SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER
THAN THE REGISTRANT [ ]
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by Rule 14a-6(e)(2))
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[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
MFS(R) INTERMEDIATE INCOME TRUST
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MFS(R) INTERMEDIATE INCOME TRUST
500 Boylston Street, Boston, Massachusetts 02116
Notice of the 2008 Annual Meeting of Shareholders
To be held on October 9, 2008
The 2008 Annual Meeting of Shareholders of the above referenced trust (the
"Trust" or "Fund") will be held at 500 Boylston Street, Boston, Massachusetts
02116, at 10:30 a.m. on Thursday, October 9, 2008, for the following purposes:
ITEM 1. To elect J. Atwood Ives, William R. Gutow, Michael Hegarty, and
Robert W. Uek as Trustees of the Trust;
ITEM 2. To act upon, if properly presented at the meeting, a shareholder
proposal that the Board of Trustees adopt a policy to conduct periodic
tender offers for shares of the Trust; and
ITEM 3. To transact such other business as may properly come before the
Meeting and any adjournment(s) or postponement(s) thereof.
THE TRUSTEES OF YOUR TRUST RECOMMEND THAT YOU VOTE
IN FAVOR OF ITEM 1 AND AGAINST ITEM 2.
Only the Trust's shareholders of record on August 4, 2008 will be entitled to
receive notice of and to vote at the Trust's Meeting of Shareholders or any
adjournment(s) or postponement(s) thereof.
By order of the Board of Trustees
SUSAN S. NEWTON
Assistant Secretary and Assistant Clerk
August 21, 2008
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOUR PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED PROXY SO THAT IT IS RECEIVED BY THE DATE OF THE MEETING
OR RECORDING YOUR VOTING INSTRUCTIONS BY TELEPHONE OR VIA THE INTERNET BY 10:29
A.M., EASTERN TIME, ON THE DATE OF THE MEETING, WHICH WILL HELP AVOID THE
ADDITIONAL EXPENSE OF A SECOND SOLICITATION FOR THE TRUST. THE ENCLOSED
ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND IS PROVIDED FOR YOUR CONVENIENCE.
MFS(R) INTERMEDIATE INCOME TRUST
Proxy Statement
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Trustees of MFS Intermediate Income
Trust (the "Trust" or "Fund") to be used at the Meeting of Shareholders of the
Trust (the "Meeting") to be held at 10:30 a.m. on October 9, 2008 at 500
Boylston Street, Boston, Massachusetts 02116, for the purposes set forth in the
accompanying Notice. Information regarding the Board of Trustees can be found
in the section of this Proxy Statement entitled "Election of Trustees." If the
enclosed form of proxy is executed and returned, it may nevertheless be revoked
prior to its exercise by a signed writing filed with the proxy tabulation
agent, The Altman Group, 60 E. 42nd Street, 405, New York, New York, 10165 or
delivered at the Meeting. On August 4, 2008, there were 116,512,419 shares
outstanding for the Trust.
Shareholders of record at the close of business on August 4, 2008 will be
entitled to one vote for each share held, and each fractional share will be
entitled to a proportionate fractional vote.
The mailing address of the Trust is 500 Boylston Street, Boston, Massachusetts
02116. Solicitation of proxies is being made by the mailing of this Notice and
Proxy Statement with its enclosures on or about August 21, 2008. In addition to
soliciting proxies by mail, the Trustees of your Trust and employees of
Massachusetts Financial Services Company ("MFS"), the Trust's investment
adviser and administrator, may solicit proxies in person or by telephone. The
expenses of the preparation of proxy statements and related materials,
including printing and delivery costs, and vote solicitation are borne by the
Trust. The Trust has engaged The Altman Group to provide shareholder meeting
services including the distribution of this Proxy Statement and related
materials to shareholders, as well as vote solicitation and tracking. It is
anticipated that the cost of these services will be $69,169 and may increase
substantially in the event that any vote is contested or increased solicitation
efforts are required.
A copy of the Trust's most recent annual report and semi-annual report may be
obtained without charge by contacting Computershare Trust Company, N.A.
("Computershare"), the Trust's transfer and shareholder servicing agent, 250
Royall Street, Canton, Massachusetts 02021, or by telephoning toll-free (800)
637-2304.
ITEM 1 -- ELECTION OF TRUSTEES
The Board of Trustees, which oversees the Trust, provides broad supervision
over the affairs of the Trust. Those Trustees who are not "interested persons"
(as defined in the Investment Company Act of 1940, as amended (the "1940 Act"))
of your Trust or of MFS are referred to as "Independent Trustees" throughout
this Proxy Statement. MFS is responsible for the investment management of the
Trust's assets and for providing a variety of other administrative services to
the Trust. The officers of the Trust are responsible for its operations.
The Board has fixed the number of Trustees of the Trust at twelve. Under the
provisions of the Trust's Declaration of Trust, the Trustees are divided into
three classes, each having a term of three years. The Nomination and
Compensation Committee has selected and nominated, and recommended that the
Board nominate, for election by shareholders J. Atwood Ives, William R. Gutow,
Michael Hegarty, and Robert W. Uek as Trustees of the class whose term will
expire at the 2011 Annual Meeting of Shareholders (or special meeting in lieu
thereof) of the Trust, to hold office until his successor is elected and
qualified, and the Board of Trustees has nominated such individuals. Each
nominee is presently a Trustee of the Trust and has agreed to serve as a
Trustee of the Trust if elected. The Board of Trustees recommends that you vote
in favor of their election.
It is intended that, absent contrary instructions, proxies will be voted in
favor of electing Messrs. Ives, Gutow, Hegarty, and Uek. If, before the
Meeting, any nominee refuses or is unable to serve, or if any of the nominees
is unavailable at the time of the Meeting, and such refusal or inability to
serve or unavailability is not anticipated, the Trustees may vote for other
nominees at their discretion, or the Trustees may fix the number of Trustees at
fewer than twelve for the Trust. Under the terms of the Trust's retirement
policy, the Trustees have a mandatory retirement age of 73 years.
The following table presents certain information regarding the current Trustees
of the Trust, including their principal occupations, which, unless specific
dates are shown, are of more than five years duration, although the titles may
not have been the same throughout.
PRINCIPAL OCCUPATIONS
POSITION(s) HELD TERM DURING THE PAST FIVE YEARS &
NAME, DATE OF BIRTH WITH TRUST TRUSTEE SINCE(1) EXPIRING OTHER DIRECTORSHIPS(2)
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INTERESTED TRUSTEES
Robert J. Manning(3); Trustee February 2004 2010 Massachusetts Financial
(born 10/20/63) Services Company, Chief
Executive Officer, President,
Chief Investment Officer and
Director
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Robert C. Pozen(3) Trustee February 2004 2009 Massachusetts Financial
(born 08/08/46) Services Company, Chairman
(since February 2004); MIT
Sloan School (education),
Senior Lecturer (since 2006);
Secretary of Economic Affairs,
The Commonwealth of
Massachusetts (January 2002 to
December 2002); Fidelity
Investments, Vice Chairman
(June 2000 to December 2001);
Fidelity Management & Research
Company (investment adviser),
President (March 1997 to July
2001); Bell Canada Enterprises
(telecommunications),
Director; Medtronic, Inc.
(medical technology),
Director; Telesat (satellite
communications), Director
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INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair February 1992 2011 Private investor; Eastern
(born 05/01/36) of Trustees Enterprises (diversified
services company), Chairman,
Trustee and Chief Executive
Officer (until November 2000)
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Robert E. Butler(4) Trustee January 2006 2009 Consultant - regulatory and
(born 11/29/41) compliance matters (since July
2002); PricewaterhouseCoopers
LLP (professional services
firm), Partner (until 2002)
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Lawrence H. Cohn, M.D. Trustee August 1993 2010 Brigham and Women's Hospital,
(born 03/11/37) Chief of Cardiac Surgery
(until 2005); Harvard Medical
School, Professor of Cardiac
Surgery; Medical Device
Technology for Partners Health
Care, Physician Director
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David H. Gunning Trustee January 2004 2009 Retired; Cleveland-Cliffs Inc.
(born 05/30/42) (mining products and service
provider), Vice Chairman/
Director (until May 2007);
Portman Limited (mining),
Director (since 2005);
Encinitos Ventures (private
investment company), Principal
(1997 to April 2001); Lincoln
Electric Holdings, Inc.
(welding equipment
manufacturer), Director
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William R. Gutow Trustee December 1993 2011 Private investor and real
(born 09/27/41) estate consultant; Capitol
Entertainment Management
Company (video franchise),
Vice Chairman; Atlantic Coast
Tan (tanning salons), Vice
Chairman (since 2002)
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Michael Hegarty Trustee December 2004 2011 Retired; AXA Financial
(born 12/21/44) (financial services and
insurance), Vice Chairman and
Chief Operating Officer (until
May 2001); The Equitable Life
Assurance Society (insurance),
President and Chief Operating
Officer (until May 2001)
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Lawrence T. Perera Trustee July 1981 2010 Hemenway & Barnes (attorneys),
(born 06/23/35) Partner
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J. Dale Sherratt Trustee August 1993 2009 Insight Resources, Inc.
(born 09/23/38) (acquisition planning
specialists), President;
Wellfleet Investments
(investor in health care
companies), Managing General
Partner (since 1993);
Cambridge Nutraceuticals
(professional nutritional
products), Chief Executive
Officer (until May 2001)
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Laurie J. Thomsen Trustee March 2005 2010 New Profit, Inc. (venture
(born 08/05/57) philanthropy), Partner (since
2006); Private investor; Prism
Venture Partners (venture
capital), Co-founder and
General Partner (until June
2004); The Travelers Companies
(commercial property liability
insurance), Director
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Robert W. Uek Trustee January 2006 2011 Retired (since 1999);
(born 05/18/41) PricewaterhouseCoopers LLP
(professional services firm),
Partner (until 1999);
Consultant to investment
company industry (since 2000);
TT International Funds (mutual
fund complex), Trustee (2000
until 2005); Hillview
Investment Trust II Funds
(mutual fund complex),
Trustee (2000 until 2005)
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(1) Date first appointed to serve as Trustee of an MFS fund. Each Trustee has served continuously since appointment
unless indicated otherwise. For the period from December 15, 2004 until February 22, 2005, Messrs. Pozen and
Manning served as Advisory Trustees.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e.,
"public companies").
(3) "Interested person" of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the
1940 Act), which is the principal federal law governing investment companies like the fund, as a result of
position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.
(4) In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by
MFS pursuant to its settlement with the SEC concerning market timing and related matters. The terms of that
settlement required that compensation and expenses related to the independent compliance consultant be borne
exclusively by MFS and, therefore, MFS paid Mr. Butler for the services he rendered to the independent
compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a total of $351,119.29.
Each current Trustee listed above served as a board member of 98 funds within
the MFS Family of Funds (the MFS Funds) as of December 31, 2007. The address of
each Trustee is c/o MFS, 500 Boylston Street, Boston, Massachusetts 02116.
Information about the Trust, including information about its investment adviser
and administrator, independent registered public accounting firm, executive
officers, and the interests of certain persons appears under "Trust
Information" beginning on page 17.
REQUIRED VOTE. Approval of this proposal as to any nominee will require the
affirmative vote of a plurality of the Trust's outstanding shares voting at the
Meeting in person or by proxy.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF THE TRUST VOTE TO ELECT EACH OF THE NOMINEES AS TRUSTEES OF THE
TRUST.
COMMITTEES
The Trust's Board of Trustees meets regularly throughout the year to discuss
matters and take certain actions relating to the Trust. The Trust's Board has
several standing committees, which are described below.
NUMBER OF
MEETINGS
IN LAST CURRENT
NAME OF COMMITTEE FISCAL YEAR FUNCTIONS MEMBERS(1)
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AUDIT COMMITTEE 8 Oversees the accounting and Butler*(2), Gutow*,
auditing procedures of the Trust Sherratt*, Thomsen*(2)
and, among other things, considers and Uek*(2)
the selection of the independent
accountants for the Trust and the
scope of the audit, and considers
the effect on the independence of
those accountants of any non-audit
services such accountants provide
to the Trust and any audit or non-
audit services such accountants
provide to other MFS Trusts, MFS
and/or certain affiliates. The
Committee is also responsible for
establishing procedures for the
receipt, retention and treatment of
complaints received by the Trust
regarding accounting, internal
accounting controls, or auditing
matters and the confidential,
anonymous submission of concerns
regarding questionable Trust
accounting matters by officers of
the Trust and employees of the
Trust's investment adviser,
administrator, principal
underwriter or any other provider
of accounting-related services to
the Trust.
COMPLIANCE AND GOVERNANCE 8 Oversees the development and Butler*, Cohn*,
COMMITTEE implementation of the Trust's Gunning*, Gutow* and
regulatory and fiduciary compliance
Sherratt* policies, procedures and
practices under the 1940 Act and other
applicable laws as well as oversight of
compliance policies of the Trust's
investment adviser and certain other
service providers as they relate to
Trust activities. The Trust's
Independent Chief Compliance Officer,
assists the Committee in carrying out
its responsibilities. In addition, the
Committee advises and makes
recommendations to the Board on matters
concerning Trustee practices and
recommendations concerning the
functions and duties of the committees
of the Board.
CONTRACTS REVIEW 5 Requests, reviews and considers the All Independent Trustees
COMMITTEE information deemed reasonably of the Board (Butler,
necessary to evaluate the terms of
Cohn, Gunning, Gutow, the investment
advisory and Hegarty, Ives, Perera,
principal underwriting agreements
Sherratt, Thomsen and and the Plan of
Distribution under Uek) Rule 12b-1 that
the Trust proposes to renew or
continue, and to make its
recommendations to the full Board of
Trustees on these matters.
NOMINATION AND 1 Recommends qualified candidates to All Independent Trustees
COMPENSATION COMMITTEE the Board in the event that a of the Board (Butler,
position is vacated or created. The
Cohn, Gunning, Gutow, Committee will
consider Hegarty, Ives, Perera,
recommendations by shareholders
Sherratt, Thomsen and when a vacancy
exists. Shareholders Uek) wishing to
recommend candidates for Trustee for
consideration by the Committee may do
so by writing to the Trust's Secretary
at the principal executive office of
the Trust. Such recommendations must be
accompanied by biographical and
occupational data on the candidate
(including whether the candidate would
be an "interested person" of the
Trust), a written consent of the
candidate to be named as a nominee and
to serve as Trustee if elected, record
and ownership information for the
recommending shareholder with respect
to the Trust, and a description of any
arrangements or understandings
regarding recommendation of the
candidate for consideration. The
Committee is also responsible for
making recommendations to the Board
regarding any necessary standards or
qualifications for service on the
Board. The Committee also reviews and
makes recommendations to the Board
regarding compensation for the
non-interested Trustees.
PORTFOLIO TRADING AND 8 Oversees the policies, procedures, Cohn*, Gunning*,
MARKETING REVIEW and practices of the Trust with Hegarty* and Perera*
COMMITTEE respect to brokerage transactions
involving portfolio securities as those
policies, procedures, and practices are
carried out by MFS and its affiliates.
The Committee also oversees the lending
of portfolio securities and the
administration of the Trust's proxy
voting policies and procedures by MFS.
In addition, the Committee receives
reports from MFS regarding the
policies, procedures, and practices of
MFS and its affiliates in connection
with their marketing and distribution
of shares of the Trust.
PRICING COMMITTEE 8 Oversees the determination of the Hegarty*, Perera*,
value of the portfolio securities Thomsen* and Uek*
and other assets held by the Trust
and determines or causes to be
determined the fair value of
securities and assets for which
market quotations are not "readily
available" in accordance with the
1940 Act. The Committee delegates
primary responsibility for carrying
out these functions to MFS and MFS'
internal valuation committee
pursuant to pricing policies and
procedures approved by the
Committee and adopted by the full
Board, which include methodologies
to be followed by MFS to determine
the fair values of portfolio
securities and other assets held by
the Trust for which market
quotations are not readily
available. The Committee meets
periodically with the members of
MFS' internal valuation committee
to review and assess the quality of
fair valuation and other pricing
determinations made pursuant to the
Trust's pricing policies and
procedures, and to review and
assess the policies and procedures
themselves. The Committee also
exercises the responsibilities of
the Board under the Amortized Cost
Valuation Procedures approved by
the Board on behalf of each Trust
which holds itself out as a "money
market fund" in accordance with
Rule 2a-7 under the 1940 Act.
SERVICES CONTRACTS 9 Reviews and evaluates the Gunning*, Sherratt*,
COMMITTEE contractual arrangements of the Thomsen* and Uek*
Trust relating to transfer agency,
administrative services, custody,
pricing and bookkeeping services, and
makes recommendations to the full Board
of Trustees on these matters.
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(1) Information about each committee member is set forth above on pages 2, 3, 4 and 5. Although Mr. Ives is
not a member of all Committees of the Board, he is invited to and attends many of the Committees' meetings
in his capacity as Chair of the Trustees.
(2) Audit Committee Financial Expert.
* Independent Trustees.
The Trustees generally hold at least eight regular meetings each calendar year.
These regular meetings take place over a two-day period. The performance and
operations of the Trust is reviewed by the Trustees at each meeting and more
in-depth reviews are conducted by the Trustees throughout the year. The Trust
held 9 Board meetings during the fiscal year ended October 31, 2007. Each
Trustee attended at least 75% of the Board and applicable committee meetings
noted for the Trust.
AUDIT COMMITTEE
The Trust's Audit Committee consists only of Independent Trustees, each of whom
is also independent of the Trust as defined by New York Stock Exchange Listing
Standards. The Audit Committee's report on the Trust's most recent audited
financials is included below under the heading "Independent Registered Public
Accounting Firm." The Trust's Board has adopted a written charter for the Audit
Committee. A copy of the Committee's charter is available on MFS.com.
NOMINATION AND COMPENSATION COMMITTEE
The Trustees have adopted a written charter for the Nomination and Compensation
Committee. A copy of the Committee's charter is available on MFS.com.
The Trust's Nomination and Compensation Committee consists only of Independent
Trustees, each of whom is also independent of the Trust as defined by New York
Stock Exchange Listing Standards.
The Nomination and Compensation Committee requires that Trustee candidates have
a college degree or equivalent business experience, but has not otherwise
established specific, minimum qualifications that must be met by an individual
to be considered by the Committee for nomination as a Trustee. The Nomination
and Compensation Committee may take into account a wide variety of factors in
considering Trustee candidates, including, but not limited to: (i) availability
and commitment of a candidate to attend meetings and perform his or her
responsibilities to the Board; (ii) relevant industry and related experience;
(iii) educational background; (iv) financial expertise; (v) an assessment of
the candidate's ability, judgment and expertise; (vi) overall diversity of the
composition of the Board; and (vii) such other factors as the Committee deems
appropriate. The Nomination and Compensation Committee may consider candidates
for Trustee recommended by current Trustees, officers or shareholders or by MFS
or any other source deemed appropriate by the Nomination and Compensation
Committee. The Nomination and Compensation Committee may, but is not required
to, retain a third-party search firm at the Trust's expense to identify
potential candidates.
The Nomination and Compensation Committee will review and consider nominees
recommended by shareholders to serve as Trustee, provided that the recommending
shareholder follows the Procedures for Shareholders to Submit Nominee
Candidates, which are set forth as Appendix B to the Trust's Nomination and
Compensation Committee Charter (which is available on MFS.com). Among other
requirements, these procedures provide that the recommending shareholder must
submit any recommendation in writing to the Trust, to the attention of the
Trust's Secretary, at the address of the principal executive offices of the
Trust. Any recommendation must include certain biographical information and
other information regarding the candidate and the recommending shareholder, and
must include a written and signed consent of the candidate to be named as a
nominee and to serve as a Trustee if elected. The foregoing description is only
a summary.
The Nomination and Compensation Committee has full discretion to reject
nominees recommended by shareholders, and there is no assurance that any such
person properly recommended and considered by the Committee will be nominated
for election to the Board of the Trust.
SHARE OWNERSHIP
As of August 4, 2008, the Trustees and officers of the Trust as a whole owned
less than 1% of the outstanding shares of the Trust.
The following table shows the dollar range of equity securities beneficially
owned by each nominee or Trustee (a) of the Trust and (b) on an aggregate
basis, in all MFS funds overseen by the nominee or Trustee, as of August 4,
2008.
The following dollar ranges apply:
N. None
A. $1 - $10,000
B. $10,001 - $50,000
C. $50,001 - $100,000
D. $100,001 - $225,000
E. Over $225,000
AGGREGATE DOLLAR RANGE
AGGREGATE DOLLAR OF SECURITIES IN ALL MFS
RANGE OF EQUITY FUNDS OVERSEEN OR TO BE
NAME OF TRUSTEE SECURITIES IN THE TRUST OVERSEEN BY THE NOMINEE
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INTERESTED TRUSTEES
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Robert J. Manning N E
Robert C. Pozen N E
INDEPENDENT TRUSTEES
--------------------
Robert E. Butler B E
Lawrence H. Cohn, M.D. C E
David H. Gunning A E
William R. Gutow A E
Michael Hegarty A E
J. Atwood Ives A E
Lawrence T. Perera A E
J. Dale Sherratt C E
Laurie J. Thomsen B E
Robert W. Uek B E
SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF TRUSTEES
The Board of Trustees of the Trust has adopted procedures by which shareholders
may send communications to the Board. Shareholders may mail written
communications to the Board of Trustees, MFS Intermediate Income Trust, c/o
Massachusetts Financial Services Company, 500 Boylston Street, Boston,
Massachusetts 02116, Attention: Frank Tarantino, Independent Chief Compliance
Officer. Shareholder communications must (i) be in writing and be signed by the
shareholder, (ii) identify the MFS Trust to which they relate and (iii)
identify the class and number of shares held by the shareholder. The Trust's
Independent Chief Compliance Officer ("ICCO") is responsible for reviewing all
properly submitted shareholder communications. The ICCO shall either (i)
provide a copy of each properly submitted shareholder communication to the
Board at its next regularly scheduled meeting or (ii) if the ICCO determines
that the communication requires more immediate attention, forward the
communication to the Chair of the Trustees promptly after receipt. The ICCO
may, in good faith, determine that a shareholder communication should not be
provided to the Board because it is ministerial in nature (such as a request
for Trust literature, share data or financial information). The ICCO may in
such cases forward the communication to the appropriate party or parties at
MFS. These procedures do not apply to (i) any communication from an officer or
Trustee of the Trust, (ii) any communication from an employee or agent of the
Trust, unless such communication is made solely in such employee's or agent's
capacity as a shareholder or (iii) any shareholder proposal submitted pursuant
to Rule l4a-8 under the Securities Exchange Act of 1934, as amended, or any
communication made in connection with such a proposal. The Trustees are not
required to attend the Trust's shareholder meetings or to otherwise make
themselves available to shareholders for communications, other than pursuant to
the aforementioned procedures. No Board members attended the 2007 Annual
Meeting of Shareholders.
The Declaration of Trust currently provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, unless it is finally adjudicated or, in case of a settlement, it has
been determined by Trustees not involved in the matter or independent legal
counsel, that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust or that they engaged in
willful misfeasance or acted with bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their offices.
TRUSTEE COMPENSATION TABLE
The table below shows the cash compensation paid to the Trustees by the Trust
for the fiscal year ended October 31, 2007. Interested Trustees receive no
compensation from the Trust for their services as Trustees.
RETIREMENT TOTAL CASH
BENEFITS COMPENSATION
TRUSTEE FEES ACCRUED AS PART OF FROM TRUST AND
NAME OF TRUSTEE FROM TRUST FUND EXPENSE FUND COMPLEX(2)
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Robert E. Butler $12,058 N/A $229,619
Lawrence H. Cohn, M.D. $12,058 $2,124 $228,509
David H. Gunning $12,241 N/A $248,508
William R. Gutow $12,058 N/A $228,509
Michael J. Hegarty $12,056 N/A $226,509
J. Atwood Ives $12,666 $0 $302,509
Lawrence T. Perera $12,109 $0 $226,953
J. Dale Sherratt $12,426 $1,905 $268,507
Laurie J. Thomsen $12,181 N/A $248,508
Robert W. Uek $12,263 N/A $254,112
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(1) For calendar year 2007. Trustees receiving compensation from the Trust
served as Trustee of 98 funds within the MFS Fund Complex (having aggregate
net assets at December 31, 2007 of approximately $106 billion).
Retirement Benefit Deferral Plan -- Under a Retirement Benefit Deferral Plan,
certain Trustees have deferred benefits from a prior retirement plan. The value
of the benefits is periodically readjusted as though the Trustee had invested
an equivalent amount in Class A shares of other Fund(s) designated by such
Trustee. The value of the deferred benefits will be paid to the Trustees upon
retirement or thereafter. The plan does not obligate the Trust to retain the
services of any Trustee or pay any particular level of compensation to any
Trustee. The plan is not funded and the Trust's obligation to pay the Trustee's
deferred compensation is a general unsecured obligation.
ITEM 2 -- SHAREHOLDER PROPOSAL
The Board of Trustees has been informed by Karpus Investment Management
("KIM"), 183 Sully's Trail, Pittsford, NY, 14534, a shareholder of
recording owning over 13.9 million shares of the Fund as of May 1, 2008,
that it intends to submit the following proposal at the meeting.
RESOLVED:
The shareholders recommend that the Board of Trustees of the Fund
("Board") adopt a policy that if the Shares trade at an average discount
of greater than six percent (6%) from net asset value over the final (12)
weeks previous to the end of October of each calendar year, the Board
will conduct a tender offer for at least ten percent (10%) of the Shares
at 99% of net asset value by the end of that calendar year.
If properly presented at the meeting, KIM's proposal will be Item 2. KIM has
requested that the following statement be included in the proxy statement in
support of its proposal.
SUPPORTING STATEMENT
The Fund's original prospectus states: "the trust...may purchase its
shares from time to time in the open market. Such repurchases will be
made only when the trust's shares are trading at a discount of 10% or
more from the net asset value." Lifeboat provisions, such as this, are
occasionally included in prospectuses for closed-end funds, such as the
Fund, to increase management's accountability to shareholders for
managing discounts, and to attempt to enhance long-term shareholder
value.
While the Fund has conducted open market repurchase offers, the Fund's
persistently wide discount to net asset value shows that the Fund's
actions have not proven effective. In fact, from April 30, 2006 to
October 31, 2007, the Fund repurchased only approximately 1.4% of its
Shares (according to filings submitted by the Fund to the SEC). During
this time MIN traded at an average 11.3 percent discount to NAV. KIM does
not believe that the Fund's ineffective, non-aggressive and seemingly
token buybacks have had a substantial, positive effect in managing the
Fund's discount.
As such, KIM believes that the approval of the Proposal by the Fund
shareholders will convey to the Board that it must take more strenuous
efforts to mitigate the persistent discount of the Fund, in both the long
and short terms. The Proposal attempts to reduce the discount problem in
the shorter term by affording displeased shareholders an exit for part of
their holdings at the net asset value of their investment, as well as in
the longer term by enhancing accountability and assuring more proactive
measures will be taken in the future to address discounts of 6% or more.
Tell the Board that you want it to take more effective action to narrow
the discount. Vote FOR KIM's Proposal to tell the Board you want it to
adhere to the spirit and intent of the prospectus' lifeboat provision to
enhance shareholder value.
* * * * *
AS DETAILED IN THE FOLLOWING STATEMENT OF OPPOSITION TO ITEM 2, THE
BOARD, INCLUDING THE INDEPENDENT TRUSTEES, HAS CONCLUDED THAT ITEM 2 IS
NOT IN THE BEST INTEREST OF THE SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE AGAINST ITEM 2.
BOARD OF TRUSTEES' STATEMENT IN OPPOSITION TO THE PROPOSAL OF KARPUS INVESTMENT
MANAGEMENT
Karpus Investment Management ("KIM") proposes a program of self-tenders with
the stated aim of narrowing the discount at which Trust shares trade in the
market. Your Board believes, however, that the mandatory and periodic self-
tenders proposed by KIM will not effectively manage the discount and will not
be in the best interests of the Trust or its shareholders. The Board has
recently taken actions to address the Trust's discount that it believes are
superior alternatives to the KIM proposal. The Board urges you to vote "NO" on
the KIM proposal.
Mandatory Tenders at Specified Periods and with a Low Trigger May Damage the
Trust.
The KIM proposal would have the Board adopt a policy that would, in essence,
require the Trust to liquidate 10% of its assets in November and December of
any year in which the mandatory tender conditions are triggered. This
requirement would be operative without regard to the prevailing market
conditions and the portfolio manager's judgment as to whether it is in the best
interests of the Trust to liquidate 10% of its assets, and incur associated
transaction costs, at the specified time to fund the self-tenders. Had this
requirement been in place in 2007, the Trust would have had to sell assets into
a very difficult market that might have required a sale of more than 10% of the
Trust's assets to cover the cost of the mandatory tender. Moreover, under the
KIM proposal, potential trading partners will know that the Trust is in a
forced sale position, which may further increase the risk of such a sale
adversely affecting the Trust's shareholders and arbitrageurs could take
advantage of a mandatory tender requirement to the detriment of long term
shareholders. Finally, during the pendency of a self-tender, the Trust will
likely hold a greater than normal percentage of its net assets in cash and cash
equivalents, which may adversely affect the Trust's ability to achieve its
investment objective.
The Trust has the ability to purchase its shares in open market transactions,
but "ONLY [emphasis added] when the Trust's shares are trading at a discount of
10% or more from the net asset value of the shares." This policy recognizes
that repurchases by the Trust, while permitted, should only be considered when
the Trust is trading at a significant discount. The policy also recognizes
that, even in this circumstance, repurchases should not be required. Instead,
they should be considered by the Board and MFS based on then current market
conditions and other factors to determine whether such repurchases are
warranted and would be in the best interest of shareholders. Finally, by
providing that the repurchases will occur at market prices, the policy enables
the Trust to provide liquidity to departing shareholders while at the same time
building value for the remaining shareholders, who benefit from the difference
between the Trust's net asset value per share and the price at which the Trust
makes its repurchases.
The lower discount threshold for self-tenders proposed by KIM -- a 6% discount
during the last quarter of the Trust's fiscal year -- and the mandatory nature
of the proposed policy would mandate that these self-tenders occur on a
predictable schedule, causing significant shrinkage of the Trust over time and
a potential increase in the Trust's expense ratio because the Trust's fixed
costs will be spread across a smaller asset base. In addition to the reduction
in asset base, there would be significant costs to conducting the proposed
tender offers, which would be borne by the Trust. MFS estimates that the
Trust's annual expense ratio would increase by approximately 0.08% in the first
year. Additionally, managers of closed-end Trusts are generally free to keep
Trust assets fully invested and generating income for shareholders, because
they need not worry about the prospect of daily redemptions as in an open-end
Trust. If the KIM proposal were to be approved, in order to raise cash to fund
the self-tender, portfolio securities must be sold that might not otherwise be
sold at that time, possibly at unfavorable prices, and with significant
transaction costs. This could negatively impact the return for long-term Trust
shareholders.
Your Board has taken actions designed to reduce the discount.
KIM closes its supporting statement with a request that you vote for its
proposal as a means of telling the Board that you want it to take action to
address the discount. This statement ignores the various measures the Board has
recently taken to address the discount. During 2007, the Board approved changes
in investment strategy to permit the Trust to invest in higher yielding
securities. The Board believes that this measure may increase the Trust's yield
and result in a narrowing of the discount over time. The Board also authorized
the adoption of a level-rate distribution plan, which began in January 2008,
pursuant to which the Trust makes monthly distributions at a fixed rate of 8.5%
of the Trust's average net asset value. The Board believes that this plan can
also contribute to narrowing or eliminating the Trust's discount. Similar plans
have been used by other closed-end funds to address their discounts. Finally,
as part of its efforts to further manage the discount, the Board recently has
authorized MFS to more aggressively engage in open market purchases of shares
in a manner that is consistent with the Trust's registration statement.
It should be noted that when the Trust announced the adoption of the level-
rate distribution plan, KIM wrote to the Trust commending the Board, indicating
that it was pleased and that the "Board's actions reflect their commitment to
address a persistently wide discount." Further, KIM stated its support of level
distribution plans as an effective means of narrowing a fund's discount. Yet,
only a few months later, KIM is claiming that the Board's efforts have been
ineffective.
The Board believes more time is needed to measure the full impact of these
changes. Already, the Trust's discount to NAV has begun to narrow. KIM's
proposal notes that the Trust's average discount from April 30, 2006 to October
31, 2007 was 11.3%. As of June 24, 2008, after implementation of the investment
strategy changes and the level-rate distribution plan, the Trust's discount was
8.52%. Furthermore, these actions have occurred in the midst of persistent
dislocations in the credit markets during the last year. The Board believes
that the Trust's discount may narrow further as credit market conditions
improve and will continue to monitor the Trust's discount and consider whether
additional actions are warranted after the measures taken by the Board recently
have had a sufficient chance to take effect.
REQUIRED VOTE: Approval of this matter will require the vote of a majority of
the Trust's outstanding shares voting at the Meeting in person
or by proxy.
THE TRUSTEES OF THE TRUST RECOMMEND THAT YOU VOTE AGAINST PROPOSAL 2.
TRUST INFORMATION
This section provides certain information about the Trust, including
information about its investment adviser and administrator, independent
registered public accounting firm, executive officers and the identity of
persons holding more than 5% of the outstanding shares of any class of the
Trust.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust engages as its investment adviser and administrator MFS, a Delaware
corporation with offices at 500 Boylston Street, Boston, Massachusetts 02116.
MFS is a majority-owned subsidiary of Sun Life of Canada (U.S.) Financial
Services Holdings, Inc., which is a majority-owned subsidiary of Sun Life
Financial (U.S.) Holdings, Inc., 500 Boylston Street, Boston, Massachusetts
02116, which in turn is a wholly-owned subsidiary of Sun Life Assurance Company
of Canada--U.S. Operations Holdings, Inc., One Sun Life Executive Park,
Wellesley Hills, Massachusetts 02481 ("Sun Life U.S. Operations"). Sun Life
U.S. Operations is a wholly-owned subsidiary of Sun Life Financial Corp., 150
King Street West, Toronto, Canada MSH 1J9, which in turn is a wholly-owned
subsidiary of Sun Life Financial Inc.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Independent Registered Public Accounting Firm and fiscal year end for the
Trust are listed below:
INDEPENDENT REGISTERED PUBLIC FISCAL
TRUST ACCOUNTING FIRM YEAR END
-----------------------------------------------------------------------------
MFS Intermediate Income Trust Deloitte & Touche ("Deloitte") October 31
The Independent Registered Public Accounting Firm has no direct or material
indirect interest in the Trust.
Representatives of the Independent Registered Public Accounting Firm are
expected to be present at the Meeting and will have an opportunity to make a
statement if they desire to do so. Such representatives also are expected to be
available to respond to appropriate questions.
The Audit Committee of the Board of Trustees of the Trust issued the following
report concerning the financial statements for the Trust's most recent fiscal
year.
The Audit Committee reviewed and discussed the audited financial
statements with Trust management. The Audit Committee also discussed with
the Auditor the matters required to be discussed by SAS 61 (Codification
of Statements on Auditing Standards). The Audit Committee received the
written disclosures and the letter from the Auditor required by
Independence Standards Board Standard No. 1 (Independence Discussions
with Audit Committees), and discussed with the Auditor its independence.
Based on this review and the review of other information and these and
other discussions, the Audit Committee recommended to the Board of
Trustees that the audited financial statements be included in the Trust's
annual report to shareholders for the Trust's 2007 fiscal year for filing
with the Securities and Exchange Commission.
Respectfully submitted for MFS Intermediate Income Trust by the Audit
Committee as of December 18, 2007.
Robert E. Butler
William R. Gutow
J. Dale Sheratt
Laurie J. Thomsen
Robert W. Uek
To the extent required by applicable regulations, pre-approval by the Audit
Committee of the Board is needed for all audit and permissible non-audit
services rendered by the Independent Registered Public Accounting Firm to the
Trust and all permissible non-audit services rendered by the Independent
Registered Public Accounting Firm to MFS and any entity controlling, controlled
by or under common control with MFS that provides ongoing services to the Trust
(including MFS Service Center, Inc.) (each, a "Service Affiliate") if the
services relate directly to the operations and financial reporting of the
Trust. Pre-approval is currently on an engagement-by- engagement basis. In the
event pre-approval of such services is necessary between regular meetings of
the Audit Committee and it is not practical to wait to seek pre-approval at the
next regular meeting of the Audit Committee, pre-approval of such services may
be referred to the Chair of the Audit Committee; provided that the Chair may
not pre-approve any individual engagement for such services exceeding $50,000
or multiple engagements for such services in the aggregate exceeding $100,000
between such regular meetings of the Audit Committee. Any engagement
pre-approved by the Chair between regular meetings of the Audit Committee shall
be presented for ratification by the entire Audit Committee at its next
regularly scheduled meeting.
Schedule A attached hereto includes tables that set forth for the Trust's two
most recent fiscal years, the fees billed by the Trust's Independent Registered
Public Accounting Firm for (a) all audit and non-audit services provided
directly to the Trust and (b) those non-audit services provided to the Trust's
Service Affiliates that relate directly to the Trust's operations and financial
reporting under the following captions:
(i) Audit Fees - fees related to the audit and review of the financial
statements included in annual reports and registration statements,
and other services that are normally provided in connection with
statutory and regulatory filings or engagements.
(ii) Audit-Related Fees - fees related to assurance and related services
that are reasonably related to the performance of the audit or
review of financial statements, but not reported under "Audit
Fees", including accounting consultations, agreed-upon procedure
reports (inclusive of annual review of basic maintenance testing
associated with the Preferred Shares), attestation reports, comfort
letters and internal control reviews.
(iii) Tax Fees - fees associated with tax compliance, tax advice and tax
planning, including services relating to the filing or amendment of
federal, state or local income tax returns, regulated investment
company qualification reviews and tax distribution and analysis
reviews.
(iv) All Other Fees - fees for products and services provided to a Trust
by the Independent Registered Public Accounting Firm other than
those reported under "Audit Fees", "Audit- Related Fees" and "Tax
Fees."
Schedule A attached hereto also sets forth the aggregate fees billed by each
Independent Registered Public Accounting Firm for the Trust's two most recent
fiscal years for non-audit services rendered to the Trust and the Trust's
Service Affiliates.
The Audit Committee has considered whether the provision by the Trust's
Independent Registered Public Accounting Firm of non-audit services to the
Trust's Service Affiliates that were not pre-approved by the Audit Committee
because such services did not relate directly to the operations and financial
reporting of the Trust) was compatible with maintaining the independence of the
Independent Registered Public Accounting Firm as the Trust's principal auditor.
EXECUTIVE OFFICERS
The following table provides information about the current executive officers
of the Trust including their principal occupations, which, unless specific
dates are shown, are of more than five years duration, although the titles may
not have been the same throughout. Each officer will hold office until his or
her successor is chosen and qualified, or until he or she retires, resigns or
is removed from office.
PRINCIPAL OCCUPATIONS
POSITION(s) HELD OFFICER DURING THE PAST FIVE YEARS
NAME, DATE OF BIRTH WITH TRUST SINCE(1) & DIRECTORSHIPS(2)
----------------------------------------------------------------------------------------------------------------
OFFICERS
Robert J. Manning(3) President March 2008 Massachusetts Financial Services
(born 10/20/63) Company, Chief Executive Officer,
President, Chief Investment Officer
and Director
Maria F. Dwyer(3) Treasurer November 2005 Massachusetts Financial Services
(born 12/1/58) Company, Executive Vice President and
Chief Regulatory Officer (since March
2004), Chief Compliance Officer (since
November 2006); President of the Trust
(2005 - 2008); Fidelity Management &
Research Company, Vice President
(prior to March 2004); Fidelity Group
of Funds, President and Treasurer
(prior to March 2004)
Christopher R. Bohane(3) Assistant Secretary July 2005 Massachusetts Financial Services
(born 01/18/74) and Assistant Clerk Company, Vice President and Senior
Counsel (since April 2003);
Kirkpatrick & Lockhart LLP (law firm),
Associate (prior to April 2003);
Ethan D. Corey(3) Assistant Secretary July 2005 Massachusetts Financial Services
(born 11/21/63) and Assistant Clerk Company, Special Counsel (since
December 2004); Dechert LLP (law
firm), Counsel (prior to December
2004)
David L. DiLorenzo(3) Assistant Treasurer July 2005 Massachusetts Financial Services
(born 08/10/68) Company, Vice President (since June
2005); JP Morgan Investor Services,
Vice President (prior to June 2005)
Timothy M. Fagan(3) Assistant Secretary September 2005 Massachusetts Financial Services
(born 7/10/68) and Assistant Clerk Company, Vice President and Senior
Counsel (since September 2005); John
Hancock Advisers, LLC, Vice President
and Chief Compliance Officer
(September 2004 to August 2005),
Senior Attorney (prior to September
2004); John Hancock Group of Funds,
Vice President and Chief Compliance
Officer (September 2004 to December
2004)
Mark D. Fischer(3) Assistant Treasurer July 2005 Massachusetts Financial Services
(born 10/27/70) Company, Vice President (since May
2005); JP Morgan Investment Management
Company, Vice President (prior to May
2005)
Brian E. Langenfeld(3) Assistant Secretary May 2006 Massachusetts Financial Services
(born 03/7/73) and Assistant Clerk Company, Vice President (since May
2006); John Hancock Advisers, LLC,
Assistant, Vice President and Counsel
(May 2005 to April 2006); John Hancock
Advisers, LLC, Attorney and Assistant
Secretary (prior to May 2005)
Ellen Moynihan(3) Assistant Treasurer April 1997 Massachusetts Financial Services
(born 11/13/57) Company, Senior Vice President
Susan S. Newton(3) Assistant Secretary May 2005 Massachusetts Financial Services
(born 03/7/50) and Assistant Clerk Company, Senior Vice President and
Associate General Counsel (since
April 2005); John Hancock Advisers,
LLC, Senior Vice President, Secretary
and Chief Legal Officer (prior to
April 2005); John Hancock Group of
Funds, Senior Vice President,
Secretary and Chief Legal Officer
(prior to April 2005)
Susan A. Pereira(3) Assistant Secretary July 2005 Massachusetts Financial Services
(born 11/5/70) and Assistant Clerk Company, Vice President and Senior
Counsel (since June 2004); Bingham
McCutchen LLP (law firm), Associate
(prior to June 2004)
Mark N. Polebaum(3) Secretary and Clerk January 2006 Massachusetts Financial Services
(born 05/01/52) Company, Executive Vice President,
General Counsel and Secretary (since
January 2006); Wilmer Cutler Pickering
Hale and Dorr LLP (law firm), Partner
(prior to January 2006)
Frank L. Tarantino Independent Chief June 2004 Tarantino LLC (provider of compliance
(born 03/07/44) Compliance Officer services), Principal (since June
2004); CRA Business Strategies Group
(consulting services), Executive Vice
President (April 2003 to June 2004);
David L. Babson & Co. (investment
adviser), Managing Director, Chief
Administrative Officer and Director
(prior to March 2003)
Richard S. Weitzel(3) Assistant Secretary October 2007 Massachusetts Financial Services
(born 7/16/70) and Assistant Clerk Company, Vice President and Assistant
General Counsel (since 2007); Vice
President and Senior Counsel (since
May 2004); Massachusetts Department
of Business and Technology, General
Counsel (February 2003 to April 2004);
Massachusetts Office of the Attorney
General, Assistant Attorney General
(April 2001 to February 2003); Ropes
& Gray (law firm), Associate (prior
to April 2001)
James O. Yost(3) Assistant Treasurer September 1990 Massachusetts Financial Services
(born 06/12/60) Company, Senior Vice President
----------
(1) Date first appointed to serve as officer of an MFS fund.
(2) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission
(i.e., "public companies").
(3) "Interested person" of the Trust within the meaning of the 1940 Act, as a result of position with MFS. The
address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.
The Trust's officers hold comparable positions with the 98 funds in the MFS
Family of Funds as of December 31, 2007, and with certain affiliates of MFS.
The address of each officer is MFS, 500 Boylston Street, Boston, Massachusetts
02116.
INTERESTS OF CERTAIN PERSONS
Schedule B attached hereto sets forth, as of August 4, 2008, to the best
knowledge of the Trust, the shareholders who beneficially owned more than 5% of
the outstanding shares of any class of such Trust.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Trustees,
directors and certain officers of the Trust and MFS, and persons who own more
than ten percent of any class of the Trust's shares, to file reports of
ownership and changes in ownership with the SEC and the New York Stock
Exchange. Such persons are required by SEC regulation to furnish the Trust with
copies of all Section 16(a) forms they file in relation to the Trust.
Based solely on a review of the copies of Forms 3, 4 and 5 and amendments
thereto furnished to the Trust with respect to its most recent fiscal year for
Trustees, directors and certain officers of the Trust and MFS and greater than
ten percent beneficial owners, the Trust believes all Section 16(a)
transactions were reported on a timely basis, except for the following filings:
Thomas A. Bogart (Corporate Board Member) made a Form 3 filing for MFS
Intermediate Income Trust on July 10, 2007; and Lawrence H. Cohn, M.D.
(Independent Trustee) made a Form 4 filing for MFS Intermediate Income Trust on
September 4, 2007. Dr. Cohn reported one transaction; Mr. Bogart reported no
transactions. To the extent that any Form 3, 3A and 4 filings were not made on
a timely basis, certain Form 5 (Annual Statement of Changes of Beneficial
Ownership) filings were not filed on a timely basis as well.
LITIGATION
Since December 2003, MFS, MFS Fund Distributors, Inc., MFS Service Center,
Inc., Sun Life Financial Inc., various MFS funds, certain current and/or former
Trustees of the MFS funds, and certain officers of MFS have been named as
defendants in multiple lawsuits filed in federal and state courts. The various
lawsuits that are still pending generally allege that some or all of the
defendants permitted or acquiesced in market timing and/or late trading in some
of the MFS funds, and inadequately disclosed MFS' internal policies concerning
market timing and such matters. The pending lawsuits assert that some or all of
the defendants violated the federal securities laws, including the Securities
Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of
1940, and the Investment Advisers Act of 1940, as well as fiduciary duties and
other violations of common law. The pending lawsuits variously have been
commenced as class actions or individual actions on behalf of investors who
purchased, held, or redeemed shares of the MFS funds during specified periods,
or as derivative actions on behalf of the MFS funds.
The lawsuits relating to market timing and related matters have been
transferred to, and consolidated before, the United States District Court for
the District of Maryland, as part of a multi-district litigation of market
timing and related claims involving several other fund complexes (In re Mutual
Funds Investment Litigation (Alger, Columbia, Janus, MFS, One Group, Putnam,
Allianz Dresdner), No. 1:04-md-15863 (transfer began March 19, 2004)). The
market timing cases related to the MFS funds include Riggs v. MFS et al., Case
No. 04-CV-01162-JFM (consolidated class action complaint filed September 30,
2004), Hammerslough v. MFS et al., Case No. 04-MD-01620 (consolidated
derivative complaint filed September 30, 2004), and Reaves v. MFS Series Trust
I, et al., Case No. 1:05-CV-02220-JFM (complaint related to Class B Shares
filed March 21, 2005). The plaintiffs in these consolidated lawsuits generally
seek injunctive relief including removal of the named Trustees, adviser and
distributor, rescission of contracts and 12b-1 Plans, disgorgement of fees and
profits, monetary damages, punitive damages, attorney's fees and costs and
other equitable and declaratory relief. Insofar as any of the actions is
appropriately brought derivatively on behalf of any of the MFS funds, any
recovery will inure to the benefit of the MFS funds. Several claims of the
various lawsuits have been dismissed; MFS and other named defendants continue
to defend the various lawsuits.
FURTHER INFORMATION ABOUT VOTING AND THE MEETING
MANNER OF VOTING PROXIES
All proxies received by management will be voted on all matters presented at
the Meeting, and if not limited to the contrary, will be voted FOR the election
of J. Atwood Ives, William R. Gutow, Michael Hegarty, and Robert W. Uek as
Trustees of the Trust (if still available for election) and AGAINST the
approval of Item 2.
All proxies received, including proxies that reflect (i) broker non-votes
(i.e., shares held by brokers or nominees as to which (a) instructions have not
been received from the beneficial owners or the persons entitled to vote, and
(b) the broker or nominee does not have discretionary voting power on a
particular matter), (ii) abstentions or (iii) the withholding of authority to
vote for a nominee for election as Trustee, will be counted as shares that are
present on a particular matter for purposes of determining the presence of a
quorum for that matter. A majority of the Trust's outstanding shares entitled
to be cast at the Meeting that are present in person or represented by proxy
constitutes a quorum. With respect to the election of Trustees, neither broker
non-votes nor abstentions nor withholding authority to vote have any effect on
the outcome of the voting. With respect to Item 2, broker non-votes,
abstentions, and withholding authority to vote will have the effect of voting
against such item.
Each shareholder of the Trust is entitled to one vote for each share of the
Trust that such shareholder owns at the close of business on August 4, 2008, on
each matter on which the shareholder is entitled to vote. Each fractional share
is entitled to a proportionate fractional vote.
The Trust will reimburse the record holders of its shares for their reasonable
expenses incurred in sending proxy material to and obtaining voting
instructions from beneficial owners.
If, because of any unexpected occurrence, any nominee is not available for
election or if any other matters properly come before the Meeting, it is the
Trust's intention that proxies not limited to the contrary will be voted in
accordance with the judgment of the persons named in the enclosed form of
proxy.
INSTRUCTIONS FOR VOTING PROXIES
The giving of a proxy will not affect a shareholder's right to vote in person
should the shareholder decide to attend the Meeting. To vote by mail, please
mark, sign, date and return the enclosed proxy card following the instructions
printed on the card. Please refer to your proxy card for instructions for
voting by telephone or internet.
SUBMISSION OF PROPOSALS
Proposals of shareholders which are intended to be presented at the 2009 Annual
Meeting of Shareholders must be received by the Trust on or prior to April 23,
2009. The submission by a shareholder of a proposal for inclusion in the proxy
materials does not guarantee that it will be included. Shareholder proposals
are subject to certain requirements under the federal securities laws.
A shareholder who wishes to make a proposal at the 2009 Annual Meeting of
Shareholders without including the proposal in the Trust's proxy statement must
ensure that the proposal is received by the Trust in good order and in
compliance with all applicable legal requirements and requirements set forth in
the Trust's By-Laws and Declaration of Trust by May 1, 2009, at the Trust's
principal office at 500 Boylston Street, Boston, Massachusetts 02116. The
persons named as proxies for the 2008 Annual Meeting of Shareholders will have
discretionary authority to vote on all matters presented at the meeting
consistent with the SEC's proxy rules.
ADJOURNMENT
In the absence of a quorum at the Meeting, or (even if a quorum is so present)
if sufficient votes in favor of a proposal set forth in the Notice of Annual
Meeting are not received by the time scheduled for the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting after the
date set forth for the original Meeting, with no other notice than announcement
at the Meeting, to permit further solicitation of proxies with respect to such
proposal. In addition, if, in the judgment of the persons named as proxies, it
is advisable to defer action on a proposal, the persons named as proxies may
propose one or more adjournments of the Meeting with respect to such proposal.
Any adjournment(s) with respect to a proposal will require the affirmative vote
of a majority of the Shares of the Fund entitled to vote thereon present in
person or represented by proxy at the session of the Meeting to be adjourned.
The persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of the proposal in question.
They will vote against any such adjournment those proxies required to be voted
against such proposal. The costs of any additional solicitation and of any
adjourned session will be borne by the Fund. Any proposals for which sufficient
favorable votes have been received by the time of the Meeting may be acted upon
and, if so, such action will be final regardless of whether the Meeting is
adjourned to permit additional solicitation with respect to any other proposal.
At any such adjourned meeting at which a quorum is present, any business may be
transacted which might have been transacted at the meeting as originally
called.
ADDITIONAL INFORMATION
The expense of the preparation, printing and mailing of the enclosed form of
proxy, the Notice and this Proxy Statement, and any tabulation costs, will be
borne by the Trust.
Only one copy of this Proxy Statement may be mailed to a household, even if
more than one person in a household is a Trust shareholder of record, unless
the Trust has received contrary instructions from one or more of the
shareholders in such household. If you need additional copies of this Proxy
Statement and you are the holder of record of your shares, please contact
Altman at 1-866-207-3648. If your shares are held in broker street name please
contact your financial intermediary to obtain additional copies of this Proxy
Statement. If in the future you do not want the mailing of proxy statements to
be combined with those for other members of your household or if you are
receiving multiple copies of this Proxy Statement and do want the mailings to
be combined with those for other members of your household, contact
Computershare, in writing, at 250 Royall Street, Canton, Massachusetts, 02021,
or by telephone at 1-800-637-2304, or contact your financial intermediary.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY
August 21, 2008 MFS(R) INTERMEDIATE INCOME TRUST
SCHEDULE A
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES
For the Trust's last two fiscal years, fees billed by the Trust's Independent
Registered Public Accounting Firm for services provided directly to the Trust:
INDEPENDENT
REGISTERED AUDIT RELATED
PUBLIC AUDIT FEES FEES
ACCOUNTING ------------------ ------------------
TRUST FIRM 2007 2006 2007 2006
----------------------------------------------------------------------------------------
MFS Intermediate Income Trust Deloitte $48,508 $43,863 $10,000 $20,000
INDEPENDENT
REGISTERED
PUBLIC TAX FEES ALL OTHER FEES
ACCOUNTING ------------------ ------------------
TRUST FIRM 2007 2006 2007 2006
----------------------------------------------------------------------------------------
MFS Intermediate Income Trust Deloitte $5,795 $8,200 $0 $0
For the Trust's last two fiscal years, fees billed by the Trust's
Independent Registered Public Accounting Firm for services provided to the
Trust's Service Affiliates that relate directly to the Trust's operations and
financial reporting:
INDEPENDENT
REGISTERED AUDIT RELATED
PUBLIC FEES(1) TAX FEES(1) ALL OTHER FEES(1)
ACCOUNTING ------------------------ ------------ --------------------
TRUST FIRM 2007 2006 2007 2006 2007 2006
----------------------------------------------------------------------------------------------------------------
Service Affiliates of MFS Deloitte $1,177,035 $1,047,925 $0 $0 $582,753 $276,806
Intermediate Income Trust
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(1) This amount reflects the fees billed to Service Affiliates of the Trust for non-audit services relating
directly to the operations and financial reporting of the Fund (portions of which services also related to
the operations and financial reporting of all funds within the MFS funds complex).
During the periods indicated in the tables above, no services described
under "Audit-Related Fees," "Tax Fees" or "All Other Fees" were approved
pursuant to the de minimis exception set forth in paragraph (c)(7)(i)(C) of
Rule 2-01 of Regulation S-X.
For the Trust's last fiscal year, no fees were billed by any Independent
Registered Public Accounting Firm that would be disclosed under the caption
"All Other Fees" to the Trust.
Aggregate fees billed by the Independent Registered Public Accounting Firm,
for the Trust's two most recent fiscal years, for non-audit services rendered
to the Trust and the Trust's Service Affiliates:
INDEPENDENT REGISTERED
TRUST PUBLIC ACCOUNTING FIRM 2007 2006
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MFS Intermediate Income Trust and its Service Deloitte $1,952,958 $1,481,116
Affiliates
SCHEDULE B
INTERESTS OF CERTAIN PERSONS
As of August 4, 2008, to the best knowledge of the Trust, the shareholders
who beneficially owned more than 5% of the outstanding shares of the Trust are
as follows:
NUMBER OF PERCENT OF
OUTSTANDING OUTSTANDING
NAME AND ADDRESS SHARES SHARES OF
OF BENEFICIAL TITLE OF BENEFICIALLY NOTED CLASS
TRUST OWNER CLASS OWNED OWNED
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MFS Intermediate Income Cede & Co. Common 110,728,231 95.04%
Trust PO Box 20
Bowling Green Station
New York, NY
M F S(R)
INVESTMENT MANAGEMENT CE-MIN-PRX-8/08
M F S(R) MFS INVESTMENT MANAGEMENT
INVESTMENT MANAGEMENT MFS(R) INTERMEDIATE INCOME TRUST
500 Boylston Street, Boston, Massachusetts 02116
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST NOTICE
OF THE 2008 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 9, 2008
The signer of this proxy card hereby appoints Christopher R. Bohane, Timothy M.
Fagan, Mark D. Fischer, Brian E. Langenfeld, Susan S. Newton, and Susan A.
Pereira and each of them separately, proxies, with power of substitution, and
hereby authorizes each of them to represent, and to vote as designated on the
reverse side, at the Meeting of Shareholders of the above-referenced Trust, on
Thursday, October 9, 2008 at 10:30 a.m. Boston time, and at any adjournment
thereof, all of the shares of the Trust that the undersigned would be entitled
to vote if personally present. Shareholders of the Trust will vote separately
on each item. Only a Trust's shareholders of record on August 4, 2008 will be
entitled to vote at the Trust's Meeting of Shareholders.
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE
YOUR PROMPTLY VOTING, SIGNING AND RETURNING THE
ENCLOSED PROXY, WHICH WILL HELP AVOID THE
ADDITIONAL EXPENSE OF A SECOND SOLICITATION FOR
YOUR TRUST. THE ENCLOSED ADDRESSED ENVELOPE
REQUIRES NO POSTAGE AND IS PROVIDED FOR YOUR
CONVENIENCE.
PLEASE FOLD HERE AND RETURN ENTIRE BALLOT - DO NOT DETACH
MFS(R) INTERMEDIATE INCOME TRUST
2008 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 9, 2008
VOTE BY PHONE, BY MAIL OR VIA THE INTERNET! Please be sure to sign and date
------------------------------------------- this proxy. Please sign exactly as
your name appears on this proxy.
CALL: TO VOTE YOUR PROXY BY PHONE, CALL When shares are held by joint
1-866-458-9858 AND ENTER THE tenants, both should sign. When
12-DIGIT CONTROL NUMBER FOUND ON signing as attorney, executor,
THE REVERSE SIDE OF THIS PROXY administrator, trustee, or
BALLOT. THIS TOUCH-TONE VOTING LINE guardian, please give full title
IS AVAILABLE 24 HOURS A DAY, SEVEN as such. If a corporation, please
DAYS A WEEK. sign in full corporate name by
president or other authorized
LOG-ON: TO VOTE ON THE INTERNET GO TO officer. If a partnership, please
WWW.PROXYONLINE.COM AND ENTER THE sign in partnership name by
12-DIGIT CONTROL NUMBER FOUND ON authorized person.
THE REVERSE SIDE OF THIS PROXY
BALLOT. PLEASE MARK YOUR VOTE ON THE
----------------------------
MAIL: TO VOTE YOUR PROXY BY MAIL, CHECK REVERSE OF THIS PROXY BALLOT.
THE APPROPRIATE VOTING BOX ON THE -----------------------------
REVERSE SIDE OF THIS PROXY BALLOT,
SIGN AND DATE THE BALLOT AND RETURN
IT IN THE ENCLOSED POSTAGE-PAID -----------------------------------
ENVELOPE OR MAIL TO: THE ALTMAN Shareholder sign here
GROUP, P.O. BOX 238, LYNDHURST,
NJ 07071.
-----------------------------------
Joint owner sign here
-----------------------------------
Date:
IT IS IMPORTANT THAT PROXIES BE VOTED PROMPTLY.
EVERY SHAREHOLDER'S VOTE IS IMPORTANT.
MFS(R) INTERMEDIATE INCOME TRUST
CONTROL NUMBER
123456789123
WE NEED YOUR PROXY VOTE AS SOON AS POSSIBLE. YOUR PROMPT ATTENTION TO THIS
MATTER WILL HELP TO AVOID THE EXPENSE OF FURTHER SOLICITATION.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE SIGNING SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1 AND AGAINST PROPOSAL 2. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
THE TRUSTEES OF YOUR TRUST RECOMMEND THAT YOU VOTE
IN FAVOR OF ITEM 1 AND AGAINST ITEM 2
-------- -------
PLEASE MARK THE BOXES BELOW IN BLUE OR BLACK INK.
PROPOSALS FOR WITHHOLD
1. ELECTION OF DIRECTORS:
01 - J. Atwood Ives [ ] [ ]
02 - William R. Gutow [ ] [ ]
03 - Michael Hegarty [ ] [ ]
04 - Robert W. Uek [ ] [ ]
FOR AGAINST ABSTAIN
2. To act upon, if properly presented at the [ ] [ ] [ ]
Meeting, a shareholder proposal that the Board
of Trustees adopt a policy to conduct periodic
tender offers for shares of the Trust.
3. To transact such other business as may properly come before the Meeting and
any adjournments thereof.
(BARCODE HERE) (TAGID HERE) (CUSIP HERE)