As filed with the Securities and Exchange Commission on September 1, 1995
1933 Act File No. 33-68310
1940 Act File No. 811-7992
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 3
AND
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 4
MFS UNION STANDARD TRUST
(Exact Name of Registrant as Specified in Charter)
500 Boylston Street, Boston, Massachusetts 02116
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: 617-954-5000 Stephen E. Cavan, Massachusetts Financial Services Company, 500 Boylston Street, Boston, Massachusetts 02116
(Name and Address of Agent for Service)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b) / / on [DATE] pursuant to paragraph (b) / / 60 days after filing pursuant to paragraph (a)(i) / / on [DATE] pursuant to paragraph (a)(i)
/X/ 75 days after filing pursuant to paragraph (a)(ii)
/ / on [DATE] pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
STATEMENT PURSUANT TO RULE 24f-2
Pursuant to Rule 24f-2, the Registrant has registered an indefinite number of its Shares of Beneficial Interest, without par value, under the Securities Act of 1933 and filed a Rule 24f-2 Notice on behalf of MFS Union Standard Equity Fund with respect to its fiscal year ended September 30, 1994 on November 29, 1994, and with respect to its fiscal year ending September 30, 1995 will file a Rule 24f-2 Notice on behalf of MFS Union Standard Equity Fund on or before November 30, 1995.
MFS UNION STANDARD TRUST
MFS UNION STANDARD RESEARCH FUND
CROSS REFERENCE SHEET
(Pursuant to Rule 404 showing location in Prospectus and/or Statement of Additional Information of the responses to the Items in Parts A and B of Form N-1A)
STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
----------------- ------------------ ------------
1 (a), (b) Front Cover Page *
2 (a) Expense Summary *
(b), (c) * *
3 (a), (b), (c), (d) * *
4 (a) The Trust and the Fund; Investment *
Objective and Policies; Investment
Techniques
(b), (c) Investment Objective and Policies; *
Investment Techniques
5 (a) The Trust and the Fund; Management *
of the Fund - Investment Adviser
(b) Front Cover Page; Management of *
the Fund - Investment Adviser; Back
Cover Page
(c) Management of the Fund - Investment *
Adviser
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STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
----------------- ------------------ ------------
(d) * *
(e) Back Cover Page *
(f) Expense Summary *
(g) Investment Techniques - Portfolio *
Trading
5A (a), (b) ** **
6 (a) Information Concerning Shares of the *
Fund - Description of Shares, Voting
Rights and Liabilities; Information
Concerning Shares of the Fund -
Redemptions; Information Concerning
Shares of the Fund - Purchases;
Information Concerning Shares of the
Fund - Exchanges
(b), (c), (d) * *
(e) Shareholder Services *
(f) Information Concerning Shares of the *
Fund - Distributions; Shareholder
Services - Distribution Options
(g) Information Concerning Shares of the *
Fund - Tax Status; Information
Concerning Shares of the Fund -
Distributions
7 (a) Front Cover Page; Management of the *
Fund - Distributor; Back Cover Page
(b) Information Concerning Shares of the *
Fund - Purchases; Information
Concerning Shares of the Fund -
Net Asset Value
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STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART A PROSPECTUS CAPTION INFORMATION
----------------- ------------------ ------------
(c) Information Concerning Shares of the *
Fund - Exchanges
(d) Front Cover Page; Information *
Concerning Shares of the Fund -
Purchases
(e) Information Concerning Shares of the *
Fund - Distribution Plan; Expense
Summary
(f) Information Concerning Shares of the *
Fund - Distribution Plan
8 (a) Information Concerning Shares of the *
Fund - Redemptions; Information
Concerning Shares of the Fund -
Exchanges
(b), (c), (d) Information Concerning Shares of the *
Fund - Redemptions
9 * *
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STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
----------------- ------------------ ------------
10 (a), (b) * Front Cover Page
11 * Front Cover Page
12 * General
Information and
Definitions
13 (a) * Additional
Investment
Techniques and
Risk Factors
(b), (c) * Additional
Investment
Techniques and
Risk Factors;
Investment
Restrictions
(d) * Additional
Investment
Techniques and
Risk Factors
14 (a), (b) * Management of
the Fund -
Trustees;
Management of
the Fund -
Officers
(c) * Appendix A
15 (a), (b) * *
(c) * Management of
the Fund -
Trustees;
Management of
the Fund -
Officers
16 (a) Management of the Fund - Management of
Investment Adviser the Fund -
Investment
Adviser;
Management of
the Fund -
Trustees;
Management of
the Fund -
Officers
(b) Management of the Fund - Management of
Investment Adviser the Fund -
Investment
Adviser
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STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
----------------- ------------------ ------------
(c) * *
(d) * Management of
the Fund -
Investment
Adviser
(e) * Portfolio
Transactions
and Brokerage
Commissions
(f) Information Concerning Shares Distribution
of the Fund - Distribution Plan Plan
(g) * *
(h) * Management of
the Fund -
Custodian;
Independent
Accountants and
Financial
Statements;
Back Cover Page
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(i) * Management of the Fund - Shareholder Servicing Agent
17 (a) * Portfolio
Transactions
and Brokerage
Commissions
(b) * *
(c) * Portfolio
Transactions
and Brokerage
Commissions
(d), (e) * *
18 (a) Information Concerning Shares of Description of
the Fund - Decription of Shares, Shares, Voting
Voting Rights and Liablitiies Rights and
Liabilities
(b) * *
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STATEMENT OF
ITEM NUMBER ADDITIONAL
FORM N-1A, PART B PROSPECTUS CAPTION INFORMATION
----------------- ------------------ ------------
19 (a) Information Concerning Shares of *
the Fund - Purchases
(b) Information Concerning Shares of Determination of
the Fund - Net Asset Value; Net Asset
Information Concerning Shares Value;
of the Fund - Purchases Performance
Information -
Net Asset
Value
(c) * *
20 * Tax Status
21 (a), (b) * Management of
the Fund -
Distributor;
Distribution
Plan
(c) * *
22 (a) * *
(b) * Determination of
Net Asset
Value;
Performance
Information
23 * Independent
Accountants
and Financial
Statements
-----------------------------
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* Not Applicable ** Contained in Annual Report (for the MFS Union Standard Equity Fund)
MFS-REGISTERED TRADEMARK- PROSPECTUS UNION November 16, 1995 STANDARD-SM- RESEARCH FUND Shares of Beneficial Interest |
MFS UNION STANDARD-SM- TRUST
500 Boylston Street, Boston, Massachusetts 02116 (617) 954-5000
MFS Union Standard Research Fund (the "Research Fund" or the "Fund") is a series of MFS Union Standard-SM- Trust (the "Trust"), a professionally managed no-load, open-end, investment management company. The Trust is designed to permit pension plans to invest in companies which meet certain labor sensitivity criteria selected for inclusion in the ACS Labor Sensitivity Index-SM- (the "LSI-SM-"). The LSI is a common stock index comprised of companies selected based on labor sensitivity criteria.
The Research Fund seeks long-term growth of capital that, net of Fund expenses, exceeds the performance of the LSI by investing at least 65% of its assets in the equity securities of the 100 largest companies by market capitalization included in the LSI. The relative weighting of a company in the Fund's portfolio will be determined by reference to its relative market capitalization and its investment merits.
The minimum initial investment generally is $3 million per account (see "Purchases"). The Fund's investment adviser and distributor are Massachusetts Financial Services Company ("MFS" or the "Adviser") and MFS Fund Distributors, Inc. ("MFD"), respectively, both of which are located at 500 Boylston Street, Boston, Massachusetts 02116.
This Prospectus sets forth concisely the information concerning the Trust and the Fund that a prospective investor ought to know before investing. The Trust, on behalf of the Fund, has filed with the Securities and Exchange Commission (the "SEC") a Statement of Additional Information, dated November 16, 1995, which contains more detailed information about the Trust and the Fund and is incorporated into this Prospectus by reference. See page 14 for a further description of the information set forth in the Statement of Additional Information. A copy of the Statement of Additional Information may be obtained without charge by contacting the Shareholder Servicing Agent (see back cover for address and phone number).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
TABLE OF CONTENTS
PAGE
----
1. Expense Summary..................................................... 3
2. The Trust and the Fund.............................................. 4
3. Labor Sensitivity Index............................................. 4
4. Investment Objective and Policies................................... 5
5. Investment Techniques............................................... 6
6. Management of the Fund.............................................. 7
7. Information Concerning Shares of the Fund........................... 8
Purchases....................................................... 8
Exchanges....................................................... 9
Redemptions..................................................... 9
Distribution Plan............................................... 11
Distributions................................................... 11
Tax Status...................................................... 11
Net Asset Value................................................. 12
Description of Shares, Voting Rights and Liabilities............ 12
Performance Information......................................... 12
Expenses........................................................ 13
8. Shareholder Services................................................ 13
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1. EXPENSE SUMMARY
RESEARCH
FUND
---------
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases................. NONE
Maximum Sales Load Imposed on Reinvested Dividends...... NONE
Deferred Sales Load..................................... NONE
Redemption Fee.......................................... NONE
Exchange Fee............................................ NONE
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS):
Management Fees......................................... 0.60 %
Rule 12b-1 Fees(1)...................................... 0.15 %
Other Expenses (after applicable fee reduction)(2)...... 0.25 %
Total Operating Expenses (after applicable fee
reduction)(2).......................................... 1.00 %
------------------------
(1) The Fund has adopted a Distribution Plan in accordance with Rule 12b-1
under the Investment Company Act of 1940, as amended (the "1940 Act"),
which provides that it will pay distribution fees aggregating up to (but
not necessarily all of) 0.25% per annum of its average daily net assets.
This fee is set at 0.15% per annum of the average daily net assets of the
Fund for the current fiscal year.
(2) The Adviser has agreed to bear, until December 31, 1998, subject to
reimbursement as described under "Information Concerning Shares of the Fund
-- Expenses," the Fund's expenses such that "Total Operating Expenses" do
not exceed 1.00% per annum of the average daily net assets of the Fund
during the current fiscal year and each fiscal year thereafter through
December 31, 1998. Otherwise, "Other Expenses" and "Total Operating
Expenses" for the Fund for the current fiscal year would be 0.84% and 1.64%
per annum, respectively. See "Information Concerning Shares of the Fund --
Expenses."
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EXAMPLE OF EXPENSES
An investor would pay the following dollar amounts of expenses on a $1,000 investment in the Fund, assuming (a) 5% annual return and (b) redemption at the end of each of the time periods indicated (unless otherwise noted):
RESEARCH
PERIOD FUND
---------------------------------------------------------------------- --------
1 year................................................................ $ 10
3 years............................................................... 32
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The purpose of the expense table above is to assist investors in understanding the various costs and expenses that a shareholder of the Fund will bear directly or indirectly. The 5% annual return used in the example is only for illustration. More complete descriptions of the following Fund expenses are set forth in the following sections: (i) management fees -- "Management of the Fund -- Investment Adviser" and (ii) Rule 12b-1 (I.E., distribution plan) fees -- "Distribution Plan."
THE "EXAMPLE" SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OF THE FUND; ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
2. THE TRUST AND THE FUND
The Trust is a no-load, open-end, investment management company designed to permit pension plans to invest in companies which meet certain labor sensitivity criteria selected for inclusion in the LSI. The Trust was organized as a business trust under the laws of The Commonwealth of Massachusetts on September 1, 1993. The Trust currently consists of two diversified series or funds, the Research Fund and the MFS Union Standard Equity Fund (the "Equity Fund"), each of which represents a portfolio with separate investment objectives and policies. The Equity Fund is offered pursuant to a separate prospectus which may be obtained without charge by contacting the Shareholder Servicing Agent (see back cover for address and phone number).
Shares of the Fund are continuously sold to the public and the Fund then uses the proceeds to buy securities for its portfolio. One hundred percent of the amount invested in the Fund is used to purchase shares without the deduction of any sales charge. The Fund offers to buy back (redeem) its shares from its shareholders at any time at net asset value without the deduction of any redemption fee or sales charge. See "Purchases" and "Redemptions."
The Trust's Board of Trustees provides broad supervision over the affairs of the Fund. MFS is the Fund's investment adviser and is responsible for the management of the Fund's assets, while the officers of the Trust are responsible for the Fund's operations. MFS manages the Fund's portfolio from day to day in accordance with its investment objective and policies. A majority of the Trust's Trustees are not affiliated with MFS. American Capital Strategies Ltd. ("ACS") administers the LSI for MFS but has no responsibility for rendering investment advice to MFS or to the Fund.
3. LABOR SENSITIVITY INDEX
The LSI is a common stock index developed and maintained by ACS for use by the Trust and represents the market-weighted performance of common stocks of companies which ACS and the Labor Advisory Board (as described below) determine meet certain labor sensitivity criteria. The "Labor Sensitivity Index-SM-" and the "LSI-SM-" are service marks of ACS. The LSI was established on the date the Equity Fund commenced investment operations (January 14, 1994) and, as of the date of this Prospectus, is comprised of common stocks of approximately 545 companies which meet certain quantitative and qualitative labor sensitivity criteria. The criteria used in developing and maintaining the LSI involve the initial use of quantitative guidelines and the subsequent use of qualitative guidelines applied by ACS with the guidance of the Labor Advisory Board (the "Advisory Board"), which is comprised of senior labor officials, senior managers of companies with significant labor contracts, academics and other national labor leaders or experts and has been established by ACS. The Advisory Board provides guidance to ACS in the development, refinement, and application of qualitative and quantitative labor sensitivity criteria for the development and maintenance of the LSI. MFS is not affiliated with ACS or the Advisory Board.
In selecting companies for inclusion in the LSI, ACS first compiles a list of companies with labor agreements. The sources for this list include the research departments of various international unions, publicly available documents, and government reports. ACS then applies quantitative guidelines which, as of the date of this Prospectus, measure the degree to which a company's workforce is unionized. At its discretion, ACS may vary from time to time the labor sensitivity factors it considers or change the emphasis it places on any specific factor.
After ACS has applied the quantitative guidelines, the list is then reviewed by the Advisory Board, which assists in the application of qualitative guidelines which take into account a number of labor sensitivity criteria. The qualitative factors considered include, as of the date of this Prospectus, whether the company is manufacturing or has manufactured products on the boycott list of the AFL-CIO or certain other unions, whether the company is or has been involved in strikes or lock-outs, and whether the company has demonstrated patterns of non-compliance with applicable labor or health and safety laws. The Advisory Board also considers patterns of outsourcing and associated plant closings, patterns of strikes or lockouts, the degree to which a company's labor relations vary throughout different divisions, subsidiaries, or parts of their company and
the extent of foreign ownership of a company with a unionized workforce, and will vary from time to time. This list and any subsequent updates are supplied to MFS by ACS. The LSI is updated at least quarterly by ACS. See "Management of the Fund -- Index Manager" and "-- Advisory Board" below.
Like the Standard & Poor's 500 Index (the "S&P 500"), the LSI is a market capitalization weighted index and reflects the reinvestment of dividends paid on the common stocks that comprise the LSI. However, unlike certain other stock indices, such as the S&P 500, the LSI is not a recognized yardstick or measurement of investment performance. Because of the criteria applied in the selection of companies to be included in the LSI, the LSI may exclude entirely or under- or over-weight particular industry sectors relative to other stock indices such as the S&P 500. The performance of the LSI (or the 100 largest companies by market capitalization contained in the LSI) may not correlate with the performance of such other indices, such as the S&P 500, for certain periods. As of the date of this Prospectus, approximately 80% of the 100 largest companies by market capitalization contained in the LSI were also represented among the companies comprising the S&P 500.
On January 14, 1994, the date that the Equity Fund commenced investment operations, the unit value of the LSI was established at 100. The unit value of the LSI will be determined once monthly as of the last day of each month. As the investment objective of the Research Fund is to provide long-term growth of capital that, net of Fund expenses, exceeds the performance of the LSI, from time to time the Research Fund will compare its total return for a given time period to the performance of the LSI for the same time period. See "Investment Objective and Policies" and "Information Concerning Shares of the Fund -- Performance Information" below. The performance of the LSI shall be measured by comparing the unit value of the LSI at the end of the time period to the unit value of the LSI at the beginning of the time period.
The selection of a company for investment by the Fund does not constitute an endorsement or validation by the Fund or MFS of the criteria applied by ACS and the Advisory Board in the development or maintenance of the LSI. ACS does not determine the investment policies of the Fund or decide which securities of companies included in the LSI the Fund will buy and sell.
Pursuant to a Proxy Services Agreement between ACS and the Trust, acting on behalf of the Fund, ACS shall vote all proxies of companies included in the Fund's portfolio consistent with proxy voting guidelines established by the AFL-CIO, unless the Board of Trustees of the Trust directs otherwise. These guidelines obligate ACS to make voting decisions consistent with the economic best interests of shareholders of the Fund, and set forth considerations to be taken into account by ACS with respect to certain types of proxy proposals.
4. INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE -- The investment objective of the Research Fund is to provide long-term growth of capital that, net of Fund expenses, exceeds the performance of the LSI. Dividend and interest income from portfolio securities, if any, is incidental to the Fund's investment objective of long-term growth of capital. Any investment involves risk and there can be no assurance that the Fund will achieve its investment objective.
INVESTMENT POLICIES -- The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 65% of its assets in equity securities of the 100 largest companies by market capitalization contained in the LSI (referred to as the "100 Largest LSI Companies" or the "Companies"). As of the date of this Prospectus, the 100 Largest LSI Companies represented approximately 80 percent of the total market capitalization of the LSI. Each of the 100 Largest LSI Companies receives a rating by the investment research analysts in the Equity Research Department of the Adviser based upon qualitative and quantitative considerations. A Company will be rated number 1 by the Adviser if the Adviser expects it to outperform the S&P 500 over the succeeding twelve months and will have a portfolio weighting, at the time of purchase, equal to approximately 120 percent of its relative market capitalization among the 100 Largest LSI Companies; a Company will be rated number 2 by the Adviser if the Adviser expects it to approximate the performance of the S&P 500 over the succeeding twelve months and will have a portfolio weighting, at the time of purchase, approximately equal to its relative weighting among
the 100 Largest LSI Companies; and a Company will be rated number 3 by the Adviser if the Adviser expects it to underperform the S&P 500 over the succeeding twelve months and will have a portfolio weighting, at the time of purchase, equal to approximately 80 percent of its relative weighting among the 100 Largest LSI Companies.
While the Fund may invest up to 35% of its total assets in equity securities of companies which are not included within the 100 Largest LSI Companies, including companies comprising the LSI other than the 100 Largest LSI Companies, the Fund expects to be fully invested in equity securities of the 100 Largest LSI Companies, except for cash and cash equivalent investments and the investments and investment techniques described below. While portfolio weightings of the securities of the Companies purchased by the Fund are determined at the time of purchase, the Fund will periodically readjust its holdings to maintain such portfolio weightings. Such adjustments may be appropriate due to a change in a ranking assigned to a Company by the Adviser, changes in the relative capitalization of the 100 Largest LSI Companies, cash inflows to the Fund (E.G., purchases) and cash outflows from the Fund (E.G., redemptions).
5. INVESTMENT TECHNIQUES
SHORT-TERM INVESTMENTS: The Fund may invest in cash or cash equivalents including, but not limited to, obligations of banks (including certificates of deposit, bankers' acceptances and repurchase agreements) with assets of $1 billion or more, commercial paper, short-term notes, U.S. Government securities and related repurchase agreements. U.S. Government securities also include interests in trusts or other entities representing interests in obligations that are issued or guaranteed by the U.S. Government, its agencies, authorities or instrumentalities. During periods of unusual market conditons when MFS believes that investing for defensive purposes is appropriate, or in order to meet anticipated redemption requests, a large portion or all of the assets of the Fund may be invested in cash or cash equivalents.
LENDING OF SECURITIES: The Fund may make loans of its portfolio securities. Such loans will usually be made only to member banks of the Federal Reserve System and member firms (and subsidiaries thereof) of the New York Stock Exchange (the "Exchange") and would be required to be secured continuously by collateral in cash, cash equivalents or U.S. Government securities maintained on a current basis at an amount at least equal to the market value of the securities loaned. The Fund would continue to collect the equivalent of the interest on the securities loaned and would also receive either interest (through investment of cash collateral) or a fee (if the collateral is U.S. Government securities). The value of securities loaned will not exceed 30% of the value of the Fund's total assets.
REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements in order to earn additional income on available cash or as a temporary defensive measure. Under a repurchase agreement, the Fund acquires securities subject to the seller's agreement to repurchase at a specified time and price. If the seller becomes subject to a proceeding under the bankruptcy laws or its assets are otherwise subject to a stay order, the Fund's right to liquidate the securities may be restricted (during which time the value of the securities could decline). As discussed in the Statement of Additional Information, the Fund has adopted certain procedures which are intended to minimize any such risk. See "Investment Restrictions" in the Statement of Additional Information.
WHEN-ISSUED SECURITIES: In order to help ensure the availability of suitable securities for its portfolio, the Fund may purchase securities on a "when-issued" or on a "forward delivery" basis, which means that the obligations will be delivered to the Fund at a future date usually beyond customary settlement time. It is expected that, under normal circumstances, the Fund will take delivery of such securities. In general, the Fund does not pay for the securities until received and does not start earning interest on the obligations until the contractual settlement date. While awaiting delivery of the obligations purchased on such basis, the Fund will establish a segregated account consisting of cash, short-term money market instruments or high quality debt securities equal to the amount of the commitments to purchase "when-issued" securities. See the Statement of Additional Information for further information.
PORTFOLIO TRADING
The Fund intends to manage its portfolio by buying and selling securities in accordance with its investment objective and policies. The Fund will engage in portfolio trading if it believes a transaction, net of costs (including custodian charges), will help in attaining its investment objective. In trading portfolio securities, the Fund seeks to take advantage of market developments and variations in the creditworthiness of issuers. For a description of the strategies which may be used by the Fund in trading portfolio securities, see "Portfolio Transactions and Brokerage Commissions" in the Statement of Additional Information.
The primary consideration in placing portfolio security transactions with broker-dealers for execution is to obtain, and maintain the availability of, execution at the most favorable prices and in the most effective manner possible. Consistent with the foregoing primary consideration, the Rules of Fair Practice of the National Association of Securities Dealers, Inc. (the "NASD") and such other policies as the Trustees may determine, MFS may consider sales of shares of investment company clients of MFD, which is also the distributor of the shares of the MFS Family of Funds, as a factor in the selection of broker- dealers to execute the Fund's portfolio transactions. For a further discussion of portfolio trading, see the Statement of Additional Information.
The Statement of Additional Information includes a discussion of other investment policies and techniques and a listing of specific investment restrictions which govern the Fund's investment policies. The specific investment restrictions listed in the Statement of Additional Information may be changed without shareholder approval, unless noted otherwise (see "Investment Restrictions" in the Statement of Additional Information). The Fund's investment limitations, policies and rating standards are adhered to at the time of purchase or utilization of assets; a subsequent change in circumstances will not be considered to result in a violation of policy.
6. MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- MFS manages the Fund pursuant to an Investment Advisory Agreement dated November 16, 1995 (the "Advisory Agreement") with the Trust on behalf of the Fund. MFS provides the Fund with overall investment advisory and administrative services, as well as general office facilities. The Fund is currently managed by a committee comprised of various equity research analysts employed by MFS. Subject to such policies as the Trustees may determine, MFS makes investment decisions for the Fund. For its services and facilities, MFS receives a management fee, computed and paid monthly, in an amount equal to 0.60% per annum of the average daily net assets of the Fund.
MFS also serves as investment adviser to each of the other funds in the MFS Family of Funds (the "MFS Funds") and to 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, MFS Institutional Trust, MFS Variable Insurance Trust, MFS/Sun Life Series Trust, Sun Growth Variable Annuity Fund, Inc. and seven variable accounts, each of which is a registered investment company established by Sun Life Assurance Company of Canada (U.S.) ("Sun Life of Canada (U.S.)") in connection with the sale of various fixed/variable annuity contracts. MFS and its wholly owned subsidiary, MFS Asset Management, Inc., provide investment advice to substantial private clients.
MFS is America's oldest mutual fund organization. MFS and its predecessor organizations have a history of money management dating from 1924 and the founding of the first mutual fund in the United States, Massachusetts Investors Trust. Net assets under the management of the MFS organization were approximately $38.4 billion on behalf of approximately 1.7 million investor accounts as of July 31, 1995. As of such date, the MFS organization managed approximately
$14.8 billion of assets invested in equity securities and approximately $19.2 billion of assets invested in fixed income securities. Approximately $3.1 billion of the assets managed by MFS are invested in securities of foreign issuers and non-U.S. dollar denominated securities of U.S. issuers. MFS is a wholly owned subsidiary of Sun Life of Canada (U.S.), which in turn is a wholly owned subsidiary of Sun Life Assurance Company of Canada ("Sun Life"). The Directors of MFS are A. Keith Brodkin, Jeffrey L. Shames, Arnold D. Scott, John D. McNeil and John R. Gardner. Mr. Brodkin is the Chairman, Mr. Shames is the President and Mr. Scott is the Secretary and a Senior Executive Vice President of MFS. Messrs. McNeil and Gardner are the Chairman and President, respectively, of Sun Life. Sun Life, a mutual life insurance company, is one of the largest international life insurance companies and has been operating in the United States since 1895, establishing a headquarters office here in 1973. The executive officers of MFS report to the Chairman of Sun Life.
A. Keith Brodkin, the Chairman and a Director of MFS, is the Chairman and
President and a Trustee of the Trust. W. Thomas London, Stephen E. Cavan, James
R. Bordewick, Jr. and James O. Yost, all of whom are officers of MFS, are
officers of the Trust.
DISTRIBUTOR -- MFD, a wholly owned subsidiary of MFS, is the distributor of shares of the Fund.
SHAREHOLDER SERVICING AGENT -- MFS Service Center, Inc. (the "Shareholder Servicing Agent"), a wholly owned subsidiary of MFS, performs transfer agency, certain dividend disbursing agency and other services for the Fund.
INDEX MANAGER -- ACS, a Maryland corporation with offices at 3 Bethesda Metro Center, Bethesda, Maryland 20814, develops, maintains and furnishes to MFS the LSI pursuant to an agreement between MFS and ACS. Under this agreement, MFS pays ACS a fee equal to 0.05% per annum, payable quarterly, of the aggregate average daily net assets of the Fund and the Equity Fund, with a minimum quarterly fee of $82,500.
ADVISORY BOARD -- The Advisory Board, established by ACS, assists in the development and maintenance of the LSI by applying qualitative labor sensitivity criteria and assisting ACS in developing and refining quantitative labor sensitivity criteria applied by ACS. The Advisory Board is comprised of senior labor officials, senior managers of companies with significant labor contracts, academics and other national labor leaders or experts.
7. INFORMATION CONCERNING SHARES OF THE FUND PURCHASES
Shares of the Fund may be purchased directly through MFD in cash or in-kind without a sales charge at their net asset value next determined after acceptance of the purchase order by the Fund's Shareholder Servicing Agent in Boston. The minimum initial investment generally is $3 million. There is no minimum on additional investments.
An order for the purchase of shares of the Fund is accepted upon receipt of federal funds available for investment. Payment by federal funds sent by wire is accepted immediately upon receipt and payment by check is accepted when federal funds become available for investment, which generally occurs on the next business day after receipt of a check. Therefore, a non-federal funds investment will generally remain idle for one business day after receipt or until federal funds otherwise become available for investment. All investments in the Fund are credited to the shareholder's account in the form of full and fractional shares at the net asset value per share next determined after acceptance of the purchase order. The Fund does not issue share certificates, but the Shareholder Servicing Agent maintains an account for each shareholder and mails to each shareholder a confirmation of each purchase or sale of shares in its account.
Purchases and exchanges should be made for investment purposes only. A pattern of frequent exchanges may be deemed by MFS to be abusive and contrary to the best interests of the Fund's other shareholders and, at the discretion of MFS, may be limited by the Fund's refusal to accept additional purchases and/or exchanges from the investor. Although the Fund does not have any specific definition of what constitutes a pattern of frequent purchases or exchanges, and will consider all relevant factors in determining whether a particular situation is abusive and contrary to the best interests of the Fund and its other
shareholders, investors should be aware that the Fund may in its discretion limit or otherwise restrict the number of times purchases or exchanges may be made by an investor. Any such restriction will be made by the Fund on a prospective basis only, upon notice to the shareholder.
OPENING AN ACCOUNT: Payments by check should be made to the order of "MFS Union Standard Trust-Research Fund" and sent to the Trust as follows: MFS Service Center, Inc., P.O. Box 1400, Boston, MA 02104-9985. Payments of federal funds should be sent by wire to the custodian of the Fund as follows:
State Street Bank and Trust Company, Boston, MA 02101
ABA # 011000028
BNF = MFS Union Standard Trust-Research Fund
Account # 99034795
OBI = (Your account as it will be registered)
Information on how to wire federal funds is available at any national bank or any state bank which is a member of the Federal Reserve System. Shareholders must also mail the enclosed Account Application to the Shareholder Servicing Agent.
A shareholder purchasing shares by wire must first telephone the Shareholder Servicing Agent toll-free at (800) 637-8730 to advise of its intended action and to obtain a wire order number.
IN-KIND PURCHASES OF SECURITIES: Shares of the Fund may be purchased by exchanging securities acceptable to the Fund for Fund shares. The Fund need not accept any security offered for exchange unless it is consistent with the Fund's investment objective, policies and restrictions, and is otherwise acceptable to the Fund. Securities accepted in exchange for shares will be valued in accordance with the Fund's usual valuation procedures. Investors interested in making an in-kind purchase of Fund shares must first telephone the Shareholder Servicing Agent toll-free at (800) 637-8730 to advise of its intended action and obtain instructions for an in-kind purchase.
EXCHANGES
Subject to the requirements set forth below, some or all of the shares in an account with the Fund for which payment has been received by the Fund (I.E., an established account) may be exchanged for shares of the Equity Fund (if available for sale) at net asset value. Exchanges will be made only after instructions in writing or by telephone (an "Exchange Request") are received for an established account by the Shareholder Servicing Agent in proper form (see "Redemptions" below). If an Exchange Request is being used to open a new account, the exchange must involve shares having an aggregate value of at least $3 million. If the Exchange Request is received by the Shareholder Servicing Agent on any business day prior to the close of regular trading on the Exchange, the exchange usually will occur on that day if all the requirements set forth above have been complied with at that time. For federal and (generally) state income tax purposes, an exchange is treated as a sale of the shares exchanged and, therefore, an exchange could result in a gain or loss to non-tax-exempt shareholders making the exchange. The exchange privilege (or any aspect of it) may be changed or discontinued upon sixty days prior written notice to shareholders and is subject to certain limitations, including certain restrictions on purchases by market timer accounts described above (see"Purchases").
REDEMPTIONS
A shareholder may withdraw all or any portion of the amount in its account on any date on which the Fund is open for business by redeeming shares at their net asset value. Since the net asset value of shares of the account fluctuates, redemptions which are taxable transactions for non-tax exempt shareholders, are likely to result in gains or losses to such shareholders. When a shareholder withdraws an amount from its account, the shareholder is deemed to have tendered for redemption a sufficient number of full and fractional shares in his account to cover the amount withdrawn. The proceeds of a redemption will normally be available within seven days, except that for shares purchased, or received in exchange for shares purchased, by check (including certified checks or cashier's checks) payment of redemption proceeds may be delayed for 15 days from the
purchase date in an effort to assure that such check has cleared. Payment of redemption proceeds may be delayed for up to seven days from the redemption date if the Fund determines that such a delay would be in the best interest of all its shareholders.
A. REDEMPTION BY MAIL -- Each shareholder may redeem all or any portion of the shares in its account by mailing or delivering to the Shareholder Servicing Agent (see back cover for address) a stock power with a written request for redemption or a letter of instruction all in "good order" for transfer. Because the shareholders of the Fund are pension plans, "good order" means that the stock power, written request for redemption or letter of instruction must be endorsed by a trustee or an authorized officer of the pension plan or an authorized officer of the pension plan's custodian and the signature(s) must be guaranteed in the manner set forth below under the caption "Signature Guarantee" (unless the conditions set forth thereunder are satisfied). In addition, in some cases "good order" requires that the pension plan or its custodian furnish evidence of authority that the individual signing on the plan's behalf has authority to so act. The Shareholder Servicing Agent may make certain DE MINIMIS exceptions to the above requirements for redemption (see "Signature Guarantee" below). Within seven days after receipt of a redemption request by the Shareholder Servicing Agent in "good order," the Fund will normally make payment in cash of the net asset value of the shares next determined after such redemption request was received, less the amount of any income tax required to be withheld, except during any period in which the right of redemption is suspended or date of payment is postponed because the Exchange is closed or trading on such Exchange is restricted or to the extent otherwise permitted by the 1940 Act, if an emergency exists.
B. REDEMPTION BY TELEPHONE -- Each shareholder may redeem an amount from its account by telephoning the Shareholder Servicing Agent toll-free at (800) 637-8730. Shareholders wishing to avail themselves of this telephone redemption privilege must so elect on their Account Application, designate thereon a commercial bank and account number to receive the proceeds of such redemption, sign the Account Application Form with the signature(s) guaranteed in the manner set forth below under the caption "Signature Guarantee" and furnish evidence of authority that the individual signing on the pension plan's behalf has authority to so act. The proceeds of such a redemption, less the amount of any income tax required to be withheld, are wired in federal funds to the designated account. If a telephone redemption request is received by the Shareholder Servicing Agent by the close of regular trading on the Exchange on any business day, shares will be redeemed at the closing net asset value of the Fund on that day. Subject to the conditions described in this section, proceeds of a redemption are normally wired on the next business day following the date of receipt of the order for redemption. The Shareholder Servicing Agent will not be responsible for any losses resulting from unauthorized telephone transactions if it follows reasonable procedures designed to verify the identity of the caller. The Shareholder Servicing Agent will request personal or other information from the caller, and will normally also record calls. Shareholders should verify the accuracy of confirmation statements immediately after their receipt.
SIGNATURE GUARANTEE: In order to protect shareholders against fraud to the greatest extent possible, the Fund requires in certain instances as indicated above that the shareholder's signature be guaranteed. In these cases the shareholder's signature must be guaranteed by an eligible bank, broker, dealer, credit union, national securities exchange, registered securities association, clearing agency or savings association. Signature guarantees shall be accepted in accordance with policies established by the Shareholder Servicing Agent. With respect to written requests for redemptions, no signature guarantee or evidence that the individual executing the stock power, written request for redemption or letter of instruction will be required if the amount of the redemption proceeds does not exceed specified minimums established from time to time by MFD and the proceeds are wired or mailed to a predesignated account or address.
If MFS determines, in its sole discretion, that it would be detrimental to the best interests of the remaining shareholders of the Fund or if requested by a shareholder, the Fund may make payment of the redemption price, either totally or partially, by a distribution in-kind of securities (instead of cash) from the Fund's portfolio. The securities distributed in such a distribution would be valued at the same amount as that assigned to them in calculating the net asset value for the shares being sold (see
"Net Asset Value" below). Securities distributed by the Fund will be selected by MFS in light of the Fund's objective and will not generally represent a pro rata distribution of each security held in the Fund's portfolio. If a shareholder received a distribution in-kind, it would incur brokerage charges when converting the securities to cash.
DISTRIBUTION PLAN
The Trustees have adopted a distribution plan (the "Distribution Plan" or the "Plan") for the Fund pursuant to Section 12(b) of the 1940 Act and Rule 12b-1 thereunder (the "Rule"), after having concluded that there is a reasonable likelihood that a plan would benefit the Fund and its shareholders.
The Distribution Plan provides that the Fund will pay MFD a distribution fee up to (but not necessarily all of) 0.25% per annum of the Fund's average daily net assets in order that MFD may pay expenses on behalf of the Fund related to the distribution of shares. Payments under the Distribution Plan have been set for an indefinite period of time at 0.15% per annum of the Fund's average daily net assets. As contemplated by the Plan, MFD as the Fund's distributor, acts as an agent of the Fund in connection with the offering of shares pursuant to the Distribution Agreement with the Trust on behalf of the Fund. MFD receives such fee as partial consideration for services performed and expenses incurred in the performance of MFD's obligations under the Distribution Agreement.
The types of expenses for which MFD may be compensated under the Plan include compensation to and expenses of employees of MFD who engage in or support the distribution of shares or who service shareholder accounts, preparation, printing and mailing of prospectuses and statements of additional information to other than existing shareholders, reports to shareholders such as semiannual and annual reports, performance reports and newsletters, sales literature and other promotional material to prospective investors, direct mail solicitation, advertising and public relations, compensation of sales personnel, office expenses (including rent and overhead), equipment, travel and telephone expenses and such other expenses as may be approved from time to time by the Trustees and as may be permitted by applicable statute, rule or regulation. If the distribution fee received by MFD exceeds its expenses, MFD may realize a profit from these arrangements. Expenses under the Plan will be reviewed quarterly and the Plan will be reviewed and is subject to approval annually by the Trustees.
DISTRIBUTIONS
The Fund intends to pay substantially all of its net investment income to its shareholders as dividends on an annual basis. In determining the net investment income available for distributions, the Fund may rely on projections of its anticipated net investment income over a longer term, rather than its actual net investment income for the period. The Fund may make one or more distributions during the calendar year to its shareholders from any net realized long-term or short-term capital gains. Shareholders may elect to receive dividends and capital gain distributions in either cash or additional shares of the Fund. See "Tax Status" and "Shareholder Services -- Distribution Options" below.
TAX STATUS
In order to minimize the taxes the Fund would otherwise be required to pay, the Fund intends to elect to be, and to qualify each year as, a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and to make distributions to its shareholders in accordance with the timing requirements set out in the Code. As a result, it is expected that the Fund will not be required to pay any entity level federal income or excise taxes.
The Fund's shareholders that are not liable for federal, state or local income taxes, such as pension plans, will generally not have to pay federal income tax, or any state and local income taxes, on the dividends and capital gain distributions they receive from the Fund, whether paid in cash or additional shares. Shareholders who are not tax-exempt entities will normally have to pay U.S. federal income taxes, and any state and local income taxes, on the dividends and capital gain distributions from the Fund, whether paid in cash or additional shares. Such shareholders should consult their tax advisers before making an investment in the Fund.
The Fund intends to withhold U.S. federal income tax at a rate of 30% on dividends and certain other payments that are subject to such withholding, and that are made to non-exempt persons who are neither citizens nor residents of the U.S., regardless of whether a lower rate may be permitted under an applicable law or treaty. The Fund is also required in certain circumstances to apply backup withholding of 31% on reportable dividends and redemption proceeds paid to any shareholder (including a shareholder who is neither a citizen nor a resident of the U.S.) who does not furnish to the Fund certain information and certifications or who is otherwise subject to backup withholding. However, backup withholding will not be applied to such shareholder payments which have had 30% withholding taken. Prospective shareholders should read the Account Application for information regarding backup withholding of federal income tax and should consult their own tax advisers as to the tax consequences of an investment in the Fund.
For individual shareholders a statement setting forth the federal income status of all dividends and distributions for each calendar year will be sent promptly after the end of such year.
NET ASSET VALUE
The net asset value per share of the Fund is determined each day during which the Exchange is open for trading. This determination is made once each day as of the close of regular trading on the Exchange by deducting the amount of the Fund's liabilities from the value of the Fund's assets and dividing the difference by the number of shares outstanding. Assets in the Fund's portfolio are valued on the basis of their current values or otherwise at their fair values, as described in the Statement of Additional Information. The net asset value of shares is effective for orders accepted by MFD prior to its calculation.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund currently has one class of shares, entitled Shares of Beneficial Interest (without par value). The Trust has reserved the right to create and issue additional classes and series of shares, in which case each class of shares of a series would participate equally in the earnings, dividends and assets attributable to that class of that particular series. Shareholders are entitled to one vote for each share held and shares of each series would be entitled to vote separately to approve investment advisory agreements or changes in investment restrictions, but shares of all series would vote together in the election of Trustees and selection of accountants. Additionally, each series will vote separately on any material increases in the fees under its Distribution Plan or on any other matter that affects solely that series, but will otherwise vote together with all other series on all other matters. The Trust does not intend to hold annual shareholder meetings. The Declaration of Trust provides that a Trustee may be removed from office in certain instances. See "Description of Shares, Voting Rights and Liabilities" in the Statement of Additional Information.
Each share of the Fund represents an equal proportionate interest in the Fund with each share, subject to the liabilities of the particular series. Shares have no pre-emptive or conversion rights. Shares are fully paid and non-assessable. Should the Fund be liquidated, shareholders are entitled to share PRO RATA in the net assets available for distribution to shareholders. Shares will remain on deposit with the Shareholder Servicing Agent and certificates will not be issued except in connection with pledges and assignments and in certain other limited circumstances.
The Trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its obligations. However, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed (E.G., fidelity bonding and omission insurance) and the Trust itself was unable to meet its obligations.
PERFORMANCE INFORMATION
From time to time, the Fund will provide total rate of return quotations for its shares and may also quote fund rankings in the relevant fund category from various sources, such as the Lipper Analytical Services, Inc. and Wiesenberger Investment Companies Service. From time to time the Fund may also compare its performance to the LSI. Total rate of return quotations will reflect the average annual percentage change over stated periods in the value of an investment in shares of the Fund with
all distributions reinvested. The Fund's total rate of return quotations are based on historical performance and are not intended to indicate future performance. Total rate of return reflects all components of investment return over a stated period of time. The Fund's quotations may from time to time be used in advertisements, shareholder reports or other communications to shareholders. For a discussion of the manner in which the Fund will calculate its total rate of return, see the Statement of Additional Information. In addition to information provided in shareholder reports, the Fund may, in its discretion, from time to time, make a list of all or a portion of its holdings available to investors upon request.
EXPENSES
The Trust pays the compensation of the Trustees who are not officers of MFS and all expenses of the Fund (other than those assumed by MFS or MFD) including but not limited to: governmental fees; interest charges; taxes; membership dues in the Investment Company Institute allocable to the Fund; fees and expenses of independent auditors, of legal counsel, and of any transfer agent, registrar or dividend disbursing agent of the Fund; expenses of redeeming shares and servicing shareholder accounts; expenses of preparing, printing and mailing share certificates, prospectuses, periodic reports, notices and proxy statements to shareholders and 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 State Street Bank and Trust Company, the Fund's Custodian, for all services to the Fund, including safekeeping of funds and securities and maintaining required books and accounts; expenses of calculating the net asset value of shares of the Fund; and expenses of shareholder meetings. Expenses relating to the issuance, registration and qualification of shares of the Fund and the preparation, printing and mailing of prospectuses are borne by the Fund except that the Distribution Agreement with MFD requires MFD to pay for prospectuses that are to be used for sales purposes. Expenses of the Trust which are not attributable to a specific series of the Trust are allocated between the series in a manner believed by management of the Trust to be fair and equitable.
Subject to termination or revision at the discretion of MFS, MFS has agreed to bear until December 31, 1998 the foregoing expenses of the Trust such that the Fund's aggregate operating expenses do not exceed 1.00% per annum of its average daily net assets. Such payments by MFS are subject to reimbursement by the Fund, which will be accomplished by the payment by the Fund of an expense reimbursement fee to MFS computed and paid monthly at a percentage of its average daily net assets for its then current fiscal year, with a limitation that immediately after such payment the aggregate operating expenses of the Fund would not exceed 1.00% of its average daily net assets. The expense reimbursement agreement terminates for the Fund on the earlier of the date on which payments made thereunder by such Fund equal the prior payment of such reimbursable expenses by MFS or December 31, 1998.
8. SHAREHOLDER SERVICES
Shareholders with questions concerning the shareholder services described below or concerning other aspects of the Fund should contact the Shareholder Servicing Agent.
ACCOUNT AND CONFIRMATION STATEMENTS -- Each shareholder will receive confirmation statements showing the transaction activity in its account.
DISTRIBUTION OPTIONS -- The following options are available to all accounts and may be changed as often as desired by notifying the Shareholder Servicing Agent:
-- Dividends and capital gain distributions reinvested in additional shares.
This option will be assigned if no other option is specified.
-- Dividends in cash; capital gain distributions reinvested in additional shares.
-- Dividends and capital gain distributions in cash.
Dividends and capital gains distributions will be reinvested (net of any tax withholding) in additional full and fractional shares at the net asset value in effect at the close of business on the record date. Dividends and capital gain distributions in amounts less than $10 will automatically be reinvested in additional shares of the Fund.
The Fund's Statement of Additional Information, dated November 16, 1995,
contains more detailed information about the Trust and the Fund, including
information related to (i) the investment objective, policies and restrictions
(ii) the Trustees, officers and investment adviser, (iii) portfolio trading,
(iv) the Fund's shares, including rights and liabilities of shareholders, (v)
the tax status of dividends and distributions, (vi) the Distribution Plan and
(vii) the method used to calculate total rate of return quotations.
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street, Boston, MA 02116
(617) 954-5000
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street, Boston, MA 02116
(617) 954-5000
CUSTODIAN AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
SHAREHOLDER SERVICING AGENT
MFS Service Center, Inc.
500 Boylston Street, Boston, MA 02116
Toll free: 800-637-8730
MAILING ADDRESS:
P.O. Box 1400, Boston, MA 02104-9985
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110
[LOGO] MFS-Registered Trademark- Union Standard-SM- Research Fund 500 Boylston Street, Boston, MA 02116
UST-1-2/95/1.5M
MFS-Registered Trademark-
Union Standard-SM-
Research Fund
[LOGO]
PROSPECTUS
NOVEMBER 16, 1995
MFS-REGISTERED TRADEMARK-
UNION STATEMENT OF
STANDARD-SM- RESEARCH FUND ADDITIONAL INFORMATION
NOVEMBER 16, 1995
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Page
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1. General Information and Definitions................................. 2
2. Additional Investment Techniques and Risk Factors................... 2
3. Investment Restrictions............................................. 3
4. Management of the Fund.............................................. 4
Trustees.......................................................... 4
Officers.......................................................... 4
Investment Adviser................................................ 4
Custodian......................................................... 5
Shareholder Servicing Agent....................................... 5
Distributor....................................................... 5
5. Portfolio Transactions and Brokerage Commissions.................... 5
6. Tax Status.......................................................... 6
7. Determination of Net Asset Value; Performance Information........... 7
8. Distribution Plan................................................... 8
9. Description of Shares, Voting Rights and Liabilities................ 8
10. Independent Accountants and Financial Statements.................... 9
Appendix A.......................................................... A-1
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MFS UNION STANDARD-SM- RESEARCH FUND
A Series of MFS Union Standard Trust
500 Boylston Street, Boston, Massachusetts 02116
(617) 954-5000
This Statement of Additional Information sets forth information which may be of interest to investors but which is not necessarily included in the Fund's Prospectus, dated November 16, 1995. This Statement of Additional Information should be read in conjunction with the Prospectus, a copy of which may be obtained without charge by contacting the Shareholder Servicing Agent (see back cover for address and phone number).
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
UST-13 2/95/370
1. GENERAL INFORMATION AND DEFINITIONS
MFS Union Standard-SM- Trust (the "Trust") is a professionally managed open-end, diversified, management investment company (a "mutual fund") designed for pension plans sponsored by labor unions and pension plans in which union members participate. The Trust currently consists of two separate series or funds: MFS Union Standard-SM- Research Fund (the "Research Fund" or the "Fund") and MFS Union Standard-SM- Equity Fund (the "Equity Fund"). This Statement of Additional Information relates only to the Research Fund. The Equity Fund is offered pursuant to a separate prospectus and statement of additional information which may be obtained by contacting the Shareholder Servicing Agent (see back cover for address and phone number). Additional funds may be created by the Trustees from time to time. The Fund offers its shares pursuant to a prospectus dated November 16, 1995, as supplemented or amended from time to time (the "Prospectus").
The Fund's investment adviser and distributor is, respectively, Massachusetts Financial Services Company ("MFS" or the "Adviser") and MFS Fund Distributors, Inc. ("MFD" or the "Distributor"), each a Delaware corporation.
2. ADDITIONAL INVESTMENT TECHNIQUES AND RISK FACTORS
LENDING OF SECURITIES
The Fund may seek to increase its income by lending portfolio securities. Such loans will usually be made only to member banks of the Federal Reserve System and to member firms (and subsidiaries thereof) of the New York Stock Exchange (the "Exchange") and would be required to be secured continuously by collateral in cash, cash equivalents, or U.S. Government securities maintained on a current basis at an amount at least equal to the market value of the securities loaned. The Fund would have the right to call a loan and obtain the securities loaned at any time on customary industry settlement notice (which will usually not exceed five business days). During the existence of a loan, the Fund would continue to receive the equivalent of the interest or dividends paid by the issuer on the securities loaned and would also receive compensation based on investment of the collateral. The Fund would not, however, have the right to vote any securities having voting rights during the existence of the loan, but would call the loan in anticipation of an important vote to be taken among holders of the securities or of the giving or withholding of their consent on a material matter affecting the investment. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the collateral should the borrower fail financially. However, the loans would be made only to firms deemed by MFS to be of good standing, and when, in the judgment of MFS, the consideration which could be earned currently from securities loans of this type justifies the attendant risk. If MFS determines to make securities loans, it is not intended that the value of the securities loaned would exceed 30% of the value of the Fund's total assets.
WHEN-ISSUED SECURITIES
The Fund may purchase securities on a "when-issued" or on a "forward delivery" basis. It is expected that, under normal circumstances, the Fund will take delivery of such securities. When the Fund commits to purchase a security on a "when-issued" or on a "forward delivery" basis, it will set up procedures consistent with the General Statement of Policy of the Securities and Exchange Commission (the "SEC") concerning such purchases. Since that policy currently recommends that an amount of the Fund's assets equal to the amount of the purchase be held aside or segregated to be used to pay for the commitment, the Fund will always have cash, short-term money market instruments or high quality debt securities sufficient to cover any commitments or to limit any potential risk. However, although the Fund does not intend to make such purchases for speculative purposes and intends to adhere to the provisions of SEC policies, purchases of securities on such bases may involve more risk than other types of purchases. For example, the Fund may have to sell assets which have been set aside in order to meet redemptions. Also, if the Fund determines it is necessary to sell the "when-issued" or "forward delivery" securities before delivery, it may incur a loss because of market fluctuations since the time the commitment to purchase such securities was made. When the time comes to pay for "when-issued" or "forward delivery" securities, the Fund will meet its obligations from the then-available cash flow on the sale of securities, or, although it would not normally expect to do so, from the sale of the "when-issued" or "forward delivery" securities themselves (which may have a value greater or less than the Fund's payment obligation).
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with sellers who are member firms (or subsidiaries thereof) of the Exchange, members of the Federal Reserve System, recognized primary U.S. Government securities dealers or institutions which MFS has determined to be of comparable creditworthiness. The securities that the Fund purchases and holds through its agent are U.S. Government securities, the values, including accrued interest, of which are equal to or greater than the repurchase price agreed to be paid by the seller. The repurchase price may be higher than the purchase price, the difference being income to the Fund, or the purchase and repurchase prices may be the same, with interest at a standard rate due to the Fund together with the repurchase price on repurchase. In either case, the income to the Fund is unrelated to the interest rate on the U.S. Government securities.
The repurchase agreement provides that in the event the seller fails to pay the price agreed upon on the agreed upon delivery date or upon demand, as the case may be, the Fund will have the right to liquidate the securities. If at the time the Fund is contractually entitled to exercise its right to liquidate the securities, the seller is subject to a proceeding under the bankruptcy laws or its assets are otherwise subject to a stay order, the Fund's exercise of its right to liquidate the securities may be delayed and result in certain losses and costs to the Fund. The Fund has adopted and follows procedures which are intended to minimize the risks of repurchase agreements. For example, the Fund only enters into repurchase agreements after MFS has determined that the seller is creditworthy, and MFS monitors the seller's creditworthiness on an ongoing basis. Moreover, under such agreements, the value, including accrued interest, of the securities (which are marked to market every business day) is required to be greater than the repurchase price, and the Fund has the right to make margin calls at any time if the value of the securities falls below the agreed upon margin.
PORTFOLIO TRADING
The Fund anticipates that its portfolio turnover rate will not exceed 100% during its current fiscal year.
3. INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions which cannot be changed without the approval of the holders of a majority of the Fund's shares (which, as used in this Statement of Additional Information, means the lesser of (i) more than 50% of the outstanding shares of the Trust or the Fund, as applicable, or (ii) 67% or more of the outstanding shares of the Trust or the Fund, as applicable, present at a meeting if holders of more than 50% of the outstanding shares of the Trust or the Fund, as applicable, are represented in person or by proxy). Except for Investment Restriction (1), these investment restrictions and policies are adhered to at the time of purchase or utilization of assets; a subsequent change in circumstances will not be considered to result in a violation of policy.
The Trust, on behalf of the Fund, may not:
(1) borrow amounts in excess of 33 1/3% of its assets including amounts borrowed;
(2) underwrite securities issued by other persons except insofar as the Fund may technically be deemed an underwriter under the Securities Act of 1933 in selling a portfolio security;
(3) purchase or sell real estate (including limited partnership interests but excluding securities secured by real estate or interests therein and securities of companies, such as real estate investment trusts, which deal in real estate or interests therein), interests in oil, gas or mineral leases, commodities or commodity contracts (excluding options, options on futures contracts, options on stock indices and any other type of option, and futures contracts) in the ordinary course of its business. The Fund reserves the freedom of action to hold and to sell real estate, mineral leases, commodities or commodity contracts (including options, options on futures contracts, options on stock indices and any other type of option, and futures contracts) acquired as a result of the ownership of securities;
(4) issue any senior securities except as permitted by the 1940 Act. For purposes of this restriction, collateral arrangements with respect to any type of option (including options on futures contracts, options and options on stock indices), forward contracts and futures contracts and collateral arrangements with respect to initial and variation margin are not deemed to be the issuance of a senior security;
(5) make loans to other persons. For these purposes, the purchase of short-term commercial paper, the purchase of a portion or all of an issue of debt securities, the lending of portfolio securities, or the investment of the Fund's assets in repurchase agreements, shall not be considered the making of a loan; or
(6) purchase any securities of an issuer of a particular industry, if as a result, 25% or more of its gross assets would be invested in securities of issuers whose principal business activities are in the same industry (except obligations issued or guaranteed by the U.S. Government or its agencies and instrumentalities and repurchase agreements collateralized by such obligations).
In addition, the Fund has adopted the following nonfundamental policies which may be changed without shareholder approval. The Trust, on behalf of the Fund, will not:
(1) invest in illiquid investments, including securities subject to legal or contractual restrictions on resale or for which there is no readily available market (e.g., trading in the security is suspended, or, in the case of unlisted securities, where no market exists) if more than 15% of the Fund's net assets (taken at market value) would be invested in such securities. Repurchase agreements maturing in more than seven days will be deemed to be illiquid for purposes of the Fund's limitation on investment in illiquid securities. Securities that are not registered under the Securities Act of 1933, as amended, and sold in reliance on Rule 144A thereunder, but are determined to be liquid by the Trust's Board of Trustees (or its delegee), will not be subject to this 15% limitation;
(2) invest more than 5% of the value of the Fund's net assets, valued at the lower of cost or market, in warrants. Included within such amount, but not to exceed 2% of the value of the Fund's net assets, may be warrants which are not listed on the New York or American Stock Exchange. Warrants acquired by the Fund in units or attached to securities may be deemed to be without value;
(3) purchase securities issued by any other investment company in excess of the amount permitted by the 1940 Act, except when such purchase is part of a plan of merger or consolidation;
(4) purchase or retain securities of an issuer any of whose officers, directors, trustees or security holders is an officer or Trustee of the Fund, or is an officer or a director of the investment adviser of the Fund, if one or more of such persons also owns beneficially more than 0.5% of the securities of such issuer, and such persons owning more than 0.5% of such securities together own beneficially more than 5% of such securities;
(5) purchase any securities or evidences of interest therein on margin, except that the Fund may obtain such short-term credit as may be necessary for the clearance of any transaction and except that the Fund may make margin deposits in connection with any type of option (including options on futures contracts, options and options on stock indices) and futures contracts;
(6) sell any security which the Fund does not own unless by virtue of its ownership of other securities the Fund has at the time of sale a right to obtain securities without payment of further consideration equivalent in kind and amount to the securities sold and provided that if such right is conditional, the sale is made upon the same conditions;
(7) invest more than 5% of its gross assets in companies which, including predecessors, controlling persons, sponsoring entities, general partners and guarantors, have a record of less than three years' continuous operation or relevant business experience;
(8) pledge, mortgage or hypothecate in excess of 33 1/3% of its gross assets. For purposes of this restriction, collateral arrangements with respect to any type of option (including options on futures contracts, options and options on stock indices), futures contracts and payments of initial and variation margin in connection therewith, are not considered a pledge of assets;
(9) purchase securities while borrowings from banks under a line of credit or similar arrangement exceed 5% of the Fund's total assets;
(10) purchase or sell any put or call option or any combination thereof, provided that this shall not prevent (a) the purchase, ownership, holding or sale of (i) warrants where the grantor of the warrants is the issuer of the underlying securities or (ii) put or call options or combinations thereof with respect to securities, indexes of securities, options on futures contracts or (b) the purchase, ownership, holding or sale of contracts for the future delivery of securities or currencies; or
(11) invest for the purpose of exercising control or management.
The Fund's limitations, policies and ratings restrictions are adhered to at the time of purchase or utilization of assets; a subsequent change in circumstances will not be considered to result in a violation of policy.
4. MANAGEMENT OF THE FUND
The Board of Trustees of the Trust provides broad supervision over the affairs of the Fund. MFS is responsible for the investment management of the Fund's assets and the officers of the Trust are responsible for its operations. The Trustees and officers of the Trust are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.)
TRUSTEES
A. KEITH BRODKIN* -- Chairman; Massachusetts Financial Services Company, Chairman.
NELSON J. DARLING, JR. -- Director or Trustee of several corporations or trusts, including: Eastern Enterprises (diversified holding company), Trustee. Address: 18 Tremont Street, Boston, Massachusetts
WILLIAM R. GUTOW -- Private Investor; Real Estate Consultant; Capitol
Entertainment (Blockbuster Video Franchise), Senior Vice President (since
1989).
Address: 3102 Maple Avenue, #100, Dallas, Texas
OFFICERS
W. THOMAS LONDON* -- Treasurer; Massachusetts Financial Services Company, Senior Vice President.
STEPHEN E. CAVAN* -- Secretary and Clerk; Massachusetts Financial Services Company, Senior Vice President, General Counsel and Assistant Secretary.
JAMES R. BORDEWICK, JR.* -- Assistant Secretary; Massachusetts Financial Services Company, Vice President and Associate General Counsel.
Mr. Brodkin and each officer holds comparable positions with certain affiliates of MFS or with certain other funds of which MFS or a subsidiary is the investment adviser or distributor. Messrs. Brodkin and Cavan are the Chairman and the Secretary, respectively, of MFD and hold similar positions with certain other MFS affiliates.
The Trust pays the compensation of the Trustees who are not officers of MFS (who will each receive $2600 annually plus $600 per meeting and committee meeting attended). Set forth in Appendix A hereto is certain information concerning the cash compensation paid to non-interested Trustees.
The Declaration of Trust 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, as to liabilities of the Trust or its shareholders, it is finally adjudicated that they engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in their offices, or with respect to any matter, unless it is adjudicated that they did not act in good faith in the reasonable belief that their actions were in the best interest of the Trust. In the case of settlement, such indemnification will not be provided unless it has been determined pursuant to the Declaration of Trust, that such officers or Trustees have not engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of their duties.
INVESTMENT ADVISER
MFS and its predecessor organizations have a history of money management dating from 1924. MFS is a wholly owned subsidiary of Sun Life of Canada (U.S.) which in turn is a wholly owned subsidiary of Sun Life Assurance Company of Canada.
MFS manages the assets of the Fund pursuant to an Investment Advisory Agreement with the Trust on behalf of the Fund dated as of November 16, 1995 (the "Advisory Agreement"). MFS provides the Fund with overall investment advisory and administrative services, as well as general office facilities. Subject to such policies as the Trustees may determine, MFS makes investment decisions for the Fund. For these services and facilities, the Adviser receives a management fee, computed and paid monthly, in an amount equal to 0.60% per annum of the average daily net assets of the Fund.
In order to comply with the expense limitations of certain state securities commissions, MFS will reduce its management fee or otherwise reimburse the Fund for any expenses, exclusive of interest, taxes and brokerage commissions, incurred by the Fund in any fiscal year to the extent such expenses exceed the most restrictive of such state expense limitations. MFS will make appropriate adjustments to such reductions and reimbursements in response to any amendment or rescission of the various state requirements.
MFS pays the compensation of the Trust's officers and of any Trustee who is an officer of MFS. MFS also furnishes at its own expense all necessary administrative services, including office space, equipment, clerical personnel, investment advisory facilities, and all executive and supervisory personnel necessary for managing the Fund's investments, effecting its portfolio transactions and, in general, administering its affairs.
The Advisory Agreement with the Fund will remain in effect until November 16, 1997, and will continue in effect thereafter only if such continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of the Fund's shares (as defined in "Investment Restrictions") and, in either case, by a majority of the Trustees who are not parties to the Advisory Agreement or interested persons of any such party. The Advisory Agreement terminates automatically if it is assigned and may be terminated without penalty by vote of a majority of the Fund's shares (as defined in "Investment Restrictions") or by either party on not more than 60 days' nor less than 30 days' written notice. The Advisory Agreement for the Fund provides
that if MFS ceases to serve as the investment adviser to the Fund, the Fund will change its name so as to delete the term "MFS" and that MFS may render services to others and may permit other fund clients to use the term "MFS" in their names. The Advisory Agreement also provides that neither MFS nor its personnel shall be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution and management of the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its or their duties or by reason of reckless disregard of its or their obligations and duties under the Advisory Agreement.
CUSTODIAN
State Street Bank and Trust Company (the "Custodian") is the custodian of the Trust's assets. The Custodian's responsibilities include safekeeping and controlling the Fund's cash and securities, handling the receipt and delivery of securities, determining income and collecting interest and dividends on the Fund's investments, maintaining books of original entry for portfolio and fund accounting and other required books and accounts, and calculating the daily net asset value of shares of the Fund. The Custodian does not determine the investment policies of the Fund or decide which securities the Fund will buy or sell. The Fund may, however, invest in securities of the Custodian and may deal with the Custodian as principal in securities transactions. The Custodian also serves as the dividend and distribution disbursing agent of the Fund. The Custodian has contracted with MFS for MFS to perform certain accounting functions related to certain transactions for which the Adviser receives remuneration on a cost basis.
SHAREHOLDER SERVICING AGENT
MFS Service Center, Inc. (the "Shareholder Servicing Agent"), a wholly owned subsidiary of MFS, is the Fund's shareholder servicing agent, pursuant to a Shareholder Servicing Agent Agreement with the Trust on behalf of the Fund, dated as of December 8, 1993 (the "Agency Agreement"). The Shareholder Servicing Agent's responsibilities under the Agency Agreement include administering and performing transfer agent functions and the keeping of records in connection with the issuance, transfer and redemption of shares of the Fund. For these services, the Shareholder Servicing Agent will receive a fee based on the number of shareholder accounts, computed and paid monthly. In addition, the Shareholder Servicing Agent will be reimbursed by the Fund for certain expenses incurred by the Shareholder Servicing Agent on behalf of the Fund. State Street Bank and Trust Company, the dividend and distribution disbursing agent for the Fund, has contracted with the Shareholder Servicing Agent to administer and perform certain dividend and distribution disbursing functions for the Fund.
DISTRIBUTOR
MFD, a wholly owned subsidiary of MFS, serves as the distributor for the continuous offering of shares of the Fund pursuant to a Distribution Agreement dated as of December 8, 1993 (the "Distribution Agreement").
The Distribution Agreement will remain in effect until August 1, 1996 and will continue in effect thereafter only if such continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of the Trust's shares (as defined in "Investment Restrictions") and in either case, by a majority of the Trustees who are not parties to such Distribution Agreement or interested persons of any such party. The Distribution Agreement terminates automatically if it is assigned and may be terminated without penalty by either party on not more than 60 days' nor less than 30 days' notice.
5. PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Specific decisions to purchase or sell securities for the Fund are made by employees of MFS, who are appointed and supervised by its senior officers. Changes in the Fund's investments are reviewed by the Board of Trustees.
The primary consideration in placing portfolio security transactions with broker-dealers for execution is to obtain and maintain the availability of execution at the most favorable prices and in the most effective manner possible. MFS has complete freedom as to the markets in and the broker-dealers through which it seeks this result. MFS attempts to achieve this result by selecting broker-dealers to execute portfolio transactions on behalf of the Fund and other clients of MFS on the basis of their professional capability, the value and quality of their brokerage services, and the level of their brokerage commissions. In the case of securities, such as government securities, which are principally traded in the over-the-counter market (where no stated commissions are paid but the prices include a dealer's markup or markdown), MFS normally seeks to deal directly with the primary market makers, unless in its opinion, better prices are available elsewhere. In the case of securities purchased from underwriters, the cost of such securities generally includes a fixed underwriting commission or concession. From time to time, soliciting dealer fees are available to MFS on the tender of the Fund's portfolio securities in so-called tender or exchange offers. Such soliciting dealer fees are in effect recaptured for the Fund by MFS. At present no other recapture arrangements are in effect.
Under the Advisory Agreement and as permitted by Section 28(e) of the Securities Exchange Act of 1934, MFS may cause the Fund to pay a broker-dealer which provides brokerage and research services to MFS an amount of commission for effecting a securities transaction for the Fund in excess of the amount other broker-dealers would have charged for the transaction if MFS determines in good faith that the greater commission is reasonable in relation to the value of the brokerage and research services provided by the executing broker-dealer viewed in terms of either a particular transaction or MFS's overall responsibilities to the Fund or to its other clients. Not all of such services are useful or of value in advising the Fund.
The term "brokerage and research services" includes advice as to the value of securities, the advisability of purchasing or selling securities, and the availability of purchasers or sellers of securities; furnishing analyses and reports concerning issues, industries, securities, economic factors and trends, portfolio strategy and the performance of accounts; and effecting securities transactions and performing functions incidental thereto such as clearance and settlement.
Although commissions paid on every transaction will, in the judgment of MFS, be reasonable in relation to the value of the brokerage services provided, commissions exceeding those which another broker might charge may be paid to broker-dealers who were selected to execute transactions on behalf of the Fund and MFS' other clients in part for providing advice as to the availability of purchasers or sellers of securities and services in effecting securities transactions and performing functions incidental thereto such as clearance and settlement.
Broker-dealers may be willing to furnish statistical, research and other factual information or services ("Research") to MFS for no consideration other than brokerage or underwriting commissions. Securities may be bought or sold from time to time through such broker-dealers on behalf of the Fund. The Trustees (together with the Trustees of the MFS Funds) have directed MFS to allocate a total of $20,000 of commission
business from the various MFS Funds to the Pershing Division of Donaldson, Lufkin & Jenrette as consideration for the annual renewal of the Lipper Directors' Analytical Data Service (which provides information useful to the Trustees in reviewing the relationship between the Fund and MFS).
The investment management personnel of MFS attempt to evaluate the quality of Research provided by brokers. Results of this effort are sometimes used by MFS as a consideration in the selection of brokers to execute portfolio transactions. However, MFS is unable to quantify the amount of commissions which will be paid as a result of such Research because a substantial number of transactions will be effected through brokers which provide Research but which were selected principally because of their execution capabilities.
The management fee that the Fund pays to MFS will not be reduced as a consequence of the receipt of brokerage and research services by MFS. To the extent the Fund's portfolio transactions are used to obtain such services, the brokerage commissions paid by the Fund will exceed those that might otherwise be paid, by an amount which cannot be presently determined. Such services would be useful and of value to MFS in serving both the Fund and other clients and, conversely, such services obtained by the placement of brokerage business of other clients would be useful to MFS in carrying out its obligations to the Fund. While such services are not expected to reduce the expenses of MFS, MFS would, through use of the services, avoid the additional expenses which would be incurred if it should attempt to develop comparable information through its own staff.
In certain instances there may be securities which are suitable for the Fund's portfolio as well as for that of one or more of the other clients of MFS or any subsidiary of MFS. Investment decisions for the Fund and for such other clients are made with a view to achieving their respective investment objectives. It may develop that a particular security is bought or sold for only one client even though it might be held by, or bought or sold for, other clients. Likewise, a particular security may be bought for one or more clients when one or more other clients are selling that same security. Some simultaneous transactions are inevitable when several clients receive investment advice from the same investment adviser, particularly when the same security is suitable for the investment objectives of more than one client. When two or more clients are simultaneously engaged in the purchase or sale of the same security, the securities are allocated among clients in a manner believed to be equitable to each. It is recognized that in some cases this system could have a detrimental effect on the price or volume of the security as far as the Fund is concerned. In other cases, however, it is believed that the Fund's ability to participate in volume transactions will produce better executions for the Fund.
6. TAX STATUS
The Fund intends to be treated and to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), by meeting all applicable requirements of Subchapter M, including requirements as to the nature of the Fund's gross income, the amount of Fund distributions, and the composition and holding period of the Fund's portfolio assets. Because the Fund intends to distribute all of its net investment income and net realized capital gains to shareholders in accordance with the timing and certain other requirements imposed by the Code, it is not expected that the Fund will be required to pay any federal income or excise taxes. If the Fund should fail to qualify for treatment as a "regulated investment company" in any year, the Fund would incur regular corporate federal income tax upon its taxable income and Fund distributions would generally be taxable as ordinary dividend income to non-exempt shareholders. The Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the extent it fails to distribute by the end of any calendar year substantially all of its ordinary income for that year and capital gain net income for the one-year period ending on October 31 of that year, plus certain other amounts. As long as the Fund qualifies for treatment as a regulated investment company under the Code, it will not be subject to any Massachusetts excise or income taxes.
Shareholders of the Fund who are not tax-exempt entities normally will have to pay federal income taxes and any state or local taxes on the dividends and capital gain distributions they receive from the Fund. Dividends from ordinary income and any distributions from net short-term capital gains, whether paid to shareholders who are non tax-exempt entities in cash or additional shares, are taxable to these shareholders as ordinary income for federal income tax purposes. A portion of the Fund's ordinary income dividends (but none of its capital gains) is normally eligible for the dividends-received deduction for corporations if the recipient otherwise qualifies for that deduction with respect to its holding of the Fund's shares. Availability of the deduction to particular corporate shareholders is subject to certain limitations and deducted amounts may be subject to the alternative minimum tax or result in certain basis adjustments. Distributions of net capital gain (I.E., the excess of the net long-term capital gains over short-term capital losses), whether received in cash or reinvested in additional shares, if designated as such by the Fund, are taxable to non-tax-exempt shareholders as long-term capital gains for federal income tax purposes without regard to the length of time the shareholders have held their shares. Fund dividends which are declared in October, November, or December, and paid the following January will be taxable to non-tax-exempt shareholders as if received on December 31 of the year in which they are declared.
Any Fund distribution will have the effect of reducing the per share net asset value of shares in the Fund by the amount of the distribution. Shareholders purchasing shares in the Fund shortly before the record date of any taxable dividend or other distribution may thus pay the full price for the shares and then effectively receive a portion of the purchase price back as a taxable distribution.
In general, any gain or loss realized upon a taxable disposition of shares of the Fund by a shareholder that holds such shares as a capital asset will be treated as long-term capital gain or loss if the shares have been held for more than twelve months and otherwise as short-term capital gain or loss. However, any loss realized upon a disposition of shares in a Fund held for six months or less will be treated as a long-term capital loss to the extent of any distributions of net capital gain made with respect to those shares. Any loss realized upon a redemption of shares may also be disallowed under rules relating to wash sales.
The Fund's current dividend and accounting policies will affect the amount, timing, and character of distributions to shareholders, and may, under certain circumstances, make an economic return of capital taxable to shareholders. Any investment by the Fund in certain securities purchased at a market discount will cause it to realize income prior to the receipt of cash payments with respect to these securities. In order to distribute this income and avoid a tax on such Fund, the Fund may be required to liquidate portfolio securities that it might otherwise have continued to hold, potentially resulting in additional taxable gain or loss to the Fund.
7. DETERMINATION OF NET ASSET VALUE; PERFORMANCE INFORMATION
NET ASSET VALUE
The net asset value per share of the Fund is determined each day during which the Exchange is open for trading. As of the date of this Statement of Additional Information, the Exchange is open for trading every weekday except for the following holidays (or the days on which they are observed): New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day). This determination is made once during each such day as of the close of regular trading on the Exchange by deducting the amount of the Fund's liabilities from the value of its assets and dividing the difference by the number of shares of the Fund outstanding. Securities in the Fund's portfolio (other than short-term obligations) for which the principal market is one or more securities or commodities exchanges will be valued at the last reported sale price or at the settlement price prior to the determination (or if there has been no current sale, at the closing bid price) on the primary exchange on which such securities are traded; but if a securities exchange is not the principal market for securities, such securities will, if market quotations are readily available, be valued at current bid prices, unless such securities are reported on the NASDAQ system, in which case they are valued at the last sale price or, if no sales occurred during the day, at the last quoted bid price. Short-term obligations, if any, in the Fund's portfolio are valued at amortized cost, which constitutes fair value as determined by the Board of Trustees. Short-term securities with a remaining maturity in excess of 60 days will be valued based upon dealer supplied valuations. Portfolio securities for which there are no quotations or valuations are valued at fair value as determined in good faith by or at the direction of the Board of Trustees. A share's net asset value is effective for orders accepted by MFD, in its capacity as the Fund's distributor, prior to its calculation.
PERFORMANCE INFORMATION
TOTAL RATE OF RETURN: The Fund will calculate its total rate of return for certain periods by determining the average annual compounded rates of return over those periods that would cause an investment of $1,000 (made with all distributions reinvested) to reach the value of that investment at the end of the periods. The Fund may also calculate total rates of return which represent aggregate performance over a period or year-by-year performance.
From time to time, the Fund may quote, and compare its performance to, the LSI. In addition, from time to time the Fund may, as appropriate, quote Fund rankings or reprint all or a portion of evaluations of fund performance and operations appearing in various independent publications, including but not limited to the following: Money, Fortune, U.S. News and World Report, Kiplinger's Personal Finance, The Wall Street Journal, Barron's, Investors Business Daily, Newsweek, Financial World, Financial Planning, Investment Advisor, USA Today, Pensions and Investments, SmartMoney, Forbes, Global Finance, Registered Representative, Institutional Investor, the Investment Company Institute, Johnson's Charts, Morningstar, Lipper Analytical Services, Inc., CDA Wiesenberger, Shearson Lehman and Salomon Bros. Indices, Ibbotson, Business Week, Lowry Associates, Media General, Investment Company Data, The New York Times, Your Money, Strangers Investment Advisor, Financial Planning on Wall Street, Standard and Poor's, Individual Investor, THE 100 BEST MUTUAL FUNDS YOU CAN BUY by Gordon K. Williamson, Consumer Price Index, and Sanford C. Bernstein & Co. Fund performance may also be compared to the performance of other mutual funds tracked by financial or business publications or periodicals. The Fund may also quote evaluations mentioned in independent radio or television broadcasts and may use charts and graphs to illustrate the past performance of various indices such as those mentioned above and illustrations using hypothetical rates of return to illustrate the effects of compounding and tax-deferral. The Fund may advertise examples of the effects of periodic investment plans, including the principle of dollar cost averaging. In such a program, an investor invests a fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer shares when prices are high and more shares when prices are low. While such a strategy does not assure a profit or guard against a loss in a declining market, the investor's average cost per share can be lower than if fixed numbers of shares are purchased at the same intervals.
MFS FIRSTS: MFS has a long history of innovations.
-- 1924 -- Massachusetts Investors Trust is established as the first open-end mutual fund in America.
-- 1924 -- Massachusetts Investors Trust is the first mutual fund to make full public disclosure of its operations in shareholder reports.
-- 1932 -- One of the first internal research departments is established to provide in-house analytical capability for an investment management firm.
-- 1933 -- Massachusetts Investors Trust is the first mutual fund to register under the Securities Act of 1933. ("Truth in Securities Act" or "Full Disclosure Act".)
-- 1936 -- Massachusetts Investors Trust is the first mutual fund to allow shareholders to take capital gain distributions either in additional shares or in cash.
-- 1976 -- MFS Municipal Bond Fund is among the first municipal bond funds established.
-- 1979 -- Spectrum becomes the first combination fixed/variable annuity with no initial sales charge.
-- 1981 -- MFS World Governments Fund is established as America's first globally diversified fixed-income mutual fund.
-- 1984 -- MFS Municipal High Income Fund is the first open-end mutual fund to seek high tax-free income from lower-rated municipal securities.
-- 1986 -- MFS Managed Sectors Fund becomes the first mutual fund to target and shift investments among industry sectors for shareholders.
-- 1986 -- MFS Municipal Income Trust is the first closed-end, high-yield municipal bond fund traded on the New York Stock Exchange.
-- 1987 -- MFS Multimarket Income Trust is the first closed-end, multimarket high income fund listed on the New York Stock Exchange.
-- 1989 -- MFS Regatta becomes America's first non-qualified market-value-adjusted fixed/variable annuity.
-- 1990 -- MFS World Total Return Fund is the first global balanced fund.
-- 1993 -- MFS World Growth Fund is the first global emerging markets fund to offer the expertise of two sub-advisers.
-- 1993 -- MFS becomes money manager of MFS Union Standard Trust, the first trust to invest in companies deemed to be union-
friendly by an Advisory Board of senior labor officials, senior managers of companies with significant labor contracts, academics and other national labor leaders or experts.
8. DISTRIBUTION PLAN
The Trustees have adopted a Distribution Plan for the Fund (the "Distribution Plan") pursuant to Section 12(b) of the 1940 Act and Rule 12b-1 thereunder (the "Rule") after having concluded that there is a reasonable likelihood that the Distribution Plan would benefit the Fund and its shareholders. The Distribution Plan is designed to promote sales, thereby increasing the net assets of the Fund. Such an increase may reduce the expense ratio to the extent the Fund's fixed costs are spread over a larger net asset base. Also, an increase in net assets may lessen the adverse effects that could result were the Fund required to liquidate portfolio securities to meet redemptions.
The Distribution Plan provides that the Fund will pay MFD a distribution fee up to (but not necessarily all of) 0.25% per annum of the Fund's average daily net assets. Payments under the Distribution Plan have been set for an indefinite period of time at 0.15% per annum of the Fund's average daily net assets.
The Distribution Plan will remain in effect from year to year only if its continuance is specifically approved at least annually by vote of both the Trustees and a majority of the Trustees who are not "interested persons" or financially interested parties to the Plan ("Distribution Plan Qualified Trustees"). The Distribution Plan requires that the Fund and MFD each shall provide to the Trustees, and the Trustees shall review, at least quarterly, a written report of the amounts expended (and purposes therefor) under such Plan. The Distribution Plan may be terminated at any time by vote of a majority of the Distribution Plan Qualified Trustees or by vote of the holders of a majority of the Fund's shares (as defined in "Investment Restrictions"). Agreements under the Distribution Plan must be in writing, will be terminated automatically if assigned, and may be terminated at any time without payment of any penalty, by vote of a majority of the Distribution Plan Qualified Trustees or by vote of the holders of a majority of the Fund's shares. The Distribution Plan may not be amended to increase materially the amount of permitted distribution expenses without the approval of a majority of the Fund's shares (as defined in "Investment Restrictions") and may not be materially amended in any case without a vote of the Trustees and a majority of the Distribution Plan Qualified Trustees. No Trustee who is not an "interested person" has any financial interest in the Distribution Plan or in any related agreement.
9. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust's Declaration of Trust permits the Trustees of the Trust to issue an unlimited number of full and fractional Shares of Beneficial Interest (without par value) of one or more separate series and to divide or combine the shares of any series into a greater or lesser number of shares without thereby changing the proportionate beneficial interests in that series. The Trustees have currently authorized shares of the two series, the Research Fund and the Equity Fund. The Declaration of Trust further authorizes the Trustees to classify or reclassify any series of shares into one or more classes. The Trustees have no current intention to classify more than one class of shares. Each share of the Fund represents an equal proportionate interest in the assets of the Fund. Upon liquidation of the Fund, shareholders of are entitled to share PRO RATA in the net assets of the Fund available for distribution to shareholders. The Trust reserves the right to create and issue additional series or classes of shares, in which case the shares of each class would participate equally in the earnings, dividends and assets allocable to that class of the particular series.
Shareholders are entitled to one vote for each share held and may vote in the election of Trustees and on other matters submitted to meetings of shareholders. Although Trustees are not elected annually by the shareholders, shareholders have under certain circumstances the right to remove one or more Trustees in accordance with the provisions of Section 16(c) of the 1940 Act. No material amendment may be made to the Declaration of Trust without the affirmative vote of a majority of the Trust's shares. Shares have no pre-emptive or conversion rights. Shares are fully paid and non-assessable. The Trust may enter into a merger or consolidation, or sell all or substantially all of its assets (or all or substantially all of the assets belonging to any series of the Trust), if approved by the vote of the holders of two-thirds of the Trust's outstanding shares voting as a single class, or of the affected series of the Trust, as the case may be, except that if the Trustees of the Trust recommend such merger, consolidation or sale, the approval by vote of the holders of a majority of the Trust's or the affected series' outstanding shares (as defined in "Investment Restrictions") will be sufficient. The Trust or any series of the Trust may also be terminated (i) upon liquidation and distribution of its assets, if approved by the vote of the holders of two-thirds of its outstanding shares, or (ii) by the Trustees by written notice to the shareholders of the Trust of the affected series. If not so terminated, the Trust will continue indefinitely.
The Trust is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a trust may, under certain circumstances, be held personally liable as partners for its obligations. However, the Declaration of Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and provides for indemnification and reimbursement of expenses out of Trust property for any shareholder held personally liable for the obligations of the Trust. The Declaration of Trust also provides that it shall maintain appropriate insurance (for example, fidelity bonding and errors and omissions insurance) for the protection of the Trust, its shareholders, Trustees, officers, employees and agents covering possible tort or other liabilities. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed and the Trust itself was unable to meet its obligations.
The Declaration of Trust further provides that obligations of the Trust are not binding upon the Trustees individually but only upon the property of the Trust and that the Trustees will not be liable for any action or failure to act, but nothing in the Declaration of Trust protects a Trustee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office.
10. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
Deloitte & Touche LLP are the Fund's independent certified public accountants.
APPENDIX A
TRUSTEE COMPENSATION TABLE
TOTAL TRUSTEE FEES
TRUSTEE FEES FROM THE FUND
NAME OF TRUSTEE FROM FUND(1) COMPLEX (2)
-------------------------------------------------- ------------ ------------------
William R. Gutow.................................. $2,500 $3,759
Nelson J. Darling................................. 2,500 3,759
|
NOTES:
(1) Estimated, for fiscal year ended September 30, 1996.
(2) For calendar year 1994. All Trustees served as Trustees of 4 funds within the MFS Fund Complex (having aggregate net assets at December 31, 1994, of approximately $143 million).
INVESTMENT ADVISER
Massachusetts Financial Services Company
500 Boylston Street, Boston, MA 02116
(617) 954-5000
DISTRIBUTOR
MFS Fund Distributors, Inc.
500 Boylston Street, Boston, MA 02116
(617) 954-5000
CUSTODIAN AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
SHAREHOLDER SERVICING AGENT
MFS Service Center, Inc.
500 Boylston Street, Boston, MA 02116
Toll free: (800) 637-8730
MAILING ADDRESS
P.O. Box 1400, Boston, MA 02104-9985
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110
MFS-REGISTERED TRADEMARK- UNION
STANDARD-SM- RESEARCH FUND
500 BOYLSTON STREET
BOSTON, MA 02116
[LOGO]
PORTFOLIO OF INVESTMENTS - September 30, 1994
Common Stocks and Warrants - 98.4%
---------------------------------------------------------------------------------------------------------------------
Issuer Shares Value
---------------------------------------------------------------------------------------------------------------------
Aerospace - 6.7%
Allied Signal, Inc. 12,000 $ 409,500
McDonnell Douglas Co. 5,000 577,500
United Technologies Corp. 8,000 501,000
----------
$ 1,488,000
---------------------------------------------------------------------------------------------------------------------
Agricultural Products - 2.0%
Conagra, Inc. 14,000 $ 441,000
---------------------------------------------------------------------------------------------------------------------
Airlines - 1.2%
Northwest Airlines Co., "A"*<F1> 15,000 $ 271,875
---------------------------------------------------------------------------------------------------------------------
Automotive - 8.3%
Automotive Industries Holdings, Inc., "A"*<F1> 4,000 $ 97,000
Cooper Tire & Rubber Co. 10,000 233,750
Ford Motor Co. 20,000 555,000
General Motors Corp. 10,000 468,750
Harley-Davidson, Inc. 18,000 497,250
----------
$ 1,851,750
---------------------------------------------------------------------------------------------------------------------
Banks and Credit Companies - 2.7%
Citicorp 8,000 $ 340,000
Firstar Corp. 8,000 248,000
----------
$ 588,000
---------------------------------------------------------------------------------------------------------------------
Business Machines - 2.9%
Xerox Corp. 6,000 $ 640,500
---------------------------------------------------------------------------------------------------------------------
Chemicals - 12.6%
du Pont (E.I.) de Nemours & Co. 10,000 $ 580,000
Hercules, Inc. 4,000 411,500
Monsanto Corp. 8,000 643,000
Rohm & Haas Co. 8,000 457,000
Sterling Chemicals, Inc.*<F1> 12,000 162,000
Union Carbide Corp. 16,000 544,000
----------
$ 2,797,500
---------------------------------------------------------------------------------------------------------------------
Consumer Goods and Services - 5.5%
American Greetings Corp., "A" 10,000 $ 288,750
Brunswick Corp. 7,500 150,938
Revco D.S., Inc.*<F1> 26,100 544,836
Sara Lee Corp. 10,000 225,000
----------
$ 1,209,524
---------------------------------------------------------------------------------------------------------------------
Electrical Equipment - 2.4%
General Electric Co. 11,000 $ 529,375
---------------------------------------------------------------------------------------------------------------------
Entertainment - 4.3%
Circus Circus Enterprises, Inc.*<F1> 10,000 $ 222,500
Disney (Walt) Co. 10,000 388,750
Promus Cos., Inc.*<F1> 10,000 336,250
----------
$ 947,500
---------------------------------------------------------------------------------------------------------------------
Forest and Paper Products - 7.2%
Georgia-Pacific Corp. 4,000 $ 306,000
Mead Corp. 7,000 364,000
Scott Paper Co. 8,000 489,000
Temple Inland, Inc. 8,000 442,000
----------
$ 1,601,000
---------------------------------------------------------------------------------------------------------------------
|
PORTFOLIO OF INVESTMENTS - continued
Common Stocks and Warrants - continued
---------------------------------------------------------------------------------------------------------------------
Issuer Shares Value
---------------------------------------------------------------------------------------------------------------------
Machinery - 5.5%
Caterpillar, Inc. 10,000 $ 541,250
Deere & Co., Inc. 10,000 686,250
----------
$ 1,227,500
---------------------------------------------------------------------------------------------------------------------
Medical and Health Products - 2.4%
Johnson & Johnson 5,000 $ 258,125
Merck & Co., Inc. 7,500 266,250
----------
$ 524,375
---------------------------------------------------------------------------------------------------------------------
Metals and Minerals - 5.6%
Allegheny Ludlum Corp. 15,000 $ 322,500
Inland Steel Industries, Inc.*<F1> 7,500 295,313
Phelps Dodge Corp. 10,000 621,250
----------
$ 1,239,063
---------------------------------------------------------------------------------------------------------------------
Oils - 4.7%
Chevron Corp. 10,000 $ 416,250
Mobil Corp. 8,000 633,000
----------
$ 1,049,250
---------------------------------------------------------------------------------------------------------------------
Pollution Control - 2.8%
Browning-Ferris Industries, Inc. 10,000 $ 317,500
USA Waste Services, Inc.*<F1> 20,000 300,000
----------
$ 617,500
---------------------------------------------------------------------------------------------------------------------
Printing and Publishing - 1.1%
Times Mirror Co., "A" 8,000 $ 246,000
---------------------------------------------------------------------------------------------------------------------
Railroads - 4.8%
CSX Corp. 6,000 $ 411,000
Southern Pacific Rail Corp.*<F1> 20,000 375,000
Union Pacific Corp. 5,000 268,125
----------
$ 1,054,125
---------------------------------------------------------------------------------------------------------------------
Special Products and Services - 1.1%
Stanley Works 6,000 $ 243,750
---------------------------------------------------------------------------------------------------------------------
Stores - 2.8%
Federated Department Stores, Inc.*<F1> 10,000 $ 230,000
May Department Stores Co. 10,000 393,750
----------
$ 623,750
---------------------------------------------------------------------------------------------------------------------
Supermarkets - 1.7%
Stop & Shop Cos., Inc.*<F1> 15,000 $ 376,875
---------------------------------------------------------------------------------------------------------------------
Utilities - Electric - 2.2%
CMS Energy Corp. 12,000 $ 261,000
DPL, Inc. 6,000 117,000
Illinova Corp. 6,000 115,500
----------
$ 493,500
---------------------------------------------------------------------------------------------------------------------
Utilities - Gas - 2.8%
Tenneco, Inc. 14,000 $ 617,750
---------------------------------------------------------------------------------------------------------------------
Utilities - Telephone - 5.1%
American Telephone & Telegraph Co. 4,500 $ 243,000
BellSouth Corp. 6,000 334,500
GTE Corp. 2,800 85,050
|
PORTFOLIO OF INVESTMENTS - continued
Common Stocks and Warrants - continued
---------------------------------------------------------------------------------------------------------------------
Issuer Shares Value
---------------------------------------------------------------------------------------------------------------------
Utilities - Telephone - continued
Southwestern Bell Corp. 3,500 $ 148,750
Sprint Corp. 4,000 152,500
US West, Inc. 4,500 174,375
----------
$ 1,138,175
---------------------------------------------------------------------------------------------------------------------
Total Common Stocks and Warrants (Identified Cost, $21,830,603) $21,817,637
---------------------------------------------------------------------------------------------------------------------
Short-Term Obligations - 2.8%
---------------------------------------------------------------------------------------------------------------------
Principal Amount
(000 Omitted)
---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 4.68s, due 10/07/94 $ 300 $ 299,766
Federal Home Loan Mortgage Corp., 4.63s, due 10/03/94 325 324,914
---------------------------------------------------------------------------------------------------------------------
Total Short-Term Obligations, at Amortized Cost $ 624,680
---------------------------------------------------------------------------------------------------------------------
Total Investments (Identified Cost, $22,455,283) $22,442,317
Other Assets, Less Liabilities - (1.2)% (257,869)
---------------------------------------------------------------------------------------------------------------------
Net Assets - 100.0% $22,184,448
---------------------------------------------------------------------------------------------------------------------
------------
<F1>* Non-income producing security.
See notes to financial statements
|
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
--------------------------------------------------------------------------------
September 30, 1994
--------------------------------------------------------------------------------
Assets:
Investments, at value (identified cost, $22,455,283) $ 22,442,317
Receivable for investments sold 423,341
Receivable for Fund shares sold 1,000
Dividends receivable 34,117
Receivable from investment adviser 26,747
Deferred organization expenses 21,569
------------
Total assets $ 22,949,091
------------
Liabilities:
Payable for investments purchased $ 739,862
Payable to affiliates -
Management fee 399
Shareholder servicing agent fee 67
Distribution fee 92
Accrued expenses and other liabilities 24,223
------------
Total liabilities $ 764,643
------------
Net assets $ 22,184,448
------------
Net assets consist of:
Paid-in capital $ 22,214,811
Unrealized depreciation on investments (12,966)
Accumulated net realized loss on investments (170,743)
Accumulated undistributed net investment income 153,346
------------
Total $ 22,184,448
------------
Shares of beneficial interest outstanding 2,301,171
------------
Net asset value, offering price and redemption price per share
(net assets of $22,184,448 / 2,301,171 shares of beneficial
interest outstanding) $ 9.64
------------
|
See notes to financial statements
FINANCIAL STATEMENTS - continued
Statement of Operations
--------------------------------------------------------------------------------
Period Ended September 30, 1994*
--------------------------------------------------------------------------------
Net investment income:
Income -
Dividends $ 219,230
Interest 33,440
----------
Total investment income $ 252,670
----------
Expenses -
Management fee $ 64,457
Trustees' compensation 3,900
Shareholder servicing agent fee 67
Distribution and service fee 14,882
Auditing fees 33,300
Printing 12,476
Legal fees 4,773
Custodian fee 1,440
Postage 200
Amortization of organization expenses 3,471
Miscellaneous 23,029
----------
Total expenses $ 161,995
Reduction of expenses by investment adviser (62,671)
----------
Net expenses $ 99,324
----------
Net investment income $ 153,346
----------
Realized and unrealized loss on investments:
Realized loss (identified cost basis) on investment transactions $ (170,743)
Change in unrealized depreciation on investments (12,966)
----------
Net realized and unrealized loss on investments $ (183,709)
----------
Decrease in net assets from operations $ (30,363)
----------
----------
|
*For the period from the commencement of investment operations, January 14, 1994
to September 30, 1994.
See notes to financial statements
FINANCIAL STATEMENTS - continued
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Period Ended September 30, 1994*
--------------------------------------------------------------------------------
Increase (decrease) in net assets:
From operations -
Net investment income $ 153,346
Net realized loss on investments (170,743)
Net unrealized loss on investments (12,966)
------------
Decrease in net assets from operations $ (30,363)
------------
Fund share transactions -
Net proceeds from sale of shares $ 22,212,350
Cost of shares reacquired (47,539)
------------
Increase in net assets from Fund share transactions $ 22,164,811
------------
Total increase in net assets $ 22,134,448
Net assets:
At beginning of period 50,000
------------
At end of period (including accumulated undistributed net
investment income of $153,346) $ 22,184,448
------------
----------
|
*For the period from the commencement of investment operations, January 14, 1994
to September 30, 1994.
Net asset value - beginning of period $ 10.00
------
Income from investment operations# -
Net investment income++ $ 0.12
Net realized and unrealized loss on investments## (0.48)
------
Total from investment operations $ (0.36)
------
Net asset value - end of period $ 9.64
------
Total return (3.60)%
Ratios (to average net assets)/Supplemental data++:
Expenses 1.00%<F4>
Net investment income 1.55%<F4>
Portfolio turnover 48%
Net assets at end of period (000 omitted) $22,184
----------
|
* For the period from the commencement of investment operations, January 14,
1994 to September 30, 1994.
# Per share data is based on average shares outstanding for the period.
## The per share amount is not in accord with the net realized and unrealized
gain for the period because of the timing of sales of Fund shares and the
amount of per share realized and unrealized gains and losses at such time.
+ Annualized.
++ The investment adviser voluntarily agreed to maintain the expenses of the
Fund at not more than 1.00% of average daily net assets. To the extent
actual expenses were over this limitation, the net investment income per
share and the ratios would have been:
Net investment income $ 0.07 Ratios (to average net assets): Expenses 1.64%+ Net investment income 0.91%+ |
See notes to financial statements
NOTES TO FINANCIAL STATEMENTS
(1) Business and Organization MFS Union Standard Equity Fund (the Fund) is a diversified series of MFS Union Standard Trust (the Trust). The Trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
(2) Significant Accounting Policies Investment Valuations - Equity securities listed on securities exchanges or reported through the NASDAQ system are valued at last sale prices. Unlisted equity securities or listed equity securities for which last sale prices are not available are valued at last quoted bid prices. Short-term obligations, which mature in 60 days or less, are valued at amortized cost, which approximates value. Securities for which there are no such quotations or valuations are valued at fair value as determined in good faith by or at the direction of the Trustees.
Deferred Organization Expenses - Costs incurred by the Fund in connection with its organization have been deferred and are being amortized on a straight-line basis over a five-year period beginning on the date of commencement of operations of the Fund.
Investment Transactions and Income - Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date for dividends received in cash. Dividend payments received in additional securities are recorded on the ex- dividend date in an amount equal to the value of the security on such date.
Tax Matters and Distributions - The Fund's policy is to comply with the provisions of the Internal Revenue Code (the Code) applicable to regulated investment companies and to distribute to shareholders all of its net income, including any net realized gain on investments. Accordingly, no provision for federal income or excise tax is provided. The Fund files a tax return annually using tax accounting methods required under provisions of the Code which may differ from generally accepted accounting principles, the basis on which these financial statements are prepared. Accordingly, the amount of net investment income and net realized gain reported on these financial statements may differ from that reported on the Fund's tax return, and consequently, the character of distributions to shareholders reported in the financial highlights may differ from that reported to shareholders on Form 1099-DIV. Distributions to shareholders are recorded on the ex-dividend date.
The Fund distinguishes between distributions on a tax basis and a financial reporting basis and requires that only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over-distributions for financial statement purposes, are classified as distributions in excess of net investment income or accumulated net realized gains.
(3) Transactions with Affiliates Investment Adviser - The Fund has an investment advisory agreement with Massachusetts Financial Services Company (MFS) to provide overall investment advisory and administrative services, and general office facilities. The management fee, computed daily and paid monthly at an annual rate of 0.65% of average daily net assets, amounted to $64,457 for the period from January 14, 1994 (commencement of investment operations) to September 30, 1994. MFS has agreed to pay until December 31, 1998, expenses of the Fund such that the Fund's aggregate operating expenses shall not exceed, on an annualized basis, 1.00% of the average daily net assets of the Fund. Such payments by MFS are subject to reimbursement by the Fund, which will be accomplished by the payment by the Fund of an expense reimbursement fee to MFS computed and paid monthly at a percentage of its average daily net assets for its then current fiscal year, with a limitation that immediately after such payment, the aggregate operating expenses of the Fund will not exceed, on an annualized basis, 1.00% of its average daily net assets. This expense reimbursement agreement terminates for the Fund on the earlier of the date on which payments made thereunder by the Fund equal the prior payments of such reimbursable expenses by MFS or December 31, 1998. For the period ended September 30, 1994, expenses subject to reimbursement by the Fund to MFS were $62,671.
NOTES TO FINANCIAL STATEMENTS - continued
The Fund pays no compensation directly to its Trustees who are officers of the investment adviser, or to officers of the Fund, all of whom receive remuneration for their services to the Fund from MFS. Certain of the officers and Trustees of the Fund are officers or directors of MFS, MFS Investor Services, Inc. (ISI) and MFS Service Center, Inc. (MFSC).
Distributor - ISI, a wholly owned subsidiary of MFS, is distributor for the Fund. The Trustees have adopted a distribution plan pursuant to Rule 12b-1 of the Investment Company Act of 1940. The distribution plan provides that the Fund will pay ISI up to 0.25% per annum of the Fund's average daily net assets in order that ISI may pay expenses on behalf of the Fund related to the distribution and servicing of its shares. Payments under the distribution plan have been set at 0.15% of average daily net assets for an indefinite period of time. Fees incurred under the distribution plan during the period ended September 30, 1994 amounted to $14,882.
Shareholder Servicing Agent - MFSC, a wholly owned subsidiary of MFS, earned $67 for the period ended September 30, 1994. The fee is calculated based on the number of shareholder accounts which the Fund has had maintained for the period.
(4) Portfolio Securities Purchases and sales of investments, other than U.S. government securities, purchased option transactions and short-term obligations, aggregated $28,549,441 and $6,500,438, respectively.
The cost and unrealized appreciation or depreciation in value of the investments owned by the Fund, as computed on a federal income tax basis, are as follows:
Aggregate cost $22,461,264
----------
Gross unrealized depreciaton $(1,033,994)
Gross unrealized appreciation 1,015,047
----------
Net unrealized depreciation $ (18,947)
----------
|
At September 30, 1994, the Fund, for federal income tax purposes, had a capital loss carry-forward of $164,762, which may be applied against any net taxable realized gains of each succeeding year until the earlier of its utilization or expiration on September 30, 2002.
(5) Shares of Beneficial Interest The Fund's Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in Fund shares were as follows:
Period Ended
September 30, 1994*
---------------------------
Shares Amount
---------------------------------------------------------------------------
Shares sold 2,301,136 $22,212,350
Shares reacquired (4,965) (47,539)
-------- ----------
Net increase 2,296,171 $22,164,811
-------- ----------
-------- ----------
----------
|
* For the period from January 14, 1994 (commencement of investment operations) to September 30, 1994.
NOTES TO FINANCIAL STATEMENTS - continued
(6) Financial Instruments The Fund may trade financial instruments with off-balance sheet risk in the normal course of its investing activities in order to manage exposure to market risks such as interest rates. These financial instruments include written options and futures contracts. The notional or contractual amounts of these instruments represent the investment the Fund has in particular classes of financial instruments and does not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. No such financial instruments were held by the Fund at September 30, 1994.
INDEPENDENT AUDITORS' REPORT
To the Trustees of MFS Union Standard Trust and Shareholders of MFS Union
Standard Equity Fund:
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of MFS Union Standard Equity Fund (one of the series constituting MFS Union Standard Trust) as of September 30, 1994, and the related statement of operations, statement of changes in net assets, and financial highlights for the period from January 14, 1994 (the commencement of investment operations) through September 30, 1994. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at September 30, 1994 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of MFS Union Standard Equity Fund at September 30, 1994, the results of its operations, the changes in its net assets, and its financial highlights for the stated period in conformity with generally accepted accounting principles.
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS ON BEHALF OF MFS UNION STANDARD RESEARCH FUND
Included in Part A of this Registration Statement:
None
Included in Part B of this Registration Statement:
None
(b) EXHIBITS ON BEHALF OF MFS UNION STANDARD RESEARCH FUND
1 (a) Declaration of Trust dated September 1, 1993; filed herewith.
(b) Amendment to Declaration of Trust-Designation of Series dated September 1, 1993; filed herewith.
(c) Amendment to Declaration of Trust - Abolishment of MFS Union Standard Fixed Income Fund, a series of Shares of Beneficial Interest and Establishment and Designation of MFS Union Standard Research Fund, a series of Shares of Beneficial Interest, dated August 29, 1995; filed herewith.
2 By-Laws, dated September 1, 1993; filed herewith.
3 Not Applicable.
4 Form of Share Certificate. (4)
5 (a) Investment Advisory Agreement by and between MFS Union Standard Trust on behalf of MFS Union Standard Equity Fund and Massachusetts Financial Services Company dated December 8, 1993; filed herewith.
(b) Form of Investment Advisory Agreement by and between MFS Union Standard Trust on behalf of MFS Union Standard Research Fund and Massachusetts Financial Services Company dated November 15, 1995; filed herewith.
6 Distribution Agreement dated December 8, 1993; filed
herewith.
7 Not Applicable.
|
8 (a) Custodian Agreement between Registrant and State Street Bank and Trust Company dated December 8, 1993. (1)
(b) Amendment to the Custodian Agreement dated December 8, 1993; filed herewith.
(c) Form of Amendment to Custodian Contract dated November 15, 1995; filed herewith.
9 (a) Form of Amended and Restated Shareholder Servicing Agent Agreement between Registrant and MFS Service Center dated November 15, 1995; filed herewith.
(b) Proxy Services Agreement between Massachusetts Financial Services Company and American Capital Strategies Ltd., dated December 8, 1993. (1)
(c) Dividend Disbursing Agency Agreement between Registrant and State Street Bank and Trust Company dated December 8, 1993; filed herewith.
10 24f-2 Opinion and Consent of Counsel was filed with the Securities and Exchange Commission on November 29, 1994.
11 Consent of Deloitte & Touche for MFS Union Standard Equity Fund. (2).
12 Not Applicable.
13 Investment Representation Letter dated November 19, 1993;
filed herewith.
14 Not Applicable.
|
15 (a) Distribution Plan for MFS Union Standard Equity Fund dated December 8, 1993; filed herewith.
(b) Form of Distribution Plan for MFS Union Standard Research Fund dated November 15, 1995; filed herewith.
16 Schedule of Computation for Performance Quotations - Total Return. (3)
17 Not Applicable.
18 Not Applicable.
Power of Attorney dated August 12, 1994; filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
MFS UNION STANDARD EQUITY FUND
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of Beneficial Interest 19
(without part value) (as of August 30, 1995)
|
MFS UNION STANDARD RESEARCH FUND
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of Beneficial Interest 0
(without part value) (as of August 30, 1995)
|
ITEM 27. INDEMNIFICATION
Section 5.3 of the Registrant's Declaration of Trust provides that every person who is or has been a Trustee or officer of the Registrant shall be indemnified by the Registrant 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. However, Section 5.3 further provides that no indemnification shall be provided to a Trustee or officer:
(i) against any liability to the Registrant or the shareholders of the Registrant 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 Registrant; or
(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 (i) or (ii) above 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 by 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 (as defined below) 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.
The term "Disinterested Trustee" is defined as one who is not an interested person of the Registrant and 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.
Expenses of preparation and presentation of a defense to any claim, action, suit, or proceeding of the character described in Section 5.3 of the Registrant's Declaration of Trust shall be advanced by the Registrant 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 Section 5.3, provided that either:
(i) such undertaking is secured by a surety bond or some other appropriate security or the Registrant 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.
Section 9 of the Shareholder Servicing Agent Agreement between the
Registrant and MFS Service Center, Inc. ("MFSC") specifies that the Registrant
will indemnify MFSC against and hold MFSC harmless from any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit not resulting from
MFSC's bad faith or negligence, and arising out of, or in connection with,
MFSC's duties on behalf of the Registrant under such Agreement. In addition,
Section 9 provides that the Registrant will indemnify MFSC against and hold MFSC
harmless from any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any claim,
demand, action or suit as a result of MFSC acting in accordance with any
instructions reasonably believed by MFSC to have been executed or orally
communicated by any person duly authorized by the Registrant or its principal
underwriter, or as a result of acting in accordance with written or oral advice
reasonably believed by MFSC to have been given by counsel for the Registrant, or
as a result of acting in accordance with any instrument or share certificate
reasonably believed by MFSC to have been genuine and signed, countersigned or
executed by any person or persons authorized to sign, countersign or execute the
same (unless contributed to by MFSC's gross negligence or bad faith).
The Trustees and officers of the Registrant and the personnel of the Registrant's investment adviser and distributor will be insured as of the effective date of this Registration Statement under an errors and omissions liability insurance policy. The Registrant and its officers are also insured under the fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940, as amended.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
MFS serves as investment adviser to the following open-end Funds
comprising the MFS Family of Funds: Massachusetts Investors Trust,
Massachusetts Investors Growth Stock Fund, MFS Growth Opportunities Fund, MFS
Government Securities Fund, MFS Government Limited Maturity Fund, MFS Series
Trust I (which has three series: MFS Managed Sectors Fund, MFS Cash Reserve Fund
and MFS World Asset Allocation Fund), MFS Series Trust II (which has four
series: MFS Emerging Growth Fund, MFS Capital Growth Fund, MFS Intermediate
Income Fund and MFS Gold & Natural Resources Fund), MFS Series Trust III (which
has two series: MFS High Income Fund and MFS Municipal High Income Fund), MFS
Series Trust IV (which has four series: MFS Money Market Fund, MFS Government
Money Market Fund, MFS Municipal Bond Fund and MFS OTC Fund), MFS Series Trust V
(which has two series: MFS Total Return Fund and MFS Research Fund), MFS Series
Trust VI (which has three series: MFS World Total Return Fund, MFS Utilities
Fund and MFS World Equity Fund), MFS Series Trust VII (which has two series: MFS
World Governments Fund and MFS Value Fund), MFS Series Trust VIII (which has two
series: MFS Strategic Income Fund and MFS World Growth Fund), MFS Series Trust
IX (which has three series: MFS Bond Fund, MFS Limited Maturity Fund and MFS
Municipal Limited Maturity Fund), MFS Series Trust X (which has four series:
MFS Government Mortgage Fund, MFS/Foreign & Colonial Emerging Markets Equity
Fund, MFS/Foreign and Colonial International Growth Fund and MFS/Foreign and
Colonial International Growth & Income Fund), and MFS Municipal Series Trust
(which has 19
series: MFS Alabama Municipal Bond Fund, MFS Arkansas Municipal Bond Fund, MFS California Municipal Bond Fund, MFS Florida Municipal Bond Fund, MFS Georgia Municipal Bond Fund, MFS Louisiana Municipal Bond Fund, MFS Maryland Municipal Bond Fund, MFS Massachusetts Municipal Bond Fund, MFS Mississippi Municipal Bond Fund, MFS New York Municipal Bond Fund, MFS North Carolina Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS South Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond Fund, MFS Texas Municipal Bond Fund, MFS Virginia Municipal Bond Fund, MFS Washington Municipal Bond Fund, MFS West Virginia Municipal Bond Fund and MFS Municipal Income Fund) (the "MFS Funds"). The principal business address of each of the aforementioned Funds is 500 Boylston Street, Boston, Massachusetts 02116.
MFS also serves as investment adviser of the following no-load, open- end Funds: MFS Institutional Trust ("MFSIT") (which has seven series), MFS Variable Insurance Trust ("MVI") (which has twelve series) and MFS Union Standard Trust ("UST") (which has two series). The principal business address of each of the aforementioned Funds is 500 Boylston Street, Boston, Massachusetts 02116.
In addition, MFS serves as investment adviser to the following closed- end Funds: MFS Municipal Income Trust, MFS Multimarket Income Trust, MFS Government Markets Income Trust, MFS Intermediate Income Trust, MFS Charter Income Trust and MFS Special Value Trust (the "MFS Closed-End Funds"). The principal business address of each of the aforementioned Funds is 500 Boylston Street, Boston, Massachusetts 02116.
Lastly, MFS serves as investment adviser to MFS/Sun Life Series Trust ("MFS/SL"), Sun Growth Variable Annuity Funds, Inc. ("SGVAF"), Money Market Variable Account, High Yield Variable Account, Capital Appreciation Variable Account, Government Securities Variable Account, World Governments Variable Account, Total Return Variable Account and Managed Sectors Variable Account. The principal business address of each is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02181.
MFS International Ltd. ("MIL"), a limited liability company organized under the laws of the Republic of Ireland and a subsidiary of MFS, whose principal business address is 41-45 St. Stephen's Green, Dublin 2, Ireland, serves as investment adviser to and distributor for MFS International Fund (which has four portfolios: MFS International Funds-U.S. Equity Fund, MFS International Funds-U.S. Emerging Growth Fund, MFS International Funds- International Government Fund and MFS International Funds-Charter Income Fund) (the "MIL Funds"). The MIL Funds are organized in Luxembourg and qualify as an undertaking for collective investments in transferable securities (UCITS). The principal business address of the MIL Funds is 47, Boulevard Royal, L-2449 Luxembourg.
MIL also serves as investment adviser to and distributor for MFS Meridian U.S. Government Bond Fund, MFS Meridian Charter Income Fund, MFS Meridian Global Government Fund, MFS Meridian U.S. Emerging Growth Fund, MFS Meridian Global Equity Fund, MFS Meridian Limited Maturity Fund, MFS Meridian World Growth Fund, MFS Meridian Money Market Fund, MFS Meridian World Total Return Fund and MFS Meridian U.S.
Equity Fund (collectively the "MFS Meridian Funds"). Each of the MFS Meridian Funds is organized as an exempt company under the laws of the Cayman Islands. The principal business address of each of the MFS Meridian Funds is P.O. Box 309, Grand Cayman, Cayman Islands, British West Indies.
MFS International (U.K.) Ltd. ("MIL-UK"), a private limited company registered with the Registrar of Companies for England and Wales whose current address is 4 John Carpenter Street, London, England ED4Y 0NH, is involved primarily in marketing and investment research activities with respect to private clients and the MIL Funds and the MFS Meridian Funds.
MFS Fund Distributors, Inc. ("MFD"), a wholly owned subsidiary of MFS, serves as distributor for the MFS Funds, MVI, UST and MFSIT.
Clarendon Insurance Agency, Inc. ("CIAI"), a wholly owned subsidiary of MFS, serves as distributor for certain life insurance and annuity contracts issued by Sun Life Assurance Company of Canada (U.S.).
MFS Service Center, Inc. ("MFSC"), a wholly owned subsidiary of MFS, serves as shareholder servicing agent to the MFS Funds, the MFS Closed-End Funds, MFSIT, MVI and UST.
MFS Asset Management, Inc. ("AMI"), a wholly owned subsidiary of MFS, provides investment advice to substantial private clients.
MFS Retirement Services, Inc. ("RSI"), a wholly owned subsidiary of MFS, markets MFS products to retirement plans and provides administrative and record keeping services for retirement plans.
MFS
The Directors of MFS are A. Keith Brodkin, Jeffrey L. Shames, Arnold D. Scott, John R. Gardner and John D. McNeil. Mr. Brodkin is the Chairman, Mr. Shames is the President, Mr. Scott is a Senior Executive Vice President and Secretary, Bruce C. Avery, William S. Harris, William W. Scott, Jr., and Patricia A. Zlotin are Executive Vice Presidents, James E. Russell is a Senior Vice President and the Treasurer, Stephen E. Cavan is a Senior Vice President, General Counsel and an Assistant Secretary, Joseph W. Dello Russo is a Senior Vice President and Chief Financial Officer, Robert T. Burns is a Vice President and an Assistant Secretary of MFS, and Mary Kay Doherty is a Vice President and Assistant Treasurer.
MASSACHUSETTS INVESTORS TRUST
MASSACHUSETTS INVESTORS GROWTH STOCK FUND
MFS GROWTH OPPORTUNITIES FUND
MFS GOVERNMENT SECURITIES FUND
MFS SERIES TRUST I
MFS SERIES TRUST V
MFS SERIES TRUST VI
MFS SERIES TRUST X
MFS GOVERNMENT LIMITED MATURITY FUND
A. Keith Brodkin is the Chairman and President, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost, Vice President of MFS, is the Assistant Treasurer, James R. Bordewick, Jr., Vice President and Associate General Counsel of MFS, is the Assistant Secretary.
MFS SERIES TRUST II
A. Keith Brodkin is the Chairman and President, Leslie J. Nanberg, Senior Vice President of MFS, is a Vice President, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer, and James R. Bordewick, Jr., is the Assistant Secretary.
MFS GOVERNMENT MARKETS INCOME TRUST
MFS INTERMEDIATE INCOME TRUST
A. Keith Brodkin is the Chairman and President, Patricia A. Zlotin, Executive Vice President of MFS and Leslie J. Nanberg, Senior Vice President of MFS, are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer, and James R. Bordewick, Jr., is the Assistant Secretary.
MFS SERIES TRUST III
A. Keith Brodkin is the Chairman and President, James T. Swanson, Robert J. Manning, Cynthia M. Brown and Joan S. Batchelder, Senior Vice Presidents of MFS, Bernard Scozzafava, Vice President of MFS, and Matthew Fontaine, Assistant Vice President of MFS, are Vice Presidents, Sheila Burns- Magnan and Daniel E. McManus, Assistant Vice Presidents of MFS, are Assistant Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer, and James R. Bordewick, Jr., is the Assistant Secretary.
MFS SERIES TRUST IV
MFS SERIES TRUST IX
A. Keith Brodkin is the Chairman and President, Robert A. Dennis and Geoffrey L. Kurinsky, Senior Vice Presidents of MFS, are Vice Presidents, Stephen E. Cavan is the
Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
MFS SERIES TRUST VII
A. Keith Brodkin is the Chairman and President, Leslie J. Nanberg and Stephen C. Bryant, Senior Vice Presidents of MFS, are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
MFS SERIES TRUST VIII
A. Keith Brodkin is the Chairman and President, Jeffrey L. Shames, Leslie J. Nanberg, Patricia A. Zlotin, James T. Swanson and John D. Laupheimer, Jr., Vice President of MFS, are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
MFS MUNICIPAL SERIES TRUST
A. Keith Brodkin is the Chairman and President, Cynthia M. Brown and Robert A. Dennis are Vice Presidents, David B. Smith, Geoffrey L. Schechter and David R. King, Vice Presidents of MFS, are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
MFS VARIABLE INSURANCE TRUST
MFS UNION STANDARD TRUST
MFS INSTITUTIONAL TRUST
A. Keith Brodkin is the Chairman and President, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
MFS MUNICIPAL INCOME TRUST
A. Keith Brodkin is the Chairman and President, Cynthia M. Brown and Robert J. Manning are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost, is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
MFS MULTIMARKET INCOME TRUST
MFS CHARTER INCOME TRUST
A. Keith Brodkin is the Chairman and President, Patricia A. Zlotin, Leslie J. Nanberg and James T. Swanson are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost, Vice President of MFS, is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
MFS SPECIAL VALUE TRUST
A. Keith Brodkin is the Chairman and President, Jeffrey L. Shames, Patricia A. Zlotin and Robert J. Manning are Vice Presidents, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, and James O. Yost, is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary.
SGVAF
W. Thomas London is the Treasurer.
MIL
A. Keith Brodkin is a Director and the Chairman, Arnold D. Scott and Jeffrey L. Shames are Directors, Ziad Malek, Senior Vice President of MFS, is the President, Thomas J. Cashman, Jr., a Senior Vice President of MFS, is a Senior Vice President, Stephen E. Cavan is a Director, Senior Vice President and the Clerk, James R. Bordewick, Jr. is a Director, Vice President and an Assistant Clerk, Robert T. Burns is an Assistant Clerk, Joseph W. Dello Russo is the Treasurer and James E. Russell is the Assistant Treasurer.
MIL-UK
A. Keith Brodkin is a Director and the Chairman, Arnold D. Scott, Jeffrey L. Shames, and James R. Bordewick, Jr., are Directors, Stephen E. Cavan is a Director and the Secretary, Ziad Malek is the President, Joseph W. Dello Russo is the Treasurer, and Robert T. Burns is the Assistant Secretary.
MIL FUND
A. Keith Brodkin is the Chairman, President and a Director, Richard B. Bailey, John A. Brindle and Richard W. S. Baker are Directors, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James O. Yost is the Assistant Treasurer and James R. Bordewick, Jr., is the Assistant Secretary, and Ziad Malek is a Senior Vice President.
MFS MERIDIAN FUND
A. Keith Brodkin is the Chairman, President and a Director, Richard B. Bailey, John A. Brindle, Richard W. S. Baker, Arnold D. Scott and Jeffrey L. Shames are Directors, Stephen E. Cavan is the Secretary, W. Thomas London is the Treasurer, James R. Bordewick, Jr., is the Assistant Secretary, James O. Yost is the Assistant Treasurer, and Ziad Malek is a Senior Vice President.
MFD
A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and Jeffrey L. Shames are Directors, William W. Scott, Jr., an Executive Vice President of MFS, is the President, Stephen E. Cavan is the Secretary, Robert T. Burns is the Assistant Secretary, Joseph W. Dello Russo is the Treasurer, and James E. Russell is the Assistant Treasurer.
CIAI
A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and Jeffrey L. Shames are Directors, Cynthia Orcott is President, Bruce C. Avery is the Vice President, Joseph W. Dello Russo is the Treasurer, James E. Russell is the Assistant Treasurer, Stephen E. Cavan is the Secretary, and Robert T. Burns is the Assistant Secretary.
MFSC
A. Keith Brodkin is the Chairman and a Director, Arnold D. Scott and Jeffrey L. Shames are Directors, Joseph A. Recomendes, a Senior Vice President of MFS, is Vice Chairman and a Director, Janet A. Clifford is the Executive Vice President, Joseph W. Dello Russo is the Treasurer, James E. Russell is the Assistant Treasurer, Stephen E. Cavan is the Secretary, and Robert T. Burns is the Assistant Secretary.
AMI
A. Keith Brodkin is the Chairman and a Director, Jeffrey L. Shames, and Arnold D. Scott are Directors, Thomas J. Cashman, Jr., is the President and a Director, Leslie J. Nanberg is a Senior Vice President, a Managing Director and a Director, Carol A. Corley, John A. Gee and Brianne Grady are Senior Vice Presidents and Managing Directors, Joseph W. Dello Russo is the Treasurer, James E. Russell is the Assistant Treasurer and Robert T. Burns is the Secretary.
RSI
William W. Scott, Jr., Joseph A. Recomendes and Bruce C. Avery are Directors, Arnold D. Scott is the Chairman and a Director, Douglas C. Grip, a Senior Vice President of MFS, is the President, Joseph W. Dello Russo is the Treasurer, James E. Russell is the Assistant Treasurer, Stephen E. Cavan is the Secretary, Robert T. Burns is the Assistant Secretary and Sharon A. Brovelli is a Senior Vice President.
In addition, the following persons, Directors or officers of MFS, have the affiliations indicated:
A. Keith Brodkin Director, Sun Life Assurance Company of
Canada (U.S.), One Sun Life Executive Park,
Wellesley Hills, Massachusetts
Director, Sun Life Insurance and Annuity
Company of New York, 67 Broad Street,
New York, New York
John R. Gardner President and a Director, Sun Life Assurance
Company of Canada, Sun Life Centre, 150 King
Street West, Toronto, Ontario, Canada (Mr.
Gardner is also an officer and/or Director
of various subsidiaries and affiliates of
Sun Life)
John D. McNeil Chairman, Sun Life Assurance Company of
Canada, Sun Life Centre, 150 King Street
West, Toronto, Ontario, Canada (Mr. McNeil
is also an officer and/or Director of
various subsidiaries and affiliates of Sun
Life)
Joseph W. Dello Russo Director of Mutual Fund Operations, The
Boston Company, Exchange Place, Boston,
Massachusetts (until August, 1994)
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ITEM 29. DISTRIBUTORS
(a) Reference is hereby made to Item 28 above.
(b) Reference is hereby made to Item 28 above; the principal business address of each of these persons is 500 Boylston Street, Boston, Massachusetts 02116.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts and records of the Registrant are located, in whole or in part, at the
office of the Registrant and the following locations:
NAME ADDRESS
---- -------
Massachusetts Financial 500 Boylston Street
Services Company Boston, MA 02116
MFS Distributors, Inc. 500 Boylston Street
Boston, MA 02116
State Street Bank and State Street South
Trust Company 5-West
North Quincy, MA 02171
MFS Service Center, Inc. 500 Boylston Street
Boston, MA 02116
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The Registrant's corporate documents are kept by the Registrant at its offices. Portfolio brokerage orders, other purchase orders, reasons for brokerage allocation and lists of persons authorized to transact business for the Registrant are kept by Massachusetts Financial Services Company at 500 Boylston Street, Boston, Massachusetts 02116. Shareholder account records are kept by MFS Service Center, Inc. at 500 Boylston Street, Boston, Massachusetts 02116. Transaction journals, receipts for the acceptance and delivery of securities and cash, ledgers and trial balances are kept by State Street Bank and Trust Company at State Street South, 5-West, North Quincy, Massachusetts 02171.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective amendment on behalf of the Research Fund, using financial statements which need not be certified, within four to six months from the effective date of the commencement of investment operations of the Research Fund.
(c) The registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest annual report to shareholders upon request and without charge.
(d) Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the provisions set forth in Item 27 of this Part C, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being Registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Post- Effective Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Boston and The Commonwealth of Massachusetts on the 30th day of August, 1995.
MFS UNION STANDARD TRUST
Title: Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this Post- Effective Amendment to its Registration Statement has been signed below by the following persons in the capacities indicated on August 30, 1995.
SIGNATURE TITLE
--------- -----
A. KEITH BRODKIN* Chairman, President (Principal
------------------------- Executive Officer) and Trustee
A. Keith Brodkin
W. THOMAS LONDON* Treasurer (Principal Financial Officer
------------------------- and Principal Accounting Officer)
W. Thomas London
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as Attorney-in-fact
Executed by James R. Bordewick, Jr.
on behalf of those indicated pursuant
to a Power of Attorney dated
August 12, 1994.
POWER OF ATTORNEY
MFS Union Standard Trust
The undersigned, Trustees and officers of MFS Union Standard Trust (the "Registrant"), hereby severally constitute and appoint A. Keith Brodkin, W. Thomas London, Stephen E. Cavan and James R. Bordewick, Jr., and each of them singly, as true and lawful attorneys, with full power to them and each of them to sign for each of the undersigned, in the names of, and in the capacities indicated below, any Registration Statement and any and all amendments thereto and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission for the purpose of registering the Registrant as a management investment company under the Investment Company Act of 1940 and/or the shares issued by the Registrant under the Securities Act of 1933 granting unto our said attorneys, and each of them, acting alone, full power and authority to do and perform each and every act and thing requisite or necessary or desirable to be done in the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys or any of them may lawfully do or cause to be done by virtue thereof.
In WITNESS WHEREOF, the undersigned have hereunto set their hand on this 12th day of August, 1994.
Signatures Title(s) ---------- --------- A. KEITH BRODKIN Chairman of the Board; ---------------------- Trustee; and Principal A. Keith Brodkin Executive Officer NELSON J. DARLING, JR. Trustee ---------------------- Nelson J. Darling, Jr. WILLIAM R. GUTOW Trustee ---------------------- William R. Gutow W. THOMAS LONDON Principal Financial and Accounting ---------------------- Officer W. Thomas London |
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
----------- ---------------------- --------
1 (a) Declaration of Trust dated September 1, 1993.
(b) Amendment to Declaration of Trust-Designation of
Series dated September 1, 1993.
(c) Amendment to Declaration of Trust - Abolishment of
MFS Union Standard Fixed Income Fund, a series of
Shares of Beneficial Interest and Establishment and
Designation of MFS Union Standard Research Fund, a
series of Shares of Beneficial Interest, dated
August 29, 1995.
2 By-Laws, dated September 1, 1993.
5 (a) Investment Advisory Agreement by and between MFS
Union Standard Trust on behalf of MFS Union Standard
Equity Fund and Massachusetts Financial Services
Company dated December 8, 1993.
(b) Form of Investment Advisory Agreement by and between
MFS Union Standard Trust on behalf of MFS Union
Standard Research Fund and Massachusetts Financial
Services Company dated November 15, 1995.
6 Distribution Agreement dated December 8, 1993.
8 (b) Amendment to the Custodian Agreement dated
December 8, 1993.
8 (c) Form of Amendment to Custodian Contract dated
November 15, 1995.
9 (a) Form of Amended and Restated Shareholder Servicing
Agent Agreement between Registrant and MFS Service
Center dated November 15, 1995.
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EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
----------- ---------------------- --------
(c) Dividend Disbursing Agency Agreement between
Registrant and State Street Bank and Trust Company
dated December 8, 1993.
13 Investment Representation Letter dated
November 19, 1993.
15 (a) Distribution Plan for MFS Union Standard Equity Fund
dated December 8, 1993.
(b) Form of Distribution Plan for MFS Union Standard
Research Fund dated November 15, 1995.
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EXHIBIT 1a
MFS UNION STANDARD TRUST
DECLARATION OF TRUST
DATED SEPTEMBER 1, 1993
TABLE OF CONTENTS
Page
----
ARTICLE I--NAME AND DEFINITIONS:
Section 1.1. Name . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II--TRUSTEES:
Section 2.1 Number of Trustees . . . . . . . . . . . . . . . . . . . 3
Section 2.2. Term of Office of Trustees . . . . . . . . . . . . . . . 3
Section 2.3. Resignation and Appointment of Trustees. . . . . . . . . 3
Section 2.4. Vacancies. . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.5. Delegation of Power to Other Trustees. . . . . . . . . . 4
ARTICLE III--POWERS OF TRUSTEES:
Section 3.1. General. . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2. Investments. . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.3. Legal Title. . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.4. Issuance and Repurchase of Securities. . . . . . . . . . 5
Section 3.5. Borrowing Money; Lending Trust Property. . . . . . . . . 5
Section 3.6. Delegation; Committees . . . . . . . . . . . . . . . . . 6
Section 3.7. Collection and Payment . . . . . . . . . . . . . . . . . 6
Section 3.8. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.9. Manner of Acting; By-Laws. . . . . . . . . . . . . . . . 6
Section 3.10. Miscellaneous Powers . . . . . . . . . . . . . . . . . . 6
Section 3.11. Principal Transactions . . . . . . . . . . . . . . . . . 7
Section 3.12. Trustees and Officers as Shareholders. . . . . . . . . . 7
ARTICLE IV--INVESTMENT ADVISER, DISTRIBUTOR AND TRANSFER AGENT:
Section 4.1. Investment Adviser . . . . . . . . . . . . . . . . . . . 7
Section 4.2. Distributor. . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.3. Transfer Agent . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4. Parties to Contract. . . . . . . . . . . . . . . . . . . 8
ARTICLE V--LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS:
Section 5.1. No Personal Liability of Shareholders, Trustees, etc.. . 9
Section 5.2. Non-Liability of Trustees, etc.. . . . . . . . . . . . . 9
Section 5.3. Mandatory Indemnification. . . . . . . . . . . . . . . . 9
Section 5.4. No Bond Required of Trustees . . . . . . . . . . . . . .11
Section 5.5. No Duty of Investigation; Notice in Trust
Instruments, etc. . . . . . . . . . . . . . . . . .11
Section 5.6. Reliance on Experts, etc.. . . . . . . . . . . . . . . .11
I
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TABLE OF CONTENTS
Page
----
ARTICLE VI--SHARES OF BENEFICIAL INTEREST:
Section 6.1. Beneficial Interest. . . . . . . . . . . . . . . . . . .11
Section 6.2. Rights of Shareholders . . . . . . . . . . . . . . . . .12
Section 6.3. Trust Only . . . . . . . . . . . . . . . . . . . . . . .12
Section 6.4. Issuance of Shares . . . . . . . . . . . . . . . . . . .12
Section 6.5. Register of Shares . . . . . . . . . . . . . . . . . . .12
Section 6.6. Transfer of Shares . . . . . . . . . . . . . . . . . . .12
Section 6.7. Notices. . . . . . . . . . . . . . . . . . . . . . . . .13
Section 6.8. Voting Powers. . . . . . . . . . . . . . . . . . . . . .13
Section 6.9. Series Designation . . . . . . . . . . . . . . . . . . .13
Section 6.10. Class Designation. . . . . . . . . . . . . . . . . . . .15
ARTICLE VII--REDEMPTIONS:
Section 7.1. Redemption of Shares . . . . . . . . . . . . . . . . . .16
Section 7.2. Price. . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 7.3. Payment. . . . . . . . . . . . . . . . . . . . . . . . .16
Section 7.4. Effect of Suspension of Determination of Net Asset
Value. . . . . . . . . . . . . . . . . . . . . . . .16
Section 7.5. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. . . . . .16
Section 7.6. Suspension of Right to Redemption. . . . . . . . . . . .17
ARTICLE VIII--DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS:17
ARTICLE IX--DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.:
Section 9.1. Duration . . . . . . . . . . . . . . . . . . . . . . . .18
Section 9.2. Termination of Trust . . . . . . . . . . . . . . . . . .18
Section 9.3. Amendment Procedure. . . . . . . . . . . . . . . . . . .19
Section 9.4. Merger, Consolidation and Sale of Assets . . . . . . . .19
Section 9.5. Incorporation and Reorganization . . . . . . . . . . . .20
Section 9.6. Incorporation or Reorganization of Series. . . . . . . .20
ARTICLE X--REPORTS TO SHAREHOLDERS AND SHAREHOLDER COMMUNICATIONS: . . . . .20
ARTICLE XI--MISCELLANEOUS:
Section 11.1. Filing . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 11.2. Governing Law. . . . . . . . . . . . . . . . . . . . . .21
Section 11.3. Counterparts . . . . . . . . . . . . . . . . . . . . . .21
Section 11.4. Reliance By Third Parties. . . . . . . . . . . . . . . .22
Section 11.5. Provisions in Conflict with Law or Regulations . . . . .22
SIGNATURE PAGE AND ADDRESSES:. . . . . . . . . . . . . . . . . . . . . . . .23
NOTARY:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
II
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DECLARATION OF TRUST
OF
MFS UNION STANDARD TRUST
Dated September 1, 1993
DECLARATION OF TRUST, made September 1, 1993, 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 (without par value) issued in one or more series, as hereinafter provided; and
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 (without par value) 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 Union Standard Trust", the current address of which is 500 Boylston Street, Boston, Massachusetts 02116.
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) "COMMISSION" has the meaning given that term 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", "HEREOF", "HEREIN", and "HEREUNDER" shall be deemed to refer to this Declaration rather than the article or section in which such words appear.
(d) "DISTRIBUTOR" means the party, other than the Trust, to the contract described in Section 4.2 hereof.
(e) "INTERESTED PERSON" has the meaning given that term in the 1940 Act.
(f) "INVESTMENT ADVISER" means a party furnishing services to the Trust pursuant to any contract described in Section 4.1 hereof.
(g) "MAJORITY SHAREHOLDER VOTE" has the same meaning as the phrase "vote of a majority of the outstanding voting securities" as defined in the 1940 Act, except that such term may be used herein with respect to the Shares of the Trust as a whole or the Shares of any particular series or class, as the context may require.
(h) "1940 ACT" means the Investment Company Act of 1940 and the Rules and Regulation thereunder, as amended from time to time.
(i) "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.
(j) "SHAREHOLDER" means a record owner of outstanding Shares.
(k) "SHARES" means the Shares of Beneficial Interest into which the beneficial interest in the Trust shall be divided from time to time or, when used in relation to any particular series or class of Shares established by the Trustees pursuant to Section 6.9 or Section 6.10 hereof, respectively, equal proportionate transferable units into which such series or class of Shares shall be divided from time to time. The term "Shares" includes fractions of Shares as well as whole Shares.
(l) "TRANSFER AGENT" means the party, other than the Trust, to a contract described in Section 4.3 hereof.
(m) "TRUST" means the trust created hereby.
(n) "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, including, without limitation, any and all property allocated or belonging to any series of Shares pursuant to Section 6.9 hereof.
(o) "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 or appointed, 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.
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.
SECTION 2.2. TERM OF OFFICE OF TRUSTEES. Subject to the provisions of
Section 16(a) of the 1940 Act, the Trustees shall hold office during the
lifetime of this Trust and until its termination as hereinafter provided; except
(a) that any Trustee may resign his trust (without need for prior or subsequent
accounting) by an instrument in writing signed by him and delivered to the other
Trustees, which shall take effect upon such delivery or upon such later date as
is specified therein; (b) that any Trustee may be removed (provided the
aggregate number of Trustees after such removal shall not be less than the
number required by Section 2.1 hereof) with cause, at any time by written
instrument, signed by at least two-thirds of the remaining Trustees, specifying
the date when such removal shall become effective; (c) that any Trustee who
requests in writing to be retired or who has become incapacitated by illness or
injury may be retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may be
removed at any meeting of Shareholders by a vote of two-thirds of the
outstanding Shares of the Trust. 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 incapacity of any of the Trustees, or in case a vacancy shall, by reason of an increase in number, or for any other reason, exist, the remaining Trustees shall fill such vacancy by appointing such other person as they in their discretion shall see fit. Such appointment shall be evidenced by a written instrument signed by a majority of the Trustees in office. Any such appointment shall not become effective, however, until the person named in the written instrument of appointment shall have accepted in writing such appointment and agreed in writing to be bound by the terms of the Declaration. An appointment of a Trustee may be made by the Trustees then in office 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.
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 months at any one time to any other Trustee or Trustees; provided that in no case shall less than two 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 the 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 U.S. and foreign currencies, any form of gold and other precious metals, commodity contracts, options, contracts for the future acquisition or delivery of fixed income or other securities, and securities of every nature and kind, including, without limitation, all types of bonds, debentures, stocks, negotiable or non-negotiable instruments, obligations, evidences 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 political subdivision, agency or instrumentality of
any such Person, or by the U.S. Government, any foreign government, any political subdivision or any agency or instrumentality of the U.S. Government, any foreign government or any political subdivision of the U.S. Government or any foreign government, or any international instrumentality, or by any bank or savings institution, 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, to 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 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, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject to the provisions set forth in Articles VII, VIII and IX and Section 6.9 hereof, to apply to any such repurchase, redemption, retirement, cancellation or acquisition of Shares any funds of the Trust or other Trust Property whether capital or surplus or otherwise, to the full extent now or hereafter permitted by 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 Trust Property, 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. Subject to Section 6.9 hereof, 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 any property is owed to the Trust; and to enter into releases, agreements and other instruments.
SECTION 3.8. EXPENSES. Subject to Section 6.9 hereof, 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 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 the 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)
determine and change the fiscal year of the Trust and the method by which its
accounts shall be kept; and (h) adopt a seal for the Trust, provided, that 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 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.
SECTION 3.12. TRUSTEES AND OFFICERS AS SHAREHOLDERS. Except as hereinafter provided, no officer, Trustee or member of the Advisory Board of the Trust, and no member, partner, officer, employee, 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. The foregoing provision shall not prevent:
(a) The Distributor from purchasing Shares from the Trust if such purchases are limited (except for reasonable allowances for clerical errors, delays and errors of transmission and cancellation of orders) to purchases for the purpose of filling orders for Shares received by the Distributor and provided that orders to purchase from the Trust are entered with the Trust or the Custodian promptly upon receipt by the Distributor of purchase orders for Shares, unless the Distributor is otherwise instructed by its customers;
(b) The Distributor from purchasing Shares as agent for the account of the Trust;
(c) The purchase from the Trust or from the Distributor of Shares by any officer, Trustee or member of the Advisory Board of the Trust or by any member, partner, officer, employee, director or trustee of the Investment Adviser or of the Distributor at a price not lower than the net asset value of the Shares next determined after acceptance of the order by the Trust, provided that any such sales are only to be made pursuant to a uniform offer described in the Trust's current prospectus; or
(d) The Investment Adviser, the Distributor or any of their officers, employees, partners, directors or trustees from purchasing Shares prior to the effective date of the Registration Statement relating to the Shares under the Securities Act of 1933, as amended.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR AND TRANSFER AGENT
SECTION 4.1. INVESTMENT ADVISER. Subject to a Majority Shareholder Vote of the Shares of each series affected thereby, 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 or furnish the Trust such management, investment advisory, statistical and research facilities and services, promotional activities, and such other facilities and services, if any, with respect to one or more series of Shares, 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 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 repurchase or 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 and other financial intermediaries 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 or parties to such contract or contracts shall undertake to furnish transfer agency and/or shareholder services. 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 Sections 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. 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 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. Notwithstanding any other provision of this Declaration to the contrary, no Trust Property shall be used to indemnify or reimburse any Shareholder of any Shares of any series other than Trust Property allocated or belonging to such series.
SECTION 5.2. NON-LIABILITY OF TRUSTEES, ETC. 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
(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) above 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 by 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 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, the Trust's 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 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.
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 (without par value) which shall be divided into one or more series as provided in Section 6.9 hereof. The number of Shares 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 an assessment of any kind by virtue of their ownership of Shares. The Shares shall be personal property giving only the rights specifically set forth in the Declaration. The Shares shall not entitle the holder to preference, preemptive, appraisal, conversion or exchange rights, except as the Trustees may determine with respect to any series of or class Shares.
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 lesser number without thereby changing their proportionate beneficial interests in Trust Property allocated or belonging to such series. Contributions to the Trust may be accepted for, and Shares shall be redeemed as, 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. It is not contemplated that certificates will be issued for the Shares; however, 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 genuineness 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 registrar 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.
SECTION 6.8. VOTING POWERS. The Shareholders shall have power to vote
only (i) for the removal of Trustees 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 9.2 hereof, (iv) with respect to any amendment of this Declaration to
the extent and as provided in Section 9.3 hereof, (v) with respect to any
merger, consolidation or sale of assets as provided in Sections 9.4 and 9.6
hereof, (vi) with respect to incorporation of the Trust or any series to the
extent and as provided in Sections 9.5 and 9.6 hereof, (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
and during any period when no Shares are outstanding, 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 Shareholder votes and meetings and related matters.
SECTION 6.9. SERIES DESIGNATION. Shares of the Trust may be divided into series, the number and relative rights, privileges and preferences of which shall be established and designated by the Trustees, in their discretion, in accordance with the terms of this Section 6.9. The Trustees may from time to time exercise their power to authorize the division of Shares into
one or more series by establishing and designating one or more series of Shares upon and subject to the following provisions:
(a) All Shares shall be identical except that there may be such variations as shall be fixed and determined by the Trustees between different series as to purchase price, right of redemption and the price, terms and manner of redemption, and special and relative rights as to dividends and on liquidation.
(b) The number of authorized Shares and the number of Shares of each series that may be issued shall be unlimited. The Trustees may classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any series into one or more series that may be established and designated from time to time. The Trustees may hold as treasury shares (of the same or some other series), reissue for such consideration and on such terms as they may determine, or cancel any Shares of any series reacquired by the Trust at their discretion from time to time.
(c) All consideration received by the Trust for the issue or sale of Shares of a particular series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to that series for all purposes, subject only to the rights of creditors of such series, and shall be so recorded upon the books of account of the Trust. In the event that there are any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular series, the Trustees shall allocate them among any one or more of the series established and designated from time to time in such a manner and on such basis as they, in their sole discretion, deem fair and equitable. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all series for all purposes. No holder of Shares of any particular series shall have any claim on or right to any assets allocated or belonging to any other series of Shares.
(d) The assets belonging to each particular series shall be charged with the liabilities of the Trust in respect of that series and all expenses, costs, charges and reserves attributable to that series, and any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular series shall be allocated and charged by the Trustees to and among any one or more of the series established and designated from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable. Each allocation of liabilities, expenses, costs, charges and reserves by the Trustees shall be conclusive and binding upon the holders of all series for all purposes. The Trustees shall have full discretion to the extent not inconsistent with the 1940 Act, to determine which items shall be treated as income and which items as capital; and each such determination and allocation shall be conclusive and binding upon the Shareholders. Under no circumstances shall the assets allocated or belonging to any particular series be charged with liabilities attributable to any other series. All Persons who have extended credit which has been allocated to a particular series, or who have a claim or contract which has been allocated to any particular series, shall look only to the assets of that particular series for payment of such credit, claim or contract.
(e) The power of the Trustees to invest and reinvest the Trust
Property allocated or belonging to any particular series shall be governed by
Section 3.2 hereof unless otherwise provided in the instrument of the Trustees
establishing such series which is hereinafter described.
(f) Each Share of a series shall represent a beneficial interest in the net assets allocated or belonging to such series only, and such interest shall not extend to the assets of the Trust generally. Dividends and distributions on Shares of a particular series may be paid with such frequency as the Trustees may determine, which may be daily or otherwise, pursuant to a standing resolution or resolutions adopted only once or with such frequency as the Trustees may determine, to the holders of Shares of that series, only from such of the income and capital gains, accrued or realized, from the assets belonging to that series, as the Trustees may determine, after providing for actual and accrued liabilities belonging to that series. All dividends and distributions on Shares of a particular series shall be distributed pro rata to the holders of that series in proportion to the number of Shares of that series held by such holders at the date and time of record established for the payment of such dividends or distributions. Shares of any particular series of the Trust may be redeemed solely out of Trust Property allocated or belonging to that series. Upon liquidation or termination of a series of the Trust, Shareholders of such series shall be entitled to receive a pro rata share of the net assets of such series only. A Shareholder of a particular series of the Trust shall not be entitled to participate in a derivative or class action on behalf of any other series or the Shareholders of any other series of the Trust.
(g) Notwithstanding any provision hereof to the contrary, on any matter submitted to a vote of the Shareholders of the Trust, all Shares then entitled to vote shall be voted in the aggregate, except that (i) when required by the 1940 Act to be voted by individual series or class, Shares shall not be voted in the aggregate, and (ii) when the Trustees have determined that the matter affects only the interests of Shareholders of one or more series or class, only Shareholders of such series or class shall be entitled to vote thereon.
(h) The establishment and designation of any series of Shares shall be effective upon the execution by a majority of the then Trustees of an instrument setting forth such establishment and designation and the relative rights and preferences of such series, or as otherwise provided in such instrument. At any time that there are no Shares outstanding of any particular series previously established and designated, the Trustees may by an instrument executed by a majority of their number abolish that series and the establishment and designation thereof. Each instrument referred to in this paragraph shall have the status of an amendment to this Declaration.
SECTION 6.10 CLASS DESIGNATION. The Trustees may, in their discretion, authorize the division of Shares of the Trust (or any series of the Trust) into one or more classes. All Shares of a class shall be identical with each other and with the Shares of each other class of the Trust or the same series of the Trust (as applicable), except for such variations between classes as may be approved by the Board of Trustees and permitted by the 1940 Act or pursuant to any exemptive order issued by the Commission.
ARTICLE VII
REDEMPTIONS
SECTION 7.1. REDEMPTION OF SHARES. All Shares of the Trust shall be redeemable, at the redemption price determined in the manner set out in this Declaration. Redeemed Shares may be resold by the Trust.
The Trust shall redeem the Shares at the price determined as hereinafter set forth, upon acceptance of the appropriately verified written application of the record holder thereof (or upon such other form of request as the Trustees may determine) at such office or agency as may be designated from time to time for that purpose in the Trust's then effective prospectus under the Securities Act of 1933. The Trustees may from time to time specify additional conditions, not inconsistent with the 1940 Act, regarding the redemption of Shares in the Trust's then effective prospectus under the Securities Act of 1933.
SECTION 7.2. PRICE. Shares shall be redeemed at their net asset value determined as set forth in Article VIII hereof as of such time as the Trustees shall have theretofore prescribed by resolution. In the absence of such resolution, the redemption price of Shares deposited shall be the net asset value of such Shares next determined as set forth in Article VIII hereof after acceptance of such application.
SECTION 7.3. PAYMENT. Payment of the redemption price of Shares of any series shall be made in cash or in property out of the assets of such series to the Shareholder of record at such time and in the manner, not inconsistent with the 1940 Act or other applicable laws, as may be specified from time to time in the Trust's then effective prospectus under the Securities Act of 1933, subject to the provisions of Section 7.4 hereof.
SECTION 7.4. EFFECT OF SUSPENSION OF DETERMINATION OF NET ASSET VALUE. If, pursuant to Section 7.6 hereof, the Trustees shall declare a suspension of the determination of net asset value, the rights of Shareholders (including those who shall have applied for redemption pursuant to Section 7.1 hereof but who shall not yet have received payment) to have Shares redeemed and paid for by the Trust shall be suspended until the termination of such suspension is declared. Any record holder who shall have his redemption right so suspended may, during the period of such suspension, by appropriate written notice of revocation at the office or agency where application was made, revoke any application for redemption not honored and withdraw any certificates on deposits. The redemption price of Shares for which redemption applications have not been revoked shall be the net asset value of such Shares next determined as set forth in Article VIII after the termination of such suspension, and payment shall be made within seven days after the date upon which the application was made plus the period after such applications during which the determination of net asset value was suspended.
SECTION 7.5. REDEMPTION OF SHARES IN ORDER TO QUALIFY AS REGULATED INVESTMENT COMPANY; DISCLOSURE OF HOLDING. If the Trustees shall, at any time and in good faith, be of the opinion that direct or indirect ownership of Shares or other securities of the Trust has or may become concentrated in any Person to an extent which would disqualify the Trust or any series of the Trust as a regulated investment company under the Internal Revenue Code of 1986, as
amended, then the Trustees shall have the power by lot or other means deemed
equitable by them (i) to call for redemption by any such Person a number, or
principal amount, of Shares or other securities of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust into conformity with the requirements for such qualification and
(ii) to refuse to transfer or issue Shares or other securities of the Trust to
any Person whose acquisition of the Shares or other securities of the Trust in
question would result in such disqualification. The redemption shall be
effected at the redemption price and in the manner provided in Section 7.1.
The holders of Shares or other securities of the Trust shall upon demand disclose to the Trustees in writing such information with respect to direct and indirect ownership of Shares or other securities of the Trust as the Trustees deem necessary to comply with the provisions of the Internal Revenue Code of 1986, as amended, or to comply with the requirements of any other taxing authority.
SECTION 7.6. SUSPENSION OF RIGHT OF REDEMPTION. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets, or
(iv) during any other period when the Commission may for the protection of
security holders of the Trust by order permit suspension of the right of
redemption or postponement of the date of payment or redemption; provided that
applicable rules and regulations of the Commission shall govern as to whether
the conditions prescribed in (ii), (iii), or (iv) exist. Such suspension shall
take effect at such time as the Trust shall specify but not later than the close
of business on the business day next following the declaration of suspension,
and thereafter there shall be no right of redemption or payment on redemption
until the Trust shall declare the suspension at an end, except that the
suspension shall terminate in any event on the first day on which said stock
exchange shall have reopened or the period specified in (ii) or (iii) shall have
expired (as to which in the absence of an official ruling by the Commission, the
determination of the Trust shall be conclusive). In the case of a suspension of
the right of redemption a Shareholder may either withdraw his request for
redemption or receive payment based on the net asset value existing after the
termination of the suspension as provided in Section 7.4 hereof.
ARTICLE VIII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Subject to Section 6.9 hereof, 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 net asset value of the Shares of any series or net income attributable to the Shares of any series, or the declaration and payment of dividends and distributions on the Shares of any series, as they may deem necessary or desirable.
ARTICLE IX
DURATION, TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
SECTION 9.1. DURATION. The Trust shall continue without limitation of time but subject to the provisions of this Article IX.
SECTION 9.2. 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 its Shares, or (ii) by the Trustees by written notice to the Shareholders. Any series of 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 of that series, or (ii) by the Trustees by written notice to the Shareholders of that series.
Upon the termination of the Trust or any series of the Trust:
(i) The Trust or series of 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 or series of the Trust and all the powers of the Trustees under this Declaration shall continue until the affairs of the Trust or series of the Trust shall have been wound up, including the power to fulfill or discharge the contracts of the Trust or series of the Trust, collect its assets, sell, convey, assign, exchange, transfer or otherwise dispose of all or any part of the remaining Trust Property or Trust Property of the series to one or more persons at public or private sale for consideration which may consist in whole or in part of cash, securities or other property of any kind, discharge or pay its liabilities, and to do all other acts appropriate to liquidate its business; provided, that any sale, conveyance, assignment, exchange, transfer or other disposition of all or substantially all the Trust Property shall require Shareholder approval in accordance with Section 9.4 hereof, and any sale, conveyance, assignment, exchange, transfer or other disposition of all or substantially all of the Trust Property allocated or belonging to any series shall require the approval of the Shareholders of such series as provided in Section 9.6 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 or Trust Property of the series, in cash or in kind or partly in cash and partly in kind, among the Shareholders of the Trust or the series according to their respective rights.
(b) After termination of the Trust or series and distribution to the Shareholders of the Trust or series 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 with
respect to the Trust or series, and the rights and interests of all Shareholders of the Trust or series shall thereupon cease.
SECTION 9.3. AMENDMENT PROCEDURE. (a) This Declaration may be amended by a Majority Shareholder Vote of the Shareholders of the Trust or by any 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 of the Trust. The Trustees may also amend this Declaration without the vote or consent of Shareholders to designate series in accordance with Section 6.9 hereof, 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 or advisable to conform this Declaration to the requirements of applicable federal laws or regulations or the requirements of the regulated investment company provisions of the Internal Revenue Code of 1986, as amended, but the Trustees shall not be liable for failing so to do.
(b) No amendment which the Trustees shall have determined shall affect the rights, privileges or interests of holders of a particular series of Shares, but not the rights, privileges or interests of holders of Shares of the Trust generally, may be made except with the vote or consent by a Majority Shareholder Vote of such series.
(c) Notwithstanding any other provision hereof, no amendment may be made under this Section 9.3 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 a Majority Shareholder Vote of Shares or series of Shares. 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.
(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.
(e) 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 amended in any respect by the affirmative vote of majority of the Trustees or by instrument signed by a majority of the Trustees.
SECTION 9.4. 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 such purpose by the holders of not less than two-thirds of the Shares outstanding and entitled to vote of the Trust, or such other vote as may be established by the Trustees with respect to any series of Shares, 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 outstanding and entitled to vote of the Trust; provided, however that if such merger, consolidation, sale, lease or exchange is
recommended by the Trustees, the vote of the holders of a majority of the Shares outstanding and entitled to vote, or such other vote as may be established by the Trustees with respect to any series of Shares, 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 9.5. 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, unit investment 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 9.4 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. Nothing contained in this Section 9.5 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 organization or entities.
SECTION 9.6. INCORPORATION OR REORGANIZATION OF SERIES. With the approval of a Majority Shareholder Vote of any series, the Trustees may sell, lease or exchange all of the Trust Property allocated or belonging to that series, or cause to be organized or assist in organizing a corporation or corporations under the laws of any other jurisdiction, or any other trust, unit investment trust, partnership, association or other organization, to take over all of the Trust Property allocated or belonging to that series and to sell, convey and transfer such Trust Property to any such corporation, trust, unit investment trust, partnership, association, or other organization in exchange for the shares or securities thereof or otherwise.
ARTICLE X
REPORTS TO SHAREHOLDERS AND SHAREHOLDER COMMUNICATIONS
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.
Whenever 10 or more Shareholders of record who have been such for at least six months preceding the date of application, and who hold in the aggregate either Shares having a net asset value of at least $25,000 or at least l% of the Shares outstanding, whichever is less, shall apply to the Trustees in writing, stating that they wish to communicate with other Shareholders with a
view to obtaining signatures to a request for a meeting of Shareholders for the
purpose of removing one or more Trustees pursuant to Section 2.2 hereof and
accompany such application with a form of communication and request which they
wish to transmit, the Trustees shall within five business days after receipt of
such application either (a) afford to such applicants access to a list of the
names and addresses of all Shareholders as recorded on the books of the Trust;
or (b) inform such applicants as to the approximate number of Shareholders of
record, and the approximate cost of mailing to them the proposed communication
and form of request. If the Trustees elect to follow the course specified in
(b) above, the Trustees, upon the written request of such applicants,
accompanied by a tender of the material to be mailed and of the reasonable
expenses of mailing, shall, with reasonable promptness, mail such material to
all Shareholders of record, unless within five business days after such tender
the Trustees mail to such applicants and file with the Commission, together with
a copy of the material to be mailed, a written statement signed by at least a
majority of the Trustees to the effect that in their opinion either such
material contains untrue statements of fact or omits to state facts necessary to
make the statements contained therein not misleading, or would be in violation
of applicable law, and specifying the basis of such opinion.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. FILING. This Declaration, as amended, and any subsequent amendment hereto shall be filed in the office of the Secretary of The Commonwealth of Massachusetts and in such other place or places as may be required under the laws of The Commonwealth 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 11.2. 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 11.3. 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 11.4. RELIANCE BY THIRD PARTIES. Any certificate executed by an individual who, according to the records of the Trust appears to be a Trustee hereunder, certifying to: (i) the number or identity of Trustees or Shareholders, (ii) the due authorization of the execution of any instrument or writing, (iii) the form of any vote passed at a meeting of Trustees or Shareholders, (iv) the fact that the number of Trustees or Shareholders present at any meeting or executing any written instrument satisfies the requirements of this Declaration, (v) the form of any By-Laws adopted by or the identity of any officers elected by the Trustees, or (vi) 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 11.5. 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 of 1986, 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 1st day of September, 1993.
500 Boylston Street Boston, Massachusetts
500 Boylston Street Boston, Massachusetts
as Trustee and not Individually
500 Boylston Street
Boston, Massachusetts
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS. BOSTON, MASSACHUSETTS
September 1, 1993
Then personally appeared the above-named Jeffrey L. Shames, Arnold D. Scott and James R. Bordewick, Jr., and who severally acknowledged the foregoing instrument to be their free act and deed.
Before me,
My commission expires: 2/14/97
EXHIBIT 1b
MFS UNION STANDARD TRUST
AMENDMENT TO THE DECLARATION OF TRUST
Establishment and Designation
of Series of Shares of Beneficial Interest
(without par value)
Pursuant to Section 6.9 of the Declaration of Trust dated August 31, 1993, as amended (the "Declaration of Trust"), of MFS Union Standard Trust (the "Trust"), the Trustees of the Trust hereby divide the Shares (as defined in the Declaration of Trust) into two separate series, each series to have the following special and relative rights:
1. The series shall be designated:
(i) MFS Union Standard Equity Fund
(ii) MFS Union Standard Fixed Income Fund
2. The series shall be authorized to invest in cash, securities, instruments and other property as from time to time described in the Trust's then currently effective registration statement under the Securities Act of 1933 to the extent pertaining to the offering of Shares of such series. Each Share of each series shall be redeemable, shall be entitled to one vote or fraction thereof in respect of a fractional share on matters on which Shares of that series shall be entitled to vote, shall represent a pro rata beneficial interest in the assets allocated or belonging to the series, and shall be entitled to receive its pro rata share of the net assets of the series upon liquidation of the series, all as provided in Section 6.9 of the Declaration of Trust.
3. Subject to the provisions of Section 6.9 and Article IX of the Declaration of Trust, the Trustees (including any successor Trustees) shall have the right at any time and from time to time to reallocate assets and expenses or to change the designation of any series now or hereafter created, or to otherwise change the special and relative rights of any such series.
Pursuant to Section 6.9(h) of the Declaration of Trust, this establishment and designation of series of Shares shall be effective upon the execution of a majority of the Trustees of the Trust.
IN WITNESS WHEREOF, a majority of the Trustees of the Trust have executed this establishment and designation, in one or more counterparts, all constituting a single instrument, as an instrument under seal in The Commonwealth of Massachusetts, as of this 1st day of September, 1993.
EXHIBIT 1c
MFS UNION STANDARD TRUST
AMENDMENT
TO DECLARATION OF TRUST
ABOLISHMENT OF MFS UNION STANDARD FIXED INCOME FUND,
A SERIES OF SHARES OF BENEFICIAL INTEREST
(WITHOUT PAR VALUE)
AND
ESTABLISHMENT AND DESIGNATION
OF MFS UNION STANDARD RESEARCH FUND,
A SERIES OF SHARES OF BENEFICIAL INTEREST
(WITHOUT PAR VALUE)
Pursuant to Sections 6.9(h) and 9.3 of the Declaration of Trust dated September 1, 1993, as amended (the "Declaration"), of MFS Union Standard Trust (the "Trust"), the Trustees of the Trust hereby abolish the MFS Union Standard Fixed Income Fund, a series of Shares (as defined in the Declaration) established and designated by the Trustees of the Trust by an amendment to the Declaration dated September 1, 1993.
Pursuant to Sections 6.9 and 9.3 of the Declaration, the Trustees of the Trust hereby establish and designate a new series of Shares (as defined in the Declaration), such series to have the following special and relative rights:
1. The new series shall be designated:
MFS Union Standard Research Fund
2. The series shall be authorized to invest in cash, securities, instruments and other property as from time to time described in the Trust's then currently effective registration statement under the Securities Act of 1933 to the extent pertaining to the offering of Shares of the series. Each Share of the series shall be redeemable, shall be entitled to one vote or fraction thereof in respect of a fractional share on matters on which Shares of the series shall be entitled to vote, shall represent a pro rata beneficial interest in the assets allocated or belonging to the series, and shall be entitled to receive its pro rata share of the net assets of the series upon liquidation of the series, all as provided in Section 6.9 of the Declaration.
3. Shareholders of the series shall vote separately as a class on any matter to the extent required by, and any matter shall be deemed to have been effectively acted upon with respect to the series as provided in, Rule 18f-2, as from time to time in effect, under the Investment Company Act of 1940, as amended, or any successor rule, and by the Declaration.
4. The assets and liabilities of the Trust shall be allocated among the previously established and existing series of the Trust and this series as set forth in Section 6.9 of the Declaration.
5. Subject to the provisions of Section 6.9 and Article IX of the Declaration, the Trustees (including any successor Trustees) shall have the right at any time and from time to time to reallocate assets and expenses or to change the designation of any series now or hereafter created, or to otherwise change the special and relative rights of any such series.
Pursuant to Section 6.9(h) of the Declaration, the abolition of the MFS Union Standard Fixed Income Fund and the establishment and designation of the MFS Union Standard Research Fund shall be effective upon the execution of this instrument by of a majority of the Trustees of the Trust.
IN WITNESS WHEREOF, a majority of the Trustees of the Trust have executed this certificate of amendment to the Declaration, in one or more counterparts, all constituting a single instrument, as an instrument under seal in The Commonwealth of Massachusetts, as of this 29th day of August, 1995.
EXHIBIT 2
BY-LAWS
OF
MFS UNION STANDARD TRUST
SEPTEMBER 1, 1993
BY-LAWS
OF
MFS UNION STANDARD TRUST
ARTICLE I
DEFINITIONS
The terms "COMMISSION", "DECLARATION", "DISTRIBUTOR", "INVESTMENT ADVISER", "MAJORITY SHAREHOLDER VOTE", "1940 ACT", "SHAREHOLDER", "SHARES", "TRANSFER AGENT", "TRUST", "TRUST PROPERTY" and "TRUSTEES" have the respective meanings given them in the Declaration of Trust of MFS Union Standard Trust, dated September 1, 1993, as amended from time to time.
ARTICLE II
OFFICES
SECTION 1. PRINCIPAL OFFICE. Until changed by the Trustees, the principal office of the Trust in The Commonwealth of Massachusetts shall be in the City of Boston, County of Suffolk.
SECTION 2. OTHER OFFICES. The Trust may have offices in such other places without as well as within the Commonwealth as the Trustees may from time to time determine.
ARTICLE III
SHAREHOLDERS
SECTION 1. MEETINGS. Meetings of the Shareholders may be called at any time by a majority of the Trustees and shall be called by any Trustee upon written request of Shareholders holding in the aggregate not less than ten percent (10%) of the outstanding Shares of the Trust having voting rights, if shareholders of all series are required under the Declaration to vote in the aggregate and not by individual series at such meeting, or of any series or class if shareholders of such series or class are entitled under the Declaration to vote by individual series or class, such request specifying the purpose or purposes for which such meeting is to be called. Any such meeting shall be held within or without The Commonwealth of Massachusetts on such day and at such time as the Trustees shall designate. The holders of a majority of outstanding Shares
entitled to vote present in person or by proxy shall constitute a quorum at any meeting of the Shareholders, except that where any provision of law, the Declaration or these By-laws permit or require that holders of any series shall vote as a series, then a majority of the aggregate number of Shares of that series entitled to vote shall be necessary to constitute a quorum for the transaction of business by that series. In the absence of a quorum, a majority of outstanding Shares entitled to vote present in person or by proxy may adjourn the meeting from time to time until a quorum shall be present.
SECTION 2. NOTICE OF MEETINGS. Notice of all meetings of Shareholders, stating the time, place and purposes of the meeting, shall be given by the Trustees by mail to each Shareholder entitled to vote at such meeting at his address as recorded on the register of the Trust, mailed at least (ten) 10 days and not more than (sixty) 60 days before the meeting. Only the business stated in the notice of the meeting shall be considered at such meeting. Any adjourned meeting may be held as adjourned without further notice. No notice need be given to any Shareholder who shall have failed to inform the Trust of his current address or if a written waiver of notice, executed before or after the meeting by the Shareholder or his attorney thereunto authorized, is filed with the records of the meeting.
SECTION 3. RECORD DATE FOR MEETINGS. For the purpose of determining the Shareholders who are entitled to notice of and to vote at any meeting, or to participate in any distribution, or for the purpose of any other action, the Trustees may from time to time close the transfer books for such period, not exceeding thirty (30) days, as the Trustees may determine; or without closing the transfer books the Trustees may fix a date not more than sixty (60) days prior to the date of any meeting of Shareholders or distribution or other action as a record date for the determination of the persons to be treated as Shareholders of record for such purpose.
SECTION 4. PROXIES. At any meeting of Shareholders, any holder of Shares entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Clerk, or with such other officer or agent of the Trust as the Clerk may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a vote of a majority of the Trustees, proxies may be solicited in the name of one or more Trustees or one or more of the officers of the Trust. Only Shareholders of record shall be entitled to vote. Each full Share shall be entitled to one vote and fractional Shares shall be entitled to a vote of such fraction. When any Share is held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Share, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Share. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. The placing of a Shareholder's name on a proxy pursuant to a telephonic or electronically transmitted instructions obtained pursuant to procedures reasonably designed to verify that such instructions have been authorized by such Shareholder shall constitute execution of such proxy by or on behalf of such Shareholder. If the holder of any such Share is a minor or a person of unsound mind, and subject to guardianship or to the legal control of any other person as regards the charge or management of such Share, he may vote by his guardian or such other person appointed or having such control, and such vote may be given in person or by proxy.
SECTION 5. INSPECTION OF RECORDS. The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted shareholders of a Massachusetts business corporation.
SECTION 6. ACTION WITHOUT MEETING. Any action which may be taken by Shareholders may be taken without a meeting if a majority of Shareholders entitled to vote on the matter (or such larger proportion thereof as shall be required by law, the Declaration or these By-Laws for approval of such matter) consent to the action in writing and the written consents are filed with the records of the meetings of Shareholders. Such consent shall be treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
SECTION 1. MEETINGS OF THE TRUSTEES. The Trustees may in their discretion provide for regular or stated meetings of the Trustees. Notice of regular or stated meetings need not be given. Meetings of the Trustees other than regular or stated meetings shall be held whenever called by the Chairman or by any one of the Trustees at the time being in office. Notice of the time and place of each meeting other than regular or stated meetings shall be given by the Secretary or an Assistant Secretary, or the Clerk or an Assistant Clerk or by the officer or Trustee calling the meeting and shall be mailed to each Trustee at least two days before the meeting, or shall be telegraphed, cabled, or wirelessed or sent by facsimile or other electronic means to each Trustee at his business address, or personally delivered to him at least one day before the meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting need not be given to any Trustee if a written waiver of notice, executed by him before or after the meeting, is filed with the records of the meeting, or to any Trustee who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him. A notice or waiver of notice need not specify the purpose of any meeting. The Trustees may meet by means of a telephone conference circuit or similar communications equipment by means of which all persons participating in the meeting can hear each other, which telephone conference meeting shall be deemed to have been held at a place designated by the Trustees at the meeting. Participation in a telephone conference meeting shall constitute presence in person at such meeting. Any action required or permitted to be taken at any meeting of the Trustees may be taken by the Trustees without a meeting if all the Trustees consent to the action in writing and the written consents are filed with the records of the Trustees' meetings. Such consents shall be treated as a vote for all purposes.
SECTION 2. QUORUM AND MANNER OF ACTING. A majority of the Trustees shall be present in person at any regular or special meeting of the Trustees in order to constitute a quorum for the transaction of business at such meeting and (except as otherwise required by law, the Declaration or these By-Laws) the act of a majority of the Trustees present at any such meeting, at which a quorum is present, shall be the act of the Trustees. In the absence of a quorum, a majority of the
Trustees present may adjourn the meeting from time to time until a quorum shall be present. Notice of an adjourned meeting need not be given.
ARTICLE V
COMMITTEES AND ADVISORY BOARD
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. The Trustees by vote of a majority of all the Trustees may elect from their own number an Executive Committee to consist of not less than three (3) Trustees to hold office at the pleasure of the Trustees which shall have the power to conduct the current and ordinary business of the Trust while the Trustees are not in session, including the purchase and sale of securities and the designation of securities to be delivered upon redemption of Shares of the Trust, and such other powers of the Trustees as the Trustees may, from time to time, delegate to the Executive Committee except those powers which by law, the Declaration or these By-Laws they are prohibited from delegating. The Trustees may also elect from their own number other Committees from time to time, the number composing such Committees, the powers conferred upon the same (subject to the same limitations as with respect to the Executive Committee) and the term of membership on such Committees to be determined by the Trustees. The Trustees may designate a chairman of any such Committee. In the absence of such designation a Committee may elect its own Chairman.
SECTION 2. MEETING, QUORUM AND MANNER OF ACTING. The Trustees may (i) provide for stated meetings of any Committee, (ii) specify the manner of calling and notice required for special meetings of any Committee, (iii) specify the number of members of a Committee required to constitute a quorum and the number of members of a Committee required to exercise specified powers delegated to such Committee, (iv) authorize the making of decisions to exercise specified powers by written assent of the requisite number of members of a Committee without a meeting, and (v) authorize the members of a Committee to meet by means of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and records of decisions taken without a meeting and cause them to be recorded in a book designated for that purpose and kept in the office of the Trust.
SECTION 3. ADVISORY BOARD. The Trustees may appoint an Advisory Board to consist in the first instance of not less than three (3) members. Members of such Advisory Board shall not be Trustees or officers and need not be Shareholders. A member of such Advisory Board shall hold office for such period as the Trustees may by resolution provide. Any member of such board may resign therefrom by a written instrument signed by him which shall take effect upon delivery to the Trustees. The Advisory Board shall have no legal powers and shall not perform the functions of Trustees in any manner, such Advisory Board being intended merely to act in an advisory capacity. Such Advisory Board shall meet at such times and upon such notice as the Trustees may by resolution provide.
ARTICLE VI
OFFICERS
SECTION 1. GENERAL PROVISIONS. The officers of the Trust shall be a Chairman, a President, a Treasurer and a Clerk, who shall be elected by the Trustees. The Trustees may elect or appoint such other officers or agents as the business of the Trust may require, including one or more Vice Presidents, a Secretary and one or more Assistant Secretaries, one or more Assistant Treasurers, and one or more Assistant Clerks. The Trustees may delegate to any officer or committee the power to appoint any subordinate officers or agents.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except as otherwise provided by law, the Declaration or these By-Laws, the Chairman, the President, the Treasurer and the Secretary shall hold office until his respective successor shall have been duly elected and qualified, and all other officers shall hold office at the pleasure of the Trustees. The Clerk and Treasurer or the Clerk and Secretary or all three may be the same person. A Vice President and the Treasurer or a Vice President and the Clerk and the Secretary may be the same person, but the offices of Vice President, Clerk and Treasurer shall not be held by the same person. Except as above provided, any two offices may be held by the same person. Any officer may be, but none need be, a Trustee or Shareholder.
SECTION 3. REMOVAL. The Trustees, at any regular or special meeting of the Trustees, may remove any officer with or without cause by a vote of a majority of the Trustees. Any officer or agent appointed by any officer or committee may be removed with or without cause by such appointing officer or committee.
SECTION 4. POWERS AND DUTIES OF THE CHAIRMAN. The Chairman may call meetings of the Trustees and of any Committee thereof when he deems it necessary and shall preside at all meetings of the Shareholders. Subject to the control of the Trustees and any Committees of the Trustees, the Chairman shall at all times exercise a general supervision and direction over the affairs of the Trust. The Chairman shall have the power to employ attorneys and counsel for the Trust and to employ such subordinate officers, agents, clerks and employees as he may find necessary to transact the business of the Trust. The Chairman shall also have the power to grant, issue, execute or sign such powers of attorney, proxies or other documents as may be deemed advisable or necessary in furtherance of the interests of the Trust. The Chairman shall have such other powers and duties as, from time to time, may be conferred upon or assigned to him by the Trustees.
SECTION 5. POWERS AND DUTIES OF THE PRESIDENT. In the absence or disability of the Chairman, the President shall perform all the duties and may exercise any of the powers of the Chairman, subject to the control of the Trustees. The President shall perform such other duties as may be assigned to him from time to time by the Trustees or the Chairman.
SECTION 6. POWERS AND DUTIES OF VICE PRESIDENTS. In the absence or disability of the President, the Vice President or, if there be more than one Vice President, any Vice President designated by the Trustees shall perform all the duties and may exercise any of the powers of the
President, subject to the control of the Trustees. Each Vice President shall perform such other duties as may be assigned to him from time to time by the Trustees or the President.
SECTION 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall be the principal financial and accounting officer of the Trust. The Treasurer shall deliver all funds of the Trust which may come into his hands to such custodian as the Trustees may employ pursuant to Article X hereof. The Treasurer shall render a statement of condition of the finances of the Trust to the Trustees as often as they shall require the same and shall in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Trustees. The Treasurer shall give a bond for the faithful discharge of his duties, if required to do so by the Trustees, in such sum and with such surety or sureties as the Trustees shall require.
SECTION 8. POWERS AND DUTIES OF THE CLERK. The Clerk shall keep the minutes of all meetings of the Shareholders in proper books provided for that purpose; he shall have custody of the seal of the Trust; he shall have charge of the Share transfer books, lists and records unless the same are in the charge of the Transfer Agent. He or the Secretary shall attend to the giving and serving of all notices by the Trust in accordance with the provisions of these By-Laws and as required by law; and subject to these By-Laws, he shall in general perform all duties incident to the office of Clerk and such other duties as from time to time may be assigned to him by the Trustees.
SECTION 9. POWERS AND DUTIES OF THE SECRETARY. The Secretary, if any, shall keep the minutes of all meetings of the Trustees. He shall perform such other duties and have such other powers in addition to those specified in these By-Laws as the Trustees shall from time to time designate. If there be no Secretary or Assistant Secretary, the Clerk shall perform the duties of Secretary.
SECTION 10. POWERS AND DUTIES OF ASSISTANT TREASURERS. In the absence or disability of the Treasurer, any Assistant Treasurer designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Treasurer. Each Assistant Treasurer shall perform such other duties as from time to time may be assigned to him by the Trustees. Each Assistant Treasurer shall give a bond for the faithful discharge of his duties, if required to do so by the Trustees, in such sum and with such surety or sureties as the Trustees shall require.
SECTION 11. POWERS AND DUTIES OF ASSISTANT CLERKS. In the absence or disability of the Clerk, any Assistant Clerk designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Clerk. The Assistant Clerks shall perform such other duties as from time to time may be assigned to them by the Trustees.
SECTION 12. POWERS AND DUTIES OF ASSISTANT SECRETARIES. In the absence or disability of the Secretary, any Assistant Secretary designated by the Trustees shall perform all of the duties, and may exercise any of the powers, of the Secretary. The Assistant Secretaries shall perform such other duties as from time to time may be assigned to them by the Trustees.
SECTION 13. COMPENSATION OF OFFICERS AND TRUSTEES AND MEMBERS OF THE ADVISORY BOARD. Subject to any applicable law or provision of the Declaration, the compensation of the officers and Trustees and members of the Advisory Board shall be fixed from time to time by the Trustees or, in the case of officers, by any Committee or officer upon whom such power may be conferred by the Trustees. No officer shall be prevented from receiving such compensation as such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of October in each year and shall end on the last day of September in the succeeding year, provided, however, that the Trustees may from time to time change the fiscal year.
ARTICLE VIII
SEAL
The Trustees shall adopt a seal which shall be in such form and shall have such inscription thereon as the Trustees may from time to time prescribe.
ARTICLE IX
WAIVERS OF NOTICE
Whenever any notice is required to be given by law, the Declaration or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent thereto. A notice shall be deemed to have been telegraphed, cabled or wirelessed or sent by facsimile or other electronic means for the purposes of these By-Laws when it has been delivered to a representative of any telegraph, cable or wireless company with instruction that it be telegraphed, cabled or wirelessed or when a confirmation of such facsimile having been sent, or a confirmation that such electronic means has sent the notice being transmitted, is generated. Any notice shall be deemed to be given at the time when the same shall be mailed, telegraphed, cabled or wirelessed or when sent by facsimile or other electronic means.
ARTICLE X
CUSTODIAN
SECTION 1. APPOINTMENT AND DUTIES. The Trustees shall at all times employ a bank or trust company having a capital, surplus and undivided profits of at least five million dollars ($5,000,000.00) as custodian with authority as its agent, but subject to such restrictions, limitations and other requirements, if any, as may be contained in the Declaration, these By-Laws and the 1940 Act:
(i) to hold the securities owned by the Trust and deliver the same upon written order;
(ii) to receive and issue receipts for any monies due to the Trust and deposit the same in ts own banking department or elsewhere as the Trustees may direct;
(iii) to disburse such funds upon orders or vouchers;
(iv) if authorized by the Trustees, to keep the books and accounts of the Trust and furnish clerical and accounting services; and
(v) if authorized to do so by the Trustees, to compute the net income of the Trust;
all upon such basis of compensation as may be agreed upon between the Trustees and the custodian. If so directed by a Majority Shareholder Vote, the custodian shall deliver and pay over all Trust Property held by it as specified in such vote.
The Trustees may also authorize the custodian to employ one or more sub- custodians from time to time to perform such of the acts and services of the custodian and upon such terms and conditions as may be agreed upon between the custodian and such sub-custodian and approved by the Trustees, provided that in every case such sub-custodian shall be a bank or trust company organized under the laws of the United States or one of the states thereof and having capital, surplus and undivided profits of at least five million dollars ($5,000,000.00) or such foreign banks and securities depositories as meet the requirements of applicable provisions of the 1940 Act or the rules and regulations thereunder.
SECTION 2. CENTRAL CERTIFICATE SYSTEM. Subject to such rules, regulations and orders as the Commission may adopt, the Trustees may direct the custodian to deposit all or any part of the securities owned by the Trust in a system for the central handling of securities established by a national securities exchange or a national securities association registered with the Commission under the Securities Exchange Act of 1934, or such other person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act, pursuant to which system all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of such securities, provided that all such deposits shall be subject to withdrawal only upon the order of the Trust or its custodian.
SECTION 3. ACCEPTANCE OF RECEIPTS IN LIEU OF CERTIFICATES. Subject to such rules, regulations and orders as the Commission may adopt, the Trustees may direct the custodian to accept written receipts or other written evidences indicating purchases of securities held in book-entry form in the Federal Reserve System in accordance with regulations promulgated by the Board of Governors of the Federal Reserve System and the local Federal Reserve Banks in lieu of receipt of certificates representing such securities.
SECTION 4. PROVISIONS OF CUSTODIAN CONTRACT. The following provisions shall apply to the employment of a custodian pursuant to this Article X and to any contract entered into with the custodian so employed:
(a) The Trustees shall cause to be delivered to the custodian all securities owned by the Trust or to which it may become entitled, and shall order the same to be delivered by the custodian only upon completion of a sale, exchange, transfer, pledge, or other disposition thereof, and upon receipt by the custodian of the consideration therefor or a certificate of deposit or a receipt of an issuer or of its Transfer Agent, all as the Trustees may generally or from time to time require or approve, or to a successor custodian; and the Trustees shall cause all funds owned by the Trust or to which it may become entitled to be paid to the custodian, and shall order the same disbursed only for investment against delivery of the securities acquired, or in payment of expenses, including management compensation, and liabilities of the Trust, including distributions to Shareholders, or to a successor custodian; provided, however, that nothing herein shall prevent delivery of securities for examination to the broker selling the same in accord with the "street delivery" custom whereby such securities are delivered to such broker in exchange for a delivery receipt exchanged on the same day for an uncertified check of such broker to be presented on the same day for certification.
(b) In case of the resignation, removal or inability to serve of any such custodian, the Trust shall promptly appoint another bank or trust company meeting the requirements of this Article X as successor custodian. The agreement with the custodian shall provide that the retiring custodian shall, upon receipt of notice of such appointment, deliver the funds and property of the Trust in its possession to and only to such successor, and that pending appointment of a successor custodian, or a vote of the Shareholders to function without a custodian, the custodian shall not deliver funds and property of the Trust to the Trust, but may deliver all or any part of them to a bank or trust company doing business in Boston, Massachusetts, of its own selection, having an aggregate capital, surplus and undivided profits (as shown in its last published report) of at least $5,000,000, as the property of the Trust to be held under terms similar to those on which they were held by the retiring custodian.
ARTICLE XI
SALE OF SHARES OF THE TRUST
The Trustees may from time to time issue and sell or cause to be issued and sold Shares for cash or other property, which shall in every case be paid or delivered to the Custodian as agent of the Trust before the delivery of any certificate for such shares. The Shares, including additional Shares which may have been repurchased by the Trust (herein sometimes referred to as "treasury shares"), may not be sold at a price less than the net asset value thereof (as defined in Article XII hereof) determined by or on behalf of the Trustees next after the sale is made or at some later time after such sale.
No Shares need be offered to existing Shareholders before being offered to others. No Shares shall be sold by the Trust (although Shares previously contracted to be sold may be issued upon payment therefor) during any period when the determination of net asset value is suspended by declaration of the Trustees pursuant to the provisions of Article XII hereof. In connection with the acquisition by merger or otherwise of all or substantially all the assets of an investment company (whether a regulated or private investment company or a personal holding company), the Trustees may issue or cause to be issued Shares and accept in payment therefor such assets at not more than market value in lieu of cash, notwithstanding that the federal income tax basis to the Trust of any assets so acquired may be less than the market value, provided that such assets are of the character in which the Trustees are permitted to invest the funds of the Trust.
The Trustees, in their sole discretion, may cause the Trust to redeem all of the Shares of the Trust held by any Shareholder if the value of such Shares is less than a minimum amount established from time to time by the Trustees.
ARTICLE XII
NET ASSET VALUE OF SHARES
SECTION 1. TIME OF DETERMINATION. The net asset value of each Share outstanding shall be determined by the Trustees on each business day (which term shall, wherever it appears in these By-Laws, be deemed to mean each day when the New York Stock Exchange is open for trading) as of the close of regular trading on the New York Stock Exchange. The power and duty to determine net asset value may be delegated by the Trustees from time to time to one or more of the Trustees or officers of the Trust, to the other party to any contract entered into pursuant to Section 4.1 of Article IV of the Declaration, or to the custodian or a transfer agent. The Trustees may also determine or cause to be determined the net asset value as of any particular time in addition to the closing time of each business day. Such additional or interim determination may be made either by appraisal or by calculation or estimate. Any such calculation or estimate shall be based on changes in the market value of representative or selected securities or on changes in recognized market averages since the last closing appraisal, and made in a manner which in the opinion of the Trustees will fairly reflect the changes in the
net asset value. At any time when the New York Stock Exchange is closed (other than customary weekend and holiday closings), the Trustees may cause the net asset value to be determined by appraising all securities at last sale prices, or at not more than the current asked nor less than the current bid prices, in the over-the-counter or other markets, and all other assets at fair value in the best judgment of the Trustees, and otherwise proceeding as above stated. For the purposes of Article VII of the Declaration and Articles XI and XII hereof, any reference to the time at which a determination of net asset value is made shall mean the time as of which the determination is made.
SECTION 2. SUSPENSION OF DETERMINATION. The Trustees may declare a suspension of the determination of net asset value to the extent permitted by the 1940 Act and rules, regulations and orders promulgated by the Commission thereunder.
SECTION 3. COMPUTATION. The net asset value of each Share of any series as of any particular time shall be the quotient (adjusted to the nearer cent) obtained by dividing the value, as of such time, of the net assets of the Trust allocated or belonging to such series (I.E., the value of the assets of the Trust allocated or belonging to such series less the liabilities of the Trust attributable to such series exclusive of capital and surplus) by the total number of Shares of such series outstanding (exclusive of treasury shares) at such time. In determining the net asset value of each share of any series:
A. Assets allocated or belonging to, and liabilities attributable to, such series shall be determined as provided in Section 6.9 of the Declaration.
B. The assets of the Trust shall be deemed to include (a) all cash on hand, on deposit or on call, including any interest accrued thereon, (b) all bonds, debentures, bills and notes and accounts receivable and other evidences of indebtedness, (c) all shares of stock, subscription rights, warrants, and other securities, other than its own Shares, (d) all stock and cash dividends or distributions receivable by the Trust which have been declared and are ex- dividend to shareholders of record at or before the time as of which the net asset value is being determined, (e) all interest accrued on any interest- bearing securities owned by the Trust, and (f) all other property of every kind and nature including prepaid expenses, the value of such assets to be determined as follows:
(i) The value of any cash on hand, on deposit or on call, bills and notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet received, shall be deemed to be the face amount thereof unless the Trustees shall have determined that any such item is not worth the face amount thereof, in which event the value thereof shall be determined in good faith by or at the direction of the Trustees;
(ii) The value of any security which is listed or dealt in upon the New York Stock Exchange or upon the American Stock Exchange shall be determined by taking the latest sale price (or, lacking any sales not less than the closing bid price nor more than the closing asked price therefor) at the time as of which the net asset value is being determined, all as reported by any report in common use or
authorized by the New York Stock Exchange or the American Stock Exchange, as the case may be; provided, however, that prices on such Exchanges need not be used to determine the value of debt securities owned by the Trust if, in the opinion of the Trustees, some other method would more accurately reflect the fair market value of such debt securities;
(iii) The value of any security which is not listed or dealt in on either of such Exchanges shall be determined in the manner described in the next preceding paragraph if listed or dealt in on any other Exchange;
(iv) The value of any security not listed or dealt in on any Exchange and for which market quotations are readily available shall be determined by taking not less than the closing bid price nor more than the closing asked price therefor on the date as of which the net asset value is being determined; and
(v) In the case of any security or other property for which no price quotations are available as above provided, the value thereof shall be determined from time to time in such manner as the Trustees shall from time to time provide by resolution.
C. The liabilities of the Trust shall be deemed to include (a) all bills, notes and accounts payable, (b) all administrative expenses payable and/or accrued, (c) all contractual obligations for the payment of money or property, including the amount of any unpaid dividends upon the Shares, declared to Shareholders of record at or before the time as of which the net asset value is being determined, (d) all reserves authorized or approved by the Trustees for taxes or contingencies, and (e) all other liabilities of the Trust of whatsoever kind and nature except liabilities represented by outstanding Shares and capital surplus of the Trust.
D. For the purposes of this Article XII
(i) Shares sold shall be deemed to become outstanding immediately after the close of business on the day on which the contract of sale is made, and the sale price thereof (less commission, if any, and less any stamp or other tax payable by the Trust in connection with the issuance thereof) shall thereupon be deemed an asset of the Trust.
(ii) Shares tendered for purchase by the Trust under Section 7.1 of Article VII of the Declaration shall be deemed to be outstanding at the close of business on the day as of which the purchase price is determined, and thereafter they shall be deemed treasury stock and, until paid, the price thereof shall be deemed a liability of the Trust.
(iii) Credits and contractual obligations payable to the Trust in foreign currency and liabilities and contractual obligations payable by the Trust in foreign currency shall be taken at the current cable rate of exchange as nearly as practicable at the time as of which the net asset value is computed.
(iv) Portfolio securities owned by the Trust which the Trustees or their delegate shall, pursuant to Section 7.3 of Article VII of the Declaration, have selected for distribution in redemption or repurchase of Shares tendered to it pursuant to Section 7.1 of Article VII of the Declaration at any time shall be included in determining the price of such Shares, and thereafter neither such securities nor such Shares shall be included in determinations of net asset value pursuant to this Article XII.
The net asset value of each Share of any class of any series as of any particular time shall be determined in a similar fashion as set forth above, with such adjustments as the Trustees and officers of the Trust deem appropriate.
ARTICLE XIII
DIVIDENDS AND DISTRIBUTIONS
SECTION 1. LIMITATIONS ON DISTRIBUTIONS. The total of distributions to Shareholders of a particular series paid in respect of any one fiscal year, subject to the exceptions noted below, shall, when and as declared by the Trustees be approximately equal to the sum of (A) the net income, exclusive of the profits or losses realized upon the sale of securities or other property, of such series for such fiscal year, determined in accordance with generally accepted accounting principles (which, if the Trustees so determine, may be adjusted for net amounts included as such accrued net income in the price of Shares of such series issued or repurchased), but if the net income of such series exceeds the amount distributed by less than one cent per share outstanding at the record date for the final dividend, the excess shall be treated as distributable income of such series for the following fiscal year; and (B), in the discretion of the Trustees, an additional amount which shall not substantially exceed the excess of profits over losses on sales of securities or other property allocated or belonging to such series for such fiscal year. The decision of the Trustees as to what, in accordance with generally accepted accounting principles, is income and what is principal shall be final, and except as specifically provided herein the decision of the Trustees as to what expenses and charges of the Trust shall be charged against principal and what against income shall be final, all subject to any applicable provisions of the 1940 Act and rules, regulations and orders of the Commission promulgated thereunder. For the purposes of the limitation imposed by this Section 1, Shares issued pursuant to Section 2 of this Article XIII shall be valued at the amount of cash which the Shareholders would have received if they had elected to receive cash in lieu of such Shares.
Inasmuch as the computation of net income and gains for federal income tax purposes may vary from the computation thereof on the books, the above provisions shall be interpreted to give to the Trustees the power in their discretion to distribute for any fiscal year as ordinary dividends and as capital gains distributions, respectively, additional amounts sufficient to enable the Trust to avoid or reduce liability for taxes. Any payment made to Shareholders pursuant to clause (B) of this Section 1 shall be accompanied by a written statement showing the source or sources of such payment, and the basis of computation thereof.
SECTION 2. DISTRIBUTIONS PAYABLE IN CASH OR SHARES. The Trustees shall
have power, to the fullest extent permitted by the laws of The Commonwealth of
Massachusetts but subject to the limitation as to cash distributions imposed by
Section 1 of this Article XIII, at any time or from time to time to declare and
cause to be paid distributions payable at the election of any Shareholder of any
series (whether exercised before or after the declaration of the distribution)
either in cash or in Shares of such series, provided that the sum of (i) the
cash distribution actually paid to any Shareholder and (ii) the net asset value
of the Shares which that Shareholder elects to receive, in effect at such time
at or after the election as the Trustees may specify, shall not exceed the full
amount of cash to which that Shareholder would be entitled if he elected to
receive only cash. In the case of a distribution payable in cash or Shares at
the election of a Shareholder, the Trustees may prescribe whether a Shareholder,
failing to express his election before a given time shall be deemed to have
elected to take Shares rather than cash, or to take cash rather then Shares, or
to take Shares with cash adjustment of fractions.
SECTION 3. STOCK DIVIDENDS. Anything in these By-Laws to the contrary notwithstanding, the Trustees may at any time declare and distribute pro rata among the Shareholders of any series a "stock dividend" out of either authorized but unissued Shares of such series or treasury Shares of such series or both.
ARTICLE XIV
AMENDMENTS
These By-Laws, or any of them, may be altered, amended or repealed, or new By-Laws may be adopted (a) by Majority Shareholder Vote, or (b) by the Trustees, provided, however, that no By-Law may be amended, adopted or repealed by the Trustees if such amendment, adoption or repeal requires, pursuant to law, the Declaration or these By-Laws, a vote of the Shareholders.
EXHIBIT 5a
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of this 8th day of December, 1993 by and between MFS UNION STANDARD TRUST, a Massachusetts business trust (the "Trust") on behalf of MFS UNION STANDARD EQUITY FUND, a series of the Trust (the "Fund"), and Massachusetts Financial Services Company, a Delaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment company registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide business management services to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and Agreements of the parties hereto as herein set forth, the parties covenant and agree as follows:
ARTICLE 1: DUTIES OF THE ADVISER. The Adviser shall provide the Fund with such investment advice and supervision as the latter may from time to time consider necessary for the proper management of its funds. The Adviser shall act as Adviser to the Fund and as such shall furnish continuously an investment program and shall determine from time to time what securities shall be purchased, sold or exchanged and what portion of the assets of the Fund shall be held uninvested, subject always to the restrictions of the Trust's Declaration of Trust, dated September 1, 1993 and By-Laws, as amended from time to time (respectively, the "Declaration" and the "By-Laws"), and to the provisions of the Investment Company Act of 1940. 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 Fund, all actions which it deems necessary to implement the investment policies determined as provided above, and in particular to place all orders for the purchase or sale of portfolio securities for the Fund's account with brokers or dealers selected by it, and to that end the Adviser is authorized as the agent of the Fund to give instructions to the Custodian of the Fund as to deliveries of securities and payments of cash for the account of the Fund. In connection with the selection of such brokers or dealers and the placing of such orders, the Adviser is directed to seek for the Fund execution at the most favorable price by responsible brokerage firms at reasonably competitive commission rates. In fulfilling this requirement the Adviser shall not be deemed to have acted unlawfully or to have breached any duty, created by this Agreement or otherwise, solely by reason of its having caused
the Fund to pay a broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Adviser determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser's overall responsibilities with respect to the Fund and to other clients of the Adviser as to which the Adviser exercises investment discretion.
ARTICLE 2: ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall furnish at its own expense investment advisory and administrative services, office space, equipment and clerical personnel necessary for servicing the investments of the Fund and maintaining the Trust's organization, and investment advisory facilities and executive and supervisory personnel for managing the investments and effecting the portfolio transactions of the Fund. The Adviser shall arrange, if desired by the Trust, for Directors, officers and employees of the Adviser to serve as Trustees, officers or agents of the Trust if duly elected or appointed to such positions and subject to their individual consent and to any limitations imposed by law. It is understood that the 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 disbursing agent of the Trust, expenses of repurchasing and redeeming shares and servicing shareholder accounts, expenses of preparing, printing and mailing stock certificates, prospectuses, periodic reports, notices and proxy statements to shareholders and 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, keeping of books and accounts and calculation of the net asset value of shares of the Fund, expenses of shareholder meetings, and expenses relating to the issuance, registration and qualification of shares of the Trust.
ARTICLE 3: COMPENSATION OF THE ADVISER. For the services to be rendered and the facilities to be furnished as provided in Articles 1 and 2 above, the Fund shall pay to the Adviser an investment advisory fee computed and paid monthly at the annual rate of 0.65% of the Fund's average daily net assets.
The Adviser agrees to pay until December 31, 1998, expenses of the Trust (except for fees paid under this Agreement or the Fund's Distribution Plan) such that the Fund's aggregate operating expenses shall not exceed 1.00% per annum of the average daily net assets of the Fund; PROVIDED, HOWEVER, that this obligation may be terminated or revised at any time by the Adviser without the consent of the Fund by notice in writing from the Adviser to the Fund, provided that such termination or revision will not be effective with respect to the fiscal year within which such notice is given. Such payments by the Adviser are subject to reimbursement by the Fund, which will be accomplished by the payment by the Fund of an expense reimbursement fee to the Adviser computed and paid monthly at a percentage of the average daily net assets of the Fund for its then current fiscal year, with a limitation that immediately after such payment the aggregate operating expenses of the Fund would not exceed 1.00% of its average daily net assets. This expense reimbursement terminates for the Fund on the earlier of the date on which
payments made thereunder by such Fund equal the prior payment of such reimbursable expenses by the Adviser or December 31, 1998.
If the Adviser shall serve for less than the whole of any period specified in this Article 3, the compensation to the Adviser shall be prorated.
ARTICLE 4: SPECIAL SERVICES. Should the Trust have occasion to request the Adviser to perform services not herein contemplated or to request the Adviser to arrange for the services of others, the Adviser will act for the Trust upon request to the best of its ability, with compensation for the Adviser's services to be agreed upon with respect to each such occasion as it arises.
ARTICLE 5: COVENANTS OF THE ADVISER. The Adviser agrees that it will not deal with itself, or with the Trustees of the Trust or the Underwriter as principals in making purchases or sales of securities or other property for the account of the Fund, will not take a long or short position in the shares of the Fund except as provided by the Declaration, and will comply with all other provisions of the Declaration and By-laws relative to the Adviser and its Directors and officers.
ARTICLE 6: LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution and management of the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder. As used in this Article 6, the term "Adviser" shall include Directors, officers and employees of the Adviser as well as the corporation itself.
ARTICLE 7: 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 services to others. The Adviser may permit other fund clients to use the words "Massachusetts Financial" or "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 and the Fund will each change its name so as to delete the words "Massachusetts Financial" or "MFS". It is understood that Trustees, officers, and shareholders of the Trust are or may be or become interested in the Adviser, as Directors, officers, employees, or otherwise and that Directors, officers and employees of the Adviser are or may become similarly interested in the Fund and that the Adviser may be or become interested in the Fund as a shareholder or otherwise.
ARTICLE 8: DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This Agreement shall become effective on the date of its execution and shall govern the relations between the parties hereto thereafter, and shall remain in force until December 8,1995, on which date it will terminate unless its continuance after December 8, 1995, 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 Trustees of the Trust, or by vote of a majority of the outstanding voting securities of the Fund. The aforesaid requirement that continuance of this Agreement be "specifically approved at least annually" shall be construed in a manner consistent with the Investment Company Act of 1940 and the Rules and Regulations thereunder.
This Agreement may be terminated at any time without the payment of any penalty by the Trustees or by vote of a majority of the outstanding voting securities of the Fund, or by the Adviser, on not more than sixty days' nor less that 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 Fund.
The terms "vote of a majority of the outstanding voting securities," "assignment," "affiliated person," and "interested persons," when used in this Agreement, shall have the respective meanings specified in the Investment Company Act of 1940 and the Rules and Regulations thereunder, subject, however, to such exemptions as my be granted by the Securities and Exchange Commission under said Act.
ARTICLE 9: RECORD KEEPING. The Adviser will maintain records in a form acceptable to the Fund and in compliance with the rules and regulations of the Securities and Exchange Commission, including but not limited to records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder, which at all times will be the property of the Fund and will be available for inspection and use by the Fund.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered in their names and on their behalf by the undersigned, thereunto duly authorized, and their respective seals to be hereto affixed, all as of the day and year first written above. The undersigned Trustee of the Trust has executed this Agreement not individually, but as Trustee under the Declaration 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 applicable to the Fund.
MFS UNION STANDARD TRUST
on behalf of
MFS UNION STANDARD EQUITY FUND
MASSACHUSETTS FINANCIAL SERVICES COMPANY
EXHIBIT 5b
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated as of this 15th day of November, 1995 by and between MFS UNION STANDARD TRUST, a Massachusetts business trust (the "Trust") on behalf of MFS UNION STANDARD RESEARCH FUND, a series of the Trust (the "Fund"), and Massachusetts Financial Services Company, a Delaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end investment company registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide business management services to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and Agreements of the parties hereto as herein set forth, the parties covenant and agree as follows:
ARTICLE 1: DUTIES OF THE ADVISER. The Adviser shall provide the Fund with such investment advice and supervision as the latter may from time to time consider necessary for the proper management of its funds. The Adviser shall act as Adviser to the Fund and as such shall furnish continuously an investment program and shall determine from time to time what securities shall be purchased, sold or exchanged and what portion of the assets of the Fund shall be held uninvested, subject always to the restrictions of the Trust's Declaration of Trust, dated September 1, 1993 and By-Laws, as amended from time to time (respectively, the "Declaration" and the "By-Laws"), and to the provisions of the Investment Company Act of 1940. 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 Fund, all actions which it deems necessary to implement the investment policies determined as provided above, and in particular to place all orders for the purchase or sale of portfolio securities for the Fund's account with brokers or dealers selected by it, and to that end the Adviser is authorized as the agent of the Fund to give instructions to the Custodian of the Fund as to deliveries of securities and payments of cash for the account of the Fund. In connection with the selection of such brokers or dealers and the placing of such orders, the Adviser is directed to seek for the Fund execution at the most favorable price by responsible brokerage firms at reasonably competitive commission rates. In fulfilling this requirement the Adviser shall not be deemed to have acted unlawfully or to have
breached any duty, created by this Agreement or otherwise, solely by reason of its having caused the Fund to pay a broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Adviser determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser's overall responsibilities with respect to the Fund and to other clients of the Adviser as to which the Adviser exercises investment discretion.
ARTICLE 2: ALLOCATION OF CHARGES AND EXPENSES. The Adviser shall furnish at its own expense investment advisory and administrative services, office space, equipment and clerical personnel necessary for servicing the investments of the Fund and maintaining the Trust's organization, and investment advisory facilities and executive and supervisory personnel for managing the investments and effecting the portfolio transactions of the Fund. The Adviser shall arrange, if desired by the Trust, for Directors, officers and employees of the Adviser to serve as Trustees, officers or agents of the Trust if duly elected or appointed to such positions and subject to their individual consent and to any limitations imposed by law. It is understood that the 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 disbursing agent of the Trust, expenses of repurchasing and redeeming shares and servicing shareholder accounts, expenses of preparing, printing and mailing stock certificates, prospectuses, periodic reports, notices and proxy statements to shareholders and 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, keeping of books and accounts and calculation of the net asset value of shares of the Fund, expenses of shareholder meetings, and expenses relating to the issuance, registration and qualification of shares of the Trust.
ARTICLE 3: COMPENSATION OF THE ADVISER. For the services to be rendered and the facilities to be furnished as provided in Articles 1 and 2 above, the Fund shall pay to the Adviser an investment advisory fee computed and paid monthly at the annual rate of 0.60% of the Fund's average daily net assets.
The Adviser agrees to pay until December 31, 1998, expenses of the Trust (except for fees paid under this Agreement or the Fund's Distribution Plan) such that the Fund's aggregate operating expenses shall not exceed 1.00% per annum of the average daily net assets of the Fund; PROVIDED, HOWEVER, that this obligation may be terminated or revised at any time by the Adviser without the consent of the Fund by notice in writing from the Adviser to the Fund, provided that such termination or revision will not be effective with respect to the fiscal year within which such notice is given. Such payments by the Adviser are subject to reimbursement by the Fund, which will be accomplished by the payment by the Fund of an expense reimbursement fee to the Adviser computed and paid monthly at a percentage of the average daily net assets of the Fund for its then current fiscal year, with a limitation that immediately after such payment the aggregate operating expenses of the Fund would not exceed 1.00% of its average daily net assets.
This expense reimbursement terminates for the Fund on the earlier of the date on which payments made thereunder by such Fund equal the prior payment of such reimbursable expenses by the Adviser or December 31, 1998.
If the Adviser shall serve for less than the whole of any period specified in this Article 3, the compensation to the Adviser shall be prorated.
ARTICLE 4: SPECIAL SERVICES. Should the Trust have occasion to request the Adviser to perform services not herein contemplated or to request the Adviser to arrange for the services of others, the Adviser will act for the Trust upon request to the best of its ability, with compensation for the Adviser's services to be agreed upon with respect to each such occasion as it arises.
ARTICLE 5: COVENANTS OF THE ADVISER. The Adviser agrees that it will not deal with itself, or with the Trustees of the Trust or the Underwriter as principals in making purchases or sales of securities or other property for the account of the Fund, will not take a long or short position in the shares of the Fund except as provided by the Declaration, and will comply with all other provisions of the Declaration and By-Laws relative to the Adviser and its Directors and officers.
ARTICLE 6: LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution and management of the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties hereunder. As used in this Article 5, the term "Adviser" shall include Directors, officers and employees of the Adviser as well as the corporation itself.
ARTICLE 7: 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 services to others. The Adviser may permit other fund clients to use the words "Massachusetts Financial" or "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 and the Fund will each change its name so as to delete the words "Massachusetts Financial" or "MFS". It is understood that Trustees, officers, and shareholders of the Trust are or may be or become interested in the Adviser, as Directors, officers, employees, or otherwise and that Directors, officers and employees of the Adviser are or may become similarly interested in the Fund and that the Adviser may be or become interested in the Fund as a shareholder or otherwise.
ARTICLE 8: DURATION, TERMINATION AND AMENDMENTS OF THIS AGREEMENT. This Agreement shall become effective on the date of its execution and shall govern the relations between the parties hereto thereafter, and shall remain in force until November 15,1997, on which date it will terminate unless its continuance after November 15, 1997, 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 Trustees of the Trust, or by vote of a majority of the outstanding voting securities of the Fund. The aforesaid requirement that continuance of this
Agreement be "specifically approved at least annually" shall be construed in a manner consistent with the Investment Company Act of 1940 and the Rules and Regulations thereunder.
This Agreement may be terminated at any time without the payment of any penalty by the Trustees or by vote of a majority of the outstanding voting securities of the Fund, or by the Adviser, on not more than sixty days' nor less that 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 Fund.
ARTICLE 9: DEFINITIONS. The terms "vote of a majority of the outstanding voting securities," "assignment," "affiliated person," and "interested persons," when used in this Agreement, shall have the respective meanings specified in the Investment Company Act of 1940 and the Rules and Regulations thereunder, subject, however, to such exemptions as my be granted by the Securities and Exchange Commission under said Act.
ARTICLE 10: RECORD KEEPING. The Adviser will maintain records in a form acceptable to the Fund and in compliance with the rules and regulations of the Securities and Exchange Commission, including but not limited to records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder, which at all times will be the property of the Fund and will be available for inspection and use by the Fund.
A copy of the Declaration is on file with the Secretary of State of The Commonwealth of Massachusetts. The Adviser acknowledges that the obligations of or arising out of this instrument are not binding upon any of the Trust's trustees, officers, employees, agents or shareholders individually, but are binding solely upon the assets and property of the Trust in accordance with its proportionate interest hereunder. If this instrument is executed by the Trust on behalf of one or more series of the Trust, the Adviser further acknowledges that the assets and liabilities of each series of the Trust are separate and distinct and that the obligations of or arising out of this instrument are binding solely upon the assets or property of the series on whose behalf the Trust has executed this instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered in their names and on their behalf by the undersigned, thereunto duly authorized, and their respective seals to be hereto affixed, all as of the day and year first written above. The undersigned officers of the Trust and the Adviser have executed this Agreement not individually, but as officers of the Trust and the Adviser, respectively.
MFS UNION STANDARD TRUST
on behalf of
MFS UNION STANDARD RESEARCH FUND,
one of its series
MASSACHUSETTS FINANCIAL SERVICES COMPANY
EXHIBIT 6
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, as of this 8th day of December, 1993, by and between MFS UNION STANDARD TRUST, a Massachusetts business trust (the "Trust"), on behalf of each series from time to time of the Trust (referred to individually as a "Fund" and collectively as the "Funds") and MFS INVESTOR SERVICES, INC., a Delaware corporation (the "Distributor");
NOW, THEREFORE, in consideration of the mutual promises and undertakings herein contained, the parties hereto agree as follows:
1. The Trust grants to the Distributor the right, as agent of the Trust, to sell Shares of Beneficial Interest, without par value, of the Funds (the "Shares") upon the terms herein below set forth during the term of this Agreement. While this Agreement is in force, the Distributor agrees to use its best efforts to find purchasers for Shares.
The Distributor shall have the right, as agent of the Trust, to order from the Trust the Shares needed, but not more than the Shares needed (except for clerical errors and errors of transmission) to fill unconditional orders for Shares placed with the Distributor by investors as set forth in the current prospectus and statement of additional information (collectively, the "Prospectus") relating to the Shares. The price which shall be paid to the Trust for the Shares so purchased shall be the net asset value on which such orders were based. The Distributor shall notify the Custodian of the Trust, at the end of each business day, or as soon thereafter as the orders placed with it have been compiled, of the number of Shares and the prices thereof which have been ordered through the Distributor since the end of the previous day.
The right granted to the Distributor to place orders for Shares with the Trust shall be exclusive, except that said exclusive right shall not apply to Shares issued in the event that an investment company (whether a regulated or private investment company or a personal holding company) is merged or consolidated with the Trust (or a Fund) or in the event that the Trust (or a Fund) acquires by purchase or otherwise, all (or substantially all) the assets or the outstanding shares of any such company; nor shall it apply to Shares issued by the Trust (or a Fund) as a stock dividend or a stock split. The exclusive right to place orders for Shares granted to the Distributor may be waived by the Distributor by notice to the Trust in writing, either unconditionally or subject to such conditions and limitations as may be set forth in the notice to the Trust. The Trust hereby acknowledges that the Distributor may render distribution and other services to other parties, including other investment companies. In connection with its duties hereunder, the Distributor shall also arrange for computation of performance statistics with respect to the Trust and arrange for publication of current price information in newspapers and other publications.
2. The Shares may be sold through the Distributor to investors upon the following terms and conditions:
The Distributor may place orders for Shares at the net asset value for such Shares (as established pursuant to paragraph l above) on behalf of such purchasers and under such circumstances as the Prospectus describes, provided that such sales comply with Rule 22d-1 under the Investment Company Act of 1940 or any exemptive order granted by the Securities and Exchange Commission. The Distributor may also place orders for Shares at net asset value on behalf of persons reinvesting the proceeds of the redemption or resale of Shares or shares of other investment companies for which the Distributor acts as Distributor or as otherwise provided in the current Prospectus.
The net asset value of Shares shall be determined by the Trust or by an agent of the Trust, as of the close of regular trading of the New York Stock Exchange on each business day on which said Exchange is open, in accordance with the method set forth in the governing instruments (as hereinafter defined) of the Trust. The Trust may also cause the net asset value to be determined in substantially the same manner or estimated in such manner and as of such other hour or hours as may from time to time be agreed upon in writing by the Trust and Distributor. The Trust shall have the right to suspend the sale of Shares if, because of some extraordinary condition, the New York Stock Exchange shall be closed, or if conditions obtaining during the hours when the Exchange is open render such action advisable, or for any other reasons deemed adequate by the Trust.
3. The Trust agrees that it will, from time to time, take all necessary action to register the offering and sale of Shares under the Securities Act of l933, as amended (the "Act"), and applicable state securities laws.
The Distributor shall be an independent contractor and neither the Distributor nor any of its directors, officers or employees as such, is or shall be an employee of the Trust. It is understood that Trustees, officers and shareholders of the Trust are or may become interested in the Distributor, as Directors, officers and employees, or otherwise and that Directors, officers and employees of the Distributor are or may become similarly interested in the Trust and that the Distributor may be or become interested in the Trust as a shareholder or otherwise. The Distributor is responsible for its own conduct and the employment, control and conduct of its agents and employees and for injury to such agents or employees or to others through its agents or employees. The Distributor assumes full responsibility for its agents and employees under applicable statutes and agrees to pay all employer taxes thereunder.
4. The Distributor covenants and agrees that, in selling Shares, it will use its best efforts in all respects duly to conform with the requirements of all state and federal laws and the Rules of Fair Practice of the National Association of Securities Dealers, Inc. (the "NASD") relating to the sale of Shares, and will indemnify and hold harmless the Trust and each of its Trustees and officers and each person, if any, who controls the Trust within the meaning of Section 15 of the Act, against any loss, liability, damages, claim or expense (including the reasonable cost of investigating or defending any alleged loss, liability, damages, claim or expense and reasonable counsel fees incurred in connection therewith), arising by reason of any person's acquiring any Shares, which may be based upon the Act or any other statute or common law, on account of any
wrongful act of the Distributor or any of its employees (including any failure to conform with any requirement of any state or federal law or the Rules of Fair Practice of the NASD relating to the sale of Shares) or on the ground that the registration statement or Prospectus or Statement of Additional Information, as from time to time amended and supplemented, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, unless any such act, statement or omission was made in reliance upon information furnished to the Distributor by or on behalf of the Trust, provided, however, that in no case (i) is the indemnity of the Distributor in favor of any person indemnified to be deemed to protect the Trust or any such person against any liability to which the Trust or any such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its or his duties or by reason of its or his reckless disregard of its obligations and duties under this Agreement, or (ii) is the Distributor to be liable under its indemnity agreement contained in this paragraph with respect to any claim made against the Trust or any person indemnified unless the Trust or such person, as the case may be, shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon the Trust or upon such person (or after the Trust or such person shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve it from any liability which it may have to the Trust or any person against whom such action is brought otherwise than on account of its indemnity agreement contained in this paragraph. The Distributor shall be entitled to participate, at its own expense, in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any such liability, but, if the Distributor elects to assume the defense, such defense shall be conducted by counsel chosen by it and satisfactory to the Trust, or to its officers or Trustees, or to any controlling person or persons, defendant or defendants in the suit. In the event that the Distributor elects to assume the defense of any such suit and retain such counsel, the Trust or such officers or Trustees or controlling person or persons, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them, but, in case the Distributor does not elect to assume the defense of any such suit, it shall reimburse the Trust and such officers and Trustees or controlling person or persons, defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by them. The Distributor agrees promptly to notify the Trust of the commencement of any litigation or proceedings against it in connection with the issue and sale of any Shares.
Neither the Distributor nor any other person is authorized to give any information or to make any representation on behalf of the Trust, other than those contained in the registration statement or Prospectus filed with the Securities and Exchange Commission under the Act (as said registration statement or Prospectus may be amended or supplemented from time to time), covering the Shares or other than those contained in periodic reports to shareholders of the Trust.
5. The Trust will pay, or cause to be paid -
(i) all costs and expenses of the Trust, including fees and disbursements of its counsel, in connection with the preparation and filing of any required registration statement or Prospectus under the Act covering Shares and all amendments and supplements thereto and any notices regarding the registration of shares, and preparing and mailing to shareholders
Prospectuses, statements and confirmations and periodic reports (including the expense of setting up in type any such registration statement, Prospectus or periodic report);
(ii) the expenses (including auditing expenses) of qualification of the Shares for sale, and, if necessary or advisable in connection therewith, of qualifying the Trust as a dealer or broker, in such states as shall be selected by the Distributor and the fees payable to each such state with respect to shares sold and for continuing the qualification therein until the Distributor notifies the Trust that it does not wish such qualification continued;
(iii) the cost of preparing temporary or permanent certificates for Shares;
(iv) all fees and disbursements of the transfer agent of the Trust;
(v) the cost and expenses of delivering to the Distributor at its office in Boston, Massachusetts, all Shares purchased through it as agent hereunder; and
(vi) all the federal and state issue and/or transfer taxes payable upon the issue by or (in the case of treasury Shares) transfer from the Trust of any and all Shares purchased through the Distributor hereunder.
The Distributor agrees that, after the Prospectus and periodic reports have been set up in type, it will bear the expense (other than the cost of mailing to shareholders of the Trust) of printing and distributing any copies thereof which are to be used in connection with the offering of Shares to investors. The Distributor further agrees that it will bear the expenses of preparing, printing and distributing any other literature used by the Distributor for use in connection with the offering of the Shares for sale to the public and any expenses of advertising in connection with such offering. Nothing in this paragraph 5 shall be deemed to prohibit or conflict with any payment by the Trust or any Fund to the Distributor pursuant to any Distribution Plan adopted and in effect pursuant to Rule 12b-1 under the Investment Company Act of 1940.
6. The Trust hereby authorizes the Distributor to repurchase, upon the terms and conditions set forth in written instructions given by the Trust to the Distributor from time to time, as agent of the Trust and for its account, such Shares as may be offered for sale to the Trust from time to time.
(a) The Distributor shall notify in writing the Custodian of the Trust, at the end of each business day, or as soon thereafter as the repurchases have been compiled, of the number of Shares repurchased for the account of the Trust since the last previous report, together with the prices at which such repurchases were made, and upon the request of any Officer or Trustee of the Trust shall furnish similar information with respect to all repurchases made up to the time of the request on any day.
(b) The Trust reserves the right to suspend or revoke the foregoing authorization at any time. Unless otherwise stated, any such suspension or revocation shall be effective forthwith upon receipt of notice thereof by an officer of the Distributor, by telegraph or by written notice from the Trust. In the event that the authorization of the Distributor is, by the terms of such notice, suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of a majority of the members of the Board of Trustees of the Trust.
(c) The Distributor shall have the right to terminate the operation of this paragraph 6 upon giving to the Trust thirty days' written notice thereof.
(d) The Trust agrees to authorize and direct the Custodian to pay, for the account of the Trust, the purchase price of any Shares so repurchased against delivery of the certificates, if any, in proper form for transfer to the Trust or for cancellation by the Trust.
(e) The Distributor shall receive no commission in respect of any repurchase of Shares under the foregoing authorization and appointment as agent.
(f) The Trust agrees to reimburse the Distributor, from time to time upon demand, for any reasonable expenses incurred in connection with the repurchase of Shares pursuant to this paragraph 6.
7. If, at any time during the existence of this Agreement, the Trust shall deem it necessary or advisable in the best interests of the Trust that any amendment of this Agreement be made in order to comply with the recommendations or requirements of the Securities and Exchange Commission or other governmental authority or to obtain any advantage under Massachusetts, any state or federal tax laws, it shall notify the Distributor of the form of amendment which it deems necessary or advisable and the reasons therefore. If the Distributor declines to assent to such amendment, the Trust may terminate this Agreement forthwith by written notice to the Distributor without payment of any penalty. If, at any time during the existence of this Agreement, upon request by the Distributor, the Trust fails (after a reasonable time) to make any changes in its governing instruments or in its methods of doing business which are necessary in order to comply with any requirements of federal or state laws or regulations, laws or regulations of the Securities and Exchange Commission or of a national securities association of which the Distributor is or may be a member, relating to the sale of Shares, the Distributor may terminate this Agreement forthwith by written notice to the Trust without payment of any penalty.
8. The Distributor agrees that it will not take any long or short positions in the Shares except as permitted by paragraphs l and 6 hereof. Whenever used in this Agreement, the term "governing instruments" shall mean the Declaration of Trust and the By-Laws of the Trust, as from time to time amended.
9. This Agreement shall become effective upon its execution and shall continue in force until December 8, 1995 on which date it will terminate unless its continuance after December 8, 1995, is specifically approved at least annually (i) by the vote of a majority of the Board of Trustees of the Trust who are not interested persons of the Trust or of the Distributor 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. The aforesaid requirement that continuance of this Agreement be "specifically approved at least annually" shall be construed in a manner consistent with the Investment Company Act of l940 and the Rules and Regulations thereunder.
This Agreement may be terminated at any time by either party without payment of any penalty on not more than sixty days' or less than thirty days' written notice to the other party.
l0. This Agreement shall automatically terminate in the event of its assignment.
11. The terms "vote of a majority of the outstanding voting securities", "interested person" and "assignment" shall have the respective meanings specified in the Investment Company Act of l940 and the Rules and Regulations thereunder, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under said Act.
12. This Agreement shall be governed by the laws of The Commonwealth of Massachusetts.
13. The undersigned officer of the Trust has executed the Agreement not individually, but as an officer under the Trust's Declaration of Trust dated September 1, 1993, and the obligations of the Agreement are not binding upon any of the Trustees, officers or shareholders of the Trust individually, but bind only the Trust estate.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written on December 8, 1993.
MFS UNION STANDARD TRUST
MFS INVESTOR SERVICES, INC.
President
EXHIBIT 8b
AMENDMENT TO CUSTODIAN CONTRACT
Amendment to Custodian Contract between MFS Union Standard Trust, a business trust organized and existing under the laws of Massachusetts, having a principal place of business at 500 Boylston Street, Boston, Massachusetts 02116 (hereinafter called the "Fund"), 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").
WHEREAS: The Fund and the Custodian are parties to a Custodian Contract dated December 8, l993 (the "Custodian Contract") ;
WHEREAS: The Fund desires that the Custodian issue a letter of credit (the "Letter of Credit") on behalf of the Fund for the benefit of ICI Mutual Insurance Company (the "Company") in accordance with the Continuing Letter of Credit and Security Agreement and that the Fund's obligations to the Custodian with respect to the Letter of Credit shall be fully collateralized at all times while the Letter of Credit is outstanding by, among other things, segregated assets of the Fund equal to 125% of the face amount to the amount of the Letter of Credit;
WHEREAS: The Custodian Contract provides for the establishment of segregated accounts for proper Fund purposes upon Proper Instructions (as defined in the Custodian Contract); and
WHEREAS: The Fund and the Custodian desire to establish a segregated account to hold the collateral for the Fund's obligations to the Custodian with respect to the Letter of Credit and to amend the Custodian Contract to provide for the establishment and maintenance thereof;
WITNESSETH: That in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto hereby amend the Custodian Contract as follows:
1. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Custodian Contract.
2. The Fund hereby instructs the Custodian to establish and maintain a segregated account (the "Letter of Credit Custody Account") for and in behalf of the Fund as contemplated by Section 2.13(iv) for the purpose of collateralizing the Fund's obligations under this Amendment to the Custodian Contract.
3. The Fund shall deposit with the Custodian and the Custodian shall hold in the Letter of Credit Custody Account cash, U.S. government securities and other high-grade debt securities owned by the Fund acceptable to the Custodian (collectively "Collateral
Securities") equal to 125% of the face amount to the amount which the Company may draw under the Letter of Credit. Upon receipt of such Collateral Securities in the Letter of Credit Custody Account, the Custodian shall issue the Letter of Credit to the Company.
4. The fund hereby grants to the Custodian a security interest in the Collateral Securities from time to time in the Letter of Credit Custody Account (the "Collateral") to secure the performance of the Fund's obligations to the Custodian with respect to the Letter of Credit, including, without limitation, under Section 5-114(3) of the Uniform Commercial Code. The Fund shall register the pledge of Collateral and execute and deliver to the Custodian such powers and instruments of assignment as may be requested by the Custodian to evidence and perfect the limited interest in the Collateral granted hereby.
5. The Collateral Securities in the Letter of Credit Custody Account may be substituted or exchanged (including substitutions or exchanges which increase or decrease the aggregate value of the Collateral) only pursuant to Proper Instructions from the Fund after the Fund notifies the Custodian of the contemplated substitution or exchange and the Custodian agrees that such substitution or exchange is acceptable to the Custodian.
6. Upon any payment made pursuant to the Letter of Credit by the Custodian to the Company, the Custodian may withdraw from the Letter of Credit Custody Account Collateral Securities in an amount equal in value to the amount actually so paid. The Custodian shall have with respect to the Collateral so withdrawn all of the rights of a secured creditor under the Uniform Commercial Code as adopted in the Commonwealth of Massachusetts at the time of such withdrawal and all other rights granted or permitted to it under law.
7. The Custodian will transfer upon receipt all income earned on the Collateral to the Fund custody account unless the Custodian receives Proper Instructions from the Fund to the contrary.
8. Upon the drawing by the Company of all amounts which may become
payable to it under the Letter of Credit and the withdrawal of all
Collateral Securities with respect thereto by the Custodian pursuant to
Section 6 hereof, or upon the termination of the Letter of Credit by the
Fund with the written consent of the Company, the Custodian shall transfer
any Collateral Securities then remaining in the Letter of Credit Custody
Account to the Fund's custody account.
9. Collateral held in the Letter of Credit Custody Account shall be released only in accordance with the provisions of this Amendment to Custodian Contract. The Collateral shall at all times until withdrawn pursuant to Section 6 hereof remain the property of the Fund, subject only to the extent of the interest granted herein to the Custodian.
10. Notwithstanding any other termination of the Custodian Contract, the Custodian Contract shall remain in full force and effect with respect to the Letter of Credit Custody Account until transfer of all Collateral Securities pursuant to Section 8 hereof.
11. The Custodian shall be entitled to reasonable compensation for its issuance of the Letter of Credit and for its services in connection with the Letter of Credit Custody Account as agreed upon from time to time between the Fund and the Custodian.
12. The Custodian Contract as amended hereby, shall be governed by, and construed and interpreted under, the laws of the Commonwealth of Massachusetts.
13. The parties agree to execute and deliver all such further documents and instruments and to take such further action as may be required to carry out the purposes of the Custodian Contract, as amended hereby.
14. Except as provided in this Amendment to Custody Contract, the Custodian Contract shall remain in full force and effect, without amendment or modification, and all applicable provisions of the Custodian Contract, as amended hereby, including, without limitation, Section 8 thereof, shall govern the Letter of Credit Custody Account and the rights and obligations of the Fund and the Custodian under this Amendment to Custodian Contract. No provision of this Amendment to Custodian Contract shall be deemed to constitute a waiver of any rights of the Custodian under the Custodian Contract or under law.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to Custodian Contract to be executed in its name and behalf by its duly authorized representatives and its seal to be hereunder affixed as of the 8th day of December, 1993.
ATTEST:
By: STEPHEN E. CAVAN By: A. KEITH BRODKIN
------------------ ------------------------
Stephen E. Cavan A. Keith Brodkin
Title:
ATTEST: STATE STREET BANK &
TRUST COMPANY
By: E. SOLOMON By: DONALD LOGUE
------------------ ------------------------
E. Solomon Donald Logue
Title: Executive Vice President
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EXHIBIT 8c
AMENDMENT TO CUSTODIAN CONTRACT
Amendment to Custodian Contract between MFS Union Standard Trust, a business trust organized and existing under the laws of Massachusetts, having a 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").
WHEREAS: The Trust and the Custodian are parties to a Custodian Contract dated December 8, 1993, as amended (the "Custodian Contract");
WHEREAS: The Trust has established a series of Shares (MFS Union Standard Research Fund (the "Series")) in addition to the initial series with respect to which it desires to have the Custodian render services as custodian under the terms of the Custodian Contract;
WITNESSETH: That in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto hereby amend the Custodian Contract as follows:
1. Capitalized terms used herein without definition have the meanings ascribed to them in the Custodian Contract.
2. Pursuant to Section 12 of the Custodian Contract, the Trust and the Custodian hereby agree that the Custodian shall render services as custodian under the terms of the Custodian Contract to the Series and that the Series is hereby deemed a "Portfolio" as defined in the Custodian Contract.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to Custodian Contract to be executed in its name and behalf by its duly authorized representatives and its seal to be hereunder affixed as of the 15th day of November, 1995.
ATTEST: MFS UNION STANDARD TRUST
By: By:
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Title:
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ATTEST: STATE STREET BANK AND TRUST
COMPANY
By: By:
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Title:
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EXHIBIT 9a
MFS UNION STANDARD TRUST
500 Boylston Street
Boston, Massachusetts 02116
[November 15, 1995]
MFS Service Center, Inc.
500 Boylston Street
Boston, Massachusetts 02116
AMENDED AND RESTATED SHAREHOLDER SERVICING AGENT AGREEMENT
Dear Sir:
MFS Union Standard Trust, which is a Massachusetts business trust (referred to as the "Trust") with two series, MFS Union Standard Equity Fund and MFS Union Standard Research Fund (each a "Fund"), is an open-end registered investment company. The Trust has selected you to act as its Shareholder Servicing Agent and you hereby agree to act as such Agent and to perform the duties and functions thereof in the manner and on the conditions hereinafter set forth. Accordingly, the Trust hereby agrees with you as follows:
1. THE FACILITY. You represent that you have the necessary computer equipment, software and other office equipment ("Facility") adequate to perform the services contemplated hereby for the Fund as well as for other investment companies (such investment companies, together with the Fund, are herein collectively referred to as the "MFS Funds") for which Massachusetts Financial Services Company ("MFS") acts as investment adviser. The Facility is presently located at 500 Boylston Street, Boston, Massachusetts, and is to be dedicated solely to the performance of services for the MFS Funds, provided that the Facility may be utilized to perform services for others with the permission of the MFS Funds.
2. NAME. Unless otherwise directed in writing by MFS, you shall perform the services contemplated hereby under the name "MFS Service Center, Inc.", which name and any similar names and any logos of which shall remain the property and under the control of MFS. Upon termination of this Agreement, you shall cease to use such name or any similar name within a reasonable period of time.
3. SERVICES TO BE PERFORMED. As Shareholder Servicing Agent ("Agent"), you shall be responsible for administering and performing transfer and dividend and distribution disbursing functions in connection with the issuance, transfer and redemption of various classes of shares of beneficial interest of the various series of the Trust existing from time to time ("Shares"). The details of the operating standards and procedures to be followed by you shall be determined from time to time by agreement between you and the Fund.
4. STANDARD OF SERVICE. As Agent for the Fund, you agree to provide service equal to or better than that provided by you or others furnishing shareholder services to other open-end investment companies ("Standard") at a fee comparable to the fee paid you for your services hereunder. The Standard shall include at least the following:
(a) Prompt reconciliation of any differences as to the number of outstanding shares between various Facility records or between Facility records and records of the Fund's custodian;
(b) Prompt processing of shareholder correspondence and of other matters requiring action by you;
(c) Prompt clearance of any daily volume backlog;
(d) Providing innovative services and technological improvements;
(e) Meeting the requirements of any governmental authority having jurisdiction over you or the Fund; and
(f) Prompt reconciliation of all bank accounts under your control belonging to the Fund or MFS.
If any MFS Fund serviced by you is reasonably of the view that the service provided by you does not meet the Standard, it shall give you written notice specifying the particulars, and you then shall have 120 days in which to restore the service so that it meets the Standard, except that such period shall be 180 days with respect to meeting that portion of the Standard described above in item (d) of this paragraph 4. If at the end of such period the Fund remains reasonably of the view that the service provided by you, in the particulars specified, does not meet the Standard, then the MFS Fund or Funds having a majority of the accounts for which you are then Agent may, by appropriate action (including the concurrence of a majority of the Trustees of such MFS Fund or Funds, who are not interested persons of MFS), elect to terminate this Agreement for cause as to all such Funds upon 90 days notice to you. Upon termination hereof, the Fund shall pay you such compensation as may be due to you as of the date of such termination, and shall likewise reimburse you for any costs, expenses, and disbursements reasonably incurred by you to such date in the performance of your duties hereunder.
5. PURCHASE OF FACILITY. In the event that you have given notice of termination of this Agreement pursuant to the provisions of paragraph 14 hereof, or for cause as provided in paragraph 4 hereof, the MFS Funds shall have the right, but shall not be required (a) to purchase the Facility and assume the unexpired portion of any leases of equipment or real estate relating to the Facility from you at a price equal to your estimated unrecovered acquisition value (as supported by the schedules and records used in determining monthly billings) of the machinery, equipment, software, furniture, fixtures and leasehold improvements included in the Facility, and (b) to negotiate with persons then employed by you in the operation of the Facility and to hire all of them in connection with the purchase of the Facility from you by the MFS Funds. You agree to release each such employee from any contractual obligations such persons may have to you that may interfere with such person's being hired at such time by the MFS Funds and agree not to interfere with the negotiation and hiring of any such persons at any such time. In the event that the MFS Funds have given notice of termination of this Agreement pursuant to the provisions of paragraph 14 hereof, for reasons other than cause as defined in paragraph 4 hereof, the MFS Funds shall purchase the Facility under the terms and conditions set forth in subsections (a) and (b) of this paragraph 5.
You shall effect the transfer of the Facility pursuant to this paragraph 5 upon the termination date specified in the notice, or at such other time as shall be agreed upon by the parties hereto.
6. RIGHTS IN DATA AND CONFIDENTIALITY. You agree that all records, data, files, input materials, reports, forms and other data received, computed or stored in the performance of this Agreement are the exclusive property of the Fund and that all such records and other data shall be furnished without additional charge, except for actual processing costs, to the Fund in machine readable as well as printed form immediately upon termination of this Agreement or at the Fund's request. You shall safeguard and maintain the confidentiality of the Fund's data and information supplied to you by the Fund and you shall not transfer or disclose the Fund's data to any third party without the Fund's prior written consent unless compelled to do so by order of a court or regulatory authority.
7. FEES. The fee for your services hereunder shall not be in excess of such amount as shall be agreed in writing between us (see Exhibit A attached hereto). Such fee shall be payable in monthly installments of one-twelfth of the annual fee. Such fee shall be subject to review at least annually and fixed by the parties in good faith negotiation on the basis of a statement of the expenses of the Facility prepared by you, which either you or the Fund may require to be certified by a major accounting firm acceptable to the parties. The party or parties requesting such certification shall bear all expenses thereof. In addition to the foregoing fee, you will be reimbursed by the Fund for out-of-pocket expenses reasonably incurred by you on behalf of the Fund, including but not limited to expenses for stationery (including business forms and checks), postage, telephone and telegraph line and toll charges, and premiums for negotiable instrument insurance and similar items.
8. RECORD KEEPING. You will maintain records in a form acceptable to the Fund and in compliance with the rules and regulations of the Securities and Exchange Commission, including but not limited to records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder, which at all times will be the property of the Fund and will be available for inspection and use by the Fund.
9. DUTY OF CARE AND INDEMNIFICATION. You will at all times act in good faith in performing your duties hereunder. You will not be liable or responsible for delays or errors by reason of circumstances beyond your control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown beyond your control, flood or catastrophe, acts of God, insurrection, war, riots or failure beyond your control of transportation, communication or power supply. The Fund will indemnify you against and hold you harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit not resulting from your bad faith or negligence, and arising out of, or in connection with, your duties on behalf of the Fund hereunder. In addition, the Fund will indemnify you against and hold you harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit as a result of your acting in accordance with any instructions reasonably believed by you to have been executed or orally communicated by any person duly authorized by the Fund or its Principal Underwriter, or as a result of acting in accordance with written or oral advice reasonably believed by you to have been given by counsel for the Fund, or as a result of acting in accordance with any instrument or share certificate reasonably believed by you to have been genuine and signed, countersigned or executed by any person or persons authorized to sign, countersign or execute the same (unless contributed to by your gross negligence or bad faith). In any case in which the Fund may be asked to indemnify you or hold you harmless, the Fund shall be advised of all pertinent facts concerning the situation in question and you will use reasonable care to identify and notify the Fund promptly concerning any situation which presents or appears likely to present a claim for indemnification against the Fund. The Fund shall have the option to defend you against any claim which may be the subject of this indemnification, and in the event that the Fund so elects such defense shall be conducted by counsel chosen by the Fund and satisfactory to you and it will so notify you, and thereupon the Fund shall take over complete defense of the claim and you shall sustain no further legal or other expenses in such situation for which you seek indemnification under this paragraph, except the expense of any additional counsel retained by you. You will in no case confess any claim or make any compromise in any case in which the Fund will be asked to indemnify you except with the Fund's prior written consent. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement.
If any officer of the Fund shall no longer be vested with authority to sign for the Fund, written notice thereof shall forthwith be given to you by the Fund and until receipt of such notice by it, you shall be fully indemnified and held harmless by the Fund in recognizing and acting upon certificates or other instruments bearing the signatures or facsimile signatures of such officer.
10. INSURANCE. You will notify the Fund should any of your insurance coverage, as set forth on Exhibit A hereto, be changed for any reason, such notification to include the date of change and reason or reasons therefor.
11. NOTICES. All notices or other communications hereunder shall be in writing and shall be deemed sufficient if mailed to either party at the addresses set forth in this Agreement, or at such other addresses as the parties hereto may designate by notice to each other.
12. FURTHER ASSURANCES. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.
13. USE OF A SUB- OR CO-TRANSFER AGENT. Notwithstanding any other provision of this Agreement, it is expressly understood and agreed that you are authorized in the performance of your duties hereunder to employ, from time to time, one or more Sub-Transfer Agents and/or Co-Transfer Agents.
14. AMENDMENT AND TERMINATION. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing, which, except in the case of termination, shall be signed by the party against which enforcement of such change, waiver or discharge is sought. Except as otherwise provided in paragraph 4 hereof, this Agreement shall continue indefinitely until terminated by 90 days' written notice given by the Fund to you or by you to the Fund. Upon termination hereof, the Fund shall pay you such compensation as may be due to you as of the date of such termination, and shall likewise reimburse you for any costs, expenses, and disbursements reasonably incurred by you to such date in the performance of your duties hereunder. You agree to cooperate with the Fund and provide all necessary assistance in effectuating an orderly transition upon termination of this Agreement.
15. SUCCESSOR. In the event that in connection with termination a successor to any of your duties or responsibilities hereunder is designated by the Fund by written notice to you, you will, promptly upon such termination and at the expense of the Fund, transfer to such successor a certified list of the shareholders of the Fund (with name, address and tax identification or Social Security number), an historical record of the account of each shareholder and the status thereof, and all other relevant books, records, correspondence, and other data established or maintained by you under this Agreement in form reasonably acceptable to the Fund (if such form differs from the form in which you have maintained the same, the Fund shall pay any expenses associated with transferring the same to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from your cognizant personnel in the establishment of books, records and other data by such successor.
16. MISCELLANEOUS. This Agreement shall be construed and enforced in accordance with and governed by the laws of the Commonwealth of Massachusetts. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
17. TRUST ONLY. A copy of the Declaration of Trust of the Trust is on file with the Secretary of State of The Commonwealth of Massachusetts. You acknowledge that the obligations of or arising out of this instrument are not binding upon any of the Trust's trustees, officers, employees, agents or shareholders individually, but are binding solely upon the assets and property of the Trust in accordance with its proportionate interest hereunder. If this instrument is executed by the Trust on behalf of one or more series of the Trust, you further acknowledge that the assets and liabilities of each series of the Trust are separate and distinct and that the obligations of or arising out of this instrument are binding solely upon the assets or property of the series on whose behalf the Trust has executed this instrument on behalf of more than one series of the Trust, you also agree that the obligations of each series hereunder shall be several and not joint, in accordance with its proportionate interest hereunder, and you agree not to proceed against any series for the obligations of another series.
Very truly yours,
MFS UNION STANDARD TRUST
on behalf of its various series
The foregoing is hereby accepted as of the date thereof.
MFS SERVICE CENTER, INC.
EXHIBIT 9c
MFS UNION STANDARD TRUST
500 Boylston Street
Boston, MA 02116
December 8, 1993
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
DIVIDEND DISBURSING AGENCY AGREEMENT
Dear Sirs:
The above-referenced trust (the "Trust") is an open-end registered investment company organized as a Massachusetts business trust. The Trust has selected you to act as its Dividend Disbursing Agent and you hereby agree to act as such Agent and perform the duties and functions thereof in the manner and on the conditions hereinafter set forth. Accordingly, the Trust hereby agrees with you as follows:
1. SERVICES TO BE PERFORMED. As Dividend Disbursing Agent ("Agent"), you shall be responsible for performing dividend and distribution disbursing agent functions with regard to the Trust's shares of beneficial interest ("Shares"). The details of the operating standards and procedures to be followed by you shall be determined from time to time by agreement between you and the Trust.
2. STANDARD OF SERVICE. As Agent for the Trust, you agree to provide service equal to at least that provided by you or others furnishing dividend and distribution disbursing services to other open-end investment companies ("Standard") at a fee, as may be agreed to from time to time, comparable to the fee paid you for your services hereunder. The Standard shall include at least the following:
(a) Prompt processing of all matters requiring action by you;
(b) Prompt clearance of any daily volume backlog;
(c) Providing innovative services and technological improvements;
(d) Meeting the requirements of any governmental authority having jurisdiction over you or the Trust; and
(e) Prompt reconciliation of all bank accounts under your control belonging to the Trust.
If the Trust is reasonably of the view that the service provided by you does not meet
the Standard, it shall give you written notice specifying the particulars, and you shall then have 120 days in which to restore the service so that it meets the Standard, except that such period shall be 180 days with respect to meeting that portion of the Standard described above in item (c) of this paragraph 2. If at the end of such period the Trust remains reasonably of the view that the service provided by you in the particulars specified, does not meet the Standard, then the Trust may, by appropriate action, elect to terminate this Agreement for cause upon 90 days notice to you. Upon termination hereof, the Trust shall pay you such compensation as may be due to you as of the date of such termination, and shall likewise reimburse you for any costs, expenses, and disbursements reasonably incurred by you to such date in the performance of your duties hereunder.
3. RIGHTS IN DATA AND CONFIDENTIALITY. You agree that all records, data, files, input materials, reports, forms and other data received, computed or stored in the performance of this Agreement are the exclusive property of the Trust and that all such records and other data shall be furnished without additional charge, except for actual processing costs, to the Trust in machine readable as well as printed form immediately upon termination of this Agreement or at the Trust's request. You shall safeguard and maintain the confidentiality of the Trust's data and information supplied to you by the Trust and you shall not transfer or disclose the Trust's data to any third party without the Trust's prior written consent unless compelled to do so by order of a court or a regulatory authority.
4. FEES. The fee, based upon check clearance and reconciliation work performed hereunder, shall not be in excess of such amount as shall be agreed in writing between us. Such fee shall be payable in monthly installments. Such fee shall be subject to review at least annually and fixed by the parties in good faith negotiation on the basis of a statement of your expenses, which either you or the Trust may require to be certified by a major accounting firm acceptable to the parties. The party requesting such certification shall bear all expenses thereof. In addition to the foregoing fee, you will be reimbursed by the Trust for out-of-pocket expenses reasonably incurred by you on behalf of the Trust, including but not limited to expenses for stationery, postage, telephone and telegraph line and toll charges and similar items.
5. RECORD KEEPING. You will maintain records in a form acceptable to the Trust and in compliance with the rules and regulations of the Securities and Exchange Commission, including, but not limited to, records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder, which at all times will be the property of the Trust and will be available for inspection and use by the Trust or the Trust's transfer agent.
6. DUTY OF CARE AND INDEMNIFICATION. You will at all times act in good faith in performing your duties hereunder. You will not be liable or responsible for delays or errors by reason of circumstances beyond your control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown beyond your control, flood or catastrophe, acts of God, insurrection, war, riots or failure beyond your control of transportation, communication or power supply. The Trust will indemnify you against and hold you harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit not resulting from your bad faith or negligence, and arising out of, or in connection with, your
duties on behalf of the Trust hereunder. In addition, the Trust will indemnify you against and hold you harmless from any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action or suit as a result of your acting in accordance with any instructions reasonably believed by you to have been given, executed or orally communicated by any person duly authorized by the Trust or as a result of acting in accordance with written or oral advice reasonably believed by you to have been given by counsel for the Trust, or as a result of acting in accordance with any instrument or share certificate reasonably believed by you to have been genuine and signed, countersigned or executed by any person or persons authorized to sign, countersign or execute the same (unless contributed to by your gross negligence or bad faith). In any case in which the Trust may be asked to indemnify you or hold you harmless, the Trust shall be advised of all pertinent facts concerning the situation in question and you will use reasonable care to identify and notify the Trust promptly concerning any situation which presents or appears likely to present a claim for indemnification against the Trust. The Trust shall have the option to defend you against any claim which may be the subject of this indemnification, and in the event that the Trust so elects such defense shall be conducted by counsel chosen by the Trust and satisfactory to you and it will so notify you, and thereupon the Trust shall take over complete defense of the claim and you shall sustain no further legal or other expenses in such situation for which you seek indemnification under this paragraph, except the expense of any additional counsel retained by you. You will in no case confess any claim or make any compromise in any case in which the Trust will be asked to indemnify you except with the Trust's prior written consent. The obligations of the parties hereto under this paragraph shall survive the termination of this Agreement.
7. INSURANCE. You will notify the Trust should any of your insurance coverage, as set forth on Exhibit A hereto, be changed for any reason, such notification to include the date of change and reason or reasons therefor.
8. NOTICES. All notices or other communications hereunder shall be in writing and shall be deemed sufficient if mailed to either party at the addresses set forth in this Agreement, or at such other addresses as the parties hereto may designate by notice to each other.
9. FURTHER ASSURANCES. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.
10. USE OF A SUB-DIVIDEND DISBURSING AGENT. Notwithstanding any other provision of this Agreement, it is expressly understood and agreed that you are authorized in the performance of your duties hereunder to employ one or more Sub-Dividend Disbursing Agents.
11. TERMINATION. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing, which, except in the case of termination, shall be signed by the party against which enforcement of such change, waiver or discharge is sought. Except as otherwise provided in paragraph 2 hereof, this Agreement shall continue indefinitely until terminated by 90 days' written notice given by the Trust to you or by you to the Trust. Upon termination hereof, the Trust shall pay you such compensation as may be due to you as of the date of such termination, and shall likewise
reimburse you for any costs, expenses, and disbursements reasonably incurred by you to such date in the performance of your duties hereunder. You agree to cooperate with the Trust and provide all necessary assistance in effectuating an orderly transition upon termination of the Agreement.
12. SUCCESSOR. In the event that in connection with termination a successor to any of your duties or responsibilities hereunder is designated by the Trust by written notice to you, you will, promptly upon such termination and at the expense of the Trust, transfer to such successor an historical record of dividends and disbursements and all other relevant books, records, correspondence, and other data established or maintained by you under this Agreement in form reasonably acceptable to the Trust (if such form differs from the form in which you have maintained the same, the Trust shall pay any expenses associated with transferring the same to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from your cognizant personnel in the establishment of books, records and other such data by such successor.
13. MISCELLANEOUS. This Agreement shall be construed and enforced in accordance with and governed by the laws of the Commonwealth of Massachusetts. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. This Agreement has been executed on behalf of the Trust by the undersigned not individually, but in the capacity indicated, and the obligations of this Agreement are not binding upon any of the Trustees, officers or shareholders of the Trust individually, but bind only the trust estate.
If you are in agreement with the foregoing, please sign the form of acceptance on this letter and the accompanying counterpart of this letter and return such counterpart to the Trust whereupon this letter shall become a binding contract between the Trust and you, the Trust having already executed this letter and its counterpart.
Very truly yours,
MFS UNION STANDARD TRUST
The foregoing is hereby accepted as of the date thereof
STATE STREET BANK AND TRUST COMPANY
EXHIBIT 13
MFS
MASSACHUSETTS FINANCIAL SERVICES COMPANY
500 BOYLSTON STREET - BOSTON - MASSACHUSETTS 02116-3741
617-954-5000
November 19, 1993
MFS Union Standard Equity Fund
MFS Union Standard Fixed Income Fund
500 Boylston Street
Boston, MA 02116
Gentlemen:
In connection with the purchase by the undersigned of 5,000 Shares of Beneficial Interest (without par value) of MFS Union Standard Equity Fund and 5,000 Shares of Beneficial Interest (without par value) of MFS Union Standard Fixed Income Fund, each a portfolio of MFS Union Standard Trust, the undersigned hereby represents and warrants to you that it is purchasing said shares as an investment with no intention of reselling said shares until a date at least two years hereafter.
Very truly yours,
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
EXHIBIT 15a
MFS UNION STANDARD TRUST
MFS UNION STANDARD EQUITY FUND
DISTRIBUTION PLAN
DISTRIBUTION PLAN with respect to the shares of beneficial interest of the MFS UNION STANDARD EQUITY FUND (the "Fund), a series of MFS UNION STANDARD TRUST (the "Trust"), a business trust organized and existing under the laws of The Commonwealth of Massachusetts, dated December 8, 1993.
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management investment company and is registered under the Investment Company Act of 1940 (the "Act"); and
WHEREAS, a plan of distribution pursuant to Rule 12b-1 of the Act has been adopted and approved by the Trustees of the Trust, including the Qualifying Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust intends to distribute the Shares of Beneficial Interest (without par value) of the Fund (the "Shares") in part in accordance with Rule 12b-1 under the Act ("Rule 12b-1"), and desires to adopt this Distribution Plan (the "Plan") as a plan of distribution pursuant to such Rule; and
WHEREAS, the Trust on behalf of the Fund and the other series, from time to time, of the Trust has entered into a distribution agreement (the "Distribution Agreement") in a form approved by the Board of Trustees of the Trust (the "Board of Trustees") in the manner specified in Rule 12b-1, with MFS Investor Services, Inc., a Delaware corporation, as distributor (the "Distributor"), whereby the Distributor provides facilities and personnel and renders services to the Fund in connection with the offering and distribution of the Shares; and
WHEREAS, the Board of Trustees, in considering whether the Fund should adopt and implement this Plan, has evaluated such information as it deemed necessary to an informed determination as to whether this Plan should be adopted and implemented and has considered such pertinent factors as it deemed necessary to form the basis for a decision to use assets of the Fund for such purposes, and has determined that there is a reasonable likelihood that the adoption and implementation of this Plan will benefit the Fund and its shareholders;
NOW, THEREFORE, the Board of Trustees hereby adopts this Plan for the Fund as a plan of distribution in accordance with Rule 12b-1 under the Act, on the following terms and conditions:
1. As specified in the Distribution Agreement, the Distributor shall provide facilities, personnel and a program with respect to the offering and sale of Shares. Among other things, the Distributor shall be responsible for all expenses of printing (excluding typesetting) and distributing prospectuses to prospective shareholders and providing such other related services as are reasonably necessary in connection therewith.
2. The Distribution Fee (as defined below) may be applied by the Distributor to any activities or expenses primarily intended to result in the sale of the Fund's shares, including, but not limited to, compensation to and expenses of employees of the Distributor who engage in or support the distribution of shares or who service shareholder accounts, preparation, printing and mailing of prospectuses and statements of additional information to other than existing shareholders, reports to shareholders such as semiannual and annual reports, performance reports and newsletters, sales literature and other promotional material to prospective investors, direct mail solicitation, advertising and public relations, compensation of sales personnel, office expenses (including rent and overhead), equipment, travel and telephone expenses and such other expenses as may be approved from time to time by the Trustees and as may be permitted by applicable statute, rule or regulation.
3. As partial consideration for the services performed and expenses incurred in the performance of its obligations under the Distribution Agreement and as specified in Section 2 hereof, the Trust on behalf of the Fund shall pay the Distributor a distribution fee periodically at a rate up to 0.25% per annum of the average daily net assets of the Fund (the "Distribution Fee"). Such payments shall commence following the effectiveness of the Distribution Agreement and shareholder approval of the Plan but only upon notification by the Distributor to the Fund of the commencement of the Plan (the "Commencement Date").
4. In addition to fees payable pursuant to Section 3 hereof, the expenses permitted to be paid by the Fund pursuant to this Plan on or after the Commencement Date shall include other distribution related expenses. These other distribution related expenses may include, but are not limited to, a commission and a payment to wholesalers and others employed by the Distributor.
5. Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Declaration of Trust or By-Laws or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Board of Trustees of the responsibility for and control of the conduct of the affairs of the Fund.
6. This Plan shall become effective upon (a) approval by a vote of at least a "majority of the outstanding voting securities" of the Shares, and (b) approval by a vote of the Board of Trustees and vote of a majority of the Trustees who are not "interested persons" of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any of the agreements related to the Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting called for the purpose of voting on this Plan.
7. This Plan shall continue in effect indefinitely; PROVIDED, HOWEVER, that such continuance is subject to annual approval by a vote of the Board of Trustees and a majority of the Qualified Trustees, such votes to be cast in person at a meeting called for the purpose of voting on continuance of this Plan. If such annual approval is not obtained, this Plan shall expire 12 months after the effective date of the last approval.
8. This Plan may be amended at any time by the Board of Trustees; provided that (a) any amendment to increase materially the amount to be spent for the services described herein shall be effective only upon approval by a vote of a "majority of the outstanding voting securities" of the Shares and (b) any material amendment of this Plan shall be effective only upon approval by a vote of the Board of Trustees and a majority of the Qualified Trustees, such votes to be cast in person at a meeting called for the purpose of voting on such amendment. This Plan may be terminated at any time by vote of a majority of the Qualified Trustees or by a vote of a "majority of the outstanding voting securities" of the Shares.
9. The Distributor shall provide the Board of Trustees, and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended under the Plan and the purposes for which such expenditures were made.
10. While this Plan is in effect, the selection and nomination of Qualified Trustees shall be committed to the discretion of the Trustees who are not "interested persons" of the Trust.
11. For the purposes of this Plan, the terms "interested person" and "majority of the outstanding voting securities" are used as defined in the Act. In addition, for purposes of determining the fees payable to the Distributor, the value of the Share's net assets shall be computed in the manner specified in the Fund's then current prospectus for computation of the net asset value of the Shares.
12. The Trust shall preserve copies of this Plan, and each agreement related hereto and each report referred to in Section 9 hereof (collectively the "Records") for a period of six years from the end of the fiscal year in which such Record was made and each such Record shall be kept in an easily accessible place for the first two years of said record keeping.
13. This Plan shall be construed in accordance with the laws of The Commonwealth of Massachusetts and the applicable provisions of the Act.
14. If any provision of this Plan shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Plan shall not be affected thereby.
EXHIBIT 15b
MFS UNION STANDARD TRUST
MFS UNION STANDARD RESEARCH FUND
DISTRIBUTION PLAN
DISTRIBUTION PLAN with respect to the shares of beneficial interest of the MFS UNION STANDARD RESEARCH FUND (the "Fund), a series of MFS UNION STANDARD TRUST (the "Trust"), a business trust organized and existing under the laws of The Commonwealth of Massachusetts, dated [November 15, 1995].
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management investment company and is registered under the Investment Company Act of 1940 (the "Act"); and
WHEREAS, a plan of distribution pursuant to Rule 12b-1 of the Act has been adopted and approved by the Trustees of the Trust, including the Qualifying Trustees (as defined below), and by the shareholders of the Fund; and
WHEREAS, the Trust intends to distribute the Shares of Beneficial Interest (without par value) of the Fund (the "Shares") in part in accordance with Rule 12b-1 under the Act ("Rule 12b-1"), and desires to adopt this Distribution Plan (the "Plan") as a plan of distribution pursuant to such Rule; and
WHEREAS, the Trust on behalf of the Fund and the other series, from time to time, of the Trust has entered into a distribution agreement (the "Distribution Agreement") in a form approved by the Board of Trustees of the Trust (the "Board of Trustees") in the manner specified in Rule 12b-1, with MFS Investor Services, Inc., a Delaware corporation, as distributor (the "Distributor"), whereby the Distributor provides facilities and personnel and renders services to the Fund in connection with the offering and distribution of the Shares; and
WHEREAS, the Board of Trustees, in considering whether the Fund should adopt and implement this Plan, has evaluated such information as it deemed necessary to an informed determination as to whether this Plan should be adopted and implemented and has considered such pertinent factors as it deemed necessary to form the basis for a decision to use assets of the Fund for such purposes, and has determined that there is a reasonable likelihood that the adoption and implementation of this Plan will benefit the Fund and its shareholders;
NOW, THEREFORE, the Board of Trustees hereby adopts this Plan for the Fund as a plan of distribution in accordance with Rule 12b-1 under the Act, on the following terms and conditions:
1. As specified in the Distribution Agreement, the Distributor shall provide facilities, personnel and a program with respect to the offering and sale of Shares. Among other things, the Distributor shall be responsible for all expenses of printing (excluding typesetting) and distributing prospectuses to prospective shareholders and providing such other related services as are reasonably necessary in connection therewith.
2. The Distribution Fee (as defined below) may be applied by the Distributor to any activities or expenses primarily intended to result in the sale of the Fund's shares, including, but not limited to, compensation to and expenses of employees of the Distributor who engage in or support the distribution of shares or who service shareholder accounts, preparation, printing and mailing of prospectuses and statements of additional information to other than existing shareholders, reports to shareholders such as semiannual and annual reports, performance reports and newsletters, sales literature and other promotional material to prospective investors, direct mail solicitation, advertising and public relations, compensation of sales personnel, office expenses (including rent and overhead), equipment, travel and telephone expenses and such other expenses as may be approved from time to time by the Trustees and as may be permitted by applicable statute, rule or regulation.
3. As partial consideration for the services performed and expenses incurred in the performance of its obligations under the Distribution Agreement and as specified in Section 2 hereof, the Trust on behalf of the Fund shall pay the Distributor a distribution fee periodically at a rate up to 0.25% per annum of the average daily net assets of the Fund (the "Distribution Fee"). Such payments shall commence following the effectiveness of the Distribution Agreement and shareholder approval of the Plan but only upon notification by the Distributor to the Fund of the commencement of the Plan (the "Commencement Date").
4. In addition to fees payable pursuant to Section 3 hereof, the expenses permitted to be paid by the Fund pursuant to this Plan on or after the Commencement Date shall include other distribution related expenses. These other distribution related expenses may include, but are not limited to, a commission and a payment to wholesalers and others employed by the Distributor.
5. Nothing herein contained shall be deemed to require the Trust to take any action contrary to its Declaration of Trust or By-Laws or any applicable statutory or regulatory requirement to which it is subject or by which it is bound, or to relieve or deprive the Board of Trustees of the responsibility for and control of the conduct of the affairs of the Fund.
6. This Plan shall become effective upon (a) approval by a vote of at least a "majority of the outstanding voting securities" of the Shares, and (b) approval by a vote of the Board of Trustees and vote of a majority of the Trustees who are not "interested persons" of the Trust and who have no direct or indirect financial interest in the operation of the Plan or in any of the agreements related to the Plan (the "Qualified Trustees"), such votes to be cast in person at a meeting called for the purpose of voting on this Plan.
7. This Plan shall continue in effect indefinitely; PROVIDED, HOWEVER, that such continuance is subject to annual approval by a vote of the Board of Trustees and a majority of the Qualified Trustees, such votes to be cast in person at a meeting called for the purpose of voting on continuance of this Plan. If such annual approval is not obtained, this Plan shall expire 12 months after the effective date of the last approval.
8. This Plan may be amended at any time by the Board of Trustees; provided that (a) any amendment to increase materially the amount to be spent for the services described herein shall be effective only upon approval by a vote of a "majority of the outstanding voting securities" of the Shares and (b) any material amendment of this Plan shall be effective only upon approval by a vote of the Board of Trustees and a majority of the Qualified Trustees, such votes to be cast in person at a meeting called for the purpose of voting on such amendment. This Plan may be terminated at any time by vote of a majority of the Qualified Trustees or by a vote of a "majority of the outstanding voting securities" of the Shares.
9. The Distributor shall provide the Board of Trustees, and the Board of Trustees shall review, at least quarterly, a written report of the amounts expended under the Plan and the purposes for which such expenditures were made.
10. While this Plan is in effect, the selection and nomination of Qualified Trustees shall be committed to the discretion of the Trustees who are not "interested persons" of the Trust.
11. For the purposes of this Plan, the terms "interested person" and "majority of the outstanding voting securities" are used as defined in the Act. In addition, for purposes of determining the fees payable to the Distributor, the value of the Share's net assets shall be computed in the manner specified in the Fund's then current prospectus for computation of the net asset value of the Shares.
12. The Trust shall preserve copies of this Plan, and each agreement related hereto and each report referred to in Section 9 hereof (collectively the "Records") for a period of six years from the end of the fiscal year in which such Record was made and each such Record shall be kept in an easily accessible place for the first two years of said record keeping.
13. This Plan shall be construed in accordance with the laws of The Commonwealth of Massachusetts and the applicable provisions of the Act.
14. If any provision of this Plan shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Plan shall not be affected thereby.