<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
JANUARY 29, 1998
1940 ACT FILE NO. 811-5912
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 9 |X|
MFS SPECIAL VALUE TRUST
(Exact Name of Registrant as Specified in Charter)
500 Boylston Street, Boston, Massachusetts 02116
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 617-954-5000
Stephen E. Cavan
Secretary and Clerk
MFS Special Value Trust
c/o Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
(Name and Address of Agent for Service)
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
1. Exhibits:
(a)(1) -- Declaration of Trust, dated
September 29, 1989; filed herewith.
(b)(1) -- Amended and Restated By-Laws,
dated December 14, 1994 (previously
filed as Exhibit (2)(b)(2) to
Amendment No. 7 to the Registration
Statement on Form N-2, filed with
the SEC on February 28, 1995
("Amendment No. 7")); incorporated
herein by reference.
(c) -- Inapplicable.
(d) -- Specimen certificate for Shares of
Beneficial Interest, without par
value; filed herewith.
(e) -- The section "Dividend Reinvestment
and Cash Purchase Plan" on page 3
of the Registrant's Annual Report
to its Shareholders, for its fiscal
year ended October 31, 1997;
incorporated herein by reference.
(f) -- Inapplicable.
(g)(1) -- Investment Advisory Agreement,
dated November 10, 1989; filed
herewith.
(g)(2) Administrative Services Agreement,
dated March 1, 1997, between
Massachusetts Financial Services
Company and the Registrant; filed
herewith.
(h) -- Omitted pursuant to General
Instruction G.3. to Form N-2.
(i) -- Retirement Plan for Non-Interested
Person Trustees, dated January 1,
1991; filed herewith.
(j)(1) -- Amended and Restated Custodian
Agreement, dated December 29, 1989;
filed herewith.
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(j)(2) -- Amendment to Custodian Agreement
dated September 11, 1991; filed
herewith.
(k)(1) -- Registrar, Transfer Agency and
Service Agreement between Registrant
and MFS Service Center, Inc., dated
August 15, 1994 (previously filed
as Exhibit (2)(k)(2) to Amendment
No. 7; incorporated herein by
reference.
(k)(2) -- Loan Agreement by and among the
Banks named therein, the MFS Funds
named therein, and The First
National Bank of Boston, dated as
of February 21, 1995 (previously
filed as Exhibit (2)(k)(3) to
Amendment No. 7)); incorporated
herein by reference.
(l) -- Omitted pursuant to General
Instruction G.3 to Form N-2.
(m) -- None.
(n) -- Omitted pursuant to General
Instruction G.3 to Form N-2.
(o) -- Inapplicable.
(p) -- Form of Purchase Agreement; filed
herewith.
(q) -- Inapplicable.
(r) -- Inapplicable.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston and Commonwealth of Massachusetts on the 29th day of January, 1998.
MFS SPECIAL VALUE TRUST
By: JAMES R. BORDEWICK, JR.
James R. Bordewick, Jr.
Assistant Secretary
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
(a)(1) Declaration of Trust, dated September 29, 1989.
(d) Specimen certificate for Shares of Beneficial Interest,
without par value.
(g)(1) Investment Advisory Agreement, dated November 10, 1989.
(g)(2) Administrative Services Agreement, dated March 1, 1997,
between Massachusetts Financial Services Company and the
Registrant.
(i) Retirement Plan for Non-Interested Person Trustees, dated
January 1, 1991.
(j)(1) Amended and Restated Custodian Agreement dated December 29,
1989.
(j)(2) Amendment to Custodian Agreement dated September 11, 1991.
(p) Form of Purchase Agreement.
<PAGE>
EXHIBIT NO. 99(a)(1)
MFS SPECIAL VALUE TRUST
----------------------------
DECLARATION OF TRUST
----------------------------
Dated September 29, 1989
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I--Name and Definitions
Section 1.1. Name 1
Section 1.2. Definitions 1
Section 1.3. Address 2
ARTICLE II--Trustees
Section 2.1. Number of Trustees 2
Section 2.2. Term of Office of Trustees 3
Section 2.3. Resignation and Appointment of Trustees 4
Section 2.4. Vacancies 4
Section 2.5. Delegation of Power to Other Trustees 5
ARTICLE III--Powers of Trustees
Section 3.1. General 5
Section 3.2. Investments 5
Section 3.3. Legal Title 6
Section 3.4. Issuance and Repurchase of Securities 7
Section 3.5. Borrowing Money; Lending Trust
Property 7
Section 3.6. Delegation; Committees 7
Section 3.7. Collection and Payment 7
Section 3.8. Expenses 7
Section 3.9. Manner of Acting; By-Laws 7
Section 3.10. Miscellaneous Powers 8
Section 3.11. Principal Transactions 8
Section 3.12. Trustees and Officers as Shareholders 9
ARTICLE IV--Investment Adviser, Distributor and
Transfer Agent
Section 4.1. Investment Adviser 9
Section 4.2. Distributor 9
Section 4.3. Transfer Agent 9
Section 4.4 Parties to Contract 10
<PAGE>
PAGE
ARTICLE V--Limitations of Liability of Share-
holders, Trustees and Others
Section 5.1. No Personal Liability of Share-
holders, Trustees, etc. 10
Section 5.2. Non-Liability of Trustees, etc. 11
Section 5.3. Mandatory Indemnification 11
Section 5.4. No Bond Required of Trustees 13
Section 5.5. No Duty of Investigation; Notice
in Trust Instruments, etc. 13
Section 5.6. Reliance on Experts, etc. 13
ARTICLE VI--Shares of Beneficial Interest
Section 6.1. Beneficial Interest 14
Section 6.2. Rights of Shareholders 14
Section 6.3. Trust Only 14
Section 6.4. Issuance of Shares 14
Section 6.5. Register of Shares 15
Section 6.6. Transfer of Shares 15
Section 6.7. Notices 15
Section 6.8. Voting Powers 16
ARTICLE VII--Determination of Net Asset Value, Net
Income and Distributions 16
ARTICLE VIII--Duration; Termination of Trust; Amendment;
Mergers, Etc.
Section 8.1. Duration 16
Section 8.2. Termination of Trust 17
Section 8.3. Amendment Procedure 17
Section 8.4. Merger, Consolidation and Sale
of Assets 18
Section 8.5. Incorporation and Reorganization 19
Section 8.6. Conversion 19
Section 8.7. Certain Transactions 20
<PAGE>
PAGE
ARTICLE IX--Reports to Shareholders 22
ARTICLE X--Miscellaneous
Section 10.1. Filing 22
Section 10.2. Governing Law 22
Section 10.3. Counterparts 22
Section 10.4. Reliance by Third Parties 22
Section 10.5. Provisions in Conflict with Law
or Regulations 23
SIGNATURE PAGE 23
<PAGE>
DECLARATION OF TRUST
OF
MFS SPECIAL VALUE TRUST
Dated September 29, 1989
DECLARATION OF TRUST, made September 29, 1989, by the Trustees;
WHEREAS, the Trustees desire to establish a trust for the investment
and reinvestment of funds contributed thereto; and
WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable Shares of Beneficial Interest as hereinafter
provided;
NOW THEREFORE, the Trustees hereby declare that all money and property
contributed to the trust established hereunder shall be held and managed in
trust for the benefit of holders, from time to time, of the Shares of Beneficial
Interest issued hereunder and subject to the provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is the "MFS
Special Value Trust."
Section 1.2. Definitions. Wherever they are used herein, the
following terms have the following respective meanings:
(a) "By-Laws" means the By-Laws referred to in section 3.9 hereof, as
from time to time amended.
(b) the terms "Commission, "Interested Person", and "Majority
Shareholder Vote" (the 67% or 50% requirement of the third sentence of Section 2
(a) (42) of the 1940 Act, whichever may be applicable) have the meanings given
them in the 1940 Act.
(c) "Declaration" means this Declaration of Trust as amended from time
to time. Reference in this Declaration of Trust to "Declaration", "herein, and
"hereunder" shall be deemed to refer to this Declaration rather than the article
or section in which such words appear.
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(d) "Distributor" means the party, other than the Trust, to the
contract, described in Section 4.2 hereof.
(e) "Investment Adviser" means a party furnishing services to the Trust
pursuant to any contract described in Section 4.1 hereof.
(f) "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations thereunder, as amended from time to time.
(g) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof, whether domestic or foreign.
(h) "Shareholder" means a record owner of outstanding Shares.
(i) "Shares" means the Shares of Beneficial Interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares.
(j) "Transfer Agent" means the party, other than the Trust, to the
contract described in Section 4.3 hereof.
(k) The "Trust" means entity specified in Section 1.1 above.
(l) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(m) "Trustees" means the persons who have signed the Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who may from time to time be duly elected, qualified and
serving as Trustees in accordance with the provisions hereof, and reference
herein to a Trustee or the Trustees shall refer to such person or persons in
their capacity as trustees hereunder.
Section 1.3. Address. The address of the Trust shall be:
500 Boylston Street
Boston, Massachusetts 02116
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ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees. 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 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
first annual meeting of shareholders or special meeting in lieu thereof
following the effective date of the Registration Statement relating to the
Shares under the Securities Act of 1933, as amended. 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 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 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 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 removed 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
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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) a Trustee may be removed at any meeting of Shareholders by a vote of
two-thirds of the outstanding Shares. 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 or 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 provisions of Section 16(a)
of the 1940 Act.
Section 2.4. Vacancies. The death, declination, resignation,
retirement, removal or incapacity of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created pursuant to
the terms of this Declaration. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled as provided in Section 2.3, the
Trustees in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by the Declaration. A written instrument certifying the existence of
such vacancy signed by a majority of the Trustees shall be conclusive evidence
of the existence of such vacancy.
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Section 2.5. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six (6) months
at any one time to any other Trustee or Trustees; provided that in no case shall
less than two (2) Trustees personally exercise the powers granted to the
Trustees under the Declaration except as herein otherwise expressly provided.
ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by the Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments and to do all such other things and execute all such
instruments as the Trustees deem necessary, proper or desirable in order to
promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of the Declaration, the presumption shall be in favor of a grant of
power to the Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 3.2. Investments. (a) The Trustees shall have the power:
(i) to conduct, operate and carry on the business of an investment
company;
(ii) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, own, hold, pledge, sell, assign, transfer, exchange, distribute, lend
or otherwise deal in or dispose of United States and foreign currencies, any
form of gold and other precious metals, commodity contracts, options, contracts
for the future acquisition or delivery of securities and securities of
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every nature and kind, including, without limitation, all types of bonds,
debentures, stocks, negotiable or non-negotiable instruments, obligations,
evidence of indebtedness, certificates of deposit or indebtedness, commercial
paper, repurchase agreements, bankers' acceptances, and other securities of any
kind, issued, created, guaranteed or sponsored by any and all Persons,
including, without limitation, states, territories and possessions of the United
States and the District of Columbia and any of the political subdivisions,
agencies or instrumentalities thereof and by the United States Government, any
foreign government, political subdivisions thereof or their agencies or
instrumentalities, or by any bank or savings institution, or of the U.S.
Government, any foreign government, political subdivision thereof or their
agencies or instrumentalities, or by any corporation or organization organized
under the laws of the United States or of any state, territory or possession
thereof, or by any corporation or organization organized under any foreign law,
or in "when issued" contracts for any such securities, or retain Trust assets in
cash and from time to time change the investments of the assets of the Trust;
and to exercise any and all rights, powers and privileges of ownership or
interest in respect of any and all such investments of every kind and
description, including, without limitation, the right to consent and otherwise
act with respect thereto, with power to designate one or more persons, firms,
associations or corporations to exercise any of said rights, powers and
privileges in respect of any of said instruments and.
(iii) to carry on any other business in connection with or incidental
to any of the foregoing powers, to do everything necessary, suitable or proper
for the accomplishment of any purpose or the attainment of any object or the
furtherance of any power hereinbefore set forth, and to do every other act or
thing incidental or appurtenant to or connected with the aforesaid purposes,
objects or powers.
(b) The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust, nor shall the Trustees be
limited by any law limiting the investments which may be made by fiduciaries.
Section 3.3. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person or nominee, on such terms as the Trustees may determine. The right,
title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee he shall automatically cease to have
any
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right, title or interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 3.4. Issuance and Repurchase of Securities. The Trustees shall
have the power to issue, sell, repurchase, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares, bonds,
debentures, notes or other instruments evidencing indebtedness any funds or
property of the Trust whether capital or surplus or otherwise, to the full
extent now or hereafter permitted by the laws of the Commonwealth of
Massachusetts governing business corporations.
Section 3.5. Borrowing Money; Lending Trust Property. The Trustees
shall have power to borrow money or otherwise obtain credit and to secure the
same by mortgaging, pledging or otherwise subjecting as security the assets of
the Trust, to endorse, guarantee, or undertake the performance of any
obligation, contract or engagement of any other Person and to lend Trust
property.
Section 3.6. Delegation; Committees. The Trustees shall have power to
delegate from time to time to such of their number or to officers, employees or
agents of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient.
Section 3.7. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which and property is owed to the Trust;
and to enter into releases, agreements and other instruments.
Section 3.8. Expenses. The Trustees shall have the power to incur and
pay any expenses which in the opinion of the Trustees are necessary or
incidental to carry out any of the purposes of the Declaration, and to pay
reasonable compensation from the funds of the Trust to themselves as Trustees.
The Trustees shall fix the compensation of all officers, employees and Trustees.
Section 3.9. Manner of Acting; By-Laws. Except as otherwise provided
herein or in the By-Laws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or
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similar communications equipment by means of which all persons participating in
the meeting can hear each other, or by written consents of all the Trustees. The
Trustees may adopt By-Laws not inconsistent with this Declaration to provide for
the conduct of the business of the Trust and may amend or repeal such By-Laws to
the extent such power is not reserved to the Shareholders.
Section 3.10. Miscellaneous Powers. The Trustees shall have the power
to: (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and authority of the Trustees as the
Trustees may determine; (d) purchase, and pay for out of Trust Property,
insurance policies insuring the Shareholders, Trustees, Officers, employees,
agents, investment advisers, distributors, selected dealers or independent
contractors of the Trust against all claims arising by reason of holding any
such position or by reason of any action taken or omitted by any such Person in
such capacity, whether or not constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such liability; (e)
establish pension, profit-sharing, Share purchase and other retirement,
incentive and benefit plans for any Trustees, officers, employees or agents of
the Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust has dealings, including the Investment Adviser, Distributor, Transfer
Agent and any dealer, to such extent as the Trustees shall determine; (g)
guarantee indebtedness or contractual obligations of others; (h) determine and
change the fiscal year of the Trust and the method by which its accounts shall
be kept; and (i) adopt a seal for the Trust, but the absence of such seal shall
not impair the validity of any instrument executed on behalf of the Trust.
Section 3.11. Principal Transactions. Except in transactions permitted
by the 1940 Act, or any order of exemption issued by the Commission, the
Trustees shall not, on behalf of the Trust, buy any securities (other than
shares) from or sell any securities (other than Shares) to, or lend any assets
of the Trust to, any Trustee or officer of the Trust or any firm of which any
such Trustee or officer is a member of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with the Investment Adviser, Distributor, or Transfer Agent or with any
Interested Person of such Person; but the Trust may employ any such Person, or
firm or company in which such Person is an Interested Person, as broker, legal
counsel, registrar, transfer agent, dividend disbursing agent or custodian upon
customary terms.
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Section 3.12. Trustees and Officers as Shareholders. No officer,
Trustee or Member of the Advisory Board of the Trust, and no member, partner,
officer, director or trustee of the Investment Adviser or of the Distributor,
and no Investment Adviser or Distributor of the Trust, shall take long or short
positions in the securities issued by the Trust.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR AND TRANSFER AGENT
Section 4.1. Investment Adviser. Subject to a Majority Shareholder Vote
the Trustees may in their discretion from time to time enter into one or more
investment advisory or management contracts whereby a party to such contract
shall undertake to furnish the Trust such management, investment advisory,
statistical and research facilities and services, promotional activities, and
such other facilities and services, if any, as the Trustees shall from time to
time consider desirable and all upon such terms and conditions as the Trustees
may in their discretion determine. Notwithstanding any provision of the
Declaration, the Trustees may delegate to the Investment Adviser authority
(subject to such general or specific instructions as the Trustees may from time
to time adopt) to effect purchases, sales, loans or exchanges of assets of the
Trust on behalf of the Trustees or may authorize any officer, employee or
Trustee to effect such purchases, sales, loans or exchanges pursuant to
recommendations of the Investment Adviser (and all without further action by the
Trustees). Any such purchases, sales, loans or exchanges shall be deemed to have
been authorized by all of the Trustees.
Section 4.2. Distributor. The Trustees may in their discretion from
time to time enter into a contract, providing for the sale of Shares whereby the
Trust may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article IV or
the By-Laws; and such contract may also provide for the sale of Shares by such
other party as principal or as agent of the Trust and may provide that such
other party may enter into selected dealer agreements with registered securities
dealers to further the purpose of the distribution or repurchase of the Shares.
Section 4.3. Transfer Agent. The Trustees may in their discretion
from time to time enter into a transfer agency and shareholder service
contract or contracts whereby the other party
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or parties to such contract or contracts shall undertake to furnish transfer
agency and/or shareholder services to the Trust. The contract or contracts shall
have such terms and conditions as the Trustees may in their discretion determine
not inconsistent with the Declaration or the By-Laws. Such services may be
provided by one or more Persons.
Section 4.4. Parties to Contract. Any contract of the character
described in Section 4.1, 4.2 or 4.3 of this Article IV or any Custodian
contract, as described in the By-Laws, may be entered into with any Person,
although one or more of the Trustees or officers of the Trust may be an officer,
partner, director, trustee, shareholder, or member of such other party to the
contract, and no such contract shall be invalidated or rendered voidable by
reason of the existence of any such relationship; nor shall any Person holding
such relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable for
any profit realized directly or indirectly therefrom, provided that the contract
when entered into was not inconsistent with the provisions of this Article IV or
the By-Laws. The same Person may be the other party to contracts entered into
pursuant to Section 4.1, 4.2 and 4.3 above or Custodian contracts, and any
individual may be financially interested or otherwise affiliated with Persons
who are parties to any or all of the contracts mentioned in this Section 4.4.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 5.1. No Personal Liability of Shareholders, Trustees, etc.
Subject to Section 5.3, no Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with Trust Property or the
acts, obligations or affairs of the Trust. No Trustee, officer, employee or
agent of the Trust shall be subject to any personal liability whatsoever to any
Person, other than the Trust or its Shareholders, in connection with Trust
Property or the affairs of the Trust, save only that arising from bad faith,
willful misfeasance, gross negligence or reckless disregard for his duty to such
Person; and all such Persons shall look solely to the Trust Property for
satisfaction of claims of any nature arising in connection with the affairs of
the Trust. If any Shareholder, Trustee, officer, employee, or agent, as such, of
the Trust, is made a party to any suit or proceeding to enforce any such
liability, he shall not, on account thereof, be held to any personal liability.
The Trust shall indemnify and hold each Shareholder harmless from and against
all claims and liabilities to which such Shareholder may become subject by
reason of his being or having been a
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Shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability. The rights accruing to a Shareholder under this Section 5.1 shall not
exclude any other right to which such Shareholder may be lawfully entitled, nor
shall anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
Section 5.2. Non-Liability of Trustees, etc. Subject to Section 5.3, no
Trustee, officer, employee or agent of the Trust shall be liable to the Trust,
its Shareholders, or to any Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties.
Section 5.3. Mandatory Indemnification. (a) Subject to the
exceptions and limitations contained in paragraph (b) below:
(i) every person who is or has been a Trustee or officer of the Trust
shall be indemnified by the Trust against all liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or incurred
by him in the settlement thereof;
(ii) the words "claim", "action", "suit", or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal, administrative or
other, including appeals), actual or threatened: and the words "liability" and
"expenses", shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or
officer:
(i) against any liability to the Trust or the Shareholders by reason of
a final adjudication by the court or other body before which the proceeding was
brought that he engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or
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(iii) in the event of a settlement involving a payment by a Trustee or
officer or other disposition not involving a final adjudication as provided in
paragraph (b)(i) or (b)(ii) resulting in a payment by a Trustee or officer,
unless there has been either a determination that such Trustee or officer did
not engage in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office by the court or
other body approving the settlement or other disposition or a reasonable
determination, based upon a review of readily available facts (as opposed to a
full trial-type inquiry) that he did not engage in such conduct:
(A) by vote of a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested Trustees
then in office act on the matter); or
(B) by written opinion of independent legal counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a Person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such Person. Nothing contained herein shall affect any rights
to indemnification to which personnel other than Trustees and officers may be
entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit, or proceeding of the character described in paragraph (a) of this
Section 5.3 shall be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the recipient to repay such
amount if it is ultimately determined that he is not entitled to indemnification
under this Section 5.3, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising out of
any such advances; or
(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office act on
the matter) or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 5.3, a "Disinterested Trustee" is one (i) who
is not an "Interested Person" of the Trust (including anyone who has been
exempted from being an "Interested Person" by
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any rule, regulation or order of the Commission), and (ii) against whom none of
such actions, suits or other proceedings or another action, suit or other
proceeding on the same or similar grounds is then or had been pending.
Section 5.4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 5.5. No Duty of Investigation; Notice in Trust Instruments,
etc. No purchaser, lender, Transfer Agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust shall be bound to make
any inquiry concerning the validity of any transaction purporting to be made by
the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in connection with
the Trust shall be conclusively presumed to have been executed or done by the
executors thereof only in their capacity as Trustees under the Declaration or in
their capacity as officers, employees or agents of the Trust. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees shall recite that the same
is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of any such instrument are not binding
upon any of the Trustees or Shareholders individually, but bind only the trust
estate, and may contain any further recital which they or he may deem
appropriate, but the omission of such recital shall not operate to bind any of
the Trustees or Shareholders individually. The Trustees shall at all times
maintain insurance for the protection of the Trust Property, its Shareholders,
Trustees, officers, employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 5.6. Reliance on Experts, etc. Each Trustee and officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by the Investment Adviser, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
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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, without par value. The number of Shares of Beneficial Interest
authorized hereunder is unlimited. 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 any assessment of any kind by
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.
Section 6.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in the Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 6.4 Issuance of Shares. The Trustees, in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times, and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares. The Trustees may from time to time divide or combine the
Shares of any series into a greater or
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lesser number without thereby changing the proportionate beneficial interests in
the Trust. Contributions to the Trust may be accepted for whole Shares and/or
1/1,000ths of a Share or integral multiples thereof.
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 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 6.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with any certificate or
certificates (if issued) for such Shares and such evidence of the genuiness of
each such execution and authorization and of other matters as may reasonably be
required. Upon such delivery the transfer shall be recorded on the register of
the Trust. Until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or register nor any officer, employee or agent
of the Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent; but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 6.7. Notices. Any and all notices to which any Shareholder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
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Section 6.8. Voting Powers. 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 hereof, (iv) with respect to any amendment
of this Declaration to the extent and as provided in Section 8.3 (v) with
respect to any merger, consolidation or sale of assets as provided in Sections
8.4 and 8.6 hereof, (vi) with respect to incorporation of the Trust or any
series 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 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 that Shares held in
the treasury of the Trust shall not be voted. There shall be no cumulative
voting in the election of Trustees. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action required by law, the
Declaration or the By-Laws to be taken by Shareholders. The By-Laws may include
further provisions for Shareholders' votes and meetings and related matters.
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 or in a duly adopted vote of the Trustees such bases and
times for determining the per Share or net asset value of the Shares of any
series or net income or the declaration and payment of dividends and
distribution as they may deem necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation
of time but subject to the provisions of this Article VIII.
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Section 8.2. Termination of Trust. (a) 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 of 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 of 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.
(b) After termination of the Trust and distribution of 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 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 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, or if they deem it
necessary to
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conform this Declaration to the requirements of applicable federal or state 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) Notwithstanding any other provision hereof, no amendment may be
made under this Section 8.3 which would change any rights with respect to the
Shares, or any series of 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 or series of 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 assessments 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 Section 2.2, 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 or
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 8.4. Merger, Consolidation and Sale of Assets. The Trust may
merge or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property, including its good will, upon such terms and conditions and for
such consideration when and as authorized at any meeting of Shareholders called
for the purpose by the affirmative vote of
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the holders of not less than two-thirds of the Shares outstanding and entitled
to vote, or by an instrument or instruments in writing without a meeting,
consented to by the holders of not less than two-thirds of the Shares; provided,
however, that if such merger, consolidation, sale, lease or exchange is
recommended by the Trustees, the vote or written consent of the holders of a
majority of Shares outstanding and entitled to vote, shall be sufficient
authorization; and any such merger, consolidation, sale, lease or exchange shall
be deemed for all purposes to have been accomplished under and pursuant to the
statutes of the Commonwealth of Massachusetts. Nothing contained herein shall be
construed as requiring approval of shareholders for any sale of assets in the
ordinary course of the business of the Trust.
Section 8.5. Incorporation and Reorganization. With the approval of the holders
of a majority of the Shares outstanding and entitled to vote, the Trustees may
cause to be organized or assist in organizing a corporation or corporations
under the laws of any jurisdiction, or any other trust, partnership, association
or other organization to take over all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
to sell, convey and transfer the Trust Property to any such corporation, trust,
partnership, association or organization in exchange for the shares or
securities thereof or otherwise, and to lend money to, subscribe for the Shares
or securities of, and enter into any contracts with any such corporation, trust,
partnership, association or organization in which the Trust holds or is about to
acquire shares or any other interest. Subject to Section 8.4 hereof, the
Trustees may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership, association or
other organization if and to the extent permitted by law, as provided under the
law then in effect. Nothing contained herein shall be construed as requiring
approval of Shareholders for the Trustees to organize or assist in organizing
one or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the Trust
Property to such organizations or entities.
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 December 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 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
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or by the terms of any class or series of preferred stock, whether now or
hereafter authorized, or any agreement between the Trust and any national
securities exchange.
Section 8.7. Certain Transactions. (a) Notwithstanding any other
provision of this Declaration and subject to the exceptions provided in
paragraph (d) of this Section, the types of transactions described in paragraph
(c) of this Section shall require the affirmative vote or consent of the holders
of sixty-six and two-thirds (66 2/3%) of the Shares outstanding and entitled to
vote, when a Principal Shareholder (as defined in paragraph (b) of this Section)
is party to the transaction. 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 or series of preferred stock, whether now or
hereafter authorized, or any agreement between the Trust and any national
securities exchange.
(b) The term "Principal Shareholder" shall mean any corporation, person
or other entity which is the beneficial owner, directly or indirectly, of more
than five percent (5%) of the outstanding Shares and shall include any affiliate
or associate, as such terms are defined in clause (ii) below, of a Principal
Shareholder. For the purposes of this Section, in addition to the Shares which a
corporation, person or other entity beneficially owns directly, (a) any
corporation, person or other entity shall be deemed to be the beneficial owner
of any Shares (i) which it has the right to acquire pursuant to any agreement or
upon exercise of conversion rights or warrants, or otherwise (but excluding
share options granted by the Trust) or (ii) which are beneficially owned,
directly or indirectly (including Shares deemed owned through application of
clause (i) above), by any other corporation, person or entity with which its
"affiliate" or "associate" (as defined below) has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
Shares, or which is its "affiliate" or "associate" as those terms are defined in
Rule 12b-2 of the General Rules and regulations under the Securities Exchange
Act of 1934 as in effect on December 1, 1986, and (b) the outstanding Shares
shall include Shares deemed owned through application of clauses (i) and (ii)
above but shall not include any other Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any
subsidiary of the Trust with or into any Principal
Shareholder.
(ii) The issuance of any securities of the Trust to any
principal Shareholder for cash.
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(iii) The sale, lease or exchange of all or any substantial
part of the assets of the Trust to any Principal Shareholder
(except assets having an aggregate fair market value of less
than $1,000,000, aggregating for the purpose of such
computation all assets sold, leased or exchanged in any series
of similar transactions within a twelve-month period or assets
sold in the ordinary course of business.
(iv) The sale, lease or exchange to the Trust or any
subsidiary thereof, in exchange for securities of the Trust of
any assets of any Principal Shareholder (except assets having
an aggregate fair market value of less than $1,000,000,
aggregating for the purposes of such computation all assets
sold, leased or exchanged in any series of similar
transactions within a twelve-month period).
(d) The provisions of this Section shall not be applicable to
(i) any of the transactions described in paragraph (c) of this
section if the Board of Trustees of the Trust shall by
resolution have approved a memorandum of understanding with
such Principal Shareholder with respect to and substantially
consistent with such transactions, or (ii) any such
transaction with any corporation of which a majority of the
outstanding shares of all classes of stock normally entitled
to vote in elections of directors is owned of record or
beneficially by the Trust and its subsidiaries.
(e) The Board of Trustees shall have the power and duty to
determine for the purposes of this Section on the basis of
information known to the Trust, whether (i) a corporation,
person or entity beneficially owns more than five percent (5%)
of the outstanding Shares, (ii) a corporation, person or
entity is an "affiliate" or "associate" (as defined above) of
another, (iii) the assets being acquired or leased to or by
the Trust or any subsidiary thereof, constitute a substantial
part of the assets of the Trust and have an aggregate fair
market value of less than $1,000,000 and (iv) the memorandum
of understanding referred to in paragraph (d) hereof is
substantially consistent with the transaction covered thereby.
Any such determination shall be conclusive and binding for all
purposes of this Section.
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ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the transactions of the Trust, including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Filing. This Declaration and any amendment hereto 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.
Section 10.2. Governing Law. This Declaration is executed by the
trustees and delivered in the Commonwealth of Massachusetts and with reference
to the laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said Commonwealth.
Section 10.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appear to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instruments or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or
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Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officers elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any Person dealing with the Trustees and their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code, as amended, or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of the Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of the Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
29th day of September, 1989.
RICHARD B. BAILEY
Richard B. Bailey
as Trustee
and not individually
500 Boylston Street
Boston, Massachusetts
W. THOMAS LONDON
W. Thomas London
as Trustee
and not individually
500 Boylston Street
Boston, Massachusetts
<PAGE>
DANIEL M. JAFFE
Daniel M. Jaffe
as Trustee
and not individually
500 Boylston Street
Boston, Massachusetts
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS BOSTON, MASSACHUSETTS
September 29, 1989
Then personally appeared the above-named Richard B. Bailey, W. Thomas
London and Daniel M. Jaffe who severally acknowledged the foregoing instrument
to be their free act and deed.
Before me,
ILLEGIBLE
(Illegible)
Notary Public
My Commission Expires:
<PAGE>
EXHIBIT NO. 99(d)
SHARES OF SHARES OF
BENEFICIAL INTEREST BENEFICIAL INTEREST
WITHOUT WITHOUT
PAR VALUE PAR VALUE
ORGANIZED UNDER THE LAWS
OF THE COMMONWEALTH THIS CERTIFICATE IS TRANSFERABLE
OF MASSACHUSETTS IN BOSTON AND IN NEW YORK CITY
C U S I P 55274E 10 2
SEE REVERSE FOR CERTAIN DEFINITIONS
MFS SPECIAL VALUE TRUST
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
MFS SPECIAL VALUE TRUST, transferable on the books of the Trust by the holder
hereof in person or by duly authorized attorney upon surrender of this
Certificate properly endorsed. This Certificate and the shares represented
hereby are issued and shall be subject to all of the provisions of the
Declaration of Trust and By-Laws of the Trust, each as from time to time
amended, (copies of which are on file with the Transfer Agent), to all of which
the holder by acceptance hereof assents. This Certificate is not valid until
countersigned and registered by the Transfer Agent and Registrar.
Witness the facsimile seal of the Trust and the facsimile signatures of
its duly authorized officers.
Dated: MFS SPECIAL VALUE TRUST
COUNTERSIGNED AND REGISTERED: BY:
STATE STREET BANK AND TRUST COMPANY
(BOSTON) TRANSFER AGENT
AND REGISTRAR
BY: W. THOMAS LONDON A. KEITH BRODKIN
W. Thomas London A. Keith Brodkin
AUTHORIZED SIGNATURE TREASURER PRESIDENT
<PAGE>
EXHIBIT NO. 99(g)(1)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 10th day of November, 1989, by and
between MFS SPECIAL VALUE TRUST, a Massachusetts business trust (the "Trust")
and Massachusetts Financial Services Company, a Delaware corporation (the
"Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as a closed-end investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the adviser is willing to provide business management services to the
Trust on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto as herein set forth, the parties covenant and agree as follows:
1. Duties of the Adviser. The Adviser shall provide the Trust with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its funds. The Adviser shall act as
Adviser to the Trust and as such shall furnish continuously an investment
program and shall determine from time to time what securities shall be
purchased, sold or exchanged and what portion of the assets of the Trust shall
be held uninvested, subject always to the restrictions of its Declaration of
Trust, dated September 29, 1989, and By-Laws, as each may be amended from time
to time (respectively the "Declaration" and "By-Laws"), to the provisions of the
Investment Company Act of 1940 and the Rules, Regulations and orders thereunder,
and to the Trust's then-current Prospectus. The Adviser shall also make
recommendations as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Trust's portfolio
securities shall be exercised. Should the Trustees at any time, however, make
any definite determination as to investment policy and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Adviser shall take, on behalf of the Trust,
all actions which it deems necessary to implement the investment policies
determined as provided above, and in particular to place all orders for the
purchase or sale of
<PAGE>
portfolio securities for the Trust's account with brokers or dealers selected by
it, and to that end the Adviser is authorized as the agent of the Trust to give
instructions to the Custodian of the Trust as to deliveries of securities and
payments of cash for the account of the Trust. In connection with the selection
of such brokers or dealers and the placing of such orders, the Adviser is
directed to seek for the Trust execution at the best available price. Subject to
this requirement of seeking the best available price, securities may be bought
from or sold to broker dealers who have furnished statistical, research and
other information or services to the Adviser.
2. Allocation of Charges and Expenses. The Adviser shall furnish its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Trust and maintaining its organization, and investment advisory facilities and
executive and supervisory personnel for managing the investments and effecting
the portfolio transactions of the Trust. The Adviser shall arrange, if desired
by the Trust, for directors, officers and employees of the Adviser to serve as
Trustees, officers or agents of the trust if duly elected or appointed to such
positions and subject to their individual consent and to any limitations imposed
by law. It is understood that the Trust will pay all of its own expenses
including, without limitation, compensation of Trustees not "affiliated" with
the Adviser; governmental fees; interest charges; taxes; membership dues in the
Investment Company Institute allocable to the Trust; fees and expenses of
independent auditors, of legal counsel and of any transfer agent, registrar or
dividend dispursing agent of the Trust; expenses of servicing shareholder
accounts; expenses of preparing, printing and mailing share certificates,
shareholder reports, notices, proxy statements and reports to governmental
officers and commissions; brokerage and other expenses connected with the
execution, recording and settlement of portfolio security transactions;
insurance premiums; fees and expenses of the custodian for all services to the
"Trust" including safekeeping of funds and securities and maintaining required
books and accounts; expenses of calculating the net asset value of shares of the
Trust; expenses of shareholder meetings; and expenses relating to the issuance,
registration and qualification of shares of the Trust and the preparation,
printing and mailing of prospectuses for such purposes (except to the extent
that any Distribution Agreement to which the Trust is a party provides that
another party is to pay some or all of such expenses).
3. Compensation of the Adviser. For the services to be rendered and
the facilities to be provided, the Trust shall pay
<PAGE>
to the Adviser, out of the assets of the Trust an investment advisory fee
computed and paid monthly in an amount equal to the sum of .68% of the Trust's
average daily net assets and 3.40% of the Trust's gross income (i.e., income
other than gains from the sale of securities, gains from options and futures
transactions, premium income from options written and gains from foreign
exchange transactions) in each case on an annual basis for the Trust's
then-current fiscal year. If the Adviser shall serve for less than the whole of
any period specified in this Article 3, the compensation to the Adviser will be
prorated.
4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Trust or the Trust principal
underwriter, if any, as principals in making purchases or sales of securities or
other property for the account of the Trust, except as permitted by the
Investment Company Act of 1940 and the Rules, Regulations or orders thereunder,
will not take a long or short position in the shares of the Trust except as
permitted by the Declaration, and will comply with all other provisions of the
Declaration and By-Laws and the then-current Prospectus of the Trust relative to
the Adviser and its directors and officers.
5. Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgement or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution and management of
the Trust, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its duties and
obligations hereunder. As used in this Section 5, the term "Adviser" shall
include directors, officers and employees of the Adviser as well as that
corporation itself.
6. Activities of the Adviser. The services of the Adviser to the Trust
are not to be deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other fund clients to use the initials "MFS" in their names. The Trust agrees
that if the Adviser shall for any reason no longer serve as the Adviser to the
Trust, the Trust will change its name so as to delete the initials "MFS". It is
understood that Trustees, officers and shareholders of the Trust are or may be
or become interested in
<PAGE>
the Adviser, as directors, officers, employees, or otherwise and that directors,
officers and employees of the Adviser are or may become similarly interested in
the Trust, and that the Adviser may be or become interested in the Trust as a
shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force until August 1, 1991, on which date it will terminate unless its
continuance after August 1, 1991 is "specifically approved at least annually"
(i) by the vote of a majority of the Trustees of the Trust who are not
"interested persons" of the Trust or of the Adviser at a meeting specifically
called for the purpose of voting on such approval, and (ii) by the Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the Trust.
This Agreement may be terminated at any time without the payment of any penalty
by the Trustees or by "vote of a majority of the outstanding voting securities"
of the Trust, or by the Adviser, in each case on not more than sixty days' nor
less than thirty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment".
This Agreement may be amended only if such amendment is approved by "vote of a
majority of the outstanding voting securities" of the Trust.
The terms "specifically approved at least annually", "vote of a majority of the
outstanding voting securities", "assignment", "affiliated person", and
interested person", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, in
the Investment Company Act of 1940 and the Rules and Regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered in their names and on their behalf by the undersigned, thereunder
duly authorized, all as of the day and year first above written. The undersigned
Trustee of the Trust has executed this Agreement not individually, but as
Trustee under the Declaration and the obligations of this Agreement are not
binding upon any of the Trustees or shareholders of the Trust, individually, but
bind only the trust estate.
MFS SPECIAL VALUE TRUST
By: A. KEITH BRODKIN
A. Keith Brodkin
Chairman and Trustee
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: A. KEITH BRODKIN
A. Keith Brodkin
President
<PAGE>
EXHIBIT NO. 99(g)(2)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
MASTER ADMINISTRATIVE SERVICES AGREEMENT dated this 1st day of March, 1997, by
and among Massachusetts Financial Services Company, a Delaware corporation (the
"Administrator"), and each of the funds (or trusts acting on behalf of their
series) identified on Exhibit A hereto (each a "Fund" and collectively the
"Funds").
W I T N E S S E T H:
WHEREAS, the Funds have entered into Investment Advisory Agreements with the
Administrator (the "Advisory Agreements") pursuant to which the Administrator
provides investment advisory services to the Funds;
WHEREAS, the Advisory Agreements recite that the Administrator will bear certain
expenses associated with the provision of investment advisory services and that
the Funds will bear their own expenses, including expenses of legal counsel to
the Funds, expenses connected with the execution, recording and settlement of
the Funds' portfolio security transactions and expenses of calculating the
Funds' net asset values;
WHEREAS, the Administrator, at its expense, has provided a variety of
administrative services to the Funds for the benefit of the Funds and their
shareholders; and
WHEREAS, the Funds desire to retain the Administrator to render certain legal,
financial administration and other administrative services to the Funds in the
manner and on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto and hereinafter set forth, the parties covenant and agree as
follows:
1. Administrative Services. Subject to the limitations set forth in the second
paragraph of Section 3 of this Agreement, the Administrator shall render to each
Fund the financial administration services set forth on Exhibit B hereto (the
"Financial Administration Services"), the legal services set forth on Exhibit C
hereto (the "Legal Services") and the other administrative services set forth on
Exhibit D hereto ("Other Administrative Services") (the Financial Administration
Services, Legal Services and Other Administrative Services are collectively
referred to as the "Administrative Services").
The Administrative Services provided by the Administrator to each Fund
may not include all Administrative Services required by the Fund, due to a
number of considerations, including, without limitation, the Administrator's
level of work flow, staffing and resources, the specialized or unique nature of
the Administrative Services and the relative priorities of such Administrative
Services. The Administrator may, on behalf of each Fund, arrange for or engage
outside legal counsel, accounting or auditing firm or any other outside service
provider or vendor
<PAGE>
(collectively, "third party vendors") to perform Administrative Services for the
Fund, and the Fund will bear the expense of any such third party vendors;
provided however, that the Administrator shall promptly inform the Fund's
governing board in the event any third party vendor is engaged to perform
Administrative Services for a Fund on a basis that is expected to generate
significant expenses for a Fund.
2. Maintenance of Books and Records. With respect to the provision of
Administrative Services, the Administrator will preserve for each Fund that is
registered as a registered investment company with the Securities and Exchange
Commission (the "SEC") all records required to be maintained as prescribed by
the rules and regulations of the SEC in the manner and for the time periods
prescribed by such rules. The Administrator agrees that all such records shall
be the property and under the control of each Fund for which they are maintained
and shall be made available, within five business days of any request therefor,
to the Fund's Board of Trustees or auditors during regular business hours at the
Administrator's offices. In the event of termination of this Agreement for any
reason, all such records shall be returned, without charge, promptly to the
appropriate Fund, free from any claim or retention of rights by the
Administrator, except that the Administrator may retain copies of such records.
3. Administrative Fee. Each Fund shall pay the Administrator a fee as agreed to
from time to time and as set forth in Exhibit E hereto (the "Administrative
Fee"). The Administrative Fee shall be accrued for each calendar day and the sum
of the daily fee accruals shall be paid monthly to the Administrator on the
second to last business day of each calendar month. If this Agreement becomes
effective or terminates before the end of any calendar month, the Administrative
Fee for the period from the effective date to the end of such calendar month or
from the beginning of such calendar month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
The governing board of each Fund will, on an annual basis, review the
services provided, the Administrator's costs in providing such services, amounts
paid to third party vendors pursuant to the arrangement described in Section 1
and the amount paid by the Fund to the Administrator pursuant to this Agreement
(including the extent to which such amount is greater or lesser than the
Administrator's costs in providing such services) and such other information as
such board may reasonably request.
4. Scope of Administrative Services; Regulatory and Business and Industry
Practice Developments. The Administrative Services to be furnished by the
Administrator include only those services required by a Fund or which are being
furnished by the Administrator at March 1, 1997. In the event that, subsequent
to March 1, 1997, because of regulatory developments, or new or modified
business or industry practices, the Fund requires services in addition to the
Administrative Services, at the request of the Fund, the Administrator will
consider furnishing such additional services, with compensation for such
additional services to be agreed upon with respect to each such occasion as it
arises.
-2-
<PAGE>
5. Non-Exclusivity. The services of the Administrator to the Funds
hereunder are not to be deemed exclusive and the Administrator shall be free
to render similar services to others.
6. Standard of Care. Neither the Administrator, nor any of its directors,
officers, stockholders, agents or employees, shall be liable or responsible to
any Fund or its shareholders for any error of judgment, mistake of law or any
loss arising out of any act or omission in the performance by the Administrator
of its duties under this Agreement, except for liability resulting from (a)
willful misfeasance, (b) bad faith, (c) in the case of Financial Administration
Services, negligence, and, in the case of Legal Services and Other
Administrative Services, gross negligence, in each case on the Administrator's
part or (d) from reckless disregard by the Administrator of its obligations and
duties under this Agreement.
7. Term, Termination, Amendment and Assignment. This Agreement shall begin on
the date first written above and shall continue indefinitely. The Agreement may
be terminated at any time, without payment of any penalty, by the Board of
Directors/Trustees which oversees the Fund upon sixty (60) days' written notice
to the Administrator. This Agreement may be terminated by the Administrator with
respect to any Fund at any time upon sixty (60) days' written notice to the
Fund. This Agreement may be amended at any time by a written agreement executed
by each party hereto and may be assigned with respect to any Fund only with the
written consent of the Fund and the Administrator.
8. Miscellaneous.
a. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise affect
their construction or effect.
b. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the domestic
substantive laws of The Commonwealth of Massachusetts, without
giving effect to any conflicts or choice of laws rule or
provision that would result in the application of the domestic
substantive laws of any other jurisdiction.
c. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one
and the same instrument.
d. Joinder of Funds. In the event that additional funds are
created from time to time which desire to retain the
Administrator to provide them with Administration Services
pursuant to this Agreement, the Administrator and the
additional fund may jointly amend Schedule A hereto to add
the additional fund, and the additional fund shall
thereafter be deemed a "Fund" for all purposes of this
-3-
<PAGE>
Agreement. The consent of the other parties to this
Agreement shall not be required to amend Schedule A hereto.
e. Scope of Fund's Obligations. A copy of the Declaration of
Trust of each Fund (or trust of which the Fund is a series)
organized as a Massachusetts business trust (each a
"Trust"), is on file with the Secretary of State of The
Commonwealth of Massachusetts. The Administrator
acknowledges that the obligations of or arising out of this
Agreement are not binding upon any of a Trust's trustees,
officers, employees, agents or shareholders individually,
but are binding solely upon the assets and property of the
Trust in accordance with its proportionate interest
thereunder and hereunder. If this Agreement is executed by
the Trust on behalf of one or more series of the Trust, the
Administrator further acknowledges that the assets and
liabilities of each series of the Trust are separate and
distinct and that the obligations of or arising out of this
Agreement are binding solely upon the assets or property of
the series on whose behalf the Trust has executed this
Agreement. The Administrator also agrees that the
obligations of each Fund hereunder shall be several and not
joint, in accordance with its proportionate interest
hereunder, and agrees not to proceed (by way of claim,
set-off or otherwise) against any Fund for the obligations
of another Fund.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affiliated, as of the date first written above.
On behalf of the MFS Family
of Funds, MFS Closed-End
Funds and MFS Institutional
Funds listed on Exhibit A
hereto
By:/S/ A. KEITH BRODKIN
A. Keith Brodkin
Chairman and
President
On behalf of the MFS/Sun
Life Series Trust and
Compass Products listed
on Exhibit A hereto
By:/S/ JOHN D. MCNEIL
John D. McNeil
Chairman
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By:/S/ JEFFREY L. SHAMES
Jeffrey L. Shames
President
-5-
<PAGE>
Exhibit A
Funds
I. MFS Family of Funds
MFS Series Trust I:
MFS Managed Sectors Fund
MFS Cash Reserve Fund
MFS World Asset Allocation Fund
MFS Special Opportunities Fund
MFS Aggressive Growth Fund
MFS Research Growth and Income Fund
MFS Equity Income Fund
MFS Core Growth Fund
MFS Convertible Securities Fund
MFS Blue Chip Fund
MFS New Discovery Fund
MFS Science & Technology Fund
MFS Research International Fund
MFS Series Trust II:
MFS Emerging Growth Fund
MFS Capital Growth Fund
MFS Gold & Natural Resources Fund
MFS Intermediate Income Fund
MFS Series Trust III:
MFS High Income Fund
MFS Municipal High Income Fund
MFS Series Trust IV:
MFS Money Market Fund
MFS Government Money Market Fund
MFS Municipal Bond Fund
MFS OTC Fund
MFS Series Trust V:
MFS Total Return Fund
MFS Research Fund
MFS Series Trust VI:
MFS World Total Return Fund
MFS Utilities Fund
MFS World Equity Fund
MFS Series Trust VII:
MFS World Governments Fund
MFS Value Fund
MFS Series Trust VIII:
MFS Strategic Income Fund
MFS World Growth Fund
-6-
<PAGE>
MFS Series Trust IX:
MFS Bond Fund
MFS Limited Maturity Fund
MFS Municipal Limited Maturity Fund
MFS Series Trust X:
MFS Government Mortgage Fund
MFS/Foreign & Colonial Emerging Markets Equity Fund
MFS/Foreign & Colonial International Growth Fund
MFS/Foreign & Colonial International Growth and Income Fund
MFS Municipal Series Trust:
MFS Alabama Municipal Bond Fund
MFS Arizona Municipal Bond Fund
MFS California Municipal Bond Fund
MFS Florida Municipal Bond Fund
MFS Georgia Municipal Bond Fund
MFS Maryland Municipal Bond Fund
MFS Massachusetts Municipal Bond Fund
MFS Mississippi Municipal Bond Fund
MFS New York Municipal Bond Fund
MFS North Carolina Municipal Bond Fund
MFS Pennsylvania Municipal Bond Fund
MFS South Carolina Municipal Bond Fund
MFS Tennessee Municipal Bond Fund
MFS Virginia Municipal Bond Fund
MFS West Virginia Municipal Bond Fund
MFS Municipal Income Fund
MFS Growth Opportunities Fund
MFS Government Securities Fund
Massachusetts Investors Growth Stock Fund
MFS Government Limited Maturity Fund
Massachusetts Investors Trust
II. MFS Closed-End Funds
MFS Municipal Income Trust
MFS Multimarket Income Trust
MFS Government Markets Income Trust
MFS Intermediate Income Trust
MFS Charter Income Trust
MFS Special Value Trust
-7-
<PAGE>
III. MFS Institutional Funds
MFS Institutional Trust:
MFS Institutional Emerging Equities Fund
MFS Institutional Worldwide Fixed Income Fund
MFS Institutional Emerging Markets Income Fund
MFS Institutional International Equity Fund
MFS Institutional Mid-Cap Growth Equity Fund
MFS Institutional Research Fund
MFS Institutional Core Plus Fixed Income Fund
MFS Union Standard Trust:
MFS Union Standard Equity Fund
MFS Variable Insurance Trust:
MFS Emerging Growth Series
MFS Value Series
MFS Research Series
MFS Growth With Income Series
MFS Total Return Series
MFS Utilities Series
MFS High Income Series
MFS World Governments Series
MFS Strategic Fixed Income Series
MFS Bond Series
MFS Limited Maturity Series
MFS Money Market Series
IV. MFS/Sun Life Series Trust
MFS Capital Appreciation Series
MFS Conservative Growth Series
MFS Government Securities Series
MFS World Governments Series
MFS High Yield Series
MFS Managed Sectors Series
MFS Money Market Series
MFS Total Return Series
MFS Utilities Series
MFS World Growth Series
MFS Zero Coupon Series 2000
MFS Research Series
MFS World Asset Allocation Series
MFS World Total Return Series
MFS Emerging Growth Series
MFS/Foreign & Colonial International Growth and Income Series
MFS/Foreign & Colonial International Growth Series
MFS/Foreign & Colonial Emerging Markets Equity Series
MFS Value Series
-8-
<PAGE>
V. Compass Products
MFS Capital Appreciation Variable Account
MFS Government Securities Variable Account
MFS World Governments Variable Account
MFS High Yield Variable Account
MFS Managed Sectors Variable Account
MFS Money Market Variable Account
MFS Total Return Variable Account
-9-
<PAGE>
Exhibit B
Financial Administration Services
The Administrator shall perform the following Financial Administration
Services for each Fund:
A. General Services.
1. Prepare such financial information of the Fund as is
reasonably necessary for reports to shareholders of the
Fund, reports to the Fund's governing board and officers,
and reports to appropriate regulatory authorities including,
without limitation, prospectuses, shareholder reports,
shareholder notices, proxy statements and other periodic
reports and render statements or copies of records as from
time to time are reasonably requested by the Fund.
2. Facilitate audits of accounts by the Fund's independent
public accountants or by any of the auditors employed or
engaged by the Fund or by any regulatory body with
jurisdiction over the Fund. Coordinate with, and monitor
the performance of, the custodian banks retained by the Fund
to perform the necessary custodial services for the Fund
including, without limitation, the safekeeping of the funds
and securities.
3. Negotiate contracts for computing the Fund's net asset value
per share, and, if applicable, its public offering price
and/or its daily dividend rates and money market yields and
other investment performance quotations, in accordance with
sub-paragraph C below, and notify the Fund and such other
persons as the Fund may reasonably request of the net asset
value per share, the public offering price and/or its daily
dividend rates and money market yields and other investment
performance quotations.
B. Valuation of Securities. The Administrator shall ensure that the value of the
Fund's securities is computed in accordance with governing law, rules and
regulations, the Fund's governing instruments and subject to the oversight and
direction of the Fund's governing body. The Administrator may use one or more
external pricing services in computing the value of a Fund's securities,
including broker/dealers, provided that the Fund's governing body or an
individual designated by the Fund's governing body has approved the use of such
pricing services.
C. Computation of Net Asset Value, Public Offering Price, Daily Dividend Rates
and Performance Quotations. The Administrator shall assure that the Fund's net
asset value, net income, public offering price, dividend rates and money market
yields, if applicable, and other investment performance quotations are
calculated in a manner and at such time or times as the
-10-
<PAGE>
Fund shall direct and in accordance with governing law, rules and regulations
and the Fund's governing instruments and subject to the oversight and direction
of the Fund's governing board.
D. Other Financial Administration Services. In addition, the
Administrator shall provide the following Financial Administration Services:
(1) Provide Treasurers or Assistant Treasurers to serve as
officers of the Fund;
(2) Coordinate the meetings of the Audit Committees, assure that
meetings are scheduled and that agendas are prepared;
participate in meetings of the Audit Committee;
(3) Review contracts and negotiate fees for the Fund for services
such as independent audit fees, custodian fees, transfer agent
fees and the fees of other service providers to the Fund;
(4) Oversee the preparation of accounting records required to be
maintained by the Fund. Assure that any audit of Fund records
is coordinated and completed timely;
(5) Direct the preparation of Fund Financial Statements and
Footnotes. Assure that all statements and disclosures are in
accordance with generally accepted accounting principles and
that disclosures meet current regulatory or accounting
requirements;
(6) Assure that all distributions of the Fund meet the distribution
and excise tax requirements to assure qualification and to
minimize taxes paid by the Fund;
(7) Establish the tax policies and procedures for the Fund; maintain
procedures and policies with respect to tax matters; maintain
tax accounting records of the Fund; complete or review tax
returns and excise tax forms for the Fund; assist in preparing
the 1099-DIV information delivered to shareholders;
(8) Complete materials for the governing board of the Fund,
including materials for board meetings and in connection with
the renewal of investment advisory and distribution contracts;
(9) Direct the accrual of Fund expenses; review and approve all
invoices submitted to the Fund; and
(10) Perform or arrange for the performance of all other Financial
Administration Services required of the Fund.
-11-
<PAGE>
Exhibit C
Legal Services
The Administrator shall provide the following Legal Services to each
Fund:
A. Organizational Matters and Initial Registration. The Administrator
shall perform the following functions relating to the organization and initial
registration of the Fund:
Draft and file with appropriate regulatory authorities the
Fund's charter documents;
Draft, negotiate and file with appropriate regulatory
authorities the Fund's service contracts;
Prepare and file the Fund's registration statement or other
similar registration documentation with appropriate regulatory
authorities (the "Registration Statement") and negotiate with such
regulatory authorities; and
Otherwise arrange for and oversee registration and qualification
of the Fund's shares.
B. Ongoing Regulatory Filings, Reports and Meetings. The Administrator
shall perform the following functions relating to ongoing regulatory filings,
reports and meetings of the Fund:
Prepare and file with appropriate regulatory authorities
amendments to the Fund's Registration Statement;
Prepare and file with appropriate regulatory authorities
supplements to the Fund's prospectus and statement of additional
information;
Design and write documents or materials required to be prepared
by or on behalf of the Fund for distribution to shareholders of
the Fund, the Fund's governing board and officers and any
governmental officers or commissions as required of the Fund and
not otherwise provided for under this Agreement including, without
limitation, prospectuses, shareholder reports, shareholder notices
and proxy statements;
Prepare and file or oversee preparation and review and provide
legal guidance on the Fund's annual, semi-annual and other
periodic reports;
Prepare and file or oversee preparation and provide legal
guidance on the Fund's tax filings and reports;
-12-
<PAGE>
Prepare and file with appropriate regulatory authorities the
Fund's proxy statement and negotiate with such regulatory
authorities;
Prepare and file with appropriate regulatory authorities various
reports in order to maintain the Fund's status in good standing;
Arrange for shareholders' meetings;
Prepare the Fund's representatives who will attend shareholder
meetings and all necessary materials in connection with such
meetings including, without limitation, a written script for such
meetings, shareholder minutes and any follow-up documents; and
Attend shareholder meetings.
C. Securities Trading and Investment Practices. The Administrator shall
perform the following functions relating to the Fund's securities trading and
investment practices:
Review and negotiate private placement and municipal securities
offering documentation and provide legal guidance on transfer
restrictions;
Provide guidance on legal considerations relating to the
purchase of foreign securities;
Draft and negotiate documentation necessary to permit the Fund to
engage in a variety of derivative and securities trading practices
and provide legal guidance with respect to these practices;
Negotiate the Fund's line of credit documentation; and
Provide legal guidance on applicable laws regulating the types
and levels of ownership of securities by the Fund.
D. Regulated Activities. Applicable securities laws regulate numerous aspects of
the Fund's business, including such matters as the Fund's: prospectus
disclosure; investment activities; affiliated transactions; investment in senior
securities; sales, redemptions and exchanges; distribution of income and capital
gains; distribution of Fund shares; board composition; code of ethics; fidelity
bond; custodial services; and investment advisory and distribution contracts.
The Administrator will provide the Fund with legal guidance with respect to
these matters and to the general application of securities laws to the Fund's
business.
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<PAGE>
E. Tax Considerations. The Administrator shall perform the following
functions relating to the application of tax rules to the Fund:
Provide legal guidance with respect to the application of tax
rules to the Fund and analyze from a tax perspective new types of
securities purchased by the Fund, new investment practices engaged
in by the Fund and new investment products or practices adopted by
the Fund; and
Draft and/or review sections of the Fund's prospectus describing
the tax consequences of an investment in the Fund.
F. Board Considerations. The Administrator shall perform the following
functions with respect to the Fund's governing board:
Provide advice concerning applicable rules governing the
composition of the Fund's governing board;
Coordinate, prepare materials for and attend board and
committee meetings and coordinate any follow up issues; and
Provide guidance and prepare materials on legal issues relevant
to the Fund's business.
G. Miscellaneous/Extraordinary Events. The Administrator shall perform
the following miscellaneous functions for the Fund:
Provide legal guidance with respect to litigation brought by the
Fund and against the Fund and negotiate litigation settlements and
pre-litigation settlements and work-out arrangements;
Obtain the required documentation to be filed in connection with
any lawsuits against the Fund and provide information or expertise
on administrative matters affecting such litigation;
Provide legal guidance on alternative distribution structures for
the Fund's shares (such as the adoption of a multiple class
structure);
Review all contracts concerning the acquisition of other
investment companies or the liquidation of the Fund, draft,
negotiate and file various documentation required in connection
therewith, provide guidance on the manner such transactions should
be structured to comply with applicable law and obtain legal
opinions and regulatory authority rulings necessary for such
transactions to comply with applicable law;
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Seek formal guidance from regulatory authorities concerning the
application of various regulations to the Fund and seek exemptive
relief where appropriate; and
Provide or arrange for all other Legal Services required of the
Fund and not otherwise provided for under this Agreement other
than the services of any counsel retained to represent the members
of the governing boards of the funds who are not "interested
persons" of the Administrator or its affiliates, as such term is
defined in the Investment Company Act of 1940.
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Exhibit D
OTHER ADMINISTRATIVE SERVICES
The Administrator shall provide the following Other Administrative
Services to each Fund:
(1) Arrange for persons or other entities to serve as transfer
agent, registrar or dividend disbursing agent as required by the
Fund;
(2) Arrange for a line of credit in the event of an unanticipated
redemption of shares;
(3) Arrange for consideration by the Board of appropriate or
necessary insurance coverage for the Fund;
(4) Subject to Section 4 hereof, perform or arrange for all
compliance functions required of the Fund;
(5) Prepare, and arrange for the printing and mailing of, any
necessary investment communications;
(6) Arrange for the printing and mailing of any documents or written
materials required to be prepared by or on behalf of the Fund
including, without limitation, stock certificates, prospectuses,
shareholder reports, shareholder notices, proxy statements and
reports to governmental officers and commissions;
(7) Arrange for any other printing, production and delivery services
required of the Fund and not otherwise provided for under this
Agreement;
(8) Provide a system of internal controls adequate to carry-out the
business of the Fund and arrange for the annual report on
internal controls of the Fund and its agents;
(9) Review the Fund's disclosure documents to ensure that
disclosures and policies conform to the Fund's actual operation;
and
(10) Provide for the calculation and timely disbursement of
appropriate regulatory authority registration fees.
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<PAGE>
Exhibit E
ADMINISTRATIVE FEE
The Administrative Fee shall be an amount, computed as set forth below,
designed to reimburse the Administrator for its actual costs (excluding costs of
staffing so-called residual matters as set forth in Exhibit #2 to Exhibit H to
the Memorandum to the Trustees of the Funds from Stephen E. Cavan and Joseph W.
Dello Russo dated September 23, 1996 (Offshore Board) or October 1, 1996
(Compass, Crimson, Institutional Products and Red Boards)) for providing the
Financial Administration Services and Legal Services (the "Actual Costs") for
providing such services for a calendar year computed pursuant to the principles
set forth in such Exhibit H, subject to such changes in those principles as may
be agreed to from time to time by the Funds and the Administrator (the "Approved
Budgeted Costs"). In computing its Actual Costs, the Administrator will follow
the cost allocation principles set forth in the Deloitte & Touche LLP Report of
Independent Consultant dated November 29, 1996 under the caption "Review of MFS
Cost Reimbursement Methodologies", subject to such changes as may be agreed to
from time to time by the Funds and the Administrator.
For calendar year 1997, the Approved Budgeted Costs are agreed to be
$5.5 million, such amount to be pro rated from the effective date of this
Agreement. For each subsequent calendar year, the Approved Budgeted Costs shall
be an amount agreed to by the Funds and the Administrator prior to the beginning
of the year, provided that, until Approved Budgeted Costs for a year are agreed
to, the Approved Budgeted Costs and Administrative Fee for the prior year shall
remain in effect.
Subject to the adjustments required by the next paragraph, the
Administrative Fee for a calendar year shall be computed by allocating the
Approved Budgeted Costs for that year among the Funds based on each Fund's
average daily net assets for its then-current fiscal year at rates reflecting a
basic rate on the first $1 billion of net assets of a Fund, a 16 2/3% discount
from the basic rate on the next $1 billion, a 33 1/3% discount from the basic
rate on the next $1 billion, and the elimination of any charge on assets in
excess of $3 billion. For 1997 the rates shall be:
0.0150% on first $1 billion;
0.0125% on next $1 billion;
0.0100% on next $1 billion;
0.0% on amounts in excess of $ 3 billion
in each case on an annualized basis for a Fund's then-current
fiscal year.
In the event that the aggregate amount of all Administrative Fees
received by the Administrator during a calendar year at any time equals 110% of
the amount of the Approved Budgeted Costs for that year, no further payments of
Administrative Fees shall be made by the Funds to the Administrator for that
calendar year. In the event that the aggregate amount of the
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Administrative Fees received by the Administrator for a calendar year is less
than the amount of the Approved Budgeted Costs for that year, the Administrator
shall not be entitled to recovery of this shortfall during the current calendar
year; however, the amount of such shortfall will be taken into account when
establishing the Administrative Fee for following calendars years. In the event
that the aggregate amount of the Administrative Fees received by the
Administrator for a calendar year is greater than the Administrator's Actual
Costs for that year, such excess fees shall be applied as a credit against the
Administrative Fees payable by the Funds hereunder for the subsequent calendar
year.
The Administrator will provide the Funds with such information as may
reasonably be required to review the Administrator's Actual Costs as of June 30
and December 31 in each year.
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EXHIBIT NO. 99(i)
MFS SPECIAL VALUE TRUST
RETIREMENT PLAN FOR NON-INTERESTED PERSON TRUSTEES
MFS Special Value Trust (the "Fund") has adopted this Retirement Plan
for Non-Interested Person Trustees (the "Plan"). The Plan has been established
for the purpose of providing certain benefits to eligible Independent Trustees
of the Fund, or their beneficiaries, after termination of the Independent
Trustees' services as such.
1. DEFINITIONS
The following terms shall have the following meanings:
Accrued Benefit: A benefit which is equal to the Normal
Retirement Benefit calculated using an Independent Trustee's
Years of Service and Annual Compensation as of the determination
date.
Actuarial Equivalent: A benefit equal in value, based on (a)
an interest rate equal to the immediate annuity rate published by
the Pension Guaranty Corporation for the January of the Plan Year
of calculation and (b) the 1983 Individual Annuity Mortality
Tables for Males.
Annual Compensation: The average of the total compensation
(retainer and meeting fees) received by an Independent Trustee
during each of the last three Plan Years preceding his termination
of services as such for which he served either as an Independent
Trustee or a Nonaffiliated Trustee for the entire year; provided,
that if an Independent Trustee served as an Independent Trustee
and/or a Nonaffiliated Trustee for fewer than three full Plan
Years prior to his termination of services, there shall be taken
into account his annualized compensation for the one or more most
recent partial Plan Years (if any) for which he served as an
Independent Trustee or a Nonaffiliated Trustee that, when
aggregated with his full Plan Years, does not exceed three Plan
Years.
Disability: Disability as defined in ss.22(e)(3) of the
Internal Revenue Code of 1986, as amended.
Independent Trustee: A Trustee of the Fund who is not an
"interested person" (as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended) of the Fund,
Lifetime Advisers, Inc. ("Lifetime"), Massachusetts Financial
Services Company ("MFS") or MFS Financial Services, Inc. ("FSI").
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Nonaffiliated Trustee: A Trustee of the Fund who has no
material business or professional relationship with the Fund,
Lifetime, MFS or FSI and who is subject to being declared an
"interested person" solely by reason of his relationship with the
Fund, Lifetime, MFS or FSI during the two most recently completed
fiscal years of the Fund.
Normal Retirement Benefit: An annual benefit at Normal
Retirement Date equal to 5% of an Independent Trustee's Annual
Compensation multiplied by the Independent Trustee's whole Years
of Service, up to a maximum of ten Years of Service, payable in
the Normal Form of Benefit, as defined in ss.3(g).
Normal Retirement Date: December 31 of the Plan Year in
which an Independent Trustee attains age 73.
Plan Year: January 1 through December 31.
Retirement: Termination of service of an Independent Trustee
after having completed at least five Years of Service and having
attained age 62, other than: (i) any termination by reason of
death; (ii) any termination by reason of Disability, provided that
any Independent Trustee who suffers a Disability and who has
otherwise satisfied the requirements for Retirement shall have the
right to elect whether his termination is by reason of Retirement
or by reason of Disability; or (iii) any termination resulting
from the Independent Trustee's willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Independent Trustee ("Misconduct").
Year of Service: A Plan Year during which an Independent
Trustee completed at least six months of service as either a
Nonaffiliated Trustee or an Independent Trustee.
2. ELIGIBILITY
No Trustee of the Fund shall be eligible to participate in the
Plan or be entitled to any rights or benefits hereunder until the
Trustee becomes an Independent Trustee. Each individual who
completes any service as an Independent Trustee on or after the
Effective Date of this Plan, and who so elects in such manner as
the Committee determines from time to time, will be eligible to
participate in the Plan.
3. RETIREMENT DATE; AMOUNT OF BENEFIT
(a) Retirement. Each Independent Trustee shall retire
on that Independent Trustee's Normal Retirement Date, if he
has not previously ceased to perform services as an
Independent Trustee. Each retired Independent Trustee is
referred to as a "Retired Trustee".
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(b) Normal Retirement Benefit. Upon an Independent
Trustee's Retirement on his Normal Retirement Date, the
Independent Trustee shall receive, commencing on his Normal
Retirement Date, his Normal Retirement Benefit.
(c) Early Retirement Benefit. Upon an Independent
Trustee's Retirement prior to his Normal Retirement Date, the
Independent Trustee shall receive an Early Retirement Benefit
commencing on the Independent Trustee's date of Retirement.
The benefit payable on an Independent Trustee's early
Retirement shall be his Accrued Benefit reduced by 5% for
every year that payment of an Early Retirement Benefit
precedes that Trustee's Normal Retirement Date.
(d) Deferred Termination Benefit. If an Independent
Trustee's service as such terminates, other than (i)
termination as a result of his Misconduct or (ii) termination
that constitutes termination by reason of his Retirement,
Disability or death, after he has completed at least five
Years of Service, he shall receive, commencing on the date he
attains age 62, his Accrued Benefit reduced by 55%.
(e) Disability Benefit. If an Independent Trustee's
service as such terminates by reason of his Disability and, if
the Independent Trustee is eligible for Retirement, he elects
that his termination be treated as being by reason of
Disability, he shall receive his Accrued Benefit paid for the
one hundred twenty (120) months immediately following the
month in which his service so terminates. In the event the
Independent Trustee dies before he has received one hundred
twenty (120) payments, monthly payments in the same amount
shall be paid to his beneficiary until the number of payments
to the Independent Trustee plus the number of payments to the
beneficiary equal one hundred twenty (120) payments.
(f) Death Benefit. Each Independent Trustee who
elects to participate in this Plan shall designate a
beneficiary in such form as the Committee approves from time
to time to receive any benefits payable under this Plan in the
event of his death. In the event there is no validly
designated beneficiary in existence on the date of an
Independent Trustee's death, his beneficiary shall be his
surviving spouse, if any, or if none, his estate. The
beneficiary of an Independent Trustee who dies during service,
and with respect to whom benefit payments have not commenced,
shall be entitled to that Independent Trustee's Accrued
Benefit paid for the one hundred twenty (120) months
immediately following death.
(g) Form of Benefit. Except as otherwise provided in
this ss.3, benefits payable under this ss.3 shall be payable
in the form of a monthly annuity for the life of the
Independent Trustee, and, if the Independent Trustee dies
before he has received one hundred twenty (120) payments,
monthly payments in the same amount shall be payable to his
beneficiary until the number of payments to the Independent
Trustee plus the number of payments to the beneficiary equal
one hundred twenty (120) payments (the "Normal Form of
Benefit"). However, notwithstanding any other provision of
this Section 3 to the contrary, if an Independent Trustee's
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beneficiary is entitled to payments under this Plan upon
the Independent Trustee's death, then (i) if the Independent
Trustee's beneficiary is his estate, the lump sum Actuarial
Equivalent present value of those payments shall be paid to
the estate in a single lump sum as soon as administratively
reasonable following the Independent Trustee's death, and
(ii) if the Independent Trustee's beneficiary is other than
his estate, the Committee in its sole discretion may direct
that the Actuarial Equivalent value of those payments be
paid in such form other than the Normal Form of Benefit
(including without limitation a lump sum) as it determines.
4. PAYMENT OF BENEFIT; ALLOCATION OF COSTS
The Fund is responsible for the payment of the benefits, as
well as all expenses of administration of the Plan, including
without limitation all accounting, legal and actuarial fees and
expenses. The obligations of the Fund to pay such benefits and
expenses will not be secured or funded in any manner, and the
obligations will not have any preference over the lawful claims of
the Fund's creditors and shareholders. The Fund shall be under no
obligation to segregate any assets for the purpose of providing
retirement benefits pursuant to this Plan, and to the extent that
any Independent Trustee or beneficiary acquires a right to receive
a benefit under the Plan, such right shall be limited to that of a
recipient of an unfunded, unsecured promise to pay amounts in the
future and such person's position with respect to such amounts
shall be that of a general unsecured creditor of the Fund. To the
extent that the Fund consists of one or more separate portfolios,
costs and expenses will be allocated among the portfolios by the
Board of Trustees of the Fund (the "Board") in a manner that is
determined by the Board to be fair and equitable under the
circumstances.
5. ADMINISTRATION
(a) The Committee. Any question involving entitlement
to payments under or the interpretation or administration of
the Plan will be referred to a committee (the "Committee") of
Independent Trustees designated by the Board. Except as
otherwise provided herein, the Committee will make all
interpretations and determinations necessary or desirable for
the Plan's administration, and such interpretations and
determinations will be final and conclusive.
(b) Powers of the Committee. The Committee will
represent and act on behalf of the Fund in respect of the
Plan and, subject to the other provisions of the Plan, the
Committee may adopt, amend or repeal by-laws or other
regulations, relating to the administration of the Plan, the
conduct of the Committee's affairs, its rights or powers or
the rights or powers of its members or of the Board. The
Committee will report to the Board from time to time on its
activities in respect of the Plan. The Committee or persons
designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
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6. MISCELLANEOUS PROVISIONS
(a) Rights Not Assignable. The right to
receive any payment under the Plan may not be transferred,
assigned, pledged or otherwise alienated.
(b) Amendment, etc. The Committee, with the
concurrence of the Board, may at any time amend or terminate
the Plan or waive any provision of the Plan, provided that no
amendment, termination or waiver will impair the rights of an
Independent Trustee to receive upon Retirement the payments
which would have been made to that Independent Trustee had
there been no such amendment, termination or waiver (based
upon that Independent Trustee's Years of Service to the date
of such amendment, termination or waiver) or the rights of a
former Independent Trustee or Retired Trustee to receive any
benefit due under the Plan, without the consent of such
present or former Independent Trustee or Retired Trustee, as
the case may be. A present or former Independent Trustee or
Retired Trustee may elect to waive receipt of his benefit by
so advising the Committee.
Notwithstanding any provision of this Plan
to the contrary, however, in the event of the sale of all or
substantially all of the assets of the Fund, the liquidation
or dissolution of the Fund, or any merger or other similar
reorganization of the Fund that the Fund does not survive:
(i) if although the Fund does not survive
there is a surviving entity, all rights and benefits
(including without limitation those of Retired Trustees)
under the Plan shall cease upon consummation of such
transaction, unless, and only to the extent that, the
board of trustees (or other similar governing body) of
the surviving entity agrees to assume the Plan and/or to
provide any such rights or benefits; and
(ii) if there is no surviving entity, the
Board shall have the right to take specific action to
terminate the Plan and/or to cause any or all rights and
benefits (including without limitation those of Retired
Trustees) under the Plan to cease as of the date of such
event but, in the absence of any such specific action,
the lump sum Actuarial Equivalent present value of the
Accrued Benefit of each present or former Independent
Trustee or Retired Trustee (or beneficiary thereof) who
on the date of liquidation is receiving or entitled to
receive a benefit under the Plan or would be entitled to
receive a benefit under the Plan based on his actual or
deemed termination of service as of the date of such
liquidation shall be paid to such person.
(c) No Right to Re-election. Nothing in the Plan will
create any obligation on the part of the Board to nominate
any Independent Trustee for re-election.
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(d) Vacancies. Although the Board will retain the
right to increase or decrease its size, it shall be the
general policy of the Board to replace each person who ceases
to serve as an Independent Trustee by selecting a new
Independent Trustee from candidates duly proposed.
(e) Consulting. Each Retired Trustee may render such
services for the Fund, for such compensation, as may be
agreed upon from time to time by such Trustee and the Board
of the Fund.
(f) Construction. Whenever any masculine terminology
is used in this Plan, it shall be taken to include the
feminine, unless the context otherwise indicates. The titles
and headings included herein are for convenience only and
shall not be construed as in any way affecting or modifying
the text of this Plan, which text shall control. This Plan
shall be construed and regulated in accordance with the laws
of The Commonwealth of Massachusetts, except to the extent
such state law is preempted by federal law.
(g) Effective Date. This Plan will become effective
on January 1, 1991 (the "Effective Date").
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EXHIBIT NO. 99(j)(1)
AMENDED AND RESTATED CUSTODIAN CONTRACT
Between
MFS SPECIAL VALUE TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held By It 1
2. Duties of the Custodian with Respect to Property of the Trust
Held by the Custodian in the United States 2
2.1. Holding Securities 2
2.2. Delivery of Securities 3
2.3. Registration of Securities 7
2.4. Bank Accounts 8
2.5. Investment and Availability of Federal Funds 9
2.6. Collection of Income 9
2.7. Payment of Trust Monies 10
2.8. Liability for Payment in Advance of
Receipt of Securities Purchased 12
2.9. Appointment of Agents 13
2.10 Deposit of Trust Assets in Securities System 13
2.10A Trust Assets Held in the Custodian's
Direct Paper System 17
2.11. Segregated Account 18
2.12. Ownership Certificates for Tax Purposes 20
2.13. Proxies 20
2.14. Communications Relating to Trust
Portfolio Securities 20
2.15. Reports to Trust by Independent Public
Accountants 21
3. Duties of the Custodian with Respect to Property of
the Trust held Outside of the United States 21
3.1 Appointment of Chase as Subcustodian 22
3.2 Standard of Care; Liability 22
3.3 Trust's Responsibility for Rules and Regulations 23
4. Proper Instructions 23
5. Actions Permitted Without Express Authority 24
6. Evidence Of Authority 24
7. Duties Of Custodian With Respect To The Books Of Account
and Calculation Of Net Asset Value and Net Income 25
8. Records 26
9. Opinion of Trust's Independent Accountants 26
10. Compensation of Custodian 27
11. Responsibility of Custodian 27
<PAGE>
12. Effective Period, Termination and Amendment 28
13. Successor Custodian 30
14. Interpretive and Additional Provisions 31
15. Massachusetts Law to Apply 32
16. Prior Contracts 32
17. Delegation of Certain Custodian Duties to MFS 32
<PAGE>
CUSTODIAN CONTRACT
This Contract between MFS Special Value Trust, a business trust
organized and existing under the laws of Massachusetts, having its principal
place of business at 500 Boylston Street, Boston, Massachusetts 02116,
hereinafter called the "Trust", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian" amends and restates the Custodian Contract between the Trust and the
Custodian dated as of November 10, 1989.
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It.
The Trust hereby employs the Custodian as the custodian of the assets
pursuant to the provisions of the Declaration of Trust including securities and
cash it desires to be held within the United States (collectively "domestic
securities") and securities and cash it desires to be held outside the United
States (collectively "foreign securities"), subject to the terms of Article 3
hereof. The Trust agrees to deliver to the Custodian all securities and cash
owned by it, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the Trust
from time to time, and the cash consideration received by it for such shares of
beneficial interest ("Shares") of the Trust as may
<PAGE>
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Trust held or received by the Trust and not delivered to the
Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
4), the Custodian shall from time to time employ one or more subcustodians, but
only in accordance with an applicable vote by the Board of Trustees of the
Trust, and provided that, except as expressly provided in Article 3 hereof, the
Custodian shall have no more or less responsibility or liability to the Trust on
account of any actions or omissions of any subcustodian so employed than any
such subcustodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Trust Held
By the Custodian in the United States.
The provisions of this Article 2 shall apply to the duties of the
Custodian as they relate to domestic securities, held in the United States.
2.1. Holding Securities. The Custodian shall hold and physically
segregate for the account of the Trust all non-cash property,
including all domestic securities owned by the Trust to be held in
the United States, other than (a) securities which are maintained
pursuant to Section 2.10 in a clearing agency which acts as a
securities depository or in a book-entry system authorized by the
U.S. Department of the Treasury, collectively referred to herein as
a "Securities System"; and (b) commercial paper of an issuer for
which State Street Bank and Trust Company acts as issuing and paying
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agent ("Direct Paper") which is deposited and/or maintained in State
Street Bank and Trust Company's Direct Paper Book-Entry System ("Direct
Paper System") pursuant to Section 2.10.A.
2.2. Delivery of Securities. The Custodian shall release and deliver
securities owned by the Trust held by the Custodian or in a Securities
System account of the Custodian or in the Direct Paper System only upon
receipt of Proper Instructions, which may be continuing instructions
when deemed appropriate by the parties, and only in the following
cases:
1) Upon sale of such securities for the
account of the Trust and receipt of payment therefor;
2) Upon the receipt of payment in connection
with any repurchase agreement related to such
securities entered into by the Trust;
3) In the case of a sale effected through a
Securities System, in accordance with the provisions
of Section 2.10 hereof;
4) To the depository agent in connection
with tender or other similar offers for portfolio
securities of the Trust;
5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise
become payable; provided that, in any such case, the cash
or other consideration is to be delivered to the
Custodian;
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6) To the issuer thereof, or its agent, for transfer
into the name of the Trust or into the name of any nominee
or nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.9 or
into the name or nominee name of any subcustodian
appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities
are to be delivered to the Custodian;
7) Upon the sale of such securities for the account
of the Trust, to the broker or its clearing agent, against
a receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except as
may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to
any plan of merger, consolidation,
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recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities,
or pursuant to any deposit agreement; provided that, in
any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
9) In the case of warrants, rights or similar
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of
securities made by the Trust, but only against receipt of
adequate collateral as agreed upon from time to time by
the Custodian and the Trust, which may be in the form of
cash or obligations issued by the United States
government, its agencies or instrumentalities, except that
in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry
system authorized by the U.S.
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Department of the Treasury, the Custodian will not be held
liable or responsible for the delivery of securities owned
by the Trust prior to the receipt of such collateral;
11) For delivery as security in connection with any
borrowings by the Trust requiring a pledge of assets by
the Trust, but only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of
any agreement among the Trust, the Custodian and a
broker-dealer registered under the Securities Exchange Act
of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating
to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Trust;
13) For delivery in accordance with the provisions of
any agreement among the Trust, the Custodian, and a
Futures Commission Merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading
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Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits
in connection with transactions by the Trust; and
14) For any other proper corporate purpose, but only
upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Trustees or
of the Executive Committee signed by an officer of the
Trust and certified by the Secretary or an Assistant
Secretary, setting forth the purpose for which such
delivery is to be made, declaring such purposes to be
proper corporate purposes, and naming the person or
persons to whom delivery of such securities shall be made.
2.3. Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) in the United States shall
be registered in the name of the Trust or in the name of any nominee
of the Trust or of any nominee of the Custodian which nominee shall
be assigned exclusively to the Trust, unless the Trust has
authorized in writing the appointment of a nominee to be used in
common with other registered investment companies having the same
investment adviser as the Trust, or in the name or nominee name of
any agent appointed pursuant to Section 2.9 or in the name or
nominee name of any
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subcustodian appointed pursuant to Article 1. All domestic securities
accepted by the Custodian on behalf of the Trust under the terms of
this Contract shall be in "street name" or other good delivery form.
2.4. Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts (the "Trust's Account or Accounts") in the
name of the Trust, subject only to draft or order by the Custodian
acting pursuant to the terms of this Contract, and shall hold in
such Account or Accounts, subject to the provisions hereof, all cash
received by it from or for the Account of the Trust, other than cash
maintained by the Trust in a bank Account established and used in
accordance with Rule 17f-3 under the Investment Company Act of
1940. Funds held by the Custodian for the Trust may be deposited by
it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that
every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each
such bank or trust company and the funds to be deposited with each
such bank or trust company shall be approved by vote of a majority
of the Board of Trustees of the Trust. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
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2.5. Investment and Availability of Federal Funds. Upon mutual agreement
between the Trust and the Custodian, the Custodian shall, upon the
receipt of Proper Instructions,
1) invest in such instruments as may be set
forth in such instruments as may be set forth in such
instructions on the same day as received all federal
funds received after a time agreed upon between the
Custodian and the Trust; and
2) make federal funds available to the Trust
as of specified times agreed upon from time to time
by the Trust and the Custodian in the amount of
checks received in payment for Shares of the Trust
which are deposited into the Trust's account.
2.6. Collection of Income. The Custodian shall collect on a timely basis
all income and other payments with respect to registered domestics
securities held hereunder to which the Trust shall be entitled
either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with
respect to bearer domestic securities if, on the date of payment by
the issuer, such domestic securities are held by the Custodian or
agent thereof and shall credit such income, as collected, to the
Trust's custodian Account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all
coupons and
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other income items requiring presentation as and when they become due
and shall collect interest when due on domestic securities held
hereunder. Income due the Trust on domestic securities loaned pursuant
to the provisions of Section 2.2 (10) shall be the responsibility of
the Trust. The Custodian will have no duty or responsibility in
connection therewith, other than to provide the Trust with such
information or data as may be necessary to assist the Trust in
arranging for the timely delivery to the Custodian of the income to
which the Trust is properly entitled.
2.7. Payment of Trust Monies. Upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Trust in the following cases
only:
1) Upon the purchase of domestic securities, for the
account of the Trust but only (a) against the delivery of
such securities to the Custodian (or any bank, banking
firm or trust company doing business in the United States
or abroad which is qualified under the Investment Company
Act of 1940, as amended, to act as a custodian and has
been designated by the Custodian as its agent for this
purpose) registered in the name of the Trust or in the
name of a nominee of the Custodian referred to in Section
2.3 hereof or in
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proper form for transfer; (b) in the case of a purchase
effected through a Securities System, in accordance with
the conditions set forth in Section 2.10 hereof; (c) in
the case of a purchase involving the Direct Paper System,
in accordance with the conditions set forth in Section
2.10A; or (d) in the case of repurchase agreements entered
into between the Trust and the Custodian, or another bank,
or a broker-dealer which is a member of NASD,
(i) against delivery of the securities
either in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank with
such securities or
(ii) against delivery of the receipt
evidencing purchase by the Trust of securities owned by
the Custodian along with written evidence of the agreement
by the Custodian to repurchase such securities from the
Trust;
2) In connection with conversion, exchange
or surrender of domestic securities owned by the Trust
as set forth in Section 2.2 hereof;
3) For the payment of any expense or
liability incurred by the Trust, including but not
limited to the following payments for the account of
the Trust: interest, taxes,
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management, accounting, transfer agent and legal fees, and
operating expenses of the Trust whether or not such
expenses are to be in whole or part capitalized or treated
as deferred expenses;
4) For the payment of any dividends declared
pursuant to the governing documents of the Trust;
5) For payment of the amount of dividends
received in respect of domestic securities sold short;
6) For any other proper purpose, but only upon
receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Trustees or
of the Executive Committee of the Trust signed by an
officer of the Trust and certified by its Secretary or an
Assistant Secretary, setting forth the purpose for which
such payment is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to whom
such payment is to be made.
2.8. Liability for Payment in Advance of Receipt of Securities Purchased. In
any and every case where payment for purchase of domestic securities
for the account of the Trust is made by the Custodian in advance of
receipt of the securities purchased in the absence of specific
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written instructions from the Trust to so pay in advance, the Custodian
shall be absolutely liable to the Trust for such securities to the same
extent as if the securities had been received by the Custodian, except
that in the case of repurchase agreements entered into by the Trust
with a bank which is a member of the Federal Reserve System, the
Custodian may transfer funds to the account of such bank prior to the
receipt of written evidence that the securities subject to such
repurchase agreement have been transferred by book-entry into a
segregated non-proprietary account of the Custodian maintained with the
Federal Reserve Bank of Boston or of the safekeeping receipt, provided
that such securities have in fact been so transferred by book-entry.
2.9. Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the Investment
Company Act of 1940, as amended, to act as a custodian, as its agent
to carry out such of the provisions of this Article 2 as the
Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 Deposit of Trust Assets in Securities Systems. The Custodian may
deposit and/or maintain domestic securities owned by the Trust in a
clearing agency registered with the Securities and Exchange Commission
under Section 17A
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of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep domestic securities of the
Trust in a Securities System provided that such securities
are represented in an account ("Custodian's Account") of
the Custodian in the Securities System which shall not
include any assets of the Custodian other than assets held
as a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to
domestic securities of the Trust which are maintained in a
Securities System shall identify by book-entry those
securities belonging to the Trust;
3) The Custodian shall pay for domestic securities
purchased for the account of the Trust upon (i) receipt of
advice from the Securities System that such securities
have been transferred to the Custodian's Account, and (ii)
the making of an entry on the
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records of the Custodian to reflect such payment and
transfer for the account of the Trust. The Custodian shall
transfer securities sold for the account of the Trust upon
(i) receipt of advice from the Securities System that
payment for such securities has been transferred to the
Custodian's Account, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and
payment for the account of the Trust. Copies of all
advices from the Securities System of transfers of
domestic securities for the account of the Trust shall
identify the Trust, be maintained for the Trust by the
Custodian and be provided to the Trust at its request.
Upon request, the Custodian shall furnish the Trust
confirmation of each transfer to or from the account of
the Trust in the form of a written advice or notice and
shall furnish to the Trust copies of daily transaction
sheets reflecting each day's transactions in the
Securities System for the account of the Trust.
4) The Custodian shall provide the Trust
with any report obtained by the Custodian on the
Securities System's accounting system,
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internal accounting control and procedures for
safeguarding domestic securities deposited in the
Securities System;
5) The Custodian shall have received the
initial or annual certificate, as the case may be,
required by Article 12 hereof;
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Trust for any loss or damage to the Trust resulting from
use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively
such rights as it may have against the Securities System;
at the election of the Trust, it shall be entitled to be
subrogated to the rights of the Custodian with respect to
any claim against the Securities System or any other
person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the
Trust has not been made whole for any such loss or damage.
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2.10.A Fund Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain domestic securities owned by the Trust in
the Direct Paper System subject to the following provisions:
1) No transaction relating to domestic securities in
the Direct Paper System will be effected in the
absence of Proper Instructions;
2) The Custodian may keep domestic securities of the
Trust in the Direct Paper System only if such
securities are represented in an account of the
Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to domestic
securities of the Trust which are maintained in the
Direct Paper System shall identify by book-entry
those securities belonging to the Trust;
4) The Custodian shall furnish the Trust confirmation of
each transfer of Direct Paper to or from the account
of the Trust, in the form of a written advice or
notice on the next business day following such
transfer and shall furnish to the Trust copies of
daily
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transaction sheets reflecting each day's
transaction in the Direct Paper System for the
account of the Trust;
5) The Custodian shall pay for domestic securities
purchased for the account of the Trust upon the
making of an entry on the records of the Custodian
to reflect such payment and transfer of securities
to the account of the Trust. The Custodian shall
transfer securities sold for the account of the
Trust upon the making of an entry on the records
of the Custodian to reflect such transfer and
receipt of payment for the account of the Trust;
6) The Custodian shall provide the Trust with any report
on the system of internal accounting control for the
Direct Paper System that the Custodian receives and
as the Trust may reasonably request from time to
time;
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of the Trust, into which account or accounts may be
transferred cash and/or domestic securities, including securities
maintained in an account by the Custodian pursuant to Section 2.10
hereof, (i) in accordance with the provisions of any
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agreement among the Trust, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Trust, (ii) for purposes of segregating cash or government securities
in connection with options purchased, sold or written by the Trust or
commodity futures contracts or options thereon purchased or sold by the
Trust, (iii) for the purpose of compliance by the Trust with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Trustees or of the Executive Committee signed by an
officer of the Trust and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
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2.12. Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of the Trust held by it
and in connection with transfers of domestic securities.
2.13. Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the domestic securities are
registered otherwise than in the name of the Trust or a nominee of
the Trust, all proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly deliver to the
Trust such proxies, all proxy soliciting materials and all notices
relating to such securities.
2.14. Communications Relating to Trust Portfolio Securities. The
Custodian shall transmit promptly to the Trust all written
information (including, without limitation, pendency of calls and
maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Trust and the maturity of futures contracts purchased
or sold by the Trust) received by the Custodian from issuers of the
domestic securities being held for the Trust. With respect to
tender or exchange offers, the Custodian shall transmit promptly to
the Trust all written information received by the Custodian from
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issuers of the domestic securities whose tender or exchange is sought
and from the party (or his agents) making the tender or exchange offer.
If the Trust desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Trust shall notify
the Custodian at least three business days prior to the date on which
the Custodian is to take such action.
2.15 Reports to Trust by Independent Public Accountants.
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent public accountants on
the accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian
under this Contract; such reports, shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Trust, to
provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies,
shall so state.
3. Duties of the Custodian with Respect to Property of the Trust Held
Outside of the United States.
The provisions of this Article 3 shall apply to the duties of the
Custodian as they relate to foreign securities held outside the United States.
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3.1 Appointment of Chase as Subcustodian. The Custodian is authorized
and instructed to by the Trust to employ Chase Manhattan Bank N.A.
("Chase") as subcustodian for the Trust's foreign securities
(including cash incidental to transactions in such securities) on
the terms and conditions set forth in the Subcustody Contract
between the Custodian and Chase which is attached hereto as Exhibit
A (the "Subcustody Contract"). The Custodian acknowledges that it
has entered into the Subcustody Contract and hereby agrees to
provide such services to the Trust and in accordance with such
Subcustody Contract as necessary for foreign custody services to be
provided pursuant thereto.
3.2. Standard of Care; Liability. Notwithstanding anything to the
contrary in this Contract, the Custodian shall not be liable to the
Trust for any loss, damage, cost, expense, liability or claim
arising out of or in connection with the maintenance of custody of
the Trust's foreign securities by Chase or by any other banking
institution or securities depository employed pursuant to the terms
of the Subcustody Contract, except that the Custodian shall be
liable for any such loss, damage, cost, expense, liability or claim
directly resulting from the failure of the Custodian to exercise
reasonable care in the performance of its duties hereunder. At the
election of the Trust, the Trust shall be entitled to be subrogated
to the rights of the Custodian under the Subcustody
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contract with respect to any claim arising hereunder against Chase or
any other banking institution or securities depository employed by
Chase if and to the extent that the Trust has not been made whole
therefor.
3.3 Trust's Responsibility for Rules and Regulations. As between the
Custodian and the Trust, the Trust shall be solely responsible to
assure that the maintenance of foreign securities and cash pursuant
to the terms of the Subcustody Contract comply with all applicable
rules, regulations, interpretations and orders of the Securities and
Exchange Commission, and the Custodian assumes no responsibility and
makes no representations as to such compliance.
4. Proper Instructions. Proper Instructions as used throughout this Contract
means a writing signed or initialed by one or more person or persons as the
Board of Trustees shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Trust shall
cause all oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the authorization
by the Board of Trustees of the Trust accompanied by a detailed description of
procedures approved by the Board of
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Trustees, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Trustees and the Custodian are satisfied that such procedures afford adequate
safeguards for the Trust's assets.
5. Actions Permitted without Express Authority. The Custodian may in
its discretion, without express authority from the Trust:
1)make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Trust;
2)surrender securities in temporary form for securities in
definitive form;
3)endorse for collection, in the name of the Trust, checks,
drafts and other negotiable instruments; and
4)in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property of
the Trust except as otherwise directed by the Board of Trustees
of the Trust.
6. Evidence of Authority. The Custodian shall be protected in acting
upon any instructions, notice, request, consent,
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certificate or other instrument or paper believed by it to be genuine and to
have been properly executed by or on behalf of the Trust. The Custodian may
receive and accept a certified copy of a vote of the Board of Trustees of the
Trust as conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action by the
Board of Trustees pursuant to the Declaration of Trust as described in such
vote, and such vote may be considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
7. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Trust to keep
the books of account of the Trust and/or compute the net asset value per share
of the outstanding shares of the Trust or, if directed in writing to do so by
the Trust, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate daily the
net income of the Trust as described in the Trust's currently effective
prospectus and shall advise the Trust and the Transfer Agent daily of the total
amounts of such net income and, if instructed in writing by an officer of the
Trust to do so, shall advise the Transfer Agent periodically of the division of
such net income among its various components. The calculations of the net asset
value per share and the daily income of the Trust shall be made at the time or
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times described from time to time in the Trust's currently effective
prospectus.
8. Records.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Trust. All such records shall be
the property of the Trust and shall at all times during the regular business
hours of the Custodian be open for inspection by duly authorized officers,
employees or agents of the Trust and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Trust's request, supply the
Trust with a tabulation of securities owned by the Trust and held by the
Custodian and shall, when requested to do so by the Trust and for such
compensation as shall be agreed upon between the Trust and the Custodian,
include certificate numbers in such tabulations.
9. Opinion of Trust's Independent Accountant
The Custodian shall take all reasonable action, as the Trust may from
time to time request, to obtain from year to year favorable opinions from the
Trust's independent accountants with respect to its activities hereunder in
connection with the preparation of the Trust's Form N-2 and amendments thereto,
and Form N-SAR or other annual reports to the Securities and Exchange
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Commission and with respect to any other requirements of such Commission.
10. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Trust and the Custodian.
11. Responsibility of Custodian.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract and shall be kept indemnified by the Trust for
any action taken or omitted by it in the proper execution of instructions from
the Trust. It shall be entitled to rely on and may act upon advice of counsel
for the Trust on all matters and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
The Custodian shall be liable for the acts and omissions of Chase
appointed as its subcustodian pursuant to the provision of Article 3 to the
extent set forth in Sections 3.2 and 3.3 hereof.
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The Trust agrees to indemnify and hold harmless the Custodian and its
nominee from and against all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or its
nominee in connection with the performance of this Contract, except such as may
arise from it or its nominee's own negligent action, negligent failure to act or
willful misconduct. The Custodian is authorized to charge any account of the
Trust for such items and its fees. To secure any such authorized charges and any
advances of cash or securities made by the Custodian to or for the benefit of
the Trust for any purpose which results in the Trust incurring and overdraft at
the end of any business day or for extraordinary or emergency purposes during
any business day, the Trust hereby grants to the Custodian a security interest
in and pledges to the Custodian securities held for it by the Custodian, in an
amount not to exceed five percent of the Trust's gross assets, the specific
securities to be designated in writing from time to time by the Trust or its
investment adviser (the "Pledged Securities"). Should the Trust fail to repay
promptly any advances of cash or securities, the Custodian shall be entitled to
use available cash and to dispose of the Pledged Securities as is necessary to
repay any such advances.
12. Effective Period. Termination and Amendment.
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either
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party by an instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than thirty (30) days
after the date of such delivery or mailing; provided, however that the Custodian
shall not act under Section 2.10 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees of the Trust has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by the Trust of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended and that the Custodian shall not act under
Section 2.10.A hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has approved the
initial use of the Direct Paper System and the receipt of an annual certificate
of the Secretary or an Assistant Secretary that the board of Trustees has
reviewed the use by the Trust of the Direct Paper System; provided further,
however, that the Trust shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and (b) that the Trust may at any time by action of
its Board of Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian or upon the happening of a like event
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at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
13. Successor Custodian.
If a successor custodian shall be appointed by the Board of Trustees of
the Trust, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Trust's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published
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report, of not less than $25,000,000, all securities, funds and other properties
held by the Custodian and all instruments held by the Custodian relative thereto
and all other property held by it under this Contract and to transfer to an
account of such successor custodian all of the Trust's securities held in any
Securities System. Thereafter, such bank or trust company shall be the successor
of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
14. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the
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Declaration of Trust of the Trust. No interpretive or additional provisions made
as provided in the preceding sentence shall be deemed to be an amendment of this
Contract.
15. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
16. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, the
existing custodian contracts between the Trust and the Custodian. Any reference
to the custodian contract between the Trust and the Custodian in documents
executed prior to the date hereof shall be deemed to refer to this Contract.
17. Delegation of Certain Custodian Duties to MFS
The Custodian may delegate to Massachusetts Financial Services Company
("MFS") the performance of any or all of its duties hereunder relating to (i)
accounting for investments in currency and for financial instruments (including,
without limitation, options contracts, futures contracts, options on futures
contracts, options on foreign currency and forward foreign currency exchange
contracts) and (ii) federal and state regulatory compliance. The Custodian shall
compensate MFS for the performance of such duties at such fee or fees as MFS
shall determine to be equal to MFS's cost for performing such duties (the "MFS
Fees"). Following its payment of the MFS Fees to MFS, the Custodian shall
recover the amount of the MFS Fees from the Trust on such terms as the Custodian
and the Trust shall agree.
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MFS assumes responsibility for all duties delegated to it by the Custodian
pursuant to this Section 17, and the Custodian may rely on MFS for the accuracy
and correctness of the accounting information provided by MFS to the Custodian
pursuant to this Section 17.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 29th day of December,1989.
ATTEST MFS SPECIAL VALUE TRUST
LINDA J. HOARD By A. KEITH BRODKIN
Linda J. Hoard A. Keith Brodkin
ATTEST STATE STREET BANK AND TRUST COMPANY
JOE KINNALLY By: ILLEGIBLE
Joe Kinnally (Illegible)
Assistant Secretary Vice President
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EXHIBIT NO. 99(j)(2)
AMENDMENT
The Custodian Contract dated December 29, 1989 between MFS Special
Value Trust (referred to herein as the "Trust") and State Street Bank and Trust
Company (the "Custodian") is hereby amended as follows:
I. Section 2.1 is amended to read as follows:
"Holding Securities". The Custodian shall hold and physically segregate
for the account of the Trust all non-cash property, including all securities
owned by the Trust, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as "Securities System" and (b) commercial paper
of an issuer for which State Street Bank and Trust Company acts as issuing and
paying agent ("Direct Paper") which is deposited and/or maintained in the Direct
Paper System of the Custodian pursuant to Section 2.10A.
II. Section 2.2 is amended to read, in relevant part as follows:
"Delivery of Securities. The Custodian shall release and
deliver securities owned by the Trust held by the Custodian or in a Securities
System account of the Custodian or in the
<PAGE>
Custodian's Direct Paper book entry system account ("Direct Paper System
Account") only upon receipt of Proper Instructions which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
1) . . . . .
.
.
.
14) . . . . ."
III. Section 2.7(1) is amended to read in relevant part as follows:
"Payment of Trust Monies. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Trust in the following cases only:
1) Upon the purchase of securities, options, future
contracts or options on futures contracts for the
account of the Trust but only (a) against the
delivery of such securities or evidence of title
to such options, futures contracts or options on
futures contracts, to the Custodian (or any bank,
banking firm or trust company doing business in
the United States or abroad which is qualified
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under the Investment Act of 1940, as amended, to
act as a custodian and has been designated by the
Custodian as its agent for this purpose)
registered in the name of the Trust or in the
name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with
the conditions set forth in Section 2.10 hereof
or (c) in the case of a purchase involving the
Direct Paper System, in accordance with the
conditions set forth in Section 2.10A; or (d) in
the case of repurchase agreements entered into
between the Trust and the Custodian, or another
bank, or a broker-dealer which is a member of
NASD, (i) against delivery of the securities
either in certificate form or through an entry
crediting the Custodian's account at the Federal
Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by
the Trust of securities owned by the Custodian
along with written evidence of the agreement by
the Custodian to repurchase such securities from
the Trust or (e) for transfer to a time deposit
account of the Trust in any bank, whether
domestic or foreign; such transfer may be
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effected prior to receipt of a confirmation from
a broker and/or the applicable bank pursuant to
Proper Instructions from the Trust as defined in
Section 4;"
IV. Following Section 2.10 there is inserted a new Section 2.10.A to
read as follows:
2.10.A "Trust Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain securities owned by the Trust in the Direct Paper
System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the
Direct Paper System will be effected in the
absence of Proper Instructions;
2) The Custodian may keep securities of the Trust in
the Direct Paper System only if such securities
are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall
not include any assets of the Custodian other
than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to
securities of the Trust which are maintained in
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the Direct Paper System shall identify by
book-entry those securities belonging to the
Trust;
4) The Custodian shall pay for securities purchased
for the account of the Trust upon the making of
an entry on the records of the Custodian to
reflect such payment and transfer of securities
to the account of the Trust. The Custodian shall
transfer securities sold for the account of the
Trust upon the making of an entry on the records
of the Custodian to reflect such transfer and
receipt of payment for the account of the Trust;
5) The Custodian shall furnish the Trust
confirmation of each transfer to or from the
account of the Trust, in the form of a written
advice or notice, of Direct Paper on the next
business day following such transfer and shall
furnish to the Trust copies of daily transaction
sheets reflecting each day's transaction in the
Securities System for the account of the Trust;
6) The Custodian shall provide the Trust with any
report on its system of internal accounting
control as the Trust may reasonably request from
time to time."
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V. Section 12 is hereby amended to read as follows:
"Effective Period, Termination and Amendment"
This contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section 2.10 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Trustees of the Trust has approved the initial use
of a particular Securities System and the receipt of an annual certificate of
the Secretary or an Assistant Secretary that the Board of Trustees has reviewed
the use by the Trust of such Securities System, as required in each case by Rule
17f-4 under the Investment Company Act of 1940, as amended and that the
Custodian shall not act under Section 2.10.A hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Trustees has approved the initial use of the Direct Paper System and the
receipt of an annual certificate of the Secretary or an Assistant Secretary that
the Board of Trustees has reviewed the use by the Trust of the Direct Paper
System; provided further, however, that the Trust shall not amend or terminate
this
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Contract in contravention of any applicable federal or state regulations, or any
provision of the Declaration of Trust, and further provided, that the Trust may
at any time by action of its Board of Trustees (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements."
Except as otherwise expressly amended and modified herein, the
provisions of the Custodian Contract shall remain in full force and effect.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed in its name and on its behalf by its duly authorized
representatives and its Seal to be hereto affixed as of the 11th day of
September, 1991.
ATTEST: MFS SPECIAL VALUE TRUST
LINDA J. HOARD By THOMAS W. LONDON
Linda J. Hoard Thomas W. London
Assistant Secretary Treasurer
ATTEST: STATE STREET BANK AND TRUST COMPANY
ILLEGIBLE SIGNATURE By ILLEGIBLE SIGNATURE
(Illegible Signature) (Illegible Signature)
Assistant Secretary Vice President
<PAGE>
EXHIBIT NO. 99(p)
MFS SPECIAL VALUE TRUST
MFS Special Value Trust
200 Berkeley Street
Boston, MA 02116
Gentlemen:
In connection with my purchase of ___________________________ Shares of
Beneficial Interest (without par value) of MFS Special Value Trust, I hereby
represent and warrant to you that I am purchasing said shares as an investment
with no intention of redeeming or reselling said shares until a date at least
two years hereafter.
Very truly yours,
