging Markets Equity Fund, MFS/Foreign
& Colonial International Growth Fund and MFS/Foreign & Colonial International
Growth and Income Fund), and MFS Municipal Series Trust (which has 16 series:
MFS Alabama Municipal Bond Fund, MFS
<PAGE>
Arkansas Municipal Bond Fund, MFS California Municipal Bond Fund, MFS Florida
Municipal Bond Fund, MFS Georgia 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 Virginia Municipal Bond Fund, MFS West
Virginia Municipal Bond Fund and MFS Municipal Income Fund) (the "MFS Funds").
The principal business address of each of the MFS 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 seven
series), MFS Variable Insurance Trust ("MVI") (which has twelve series) and MFS
Union Standard Trust ("UST"). 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 MFS Closed-End Funds is 500 Boylston
Street, Boston, Massachusetts 02116.
Lastly, MFS serves as investment adviser to MFS/Sun Life
Series Trust ("MFS/SL"), 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 of the
aforementioned funds is One Sun Life Executive Park, Wellesley Hills,
Massachusetts 02181.
MFS International Ltd. ("MIL"), a limited liability company
organized under the laws of Bermuda and a subsidiary of MFS, whose principal
business address is Cedar House, 41 Cedar Avenue, Hamilton HM12 Bermuda, serves
as investment adviser to and distributor for MFS American Funds (which has six
portfolios: MFS American Funds-U.S. Equity Fund, MFS American Funds-U.S.
Emerging Growth Fund, MFS American Funds-U.S. High Yield Bond Fund, MFS American
Funds - U.S. Dollar Reserve Fund, MFS American Funds-Charter Income Fund and MFS
American Funds-U.S. Research Fund) (the "MIL Funds"). The MIL Funds are
organized in Luxembourg and qualify as an undertaking for collective investments
in transferable securities (UCITS). The principal business address of the MIL
Funds is 47, Boulevard Royal, L-2449 Luxembourg.
MIL also serves as investment adviser to and distributor for
MFS Meridian U.S. Government Bond Fund, MFS Meridian Charter Income Fund, MFS
Meridian Global Government Fund, MFS Meridian U.S. Emerging Growth Fund, MFS
Meridian Global Equity Fund, MFS Meridian Limited Maturity Fund, MFS Meridian
World Growth Fund, MFS Meridian Money Market Fund, MFS Meridian World Total
Return Fund, MFS Meridian U.S. Equity Fund, MFS Meridian Research Fund, MFS
Meridian U.S. High Yield Fund and MFS Emerging Markets Debt Fund (collectively
the "MFS Meridian Funds"). Each of the MFS Meridian Funds is organized as an
exempt company under the laws of the Cayman Islands. The principal business
address of each of the MFS Meridian Funds is P.O. Box 309, Grand Cayman, Cayman
Islands, British West Indies.
<PAGE>
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, England 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 Fund Distributors, Inc. ("MFD"), a wholly owned subsidiary of
MFS, serves as distributor for the MFS Funds, MVI, UST and MFSIT.
Clarendon Insurance Agency, Inc. ("CIAI"), a wholly owned subsidiary of
MFS, serves as distributor for certain life insurance and annuity contracts
issued by Sun Life Assurance Company of Canada (U.S.).
MFS Service Center, Inc. ("MFSC"), a wholly owned subsidiary of MFS,
serves as shareholder servicing agent to the MFS Funds, the MFS Closed-End
Funds, MFSIT, MVI and UST.
MFS Institutional Advisors, Inc. ("MFSI"), 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, Donald A. Stewart and John D. McNeil. Mr. Brodkin is the Chairman, Mr.
Shames is the President, Mr. Scott is a Senior Executive Vice President and
Secretary, Bruce C. Avery, William S. Harris, William W. Scott, Jr., Patricia A.
Zlotin, John W. Ballen, Thomas J. Cashman, Jr., Joseph W. Dello Russo and Kevin
R. Parke are Executive Vice Presidents, Stephen E. Cavan is a Senior Vice
President, General Counsel and an Assistant Secretary, Robert T. Burns is a
Senior Vice President, Associate General Counsel and an Assistant Secretary of
MFS, and Thomas B. Hastings is a Vice President and Treasurer of MFS.
Massachusetts Investors Trust
Massachusetts Investors Growth Stock Fund
MFS Growth Opportunities Fund
MFS Government Securities Fund
MFS Series Trust I
MFS Series Trust V
MFS Series Trust VI
MFS Series Trust X
MFS Government Limited Maturity Fund
A. Keith Brodkin is the Chairman and President, Stephen E. Cavan is
the Secretary, W. Thomas London is the Treasurer, James O. Yost, Ellen M.
Moynihan and Mark
<PAGE>
E. Bradley, Vice Presidents of MFS, are the Assistant Treasurers, James R.
Bordewick, Jr., Senior Vice President and Associate General Counsel of MFS, is
the 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, Ellen M. Moynihan
and Mark E. Bradley are the Assistant Treasurers, and James R. Bordewick, Jr.,
is the Assistant Secretary.
MFS Government Markets Income Trust
MFS Intermediate Income Trust
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, Ellen M. Moynihan
and Mark E. Bradley are the Assistant Treasurers, 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, and Bernard Scozzafava, Vice President of MFS, are Vice
Presidents, Sheila Burns-Magnan, Assistant Vice President of MFS, and Daniel E.
McManus, Vice President of MFS, are Assistant Vice Presidents, Stephen E. Cavan
is the Secretary, W. Thomas London is the Treasurer, James O. Yost, Ellen M.
Moynihan and Mark E. Bradley are the Assistant Treasurers, and James R.
Bordewick, Jr., is the 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, Ellen M. Moynihan and Mark E. Bradley are the Assistant Treasurers and
James R. Bordewick, Jr., is the 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,
Ellen M. Moynihan and Mark E. Bradley are the Assistant Treasurers and James R.
Bordewick, Jr., is the 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
<PAGE>
MFS, are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is
the Treasurer, James O. Yost, Ellen M. Moynihan and Mark E. Bradley are the
Assistant Treasurers and James R. Bordewick, Jr., is the 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, Daniel E. McManus,
Vice President of MFS, is an Assistant Vice President, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James O. Yost, Ellen M. Moynihan
and Mark E. Bradley are the Assistant Treasurers and James R. Bordewick, Jr., is
the Assistant Secretary.
MFS Variable Insurance Trust
MFS Union Standard 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 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, Ellen M. Moynihan and Mark E.
Bradley are the Assistant Treasurers and James R. Bordewick, Jr., is the
Assistant Secretary.
MFS Multimarket Income Trust
MFS Charter Income Trust
A. Keith Brodkin is the Chairman and President, 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, Ellen M. Moynihan and Mark E.
Bradley are the Assistant Treasurers and James R. Bordewick, Jr., is the
Assistant Secretary.
MFS Special Value Trust
A. Keith Brodkin is the Chairman and President, Jeffrey L. Shames and
Robert J. Manning are Vice Presidents, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James O. Yost, Ellen M. Moynihan and Mark E.
Bradley are the Assistant Treasurers and James R. Bordewick, Jr., is the
Assistant Secretary.
MFS/Sun Life Series Trust
John D. McNeil, Chairman and Director of Sun Life Assurance Company
of Canada, is the Chairman, Stephen E. Cavan is the Secretary, W. Thomas London
is the Treasurer, James O. Yost, Ellen M. Moynihan and Mark E. Bradley are the
Assistant Treasurers and James R. Bordewick, Jr., is the Assistant Secretary.
<PAGE>
Money Market Variable Account
High Yield Variable Account
Capital Appreciation Variable Account
Government Securities Variable Account
Total Return Variable Account
World Governments Variable Account
Managed Sectors Variable Account
John D. McNeil is the Chairman, Stephen E. Cavan is the Secretary, and
James R. Bordewick, Jr., is the Assistant Secretary.
MIL
A. Keith Brodkin is a Director and the Chairman, Arnold D. Scott and
Jeffrey L. Shames are Directors, Thomas J. Cashman, Jr., an Executive Vice
President of MFS, is a Senior 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, Joseph
W. Dello Russo, Executive Vice President and Chief Financial Officer of MFS, is
the Treasurer and Thomas B. Hastings is the Assistant Treasurer.
MIL-UK
A. Keith Brodkin is a Director and the Chairman, Arnold D. Scott,
Jeffrey L. Shames, and James R. Bordewick, Jr., are Directors, Stephen E. Cavan
is a Director and the Secretary, 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, Richard B.
Bailey, John A. Brindle, Richard W. S. Baker and William F. Waters 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.
MFS Meridian Funds
A. Keith Brodkin is the Chairman, President and a Director, Richard B.
Bailey, John A. Brindle, Richard W. S. Baker, Arnold D. Scott, Jeffrey L. Shames
and William F. Waters are Directors, Stephen E. Cavan is the Secretary, W.
Thomas London is the Treasurer, James R. Bordewick, Jr., is the Assistant
Secretary and James O. Yost is the Assistant Treasurer.
MFD
A. Keith Brodkin is the Chairman and a Director, 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, Joseph W. Dello Russo is the Treasurer, and
Thomas B. Hastings is the Assistant Treasurer.
<PAGE>
CIAI
A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and
Jeffrey L. Shames are Directors, Cynthia Orcott is President, Bruce C. Avery is
the Vice President, Joseph W. Dello Russo is the Treasurer, Thomas B. Hastings
is the Assistant Treasurer, Stephen E. Cavan is the Secretary, and Robert T.
Burns is the Assistant Secretary.
MFSC
A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and
Jeffrey L. Shames are Directors, Joseph A. Recomendes, a Senior Vice President
of MFS, is Vice Chairman and a Director, Janet A. Clifford is the Executive Vice
President, Joseph W. Dello Russo is the Treasurer, Thomas B. Hastings is the
Assistant Treasurer, Stephen E. Cavan is the Secretary, and Robert T. Burns is
the Assistant Secretary.
MFSI
A. Keith Brodkin is the Chairman and a Director, Jeffrey L. Shames, and
Arnold D. Scott are Directors, Thomas J. Cashman, Jr., is the President and a
Director, Leslie J. Nanberg is a Senior Vice President, a Managing Director and
a Director, George F. Bennett, Carol A. Corley, John A. Gee, Brianne Grady and
Kevin R. Parke (who is an Executive Vice President of MFS) are Senior Vice
Presidents and Managing Directors, Joseph W. Dello Russo is the Treasurer,
Thomas B. Hastings is the Assistant Treasurer and Robert T. Burns is the
Secretary.
RSI
William W. Scott, Jr. and Bruce C. Avery are Directors, Arnold D.
Scott is the Chairman and a Director, Joseph W. Dello Russo is the Treasurer,
Thomas B. Hastings is the Assistant Treasurer, Stephen E. Cavan is the
Secretary, Robert T. Burns is the Assistant Secretary and Sharon A. Brovelli and
Martin E. Beaulieu are Senior Vice Presidents.
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
Donald A. Stewart President and a Director, Sun Life Assurance
Company of Canada, Sun Life Centre, 150
King Street West, Toronto, Ontario, Canada
(Mr. Stewart is also an officer and/or
Director of various subsidiaries and
affiliates of Sun Life)
<PAGE>
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)
Joseph W. Dello Russo Director of Mutual Fund Operations, The
Boston Company, Exchange Place, Boston,
Massachusetts (until August, 1994)
Item 29. Distributors
(a) Reference is hereby made to Item 28 above.
(b) Reference is hereby made to Item 28 above; the principal
business address of each of these persons is 500 Boylston Street, Boston,
Massachusetts 02116.
(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
(distributor) Boston, MA 02116
State Street Bank and Trust Company State Street South
(custodian) 5-West
North Quincy, MA 02171
Investors Bank & Trust Company 89 South Street
(custodian) Boston, MA 02111
MFS Service Center, Inc. 500 Boylston Street
(transfer agent) Boston, MA 02116
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
<PAGE>
(b) With respect to MFS(R) Convertible Securities Fund, MFS(R)
Blue Chip Fund, MFS(R) New Discovery Fund, MFS(R) Science and Technology Fund
and MFS(R) Research International Fund, the registrant undertakes to file an
Amendment to the Registration Statement with financial statements which need not
be certified, within four to six months from the effective date of this
Post-Effective Amendment or the commencement of investment operations of such
Funds.
(c) The registrant undertakes to furnish each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report to
Shareholders upon request and without a charge.
(d) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the provisions set forth in Item 27 of
this Part C, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the Securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<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 19th day of June 1997.
MFS SERIES TRUST I
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 June 19, 1997.
SIGNATURE TITLE
A. KEITH BRODKIN* Chairman, President (Principal
A. Keith Brodkin Executive Officer) and Trustee
W. THOMAS LONDON* Treasurer (Principal Financial Officer
W. Thomas London and Principal Accounting Officer)
RICHARD B. BAILEY* Trustee
Richard B. Bailey
MARSHALL N. COHAN* Trustee
Marshall N. Cohan
LAWRENCE H. COHN, M.D.* Trustee
Lawrence H. Cohn, M.D.
<PAGE>
SIR J. DAVID GIBBONS* Trustee
Sir J. David Gibbons
ABBY M. O'NEILL* Trustee
Abby M. O'Neill
WALTER E. ROBB, III* Trustee
Walter E. Robb, III
ARNOLD D. SCOTT* Trustee
Arnold D. Scott
JEFFREY L. SHAMES* Trustee
Jeffrey L. Shames
J. DALE SHERRATT* Trustee
J. Dale Sherratt
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, incorporated by
reference to Registrant's Post-
Effective Amendment No. 21 filed with
the SEC via EDGAR on October 17, 1995.
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
1 (f) Amendment to Declaration of Trust, dated
December 19, 1996 to redesignate Class P Shares
as Class I Shares.
(g) Amendment to Declaration of Trust, dated April 9,
1997 to redesignate MFS Aggressive Growth Fund as
MFS Strategic Growth Fund.
5 (e) Amendment to Investment Advisory Agreement for
MFS(R) Research Growth and Income Fund, dated
January 2, 1997.
(i) Investment Advisory Agreement for MFS(R)
Convertible Securities Fund, dated January 2, 1997.
(j) Investment Advisory Agreement for MFS(R) Blue
Chip Fund, dated January 2, 1997.
(k) Investment Advisory Agreement for MFS(R) New
Discovery Fund, dated January 2, 1997.
(l) Investment Advisory Agreement for MFS(R)
Science and Technology Fund, dated January 2, 1997.
(m) Investment Advisory Agreement for MFS(R)
Research International Fund, dated January 2, 1997.
(n) Sub-Advisory Agreement for MFS(R) Research
International Fund by and between Massachusetts
Financial Services Company and Foreign &
Colonial Management Ltd. dated January 2, 1997.
(o) Sub-Advisory Agreement for MFS(R) Research
International Fund by and between Foreign &
Colonial Management Ltd. and Foreign &
Colonial Emerging Markets Limited, dated January 2, 1997.
<PAGE>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
9 (b) Amendment to Shareholder Servicing Agent
Agreement to amend fee schedule, dated
January 1, 1997.
(e) Third Amendment dated February 14, 1997 to Loan
Agreement dated as of February 21, 1995 by and
among the Banks named therein and The First
National Bank of Boston.
17 Financial Data Schedules for Class A Shares
and Class I Shares for MFS Blue Chip Fund, MFS
New Discovery Fund, MFS Convertible Securities
Fund, MFS Research International Fund
and MFS Science and Technology Fund.
<PAGE>
EXHIBIT NO. 99.1(f)
MFS SERIES TRUST I
CERTIFICATION OF AMENDMENT
TO THE DECLARATION OF TRUST
REDESIGNATION
OF CLASS P SHARES AS CLASS I SHARES
The undersigned, being a majority of the Trustees of MFS Series Trust I
(the "Trust"), a business trust organized under the laws of The Commonwealth of
Massachusetts pursuant to an Amended and Restated Declaration of Trust dated
January 6, 1995 as amended (the "Declaration"), acting pursuant to Section 6.10
of the Declaration, do hereby redesignate the shares previously designated as
Class P shares of each series of the Trust as Class I shares.
IN WITNESS WHEREOF, a majority of the Trustees of the Trust have executed
this amendment, in one or more counterparts, all constituting a single
instrument, as an instrument under seal in The Commonwealth of Massachusetts, as
of this 11th day of December, 1996.
A. KEITH BRODKIN WALTER E. ROBB, III
A. Keith Brodkin Walter E. Robb, III
76 Farm Road 35 Farm Road
Sherborn, MA 01770 Sherborn, MA 01770
RICHARD B. BAILEY ARNOLD D. SCOTT
Richard B. Bailey Arnold D. Scott
63 Atlantic Avenue 20 Rowes Wharf
Boston, MA 02110 Boston, MA 02110
MARSHALL N. COHAN JEFFREY L. SHAMES
Marshall N. Cohan Jeffrey L. Shames
2524 Bedford Mews Drive 60 Brookside Road
Wellington, FL 33414 Needham, MA 02192
LAWRENCE H. COHN J. DALE SHERRATT
Lawrence H. Cohn J. Dale Sherratt
45 Singletree Road 86 Farm Road
Chestnut Hill, MA 02167 Sherborn, MA 01770
<PAGE>
SIR J. DAVID GIBBONS WARD SMITH
Sir J. David Gibbons Ward Smith
"Leeward" 36080 Shaker Blvd
5 Leeside Drive Hunting Valley, OH 44022
"Point Shares"
Pembroke, Bermuda HM 05
ABBY M. O'NEILL
Abby M. O'Neill
200 Sunset Road
Oyster Bay, NY 11771
<PAGE>
EXHIBIT NO. 99.1(g)
MFS SERIES TRUST I
CERTIFICATION OF AMENDMENT
TO THE DECLARATION OF TRUST
REDESIGNATION OF SERIES
The undersigned, being a majority of the Trustees of MFS Series Trust I
(the "Trust"), a business trust organized under the laws of The Commonwealth of
Massachusetts, pursuant to Section 6.9 and 9.3 of the Amended and Restated
Declaration of Trust dated January 6, 1995, as amended (the "Declaration"),
hereby redesignate an existing series of Shares (as defined in the Declaration)
as follows:
The series designated as MFS Aggressive Growth Fund shall be
redesignated as MFS Strategic Growth Fund.
IN WITNESS WHEREOF, a majority of the Trustees of the Trust have
executed this certificate of amendment to the Declaration of Trust, in one or
more counterparts, all constituting a single instrument, as an instrument under
seal in The Commonwealth of Massachusetts, as of this 9th day of April, 1997.
WALTER E. ROBB, III
A. Keith Brodkin Walter E. Robb, III
76 Farm Road 35 Farm Road
Sherborn, MA 01770 Sherborn, MA 01770
RICHARD B. BAILEY ARNOLD D. SCOTT
Richard B. Bailey Arnold D. Scott
63 Atlantic Avenue 20 Rowes Wharf
Boston, MA 02110 Boston, MA 02110
MARSHALL N. COHAN JEFFREY L. SHAMES
Marshall N. Cohan Jeffrey L. Shames
2524 Bedford Mews Drive 38 Lake Avenue
Wellington, FL 33414 Newton, MA 02159
<PAGE>
LAWRENCE H. COHN J. DALE SHERRATT
Lawrence H. Cohn J. Dale Sherratt
45 Singletree Road 86 Farm Road
Chestnut Hill, MA 02167 Sherborn, MA 01770
SIR J. DAVID GIBBONS WARD SMITH
Sir J. David Gibbons Ward Smith
"Leeward" 36080 Shaker Blvd
5 Leeside Drive Hunting Valley, OH 44022
"Point Shares"
Pembroke, Bermuda HM 05
ABBY M. O'NEILL
Abby M. O'Neill
200 Sunset Road
Oyster Bay, NY 11771
<PAGE>
EXHIBIT NO. 99.5(e)
AMENDMENT TO INVESTMENT
ADVISORY AGREEMENT
AMENDMENT dated as of January 2, 1997 to the Investment Advisory Agreement dated
January 2, 1996 by and between MFS Series Trust I (the "Trust") on behalf of MFS
Research Growth and Income Fund (the "Fund"), a series of the Trust, and
Massachusetts Financial Services Company, a Delaware corporation (the "Adviser")
(the "Agreement").
WITNESSETH
WHEREAS, the Trust on behalf of the Fund has entered into the Agreement with the
Adviser; and
WHEREAS, MFS has agreed to amend the Agreement as provided below;
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. Amendment of the Agreement: Effective as of the date hereof, the first
sentence of Article 3 of the Agreement is deleted and replaced in its entirety
as follows:
"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 in an amount equal to the sum of
0.65% of the first $500 million of the Fund's average daily
net assets and 0.55% of the amount in excess of $500 million,
in each case on an annualized basis for the Fund's
then-current fiscal year."
2. Miscellaneous: Except as set forth in this Amendment, the Agreement
shall remain in full force and effect, without amendment or modification.
3. Prior Amendments: This Amendment supersedes any and all previous
amendments to the Agreement.
4. Limitation of Liability of the Trustees and Shareholders: A copy of the
Trust's Declaration of Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts. The parties hereto acknowledge that the
obligations of or arising out of this instrument are not binding upon any of the
Trust's trustees, officers, employees, agents or shareholders individually, but
are binding solely upon the assets and property of the Trust in accordance with
its proportionate interest hereunder. If this instrument is executed by the
Trust on behalf of one or more series of the Trust, the parties hereto
acknowledge that the assets and liabilities of each series of the Trust are
separate and distinct and that the obligations of or arising out of this
instrument are binding solely upon
<PAGE>
the assets or property of the series on whose behalf the Trust has executed this
instrument. If the Trust has executed this instrument on behalf of more than one
series of the Trust, the parties hereto also agree that the obligations of each
series hereunder shall be several and not joint, in accordance with its
proportionate interest hereunder, and the parties hereto agree not to proceed
against any series for the obligations of another series.
IN WITNESS WHEREOF, the parties have caused this Amendment to the Agreement to
be executed and delivered in the names and on their behalf by the undersigned,
therewith duly authorized, all as of the day and year first above written.
MFS SERIES TRUST I,
on behalf of MFS RESEARCH GROWTH
AND INCOME FUND
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: ARNOLD D. SCOTT
Arnold D. Scott
Senior Executive Vice President
<PAGE>
EXHIBIT NO. 99.5(i)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 2nd day of January, 1997, by
and between MFS SERIES TRUST I, a Massachusetts business trust (the "Trust"), on
behalf of MFS CONVERTIBLE SECURITIES FUND, a series of the Trust (the "Fund"),
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 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 Trust's Amended and
Restated Declaration of Trust, dated January 6, 1995, and By-Laws, each as
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
to the provisions of the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Fund's then-current Prospectus and
Statement of Additional Information. The Adviser 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 the investment policy and notify the Adviser thereof in
writing, the Adviser shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination shall be 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 the
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 at reasonably competitive
commission rates. In fulfilling this requirement, the Adviser shall
<PAGE>
not be deemed to have acted unlawfully or to have breached any duty, created by
this Agreement or otherwise, solely by reason of its having caused the Fund to
pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determined in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund and to other clients of the Adviser as
to which the Adviser exercises investment discretion.
The Adviser may from time to time enter into sub-investment advisory agreements
with one or more investment advisers with such terms and conditions as the
Adviser may determine, provided that such sub-investment advisory agreements
have been approved in accordance with applicable provisions of the Investment
Company Act of 1940. Subject to the provisions of Article 6, the Adviser shall
not be liable for any error of judgment or mistake of law by any sub-adviser or
for any loss arising out of any investment made by any sub-adviser or for any
act or omission in the execution and management of the Fund by any sub-adviser.
Article 2. Allocation of Charges and Expenses. 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 inclu ding, 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; and 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 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 an annual rate equal to 0.65% of the
Fund's average daily net assets for its then-current fiscal year. If the Adviser
shall serve for less than the whole of any period specified in this Article 3,
the compensation to the Adviser will be prorated.
<PAGE>
Article 4. Special Services.. Should the Trust have occasion to request
the Adviser to perform services not herein contemplated or to request the
Adviser to arrange for the services of others, the Adviser will act for the
Trust on behalf of the Fund upon request to the best of its ability, with
compensation for the Adviser's services to be agreed upon with respect to each
such occasion as it arises.
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 Trust's
distributor, if any, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders 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 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 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 deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other fund clients to use the initials "MFS" in their names. The Fund agrees
that if the Adviser shall for any reason no longer serve as the Adviser to the
Fund, the Fund 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 Fund as a shareholder or otherwise.
Article 8. Duration, Termination and Amendment 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 January 2, 1999 on which date it will terminate unless its
continuance after January 2, 1999 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".
<PAGE>
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Fund.
Article 9. Scope of Trust's Obligations. A copy of the Trust's
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts. The Adviser acknowledges that the obligations of or arising
out of this Agreement are not binding upon any of the Trust's trustees,
officers, employees, agents or shareholders individually, but are binding solely
upon the assets and property of the Trust. If this Agreement is executed by the
Trust on behalf of one or more series of the Trust, the Adviser further
acknowledges that the assets and liabilities of each series of the Trust are
separate and distinct and that the obligations of or arising out of this
Agreement are binding solely upon the assets or property of the series on whose
behalf the Trust has executed this Agreement.
Article 10. Definitions. 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, 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.
Article 11. Record Keeping. The Adviser will maintain records in a form
acceptable to the Trust 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 Trust
and will be available for inspection and use by the Trust.
<PAGE>
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.
MFS SERIES TRUST I on behalf of
MFS CONVERTIBLE SECURITIES
FUND, one of its series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
<PAGE>
EXHIBIT NO. 99.5(j)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 2nd day of January, 1997, by
and between MFS SERIES TRUST I, a Massachusetts business trust (the "Trust"), on
behalf of MFS BLUE CHIP FUND, a series of the Trust (the "Fund"), 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 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 Trust's Amended and
Restated Declaration of Trust, dated January 6, 1995, and By-Laws, each as
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
to the provisions of the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Fund's then-current Prospectus and
Statement of Additional Information. The Adviser 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 the investment policy and notify the Adviser thereof in
writing, the Adviser shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination shall be 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 the
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 at reasonably competitive
commission rates. In fulfilling this requirement, the Adviser shall not be
deemed to have acted unlawfully or to have breached any duty, created by this
<PAGE>
Agreement or otherwise, solely by reason of its having caused the Fund to pay a
broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction, if the Adviser determined in good faith
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund and to other clients of the Adviser as
to which the Adviser exercises investment discretion.
The Adviser may from time to time enter into sub-investment advisory agreements
with one or more investment advisers with such terms and conditions as the
Adviser may determine, provided that such sub-investment advisory agreements
have been approved in accordance with applicable provisions of the Investment
Company Act of 1940. Subject to the provisions of Article 6, the Adviser shall
not be liable for any error of judgment or mistake of law by any sub-adviser or
for any loss arising out of any investment made by any sub-adviser or for any
act or omission in the execution and management of the Fund by any sub-adviser.
Article 2. Allocation of Charges and Expenses. 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; and 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 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 an annual rate equal to 0.65% of the
Fund's average daily net assets for its then-current fiscal year. If the Adviser
shall serve for less than the whole of any period specified in this Article 3,
the compensation to the Adviser will be prorated.
<PAGE>
Article 4. Special Services.. Should the Trust have occasion to request
the Adviser to perform services not herein contemplated or to request the
Adviser to arrange for the services of others, the Adviser will act for the
Trust on behalf of the Fund upon request to the best of its ability, with
compensation for the Adviser's services to be agreed upon with respect to each
such occasion as it arises.
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 Trust's
distributor, if any, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders 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 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 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 deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other fund clients to use the initials "MFS" in their names. The Fund agrees
that if the Adviser shall for any reason no longer serve as the Adviser to the
Fund, the Fund 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 Fund as a shareholder or otherwise.
Article 8. Duration, Termination and Amendment 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 January 2, 1999 on which date it will terminate unless its
continuance after January 2, 1999 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".
<PAGE>
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Fund.
Article 9. Scope of Trust's Obligations. A copy of the Trust's
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts. The Adviser acknowledges that the obligations of or arising
out of this Agreement are not binding upon any of the Trust's trustees,
officers, employees, agents or shareholders individually, but are binding solely
upon the assets and property of the Trust. If this Agreement is executed by the
Trust on behalf of one or more series of the Trust, the Adviser further
acknowledges that the assets and liabilities of each series of the Trust are
separate and distinct and that the obligations of or arising out of this
Agreement are binding solely upon the assets or property of the series on whose
behalf the Trust has executed this Agreement.
Article 10. Definitions. 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, 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.
Article 11. Record Keeping. The Adviser will maintain records in a form
acceptable to the Trust 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 Trust
and will be available for inspection and use by the Trust.
<PAGE>
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.
MFS SERIES TRUST I on
behalf of MFS BLUE CHIP FUND,
one of its series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
<PAGE>
EXHIBIT NO. 99.5(k)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 2nd day of January, 1997, by
and between MFS SERIES TRUST I, a Massachusetts business trust (the "Trust"), on
behalf of MFS NEW DISCOVERY FUND, a series of the Trust (the "Fund"), 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 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 Trust's Amended and
Restated Declaration of Trust, dated January 6, 1995, and By-Laws, each as
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
to the provisions of the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Fund's then-current Prospectus and
Statement of Additional Information. The Adviser 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 the investment policy and notify the Adviser thereof in
writing, the Adviser shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination shall be 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 the
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 at reasonably competitive
commission rates. In fulfilling this requirement, the Adviser shall not be
deemed to have acted unlawfully or to have breached any duty, created by this
<PAGE>
Agreement or otherwise, solely by reason of its having caused the Fund to pay a
broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction, if the Adviser determined in good faith
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund and to other clients of the Adviser as
to which the Adviser exercises investment discretion.
The Adviser may from time to time enter into sub-investment advisory agreements
with one or more investment advisers with such terms and conditions as the
Adviser may determine, provided that such sub-investment advisory agreements
have been approved in accordance with applicable provisions of the Investment
Company Act of 1940. Subject to the provisions of Article 6, the Adviser shall
not be liable for any error of judgment or mistake of law by any sub-adviser or
for any loss arising out of any investment made by any sub-adviser or for any
act or omission in the execution and management of the Fund by any sub-adviser.
Article 2. Allocation of Charges and Expenses. 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 inclu ding, 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; and 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 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 an annual rate equal to 0.75% of the
Fund's average daily net assets for its then-current fiscal year. If the Adviser
shall serve for less than the whole of any period specified in this Article 3,
the compensation to the Adviser will be prorated.
<PAGE>
Article 4. Special Services.. Should the Trust have occasion to request
the Adviser to perform services not herein contemplated or to request the
Adviser to arrange for the services of others, the Adviser will act for the
Trust on behalf of the Fund upon request to the best of its ability, with
compensation for the Adviser's services to be agreed upon with respect to each
such occasion as it arises.
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 Trust's
distributor, if any, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders 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 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 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 deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other fund clients to use the initials "MFS" in their names. The Fund agrees
that if the Adviser shall for any reason no longer serve as the Adviser to the
Fund, the Fund 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 Fund as a shareholder or otherwise.
Article 8. Duration, Termination and Amendment 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 January 2, 1999 on which date it will terminate unless its
continuance after January 2, 1999 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".
<PAGE>
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Fund.
Article 9. Scope of Trust's Obligations. A copy of the Trust's
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts. The Adviser acknowledges that the obligations of or arising
out of this Agreement are not binding upon any of the Trust's trustees,
officers, employees, agents or shareholders individually, but are binding solely
upon the assets and property of the Trust. If this Agreement is executed by the
Trust on behalf of one or more series of the Trust, the Adviser further
acknowledges that the assets and liabilities of each series of the Trust are
separate and distinct and that the obligations of or arising out of this
Agreement are binding solely upon the assets or property of the series on whose
behalf the Trust has executed this Agreement.
Article 10. Definitions. 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, 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.
Article 11. Record Keeping. The Adviser will maintain records in a form
acceptable to the Trust 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 Trust
and will be available for inspection and use by the Trust.
<PAGE>
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.
MFS SERIES TRUST I on
behalf of MFS NEW DISCOVERY
FUND, one of its series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
<PAGE>
EXHIBIT NO. 99.5(l)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 2nd day of January, 1997, by
and between MFS SERIES TRUST I, a Massachusetts business trust (the "Trust"), on
behalf of MFS SCIENCE AND TECHNOLOGY FUND, a series of the Trust (the "Fund"),
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 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 Trust's Amended and
Restated Declaration of Trust, dated January 6, 1995, and By-Laws, each as
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
to the provisions of the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Fund's then-current Prospectus and
Statement of Additional Information. The Adviser 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 the investment policy and notify the Adviser thereof in
writing, the Adviser shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination shall be 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 the
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 at reasonably competitive
commission rates. In fulfilling this requirement, the Adviser shall
<PAGE>
not be deemed to have acted unlawfully or to have breached any duty, created by
this Agreement or otherwise, solely by reason of its having caused the Fund to
pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determined in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund and to other clients of the Adviser as
to which the Adviser exercises investment discretion.
The Adviser may from time to time enter into sub-investment advisory agreements
with one or more investment advisers with such terms and conditions as the
Adviser may determine, provided that such sub-investment advisory agreements
have been approved in accordance with applicable provisions of the Investment
Company Act of 1940. Subject to the provisions of Article 6, the Adviser shall
not be liable for any error of judgment or mistake of law by any sub-adviser or
for any loss arising out of any investment made by any sub-adviser or for any
act or omission in the execution and management of the Fund by any sub-adviser.
Article 2. Allocation of Charges and Expenses. 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 inclu ding, 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; and 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 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 an annual rate equal to 0.75% of the
Fund's average daily net assets for its then-current fiscal year. If the Adviser
shall serve for less than the whole of any period specified in this Article 3,
the compensation to the Adviser will be prorated.
<PAGE>
Article 4. Special Services.. Should the Trust have occasion to request
the Adviser to perform services not herein contemplated or to request the
Adviser to arrange for the services of others, the Adviser will act for the
Trust on behalf of the Fund upon request to the best of its ability, with
compensation for the Adviser's services to be agreed upon with respect to each
such occasion as it arises.
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 Trust's
distributor, if any, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders 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 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 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 deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other fund clients to use the initials "MFS" in their names. The Fund agrees
that if the Adviser shall for any reason no longer serve as the Adviser to the
Fund, the Fund 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 Fund as a shareholder or otherwise.
Article 8. Duration, Termination and Amendment 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 January 2, 1999 on which date it will terminate unless its
continuance after January 2, 1999 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".
<PAGE>
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Fund.
Article 9. Scope of Trust's Obligations. A copy of the Trust's
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts. The Adviser acknowledges that the obligations of or arising
out of this Agreement are not binding upon any of the Trust's trustees,
officers, employees, agents or shareholders individually, but are binding solely
upon the assets and property of the Trust. If this Agreement is executed by the
Trust on behalf of one or more series of the Trust, the Adviser further
acknowledges that the assets and liabilities of each series of the Trust are
separate and distinct and that the obligations of or arising out of this
Agreement are binding solely upon the assets or property of the series on whose
behalf the Trust has executed this Agreement.
Article 10. Definitions. 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, 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.
Article 11. Record Keeping. The Adviser will maintain records in a form
acceptable to the Trust 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 Trust
and will be available for inspection and use by the Trust.
<PAGE>
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.
MFS SERIES TRUST I on behalf of
MFS SCIENCE AND TECHNOLOGY
FUND, one of its series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
<PAGE>
EXHIBIT NO. 99.5(m)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 2nd day of January, 1997, by
and between MFS SERIES TRUST I, a Massachusetts business trust (the "Trust"), on
behalf of MFS RESEARCH INTERNATIONAL FUND, a series of the Trust (the "Fund"),
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 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 Trust's Amended and
Restated Declaration of Trust, dated January 6, 1995, and By-Laws, each as
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
to the provisions of the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Fund's then-current Prospectus and
Statement of Additional Information. The Adviser 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 the investment policy and notify the Adviser thereof in
writing, the Adviser shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such
determination shall be 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 the
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 at reasonably competitive
commission rates. In fulfilling this requirement, the Adviser shall
<PAGE>
not be deemed to have acted unlawfully or to have breached any duty, created by
this Agreement or otherwise, solely by reason of its having caused the Fund to
pay a broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Adviser determined in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund and to other clients of the Adviser as
to which the Adviser exercises investment discretion.
The Adviser may from time to time enter into sub-investment advisory agreements
with one or more investment advisers with such terms and conditions as the
Adviser may determine, provided that such sub-investment advisory agreements
have been approved in accordance with applicable provisions of the Investment
Company Act of 1940. Subject to the provisions of Article 6, the Adviser shall
not be liable for any error of judgment or mistake of law by any sub-adviser or
for any loss arising out of any investment made by any sub-adviser or for any
act or omission in the execution and management of the Fund by any sub-adviser.
Article 2. Allocation of Charges and Expenses. 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; and 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 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 an annual rate equal to 1.00% of the
Fund's average daily net assets for its then-current fiscal year. If the Adviser
shall serve for less than the whole of any period specified in this Article 3,
the compensation to the Adviser will be prorated.
<PAGE>
Article 4. Special Services.. Should the Trust have occasion to request
the Adviser to perform services not herein contemplated or to request the
Adviser to arrange for the services of others, the Adviser will act for the
Trust on behalf of the Fund upon request to the best of its ability, with
compensation for the Adviser's services to be agreed upon with respect to each
such occasion as it arises.
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 Trust's
distributor, if any, as principals in making purchases or sales of securities or
other property for the account of the Fund, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders 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 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 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 deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other fund clients to use the initials "MFS" in their names. The Fund agrees
that if the Adviser shall for any reason no longer serve as the Adviser to the
Fund, the Fund 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 Fund as a shareholder or otherwise.
Article 8. Duration, Termination and Amendment 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 January 2, 1999 on which date it will terminate unless its
continuance after January 2, 1999 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".
<PAGE>
This Agreement may be amended only if such amendment is approved by
"vote of a majority of the outstanding voting securities" of the Fund.
Article 9. Scope of Trust's Obligations. A copy of the Trust's
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts. The Adviser acknowledges that the obligations of or arising
out of this Agreement are not binding upon any of the Trust's trustees,
officers, employees, agents or shareholders individually, but are binding solely
upon the assets and property of the Trust. If this Agreement is executed by the
Trust on behalf of one or more series of the Trust, the Adviser further
acknowledges that the assets and liabilities of each series of the Trust are
separate and distinct and that the obligations of or arising out of this
Agreement are binding solely upon the assets or property of the series on whose
behalf the Trust has executed this Agreement.
Article 10. Definitions. 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, 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.
Article 11. Record Keeping. The Adviser will maintain records in a form
acceptable to the Trust 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 Trust
and will be available for inspection and use by the Trust.
<PAGE>
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.
MFS SERIES TRUST I on behalf of
MFS RESEARCH INTERNATIONAL
FUND, one of its series
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
<PAGE>
EXHIBIT NO. 99.5(n)
SUB-ADVISORY AGREEMENT
MFS RESEARCH INTERNATIONAL FUND
SUB-ADVISORY AGREEMENT, dated this 2nd day of January, 1997, by and
between MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation (the
"Adviser") and FOREIGN & COLONIAL MANAGEMENT LTD., a company incorporated under
the laws of England and Wales (the "Sub-Adviser").
WITNESSETH:
WHEREAS, the Adviser provides MFS Research International Fund (the
"Fund"), a series of MFS Series Trust I (the "Trust"), an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), business services pursuant to the terms and conditions of an
investment advisory agreement dated January 2, 1997 (the "Advisory Agreement")
between the Adviser and the Trust, on behalf of the Fund; and
WHEREAS, the Sub-Adviser is willing to provide services to the Adviser
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 Sub-Adviser. The Sub-Adviser will furnish the Adviser
with information and advice relating to such portion of the Fund's assets as the
Adviser shall from time to time designate (the "Designated Assets"). Subject to
the supervision of the Trustees of the Trust and the Adviser, the Sub-Adviser
will: (a) manage the Designated Assets on behalf of the Fund in accordance with
the Fund's investment objective, policies and limitations as stated in the
Fund's then current Prospectus (the "Prospectus") and Statement of Additional
Information (the "Statement"), and the Trust's Amended and Restated Declaration
of Trust dated December 14, 1994, as amended, and Amended and Restated By-Laws,
each as from time to time in effect (respectively, the "Declaration" and the
"By-Laws") and in compliance with the 1940 Act and the rules, regulations and
orders thereunder; (b) make investment decisions with respect to the Designated
Assets; (c) place purchase and sale orders for portfolio transactions with
respect to the Designated Assets; (d) manage otherwise uninvested cash assets
with respect to the Designated Assets; (e) as the agent of the Fund, give
instructions (including trade tickets) to the custodian and any sub-custodian of
the Fund as to deliveries of securities, transfers of currencies and payments of
cash with respect to the Designated Assets (the Sub-Adviser shall promptly
notify the Adviser of such instructions); (f) employ professional portfolio
managers to provide research services to the Fund; (g) attend periodic meetings
of the Board of Trustees of the Trust and (h) obtain all the registrations,
qualifications and consents, on behalf of the Fund, which are necessary for the
Fund to purchase and sell assets in each jurisdiction (other than the United
States) in which the Fund's Designated Assets are to be invested (the
Sub-Adviser shall promptly provide the Adviser with copies of any such
registrations,
<PAGE>
qualifications and consents). In providing these services, the Sub-Adviser will
furnish continuously an investment program with respect to the Designated
Assets. The Sub-Adviser shall be responsible for monitoring the Fund's
compliance with the Prospectus, the Statement, the Declaration, the By-Laws and
the 1940 Act and the rules, regulations and orders thereunder and in monitoring
such compliance the Sub-Adviser shall do so in the functional currency of the
Fund. The Sub-Adviser shall only be responsible for compliance with the
above-mentioned restrictions in regards to the Designated Assets. The Adviser
agrees to provide the Sub-Adviser with such assistance as may be reasonably
requested by the Sub-Adviser in connection with its activities under this
Agreement, including, without limitation, information concerning the Fund, its
funds available, or to become available, for investment and generally as to the
conditions of the Fund's affairs. From time to time the Adviser will notify the
Sub-Adviser of the aggregate U.S. Dollar amount of the Designated Assets. The
Adviser will have responsibility for exercising proxy, consent and other rights
pertaining to the Designated Assets; provided, however, that the Sub-Adviser
will, as requested, make recommendations to the Adviser as to the manner in
which such proxy, consent and other rights should be exercised.
Should the Trustees of the Trust or the Adviser at any time make any
determination as to investment policy and notify the Sub-Adviser thereof in
writing, the Sub-Adviser shall be bound by such determination for the period, if
any, specified in such notice or until notified that such determination has been
revoked. Further, the Adviser or the Trustees of the Trust may at any time, upon
written notice to the Sub-Adviser, suspend or restrict the right of the
Sub-Adviser to determine what Designated Assets shall be purchased or sold and
what portion, if any, of the Fund's Designated Assets shall be held uninvested.
It is understood that the Adviser undertakes to discuss with the Sub-Adviser any
such determinations of investment policy and any such suspension or restrictions
on the right of the Sub-Adviser to determine what Designated Assets shall be
purchased or sold or held uninvested, prior to the implementation thereof.
2. Certain Information to the Sub-Adviser. Copies of the Prospectus,
the Statement, the Declaration and the By-Laws have been delivered to the
Sub-Adviser. The Adviser agrees to notify the Sub-Adviser of each change in the
investment policies of the Fund and to provide to the Sub-Adviser as promptly as
practicable copies of all amendments and supplements to the Prospectus, the
Statement, the Declaration and the By-Laws. In addition, the Adviser will
promptly provide the Sub-Adviser with any procedures applicable to the
Sub-Adviser adopted from time to time by the Trustees of the Trust and agrees to
provide promptly to the Sub-Adviser copies of all amendments thereto.
3. Execution of Certain Documents. Subject to any other written
instructions of the Adviser and the Trustees of the Trust, the Sub-Adviser is
hereby appointed the Adviser's and the Trust's agent and attorney-in-fact to
execute account documentation, agreements, contracts and other documents as the
Sub-Adviser shall be requested by brokers, dealers, counterparties and other
persons in connection with its management of the Designated Assets.
4. Reports. The Sub-Adviser shall furnish to the Trustees of the Trust
or the Adviser, or both, as may be appropriate, quarterly reports of its
activities on behalf of the Fund, as required by applicable law or as otherwise
requested from time to time by the Trustees of the Trust or the Adviser, and
such additional information, reports, evaluations,
<PAGE>
analyses and opinions as the Trustees of the Trust or the Adviser, as
appropriate, may request from time to time.
5. Brokerage. In connection with the selections of brokers, dealers or
other entities and the placing of orders for the purchase and sale of portfolio
investments for the Fund, the Sub-Adviser is directed to seek for the Fund
execution at the most favorable price by responsible brokerage firms at
reasonably competitive commission rates. In fulfilling this requirement, the
Sub-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, dealer or other entity an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker, dealer or other entity would have charged for effecting that
transaction, if the Sub-Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934, as amended) provided by such broker, dealer or other entity, viewed in
terms of either that particular transaction or the Sub-Adviser's overall
responsibilities with respect to the Fund and to other clients of the
Sub-Adviser as to which the Sub-Adviser exercises investment discretion.
6. Services to Other Companies or Accounts. On occasions when the
Sub-Adviser deems the purchase or sale of a security to be in the best interest
of the Fund as well as other clients, the Sub-Adviser, to the extent permitted
by applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction will be made by the Sub-Adviser in the
manner it considers to be the most equitable. The Sub-Adviser agrees to allocate
similarly opportunities to sell or otherwise dispose of securities among the
Fund and other clients of the Sub-Adviser.
7. Other Sub-Advisers. The Sub-Adviser may from time to time enter into
investment sub-advisory agreements with one or more investment advisers, (an
"Other Sub-Adviser"), to the Fund to perform some or all of the services for
which the Sub-Adviser is responsible pursuant to this Agreement upon such terms
and conditions as the Adviser and the Sub-Adviser may determine; provided,
however, that such investment sub-advisory agreements have been approved by a
majority of the Trustees of the Trust who are not interested persons of the
Trust, or the Sub-Adviser or the Other Sub-Adviser and by vote of a majority of
the outstanding voting securities of the Fund; and, provided, further, that the
Sub-Adviser shall own a majority of the voting securities of any Other
Sub-Adviser. The Sub-Adviser may terminate the services of any Other Sub-Adviser
at any time in its sole discretion, and shall at such time assume the
responsibilities of such Other Sub-Adviser unless and until a successor Other
Sub-Adviser is selected. The Sub-Adviser shall be liable for any error of
judgment or mistake of law by any Other Sub-Adviser and for any act or omission
in the execution and management of the Fund by any Other Sub-Adviser.
<PAGE>
8. Compensation of the Sub-Adviser. For the services to be rendered by
the Sub-Adviser under this Agreement, the Adviser shall pay to the Sub-Adviser
compensation, computed and paid monthly in arrears in U.S. dollars, at a rate of
0.40% per annum of the average daily net asset value of the Fund. If the
Sub-Adviser shall serve for less than the whole of any month, the compensation
payable to the Sub-Adviser with respect to the Fund will be prorated. The
Sub-Adviser will pay its expenses incurred in performing its duties under this
Agreement. Neither the Trust nor the Fund shall be liable to the Sub-Adviser for
the compensation of the Sub-Adviser. For the purpose of determining fees payable
to the Sub-Adviser, the value of the Fund's net assets shall be computed at the
times and in the manner specified in the Prospectus and/or Statement. In the
event that the Adviser reduces its management fee payable under the Advisory
Agreement in order to comply with the expense limitations of a State securities
commission or otherwise, the Sub-Adviser agrees to reduce its fee payable under
this Agreement by a pro rata amount.
9. Limitation of Liability of the Sub-Adviser. The Sub-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. The
Trust, on behalf of the Fund, may enforce any obligations of the Sub-Adviser
under this Agreement and may recover directly from the Sub-Adviser for any
liability it may have to the Fund.
10. Activities of the Sub-Adviser. The services of the Sub-Adviser to
the Fund are not deemed to be exclusive, the Sub-Adviser being free to render
investment advisory and/or other services to others. It is understood that the
Trustees, officers and shareholders of the Trust, the Fund or the Adviser are or
may be or become interested in the Sub-Adviser or any person controlling,
controlled by or under common control with the Sub-Adviser, as trustees,
officers, employees or otherwise and that trustees, officers and employees of
the Sub-Adviser or any person controlling, controlled by or under common control
with the Sub-Adviser may become similarly interested in the Trust, the Fund or
the Adviser and that the Sub-Adviser may be or become interested in the Fund as
a shareholder or otherwise.
11. Covenants of the Sub-Adviser. The Sub-Adviser agrees that it (a)
will not deal with itself, "affiliated persons" of the Sub-Adviser, the Trustees
of the Trust or the Fund's distributor, as principals, agents, brokers or
dealers in making purchases or sales of securities or other property for the
account of the Fund, except as permitted by the 1940 Act and the rules,
regulations and orders thereunder and subject to the prior written approval of
the Adviser, (b) will not take a long or short position in the shares of the
Fund except as permitted by the Declaration and (c) will comply with all other
provisions of the Declaration and the By-Laws and the then-current Prospectus
and Statement relative to the Sub-Adviser and its trustees, officers, employees
and affiliates.
12. Representations, Warranties and Additional Agreements of the
Sub-Adviser. The Sub-Adviser represents, warrants and agrees that:
(a) It: (i) is registered as an investment adviser under the U.S.
Investment Advisers Act of 1940 (the "Advisers Act"), is
authorized to undertake investment business in the United
Kingdom by virtue of
<PAGE>
its membership in the Investment Management Regulatory
Organisation ("IMRO") and is registered under the laws of
any jurisdiction in which the Sub-Adviser is required to be
registered as an investment adviser in order to perform its
obligations under this Agreement, and will continue to be so
registered for so long as this Agreement remains in effect;
(ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement;
(iii) has met, and will continue to meet for so long as this
Agreement remains in effect, any other applicable Federal or
State requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to
be met in order to perform the services contemplated by this
Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; (v) will
immediately notify the Adviser in writing of the occurrence
of any event that would disqualify the Sub-Adviser from
serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise; and
(vi) will immediately notify the Adviser in writing of any
change of control of the Sub-Adviser or any parent of the
Sub-Adviser resulting in an "assignment" of this Agreement.
(b) It will maintain, keep current and preserve on behalf of the
Fund, in the manner and for the periods of time
required or permitted by the 1940 Act and the rules,
regulations and orders thereunder and the Advisers Act and
the rules, regulations and orders thereunder, records
relating to investment transactions made by the Sub-Adviser
for the Fund as may be reasonably requested by the Adviser
or the Fund from time to time. The Sub-Adviser agrees that
such records are the property of the Fund, and will be
surrendered to the Fund promptly upon request; provided,
however, that the Sub-Adviser may retain copies of such
records for archival purposes as required by IMRO.
(c) The Sub-Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act
and, if it has not already done so, will provide the Adviser
and the Trust with a copy of such code of ethics, and upon
any amendment to such code of ethics, promptly provide such
amendment. At least annually the Sub-Adviser will provide
the Trust and the Adviser with a certificate signed by the
chief compliance officer (or the person performing such
function) of the Sub-Adviser certifying, to the best of his
or her knowledge, compliance with the code of ethics during
the immediately preceding twelve (12) month period,
including any material violations of or amendments to the
code of ethics or the administration thereof.
(d) It has provided the Adviser and the Trust with a copy
of its Form ADV as most recently filed with the
Securities and Exchange Commission (the "SEC") and will,
promptly after filing any amendment to its Form ADV with the
SEC, furnish a copy of such amendment to the Adviser and the
Trust.
<PAGE>
13. Duration and Termination 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 January
2, 1999 and each year thereafter but only so long as its continuance is
"specifically approved at least annually" (a) by the vote of a majority of the
Trustees of the Trust who are not "interested persons" of the Trust or of the
Adviser or of the Sub-Adviser at a meeting specifically called for the purpose
of voting on such approval, and (b) 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 of the Trust, by "vote of a majority of the outstanding voting
securities" of the Fund or by the Adviser, on not more than sixty days nor less
than thirty days written notice, or by the Sub-Adviser on not more than ninety
days nor less than sixty days written notice. This Agreement shall automatically
terminate in the event of its "assignment" or in the event that the Advisory
Agreement shall have terminated for any reason.
14. Amendments to this Agreement. This Agreement may be amended
only if such amendment is approved by "vote of a majority of the outstanding
voting securities" of the Fund, by the Adviser and by the Sub-Adviser.
15. Certain Definitions. The terms "specifically approved at least
annually", "vote of a majority of the outstanding voting securities",
"assignment", "control", "affiliated persons" and "interested person", when used
in this Agreement, shall have the respective meanings specified, and shall be
construed in a manner consistent with, the 1940 Act and the rules, regulations
and orders thereunder, subject, however, to such exemptions as may be granted by
the SEC under the 1940 Act.
16. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Sub-Adviser pursuant
to Section 12 hereof shall survive for the duration of this Agreement and the
Sub-Adviser shall immediately notify, but in no event later than five (5)
business days, the Adviser in writing upon becoming aware that any of the
foregoing representations and warranties are no longer true.
17. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the internal laws of The Commonwealth of Massachusetts. All
notices provided for by this Agreement shall be in writing and shall be deemed
given when received, against appropriate receipt, by the Sub-Adviser's Secretary
in the case of the Sub-Adviser, the Adviser's General Counsel in the case of the
Adviser, and the Trust's Secretary in the case of the Fund, or such other person
as a party shall designate by notice to the other parties. This Agreement
constitutes the entire agreement among the parties hereto and supersedes any
prior agreement among the parties relating to the subject matter hereof. The
section headings of this Agreement are for convenience of reference and do not
constitute a part hereof.
<PAGE>
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.
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: JEFFREY L. SHAMES
Jeffrey L. Shames
President
FOREIGN & COLONIAL
MANAGEMENT LTD.
By: JAMES OGLIVY
James Oglivy
By: JONATHAN LUBRAN
Jonathan Lubran
<PAGE>
The foregoing is hereby agreed to:
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts. The parties hereto
acknowledge that the obligations of or arising out of this instrument are not
binding upon any of the Trust's trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and property
of the Trust in accordance with its proportionate interest hereunder. If this
instrument is executed by the Trust on behalf of one or more series of the
Trust, the parties hereto acknowledge that the assets and liabilities of each
series of the Trust are separate and distinct and that the obligations of or
arising out of this instrument are binding solely upon the assets or property of
the series on whose behalf the Trust has executed this instrument. If the Trust
has executed this instrument on behalf of more than one series of the Trust, the
parties hereto also agree that the obligations of each series hereunder shall be
several and not joint, in accordance with its proportionate interest hereunder,
and the parties hereto agree not to proceed against any series for the
obligations of another series.
MFS SERIES TRUST I
on behalf of MFS RESEARCH INTERNATIONAL FUND
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
<PAGE>
EXHIBIT NO. 99.5(o)
SUB-ADVISORY AGREEMENT
MFS RESEARCH INTERNATIONAL FUND
SUB-ADVISORY AGREEMENT, dated this 2nd day of January, 1997, by and
between FOREIGN & COLONIAL MANAGEMENT LTD., a company incorporated under the
laws of England and Wales (the "Sub-Adviser"), and FOREIGN & COLONIAL EMERGING
MARKETS LIMITED, a company incorporated under the laws of England and Wales
("FCEM").
WITNESSETH:
WHEREAS, Massachusetts Financial Services Company (the "Adviser")
provides MFS Research International Fund (the "Fund"), a series of MFS Series
Trust I (the "Trust"), an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), business services
pursuant to the terms and conditions of an investment advisory agreement dated
January 2, 1997 (the "Advisory Agreement") between the Adviser and the Trust, on
behalf of the Fund;
WHEREAS, the Sub-Adviser provides services to the Adviser pursuant to
the terms and conditions of a sub-advisory agreement dated Janaury 2, 1997 (the
"FCM Sub-Advisory Agreement") between the Adviser and the Sub-Adviser; and
WHEREAS, FCEM is willing to provide services to the Sub-Adviser 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 FCEM. FCEM will furnish the Sub-Adviser with information
and advice relating to such portion of the Fund's assets as the Adviser,
Sub-Adviser and FCEM shall from time to time mutually designate (the "Designated
Assets"). Subject to the supervision of the Trustees of the Trust, the Adviser
and the Sub-Adviser, FCEM will: (a) manage the Designated Assets on behalf of
the Fund in accordance with the Fund's investment objective, policies and
limitations as stated in the Fund's then current Prospectus (the "Prospectus")
and Statement of Additional Information (the "Statement"), and the Trust's
Amended and Restated Declaration of Trust dated December 14, 1994, as amended,
and Amended and Restated By-Laws, each as from time to time in effect
(respectively, the"Declaration" and the "By-Laws") and in compliance with the
1940 Act and the rules, regulations and orders thereunder; (b) make investment
decisions with respect to the Designated Assets; (c) place purchase and sale
orders for portfolio transactions with respect to the Designated Assets; (d)
manage otherwise uninvested cash assets with respect to the Designated Assets ;
(e) as the agent of the Fund, give instructions (including trade tickets) to the
custodian and any sub-custodian of the Fund as to deliveries of securities,
transfers of currencies and payments of cash with respect to the Designated
Assets (FCEM shall promptly notify the Adviser and the Sub-Adviser of such
instructions); (f) employ professional portfolio managers to provide research
services to the
<PAGE>
Fund; (g) attend periodic meetings of the Board of Trustees of the Trust and (h)
obtain all the registrations, qualifications and consents, on behalf of the
Fund, which are necessary for the Fund to purchase and sell assets in each
jurisdiction (other than the United States) in which the Designated Assets are
to be invested (FCEM shall promptly provide the Adviser and the Sub-Adviser with
copies of any such registrations, qualifications and consents). In providing
these services, FCEM will furnish continuously an investment program with
respect to the Designated Assets. FCEM shall be responsible for monitoring the
Fund's compliance with the Prospectus, the Statement, the Declaration, the
By-Laws and the 1940 Act and the rules, regulations and orders thereunder and in
monitoring such compliance FCEM shall do so in the functional currency of the
Fund. FCEM shall only be responsible for compliance with the above-mentioned
restrictions in regards to the Designated Assets. The Sub-Adviser agrees to
provide FCEM with such assistance as may be reasonably requested by FCEM in
connection with its activities under this Agreement, including, without
limitation, information concerning the Fund, its funds available, or to become
available, for investment and generally as to the conditions of the Fund's
affairs.
Should the Trustees of the Trust or the Adviser and the Sub-Adviser at
any time make any determination as to investment policy and notify FCEM thereof
in writing, FCEM shall be bound by such determination for the period, if any,
specified in such notice or until notified that such determination has been
revoked. Further, the Adviser and the Sub-Adviser or the Trustees of the Trust
may at any time, upon written notice to FCEM, suspend or restrict the right of
FCEM to determine what assets of the Fund shall be purchased or sold and what
portion, if any, of the Fund's assets shall be held uninvested. It is understood
that the Adviser and the Sub-Adviser undertake to discuss with FCEM any such
determinations of investment policy and any such suspensions or restrictions on
the right of FCEM to determine what assets of the Fund shall be purchased or
sold or held uninvested, prior to the implementation thereof.
2. Execution of Certain Documents. Subject to any other written
instructions of the Adviser, the Sub-Adviser and the Trustees of the Trust, FCEM
is hereby appointed the Sub-Adviser's and the Trust's agent and attorney-in-fact
to execute account documentation, agreements, contracts and other documents as
FCEM shall be requested by brokers, dealers, counterparties and other persons in
connection with its management of the Designated Assets.
3. Brokerage. In connection with the selections of brokers, dealers or
other entities and the placing of orders for the purchase and sale of portfolio
investments for the Fund with respect to the Designated Assets, FCEM is directed
to seek for the Fund execution at the most favorable price by responsible
brokerage firms at reasonably competitive commission rates. In fulfilling this
requirement, FCEM 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, dealer or other entity an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker, dealer or other entity would have charged for
effecting that transaction, if FCEM determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934, as amended) provided by such broker, dealer or other entity, viewed in
terms of either that particular
<PAGE>
transaction or FCEM's overall responsibilities with respect to the Fund and to
other clients of FCEM as to which FCEM exercises investment discretion.
4. Reports. FCEM shall furnish to the Trustees of the Trust, the
Adviser or the Sub-Adviser, or all of them, as may be appropriate, quarterly
reports of its activities on behalf of the Fund, as required by applicable law
or as otherwise requested from time to time by the Trustees of the Trust, the
Adviser or the Sub-Adviser, and such additional information, reports,
evaluations, analyses and opinions as the Trustees of the Trust, the Adviser or
the Sub-Adviser, as appropriate, may request from time to time.
5. Services to Other Companies or Accounts. On occasions when FCEM
deems the purchase or sale of a security to be in the best interest of the Fund
as well as other clients, FCEM, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so purchased or sold in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction will be made by FCEM in the manner it considers to be the most
equitable. FCEM agrees to allocate similarly opportunities to sell or otherwise
dispose of securities among the Fund and other clients of FCEM.
6. Compensation of FCEM. For the services to be rendered by FCEM under
this Agreement, the Sub-Adviser shall pay to FCEM compensation, computed and
paid monthly in arrears, at a rate of 0.12% per annum of the average daily net
asset value of the Fund. If FCEM shall serve for less than the whole of any
month, the compensation payable to FCEM with respect to the Fund will be
prorated. FCEM will pay its expenses incurred in performing its duties under
this Agreement. Neither the Trust, the Adviser nor the Fund shall be liable to
FCEM for the compensation of FCEM. For the purpose of determining fees payable
to FCEM, the value of the Fund's net assets shall be computed at the times and
in the manner specified in the Prospectus and/or Statement. In the event that
the Sub-Adviser reduces its management fee payable under the FCM Sub-Advisory
Agreement in order to comply with the expense limitations of a State securities
commission or otherwise, FCEM agrees to reduce its fee payable under this
Agreement by a pro rata amount.
7. Limitation of Liability of FCEM. FCEM 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. The Trust, on behalf of the
Fund, may enforce any obligations of FCEM under this Agreement and may recover
directly from FCEM for any liability it may have to the Fund.
8. Activities of FCEM. The services of FCEM to the Fund are not deemed
to be exclusive, FCEM being free to render investment advisory and/or other
services to others. It is understood that the Trustees, officers and
shareholders of the Trust, the Fund, the Adviser or the Sub-Adviser are or may
become interested in FCEM or any person controlling, controlled by or under
common control with FCEM, as trustees, officers, employees or otherwise and that
trustees, officers and employees of FCEM or any person controlling, controlled
by or under common control with FCEM may become similarly interested in the
Trust, the Fund, the Adviser or the Sub-Adviser and that FCEM may be or become
interested in the Fund as a shareholder or otherwise.
<PAGE>
9. Covenants of FCEM. FCEM agrees that it (a) will not deal with
itself, "affiliated persons" of FCEM, the Sub-Adviser, the Trustees of the Trust
or the Fund's distributor, as principals, agents, brokers or dealers in making
purchases or sales of securities or other property for the account of the Fund,
except as permitted by the 1940 Act and the rules, regulations and orders
thereunder and subject to the prior written approval of the Adviser, (b) will
not take a long or short position in the shares of the Fund except as permitted
by the Declaration and (c) will comply with all other provisions of the
Declaration and the By-Laws and the then-current Prospectus and Statement
relative to FCEM and its trustees, officers, employees and affiliates.
10. Representations, Warranties and Additional Agreements of FCEM.
FCEM represents, warrants and agrees that:
(a) It: (i) is registered as an investment adviser under the U.S.
Investment Advisers Act of 1940 (the "Advisers Act"), is authorized to
undertake investment business in the United Kingdom by virtue of its
membership in the Investment Management Regulatory Organisation
("IMRO") and is registered under the laws of any jurisdiction in which
FCEM is required to be registered as an investment adviser in order to
perform its obligations under this Agreement, and will continue to be
so registered for so long as this Agreement remains in effect; (ii) is
not prohibited by the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any
other applicable Federal or State requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency,
necessary to be met in order to perform the services contemplated by
this Agreement; (iv) has the authority to enter into and perform the
services contemplated by this Agreement; (v) will immediately notify
the Adviser and the Sub-Adviser in writing of the occurrence of any
event that would disqualify FCEM from serving as an investment adviser
of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise; and (vi) will immediately notify the Adviser and the
Sub-Adviser in writing of any change of control of FCEM or any parent
of FCEM resulting in an "assignment" of this Agreement.
(b) It will maintain, keep current and preserve on behalf of the
Fund, in the manner and for the periods of time required or permitted
by the 1940 Act and the rules, regulations and orders thereunder and
the Advisers Act and the rules, regulations and orders thereunder,
records relating to investment transactions made by FCEM for the Fund
as may be reasonably requested by the Adviser or the Fund from time to
time. FCEM agrees that such records are the property of the Fund, and
will be surrendered to the Fund promptly upon request; provided,
however, that FCEM may retain copies of such records for archival
purposes as required by IMRO.
(c) FCEM has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and, if it has not
already done so, will provide the Adviser, the Sub-Adviser and the
Trust with a copy of such code of ethics, and upon any amendment to
such code of ethics, promptly provide such
<PAGE>
amendment. At least annually FCEM will provide the Trust, the
Sub-Adviser and the Adviser with a certificate signed by the chief
compliance officer (or the person performing such function) of FCEM
certifying, to the best of his or her knowledge, compliance with the
code of ethics during the immediately preceding twelve (12) month
period, including any material violations of or amendments to the code
of ethics or the administration thereof.
(d) It has provided the Adviser, the Sub-Adviser and the Trust
with a copy of its Form ADV as most recently filed with the Securities
and Exchange Commission (the "SEC") and will, promptly after filing
any amendment to its Form ADV with the SEC, furnish a copy of such
amendment to the Adviser, the Sub-Adviser and the Trust.
11. Duration and Termination 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 Janaury
2, 1999 and each year thereafter but only so long as its continuance is
"specifically approved at least annually" (a) by the vote of a majority of the
Trustees of the Trust who are not "interested persons" of the Trust, the
Adviser, the Sub-Adviser or FCEM at a meeting specifically called for the
purpose of voting on such approval, and (b) 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 of the Trust, by "vote of a majority of the outstanding
voting securities" of the Fund or by the Adviser or the Sub-Adviser, on not more
than sixty days nor less than thirty days written notice, or by FCEM on not more
than ninety days nor less than sixty days written notice. This Agreement shall
automatically terminate in the event of its "assignment" or in the event that
the FCM Sub-Advisory Agreement or the Advisory Agreement shall have terminated
for any reason.
12. Amendments to this Agreement. This Agreement may be amended only if
such amendment is approved by "vote of a majority of the outstanding voting
securities" of the Fund, by the Adviser, by the Sub-Adviser and by FCEM.
13. Certain Definitions. The terms "specifically approved at least
annually", "vote of a majority of the outstanding voting securities",
"assignment", "control", "affiliated person" and "interested person", when used
in this Agreement, shall have the respective meanings specified, and shall be
construed in a manner consistent with, the 1940 Act and the rules, regulations
and orders thereunder, subject, however, to such exemptions as may be granted by
the SEC under the 1940 Act.
14. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by FCEM pursuant to Section
9 hereof shall survive for the duration of this Agreement and FCEM shall
immediately notify, but in no event later than five (5) business days, the
Adviser and the Sub-Adviser in writing upon becoming aware that any of the
foregoing representations and warranties are no longer true.
15. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the internal laws of The Commonwealth of Massachusetts. All
notices provided for by this Agreement shall be in writing and shall be deemed
given when
<PAGE>
received, against appropriate receipt, by the Sub-Adviser's Secretary in the
case of the Sub-Adviser, by the Adviser's General Counsel in the case of the
Adviser, by FCEM's Secretary in the case of FCEM and by the Trust's Secretary in
the case of the Fund, or such other person as a party shall designate by notice
to the other parties. This Agreement constitutes the entire agreement among the
parties hereto and supersedes any prior agreement among the parties relating to
the subject matter hereof. The section headings of this Agreement are for
convenience of reference and do not constitute a part hereof.
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.
FOREIGN & COLONIAL
MANAGEMENT LTD.
By: JAMES OGLIVY
James Ogilvy
By: JONATHAN LUBRAN
Jonathan Lubran
FOREIGN & COLONIAL
EMERGING MARKETS
LIMITED
By: AUDLEY TWISTON DAVIES
Audley Twiston Davies
<PAGE>
The foregoing is hereby agreed to:
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts. The parties hereto
acknowledge that the obligations of or arising out of this instrument are not
binding upon any of the Trust's trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and property
of the Trust in accordance with its proportionate interest hereunder. If this
instrument is executed by the Trust on behalf of one or more series of the
Trust, the parties hereto acknowledge that the assets and liabilities of each
series of the Trust are separate and distinct and that the obligations of or
arising out of this instrument are binding solely upon the assets or property of
the series on whose behalf the Trust has executed this instrument. If the Trust
has executed this instrument on behalf of more than one series of the Trust, the
parties hereto also agree that the obligations of each series hereunder shall be
several and not joint, in accordance with its proportionate interest hereunder,
and the parties hereto agree not to proceed against any series for the
obligations of another series.
MFS SERIES TRUST I
on behalf of MFS RESEARCH INTERNATIONAL FUND
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman
<PAGE>
EXHIBIT NO. 99.9(b)
MFS SERIES TRUST I
500 Boylston Street o Boston o Massachusetts o 02116
(617) o 954-5000
January 1, 1997
MFS Service Center, Inc.
500 Boylston Street
Boston, MA 02116
Dear Sir/Madam:
This will confirm our understanding that Exhibit B to the Shareholder Servicing
Agent Agreement between us, dated August 1, 1985, as amended, is hereby amended,
effective immediately, to read in its entirety as set forth on Attachment 1
hereto.
Please indicate your acceptance of the foregoing by signing below.
Sincerely,
MFS SERIES TRUST I
By: W. THOMAS LONDON
W. Thomas London
Treasurer
Accepted and Agreed:
MFS SERVICE CENTER, INC.
By: JOSEPH W. DELLO RUSSO
Joseph W. Dello Russo
Treasurer
<PAGE>
ATTACHMENT 1
January 1, 1997
EXHIBIT B TO THE SHAREHOLDER
SERVICING AGENT AGREEMENT BETWEEN
MFS SERVICE CENTER, INC. ("MFSC")
AND MFS SERIES TRUST I (the "Fund")
The fees to be paid by the Fund on behalf of its series with respect to all
shares of each series of the Fund to MFSC, for MFSC's services as shareholder
servicing agent, shall be 0.13% of the average daily net assets of the Fund.
<PAGE>
EXHIBIT NO. 99.9(e)
THIRD AMENDMENT TO LOAN AGREEMENT
This Third Amendment to the Loan Agreement, dated as of February 21,
1995, as heretofore amended (as so amended, the "Loan Agreement"), by and among
the Persons listed on Exhibit A to the Loan Agreement (collectively, the
"Borrowers", and each individually a "Borrower"), the Banks listed on Exhibit F
to the Loan Agreement (collectively, the "Banks", and each individually a
"Bank"), and The First National Bank of Boston, as agent (the "Agent"), is made
as of February 14, 1997. Unless otherwise indicated or unless the context
otherwise requires, capitalized terms used herein without definition which are
defined in the Loan Agreement shall have the meanings ascribed to them in the
Loan Agreement.
Recitals
WHEREAS, the Borrowers desire to amend the Loan Agreement to increase
the Maximum Commitment Amount by Fifty Million Dollars ($50,000,000) to Four
Hundred Million Dollars ($400,000,000), and to add Citibank N.A. as a party to
the Loan Agreement; and
WHEREAS, the Banks and the Agent are willing to amend the Loan
Agreement to increase the Maximum Commitment Amount and to add Citibank N.A.
as a party thereto; and
WHEREAS, the Banks, the Borrowers and the Agent desire to make
certain other changes to the Loan Agreement;
NOW, THEREFORE, in furtherance of the foregoing, and in consideration
of mutual promises and other good and valuable consideration each to the other
given, the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Amendments to Loan Agreement
(a) Section 1.01 of the Loan Agreement is hereby amended by deleting
the definition of "Exempted Borrower" in its entirety.
(b) Section 1.01 of the Loan Agreement is hereby further amended by
deleting the third line of the definition of "Maximum Commitment Amount", and
substituting in lieu thereof the following:
"...hereunder, which in the first instance shall be $400,000,000,
as..."
<PAGE>
(c) Section 2.13 of the Loan Agreement is hereby amended by deleting
the fifth and sixth lines of said Section 2.13; and substituting in lieu thereof
the following:
"...in the aggregate for all of the Borrowers to seven (7)
basis points (7/100 of 1%) per annum of the average daily
unused..."
(d) Section 2.14 of the Loan Agreement is hereby amended by deleting
said Section 2.14 in its entirety, and substituting in lieu thereof the
following:
"Section 2.14. Use of Proceeds. Each Borrower will use the
proceeds of the Loans solely for temporary or emergency purposes,
including, without limitation, the temporary financing of
repurchases or redemptions of Shares of such Borrower, provided
that such use of proceeds shall either (i) constitute an
"Exempted Transaction" as described in section 221.6(f) of
Regulation U(12 CFR Part 221) of the Board or shall otherwise
constitute an "Exempted Transaction" under, or shall not
constitute a "purpose credit" for purposes of, Regulation U, or
(ii) such use of proceeds shall not otherwise cause such Loans to
violate the provisions of Regulation U. Without limiting the
foregoing, no Borrower will, directly or indirectly, use any part
of such proceeds for any purpose which would violate any
provision of any applicable statute, regulation, order or
restriction. In the event that the proposed use of proceeds of
any Loan to a Borrower shall not constitute an "Exempted
Transaction" under Regulation U, but shall nonetheless constitute
a "purpose credit" for purposes thereof, the Borrower, at the
time the Borrowing Request is made, shall furnish each Bank with
a statement in conformity with the requirements of Federal
Reserve Form F.R. U-1 referred to in said Regulation U."
(e) Section 7.01 of the Loan Agreement is hereby amended by deleting
the first twelve lines of text following paragraph (i) thereof, and substituting
in lieu thereof the following:
"then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing with respect
to such Borrower, (i) in the case of any Event of Default
specified in paragraph (g) above, the Commitments shall
thereupon automatically be terminated and the principal of
and accrued interest on the Loans shall automatically become
due and payable without presentment, demand, protest or
other notice or formality of any kind, all of which are
hereby expressly waived, and (ii) in the case of any other
Event of Default specified above, either or both of the
following actions may be taken: the Agent may, and upon the
written or telephonic (confirmed in writing) request of the
Majority Banks shall, by written notice to such Borrower (A)
declare the principal of and accrued interest in respect of
such Borrower's Loans to be forthwith due and payable,
whereupon the principal of and accrued interest in respect
of such Loans shall become forthwith due and payable without
presentment, demand, protest or other notice of any kind,
all of which are hereby
<PAGE>
expressly waived by such Borrower, and/or (B) terminate the
Commitments as to such Borrower, whereupon the ..."
(f) Section 11.01 of the Loan Agreement is hereby amended by deleting
said Section 11.01 in its entirety; and substituting in lieu thereof the
following:
"Section 11.01. Term and Termination of Agreement. This Agreement
and the Commitments shall continue for a term of 364 days
beginning February 14, 1997, unless earlier terminated in
accordance with Sections 2.02, 7.01 or 11.03 hereof, and may, at
the discretion of the Banks, be renewed for successive terms of
364 days as hereinafter provided. The Agent, on behalf of the
Banks, shall notify the Borrower Agents in writing not less than
thirty (30) days prior to the expiration of any such term (an
"Expiration Date") if the Banks are willing to renew the
Commitments hereunder (a "Renewal Notice"), in which event this
Agreement and the Commitments shall continue for an additional
term of 364 days, unless terminated earlier in accordance
herewith. If the Agent does not furnish a Renewal Notice to the
Borrower Agents at least 30 days prior to any Expiration Date as
aforesaid, the Commitments and the Banks' obligations to make
Loans hereunder shall terminate on such Expiration Date and this
Agreement shall terminate and be of no further force and effect
except for (i) the obligations of the Borrowers to pay any and
all of their obligations incurred hereunder or in respect hereof
(including the payment of the entire unpaid principal of and
accrued interest on the Loans and the payment in full of all fees
and expenses provided for herein), and (ii) the rights of the
Borrowers pursuant to section 2.13 hereof to be reimbursed costs,
if any, recovered by the Banks."
(g) Section 12.04(c) of the Loan Agreement is hereby amended by
deleting said Section 12.04(c) in its entirety, and substituting in lieu thereof
the following:
"(c) if to the Agent:
The First National Bank of Boston
Financial Institutions Division
100 Federal Street, 01-10-07
Boston, MA 02110
Attention: Carol A. Clark, Director
with copies to:
Joel H. Peterson, Esquire
Erickson, Schaffer & Peterson, P.C.
20 William Street, Suite 150
Wellesley, MA 02181"
(h) Exhibit F to the Loan Agreement is hereby amended by deleting said
Exhibit F in its entirety, and substituting in lieu thereof Exhibit F appended
hereto.
<PAGE>
SECTION 2. Representations and Warranties. In order to induce the Banks and the
Agent to enter into this Third Amendment, each Borrower, severally and not
jointly, makes the following representations and warranties, all of which shall
survive the execution and delivery of this Third Amendment:
(a) The Borrower has adequate power and authority to execute and
deliver this Third Amendment and to perform its obligations hereunder and under
the Loan Agreement as amended hereby.
(b) The execution, delivery and performance of this Third Amendment has
been duly authorized by all necessary action on the part of the Borrower, will
not result in a violation of or be in conflict with or constitute a default
under any term of the Prospectus or Registration Statement, as applicable, of
the Borrower, or of its charter, declaration of trust or by-laws, or of any
investment, borrowing or other similar type of policy or restriction to which
the Borrower is subject or of any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to the Borrower, or
result in the creation of any mortgage, lien, charge or encumbrance upon any of
the properties or assets of the Borrower pursuant to any such term.
(c) This Third Amendment effectively amends the Loan Agreement in
accordance with the terms hereof. The obligations of the Borrower hereunder and
under the Loan Agreement as amended hereby constitute the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
(d) All of the representations and warranties made by the Borrower in
the Loan Agreement, including those in Article III thereof, are true and correct
on the date hereof as if made on and as of the date hereof and are so repeated
herein, except that representations and warranties of financial statements or
conditions as of an earlier date relate solely to such earlier date.
(e) Upon the execution and delivery of this Third Amendment, no Event
of Default, nor any event which with the giving of notice or the passage of time
or both would constitute an Event of Default, shall exist and be continuing.
SECTION 3. Conditions Precedent. The agreements contained herein and the
amendments contemplated hereby shall become effective on the date when all of
the parties hereto shall have executed a copy hereof and shall have delivered
the same to the Banks and the Agent and when each of the following conditions
shall have been fulfilled:
(a) The Agent shall have received from each Borrower, with sufficient
copies for each Bank, copies of all resolutions of its Board of Trustees
authorizing (i) its execution and delivery of this Third Amendment, and (ii) its
performance of all of its agreements and obligations hereunder and under the
Loan Agreement as amended hereby, certified by the Secretary or Assistant
Secretary of the Borrower;
<PAGE>
(b) Each Borrower shall have performed and complied in all material
respects with all terms and conditions herein required to be performed or
complied with by it on or prior to the date hereof, and the consummation of the
transactions on the date hereof shall not result in an Event of Default or in
any event which with the giving of notice or the passage of time or both would
constitute an Event of Default;
(c) The Agent shall have received from each Borrower, with sufficient
copies for each Bank, a certificate dated as of the date of this Third
Amendment, in form and substance satisfactory to the Banks and the Agent, in
which such Borrower shall represent and warrant to the Banks and the Agent all
matters set forth in Section 2 hereof and shall represent and warrant to the
Banks and the Agent the conditions precedent set forth in paragraph (b) of this
Section 3 are satisfied at and as of the Date of this Third Amendment;
(d) The Agent and the Banks shall have received all other information
and documents which the Agent or any Bank may reasonably have requested in
connection with the transactions contemplated hereunder and under the Loan
Agreement as amended hereby, such information and documents, where appropriate,
to be certified by the proper officers of each Borrower or by governmental
authorities.
SECTION 4. Ratification of Existing Agreements, Etc. All of the Borrowers'
obligations to the Banks and the Agent under or in respect of the Loan
Agreement, except as otherwise expressly modified or contemplated to be modified
in this Third Amendment, are hereby ratified and confirmed in all respects, and
as so ratified and confirmed constitute legal, valid and binding obligations of
the Borrowers enforceable against the Borrowers in accordance with their
respective terms.
SECTION 5. Miscellaneous.
(a) This Third Amendment may be executed on separate counterparts by
the parties hereto, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same agreement.
(b) This Third Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the laws of
The Commonwealth of Massachusetts (without giving effect to the conflict of laws
principles thereof).
(c) The headings of the several sections of this Third Amendment are
inserted for convenience only and shall not in any way effect the meaning or
construction of any provision of this Third Amendment.
(d) Each officer executing this Third Amendment on behalf of each
Borrower, which is a trust or a Massachusetts business trust, is signing this
Third Amendment not individually, but in his capacity as an officer of such
Borrower, and the obligations of such Borrower under this Third Amendment and
under the Loan Agreement, as amended hereby, are not binding upon any of the
Trustees, officers, employees, agents or Shareholders of such Borrower
individually, but bind only the trust estate of such Borrower.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Third
Amendment to be duly executed by its duly authorized officer as an instrument
under seal in The Commonwealth of Massachusetts as of the day and year first
above written.
MASSACHUSETTS INVESTORS TRUST
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
MFS GROWTH OPPORTUNITIES FUND
MFS GOVERNMENT SECURITIES FUND
MFS GOVERNMENT LIMITED MATURITY FUND
MFS SERIES TRUST I, on behalf of MFS Managed
Sectors Fund, MFS Cash Reserve Fund, MFS
World Asset Allocation Fund, MFS
Special Opportunities Fund, MFS Aggressive
Growth Fund, MFS Research Growth and Income
Fund, MFS Equity Income Fund and MFS Core
Growth Fund
MFS SERIES TRUST II, on behalf of MFS
Emerging Growth Fund, MFS Capital Growth
Fund, MFS Gold & Natural Resources
Fund and MFS Intermediate Income Fund
MFS SERIES TRUST III, on behalf of MFS High
Income Fund and 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 and MFS OTC
Fund
MFS SERIES TRUST V, on behalf of MFS Research
Fund and MFS Total Return Fund
MFS SERIES TRUST VI, on behalf of MFS
Utilities Fund, MFS World Total Return Fund
and MFS World Equity Fund
MFS SERIES TRUST VII, on behalf of MFS
Value Fund and MFS World Governments Fund
<PAGE>
MFS SERIES TRUST VIII, on behalf of MFS
Strategic Income Fund and MFS World Growth
Fund
MFS SERIES TRUST IX, on behalf of MFS Bond
Fund, MFS Limited Maturity Fund and MFS
Municipal Limited Maturity Fund
MFS SERIES TRUST X, on behalf of MFS
Government Mortgage Fund, MFS/Foreign &
Colonial Emerging Markets Equity Fund, MFS/
Foreign and Colonial International Growth and
Income Fund and MFS/Foreign & Colonial
International Growth Fund
MFS MUNICIPAL SERIES TRUST, on behalf of
MFS Alabama Municipal Bond Fund, MFS
Arkansas Municipal Bond Fund, MFS California
Municipal Bond Fund, MFS Florida Municipal
Bond Fund, MFS Georgia Municipal Bond Fund,
MFS Louisiana Municipal Bond Fund, MFS
Maryland Municipal Bond Fund, MFS
Massachusetts Municipal Bond Fund, MFS
Mississippi Municipal Bond Fund, MFS New York
Municipal Bond Fund, MFS North Carolina
Municipal Bond Fund, MFS Pennsylvania
Municipal Bond Fund, MFS South Carolina
Municipal Bond Fund, MFS Tennessee Municipal
Bond Fund, MFS Texas Municipal Bond Fund,
MFS Virginia Municipal Bond Fund, MFS
Washington Municipal Bond Fund, MFS West
Virginia Municipal Bond Fund and MFS
Municipal Income Fund
MFS SPECIAL VALUE TRUST
MFS CHARTER INCOME TRUST
MFS INTERMEDIATE INCOME TRUST
MFS GOVERNMENT MARKETS INCOME TRUST
MFS MUNICIPAL INCOME TRUST
<PAGE>
MFS VARIABLE INSURANCE TRUST, on behalf of
MFS Emerging Growth Series, MFS Value Series,
MFS Research Series, MFS Growth and
Income Series, MFS Total Return Series, MFS
Utilities Series, MFS High Income Series,
MFS World Government Series, MFS Strategic
Fixed Income Series, MFS Bond Series, MFS
Limited Maturity Series and MFS Money Market
Series
MFS INSTITUTIONAL TRUST, on behalf of MFS
Institutional Worldwide Fixed Income Fund,
MFS Institutional Emerging Equities Fund, MFS
Institutional Emerging Markets Fixed Income
Fund, MFS Institutional Core Plus Fixed
Income Fund, MFS Institutional
Research Fund, MFS Institutional Mid-Cap
Growth Equity Fund and MFS Institutional
International Equity Fund
MFS UNION STANDARD TRUST, on behalf of MFS
Union Standard Equity Fund and MFS Union
Standard Research Fund
By: W. THOMAS LONDON
W. Thomas London Treasurer
THE FIRST NATIONAL BANK ABN AMRO BANK N.V. NEW YORK BRANCH
OF BOSTON
By: CAROL A. CLARK By: STELLA MILENO
Name: Carol A. Clark Name: Stella Mileno
Title: Managing Director Title: Group Vice President
By: VICTOR J. FENNON
Name: Victor J. Fennon
Title: Vice President
<PAGE>
THE CHASE MANHATTAN BANK STATE STREET BANK AND TRUST
COMPANY
By: ROGER A. PARKER By: R. THOMAS COFFEY
Name: Roger A. Parker Name: R. Thomas Coffey
Title: Vice President Title: Vice President
UNION BANK OF CITIBANK N.A.
CALIFORNIA, N.A.
By: DAVID C. HANTS By: YUSSUR ABRAN
Name: David C. Hants Name: Yussur Abran
Title: Vice President Title: Vice President
THE FIRST NATIONAL BANK
OF BOSTON, as Agent
By: CAROL A. CLARK
Name: Carol A. Clark
Title: Managing Director
<PAGE>
EXHIBIT F
Banks; Addresses; Commitments
The First National Bank of Boston
Financial Institutions
100 Federal Street, 01-10-07
Boston, MA 02110
Telecopy No. (617) 434-1537
Attention: Carol A. Clark
Director
Commitment Amount: $ 75,000,000
Commitment Percentage: 18.750%
ABN AMRO Bank N.V.
New York Branch
500 Park Avenue, 2nd Floor
New York, NY 10022
Telecopy No. (212) 446-4335
Attention: John Kirk
Vice President
Commitment Amount: $ 75,000,000
Commitment Percentage: 18.750%
The Chase Manhattan Bank
Chase Securities, Inc.
270 Park Avenue
New York, NY 10017-2070
Telecopy No. (212) 270-5222
Attention: David Cintron
Vice President
Commitment Amount: $ 75,000,000
Commitment Percentage: 18.750%
<PAGE>
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, MA 02171
Telecopy No. (617) 537-5194
Attention: David V. Cox
Vice President
Commitment Amount: $ 62,500,000
Commitment Percentage: 15.625%
Union Bank of California, N.A.
350 California Street, 11th Floor
San Francisco, CA 94104
Telecopy No. (415) 705-7037
Attention: David C. Hants
Vice President
Commitment Amount: $ 62,500,000
Commitment Percentage: 15.625%
Citibank N.A.
Citicorp Securities, Inc.
399 Park Avenue, 12th Floor
New York, NY 10043
Telecopy No. (212) 371-6309
Attention: Yussur A.F. Abrar
Vice President
Commitment Amount: $ 50,000,000
Commitment Percentage: 12.500%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000798244
<NAME> MFS SERIES TRUST I
<SERIES>
<NUMBER> 091
<NAME> MFS BLUE CHIP FUND - CLASS A
<MULTIPLIER> 1
<S> <C>
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