MFS(R) CHARTER
INCOME TRUST
500 Boylston Street, Boston, Massachusetts 02116
MFS(R) CHARTER
INCOME TRUST
500 Boylston Street
Boston, Massachusetts 02116
Proxy Statement
For the 1999 Annual Meeting
of Shareholders to be held on
October 21, 1999
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (sec) 240.14a-11(c) or (sec) 240.14a-12
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MFS CHARTER 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.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE>
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF TRUSTEES OF
MFS(R) CHARTER INCOME TRUST
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS, OCTOBER 21, 1999
p The undersigned hereby appoints JAMES R. BORDEWICK, JR., STEPHEN E.
CAVAN, W. THOMAS LONDON and JEFFREY L. SHAMES, and each of them, proxies
R with several powers of substitution, to vote for the undersigned at the
1999 Annual Meeting of Shareholders of MFS CHARTER INCOME TRUST, to be
O held at 500 Boylston Street, Boston, Massachusetts, on Thursday, October
21, 1999, notice of which meeting and the Proxy Statement accompanying
X the same have been received by the undersigned, or at any adjournment
thereof, upon the following matters as described in the Notice of Meeting
Y and 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 SIDE 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' ITEM 2. THE PROXY WILL BE
VOTED IN ACCORDANCE WITH THE HOLDER'S BEST JUDGMENT AS TO ANY OTHER
MATTER.
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- --------------- PLEASE VOTE AND SIGN ON OTHER SIDE -------------
AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
----------------------------------------------------
Please sign this proxy exactly as your name appears on the 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.
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[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
For
With- All
For hold Except For Against Abstain
<S> <C> <C> <C> <C> <C> <C> <C>
1.) ELECTION OF TRUSTEES [ ] [ ] [ ] 2.) RATIFICATION OF SELECTION [ ] [ ] [ ]
OF ACCOUNTANTS
Nominees:
Richard B. Bailey
Marshall N. Cohan
J. Dale Sherratt
</TABLE>
If you do not wish your shares voted "FOR" a particular nominee, mark
the "For All Except" box and strike a line through that nominee's name.
Your shares will be voted for the remaining nominees.
-----------
Please be sure to sign and date this Proxy. Date
- -----------------------------------------------------------------
Shareholder sign here ___________ Co-owner sign here ___________
<PAGE>
MFS(R) CHARTER INCOME TRUST
500 Boylston Street, Boston, Massachusetts 02116
Notice of the 1999 Annual Meeting of Shareholders
To be held on October 21, 1999
The 1999 Annual Meeting of Shareholders of MFS Charter Income Trust (the
"Trust") will be held at 500 Boylston Street, Boston, Massachusetts, at 9:30
a.m. on Thursday, October 21, 1999, for the following purposes:
ITEM 1. To elect Richard B. Bailey, Marshall N. Cohan and J. Dale Sherratt as
Trustees of the Trust;
ITEM 2. To ratify the selection of Ernst & Young LLP as the independent
public accountants to be employed by the Trust for the fiscal year
ending November 30, 1999; and
ITEM 3. To transact such other business as may come before the Meeting and
any adjournments thereof.
YOUR TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF ALL ITEMS.
Only shareholders of record on August 23, 1999 will be entitled to vote at the
Annual Meeting of Shareholders.
STEPHEN E. CAVAN, Secretary and Clerk
September 3, 1999
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 PROVIDED FOR YOUR CONVENIENCE.
<PAGE>
MFS(R) CHARTER INCOME TRUST
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) Charter Income Trust
(the "Trust") to be used at the Annual Meeting of Shareholders (the "Meeting")
to be held at 9:30 a.m. on Thursday, October 21, 1999 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 proxy
tabulation agent, State Street Bank and Trust Company, P.O. Box 592, Boston,
Massachusetts 02102 or delivered at the Meeting. On August 23, 1999, there were
outstanding 66,578,648 shares of the Trust. Shareholders of record at the close
of business on August 23, 1999 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 September 3, 1999. A copy of the
Trust's most recent annual report and semi-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 Richard B.
Bailey, Marshall N. Cohan and J. Dale Sherratt, as Trustees of the class whose
term will expire at the 2002 Annual Meeting of Shareholders (or special meeting
in lieu thereof). Messrs. Bailey, Cohan and Sherratt are currently Trustees of
the Trust. Under the terms of the Trust's retirement plan, the Trustees have a
mandatory retirement age of 75. Consequently, Messrs. Bailey and Cohan will
retire no later than December 31, 2001.
The following table presents certain information regarding the Trustees of
the Trust, 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 he or she 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
has been affiliated with the investment adviser for more than five years.
<TABLE>
<CAPTION>
Shares of
Name, Age, Position with Trust, First Trust Owned
Principal Occupation and Became Term Beneficially as of Percent
Other Directorships(1) a Trustee Expiring August 18, 1999(2) of Class(3)
- ------------------------------- --------- -------- ------------------ -----------
<S> <C> <C> <C> <C>
JEFFREY L. SHAMES* (born 6/2/55), Trustee; Massachusetts
Financial Services Company, Chairman of the Board and
Chief Executive Officer. 1993 2000 0 0.00%
RICHARD B. BAILEY* (born 9/14/26), Trustee; Private Investor;
Massachusetts Financial Services Company, former Chairman
and Director (prior to September 1991). 1993 1999 0 0.00%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of
Name, Age, Position with Trust, First Trust Owned
Principal Occupation and Became Term Beneficially as of Percent
Other Directorships(1) a Trustee Expiring August 18, 1999(2) of Class(3)
- ------------------------------- --------- -------- ------------------ -----------
<S> <C> <C> <C> <C>
MARSHALL N. COHAN (born 11/16/26), Trustee;
Private Investor. 1993 1999 25.00 0.00%
LAWRENCE H. COHN, M.D. (born 3/11/37), Trustee;
Brigham and Women's Hospital, Chief of Cardiac
Surgery; Harvard Medical School, Professor of Surgery. 1989 2000 1,228.80 0.00%
SIR J. DAVID GIBBONS, KBE (born 6/15/27), Trustee;
Edmund Gibbons Limited, Chief Executive Officer;
Colonial Insurance Company Ltd., Director & Chairman. 1993 2001 0 0.00%
ABBY M. O'NEILL (born 4/27/28), Trustee; Private Investor;
Rockefeller Financial Services, Inc. (investment advisers),
Director. 1993 2000 0 0.00%
WALTER E. ROBB, III (born 8/18/26), Trustee; Benchmark Advisors,
Inc. (corporate financial consultants), President and Treasurer;
Benchmark Consulting Group, Inc. (office services), President;
CitiFunds and CitiSelect Folios (mutual funds), Trustee. 1993 2001 832.08 0.00%
ARNOLD D. SCOTT* (born 12/16/42), Trustee; Massachusetts
Financial Services Company, Senior Executive Vice President,
Director and Secretary. 1993 2001 346.51 0.00%
J. DALE SHERRATT (born 9/23/38), Trustee; Insight
Resources, Inc. (acquisition planning specialists), President;
Wellfleet Investments (investor in health care companies),
Managing General Partner (since 1993). 1989 1999 8,971.38 0.00%
WARD SMITH (born 9/13/30), Trustee; NACCO Industries
(holding company), Chairman (prior to June 1994); Sunstrand
Corporation (diversified mechanical manufacturer), Director. 1993 2000 0 0.00%
All Trustees and officers as a group 12,789.80 0.01%
</TABLE>
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(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 August 18, 1999. 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.
2
<PAGE>
All Trustees serve as Trustees of 43 funds within the MFS fund complex
advised by Massachusetts Financial Services Company ("MFS" or the "Adviser"),
investment adviser to the Trust, except for Messrs. Bailey and Scott, who each
serve as Trustees of 74 funds within the MFS fund complex, and Mr. Shames, who
serves as a Trustee of 132 funds within the MFS fund 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. Mr. Bailey is considered an "interested
person" of the Trust because he is a director of Sun Life Assurance Company of
Canada (U.S.), an affiliate of MFS.
The Trust pays each Trustee who is not an officer of MFS a fee of $8,275
per year, plus $500 per meeting and $500 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 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 Estimated Total Trustee Fees
Trustee Fees Accrued as part of Trust Credited Years of from Trust and Fund
Trustee from Trust(1) Expense(1) Service(2) Complex(3)
- ---------------------- --------------- -------------------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Richard B. Bailey $13,275 $3,522 8 $259,430
Marshall N. Cohan 14,775 3,938 8 143,259
Dr. Lawrence Cohn 13,947 6,489 22 153,579
Sir J. David Gibbons 13,275 3,647 8 130,059
Abby M. O'Neill 13,275 3,522 9 130,059
Walter E. Robb, III 15,447 3,938 8 171,154
Arnold D. Scott -0- -0- N/A -0-
Jeffrey L. Shames -0- -0- N/A -0-
J. Dale Sherratt 15,611 7,539 24 157,714
Ward Smith 15,111 4,188 12 146,739
</TABLE>
(1) For fiscal year ended November 30, 1998.
(2) Based on normal retirement age of 75.
(3) For calendar year 1998. All Trustees served as Trustees of 43 funds within
the MFS fund complex (having aggregate net assets at December 31, 1998 of
approximately $25 billion) except Mr. Bailey who served as a Trustee of 74
funds within the MFS fund complex (having aggregate net assets at December
31, 1998 of approximately $68 billion).
3
<PAGE>
ESTIMATED ANNUAL BENEFITS PAYABLE
BY THE TRUST UPON RETIREMENT (4)
<TABLE>
<CAPTION>
Average Years of Service
Trustee Fees 3 5 7 10 or more
---------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 11,948 $1,792 $2,987 $4,182 $5,974
12,992 1,949 3,248 4,547 6,496
14,037 2,106 3,509 4,913 7,019
15,082 2,262 3,771 5,279 7,541
16,127 2,419 4,032 5,645 8,064
17,172 2,576 4,293 6,010 8,586
</TABLE>
(4) Other funds in the MFS fund complex provide similar retirement benefits to
the Trustees.
The Board of Trustees of the Trust met 6 times during its last fiscal year.
The Board has a standing Audit Committee, composed of Messrs. Cohan, Robb,
Sherratt and Smith 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 their independence. The Audit
Committee met 4 times during the Trust's last fiscal year. The Board has created
a Nominating Committee, composed of Ms. O'Neill and Messrs. Cohan, Cohn,
Gibbons, Robb, Sherratt and Smith, 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. The Board currently expects to reduce the size of the Board upon the
retirements disclosed above in order to eliminate the vacancies created thereby.
Shareholders wishing to recommend Trustee candidates for consideration by the
Nominating Committee may do so by writing the Secretary of the Trust. Nominees
must be persons who are not "interested persons" of the Trust as defined in the
1940 Act. 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 matter as to any nominee will require the
affirmative vote of a plurality of the Trust's outstanding shares 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 Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust, of Ernst & Young
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 and to
provide certain other tax-related services (such as tax return preparation and
assistance and consultation with respect to the preparation of filings with the
SEC) in respect of all or any part of the fiscal year ending November 30, 1999
Ernst & Young LLP has no direct or material indirect interest in the Trust.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting and will have an opportunity to make a statement if they desire to do
so. Such representatives are also expected to be available to respond to
appropriate questions.
4
<PAGE>
Required Vote. Ratification of this matter will require the affirmative vote of
a majority of the Trust's outstanding shares voting at the Meeting on this
matter in person or by proxy.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust engages as its investment adviser and administrator MFS, a
Delaware corporation, with offices at 500 Boylston Street, Boston, MA 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 election of Messrs. Bailey, Shames and Sherratt as Trustees of the Trust (if
still available for election), and ratification of the selection of Ernst &
Young LLP as independent public accountants.
All proxies voted, including proxies that reflect abstentions or the
withholding of authority to vote for a nominee for election as Trustee, will be
counted toward establishing a quorum. A majority of the Trust's outstanding
shares entitled to be cast on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Passage of any
proposal being considered at the Meeting will occur only if a sufficient number
of votes are cast FOR the proposal. With respect to the election of Trustees and
the ratification of public accountants, neither withholding authority to vote
nor abstentions have any effect on the outcome of the voting on either item.
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 matter properly comes 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.
SUBMISSION OF CERTAIN PROPOSALS
Proposals of shareholders which are intended to be presented at the 2000
Annual Meeting of Shareholders must be received by the Trust on or prior to May
6, 2000.
SECTION 16(a)-BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS Section 16(a) of the
Securities Exchange Act of 1934 requires Trustees,
directors and certain officers of the Trust and MFS, 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 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 November 30, 1998, 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.
5
<PAGE>
ADDITIONAL INFORMATION
To obtain the necessary representation at the Meeting, solicitations may be
made by mail, telephone or interview by Corporate Investor Communications, Inc.
("CIC") or its agents, as well as by officers of the Trust, employees of the
Adviser and securities dealers by whom shares of the Trust have been sold. It is
anticipated that the total cost of any such solicitations, if made by CIC or its
agents, would be approximately $9,500 plus out-of-pocket expenses, and if made
by any other party, would be nominal.
The expense of solicitations as well as the preparation, printing and
mailing of the enclosed form of proxy, and this Notice and Proxy Statement, will
be borne by the Trust.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
September 3, 1999 MFS CHARTER INCOME TRUST
6
