MFS MUNICIPAL INCOME TRUST, DEF 14A, 2000-07-25

MFS MUNICIPAL INCOME TRUST
DEF 14A, 2000-07-25

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934

FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

--------------------------------------------------------------------------------

CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

MFS Municipal Income Trust
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

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<PAGE> 2

MFS MUNICIPAL INCOME TRUST
500 Boylston Street Boston Massachusetts 02116-3741

800-637-2304

July 25, 2000

Dear Shareholder:

I am writing to ask for your vote on an important matter that is designed
to open up the possibility of an increase in the income paid to you by the MFS
Municipal Income Trust (the "Trust"). While you are, of course, welcome to join
us at the Trust's annual shareholder meeting on September 14, 2000, most
shareholders cast their vote by filling out and signing the enclosed proxy card
or by voting by telephone or over the internet.

The Trustees of the Trust have unanimously recommended, subject to your
approval, that certain amendments to the Trust's Declaration of Trust be made.
These amendments would permit the Trustees to authorize and issue one or more
series of preferred shares of the Trust. If you approve these amendments, the
Trustees intend to approve the sale of up to $140 million of floating rate
preferred shares. The issuance of these preferred shares would be expected to
increase the income paid by the Trust to you. The Trust would pay dividends to
the preferred shareholders at short-term interest rates and would invest the
proceeds from the preferred share offering in longer-term debt securities.
Because, historically, prevailing long-term interest rates have generally been
higher than prevailing short-term rates, the Trust expects that it would be able
to earn more income on the long-term investments than what it would pay out to
the holders of preferred shares. The difference between the amount earned, less
expenses, and the amount paid to the holders of preferred shares would be
additional income to the Trust, which would be distributed to you.

As noted above, your Trustees recommend that you vote FOR the proposed
amendments to the Trust's Declaration of Trust by signing and returning the
enclosed proxy card or by following the enclosed instructions to vote via
telephone or over the internet. These proposed amendments are detailed in the
enclosed Proxy Statement.

At the shareholder meeting, you also will be asked to elect certain
Trustees and ratify the selection of the independent auditors.

The Trust is using Shareholder Communications Corporation ("SCC"), a
professional proxy solicitation firm, to assist shareholders in the voting
process. As the date of the meeting approaches, if we have not already heard
from you, you may receive a telephone call from SCC reminding you to exercise
your right to vote.

YOUR VOTE MAKES A DIFFERENCE

No matter what size your investment may be, your vote is critical. I urge
you to review the enclosed material and to complete, sign and return the
enclosed proxy ballot to us immediately. Your prompt response will help avoid
the need for additional mailings at the Trust's expense. For your convenience,
we have provided a postage-paid envelope.

If you have any questions or need additional information, please contact
your investment professional or call your Customer Service Representative at
1-800-637-2304, Monday through Friday between 8:00 A.M. and 8:00 P.M. Eastern
Time. I thank you for your prompt vote on this matter.

Sincerely,

/s/ Jeffrey L. Shames

Jeffrey L. Shames
Chairman and President
<PAGE> 3

MFS(R)MUNICIPAL INCOME TRUST

500 BOYLSTON STREET, BOSTON, MASSACHUSETTS 02116

NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 14, 2000

The 2000 Annual Meeting of Shareholders of MFS(R) Municipal Income Trust (the
"Trust") will be held at 500 Boylston Street, Boston, Massachusetts, at 9:30
a.m. on Thursday, September 14, 2000, for the following purposes:

ITEM 1. To elect Jeffrey L. Shames, J. Atwood Ives, Lawrence T. Perera and
Arnold D. Scott as Trustees of the Trust.

ITEM 2. To ratify the selection of Deloitte & Touche LLP as the
independent public accountants to be employed by the Trust for the
fiscal year ending October 31, 2000.

ITEM 3. To approve or disapprove amendments to the Trust's Declaration of
Trust to authorize the issuance of preferred shares of the Trust.

ITEM 4. To transact such other business as may properly come before the
Meeting and any adjournments thereof.

YOUR TRUSTEES RECOMMEND THAT YOU
VOTE IN FAVOR OF ALL ITEMS.

Only shareholders of record on July 17, 2000 will be entitled to vote at the
Annual Meeting of Shareholders.

STEPHEN E. CAVAN, Secretary and Clerk

July 25, 2000

YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING,
DATING AND RETURNING THE ENCLOSED PROXY, WHICH WILL HELP IN AVOIDING THE
ADDITIONAL EXPENSE OF A SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE
REQUIRES NO POSTAGE AND IS INTENDED FOR YOUR CONVENIENCE. YOU MAY ALSO VOTE YOUR
PROXY BY TELEPHONE OR INTERNET. FOR INSTRUCTIONS ON HOW TO VOTE VIA TELEPHONE OR
INTERNET, PLEASE REFER TO THE OUTSIDE COVER OF THIS PROXY STATEMENT.

<PAGE> 4

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of proxies
by and on behalf of the Board of Trustees of MFS(R) Municipal Income Trust (the
"Trust") to be used at the 2000 Annual Meeting of Shareholders (the "Meeting")
to be held at 9:30 a.m. on Thursday, September 14, 2000, at 500 Boylston Street,
Boston, Massachusetts, for the purposes set forth in the accompanying Notice.
(If the enclosed form of proxy is executed and returned, it may nevertheless be
revoked prior to its exercise by a signed writing filed with the tabulation
agent, EquiServe, 150 Royall Street,Canton, Massachusetts 02021, or delivered at
the Meeting.) On July 17, 2000, there were outstanding 39,241,256 shares of the
Trust. Shareholders of record at the close of business on July 17, 2000 will be
entitled to one vote for each share held.

The mailing address of the Trust is 500 Boylston Street, Boston,
Massachusetts 02116. Solicitation of proxies is being made by the mailing of
this Notice and Proxy Statement with its enclosures on or about July 25, 2000. A
copy of the Trust's Annual Report and its most recent Semi-Annual Report
succeeding the Annual Report may be obtained without charge by contacting MFS
Service Center, Inc., the Trust's transfer and shareholder servicing agent (the
"Shareholder Servicing Agent"), P.O. Box 2281, Boston, MA 02107-9906, or by
telephone toll-free at (800) 637-2304.

ITEM 1--ELECTION OF TRUSTEES
Under the provisions of the Trust's Declaration of Trust, the Trustees are
divided into three classes each having a term of three years. It is intended
that proxies not limited to the contrary will be voted in favor of Jeffrey L.
Shames, J. Atwood Ives, Lawrence T. Perera and Arnold D. Scott, each as Trustee
of the class whose term will expire at the 2003 Annual Meeting of Shareholders
(or special meeting in lieu thereof). Messrs. Shames, Ives, Perera and Scott are
presently Trustees of the Trust. Under the terms of the Trust's retirement plan,
the Trustees have a mandatory retirement age of 73; however, the Trustees have
extended the retirement age of David B. Stone, a Trustee of the Trust, to age
74.

The following table presents certain information regarding the Trustees,
including their principal occupations, which, unless specific dates are shown,
are of more than five years duration, although the titles may not have been the
same throughout. An asterisk beside a Trustee's name indicates that the Trustee
is an "interested person," as defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), of the Trust's investment adviser and that the Trustee
has been affiliated with the investment adviser for more than five years.

<TABLE>
<CAPTION>
SHARES OF
TRUST OWNED
BENEFICIALLY
NAME, AGE, POSITION WITH TRUST, PRINCIPAL FIRST BECAME TERM AS OF PERCENT
OCCUPATION AND OTHER DIRECTORSHIPS(1) A TRUSTEE EXPIRING JULY 12, 2000(2) OF CLASS(3)
<S> <C> <C> <C> <C>
JEFFREY L. SHAMES,* (born 6/2/55),
Chairman and President; Massachusetts
Financial Services Company, Chairman
and Chief Executive Officer. 1993 2000 0 0%
J. ATWOOD IVES, (born 5/1/36), Trustee;
Eastern Enterprises (diversified
services company), Chairman, Trustee
and Chief
Executive Officer. 1992 2000 0 0%
</TABLE>

1
<PAGE> 5

<TABLE>
<CAPTION>
SHARES OF
TRUST OWNED
BENEFICIALLY
NAME, AGE, POSITION WITH TRUST, PRINCIPAL FIRST BECAME TERM AS OF PERCENT
OCCUPATION AND OTHER DIRECTORSHIPS(1) A TRUSTEE EXPIRING JULY 12, 2000(2) OF CLASS(3)
<S> <C> <C> <C> <C>
LAWRENCE T. PERERA, (born 6/23/35),
Trustee; Hemenway & Barnes (attorneys),
Partner. 1986 2000 0 0%
WILLIAM J. POORVU, (born 4/10/35),
Trustee; Harvard University Graduate
School of Business Administration,
Adjunct Professor; CBL & Associates
Properties, Inc. (real estate
investment trust), Director; The
Baupost Fund (a registered investment
company), Vice Chairman and Trustee. 1986 2002 2781.9279 .0071%
CHARLES W. SCHMIDT, (born 3/18/28),
Trustee; Private Investor; IT Group,
Inc. (diversified environmental
services and consulting), Director. 1986 2001 416.2525 .0011%
ARNOLD D. SCOTT,* (born 12/16/42),
Trustee; Massachusetts Financial
Services Company, Senior Executive Vice
President and Director. 1993 2000 351.2556 .0009%
ELAINE R. SMITH, (born 4/25/46), Trustee;
Independent consultant. 1992 2002 128.863 .0003%
DAVID B. STONE, (born 9/2/27), Trustee;
North American Management Corp.
(Investment Adviser), Chairman and
Director; Eastern Enterprises
(diversified services company),
Trustee. 1989 2002 0 0%
All Trustees and officers as a group 3678.299 .0094%
</TABLE>

---------------

(1) Directorships or Trusteeships of companies required to report to the
Securities and Exchange Commission (the "SEC") (i.e., "public companies").

(2) Numbers are approximate and include, where applicable, shares owned by a
Trustee's or officer's spouse or minor children or shares which were
otherwise reported by the Trustee or officer as "beneficially owned" under
SEC rules.

(3) Percentage of shares outstanding on July 12, 2000. All shares are held with
sole voting and investment power, except to the extent that such powers may
be shared by a family member or a trustee of a family trust.

All Trustees serve as Trustees of 38 funds within the MFS fund complex
advised by Massachusetts Financial Services Company ("MFS" or the "Adviser"),
investment adviser to the Trust, except for Mr. Scott, who serves as Trustee of
79 funds within the MFS fund complex, and Mr. Shames, who serves as Trustee of
108 funds within the MFS fund

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<PAGE> 6

complex. Messrs. Scott and Shames are "interested persons" (as defined under the
1940 Act) of the Trust because they are each an officer and director of MFS;
Messrs. Scott and Shames each own shares of common stock of MFS.

The Trust pays each Trustee who is not an officer of the Adviser a fee of
$7,000 per year plus $400 per meeting and $400 per committee meeting attended,
together with such Trustee's actual out-of-pocket expenses relating to
attendance at meetings. In addition, each Trustee who is not an officer of the
Adviser will be entitled to receive certain benefits pursuant to the Trust's
retirement plan. Under this plan, each such Trustee (or his or her
beneficiaries) will be entitled to receive an annual retirement or death benefit
in an amount of up to a maximum of 50% of such Trustee's average annual
compensation, depending on the Trustee's length of service. Set forth below is
certain information concerning the cash compensation paid to these Trustees and
benefits accrued, and estimated benefits payable, under the retirement plan.

TRUSTEE COMPENSATION TABLE

<TABLE>
<CAPTION>
RETIREMENT
BENEFIT
TRUSTEE FEES ACCRUED AS PART ESTIMATED TOTAL TRUSTEE
FROM OF TRUST CREDITED YEARS FEES FROM TRUST
TRUSTEE TRUST(1) EXPENSE(1) OF SERVICE(2) AND FUND COMPLEX(3)
------- ------------ --------------- -------------- -------------------
<S> <C> <C> <C> <C>
J. Atwood Ives $13,367 $4,876 17 $132,623
Lawrence T. Perera 13,367 6,094 21 144,098
William J. Poorvu 13,367 6,161 21 141,338
Charles W. Schmidt 13,367 6,161 14 137,678
Arnold D. Scott 0 0 N/A 0
Jeffrey L. Shames 0 0 N/A 0
Elaine R. Smith 13,367 5,356 27 144,098
David B. Stone 15,767 6,961 12 151,418
</TABLE>

---------------

(1) For fiscal year ended October 31, 1999.

(2) Based on normal retirement age of 73 (age 74 for Mr. Stone).

(3) For calendar year 1999. All Trustees receiving compensation served as
Trustees of 34 funds within the MFS fund complex (having aggregate net
assets at December 31, 1999, of approximately $58.6 billion).

ESTIMATED ANNUAL BENEFITS PAYABLE BY THE TRUST UPON RETIREMENT(4)

<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE -----------------------------------------
TRUSTEE FEES 3 5 7 10 OR MORE
------------ ------ ------ ------ ----------
<S> <C> <C> <C> <C>
$12,030 $1,805 $3,008 $4,211 $6,015
13,093 1,964 3,273 4,583 6,546
14,156 2,123 3,539 4,954 7,078
15,218 2,283 3,805 5,326 7,609
16,281 2,442 4,070 5,698 8,141
17,344 2,602 4,336 6,070 8,672
</TABLE>

---------------

(4) Other funds in the MFS fund complex provide similar retirement benefits to
the Trustees.

The Board of Trustees of the Trust met six times during its last fiscal
year. The Board has a standing Audit Committee, currently composed of Ms. Smith
and Messrs. Perera,

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<PAGE> 7

Poorvu, and Stone, which met four times during the Trust's last fiscal year, to
review the internal and external accounting and auditing procedures of the Trust
and, among other things, to consider the selection of independent public
accountants for the Trust, to approve all significant services proposed to be
performed by its independent public accountants and to consider the possible
effect of such services on the independence of those accountants. The Board has
created a Nominating Committee, composed of Ms. Smith and Messrs. Ives, Perera,
Poorvu, Schmidt and Stone, that is responsible for recommending qualified
candidates to the Board in the event that a position is vacated or created. The
Nominating Committee consists only of Trustees who are not "interested persons"
of the Trust as defined in the 1940 Act. The Nominating Committee would consider
recommendations by shareholders if a vacancy were to exist. Shareholders wishing
to recommend Trustee candidates for consideration by the Nominating Committee
may do so by writing the Secretary of the Trust. Members of the Nominating
Committee confer periodically and hold meetings as required. The Nominating
Committee did not meet during the Trust's last fiscal year.

REQUIRED VOTE. Approval of this proposal as to any nominee will require the
affirmative vote of a plurality of the outstanding shares of the Trust voting at
the Meeting in person or by proxy.

ITEM 2-- RATIFICATION OF SELECTION OF ACCOUNTANTS
It is intended that proxies not limited to the contrary will be voted in favor
of ratifying the selection, by a majority of the Trustees who are not
"interested persons" (as that term is defined in the 1940 Act) of the Trust, of
Deloitte & Touche LLP under Section 32(a) of the 1940 Act as independent public
accountants to certify every financial statement of the Trust required by any
law or regulation to be certified by independent public accountants and filed
with the SEC in respect of all or any part of the fiscal year ending October 31,
2000. Deloitte & Touche LLP has no direct or material indirect interest in the
Trust. A representative of Deloitte & Touche LLP is expected to be present at
the Meeting and will have an opportunity to make a statement if he desires to do
so. Such representative is also expected to be available to respond to
appropriate questions.

REQUIRED VOTE. Approval of this proposal will require the affirmative vote of a
majority of the shares of the Trust voted at the Meeting in person or by proxy.

ITEM 3-- TO APPROVE OR DISAPPROVE AMENDMENTS TO THE TRUST'S DECLARATION OF TRUST
TO AUTHORIZE THE ISSUANCE OF PREFERRED SHARES OF THE TRUST
It is intended that proxies not limited to the contrary will be voted in favor
of the approval of proposed amendments to the Trust's Declaration of Trust. At a
meeting on June 21, 2000, the Board of Trustees unanimously approved and
recommended the approval by shareholders of certain amendments to the Trust's
Declaration of Trust. These Amendments are in the form attached to this proxy
statement as Appendix A. The following discussion summarizes the proposed
Amendments.

The Amendments, if approved, would authorize the issuance of one or more
series of preferred shares of the Trust by action of the Board of Trustees,
without further shareholder approval. The Board of Trustees would determine the
preferences, voting powers, and rights associated with any series of preferred
shares of the Trust.

Holders of existing shares of beneficial interest of the Trust (common
shares) will have no preemptive right to purchase or otherwise acquire any
preferred shares that might be issued. It is anticipated that the net asset
value of a preferred share will equal its original purchase price per share plus
accumulated dividends per share.

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<PAGE> 8

At its meeting the Board of Trustees concluded that the issuance of up to
$140 million of floating rate preferred stock would be in the best interests of
the holders of common shares. The dividends paid by the Trust on the preferred
shares generally would be at a short-term interest rate. The Trust anticipates
that it would invest the proceeds from the issuance of the preferred shares in
longer-term debt securities. Because, historically, prevailing long-term
interest rates have generally been higher than prevailing short-term rates, the
Trust expects that it generally will be able to earn more income on the
long-term investments than what it must pay out to the holders of the preferred
shares. The difference between the amount earned, less expenses, and the amount
paid to holders of preferred shares would be additional income to the Trust and
its holders of common shares. If the Amendments are approved by shareholders,
the Trust anticipates that it will seek to offer up to $140 million of floating
rate preferred stock. There can be no assurance, however, that such stock
actually will be issued.

PROPOSED ISSUANCE OF PREFERRED SHARES

The Board of Trustees of the Trust has approved, subject to your approval of the
amendments to the Trust's Declaration of Trust, the issuance of preferred shares
in one or more initial series. Each of these series may differ in each series'
date of issuance, amount payable upon redemption or liquidation, redemption
rights, certain voting rights, dividend rates and dividend payment dates and
dividend periods. The proposed initial series, which would each have a variable
dividend rate or rates, would be structured to be suitable for investment by
persons seeking income that is exempt from federal income tax. The Board of
Trustees believes that issuing such series of preferred shares may, in certain
circumstances, increase the net investment income available for distribution to
the holders of the common shares because of the effect of leverage (see "Risks
of Issuance of Preferred Shares--Leverage" below), although there can be no
assurance that such increase would in fact be achieved, and may contribute to a
narrowing of the discount at which the Trust's common shares trade on the New
York Stock Exchange.

Holders of the proposed initial series would be entitled to receive
cumulative dividends at a variable rate with respect to each respective series
that would be set initially and at periodic intervals thereafter, through
auctions, at a level that would be intended to cause the preferred shares to
trade at their original offering price, subject to a ceiling set by reference to
the credit rating assigned to the shares and prevailing rates on certain short-
term securities. The dividends on each initial series would be intended, to the
extent possible, to qualify in their entirety as "exempt-interest dividends"
which are not subject to federal income tax under current law. To the extent
that such dividends did not so qualify, additional dividends might be paid or
might accumulate on the preferred shares so that, assuming payment, the net
after-tax return to a holder of the preferred shares would be the same as if all
of the dividends had qualified. See "Federal Income Tax Considerations" below.
Auctions of the proposed initial series of preferred shares would generally be
held, and thereafter the dividend rate would generally be reset, periodically
over short time periods (generally seven days but at the option of the Trust up
to five years).

The Trust would use the proceeds of the issuance of the preferred shares
for investment in accordance with the Trust's investment objectives and
policies. The Trust intends to invest the proceeds principally in longer-term
debt securities.

The Trust would generally have the right to redeem any series of preferred
shares on or about any dividend payment date, at a stated redemption price plus
an amount equal to accumulated and unpaid dividends, plus with respect to a
redemption made at the Board of Trustees' discretion during a special rate
period, a redemption premium. Any incremental return available from investing
new funds reduced by expenses attributable thereto (net

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<PAGE> 9

incremental return) would be available for distribution to the holders of the
common shares and, if the rate of return on the Trust's investments after
expenses exceeds the dividend rate on the preferred shares, should enhance the
return on the common shares and may contribute to a narrowing of the discount at
which the Trust's common shares trade on the New York Stock Exchange from the
level of discount at which these shares would trade in the absence of the
issuance of such preferred shares. However, there can be no assurance that the
historical relationship between short-term and long-term interest rates will
always continue or that the Trust will receive any net incremental return that
would be available to the holders of the common shares. Because the holders of
the preferred shares would be entitled to receive dividends before the holders
of the common shares, if the dividend rate on the preferred shares were greater
than the net rate of return earned by the Trust on its portfolio investments,
the amounts available for distribution to the holders of the common shares could
be reduced. However, the Board of Trustees does not intend to approve the
issuance of the preferred shares unless it believes, at the time of such
issuance, that the return on the Trust's common shares is likely for the
foreseeable future to be enhanced by the issuance. In addition, if, after a
series of preferred shares were issued, the continuing payment of dividends on
such shares had the effect of reducing the return on the common shares, the
Trust expects that it would consider the redemption of preferred shares, to the
extent possible or permitted by the terms of such shares.

Shareholders should be aware that the net proceeds to the Trust of any
issuance of preferred shares will increase the net assets of the Trust, and
therefore will increase the dollar amount of the investment advisory and
administrative services fees payable by the Trust and its holders of common
shares to the Adviser, because these fees are calculated as a percentage of the
average daily net assets and gross income of the Trust. However, the advisory
fees as a percentage of the Trust's average daily net assets would not change as
a result of the issuance of preferred shares.

The Trust expects to seek a credit rating of each proposed initial series
of preferred shares from one or more national securities rating agencies. There
can, however, be no assurance that such credit ratings will be obtained. In
addition, obtaining such credit ratings will involve additional costs to the
Trust and may require that the Trust agree to various financial and operating
restraints as a condition of such credit ratings.

The discussion above describes an issuance of preferred shares considered
by the Board of Trustees. If the proposed amendments to the Declaration of Trust
concerning the issuance of additional classes or series of shares are approved,
and if the Board of Trustees determines to proceed with issuance of one or more
initial series of preferred shares, the terms of such issuance may be the same
as, or different from, the terms described above. The proposed Amendments would
permit issuance of series of additional classes or series of shares, including
preferred shares, other than the possible series described above, without
further shareholder approval. Such broad authorization at this time of
additional classes or series of shares will provide flexibility to take
advantage of opportunities and possible future circumstances in which the
issuance of preferred shares might be desirable. Requiring shareholders to meet
and approve each separate issuance of such shares would be time-consuming and
costly, particularly in those instances where the number of shares to be issued
may be small in relation to the total capital of the Trust. Moreover, if
shareholder approval of such securities were postponed until a specific need
arose, the delay could, in some instances, deprive the Trust of opportunities
otherwise available.

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<PAGE> 10

FEDERAL INCOME TAX CONSIDERATIONS
Set forth below is a general description of certain federal income tax
consequences to the Trust and to the holders of common shares of the Trust, of
the possible issuance by the Trust of the initial series of preferred shares
described above. If a series of preferred shares were issued with different
terms from those of the proposed initial series, different federal income tax
consequences from those described below might result. The description assumes
that the Trust will continue to qualify as a regulated investment company under
the Internal Revenue Code of 1986, as amended (the "Code"), as it did in its
most recent fiscal year, so as to be relieved of federal income tax on net
investment income and net capital gains distributed to shareholders. If the
Trust were prohibited from paying dividends on its common shares by the asset
coverage requirements of the preferred shares described below under "Description
of Preferred Shares," its ability to meet the qualification requirements of the
Code might be impaired. The Trust expects, however, that to the extent possible
it would purchase or redeem preferred shares to maintain compliance with such
asset coverage requirements. If the Trust failed to qualify for taxation as a
regulated investment company under the Code in any taxable year, the Trust would
be subject to tax on its taxable income at corporate rates, and all
distributions from earnings and profits, including any distributions of net
tax-exempt income and net long-term capital gains, would be taxable to
shareholders as ordinary income. In addition, the Trust could be required to
recognize unrealized gains, pay substantial taxes and interest (including an
interest charge measured by the underpayment rate established in section 6621 of
the Code on an amount equal to 50% of the Trust's earnings and profits for the
taxable year) and make substantial distributions before re-qualifying for
taxation as a regulated investment company. In addition, before re-qualifying,
the Trust might under certain circumstances be required to recognize net
unrealized gains for federal income tax purposes.

To the extent that the Trust has net tax-exempt income from its
investments, dividends paid by the Trust from its net investment income may be
designated by the Trust as "exempt-interest dividends," which are not subject to
federal income tax. If the Trust issues the proposed initial series of preferred
shares described above, then--in order to increase the marketability of the
series and thereby minimize the dividend rate required to be paid to make those
shares attractive to investors--the Trust intends to give holders of the shares
of the series priority over holders of common shares with respect to the payment
of dividends. If any of the dividends on the preferred shares is determined to
be from taxable capital gains or ordinary income, the terms of the preferred
shares may require the Trust to pay an extra amount of dividends on the
preferred shares in an amount sufficient to make each holder of the preferred
shares whole (on an after-tax basis) with respect to the estimated federal
income tax which the holder would be required to pay on the taxable
distributions (gross-up payments). The amount of any dividends payable to common
shareholders would normally be reduced by the amount of any such gross-up
payments.

As a regulated investment company, the Trust is generally entitled to a
deduction for dividends paid to its shareholders out of its ordinary income.
Under Section 562(c) of the Code, a distribution will not qualify for the
deduction for dividends paid unless the distribution is pro rata, with no
preferences to any share of the Trust as compared with other shares of the same
class, and with no preference to one class of shares as compared with another
class except to the extent that the former is entitled (without reference to
waivers of their rights by shareholders) to such preference. The Trust intends
to make distributions in a manner that will allow such distributions to qualify
for the dividends-paid deduction.

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<PAGE> 11

DESCRIPTION OF PREFERRED SHARES
GENERAL. The proposed Amendments would authorize the Board of Trustees to
establish at or prior to the time of issuance of a class of preferred shares, or
any series thereof, the issue price or prices, voting rights, dividend rate or
rates, redemption price, liquidation value, conversion rights and such other
terms and conditions of that class or series as the Board of Trustees deems
appropriate, without further action on the part of the common shareholders.
Under the 1940 Act, the Trust would not be permitted to issue preferred shares
unless immediately after such issuance the value of the Trust's assets, less all
liabilities and indebtedness not represented by senior securities (including
private or temporary borrowings), would be at least 200% of (i) the aggregate
amount of all debt securities, plus (ii) the aggregate involuntary liquidation
preference of any shares (such as the preferred shares) having priority as to
distribution of assets or payment of dividends over any other shares.

VOTING RIGHTS. The 1940 Act requires that the holders of preferred shares,
voting separately as a single class, have the right to elect at least two
Trustees at all times, and, subject to the prior rights, if any, of the holders
of any other class of senior securities outstanding, to elect a majority of the
Trustees at any time two years' dividends on the preferred shares are unpaid.
(In order to give effect to this right to elect Trustees, the proposed
amendments to the Declaration of Trust would remove the provision that fixes the
maximum number of Trustees at 15.) All other Trustees would be elected by the
holders of the common shares and the preferred shares, voting together as a
single class. The 1940 Act also requires that, in addition to any approval by
shareholders that might otherwise be required, the approval of the holders of a
majority of the outstanding preferred shares, voting separately as a class,
would be required to (a) adopt any plan of reorganization that would adversely
affect the preferred shares and (b) take any action requiring a vote of security
holders pursuant to Section 13(a) of the 1940 Act, including, among other
things, changes in the Trust's sub-classification as a closed-end investment
company, changes in the classification of the Trust from a non-diversified
investment company or changes in its fundamental investment policies and
restrictions. Holders of preferred shares have such other voting rights as are
required by law or are provided by the Trust's Board of Trustees at the time of
issuance of the shares, and holders of a particular series of preferred shares
may be entitled to vote as a separate series on certain matters.

DIVIDEND AND LIQUIDATION PREFERENCE. Holders of preferred shares would be
entitled to receive dividends before holders of common shares, and would be
entitled to receive the liquidation value of their shares before any
distributions were made to holders of common shares, should the Trust ever be
dissolved. The dividend rights and liquidation value of the class or any
particular series of preferred shares would be determined at the time of
issuance of shares of the class or series, subject to the requirement of the
1940 Act that the dividends payable on preferred shares be cumulative. The Trust
would not be permitted to pay or declare dividends (except a dividend payable in
shares of the Trust) or other distributions on the common shares, or the
purchase of any common shares by the Trust, unless the asset coverage test
described above under "General" would be met, after giving effect to the
dividend or distribution.

RISKS OF ISSUANCE OF PREFERRED SHARES
LEVERAGE. The issuance of preferred shares would create leverage. The Trust
would be required to pay dividends on the preferred shares and may be required,
under certain circumstances, to redeem the preferred shares. This obligation of
the Trust would affect the amount of income available for distribution on the
Trust's common shares and the net asset value of the common shares. The initial
dividend rate or rates that would be paid on

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<PAGE> 12

any class or series of preferred shares would be determined at the time of
issuance and would be the result of arms-length negotiations with the
underwriters and would depend on various factors including market conditions
prevailing at the time. The dividend rate will generally vary from time to time
after the initial issuance of each series of preferred shares. At initial
issuance or from time to time thereafter, the dividend rate could exceed both
the current yield on the Trust's portfolio investments and the yield received by
the Trust on investments made with the proceeds of the issuance of the offering
of preferred shares and, therefore, an offering of preferred shares could result
in a reduction of net investment income available for distribution on common
shares.

It is not possible to determine with certainty the effect on the net asset
value of the Trust's common shares that might result from the leverage effect of
issuance of preferred shares. After preferred shares are issued, any increase or
decrease in the net asset value per common share may be somewhat greater than
would have been the case had no preferred shares been issued. Also, the issuance
of preferred shares could heighten the effect on the holders of common shares of
any increase or decrease in the yield on the Trust's portfolio for a given
period of time. The Board of Trustees does not intend to issue preferred shares
unless it believes, at the time of such issuance, that such issuance is likely
for the foreseeable future to increase the yield on the Trust's common shares.
The Board of Trustees could choose to redeem any series of preferred shares, in
most cases, on or about any dividend payment date, if the Board deems redemption
of such shares to be advisable and if the terms of the preferred shares permit
such redemption.

DILUTION OF VOTING RIGHTS. The voting rights of the outstanding common shares
would be diluted upon the issuance of any preferred shares, because the holders
of any preferred shares would have voting rights as described above under
"Description of Preferred Shares--Voting Rights." Voting rights in the Trust are
non-cumulative.

OTHER CONSIDERATIONS.

The class voting requirements, and the Board of Trustees representation, of
the preferred shares could make it more difficult for the Trust to engage in
certain types of transactions that might be proposed by the Board of Trustees
and/or holders of common shares, such as a merger, sale of assets, exchange of
securities, liquidation of the Trust or conversion to an open-end fund. Holders
of preferred shares might have interests that differ from holders of common
shares and there can be no assurance that holders of preferred shares will vote
to approve transactions approved by holders of the common shares. The Trust's
Board of Trustees is not currently aware of any efforts, pending or threatened,
to acquire control of the Trust or to force an open-ending, merger or sale of
assets by the Trust, or the liquidation or dissolution of the Trust. The purpose
in presenting the proposed amendments to shareholders at this time is not to
have available a defensive technique (although that would be a result of
approval of the amendment), but to have available a mechanism for increasing the
capital of the Trust in a way that might enhance the return on the Trust's
common shares.

The flexibility to issue preferred shares as well as common shares could
enhance the Board of Trustee's ability to negotiate on behalf of the
shareholders in a takeover, but issuance of the preferred shares might also
render more difficult or discourage a merger, tender offer or proxy contest, the
assumption of control by the holder of a large block of the Trust's securities
and the removal of incumbent management. The Declaration of Trust already
includes certain defensive provisions that are discussed in the following
paragraph. The Board of Trustees has no plans at this time to adopt or to ask
shareholders to adopt any other defensive or potentially defensive provisions.

The Declaration of Trust currently includes provisions that could have the
effect of limiting the ability of other entities or persons to acquire control
of the Trust or to change
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<PAGE> 13

the composition of its Board of Trustees, and could have the effect of depriving
shareholders of an opportunity to sell their shares at a premium over prevailing
market prices by discouraging a third party from seeking to obtain control of
the Trust. Specifically, the Trust's Board of Trustees is divided into three
classes, each having a term of three years. The term of one class expires at
each annual meeting of shareholders. This provision could delay for up to two
years the replacement of a majority of the Board of Trustees. In addition,
conversion of the Trust to an open-end investment company would require the
favorable vote of the holders of at least two-thirds of the shares of the Trust
entitled to be voted on the matter. The 1940 Act requires that the holders of
the preferred shares vote separately from the holders of common shares on this
issue. Therefore, if the holders of preferred shares did not approve the
conversion of the Trust to an open-end investment company, the Trust could not
be converted to an open-end investment company even if the holders of two-thirds
or more of the common shares favored such a conversion. Any amendments to the
sections of the Declaration of Trust which relate to the division of the Board
of Trustees into three classes or to the requirement that two-thirds of the
outstanding shares vote to approve any conversion of the Trust to an open-end
company would themselves require approval by affirmative vote of two-thirds of
the outstanding shares of the Trust.

REQUIRED VOTE. Approval of the proposed amendments requires the affirmative
vote of the holders of two-thirds of the outstanding shares entitled to be voted
at the meeting.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF PROPOSAL 3.

INVESTMENT ADVISER AND ADMINISTRATOR
The Trust engages as its investment adviser and administrator MFS, a Delaware
corporation with offices at 500 Boylston Street, Boston, Massachusetts 02116.
MFS is a subsidiary of Sun Life of Canada (U.S.) Financial Services Holdings,
Inc., One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, which
is in turn an indirect wholly owned subsidiary of Sun Life Assurance Company of
Canada, 150 King Street West, Toronto, Canada M5H1J9.

MANNER OF VOTING PROXIES
All proxies received by the management will be voted on all matters presented at
the Meeting, and if not limited to the contrary, will be voted "for" the matters
listed in the accompanying Notice of Annual Meeting of Shareholders and "for"
any other matters deemed appropriate.

If a proxy is properly executed and returned accompanied by instructions to
withhold authority to vote (sometimes called a broker "non-vote" (that is, a
proxy from a broker or nominee indicating that this person has not received
instructions from the beneficial owner or other person entitled to vote shares
on a particular matter with respect to which the broker or nominee does not have
discretionary power)), or is marked with an abstention (collectively,
"abstentions"), the shares represented thereby will be considered to be present
at the Meeting for purpose of determining the existence of a quorum for the
transaction of business. Abstentions will not constitute a vote "for" or
"against" a matter and will be disregarded in determining the "votes cast" on an
issue. Therefore, abstentions will have the same effect as a vote "against"
proposal 3 and will have no effect on proposals 1 or 2.

Proxy solicitations will be made primarily by mail, but proxy solicitations
also may be made by telephone, telegraph, electronic means or personal
interviews. In addition, Shareholder Communications Corporation (SCC) has been
retained to assist in the

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<PAGE> 14

solicitation of proxies, at an estimated cost of up to $50,000 (depending on the
extent of services provided). The costs of the proxy solicitation and expenses
incurred in connection with the preparation, printing and mailing of this proxy
statement and its enclosures will be borne by the Trust. The Trust will
reimburse banks, brokers and other persons holding the Trust's shares registered
in their names or in the names of their nominees for their expenses incurred in
sending proxy material to and obtaining proxies from the beneficial owners of
such shares.

The Trust knows of no other matters to be brought before the Meeting. If,
however, because of any unexpected occurrence, any nominee is not available for
election or if any other matters properly come before the Meeting, it is the
Trust's intention that proxies not limited to the contrary will be voted in
accordance with the judgment of the persons named in the enclosed form of proxy.

You may vote your proxy by telephone or internet. For instructions on how
to vote via telephone or internet, please refer to the outside cover of this
Proxy Statement.

SUBMISSION OF PROPOSALS
Proposals of shareholders which are intended to be presented at the 2001 Annual
Meeting of Shareholders must be received by the Trust on or prior to March 31,
2001.

SECTION 16(A)--BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires trustees,
directors and certain officers of the Trust and the Adviser, and persons who own
more than ten percent of the Trust's shares, to file reports of ownership and
changes in ownership with the SEC and the New York Stock Exchange. Such persons
are required by SEC regulation to furnish the Trust with copies of all Section
16(a) forms they file.

Based solely on review of the copies of such Forms 3, 4 and 5 and
amendments thereto furnished to the Trust with respect to its most recent fiscal
year, or written representations that no Forms 5 were required, the Trust
believes that during the year ended October 31, 1999, all Section 16(a) filing
requirements applicable to trustees, directors and certain officers of the Trust
and the Adviser and greater than ten percent beneficial owners were complied
with.

ADDITIONAL INFORMATION
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Annual Meeting are not received by September 14, 2000, the persons
named as appointed proxies on the enclosed proxy card may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares present in person or by proxy at the session of the Meeting to be
adjourned. The persons names as appointed proxies on the enclosed proxy card
will vote in favor of any such adjournment those proxies required to be voted in
favor of the proposal for which further solicitation of proxies is made. They
will vote against any such adjournment those proxies required to be voted
against such proposal. The costs of any such additional solicitation and of any
adjournment session will be borne by the Trust.

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.

July 25, 2000 MFS MUNICIPAL INCOME TRUST

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APPENDIX A

DECLARATION OF TRUST PROVISIONS
PROPOSED TO BE AMENDED
(deleted text is marked through [bracketed] and
added text appears in italics [[double bracketed]])

ARTICLE I

NAME AND DEFINITIONS

SECTION 1.2 DEFINITIONS. Wherever they are used herein, the following terms
have the following respective meanings:

(c) [[The terms "Class" and "Class of Shares" refer to the division of
Shares into two or more classes as provided in Section 6.1 hereof.]]

[[(i) The terms "Series" and "Series of Shares" refer to the division of
Shares representing any Class into two or more Series as provided in
Section 6.1 hereof.]]

[(i)][[(k)]] "Shares" means the [Shares of Beneficial Interest] [[shares of
beneficial interest]] into which the beneficial interest in the Trust shall
be divided from time to time [[or, if more than one Class or Series of
Shares is authorized by the Trustees, the shares of beneficial interest
into which each Class or Series of Shares shall be divided from time to
time,]] and includes fractions of Shares as well as whole Shares.

[[(l) "Statement" means a certificate signed by any officer of the Trust
setting forth the resolution or resolutions providing for the issuance of a
Class or Classes of Shares and any Series thereof, as described in Section
6.1 hereof.]]

ARTICLE II

TRUSTEES

SECTION 2.1. NUMBER OF TRUSTEES. [The] [[Subject to the voting powers of one or
more Classes or Series of Shares as set forth in this Declaration and in any
Statement, the]] number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by a majority of the Trustees,
provided, however, that the number of Trustees shall in no event be less than
three (3) [nor more than fifteen (15)]. No reduction in the number of Trustees
shall have the effect of removing any Trustee from office prior to the
expiration of his term unless the Trustee is specifically removed pursuant to
Section 2.2 of this Article II at the time of the decrease.

SECTION 2.2. TERM OF OFFICE OF TRUSTEES. The Board of Trustees shall be divided
into three classes. [Within the limits above specified, the] [[The]] number of
Trustees in each class shall be determined by resolution of the Board of
Trustees. The term of office of all of the Trustees shall expire on the date of
the first annual meeting of shareholders or special meeting in lieu thereof
following the [Effective Date] [[first date of effectiveness of this Declaration
(September 18, 1986)]]. The term of office of the first class shall expire on
the date of the second annual meeting of shareholders or special meeting in lieu
thereof. The term of office of the second class shall expire on the date of the
third annual meeting of shareholders or special meeting in lieu thereof. The
term of office of the third class shall expire on the date of the fourth annual
meeting of shareholders or special meeting in lieu thereof. Upon expiration of
the term of office of each class as set forth above, the number of Trustees in
such class, as determined by the Board of Trustees, shall be elected for a

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term expiring on the date of the third annual meeting of shareholders or special
meeting in lieu thereof following such expiration to succeed the Trustees whose
terms of office expire. The Trustees shall be elected at an annual meeting of
the shareholders or special meeting in lieu thereof called for that purpose,
except as provided in Section 2.3 of this Article [and each]; [[provided,
however, if so provided in any Statement relating to a Class or Classes of
Shares and any Series thereof designated by the Trustees pursuant to Section 6.1
hereof, such Class or Classes of Shares, voting as a Class at an annual meeting
of the Shareholders or special meeting in lieu thereof called for such purpose,
may elect at least two (2) Trustees at all times, and, provided, further, that
under the conditions enumerated in such Statement, such Class or Classes of
Shares voting as a Class shall be entitled to elect at least a majority of the
Trustees pursuant to the designations and powers, preferences and rights and the
qualifications, limitations and restrictions of such Class or Classes of Shares
as determined in accordance with the Statement relating to such Class or Classes
of Shares.]]

[[Each]] Trustee elected shall hold office until his successor shall have
been elected and shall have qualified; except (a) that any Trustee may resign
his trust (without need for prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed (provided the aggregate number of Trustees after
such removal shall not be less than the number required by Section 2.1 hereof)
with cause, at any time by written instrument, signed by at least two-thirds of
the remaining Trustees, specifying the date when such removal shall become
effective; (c) that any Trustee who requests in writing to be retired or who has
become incapacitated by illness or injury may be retired by written instrument
signed by a majority of the other Trustees, specifying the date of his
retirement; and (d) [[subject to the voting powers of one or more Classes or
Series of Shares as set forth in this Declaration and in any Statement,]] a
Trustee may be removed at any meeting of Shareholders by a vote of two-thirds of
the outstanding Shares [[of the Classes or Series entitled to vote for the
election of such Trustee]]. Upon the resignation or removal of a Trustee, or his
otherwise ceasing to be a Trustee, he shall execute and deliver such documents
as the remaining Trustees shall require for the purpose of conveying to the
Trust or the remaining Trustees any Trust property held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents as
the remaining Trustees shall require as provided in the preceding sentence.

SECTION 2.3. RESIGNATION AND APPOINTMENT OF TRUSTEES. In case of the
declination, death, resignation, retirement, removal or inability of any of the
Trustees, or in case a vacancy shall, by reason of an increase in number, or for
any other reason, exist, the remaining Trustees shall fill such vacancy by
appointing such other person as they in their discretion shall see fit. Such
appointment shall be evidenced by a written instrument signed by a majority of
the Trustees in office. Any such appointment shall not become effective,
however, until the person named in the written instrument of appointment shall
have accepted in writing such appointment and agreed in writing to be bound by
the terms of the Declaration. Within twelve months of such appointment, the
Trustees shall cause notice of such appointment to be mailed to each Shareholder
at his address as recorded on the books of the Trustees. An appointment of a
Trustee may be made by the Trustees then in office and notice thereof mailed to
Shareholders as aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. The power of appointment is subject to the [[voting power of one or
more Classes or Series of Shares as set forth in this Declaration and in any
Statement, and is subject to the]] provisions of Section 16(a) of the 1940 Act.

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ARTICLE VI

SHARES OF BENEFICIAL INTEREST

SECTION 6.1. BENEFICIAL INTEREST. The [interest of the beneficiaries hereunder
shall be divided into transferable shares of beneficial interest all of one
class,] [[Trustees may, without Shareholder approval, authorize one or more
Classes of Shares with or]] without par value[. The number of] [[(which Classes
may be divided into two or more Series), Shares of each such Class or Series
having such preferences, voting powers, terms of redemption, if any, and special
or relative rights or privileges (including conversion rights, if any) as the
Trustees may determine.]]

[[As of the Effective Date, the Shares shall be divided into two Classes of
Shares, a Class of an unlimited number of common]] shares of beneficial interest
[authorized hereunder is unlimited.] [[, without par value (the "Common Shares")
and a Class of an unlimited number of preferred shares of beneficial interest,
without par value (the "Preferred Shares"). All Shares outstanding as of the
Effective Date shall be designated as Common Shares.]]

[[The designations and powers, preferences and rights, and the
qualifications, limitations and restrictions of the Common Shares are as follows
and as set forth elsewhere in this Declaration.

(a) Subject to the rights of the holders of the Preferred Shares, in the
event of the termination of the Trust the holders of the Common Shares
shall be entitled to receive pro rata the net distributable assets of the
Trust.

(b) The holders of the Common Shares shall not, as such holders, have any
right to acquire, purchase or subscribe for any Common Shares or securities
of the Trust which it may hereafter issue or sell, other than such right,
if any, as the Trustees in their discretion may determine.

(c) Subject to the rights of the holders of the Preferred Shares, dividends
or other distributions, when, as and if declared by the Trustees, shall be
shared equally by the holders of Common Shares on a share for share basis.
The Trustees may direct that any dividends or other distributions or any
portion thereof as declared and distributed shall be paid in cash to the
holder, or, alternatively, may direct that any such dividends be reinvested
in full and fractional Shares of the Trust if such holder elects to have
them reinvested.

(d) The Trustees may hold as treasury shares (of the same or some other
Series), reissue for such consideration and on such terms as they may
determine, or cancel any Common Shares of any Series reacquired by the
Trust at their discretion from time to time. Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust.

The designations and powers, preferences and rights, and the
qualifications, limitations and restrictions of the Preferred Shares shall be as
set forth in the Statement relating to the Preferred Shares.]]

All Shares issued hereunder including, without limitation, Shares issued in
connection with a dividend in Shares or a split of Shares, shall be fully paid
and non-assessable.

SECTION 6.2. RIGHTS OF SHAREHOLDERS. The ownership of the Trust Property of
every description and the right to conduct any business hereinbefore described
are vested exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by their Shares,
and they shall have no right to call for any partition or division of any
property, profits, rights or interests of the Trust nor can they be called upon
to assume any losses of the Trust or suffer an assessment of any kind by
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virtue of their ownership of Shares. The Shares shall be personal property
giving only the rights in the Declaration specifically set forth. The Shares
shall not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights, [[except as the Trustees may determine with respect to any
Class or Series of Shares]].

SECTION 6.5. REGISTER OF SHARES. A register shall be kept at the principal
office of the Trust or at an office of the Transfer Agent which shall contain
the names and addresses of the Shareholders and the number of Shares held by
them respectively and a record of all transfers thereof. Such register shall be
conclusive as to who are the holders of [the] [[each Class and Series of]]
Shares and who shall be entitled to receive dividends or distributions or
otherwise to exercise or enjoy the rights of Shareholders. No Shareholder shall
be entitled to receive payment of any dividend or distribution, nor to have
notice given to him as herein or in the By-Laws provided, until he has given his
address to the Transfer Agent or such other officer or agent of the Trustees as
shall keep the said register for entry thereon. The Trustees, in their
discretion, may authorize the issuance of Share certificates and promulgate
appropriate rules and regulations as to their use.

SECTION 6.8. VOTING POWERS. [The] [[Subject to the voting power of one or more
Classes or Series of Shares as set forth in this Declaration and in any
Statement, the]] Shareholders shall have power to vote only (i) for the election
of Trustees or for their removal as provided in Section 2.2 hereof, (ii) with
respect to any investment advisory or management contract as provided in Section
4.1 hereof, (iii) with respect to termination of the Trust as provided in
Section 8.2, (iv) with respect to any amendment of the Declaration to the extent
and as provided in Section 8.3, (v) with respect to any merger, consolidation,
conversion or sale of assets as provided in Sections 8.4, 8.5 and 8.7, (vi) with
respect to incorporation of the Trust to the extent and as provided in Section
8.5, (vii) to the same extent as the stockholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or claim should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or the Shareholders, and (viii) with respect to such additional
matters relating to the Trust as may be required by the Declaration, the
By-Laws, [[any Statement]] or any registration of the Trust with the Commission
(or any successor agency) or any state, or as the Trustees may consider
necessary or desirable. Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote, [[except as otherwise provided in
any Statement and]] except that Shares held in the treasury of the Trust shall
not be voted. [[Notwithstanding any other provision of this Declaration, on any
matter submitted to a vote of Shareholders, all Shares of the Trust then
entitled to vote shall, except as otherwise provided in the By-Laws or any
Statement or required by law, be voted in the aggregate as a single Class
without regard to Classes or Series of Shares.]] There shall be no cumulative
voting in the election of Trustees. Until Shares [[of a particular Class or
Series]] are issued, the Trustees may exercise all rights of Shareholders [[of
such Class or Series]] and may take any action required by law, the Declaration
[or], the By-Laws [[or any Statement]] to be taken by Shareholders [[as to such
Class or Series]]. The By-Laws [[and any Statement]] may include further
provisions for Shareholders' votes and meetings and related matters.

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ARTICLE VII

DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS

The Trustees, in their absolute discretion, may prescribe and shall set
forth in the By-Laws, [[in any Statement,]] or in a duly adopted vote of the
Trustees such bases and times for determining the per Share net asset value of
the [[Shares or any Class or Series of]] Shares or net income, or the
declaration and payment of dividends and distributions, as they may deem
necessary or desirable.

ARTICLE VIII

DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.

SECTION 8.2. TERMINATION OF TRUST. (a) [The] [[Subject to the voting powers of
one or more Classes or Series of Shares as set forth in this Declaration and in
any Statement, the]] Trust may be terminated (i) by the affirmative vote of the
holders of not less than two-thirds of the Shares outstanding and entitled to
vote at any meeting of Shareholders, or (ii) by an instrument in writing,
without a meeting, signed by a majority of the Trustees and consented to by the
holders of not less than two-thirds of such Shares. Upon the termination of the
Trust:

(i) The Trust shall carry on no business except for the purpose of winding
up its affairs;

(ii) The Trustees shall proceed to wind up the affairs of the Trust and all
the powers of the Trustees under this Declaration shall continue until the
affairs of the Trust shall have been wound up, including the power to
fulfill or discharge the contracts of the Trust, collect its assets, sell,
convey, assign, exchange, transfer or otherwise dispose of all or any part
of the remaining Trust Property to one or more persons at public or private
sale for consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its liabilities,
and to do all other acts appropriate to liquidate its business; provided,
that any sale, conveyance, assignment, exchange, transfer or other
disposition of all or substantially all the Trust Property shall require
Shareholder approval in accordance with Section 8.4 hereof; and

(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly in
cash and partly in kind, among the Shareholders according to their
respective rights [[and as required or permitted by the preferences and
special or relative rights and privileges of any Class or Series of
Shares]].

(b) After termination of the Trust and distribution to the Shareholders as
herein provided, a majority of the Trustees shall execute and lodge among
the records of the Trust an instrument in writing setting forth the fact of
such termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties hereunder, and the rights and interests of
all Shareholders shall thereupon cease.

SECTION 8.3. AMENDMENT PROCEDURE. (a) Except [[to the extent that any Statement
or applicable law may require a higher vote or the separate vote of one or more
Classes or Series of Shares, and except]] as provided in paragraph (c) of this
Section 8.3 this Declaration may be amended by a Majority Shareholder Vote or by
an instrument in writing, without a meeting, signed by a majority of the
Trustees and consented to by the holders of not less than a majority of the
Shares outstanding and entitled to vote. The Trustees may

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also amend this Declaration without the vote or consent of Shareholders, to
change the name of the Trust, to supply any omission, to cure, correct or
supplement any ambiguous, defective or inconsistent provision hereof, [[to
authorize one or more Classes or Series of Shares or to make any additions
and/or changes deemed necessary to effectuate the designations and powers,
preferences and rights, and the qualifications, limitations and restrictions
adopted by the Trustees with respect to any Class or Series of Shares so
authorized pursuant to Article VI of this Declaration,]] or if they deem it
necessary to conform this Declaration to the requirements of applicable federal
laws or regulations or the requirements of the regulated investment company
provisions of the Internal Revenue Code, but the Trustees shall not be liable
for failing so to do.

(b) [No] [[Except to the extent that any Statement or applicable law may
require a higher vote or the separate vote of one or more Classes or Series
of Shares, no]] amendment may be made under this Section 8.3 which would
change any rights with respect to any Shares by reducing the amount payable
thereon upon liquidation of the Trust or by diminishing or eliminating any
voting rights pertaining thereto, except with the vote or consent of the
holders of two-thirds of the Shares outstanding and entitled to vote.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the
Shareholders, Trustees, Officers, employees and agents of the Trust or to
permit assessment upon Shareholders.

(c) No amendment may be made under this Section 8.3 which shall amend,
alter, change or repeal any of the provisions of Sections 8.3, 8.4, 8.6 and
8.7 unless the amendment effecting such amendment, alteration, change or
repeal shall receive the affirmative vote or consent of sixty-six and
two-thirds percent (66 2/3%) of the Shares outstanding and entitled to
vote. Such affirmative vote or consent shall be in addition to the vote or
consent of the holders of Shares otherwise required by law or by the terms
of any [class] [[Class]] or [series] [[Series]] of preferred stock, whether
now or hereafter authorized, or any agreement between the Trust and any
national securities exchange.

(d) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by
the Trustees as aforesaid or a copy of the Declaration, as amended, and
executed by a majority of the Trustees, shall be conclusive evidence of
such amendment when lodged among the records of the Trust.

[Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.]

SECTION 8.6. CONVERSION. Notwithstanding any other provision of this
Declaration, the conversion of the Trust from a "closed-end company" to an
"open-end company," as those terms are defined in Sections 5(a)(2) and 5(a)(1),
respectively, of the 1940 Act as in effect on June 1, 1986, shall require the
affirmative vote or consent of the holders of sixty-six and two-thirds percent
(66 2/3%) of the Shares [[of each Class]] outstanding and entitled to vote. Such
affirmative vote or consent shall be in addition to the vote or consent of the
holders of the Shares otherwise required by law or by the terms of any [class]
[[Class]] or [series] [[Series]] of preferred stock, whether now or hereafter
authorized, or any agreement between the Trust and any national securities
exchange.

A-6
<PAGE> 21

ARTICLE X

MISCELLANEOUS

SECTION 10.1. FILING. This Declaration and any amendment hereto [[and any
Statement]] shall be filed in the office of the Secretary of the Commonwealth of
Massachusetts and in such other places as may be required under the laws of
Massachusetts and may also be filed or recorded in such other places as the
Trustees deem appropriate. Each amendment so filed shall be accompanied by a
certificate signed and acknowledged by a Trustee stating that such action was
duly taken in a manner provided herein, and unless such amendment or such
certificate sets forth some later time for the effectiveness of such amendment,
such amendment shall be effective upon its filing. A restated Declaration,
integrating into a single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from time to time by a
majority of the Trustees and shall, upon filing with the Secretary of the
Commonwealth of Massachusetts, be conclusive evidence of all amendments
contained therein and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.

A-7
<PAGE> 22

MFS(R) MUNICIPAL INCOME TRUST
PROXY INFORMATION

The enclosed proxy statement discusses important issues affecting your
investment in the MFS Municipal Income Trust. To make voting faster and more
convenient for you, we're offering the options of voting on the internet or by
telephone instead of completing and mailing the enclosed proxy card. Either
method is generally available 24 hours a day, and your vote will be confirmed
and posted immediately. If you choose to vote via the internet or by phone, do
not mail the proxy card.

However you choose to vote, it is important that you vote to save the expense of
additional solicitations.

WAYS TO VOTE:

TO VOTE ON THE INTERNET
1. Read the proxy statement.
2. Go to www.eproxyvote.com/mfm. [GRAPHIC]
3. Enter the control number on
your proxy card.
4. Follow the instructions on the site.

TO VOTE BY TELEPHONE
1. Read the proxy statement.
2. Call toll-free 1-877-PRX-VOTE.
[GRAPHIC] (1-877-779-8683)
3. Enter the control number on
your proxy card.
4. Follow the recorded instructions.

YOUR VOTE IS IMPORTANT TO US, PLEASE VOTE NOW.

QUESTIONS:

Shareholder Communications Corporation (SCC), a professional proxy solicitation
firm, has been selected to assist shareholders in the voting process. If we have
not received your proxy card as the date of the meeting approaches, SCC may call
you to remind you to exercise your right to vote. If you have any questions,
please call SCC toll-free at 1-877-504-5022 any business day between 9 a.m. and
11 p.m. Eastern time.

<PAGE> 23

[MFS LOGO]
INVESTMENT MANAGEMENT

We invented the mutual fund(R)

500 Boylston Street
Boston, MA 02116-3741

<TABLE>
<S> <C>
(c)2000 MFS Investment Management(R)
MFS(R) Investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116. MFMCE-14BEN-7/00 17.6M
</TABLE>
<PAGE> 24

MFS(R) MUNICIPAL INCOME TRUST
PROXY INFORMATION

However you choose to vote, it is important that you vote to save the expense of
additional solicitations.

WAYS TO VOTE:

TO VOTE ON THE INTERNET
1. Read the proxy statement.
2. Go to www.proxyvote.com. [GRAPHIC]
3. Enter the control number on
your proxy card.
4. Follow the instructions on the site.

TO VOTE BY TELEPHONE
1. Read the proxy statement.
2. Call the toll-free number printed on your proxy ballot.
[GRAPHIC] 3. Enter the control number on
your proxy card.
4. Follow the recorded instructions.

YOUR VOTE IS IMPORTANT TO US, PLEASE VOTE NOW.

QUESTIONS:

<PAGE> 25

[MFS LOGO]
INVESTMENT MANAGEMENT

We invented the mutual fund(R)

500 Boylston Street
Boston, MA 02116-3741

MFS(R) MUNICIPAL INCOME TRUST

PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS,
SEPTEMBER 14, 2000

The undersigned, revoking prior proxies, hereby appoints Jeffrey L. Shames,
James R. Bordewick, Jr., Stephen E. Cavan, W. Thomas London and James O. Yost,
and each of them, proxies with several powers of substitution, to vote for the
undersigned at the 2000 Annual Meeting of Shareholders of MFS(R) Municipal
Income Trust to be held at 500 Boylston Street, Boston, Massachusetts, on
Thursday, September 14, 2000, notice of which meeting and the Proxy Statement
accompanying the same have been received by the undersigned, or at any
adjournment thereof, upon the following matters as described in the Notice of
Meeting and the accompanying Proxy Statement.

WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. ALL PROPOSALS (SET FORTH ON THE REVERSE OF THIS
PROXY CARD) HAVE BEEN PROPOSED BY THE BOARD OF TRUSTEES. IF NO DIRECTION IS
GIVEN ON THESE PROPOSALS, THIS PROXY CARD WILL BE VOTED "FOR" THE NOMINEES AND
"FOR" ITEMS 2 AND 3. THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE HOLDER'S
BEST JUDGMENT AS TO ANY OTHER MATTERS.

PLEASE VOTE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.

Please sign this proxy exactly as your name or names appear on reverse side of
this card. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more than
one name appears, a majority must sign. If a corporation, this signature should
be that of an authorized officer who should state his or her title.

<PAGE> 27

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

--------------------------------
MFS(R) MUNICIPAL INCOME TRUST
--------------------------------

CONTROL NUMBER:
RECORD DATE SHARES:

Please be sure to sign and date this Proxy. Date
--------------------

--------------------------------------------------------------------------------
Shareholder sign here Co-owner sign here

1. Election of Trustees.

NOMINEES: FOR ALL WITH- FOR ALL
(01) JEFFREY L. SHAMES NOMINEES HELD EXCEPT
(02) J. ATWOOD IVES
(03) LAWRENCE T. PERERA [ ] [ ] [ ]
(04) ARNOLD D. SCOTT

IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK THE "FOR
ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME(S) OF THE NOMINEE(S). YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEE(S).

FOR AGAINST ABSTAIN
2. Ratification of Selection of Accountants.
[ ] [ ] [ ]

FOR AGAINST ABSTAIN
3. To Approve or Disapprove Amendments to
the Trust's Declaration of Trust to Authorize [ ] [ ] [ ]
the Issuance of Preferred Shares of the
Trust.

DETACH CARD DETACH CARD
<S> <C>
------------------ ------------------
VOTE BY TELEPHONE VOTE BY INTERNET
------------------ ------------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed and posted.

FOLLOW THESE FOUR EASY STEPS: FOLLOW THESE FOUR EASY STEPS:

------------------------------------------------------- --------------------------------------------------------
1. READ THE ACCOMPANYING PROXY STATEMENT AND ATTACHED 1. READ THE ACCOMPANYING PROXY STATEMENT AND ATTACHED
PROXY CARD. PROXY CARD.

2. CALL THE TOLL-FREE NUMBER 2. GO TO THE WEBSITE
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/mfm
THERE IS NO CHARGE FOR THIS CALL.

3 ENTER YOUR CONTROL NUMBER LOCATED ON YOUR PROXY CARD. 3. ENTER YOUR CONTROL NUMBER LOCATED ON YOUR PROXY CARD.

4. FOLLOW THE RECORDED INSTRUCTIONS. 4. FOLLOW THE INSTRUCTIONS PROVIDED.
------------------------------------------------------- --------------------------------------------------------

YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
CALL 1-877-PRX-VOTE ANYTIME! GO TO http://www.eproxyvote.com/mfm ANYTIME!

DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET

</TABLE>

<PAGE> 29

Online Proxy Voting for MFS Municipal Income Trust Page 1 of 1

MFS(R) MUNICIPAL INCOME TRUST

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS,

SEPTEMBER 14, 2000

The undersigned revoking prior proxies, hereby appoints Jeffrey L. Shames,
James R. Bordewick, Jr., Stephen E. Cavan, W. Thomas London and James O. Yost,
and each of them, proxies with several powers of substitution, to vote for the
undersigned at the 2000 Annual Meeting of Shareholders of MFS(R) Municipal
Income Trust to be held at 500 Boylston Street, Boston, Massachusetts, on
Thursday, September 14, 2000, notice of which meeting and the Proxy Statement
accompanying the same have been received by the undersigned, or at any
adjournment thereof, upon the following matters as described in the Notice of
Meeting and the accompanying Proxy Statement.

When properly executed, this proxy will be voted in the manner directed herein
by the undersigned shareholder. All proposals (set forth below) have been
proposed by the Board of Trustees. If no direction is given on these
proposals, this proxy card will be voted "FOR" the nominees and "FOR" Items 2
and 3. The proxy will be voted in accordance with the holder's best judgment as
to any other matters.

The Board of Trustees recommends a Vote
"FOR" all Nominees for Trustees and
"FOR" Proposals 2 and 3.

--------------------------------------------------------------------------------

For All Members Withhold
Except As Named As To All
Below Nominees

1. Election of Trustees [ ] [ ]

Check the box for the Trustee(s) from whom you wish to withhold your vote:
[ ] Jeffrey L. Shames
[ ] J. Atwood Ives
[ ] Lawrence T. Perera
[ ] Arnold D. Scott

For Against Abstain
2. Ratification of Selection of Accountants. [ ] [ ] [ ]

For Against Abstain
3. To Approve or Disapprove Amendments to the
Trust's Declaration of Trust to Authorize the
Issuance of Preferred Shares of the Trust. [ ] [ ] [ ]

--------------------------------------------------------------------------------

To submit your vote please click the button below.
(Your vote will not be counted until the Submit Your Vote Button is checked.)

Submit Your Vote [ ]