SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER
THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[ ] Confidential for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
MFS Charter Income Trust
MFS Intermediate Income Trust
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
MFS(R) CHARTER INCOME TRUST
MFS(R) INTERMEDIATE INCOME TRUST
500 Boylston Street, Boston, Massachusetts 02116
Notice of the 2003 Annual Meetings of Shareholders
To be held on October 8, 2003
The 2003 Annual Meeting of Shareholders of each of the above referenced
trusts (each a "Trust" and collectively the "Trusts") will be held at 500
Boylston Street, Boston, Massachusetts, at 9:30 a.m. on Wednesday, October 8,
2003, for the following purposes:
ITEM 1. To elect John W. Ballen, William J. Poorvu, J. Dale Sherratt and Ward
Smith as Trustees of each Trust;
ITEM 2. To act on a shareholder proposal;
ITEM 3. To ratify the selection of each Trust's auditor as the independent
public accountants to be employed by the Trust for the current fiscal
year; and
ITEM 4. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
Each Trust will hold a separate meeting. Shareholders of each Trust will vote
separately on each item.
THE TRUSTEES OF YOUR TRUST RECOMMEND THAT YOU VOTE AGAINST ITEM 2
AND IN FAVOR OF ITEMS 1, 3 AND 4.
Only a Trust's shareholders of record on August 1, 2003 will be entitled to
vote at that Trust's Annual Meeting of Shareholders.
STEPHEN E. CAVAN, Secretary and Clerk
August 18, 2003
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED PROXY, WHICH WILL HELP IN AVOIDING THE ADDITIONAL
EXPENSE OF A SECOND SOLICITATION FOR YOUR TRUST. THE ENCLOSED ADDRESSED
ENVELOPE REQUIRES NO POSTAGE AND IS PROVIDED FOR YOUR CONVENIENCE.
MFS(R) CHARTER INCOME TRUST
MFS(R) INTERMEDIATE INCOME TRUST
Proxy Statement
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees of MFS Charter Income Trust
and MFS Intermediate Income Trust (each a "Trust" and collectively the
"Trusts") to be used at the 2003 Annual Meeting of Shareholders of each Trust
(each a "Meeting") to be held at 9:30 a.m. on October 8, 2003, at 500 Boylston
Street, Boston, Massachusetts, for the purposes set forth in the accompanying
Notice. If the enclosed form of proxy is executed and returned, it may
nevertheless be revoked prior to its exercise by a signed writing filed with
the proxy tabulation agent, Management Information Services Corporation
("MIS"), 60 Research Road, Hingham, Massachusetts 02043, or delivered at a
Meeting. On August 1, 2003, the following number of shares were outstanding
for each Trust:
# OF SHARES
TRUST OUTSTANDING
- -------------------------------------------------------------------------
MFS Charter Income Trust 64,755,283.40
MFS Intermediate Income Trust 135,059,965.53
Shareholders of record at the close of business on August 1, 2003, will be
entitled to one vote for each share held. Each Trust will vote separately on
each item; votes of multiple Trusts will not be aggregated.
The mailing address of each Trust is 500 Boylston Street, Boston,
Massachusetts 02116. Solicitation of proxies is being made by the mailing of
this Notice and Proxy Statement with its enclosures on or about August 18,
2003. A copy of each Trust's most recent annual report and semi-annual report
may be obtained without charge by contacting MFS Service Center, Inc., each
Trust's transfer and shareholder servicing agent (the "Shareholder Servicing
Agent"), P.O. Box 2281, Boston, MA 02107-9906, or by telephone toll-free at
(800) 637-2304.
ITEM 1 -- ELECTION OF TRUSTEES
The Board of Trustees which oversees each Trust provides broad supervision
over the affairs of each Trust. Massachusetts Financial Services Company
("MFS" or the "Adviser"), each Trust's investment adviser and administrator,
is responsible for the investment management of each Trust's assets and for
providing a variety of other administrative services to each Trust. The
officers of each Trust are responsible for its operations.
Under the provisions of each Trust's Declaration of Trust, the Trustees are
divided into three classes, each having a term of three years. It is intended
that proxies not limited to the contrary will be voted in favor of electing
John W. Ballen, William J. Poorvu, J. Dale Sherratt and Ward Smith as Trustees
of the class whose term will expire at the 2006 Annual Meeting of Shareholders
(or special meeting in lieu thereof) of each Trust. Under the terms of each
Trust's retirement policy, the Trustees have a mandatory retirement age. Mr.
Smith will retire in accordance with this policy on December 31, 2005. Messrs.
Ballen, Poorvu, Sherratt and Smith presently are Trustees of each Trust. If,
before the election, any nominee refuses or is unable to serve, proxies will
be voted for a replacement nominee designated by each Trust's current
Trustees.
The following table presents certain information regarding the Trustees of
each Trust, including their principal occupations, which, unless specific
dates are shown, are of more than five years duration, although the titles may
not have been the same throughout.
An asterisk beside a Trustee's name indicates that he or she is an "interested
person", as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), of MFS and has been affiliated with MFS for more than five years,
unless otherwise indicated.
POSITION(s) HELD TRUSTEE TERM PRINCIPAL OCCUPATIONS & OTHER
NAME, DATE OF BIRTH WITH TRUST SINCE(1) EXPIRING DIRECTORSHIPS(2) DURING THE PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
Jeffrey L. Shames* Chairman October 1993 2005 Massachusetts Financial Services Company,
(born 06/02/55) Chairman
- -----------------------------------------------------------------------------------------------------------------------------------
John W. Ballen* Trustee August 2001 2003 Massachusetts Financial Services Company,
(born 09/12/59) Chief Executive Officer and Director
- -----------------------------------------------------------------------------------------------------------------------------------
Kevin R. Parke* Trustee January 2002 2004 Massachusetts Financial Services Company,
(born 12/14/59) Chief Investment Officer, President and
Director
- -----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
Lawrence H. Cohn, M.D. Trustee August 1993 2004 Brigham and Women's Hospital, Chief of
(born 03/11/37) Cardiac Surgery; Harvard Medical School,
Professor of Surgery
- -----------------------------------------------------------------------------------------------------------------------------------
William R. Gutow Trustee July 1994 2005 Private investor and real estate consultant;
(born 09/27/41) Capitol Entertainment Management Company
(video franchise), Vice Chairman
- -----------------------------------------------------------------------------------------------------------------------------------
J. Atwood Ives Trustee February 1992 2005 Private investor; KeySpan Corporation
(born 05/01/36) (energy related services), Director; Eastern
Enterprises (diversified services company),
Chairman, Trustee and Chief Executive
Officer (until November 2000)
- -----------------------------------------------------------------------------------------------------------------------------------
Abby M. O'Neill Trustee October 1992 2005(3) Private investor; Rockefeller Financial
(born 04/27/28) Services, Inc. (investment advisers),
Chairman and Chief Executive Officer
- -----------------------------------------------------------------------------------------------------------------------------------
Lawrence T. Perera Trustee July 1981 2004 Hemenway & Barnes (attorneys), Partner
(born 06/23/35)
- -----------------------------------------------------------------------------------------------------------------------------------
William J. Poorvu Trustee August 1982 2003 Private investor; Harvard University
(born 04/10/35) Graduate School of Business Administration,
Class of 1961; Adjunct Professor in
Enterpreneurship Emeritus; CBL & Associates
Properties, Inc. (real estate investment
trust), Director
- -----------------------------------------------------------------------------------------------------------------------------------
J. Dale Sherratt Trustee August 1993 2003 Insight Resources, Inc. (acquisition
(born 09/23/38) planning specialists), President; Wellfleet
Investments (investor in health care
companies), Managing General Partner (since
1993); Cambridge Nutraceuticals
(professional nutritional products), Chief
Executive Officer (until May 2001)
- -----------------------------------------------------------------------------------------------------------------------------------
Elaine R. Smith Trustee February 1992 2004 Independent health care industry consultant
(born 04/25/46)
- -----------------------------------------------------------------------------------------------------------------------------------
Ward Smith Trustee October 1992 2003 Private investor
(born 09/13/30)
- ----------
(1) Date first appointed to serve as Trustee of an MFS fund. Each Trustee has served continuously since appointment.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., "public
companies").
(3) Ms. O'Neill will retire in accordance with each Trust's retirement policy on December 31, 2003.
* "Interested person" of MFS within the meaning of the 1940 Act.
Messrs. Shames, Ballen and Parke hold comparable positions with certain other
funds of which MFS or a subsidiary is the investment adviser or distributor.
Each Trustee serves as a board member of 112 MFS funds within the MFS Family
of Funds. The address of each Trustee is c/o MFS, 500 Boylston Street, Boston,
Massachusetts 02116.
Information about the executive officers of each Trust, share ownership, the
identity of certain persons holding 5% or more of each Trust's outstanding
shares, Trustee compensation, and Board and Committee meetings appears under
"Trust Information" beginning on page 8.
REQUIRED VOTE. Approval of this matter as to any nominee will require the
affirmative vote of a plurality of a Trust's outstanding shares voting at the
Meeting in person or by proxy.
ITEM 2 -- SHAREHOLDER PROPOSAL RECOMMENDING THAT EACH TRUST'S TRUSTEES BE
REQUIRED TO INVEST AT LEAST 10% OF THEIR TRUSTEE FEES IN TRUST SHARES
SHAREHOLDER PROPOSAL
Each Trust has been informed on March 28, 2003 by Mr. Edwin S. Mullett, 1420
Fern Court, Vero Beach, Florida 32963-4009, a shareholder of record who owned
5,600 shares of the MFS Intermediate Income Trust and 8,600 shares of the MFS
Charter Income Trust, that he intends to submit the following proposal at each
Meeting:
"Recommend that the Board take the necessary steps to implement a
Trustees Stock Purchase Program through which all Independent Trustees
would invest at least 10% of their future fees in shares of the
Trust."
In support of his proposal, Mr. Mullett states that:
"Surely the Trustees would be better able to represent the interests
of the shareholders if they were shareholders themselves. However,
only two of the ten Independent Trustees are shareholders (none of the
Interested Trustees are). Wouldn't you prefer to have Trustees who
were also shareholders? Please support this proposal and encourage the
Trustees to join us as shareholders."
EACH TRUST'S BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST
THE RESOLUTION CONTAINED IN THIS SHAREHOLDER PROPOSAL FOR THE REASONS SET
FORTH BELOW.
RECOMMENDATION OF TRUSTEES
The statement in support of the resolution suggests that the Trustees could
best represent shareholder interests if they were shareholders themselves. The
Trustees disagree with this proposition in principle and do not believe that
the practical effect of ownership of a Trust's shares by the Trustees would
result in better representation or understanding of shareholder interests.
The Trustees are unaware that there is any established basis for the
proposition that share ownership by trustees makes a trustee a more effective
representative of shareholders. The Trustees are responsible for overseeing
the Trust's operations and for acting in the best interests of shareholders.
In furtherance of these responsibilities, the Trustees meet regularly with
each Trust's officers, independent public accountants and legal counsel and
with officers of the Adviser, and review each Trust's portfolio holdings and
strategy, operations and share value, market price and trading activity.
Whether or not the Trustees own a Trust's shares has no impact on their
responsibilities to the Trust and its shareholders or on the degree of
diligence with which the Trustees exercise their duties. The Trustees believe
that the proper focus of shareholder concern should be on the background and
experience of an individual trustee, and his or her level of diligence and
skill in seeking to protect and promote shareholder interests, and do not
believe that ownership of Trust shares in and of itself should or would result
in an enhanced degree of oversight or better representation or understanding
of shareholder interests.
While the resolution contained in the shareholder proposal would only require
that the Trustees own shares of a Trust, the principle advanced by Mr. Mullett
which underlies this proposal would suggest that the Trustees also should own
shares of each fund they oversee. As noted above under "Item 1 - Election of
Trustees," the Trustees are also trustees of 112 different closed-end and
open-end funds sponsored by the Adviser. Each of these funds has its own
investment objective and policies; for example, some funds seek capital growth
by investing primarily in equity securities, some funds seek income by
investing primarily in fixed-income securities, some funds seek a combination
of capital growth and income by investing in both equity and fixed income
securities, some funds seek high current income by investing primarily in
below investment grade bonds (i.e., junk bonds), some funds seek income exempt
from federal income taxes or income exempt from both federal and state income
taxes, and some funds seek current income while preserving capital by
investing in money market instruments.
Just like any other individual investor, a Trustee's decision to purchase
shares in any fund is based on a number of personal considerations, including
the individual's investment goals, risk tolerance, investment time horizon,
existing investments, tax situation and the manner in which the fund will fit
within the individual's overall investment portfolio. Any one of the funds
currently supervised by the Trustees, including each Trust, may or may not be
an appropriate investment for any particular Trustee based upon these personal
considerations. Indeed, a number of funds which the Trustees oversee seek
income exempt from both federal income taxes and the taxes of particular
states, and only shareholders who reside in these states benefit from the
unique tax advantages these funds are designed to produce. As a matter of
principle, the Trustees do not believe that a share purchase program is
appropriate and should dictate how they approach making a personal investment
decision, especially given that a particular fund may not be an appropriate
investment vehicle for them.
Each Trust's shareholders have an interest in attracting and retaining highly
qualified individuals to serve as Trustees of the Trust. The imposition of a
requirement that Trustees own a Trust's shares, or shares of any other fund
they supervise, may discourage qualified individuals from serving in this
capacity given the likelihood that some of these investments would not be
appropriate in light of the individual's particular investment goals and
personal situation. To the extent that this requirement would deter highly
qualified individuals from serving as Trustees of a Trust, the resolution
contained in the shareholder proposal requiring such share ownership may have
the unintended effect of attracting less highly qualified candidates, which is
clearly contrary to the interests of each Trust and its shareholders.
In addition, the imposition of this requirement, if applied to each Trust and
the other funds the Trustees oversee, would be impracticable and undesirable
because it could make it more difficult, for the reasons discussed above, to
maintain the same board of trustees for all of these funds given their large
number. The Trustees believe that there are distinct advantages to the funds
and their shareholders in having a single board oversee multiple funds within
a fund complex. First, serving as a Trustee of a number of funds tends to
increase each Trustee's knowledge and expertise regarding matters which affect
all the funds he or she oversees. Second, having a common board enhances the
ability of each fund to obtain, at modest cost to each separate fund, the
services of high caliber trustees. Third, having a common board avoids the
duplication of effort that would arise from having different groups of
individuals serving as trustees of each of the funds and avoids the cost and
confusion that may arise from different conclusions being reached by different
boards on the same operational and management issues.
Accordingly, for the reasons discussed herein, the Board of Trustees
unanimously recommends that shareholders vote AGAINST the resolution contained
in the shareholder proposal.
REQUIRED VOTE. Approval of the shareholder proposal will require the
affirmative vote of a majority of a Trust's outstanding shares cast at the
Meeting on this proposal in person or by proxy.
ITEM 3 -- RATIFICATION OF SELECTION OF ACCOUNTANTS
It is intended that proxies not limited to the contrary will be voted in favor
of ratifying the selection, by a majority of the Trustees who are not
"interested persons" (as that term is defined in the 1940 Act) of each Trust,
of the following auditors (each an "Auditor") under section 32(a) of the 1940
Act as independent public accountants of a Trust for the current fiscal year.
TRUST AUDITOR FISCAL YEAR END
- -------------------------------------------------------------------------------
MFS Charter Income Trust Ernst & Young LLP November 30
("Ernst & Young")
MFS Intermediate Income Trust Deloitte & Touche LLP October 31
("Deloitte")
No Auditor has a direct or material indirect interest in a Trust.
Representatives of the applicable Auditor are expected to be present at each
Meeting and will have an opportunity to make a statement if they desire to do
so. Such representatives also are expected to be available to respond to
appropriate questions.
The Audit Committee of the Board of Trustees of each Trust issued the
following report concerning the financial statements for each Trust's most
recent fiscal year.
The Audit Committee reviewed and discussed the audited financial
statements with Trust management. The Audit Committee also discussed with
the Auditor the matters required to be discussed by SAS 61 (Codification
of Statements on Auditing Standards). The Audit Committee received the
written disclosures and the letter from the Auditor required by
Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees), and discussed with the Auditor its independence.
Based on this review and these discussions, the Audit Committee
recommended to the Board of Trustees that the audited financial statements
be included in the Trust's annual report to shareholders for the Trust's
2002 fiscal year for filing with the Securities and Exchange Commission.
William R. Gutow
J. Atwood Ives
William J. Poorvu
J. Dale Sherratt
Ward Smith
The following table sets forth the aggregate fees paid to each Auditor (or
certain of its affiliates) for each Trust's 2002 fiscal year, for professional
services rendered for: (i) the audit of the Trust's financial statements for
that fiscal year; (ii) the audits of the annual financial statements for all
funds in the MFS fund complex audited by the Auditor; (iii) financial
information systems design and implementation services to the Trust, MFS and
any entity controlling, controlled by or under common control with MFS that
provides services to the Trust (including MFS Service Center, Inc.); and (iv)
all other services (other than the foregoing services) to the Trust, MFS, and
any entity controlling, controlled by or under common control with MFS that
provides services to the Trust. The Audit Committee of each Trust considered
whether the provision of information technology services and of non-audit
services by the Auditor is compatible with the maintenance of that firm's
independence.
FINANCIAL ALL OTHER FEES
INFORMATION (OTHER THANFEES
SYSTEMS DESIGN AND LISTED IN
IMPLEMENTATION ADJOINING COLUMNS)
FEES PAID BY THE PAID BY THE TRUST,
AGGREGATE AUDIT TRUST, MFS AND MFS MFS AND MFS
AUDIT FEES PAID BY FEES PAID BY ALL RELATED ENTITIES RELATED ENTITIES
THE TRUST FOR ITS FUNDS IN THE MFS THAT PROVIDE THAT PROVIDE
MOST RECENT FISCAL COMPLEX AUDITED BY SERVICES TO THE SERVICES TO THE
TRUST AUDITOR FISCAL YEAR END YEAR THE AUDITOR TRUST TRUST
- ------------------- -------------- --------------- ------------------ ------------------ ------------------ ------------------
MFS Charter
Income Trust Ernst & Young November 30 $38,000 $1,373,300 $0 $129,775
MFS Intermediate
Income Trust Deloitte October 31 $34,700 $3,039,065 $206,050 $666,711
REQUIRED VOTE. Ratification of this matter will require the affirmative vote
of a majority of a Trust's outstanding shares voting at the Meeting on this
matter in person or by proxy.
TRUST INFORMATION
This section provides certain information about each Trust, including
information about executive officers, share ownership, the identity of certain
persons holding 5% or more of the outstanding shares of each Trust, Trustee
compensation, and Board and Committee meetings.
EXECUTIVE OFFICERS
The following table provides information about the executive officers of each
Trust including their principal occupations, which, unless specific dates are
shown, are of more than five years duration, although the titles may not have
been the same throughout. Each officer will hold office until his or her
successor is chosen and qualified, or until he or she retires, resigns or is
removed from office.
POSITION(s) HELD OFFICER PRINCIPAL OCCUPATIONS & OTHER
WITH THE TRUST SINCE(1) DIRECTORSHIPS(2) DURING THE PAST FIVE
NAME, DATE OF BIRTH YEARS
- ----------------------------------------------------------------------------------------------------------------------
OFFICERS
John W. Ballen President August 2001 Massachusetts Financial Services
(born 09/12/59) Company, Chief Executive Officer and
Director
- ----------------------------------------------------------------------------------------------------------------------
James R. Bordewick, Jr. Assistant Secretary September 1990 Massachusetts Financial Services Company,
(born 03/06/59) and Assistant Clerk Senior Vice President and Associate
General Counsel
- ----------------------------------------------------------------------------------------------------------------------
Stephen E. Cavan Secretary and Clerk December 1989 Massachusetts Financial Services Company,
(born 11/06/53) Senior Vice President, General Counsel and
Secretary
- ----------------------------------------------------------------------------------------------------------------------
Stephanie A. DeSisto Assistant Treasurer April 2003 Massachusetts Financial Services
(born 10/01/53) Company, Vice President (since April
2003); Brown Brothers Harriman & Co.,
Senior Vice President (November 2002 to
April 2003); ING Groep N.V./Aeltus
Investment Management, Senior Vice
President (prior to November 2002)
- ----------------------------------------------------------------------------------------------------------------------
Robert R. Flaherty Assistant Treasurer August 2000 Massachusetts Financial Services Company,
(born 09/18/63) Vice President (since August 2000); UAM
Fund Services, Senior Vice President
(prior to August 2000)
- ----------------------------------------------------------------------------------------------------------------------
Richard M. Hisey Treasurer July 2002 Massachusetts Financial Services
(born 08/29/58) Company, Senior Vice President (since July
2002); The Bank of New York, Senior Vice
President (September 2000 to July 2002);
Lexington Global Asset Managers, Inc.,
Executive Vice President and Chief
Financial Officer (prior to September
2000); Lexington Funds, Treasurer (prior
to September 2000)
- ----------------------------------------------------------------------------------------------------------------------
Ellen Moynihan Assistant Treasurer April 1997 Massachusetts Financial Services Company,
(born 11/13/57) Vice President
- ----------------------------------------------------------------------------------------------------------------------
James O. Yost Assistant Treasurer September 1990 Massachusetts Financial Services Company,
(born 06/12/60) Senior Vice President
- ------------
(1) Date first appointed to serve as officer of an MFS fund. Each officer has served continuously since appointment.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., "public
companies").
Each of a Trust's officers holds comparable positions with certain other funds
of which MFS or a subsidiary is the investment adviser or distributor, and
with certain affiliates of MFS. The address of each officer is c/o MFS, 500
Boylston Street, Boston, Massachusetts 02116.
SHARE OWNERSHIP
The following table shows as of August 1, 2003 (i) the dollar range of
equity securities beneficially owned by each Trustee (a) of each Trust and
(b), on an aggregate basis, in all MFS funds overseen by the Trustee and (ii)
the number and percentage of shares of each Trust owned by each Trustee and by
the Trustees and executive officers as a group.
The following dollar ranges apply:
N. None
A. $1 - $10,000
B. $10,001 - $50,000
C. $50,001 - $100,000
D. Over $100,000
AGGREGATE DOLLAR
RANGE OF EQUITY DOLLAR RANGE SHARES OF THE
SECURITIES IN ALL OF EQUITY TRUST PERCENT
MFS FUNDS OVERSEEN SECURITIES IN BENEFICIALLY OF THE
NAME OF TRUSTEE INDIVIDUAL TRUST NAME BY THE TRUSTEE THE TRUST OWNED(1) TRUST
- --------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES
Jeffrey L. Shames MFS Charter Income D N 0
MFS Intermediate Income Trust D N 0
John W. Ballen MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
Kevin R. Parke MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
NON-INTERESTED TRUSTEES
Lawrence H. Cohn, M.D. MFS Charter Income Trust D B 1,669.87 .002578%
MFS Intermediate Income Trust D N 0
William R. Gutow MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
J. Atwood Ives MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
Abby M. O'Neill MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
Lawrence T. Perera MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D A 250.00 .000185%
William J. Poorvu MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
J. Dale Sherratt MFS Charter Income Trust D D 10,719.90 .016554%
MFS Intermediate Income Trust D D 14,600.00 .010810%
Elaine R. Smith MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
Ward Smith MFS Charter Income Trust D N 0
MFS Intermediate Income Trust D N 0
TOTAL HOLDINGS OF TRUSTEES MFS Charter Income Trust N/A N/A 12,389.78 .019133%
AND EXECUTIVE OFFICERS AS A MFS Intermediate Income Trust N/A N/A 14,850.00 .010995%
GROUP
- ------------
(1) All shares are held with sole voting and investment power except to the extent that such powers may be shared by a family
member or a trustee of a family trust.
INTERESTS OF CERTAIN PERSONS
As of August 1, 2003, to the best knowledge of each Trust, the following shareholders beneficially owned 5% or more of the
outstanding shares of the Trusts.
NUMBER OF PERCENT OF
OUTSTANDING OUTSTANDING
TRUST NAME NAME AND ADDRESS OF SHAREHOLDER CLASS OF SHARES SHARES OWNED SHARES OWNED
- ---------------------------------------------------------------------------------------------------------------------------------
MFS Charter Income Trust Cede & Co. Fast Common 54,128,693.00 83.59%
PO Box 20
Bowling Green Station
New York, NY 10274-0020
MFS Intermediate Income Trust Cede & Co. Fast Common 116,266,158.43 86.08%
PO Box 20
Bowling Green Station
New York, NY 10274-0020
TRUSTEE COMPENSATION TABLE
The table below shows the cash compensation paid to the Trustees by each Trust for the fiscal year ended on the date noted.
Interested Trustees do not receive any compensation from a Trust for their services as Trustees. The table includes information for
Mr. Gibbons who retired at the end of 2002.
TOTAL CASH
COMPENSATION
TRUSTEE FEES FROM TRUST AND
NAME OF TRUSTEE INDIVIDUAL TRUST NAME FROM THE TRUST(1) FUND COMPLEX(2)
- -------------------------------------------------------------------------------------------------------------------------------
Lawrence W. Cohn, M.D. MFS Charter Income Trust $ 9,981 $148,006
MFS Intermediate Income Trust $15,580 $148,006
The Hon. Sir J. David MFS Charter Income Trust $10,100 $160,890
Gibbons, KBE MFS Intermediate Income Trust $15,724 $160,890
William R. Gutow MFS Charter Income Trust $ 6,222 $148,006
MFS Intermediate Income Trust $10,667 $148,006
J. Atwood Ives MFS Charter Income Trust $ 6,275 $164,031
MFS Intermediate Income Trust $10,756 $164,031
Abby M. O'Neill MFS Charter Income Trust $ 9,815 $146,450
MFS Intermediate Income Trust $15,235 $146,450
Lawrence T. Perera MFS Charter Income Trust $ 6,222 $151,574
MFS Intermediate Income Trust $10,661 $151,574
William J. Poorvu MFS Charter Income Trust $ 6,281 $161,463
MFS Intermediate Income Trust $10,766 $161,463
J. Dale Sherratt MFS Charter Income Trust $10,486 $149,006
MFS Intermediate Income Trust $16,090 $149,006
Elaine R. Smith MFS Charter Income Trust $ 6,228 $152,574
MFS Intermediate Income Trust $10,677 $152,574
Ward Smith MFS Charter Income Trust $10,627 $165,334
MFS Intermediate Income Trust $16,323 $165,334
- ------------
(1) Information provided for the MFS Charter Income Trust is for the fiscal year ended November 30, 2002, and information provided
for the MFS Intermediate Income Trust is for the fiscal year ended October 31, 2002.
(2) For calendar year 2002. Trustees receiving compensation from each Trust served as Trustee of 112 funds within the MFS Fund
complex (having aggregate net assets at December 31, 2002 of approximately $74.3 billion).
Prior to December 31, 2001, each Trust had a retirement plan for non- interested Trustees and Trustees who were not officers of the
Trust. Effective December 31, 2001, each Trust's retirement plan terminated, except with respect to those Trustees who retired on
or before that date. The remaining Trustees who were previously covered under the retirement plan had their accrued benefits under
the plan "rolled-over" into a deferred compensation arrangement along with other compensation to account for future benefits they
would have received under the retirement plan if it had continued for such Trustees.
COMMITTEES
Each Trust's Board of Trustees meets regularly throughout the year to discuss matters and take certain actions relating to the
Trust. Each Trust's Board has several standing committees, which are described below.
NUMBER OF
MEETINGS IN LAST
NAME OF COMMITTEE FISCAL YEAR FUNCTIONS MEMBERS(1)
- ----------------------------------------------------------------------------------------------------------------------------
AUDIT COMMITTEE 7 Provides oversight with respect to the accounting Gutow, Ives, Poorvu,
and auditing procedures of the Trust and, among Sherratt and W. Smith
other things, considers the selection of the
independent accountants for the Trust and the
scope of the audit, and considers the effect on
the independence of those accountants of any non-
audit services such accountants provide to the
Trust and any audit or non-audit services such
accountants provide to other MFS Funds, MFS and/
or certain affiliates.
NOMINATING COMMITTEE 0 Recommends qualified candidates to the Board in All non-interested Trustees
the event that a position is vacated or created. of the Board (Cohn, Gutow,
The Nominating Committee would consider Ives, O'Neill, Perera,
recommendations by shareholders if a vacancy were Poorvu, Sherratt, E. Smith
to exist. Shareholders wishing to recommend and
Trustee candidates for consideration by the W. Smith)
Nominating Committee may do so by writing the
Trust's Secretary. Such suggestions must be
accompanied by complete biographical and
occupational data on the prospective nominee,
along with a written consent of the prospective
nominee to consideration of his or her name by
the Committee.
COMPENSATION COMMITTEE 0 Administers and approves all elements of All non-interested Trustees
compensation for the Trustees who are not of the Board (Cohn, Gutow,
"interested persons" of the Trust as defined in Ives, O'Neill, Perera,
the 1940 Act or affiliated with the Trust's Poorvu, Sherratt, E. Smith
investment adviser. and
W. Smith)
CONTRACTS REVIEW COMMITTEE 1 Requests, reviews and considers the information All non-interested Trustees
deemed reasonably necessary to evaluate the terms of the Board (Cohn, Gutow,
of the investment advisory agreement that the Ives, O'Neill, Perera,
Trust proposes to renew or continue, and makes Poorvu, Sherratt, E. Smith
its recommendations to the full Board of Trustees and
on these matters. W. Smith)
GOVERNANCE COMMITTEE 0 Reviews and articulates the governance structure Cohn, Ives, Poorvu, Shames*,
of the Board of Trustees. The Committee advises Sherratt and
and makes recommendations to the Board on matters W. Smith
concerning directorship practices and
recommendations concerning the functions and
duties of the committees of the Board.
PORTFOLIO TRADING AND MARKETING 6 Reviews process and procedures, internal controls Cohn, Perera, O'Neill and
REVIEW COMMITTEE and compliance monitoring relating to (i) E. Smith
portfolio trading, best execution and brokerage
costs and trade allocations, (ii) the production
and use of sales and marketing materials in
various forms of media and (iii) the Trust's
investment policies and practices.
PRICING COMMITTEE 0 Reviews procedures for the valuation of Ballen*, Parke*, Poorvu,
securities and periodically reviews information Shames*, E. Smith and
from MFS regarding fair value and liquidity W. Smith
determinations made pursuant to the board-
approved procedures, and makes related
recommendations to the full Board and, if
requested by MFS, assists MFS's internal
valuation committee and/or the full Board in
resolving particular valuation matters.
- ------------
(1) Information about each committee member is set forth above on pages 3 and 4.
* "Interested person" of MFS within the meaning of the 1940 Act.
Each Trust held 10 Board meetings during the Trust's 2002 fiscal year. Each
Trustee attended at least 75% of the Board and applicable committee meetings
noted for each Trust.
Each Trust's Board has adopted a written charter for the Audit Committee that
was previously included as an appendix to each Trust's proxy statement as
required by applicable rules. The charter most recently was included in each
Trust's 2001 proxy statement.
Each Trust's Audit Committee consists only of Trustees who are not "interested
persons" of the Trust as defined in the 1940 Act and who are independent of
the Trust as defined by New York Stock Exchange Listing Standards. Each
Trust's Audit Committee's report on the Trust's most recent audited financials
is included in Item 2 above.
Each Trust's Declaration of Trust currently provides that the Trust will
indemnify its Trustees and officers against liabilities and expenses incurred
in connection with litigation in which they may be involved because of their
offices with the Trust, unless it is finally adjudicated or, in case of a
settlement, it has been determined by Trustees not involved in the matter or
independent legal counsel, that they have not acted in good faith in the
reasonable belief that their actions were in the best interests of the Trust
or that they engaged in willful misfeasance or acted with bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
their offices.
INVESTMENT ADVISER AND ADMINISTRATOR
Each Trust engages as its investment adviser and administrator MFS, a Delaware
corporation with offices at 500 Boylston Street, Boston, Massachusetts 02116.
MFS is a majority-owned subsidiary of Sun Life of Canada (U.S.) Financial
Services Holdings, Inc., 500 Boylston Street, Boston Massachusetts 02116,
which is in turn a majority-owned subsidiary of Sun Life Assurance Company of
Canada-U.S. Operations Holdings, Inc., One SunLife Executive Park, Wellesley
Hills, Massachusetts 02481. Sun Life Assurance Company of Canada-U.S.
Operations Holdings, Inc., is a wholly-owned subsidiary of Sun Life Assurance
Company of Canada, 150 King Street West, 14th Floor, Toronto, Canada MSH 1J9,
which in turn is a wholly-owned subsidiary of Sun Life Financial Services of
Canada, Inc., at the same address.
MANNER OF VOTING PROXIES
All proxies received by the management will be voted on all matters presented
at the Meeting, and if not limited to the contrary, will be voted FOR the
election of Messrs. Ballen, Poorvu, Sherratt and Smith as Trustees of the
Trust (if still available for election), FOR the ratification of the selection
of the applicable Auditor as independent public accountants, and AGAINST the
shareholder proposal.
All proxies voted, including proxies that reflect (i) broker non-votes (if a
broker has voted on an item before the Meeting), (ii) abstentions or (iii) the
withholding of authority to vote for a nominee for election as Trustee, will
be counted toward establishing a quorum. A majority of a Trust's outstanding
shares entitled to be cast on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Passage of any
proposal being considered at the Meeting will occur only if a sufficient
number of votes are cast FOR the proposal. With respect to the election of
Trustees, the shareholder proposal, and the ratification of public
accountants, neither withholding authority to vote nor abstentions nor broker
non-votes have any effect on the outcome of the voting.
The Trusts have engaged the services of Georgeson Shareholder Communications,
Inc. to assist in the solicitation of proxies for the Trusts. The costs of the
proxy solicitation are expected to be approximately $28,000 and $42,000 for
MFS Charter Income Trust and MFS Intermediate Income Trust, respectively.
Solicitation costs are borne separately by each Trust. Each Trust will
reimburse the record holders of its shares for their expenses incurred in
sending proxy material to and obtaining voting instructions from beneficial
owners.
Each Trust knows of no other matters to be brought before the Meeting. If,
however, because of any unexpected occurrence, any nominee is not available
for election or if any other matters properly come before the Meeting, it is
each Trust's intention that proxies not limited to the contrary will be voted
in accordance with the judgment of the persons named in the enclosed form of
proxy.
SUBMISSION OF PROPOSALS
Proposals of shareholders which are intended to be presented at the 2004
Annual Meeting of Shareholders must be received by the Trust on or prior to
April 20, 2004.
SECTION 16(a) -- BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Trustees,
directors and certain officers of each Trust and MFS, and persons who own more
than ten percent of a Trust's shares, to file reports of ownership and changes
in ownership with the Securities and Exchange Commission ("SEC") and the New
York Stock Exchange. Such persons are required by SEC regulation to furnish
each Trust with copies of all Section 16(a) forms they file in relation to
that Trust.
Based solely on a review of the copies of Forms 3, 4 and 5 and amendments
thereto furnished to each Trust with respect to its most recent fiscal year,
or written representations that no Forms 5 were required, each Trust believes
that during its 2002 fiscal year, all Section 16(a) filing requirements
applicable to Trustees, directors and certain officers of the Trust and MFS
and greater than ten percent beneficial owners were complied with except as
follows. Each Trust believes that MFS personnel failed to make Form 3 (Initial
Statement of Beneficial Ownership) filings for the following persons on a
timely basis: James C. Baillie (MFS Director); James R. Bordewick, Jr.
(Assistant Secretary of the Trusts); Ellen Moynihan (Assistant Treasurer of
the Trusts); Donald M. Mykrantz (Senior Vice President of MFS); C. James
Prieur (MFS Director); Richard D. Schmalensee (MFS Director); Robin A.
Stelmach (Senior Vice President of MFS); William W. Stinson (MFS Director);
and James O. Yost (Assistant Treasurer of the Trusts). In no case did any of
these persons own shares of any Trust, and none of the late filings noted
involved a failure to report current trading in any Trust's shares.
ADDITIONAL INFORMATION
The expense of the preparation, printing and mailing of the enclosed form of
proxy, this Notice and Proxy Statement, and any tabulation costs, will be
borne ratably by the Trusts.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
August 18, 2003 MFS(R) CHARTER INCOME TRUST
MFS(R) INTERMEDIATE INCOME TRUST
MFS(R) CHARTER
INCOME TRUST
MFS(R) INTERMEDIATE
INCOME TRUST
500 Boylston Street, Boston, Massachusetts 02116
MFS-CE2-PRX-8/03
127M
MFS(R) CHARTER
INCOME TRUST
MFS(R) INTERMEDIATE
INCOME TRUST
500 Boylston Street
Boston, Massachusetts 02116
- --------------------------------------------------------------------------------
Proxy Statement
For the 2003 Annual Meetings
of Shareholders to be held on
October 8, 2003
- --------------------------------------------------------------------------------
[Logo] M F S(R)
INVESTMENT MANAGEMENT
P.O. BOX 9132, HINGHAM, MA 02043-9132
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF THE TRUST
PROXY FOR A MEETING OF SHAREHOLDERS
FUND NAME PRINTS HERE TO BE HELD ON OCTOBER 8, 2003
The undersigned hereby appoints James R. Bordewick, Jr., Stephen E. Cavan,
Richard M. Hisey, John W. Ballen, Kevin R. Parke and Jeffrey L. Shames and each
of them separately, proxies, with power of substitution, and hereby authorizes
them to represent, and to vote, as designated on the reverse side, at the
Meeting of Shareholders of the above-referenced Trust, on Wednesday, October 8,
2003 at 9:30 a.m., Boston time, and at any adjournments thereof, all of the
shares of the Trust which the undersigned would be entitled to vote if
personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 3 AND AGAINST PROPOSAL 2. IN THEIR DISCRETION, THE
PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. THE TRUSTEES RECOMMEND A VOTE FOR PROPOSALS 1 AND 3 AND
AGAINST PROPOSAL 2.
THIS PROXY CARD IS VALID ONLY WHEN
SIGNED AND DATED.
Date ______________________________
Signature (PLEASE SIGN WITHIN BOX)
----------------------------------
----------------------------------
NOTE: Please sign exactly as name
appears on this card. All joint
owners should sign. When signing
as executor, administrator,
attorney, trustee or guardian or
as custodian for a minor, please
give full title as such. If a
corporation, please sign in full
corporate name and indicate the
signers office. If a partnership,
sign in the partnership name.
MFS-MIN/MCR
Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X]
PLEASE DO NOT USE FINE POINT PENS.
FOR all WITHHOLD
nominees authority to
listed (except to vote
as marked to for all
YOUR TRUSTEES RECOMMEND THAT YOU VOTE the contrary nominees
FOR ALL ITEMS. at left)
[ ] [ ]
ITEM 1. To elect a Board of Trustees.
NOMINEES: (01) John W. Ballen,
(02) William J. Poorvu,
(03) J. Dale Sherratt, (04) Ward Smith
- -------------------------------------------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided above.
FOR AGAINST ABSTAIN
ITEM 2. To act on a shareholder proposal [ ] [ ] [ ]
recommending that each Trust's Trustees
be required to invest at 0 0 0 least
10% of their Trustees fees in trust
shares.
ITEM 3. To ratify the selection of independent [ ] [ ] [ ]
public accountants for the current
fiscal year.
PLEASE SIGN AND DATE ON THE REVERSE SIDE. MFS-MIN/MCR