<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 17, 1995
1933 ACT FILE NO. 2-27962
1940 ACT FILE NO. 811-1545
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 42 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 29 [X]
EATON VANCE SPECIAL INVESTMENT TRUST
------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
617-482-8260
------------------------------
(REGISTRANT'S TELEPHONE NUMBER)
H. DAY BRIGHAM, JR.
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective on September 28,
1995 pursuant to paragraph (a) of Rule 485 or such earlier date as the
Commission may determine.
The exhibit index required by Rule 483(a) under the Securities Act of 1933
is located on page in the sequential numbering system of the manually
signed copy of this Registration Statement.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
February 23, 1995 filed its "Notice" as required by that Rule for the fiscal
year ended December 31, 1994.
Investors Portfolio, Stock Portfolio and Total Return Portfolio have also
executed this Registration Statement.
================================================================================
<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
Cross Reference Sheets required by Rule 481(a) under the Securities Act of
1933
Part A--The Prospectuses of:
EV Classic Investors Fund
EV Marathon Investors Fund
EV Traditional Investors Fund
EV Classic Stock Fund
EV Marathon Stock Fund
EV Traditional Stock Fund
EV Classic Total Return Fund
EV Marathon Total Return Fund
EV Traditional Total Return Fund
Part B--The Statements of Additional Information of:
EV Classic Investors Fund
EV Marathon Investors Fund
EV Traditional Investors Fund
EV Classic Stock Fund
EV Marathon Stock Fund
EV Traditional Stock Fund
EV Classic Total Return Fund
EV Marathon Total Return Fund
EV Traditional Total Return Fund
Part C--Other Information
Signatures
Exhibit Index Required by Rule 483(a) under the Securities Act of 1933
Exhibits
This Amendment is not intended to amend the Prospectuses and Statements of
Additional Information of any other Fund of the Trust not identified above.
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC INVESTORS FUND
EV MARATHON INVESTORS FUND
EV TRADITIONAL INVESTORS FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- ----- -------- ------------
1. ............. Cover Page Cover Page
2. ............. Synopsis Shareholder and Fund Expenses
3. ............. Condensed Financial The Fund's Financial
Information Highlights;
Performance Information
4. ............. General Description of The Fund's Investment
Registrant Objectives; How the Fund and
the Portfolio Invest their
Assets; Organization of the
Fund and the Portfolio
5. ............. Management of the Fund Management of the Fund and the
Portfolio
5A. ............ Management's Discussion of Not Applicable
Fund Performance
6. ............. Capital Stock and Other Organization of the Fund and
Securities the Portfolio; Reports to
Shareholders; The Lifetime
Investing Account/
Distribution Options;
Distributions and Taxes
7. ............. Purchase of Securities Valuing Fund Shares; How to
Being Offered Buy Fund Shares; Distribution
Plan/Service Plan; The
Lifetime Investing Account/
Distribution Options; The
Eaton Vance Exchange
Privilege; Eaton Vance
Shareholder Services
8. ............. Redemption or Repurchase How to Redeem Fund Shares
9. ............. Pending Legal Proceedings Not Applicable
<PAGE>
PART B STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
- ----- -------- ----------------------------
10. ............. Cover Page Cover Page
11. ............. Table of Contents Table of Contents
12. ............. General Information and Other Information
History
13. ............. Investment Objectives and Investment Objectives and
Policies Policies; Investment
Restrictions
14. ............. Management of the Fund Trustees and Officers; Fees and
Expenses
15. ............. Control Persons and Control Persons and Principal
Principal Holders of Holders of Securities
Securities
16. ............. Investment Advisory and Investment Adviser and
Other Services Administrator; Distribution
Plan/Service Plan; Custodian;
Independent Accountants; Fees
and Expenses
17. ............. Brokerage Allocation and Portfolio Security
Other Practices Transactions; Fees and
Expenses
18. ............. Capital Stock and Other Other Information
Securities
19. ............. Purchase, Redemption and Determination of Net Asset
Pricing of Securities Value; Principal Underwriter;
Being Offered Services for Accumulation;
Service for Withdrawal;
Distribution Plan/Service
Plan; Fees and Expenses
20. ............. Tax Status Taxes
21. ............. Underwriters Principal Underwriter; Fees and
Expenses
22. ............. Calculation of Performance Investment Performance;
Data Performance Information
23. ............. Financial Statements Financial Statements
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC STOCK FUND
EV MARATHON STOCK FUND
EV TRADITIONAL STOCK FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- ----- -------- ------------
1. ............. Cover Page Cover Page
2. ............. Synopsis Shareholder and Fund Expenses
3. ............. Condensed Financial The Fund's Financial
Information Highlights;
Performance Information
4. ............. General Description of The Fund's Investment
Registrant Objective; How the Fund and
the Portfolio Invest their
Assets; Organization of the
Fund and the Portfolio
5. ............. Management of the Fund Management of the Fund and the
Portfolio
5A. ............ Management's Discussion of Not Applicable
Fund
Performance
6. ............. Capital Stock and Other Organization of the Fund and
Securities the Portfolio; Reports to
Shareholders; The Lifetime
Investing Account/
Distribution Options;
Distributions and Taxes
7. ............. Purchase of Securities Valuing Fund Shares; How to
Being Buy Fund Shares; Distribution
Offered Plan/Service Plan; The
Lifetime Investing Account/
Distribution Options; The
Eaton Vance Exchange
Privilege; Eaton Vance
Shareholder Services
8. ............. Redemption or Repurchase How to Redeem Fund Shares
9. ............. Pending Legal Proceedings Not Applicable
<PAGE>
PART B STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
- ----- -------- ----------------------------
10. ............. Cover Page Cover Page
11. ............. Table of Contents Table of Contents
12. ............. General Information and Other Information
History
13. ............. Investment Objectives and Investment Objectives, Policies
Policies and Restrictions; Other
Investment Features
14. ............. Management of the Fund Trustees and Officers; Fees and
Expenses
15. ............. Control Persons and Control Persons and Principal
Principal Holders of Holders of Securities
Securities
16. ............. Investment Advisory and Investment Adviser and
Other Administrator; Distribution
Services Plan/Service Plan; Custodian;
Independent Accountants; Fees
and Expenses
17. ............. Brokerage Allocation and Portfolio Security
Other Transactions; Fees and
Practices Expenses
18. ............. Capital Stock and Other Other Information
Securities
19. ............. Purchase, Redemption and Determination of Net Asset
Pricing of Securities Value; Principal Underwriter;
Being Offered Services for Accumulation;
Service for Withdrawal;
Distribution Plan/Service
Plan; Fees and Expenses
20. ............. Tax Status Taxes
21. ............. Underwriters Principal Underwriter; Fees and
Expenses
22. ............. Calculation of Performance Investment Performance;
Data Performance Information
23. ............. Financial Statements Financial Statements
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC TOTAL RETURN FUND
EV MARATHON TOTAL RETURN FUND
EV TRADITIONAL TOTAL RETURN FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- ----- -------- ------------
1. ............. Cover Page Cover Page
2. ............. Synopsis Shareholder and Fund Expenses
3. ............. Condensed Financial The Fund's Financial
Information Highlights;
Performance Information
4. ............. General Description of The Fund's Investment
Registrant Objective; How the Fund and
the Portfolio Invest their
Assets; Organization of the
Fund and the Portfolio
5. ............. Management of the Fund Management of the Fund and the
Portfolio
5A. ............ Management's Discussion of Not Applicable
Fund
Performance
6. ............. Capital Stock and Other Organization of the Fund and
Securities the Portfolio; Reports to
Shareholders; The Lifetime
Investing Account/
Distribution Options;
Distributions and Taxes
7. ............. Purchase of Securities Valuing Fund Shares; How to
Being Buy Fund Shares; Distribution
Offered Plan/Service Plan; The
Lifetime Investing Account/
Distribution Options; The
Eaton Vance Exchange
Privilege; Eaton Vance
Shareholder Services
8. ............. Redemption or Repurchase How to Redeem Fund Shares
9. ............. Pending Legal Proceedings Not Applicable
<PAGE>
PART B STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
- ----- -------- ----------------------------
10. ............. Cover Page Cover Page
11. ............. Table of Contents Table of Contents
12. ............. General Information and Other Information
History
13. ............. Investment Objectives and Investment Objectives and
Policies Policies; Investment
Restrictions
14. ............. Management of the Fund Trustees and Officers; Fees and
Expenses
15. ............. Control Persons and Control Persons and Principal
Principal Holders of Holders of Securities
Securities
16. ............. Investment Advisory and Investment Adviser and
Other Administrator; Distribution
Services Plan/Service Plan; Custodian;
Independent Accountants; Fees
and Expenses
17. ............. Brokerage Allocation and Portfolio Security
Other Transactions; Fees and
Practices Expenses
18. ............. Capital Stock and Other Other Information
Securities
19. ............. Purchase, Redemption and Determination of Net Asset
Pricing of Securities Value; Principal Underwriter;
Being Offered Services for Accumulation;
Service for Withdrawal;
Distribution Plan/Service
Plan; Fees and Expenses
20. ............. Tax Status Taxes
21. ............. Underwriters Principal Underwriter; Fees and
Expenses
22. ............. Calculation of Performance Investment Performance;
Data Performance Information
23. ............. Financial Statements Financial Statements
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC INVESTORS FUND
SUPPLEMENT TO PROSPECTUS DATED JUNE 1, 1995
Effective August 1, 1995, EV Classic Investors Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Investors Trust, which
was also a Massachusetts business trust. Except for the fact that the Fund is
now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Investors Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE INVESTORS TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EV CLASSIC INVESTORS FUND
EV CLASSIC INVESTORS FUND (THE "FUND") IS A MUTUAL FUND SEEKING TO PROVIDE
CURRENT INCOME AND LONG-TERM GROWTH OF CAPITAL. THE FUND INVESTS ITS ASSETS IN
INVESTORS PORTFOLIO (THE "PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY
HAVING THE SAME INVESTMENT OBJECTIVES AS THE FUND, RATHER THAN BY DIRECTLY
INVESTING IN AND MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY
STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF EATON VANCE INVESTORS TRUST
(THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated June 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ........................ 11
The Fund's Financial Highlights ................... 3 How to Redeem Fund Shares ..................... 12
The Fund's Investment Objectives .................. 4 Reports to Shareholders ....................... 14
How the Fund and the Portfolio Invest The Lifetime Investing Account/Distribution
their Assets .................................... 4 Options ..................................... 14
Organization of the Fund and the Portfolio ....... 5 The Eaton Vance Exchange Privilege ............ 15
Management of the Fund and the Portfolio .......... 8 Eaton Vance Shareholder Services .............. 16
Distribution Plan ................................. 9 Distributions and Taxes ....................... 17
Valuing Fund Shares ............................... 11 Performance Information ....................... 18
- ------------------------------------------------------------------------------------------------------------
PROSPECTUS DATED JUNE 1, 1995
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDER AND FUND EXPENSES
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Contingent Deferred Sales Charge Imposed on Redemptions During the First Year (as a
percentage of redemption proceeds exclusive of all reinvestments and capital appreciation
in the account) 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.625%
Rule 12b-1 Distribution (and Service) Fees 1.000
Other Expenses (after expense reduction) 1.605
-----
Total Operating Expenses (after expense reduction) 3.23%
=====
<CAPTION>
EXAMPLES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses (including a contingent deferred
sales charge in the case of redemption during the first year after purchase) on
a $1,000 investment, assuming (a) 5% annual return and (b) redemption at the
end of each period: $43 $99 $169 $353
An investor would pay the following expenses on the same investment,
assuming (a) 5% annual return and (b) no redemptions: $33 $99 $169 $353
</TABLE>
Notes:
The tables and Examples summarize the aggregate expenses of the Fund and the
Portfolio and are designed to help investors understand the costs and expenses
they will bear, directly or indirectly, by investing in the Fund. Information
for the Fund is based on its expenses for the most recent fiscal year. Absent an
allocation of expenses to the Administrator, Other Expenses would have been
3.925%, and Total Operating Expenses would have been 5.55%.
The Fund invests exclusively in the Portfolio. The Trustees believe that,
over time, the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to, or less than, the per share expenses the Fund would
incur if the Fund were instead to retain the services of an investment adviser
and its assets were invested directly in the types of securities being held by
the Portfolio.
The Examples should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. Federal
regulations require the Examples to assume a 5% annual return, but actual annual
return will vary. For further information regarding the expenses of both the
Fund and the Portfolio see "Organization of the Fund and the Portfolio" and "How
to Redeem Fund Shares". A long-term shareholder in the Fund paying Rule 12b-1
Distribution Fees may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the National Association of
Securities Dealers, Inc.
The contingent deferred sales charge is imposed on the redemption of shares
purchased on or after January 30, 1995. No contingent deferred sales charge is
imposed on (a) shares purchased more than one year prior to redemption, (b)
shares acquired through the reinvestment of distributions or (c) any
appreciation in value of other shares in the account, and no such charge is
imposed on exchanges of Fund shares for shares of one or more other funds listed
under "The Eaton Vance Exchange Privilege". See "How to Redeem Fund Shares".
Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in the
future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which have been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
----------------------
1995 1994*
---- -----
NET ASSET VALUE -- Beginning of period .......... $10.460 $10.000
------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income ......................... $ 0.215 $ 0.025
Net realized and unrealized gain (loss) on
investments ................................. (0.810) 0.435
------- -------
Total income (loss)
from investment operations .............. $(0.595) $ 0.460
------- -------
LESS DISTRIBUTIONS:
From net investment income
. ............................................... $(0.166) --
In excess of net
investment income ............................... (0.074) --
From realized gain on
investments ..................................... (0.002) --
From paid in capital .......................... (0.013) --
------- -------
Total distributions ....................... $(0.255) --
------- -------
NET ASSET VALUE -- End of period ................ $ 9.610 $10.460
======= =======
TOTAL RETURN1 ................................... (5.71)% 4.60%
RATIOS/SUPPLEMENTAL DATA (to
average daily net assets):**
Expenses(2) ................................... 3.23% 1.68%+
Net investment income ......................... 1.49% 1.81%+
NET ASSETS, END OF PERIOD
(000's omitted) ................................. $ 2,073 $ 664
*For the period from the start of business, November 2, 1993, to January 31,
1994.
**The expenses related to the operation of the Fund reflect an allocation of
expenses to the Administrator or an assumption of expenses by the Investment
Adviser. Had such action not been taken, the ratios would have been as
follows:
RATIOS (to average daily net assets)
Expenses(2) .................................... 5.55% 4.97%+
Net investment income (loss) ................... (0.83)% (1.46)%+
(1)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be reinvested at
the net asset value on the record date.
(2)Includes the Fund's share of Investors Portfolio's allocated expenses.
+Computed on an annualized basis.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVES
- --------------------------------------------------------------------------------
The investment objectives of EV CLASSIC INVESTORS FUND are to provide current
income and long-term growth of capital. The Fund currently seeks to meet its
investment objectives by investing its assets in Investors Portfolio, a separate
registered investment company which has the same investment objectives and
policies as the Fund and whose management will place emphasis on equity
securities considered to be of high or improving quality. Investments will also
be made in fixed-income securities such as preferred stocks, bonds, debentures,
notes or money market instruments in order to maintain a reasonable level of
current income, preserve capital or create a buying reserve. The investment
objectives of the Fund may be changed by the Trustees without a vote of
shareholders; as a matter of policy, the Trustees would not materially change
the investment objectives of the Fund without shareholder approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS
- ------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVES BY INVESTING EITHER DIRECTLY
OR INDIRECTLY THROUGH ANOTHER OPEN-END MANAGEMENT INVESTMENT COMPANY WHICH
INTENDS TO INVEST IN BOTH EQUITY AND DEBT SECURITIES. IT IS THE PORTFOLIO'S
CURRENT POLICY THAT INVESTMENTS IN EQUITY SECURITIES WILL GENERALLY NOT EXCEED
75% NOR BE LESS THAN 25% OF THE PORTFOLIO'S NET ASSETS. The policy of the
Portfolio is to invest in a broadly diversified list of seasoned securities
representing a number of different industries. It is the policy of the Portfolio
not to concentrate its investments in any particular industry or group of
industries. Electric utility companies, gas utility companies, natural gas
producing companies, transmission companies, telephone companies and water works
companies will for the purpose of this policy be considered separate industries.
The Portfolio may not invest more than 25% of the value of its total assets at
the time of acquisition in any one industry, with public utility companies, as
segregated above, being considered separate industries. The policies set forth
in this paragraph are fundamental policies of both the Fund and the Portfolio
and may not be changed unless authorized by a vote of the shareholders of the
Fund or the investors in the Portfolio, as the case may be.
The Portfolio may invest in various kinds and types of debt securities from
time to time, including without limitation obligations issued, guaranteed or
otherwise backed by U.S. Government agencies and instrumentalities,
collateralized mortgage obligations and various other mortgage-backed
securities, and other types of asset-backed obligations and collateralized
securities. The Portfolio may also invest in lower quality, high risk, high
yielding debt securities (commonly referred to as "junk bonds"). The Portfolio
currently intends to limit its investments in these securities to 5% or less of
its assets.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Since the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies or may enter into forward foreign currency
exchange contracts to purchase or sell a specified currency at a specified price
and future date. As of April 28, 1995, the Portfolio had 5.48% of its net assets
invested in securities issued by foreign companies.
The Portfolio may purchase and sell exchange-traded futures contracts on
stock indices and options thereon to hedge against fluctuations in securities
prices or as a substitute for the purchase or sale of securities. Such
transactions involve a risk of loss or depreciation due to unanticipated adverse
changes in securities prices, which may exceed the Portfolio's initial
investment in these contracts. Futures contracts involve transaction costs. To
the extent that the Portfolio enters into futures contracts and options thereon
traded on an exchange regulated by the Commodity Futures Trading Commission, in
each case that are not for bona fide hedging purposes (as defined by the CFTC),
the aggregate initial margin and premiums required to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into. There can be no assurance that the Investment Adviser's use of
stock index futures will be advantageous to the Portfolio.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objectives cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder or
an investor vote, respectively. Except for such enumerated restrictions and as
otherwise indicated in this Prospectus, the investment objectives and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objectives, the
Fund might have investment objectives different from the objectives which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND PROSPECTIVE
INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER INVESTMENTS WHEN
CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT ELIMINATE RISK OR
ASSURE ACHIEVEMENT OF ITS OBJECTIVES.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
The Fund is a diversified series of Eaton Vance Investors Trust, a business
trust established under Massachusetts law pursuant to a Declaration of Trust
dated May 25, 1989, as amended and restated. The Trust is the successor to a
Massachusetts corporation which commenced its investment company operations in
1932. The Trust is a mutual fund -- an open-end management investment company.
THE TRUSTEES OF THE TRUST ARE RESPONSIBLE FOR THE OVERALL MANAGEMENT AND
SUPERVISION OF ITS AFFAIRS. The Trust may issue an unlimited number of shares of
beneficial interest (no par value per share) in one or more series and because
the Trust can offer separate series (such as the Fund) it is known as a "series
company." Each share represents an equal proportionate beneficial interest in
the Fund. When issued and outstanding, the shares are fully paid and
nonassessable by the Trust and redeemable as described under "How to Redeem Fund
Shares." Shareholders are entitled to one vote for each full share held.
Fractional shares may be voted proportionately. Shares have no preemptive or
conversion rights and are freely transferable. In the event of the liquidation
of the Fund, shareholders are entitled to share pro rata in the net assets of
the Fund available for distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objectives by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimis amount of cash), which is a
separate investment company with identical investment objectives. Therefore, the
Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objectives, policies and restrictions, see "The Fund's Investment
Objectives" and "How the Fund and the Portfolio Invest their Assets". Further
information regarding investment practices may be found in the Statement of
Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $300 million.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objectives and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objectives will be preceded by thirty
days' advance written notice to the shareholders of the Fund or the investors in
the Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objectives or policies of the Fund, those shares
may be subject to a contingent deferred sales charge, as described in "How to
Redeem Fund Shares." In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Trust determines that the investment
objectives of the Portfolio are no longer consistent with the investment
objectives of the Fund, such Trustees would consider what action might be taken,
including investing the assets of the Fund in another pooled investment entity
or retaining an investment adviser to manage the Fund's assets in accordance
with its investment objectives. The Fund's investment performance may be
affected by a withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio up to and including $300 million, and 1/24 of 1%
(equivalent to 0.50% annually) of the average daily net assets over $300
million. For the fiscal year ended January 31, 1995, the Portfolio paid BMR
advisory fees equivalent to 0.625% of the Portfolio's average daily net assets
for such year.
BMR furnishes for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Portfolio. BMR also places the portfolio transactions of the Portfolio with many
broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Portfolio and at reasonably
competitive commission rates. Subject to the foregoing, BMR may consider sales
of shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions.
Thomas E. Faust, Jr. has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance
since 1985 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objectives of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
DISTRIBUTION PLAN
- ------------------------------------------------------------------------------
THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to and complies with
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 6.25% of the
amount received by the Fund for each share sold and (ii) distribution fees
calculated by applying the rate of 1% over the prime rate then reported in The
Wall Street Journal to the outstanding balance of Uncovered Distribution Charges
(as described below) of the Principal Underwriter. On sales of shares made prior
to January 30, 1995, the Principal Underwriter currently pays monthly sales
commissions to a financial service firm (an "Authorized Firm") in amounts
anticipated to be equivalent to .75%, annualized, of the assets maintained in
the Fund by the customers of such Firm. On sales of shares made on January 30,
1995, and thereafter, the Principal Underwriter currently expects to pay to an
Authorized Firm (a) sales commissions (except on exchange transactions and
reinvestments) at the time of sale equal to .75% of the purchase price of the
shares sold by such Firm, and (b) monthly sales commissions approximately
equivalent to 1/12 of .75% of the value of shares sold by such Firm and
remaining outstanding for at least one year. The Plan is designed to permit an
investor to purchase Fund shares through an Authorized Firm without incurring an
initial sales charge and at the same time permit the Principal Underwriter to
compensate Authorized Firms in connection with the sale of Fund shares.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan.Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments made to the Principal
Underwriter pursuant to the Plan, including any contingent deferred sales
charges, have exceeded the total expenses theretofore incurred by such
organization in distributing shares of the Fund. Total expenses for this purpose
will include an allocable portion of the overhead costs of such organization and
its branch offices.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the fiscal year ended January 31, 1995,
the Fund paid or accrued sales commissions under the Plan equivalent to .75% of
the Fund's average daily net assets for such year. As at January 31, 1995, the
outstanding Uncovered Distribution Charges of the Principal Underwriter
calculated under the Plan amounted to approximately $319,666 (equivalent to
15.42% of the Fund's net assets on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented this provision of the Plan by
authorizing the Fund to make monthly service fee payments to the Principal
Underwriter in amounts not expected to exceed .25% of the Fund's average daily
net assets for any fiscal year. The Fund accrues the service fee daily at the
rate of 1/365 of .25% of the Fund's net assets. On sales of shares made prior to
January 30, 1995, the Principal Underwriter currently makes monthly service fee
payments to an Authorized Firm in amounts anticipated to be equivalent to .25%,
annualized, of the assets maintained in the Fund by the customers of such Firm.
On sales of shares made on January 30, 1995 and thereafter, the Principal
Underwriter currently expects to pay to an Authorized Firm (a) a service fee
(except on exchange transactions and reinvestments) at the time of sale equal to
.25% of the purchase price of the shares sold by such Firm, and (b) monthly
service fees approximately equivalent to 1/12 of .25% of the value of shares
sold by such Firm and remaining outstanding for at least one year. During the
first year after a purchase of Fund shares, the Principal Underwriter will
retain the service fee as reimbursement for the service fee payment made to the
Authorized Firm at the time of sale. As permitted by the NASD Rule, all service
fee payments are made for personal services and/or the maintenance of
shareholder accounts. Service fees are separate and distinct from the sales
commissions and distribution fees payable by the Fund to the Principal
Underwriter, and as such are not subject to automatic discontinuance when there
are no outstanding Uncovered Distribution Charges of the Principal Underwriter.
For the fiscal year ended January 31, 1995, the Fund paid or accrued service
fees under the Plan equivalent to .25% of the Fund's average daily net assets
for such year.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
- ------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m., New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at the closing sale prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- ------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse any order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares."
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Classic Investors Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Classic Investors Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular Federal, state and local tax
consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- ------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MA 02104, during its business hours
a written request for redemption in good order, plus any share certificates with
executed stock powers. The redemption price will be based on the net asset value
per Fund share next computed after such delivery. Good order means that all
relevant documents must be endorsed by the record owner (s) exactly as the
shares are registered and the signature(s) must be guaranteed by a member of
either the Securities Transfer Association's STAMP program or the New York Stock
Exchange's Medallion Signature Program, or certain banks, savings and loan
institutions, credit unions, securities dealers, securities exchanges, clearing
agencies and registered securities associations as required by a regulation of
the Securities and Exchange Commission and acceptable to The Shareholder
Services Group, Inc. In addition, in some cases, good order may require the
furnishing of additional documents such as where shares are registered in the
name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charges (described below) and any
Federal income tax required to be withheld. Although the Fund normally expects
to make payment in cash for redeemed shares, the Trust, subject to compliance
with applicable regulations, has reserved the right to pay the redemption price
of shares of the Fund, either totally or partially, by a distribution in kind of
readily marketable securities withdrawn by the Fund from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make
additional purchases. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares purchased on or after January 30, 1995
and redeemed within the first year of their purchase (except shares acquired
through the reinvestment of distributions) generally will be subject to a
contingent deferred sales charge. This contingent deferred sales charge is
imposed on any redemption the amount of which exceeds the aggregate value at the
time of redemption of (a) all shares in the account purchased more than one year
prior to the redemption, (b) all shares in the account acquired through
reinvestment of distributions, and (c) the increase, if any, of value in the
other shares in the account (namely those purchased within the year preceding
the redemption) over the purchase price of such shares. Redemptions are
processed in a manner to maximize the amount of redemption proceeds which will
not be subject to a contingent deferred sales charge. That is, each redemption
will be assumed to have been made first from the exempt amounts referred to in
clauses (a), (b) and (c) above, and second through liquidation of those shares
in the account referred to in clause (c) on a first-in-first out basis. Any
contingent deferred sales charge which is required to be imposed on share
redemptions will be equal to 1% of the net asset value of redeemed shares.
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege," the purchase of Fund shares acquired in
the exchange is deemed to have occurred at the time of the original purchase of
the exchanged shares.
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will also be waived
for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton Vance
Shareholder Services"), (2) as part of a distribution from a retirement plan
qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code"), or (3) as part of a minimum required distribution from
other tax-sheltered retirement plans. The contingent deferred sales charge will
be paid to the Principal Underwriter or the Fund.
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with a
Fund involves special procedures and will require the beneficial owner to obtain
historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL INVESTMENTS
IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of one or more other
funds in the Eaton Vance Classic Group of Funds or Eaton Vance Money Market
Fund, which are distributed subject to a contingent deferred sales charge, on
the basis of the net asset value per share of each fund at the time of the
exchange, provided that such exchange offers are available only in states where
shares of the fund being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of shares
acquired in an exchange, the purchase of shares acquired in one or more
exchanges is deemed to have occurred at the time of the original purchase of the
exchanged shares.
Shares of the other funds in the Eaton Vance Classic Group of Funds (and
shares of Eaton Vance Money Market Fund acquired as the result of an exchange
from an EV Classic fund) may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange, but subject
to any restrictions or qualifications set forth in the current prospectus of any
such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone, provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Classic Investors Fund may be mailed directly to The Shareholder Services Group,
Inc., BOS725, P.O. Box 1559, Boston, MA 02104 at any time -- whether or not
distributions are reinvested. The name of the shareholder, the Fund and the
account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares." A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 60 days after such repurchase
or redemption, and the privilege has not been used more than once in the prior
12 months. Shares are sold to a reinvesting shareholder at the next determined
net asset value following timely receipt of a written purchase order by the
Principal Underwriter or by the Fund (or by the Fund's Transfer Agent). To the
extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
--Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
--Individual Retirement Account Plans for individuals and their non-
employed spouses; and
--403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements
of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
The Fund's present policy is to pay quarterly dividends from the net investment
income allocated to the Fund by the Portfolio, less the Fund's direct and
allocated expenses, and to distribute at least annually any net realized capital
gains. A portion of distributions from net investment income may be eligible for
the dividends-received deduction for corporations. The Fund's distributions from
its net investment income, net short-term capital gains and certain net foreign
exchange gains will be taxable to shareholders as ordinary income, whether
received in cash or reinvested in additional shares. The Fund's distributions
from its net long-term capital gains are taxable to shareholders as such,
whether received in cash or reinvested in additional shares and regardless of
the length of time shares have been owned by shareholders. If shares are
purchased shortly before the record date of a distribution, the shareholder will
pay the full price for the shares and then receive some portion of the price
back as a taxable distribution. Certain distributions, if declared in October,
November or December and paid the following January, will be taxed to
shareholders as if received on December 31 of the year in which they are
declared.
The Fund will provide its shareholders annually with tax information notices
and Forms 1099 to assist in the preparation of their Federal and state tax
returns for the prior calendar year's distributions, proceeds from the
redemption or exchange of Fund shares, and Federal income tax (if any) withheld
by the Fund's Transfer Agent.
The Fund intends to qualify as a regulated investment company under the
Code, and to satisfy all requirements necessary to be relieved of Federal taxes
on income and gains it distributes to shareholders. In satisfying these
requirements, the Fund will treat itself as owning its proportionate share of
each of the Portfolio's assets and as entitled to the income of the Portfolio
properly attributable to such share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY FEDERAL
INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS ITS NET
INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE TIMING
REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE PORTFOLIO
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by computing the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (net asset value) for specified periods ending with the most recent
calendar quarter, assuming reinvestment of all distributions. The average annual
total return calculation assumes a complete redemption of the investment and the
deduction of any applicable contingent deferred sales charge at the end of the
period. The Fund may also publish annual and cumulative total return figures
from time to time.
Performance figures published by the Fund which do not include the effect of
any applicable contingent deferred sales charge would be reduced if it were
included.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what the Fund's total return may be in any future period. If the expenses
related to the operation of the Fund or the Portfolio are allocated to Eaton
Vance, the Fund's performance will be higher.
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC
INVESTORS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Bosotn, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02110
LOGO C-IFP
EV CLASSIC
INVESTORS
FUND
PROSPECTUS
JUNE 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV MARATHON INVESTORS FUND
SUPPLEMENT TO PROSPECTUS DATED JUNE 1, 1995
Effective August 1, 1995, EV Marathon Investors Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Investors Trust, which
was also a Massachusetts business trust. Except for the fact that the Fund is
now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Investors Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE INVESTORS TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
Part A
Information Required in a Prospectus
EV MARATHON INVESTORS FUND
EV MARATHON INVESTORS FUND (THE "FUND") IS A MUTUAL FUND SEEKING TO PROVIDE
CURRENT INCOME AND LONG-TERM GROWTH OF CAPITAL. THE FUND INVESTS ITS ASSETS IN
INVESTORS PORTFOLIO (THE "PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY
HAVING THE SAME INVESTMENT OBJECTIVES AS THE FUND, RATHER THAN BY DIRECTLY
INVESTING IN AND MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY
STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF EATON VANCE INVESTORS TRUST
(THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated June 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ........................ 11
The Fund's Financial Highlights ................... 3 How to Redeem Fund Shares ..................... 12
The Fund's Investment Objectives .................. 4 Reports to Shareholders .........................14
How the Fund and the Portfolio Invest The Lifetime Investing Account/
their Assets .................................... 4 Distribution Options ........................ 14
Organization of the Fund and the Portfolio ........ 5 The Eaton Vance Exchange Privilege ............ 16
Management of the Fund and the Portfolio .......... 8 Eaton Vance Shareholder Services .............. 17
Distribution Plan ................................. 9 Distributions and Taxes ....................... 18
Valuing Fund Shares ............................... 10 Performance Information ....................... 19
- ------------------------------------------------------------------------------------------------------------
PROSPECTUS DATED JUNE 1, 1995
</TABLE>
<PAGE>
SHAREHOLDER AND FUND EXPENSES
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Range of Declining Contingent Deferred Sales Charges
Imposed on Redemptions During the First Seven Years
(as a percentage of redemption proceeds exclusive of all
reinvestments and capital appreciation in the account) 5.00%-0%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.625%
Rule 12b-1 Distribution (and Service) Fees 0.800
Other Expenses 1.035
----
Total Operating Expenses 2.46%
====
<TABLE>
<CAPTION>
EXAMPLES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following contingent deferred sales
charge and expenses on a $1,000 investment, assuming (a) 5% annual
return and (b) redemption at the end of each time period: $74 $115 $149 $275
An investor would pay the following expenses on the same investment,
assuming (a) 5% annual return and (b) no redemptions: $24 $75 $129 $275
</TABLE>
Notes:
The tables and Examples summarize the aggregate expenses of the Fund and the
Portfolio and are designed to help investors understand the costs and expenses
they will bear, directly or indirectly, by investing in the Fund. Information
for the Fund is based on its expenses for the most recent fiscal year, except
for Service Fees, which are estimated to be 0.05% in the current fiscal year.
The Fund invests exclusively in the Portfolio. The Trustees believe that,
over time, the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to, or less than, the per share expenses the Fund would
incur if the Fund were instead to retain the services of an investment adviser
and its assets were invested directly in the types of securities being held by
the Portfolio.
The Examples should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. Federal
regulations require the Examples to assume a 5% annual return, but actual annual
return will vary. For further information regarding the expenses of both the
Fund and the Portfolio see "Organization of the Fund and the Portfolio" and "How
to Redeem Fund Shares." A long-term shareholder in the Fund paying Rule 12b-1
Distribution Fees may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the rules of the National Association of
Securities Dealers, Inc.
No contingent deferred sales charge is imposed on (a) shares purchased more
than six years prior to redemption, (b) shares acquired through the reinvestment
of distributions or (c) any appreciation in value of other shares in the
account, and no such charge is imposed on exchanges of Fund shares for shares of
one or more other funds listed under "The Eaton Vance Exchange Privilege." See
"How to Redeem Fund Shares."
Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in the
future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which have been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- --------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
------------------------------
1995 1994*
------- -------
NET ASSET VALUE -- Beginning of period ............. $10.390 $ 10.000
------- --------
Income (loss) from investment operations:
Net investment income .......................... $ 0.286 $ 0.025
Net realized and unrealized gain
(loss) on investments ......................... (0.861) 0.365
------- --------
Total income (loss) from investment
operations .... (0.575) $ 0.390
------- --------
Less distributions:
From net investment income ..................... (0.274) --
From realized gain on investments .............. (0.001) --
------- --------
Total distributions .......................... (0.275) --
NET ASSET VALUE -- End of period ................... $ 9.540 $ 10.390
======= ========
TOTAL RETURN(1) .................................... (5.54)% 3.9%
RATIOS/SUPPLEMENTAL DATA
(to average daily net assets)**:
Expenses(2) ...................................... 2.41% 1.04%+
Net investment income ............................ 2.47% 2.49%+
NET ASSETS, END OF PERIOD (000's omitted) .......... $14,508 $ 2,487
*For the period from the start of business, November 2, 1993, to January 31,
1994.
**The expenses related to the operation of the Fund reflect an assumption of
expenses by the Investment Adviser. Had such action not been taken, the ratios
would have been as follows:
RATIOS (to average daily net assets)
Expenses(2) .................................... -- 2.29%+
Net investment income .......................... -- 1.24%+
(1)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be reinvested at
the net asset value on the record date.
(2)Includes the Fund's share of Investors Portfolio's allocated expenses.
+Computed on an annualized basis.
Note: Certain of the per share amounts have been computed using average shares
outstanding.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVES
- --------------------------------------------------------------------------------
The investment objectives of EV MARATHON INVESTORS FUND are to provide current
income and long-term growth of capital. The Fund currently seeks to meet its
investment objectives by investing its assets in Investors Portfolio, a separate
registered investment company which has the same investment objectives and
policies as the Fund and whose management will place emphasis on equity
securities considered to be of high or improving quality. Investments will also
be made in fixed-income securities such as preferred stocks, bonds, debentures,
notes or money market instruments in order to maintain a reasonable level of
current income, preserve capital or create a buying reserve. The investment
objectives of the Fund may be changed by the Trustees without a vote of
shareholders; as a matter of policy, the Trustees would not materially change
the investment objectives of the Fund without shareholder approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS
- --------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVES BY INVESTING EITHER DIRECTLY
OR INDIRECTLY THROUGH ANOTHER OPEN-END MANAGEMENT INVESTMENT COMPANY WHICH
INTENDS TO INVEST IN BOTH EQUITY AND DEBT SECURITIES. IT IS THE PORTFOLIO'S
CURRENT POLICY THAT INVESTMENTS IN EQUITY SECURITIES WILL GENERALLY NOT EXCEED
75% NOR BE LESS THAN 25% OF THE PORTFOLIO'S NET ASSETS. The policy of the
Portfolio is to invest in a broadly diversified list of seasoned securities
representing a number of different industries. It is the policy of the Portfolio
not to concentrate its investments in any particular industry or group of
industries. Electric utility companies, gas utility companies, natural gas
producing companies, transmission companies, telephone companies and water works
companies will for the purpose of this policy be considered separate industries.
The Portfolio may not invest more than 25% of the value of its total assets at
the time of acquisition in any one industry, with public utility companies, as
segregated above, being considered separate industries. The policies set forth
in this paragraph are fundamental policies of both the Fund and the Portfolio
and may not be changed unless authorized by a vote of the shareholders of the
Fund or the investors in the Portfolio, as the case may be.
The Portfolio may invest in various kinds and types of debt securities from
time to time, including without limitation obligations issued, guaranteed or
otherwise backed by U.S. Government agencies and instrumentalities,
collateralized mortgage obligations and various other mortgage-backed
securities, and other types of asset-backed obligations and collateralized
securities. The Portfolio may also invest in lower quality, high risk, high
yielding debt securities (commonly referred to as "junk bonds"). The Portfolio
currently intends to limit its investments in these securities to 5% or less of
its assets.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Since the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies or may enter into forward foreign currency
exchange contracts to purchase or sell a specified currency at a specified price
and future date. As of April 28, 1995, the Portfolio had 5.48% of its net assets
invested in securities issued by foreign companies.
The Portfolio may purchase and sell exchange-traded futures contracts on
stock indices and options thereon to hedge against fluctuations in securities
prices or as a substitute for the purchase or sale of securities. Such
transactions involve a risk of loss or depreciation due to unanticipated adverse
changes in securities prices, which may exceed the Portfolio's initial
investment in these contracts. Futures contracts involve transaction costs. To
the extent that the Portfolio enters into futures contracts and options thereon
traded on an exchange regulated by the Commodity Futures Trading Commission, in
each case that are not for bona fide hedging purposes (as defined by the CFTC),
the aggregate initial margin and premiums required to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into. There can be no assurance that the Investment Adviser's use of
stock index futures will be advantageous to the Portfolio.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objectives cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder or
an investor vote, respectively. Except for such enumerated restrictions and as
otherwise indicated in this Prospectus, the investment objectives and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objectives, the
Fund might have investment objectives different from the objectives which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND PROSPECTIVE
INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER INVESTMENTS WHEN
CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT ELIMINATE RISK OR
ASSURE ACHIEVEMENT OF ITS OBJECTIVES.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
The Fund is a diversified series of Eaton Vance Investors Trust, a business
trust established under Massachusetts law pursuant to a Declaration of Trust
dated May 25, 1989, as amended and restated. The Trust is the successor to a
Massachusetts corporation which commenced its investment company operations in
1932. The Trust is a mutual fund -- an open-end management investment company.
THE TRUSTEES OF THE TRUST ARE RESPONSIBLE FOR THE OVERALL MANAGEMENT AND
SUPERVISION OF ITS AFFAIRS. The Trust may issue an unlimited number of shares of
beneficial interest (no par value per share) in one or more series and because
the Trust can offer separate series (such as the Fund) it is known as a "series
company." Each share represents an equal proportionate beneficial interest in
the Fund. When issued and outstanding, the shares are fully paid and
nonassessable by the Trust and redeemable as described under "How to Redeem Fund
Shares." Shareholders are entitled to one vote for each full share held.
Fractional shares may be voted proportionately. Shares have no preemptive or
conversion rights and are freely transferable. In the event of the liquidation
of the Fund, shareholders are entitled to share pro rata in the net assets of
the Fund available for distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objectives by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimis amount of cash), which is a
separate investment company with identical investment objectives. Therefore, the
Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objectives, policies and restrictions, see "The Fund's Investment
Objectives" and "How the Fund and the Portfolio Invest their Assets". Further
information regarding investment practices may be found in the Statement of
Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $300 million.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objectives and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objectives will be preceded by thirty
days' advance written notice to the shareholders of the Fund or the investors in
the Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objectives or policies of the Fund, those shares
may be subject to a contingent deferred sales charge, as described in "How to
Redeem Fund Shares". In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Trust determines that the investment
objectives of the Portfolio are no longer consistent with the investment
objectives of the Fund, such Trustees would consider what action might be taken,
including investing the assets of the Fund in another pooled investment entity
or retaining an investment adviser to manage the Fund's assets in accordance
with its investment objectives. The Fund's investment performance may be
affected by a withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust, and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio up to and including $300 million, and 1/24 of 1%
(equivalent to 0.50% annually) of the average daily net assets over $300
million. For the fiscal year ended January 31, 1995, the Portfolio paid BMR
advisory fees equivalent to 0.625% of the Portfolio's average daily net assets
for such year.
BMR furnishes for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Portfolio. BMR also places the portfolio transactions of the Portfolio with many
broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Portfolio and at reasonably
competitive commission rates. Subject to the foregoing, BMR may consider sales
of shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions.
Thomas E. Faust, Jr. has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1985 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objectives of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
DISTRIBUTION PLAN
- --------------------------------------------------------------------------------
THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with,
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 5% of the amount
received by the Fund for each share sold and (ii) distribution fees calculated
by applying the rate of 1% over the prime rate then reported in The Wall Street
Journal to the outstanding balance of Uncovered Distribution Charges (as
described below) of the Principal Underwriter. The Principal Underwriter
currently expects to pay sales commissions (except on exchange transactions and
reinvestments) to a financial service firm (an "Authorized Firm") at the time of
sale equal to 4% of the purchase price of the shares sold by such Firm. The
Principal Underwriter will use its own funds (which may be borrowed from banks)
to pay such commissions. Because the payment of the sales commissions and
distribution fees to the Principal Underwriter is subject to the NASD Rule
described below, it will take the Principal Underwriter a number of years to
recoup the sales commissions paid by it to Authorized Firms from the payments
received by it from the Fund pursuant to the Plan.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments received by the
Principal Underwriter from the Fund pursuant to the Plan, including any
contingent deferred sales charges, have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the fiscal year ended January 31, 1995,
the Fund paid sales commissions under the Plan equivalent to .75% of the Fund's
average daily net assets for such year. As at January 31, 1995, the outstanding
Uncovered Distribution Charges of the Principal Underwriter calculated under the
Plan amounted to approximately $603,844 (equivalent to 4.2% of the Fund's net
assets on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented this provision of the Plan by
authorizing the Fund to make quarterly payments of service fees to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed .25% of the
Fund's average daily net assets for any fiscal year based on the value of Fund
shares sold by such persons and remaining outstanding for at least twelve
months. As permitted by the NASD Rule, such payments are made for personal
services and/or the maintenance of shareholder accounts. Service fees are
separate and distinct from the sales commissions and distribution fees payable
by the Fund to the Principal Underwriter, and as such are not subject to
automatic discontinuance when there are no outstanding Uncovered Distribution
Charges of the Principal Underwriter. For the fiscal year ended January 31,
1995, the Fund did not pay or accrue any service fees under the Plan. The Fund
began accruing for its service fee payments during the quarter ending June 30,
1995.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
- --------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m., New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio), in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at the closing sale prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- --------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse any order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services."
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares."
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Marathon Investors Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Marathon Investors Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular Federal, state and local tax
consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MA 02104, during its business hours
a written request for redemption in good order plus any share certificates with
executed stock powers. The redemption price will be based on the net asset value
per Fund share next computed after such delivery. Good order means that all
relevant documents must be endorsed by the record owner (s) exactly as the
shares are registered and the signature(s) must be guaranteed by a member of
either the Securities Transfer Association's STAMP program or the New York Stock
Exchange's Medallion Signature Program, or certain banks, savings and loan
institutions, credit unions, securities dealers, securities exchanges, clearing
agencies and registered securities associations as required by a regulation of
the Securities and Exchange Commission and acceptable to The Shareholder
Services Group, Inc. In addition, in some cases, good order may require the
furnishing of additional documents such as where shares are registered in the
name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charges (described below) and any
Federal income tax required to be withheld. Although the Fund normally expects
to make payment in cash for redeemed shares, the Trust, subject to compliance
with applicable regulations, has reserved the right to pay the redemption price
of shares of the Fund, either totally or partially, by a distribution in kind of
readily marketable securities withdrawn by the Fund from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem Fund accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make
additional purchases. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares redeemed within the first six years of
their purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge.
This contingent deferred sales charge is imposed on any redemption the amount of
which exceeds the aggregate value at the time of redemption of (a) all shares in
the account purchased more than six years prior to the redemption, (b) all
shares in the account acquired through reinvestment of distributions, and (c)
the increase, if any, of value of all other shares in the account (namely those
purchased within the six years preceding the redemption) over the purchase price
of such shares. Redemptions are processed in a manner to maximize the amount of
redemption proceeds which will not be subject to a contingent deferred sales
charge. That is, each redemption will be assumed to have been made first from
the exempt amounts referred to in clauses (a), (b) and (c) above, and second
through liquidation of those shares in the account referred to in clause (c) on
a first-in-first-out basis. Any contingent deferred sales charge which is
required to be imposed on share redemptions will be made in accordance with the
following schedule:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
-------------- --------------
First ...................................... 5%
Second ..................................... 5%
Third ...................................... 4%
Fourth ..................................... 3%
Fifth ...................................... 2%
Sixth ...................................... 1%
Seventh and following ...................... 0%
For shares purchased prior to August 1, 1994, the contingent deferred sales
charge for redemptions within the first year after purchase is 6%. In
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange for shares of a fund currently listed under "The
Eaton Vance Exchange Privilege", the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
Fund shares acquired in the exchange is deemed to have occurred at the time of
the original purchase of the exchanged shares. The contingent deferred sales
charge will be waived for shares redeemed (1) pursuant to a Withdrawal Plan (see
"Eaton Vance Shareholders Services"), (2) as part of a required distribution
from a tax-sheltered retirement plan, or (3) following the death of all
beneficial owners of such shares, provided the redemption is requested within
one year of death (a death certificate and other applicable documents may be
required).
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will be paid to the
Principal Underwriter or the Fund.
- --------------------------------------------------------------------------------
THE FOLLOWING EXAMPLE ILLUSTRATES THE OPERATION OF THE CONTINGENT DEFERRED SALES
CHARGE. ASSUME THAT AN INVESTOR PURCHASES $10,000 OF THE FUND'S SHARES AND THAT
16 MONTHS LATER THE VALUE OF THE ACCOUNT HAS GROWN THROUGH INVESTMENT
PERFORMANCE AND REINVESTMENT OF DISTRIBUTIONS TO $12,000. THE INVESTOR THEN MAY
REDEEM UP TO $2,000 OF SHARES WITHOUT INCURRING A CONTINGENT DEFERRED SALES
CHARGE. IF THE INVESTOR SHOULD REDEEM $3,000 OF SHARES, A CONTINGENT DEFERRED
SALES CHARGE WOULD BE IMPOSED ON $1,000 OF THE REDEMPTION. THE RATE WOULD BE 5%
BECAUSE THE REDEMPTION WAS MADE IN THE SECOND YEAR AFTER THE PURCHASE WAS MADE
AND THE CHARGE WOULD BE $50.
- --------------------------------------------------------------------------------
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with a
Fund involves special procedures and will require the beneficial owner to obtain
historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL INVESTMENTS
IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of one or more other
funds in the Eaton Vance Marathon Group of Funds (which includes Eaton Vance
Equity-Income Trust and any EV Marathon fund, except Eaton Vance Prime Rate
Reserves) or Eaton Vance Money Market Fund, which are distributed subject to a
contingent deferred sales charge, on the basis of the net asset value per share
of each fund at the time of the exchange, provided that such exchange offers are
available only in states where shares of the fund being acquired may be legally
sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of shares
acquired in an exchange, the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
shares acquired in one or more exchanges is deemed to have occurred at the time
of the original purchase of the exchanged shares. For the contingent deferred
sales charge schedule applicable to the Eaton Vance Marathon Group of Funds
(except EV Marathon Strategic Income Fund and Class I shares of any EV Marathon
Limited Maturity Fund), see "How to Redeem Fund Shares". The contingent deferred
sales charge schedule applicable to EV Marathon Strategic Income Fund and Class
I shares of any EV Marathon Limited Maturity Fund is 3%, 2.5%, 2% or 1% in the
event of a redemption occurring in the first, second, third or fourth year,
respectively, after the original share purchase.
Shares of the other funds in the Eaton Vance Marathon Group of Funds and
shares of Eaton Vance Money Market Fund may be exchanged for Fund shares on the
basis of the net asset value per share of each fund at the time of the exchange,
but subject to any restrictions or qualifications set forth in the current
prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone; provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Marathon Investors Fund may be mailed directly to The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104 at any time -- whether or
not distributions are reinvested. The name of the shareholder, the Fund and the
account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 60 days after such repurchase
or redemption, and the privilege has not been used more than once in the prior
12 months. Shares are sold to a reinvesting shareholder at the next determined
net asset value following timely receipt of a written purchase order by the
Principal Underwriter or by the Fund (or by the Fund's Transfer Agent). To the
extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption), some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-
employed spouses; and
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and non-profit organizations meeting certain
requirements of the Internal Revenue Code of 1986, as amended (the
"Code").
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The Fund's present policy is to pay quarterly dividends from the net investment
income allocated to the Fund by the Portfolio, less the Fund's direct and
allocated expenses, and to distribute at least annually any net realized capital
gains. A portion of distributions from net investment income may be eligible for
the dividends-received deduction for corporations. The Fund's distributions from
its net investment income, net short-term capital gains and certain net foreign
exchange gains will be taxable to shareholders as ordinary income, whether
received in cash or reinvested in additional shares. The Fund's distributions
from its net long-term capital gains are taxable to shareholders as such,
whether received in cash or reinvested in additional shares and regardless of
the length of time shares have been owned by shareholders. If shares are
purchased shortly before the record date of a distribution, the shareholder will
pay the full price for the shares and then receive some portion of the price
back as a taxable distribution. Certain distributions, if declared in October,
November or December and paid the following January, will be taxed to
shareholders as if received on December 31 of the year in which they are
declared.
The Fund will provide its shareholders annually with tax information notices
and Forms 1099 to assist in the preparation of their Federal and state tax
returns for the prior calendar year's distributions, proceeds from the
redemption or exchange of Fund shares, and Federal income tax (if any) withheld
by the Fund's Transfer Agent.
The Fund intends to qualify as a regulated investment company under the Code
and to satisfy all requirements necessary to be relieved of Federal taxes on
income and gains it distributes to shareholders. In satisfying these
requirements, the Fund will treat itself as owning its proportionate share of
each of the Portfolio's assets and as entitled to the income of the Portfolio
properly attributable to such share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY FEDERAL
INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS ITS NET
INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE TIMING
REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE PORTFOLIO
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by computing the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (net asset value) for specified periods ending with the most recent
calendar quarter, assuming reinvestment of all distributions. The average annual
total return calculation assumes a complete redemption of the investment and the
deduction of any applicable contingent deferred sales charge at the end of the
period. The Fund may also publish annual and cumulative total return figures
from time to time.
The Fund may also publish total return figures which do not take into
account any contingent deferred sales charge which may be imposed upon
redemptions at the end of the specified period. Any performance figure which
does not take into account the contingent deferred sales charge would be reduced
to the extent such charge is imposed upon a redemption.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what the Fund's total return may be in any future period.
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON
INVESTORS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS 725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
[LOGO]
EV MARATHON INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-IFP
EV MARATHON
INVESTORS
FUND
PROSPECTUS
JUNE 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV TRADITIONAL INVESTORS FUND
SUPPLEMENT TO PROSPECTUS DATED JUNE 1, 1995
Effective August 1, 1995, EV Traditional Investors Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Investors Trust, which
was also a Massachusetts business trust. Except for the fact that the Fund is
now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Investors Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE INVESTORS TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
Part A
Information Required in a Prospectus
EV TRADITIONAL INVESTORS FUND
EV TRADITIONAL INVESTORS FUND (THE "FUND") IS A MUTUAL FUND SEEKING TO
PROVIDE CURRENT INCOME AND LONG-TERM GROWTH OF CAPITAL. THE FUND INVESTS ITS
ASSETS IN INVESTORS PORTFOLIO (THE "PORTFOLIO"), A DIVERSIFIED OPEN-END
INVESTMENT COMPANY HAVING THE SAME INVESTMENT OBJECTIVES AS THE FUND, RATHER
THAN BY DIRECTLY INVESTING IN AND MANAGING ITS OWN PORTFOLIO OF SECURITIES AS
WITH HISTORICALLY STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF EATON VANCE
INVESTORS TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated June 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Redeem Fund Shares ..................... 12
The Fund's Financial Highlights ................... 3 Reports to Shareholders ....................... 13
The Fund's Investment Objectives .................. 4 The Lifetime Investing Account/
How the Fund and the Portfolio Invest Distribution Options ........................ 13
their Assets .................................... 4 The Eaton Vance Exchange Privilege ............ 14
Organization of the Fund and the Portfolio ........ 5 Eaton Vance Shareholder Services .............. 15
Management of the Fund and the Portfolio .......... 8 Distributions and Taxes ....................... 17
Service Plan ...................................... 9 Performance Information ....................... 18
Valuing Fund Shares ............................... 9 Statement of Intention and Escrow
How to Buy Fund Shares ........................... 10 Agreement ................................... 18
- ------------------------------------------------------------------------------------------------------------
PROSPECTUS DATED JUNE 1, 1995
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDER AND FUND EXPENSES
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) 4.75%
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charges (on purchases of $1 million or more) Imposed on
Redemptions During the First Eighteen Months (as a percentage of redemption proceeds
exclusive of all reinvestments and capital appreciation in the account) 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.625%
Rule 12b-1 Fees (Service Plan) 0.061
Other Expenses 0.224
-----
Total Operating Expenses 0.91 %
=====
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses
(including maximum initial sales
charge) on a $1,000 investment, assuming (a) 5% annual
return and (b) redemption at the end of each time period: $56 $75 $95 $154
</TABLE>
Notes:
The tables and Example summarize the aggregate expenses of the Fund and the
Portfolio and are designed to help investors understand the costs and expenses
they will bear, directly or indirectly, by investing in the Fund. Information
for the Fund is based on its expenses for the most recent fiscal year.
The Fund invests exclusively in the Portfolio. The Trustees believe that,
over time, the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to, or less than, the per share expenses the Fund would
incur if the Fund were instead to retain the services of an investment adviser
and its assets were invested directly in the types of securities being held by
the Portfolio.
The Example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. Federal
regulations require the Example to assume a 5% annual return, but actual annual
return will vary. For further information regarding the expenses of both the
Fund and the Portfolio see "Organization of the Fund and the Portfolio" and "How
to Redeem Fund Shares".
No sales charge is payable at the time of purchase on investments of $1
million or more. However, a contingent deferred sales charge of 1% will be
imposed on such investments in the event of certain redemptions within 18 months
of purchase. See "How to Buy Fund Shares," "How to Redeem Fund Shares" and
"Eaton Vance Shareholder Services."
Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in the
future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which have been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. The financial
highlights for each of the four years in the period ended January 31, 1989,
presented herein, were audited by other auditors whose report dated March 2,
1992, expressed an unqualified opinion on such financial highlights. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
-----------------------------------------------------------------------------------------------------
1995 1994<F4> 1993 1992 1991 1990 1989<F5> 1988<F5> 1987<F5> 1986<F5>
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
beginning of year ....... $ 7.600 $ 7.390 $ 7.500 $ 7.060 $ 7.180 $ 7.330 $ 6.940 $ 8.270 $ 8.890 $ 7.810
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment
income ................ $ 0.283 $ 0.217 $ 0.342 $ 0.364 $ 0.417 $ 0.427 $ 0.390 $ 0.357 $ 0.408 $ 0.509
Net realized and.
unrealized gain on
investments ........... (0.623) 0.833 0.318 0.736 0.103 0.303 0.500 (0.387) 0.952 0.941
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Total income (loss)
from investment
operations .......... $ (0.340) $ 1.050 $ 0.660 $ 1.100 $ 0.520 $ 0.730 $ 0.890 $ (0.030) $ 1.360 $ 1.450
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------
LESS DISTRIBUTIONS:
From net investment
income ................. $ (0.275) $ (0.307) $(0.360) $ (0.360) $ (0.430) $ (0.420) $ (0.370) $ (0.360) $(0.470) $(0.370)
In excess of net
investment income ...... -- (0.008) -- -- -- -- -- -- -- --
From realized gain
on investments ......... (0.145) (0.525) (0.410) (0.300) (0.198) (0.460) (0.130) (0.622) (1.195) --
From paid in capital -- -- -- -- (0.012) -- -- (0.318) (0.315) --
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Total
distributions ....... $ (0.420) $ (0.840) $(0.770) $ (0.660) $ (0.640) $ (0.880) $ (0.500) $ (1.300) $(1.980) $(0.370)
======== ======== ======= ======== ======== ======== ======== ======== ======= =======
NET ASSET VALUE, end
of year ................. $ 6.840 $ 7.600 $ 7.390 $ 7.500 $ 7.060 $ 7.180 $ 7.330 $ 6.940 $ 8.270 $ 8.890
======== ======== ======= ======== ======== ======== ======== ======== ======= =======
TOTAL RETURN<F1>.......... (4.45)% 15.13% 9.30% 16.26% 7.78% 10.27% 13.40% (0.39)% 18.17% 19.09%
RATIOS/SUPPLEMENTAL DATA
(to average daily
net assets):
Expenses<F2> ........... 0.91% 0.90% 0.89% 0.86% 0.89% 0.92% 0.93% 0.90% 0.86% 0.86%
Net investment
income ................ 4.05% 4.07% 4.62% 4.96% 5.99% 5.73% 5.54% 4.40% 4.96% 6.16%
PORTFOLIO TURNOVER<F3> ... -- 44% 32% 51% 66% 56% 53% 75% 89% 64%
NET ASSETS AT END OF YEAR
(000'S OMITTED) ........ $200,419 $227,402 $212,545 $210,197 $198,066 $204,030 $209,544 $209,820 $231,153 $225,256
<FN>
<F1>Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on
the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value
on the record date.
<F2>Includes the Fund's share of Investors Portfolio's allocated expenses for the six months ended July 31, 1994 and for the period
from October 28, 1993, to January 31, 1994.
<F3>Portfolio Turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in
securities. The portfolio turnover for the period since the Fund transferred its assets to the Portfolio is shown in the
Portfolio's financial statements which are included in the Fund's Statement of Additional Information.
<F4>As of February 1, 1994, the Fund discontinued the use of equalization accounting. (See "Notes to Financial Statements", which
are included in the Fund's Statement of Additional Information.)
<F5>Audited by previous auditors.
</FN>
</TABLE>
<PAGE>
THE FUND'S INVESTMENT OBJECTIVES
- --------------------------------------------------------------------------------
The investment objectives of EV TRADITIONAL INVESTORS FUND are to provide
current income and long-term growth of capital. The Fund currently seeks to meet
its investment objectives by investing its assets in Investors Portfolio, a
separate registered investment company which has the same investment objectives
and policies as the Fund and whose management will place emphasis on equity
securities considered to be of high or improving quality. Investments will also
be made in fixed-income securities such as preferred stocks, bonds, debentures,
notes or money market instruments in order to maintain a reasonable level of
current income, preserve capital or create a buying reserve. The investment
objectives of the Fund may be changed by the Trustees without a vote of
shareholders; as a matter of policy, the Trustees would not materially change
the investment objectives of the Fund without shareholder approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS
- --------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVES BY INVESTING EITHER DIRECTLY
OR INDIRECTLY THROUGH ANOTHER OPEN-END MANAGEMENT INVESTMENT COMPANY WHICH
INTENDS TO INVEST IN BOTH EQUITY AND DEBT SECURITIES. IT IS THE PORTFOLIO'S
CURRENT POLICY THAT INVESTMENTS IN EQUITY SECURITIES WILL GENERALLY NOT EXCEED
75% NOR BE LESS THAN 25% OF THE PORTFOLIO'S NET ASSETS. The policy of the
Portfolio is to invest in a broadly diversified list of seasoned securities
representing a number of different industries. It is the policy of the Portfolio
not to concentrate its investments in any particular industry or group of
industries. Electric utility companies, gas utility companies, natural gas
producing companies, transmission companies, telephone companies and water works
companies will for the purpose of this policy be considered separate industries.
The Portfolio may not invest more than 25% of the value of its total assets at
the time of acquisition in any one industry, with public utility companies, as
segregated above, being considered separate industries. The policies set forth
in this paragraph are fundamental policies of both the Fund and the Portfolio
and may not be changed unless authorized by a vote of the shareholders of the
Fund or the investors in the Portfolio, as the case may be.
The Portfolio may invest in various kinds and types of debt securities from
time to time, including without limitation obligations issued, guaranteed or
otherwise backed by U.S. Government agencies and instrumentalities,
collateralized mortgage obligations and various other mortgage-backed
securities, and other types of asset-backed obligations and collateralized
securities. The Portfolio may also invest in lower quality, high risk, high
yielding debt securities (commonly referred to as "junk bonds"). The Portfolio
currently intends to limit its investments in these securities to 5% or less of
its assets.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Since the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies or may enter into forward foreign currency
exchange contracts to purchase or sell a specified currency at a specified price
and future date. As of April 28, 1995, the Portfolio had 5.48% of its net assets
invested in securities issued by foreign companies.
The Portfolio may purchase and sell exchange-traded futures contracts on
stock indices and options thereon to hedge against fluctuations in securities
prices or as a substitute for the purchase or sale of securities. Such
transactions involve a risk of loss or depreciaton due to unanticipated adverse
changes in securities prices, which may exceed the Portfolio's initial
investment in these contracts. Futures contracts involve transaction costs. To
the extent that the Portfolio enters into futures contracts and optons thereon
traded on an exchange regulated by the Commodity Futures Trading Commission, in
each case that are not for bona fide hedging purposes (as defined by the CFTC),
the aggregate initial margin and premiums requried to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into. There can be no assurance that the Investment Adviser's use of
stock index futures will be advantageous to the Portfolio.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objectives cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder or
an investor vote, respectively. Except for such enumerated restrictions and as
otherwise indicated in this Prospectus, the investment objectives and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objectives, the
Fund might have investment objectives different from the objectives which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND PROSPECTIVE
INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER INVESTMENTS WHEN
CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT ELIMINATE RISK OR
ASSURE ACHIEVEMENT OF ITS OBJECTIVES.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
The Fund is a diversified series of Eaton Vance Investors Trust, a business
trust established under Massachusetts law pursuant to a Declaration of Trust
dated May 25, 1989, as amended and restated. The Trust is the successor to a
Massachusetts corporation which commenced its investment company operations in
1932. The Trust is a mutual fund -- an open-end management investment company.
THE TRUSTEES OF THE TRUST ARE RESPONSIBLE FOR THE OVERALL MANAGEMENT AND
SUPERVISION OF ITS AFFAIRS. The Trust may issue an unlimited number of shares of
beneficial interest (no par value per share) in one or more series and because
the Trust can offer separate series (such as the Fund) it is known as a "series
company." Each share represents an equal proportionate beneficial interest in
the Fund. When issued and outstanding, the shares are fully paid and
nonassessable by the Trust and redeemable as described under "How to Redeem Fund
Shares." Shareholders are entitled to one vote for each full share held.
Fractional shares may be voted proportionately. Shares have no preemptive or
conversion rights and are freely transferable. In the event of the liquidation
of the Fund, shareholders are entitled to share pro rata in the net assets of
the Fund available for distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objectives by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimis amount of cash), which is a
separate investment company with identical investment objectives. Therefore, the
Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objectives, policies and restrictions, see "The Fund's Investment
Objectives" and "How the Fund and the Portfolio Invest their Assets". Further
information regarding investment practices may be found in the Statement of
Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $300 million. The shareholders of
the Fund have previously approved the policy of investing the Fund's assets in
an interest in the Portfolio.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objectives and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objectives will be preceded by thirty
days' advance written notice to the shareholders of the Fund or the investors in
the Portfolio, as the case may be. In the event the Fund withdraws all of its
assets from the Portfolio, or the Board of Trustees of the Trust determines that
the investment objectives of the Portfolio are no longer consistent with the
investment objectives of the Fund, such Trustees would consider what action
might be taken, including investing the assets of the Fund in another pooled
investment entity or retaining an investment adviser to manage the Fund's assets
in accordance with its investment objectives. The Fund's investment performance
may be affected by a withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust, and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio up to and including $300 million, and 1/24 of 1%
(equivalent to 0.50% annually) of the average daily net assets over $300
million. For the fiscal year ended January 31, 1995, the Portfolio paid BMR
advisory fees equivalent to 0.625% of the Portfolio's average daily net assets
for such year.
BMR furnishes for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Portfolio. BMR also places the portfolio transactions of the Portfolio with many
broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Portfolio and at reasonably
competitive commission rates. Subject to the foregoing, BMR may consider sales
of shares of the Fund or of other investment companies sponsored by BMR or Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions.
Thomas E. Faust, Jr. has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1985 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objectives of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
SERVICE PLAN
- --------------------------------------------------------------------------------
In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the requirements of
Rule 12b-1 under the Investment Company Act of 1940 and the service fee
requirements of the revised sales charge rule of the National Association of
Securities Dealers, Inc. THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE
PAYMENTS FOR PERSONAL SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO
THE PRINCIPAL UNDERWRITER, FINANCIAL SERVICE FIRMS ("AUTHORIZED FIRMS") AND
OTHER PERSONS IN AMOUNTS NOT EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET
ASSETS FOR ANY FISCAL YEAR. The Trustees of the Trust have implemented the Plan
by authorizing the Fund to make quarterly service fee payments to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed .25% of the
Fund's average daily net assets for any fiscal year based on the value of Fund
shares sold by such persons and remaining outstanding for at least twelve
months. During the fiscal year ended January 31, 1995, the Fund paid or accrued
service fees under the Plan equivalent to .224% of the Fund's average daily net
assets for such year. The Plan is described further in the Statement of
Additional Information.
VALUING FUND SHARES
- --------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m., New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firm's
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at the closing sale prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- --------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firm and the Principal Underwriter. The Principal Underwriter will furnish the
names of Authorized Firms to an investor upon request. The Fund may suspend the
offering of shares at any time and may refuse any order for the purchase of
shares.
The sales charge may vary depending on the size of the purchase and the
number of shares of Eaton Vance funds the investor may already own, any
arrangement to purchase additional shares during a 13-month period or special
purchase programs. Complete details of how investors may purchase shares at
reduced sales charges under a Statement of Intention, Right of Accumulation, or
various Employee Benefit Plans are available from Authorized Firms or the
Principal Underwriter.
The current sales charges are:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER DISCOUNT
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE AMOUNT INVESTED OFFERING PRICE OFFERING PRICE
- ------------------ ---------------- ---------------- ----------------
<S> <C> <C> <C>
Less than $100,000 .................................................... 4.99% 4.75% 4.00%
$100,000 but less than $250,000 ....................................... 3.90 3.75 3.15
$250,000 but less than $500,000 ....................................... 2.83 2.75 2.30
$500,000 but less than $1,000,000 ..................................... 2.04 2.00 1.70
$1,000,000 or more .................................................... 0* 0* 0**
*No sales charge is payable at the time of purchase on investments of $1 million or more. A contingent deferred sales charge
("CDSC") of 1% will be imposed on such investments, as described below, in the event of certain redemption transactions within
18 months of purchase.
**The Principal Underwriter may pay a commission to Authorized Firms who initiate and are responsible for purchases of $1 million
or more as follows: 1.00% on sales up to $2 million, plus 0.80% on the next $1 million, 0.20% on the next $2 million, and 0.08%
on the excess over $5 million.
</TABLE>
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge,
Authorized Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The Principal Underwriter may, from time to time, at its
own expense, provide additional incentives to Authorized Firms which employ
registered representatives who sell a minimum dollar amount of the Fund's shares
and/or shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
Shares of the Fund may be sold at net asset value to current and retired
Directors and Trustees of Eaton Vance funds, including the Portfolio; to
officers and employees and clients of Eaton Vance and its affiliates; to
registered representatives and employees of Authorized Firms and bank employees
who refer customers to registered representatives of Authorized Firms; and to
such persons' spouses and children under the age of 21 and their beneficial
accounts. Shares may also be issued at net asset value (1) in connection with
the merger of an investment company with the Fund, (2) to investors making an
investment as part of a fixed fee program whereby an entity unaffiliated with
the investment adviser provides multiple investment services, such as
management, brokerage and custody, and (3) where the amount invested represents
redemption proceeds from a mutual fund unaffiliated with Eaton Vance, if the
redemption occurred no more than 60 days prior to the purchase of Fund shares
and the redeemed shares were subject to a sales charge.
No initial sales charge and no contingent deferred sales charge will be
payable or imposed with respect to shares of the Fund purchased by retirement
plans qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of
1986, as amended (the "Code") ("Eligible Plans"). In order to purchase shares
without a sales charge, the plan sponsor of an Eligible Plan must notify the
Transfer Agent of the Fund of its status as an Eligible Plan. Participant
accounting services (including trust fund reconciliation services) will be
offered only through third party recordkeepers and not by EVD. The Fund's
Principal Underwriter may pay commissions to Authorized Firms who initiate and
are responsible for purchases of shares of the Fund by Eligible Plans of up to
1.00% of the amount invested in such shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at the applicable public offering price shown above. The minimum
value of securities (or securities and cash) accepted for deposit is $5,000.
Securities accepted will be sold by IBT as agent for the account of their owner
on the day of their receipt by IBT or as soon thereafter as possible. The number
of Fund shares to be issued in exchange for securities will be the aggregate
proceeds from the sale of such securities divided by the applicable public
offering price per Fund share on the day such proceeds are received. Eaton Vance
will use reasonable efforts to obtain the then curent market price for such
securities but does not guarantee the best available price. Eaton Vance will
absorb any transaction costs, such as commissions, on the sale of the
securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional Investors Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Investors Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular Federal, state and local tax
consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MA 02104, during its business hours
a written request for redemption in good order, plus any share certificates with
executed stock powers. The redemption price will be based on the net asset value
per Fund share next computed after such delivery. Good order means that all
relevant documents must be endorsed by the record owner (s) exactly as the
shares are registered and the signature(s) must be guaranteed by a member of
either the Securities Transfer Association's STAMP program or the New York Stock
Exchange's Medallion Signature Program, or certain banks, savings and loan
institutions, credit unions, securities dealers, securities exchanges, clearing
agencies and registered securities associations as required by a regulation of
the Securities and Exchange Commission and acceptable to The Shareholder
Services Group, Inc. In addition, in some cases, good order may require the
furnishing of additional documents such as where shares are registered in the
name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem Fund accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares.
Contingent Deferred Sales Charge. If shares have been purchased at net asset
value with no initial sales charge by virtue of the purchase having been in the
amount of $1 million or more and are redeemed within 18 months after the end of
the calendar month in which the purchase was made, a CDSC of 1% will be imposed
on such redemption. The CDSC will be retained by the Principal Underwriter. The
CDSC will be imposed on an amount equal to the lesser of the current market
value or the original purchase price of the shares redeemed. Accordingly, no
CDSC will be imposed on increases in account value above the initial purchase
price, including any dividends that have been reinvested in additional shares.
In determining whether a CDSC is applicable to a redemption, the calculation
will be made in a manner that results in the lowest possible rate being charged.
Accordingly, it will be assumed that redemptions are made first from any shares
in the shareholder's account that are not subject to a CDSC. The CDSC is waived
for redemptions involving certain liquidation, merger or acquisition
transactions involving other investment companies. If a shareholder reinvests
redemption proceeds within the 60-day period and in accordance with the
conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with a
Fund involves special procedures and will require the beneficial owner to obtain
historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL INVESTMENTS
IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of any of the following
funds: Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston,
Eaton Vance Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund
in the Eaton Vance Traditional Group of Funds on the basis of the net asset
value per share of each fund at the time of the exchange, provided that such
exchange offers are available only in states where shares of the fund being
acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of
the above funds without incurring the CDSC. The shares acquired in an exchange
may be subject to a CDSC upon redemption. For purposes of computing the CDSC
payable upon the redemption of shares acquired in an exchange, the holding
period of the original shares is added to the holding period of the shares
acquired in the exchange.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of the other funds are available from Authorized Firms or the
Principal Underwriter The prospectus for each fund describes its investment
objectives and policies, and shareholders should obtain a prospectus and
consider these objectives and policies carefully before requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment
adviser or administrator may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange (plus, in the
case of an exchange made within six months of the date of purchase, an amount
equal to the difference, if any, between the sales charge previously paid on the
shares being exchanged and the sales charge payable on the Fund shares being
acquired). Any such exchange is subject to any restrictions or qualifications
set forth in the current prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone; provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Traditional Investors Fund may be mailed directly to The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104 at any time -- whether or
not distributions are reinvested. The name of the shareholder, the Fund and the
account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "Statement of Intention and
Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $100,000 or more. Shares of the Eaton Vance funds listed
under "The Eaton Vance Exchange Privilege" may be combined under the Statement
of Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an amount specified by the shareholder. A minimum
deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST AT NET ASSET VALUE ANY PORTION OR ALL OF THE REPURCHASE OR REDEMPTION
PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO ROUND OFF
THE PURCHASE TO THE NEAREST FULL SHARE), IN SHARES OF THE FUND, or, provided
that the shares repurchased or redeemed have been held for at least 60 days, in
shares of any of the other funds offered by the Principal Underwriter subject to
an initial sales charge, provided that the reinvestment is effected within 60
days after such repurchase or redemption, and the privilege has not been used
more than once in the prior 12 months. Shares are sold to a reinvesting
shareholder at the next determined net asset value following timely receipt of a
written purchase order by the Principal Underwriter or by the fund whose shares
are to be purchased (or by such fund's transfer agent). The privilege is also
available to holders of shares of the other funds offered by the Principal
Underwriter subject to an initial sales charge who wish to reinvest such
repurchase or redemption proceeds in shares of the Fund. If a shareholder
reinvests redemption proceeds within the 60 day period the shareholder's account
will be credited with the amount of any CDSC paid on such redeemed shares. To
the extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Special rules may apply to the computation of gain or loss and to the
deduction of loss on a repurchase or redemption followed by a reinvestment. See
"Distributions and Taxes". Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-
employed spouses; and
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The Fund's present policy is to pay quarterly dividends from the net investment
income allocated to the Fund by the Portfolio, less the Fund's direct and
allocated expenses, and to distribute at least annually any net realized capital
gains. A portion of distributions from net investment income may be eligible for
the dividends-received deduction for corporations. The Fund's distributions from
its net investment income, net short-term capital gains and certain net foreign
exchange gains will be taxable to shareholders as ordinary income, whether
received in cash or reinvested in additional shares. The Fund's distributions
from its net long-term capital gains are taxable to shareholders as such,
whether received in cash or reinvested in additional shares and regardless of
the length of time Fund shares have been owned by shareholders. If shares are
purchased shortly before the record date of a distribution, the shareholder will
pay the full price for the shares and then receive some portion of the price
back as a taxable distribution. Certain distributions, if declared by the Fund
in October, November or December and paid the following January, will be taxable
to shareholders as if received on December 31 of the year in which they are
declared.
Sales charges paid upon a purchase of shares of the Fund cannot be taken
into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
shares of the Fund or of another fund are subsequently acquired pursuant to the
Fund's reinvestment or exchange privilege. Any disregarded amounts will result
in an adjustment to the shareholder's tax basis in some or all of any other
shares acquired.
The Fund will provide its shareholders annually with tax information notices
and Forms 1099 to assist in the preparation of their Federal and state tax
returns for the prior calendar year's distributions, proceeds from the
redemption or exchange of Fund shares, and Federal income tax (if any) withheld
by the Fund's Transfer Agent.
The Fund intends to qualify as a regulated investment company under the
Code, and to satisfy all requirements necessary to be relieved of Federal taxes
on income and gains it distributes to shareholders. In satisfying these
requirements, the Fund will treat itself as owning its proportionate share of
each of the Portfolio's assets and as entitled to the income of the Portfolio
properly attributable to such share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY FEDERAL
INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS ITS NET
INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE TIMING
REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE PORTFOLIO
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
ROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
average annual total return calculation assumes the maximum sales charge is
deducted from the initial $1,000 purchase order and that all dividends and
distributions are reinvested at net asset value on the reinvestment dates during
the period. The Fund may also publish annual and cumulative total return figures
from time to time.
The Fund may also furnish total return calculations based on investments at
various sales charge levels or at net asset value. Any performance data which is
based on the Fund's net asset value per share would be reduced if a sales charge
were taken into account.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what the Fund's total return may be in any future period.
STATEMENT OF INTENTION AND ESCROW AGREEMENT
- --------------------------------------------------------------------------------
TERMS OF ESCROW. If the investor, on an application, makes a Statement of
Intention to invest a specified amount over a thirteen month period, then out of
the initial purchase (or subsequent purchases if necessary) 5% of the dollar
amount specified on the application shall be held in escrow by the escrow agent
in the form of shares (computed to the nearest full share at the public offering
price applicable to the initial purchase hereunder) registered in the investor's
name. All income dividends and capital gains distributions on escrowed shares
will be paid to the investor or to the investor's order.
When the minimum investment so specified is completed, the escrowed shares
will be delivered to the investor. If the investor has an accumulation account
the shares will remain on deposit under the investor's account.
If total purchases under this Statement of Intention are less than the
amount specified, the investor will promptly remit to EVD any difference between
the sales charge on the amount specified and on the amount actually purchased.
If the investor does not within 20 days after written request by EVD or the
Authorized Firm pay such difference in sales charge, the escrow agent will
redeem an appropriate number of the escrowed shares in order to realize such
difference. Full shares remaining after any such redemption together with any
excess cash proceeds of the shares so redeemed will be delivered to the investor
or to the investor's order by the escrow agent.
In signing the application, the investor irrevocably constitutes and
appoints the escrow agent the investor's attorney to surrender for redemption
any or all escrowed shares with full power of substitution in the premises.
PROVISION FOR RETROACTIVE PRICE ADJUSTMENT. If total purchases made under this
Statement are large enough to qualify for a lower sales charge than that
applicable to the amount specified, all transactions will be computed at the
expiration date of this Statement to give effect to the lower charge. Any
difference in sales charge will be refunded to the investor in cash, or applied
to the purchase of additional shares at the lower charge if specified by the
investor. This refund will be made by the Authorized Firm and by EVD. If at the
time of the recomputation a firm other than the original firm is placing the
orders, the adjustment will be made only on those shares purchased through the
firm then handling the account.
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL
INVESTORS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02109
T-IFP
EV TRADITIONAL
INVESTORS
FUND
PROSPECTUS
JUNE 1, 1995
[LOGO]
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC STOCK FUND
SUPPLEMENT TO PROSPECTUS DATED APRIL 1, 1995
Effective August 1, 1995, EV Classic Stock Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Securities Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Securities Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE SECURITIES TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
EV CLASSIC STOCK FUND
EV CLASSIC STOCK FUND (THE "FUND") IS A MUTUAL FUND SEEKING GROWTH OF
PRINCIPAL AND INCOME. THE FUND INVESTS ITS ASSETS IN STOCK PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME
INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND
MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL
FUNDS. THE FUND IS A SERIES OF EATON VANCE SECURITIES TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated April 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ........................ 12
The Fund's Financial Highlights ................... 3 How to Redeem Fund Shares ..................... 13
The Fund's Investment Objective ................... 4 Reports to Shareholders ....................... 15
How the Fund and the Portfolio Invest The Lifetime Investing Account/Distribution
their Assets; Investment Risks .................. 4 Options ..................................... 15
Organization of the Fund and the Portfolio ........ 5 The Eaton Vance Exchange Privilege ............ 16
Management of the Fund and the Portfolio .......... 7 Eaton Vance Shareholder Services .............. 17
Distribution Plan ................................. 8 Distributions and Taxes ....................... 18
Valuing Fund Shares ............................... 11 Performance Information ....................... 19
</TABLE>
- ------------------------------------------------------------------------------
PROSPECTUS DATED APRIL 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES \1/
- ------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charge Imposed on Redemptions During the
First Year
(as a percentage of redemption proceeds exclusive of all
reinvestments and capital
appreciation in the account)\2/ 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.625%
Rule 12b-1 Distribution (and Service) Fees 1.000%
Other Expenses 0.355%
------
Total Operating Expenses 1.980%
======
EXAMPLE 1 YEAR 3 YEARS
------ -------
An investor would pay the following expenses (including
a contingent deferred sales charge in the case of
redemption during the first year after purchase) on a
$1,000 investment, assuming (a) 5% annual return and (b)
redemption at the end of each time period: $30 $62
An investor would pay the following expenses on the same
investment, assuming (a) 5% return and (b) no
redemptions: $20 $62
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to the per share expenses which the Fund would incur
if the Trust retained the services of an investment adviser and the assets
of the Fund were invested directly in the type of securities being held by
the Portfolio. Because the Fund does not yet have a sufficient operating
history, the percentages indicated as Annual Fund and Allocated Portfolio
Operating Expenses in the table and the amounts included in the Example are
based on the Fund's and the Portfolio's projected fees and expenses for the
current fiscal year ending December 31, 1995. The Example should not be
considered a representation of past or future expenses and actual expenses
may be greater or less than those shown. The Example assumes a 5% annual
return and the Fund's actual performance may result in an annual return
greater or less than 5%. For further information regarding the expenses of
both the Fund and the Portfolio, see "The Fund's Financial Highlights",
"Organization of the Fund and the Portfolio", "Management of the Fund and
the Portfolio" and "How to Redeem Fund Shares". Because the Fund makes
payments under its Distribution Plan adopted under Rule 12b-1, a long-term
shareholder may pay more than the economic equivalent of the maximum
front-end sales charge permitted by a rule of the National Association of
Securities Dealers, Inc. See "Distribution Plan".
\2/ The contingent deferred sales charge is imposed on the redemption of shares
purchased on or after January 30, 1995. No contingent deferred sales charge
is imposed on (a) shares purchased more than one year prior to redemption,
(b) shares acquired through the reinvestment of distributions or (c) any
appreciation in value of other shares in the account (see "How to Redeem
Fund Shares"), and no such charge is imposed on exchanges of Fund shares for
shares of one or more other funds listed under "The Eaton Vance Exchange
Privilege."
\3/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which has been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
FOR THE PERIOD FROM THE START OF BUSINESS, NOVEMBER 4, 1994, TO DECEMBER 31,
1994
NET ASSET VALUE -- Beginning of period .......................... $10.00
------
Income from investment operations:
Net investment income (loss) ................................ $ --
------
Net realized and unrealized gain (loss) on investments ...... (0.13)
------
Total income (loss) from investment operations ............ $(0.13)
------
NET ASSET VALUE -- End of period ................................ $ 9.87
======
TOTAL RETURN\1/ ................................................. (1.30)%
RATIOS/SUPPLEMENTAL DATA (to average daily net assets)**:
Expenses\2/ ................................................... 1.59%+
Net investment income (loss) .................................. 1.01%+
NET ASSETS AT END OF PERIOD (000's omitted) ..................... $ 146
**The expenses related to the operation of the Fund reflect an allocation of
expenses to the Administrator. Had such action not been taken, the ratios
would have been as follows:
RATIOS (to average daily net assets)
Expenses\2/ ................................................. 39.84%
Net investment income (loss) ................................ (37.23)%
+ Computed on an annualized basis.
\1/ Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of the period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the record date.
\2/ ncludes the Fund's share of Stock Portfolio's allocated expenses for the
period from the Fund's start of business, November 4, 1994, to December 31,
1994.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
- ------------------------------------------------------------------------------
EV CLASSIC STOCK FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE GROWTH OF PRINCIPAL
AND INCOME FOR ITS SHAREHOLDERS. The Fund currently seeks to meet its investment
objective by investing its assets in the Stock Portfolio, a separate registered
investment company that invests in a number of carefully selected securities.
The emphasis is upon common stocks. The Fund's and the Portfolio's investment
objectives are nonfundamental and may be changed when authorized by a vote of
the Tustees of the Trust or the Portfolio, respectively, without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. The Trustees of the Trust have no present intention to change the
Fund's objective and intend to submit any proposed material change in the
investment objective to shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR
ASSETS; INVESTMENT RISKS
- ------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN THE
PORTFOLIO. TO ACHIEVE THE PORTFOLIO'S OBJECTIVE, PRIMARY EMPHASIS WILL BE PLACED
ON COMMON STOCKS OF COMPANIES WHICH APPEAR TO OFFER GOOD PROSPECTS FOR INCREASES
IN BOTH EARNINGS AND DIVIDENDS. The Portfolio will invest primarily (i.e., at
least 65% of its total assets during normal investment conditions) in equity
securities (common and preferred stocks, and securities convertible into common
stocks). The Portfolio's investments in convertible debt securities will be
limited to 20% of net assets. The criteria for such investments are the same as
those used for the common stock of the issuer and accordingly, may be of any
credit quality (including below investment grade). The Portfolio purchases
securities primarily for investment, rather than with a view to realizing
trading profits. Nevertheless, portfolio changes are made whenever considered
advisable in the pursuit of the Portfolio's stated investment objective.
In seeking to achieve its investment objective, or to consolidate growth
previously attained, the Portfolio may from time to time purchase bonds, U.S.
Government obligations and other securities. Bonds will constitute 5% or less of
net assets and be investment grade at the time of investment (i.e., rated Baa or
higher by Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's
Ratings Group or, if unrated, determined to be of comparable quality by the
Portfolio's Investment Adviser). Convertible debt securities that are not
investment grade have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade debt
securities.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies.
For income purposes, the Portfolio may write (sell) covered exchange-traded
call options on portfolio securities with respect to 25% of its net assets. The
Portfolio may enter into closing transactions to realize gains or minimize
losses, if a liquid secondary market then exists. If exercised, the Portfolio
will be unable to realize further price appreciation on the underlying
securities and portfolio turnover will increase, resulting in higher brokerage
costs. Options writing is a highly specialized activity that involves skills
different from ordinary portfolio securities transactions.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objective cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
or an investor vote, respectively. Except for such enumerated restrictions and
as otherwise indicated in this Prospectus, the investment objective and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objective, the
Fund might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
----------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND
PROSPECTIVE INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER
INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT
ELIMINATE RISK OR ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
----------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SECURITIES TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 19, 1990, AS AMENDED, AS THE SUCCESSOR TO A MASSACHUSETTS TRUST
WHICH COMMENCED ITS INVESTMENT COMPANY OPERATIONS IN 1931. THE TRUST IS A MUTUAL
FUND -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series and because the Trust can offer separate series
(such as the Fund) it is known as a "series company". Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Investment
Risks". Further information regarding investment practices may be found in the
Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objective or policies of the Fund, those shares may
be subject to a contingent deferred sales charge, as described in "How to Redeem
Fund Shares". In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Trust determines that the investment
objective of the Portfolio is no longer consistent with the investment objective
of the Fund, such Trustees would consider what action might be taken, including
investing the assets of the Fund in another pooled investment entity or
retaining an investment adviser to manage the Fund's assets in accordance with
its investment objective. The Fund's investment performance may be affected by a
withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take action to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio. For the period from the start of business, August
1, 1994, to December 31, 1994, the Portfolio paid BMR advisory fees equivalent
to 0.625% (annualized) of the Portfolio's average daily net assets for such
period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. BMR places the portfolio transactions of the
Portfolio for execution with many broker-dealer firms and uses its best efforts
to obtain execution of such transactions at prices which are advantageous to the
Portfolio and at reasonably competitive commission rates. Subject to the
foregoing, BMR may consider sales of shares of the Fund or of other investment
companies sponsored by BMR or Eaton Vance as a factor in the selection of
broker-dealer firms to execute portfolio transactions.
Duncan W. Richardson has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certficates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and the
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Portfolio and the Fund will also each bear
expenses incurred in connection with litigation in which the Portfolio or the
Fund, as the case may be, is a party and any legal obligation to indemnify its
respective officers and Trustees with respect thereto.
DISTRIBUTION PLAN
- ------------------------------------------------------------------------------
THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with,
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 6.25% of the
amount received by the Fund for each share sold and (ii) distribution fees
calculated by applying the rate of 1% over the prime rate then reported in The
Wall Street Journal to the outstanding balance of Uncovered Distribution Charges
(as described below) of the Principal Underwriter. On sales of shares made prior
to January 30, 1995, the Principal Underwriter currently pays monthly sales
commissions to a financial service firm (an "Authorized Firm") in amounts
anticipated to be equivalent to .75%, annualized, of the assets maintained in
the Fund by the customers of such Firm. On sales of shares made on January 30,
1995 and thereafter, the Principal Underwriter currently expects to pay to an
Authorized Firm (a) sales commissions (except on exchange transactions and
reinvestments) at the time of sale equal to .75% of the purchase price of the
shares sold by such Firm, and (b) monthly sales commissions approximately
equivalent to 1/12 of .75% of the value of shares sold by such Firm and
remaining outstanding for at least one year. The Plan is designed to permit an
investor to purchase Fund shares through an Authorized Firm without incurring an
initial sales charge and at the same time permit the Principal Underwriter to
compensate Authorized Firms in connection with the sale of Fund shares.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments made to the Principal
Underwriter pursuant to the Plan, including any contingent deferred sales
charges, have exceeded the total expenses theretofore incurred by such
organization in distributing shares of the Fund. Total expenses for this purpose
will include an allocable portion of the overhead costs of such organization and
its branch offices.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan with respect to each day will be accrued on such day as a liability of the
Fund and will accordingly reduce the Fund's net assets upon such accrual, all in
accordance with generally accepted accounting principles. The amount payable on
each day is limited to 1/365 of .75% of the Fund's net assets on such day. The
level of the Fund's net assets changes each day and depends upon the amount of
sales and redemptions of Fund shares, the changes in the value of the
investments held by the Portfolio, the expenses of the Fund and the Portfolio
accrued and allocated to the Fund on such day, income on portfolio investments
of the Portfolio accrued and allocated to the Fund on such day, and any
dividends and distributions declared on Fund shares. The Fund does not accrue
possible future payments as a liability of the Fund or reduce the Fund's current
net assets in respect of unknown amounts which may become payable under the Plan
in the future because the standards for accrual of a liability under such
accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. The Plan continues in effect through and including April 28, 1995,
and shall continue in effect indefinitely thereafter for so long as such
continuance is approved at least annually by the vote of both a majority of (i)
the Trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to the Plan (the "Rule 12b-1 Trustees") and (ii) all of
the Trustees then in office, and the Distribution Agreement contains a similar
provision. The Plan and Distribution Agreement may be terminated at any time by
vote of a majority of the Rule 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the period from the start of business,
November 4, 1994, to December 31, 1994, the Fund paid or accrued sales
commissions under the Plan equivalent to .75% (annualized) of the Fund's average
daily net assets for such period. As at December 31, 1994, the Uncovered
Distribution Charges of the Principal Underwriter calculated under the Plan
amounted to approximately $8,794 (equivalent to 6.04% of the Fund's net assets
on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented the Plan by authorizing the
Fund to make monthly service fee payments to the Principal Underwriter in
amounts not expected to exceed .25% of the Fund's average daily net assets for
any fiscal year. The Fund accrues the service fee daily at the rate of 1/365 of
.25% of the Fund's net assets. On sales of shares made prior to January 30,
1995, the Principal Underwriter currently makes monthly service fee payments to
an Authorized Firm in amounts anticipated to be equivalent to .25%, annualized,
of the assets maintained in the Fund by the customers of such Firm. On sales of
shares made on January 30, 1995 and thereafter, the Principal Underwriter
currently expects to pay to an Authorized Firm (a) a service fee (except on
exchange transactions and reinvestments) at the time of sale equal to .25% of
the purchase price of the shares sold by such Firm, and (b) monthly service fees
approximately equivalent to 1/12 of .25% of the value of shares sold by such
Firm and remaining outstanding for at least one year. During the first year
after a purchase of Fund shares, the Principal Underwriter will retain the
service fee as reimbursement for the service fee payment made to the Authorized
Firm at the time of sale. As permitted by the NASD Rule, all service fee
payments are made for personal services and/or the maintenance of shareholder
accounts. Service fees are separate and distinct from the sales commissions and
distribution fees payable by the Fund to the Principal Underwriter, and as such
are not subject to automatic discontinuance when there are no outstanding
Uncovered Distribution Charges of the Principal Underwriter. For the period from
the start of business, November 4, 1994, to December 31, 1994, the Fund paid or
accrued service fees under the Plan equivalent to .25% (annualized) of the
Fund's average daily net assets for such period.
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions, distribution fees and service fees to the Principal
Underwriter which may be equivalent, on an aggregate basis during any fiscal
year of the Fund, to 1% of the Fund's average daily net assets for such year.
The Fund believes that the combined rate of all these payments may be higher
than the rate of payments made under distribution plans adopted by other
investment companies pursuant to Rule 12b-1. Although the Principal Underwriter
will use its own funds (which may be borrowed from banks) to pay sales
commissions and service fees at the time of sale, it is anticipated that the
Eaton Vance organization will profit by reason of the operation of the Plan
through increases in the Fund's assets (thereby increasing the advisory fees
payable to BMR by the Portfolio) resulting from sales of Fund shares and through
amounts paid under the Plan to the Principal Underwriter and contingent deferred
sales charges paid to the Principal Underwriter.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
- ------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at closing sale prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
----------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
----------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- ------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse an order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares".
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Classic Stock Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Classic Stock Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
----------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
----------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- ------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per Fund share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner (s)
exactly as the shares are registered and the signature(s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission (the "Commission") and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charge (described below) and any
Federal income tax required to be withheld. Although the Fund normally expects
to make payment in cash for redeemed shares, the Trust, subject to compliance
with applicable regulations, has reserved the right to pay the redemption price
of shares of the Fund, either totally or partially, by a distribution in kind of
readily marketable securities withdrawn by the Fund from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, with word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares purchased on or after January 30, 1995
and redeemed within the first year of their purchase (except shares acquired
through the reinvestment of distributions) generally will be subject to a
contingent deferred sales charge. This contingent deferred sales charge is
imposed on any redemption the amount of which exceeds the aggregate value at the
time of redemption of (a) all shares in the account purchased more than one year
prior to the redemption, (b) all shares in the account acquired through
reinvestment of distributions, and (c) the increase, if any, of value of all
other shares in the account (namely those purchased within the year preceding
the redemption) over the purchase price of such shares. Redemptions are
processed in a manner to maximize the amount of redemption proceeds which will
not be subject to a contingent deferred sales charge. That is, each redemption
will be assumed to have been made first from the exempt amounts referred to in
clauses (a), (b) and (c) above, and second through liquidation of those shares
in the account referred to in clause (c) on a first-in-first- out basis. Any
contingent deferred sales charge which is required to be imposed on share
redemptions will be equal to 1% of the net asset value of redeemed shares.
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege," the purchase of Fund shares acquired in
the exchange is deemed to have occurred at the time of the original purchase of
the exchanged shares.
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will also be waived
for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton Vance
Shareholder Services"), (2) as part of a distribution from a retirement plan
qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code"), or (3) as part of a minimum required distribution from
other tax-sheltered retirement plans. The contingent deferred sales charge will
be paid to the Principal Underwriter or the Fund. When paid to the Principal
Underwriter it will reduce the amount of Uncovered Distribution Charges
calculated under the Fund's Distribution Plan. See "Distribution Plan."
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
----------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
----------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of one or more other
funds in the Eaton Vance Classic Group of Funds or Eaton Vance Money Market
Fund, which are distributed subject to a contingent deferred sales charge, on
the basis of the net asset value per share of each fund at the time of the
exchange, provided that such exchange offers are available only in states where
shares of the fund being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange, the purchase of shares acquired in one or more
exchanges is deemed to have occurred at the time of the original purchase of the
exchanged shares.
Shares of the other funds in the Eaton Vance Classic Group of Funds (and
shares of Eaton Vance Money Market Fund acquired as the result of an exchange
from an EV Classic fund) may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange, but subject
to any restrictions or qualifications set forth in the current prospectus of any
such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone, provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares." A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such repurchase
or redemption. Shares are sold to a reinvesting shareholder at the next
determined net asset value following timely receipt of a written purchase order
by the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent).
To the extent that any shares of the Fund are sold at a loss and the proceeds
are reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-
employed spouses; and
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
It is the present policy of the Fund to pay at least quarterly dividends from
net investment income (when available) allocated to the Fund by the Portfolio,
less the Fund's direct and allocated expenses, and to distribute at least
annually any net capital gains realized (the Fund's realized net capital gains
consist of the net realized capital gains from the sale of portfolio securities
allocated to the Fund by the Portfolio).
Shareholders may reinvest dividends, if any, in shares of the Fund at the
current net asset value per share as of the ex-dividend date and may accumulate
capital gains distributions, if any, in additional shares also at the current
net asset value per share as of the ex-dividend date.
Distributions by the Fund of ordinary income and net short-term capital
gains allocated to the Fund by the Portfolio will be taxable to the Fund's
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Shareholders reinvesting such distributions
should treat the amount of the entire distribution as the tax cost basis of the
additional shares acquired by reason of such reinvestment. Distributions of net
long-term capital gains are taxable to shareholders as such, whether received in
cash or reinvested in additional shares of the Fund, and regardless of the
length of time shares have been owned by shareholders. If shares are purchased
shortly before the record date of a distribution, the shareholder will pay the
full price for the shares and then receive some portion of the price back as a
taxable distribution. Certain distributions which are declared in October,
November or December and paid the following January will be reportable by
shareholders as if received on December 31 of the year in which they are
declared.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
----------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A
PARTNERSHIP UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR
EXCISE TAXES.
----------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by computing the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (net asset value) for specified periods ending with the most recent
calendar quarter, assuming reinvestment of all distributions. The average annual
total return calculation assumes a complete redemption of the investment and the
deduction of any applicable contingent deferred sales charge at the end of the
period. The Fund may also publish annual and cumulative total return figures
from time to time.
Performance figures published by the Fund which do not include the effect of
any applicable contingent deferred sales charge would be reduced if it were
included.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what an investor's total return may be in any future period. If the expenses of
the Fund or the Portfolio are paid by Eaton Vance, the Fund's performance will
be higher.
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC
STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC
STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-STP
EV Classic
Stock
Fund
Prospectus
April 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV MARATHON STOCK FUND
SUPPLEMENT TO PROSPECTUS DATED APRIL 1, 1995
Effective August 1, 1995, EV Marathon Stock Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Securities Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Securities Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE SECURITIES TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
EV MARATHON STOCK FUND
EV MARATHON STOCK FUND (THE "FUND") IS A MUTUAL FUND SEEKING GROWTH OF
PRINCIPAL AND INCOME. THE FUND INVESTS ITS ASSETS IN STOCK PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME
INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND
MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL
FUNDS. THE FUND IS A SERIES OF EATON VANCE SECURITIES TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated April 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Buy Fund Shares ........................ 12
The Fund's Financial Highlights ................... 3 How to Redeem Fund Shares ..................... 13
The Fund's Investment Objective ................... 4 Reports to Shareholders ....................... 15
How The Fund and the Portfolio Invest The Lifetime Investing Account/distribution
their Assets; Investment Risks .................. 4 Options ..................................... 15
Organization of the Fund and the Portfolio ........ 5 The Eaton Vance Exchange Privilege ............ 16
Management of the Fund and the Portfolio .......... 7 Eaton Vance Shareholder Services .............. 17
Distribution Plan ................................. 8 Distributions and Taxes ....................... 18
Valuing Fund Shares ............................... 11 Performance Information ....................... 19
- ------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS DATED APRIL 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES \1/
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Range of Declining Contingent Deferred Sales Charges Imposed
on Redemptions During the First Seven Years (as a percentage
of redemption proceeds exclusive of all reinvestments and
capital appreciation in the account)\2/ 5.00% - 0%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.625%
Rule 12b-1 Distribution (and Service) Fees\3/ 0.770%
Other Expenses 0.355%
-----
Total Operating Expenses 1.75%
======
1 YEAR 3 YEARS
------ -------
AN INVESTOR WOULD PAY THE FOLLOWING CONTINGENT DEFERRED
SALES CHARGE AND EXPENSES ON A $1,000 INVESTMENT, ASSUMING
(A) 5% ANNUAL RETURN AND (B) REDEMPTION AT THE END OF EACH
TIME PERIOD: $68 $95
AN INVESTOR WOULD PAY THE FOLLOWING EXPENSES ON THE SAME
INVESTMENT, ASSUMING (A) 5% ANNUAL RETURN AND (B) NO
REDEMPTIONS: $18 $55
NOTES:
\1/ The purpose of the above table and example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to the per share expenses which the Fund would incur
if the Trust retained the services of an investment adviser and the assets
of the Fund were invested directly in the type of securities being held by
the Portfolio. Because the Fund does not yet have a sufficient operating
history, the percentages indicated as Annual Fund and allocated Portfolio
Operating Expenses in the table and the amounts included in the example are
based on the Fund's and the Portfolio's projected fees and expenses for the
current fiscal year ending December 31, 1995. The Example should not be
considered a representation of past or future expenses and actual expenses
may be greater or less than those shown. The Example assumes a 5% annual
return and the Fund's actual performance may result in an annual return
greater or less than 5%. For further information regarding the expenses of
both the Fund and the Portfolio, see "The Fund's Financial Highlights",
"Organization of the Fund and the Portfolio", "Management of the Fund and
the Portfolio" and "How to Redeem Fund Shares". Because the Fund makes
payments under its Distribution Plan adopted under Rule 12b-1, a long-term
shareholder may pay more than the economic equivalent of the maximum
front-end sales charge permitted by a rule of the National Association of
Securities Dealers, Inc. See "Distribution Plan".
\2/ No contingent deferred sales chargeis imposed on (a) shares purchased more
than six years prior to the redemption, (b) shares acquired through the
reinvestment of distributions or (c) any appreciation in value of other
shares in the account (see "How to Redeem Fund Shares"), and no such charge
is imposed on exchanges of Fund shares for shares of one or more other funds
listed under "The Eaton Vance Exchange Privilege".
\3/ The percentage has been restated because the Fund expects to begin accruing
for its service fee payments during the quarter ending September 30, 1995.
\4/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which has been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
FOR THE PERIOD FROM THE START OF BUSINESS, AUGUST 17, 1994, TO DECEMBER 31, 1994
NET ASSET VALUE -- Beginning of period .......................... $10.00
------
Income from investment operations:
Net investment income (loss) ................................ $(0.01)
Net realized and unrealized gain (loss) on investments ...... (0.39)
----
Total income (loss) from investment operations ............ $ (0.40)
----
NET ASSET VALUE, -- End of period ............................... $ 9.60
=====
TOTAL RETURN\1/ ................................................. (3.9)%
RATIOS/SUPPLEMENTAL DATA (to average daily net assets):**
Expenses\2/ ................................................... +3.25%
Net investment income (loss) .................................. (0.74)%+
Net assets, end of period (000's omitted) ....................... $1,604
**The expenses related to the operation of the Fund reflect an allocation of
expenses to the Administrator. Had such action not been taken, the ratios
would have been as follows:
RATIOS (to average daily net assets):
Expenses\2/ ................................................... 3.81 %+
Net investment income (loss) .................................. (0.18)%+
+Computed on an annualized basis.
Note: Per share amounts have been computed using average shares outstanding
during the period. The per share amount is not in accord with the net
realized and unrealized gain for the period allocated to the Fund by the
Portfolio due to the timing of the sales of Fund shares and the amount of
per share realized and unrealized gains and losses at such time.
\1/Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of the period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the record date.
\2/Includes the Fund's share of Stock Portfolio's allocated expenses for the
period from the Fund's start of business, August 17, 1994, to December 31,
1994.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
EV MARATHON STOCK FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE GROWTH OF PRINCIPAL
AND INCOME FOR ITS SHAREHOLDERS. The Fund currently seeks to meet its investment
objective by investing its assets in the Stock Portfolio, a separate registered
investment company that invests in a number of carefully selected securities.
The emphasis is upon common stocks. The Fund's and the Portfolio's investment
objectives are nonfundamental and may be changed when authorized by a vote of
the Tustees of the Trust or the Portfolio, respectively, without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. The Trustees of the Trust have no present intention to change the
Fund's objective and intend to submit any proposed material change in the
investment objective to shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS; INVESTMENT RISKS
- --------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN THE
PORTFOLIO. TO ACHIEVE THE PORTFOLIO'S OBJECTIVE, PRIMARY EMPHASIS WILL BE PLACED
ON COMMON STOCKS OF COMPANIES WHICH APPEAR TO OFFER GOOD PROSPECTS FOR INCREASES
IN BOTH EARNINGS AND DIVIDENDS. The Portfolio will invest primarily (i.e., at
least 65% of its total assets during normal investment conditions) in equity
securities (common and preferred stocks, and securities convertible into common
stocks). The Portfolio's investments in convertible debt securities will be
limited to 20% of net assets. The criteria for such investments are the same as
those used for the common stock of the issuer and accordingly, may be of any
credit quality (including below investment grade). The Portfolio purchases
securities primarily for investment, rather than with a view to realizing
trading profits. Nevertheless, portfolio changes are made whenever considered
advisable in the pursuit of the Portfolio's stated investment objective.
In seeking to achieve its investment objective, or to consolidate growth
previously attained, the Portfolio may from time to time purchase bonds, U.S.
Government obligations and other securities. Bonds will constitute 5% or less of
net assets and be investment grade at the time of investment (i.e., rated Baa or
higher by Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's
Ratings Group or, if unrated, determined to be of comparable quality by the
Portfolio's Investment Adviser). Convertible debt securities that are not
investment grade have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade debt
securities.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies.
For income purposes, the Portfolio may write (sell) covered exchange-traded
call options on portfolio securities with respect to 25% of its net assets. The
Portfolio may enter into closing transactions to realize gains or minimize
losses, if a liquid secondary market then exists. If exercised, the Portfolio
will be unable to realize further price appreciation on the underlying
securities and portfolio turnover will increase, resulting in higher brokerage
costs. Options writing is a highly specialized activity that involves skills
different from ordinary portfolio securities transactions.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objective cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
or an investor vote, respectively. Except for such enumerated restrictions and
as otherwise indicated in this prospectus, the investment objective and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objective, the
Fund might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND
PROSPECTIVE INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND
OTHER INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE
FUND CANNOT ELIMINATE RISK OR ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SECURITIES TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 19, 1990, AS AMENDED, AS THE SUCCESSOR TO A MASSACHUSETTS TRUST
WHICH COMMENCED ITS INVESTMENT COMPANY OPERATIONS IN 1931. THE TRUST IS A MUTUAL
FUND -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interst (no par value per
share) in one or more series and because the Trust can offer separate series
(such as the Fund) it is known as a "series company." Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Investment
Risks". Further information regarding investment practices may be found in the
Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days,
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objective or policies of the Fund, those shares may
be subject to a contingent deferred sales charge, as described in "How to Redeem
Fund Shares". In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Trust determines that the investment
objective of the Portfolio is no longer consistent with the investment objective
of the Fund, such Trustees would consider what action might be taken, including
investing the assets of the Fund in another pooled investment entity or
retaining an investment adviser to manage the Fund's assets in accordance with
its investment objective. The Fund's investment performance may be affected by a
withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which
invest in the Portfolio may be obtained by contacting Eaton Vance Distributors,
Inc. (the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA
02110, (617) 482-8260. Smaller investors in the Portfolio may be adversely
affected by the actions of larger investors in the Portfolio. For example, if a
large investor withdraws from the Portfolio, the remaining investors may
experience higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take action to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio. For the period from the start of business, August
1, 1994, to December 31, 1994, the Portfolio paid BMR advisory fees equivalent
to 0.625% (annualized) of the Portfolio's average daily net assets for such
period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. BMR places the portfolio transactions of the
Portfolio for execution with many broker-dealer firms and uses its best efforts
to obtain execution of such transactions at prices which are advantageous to the
Portfolio and at reasonably competitive commission rates. Subject to the
foregoing, BMR may consider sales of shares of the Fund or of other investment
companies sponsored by BMR or Eaton Vance as a factor in the selection of
broker-dealer firms to execute portfolio transactions.
Duncan W. Richardson has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible
for all of its respective costs and expenses not expressly stated to be payable
by BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certficates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and the
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Portfolio and the Fund will also each bear
expenses incurred in connection with litigation in which the Portfolio or the
Fund, as the case may be, is a party and any legal obligation to indemnify its
respective officers and Trustees with respect thereto.
DISTRIBUTION PLAN
- --------------------------------------------------------------------------------
THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with,
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 5% of the amount
received by the Fund for each share sold and (ii) distribution fees calculated
by applying the rate of 1% over the prime rate then reported in The Wall Street
Journal to the outstanding balance of Uncovered Distribution Charges (as
described below) of the Principal Underwriter. The Principal Underwriter
currently expects to pay sales commissions (except on exchange transactions and
reinvestments) to a financial services firm (an "Authorized Firm") at the time
of sale equal to 4% of the purchase price of the shares sold by such Firm. The
Principal Underwriter will use its own funds (which may be borrowed from banks)
to pay such commissions. Because the payment of the sales commissions and
distribution fees to the Principal Underwriter is subject to the NASD Rule
described below, it will take the Principal Underwriter a number of years to
recoup the sales commissions paid by it to Authorized Firms from the payments
received by it from the Fund pursuant to the Plan.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments received by the
Principal Underwriter from the Fund pursuant to the Plan, including any
contingent deferred sales charges, have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan with respect to each day will be accrued on such day as a liability of the
Fund and will accordingly reduce the Fund's net assets upon such accrual, all in
accordance with generally accepted accounting principles. The amount payable on
each day is limited to 1/365 of .75% of the Fund's net assets on such day. The
level of the Fund's net assets changes each day and depends upon the amount of
sales and redemptions of Fund shares, the changes in the value of the
investments held by the Portfolio, the expenses of the Fund and the Portfolio
accrued and allocated to the Fund on such day, income on portfolio investments
of the Portfolio accrued and allocated to the Fund on such day, and any
dividends and distributions declared on Fund shares. The Fund does not accrue
possible future payments as a liability of the Fund or reduce the Fund's current
net assets in respect of unknown amounts which may become payable under the Plan
in the future because the standards for accrual of a liability under such
accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. The Plan continues in effect through and including April 28, 1995,
and shall continue in effect indefinitely thereafter for so long as such
continuance is approved at least annually by the vote of both a majority of (i)
the Trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to the Plan (the "Rule 12b-1 Trustees") and (ii) all of
the Trustees then in office, and the Distribution Agreement contains a similar
provision. The Plan and Distribution Agreement may be terminated at any time by
vote of a majority of the Rule 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund.
Periods with a high level of sales of Fund shares accompanied by a low
level of early redemptions of Fund shares resulting in the imposition of
contingent deferred sales charges will tend to increase the time during which
there will exist Uncovered Distribution Charges of the Principal Underwriter.
Conversely, periods with a low level of sales of Fund shares accompanied by a
high level of early redemptions of Fund shares resulting in the imposition of
contingent deferred sales charges will tend to reduce the time during which
there will exist Uncovered Distribution Charges of the Principal Underwriter.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the period from the start of business,
August 17, 1994, to December 31, 1994, the Fund paid sales commissions under the
Plan equivalent to .75% (annualized) of the Fund's average daily net assets for
such period. As at December 31, 1994, the Uncovered Distribution Charges of the
Principal Underwriter calculated under the Plan amounted to approximately
$39,703 (equivalent to 3.7% of the Fund's net assets on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented the Plan by authorizing the
Fund to make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .25% of the Fund's average
daily net assets for any fiscal year based on the value of Fund shares sold by
such persons and remaining outstanding for at least twelve months. As permitted
by the NASD Rule, all such payments are made for personal services and/or the
maintenance of shareholder accounts. Service fees are separate and distinct from
the sales commissions and distribution fees payable by the Fund to the Principal
Underwriter, and as such are not subject to automatic discontinuance when there
are no outstanding Uncovered Distribution Charges of the Principal Underwriter.
The Fund expects to begin accruing for its service fee payments during the
quarter ending September 30, 1995.
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions and distribution fees to the Principal Underwriter and service
fees to the Principal Underwriter and Authorized Firms which may be equivalent,
on an aggregate basis during any fiscal year of the Fund, to 1% of the Fund's
average daily net assets for such year. The Fund believes that the combined rate
of all these payments may be higher than the rate of payments made under
distribution plans adopted by other investment companies pursuant to Rule 12b-1.
It is anticipated that the Eaton Vance organization will profit by reason of the
operation of the Plan through increases in the Fund's assets (thereby increasing
the advisory fees payable to BMR by the Portfolio) resulting from sales of Fund
shares and through amounts paid under the Plan to the Principal Underwriter and
contingent deferred sales charges paid to the Principal Underwriter.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
- --------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at closing sale prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY
MULTIPLYING THE NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET
VALUE PER SHARE.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- --------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse an order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase
plans under which the average initial purchase by a participant of the plan is
$1,000 or more, the Fund may accept initial investments of less than $1,000 on
the part of an individual participant. In the event a shareholder who is a
participant of such a plan terminates participation in the plan, his or her
shares will be transferred to a regular individual account. However, such
account will be subject to the right of redemption by the Fund as described
under "How to Redeem Fund Shares".
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Marathon Stock Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Marathon Stock Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per Fund share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner(s)
exactly as the shares are registered and the signature (s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission (the "Commission") and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by
The Shareholder Services Group, Inc., the Fund will make payment in cash for the
net asset value of the shares as of the date determined above, reduced by the
amount of any applicable contingent deferred sales charge (described below) and
any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, with word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares redeemed within the first six
years of their purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge.
This contingent deferred sales charge is imposed on any redemption the amount of
which exceeds the aggregate value at the time of redemption of (a) all shares in
the account purchased more than six years prior to the redemption, (b) all
shares in the account acquired through reinvestment of distributions, and (c)
the increase, if any, of value of all other shares in the account (namely those
purchased within the six years preceding the redemption) over the purchase price
of such shares. Redemptions are processed in a manner to maximize the amount of
redemption proceeds which will not be subject to a contingent deferred sales
charge. That is, each redemption will be assumed to have been made first from
the exempt amounts referred to in clauses (a), (b) and (c) above, and second
through liquidation of those shares in the account referred to in clause (c) on
a first-in-first-out basis. Any contingent deferred sales charge which is
required to be imposed on share redemptions will be made in accordance with the
following schedule:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
FIRST ............................................ 5%
SECOND ........................................... 5%
THIRD ............................................ 4%
FOURTH ........................................... 3%
FIFTH ............................................ 2%
SIXTH ............................................ 1%
SEVENTH AND FOLLOWING ............................ 0%
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege," the contingent deferred sales charge
schedule applicable to the shares at the time of purchase will apply and the
purchase of Fund shares acquired in the exchange is deemed to have occurred at
the time of the original purchase of the exchanged shares. The contingent
deferred sales charge will be waived for shares redeemed (1) pursuant to a
Withdrawal Plan (see "Eaton Vance Shareholder Services"), (2) as part of a
required distribution from a tax-sheltered retirement plan or (3) following the
death of all beneficial owners of such shares, provided the redemption is
requested within one year of death (a death certificate and other applicable
documents may be required).
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will be paid to the
Principal Underwriter or the Fund. When paid to the Principal Underwriter it
will reduce the amount of Uncovered Distribution Charges calculated under the
Fund's Distribution Plan. See "Distribution Plan".
- --------------------------------------------------------------------------------
THE FOLLOWING EXAMPLE ILLUSTRATES THE OPERATION OF THE CONTINGENT
DEFERRED SALES CHARGE. ASSUME THAT AN INVESTOR PURCHASES $10,000 OF
THE FUND'S SHARES AND THAT 16 MONTHS LATER THE VALUE OF THE ACCOUNT
HAS GROWN THROUGH INVESTMENT PERFORMANCE AND REINVESTMENT OF
DISTRIBUTIONS TO $12,000. THE INVESTOR THEN MAY REDEEM UP TO $2,000 OF
SHARES WITHOUT INCURRING A CONTINGENT DEFERRED SALES CHARGE. IF THE
INVESTOR SHOULD REDEEM $3,000 OF SHARES, A CHARGE WOULD BE IMPOSED ON
$1,000 OF THE REDEMPTION. THE RATE WOULD BE 5% BECAUSE THE REDEMPTION
WAS MADE IN THE SECOND YEAR AFTER THE PURCHASE WAS MADE AND THE CHARGE
WOULD BE $50.
- --------------------------------------------------------------------------------
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the fund's independent accountants. Shortly after the end of each
calendar year, the fund will furnish all shareholders with information necessary
for preparing federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS/DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the fund which at all times
shows the balance of shares owned. The fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Shares of the Fund may be exchanged for shares of one or more other funds in the
Eaton Vance Marathon Group of Funds (which includes Eaton Vance Equity-Income
Trust and any EV Marathon fund, except Eaton Vance Prime Rate Reserves) or Eaton
Vance Money Market Fund, which are distributed subject to a contingent deferred
sales charge, on the basis of the net asset value per share of each fund at the
time of the exchange, provided that such exchange offers are available only in
states where shares of the fund being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes
of calculating the contingent deferred sales charge upon the redemption of
shares acquired in an exchange, the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
shares acquired in one or more exchanges is deemed to have occurred at the time
of the original purchase of the exchanged shares. For the contingent deferred
sales charge schedule applicable to the Eaton Vance Marathon Group of Funds
(except EV Marathon Strategic Income Fund and Class I shares of any EV Marathon
Limited Maturity Fund), see "How to Redeem Fund Shares". The contingent deferred
sales charge schedule applicable to EV Marathon Strategic Income Fund and Class
I shares of any EV Marathon Limited Maturity Fund is 3%, 2.5%, 2% or 1% in the
event of a redemption occurring in the first, second, third or fourth year,
respectively, after the original share purchase.
Shares of the other funds in the Eaton Vance Marathon Group of Funds and
shares of Eaton Vance Money Market Fund may be exchanged for Fund shares on the
basis of the net asset value per share of each fund at the time of the exchange,
but subject to any restrictions or qualifications set forth in the current
prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone, provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such repurchase
or redemption. Shares are sold to a reinvesting shareholder at the net asset
value next determined following timely receipt of a written purchase order by
the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent). To
the extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS:Shares of the Fund are available for purchase in
connection with the following tax-sheltered retirement plans:
- -- Pension and Profit Sharing Plans for self-employed individuals, corporations
and non-profit organizations;
- -- Individual Retirement Account Plans for individuals and their non-employed
spouses; and
- -- 403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements of
the Internal Revenue Code of 1986, as amended (the "Code").
Detailed information concerning these plans, including certain exceptions
to minimum investment requirements, and copies of the plans are available from
the Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
It is the present policy of the Fund to pay at least quarterly dividends from
net investment income (when available) allocated to the Fund by the Portfolio,
less the Fund's direct and allocated expenses, and to distribute at least
annually any net capital gains realized (the Fund's realized net capital gains
consist of the net realized capital gains from the sale of portfolio securities
allocated to the Fund by the Portfolio).
Shareholders may reinvest dividends, if any, in shares of the Fund at the
current net asset value per share as of the ex-dividend date and may accumulate
capital gains distributions, if any, in additional shares also at the current
net asset value per share as of the ex-dividend date.
Distributions by the Fund of ordinary income and net short-term capital
gains allocated to the Fund by the Portfolio, will be taxable to the Fund's
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Shareholders reinvesting such distributions
should treat the amount of the entire distribution as the tax cost basis of the
additional shares acquired by reason of such reinvestment. Distributions of net
long-term capital gains are taxable to shareholders as such, whether received in
cash or reinvested in additional shares of the Fund, and regardless of the
length of time shares have been owned by shareholders. If shares are purchased
shortly before the record date of a distribution, the shareholder will pay the
full price for the shares and then receive some portion of the price back as a
taxable distribution. Certain distributions which are declared in October,
November or December and paid the following January will be reportable by
shareholders as if received on December 31 of the year in which they are
declared.
Shareholders will receive annually tax information notices and Forms 1099
to assist in the preparation of their Federal and state tax returns for the
prior calendar year's distributions, proceeds from the redemption or exchange of
Fund shares, and Federal income tax (if any) withheld by the Fund's Transfer
Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY FEDERAL
INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS ITS NET
INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE TIMING
REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE PORTFOLIO
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by computing the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (net asset value) for specified periods ending with the most recent
calendar quarter, assuming reinvestment of all distributions. The average annual
total return calculation assumes a complete redemption of the investment and the
deduction of any applicable contingent deferred sales charge at the end of the
period. The Fund may also publish annual and cumulative total return figures
from time to time.
The Fund may also publish total return figures which do not take into
account any contingent deferred sales charge which may be imposed upon
redemptions at the end of the specified period. Any performance figure which
does not take into account the contingent deferred sales charge would be reduced
to the extent such charge is imposed upon a redemption.
Investors should note that the investment results of the Fund will
fluctuate over time, and any presentation of the Fund's total return for any
prior period should not be considered as a representation of what an investment
may earn or what an investor's total return may be in any future period. If the
expenses of the Fund or the Portfolio are paid by Eaton Vance, the Fund's
performance will be higher.
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV MARATHON STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
EV MARATHON
STOCK
FUND
PROSPECTUS
APRIL 1, 1995
M-STP
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV TRADITIONAL STOCK FUND
SUPPLEMENT TO PROSPECTUS DATED APRIL 1, 1995
Effective August 1, 1995, EV Traditional Stock Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Securities Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Securities Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE SECURITIES TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
EV TRADITIONAL STOCK FUND
EV TRADITIONAL STOCK FUND (THE "FUND") IS A MUTUAL FUND SEEKING GROWTH OF
PRINCIPAL AND INCOME. THE FUND INVESTS ITS ASSETS IN STOCK PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME
INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND
MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL
FUNDS. THE FUND IS A SERIES OF EATON VANCE SECURITIES TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated April 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURI-
TIES 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 PROS-
PECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Redeem Fund Shares ..................... 12
The Fund's Financial Highlights ................... 3 Reports to Shareholders ....................... 13
The Fund's Investment Objective ................... 4 The Lifetime Investing Account/Distribution
How the Fund and the Portfolio Options ..................................... 13
Invest their Assets; Investment Risks ........... 4 The Eaton Vance Exchange Privilege ............ 14
Organization of the Fund and the Portfolio ........ 5 Eaton Vance Shareholder Services .............. 15
Management of the Fund and the Portfolio .......... 7 Distributions and Taxes ....................... 17
Service Plan ...................................... 9 Performance Information ....................... 18
Valuing Fund Shares ............................... 9 Statement of Intention and
How to Buy Fund Shares ........................... 10 Escrow Agreement ............................ 18
</TABLE>
- --------------------------------------------------------------------------------
PROSPECTUS DATED APRIL 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES\1/
- ------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price) 4.75%
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charges (on purchases of $1 million or more)
Imposed on Redemptions
During the First Eighteen Months (as a percentage of redemption proceeds
exclusive of all
reinvestments and capital appreciation in the account)\2/ 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee\3/ 0.625%
Rule 12b-1 Fees (Service Plan) 0.049%
Other Expenses 0.306%
-----
Total Operating Expenses 0.980%
=====
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
An investor would pay the following
expenses (including maximum initial
sales charge) on a $1,000 investment,
assuming (a) 5% annual return and (b)
redemption at the end of each time period: $57 $77 $99 $162
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to the per share expenses which the Fund would incur
if the Trust retained the services of an investment adviser and the assets
of the Fund were invested directly in the type of securities being held by
the Portfolio. The costs and expenses included in the table and Example are
based on the Fund's fiscal year ended December 31, 1994, and reflect the
Fund's current policy of investing its assets in the Portfolio. The Example
should not be considered a representation of past or future expenses, and
actual expenses may be greater or less than those shown. The Example assumes
a 5% annual return and the Fund's actual performance may result in an annual
return greater or less than 5%. For further information regarding the
expenses of both the Fund and the Portfolio see "The Fund's Financial
Highlights", "Organization of the Fund and the Portfolio", "Management of
the Fund and the Portfolio" and "How to Redeem Fund Shares".
\2/ If shares have been purchased at net asset value with no initial sales
charge by virtue of the purchase having been in the amount of $1 million or
more and are redeemed within 18 months after the end of the calendar month
in which the purchase was made, a contingent deferred sales charge of 1%
will be imposed on such redemption. See "How to Buy Fund Shares", "How to
Redeem Fund Shares" and "Eaton Vance Shareholder Services".
\3/ As of the close of business on August 1, 1994, the Fund transferred its
assets to the Portfolio in exchange for an interest in the Portfolio. Prior
to such date, the Fund retained Eaton Vance Management as its investment
adviser.
\4/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which has been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. The financial
highlights for each of the seven years in the period ended December 31, 1991,
presented here, were audited by other auditors, whose report dated January 21,
1992, expressed an unqualified opinion on such financial highlights. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------------------
1994 1993 1992 1991<F1> 1990<F1> 1989<F1> 1988<F1> 1987<F1> 1986<F1> 1985<F1>
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE --
Beginning of year ...... $12.490 $13.480 $14.030 $13.070 $14.710 $12.690 $12.240 $13.490 $14.680 $12.140
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income $ 0.250 $ 0.270<F2> $ 0.312 $ 0.449 $ 0.564 $ 0.525 $ 0.475 $ 0.456 $ 0.550 $ 0.550
Net realized and
unrealized gain
(loss) on
investments ........ (0.765) 0.270<F2> 0.658 2.191 (0.504) 3.035 1.325 (0.166) 1.480 3.080
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total income (loss)
from investment
operations ....... $ (0.515) $ 0.540 $ 0.970 $ 2.640 $ 0.060 $ 3.560 $ 1.800 $ 0.290 $ 2.030 $ 3.630
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment
income ............... $ (0.250) $ (0.270) $(0.320) $(0.460) $(0.630) $(0.500) $(0.450) $(0.490) $(0.580) $(0.590)
From net realized
gains on
investments ........ (0.765) (1.260) (1.200) (1.220) (1.070) (1.040) (0.900) (1.050) (2.640) (0.500)
In excess of net
realized gains ..... (0.060) -- -- -- -- -- -- -- -- --
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions $ (1.075) $ (1.530) $(1.520) $(1.680) $(1.700) $(1.540) $(1.350) $(1.540) $(3.220) $(1.090)
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE -- End
of year .............. $10.900 $12.490 $13.480 $14.030 $13.070 $14.710 $12.690 $12.240 $13.490 $14.680
======== ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN<F3> ....... (4.12%) 4.19% 6.93% 21.45% 0.59% 28.92% 15.01% 1.99% 15.43% 32.26%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
year (000's omitted).. $84,299 $97,513 $91,299 $91,844 $80,642 $89,809 $76,761 $74,219 $79,564 $79,303
Ratio of expenses to
average daily net
assets ............. 0.98%<F4> 0.96% 0.92% 0.94% 0.99% 0.90% 0.96% 0.95% 0.86% 0.86%
Ratio of net
investment income to
average daily net
assets ............. 2.09% 2.01% 2.29% 3.23% 4.02% 3.66% 3.64% 3.17% 3.83% 4.18%
PORTFOLIO TURNOVER<F5> .. 66% 105% 59% 42% 42% 14% 29% 26% 42% 70%
<FN>
<F1> Audited by previous auditors.
<F2> Computed on an average share basis.
<F3> Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Dividends and distributions, if any, are assumed to be
reinvested at the net asset value on the record date.
<F4> Includes the Fund's share of Stock Portfolio's allocated expenses for the
period from August 1, 1994, to December 31, 1994.
<F5> Portfolio turnover represents the rate of portfolio activity for the
period while the Fund was making investments directly in securities. The
portfolio turnover for the period since the Fund transferred its assets to
the Portfolio is shown in the Portfolio's financial statements which are
included in the Fund's annual report.
</FN>
</TABLE>
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
- ------------------------------------------------------------------------------
EV TRADITIONAL STOCK FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE GROWTH OF
PRINCIPAL AND INCOME FOR ITS SHAREHOLDERS. The Fund currently seeks to meet its
investment objective by investing its assets in the Stock Portfolio, a separate
registered investment company that invests in a number of carefully selected
securities. The emphasis is upon common stocks. The Fund's and the Portfolio's
investment objectives are nonfundamental and may be changed when authorized by a
vote of the Tustees of the Trust or the Portfolio, respectively, without
obtaining the approval of the Fund's shareholders or the investors in the
Portfolio, as the case may be. The Trustees of the Trust have no present
intention to change the Fund's objective and intend to submit any proposed
material change in the investment objective to shareholders in advance for their
approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR
ASSETS; INVESTMENT RISKS
- ------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN THE
PORTFOLIO. TO ACHIEVE THE PORTFOLIO'S OBJECTIVE, PRIMARY EMPHASIS WILL BE PLACED
ON COMMON STOCKS OF COMPANIES WHICH APPEAR TO OFFER GOOD PROSPECTS FOR INCREASES
IN BOTH EARNINGS AND DIVIDENDS. The Portfolio will invest primarily (i.e., at
least 65% of its total assets during normal investment conditions) in equity
securities (common and preferred stocks, and securities convertible into common
stocks). The Portfolio's investments in convertible debt securities will be
limited to 20% of net assets. The criteria for such investments are the same as
those used for the common stock of the issuer and accordingly, may be of any
credit quality (including below investment grade). The Portfolio purchases
securities primarily for investment, rather than with a view to realizing
trading profits. Nevertheless, portfolio changes are made whenever considered
advisable in the pursuit of the Portfolio's stated investment objective.
In seeking to achieve its investment objective, or to consolidate growth
previously attained, the Portfolio may from time to time purchase bonds, U.S.
Government obligations and other securities. Bonds will constitute 5% or less of
net assets and be investment grade at the time of investment (i.e., rated Baa or
higher by Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's
Ratings Group or, if unrated, determined to be of comparable quality by the
Portfolio's Investment Adviser). Convertible debt securities that are not
investment grade have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade debt
securities.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies.
For income purposes, the Portfolio may write (sell) covered exchange-traded
call options on portfolio securities with respect to 25% of its net assets. The
Portfolio may enter into closing transactions to realize gains or minimize
losses, if a liquid secondary market then exists. If exercised, the Portfolio
will be unable to realize further price appreciation on the underlying
securities and portfolio turnover will increase, resulting in higher brokerage
costs. Options writing is a highly specialized activity that involves skills
different from ordinary portfolio securities transactions.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. Investments in bonds are subject to the risk that the issuer may
default on its obligations to pay principal and interest. The value of bonds
tends to increase during periods of falling interest rates and to decline during
periods of rising interest rates. By investing in a diversified portfolio of
securities, the Portfolio seeks both to reduce the risks ordinarily inherent in
holding one security or securities of a single issuer and to improve the
prospects for possible growth by investing in a substantial number of prudently
selected securities. Attainment of the Portfolio's objective cannot, of course,
be assured since its asset value fluctuates with changes in the market value of
its investments and dividends paid depend upon income received by the Portfolio.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
or an investor vote, respectively. Except for such enumerated restrictions and
as otherwise indicated in this prospectus, the investment objective and policies
of the Fund and the Portfolio are not fundamental policies and accordingly may
be changed by the Trustees of the Trust and the Portfolio without obtaining the
approval of the Fund's shareholders or the investors in the Portfolio, as the
case may be. If any changes were made in the Fund's investment objective, the
Fund might have an investment objective different from the objective which an
investor considered appropriate at the time the investor became a shareholder of
the Fund.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND
PROSPECTIVE INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER
INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT
ELIMINATE RISK OR ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SECURITIES TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 19, 1990, AS AMENDED, AND IS THE SUCCESSOR TO A MASSACHUSETTS
TRUST WHICH COMMENCED ITS INVESTMENT COMPANY OPERATIONS IN 1931. THE TRUST IS A
MUTUAL FUND -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the
Trust are responsible for the overall management and supervision of its affairs.
The Trust may issue an unlimited number of shares of beneficial interest (no par
value per share) in one or more series and because the Trust can offer separate
series (such as the Fund) it is known as a "series company." Each share
represents an equal proportionate beneficial interest in the Fund. When issued
and outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Investment
Risks". Further information regarding investment practices may be found in the
Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund. The
public shareholders of the Fund have previously approved the policy of investing
the Fund's assets in an interest in the Portfolio.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. In the event the Fund withdraws all of its assets
from the Portfolio, or the Board of Trustees of the Trust determines that the
investment objective of the Portfolio is no longer consistent with the
investment objective of the Fund, such Trustees would consider what action might
be taken, including investing the assets of the Fund in another pooled
investment entity or retaining an investment adviser to manage the Fund's assets
in accordance with its investment objective. The Fund's investment performance
may be affected by a withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the average daily
net assets of the Portfolio. For the period from the start of business, August
1, 1994, to December 31, 1994, the Portfolio paid BMR advisory fees equivalent
to 0.625% (annualized) of the Portfolio's average daily net assets for such
period. Prior to the close of business on August 1, 1994 (when the Fund
transferred its assets to the Portfolio in exchange for an interest in the
Portfolio), the Fund retained Eaton Vance as its investment adviser. For the
period from January 1, 1994, to August 1, 1994, the Fund paid Eaton Vance
advisory fees equivalent to 0.625% (annualized) of the Fund's average daily net
assets for such period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio. BMR places the portfolio transactions of the
Portfolio for execution with many broker-dealer firms and uses its best efforts
to obtain execution of such transactions at prices which are advantageous to the
Portfolio and at reasonably competitive commission rates. Subject to the
foregoing, BMR may consider sales of shares of the Fund or of other investment
companies sponsored by BMR or Eaton Vance as a factor in the selection of
broker-dealer firms to execute portfolio transactions.
Duncan W. Richardson has acted as the portfolio manager of the Portfolio
since it commenced operations. He has been a Vice President of Eaton Vance since
1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certficates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and the
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Portfolio and the Fund will also each bear
expenses incurred in connection with litigation in which the Portfolio or the
Fund, as the case may be, is a party and any legal obligation to indemnify its
respective officers and Trustees with respect thereto.
SERVICE PLAN
- ------------------------------------------------------------------------------
In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the requirements of
Rule 12b-1 under the Investment Company Act of 1940 and the service fee
requirements of the revised sales charge rule of the National Association of
Securities Dealers, Inc. THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE
PAYMENTS FOR PERSONAL SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO
THE PRINCIPAL UNDERWRITER, FINANCIAL SERVICE FIRMS ("AUTHORIZED FIRMS") AND
OTHER PERSONS IN AMOUNTS NOT EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET
ASSETS FOR ANY FISCAL YEAR. The Trustees of the Trust have implemented the Plan
by authorizing the Fund to make quarterly service fee payments to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed .25% of that
portion of the Fund's average daily net assets for any fiscal year which is
attributable to shares of the Fund sold on or after January 2, 1991 and
remaining outstanding for at least twelve months. During the fiscal year ended
December 31, 1994, the Fund made payments under the Plan equivalent to .049% of
the Fund's average daily net assets for such year. The Plan is described further
in the Statement of Additional Information.
VALUING FUND SHARES
- ------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share and the public offering price
based thereon. It is the Authorized Firms' responsibility to transmit orders
promptly to the Principal Underwriter, which is a wholly-owned subsidiary of
Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at closing sale prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- ------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firms and the Principal Underwriter. The Principal Underwriter will furnish the
names of Authorized Firms to an investor upon request. The Fund may suspend the
offering of shares at any time and may refuse an order for the purchase of
shares.
The sales charge may vary depending on the size of the purchase and the
number of shares of Eaton Vance funds the investor may already own, any
arrangement to purchase additional shares during a 13-month period or special
purchase programs. Complete details of how investors may purchase shares at
reduced sales charges under a Statement of Intention, Right of Accumulation, or
various employee benefit plans are available from Authorized Firms or the
Principal Underwriter.
The current sales charges are:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER DISCOUNT
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT INVESTED OFFERING PRICE OFFERING PRICE
AMOUNT OF PURCHASE --------------- -------------- --------------
<S> <C> <C> <C> <C>
Less than $100,000 .............................................. 4.99% 4.75% 4.00%
$100,000 but less than $250,000 ................................. 3.90 3.75 3.15
$250,000 but less than $500,000 ................................. 2.83 2.75 2.30
$500,000 but less than $1,000,000 ............................... 2.04 2.00 1.70
$1,000,000 or more .............................................. 0<F1> 0<F1> 0<F2>
<FN>
<F1> No sales charge is payable at the time of purchase on investments of $1
million or more. A contingent deferred sales charge ("CDSC") of 1% will be
imposed on such investments, as described below, in the event of certain
redemption transactions within 18 months of purchase.
<F2> The Principal Underwriter may pay a commission to Authorized Firms who
initiate and are responsible for purchases of $1 million or more as
follows: 1.00% on sales up to $2 million, plus 0.80% on the next $1
million, 0.20% on the next $2 million, and 0.08% on the excess over $5
million.
</FN>
</TABLE>
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge, such
Firms may be deemed to be underwriters as that term is defined in the Securities
Act of 1933. The Principal Underwriter may, from time to time, at its own
expense, provide additional incentives to Authorized Firms which employ
registered representatives who sell a minimum dollar amount of the Fund's shares
and/or shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
Shares of the Fund may be sold at net asset value to current and retired
Directors and Trustees of Eaton Vance funds, including the Portfolio; to
officers and employees and clients of Eaton Vance and its affiliates; to
registered representatives and employees of Authorized Firms and bank employees
who refer customers to registered representatives of Authorized Firms; and to
such persons' spouses and children under the age of 21 and their beneficial
accounts. Shares may also be issued at net asset value (1) in connection with
the merger of an investment company with the Fund, (2) to investors making an
investment as part of a fixed fee program whereby an entity unaffiliated with
the Investment Adviser provides multiple investment services, such as
management, brokerage and custody and (3) where the amount invested represents
redemption proceeds from a mutual fund unaffiliated with Eaton Vance, if the
redemption occurred no more than 60 days prior to the purchase of Fund shares
and the redeemed shares were subject to a sales charge.
No initial sales charge and no contingent deferred sales charge will be
payable or imposed with respect to shares of the Fund purchased by retirement
plans qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of
1986, as amended (the "Code") ("Eligible Plans"). In order to purchase shares
without a sales charge, the plan sponsor of an Eligible Plan must notify the
Transfer Agent of the Fund of its status as an Eligible Plan. Participant
accounting services (including trust fund reconciliation services) will be
offered only through third party recordkeepers and not by EVD. The Fund's
Principal Underwriter may pay commissions to Authorized Firms who initiate and
are responsible for purchases of shares of the Fund by Eligible Plans of up to
1.00% of the amount invested in such shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at the applicable public offering price as shown above. The minimum
value of securities (or securities and cash) accepted for deposit is $5,000.
Securities accepted will be sold by IBT as agent for the account of their owner
on the day of their receipt by IBT or as soon thereafter as possible. The number
of Fund shares to be issued in exchange for securities will be the aggregate
proceeds from the sale of such securities, divided by the applicable public
offering price per Fund share on the day such proceeds are received. Eaton Vance
will use reasonable efforts to obtain the then current market price for such
securities but does not guarantee the best available price. Eaton Vance will
absorb any transaction costs, such as commissions, on the sale of the
securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional Stock Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Stock Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- ------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per Fund share next computed after such delivery. Good order
means that all relevant documents must be endorsed by the record owner (s)
exactly as the shares are registered and the signature(s) must be guaranteed by
a member of either the Securities Transfer Association's STAMP program or the
New York Stock Exchange's Medallion Signature Program, or certain banks, savings
and loan institutions, credit unions, securities dealers, securities exchanges,
clearing agencies and registered securities associations as required by a
regulation of the Securities and Exchange Commission (the "Commission") and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares.
Contingent Deferred Sales Charge. If shares have been purchased at net asset
value with no initial sales charge by virtue of the purchase having been in the
amount of $1 million or more and are redeemed within 18 months after the end of
the calendar month in which the purchase was made, a CDSC of 1% will be imposed
on such redemption. The CDSC will be retained by the Principal Underwriter. The
CDSC will be imposed on an amount equal to the lesser of the current market
value or the original purchase price of the shares redeemed. Accordingly, no
CDSC will be imposed on increases in account value above the initial purchase
price, including any distributions that have been reinvested in additional
shares. In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate
being charged. Accordingly, it will be assumed that redemptions are made first
from any shares in the shareholder's account that are not subject to a CDSC. The
CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds within the 30-day period and in accordance with
the conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
Each time a transaction takes place in a shareholder's account, the
shareholder will receive a statement showing complete details of the transaction
and the current balance in the account. (Under certain investment plans,
statements may be sent only quarterly). THE LIFETIME INVESTING ACCOUNT ALSO
PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A
CHECK FOR $50 OR MORE to The Shareholder Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, Massachusetts 02104. (Please provide the name of the
shareholder, the Fund and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend-disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each confirmation statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash; and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option, will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of any of the following
funds: Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston,
Eaton Vance Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund
in the Eaton Vance Traditional Group of Funds on the basis of net asset value
per share of each fund at the time of the exchange, provided that such exchange
offers are available only in states where shares of the fund being acquired may
be legally sold.
Each exchange must involve shares which have a net asset value of $1,000.
The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of
the above funds without incurring the CDSC. The shares acquired in an exchange
may be subject to a CDSC upon redemption. For purposes of computing the CDSC
payable upon the redemption of shares acquired in an exchange, the holding
period of the original shares is added to the holding period of the shares
acquired in the exchange.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of the other funds are available from Authorized Firms or the
Principal Underwriter The prospectus for each fund describes its investment
objectives and policies, and shareholders should obtain a prospectus and
consider these objectives and policies carefully before requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment
adviser or administrator may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange (plus, in the
case of an exchange made within six months of the date of purchase, an amount
equal to the difference, if any, between the sales charge previously paid on the
shares being exchanged and the sales charge payable on the Fund shares being
acquired). Any such exchange is subject to any restrictions or qualifications
set forth in the current prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone; provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "Statement of Intention and
Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $100,000 or more. Shares of the Eaton Vance funds mentioned
below under "The Eaton Vance Exchange Privilege" may be combined under the
Statement of Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in the amount specified by the shareholder. A
minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST ANY PORTION OR ALL OF THE REPURCHASE OR REDEMPTION PROCEEDS (PLUS THAT
AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO ROUND OFF THE PURCHASE TO THE
NEAREST FULL SHARE) IN SHARES OF THE FUND, or, provided that the shares
repurchased or redeemed have been held for at least 30 days, in shares of any of
the other funds offered by the Principal Underwriter subject to an initial sales
charge, at net asset value, provided that the reinvestment is effected within 30
days after such repurchase or redemption. Shares are sold to a reinvesting
shareholder at the next determined net asset value following timely receipt of a
written purchase order by the Principal Underwriter or by the fund whose shares
are to be purchased (or by such fund's transfer agent). The privilege is also
available to holders of shares of the other funds offered subject to an initial
sales charge by the Principal Underwriter who wish to reinvest such redemption
or repurchase proceeds in shares of the Fund. If a shareholder reinvests
redemption proceeds within the 30-day period the shareholder's account will be
credited with the amount of any CDSC paid on such redeemed shares. To the extent
that any shares of the Fund are sold at a loss and the proceeds are reinvested
in shares of the Fund (or other shares of the Fund are acquired within the
period beginning 30 days before and ending 30 days after the date of the
redemption) some or all of the loss generally will not be allowed as a tax
deduction. Special rules may apply to the computation of gain or loss and to the
deduction of loss on a repurchase or redemption followed by a reinvestment. See
"Distributions and Taxes". Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase in
connection with the following tax-sheltered retirement plans:
--Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
--Individual Retirement Account Plans for individuals and their non-
employed spouses; and
--403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
It is the present policy of the Fund to pay at least quarterly dividends
from net investment income (when available) allocated to the Fund by the
Portfolio, less the Fund's direct and allocated expenses, and to distribute at
least annually any realized net capital gains (the Fund's realized net capital
gains generally consist of the net realized capital gains from the sale of
portfolio securities allocated to the Fund by the Portfolio).
Shareholders may reinvest dividends, if any, in shares of the Fund at the
current net asset value per share as of the ex-dividend date and may accumulate
capital gains distributions, if any, in additional shares of the Fund also at
the current net asset value per share as of the ex-dividend date.
Distributions by the Fund of ordinary income and net short-term capital
gains allocated to the Fund by the Portfolio, will be taxable to the Fund's
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Shareholders reinvesting such distributions
should treat the amount of the entire distribution as the tax cost basis of the
additional shares acquired by reason of such reinvestment. Distributions of net
long-term capital gains are taxable to shareholders as such, whether received in
cash or reinvested in additional shares of the Fund, and regardless of the
length of time shares have been owned by shareholders. If shares are purchased
shortly before the record date of a distribution, the shareholder will pay the
full price for the shares and then receive some portion of the price back as a
taxable distribution. Certain distributions which are declared in October,
November or December and paid the following January will be reportable by
shareholders as if received on December 31 of the year in which they are
declared.
Sales charges paid upon a purchase of shares of the Fund cannot be taken
into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
shares of the Fund or of another fund are subsequently acquired pursuant to the
Fund's reinvestment or exchange privilege. In addition, losses realized on a
redemption of Fund shares may be disallowed under certain "wash sale" rules if
within a period beginning 30 days before and ending 30 days after the date of
redemption other shares of the Fund are acquired. Any disregarded or disallowed
amounts will result in an adjustment to the shareholder's tax basis in some or
all of any other shares acquired.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A
PARTNERSHIP UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR
EXCISE TAXES.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN. The
Fund's average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compounded rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes the maximum sales charge is deducted from the initial $1,000
purchase order and that all dividends and distributions are reinvested at net
asset value on the reinvestment dates during the period. The Fund may also
publish annual and cumulative total return figures from time to time.
The Fund may also furnish total return calculations based on investments at
various sales charge levels or at net asset value. Any performance data which is
based on the Fund's net asset value per share would be reduced if a sales charge
were taken into account.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's total return for any prior period
should not be considered as a representation of what an investment may earn or
what an investor's total return may be in any future period.
STATEMENT OF INTENTION AND ESCROW AGREEMENT
- ------------------------------------------------------------------------------
TERMS OF ESCROW. If the investor, on an application, makes a Statement of
Intention to invest a specified amount over a thirteen-month period, then out of
the initial purchase (or subsequent purchases if necessary) 5% of the dollar
amount specified on the application shall be held in escrow by the escrow agent
in the form of shares (computed to the nearest full share at the public offering
price applicable to the initial purchase hereunder) registered in the investor's
name. All income dividends and capital gains distributions on escrowed shares
will be paid to the investor or to the investor's order.
When the minimum investment so specified is completed, the escrowed shares
will be delivered to the investor. If the investor has an accumulation account
the shares will remain on deposit under the investor's account.
If total purchases under this Statement of Intention are less than the
amount specified, the investor will promptly remit to EVD any difference between
the sales charge on the amount specified and on the amount actually purchased.
If the investor does not within 20 days after written request by EVD or the
Authorized Firm pay such difference in sales charge, the escrow agent will
redeem an appropriate number of the escrowed shares in order to realize such
difference. Full shares remaining after any such redemption together with any
excess cash proceeds of the shares so redeemed will be delivered to the investor
or to the investor's order by the escrow agent.
In signing the application, the investor irrevocably constitutes and
appoints the escrow agent the investor's attorney to surrender for redemption
any or all escrowed shares with full power of substitution in the premises.
PROVISION FOR RETROACTIVE PRICE ADJUSTMENT. If total purchases made under this
Statement are large enough to qualify for a lower sales charge than that
applicable to the amount specified, all transactions will be computed at the
expiration date of this Statement to give effect to the lower charge. Any
difference in sales charge will be refunded to the investor in cash, or applied
to the purchase of additional shares at the lower charge if specified by the
investor. This refund will be made by the Authorized Firm and by EVD. If at the
time of the recomputation a firm other than the original firm is placing the
orders, the adjustment will be made only on those shares purchased through the
firm then handling the account.
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-STP
EV TRADITIONAL
STOCK FUND
PROSPECTUS
APRIL 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC TOTAL RETURN FUND
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1995
Effective August 1, 1995, EV Classic Total Return Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Total Return Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Total Return Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE TOTAL RETURN TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
Part A
Information Required in a Prospectus
EV CLASSIC TOTAL RETURN FUND
EV Classic Total Return Fund (the "Fund") is a mutual fund seeking high
total return from relatively predictable income in conjunction with capital
appreciation, consistent with prudent management and preservation of capital.
The Fund invests its assets in Total Return Portfolio (the "Portfolio"), a
diversified open-end investment company having the same investment objective as
the Fund, rather than by directly investing in and managing its own portfolio of
securities as with historically structured mutual funds. The Fund is a series of
Eaton Vance Total Return Trust (the "Trust").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated May 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURI-
TIES 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 PROS-
PECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Page Page
Shareholder and Fund Expenses ...................... 2 How to Buy Fund Shares ......................... 14
The Fund's Financial Highlights .................... 3 How to Redeem Fund Shares ...................... 15
The Fund's Investment Objective .................... 4 Reports to Shareholders ........................ 17
How the Fund and the Portfolio Invest The Lifetime Investing Account/Distribution
their Assets; Investment Risks ................... 4 Options ...................................... 17
Organization of the Fund and the Portfolio ......... 8 The Eaton Vance Exchange Privilege ............. 18
Management of the Fund and the Portfolio ........... 10 Eaton Vance Shareholder Services ............... 19
Distribution Plan .................................. 11 Distributions and Taxes ........................ 20
Valuing Fund Shares ................................ 13 Performance Information ........................ 21
</TABLE>
- --------------------------------------------------------------------------------
Prospectus dated May 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES\1/
- ------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Contingent Deferred Sales Charges Imposed on Redemptions
During the First Year (as a percentage of redemption
proceeds exclusive of all reinvestments and capital
appreciation in the account)\2/ 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.74%
Rule 12b-1 Distribution (and Service) Fees 1.00%
Other Expenses (after expense reduction)\3/ 0.92%
-----
Total Operating Expenses (after expense reduction)\3/ 2.66%
=====
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
An investor would pay the following
expenses (including a contingent
deferred sales charge in the case
of redemption during the first year
after purchase) on a $1,000 investment,
assuming (a) 5% annual return and (b)
redemption at the end of each time period: $37 $83 $141 $299
An investor would pay the following
expenses on the same investment,
assuming (a) 5% return and (b) no
redemptions: $27 $83 $141 $299
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to or less than the per share expenses which the Fund
would incur if the Trust retained the services of an investment adviser and
the assets of the Fund were invested directly in the type of securities
being held by the Portfolio. The percentages indicated as Annual Fund and
Allocated Portfolio Operating Expenses in the table and the amounts included
in the Example are based on the Fund's and the Portfolio's results for the
fiscal year ended December 31, 1994. The Example should not be considered a
representation of past or future expenses and actual expenses may be greater
or less than those shown. The Example assumes a 5% annual return, and the
Fund's actual performance may result in an annual return greater or less
than 5%. For further information regarding the expenses of both the Fund and
the Portfolio see "The Fund's Financial Highlights," "Organization of the
Fund and the Portfolio," "Management of the Fund and the Portfolio" and "How
to Redeem Fund Shares." Because the Fund makes payments under its
Distribution Plan adopted under Rule 12b-1, a long-term shareholder may pay
more than the economic equivalent of the maximum front-end sales charge
permitted by a rule of the National Association of Securities Dealers, Inc.
See "Distribution Plan."
\2/ The contingent deferred sales charge is imposed on the redemption of shares
purchased on or after January 30, 1995. No contingent deferred sales charge
is imposed on (a) shares purchased more than one year prior to redemption,
(b) shares acquired through the reinvestment of distributions or (c) any
appreciation in value of other shares in the account (see "How to Redeem
Fund Shares"), and no such charge is imposed on exchanges of Fund shares for
shares of one or more other funds listed under "The Eaton Vance Exchange
Privilege."
\3/ Absent an allocation of expenses to the Administrator, Other Expenses would
have been 1.96%, and Total Operating Expenses would have been 3.70%.
\4/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which have been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
1994 1993*
---- -----
NET ASSET VALUE -- Beginning of period $10.0300 $10.0000
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income $ 0.3167 $ 0.0253
Net realized and unrealized gain/(loss)
on investments (1.6077) 0.0577
-------- --------
Total income/(loss) from investment
operations $(1.2910) $ 0.0830
-------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income $(0.3013) $(0.0253)
Tax return of capital (0.0577) (0.0277)
-------- --------
Total distributions $(0.3590) $(0.0530)
-------- --------
NET ASSET VALUE -- End of period $ 8.3800 $10.0300
======== ========
TOTAL RETURN\1/ (12.98%) 0.83%
RATIOS/SUPPLEMENTAL DATA (to average daily
net assets):**
Expenses\2/ 2.66% 0.83%+
Net investment income 3.32% 2.56%+
NET ASSETS AT END OF PERIOD (000's omitted) $ 5,589 $ 3,461
- ----------
+Computed on an annualized basis.
*For the period from the start of business, November 1, 1993, to December 31,
1993.
**The expenses related to the operation of the Fund reflect an allocation of
expenses to the Administrator. Had such action not been taken, the ratios
would have been as follows:
Ratios (to average daily net assets)
Expenses 3.70% 2.22%+
Net investment income 2.29% 1.17%+
\1/ Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the record date.
\2/ Includes the Fund's share of Total Return Portfolio's allocated expenses for
the year ended December 31, 1994 and for the period from the Fund's start of
business, November 1, 1993, to December 31, 1993.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
EV CLASSIC TOTAL RETURN FUND'S INVESTMENT OBJECTIVE IS TO SEEK FOR ITS
SHAREHOLDERS A HIGH LEVEL OF TOTAL RETURN, CONSISTING OF RELATIVELY PREDICTABLE
INCOME IN CONJUNCTION WITH CAPITAL APPRECIATION, CONSISTENT WITH PRUDENT
MANAGEMENT AND PRESERVATION OF CAPITAL. The Fund currently seeks to meet its
investment objective by investing its assets in the Total Return Portfolio, a
separate registered investment company which has the same investment objective
as the Fund. The Fund's and the Portfolio's investment objectives are
nonfundamental and may be changed when authorized by a vote of the Trustees of
the Trust or the Portfolio, respectively, without obtaining the approval of the
Fund's shareholders or the investors in the Portfolio, as the case may be. The
Trustees of the Trust have no present intention to change the Fund's objective
and intend to submit any proposed material change in the investment objective to
shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS; INVESTMENT RISKS
- ------------------------------------------------------------------------------
THE PORTFOLIO SEEKS TO ACHIEVE ITS OBJECTIVE BY INVESTING PRINCIPALLY IN
DIVIDEND-PAYING COMMON STOCKS WITH THE POTENTIAL TO INCREASE DIVIDENDS IN THE
FUTURE. The Portfolio concentrates its investments in common stocks of public
utilities ("utility stocks"), principally electric, gas and telephone companies.
Accordingly, the Portfolio invests at least 25% of its total assets, and may
invest up to 100% of its total assets, in utility stocks. The Portfolio may also
invest in preferred stocks and may hold non-income-producing securities.
The Portfolio may from time to time invest in fixed-income debt securities
when the Portfolio's investment adviser ("BMR" or the "Investment Adviser")
believes that their total return potential is consistent with the Fund's
objective. The Portfolio may invest its cash reserves in high quality money
market securities, which include securities of the U.S. Government and its
agencies or instrumentalities maturing in one year or less, commercial paper,
and bankers' acceptances and certificates of deposit of domestic banks or
savings and loan associations having total assets of $1 billion or more. The
Portfolio may also invest in longer-term debt securities that at the time of
purchase are rated Aaa, Aa or A by Moody's Investors Service, Inc. ("Moody's"),
or AAA, AA or A by Standard & Poor's Ratings Group ("S&P"), Fitch Investors
Service, Inc. ("Fitch") or Duff & Phelps, Inc. ("Duff"), or that at the time of
purchase are issued, guaranteed, backed or secured by the U.S. government or any
of its agencies or instrumentalities. The Portfolio currently intends to limit
its investments in fixed-income debt securities to 20% or less of its net
assets. Subject to such limitation, the Portfolio may invest up to 10% of its
net assets in fixed-income debt securities that at the time of purchase are
rated investment grade (i.e., rated Baa or higher by Moody's, or BBB or higher
by S&P, Fitch or Duff) or below investment grade. Debt securities rated below
Baa or BBB are commonly known as "junk bonds".
In view of the Portfolio's policy of concentrating its investments in
utility stocks, an investment in shares of the Fund should be made with an
understanding of the characteristics of the public utility industry and the
potential risks of such an investment. Industry-wide problems include the
effects of fluctuating economic conditions, energy conservation practices,
environmental regulations, high capital expenditures, construction delays due to
pollution control and environmental considerations, uncertainties as to fuel
availability and costs, increased competition in deregulated sectors of the
industry, and difficulties in obtaining timely and adequate rate relief from
regulatory commissions. If applications for rate increases are not granted or
are not acted upon promptly, the market prices of and dividend payments on
utility stocks may be adversely affected. The Portfolio's policy of
concentrating in utility stocks is a fundamental policy and may not be changed
unless authorized by an investor vote. The Fund has a similar fundamental policy
which cannot be changed unless authorized by a shareholder vote.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies, foreign currency futures and options, and
forward foreign currency exchange contracts.
The Portfolio may invest a significant portion of its assets in the
securities of real estate investment trusts ("REITs"), which are affected by
conditions in the real estate industry, interest rate changes and, in the case
of REITs investing in health care facilities, events affecting the health care
industry.
The Portfolio may also enter into repurchase agreements with respect to
securities of the U.S. Government and its agencies or instrumentalities with the
seller of such securities, usually a bank. Under a repurchase agreement, the
seller agrees to repurchase the securities at the Portfolio's cost plus interest
within a specified time (normally one day). Repurchase agreements involve a risk
that the value of the securities subject to the repurchase agreement may decline
to an amount less than the repurchase price and that, in the event of the
seller's bankruptcy or insolvency, the Portfolio may be prevented from disposing
of such securities. The Portfolio will comply with the collateralization
policies of the Securities and Exchange Commission (the "Commission"), which
policies require that the Portfolio or its custodian obtain actual or
constructive possession of the collateral and that the market value of the
securities held as collateral be marked to the market daily and at least equal
the repurchase price during the term of the agreement. The Portfolio intends
that the total of its investments, if any, in repurchase agreements maturing in
more than 7 days and other illiquid securities will not exceed 15% of its net
assets.
DERIVATIVE INSTRUMENTS. The Portfolio may purchase or sell derivative
instruments (which are instruments that derive their value from another
instrument, security, index or currency) to enhance return, to hedge against
fluctuations in securities prices, interest rates or currency exchange rates, or
as a substitute for the purchase or sale of securities or currencies. The
Portfolio's transactions in derivative instruments may include the purchase or
sale of futures contracts on securities (such as U.S. Government securities),
securities indices, other indices, other financial instruments or currencies;
options on futures contracts; exchange-traded options on securities, indices or
currencies; and forward foreign currency exchange contracts. The Portfolio's
transactions in derivative instruments involve a risk of loss or depreciation
due to unanticipated adverse changes in securities prices, interest rates, the
other financial instruments' prices or currency exchange rates, the inability to
close out a position or default by the counterparty. The loss on derivative
instruments (other than purchased options) may exceed the Portfolio's initial
investment in these instruments. In addition, the Portfolio may lose the entire
premium paid for purchased options that expire before they can be profitably
exercised by the Portfolio. The Portfolio incurs transaction costs in opening
and closing positions in derivative instruments. There can be no assurance that
the Investment Adviser's use of derivative instruments will be advantageous to
the Portfolio.
The Portfolio may write (sell) covered call and put options on securities,
currencies and indices with respect to up to 50% of its net assets, as measured
by the aggregate value of the securities underlying such written call and put
options. If a written covered call option is exercised, the Portfolio will be
unable to realize further price appreciation on the underlying securities and
portfolio turnover will increase, resulting in higher brokerage costs. The
Portfolio may purchase call and put options on any securities in which the
Portfolio may invest or options on any securities index composed of securities
in which the Portfolio may invest. The Portfolio does not intend to purchase an
option on any security if, after such transaction, more than 5% of its net
assets, as measured by the aggregate of all premiums paid for all such options
held by the Portfolio, would be so invested.
To the extent that the Portfolio enters into futures contracts, options on
futures contracts and options on foreign currencies traded on an exchange
regulated by the Commodity Futures Trading Commission ("CFTC"), in each case
that are not for bona fide hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums required to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into.
Forward contracts are individually negotiated and privately traded by
currency traders and their customers. A forward contract involves an obligation
to purchase or sell a specific currency (or basket of currencies) for an agreed
price at a future date, which may be any fixed number of days from the date of
the contract. The Portfolio may engage in cross-hedging by using forward
contracts in one currency (or basket of currencies) to hedge against
fluctuations in the value of securities denominated in a different currency if
the Investment Adviser determines that there is an established historical
pattern of correlation between the two currencies (or the basket of currencies
and the underlying currency). Use of a different foreign currency magnifies the
Portfolio's exposure to foreign currency exchange rate fluctuations. The
Portfolio may also use forward contracts to shift its exposure to foreign
currency exchange rate changes from one currency to another.
LEVERAGE THROUGH BORROWING. The Portfolio may from time to time increase its
ownership of portfolio securities above the amounts otherwise possible by
borrowing from banks on an unsecured basis at fixed or variable rates of
interest and investing the borrowed funds. The Investment Adviser currently
anticipates that the Portfolio will incur borrowings for the purpose of
acquiring additional income-producing securities when it is believed that the
interest payable with respect to such borrowings will be exceeded by (a) the
income payable on the securities acquired with such borrowings or (b) the
anticipated total return (a combination of income and appreciation) on such
securities. Such borrowings might be made, for example, when short-term interest
rates fall below the yields available from the securities acquired with the
borrowed funds or the total return anticipated from such securities.
The Portfolio is required to maintain asset coverage of at least 300% with
respect to such borrowings, which means that the Portfolio may borrow an amount
up to 50% of the value of its net assets (not including such borrowings). The
Portfolio may be required to dispose of securities held by it on unfavorable
terms if market fluctuations or other factors reduce such asset coverage to less
than 300%.
Leveraging will exaggerate any increase or decrease in the market value of
the securities held by the Portfolio. Money borrowed for leveraging will be
subject to interest costs which may or may not exceed the income from the
securities purchased. The Portfolio may also be required to maintain minimum
average balances in connection with such borrowing or to pay a commitment or
other fee to maintain a line of credit; either of these requirements will
increase the cost of borrowing over the stated interest rate. Unless the income
and appreciation, if any, on assets acquired with borrowed funds exceeds the
cost of borrowing, the use of leverage will diminish the investment performance
of the Portfolio compared with what it would have been without leverage.
The Portfolio will not always borrow money for additional investments. The
Portfolio's willingness to borrow money for investment purposes, and the amount
it will borrow, will depend on many factors, the most important of which are the
investment outlook, market conditions and interest rates. Successful use of a
leveraging strategy depends on the Investment Adviser's ability to predict
correctly interest rates and market movements, and there is no assurance that a
leverage strategy will be successful during any period in which it is employed.
The average daily loan balance for the fiscal year ended December 31, 1994 was
$3,137,134 and the average daily interest rate was 5.96%.
LENDING OF SECURITIES. The Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Commission, such loans would be required to
be secured continuously by collateral in cash, cash equivalents or U.S.
Government securities held by the Portfolio's custodian and maintained on a
current basis at an amount at least equal to the market value of the securities
loaned which will be marked to market daily. The Portfolio would have the right
to call a loan and obtain the securities loaned at any time on five business
days' notice. During the existence of a loan, the Portfolio will continue to
receive the equivalent of the interest or dividends paid by the issuer on the
securities loaned and will also receive a fee, or all or a portion of the
interest on investment of the collateral, if any. However, the Portfolio may pay
lending fees to such borrowers. The Portfolio would not 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 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 securities loaned if
the borrower of the securities fails financially. However, the loans would be
made only to organizations deemed by the Portfolio's management to be of good
standing and, when, in the judgment of the Portfolio's management, the
consideration which can be earned from securities loans of this type justifies
the attendant risk. If the management of the Portfolio decides to make
securities loans, it is intended that the value of the securities loaned would
not exceed 30% of the Portfolio's total assets.
INVESTMENT RESTRICTIONS. The Fund and the Portfolio have adopted certain
fundmental investment restrictions which are enumerated in detail in the
Statement of Additional Information and which may not be changed unless
authorized by a shareholder vote and an investor vote, respectively. Except for
such enumerated restrictions and as otherwise indicated in this prospectus, the
investment objective and policies of the Fund and the Portfolio are not
fundamental policies and accordingly may be changed by the Trustees of the Trust
and the Portfolio without obtaining the approval of the Fund's shareholders or
the investors in the Portfolio, as the case may be. If any changes were made in
the Fund's investment objective, the Fund might have an investment objective
different from the objective which an investor considered appropriate at the
time the investor became a shareholder of the Fund.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. The lowest investment grade, lower rated and comparable unrated debt
securities in which the Portfolio may invest will have speculative
characteristics in varying degrees. While such securities may have some quality
and protective characteristics, these characteristics can be expected to be
offset or outweighed by uncertainties or major risk exposures to adverse
conditions. Lower rated and comparable unrated securities are subject to the
risk of an issuer's inability to meet principal and interest payments on the
securities (credit risk) and may also be subject to price volatility due to such
factors as interest rate sensitivity, market perception of the creditworthiness
of the issuer and general market liquidity (market risk). Lower rated and
comparable unrated securities are also more likely to react to real or perceived
developments affecting markets and credit risk than are more highly rated
securities, which react primarily to movements in the general level of interest
rates. The Portfolio may retain defaulted securities in its portfolio when such
retention is considered desirable by the Investment Adviser. In the case of a
defaulted security, the Portfolio may incur additional expense seeking recovery
of its investment. In the event the rating of a security held by the Portfolio
is downgraded, the Investment Adviser will consider disposing of such security,
but is not obligated to do so.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND PROSPECTIVE
INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER INVESTMENTS WHEN
CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT ELIMINATE RISK OR
ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
- ------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE TOTAL RETURN TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 9, 1981, AS AMENDED AND RESTATED. THE TRUST IS A MUTUAL FUND -- AN
OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series, and because the Trust can offer separate series
(such as the Fund) it is known as a series company. Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions of the Fund and the
Portfolio, see "The Fund's Investment Objective" and "How the Fund and the
Portfolio Invest their Assets; Investment Risks". Further information regarding
investment practices may be found in the Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $500 million.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objective or policies of the Fund, those shares may
be subject to a contingent deferred sales charge, as described in "How to Redeem
Fund Shares". In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Trust determines that the investment
objective of the Portfolio is no longer consistent with the investment objective
of the Fund, such Trustees would consider what action might be taken, including
investing the assets of the Fund in another pooled investment entity or
retaining an investment adviser to manage the Fund's assets in accordance with
its investment objective. The Fund's investment performance may be affected by a
withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the non-interested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take action to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- --------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of .0625% (equivalent to .75% annually) of the average daily net
assets of the Portfolio up to $500 million. On net assets of $500 million and
over the annual fee is reduced as follows:
ANNUALIZED FEE RATE
AVERAGE DAILY NET ASSETS FOR THE MONTH (FOR EACH LEVEL)
- -------------------------------------- -------------------
$500 million but less than $1 billion ............ 0.6875%
$1 billion but less than $1.5 billion ............ 0.6250%
$1.5 billion but less than $2 billion ............ 0.5625%
$2 billion but less than $3 billion .............. 0.5000%
$3 billion and over .............................. 0.4375%
For the fiscal year ended December 31, 1994, the Portfolio paid BMR advisory
fees equivalent to 0.74% of the Portfolio's average daily net assets for such
year.
BMR furnishes for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Portfolio. BMR also places the portfolio security transactions of the Portfolio
for execution with many broker-dealer firms and uses its best efforts to obtain
execution of such transactions at prices which are advantageous to the Portfolio
and at reasonably competitive commission rates. Subject to the foregoing, BMR
may consider sales of shares of the Fund or of other investment companies
sponsored by BMR or Eaton Vance as a factor in the selection of broker-dealer
firms to execute portfolio transactions.
Timothy O'Brien has acted as the portfolio manager of the Portfolio since
January, 1995. Mr. O'Brien joined Eaton Vance as a Vice President on April 25,
1994. Prior to joining Eaton Vance, he served as a Vice President of Loomis,
Sayles & Co.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly-held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible
for all of its respective costs and expenses not expressly stated to be
payable by BMR under the investment advisory agreement, by Eaton Vance under
the administrative services agreement, or by EVD under the distribution
agreement.
DISTRIBUTION PLAN
- --------------------------------------------------------------------------------
THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to and complies with
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 6.25% of the
amount received by the Fund for each share sold and (ii) distribution fees
calculated by applying the rate of 1% over the prime rate then reported in The
Wall Street Journal to the outstanding balance of Uncovered Distribution Charges
(as described below) of the Principal Underwriter. On sales of shares made prior
to January 30, 1995, the Principal Underwriter currently pays monthly sales
commissions to a financial service firm (an "Authorized Firm") in amounts
anticipated to be equivalent to .75%, annualized, of the assets maintained in
the Fund by the customers of such Firm. On sales of shares made on January 30,
1995 and thereafter, the Principal Underwriter currently expects to pay to an
Authorized Firm (a) sales commissions (except on exchange transactions and
reinvestments) at the time of sale equal to .75% of the purchase price of the
shares sold by such Firm, and (b) monthly sales commissions approximately
equivalent to 1/12 of .75% of the value of shares sold by such Firm and
remaining outstanding for at least one year. The Plan is designed to permit an
investor to purchase Fund shares through an Authorized Firm without incurring an
initial sales charge and at the same time permit the Principal Underwriter to
compensate Authorized Firms in connection with the sale of Fund shares.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments made to the Principal
Underwriter pursuant to the Plan, including any contingent deferred sales
charges, have exceeded the total expenses theretofore incurred by such
organization in distributing shares of the Fund. Total expenses for this purpose
will include an allocable portion of the overhead costs of such organization and
its branch offices.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the fiscal year ended December 31, 1994,
the Fund paid or accrued sales commissions under the Plan equivalent to .75% of
the Fund's average daily net assets for such year. As at December 31, 1994, the
outstanding Uncovered Distribution Charges of the Principal Underwriter
calculated under the Plan amounted to approximately $440,459 (equivalent to 7.9%
of the Fund's net assets on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented the Plan by authorizing the
Fund to make monthly service fee payments to the Principal Underwriter in
amounts not expected to exceed .25% of the Fund's average daily net assets for
any fiscal year. The Fund accrues the service fee daily at the rate of 1/365 of
.25% of the Fund's net assets. On sales of shares made prior to January 30,
1995, the Principal Underwriter currently makes monthly service fee payments to
an Authorized Firm in amounts anticipated to be equivalent to .25%, annualized,
of the assets maintained in the Fund by the customers of such Firm. On sales of
shares made on January 30, 1995 and thereafter, the Principal Underwriter
currently expects to pay to an Authorized Firm (a) a service fee (except on
exchange transactions and reinvestments) at the time of sale equal to .25% of
the purchase price of the shares sold by such Firm, and (b) monthly service fees
approximately equivalent to 1/12 of .25% of the value of shares sold by such
Firm and remaining outstanding for at least one year. During the first year
after a purchase of Fund shares, the Principal Underwriter will retain the
service fee as reimbursement for the service fee payment made to the Authorized
Firm at the time of sale. As permitted by the NASD Rule, all service fee
payments are made for personal services and/or the maintenance of shareholder
accounts. Service fees are separate and distinct from the sales commissions and
distribution fees payable by the Fund to the Principal Underwriter, and as such
are not subject to automatic discontinuance when there are no outstanding
Uncovered Distribution Charges of the Principal Underwriter. For the fiscal year
ended December 31, 1994, the Fund paid or accrued service fees under the Plan
equivalent to .25% of the Fund's average daily net assets for such year.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
- --------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m., New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT") (as
agent for the Fund) in the manner authorized by the Trustees of the Trust. Net
asset value is computed by dividing the value of the Fund's total assets, less
its liabilities, by the number of shares outstanding. Because the Fund invests
its assets in an interest in the Portfolio, the Fund's net asset value will
reflect the value of its interest in the Portfolio (which, in turn, reflects the
underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at closing sales prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- ------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- --------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse any order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares."
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Classic Total Return Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Classic Total Return Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MA 02104 during its business hours a
written request for redemption in good order, plus any share certificates with
executed stock powers. The redemption price will be based on the net asset value
per Fund share next computed after such delivery. Good order means that all
relevant documents must be endorsed by the record owner(s) exactly as the shares
are registered and the signature(s) must be guaranteed by a member of either the
Securities Transfer Association's STAMP program or the New York Stock Exchange's
Medallion Signature Program, or certain banks, savings and loan institutions,
credit unions, securities dealers, securities exchanges, clearing agencies and
registered securities associations as required by a regulation of the Securities
and Exchange Commission and acceptable to The Shareholder Services Group, Inc.
In addition, in some cases, good order may require the furnishing of additional
documents such as where shares are registered in the name of a corporation,
partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charge (described below) and any
Federal income tax required to be withheld. Although the Fund normally expects
to make payment in cash for redeemed shares, the Trust, subject to compliance
with applicable regulations, has reserved the right to pay the redemption price
of shares of the Fund, either totally or partially, by a distribution in kind of
readily marketable securities withdrawn by the Fund from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to 15 days from the purchase date when
the purchase check has not yet cleared. Redemptions or repurchases may result in
a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares purchased on or after January 30, 1995
and redeemed within the first year of their purchase (except shares acquired
through the reinvestment of distributions) generally will be subject to a
contingent deferred sales charge. This contingent deferred sales charge is
imposed on any redemption, the amount of which exceeds the aggregate value at
the time of redemption of (a) all shares in the account purchased more than one
year prior to the redemption, (b) all shares in the account acquired through
reinvestment of distributions, and (c) the increase, if any, of value in the
other shares in the account (namely those purchased within the year preceding
the redemption) over the purchase price of such shares. Redemptions are
processed in a manner to maximize the amount of redemption proceeds which will
not be subject to a contingent deferred sales charge. That is, each redemption
will be assumed to have been made first from the exempt amounts referred to in
clauses (a), (b) and (c) above, and second through liquidation of those shares
in the account referred to in clause (c) on a first-in-first- out basis. Any
contingent deferred sales charge which is required to be imposed on share
redemptions will be equal to 1% of the net asset value of redeemed shares.
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege," the purchase of Fund shares acquired in
the exchange is deemed to have occurred at the time of the original purchase of
the exchanged shares.
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will also be waived
for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton Vance
Shareholder Services"), (2) as part of a distribution from a retirement plan
qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code"), or (3) as part of a minimum required distribution from
other tax-sheltered retirement plans. The contingent deferred sales charge will
be paid to the Principal Underwriter or the Fund.
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current balance in the account. THE LIFETIME
INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN
SHARES BY SENDING A CHECK FOR $50 OR MORE TO The Shareholder Services Group,
Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend-disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each account statement.
Share Option -- Dividends and capital gains will be reinvested in
additional shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of one or more other
funds in the Eaton Vance Classic Group of Funds or Eaton Vance Money Market
Fund, which are distributed subject to a contingent deferred sales charge, on
the basis of the net asset value per share of each fund at the time of the
exchange, provided that such exchange offers are available only in states where
shares of the fund being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange, the purchase of shares acquired in one or more
exchanges is deemed to have occurred at the time of the original purchase of the
exchanged shares.
Shares of the other funds in the Eaton Vance Classic Group of Funds (and
shares of Eaton Vance Money Market Fund acquired as the result of an exchange
from an EV Classic fund) may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange, but subject
to any restrictions or qualifications set forth in the current prospectus of any
such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone, provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Classic Total Return Fund may be mailed directly to The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104 at any time -- whether or
not distributions are reinvested. The name of the shareholder, the Fund and the
account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such repurchase
or redemption. Shares are sold to a reinvesting shareholder at the next
determined net asset value following timely receipt of a written purchase order
by the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent).
To the extent that any shares of the Fund are sold at a loss and the proceeds
are reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase in
connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-
employed spouses; and
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Code.
Detailed information concerning these plans, including certain exceptions
to minimum investment requirements, and copies of the plans are available from
the Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
THE FUND'S POLICY IS TO DISTRIBUTE MONTHLY SUBSTANTIALLY ALL OF THE NET
INVESTMENT INCOME ALLOCATED TO THE FUND BY THE PORTFOLIO, LESS THE FUND'S DIRECT
AND ALLOCATED EXPENSES, AND TO DISTRIBUTE AT LEAST ANNUALLY SUBSTANTIALLY ALL OF
ITS NET REALIZED CAPITAL GAINS. A portion of distributions from net investment
income will be eligible for the dividends-received deduction for corporations.
The Fund's distributions from its net investment income, net short-term capital
gains, and certain net foreign exchange gains are taxable to shareholders as
ordinary income, whether paid in cash or reinvested in additional shares of the
Fund. The Fund's distributions from its net long-term capital gains are taxable
to shareholders as long-term capital gains, whether paid in cash or reinvested
in additional shares of the Fund and regardless of the length of time Fund
shares have been owned by shareholders. Certain distributions, if declared by
the Fund in October, November or December and paid the following January, will
be taxable to shareholders as if received on December 31 of the year in which
they are declared.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP
UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- ------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The Fund's current yield is calculated by dividing the net investment
income per share during a recent 30-day period by the maximum offering price per
share (net asset value) of the Fund on the last day of the period and
annualizing the resulting figure. The Fund's average annual total return is
determined by computing the average annual percentage change in value of $1,000
invested at the maximum public offering price (net asset value) for specified
periods ending with the most recent calendar quarter, assuming reinvestment of
all distributions. The average annual total return calculation assumes a
complete redemption of the investment and the deduction of any applicable
contingent deferred sales charge at the end of the period. The Fund may also
publish annual and cumulative total return figures from time to time.
The Fund may also publish its distribution rate and/or its effective
distribution rate. The Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current maximum offering
price per share (net asset value). The Fund's effective distribution rate is
computed by dividing the distribution rate by 12 and reinvesting the resulting
amount for a full year on a monthly basis. The effective distribution rate will
be higher than the distribution rate because of the compounding effect of the
assumed reinvestment. Investors should note that the Fund's yield is calculated
using a standardized formula, the income component of which is computed from
dividends on equity securities held by the Portfolio based on the stated annual
dividend rates of such securities, exclusive of special or extra distributions
(with all purchases and sales of securities during such period included in the
income calculation on a settlement date basis), and from the income earned on
short-term debt instruments held by the Portfolio, whereas the distribution rate
is based on the Fund's last monthly distribution, which tends to be relatively
stable and may be more or less than the amount of net investment income and
short-term capital gain actually earned by the Fund during the month.
Performance figures published by the Fund which do not include the effect of
any applicable contingent deferred sales charge would be reduced if it were
included.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield or total return for
any prior periods should not be considered as a representation of what an
investment may earn or what the Fund's yield or total return may be in any
future period. If the expenses related to the operation of the Fund or the
Portfolio are allocated to Eaton Vance, the Fund's performance will be higher.
<PAGE>
INVESTMENT ADVISER OF
TOTAL RETURN PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC TOTAL RETURN FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS 725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC TOTAL RETURN FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-TRP
EV CLASSIC
TOTAL RETURN
FUND
PROSPECTUS
MAY 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV MARATHON TOTAL RETURN FUND
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1995
Effective August 1, 1995, EV Marathon Total Return Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Total Return Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Total Return Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE TOTAL RETURN TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
Part A
Information Required in a Prospectus
EV MARATHON TOTAL RETURN FUND
EV MARATHON TOTAL RETURN FUND (THE "FUND") IS A MUTUAL FUND SEEKING HIGH
TOTAL RETURN FROM RELATIVELY PREDICTABLE INCOME IN CONJUNCTION WITH CAPITAL
APPRECIATION, CONSISTENT WITH PRUDENT MANAGEMENT AND PRESERVATION OF CAPITAL.
THE FUND INVESTS ITS ASSETS IN TOTAL RETURN PORTFOLIO (THE "PORTFOLIO"), A
DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME INVESTMENT OBJECTIVE AS
THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND MANAGING ITS OWN PORTFOLIO OF
SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF
EATON VANCE TOTAL RETURN TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated May 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ................................. 2 How to Buy Fund Shares ................................... 13
The Fund's Financial Highlights ............................... 3 How to Redeem Fund Shares ................................ 14
The Fund's Investment Objective ............................... 4 Reports to Shareholders .................................. 16
How the Fund and the Portfolio Invest The Lifetime Investing Account/Distribution
their Assets; Investment Risks .............................. 4 Options ................................................ 17
Organization of the Fund and the Portfolio .................... 8 The Eaton Vance Exchange Privilege ....................... 18
Management of the Fund and the Portfolio ...................... 10 Eaton Vance Shareholder Services ......................... 19
Distribution Plan ............................................. 11 Distributions and Taxes .................................. 20
Valuing Fund Shares ........................................... 13 Performance Information .................................. 21
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS DATED MAY 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES(1)
- ------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Range of Declining Contingent Deferred Sales Charges
Imposed on Redemptions During the First Seven Years
(as a percentage of redemption proceeds exclusive of
all reinvestments and capital appreciation in the
account)\2/ 5.00%-0%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.74%
Rule 12b-1 Distribution (and Service) Fees 0.80%
Other Expenses 0.58%
-----
Total Operating Expenses 2.12%
=====
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following contingent deferred sales charge
and expenses on a $1,000 investment, assuming (a) 5% annual return and
(b) redemption at the end of each period: $72 $106 $134 $245
An investor would pay the following expenses on the same investment,
assuming (a) 5% annual return and (b) no redemptions: $22 $ 66 $114 $245
</TABLE>
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to or less than the per share expenses which the Fund
would incur if the Trust retained the services of an investment adviser and
the assets of the Fund were invested directly in the type of securities
being held by the Portfolio. The percentages indicated as Annual Fund and
Allocated Portfolio Operating Expenses in the table and the amounts included
in the Example are based on the Fund's and the Portfolio's results for the
fiscal year ended December 31, 1994, except for Service Fees, which are
estimated to be 0.05% in the current fiscal year. The Example should not be
considered a representation of past or future expenses and actual expenses
may be greater or less than those shown. The Example assumes a 5% annual
return, and the Fund's actual performance may result in an annual return
greater or less than 5%. For further information regarding the expenses of
both the Fund and the Portfolio, see "The Fund's Financial Highlights,"
"Organization of the Fund and the Portfolio," "Management of the Fund and
the Portfolio" and "How to Redeem Fund Shares." Because the Fund makes
payments under its Distribution Plan adopted under Rule 12b-1, a long-term
shareholder may pay more than the economic equivalent of the maximum
front-end sales charge permitted by a rule of the National Association of
Securities Dealers, Inc. See "Distribution Plan."
\2/ No contingent deferred sales charge is imposed on (a) shares purchased more
than six years prior to the redemption, (b) shares acquired through the
reinvestment of distributions or (c) any appreciation in value of other
shares in the account (see "How to Redeem Fund Shares"), and no such charge
is imposed on exchanges of Fund shares for shares of one or more other funds
listed under "The Eaton Vance Exchange Privilege."
\3/ Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies may do so in
the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which have been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing. which
report is contained in the Statement of Additional Information. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
1994 1993*
---- -----
NET ASSET VALUE -- Beginning of period
...................................... $ 9.9300 $10.0000
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............ $ 0.3638 $ 0.0409
Net realized and unrealized gain/
(loss) on investments ........... (1.5988) (0.0559)\1/
-------- --------
Total income/(loss) from
investment operations ......... $(1.2350) $(0.0150)
-------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income ....... $(0.3535) $(0.0461)
Tax return of capital ............ (0.0415) (0.0089)
-------- --------
Total distributions ............ $(0.3950) $(0.0550)
-------- --------
NET ASSET VALUE -- End of period ..... $ 8.3000 $ 9.9300
======== ========
TOTAL RETURN\2/ ...................... (12.57%) (0.15%)
RATIOS/SUPPLEMENTAL DATA (to average daily net assets):**
Expenses\3/ ........................ 2.07% 0.68%+
Net investment income .............. 3.95% 3.38%+
NET ASSETS AT END OF PERIOD
(000's omitted) ..................... $ 26,210 $ 11,519
- ----------
+Computed on an annualized basis.
*For the period from the start of business, November 1, 1993, to December 31,
1993.
**The expenses related to the operation of the Fund reflect an allocation of
expenses to the Administrator. Had such action not been taken, the ratios
would have been as follows:
Ratios (to average daily net assets)
Expenses ................... -- 1.83%+
Net investment income ...... -- 2.23%+
Note: Per share amounts have been computed using average shares outstanding
during the period.
\1/The per share amount for the period from the start of business,
November 1, 1993 to December 31, 1993 is not in accord with the net
realized and unrealized gain for the period allocated to the Fund by
the Portfolio due to the timing of the sales of Fund shares and the
amount of per share realized and unrealized gains and losses at such
time.
\2/Total return is calculated assuming a purchase at the net asset value
on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are
assumed to be reinvested at the net asset value on the record date.
\3/Includes the Fund's share of Total Return Portfolio's allocated
expenses for the year ended December 31, 1994 and for the period from
the Fund's start of business, November 1, 1993, to December 31, 1993.
THE FUND'S INVESTMENT OBJECTIVE
- ------------------------------------------------------------------------------
EV MARATHON TOTAL RETURN FUND'S INVESTMENT OBJECTIVE IS TO SEEK FOR ITS
SHAREHOLDERS A HIGH LEVEL OF TOTAL RETURN, CONSISTING OF RELATIVELY PREDICTABLE
INCOME IN CONJUNCTION WITH CAPITAL APPRECIATION, CONSISTENT WITH PRUDENT
MANAGEMENT AND PRESERVATION OF CAPITAL. The Fund currently seeks to meet its
investment objective by investing its assets in the Total Return Portfolio, a
separate registered investment company which has the same investment objective
as the Fund. The Fund's and the Portfolio's investment objectives are
nonfundamental and may be changed when authorized by a vote of the Trustees of
the Trust or the Portfolio, respectively, without obtaining the approval of the
Fund's shareholders or the investors in the Portfolio, as the case may be. The
Trustees of the Trust have no present intention to change the Fund's objective
and intend to submit any proposed material change in the investment objective to
shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS; INVESTMENT RISKS
- ------------------------------------------------------------------------------
THE PORTFOLIO SEEKS TO ACHIEVE ITS OBJECTIVE BY INVESTING PRINCIPALLY IN
DIVIDEND-PAYING COMMON STOCKS WITH THE POTENTIAL TO INCREASE DIVIDENDS IN THE
FUTURE. The Portfolio concentrates its investments in common stocks of public
utilities ("utility stocks"), principally electric, gas and telephone companies.
Accordingly, the Portfolio invests at least 25% of its total assets, and may
invest up to 100% of its total assets, in utility stocks. The Portfolio may also
invest in preferred stocks and may hold non-incoming-producing securities.
The Portfolio may from time to time invest in fixed-income debt securities
when the Portfolio's investment adviser ("BMR" or the "Investment Adviser")
believes that their total return potential is consistent with the Fund's
objective. The Portfolio may invest its cash reserves in high quality money
market securities, which include securities of the U.S. Government and its
agencies or instrumentalities maturing in one year or less, commercial paper,
and bankers' acceptances and certificates of deposit of domestic banks or
savings and loan associations having total assets of $1 billion or more. The
Portfolio may also invest in longer-term debt securities that at the time of
purchase are rated Aaa, Aa or A by Moody's Investors Service, Inc. ("Moody's"),
or AAA, AA or A by Standard & Poor's Ratings Group ("S&P"), Fitch Investors
Service, Inc. ("Fitch") or Duff & Phelps, Inc. ("Duff"), or that at the time of
purchase are issued, guaranteed, backed or secured by the U.S. Government or any
of its agencies or instrumentalities. The Portfolio currently intends to limit
its investments in fixed-income debt securities to 20% or less of its net
assets. Subject to such limitation, the Portfolio may invest up to 10% of its
net assets in fixed-income debt securities that at the time of purchase are
rated investment grade (i.e., rated Baa or higher by Moody's, or BBB or higher
by S&P, Fitch or Duff) or below investment grade. Debt securities rated below
Baa or BBB are commonly known as "junk bonds".
In view of the Portfolio's policy of concentrating its investments in
utility stocks, an investment in shares of the Fund should be made with an
understanding of the characteristics of the public utility industry and the
potential risks of such an investment. Industry-wide problems include the
effects of fluctuating economic conditions, energy conservation practices,
environmental regulations, high capital expenditures, construction delays due to
pollution control and environmental considerations, uncertainties as to fuel
availability and costs, increased competition in deregulated sectors of the
industry, and difficulties in obtaining timely and adequate rate relief from
regulatory commissions. If applications for rate increases are not granted or
are not acted upon promptly, the market prices of and dividend payments on
utility stocks may be adversely affected. The Portfolio's policy of
concentrating in utility stocks is a fundamental policy and may not be changed
unless authorized by an investor vote. The Fund has a similar fundamental policy
which cannot be changed unless authorized by a shareholder vote.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies, foreign currency futures and options, and
forward foreign currency exchange contracts.
The Portfolio may invest a significant portion of its assets in the
securities of real estate investment trusts ("REITs"), which are affected by
conditions in the real estate industry, interest rate changes and, in the case
of REITs investing in health care facilities, events affecting the health care
industry.
The Portfolio may also enter into repurchase agreements with respect to
securities of the U.S. Government and its agencies or instrumentalities with the
seller of such securities, usually a bank. Under a repurchase agreement, the
seller agrees to repurchase the securities at the Portfolio's cost plus interest
within a specified time (normally one day). Repurchase agreements involve a risk
that the value of the securities subject to the repurchase agreement may decline
to an amount less than the repurchase price and that, in the event of the
seller's bankruptcy or insolvency, the Portfolio may be prevented from disposing
of such securities. The Portfolio will comply with the collateralization
policies of the Securities and Exchange Commission (the "Commission"), which
policies require that the Portfolio or its custodian obtain actual or
constructive possession of the collateral and that the market value of the
securities held as collateral be marked to the market daily and at least equal
the repurchase price during the term of the agreement. The Portfolio intends
that the total of its investments, if any, in repurchase agreements maturing in
more than 7 days and other illiquid securities will not exceed 15% of its net
assets.
DERIVATIVE INSTRUMENTS. The Portfolio may purchase or sell derivative
instruments (which are instruments that derive their value from another
instrument, security, index or currency) to enhance return, to hedge against
fluctuations in securities prices, interest rates or currency exchange rates, or
as a substitute for the purchase or sale of securities or currencies. The
Portfolio's transactions in derivative instruments may include the purchase or
sale of futures contracts on securities (such as U.S. Government securities),
securities indices, other indices, other financial instruments or currencies;
options on futures contracts; exchange-traded options on securities, indices or
currencies; and forward foreign currency exchange contracts. The Portfolio's
transactions in derivative instruments involve a risk of loss or depreciation
due to unanticipated adverse changes in securities prices, interest rates, the
other financial instruments' prices or currency exchange rates, the inability to
close out a position or default by the counterparty. The loss on derivative
instruments (other than purchased options) may exceed the Portfolio's initial
investment in these instruments. In addition, the Portfolio may lose the entire
premium paid for purchased options that expire before they can be profitably
exercised by the Portfolio. The Portfolio incurs transaction costs in opening
and closing positions in derivative instruments. There can be no assurance that
the Investment Adviser's use of derivative instruments will be advantageous to
the Portfolio.
The Portfolio may write (sell) covered call and put options on securities,
currencies and indices with respect to up to 50% of its net assets, as measured
by the aggregate value of the securities underlying such written call and put
options. If a written covered call option is exercised, the Portfolio will be
unable to realize further price appreciation on the underlying securities and
portfolio turnover will increase, resulting in higher brokerage costs. The
Portfolio may purchase call and put options on any securities in which the
Portfolio may invest or options on any securities index composed of securities
in which the Portfolio may invest. The Portfolio does not intend to purchase an
option on any security if, after such transaction, more than 5% of its net
assets, as measured by the aggregate of all premiums paid for all such options
held by the Portfolio, would be so invested.
To the extent that the Portfolio enters into futures contracts, options on
futures contracts and options on foreign currencies traded on an exchange
regulated by the Commodity Futures Trading Commission ("CFTC"), in each case
that are not for bona fide hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums required to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into.
Forward contracts are individually negotiated and privately traded by
currency traders and their customers. A forward contract involves an obligation
to purchase or sell a specific currency (or basket of currencies) for an agreed
price at a future date, which may be any fixed number of days from the date of
the contract. The Portfolio may engage in cross-hedging by using forward
contracts in one currency (or basket of currencies) to hedge against
fluctuations in the value of securities denominated in a different currency if
the Investment Adviser determines that there is an established historical
pattern of correlation between the two currencies (or the basket of currencies
and the underlying currency). Use of a different foreign currency magnifies the
Portfolio's exposure to foreign currency exchange rate fluctuations. The
Portfolio may also use forward contracts to shift its exposure to foreign
currency exchange rate changes from one currency to another.
LEVERAGE THROUGH BORROWING. The Portfolio may from time to time increase its
ownership of portfolio securities above the amounts otherwise possible by
borrowing from banks on an unsecured basis at fixed or variable rates of
interest and investing the borrowed funds. The Investment Adviser currently
anticipates that the Portfolio will incur borrowings for the purpose of
acquiring additional income-producing securities when it is believed that the
interest payable with respect to such borrowings will be exceeded by (a) the
income payable on the securities acquired with such borrowings or (b) the
anticipated total return (a combination of income and appreciation) on such
securities. Such borrowings might be made, for example, when short-term interest
rates fall below the yields available from the securities acquired with the
borrowed funds or the total return anticipated from such securities.
The Portfolio is required to maintain asset coverage of at least 300% with
respect to such borrowings, which means that the Portfolio may borrow an amount
up to 50% of the value of its net assets (not including such borrowings). The
Portfolio may be required to dispose of securities held by it on unfavorable
terms if market fluctuations or other factors reduce such asset coverage to less
than 300%.
Leveraging will exaggerate any increase or decrease in the market value of
the securities held by the Portfolio. Money borrowed for leveraging will be
subject to interest costs which may or may not exceed the income from the
securities purchased. The Portfolio may also be required to maintain minimum
average balances in connection with such borrowing or to pay a commitment or
other fee to maintain a line of credit; either of these requirements will
increase the cost of borrowing over the stated interest rate. Unless the income
and appreciation, if any, on assets acquired with borrowed funds exceeds the
cost of borrowing, the use of leverage will diminish the investment performance
of the Portfolio compared with what it would have been without leverage.
The Portfolio will not always borrow money for additional investments. The
Portfolio's willingness to borrow money for investment purposes, and the amount
it will borrow, will depend on many factors, the most important of which are the
investment outlook, market conditions and interest rates. Successful use of a
leveraging strategy depends on the Investment Adviser's ability to predict
correctly interest rates and market movements, and there is no assurance that a
leverage strategy will be successful during any period in which it is employed.
The average daily loan balance for the fiscal year ended December 31, 1994 was
$3,137,134 and the average daily interest rate was 5.96%.
LENDING OF SECURITIES. The Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Commission, such loans would be required to
be secured continuously by collateral in cash, cash equivalents or U.S.
Government securities held by the Portfolio's custodian and maintained on a
current basis at an amount at least equal to the market value of the securities
loaned which will be marked to market daily. The Portfolio would have the right
to call a loan and obtain the securities loaned at any time on five business
days' notice. During the existence of a loan, the Portfolio will continue to
receive the equivalent of the interest or dividends paid by the issuer on the
securities loaned and will also receive a fee, or all or a portion of the
interest on investment of the collateral, if any. However, the Portfolio may pay
lending fees to such borrowers. The Portfolio would not 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 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 securities loaned if
the borrower of the securities fails financially. However, the loans would be
made only to organizations deemed by the Portfolio's management to be of good
standing and, when, in the judgment of the Portfolio's management, the
consideration which can be earned from securities loans of this type justifies
the attendant risk. If the management of the Portfolio decides to make
securities loans, it is intended that the value of the securities loaned would
not exceed 30% of the Portfolio's total assets.
INVESTMENT RESTRICTIONS. The Fund and the Portfolio have adopted certain
fundmental investment restrictions which are enumerated in detail in the
Statement of Additional Information and which may not be changed unless
authorized by a shareholder vote and an investor vote, respectively. Except for
such enumerated restrictions and as otherwise indicated in this prospectus, the
investment objective and policies of the Fund and the Portfolio are not
fundamental policies and accordingly may be changed by the Trustees of the Trust
and the Portfolio without obtaining the approval of the Fund's shareholders or
the investors in the Portfolio, as the case may be. If any changes were made in
the Fund's investment objective, the Fund might have an investment objective
different from the objective which an investor considered appropriate at the
time the investor became a shareholder of the Fund.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. The lowest investment grade, lower rated and comparable unrated debt
securities in which the Portfolio may invest will have speculative
characteristics in varying degrees. While such securities may have some quality
and protective characteristics, these characteristics can be expected to be
offset or outweighed by uncertainties or major risk exposures to adverse
conditions. Lower rated and comparable unrated securites are subject to the risk
of an issuer's inability to meet principal and interest payments on the
securities (credit risk) and may also be subject to price volatility due to such
factors as interst rate sensitivity, market perception of the creditworthiness
of the issuer and general market liquidity (market risk). Lower rated and
comparable unrated securities are also more likely to react to real or perceived
developments affecting markets and credit risk than are more highly rated
securities, which react primarily to movements in the general level of interest
rates. The Portfolio may retain defaulted securities in its portfolio when such
retention is considered desirable by the Investment Adviser. In the case of a
defaulted security, the Portfolio may incur additional expenses seeking recovery
of its investment. In the event the rating of a security held by the Portfolio
is downgraded, the Investment Adviser will consider disposing of such security,
but is not obligated to do so.
- ------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND PROSPECTIVE
INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER INVESTMENTS WHEN
CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT ELIMINATE RISK OR
ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
- ------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE TOTAL RETURN TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 9, 1981, AS AMENDED AND RESTATED. THE TRUST IS A MUTUAL FUND -- AN
OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series and because the Trust can offer separate series
(such as the Fund) it is known as a "series company." Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW YORK
AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions of the Fund and the
Portfolio, see "The Fund's Investment Objective" and "How the Fund and the
Portfolio Invest their Assets; Investment Risks". Further information regarding
investment practices may be found in the Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $500 million.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders or the investors in the Portfolio, as
the case may be. If a shareholder redeems shares because of a change in the
nonfundamental objective or policies of the Fund, those shares may be subject to
a contingent deferred sales charge, as described in "How to Redeem Fund Shares."
In the event the Fund withdraws all of its assets from the Portfolio, or the
Board of Trustees of the Trust determines that the investment objective of the
Portfolio is no longer consistent with the investment objective of the Fund,
such Trustees would consider what action might be taken, including investing the
assets of the Fund in another pooled investment entity or retaining an
investment adviser to manage the Fund's assets in accordance with its investment
objective. The Fund's investment performance may be affected by a withdrawal of
all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of .0625% (equivalent to .75% annually) of the average daily net
assets of the Portfolio up to $500 million. On net assets of $500 million and
over the annual fee is reduced as follows:
<TABLE>
<CAPTION>
ANNUALIZED FEE RATE
AVERAGE DAILY NET ASSETS FOR THE MONTH (FOR EACH LEVEL)
-------------------------------------- -------------------
<S> <C>
$500 million but less than $1 billion ................................. 0.6875%
$1 billion but less than $1.5 billion ................................. 0.6250%
$1.5 billion but less than $2 billion ................................. 0.5625%
$2 billion but less than $3 billion ................................... 0.5000%
$3 billion and over ................................................... 0.4375%
</TABLE>
For the fiscal year ended December 31, 1994, the Portfolio paid BMR advisory
fees equivalent to 0.74% of the Portfolio's average daily net assets for such
year.
BMR furnishes for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Portfolio. BMR also places the portfolio security transactions of the Portfolio
for execution with many broker-dealer firms and uses its best efforts to obtain
execution of such transactions at prices which are advantageous to the Portfolio
and at reasonably competitive commission rates. Subject to the foregoing, BMR
may consider sales of shares of the Fund or of other investment companies
sponsored by BMR or Eaton Vance as a factor in the selection of broker-dealer
firms to execute portfolio transactions.
Timothy O'Brien has acted as the portfolio manager of the Portfolio since
January, 1995. Mr. O'Brien joined Eaton Vance as a Vice President on April 25,
1994. Prior to joining Eaton Vance, he served as a Vice President of Loomis,
Sayles & Co.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
DISTRIBUTION PLAN
- ------------------------------------------------------------------------------
THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with,
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 5% of the amount
received by the Fund for each share sold and (ii) distribution fees calculated
by applying the rate of 1% over the prime rate then reported in The Wall Street
Journal to the outstanding balance of Uncovered Distribution Charges (as
described below) of the Principal Underwriter. The Principal Underwriter
currently expects to pay sales commissions (except on exchange transactions and
reinvestments) to a financial services firm (an "Authorized Firm") at the time
of sale equal to 4% of the purchase price of the shares sold by such Firm. The
Principal Underwriter will use its own funds (which may be borrowed from banks)
to pay such commissions. Because the payment of the sales commissions and
distribution fees to the Principal Underwriter is subject to the NASD rule
described below, it will take the Principal Underwriter a number of years to
recoup the sales commissions paid by it to Authorized Firms from the payments
received by it from the Fund pursuant to the Plan.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments received by the
Principal Underwriter from the Fund pursuant to the Plan, including any
contingent deferred sales charges, have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commission attributable to a
sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the fiscal year ended December 31, 1994,
the Fund paid sales commissions under the Plan equivalent to .75% of the Fund's
average daily net assets for such year. As at December 31, 1994, the outstanding
Uncovered Distribution Charges of the Principal Underwriter calculated under the
Plan amounted to approximately $1,322,445 (equivalent to 5.0% of the Fund's net
assets on such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented the Plan by authorizing the
Fund to make quarterly payments of service fees to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .25% of the Fund's average
daily net assets for each fiscal year based on the value of Fund shares sold by
such persons and remaining outstanding for at least twelve months. As permitted
by the NASD Rule, such payments are made for personal services and/or the
maintenance of shareholder accounts. Service fees are separate and distinct from
the sales commissions and distribution fees payable by the Fund to the Principal
Underwriter, and as such are not subject to automatic discontinuance when there
are no outstanding Uncovered Distribution Charges of the Principal Underwriter.
For the fiscal year ended December 31, 1994, the Fund did not pay or accrue any
service fees under the Plan. The Fund began accruing for its service fee
payments in the quarter ended March 31, 1995.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
- ------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m., New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by subtracting the liabilities of the Portfolio from the value
of its total assets. Securities listed on securities exchanges or in the NASDAQ
National Market are valued at closing sales prices. For further information
regarding the valuation of the Portfolio's assets, see "Determination of Net
Asset Value" in the Statement of Additional Information. Eaton Vance Corp. owns
77.3% of the outstanding stock of IBT, the Fund's and the Portfolio's custodian.
- ------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- ------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- ------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse any order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described below under "How to
Redeem Fund Shares."
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current price for such securities but does
not guarantee the best price available. Eaton Vance will absorb any transaction
costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Marathon Total Return Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Marathon Total Return Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
- -------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- -------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- ------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MA 02104, during its business hours,
a written request for redemption in good order plus any share certificates with
executed stock powers. The redemption price will be based on the net asset value
per Fund share next computed after such delivery. Good order means that all
relevant documents must be endorsed by the record owner (s) exactly as the
shares are registered and the signature(s) must be guaranteed by a member of
either the Securities Transfer Association's STAMP program or the New York Stock
Exchange's Medallion Signature Program, or certain banks, savings and loan
institutions, credit unions, securities dealers, securities exchanges, clearing
agencies and registered securities associations as required by a regulation of
the Securities and Exchange Commission and acceptable to The Shareholder
Services Group, Inc. In addition, in some cases, good order may require the
furnishing of additional documents such as where shares are registered in the
name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any applicable contingent deferred sales charge (described below) and any
Federal income tax required to be withheld. Although the Fund normally expects
to make payment in cash for redeemed shares, the Trust, subject to compliance
with applicable regulations, has reserved the right to pay the redemption price
of shares of the Fund, either totally or partially, by a distribution in kind of
readily marketable securities withdrawn by the Fund from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to fifteen days from the purchase date
when the purchase check has not yet cleared. Redemptions or repurchases may
result in a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares redeemed within the first six years of
their purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge.
This contingent deferred sales charge is imposed on any redemption the amount of
which exceeds the aggregate value at the time of redemption of (a) all shares in
the account purchased more than six years prior to the redemption, (b) all
shares in the account acquired through reinvestment of distributions, and (c)
the increase, if any, in the value of all other shares in the account (namely
those purchased within the six years preceding the redemption) over the purchase
price of such shares. Redemptions are processed in a manner to maximize the
amount of redemption proceeds which will not be subject to a contingent deferred
sales charge. That is, each redemption will be assumed to have been made first
from the exempt amounts referred to in clauses (a), (b) and (c) above, and
second through liquidation of those shares in the account referred to in clause
(c) on a first-in-first-out basis. Any contingent deferred sales charge which is
required to be imposed on share redemptions will be made in accordance with the
following schedule:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
-------------- --------------
First ............. 5%
Second ............ 5%
Third ............. 4%
Fourth ............ 3%
Fifth ............. 2%
Sixth ............. 1%
Seventh and following 0%
For shares purchased prior to August 1, 1994, the contingent deferred sales
charge for redemptions within the first year after purchase is 6%. In
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange of shares of a fund currently listed under "The
Eaton Vance Exchange Privilege," the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
Fund shares acquired in the exchange is deemed to have occurred at the time of
the original purchase of the exchanged shares. The contingent deferred sales
charge will be waived for shares redeemed (1) pursuant to a Withdrawal Plan (see
"Eaton Vance Shareholder Services"), (2) as part of a required distribution from
a tax-sheltered retirement plan or (3) following the death of all beneficial
owners of such shares, provided the redemption is requested within one year of
death (a death certificate and other applicable documents may be required).
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will be paid to the
Principal Underwriter or the Fund.
- ------------------------------------------------------------------------------
THE FOLLOWING EXAMPLE ILLUSTRATES THE OPERATION OF THE CONTINGENT DEFERRED SALES
CHARGE. ASSUME THAT AN INVESTOR PURCHASES $10,000 OF THE FUND'S SHARES AND THAT
16 MONTHS LATER THE VALUE OF THE ACCOUNT HAS GROWN THROUGH INVESTMENT
PERFORMANCE AND REINVESTMENT OF DISTRIBUTIONS TO $12,000. THE INVESTOR THEN MAY
REDEEM UP TO $2,000 OF SHARES WITHOUT INCURRING A CONTINGENT DEFERRED SALES
CHARGE. IF THE INVESTOR SHOULD REDEEM $3,000 OF SHARES, A CHARGE WOULD BE
IMPOSED ON $1,000 OF THE REDEMPTION. THE RATE WOULD BE 5% BECAUSE THE REDEMPTION
WAS MADE IN THE SECOND YEAR AFTER THE PURCHASE WAS MADE AND THE CHARGE WOULD BE
$50.
- ------------------------------------------------------------------------------
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current balance in the account. THE LIFETIME
INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN
SHARES BY SENDING A CHECK FOR $50 OR MORE to The Shareholder Services Group,
Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, Massachusetts 02104. Please provide the name of the
shareholder, the Fund and the account number.
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend-disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each account statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- ------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL INVESTMENTS
IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- ------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund may currently be exchanged for shares of one or more other
funds in the Eaton Vance Marathon Group of Funds (which includes Eaton Vance
Equity-Income Trust and any EV Marathon fund, except Eaton Vance Prime Rate
Reserves) or Eaton Vance Money Market Fund, which are distributed subject to a
contingent deferred sales charge, on the basis of the net asset value per share
of each fund at the time of the exchange, provided that such exchange offers are
available only in states where shares of the fund being acquired may be legally
sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of the other funds are available from Authorized Firms or the
Principal Underwriter. The prospectus for each fund describes its investment
objectives and policies, and shareholders should obtain a prospectus and
consider these objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of shares
acquired in an exchange, the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
shares acquired in one or more exchanges is deemed to have occurred at the time
of the original purchase of the exchanged shares. For the contingent deferred
sales charge schedule applicable to the Eaton Vance Marathon Group of Funds
(except EV Marathon Strategic Income Fund and Class I shares of any EV Marathon
Limited Maturity Fund), see "How to Redeem Fund Shares". The contingent deferred
sales charge schedule applicable to EV Marathon Strategic Income Fund and Class
I shares of any EV Marathon Limited Maturity Fund is 3%, 2.5%, 2% or 1% in the
event of a redemption occurring in the first, second, third or fourth year,
respectively, after the original share purchase.
Shares of other funds in the Eaton Vance Marathon Group of Funds and shares
of Eaton Vance Money Market Fund may be exchanged for Fund shares on the basis
of the net asset value per share of each fund at the time of the exchange, but
subject to any restrictions or qualifications set forth in the current
prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone, provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Marathon Total Return Fund may be mailed directly to The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104 at any time -- whether or
not distributions are reinvested. The name of the shareholder, the Fund and the
account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
WITHDRAWAL PLAN. A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such repurchase
or redemption. Shares are sold to a reinvesting shareholder at the next
determined net asset value following timely receipt of a written purchase order
by the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent).
To the extent that any shares of the Fund are sold at a loss and the proceeds
are reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption), some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-
employed spouses; and
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Internal Revenue Code of 1986, as amended (the
"Code").
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
THE FUND'S POLICY IS TO DISTRIBUTE MONTHLY SUBSTANTIALLY ALL OF THE NET
INVESTMENT INCOME ALLOCATED TO THE FUND BY THE PORTFOLIO, LESS THE FUND'S DIRECT
AND ALLOCATED EXPENSES, AND TO DISTRIBUTE AT LEAST ANNUALLY SUBSTANTIALLY ALL OF
ITS NET REALIZED CAPITAL GAINS. A portion of distributions from net investment
income will be eligible for the dividends-received deduction for corporations.
The Fund's distributions from its net investment income, net short-term capital
gains, and certain foreign exchange gains will be taxable to shareholders as
ordinary income, whether paid in cash or reinvested in additional shares of the
Fund. The Fund's distributions from its net long-term capital gains are taxable
to shareholders as long-term capital gains, whether paid in cash or reinvested
in additional shares of the Fund and regardless of the length of time Fund
shares have been owned by shareholders. Certain distributions, if declared by
the Fund in October, November or December and paid the following January, will
be taxable to shareholders as if received on December 31 of the year in which
they are declared.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
- -------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY FEDERAL
INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS ITS NET
INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE TIMING
REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE PORTFOLIO
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- -------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The Fund's current yield is calculated by dividing the net investment
income per share during a recent 30-day period by the maximum offering price per
share (net asset value) of the Fund on the last day of the period and
annualizing the resulting figure. The Fund's average annual total return is
determined by computing the average annual percentage change in value of $1,000
invested at the maximum public offering price (net asset value) for specified
periods ending with the most recent calendar quarter, assuming reinvestment of
all distributions. The average annual total return calculation assumes a
complete redemption of the investment and the deduction of any applicable
contingent deferred sales charge at the end of the period. The Fund may also
publish annual and cumulative total return figures from time to time.
The Fund may also publish its distribution rate and/or its effective
distribution rate. The Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current maximum offering
price per share (net asset value). The Fund's effective distribution rate is
computed by dividing the distribution rate by 12 and reinvesting the resulting
amount for a full year on a monthly basis. The effective distribution rate will
be higher than the distribution rate because of the compounding effect of the
assumed reinvestment. Investors should note that the Fund's yield is calculated
using a standardized formula, the income component of which is computed from
dividends on equity securities held by the Portfolio based on the stated annual
dividend rates of such securities, exclusive of special or extra distributions
(with all purchases and sales of securities during such period included in the
income calculation on a settlement date basis), and from the income earned on
short-term debt instruments held by the Portfolio, whereas the distribution rate
is based on the Fund's last monthly distribution, which tends to be relatively
stable and may be more or less than the amount of net investment income and
short-term capital gain actually earned by the Fund during the month.
The Fund may also publish performance figures which do not take into account
any contingent deferred sales charge which may be imposed upon redemptions at
the end of the specified period. Any performance figure which does not take into
account the contingent deferred sales charge would be reduced to the extent such
charge is imposed upon a redemption.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield or total return, for
any prior periods should not be considered as a representation of what an
investment may earn or what the Fund's yield or total return may be in any
future period.
<PAGE>
INVESTMENT ADVISER OF
TOTAL RETURN PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON TOTAL RETURN FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS 725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV MARATHON TOTAL RETURN FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-TMP
EV MARATHON
TOTAL RETURN
FUND
PROSPECTUS
MAY 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV TRADITIONAL TOTAL RETURN FUND
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1995
Effective August 1, 1995, EV Traditional Total Return Fund was
reorganized and became a series of Eaton Vance Special Investment Trust, a
business trust organized under the laws of the Commonwealth of Massachusetts.
Prior to the reorganization, the Fund had been a series of Eaton Vance Total
Return Trust, which was also a Massachusetts business trust. Except for the fact
that the Fund is now a series of Eaton Vance Special Investment Trust, shares of
the Fund represent the same interest in the Fund's assets, are of the same
class, are subject to the same terms and conditions, fees and expenses and
confer the same rights as when the Fund was a series of Eaton Vance Total Return
Trust.
THE DATE OF THE ATTACHED PROSPECTUS IS CHANGED TO AUGUST 1, 1995. ALL
REFERENCES IN THE PROSPECTUS TO EATON VANCE TOTAL RETURN TRUST OR THE TRUST ARE
DEFINED TO MEAN EATON VANCE SPECIAL INVESTMENT TRUST.
August 1, 1995
<PAGE>
Part A
Information Required in a Prospectus
EV TRADITIONAL TOTAL RETURN FUND
EV TRADITIONAL TOTAL RETURN FUND (THE "FUND") IS A MUTUAL FUND SEEKING HIGH
TOTAL RETURN FROM RELATIVELY PREDICTABLE INCOME IN CONJUNCTION WITH CAPITAL
APPRECIATION, CONSISTENT WITH PRUDENT MANAGEMENT AND PRESENTATION OF CAPITAL.
THE FUND INVESTS ITS ASSETS IN TOTAL RETURN PORTFOLIO (THE "PORTFOLIO"), A
DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME INVESTMENT OBJECTIVE AS
THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND MANAGING ITS OWN PORTFOLIO OF
SECURITIES AS WITH HISTORICALLY STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF
EATON VANCE TOTAL RETURN TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated May 1, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
- ------------------------------------------------------------------------------
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.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ................................. 2 How to Redeem Fund Shares ................................ 14
The Fund's Financial Highlights ............................... 3 Reports to Shareholders .................................. 15
The Fund's Investment Objective ............................... 4 The Lifetime Investing Account/Distribution
How the Fund and the Portfolio Invest Options ................................................ 15
their Assets; Investment Risks............................... 4 The Eaton Vance Exchange Privilege ....................... 16
Organization of the Fund and the Portfolio .................... 8 Eaton Vance Shareholder Services ......................... 17
Management of the Fund and the Portfolio ...................... 10 Distributions and Taxes .................................. 19
Service Plan .................................................. 11 Performance Information .................................. 20
Valuing Fund Shares ........................................... 11 Statement of Intention and
How to Buy Fund Shares ........................................ 12 Escrow Agreement ....................................... 20
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS DATED MAY 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES\1/
- ------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.75%
Sales Charges Imposed on Reinvested Distributions None
Redemption Fees None
Fees to Exchange Shares None
Contingent Deferred Sales Charges (on purchases of
$1 million or more) Imposed on Redemptions During
the First Eighteen Months (as a percentage of
redemption proceeds exclusive of all reinvestments
and capital appreciation in the account)\2/ 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.74%
Rule 12b-1 Fees (Service Plan) 0.18%
Other Expenses 0.26%
-----
Total Operating Expenses 1.18%
=====
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following maximum initial sales charge
and expenses on a $1,000 investment, assuming (a) 5% annual return
and (b) redemption at the end of each time period: $59 $83 $109 $184
</TABLE>
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to or less than the per share expenses which the Fund
would incur if the Trust retained the services of an investment adviser and
the assets of the Fund were invested directly in the type of securities
being held by the Portfolio. The costs and expenses included in the table
and Example are based on the Fund's and the Portfolio's results for the
fiscal year ended December 31, 1994, and reflect the Fund's current policy
of investing in the Portfolio. The Example should not be considered a
representation of past or future expenses and actual expenses may be greater
or less than those shown. The Example assumes a 5% annual return and the
Fund's actual performance may result in an annual return greater or less
than 5%. For further information regarding the expenses of both the Fund and
the Portfolio see "The Fund's Financial Highlights," "Organization of the
Fund and the Portfolio," "Management of the Fund and the Portfolio" and "How
to Redeem Fund Shares."
\2/ If shares have been purchased at net asset value with no initial sales
charge by virtue of the purchase having been in the amount of $1 million or
more and are redeemed within 18 months after the end of the calendar month
in which the purchase was made, a contingent deferred sales charge of 1%
will be imposed on such redemption. See "How to Buy Fund Shares," "How to
Redeem Fund Shares" and "Eaton Vance Shareholder Services."
\3/ Other investment companies with different distribution arrangements and
fees are investing in the Portfolio and additional such companies may do
so in the future. See "Organization of the Fund and the Portfolio."
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
The following information should be read in conjunction with the audited
financial statements included in the Statement of Additional Information, all of
which have been so included in reliance upon the report of Coopers & Lybrand
L.L.P., independent accountants, as experts in accounting and auditing, which
report is contained in the Statement of Additional Information. The financial
highlights for each of the seven years in the period ended December 31, 1991,
presented here, were audited by other auditors, whose report dated February 7,
1992, expressed an unqualified opinion on such financial highlights. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------------------
1994 1993 1992 1991<F3> 1990<F3> 1989<F3> 1988<F3> 1987<F3> 1986<F3> 1985<F3>
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of year $ 9.1400 $ 9.3600 $ 9.7500 $ 9.0700 $ 9.9400 $ 7.9200 $ 7.6000 $10.6800 $ 9.2850 $ 7.6500
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income $ 0.5458 $ 0.3626 $ 0.5113 $ 0.5204 $ 0.5026 $ 0.5202 $ 0.5400 $ 0.6129 $ 0.6215 $ 0.6340
Net realized and
unrealized
gain (loss) on
investments (1.6678) 0.5524 0.0937 1.4896 (0.5226) 2.0498 0.3500 (2.2478) 2.2855 1.9395
Credit (provision)
for contingency
accumulated
tax earnings . -- -- -- -- -- -- -- 0.1499 0.0330 (0.0025)
Credit (provision)
for federal
tax on
realized and
unrealized
capital gains -- -- -- -- -- -- -- -- -- 0.4990
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total income
(loss) from
investment
operations $(1.1220) $ 0.9150 $ 0.6050 $ 2.0100 $(0.0200) $ 2.5700 $ 0.8900 $(1.6349) $ 2.9070 $ 2.5735
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From net
investment
income $(0.3880) $(0.4650) $(0.5200) $(0.5200) $(0.5500) $(0.5500) $(0.5200) $(0.8000) $(0.4000) $(0.4250)
From net
realized gain
on investments -- (0.6544) (0.4750) (0.8100) (0.3000) -- (0.0500) (0.7950) (1.1450) (1.0100)
In excess of net
realized gain
on investment
transactions -- (0.0156) -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total
distributions $(0.3880) $(1.1350) $(0.9950) $(1.3300) $(0.8500) $(0.5500) $(0.5700) $(1.5950) $(1.5450) $(1.4350)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value --
End of year $ 7.6300 $ 9.1400 $ 9.3600 $ 9.7500 $ 9.0700 $ 9.9400 $ 7.9200 $ 7.6000 $10.6800 $ 9.2850
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Total return\2/ (12.28)% 9.49% 6.60% 23.61% 0.15% 33.46% 11.94% (15.23%) 31.48% 40.13%
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Ratios/Supplemental
Data:
(to average daily
net assets)
Interest expense* -- 0.20% 0.29% 0.38% 0.08% 0.17% 0.03% 0.68% 0.71% 1.53%
Other expenses* 1.18% 1.11% 1.10% 1.13% 1.19% 1.15% 1.17% 1.03% 0.94% 0.85%
Net investment
income before
credit for taxes 4.90% 4.64% 5.43% 5.60% 5.49% 5.90% 6.81% 6.18% 5.62% 7.42%
Portfolio Turnover** -- 63% 54% 69% 52% 60% 78% 190% 74% 85%
Net Assets at end
of year (000's
omitted) $445,133 $629,514 $564,912 $545,731 $491,253 $536,954 $472,774 $519,413 $588,161 $679,340
Leverage Analysis:
Amount of debt
outstanding at
end of period
(000's omitted) -- --<F4> $ 47,045 $ 56,370 -- $ 15,000 -- -- $ 64,000 $ 7,000
Average daily
balance of debt
outstanding
during period
(000's omitted) -- $29,906<F4> $27,764 $ 25,901 $ 3,793 $ 6,364 $ 2,965 $ 50,396 $ 51,871 $ 77,838
Average weekly
balance of shares
outstanding
during period
(000's omitted) -- 61,377<F4> 57,280 53,281 53,078 55,398 64,459 66,034 52,486 62,494
Average amount of
debt per share
during period -- $ 0.487<F4> $ 0.485 $ 0.486 $ 0.071 $ 0.115 $ 0.046 $ 0.763 $ 0.988 $ 1.246
<F1>Includes the Fund's share of Total Return Portfolio's allocated expenses for
the year ended December 31, 1994 and for the period from October 28, 1993,
to December 31, 1993.
<F2>Portfolio Turnover represents the rate of portfolio activity for the period
while the Fund was making investments directly in securities. The portfolio
turnover for the period since the Fund transferred its assets to the
Portfolio is shown in the Portfolio's financial statements.
<F3>Audited by previous auditors.
<F4>The Leverage Analysis is for the period January 1 to October 27, 1993, when
the Fund transferred the line of credit to the Portfolio. The analysis for
the year ended December 31, 1994 and the period from October 28, 1993 to
December 31, 1993 is shown in the Portfolio's financial statements, which
are included in the Fund's Statement of Additional Information.
<F5>Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the record date.
</TABLE>
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
- ------------------------------------------------------------------------------
EV TRADITIONAL TOTAL RETURN FUND'S INVESTMENT OBJECTIVE IS TO SEEK FOR ITS
SHAREHOLDERS A HIGH LEVEL OF TOTAL RETURN, CONSISTING OF RELATIVELY PREDICTABLE
INCOME IN CONJUNCTION WITH CAPITAL APPRECIATION, CONSISTENT WITH PRUDENT
MANAGEMENT AND PRESERVATION OF CAPITAL. The Fund currently seeks to meet its
investment objective by investing its assets in the Total Return Portfolio, a
separate registered investment company which has the same investment objective
as the Fund. The Fund's and the Portfolio's investment objectives are
nonfundamental and may be changed when authorized by a vote of the Trustees of
the Trust or the Portfolio, respectively, without obtaining the approval of the
Fund's shareholders or the investors in the Portfolio, as the case may be. The
Trustees of the Trust have no present intention to change the Fund's objective
and intend to submit any proposed material change in the investment objective to
shareholders in advance for their approval.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS;
INVESTMENT RISKS
- ------------------------------------------------------------------------------
THE PORTFOLIO SEEKS TO ACHIEVE ITS OBJECTIVE BY INVESTING PRINCIPALLY IN
DIVIDEND-PAYING COMMON STOCKS WITH THE POTENTIAL TO INCREASE DIVIDENDS IN THE
FUTURE. The Portfolio concentrates its investments in common stocks of public
utilities ("utility stocks"), principally electric, gas and telephone companies.
Accordingly, the Portfolio invests at least 25% of its total assets, and may
invest up to 100% of its total assets, in utility stocks. The Portfolio may also
invest in preferred stocks and may hold non-income-producing securities.
The Portfolio may from time to time invest in fixed-income debt securities
when the Portfolio's investment adviser ("BMR" or the "Investment Adviser")
believes that their total return potential is consistent with the Fund's
objective. The Portfolio may invest its cash reserves in high quality money
market securities, which include securities of the U.S. Government and its
agencies or instrumentalities maturing in one year or less, commercial paper,
and bankers' acceptances and certificates of deposit of domestic banks or
savings and loan associations having total assets of $1 billion or more. The
Portfolio may also invest in longer-term debt securities that at the time of
purchase are rated Aaa, Aa or A by Moody's Investors Service, Inc. ("Moody's"),
or AAA, AA or A by Standard & Poor's Ratings Group ("S&P"), Fitch Investors
Service, Inc. ("Fitch") or Duff & Phelps, Inc. ("Duff"), or that at the time of
purchase are issued, guaranteed, backed or secured by the U.S. Government or any
of its agencies or instrumentalities. The Portfolio currently intends to limit
its investments in fixed-income debt securities to 20% or less of its net
assets. Subject to such limitation, the Portfolio may invest up to 10% of its
net assets in fixed-income debt securities that at the time of purchase are
rated investment grade (i.e., rated Baa or higher by Moody's, or BBB or higher
by S&P, Fitch or Duff) or below investment grade. Debt securities rated below
Baa or BBB are commonly known as "junk bonds".
In view of the Portfolio's policy of concentrating its investments in
utility stocks, an investment in shares of the Fund should be made with an
understanding of the characteristics of the public utility industry and the
potential risks of such an investment. Industry-wide problems include the
effects of fluctuating economic conditions, energy conservation practices,
environmental regulations, high capital expenditures, construction delays due to
pollution control and environmental considerations, uncertainties as to fuel
availability and costs, increased competition in deregulated sectors of the
industry, and difficulties in obtaining timely and adequate rate relief from
regulatory commissions. If applications for rate increases are not granted or
are not acted upon promptly, the market prices of and dividend payments on
utility stocks may be adversely affected. The Portfolio's policy of
concentrating in utility stocks is a fundamental policy and may not be changed
unless authorized by an investor vote. The Fund has a similar fundamental policy
which cannot be changed unless authorized by a shareholder vote.
The Portfolio may invest in securities issued by foreign companies
(including American Depository Receipts and Global Depository Receipts). Such
investments may be subject to various risks such as fluctuations in currency and
exchange rates, foreign taxes, social, political and economic conditions in the
countries in which such companies operate, and changes in governmental, economic
or monetary policies both here and abroad. There may be less publicly available
information about a foreign company than about a comparable domestic company.
Because the securities markets in many foreign countries are not as developed as
those in the United States, the securities of many foreign companies are less
liquid and their prices are more volatile than securities of comparable domestic
companies. In order to hedge against possible variations in foreign exchange
rates pending the settlement of foreign securities transactions, the Portfolio
may buy or sell foreign currencies, foreign currency futures and options, and
forward foreign currency exchange contracts.
The Portfolio may invest a significant portion of its assets in the
securities of real estate investment trusts ("REITs"), which are affected by
conditions in the real estate industry, interest rate changes and, in the case
of REITs investing in health care facilities, events affecting the health care
industry.
The Portfolio may also enter into repurchase agreements with respect to
securities of the U.S. Government and its agencies or instrumentalities with the
seller of such securities, usually a bank. Under a repurchase agreement, the
seller agrees to repurchase the securities at the Portfolio's cost plus interest
within a specified time (normally one day). Repurchase agreements involve a risk
that the value of the securities subject to the repurchase agreement may decline
to an amount less than the repurchase price and that, in the event of the
seller's bankruptcy or insolvency, the Portfolio may be prevented from disposing
of such securities. The Portfolio will comply with the collateralization
policies of the Securities and Exchange Commission (the "Commission"), which
policies require that the Portfolio or its custodian obtain actual or
constructive possession of the collateral and that the market value of the
securities held as collateral be marked to the market daily and at least equal
the repurchase price during the term of the agreement. The Portfolio intends
that the total of its investments, if any, in repurchase agreements maturing in
more than 7 days and other illiquid securities will not exceed 15% of its net
assets.
DERIVATIVE INSTRUMENTS. The Portfolio may purchase or sell derivative
instruments (which are instruments that derive their value from another
instrument, security, index or currency) to enhance return, to hedge against
fluctuations in securities prices, interest rates or currency exchange rates, or
as a substitute for the purchase or sale of securities or currencies. The
Portfolio's transactions in derivative instruments may include the purchase or
sale of futures contracts on securities (such as U.S. Government securities),
securities indices, other indices, other financial instruments or currencies;
options on futures contracts; exchange-traded options on securities, indices or
currencies; and forward foreign currency exchange contracts. The Portfolio's
transactions in derivative instruments involve a risk of loss or depreciation
due to unanticipated adverse changes in securities prices, interest rates, the
other financial instruments' prices or currency exchange rates, the inability to
close out a position or default by the counterparty. The loss on derivative
instruments (other than purchased options) may exceed the Portfolio's initial
investment in these instruments. In addition, the Portfolio may lose the entire
premium paid for purchased options that expire before they can be profitably
exercised by the Portfolio. The Portfolio incurs transaction costs in opening
and closing positions in derivative instruments. There can be no assurance that
the Investment Adviser's use of derivative instruments will be advantageous to
the Portfolio.
The Portfolio may write (sell) covered call and put options on securities,
currencies and indices with respect to up to 50% of its net assets, as measured
by the aggregate value of the securities underlying such written call and put
options. If a written covered call option is exercised, the Portfolio will be
unable to realize further price appreciation on the underlying securities and
portfolio turnover will increase, resulting in higher brokerage costs. The
Portfolio may purchase call and put options on any securities in which the
Portfolio may invest or options on any securities index composed of securities
in which the Portfolio may invest. The Portfolio does not intend to purchase an
option on any security if, after such transaction, more than 5% of its net
assets, as measured by the aggregate of all premiums paid for all such options
held by the Portfolio, would be so invested.
To the extent that the Portfolio enters into futures contracts, options on
futures contracts and options on foreign currencies traded on an exchange
regulated by the Commodity Futures Trading Commission ("CFTC"), in each case
that are not for bona fide hedging purposes (as defined by the CFTC), the
aggregate initial margin and premiums required to establish these positions
(excluding the amount by which options are "in-the-money") may not exceed 5% of
the liquidation value of the Portfolio's portfolio, after taking into account
unrealized profits and unrealized losses on any contracts the Portfolio has
entered into.
Forward contracts are individually negotiated and privately traded by
currency traders and their customers. A forward contract involves an obligation
to purchase or sell a specific currency (or basket of currencies) for an agreed
price at a future date, which may be any fixed number of days from the date of
the contract. The Portfolio may engage in cross-hedging by using forward
contracts in one currency (or basket of currencies) to hedge against
fluctuations in the value of securities denominated in a different currency if
the Investment Adviser determines that there is an established historical
pattern of correlation between the two currencies (or the basket of currencies
and the underlying currency). Use of a different foreign currency magnifies the
Portfolio's exposure to foreign currency exchange rate fluctuations. The
Portfolio may also use forward contracts to shift its exposure to foreign
currency exchange rate changes from one currency to another.
LEVERAGE THROUGH BORROWING. The Portfolio may from time to time increase its
ownership of portfolio securities above the amounts otherwise possible by
borrowing from banks on an unsecured basis at fixed or variable rates of
interest and investing the borrowed funds. The Investment Adviser currently
anticipates that the Portfolio will incur borrowings for the purpose of
acquiring additional income-producing securities when it is believed that the
interest payable with respect to such borrowings will be exceeded by (a) the
income payable on the securities acquired with such borrowings or (b) the
anticipated total return (a combination of income and appreciation) on such
securities. Such borrowings might be made, for example, when short-term interest
rates fall below the yields available from the securities acquired with the
borrowed funds or the total return anticipated from such securities.
The Portfolio is required to maintain asset coverage of at least 300% with
respect to such borrowings, which means that the Portfolio my borrow an amount
up to 50% of the value of its net assets (not including such borrowings). The
Portfolio may be required to dispose of securities held by it on unfavorable
terms if market fluctuations or other factors reduce such asset coverage to less
than 300%.
Leveraging will exaggerate any increase or decrease in the market value of
the securities held by the Portfolio. Money borrowed for leveraging will be
subject to interest costs which may or may not exceed the income from the
securities purchased. The Portfolio may also be required to maintain minimum
average balances in connection with such borrowing or to pay a commitment or
other fee to maintain a line of credit; either of these requirements will
increase the cost of borrowing over the stated interest rate. Unless the income
and appreciation, if any, on assets acquired with borrowed funds exceeds the
cost of borrowing, the use of leverage will diminish the investment performance
of the Portfolio compared with what it would have been without leverage.
The Portfolio will not always borrow money for additional investments. The
Portfolio's willingness to borrow money for investment purposes, and the amount
it will borrow, will depend on many factors, the most important of which are the
investment outlook, market conditions and interest rates. Successful use of a
leveraging strategy depends on the Investment Adviser's ability to predict
correctly interest rates and market movements, and there is no assurance that a
leverage strategy will be successful during any period in which it is employed.
The average daily loan balance for the fiscal year ended December 31, 1994 was
$3,137,134 and the average daily interest rate was 5.96%.
LENDING OF SECURITIES. The Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Commission, such loans would be required to
be secured continuously by collateral in cash, cash equivalents or U.S.
Government securities held by the Portfolio's custodian and maintained on a
current basis at an amount at least equal to the market value of the securities
loaned which will be marked to market daily. The Portfolio would have the right
to call a loan and obtain the securities loaned at any time on five business
days' notice. During the existence of a loan, the Portfolio will continue to
receive the equivalent of the interest or dividends paid by the issuer on the
securities loaned and will also receivea fee, or all or a portion of the
interest on investment of the collateral, if any. However, the Portfolio may pay
lending fees to such borrowers The Portfolio would not 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 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 securities loaned if
the borrower of the securities fails financially. However, the loans would be
made only to organizations deemed by the Portfolio's management to be of good
standing and, when, in the judgment of the Portfolio's management, the
consideration which can be earned from securities loans of this type justifies
the attendant risk. If the management of the Portfolio decides to make
securities loans, it is intended that the value of the securities loaned would
not exceed 30% of the Portfolio's total assets.
INVESTMENT RESTRICTIONS. The Fund and the Portfolio have adopted certain
fundmental investment restrictions which are enumerated in detail in the
Statement of Additional Information and which may not be changed unless
authorized by a shareholder vote and an investor vote, respectively. Except for
such enumerated restrictions and as otherwise indicated in this prospectus, the
investment objective and policies of the Fund and the Portfolio are not
fundamental policies and accordingly may be changed by the Trustees of the Trust
and the Portfolio without obtaining the approval of the Fund's shareholders or
the investors in the Portfolio, as the case may be. If any changes were made in
the Fund's investment objective, the Fund might have an investment objective
different from the objective which an investor considered appropriate at the
time the investor became a shareholder of the Fund.
An investment in the Fund entails the risk that the principal value of Fund
shares and the income earned thereon may not increase or may decline. The
Portfolio's investments in equity securities are subject to the risk of adverse
developments affecting particular companies or industries and the stock market
generally. The lowest investment grade, lower rated and comparable unrated debt
securities in which the Portfolio may invest will have speculative
characteristics in varying degrees. While such securities may have some quality
and protective characteristics, these characteristics can be expected to be
offset or outweighed by uncertainties or major risk exposures to adverse
conditions. Lower rated and comparable unrated securities are subject to the
risk of an issuer's inability to meet principal and interest payments on the
securities (credit risk) and may also be subject to price volatility due to such
factors as interest rate sensitivity, market perception of the creditworthiness
of the issuer and general market liquidity (market risk). Lower rated and
comparable unrated securities are also more likely to react to real or perceived
developments affecting markets and credit risk than are more highly rated
securities, which react primarily to movements in the general level of interest
rates. The Portfolio may retain defaulted securities in its portfolio when such
retention is considered desirable by the Investment Adviser. In the case of a
defaulted security, the Portfolio may incur additional expenses seeking recovery
of its investment. In the event the rating of a security held by the Portfolio
is downgraded, the Investment Adviser will consider disposing of such security,
but is not obligated to do so.
- --------------------------------------------------------------------------------
THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND PROSPECTIVE
INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER INVESTMENTS WHEN
CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT ELIMINATE RISK OR
ASSURE ACHIEVEMENT OF ITS OBJECTIVE.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE TOTAL RETURN TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED OCTOBER 9, 1981, AS AMENDED AND RESTATED. THE TRUST IS A MUTUAL FUND -- AN
OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series and because the Trust can offer separate series
(such as the Fund) it is known as a "series company". Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK, AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions of the Fund and the
Portfolio, see "The Fund's Investment Objective" and "How the Fund and the
Portfolio Invest their Assets; Investment Risks". Further information regarding
investment practices may be found in the Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $500 million. The public
shareholders of the Fund have previously approved the policy of investing the
Fund's assets in an interest in the Portfolio.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. In the event the Fund withdraws all of its assets
from the Portfolio, or the Board of Trustees of the Trust determines that the
investment objective of the Portfolio is no longer consistent with the
investment objective of the Fund, such Trustees would consider what action might
be taken, including investing the assets of the Fund in another pooled
investment entity or retaining an investment adviser to manage the Fund's assets
in accordance with its investment objective. The Fund's investment performance
may be affected by a withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large
investor withdraws from the Portfolio, the remaining investors may experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust and the Trustees of the Portfolio are the same. Such procedures require
each Board to take action to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of .0625% (equivalent to .75% annually) of the average daily net
assets of the Portfolio up to $500 million. On net assets of $500 million and
over the annual fee is reduced as follows:
Annualized Fee Rate
Average Daily Net Assets for the Month (For Each Level)
-------------------------------------- -------------------
$500 million but less than $1 billion ........... 0.6875%
$1 billion but less than $1.5 billion ........... 0.6250%
$1.5 billion but less than $2 billion ........... 0.5625%
$2 billion but less than $3 billion ............. 0.5000%
$3 billion and over ............................. 0.4375%
For the fiscal year ended December 31, 1994, the Portfolio paid BMR advisory
fees equivalent to 0.74% of the Portfolio's average daily net assets for such
year.
BMR furnishes for the use of the Portfolio office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Portfolio. BMR also places the portfolio security transactions of the Portfolio
for execution with many broker-dealer firms and uses its best efforts to obtain
execution of such transactions at prices which are advantageous to the Portfolio
and at reasonably competitive commission rates. Subject to the foregoing, BMR
may consider sales of shares of the Fund or of other investment companies
sponsored by BMR or Eaton Vance as a factor in the selection of broker-dealer
firms to execute portfolio transactions.
Timothy O'Brien has acted as the portfolio manager of the Portfolio since
January, 1995. Mr. O'Brien joined Eaton Vance as a Vice President on April 25,
1994. Prior to joining Eaton Vance, he served as a Vice President of Loomis,
Sayles & Co.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly-held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
SERVICE PLAN
- --------------------------------------------------------------------------------
In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the requirements of
Rule 12b-1 under the Investment Company Act of 1940 and the service fee
requirements of the revised sales charge rule of the National Association of
Securities Dealers, Inc. THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE
PAYMENTS FOR PERSONAL SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO
THE PRINCIPAL UNDERWRITER, FINANCIAL SERVICE FIRMS ("AUTHORIZED FIRMS") AND
OTHER PERSONS IN AMOUNTS NOT EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET
ASSETS FOR ANY FISCAL YEAR. The Trustees of the Trust have implemented the Plan
by authorizing the Fund to make quarterly service fee payments to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed .25% of the
Fund's average daily net assets for any fiscal year based on the value of Fund
shares sold by such persons and remaining outstanding for at least twelve
months. During the fiscal year ended December 31, 1994, the Fund paid or accrued
service fees under the Plan equivalent to .18% of the Fund's average daily net
assets for such year. The Plan is described further in the Statement of
Additional Information.
VALUING FUND SHARES
- ------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m., New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which in turn, reflects
the underlying value of the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share and the public offering price
based thereon. It is the Authorized Firms' responsibility to transmit orders
promptly to the Principal Underwriter, which is a wholly-owned subsidiary of
Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Securities
listed on securities exchanges or in the NASDAQ National Market are valued at
closing sales prices. For further information regarding the valuation of the
Portfolio's assets, see "Determination of Net Asset Value" in the Statement of
Additional Information. Eaton Vance Corp. owns 77.3% of the outstanding stock of
IBT, the Fund's and the Portfolio's custodian.
- --------------------------------------------------------------------------------
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- --------------------------------------------------------------------------------
HOW TO BUY FUND SHARES
- ------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firm and the Principal Underwriter. The Principal Underwriter will furnish the
names of Authorized Firms to an investor upon request. The Fund may suspend the
offering of shares at any time and may refuse any order for the purchase of
shares.
The sales charge may vary depending on the size of the purchase and the
number of shares of Eaton Vance funds the investor may already own, any
arrangement to purchase additional shares during a 13-month period, or special
purchase programs. Complete details of how investors may purchase shares at
reduced sales charges under a Statement of Intention, Right of Accumulation, or
various employee benefit plans are available from Authorized Firms or the
Principal Underwriter.
The current sales charges are:
<TABLE>
<CAPTION>
SALES CHARGE AS SALES CHARGE AS DEALER DISCOUNT AS
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
AMOUNT OF PURCHASE AMOUNT INVESTED OFFERING PRICE OFFERING PRICE
------------------ --------------- -------------- --------------
<S> <C> <C> <C>
Less than $100,000 .......................................... 4.99% 4.75% 4.00%
$100,000 but less than $250,000 ............................. 3.90 3.75 3.15
$250,000 but less than $500,000 ............................. 2.83 2.75 2.30
$500,000 but less than $1,000,000 ........................... 2.04 2.00 1.70
$1,000,000 or more .......................................... 0<F1> 0<F1> 0<F2>
- ----------
<FN>
<F1>No sales charge is payable at the time of purchase on investments of $1 million or more. A contingent deferred
sales charge ("CDSC") of 1% will be imposed on such investments, as described below, in the event of certain
redemption transactions within 18 months of purchase.
<F2>The Principal Underwriter may pay a commission to Authorized Firms who initiate and are responsible for purchases of
$1 million or more as follows: 1.00% on sales up to $2 million, plus 0.80% on the next $1 million, 0.20% on the
next $2 million, and 0.08% on the excess over $5 million.
</TABLE>
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge,
Authorized Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The Principal Underwriter may, from time to time, at its
own expense, provide additional incentives to Authorized Firms which employ
registered representatives who sell a minimum dollar amount of the Fund's shares
and/or shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent (the "Transfer Agent") as follows:
The Shareholder Services Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
Shares of the Fund may be sold at net asset value to current and retired
Directors and Trustees of Eaton Vance funds, including the Portfolio; to
officers and employees and clients of Eaton Vance and its affiliates; to
registered representatives and employees of Authorized Firms and bank employees
who refer customers to registered representatives of Authorized Firms; and to
such persons' spouses and children under the age of 21 and their beneficial
accounts. Shares may also be issued at net asset value (1) in connection with
the merger of an investment company with the Fund, (2) to investors making an
investment as part of a fixed fee program whereby an entity unaffiliated with
the investment adviser provides multiple investment services, such as
management, brokerage and custody, and (3) where the amount invested represents
redemption proceeds from a mutual fund unaffiliated with Eaton Vance, if the
redemption occurred no more than 60 days prior to the purchase of Fund shares
and the redeemed shares were subject to a sales charge.
No initial sales charge and no contingent deferred sales charge will be
payable or imposed with respect to shares of the Fund purchased by retirement
plans qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of
1986, as amended (the "Code") ("Eligible Plans"). In order to purchase shares
without a sales charge, the plan sponsor of an Eligible Plan must notify the
Transfer Agent of the Fund of its status as an Eligible Plan. Participant
accounting services (including trust fund reconciliation services) will be
offered only through third party recordkeepers and not by EVD. The Fund's
Principal Underwriter may pay commissions to Authorized Firms who initiate and
are responsible for purchases of shares of the Fund by Eligible Plans of up to
1.00% of the amount invested in such shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at the applicable public offering price shown above. The minimum
value of securities (or securities and cash) accepted for deposit is $5,000.
Securities accepted will be sold by IBT as agent for the account of their owner
on the day of their receipt by IBT or as soon thereafter as possible. The number
of Fund shares to be issued in exchange for securities will be the aggregate
proceeds from the sale of such securities divided by the applicable public
offering price per Fund share on the day such proceeds are received. Eaton Vance
will use reasonable efforts to obtain the then current market price for such
securities but does not guarantee the best available price. Eaton Vance will
absorb any transaction costs, such as commissions, on the sale of the
securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Traditional Total Return Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Total Return Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular Federal, state and local tax
consequences of exchanging securities for Fund shares.
- --------------------------------------------------------------------------------
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- --------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MA 02104, during its business hours,
a written request for redemption in good order plus any share certificates with
executed stock powers. The redemption price will be based on the net asset value
per Fund share next computed after such delivery. Good order means that all
relevant documents must be endorsed by the record owner (s) exactly as the
shares are registered and the signature(s) must be guaranteed by a member of
either the Securities Transfer Association's STAMP program or the New York Stock
Exchange's Medallion Signature Program, or certain banks, savings and loan
institutions, credit unions, securities dealers, securities exchanges, clearing
agencies and registered securities associations as required by a regulation of
the Securities and Exchange Commission and acceptable to The Shareholder
Services Group, Inc. In addition, in some cases, good order may require the
furnishing of additional documents such as where shares are registered in the
name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the shares as of the date determined above, reduced by the amount
of any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to fifteen days from the purchase date
when the purchase check has not yet cleared. Redemptions or repurchases may
result in a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem Fund accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares.
Contingent Deferred Sales Charge. If shares have been purchased at net asset
value with no initial sales charge by virtue of the purchase having been in the
amount of $1 million or more and are redeemed within 18 months after the end of
the calendar month in which the purchase was made, a CDSC of 1% will be imposed
on such redemption. The CDSC will be retained by the Principal Underwriter. The
CDSC will be imposed on an amount equal to the lesser of the current market
value or the original purchase price of the shares redeemed. Accordingly, no
CDSC will be imposed on increases in account value above the initial purchase
price, including any distributions that have been reinvested in additional
shares. In determining whether a CDSC is applicable to a redemption, the
calculation will be made in a manner that results in the lowest possible rate
being charged. Accordingly, it will be assumed that redemptions are made first
from any shares in the shareholder's account that are not subject to a CDSC. The
CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds within the 30-day period and in accordance with
the conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current balance in the account. THE LIFETIME
INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN
SHARES BY SENDING A CHECK FOR $50 OR MORE to The Shareholder Services Group,
Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2 or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, Massachusetts 02104. (Please provide the name of the
shareholder, the Fund and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend-disbursing agent, The Shareholder Services Group, Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each account statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or
capital gains distribution checks which are returned by the United States Postal
Service as not deliverable or which remain uncashed for six months or more will
be reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL INVESTMENTS
IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of any of the following
funds: Eaton Vance Cash Management Fund, Eaton Vance Income Fund of Boston,
Eaton Vance Municipal Bond Fund L.P., Eaton Vance Tax Free Reserves and any fund
in the Eaton Vance Traditional Group of Funds on the basis of the net asset
value per share of each fund at the time of the exchange, provided that such
exchange offers are available only in states where shares of the fund being
acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of
the above funds without incurring the CDSC. The shares acquired in an exchange
may be subject to a CDSC upon redemption. For purposes of computing the CDSC
payable upon the redemption of shares acquired in an exchange, the holding
period of the original shares is added to the holding period of the shares
acquired in the exchange.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of the other funds are available from Authorized Firms or the
Principal Underwriter The prospectus for each fund describes its investment
objectives and policies, and shareholders should obtain a prospectus and
consider these objectives and policies carefully before requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment
adviser or administrator may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange (plus, in the
case of an exchange made within six months of the date of purchase, an amount
equal to the difference, if any, between the sales charge previously paid on the
shares being exchanged and the sales charge payable on the Fund shares being
acquired). Any such exchange is subject to any restrictions or qualifications
set forth in the current prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided that the investor has not disclaimed in writing the use of the
privilege. To effect such exchanges, call The Shareholder Services Group, Inc.
at 800-262-1122 or, within Massachusetts, 617-573-9403, Monday through Friday,
9:00 a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone
exchange must be registered in the same name(s) and with the same address as the
shares being exchanged. Neither the Fund, the Principal Underwriter nor The
Shareholder Services Group, Inc. will be responsible for the authenticity of
exchange instructions received by telephone; provided that reasonable procedures
to confirm that instructions communicated are genuine have been followed.
Telephone instructions will be tape recorded. In times of drastic economic or
market changes, a telephone exchange may be difficult to implement. An exchange
may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of EV
Traditional Total Return Fund may be mailed directly to The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104 at any time -- whether or
not distributions are reinvested. The name of the shareholder, the Fund and the
account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $100,000 or more made over a 13-month
period are eligible for reduced sales charges. See "Statement of Intention and
Escrow Agreement".
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $100,000 or more. Shares of the Eaton Vance funds listed
under "The Eaton Vance Exchange Privilege" may be combined under the Statement
of Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an amount specified by the shareholder. A
minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST ANY PORTION OR ALL OF THE REPURCHASE OR REDEMPTION PROCEEDS (PLUS THAT
AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO ROUND OFF THE PURCHASE TO THE
NEAREST FULL SHARE) IN SHARES OF THE FUND, or, provided that the shares
repurchased or redeemed have been held for at least 30 days, in shares of any of
the other funds offered by the Principal Underwriter subject to an initial sales
charge, at net asset value, provided that the reinvestment is effected within 30
days after such repurchase or redemption. Shares are sold to a reinvesting
shareholder at the next determined net asset value following timely receipt of a
written purchase order by the Principal Underwriter or by the fund whose shares
are to be purchased (or by such fund's transfer agent). The privilege is also
available to holders of shares of the other funds offered by the Principal
Underwriter subject to an initial sales charge who wish to reinvest such
repurchase or redemption proceeds in shares of the Fund. If a shareholder
reinvests redemption proceeds within the 30 day period the shareholder's account
will be credited with the amount of any CDSC paid on such redeemed shares. To
the extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Special rules may apply to the computation of gain or loss and to the
deduction of loss on a repurchase or redemption followed by a reinvestment. See
"Distributions and Taxes". Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-
employed spouses; and
-- 403(b) Retirement Plans for employees of public school systems,
hospitals, colleges and other non-profit organizations meeting certain
requirements of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
THE FUND'S POLICY IS TO DISTRIBUTE MONTHLY SUBSTANTIALLY ALL OF THE NET
INVESTMENT INCOME ALLOCATED TO THE FUND BY THE PORTFOLIO, LESS THE FUND'S DIRECT
AND ALLOCATED EXPENSES, AND TO DISTRIBUTE AT LEAST ANNUALLY SUBSTANTIALLY ALL OF
ITS NET REALIZED CAPITAL GAINS. A portion of distributions from net investment
income will be eligible for the dividends-received deduction for corporations.
The Fund's distributions from its net investment income, net short-term capital
gains, and certain foreign exchange gains will be taxable to shareholders as
ordinary income, whether paid in cash or reinvested in additional shares of the
Fund. The Fund's distributions from its net long-term capital gains are taxable
to shareholders as long-term capital gains, whether paid in cash or reinvested
in additional shares of the Fund and regardless of the length of time Fund
shares have been owned by shareholders. Certain distributions declared by the
Fund in October, November or December and paid the following January will be
taxable to shareholders as if received on December 31 of the year in which they
are declared.
Sales charges paid upon a purchase of shares of the Fund cannot be taken
into account for purposes of determining gain or loss on a redemption or
exchange of the shares before the 91st day after their purchase to the extent
shares of the Fund or of another fund are subsequently acquired pursuant to the
Fund's reinvestment or exchange privilege. Any disregarded amounts will result
in an adjustment to the shareholder's tax basis in some or all of any other
shares acquired.
Shareholders will receive annually tax information notices and Forms 1099 to
assist in the preparation of their Federal and state tax returns for the prior
calendar year's distributions, proceeds from the redemption or exchange of Fund
shares, and Federal income tax (if any) withheld by the Fund's Transfer Agent.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
- --------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS
ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE
TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE
PORTFOLIO DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The Fund's current yield is calculated by dividing the net investment
income per share during a recent 30-day period by the maximum offering price per
share of the Fund on the last day of the period and annualizing the resulting
figure. The Fund's average annual total return is determined by multiplying a
hypothetical initial purchase order of $1,000 by the average annual compound
rate of return (including capital appreciation/ depreciation, and dividends and
distributions paid and reinvested) for the stated period and annualizing the
result. The average annual total return calculation assumes the maximum sales
charge is deducted from the initial $1,000 purchase order and that all dividends
and distributions are reinvested at net asset value on the reinvestment dates
during the period. The Fund may also publish annual and cumulative total return
figures from time to time.
The Fund may also publish its distribution rate and/or its effective
distribution rate. The Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current maximum offering
price per share (including the maximum sales charge). The Fund's effective
distribution rate is computed by dividing the distribution rate by 12 and
reinvesting the resulting amount for a full year on a monthly basis. The
effective distribution rate will be higher than the distribution rate because of
the compounding effect of the assumed reinvestment. Investors should note that
the Fund's yield is calculated using a standardized formula, the income
component of which is computed from dividends on equity securities held by the
Portfolio based on the stated annual dividend rates of such securities,
exclusive of special or extra distributions (with all purchases and sales of
securities during such period included in the income calculation on a settlement
date basis), and from the income earned on short-term debt instruments held by
the Portfolio, whereas the distribution rate is based on the Fund's last monthly
distribution, which tends to be relatively stable and may be more or less than
the amount of net investment income and short-term capital gain actually earned
by the Fund during the month.
The Fund may also furnish total return calculations based on investments at
various sales charge levels or at net asset value. Any performance data which is
based on the Fund's net asset value per share would be reduced if a sales charge
were taken into account.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield or total return for
any prior periods should not be considered as a representation of what an
investment may earn or what the Fund's yield or total return may be in any
future period.
STATEMENT OF INTENTION AND ESCROW AGREEMENT
- ------------------------------------------------------------------------------
TERMS OF ESCROW. If the investor, on an application, makes a Statement of
Intention to invest a specified amount over a thirteen-month period, then out of
the initial purchase (or subsequent purchases if necessary) 5% of the dollar
amount specified on the application shall be held in escrow by the escrow agent
in the form of shares (computed to the nearest full share at the public offering
price applicable to the initial purchase hereunder) registered in the investor's
name. All income dividends and capital gains distributions on escrowed shares
will be paid to the investor or to the investor's order.
When the minimum investment so specified is completed, the escrowed shares
will be delivered to the investor. If the investor has an accumulation account
the shares will remain on deposit under the investor's account.
If total purchases under this Statement of Intention are less than the
amount specified, the investor will promptly remit to EVD any difference between
the sales charge on the amount specified and on the amount actually purchased.
If the investor does not within 20 days after written request by EVD or the
Authorized Firm pay such difference in sales charge, the escrow agent will
redeem an appropriate number of the escrowed shares in order to realize such
difference. Full shares remaining after any such redemption together with any
excess cash proceeds of the shares so redeemed will be delivered to the investor
or to the investor's order by the escrow agent.
In signing the application, the investor irrevocably constitutes and
appoints the escrow agent the investor's attorney to surrender for redemption
any or all escrowed shares with full power of substitution in the premises.
PROVISION FOR RETROACTIVE PRICE ADJUSTMENT. If total purchases made under this
Statement are large enough to qualify for a lower sales charge than that
applicable to the amount specified, all transactions will be computed at the
expiration date of this Statement to give effect to the lower charge. Any
difference in sales charge will be refunded to the investor in cash, or applied
to the purchase of additional shares at the lower charge if specified by the
investor. This refund will be made by the Authorized Firm and by EVD. If at the
time of the recomputation a firm other than the original firm is placing the
orders, the adjustment will be made only on those shares purchased through the
firm then handling the account.
<PAGE>
INVESTMENT ADVISER OF
TOTAL RETURN PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL TOTAL RETURN FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS 725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL TOTAL RETURN FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-TMP
EV TRADITIONAL
TOTAL RETURN
FUND
PROSPECTUS
MAY 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC INVESTORS FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 1, 1995
Effective August 1, 1995, EV Classic Investors Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Investors Trust, which
was also a Massachusetts business trust. Except for the fact that the Fund is
now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Investors Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE INVESTORS TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE SPECIAL
INVESTMENT TRUST.
August 1, 1995
C-IFSAIS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
June 1, 1995
EV CLASSIC INVESTORS FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Classic Investors Fund (the "Fund") and certain
other series of Eaton Vance Investors Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II.
TABLE OF CONTENTS Page
PART I
Investment Objectives and Policies ................ 2
Investment Restrictions ........................... 4
Trustees and Officers ............................. 5
Investment Adviser and Administrator .............. 7
Custodian ......................................... 9
Service for Withdrawal ............................ 10
Determination of Net Asset Value .................. 10
Investment Performance ............................ 10
Taxes ............................................. 12
Portfolio Security Transactions ................... 14
Other Information ................................. 15
Independent Accountants ........................... 16
PART II
Fees and Expenses ................................. a-1
Performance Information ........................... a-2
Principal Underwriter ............................. a-2
Distribution Plan ................................. a-2
Additional Tax Matters ............................ a-4
Control Persons and Principal Holders of Securities a-4
Financial Statements .............................. a-5
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED JUNE 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV MARATHON INVESTORS FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 1, 1995
Effective August 1, 1995, EV Marathon Investors Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Investors Trust, which
was also a Massachusetts business trust. Except for the fact that the Fund is
now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Investors Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE INVESTORS TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE SPECIAL
INVESTMENT TRUST.
August 1, 1995
M-IFSAIS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
June 1, 1995
EV MARATHON INVESTORS FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Marathon Investors Fund (the "Fund") and certain
other series of Eaton Vance Investors Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II.
TABLE OF CONTENTS Page
PART I
Investment Objectives and Policies ................ 2
Investment Restrictions ........................... 4
Trustees and Officers ............................. 5
Investment Adviser and Administrator .............. 7
Custodian ......................................... 9
Service for Withdrawal ............................ 10
Determination of Net Asset Value .................. 10
Investment Performance ............................ 10
Taxes ............................................. 12
Portfolio Security Transactions ................... 14
Other Information ................................. 15
Independent Accountants ........................... 16
PART II
Fees and Expenses ................................. a-1
Performance Information ........................... a-2
Principal Underwriter ............................. a-2
Distribution Plan ................................. a-2
Additional Tax Matters ............................ a-4
Control Persons and Principal Holders of Securities a-4
Financial Statements .............................. a-5
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED JUNE 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV TRADITIONAL INVESTORS FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED JUNE 1, 1995
Effective August 1, 1995, EV Traditional Investors Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Investors Trust, which
was also a Massachusetts business trust. Except for the fact that the Fund is
now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Investors Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE INVESTORS TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE SPECIAL
INVESTMENT TRUST.
August 1, 1995
T-IFSAIS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
June 1, 1995
EV TRADITIONAL INVESTORS FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Traditional Investors Fund (the "Fund") and
certain other series of Eaton Vance Investors Trust (the "Trust"). Part II
provides information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II.
TABLE OF CONTENTS Page
PART I
Investment Objectives and Policies ................ 2
Investment Restrictions ........................... 4
Trustees and Officers ............................. 5
Investment Adviser and Administrator .............. 7
Custodian ......................................... 9
Service for Withdrawal ............................ 10
Determination of Net Asset Value .................. 10
Investment Performance ............................ 10
Taxes ............................................. 12
Portfolio Security Transactions ................... 14
Other Information ................................. 15
Independent Accountants ........................... 16
PART II
Fees and Expenses ................................. a-1
Performance Information ........................... a-2
Services for Accumulation ......................... a-2
Principal Underwriter ............................. a-3
Service Plan ...................................... a-4
Additional Tax Matters ............................ a-4
Control Persons and Principal Holders of Securities a-4
Appendix .......................................... a-5
Financial Statements .............................. a-17
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED JUNE 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
This Part I provides information about the Fund and certain other series of
the Trust.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of the Fund are to provide current income and
long-term growth of capital. The Fund currently seeks to meet its investment
objectives by investing its assets in the Investors Portfolio (the "Portfolio"),
a separate registered investment company with the same investment objectives as
the Fund and substantially the same investment policies and restrictions as the
Fund.
The Trustees of the Trust may withdraw the Fund's investment from the
Portfolio at any time, if they determine that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in
another investment company with substantially the same investment objectives,
policies and restrictions as those of the Fund or directly in investment
securities in accordance with the Portfolio's investment policies, as described
below. Except as indicated below, the approval of the Fund's shareholders would
not be required to change the Portfolio's investment policies discussed below,
including those concerning security transactions.
Because the investment characteristics of the Fund will correspond directly
to those of the Portfolio, the following is a discussion of the various
policies, investments and techniques employed by the Portfolio.
The Portfolio is a flexibly managed account seeking to provide current
income and long-term growth of capital through careful selection of securities
considered to be of high or improving quality. The net asset value of the Fund
will fluctuate in response to changes in the value of the securities held by the
Portfolio. When the Portfolio sells securities held by it, it may realize a gain
or loss depending on whether it sells them for more or less than their cost. As
in any investment which fluctuates in value, the management of the Portfolio
cannot, of course, assure the achievement of the objectives or eliminate risk.
It is believed, however, that through selective diversification and continuous
supervision, the risks of investing will be reduced and the shareholder's
opportunities for rewarding investment results over the long term may be
enhanced.
While it is not the policy of the Portfolio to purchase securities with a
view to short-term profits, the Portfolio will dispose of securities without
regard to the time they have been held if such action seems advisable. The
portfolio turnover rate of the Portfolio, exclusive of transactions in
securities whose maturities at the time of acquisition were one year or less,
for the fiscal year ended January 31, 1995, was 28%.
The Portfolio may invest in various kinds and types of debt securities from
time to time, including without limitation obligations issued, guaranteed or
otherwise backed by U.S. Government agencies and instrumentalities,
collateralized mortgage obligations ("CMOs") and various other mortgage-backed
securities including CMOs issued by entities which qualify under the Internal
Revenue Code as Real Estate Mortgage Investment Conduits ("REMICs"), and other
types of asset-backed obligations and collateralized securities. The Portfolio
will not, however, invest in residual interests in REMICs.
CREDIT QUALITY-RISKS. The Portfolio may invest in lower quality, high risk, high
yielding debt securities (commonly referred to as "junk bonds"). The Portfolio
currently intends to limit its investments in these securities to 5% or less of
its assets. These securities are subject to substantially greater credit risks
than some of the other fixed-income securities in which the Portfolio may
invest. These credit risks include the possibility of default or bankruptcy of
the issuer. The value of such securities may also be subject to a greater degree
of volatility in response to interest rate fluctuations, economic downturns and
changes in the financial condition of the issuer. These securities are less
liquid and are more difficult to value than other fixed-income securities.
During periods of deteriorating economic conditions and contraction in the
credit markets, the ability of issuers of such securities to service their debt,
meet projected goals, or obtain additional financing may be impaired.
WHEN-ISSUED SECURITIES. The Portfolio may purchase debt securities on a when-
issued basis; that is, delivery and payment for the securities normally take
place up to 90 days after the date of the transaction. The payment obligation
and the interest rate that will be received on the securities are fixed at the
time the Portfolio enters into the purchase commitment. The Portfolio's
custodian bank will place cash or high grade liquid debt securities in a
separate account of the Portfolio in an amount at least equal to the when-
issued commitments. If the value of the securities placed in the separate
account declines, additional cash or securities will be placed in the account on
a daily basis so that the value of the account will at least equal the amount of
the Portfolio's when-issued commitments. When the Portfolio commits to purchase
a security on a when-issued basis, it records the transaction and reflects the
value of the security in determining its net asset value. Securities purchased
on a when-issued basis and the securities held by the Portfolio are subject to
changes in value based upon the public's perception of the creditworthiness of
the issuer and changes in the level of interest rates (which will generally
result in both changing in value in the same way, i.e., both experiencing
appreciation when interest rates decline and depreciation when interest rates
rise). Therefore, to the extent that the Portfolio remains substantially fully
invested at the same time that it has purchased securities on a when-issued
basis, there will be greater fluctuations in the Portfolio's net asset value
than if it solely set aside cash to pay for when-issued securities.
FOREIGN SECURITIES. Investing in securities issued by companies whose principal
business activities are outside the United States may involve significant risks
not present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those not
subject to the disclosure and reporting requirements of the United States
securities laws. Foreign issuers are generally not bound by uniform accounting,
auditing, and financial reporting requirements and standards of practice
comparable to those applicable to domestic issuers. Investments in foreign
securities also involve the risk of possible adverse changes in investment or
exchange control regulations, expropriation or confiscatory taxation, limitation
on the removal of funds or other assets of the Portfolio, political or financial
instability or diplomatic and other developments which could affect such
investments. Furthermore, economies of particular countries or areas of the
world may differ favorably or unfavorably from the economy of the United States.
It is anticipated that in most cases the best available market for foreign
securities will be on exchanges or in over-the-counter markets located outside
of the United States. Foreign stock markets, while growing in volume and
sophistication, are generally not as developed as those in the United States,
and securities of some foreign issuers (particularly those located in developing
countries) may be less liquid and more volatile than securities of comparable
U.S. companies. In addition, foreign brokerage commissions are generally higher
than commissions on securities traded in the United States and may be
non-negotiable. In general, there is less overall governmental supervision and
regulation of foreign securities markets, broker-dealers, and issuers than in
the United States.
Since investments in companies whose principal business activities are
located outside of the United States will frequently involve currencies of
foreign countries, and since assets of the Portfolio may temporarily be held in
bank deposits in foreign currencies during the completion of investment
programs, the value of the assets of the Portfolio as measured in U.S. dollars
may be affected favorably or unfavorably by changes in foreign currency exchange
rates and exchange control regulations. The Portfolio may conduct its foreign
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering into
contracts to purchase or sell foreign currencies at a future date (i.e., a
"forward foreign currency exchange" contract or "forward" contract). It may
convert currency on a spot basis from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to the Portfolio at one rate, while offering a lesser rate of exchange should
the Portfolio desire to resell that currency to the dealer. Forward contracts
are traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. When the Portfolio enters into a contract for the purchase or
sale of a security denominated in a foreign currency, it may desire to "lock in"
the U.S. dollar price of the security. By entering into a forward contract for
the purchase or sale, for a fixed amount of U.S. dollars, of the amount of
foreign currency involved in the underlying security transaction, the Portfolio
will be able to protect itself against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date the security is purchased or sold
and the date on which payment is made or received. Although a forward contract
will minimize the risk of loss due to a decline in the value of the hedged
currency, it also limits any potential gain which might result should the value
of such currency increase.
STOCK INDEX FUTURES. Entering into a derivative instrument involves a risk that
the applicable market will move against the Portfolio's position and that the
Portfolio will incur a loss. This loss may exceed the amount of the initial
investment made or the premium received by the Portfolio. Derivative instruments
may sometimes increase or leverage the Portfolio's exposure to a particular
market risk. Leverage enhances the Portfolio's exposure to the price volatility
of derivative instruments it holds. The Portfolio's success in using derivative
instruments to hedge portfolio assets depends on the degree of price correlation
between the derivative instruments and the hedged asset. Imperfect correlation
may be caused by several factors, including temporary price disparities among
the trading markets for the derivative instrument, the assets underlying the
derivative instrument and the Portfolio's assets. During periods of market
volatility, a commodity exchange may suspend or limit trading in an
exchange-traded derivative instrument, which may make the contract temporarily
illiquid and difficult to price. Commodity exchanges may also establish daily
limits on the amount that the price of a futures contract or futures can vary
from the previous day's settlement price. Once the daily limit is reached, no
trades may be made that day at a price beyond the limit. This may prevent the
Portfolio from closing out positions and limiting its losses. Certain provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), limit the extent
to which the Portfolio may purchase and sell derivative instruments. The
Portfolio will engage in transactions in futures contracts and related options
only to the extent such transactions are consistent with the requirements of the
Code for maintaining the qualification of the Fund as a regulated investment
company ("RIC") for Federal income tax purposes.
Transactions using futures contracts and options thereon (other than options
that the Portfolio has purchased) expose the Portfolio to an obligation to
another party. The Portfolio will not enter into any such transactions unless it
owns either (1) an offsetting ("covered") position in securities or futures
contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. The Portfolio will comply with Securities and Exchange
Commission guidelines regarding cover for these instruments and, if the
guidelines so require, set aside cash, U.S. Government securities or other
liquid, high-grade debt securities in a segregated account with its custodian in
the prescribed amount.
Assets used as cover or held in a segregated account cannot be sold while
the position in the corresponding futures contract or option is open, unless
they are replaced with other appropriate assets. As a result, the commitment of
a large portion of the Portfolio's assets to cover or segregated accounts could
impede portfolio management or the Portfolio's ability to meet redemption
requests or other current obligations.
The Portfolio may enter into futures contracts, and options on futures
contracts, traded on an exchange regulated by the Commodities Futures Trading
Commission ("CFTC") and on foreign exchanges, but, with respect to foreign
exchange-traded futures contracts and options on such futures contracts, only if
the Investment Adviser determined that trading on each such foreign exchange
does not subject the Portfolio to risks, including credit and liquidity risks,
that are materially greater then the risks associated with trading on
CFTC-regulated exchanges.
INVESTMENT RESTRICTIONS
The following investment restrictions are designated as fundamental policies
and as such cannot be changed without the approval of the holders of a majority
of the Fund's outstanding voting securities, which as used in this Statement of
Additional Information means the lesser of (a) 67% of the shares of the Fund
present or represented by proxy at a meeting if the holders of more than 50% of
the shares are present or represented at the meeting or (b) more than 50% of the
shares of the Fund. Accordingly, the Fund may not:
(1) With respect to 75% of its total assets, purchase the securities of any
one issuer if such purchase at the time thereof would cause more than 5% of its
gross assets taken at market value to be invested in the securities of such
issuer, or would cause more than 10% of the outstanding voting securities of
such issuer to be held by the Fund, except obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities and except securities of
other investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities);
(4) Invest more than 25% of the value of its total assets at the time of
acquisition in any one industry with public utility companies (being electric
utility companies, natural gas producing companies, transmission companies,
telephone companies, and water works companies) being considered separate
industries;
(5) Make loans to any person except by (a) the acquisition of debt
securities and making of portfolio investments, (b) entering into repurchase
agreements or (c) lending portfolio securities;
(6) Purchase or sell real estate although it may purchase and sell
securities which are secured by real estate and securities of companies which
invest or deal in real estate; and
(7) Purchase or sell physical commodities or commodity contracts for the
purchase or sale of physical commodities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objectives, policies and restrictions as the
Fund.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing numbered investment restrictions adopted by the
Fund; such restrictions cannot be changed without the approval of a "majority of
the outstanding voting securities" of the Portfolio, which as used in this
Statement of Additional Information means the lesser of (a) 67% of the
outstanding voting securities of the Portfolio present or represented by proxy
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented at the meeting or (b)
more than 50% of the outstanding voting securities of the Portfolio. The term
"voting securities" as used in this paragraph has the same meaning as in the
Investment Company Act of 1940 (the "1940 Act"). Whenever the Trust is requested
to vote on a change in the fundamental investment restrictions of the Portfolio,
the Trust will hold a meeting of Fund shareholders and will cast its vote as
instructed by the shareholders.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Trust without approval by the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio with or
without the approval of the Fund or the Portfolio's other investors. As a matter
of nonfundamental policy, neither the Fund nor the Portfolio may: (a) invest in
put or call options or straddles or spreads; (b) sell or contract to sell any
security which it does not own unless by virtue of its ownership of other
securities it has at the time of sale a right to obtain securities 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; (c) purchase securities
of any issuer which has a record of less than three years' continuous operation
including, however, in such three years the operation of any predecessor company
or companies, partnership or individual enterprise if the issuer whose
securities are proposed as an investment for the Fund or the Portfolio has come
into existence as a result of a merger, consolidation, reorganization, or the
purchase of substantially all the assets of such predecessor company or
companies, partnership or individual enterprise; provided that 5% of the total
assets of the Fund or the Portfolio may be invested in such companies and
nothing in (c) shall prevent the purchase of securities of an issuer
substantially all of whose assets are (i) securities of one or more issuers
which have had a record of three years' continuous operation, or (ii) assets of
an independent division of an issuer, which division has had a record of three
years' continuous operation and further provided that exempted from this
restriction are U.S. Government securities, securities of issuers which are
rated by at least one nationally recognized statistical rating organization,
municipal obligations and obligations issued or guaranteed by any foreign
government or its agencies or instrumentalities; (d) purchase or retain in its
portfolio any securities issued by an issuer any of whose officers, directors,
trustees or security holders is an officer or Trustee of the Trust or the
Portfolio or is a member, officer, director or trustee of or person interested
in any investment adviser of the Trust or the Portfolio, if after the purchase
of the securities of such issuer by the Fund or the Portfolio one or more of
such persons owns beneficially more than 1/2 of 1% of the shares or securities
or both (all taken at market value) of such issuer and such persons owning more
than 1/2 of 1% of such shares of securities together own beneficially more than
5% of such shares or securities or both (all taken at market value); (e)
purchase oil, gas or other mineral leases or purchase partnership interests in
oil, gas or other mineral exploration or development programs; and (f) invest
more than 15% of net assets in investments which are not readily marketable,
including restricted securities and repurchase agreements maturing in more than
seven days. Restricted securities for the purposes of this limitation do not
include securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 that the Board of Trustees of the Trust or the Portfolio,
or its delegate, determines to be liquid, based upon the trading markets for the
specific security.
In order to permit the sale of shares of the Fund in certain states, the
Fund may make commitments more restrictive than the policies described above.
Should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the state(s) involved.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Portfolio's investment
adviser, Boston Management and Research ("BMR" or the "Investment Adviser"), a
wholly-owned subsidiary of Eaton Vance Management ("Eaton Vance"); of Eaton
Vance's parent, Eaton Vance Corp. ("EVC"); and of BMR's and Eaton Vance's
trustee, Eaton Vance, Inc. ("EV"). Eaton Vance and EV are both wholly-owned
subsidiaries of EVC. Those Trustees who are "interested persons" of the Trust,
the Portfolio, BMR, Eaton Vance, EVC or EV as defined in the 1940 Act, by virtue
of their affiliation with any one or more of the Fund, BMR, Eaton Vance, EVC or
EV, are indicated by an asterisk (*).
TRUSTEES OF THE TRUST AND THE PORTFOLIO
M. DOZIER GARDNER (61), President and Trustee*
President and Chief Executive Officer of BMR, Eaton Vance, EVC and EV and a
Director of EVC and EV. Director or Trustee and officer of various investment
companies managed by Eaton Vance or BMR.
DONALD R. DWIGHT (64), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New England,
Inc. since 1983. Director or Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
JAMES B. HAWKES (53), Vice President of the Portfolio and Trustee*
Executive Vice President of BMR, Eaton Vance, EVC and EV, and a Director of EVC
and EV. Director or Trustee and officer of various investment companies
managed by Eaton Vance or BMR. Mr. Hawkes was elected Trustee of the Trust on
June 14, 1993.
SAMUEL L. HAYES, III (60), Trustee
Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration, Soldiers
Field Road, Boston, Massachusetts 02163
PETER F. KIELY (58), Vice President and Trustee*
Vice President of Eaton Vance, BMR and EV. Director or Trustee of various
investment companies managed by Eaton Vance or BMR. Mr. Kiely was elected Vice
President and Trustee of the Trust on December 16, 1991.
NORTON H. REAMER (59), Trustee
President and Director, United Asset Management Corporation, a holding company
owning institutional investment management firms. Chairman, President and
Director, The Regis Fund, Inc. (mutual fund). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (68), Trustee
Director, Fiduciary Company Incorporated. Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (65), Trustee
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE TRUST AND THE PORTFOLIO
THOMAS E. FAUST, JR. (37), Vice President
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Faust was elected a Vice
President of the Trust and the Portfolio on December 13, 1993.
MICHAEL B. TERRY (52), Vice President
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (50), Treasurer
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
WILLIAM J. AUSTIN, JR. (43), Assistant Treasurer
Assistant Vice President of BMR, Eaton Vance and EV. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Austin was elected
Assistant Treasurer of the Trust on December 16, 1991.
THOMAS OTIS (63), Secretary
Vice President and Secretary of BMR, Eaton Vance, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (59), Assistant Treasurer and Assistant Secretary
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
A. JOHN MURPHY (32), Assistant Secretary
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993) and Registration Specialist, Fidelity Management &
Research Co. (1986-1991). Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the Trust
and the Portfolio on March 27, 1995.
Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of Trustees of the Trust and of the Portfolio. The
Special Committee's functions include a continuous review of the Trust's
contractual relationship with the Administrator and the Portfolio's contractual
relationship with the Investment Adviser, making recommendations to the Trustees
regarding the compensation of those Trustees who are not members of the Eaton
Vance organization, and making recommendations to the Trustees regarding
candidates to fill vacancies, as and when they occur, in the ranks of those
Trustees who are not "interested persons" of the Trust, the Portfolio, or the
Eaton Vance organization.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust and of the Portfolio. The Audit Committee's
functions include making recommendations to the Board regarding the selection of
the independent accountants, and reviewing with such accountants and the
Treasurer of the Trust and of the Portfolio matters relative to accounting and
auditing practices and procedures, accounting records, internal accounting
controls, and the functions performed by the custodian and transfer agent of the
Trust and of the Portfolio.
Trustees of the Portfolio who are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of a Trustees Deferred Compensation Plan (the "Plan").
Under the Plan, an eligible Trustee may elect to have his deferred fees invested
by the Portfolio in the shares of one or more funds in the Eaton Vance Family of
Funds, and the amount paid to the Trustees under the Plan will be determined
based upon the performance of such investments. Deferral of Trustees' fees in
accordance with the Plan will have a negligible effect on the Portfolio's
assets, liabilities, and net income per share, and will not obligate the
Portfolio to retain the services of any Trustee or obligate the Portfolio to pay
any particular level of compensation to the Trustee.
The fees and expenses of those Trustees of the Trust and the Portfolio who
are not members of the Eaton Vance organization (the noninterested Trustees) are
paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. For the compensation earned by the noninterested Trustees of the
Trust and the Portfolio, see "Fees and Expenses" in Part II of this Statement of
Additional Information.
INVESTMENT ADVISER AND ADMINISTRATOR
The Portfolio engages BMR as its investment adviser pursuant to an
Investment Advisory Agreement dated October 28, 1993. BMR or Eaton Vance acts as
investment adviser to investment companies and various individual and
institutional clients with total assets under management of approximately $15
billion.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of their clients. The
fixed-income division focuses on all kinds of taxable investment- grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
BMR manages the investments and affairs of the Portfolio subject to the
supervision of the Portfolio's Board of Trustees. BMR furnishes to the Portfolio
investment research, advice and supervision, furnishes an investment program and
determines what securities will be purchased, held or sold by the Portfolio and
what portion, if any, of the Portfolio's assets will be held uninvested. The
Investment Advisory Agreement requires BMR to pay the salaries and fees of all
officers and Trustees of the Portfolio who are members of the BMR organization
and all personnel of BMR performing services relating to research and investment
activities. The Portfolio is responsible for all expenses not expressly stated
to be payable by BMR under the Investment Advisory Agreement, including, without
implied limitation, (i) expenses of maintaining the Portfolio and continuing its
existence, (ii) registration of the Portfolio under the 1940 Act, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of interests in the Portfolio, (viii) expenses of
registering and qualifying the Portfolio and interests in the Portfolio under
Federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to investors, and fees and expenses of registering and
maintaining registrations of the Portfolio and of the Portfolio's placement
agent as broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to investors and of meetings of investors and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Portfolio (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and records, and
determination of net asset values, book capital account balances and tax capital
account balances), (xiv) fees, expenses and disbursements of transfer agents,
dividend disbursing agents, investor servicing agents and registrars for all
services to the Portfolio, (xv) expenses for servicing the accounts of
investors, (xvi) any direct charges to investors approved by the Trustees of the
Portfolio, (xvii) compensation and expenses of Trustees of the Portfolio who are
not members of BMR's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Portfolio to indemnify its Trustees,
officers and investors with respect thereto.
Under the Investment Advisory Agreement with the Portfolio, BMR receives a
monthly advisory fee of 5/96 of 1% (equivalent to .625% annually) of average
daily net assets of the Portfolio up to and including $300 million, and 1/24 of
1% (equivalent to .50% annually) of average daily net assets over $300 million.
As of January 31, 1995, the Portfolio had net assets of $217,157,495. For the
fiscal year ended January 31, 1995, the Adviser earned advisory fees of
$1,375,751 (equivalent to .625% of the Portfolio's average daily net assets for
such year). For the period from the start of business, October 28, 1993, to
January 31, 1994, the Portfolio paid BMR advisory fees of $358,699 (equivalent
to .625% (annualized) of the Portfolio's average daily net assets for such
period).
The Investment Advisory Agreement with BMR remains in effect until February
28, 1996. It may be continued indefinitely so long as such continuance after
February 28, 1996 is approved at least annually (i) by the vote of a majority of
the Trustees of the Portfolio who are not interested persons of the Portfolio or
of BMR cast in person at a meeting specifically called for the purpose of voting
on such approval and (ii) by the Board of Trustees of the Portfolio or by vote
of a majority of the outstanding voting securities of the Portfolio. The
Agreement may be terminated at any time without penalty on sixty (60) days'
written notice by the Board of Trustees of either party, or by vote of the
majority of the outstanding voting securities of the Portfolio, and the
Agreement will terminate automatically in the event of its assignment. The
Agreement provides that BMR may render services to others and engage in other
business activities and may permit other fund clients and other corporations and
organizations to use the words "Eaton Vance" or "Boston Management and Research"
in their names. The Agreement also provides that BMR shall not be liable for any
loss incurred in connection with the performance of its duties, or action taken
or omitted under that Agreement, in the absence of willful misfeasance, bad
faith, gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties thereunder, or for any losses
sustained in the acquisition, holding or disposition of any security or other
investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but receives no compensation for providing administrative services to the
Fund. Under its agreement with the Fund, Eaton Vance has been engaged to
administer the Fund's affairs, subject to the supervision of the Trustees of the
Trust, and shall furnish for the use of the Fund office space and all necessary
office facilities, equipment and personnel for administering the affairs of the
Fund.
The Fund pays all of its own expenses including, without limitation, (i)
expenses of maintaining the Fund and continuing its existence, (ii) registration
of the Trust under the 1940 Act, (iii) commissions, fees and other expenses
connected with the purchase or sale of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale, repurchase and redemption of
shares, (viii) expenses of registering and qualifying the Fund and its shares
under federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Eaton Vance organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are both
wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both Massachusetts
business trusts, and EV is the trustee of BMR and Eaton Vance. The Directors of
EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner, James B. Hawkes
and Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons
and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman and Mr. Gardner
is president and chief executive officer of EVC, BMR, Eaton Vance and EV. All of
the issued and outstanding shares of Eaton Vance and EV are owned by EVC. All of
the issued and outstanding shares of BMR are owned by Eaton Vance. All shares of
the outstanding Voting Common Stock of EVC are deposited in a Voting Trust which
expires on December 31, 1996, the Voting Trustees of which are Messrs. Clay,
Brigham, Gardner, Hawkes and Rowland. The Voting Trustees have unrestricted
voting rights for the election of Directors of EVC. All of the outstanding
voting trust receipts issued under said Voting Trust are owned by certain of the
officers of BMR and Eaton Vance who are also officers and Directors of EVC and
EV. As of April 30, 1995, Messrs. Clay, Gardner and Hawkes each owned 24% of
such voting trust receipts, and Messrs. Rowland and Brigham owned 15% and 13%,
respectively, of such voting trust receipts. Messrs. Gardner, Hawkes and Otis
are officers or Trustees of the Trust and/or the Portfolio and are members of
the EVC, BMR, Eaton Vance and EV organizations. Messrs. Austin, Faust, Kiely,
Murphy, O'Connor and Terry and Ms. Sanders are officers or Trustees of the Trust
and the Portfolio and are also members of the BMR, Eaton Vance and EV
organizations. BMR will receive the fees paid under the Investment Advisory
Agreement.
Eaton Vance owns all of the stock of Energex Corporation, which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy Corp.
(which is engaged in oil and gas operations) and 77.3% of the stock of Investors
Bank & Trust Company, custodian of the Fund and the Portfolio, which provides
custodial, trustee and other fiduciary services to investors, including
individuals, employee benefit plans, corporations, investment companies, savings
banks and other institutions. In addition, Eaton Vance owns all the stock of
Northeast Properties, Inc., which is engaged in real estate investment,
management and consulting. EVC owns all the stock of Fulcrum Management, Inc.
and MinVen, Inc., which are engaged in the development of precious metal
properties. EVC, BMR, Eaton Vance and EV may also enter into other businesses.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund and
the Portfolio, Investors Bank & Trust Company. It is Eaton Vance's opinion that
the terms and conditions of such transactions were not and will not be
influenced by existing or potential custodial or other relationships between the
Trust or the Portfolio and such banks.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston,
Massachusetts (a 77.3% owned subsidiary of EVC) acts as custodian for the Fund
and the Portfolio. IBT has the custody of all cash and securities representing
the Fund's interest in the Portfolio, has custody of all the Portfolio's assets,
maintains the general ledger of the Portfolio and the Fund, and computes the
daily net asset value of interests in the Portfolio and the net asset value of
shares of the Fund. In such capacity it attends to details in connection with
the sale, exchange, substitution, transfer or other dealings with the
Portfolio's investments, receives and disburses all funds and performs various
other ministerial duties upon receipt of proper instructions from the Fund and
the Portfolio. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of Fund and Portfolio net assets and a portion of the
fee relates to activity charges, primarily the number of portfolio transactions.
These fees are then reduced by a credit for cash balances of the particular
investment company at the custodian equal to 75% of the 91-day, U.S. Treasury
Bill auction rate applied to the particular investment company's average daily
collected balances for the week. In view of the ownership of EVC in IBT, the
Portfolio is treated as a self-custodian pursuant to Rule 17f-2 under the 1940
Act, and the Portfolio's investments held by IBT as custodian are thus subject
to the additional examinations by the Portfolio's independent certified public
accountants as called for by such Rule. For the fiscal year ended January 31,
1995, the Portfolio paid IBT $114,290. For the custody fees that the Fund paid
to IBT, see "Fees and Expenses" in Part II of this Statement of Additional
Information.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Trust's Transfer Agent will send to the
shareholder regular monthly or quarterly payments of any permitted amount
designated by the shareholder (see "Eaton Vance Shareholder Services --
Withdrawal Plan" in Fund's current Prospectus) based upon the value of the
shares held. The checks will be drawn from share redemptions and hence are a
return of principal. Income dividends and capital gains distributions in
connection with withdrawal accounts will be credited at net asset value as of
the record date for each distribution. Continued withdrawals in excess of
current income will eventually use up principal, particularly in a period of
declining market prices.
To use this service, at least $5,000 in cash or shares at the public
offering price will have to be deposited with the Transfer Agent. The
maintenance of a withdrawal plan concurrently with purchases of additional Fund
shares would be disadvantageous if a sales charge is included in such purchases.
A shareholder may not have a withdrawal plan in effect at the same time he or
she has authorized Bank Automated Investing or is otherwise making regular
purchases of Fund shares. Either the shareholder, the Transfer Agent or the
Principal Underwriter will be able to terminate the withdrawal plan at any time
without penalty.
DETERMINATION OF NET ASSET VALUE
The net asset value of the Portfolio and of shares of the Fund is determined
by IBT (as agent and custodian for the Fund and the Portfolio) in the manner
described under "Valuing Fund Shares" in the Fund's current prospectus. The Fund
and the Portfolio will be closed for business and will not price their
respective shares or interests on the following business holidays: New Year's
Day, Presidents' Day, Good Friday (a New York Stock Exchange holiday), Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The value of equity securities listed on the New York or American Stock
Exchanges or listed on the NASDAQ National Market System are valued at closing
sale prices (or, lacking any closing sale price, the mean between the closing
bid and asked prices therefor). Equity securities not listed on either of said
Exchanges but on any other securities exchange shall be valued as if listed on
said Exchanges, provided the close of trading coincides. If the close of trading
on such securities exchange does not coincide with the close of trading on the
Exchange, the value shall be based on the latest available price data at the
time of determination of net asset value. Unlisted equity securities are valued
at the mean between the latest bid and asked prices in the over-the-counter
market. Obligations with a remaining maturity of 60 days or less are valued at
amortized cost. Debt securities (other than short-term obligations,
collateralized mortgage obligations and mortgage-backed "pass-through"
securities ) are valued at appraised market values furnished by a pricing
service. Collateralized mortgage obligations and mortgage-backed "pass-through"
securities are valued by the Investment Adviser using a matrix pricing system
which takes into account closing bond valuations, yield differentials,
anticipated prepayments and interest rates. Securities for which there are no
such quotations or valuations and all other assets are valued at fair value as
determined in good faith by or at the direction of the Trustees of the
Portfolio.
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage, determined on the prior
Portfolio Business Day, which represented that investor's share of the aggregate
interests in the Portfolio on such prior day. Any additions or withdrawals for
the current Portfolio Business Day will then be recorded. Each investor's
percentage of the aggregate interest in the Portfolio will then be recomputed as
a percentage equal to a fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Portfolio Valuation Time on the
prior Portfolio Business Day plus or minus, as the case may be, the amount of
any additions to or withdrawals from the investor's investment in the Portfolio
on the current Portfolio Business Day and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of the Portfolio Valuation Time on
the prior Portfolio Business Day plus or minus, as the case may be, the amount
of the net additions to or withdrawals from the aggregate investment in the
Portfolio on the current Portfolio Business Day by all investors in the
Portfolio. The percentage so determined will then be applied to determine the
value of the investor's interest in the Portfolio for the current Portfolio
Business Day.
INVESTMENT PERFORMANCE
The average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and distributions paid and
reinvested) for the stated period and, if necessary, annualizing the result. The
calculation assumes that all distributions are reinvested at net asset value on
the reinvestment dates during the period and either (i) the deduction of the
maximum sales charge from the initial $1,000 purchase order, or (ii) a complete
redemption of the investment and, if applicable, the deduction of a contingent
deferred sales charge at the end of the period. For information concerning the
total return of the Fund, see "Performance Information" in Part II of this
Statement of Additional Information.
The Fund's total return may be compared to the Consumer Price Index and
various domestic securities indices, for example: Standard & Poor's 400 Stock
Index, Standard & Poor's 500 Stock Index, Merrill Lynch U.S. Treasury (15-year
plus) Index, Lehman Brothers Government/Corporate Bond Index, and the Dow Jones
Industrial Average. The Fund's total return, and comparisons with these indices
may be used in advertisements and in information furnished to present or
prospective shareholders. The Fund's performance may differ from that of other
investors in the Portfolio, including any other investment companies.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations, (e.g., Ibbotson Associates, Standard &
Poor's Ratings Group, Merrill Lynch, Pierce, Fenner & Smith, Inc., Bloomberg,
L.P., Dow Jones & Company, Inc., and The Federal Reserve Board) or included in
various publications (e.g., The Wall Street Journal, Barron's and The Decade:
Wealth of Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the
investment performance or return achieved by various classes and types of
investments (e.g., common stocks, small company stocks, long-term corporate
bonds, long-term government bonds, intermediate-term government bonds, U.S.
Treasury bills) over various periods of time. This information may be used to
illustrate the benefits of long-term investments in a diversified portfolio of
common stocks and fixed-income securities. This diversification is commonly
referred to as "asset allocation."
The Portfolio's asset allocation on February 28, 1995 was:
PERCENT OF
NET ASSETS
----------
Equities 62.0%
Fixed-Income Securities 35.6
Money Market Instruments 2.4
-----
Total 100.00%
The Portfolio's 10 largest common stock holdings on February 28, 1995 were:
PERCENT OF
COMPANY NET ASSETS
------- ----------
Astra, AB 2.6%
Reuters Holdings, ADR 1.9
Loctite Corp. 1.9
Phillips Petroleum 1.8
Scott Paper Company 1.8
General RE 1.7
MGIC Investment Corp. 1.7
Willamette Industries 1.7
Exxon Corp. 1.7
Ryder System Inc. 1.7
-----
Total 18.5%
From time to time, evaluations of the Fund's performance made by independent
sources, (e.g., Lipper Analytical Services, Inc., CDA/Wiesenberger and
Morningstar, Inc.), may be used in advertisements and in information furnished
to present or prospective shareholders.
From time to time, information, charts and illustrations relating to
inflation and the effects of inflation on the dollar may be included in
advertisements and other material furnished to present and prospective
shareholders. For example: After 10 years, the purchasing power of $25,000 would
shrink to $16,621, $14,968, $13,465 and $12,100, if the annual rates of
inflation during such period were 4%, 5%, 6% and 7%, respectively. (To calculate
the purchasing power, the value at the end of each year is reduced by the above
inflation rates for 10 consecutive years.)
Information used in advertisements and in materials furnished to present and
prospective shareholders may include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds which may be employed
to meet specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents. These three
financial goals may be referred to in such advertisements or materials as the
"Triple Squeeze."
For additional information on the Fund's investment performance, see
"Performance Information" in Part II of this Statement of Additional
Information.
TAXES
See "Distributions and Taxes" in the Fund's current Prospectus and
"Additional Tax Matters" in Part II of this Statement of Additional
Information.
Each series of the Trust is treated as a separate entity for Federal income
tax purposes. The Fund has elected or will elect to be treated and intends to
qualify each year as a RIC under the Code. Accordingly, the Fund intends to
satisfy certain requirements relating to sources of its income and
diversification of its assets and to distribute all of its net investment income
and net realized capital gains in accordance with the timing requirements
imposed by the Code, so as to avoid any Federal income or excise tax to the
Fund. Because the Fund invests its assets in the Portfolio, the Portfolio
normally must satisfy the applicable source of income and diversification
requirements in order for the Fund to satisfy them. The Portfolio will allocate
at least annually among its investors, including the Fund, the Portfolio's net
investment income, net realized capital gains, and any other items of income,
gain, loss, deduction or credit. The Portfolio will make allocations to the Fund
in accordance with the Code and applicable regulations and will make moneys
available for withdrawal at appropriate times and in sufficient amounts to
enable the Fund to satisfy the tax distribution requirements that apply to the
Fund and that must be satisfied in order to avoid Federal income and/or excise
tax on the Fund. For purposes of applying the requirements of the Code regarding
qualification as a RIC, the Fund will be deemed (i) to own its proportionate
share of each of the assets of the Portfolio and (ii) to be entitled to the
gross income of the Portfolio attributable to such share.
In order to avoid Federal excise tax, the Code requires that the Fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year, at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses, generally computed on the basis of the one-year period
ending on October 31 of such year, after reduction by any available capital loss
carryforwards, and 100% of any income from the prior year (as previously
computed) that was not paid out during such year and on which the Fund paid no
Federal income tax. Further, under current law, provided that the Fund qualifies
as a RIC for Federal tax purposes and the Portfolio is treated as a partnership
for Massachusetts and Federal tax purposes, neither the Fund nor the Portfolio
is liable for any income, corporate excise or franchise tax in the Commonwealth
of Massachusetts.
The Portfolio's investment in securities with original issue discount, if
any, such as zero coupon securities and payment-in-kind securities, or in any
securities acquired at a market discount if the Portfolio elects to include
market discount in income currently, will cause it to realize income prior to
the receipt of cash payments with respect to these securities. Such income will
be allocated daily to interests in the Portfolio and, in order to enable the
Fund to distribute its proportionate share of this income and avoid a tax
payable by the Fund, the Portfolio may be required to liquidate portfolio
securities that it might otherwise have continued to hold in order to generate
cash that the Fund may withdraw from the Portfolio for subsequent distribution
to Fund shareholders.
Investments in lower-rated or unrated securities may present special tax
issues for the Portfolio and hence for the Fund to the extent actual or
anticipated defaults may be more likely with respect to such securities. Tax
rules are not entirely clear about issues such as when the Portfolio may cease
to accrue interest, original issue discount, or market discount; when and to
what extent deductions may be taken for bad debts or worthless securities; how
payments received on obligations in default should be allocated between
principal and income; and whether exchanges of debt obligations in a workout
context are taxable.
Distributions by the Fund of net investment income, certain net foreign
exchange gains and the excess of net short-term capital gains over net long-term
capital losses earned by the Portfolio and allocated to the Fund by the
Portfolio are taxable to shareholders of the Fund as ordinary income whether
received in cash or in additional shares. Distributions of the excess of net
long-term capital gains over net short-term capital losses (including any
capital losses carried forward from prior years) earned by the Portfolio and
allocated to the Fund are taxable to shareholders of the Fund as long-term
capital gains, whether received in cash or in additional shares and regardless
of the length of time their shares of the Fund have been held. Certain
distributions declared in October, November or December and paid the following
January will be taxed to shareholders as if received on December 31 of the year
in which they are declared.
A portion of distributions made by the Fund which are derived from dividends
received by the Portfolio from domestic corporations and allocated to the Fund
may qualify for the dividends-received deduction for corporations. The
dividends-received deduction for corporate shareholders is reduced to the extent
the shares of the Fund with respect to which the dividends are received are
treated as debt-financed under the Federal income tax law and is eliminated if
the shares are deemed to have been held for less than a minimum period,
generally 46 days. Receipt of certain distributions qualifying for the deduction
may result in reduction of the tax basis of the corporate shareholder's shares.
Distributions eligible for the dividends-received deduction may give rise to or
increase an alternative minimum tax for corporations.
Any loss realized upon the redemption or exchange of shares of the Fund with
a tax holding period of 6 months or less will be treated as a long-term capital
loss to the extent of any distribution of net long-term capital gains with
respect to such shares. In addition, a loss realized on a redemption of Fund
shares may be disallowed under certain "wash sale" rules if other shares of the
Fund are acquired within a period beginning 30 days before and ending 30 days
after the date of such redemption. Any disallowed loss will result in an
adjustment to the shareholder's tax basis in some or all of the other shares
acquired.
The Portfolio may be subject to foreign withholding taxes with respect to
income (possibly including, in some cases, capital gains) on certain foreign
securities. These taxes may be reduced or eliminated under the terms of an
applicable U.S. income tax treaty. As it is not expected that more than 50% of
the value of the total assets of the Fund, taking into account its allocable
share of the Portfolio's total assets, at the close of any taxable year of the
Fund will consist of securities issued by foreign corporations, the Fund will
not be eligible to pass through to shareholders their proportionate share of any
foreign taxes paid by the Portfolio and allocated to the Fund, so that
shareholders of the Fund will not include in income, and will not be entitled to
take any foreign tax credits or deductions for, foreign taxes paid by the
Portfolio and allocated to the Fund. Certain foreign exchange gains and losses
realized by the Portfolio and allocated to the Fund will be treated as ordinary
income and losses. Certain uses of foreign currency and investments by the
Portfolio in the stock of certain "passive foreign investment companies" may be
limited or a tax election may be made, if available, in order to preserve the
Fund's qualification as a RIC and/or to avoid imposition of a tax on the Fund.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and to
other retirement plans and shareholders investing through such plans should
consult their tax advisers for more information.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain required certifications, as well as shareholders with respect to whom
the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of Federal income tax from the
Fund's dividends and distributions and the proceeds of redemptions (including
repurchases and exchanges), at a rate of 31%. An individual's taxpayer
identification number is generally his or her social security number.
Non-resident alien individuals and certain foreign corporations and other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short-term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. Federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
Distributions of the Fund may also be subject to state and local taxes. A
state tax exemption may be available in some states to the extent distributions
of the Fund are derived from interest on certain U.S. Government obligations.
Shareholders should consult their tax advisers with respect to state and local
tax consequences of investing in the Fund.
The foregoing discussion does not describe many of the tax rules applicable
to certain classes of investors, such as IRAs and other retirement plans,
tax-exempt entities, insurance companies and financial institutions.
Shareholders should consult their own tax advisers with respect to special tax
rules that may apply in their particular situations, as well as the state, local
or foreign tax consequences of investing in the Fund.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions of the
Portfolio, including the selection of the market and the broker-dealer firm, are
made by BMR. BMR is also responsible for the execution of transactions for all
other accounts managed by it.
BMR places the portfolio security transactions of the Portfolio and of all
other accounts managed by it for execution with many broker-dealer firms. BMR
uses its best efforts to obtain execution of portfolio security transactions at
prices which are advantageous to the Portfolio and (when a disclosed commission
is being charged) at reasonably competitive commission rates. In seeking such
execution, BMR will use its best judgment in evaluating the terms of a
transaction, and will give consideration to various relevant factors, including
without limitation the size and type of the transaction, the nature and
character of the market for the security, the confidentiality, speed and
certainty of effective execution required for the transaction, the general
execution and operational capabilities of the broker-dealer, the reputation,
reliability, experience and financial condition of the broker-dealer, the value
and quality of the services rendered by the broker-dealer in other transactions,
and the reasonableness of the commission, if any. Transactions on United States
stock exchanges and other agency transactions involve the payment by the
Portfolio of negotiated brokerage commissions. Such commissions vary among
different broker-dealer firms, and a particular broker-dealer may charge
different commissions according to such factors as the difficulty and size of
the transaction and the volume of business done with such broker-dealer.
Transactions in foreign securities usually involve the payment of fixed
brokerage commissions, which are generally higher than those in the United
States. There is generally no stated commission in the case of securities traded
in the over-the-counter markets, but the price paid or received by the Portfolio
usually includes an undisclosed dealer markup or markdown. In an underwritten
offering the price paid by the Portfolio includes a disclosed fixed commission
or discount retained by the underwriter or dealer. Although commissions paid on
portfolio security transactions will, in the judgment of BMR, be reasonable in
relation to the value of the services provided, commissions exceeding those
which another firm might charge may be paid to broker-dealers who were selected
to execute transactions on behalf of the Portfolio and BMR's other clients for
providing brokerage and research services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio security transaction on behalf of the
Portfolio may receive a commission which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if BMR determines in good faith that such commission was reasonable
in relation to the value of the brokerage and research services provided. This
determination may be made on the basis of either that particular transaction or
on the basis of the overall responsibilities which BMR and its affiliates have
for accounts over which they exercise investment discretion. In making any such
determination, BMR will not attempt to place a specific dollar value on the
brokerage and research services provided or to determine what portion of the
commission should be related to such services. Brokerage and research services
may include advice as to the value of securities, the advisability of investing
in, purchasing, or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing analyses and reports concerning
issuers, 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); and
the "Research Services" referred to in the next paragraph.
It is a common practice of the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-dealer firms which
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, BMR receives Research Services from many broker-dealer firms with
which BMR places the Portfolio transactions and from third parties with which
these broker-dealers have arrangements. These Research Services include such
matters as general economic and market reviews, industry and company reviews,
evaluations of securities and portfolio strategies and transactions and
recommendations as to the purchase and sale of securities and other portfolio
transactions, financial, industry and trade publications, news and information
services, pricing and quotation equipment and services, and research oriented
computer hardware, software, data bases and services. Any particular Research
Service obtained through a broker-dealer may be used by BMR in connection with
client accounts other than those accounts which pay commissions to such
broker-dealer. Any such Research Service may be broadly useful and of value to
BMR in rendering investment advisory services to all or a significant portion of
its clients, or may be relevant and useful for the management of only one
client's account or of a few clients' accounts, or may be useful for the
management of merely a segment of certain clients' accounts, regardless of
whether any such account or accounts paid commissions to the broker-dealer
through which such Research Service was obtained. The advisory fee paid by the
Portfolio is not reduced because BMR receives such Research Services. BMR
evaluates the nature and quality of the various Research Services obtained
through broker-dealer firms and attempts to allocate sufficient commissions to
such firms to ensure the continued receipt of Research Services which BMR
believes are useful or of value to it in rendering investment advisory services
to clients.
Subject to the requirement that BMR shall use its best efforts to seek to
execute portfolio security transactions at advantageous prices and at reasonably
competitive commission rates or spreads, BMR is authorized to consider as a
factor in the selection of any broker-dealer firm with whom portfolio orders may
be placed the fact that such firm has sold or is selling shares of the Fund or
of other investment companies sponsored by BMR or Eaton Vance. This policy is
not inconsistent with a rule of the National Association of Securities Dealers,
Inc., which rule provides that no firm which is a member of the Association
shall favor or disfavor the distribution of shares of any particular investment
company or group of investment companies on the basis of brokerage commissions
received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates. BMR
will attempt to allocate equitably portfolio security transactions among the
Portfolio and the portfolios of its other investment accounts whenever decisions
are made to purchase or sell securities by the Portfolio and one or more of such
other accounts simultaneously. In making such allocations, the main factors to
be considered are the respective investment objectives of the Portfolio and such
other accounts, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Portfolio
and such accounts, the size of investment commitments generally held by the
Portfolio and such accounts and the opinions of the persons responsible for
recommending investments to the Portfolio and such accounts. While this
procedure could have a detrimental effect on the price or amount of the
securities available to the Portfolio from time to time, it is the opinion of
the Trustees of the Trust and the Portfolio that the benefits available from the
BMR organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions. For the fiscal year ended January 31, 1995, the
Portfolio paid brokerage commissions of $99,462 on portfolio security
transactions, of which approximately $96,762 was paid in respect of portfolio
security transactions aggregating $52,313,396 to firms which provided some
Research Services to BMR or its affiliates. For the period from the start of
business, October 28, 1993, to the fiscal year ended January 31, 1994, the
Portfolio paid brokerage commissions of $64,202 on portfolio security
transactions, of which approximately $48,366 was paid in respect of portfolio
security transactions aggregating approximately $25,514,970 to firms which
provided some Research Services to BMR or its affiliates.
OTHER INFORMATION
Eaton Vance, pursuant to its agreement with the Trust, controls the use of
the words "Eaton Vance" in the Fund's name and may use the words "Eaton Vance"
in other connections and for other purposes.
The Trust is a Massachusetts business trust established in 1989. On
September 27, 1993, the Trust changed its name from Eaton Vance Investors Fund.
The Trust is the successor to Eaton Vance Investors Fund, Inc., a Massachusetts
corporation that was organized in 1936 as the successor to a Boston investment
trust that commenced its investment operations in 1932. The Trust has
continuously operated as an investment company since 1932.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's By-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Trust's Amended and Restated Declaration of Trust may be amended by the
Trustees when authorized by vote of a majority of the outstanding voting
securities of the Trust, the financial interests of which are affected by the
amendment. The Trustees may also amend the Declaration of Trust without the vote
or consent of shareholders to change the name of the Trust or any series or to
make such other changes as do not have a materially adverse effect on the
financial interests of shareholders or if they deem it necessary to conform it
to applicable Federal or state laws or regulations. The Trust or any series or
class thereof may be terminated by: (1) the affirmative vote of the holders of
not less than two-thirds of the shares outstanding and entitled to vote at any
meeting of shareholders of the Trust or the appropriate series or class thereof,
or by an instrument or instruments in writing without a meeting, consented to by
the holders of two-thirds of the shares of the Trust or a series or class
thereof, provided, however, that, if such termination is recommended by the
Trustees, the vote of a majority of the outstanding voting securities of the
Trust or a series or class thereof entitled to vote thereon shall be sufficient
authorization; or (2) by means of an instrument in writing signed by a majority
of the Trustees, to be followed by a written notice to shareholders stating that
a majority of the Trustees has determined that the continuation of the Trust or
a series or a class thereof is not in the best interest of the Trust, such
series or class or of their respective shareholders.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law; 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. In addition, the By-Laws of the Trust provide that no natural person
shall serve as a Trustee of the Trust after the holders of record of not less
than two-thirds of the outstanding shares have declared that he be removed from
office either by declaration in writing filed with the custodian of the assets
of the Trust or by votes cast in person or by proxy at a meeting called for the
purpose. The By-Laws also provide that the Trustees shall promptly call a
meeting of shareholders for the purpose of voting upon a question of removal of
a Trustee when requested to do so by the record holders of not less than 10 per
centum of the outstanding shares.
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees of the
Portfolio holding office have been elected by investors. In such an event the
Trustees then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interest
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The right to redeem shares of the Fund can be suspended and the payment of
the redemption price deferred when the Exchange is closed (other than for
customary weekend and holiday closings), during periods when trading on the
Exchange is restricted as determined by the Securities and Exchange Commission
(the "Commission"), or during any emergency as determined by the Commission
which makes it impracticable for the Portfolio to dispose of its securities or
value its assets, or during any other period permitted by order of the
Commission for the protection of investors.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts
02109, are the independent accountants of the Fund and the Portfolio, providing
audit services, tax return preparation, and assistance and consultation with
respect to the preparation of filings with the Securities and Exchange
Commission.
For the financial statements of the Fund and the Portfolio, see "Financial
Statements" in Part II of this Statement of Additional Information.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV CLASSIC INVESTORS FUND. On
September 27, 1993, the Fund became a series of the Trust.
FEES AND EXPENSES
INVESTMENT ADVISER
To enhance the net income of the Fund, BMR voluntarily assumed $2,854 of the
Fund's expenses for the period from the start of business, November 2, 1993, to
the fiscal year ended January 31, 1994.
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund. For the fiscal year ended
January 31, 1995, $47,375 of the Fund's operating expenses were allocated to the
Administrator.
DISTRIBUTION PLAN
For the fiscal year ended January 31, 1995, the Fund accrued sales
commission payments under the Plan aggregating $15,342, of which $15,017 was
paid to the Principal Underwriter. The Principal Underwriter paid $14,814 as
sales commissions to Authorized Firms and the balance was retained by the
Principal Underwriter. As at January 31, 1995, the outstanding Uncovered
Distribution Charges of the Principal Underwriter calculated under the Plan
amounted to approximately $319,666 (which amount was equivalent to 15.42% of the
Fund's net assets on such day). For the fiscal year ended January 31, 1995, the
Fund accrued service fee payments under the Plan aggregating $5,114, of which
$4,928 was paid to the Principal Underwriter. The Principal Underwriter paid
$4,918 as service fee payments to Authorized Firms and the balance was retained
by the Principal Underwriter.
PRINCIPAL UNDERWRITER
For the fiscal year ended January 31, 1995, the Fund paid the Principal
Underwriter $105.00 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each such transaction).
CUSTODIAN
For the fiscal year ended January 31, 1995, the Fund paid IBT $10,731.
<TABLE>
<CAPTION>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton
Vance organization (the noninterested Trustees) are paid by the Fund (and the other series of the Trust) and the
Portfolio, respectively. (The Trustees of the Trust and the Portfolio who are members of the Eaton Vance
organization receive no compensation from the Fund or the Portfolio.) During the fiscal year ended January 31,
1995, the noninterested Trustees of the Trust and the Portfolio earned the following compensation in their
capacities as Trustees from the Fund and the Portfolio, and during the first quarter ended March 31, 1995, earned
the following compensation in their capacities as Trustees from the other funds in the Eaton Vance fund
complex<F1>:
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
---- ------------ -------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Donald R. Dwight $0 $637<F2> $ 8,750 $33,750
Samuel L. Hayes, III 0 638<F3> 24,885 41,250
Norton H. Reamer 0 640 --0-- 33,750
John L. Thorndike 0 665 --0-- 35,000
Jack L. Treynor 0 664 --0-- 35,000
<FN>
<F1>The Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Includes $211 of deferred compensation.
<F3>Includes $599 of deferred compensation.
</TABLE>
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from November 2, 1993 through January 31,
1995 and for the one year period ended January 31, 1995.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT<F3>
VALUE OF
INVEST-
MENT AFTER
VALUE OF INVEST- DEDUCT- TOTAL RETURN BEFORE TOTAL RETURN AFTER
MENT BEFORE DE- ING THE DEDUCTING DEDUCTING
DUCTING THE CON- CONTINGENT THE CONTINGENT DEFERRED THE CONTINGENT DEFERRED
TINGENT DEFERRED DEFERRED SALES SALES CHARGE SALES CHARGE<F2>
INVESTMENT INVESTMENT AMOUNT OF SALES CHARGE CHARGE<F2> ------------------------- -------------------------
PERIOD DATE INVESTMENT ON 1/31/95 1/31/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------- ---------- ---------- ---------------- -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the
Fund<F1> 11/2/93 $1,000 $986.28 $986.28 -1.37% -1.10% -1.37% -1.10%
1 Year Ended
1/31/95 1/31/94 $1,000 $942.90 $933.71 -5.71% -5.71% -6.63% -6.63%
<CAPTION>
PERCENTAGE CHANGES -- 11/2/93-1/31/95<F3>
NET ASSET VALUE TO NET ASSET VALUE NET ASSET VALUE TO NET ASSET VALUE
BEFORE DEDUCTING THE CONTINGENT DEFERRED AFTER DEDUCTING THE CONTINGENT DEFERRED
SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED SALES CHARGE<F2> WITH ALL DISTRIBUTIONS REINVESTED
FISCAL YEAR ---------------------------------------------- ------------------------------------------------
ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
- ----------- ------ ---------- -------------- ------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
1/31/94<F1> -- 4.60% -- -- 3.60% --
1/31/95 -5.71% -1.37% -1.10% -6.63% -1.37% -1.10%
Past performance is not indicative of future results. Investment return and principal value will fluctuate; shares, when
redeemed, may be worth more or less than their original cost.
- ----------
<FN>
<F1> Investment operations began on November 2, 1993.
<F2> No contingent deferred sales charge is imposed on shares purchased more than one year prior to the redemption, shares acquired
through the reinvestment of distributions, or any appreciation in value of other shares in the account, and no such charge is
imposed on exchanges of Fund shares for shares of one or more other funds listed under "The Eaton Vance Exchange Privilege" in
the Prospectus.
<F3>If a portion of the Fund's expenses had not been subsidized, the Fund would have had lower returns.
</TABLE>
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to financial service firms ("Authorized Firms") or
investors and other selling literature and of advertising is borne by the
Principal Underwriter. The fees and expenses of qualifying and registering and
maintaining qualifications and registrations of the Fund and its shares under
Federal and state securities laws is borne by the Fund. In addition, the Fund
makes payments to the Principal Underwriter pursuant to its Distribution Plan as
described in the Fund's current prospectus; the provisions of the Fund's
Distribution Plan relating to such payments are included in the Distribution
Agreement. The Distribution Agreement is renewable annually by the Trust's Board
of Trustees (including a majority of its Trustees who are not interested persons
of the Trust and who have no direct or indirect financial interest in the
operation of the Fund's Distribution Plan or the Distribution Agreement), may be
terminated on sixty days' notice either by such Trustees or by vote of a
majority of the outstanding voting securities of the Fund or on six months'
notice by the Principal Underwriter and is automatically terminated upon
assignment. The Principal Underwriter distributes Fund shares on a "best
efforts" basis under which it is required to take and pay for only such shares
as may be sold.
The Fund has authorized the Principal Underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction handled
by the Principal Underwriter. The Principal Underwriter estimates that the
expenses incurred by it in acting as repurchase agent for the Fund will exceed
the amounts paid therefor by the Fund. For the amount paid by the Fund to the
Principal Underwriter for acting as repurchase agent, see "Fees and Expenses" in
this Part II.
DISTRIBUTION PLAN
The Distribution Plan ("the Plan") is described in the prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
The amount payable to the Principal Underwriter pursuant to the Plan as
sales commissions and distribution fees with respect to each day will be accrued
on such day as a liability of the Fund and will accordingly reduce the Fund's
net assets upon such accrual, all in accordance with generally accepted
accounting principles. The amount payable on each day is limited to 1/365 of
.75% of the Fund's net assets on such day. The level of the Fund's net assets
changes each day and depends upon the amount of sales and redemptions of Fund
shares, the changes in the value of the investments held by the Portfolio, the
expenses of the Fund and the Portfolio accrued and allocated to the Fund on such
day, income on portfolio investments of the Portfolio accrued and allocated to
the Fund on such day, and any dividends and distributions declared on Fund
shares. The Fund does not accrue possible future payments as a liability of the
Fund or reduce the Fund's current net assets in respect of unknown amounts which
may become payable under the Plan in the future because the standards for
accrual of a liability under such accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Fund's Plan.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
In calculating daily the amount of Uncovered Distribution Charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid or payable
under the Plan by the Fund to the Principal Underwriter and contingent deferred
sales charges theretofore paid or payable to the Principal Underwriter will be
subtracted from such distribution charges; if the result of such subtraction is
positive, a distribution fee (computed at 1% over the prime rate then reported
in The Wall Street Journal) will be computed on such amount and added thereto,
with the resulting sum constituting the amount of outstanding Uncovered
Distribution Charges with respect to such day. The amount of outstanding
Uncovered Distribution Charges of the Principal Underwriter calculated on any
day does not constitute a liability recorded on the financial statements of the
Fund.
The amount of Uncovered Distribution Charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Classic Group of Funds which result in a
reduction of Uncovered Distribution Charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan. (For shares sold prior to January 30, 1995,
Plan payments are as follows: the Principal Underwriter pays monthly sales
commissions and service fee payments to Authorized Firms equivalent to
approximately .75% and .25%, respectively, annualized, of the assets maintained
in the Fund by their customers beginning at the time of sale. No payments were
made at the time of sale and there is no contingent deferred sales charge.)
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions, distribution fees and service fees to the Principal
Underwriter which may be equivalent, on an aggregate basis during any fiscal
year of the Fund, to 1% of the Fund's average daily net assets for such year.
For the sales commission and service fee payments made by the Fund and the
outstanding Uncovered Distribution Charges of the Principal Underwriter, see
"Fees and Expenses -- Distribution Plan" in this Part II. The Fund believes that
the combined rate of all these payments may be higher than the rate of payments
made under distribution plans adopted by other investment companies pursuant to
Rule 12b-1. Although the Principal Underwriter will use its own funds (which may
be borrowed from banks) to pay sales commissions and service fees at the time of
sale, it is anticipated that the Eaton Vance organization will profit by reason
of the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from sale
of Fund shares and through the amounts paid to the Principal Underwriter,
including contingent deferred sales charges, pursuant to the Plan. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts theretofore received by the Principal
Underwriter pursuant to the Plan and from contingent deferred sales charges have
exceeded the total expenses theretofore incurred by such organization in
distributing shares of the Fund. Total expenses for this purpose will include an
allocable portion of the overhead costs of such organization and its branch
offices, which costs will include without limitation leasing expense,
depreciation of building and equipment, utilities, communication and postage
expense, compensation and benefits of personnel, travel and promotional expense,
stationery and supplies, literature and sales aids, interest expense, data
processing fees, consulting and temporary help costs, insurance, taxes other
than income taxes, legal and auditing expense and other miscellaneous overhead
items. Overhead is calculated and allocated for such purpose by the Eaton Vance
organization in a manner deemed equitable to the Fund.
The Plan continues in effect through and including April 28, 1996, and shall
continue in effect indefinitely thereafter for so long as such continuance is
approved at least annually by the vote of both a majority of (i) the Trustees of
the Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Rule 12b-1 Trustees") and (ii) all of the Trustees
then in office, and the Distribution Agreement contains a similar provision. The
Plan and Distribution Agreement may be terminated at any time by vote of a
majority of the Rule 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund. The provisions of the Plan relating
to payments of sales commissions and distribution fees to the Principal
Underwriter are also included in the Distribution Agreement between the Trust on
behalf of the Fund and the Principal Underwriter. Pursuant to Rule 12b-1, the
Plan has been approved by the Fund's initial sole shareholder (Eaton Vance) and
by the Board of Trustees of the Trust, including the Rule 12b-1 Trustees. Under
the Plan, the President or a Vice President of the Trust shall provide to the
Trustees for their review, and the Trustees shall review at least quarterly, a
written report of the amount expended under the Plan and the purposes for which
such expenditures were made. The Plan may not be amended to increase materially
the payments described therein without approval of the shareholders of the Fund,
and all material amendments of the Plan must also be approved by the Trustees as
required by Rule 12b-1. So long as the Plan is in effect, the selection and
nomination of Trustees who are not interested persons of the Trust shall be
committed to the discretion of the Trustees who are not such interested persons.
The Trustees believe that the Plan will be a significant factor in the
expected growth of the Fund's assets, and will result in increased investment
flexibility and advantages which will benefit the Fund and its shareholders.
Payments for sales commissions and distribution fees made to the Principal
Underwriter under the Plan will compensate the Principal Underwriter for its
services and expenses in distributing shares of the Fund. Service fee payments
made to the Principal Underwriter and Authorized Firms under the Plan provide
incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees have determined that in
their judgment there is a reasonable likelihood that the Plan will benefit the
Fund and its shareholders.
ADDITIONAL TAX MATTERS
The Fund qualified as a RIC under the Code for its taxable year ended
January 31, 1995 (see Notes to Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of April 28, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
April 28, 1995, the following shareholders held of record the percentage of
outstanding shares of the Fund indicated after their names: Frontier Trust Co.
FBO D&F Corporation 401K Savings and Retirement Plan, c/o The Barclay Group,
Ambler, PA 19002 (11.8%); Frontier Trust Co. Custodian FBO O'Conner Davies & Co.
401K Savings & Retirement Plan, c/o The Barclay Group, Ambler, PA 19002 (7.4%);
and Thomas Campoli & John P. Campoli, Trustees, Campoli & Curley PC Profit
Sharing Trust U/A dtd 10/1/85, Pittsfield, MA 01202 (5.6%). To the knowledge of
the Trust, no other person owned of record or beneficially 5% or more of the
Fund's outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended January 31, 1995 as previously filed electronically with the
Securities and Exchange Commission (Accession Number: 0000950156-95-000182).
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC
INVESTORS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-IFSAI
[Logo]
EV Classic
Investors
Fund
Statement of
Additional
Information
June 1, 1995
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV MARATHON INVESTORS FUND. On
September 27, 1993, the Fund became a series of the Trust.
FEES AND EXPENSES
INVESTMENT ADVISER
To enhance the net income of the Fund, BMR voluntarily assumed $3,015 of the
Fund's expenses for the period from the start of business, November 2, 1993, to
the fiscal year ended January 31, 1994.
DISTRIBUTION PLAN
For the fiscal year ended January 31, 1995, the Fund paid sales commissions
under the Plan aggregating $64,624, which amount was used by the Principal
Underwriter to partially defray sales commissions aggregating $278,071 paid
during such period by the Principal Underwriter to Authorized Firms on sales of
Fund shares. During such period, contingent deferred sales charges aggregating
approximately $63,911 were imposed on early redeeming shareholders and paid to
the Principal Underwriter, which amount was used by the Principal Underwriter to
partially defray such sales commissions. As at January 31, 1995, the outstanding
Uncovered Distribution Charges of the Principal Underwriter calculated under the
Plan amounted to approximately $603,844 (which amount was equivalent to 4.2% of
the Fund's net assets on such day). For the fiscal year ended January 31, 1995,
the Fund did not pay or accrue any service fees under the Plan. The Fund began
accruing for its service fee payments in the quarter ending June 30, 1995.
PRINCIPAL UNDERWRITER
For the fiscal year ended January 31, 1995, the Fund paid the Principal
Underwriter $215.00 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each such transaction).
CUSTODIAN
For the fiscal year ended January 31, 1995, the Fund paid IBT $10,691.
<TABLE>
<CAPTION>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton Vance organization
(the noninterested Trustees) are paid by the Fund (and the other series of the Trust) and the Portfolio, respectively. (The
Trustees of the Trust and the Portfolio who are members of the Eaton Vance organization receive no compensation from the Fund or
the Portfolio.) During the fiscal year ended January 31, 1995, the noninterested Trustees of the Trust and the Portfolio earned
the following compensation in their capacities as Trustees from the Fund and the Portfolio, and during the first quarter ended
March 31, 1995, earned the following compensation in their capacities as Trustees from the other funds in the Eaton Vance fund
complex<F1>:
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
---- ------------ -------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Donald R. Dwight $8 $637<F2> $ 8,750 $33,750
Samuel L. Hayes, III 8 638<F3> 24,885 41,250
Norton H. Reamer 8 640 --0-- 33,750
John L. Thorndike 8 665 --0-- 35,000
Jack L. Treynor 8 664 --0-- 35,000
<FN>
<F1> The Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2> Includes $211 of deferred compensation.
<F3> Includes $599 of deferred compensation.
</TABLE>
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from November 2, 1993 through January 31,
1995 and for the one year period ended January 31, 1995.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF
INVEST-
MENT AFTER
VALUE OF INVEST- DEDUCT-
MENT BEFORE DE- ING THE TOTAL RETURN BEFORE TOTAL RETURN AFTER
DUCTING THE CON- CONTINGENT THE CONTINGENT DEFERRED THE CONTINGENT DEFERRED
TINGENT DEFERRED DEFERRED SALES SALES CHARGE SALES CHARGE<F2>
INVESTMENT INVESTMENT AMOUNT OF SALES CHARGE CHARGE<F2> ----------------------- -----------------------
PERIOD DATE INVESTMENT ON 1/31/95 1/31/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------- ---------- ---------- ---------------- -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the
Fund<F1> 11/2/93 $1,000 $981.47<F3> $933.77<F3> -1.85%<F3> -1.49%<F3> - 6.62%<F3> - 5.35%<F3>
1 Year Ended
1/31/95 1/31/94 $1,000 $944.60 $898.69 -5.54% -5.54% -10.13% -10.13%
<CAPTION>
PERCENTAGE CHANGES -- 11/2/93-1/31/95
NET ASSET VALUE TO NET ASSET VALUE NET ASSET VALUE TO NET ASSET VALUE
BEFORE DEDUCTING THE CONTINGENT DEFERRED AFTER DEDUCTING THE CONTINGENT DEFERRED
SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED SALES CHARGE<F2> WITH ALL DISTRIBUTIONS REINVESTED
---------------------------------------------- --------------------------------------------------
FISCAL YEAR ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
- ----------------- ------ ---------- -------------- ------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
1/31/94<F1> -- 3.90%<F3> -- -- -1.10%<F3> --
1/31/95 -5.54% -1.85% -1.49% -10.13% -6.62% -5.35%
Past performance is not indicative of future results. Investment return and principal value will fluctuate; shares, when redeemed,
may be worth more or less than their original cost.
- ----------
<FN>
<F1> Investment operations began on November 2, 1993.
<F2> No contingent deferred sales charge is imposed on shares purchased more than six years prior to the redemption, shares
acquired through the reinvestment of distributions, or any appreciation in value of other shares in the account, and no such
charge is imposed on exchanges of Fund shares for shares of one or more other funds listed under "The Eaton Vance Exchange
Privilege" in the Prospectus.
<F3> If a portion of the Fund's expenses had not been subsidized, the Fund would have had lower returns.
</TABLE>
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to financial service firms ("Authorized Firms") or
investors and other selling literature and of advertising is borne by the
Principal Underwriter. The fees and expenses of qualifying and registering and
maintaining qualifications and registrations of the Fund and its shares under
Federal and state securities laws is borne by the Fund. In addition, the Fund
makes payments to the Principal Underwriter pursuant to its Distribution Plan as
described in the Fund's current prospectus; the provisions of the Fund's
Distribution Plan relating to such payments are included in the Distribution
Agreement. The Distribution Agreement is renewable annually by the Trust's Board
of Trustees (including a majority of its Trustees who are not interested persons
of the Trust and who have no direct or indirect financial interest in the
operation of the Fund's Distribution Plan or the Distribution Agreement), may be
terminated on sixty days' notice either by such Trustees or by vote of a
majority of the outstanding voting securities of the Fund or on six months'
notice by the Principal Underwriter and is automatically terminated upon
assignment. The Principal Underwriter distributes Fund shares on a "best
efforts" basis under which it is required to take and pay for only such shares
as may be sold.
The Fund has authorized the Principal Underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction handled
by the Principal Underwriter. The Principal Underwriter estimates that the
expenses incurred by it in acting as repurchase agent for the Fund will exceed
the amounts paid therefor by the Fund. For the amount paid by the Fund to the
Principal Underwriter for acting as repurchase agent, see "Fees and Expenses" in
this Part II.
DISTRIBUTION PLAN
The Distribution Plan ("the Plan") is described in the Prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
The amount payable to the Principal Underwriter pursuant to the Plan as
sales commissions and distribution fees with respect to each day will be accrued
on such day as a liability of the Fund and will accordingly reduce the Fund's
net assets upon such accrual, all in accordance with generally accepted
accounting principles. The amount payable on each day is limited to 1/365 of
.75% of the Fund's net assets on such day. The level of the Fund's net assets
changes each day and depends upon the amount of sales and redemptions of Fund
shares, the changes in the value of the investments held by the Portfolio, the
expenses of the Fund and the Portfolio accrued and allocated to the Fund on such
day, income on portfolio investments of the Portfolio accrued and allocated to
the Fund on such day, and any dividends and distributions declared on Fund
shares. The Fund does not accrue possible future payments as a liability of the
Fund or reduce the Fund's current net assets in respect of unknown amounts which
may become payable under the Plan in the future because the standards for
accrual of a liability under such accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Fund's Plan.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
In calculating daily the amount of Uncovered Distribution Charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid or payable
under the Plan by the Fund to the Principal Underwriter and contingent deferred
sales charges theretofore paid or payable to the Principal Underwriter will be
subtracted from such distribution charges; if the result of such subtraction is
positive, a distribution fee (computed at 1% over the prime rate then reported
in The Wall Street Journal) will be computed on such amount and added thereto,
with the resulting sum constituting the amount of outstanding Uncovered
Distribution Charges with respect to such day. The amount of outstanding
Uncovered Distribution Charges of the Principal Underwriter calculated on any
day does not constitute a liability recorded on the financial statements of the
Fund.
The amount of Uncovered Distribution Charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Marathon Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan.
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions and distribution fees to the Principal Underwriter and service
fees to the Principal Underwriter and Authorized Firms which may be equivalent,
on an aggregate basis during any fiscal year of the Fund, to 1% of the Fund's
average daily net assets for such year. For the sales commissions and service
fee payments made by the Fund and the outstanding Uncovered Distribution Charges
of the Principal Underwriter, see "Fees and Expenses -- Distribution Plan" in
this Part II. The Fund believes that the combined rate of all these payments may
be higher than the rate of payments made under distribution plans adopted by
other investment companies pursuant to Rule 12b- 1. Although the Principal
Underwriter will use its own funds (which may be borrowed from banks) to pay
sales commissions at the time of sale, it is anticipated that the Eaton Vance
organization will profit by reason of the operation of the Plan through an
increase in the Fund's assets (thereby increasing the advisory fee payable to
BMR by the Portfolio) resulting from sale of Fund shares and through the amounts
paid to the Principal Underwriter, including contingent deferred sales charges,
pursuant to the Plan. The Eaton Vance organization may be considered to have
realized a profit under the Plan if at any point in time the aggregate amounts
theretofore received by the Principal Underwriter pursuant to the Plan and from
contingent deferred sales charges have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices, which costs will include without limitation
leasing expense, depreciation of building and equipment, utilities,
communication and postage expense, compensation and benefits of personnel,
travel and promotional expense, stationery and supplies, literature and sales
aids, interest expense, data processing fees, consulting and temporary help
costs, insurance, taxes other than income taxes, legal and auditing expense and
other miscellaneous overhead items. Overhead is calculated and allocated for
such purpose by the Eaton Vance organization in a manner deemed equitable to the
Fund.
The Plan continues in effect through and including April 28, 1996, and shall
continue in effect indefinitely thereafter for so long as such continuance is
approved at least annually by the vote of both a majority of (i) the Trustees of
the Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to the Plan (the "Rule 12b-1 Trustees") and (ii) all of the Trustees
then in office, and the Distribution Agreement contains a similar provision. The
Plan and Distribution Agreement may be terminated at any time by vote of a
majority of the Rule 12b-1 Trustees or by a vote of a majority of the
outstanding voting securities of the Fund. The provisions of the Plan relating
to payments of sales commissions and distribution fees to the Principal
Underwriter are also included in the Distribution Agreement between the Trust on
behalf of the Fund and the Principal Underwriter. Pursuant to Rule 12b-1, the
Plan has been approved by the Fund's initial sole shareholder (Eaton Vance) and
by the Board of Trustees of the Trust, including the Rule 12b-1 Trustees. Under
the Plan, the President or a Vice President of the Trust shall provide to the
Trustees for their review, and the Trustees shall review at least quarterly, a
written report of the amount expended under the Plan and the purposes for which
such expenditures were made. The Plan may not be amended to increase materially
the payments described therein without approval of the shareholders of the Fund,
and all material amendments of the Plan must also be approved by the Trustees as
required by Rule 12b-1. So long as the Plan is in effect, the selection and
nomination of Trustees who are not interested persons of the Trust shall be
committed to the discretion of the Trustees who are not such interested persons.
The Trustees believe that the Plan will be a significant factor in the
expected growth of the Fund's assets, and will result in increased investment
flexibility and advantages which will benefit the Fund and its shareholders.
Payments for sales commissions and distribution fees made to the Principal
Underwriter under the Plan will compensate the Principal Underwriter for its
services and expenses in distributing shares of the Fund. Service fee payments
made to the Principal Underwriter and Authorized Firms under the Plan provide
incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees have determined that in
their judgment there is a reasonable likelihood that the Plan will benefit the
Fund and its shareholders.
ADDITIONAL TAX MATTERS
The Fund qualified as a RIC under the Code for its taxable year ended
January 31, 1995 (See Notes to Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of April 28, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
April 28, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc., New Brunswick, NJ
was the record owner of approximately 12.55% of the outstanding shares which
were held on behalf of its customers who are the beneficial owners of such
shares, and as to which it had voting power under certain limited circumstances.
To the knowledge of the Trust, no other person owned of record or beneficially
5% or more of the Fund's outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended January 31, 1995 as previously filed electronically with the
Securities and Exchange Commission (Accession Number: 0000950156-95-000184).
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON INVESTORS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand
One Post Office Square
Boston, MA 02109
EV MARATHON INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-IFSAI
EV MARATHON
INVESTORS
FUND
STATEMENT OF
ADDITIONAL
INFORMATION
JUNE 1, 1995
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV TRADITIONAL INVESTORS FUND. On
September 27, 1993, the Fund became a series of the Trust and its name was
changed from Eaton Vance Investors Fund to EV Traditional Investors Fund.
FEES AND EXPENSES
INVESTMENT ADVISER
Prior to the close of business on October 27, 1993 (when the Fund
transferred its assets to the Portfolio in exchange for an interest in the
Portfolio), the Fund retained Eaton Vance as its investment adviser. For the
period from February 1, 1993, to the close of business October 27, 1993, the
Fund paid Eaton Vance advisory fees of $995,730 (equivalent to 0.625%
(annualized) of the Fund's average net assets for such period). For the fiscal
year ended January 31, 1993, the Fund paid Eaton Vance advisory fees of
$1,308,553.
SERVICE PLAN
For the fiscal year ended January 31, 1995, the Fund made service fee
payments under the Plan to the Principal Underwriter aggregating $112,588, of
which $82,393 was paid to Authorized Firms and the balance was retained by the
Principal Underwriter.
PRINCIPAL UNDERWRITER
For the fiscal year ended January 31, 1995, the Fund paid the Principal
Underwriter $1,247.50 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each such transaction).
The total sales charges for sales of shares of the Fund during the fiscal
years ended January 31, 1995, 1994 and 1993, were $83,722, $173,052 and
$154,718, respectively, of which $13,173, $25,871 and $24,300, respectively, was
received by the Principal Underwriter. For the fiscal years ended January 31,
1995, 1994 and 1993, Authorized Firms received $70,549, $147,180 and
$130,418, respectively, from total sales charges.
CUSTODIAN
For the fiscal year ended January 31, 1995, the Fund paid IBT $15,287.
BROKERAGE
During the period from February 1, 1993, to October 27, 1993, the Fund paid
brokerage commissions of $139,448 on portfolio security transactions, of which
approximately $118,975 was paid in respect of portfolio security transactions
aggregating approximately $78,305,957 to firms which provided some Research
Services to Eaton Vance (although many of such firms may have been selected in
any particular transaction primarily because of their execution capabilities).
During the fiscal year ended January 31, 1993, the Fund paid brokerage
commissions of $85,826 on portfolio security transactions.
<TABLE>
<CAPTION>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton Vance organization
(the noninterested Trustees) are paid by the Fund (and the other series of the Trust) and the Portfolio, respectively. (The
Trustees of the Trust and the Portfolio who are members of the Eaton Vance organization receive no compensation from the Fund or
the Portfolio.) During the fiscal year ended January 31, 1995, the noninterested Trustees of the Trust and the Portfolio earned
the following compensation in their capacities as Trustees from the Fund and the Portfolio, and during the first quarter ended
March 31, 1995, earned the following compensation in their capacities as Trustees from the other funds in the Eaton Vance fund
complex<F1>:
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
---- ------------ -------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Donald R. Dwight $165 $637<F2> $ 8,750 $33,750
Samuel L. Hayes, III 164 638<F3> 24,885 41,250
Norton H. Reamer 156 640 --0-- 33,750
John L. Thorndike 158 665 --0-- 35,000
Jack L. Treynor 168 664 --0-- 35,000
<FN>
<F1> The Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2> Includes $211 of deferred compensation.
<F3> Includes $599 of deferred compensation.
</TABLE>
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the ten, five and one year periods ended January 31, 1995.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
TOTAL RETURN TOTAL RETURN
VALUE OF EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT -------------------------- -------------------------
PERIOD DATE INVESTMENT<F1> ON 1/31/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10 Years ended
1/31/95 1/31/85 $952.44 $2,515.37 164.10% 10.20% 151.55% 9.66%
5 Years ended
1/31/95 1/31/90 $952.25 $1,434.68 50.66% 8.54% 43.51% 7.49%
1 Year ended
1/31/95 1/31/94 $952.38 $ 909.97 -4.45% -4.45% -8.99% -8.99%
- ----------
<FN>
<F1> Initial investment less current maximum sales charge of 4.75%
</FN>
<CAPTION>
PERCENTAGE CHANGES JANUARY 31, 1985 -- JANUARY 31, 1995
NET ASSET VALUE TO NET ASSET VALUE MAXIMUM OFFERING PRICE TO NET ASSET VALUE
FISCAL WITH ALL DISTRIBUTIONS REINVESTED WITH ALL DISTRIBUTIONS REINVESTED
YEAR ---------------------------------------------------- -------------------------------------------------
ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/31/86 19.09% 19.09% 19.09% 13.43% 13.43% 13.43%
1/31/87 18.17 40.73 18.63 12.56 34.04 15.78
1/31/88 -0.39 40.19 11.92 -5.12 33.53 10.12
1/31/89 13.40 58.97 12.29 8.01 51.42 10.93
1/31/90 10.27 75.29 11.88 5.03 66.97 10.80
1/31/91 7.78 88.94 11.19 2.66 79.96 10.29
1/31/92 16.26 119.66 11.90 10.74 109.22 11.12
1/31/93 9.30 140.09 11.57 4.11 128.68 10.89
1/31/94 15.13 176.41 11.96 9.66 163.28 11.36
1/31/95 -4.45 164.10 10.20 -8.99 151.55 9.66
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate; shares, when redeemed, may be worth more or less
than their original cost.
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge, other than
the sales charge included in the offering price, and may be changed or
discontinued without penalty at any time.
Intended Quantity Investment--Statement of Intention. If it is anticipated that
$100,000 or more of Fund shares and shares of the other continuously offered
open-end funds listed under "The Eaton Vance Exchange Privilege" in the current
Prospectus of the Fund will be purchased within a 13-month period, a Statement
of Intention should be signed so that shares may be obtained at the same reduced
sales charge as though the total quantity were invested in one lump sum. Shares
held under Right of Accumulation (see below) as of the date of the Statement
will be included toward the completion of the Statement. The Statement
authorizes the Transfer Agent to hold in escrow sufficient shares (5% of the
dollar amount specified in the Statement) which can be redeemed to make up any
difference in sales charge on the amount intended to be invested and the amount
actually invested. Execution of a Statement does not obligate the shareholder to
purchase or the Fund to sell the full amount indicated in the Statement, and
should the amount actually purchased during the 13-month period be more or less
than that indicated on the Statement, price adjustments will be made. For sales
charges and other information on quantity purchases, see "How to Buy Fund
Shares" in the Fund's current Prospectus. Any investor considering signing a
Statement of Intention should read it carefully.
Right of Accumulation--Cumulative Quantity Discount. The applicable sales charge
level for the purchase of Fund shares is calculated by taking the dollar amount
of the current purchase and adding it to the value (calculated at the maximum
current offering price) of the shares the shareholder owns in his or her
account(s) in the Fund and in the other continuously offered open-end funds
listed under "The Eaton Vance Exchange Privilege" in the current Prospectus of
the fund for which Eaton Vance acts as investment adviser or administrator at
the time of purchase. The sales charge on the shares being purchased will then
be at the rate applicable to the aggregate investment. For example, if the
shareholder owned shares valued at $80,000 in EV Traditional Growth Fund, and
purchased an additional $20,000 of Fund shares, the sales charge for the $20,000
purchase would be at the rate of 3.75% of the offering price (3.90% of the net
amount invested) which is the rate applicable to single transactions of
$100,000. For sales charges on quantity purchases, see "How to Buy Fund Shares"
in the Fund's current Prospectus. Shares purchased (i) by an individual, his or
her spouse and their children under the age of twenty-one, and (ii) by a
trustee, guardian or other fiduciary of a single trust estate or a single
fiduciary account, will be combined for the purpose of determining whether a
purchase will qualify for the Right of Accumulation and if qualifying, the
applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his or her financial service firm ("Authorized Firm") must provide
the Principal Underwriter (in the case of a purchase made through an Authorized
Firm) or the Transfer Agent (in the case of an investment made by mail) with
sufficient information to permit verification that the purchase order qualifies
for the accumulation privilege. Confirmation of the order is subject to such
verification. The Right of Accumulation privilege may be amended or terminated
at any time as to purchases occurring thereafter.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through certain Authorized Firms which have agreements with the Principal
Underwriter. The Principal Underwriter is a wholly-owned subsidiary of Eaton
Vance.
The public offering price is the net asset value next computed after receipt
of the order, plus, where applicable, a variable percentage (sales charge)
depending upon the amount of purchase as indicated by the sales charge table set
forth in the Fund's current Prospectus (see "How to Buy Fund Shares").
Such table is applicable to purchases of the Fund alone or in combination
with purchases of the other funds offered by the Principal Underwriter, made at
a single time by (i) an individual, or an individual, his or her spouse and
their children under the age of twenty-one, purchasing shares for his or their
own account; and (ii) a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account.
The table is also presently applicable to (1) purchases of Fund shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter through one dealer aggregating $100,000 or more made by
any of the persons enumerated above within a thirteen-month period starting with
first purchase pursuant to a written Statement of Intention, in the form
provided by the Principal Underwriter, which includes provisions for a price
adjustment depending upon the amount actually purchased within such period (a
purchase not made pursuant to such Statement may be included thereunder if the
Statement is filed within 90 days of such purchase); or (2) purchases of the
Fund pursuant to the Right of Accumulation and declared as such at the time of
purchase.
Subject to the applicable provisions of the 1940 Act, the Fund may issue
shares at net asset value in the event that an investment company (whether a
regulated or private investment company or a personal holding company) is merged
or consolidated with or acquired by the Fund. Normally no sales charges will be
paid in connection with an exchange of Fund shares for the assets of such
investment company.
Shares may be sold at net asset value to any officer, director, trustee,
general partner or employee of the Fund, the Portfolio or any investment company
for which Eaton Vance or BMR acts as investment adviser, any investment
advisory, agency, custodial or trust account managed or administered by Eaton
Vance or by any parent, subsidiary or other affiliate of Eaton Vance, or any
officer, director or employee of any parent, subsidiary or other affiliate of
Eaton Vance. The terms "officer," "director," "trustee," "general partner" or
"employee" as used in this paragraph include any such person's spouse and minor
children, and also retired officers, directors, trustees, general partners and
employees and their spouses and minor children. Shares of the Fund may also be
sold at net asset value to registered representatives and employees of certain
Authorized Firms and to such persons' spouses and children and their beneficial
accounts.
The Trust reserves the right to suspend or limit the offering of shares of
the Fund to the public at any time.
The Principal Underwriter acts as principal in selling shares of the Fund
under the Distribution Agreement with the Trust on behalf of the Fund. The
expenses of printing copies of prospectuses used to offer shares to financial
service firms or investors and other selling literature and of advertising are
borne by the Principal Underwriter. The fees and expenses of qualifying and
registering and maintaining qualifications and registrations of the Fund and its
shares under Federal and state securities laws are borne by the Fund. The
Distribution Agreement is renewable annually by the Board of Trustees of the
Trust (including a majority of its Trustees who are not interested persons of
the Principal Underwriter or the Trust), may be terminated on six months' notice
by either party, and is automatically terminated upon assignment. The Principal
Underwriter distributes Fund shares on a "best efforts" basis under which it is
required to take and pay for only such shares as may be sold. The Principal
Underwriter allows Authorized Firms discounts from the applicable public
offering price which are alike for all Authorized Firms. In the case of the
maximum sales charge the Authorized Firm retains 4% of the public offering price
(4.20% of the net amount invested) and the Principal Underwriter retains 0.75%
of the public offering price (0.79% of the net amount invested). However, the
Principal Underwriter may allow, upon notice to all Authorized Firms with whom
it has agreements, discounts up to the full sales charge during the periods
specified in the notice. During periods when the discount includes the full
sales charge, such Authorized Firms may be deemed to be underwriters as that
term is defined in the Securities Act of 1933.
SERVICE PLAN
The Trust on behalf of the Fund has adopted a Service Plan (the "Plan")
designed to meet the requirements of Rule 12b-1 (the "Rule") under the 1940 Act
and the service fee requirements of the revised sales charge rule of the
National Association of Securities Dealers, Inc. (Management believes service
fee payments are not distribution expenses governed by the Rule, but has chosen
to have the Plan approved as if the Rule were applicable.) The following
supplements the discussion of the Plan contained in the Fund's prospectus.
The Plan remains in effect through and including April 28, 1996 and from
year to year thereafter provided such continuance is approved by a vote of both
a majority of (i) 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 any agreements related to it (the "Rule 12b-1 Trustees") and (ii) all of the
Trustees then in office, cast in person at a meeting (or meetings) called for
the purpose of voting on this Plan. The Plan may be terminated any time by vote
of the Rule 12b-1 Trustees or by a vote of a majority of the outstanding voting
securities of the Fund. Pursuant to the Rule, the Plan has been approved by the
Board of Trustees of the Trust, including the Rule 12b-1 Trustees. The Plan
amends and replaces the Fund's original distribution plan (which originally
became effective on July 28, 1989 and which was approved by the Fund's
shareholders).
Under the Plan, the President or a Vice President of the Trust shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described herein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees of the Trust as prescribed by the Rule. So long as the
Plan is in effect, the selection and nomination of Trustees who are not
interested persons of the Trust shall be committed to the discretion of the
Trustees who are not such interested persons. The Trustees have determined that
in their judgment there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders. For the service fees paid by the Fund under the
Plan, see "Fees and Expenses" in this Part II.
ADDITIONAL TAX MATTERS
The Fund qualified as a RIC under the Code for its taxable year ended
January 31, 1995 (see Notes to Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of April 28, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. To
the knowledge of the Trust, no other person owned of record or beneficially 5%
or more of the Fund's outstanding shares.
<PAGE>
APPENDIX
EV TRADITIONAL INVESTORS FUND [LOGO]
NINETEEN
OUT OF
TWENTY
YEARS OF
POSITIVE PERFORMANCE!
<PAGE>
- --------------------------------------------------------------------------------
DEFINE YOUR FINANCIAL GOALS
- --------------------------------------------------------------------------------
* BUILDING FOR FINANCIAL INDEPENDENCE
* WORKING TOWARD A SECURE RETIREMENT
* ENSURING A COLLEGE EDUCATION FOR YOUR CHILDREN
* PLANNING FOR THE CARE OF AGING PARENTS
- --------------------------------------------------------------------------------
THEN DECIDE HOW ARE YOU GOING TO REALIZE THEM
- --------------------------------------------------------------------------------
Basically, you have two choices in trying to reach your financial goals: Try to
make the money quickly, with little real chance of success. Or try to earn it
over the long term, with a better potential for success.
- --------------------------------------------------------------------------------
AND WHERE YOU ARE GOING TO INVEST
- --------------------------------------------------------------------------------
"A penny saved is a penny earned," wrote Benjamin Franklin in Poor Richard's
Almanac. Good advice, as far as it goes. But where you put your money is just as
important.
For short-term needs and emergencies, nothing beats the convenience of a savings
account or a money market fund. (Of course, savings accounts are insured by the
FDIC and offer a fixed rate of return.) But these short-term savings vehicles
have an important flaw. They are less able to overcome the effects of inflation,
as the chart on the next page shows.
- --------------------------------------------------------------------------------
LONG-TERM INVESTMENTS FOR LONG-TERM GOALS
- --------------------------------------------------------------------------------
True, the news about inflation in recent years has been reassuring. However,
even assuming a moderate 3 percent inflation rate, the purchasing power of a
dollar will decline by 26 percent in 10 years. It's the loss of your purchasing
power caused by the steady erosion of inflation that can wreak the most havoc on
your financial plans. That's why for long-term goals, it's wise to look to
long-term investments that have the potential to beat inflation over a period of
years.
[GRAPHIC OMITTED: 4 pie charts showing:
Stocks have beaten inflation over the long term
Percent of holding periods stocks beat inflation (1926 - 1994)
1-year holding periods 65%
5-year holding periods 78%
10-year holding periods 92%
20-year holding periods 100%
caption reads:
past performance is not indicative of future results
Source: "Stocks, Bonds, Bills, and Inflation 1995 Yearbook,"
Ibbotson Associates.]
<PAGE>
- --------------------------------------------------------------------------------
COMMON STOCKS MAY HELP COMBAT INFLATION ...
- --------------------------------------------------------------------------------
Common stocks represent ownership in a publicly-owned company or corporation.
You share in the company's earnings, which are paid to you as dividends. And if
the business grows, your stock will probably appreciate in value. Common stocks
have given a good account of themselves over the years, before and after
inflation, as the chart below shows.
HISTORICAL INVESTMENT RETURNS, 1926 - 1994
AVERAGE ANNUAL RATES OF RETURN (INCOME PLUS CAPITAL CHANGES). TREASURY BILLS'
AND LONG-TERM GOVERNMENT BONDS' PRINCIPAL AND INTEREST ARE GUARANTEED BY THE
U.S. GOVERNMENT. IF HELD TO MATURITY, TREASURY BILLS AND GOVERNMENT BONDS OFFER
A FIXED PRINCIPAL VALUE AND FIXED RATE OF RETURN. INFLATION AND RETURNS OF
INVESTMENT TYPES SHOWN WILL FLUCTUATE. FIGURES ARE NOT MEANT TO REPRESENT THE
FUND`S PERFORMANCE.
Source: "Stocks, Bonds, Bills, and Inflation 1995 Yearbook," Ibbotson
Associates.
[GRAPHIC OMITTED: bar chart showing:
INFLATION 3.1%
U.S. TREASURY BILLS 3.7%
LONG-TERM GOV`T BONDS 4.8%
LONG-TERM CORPORATE BONDS 5.4%
COMMON STOCKS 10.2%]
- --------------------------------------------------------------------------------
FIXED-INCOME SECURITIES FOR POTENTIALLY GREATER STABILITY OF PRINCIPAL ...
- --------------------------------------------------------------------------------
Long-term corporate bonds are the means by which corporations borrow money to
finance their operations. Fixed-income securities such as long-term corporate
bonds are an important complement to common stocks. While common stocks work to
combat inflation and increase your money, fixed-income investments can help
increase stability of principal and, because they pay dividends, cash flow.
Long-term U.S. government bonds are favored by investors worldwide for the
guarantee, backed by the U.S. government or one of its agencies, of timely
payment of principal and interest. Of course, the market prices of U.S.
government bonds are not guaranteed or backed by the U.S. government or its
agencies.
- --------------------------------------------------------------------------------
PLUS MONEY MARKET INSTRUMENTS MAY HELP PRESERVE CAPITAL
- --------------------------------------------------------------------------------
Because of their short-term nature, money market instruments generally have
minimal price fluctuations in response to changes in interest rates. As a
result, they can help preserve capital and provide a reasonable level of current
income. What's more, they can create a reserve that can be tapped to buy stocks
or bonds when an opportunity shows itself.
<PAGE>
- --------------------------------------------------------------------------------
INTRODUCING EV TRADITIONAL INVESTORS FUND ...
- --------------------------------------------------------------------------------
When EV Traditional Investors Fund was launched on April 1, 1932, its stated
goal was to provide "...a vehicle for intelligent and conservative investing,"
based on a policy of maintaining "...a balance between bonds, stocks, and/or
cash which seems to be advisable from time to time." That goal is just as
important today as it was then.
- --------------------------------------------------------------------------------
GROWTH OF AN INVESTMENT IN EV TRADITIONAL INVESTORS FUND
- --------------------------------------------------------------------------------
A HYPOTHETICAL INVESTMENT OF $10,000 IN INVESTORS FUND AT INCEPTION IN 1932
WOULD HAVE GROWN TO OVER $3 MILLION BY MARCH 31, 1995...
MORE RECENTLY, THE FUND HAS EXPERIENCED 19 OUT OF 20 YEARS OF POSITIVE
PERFORMANCE, FROM 1975 TO 1994.
----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH 3/31/95
Without maximum With maximum
sales charge 4.75% sales charge
1 year 8.6% 3.4%
5 years 9.5 8.4
10 years 10.7 10.2
25 years 10.3 10.1
----------------------------------------------
[GRAPHIC OMITTED: chart showing the following plot points:]
A hypothetical investment of $10,000 in Investors Fund at inception in 1932
would have grown to over $3 million by March 31, 1995...
Total net Total net
asset value asset value
w/ all distributions w/ all dividends
reinvested ($) taken in cash ($)
12/31/32 9,494 9,494
12/31/33 12,767 12,767
12/31/34 14,189 14,189
12/31/35 21,423 20,926
12/31/36 31,503 23,502
12/31/37 19,483 14,141
12/31/38 23,874 16,603
12/31/39 22,774 15,258
12/31/40 20,951 13,397
12/31/41 19,155 11,622
12/31/42 22,442 12,767
12/31/43 28,657 15,649
12/31/44 34,330 18,073
12/31/45 47,509 23,750
12/31/46 46,395 21,737
12/31/47 44,988 18,845
12/31/48 46,504 18,206
12/31/49 55,140 20,677
12/31/50 61,208 21,698
12/31/51 69,260 23,044
12/31/52 76,076 23,044
12/31/53 78,210 22,242
12/31/54 104,703 28,674
12/31/55 123,677 31,947
12/31/56 129,172 31,279
12/31/57 129,479 28,836
12/31/58 168,108 34,122
12/31/59 178,039 33,931
12/31/60 194,704 33,969
12/31/61 232,565 38,969
12/31/62 223,960 35,305
12/31/63 249,183 37,595
12/31/64 283,861 40,954
12/31/65 295,836 40,153
12/31/66 267,583 34,198
12/31/67 287,432 34,427
12/31/68 322,144 36,298
12/31/69 294,049 31,069
12/31/70 319,387 31,260
12/31/71 352,354 32,405
12/31/72 384,209 32,939
12/31/73 334,709 25,840
12/31/74 287,577 20,076
12/31/75 356,115 23,550
12/31/76 456,713 28,817
12/31/77 460,291 27,252
12/31/78 496,500 26,603
12/31/79 589,282 29,008
12/31/80 707,929 31,260
12/31/81 741,114 28,931
12/31/82 931,356 30,496
12/31/83 1,066,839 31,985
12/31/84 1,162,481 30,496
12/31/85 1,458,972 33,893
12/31/86 1,594,565 29,160
12/31/87 1,684,708 25,954
12/31/88 1,864,686 26,756
12/31/89 2,251,805 28,702
12/31/90 2,274,677 26,450
12/31/91 2,758,774 29,313
12/31/92 2,936,686 28,130
12/31/93 3,265,261 27,939
12/31/94 3,206,008 25,840
3/31/95 3,446,216 27,519
This chart reflects change in net asset value with all distributions reinvested
in a hypothetical investment of $10,000 at 4/1/32. Figures reflect the Fund's
current maximum sales charge of 4.75% for purchases of less than $10,000.
Twenty-year performance is from 12/31/74 through 3/31/95. Past performance is
not indicative of future results. Investment return and principal value will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost.
- --------------------------------------------------------------------------------
FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
EV TRADITIONAL INVESTORS FUND IS IDEAL FOR LONG-TERM GOALS
- --------------------------------------------------------------------------------
EV Traditional Investors Fund, a middle-of-the-road strategy, is an ideal
vehicle for the conservative investor with long-term financial goals.
* BECAUSE THE PORTFOLIO HOLDS COMMON STOCKS, investors can harness stocks'
potential for fighting inflation. A share of EV Traditional Investors Fund
represents an interest in a great many common stock holdings. Diversification
among the stocks of many companies in many industries is a way to reduce the
risk of putting all your eggs in one basket.
* BECAUSE THE PORTFOLIO HOLDS CORPORATE AND GOVERNMENT FIXED-INCOME SECURITIES,
shareholders can expect cash flow and reduced share-price declines caused by
downturns in stock prices.
* BECAUSE THE PORTFOLIO INCLUDES SOME MONEY MARKET INSTRUMENTS, investors can
enjoy current income and an added measure of price stability.
INVESTORS FUND BEGAN SERVING INVESTORS IN 1932
There have always been "reasons" not to invest...
1932 INVESTORS FUND BEGINS OPERATIONS
1933
1934 ECONOMIC DEPRESSION DEEPENS
1935
1936 ECONOMY STILL STRUGGLING
1937
1938 EUROPE PREPARES FOR WAR
1939 A HYPOTHETICAL INVESTMENT OF $10,000 IN INVESTORS FUND AT INCEPTION WOULD
HAVE GROWN TO $22,774 BY 12/31/39 Investment results include max. sales
charge of 4.75% at inception, and reinvestment of all distributions.
[Photo]
Building a steamplant for the Tennessee Valley Authority. (Margaret
Bourke-White, Life Magazine (C) Time Warner)
<PAGE>
- --------------------------------------------------------------------------------
THE BENEFITS OF ASSET ALLOCATION
- --------------------------------------------------------------------------------
EV Traditional Investors Fund has achieved positive total returns (i.e., change
in value plus the reinvestment of any distributions) for 19 out of 20 years from
1975 through 1994. If the Fund had invested solely in equities for that same
period, it would have been invested in the best performing of the three asset
classes in just 11 of 20 years. ( The table below uses the Standard & Poor's 500
Composite Index, an unmanaged portfolio of equity securities, as a barometer of
general stock market performance.) Similarly, fixed-income securities, as
measured by the Lehman Brothers Government/Corporate Bond Index, which is an
unmanaged portfolio of bonds used to gauge bond market performance, were the
leading performer in 4 out of the 20 years. By investing in all three asset
classes, the Fund was able to reward investors in every year since 1975 except
for 1994.
<TABLE>
<CAPTION>
EV TRADITIONAL EQUITIES: FIXED-INCOME MONEY MARKET
INVESTORS FUND: IN 11 OUT OF 20 SECURITIES: INSTRUMENTS:
IN 19 OUT OF 20 YEARS EQUITIES IN 4 OUT OF 20 YEARS IN 4 OUT OF 20 YEARS
YEARS, THE FUND (S&P 500) FIXED INCOME SECURITIES MONEY MARKET INSTRUMENTS
ACHIEVED A POSITIVE HAD THE HIGHEST (LEHMAN BROS. GOV./ (91-DAY TREASURY BILLS) OUT-
RETURN... TOTAL RETURN... CORP. BOND INDEX) WERE PERFORMED AT LEASE ONE
THE LEADERS... OTHER ASSET CLASS...
<S> <C> <C> <C> <C>
1975 23.8% 37.1% 12.3% 5.8%
1976 28.3 23.8 15.6 5.1
1977 0.8 -7.2 3.0 5.5
1978 7.9 6.5 1.2 7.7
1979 18.7 18.5 2.3 10.6
1980 20.1 32.5 3.1 12.7
1981 4.7 -4.9 7.3 14.2
1982 25.7 21.5 31.1 10.6
1983 14.6 22.5 8.1 9.1
1984 9.0 6.2 15.0 9.8
1985 25.5 31.6 21.3 7.6
1986 9.3 18.6 15.6 6.0
1987 5.7 5.2 2.3 6.0
1988 10.7 16.5 7.6 7.1
1989 8.2 31.6 14.2 8.4
1990 1.0 -3.1 8.3 7.5
1991 21.3 30.4 16.1 5.2
1992 6.4 7.6 7.6 3.4
1993 11.2 10.0 11.0 3.0
1994 -1.8 1.4 -3.5 4.6
</TABLE>
1940
1941 PEARL HARBOR ATTACKED
1942
1943 INDUSTRY MOBILIZES
1944
1945 POST-WAR RECESSION PREDICTED
1946
1947 COLD WAR BEGINS
1948
1949 A HYPOTHETICAL INVESTMENT OF $10,000 IN INVESTORS FUND AT INCEPTION WOULD
HAVE GROWN TO $55,140 BY 12/31/49
[Photo]
Women sew uniforms for the war effort.
<PAGE>
- --------------------------------------------------------------------------------
WHEN SHOULD YOU INVEST?
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IT MAKES VIRTUALLY LITTLE DIFFERENCE WHEN YOU INVEST IN INVESTORS FUND. HERE'S WHY.
WORST DAY BEST DAY
This is what would have happened if you had ...And this is what would have happened if you
invested $10,000 a year in the Fund for the had invested $10,000 a year in the Fund for the
past 20 years on the worst possible day past 20 years on the best possible dady each
each year, the day the market peaked... year, the day the market hit bottom...
DATE OF CUMULATIVE ACCOUNT VALUE DATE OF CUMULATIVE ACCOUNT VALUE
MARKET HIGH INVESTMENT ON 12/31 MARKET HIGH INVESTMENT ON 12/31
<S> <C> <C> <C> <C> <C>
7/15/75 $ 10,000 $ 9,790 1/8/75 $ 10,000 $ 11,152
9/21/76 20,000 22,553 1/2/76 20,000 25,600
1/3/77 30,000 32,674 11/2/77 30,000 35,801
9/12/78 40,000 44,260 3/6/78 40,000 49,491
10/5/79 50,000 62,127 2/27/79 50,000 69,787
11/28/80 60,000 84,093 3/27/80 60,000 96,028
1/6/81 70,000 98,161 9/25/81 70,000 111,248
11/9/82 80,000 133,485 8/12/82 80,000 152,282
10/10/83 90,000 162,453 1/3/83 90,000 185,355
11/6/84 100,000 186,857 7/24/84 100,000 212,919
12/16/85 110,000 244,242 1/4/85 110,000 278,679
12/2/86 120,000 276,584 1/22/86 120,000 315,198
8/25/87 130,000 300,614 12/4/87 130,000 343,137
10/21/88 140,000 342,501 1/20/88 140,000 390,335
10/9/89 150,000 423,592 1/3/89 150,000 482,599
7/16/90 160,000 437,434 10/11/90 160,000 497,770
12/31/91 170,000 540,324 1/9/91 170,000 615,379
12/18/92 180,000 584,970 4/8/92 180,000 665,834
12/28/93 190,000 660,219 1/8/93 190,000 751,200
2/2/94 200,000 657,500 4/4/94 200,000 747,472
AVERAGE ANNUAL TOTAL RETURN: 10.89% AVERAGE ANNUAL TOTAL RETURN: 11.66%
</TABLE>
WHAT MATTERS IS THAT YOU DO INVEST. ANY TIME IS A GOOD TIME TO START AN
INVESTMENT PROGRAM IN EV TRADITIONAL INVESTORS FUND.
Illustrations reflect maximum applicable sales charges at the time of each
annual investment, including reduced sales charges through Rights of
Accumulation. Dates on market highs and lows correspond to the fluctuations of
the S&P 500 Composite Index. Past performance of the Index and of the Fund is
historical and is not indicative of future results. Investment return and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
1950 NORTH KOREA INVADES SOUTH
1951
1952 U.S. SEIZES STEEL MILLS
1953
1954 SEN. MCCARTHY HOLDS HEARINGS
1955
1956 CRISIS FLARES IN SUEZ
1957
1958 RECESSION RETURNS
1959 A HYPOTHETICAL INVESTMENT OF $10,000 IN INVESTORS FUND AT INCEPTION WOULD
HAVE GROWN TO $178,039 BY 12/31/59
[Photo]
Tract housing made home ownership in the suburbs affordable.
<PAGE>
- --------------------------------------------------------------------------------
HOW INVESTORS FUND CAN HELP BUILD AN INVESTMENT ACCOUNT
- --------------------------------------------------------------------------------
Their children grown, Jack and Eileen C. decided in 1980 to set up a retirement
account in EV Traditional Investors Fund. Every month for five years they
invested $1,000. Then they left their account to accumulate for 10 years, with
all distributions reinvested in additional shares of Investors Fund - letting
their account "slowly age," they joked. At the end of 1994, when they retired,
they found that their five years of investing and 10 years of patience had built
an account worth $231,429.
HERE'S HOW THEIR INVESTMENT ACCUMULATED OVER THE YEARS...
YEAR ENDED ANNUAL CUMULATIVE VALUE OF
12/31 INVESTMENT INVESTMENT ACCOUNT
1980 $12,000 $12,000 $ 13,891
1981 12,000 24,000 26,441
1982 12,000 36,000 46,889
1983 12,000 48,000 65,613
1984 12,000 60,000 83,915
1985 105,317
1986 115,105
1987 121,612
1988 134,604
1989 162,549
1990 164,200
1991 199,145
1992 211,988
1993 235,706
1994 231,429
Accumulations include maximum sales charge. Past performance is not indicative
of future results.
1960 U-2 PLANE SHOT DOWN IN USSR
1961
1962 SOVIET MISSILES PRECIPITATE CUBAN CRISIS
1963
1964 U.S. SENDS PLANES TO LAOS
1965
1966 WAR IN VIETNAM HEATS UP
1967
1968 USS PUEBLO SEIZED IN SEA OF JAPAN
1969 A HYPOTHETICAL INVESTMENT OF $10,000 IN INVESTORS FUND AT INCEPTION WOULD
HAVE GROWN TO $294,049 BY 12/31/69
[Photo]
Demonstrators challenged U.S. engagement in Vietnam.
<PAGE>
- --------------------------------------------------------------------------------
HOW YOU CAN DRAW ON AN INVESTORS FUND ACCOUNT
- --------------------------------------------------------------------------------
Many retired shareholders take their dividends in cash while letting their
capital gain distributions buy new shares, so that the income from the
increasing number of shares would help offset inflation. For example, Joanna and
Peter M. invested $100,000 in EV Traditional Investors Fund on the last day of
1979. They retired and started to receive quarterly checks from their account.
At the end of 1994, their account was worth $225,077. Meanwhile, they had
received $135,407 in dividends over the years and reinvested $150,571 in capital
gain distributions.
ANNUAL ANNUAL
YEAR ENDED DIVIDEND CAPITAL GAINS VALUE OF
12/31 INCOME DISTRIBUTION ACCOUNT
1980 $ 5,536 $ 5,190 $109,478
1981 7,369 5,614 106,998
1982 8,470 9,599 124,370
1983 8,392 2,957 133,651
1984 8,696 8,293 136,127
1985 9,239 8,007 160,395
1986 9,198 28,492 165,812
1987 7,908 20,684 167,614
1988 9,120 3,204 176,000
1989 10,700 11,732 200,948
1990 11,639 5,633 190,920
1991 9,980 8,338 220,383
1992 10,446 11,926 223,528
1993 9,667 16,179 238,339
1994 9,047 4,721 225,077
-------- --------
$135,407 $150,571
Accumulations are adjusted for 3.75% sales charge for purchases of $100,000 or
more. For smaller purchases, there is a 4.75% sales charge. Past performance is
not indicative of future results.
1970 CAMBODIA INVADED
1971
1972 U.S. HAS LARGEST TRADE DEFICIT IN HISTORY
1973
1974 STOCK MARKET HAS RECORD DECLINE
1975
1976 ECONOMIC RECOVERY SLOWS
1977
1978 INTEREST RATES BEGIN HISTORIC CLIMB
1979 A HYPOTHETICAL INVESTMENT OF $10,000 IN INVESTORS FUND AT INCEPTION WOULD
HAVE GROWN TO $589,282 BY 12/31/79
[Photo]
Cars line up for gas during the Arab oil embargo.
<PAGE>
- --------------------------------------------------------------------------------
DOES EV TRADITIONAL INVESTORS FUND FIT YOUR GOALS?
- --------------------------------------------------------------------------------
* COMMON STOCKS MAY HELP COMBAT INFLATION...
* FIXED-INCOME SECURITIES FOR POTENTIALLY GREATER STABILITY OF PRINCIPAL...
* MONEY MARKET INSTRUMENTS MAY HELP PRESERVE CAPITAL...
* THE BENEFITS OF ASSET ALLOCATION...
- --------------------------------------------------------------------------------
CONSIDER THE RESULTS
- --------------------------------------------------------------------------------
* 62 YEARS OF MEETING ITS GOALS...
* 19 OUT OF 20 YEARS OF POSITIVE PERFORMANCE FROM 1975 - 1994
- --------------------------------------------------------------------------------
70 YEARS OF INVESTMENT EXPERIENCE
- --------------------------------------------------------------------------------
Eaton Vance Management and its predecessor companies have been managing assets
of individuals and institutions since 1924. The firm acts as adviser to mutual
funds and to the institutional accounts of corporations, hospitals, retirement
plans, universities, foundations and trusts. All funds benefit from Eaton
Vance's 70 years of experience as a Boston money manager. In fact, the
management of each fund draws on the cumulative knowledge and experience of the
firm's full investment and research staff. Eaton Vance currently manages assets
of approximately $15 billion in 150 mutual funds.
1980 GRAIN EMBARGO DECLARED AGAINST USSR
1981
1982 UNEMPLOYMENT REACHES HIGHEST LEVEL SINCE 1940
1983
1984 U.S. INVADES GRENADA
1985
1986 SPACE SHUTTLE CHALLENGER EXPLODES
1987
1988 U.S. HAS WORST DROUGHT IN 50 YEARS
1989 A HYPOTHETICAL INVESTMENT OF $10,000 IN INVESTORS FUND AT INCEPTION WOULD
HAVE GROWN TO $2,251,805 BY 12/31/89
[Photo]
Pricey cars and shops along Rodeo Drive symbolize decade of excess.
<PAGE>
- --------------------------------------------------------------------------------
FUND SERVICES ENHANCE SHAREHOLDERS' FLEXIBILITY
- --------------------------------------------------------------------------------
* INVEST A MINIMUM OF $1,000. The minimum subsequent investment is only $50.
* REINVEST FUND DISTRIBUTIONS AUTOMATICALLY. Accumulate additional fund shares
at no charge if you don't need dividends and capital gains distributions for
current expenses.
* REALLOCATE YOUR ASSETS AMONG EATON VANCE FUNDS WITH THE SAME DISTRIBUTION
PLAN. As your investment goals change, you can, with just a telephone call,
shift assets (minimum $1,000) into other Eaton Vance Traditional Funds.
Although there is no charge for the service, the exchange may be a taxable
event. The exchange privilege may be changed or discontinued without penalty
at any time.
* BANK DRAFT INVESTING. Add to your investment regularly, with a fixed amount
(minimum $50) invested each month or quarter, directly from your bank or
checking account.
* TAX-SHELTERED RETIREMENT PLANS. Purchase shares of the Fund in an Individual
Retirement Account, Pension or Profit-Sharing Plan or a 403(b) Retirement
Plan.
* EASY ACCESS TO YOUR MONEY. You can redeem all or part of your investment on
any business day at the then-current net asset value, which may be more or
less than at the time of purchase.
* SYSTEMATIC WITHDRAWAL PLANS. You may arrange for shares to be redeemed
automatically, with the checks sent to you or another person..
* NO SALES CHARGE FOR PURCHASES OF $1 MILLION OR MORE. A contingent deferred
sales charge of 1 percent will be imposed on such investments in the event of
certain redemption transactions within 18 months of purchase.
- --------------------------------------------------------------------------------
CALL YOUR FINANCIAL ADVISER NOW
FOR MORE INFORMATION!
- --------------------------------------------------------------------------------
1990 OPERATION DESERT SHIELD LIBERATES KUWAIT
1991
1992 "BIG 3" U.S. AUTO MAKERS ANNOUNCE HUGE LOSSES
1993
1994
A HYPOTHETICAL INVESTMENT OF $10,000
IN EV TRADITIONAL INVESTORS FUND AT
INCEPTION WOULD HAVE GROWN TO
$3,446,216 BY 3/31/95!
<PAGE>
For more complete information about EV Traditional Investors Fund or any
other Eaton Vance Fund, including distribution plans, charges and
expenses, please write or call your financial advisor for a prospectus.
Read the prospectus(es) carefully before you invest or send money.
[LOGO] EATON VANCE DISTRIBUTORS, INC.
24 Federal Street
Boston, MA 02110
30806 - 4/95 T-IFPP
<PAGE>
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended January 31, 1995 as previously filed electronically with the
Securities and Exchange Commission (Accession Number: 0000950156-95-000183).
<PAGE>
INVESTMENT ADVISER OF
INVESTORS PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL INVESTORS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
EATON VANCE DISTRIBUTORS, INC.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL INVESTORS FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-IFSAI
EV TRADITIONAL
INVESTORS FUND
STATEMENT OF
ADDITIONAL
INFORMATION
[Logo]
JUNE 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC STOCK FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 1, 1995
Effective August 1, 1995, EV Classic Stock Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Securities Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Securities Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE SECURITIES TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE
SPECIAL INVESTMENT TRUST.
August 1, 1995
C-STSAIS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
April 1, 1995
EV CLASSIC STOCK FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Classic Stock Fund (the "Fund") and certain other
series of Eaton Vance Securities Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes cross-
references to the relevant sections of Part II that provide additional, Fund-
specific information.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
PART I
Investment Objective, Policies and Restrictions ........................... 2
Other Investment Features ................................................. 3
Trustees and Officers ..................................................... 5
Investment Adviser and Administrator ...................................... 6
Custodian ................................................................. 8
Service for Withdrawal .................................................... 8
Determination of Net Asset Value .......................................... 9
Investment Performance .................................................... 9
Taxes ..................................................................... 10
Portfolio Security Transactions ........................................... 12
Other Information ......................................................... 14
Independent Accountants ................................................... 15
PART II
Fees and Expenses ........................................................ a-1
Principal Underwriter .................................................... a-1
Distribution Plan ........................................................ a-2
Performance Information .................................................. a-3
Additional Tax Matters ................................................... a-3
Control Persons and Principal Holders of Securities ...................... a-4
Financial Statements ..................................................... a-5
- ------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EV CLASSIC STOCK FUND DATED APRIL 1, 1995, AS
SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD
BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED
WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL
UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV MARATHON STOCK FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 1, 1995
Effective August 1, 1995, EV Marathon Stock Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Securities Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Securities Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE SECURITIES TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE
SPECIAL INVESTMENT TRUST.
August 1, 1995
M-STSAIS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
April 1, 1995
EV MARATHON STOCK FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Marathon Stock Fund (the "Fund") and certain other
series of Eaton Vance Securities Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes cross-
references to the relevant sections of Part II that provide additional, Fund-
specific information.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PART I
Investment Objective, Policies and Restrictions ..................... 2
Other Investment Features ........................................... 3
Trustees and Officers ............................................... 5
Investment Adviser and Administrator ................................ 6
Custodian ........................................................... 8
Service for Withdrawal .............................................. 8
Determination of Net Asset Value .................................... 9
Investment Performance .............................................. 9
Taxes ............................................................... 10
Portfolio Security Transactions ..................................... 12
Other Information ................................................... 14
Independent Accountants ............................................. 15
PART II
Fees and Expenses ................................................... a-1
Principal Underwriter ............................................... a-1
Distribution Plan ................................................... a-2
Performance Information ............................................. a-3
Additional Tax Matters .............................................. a-3
Control Persons and Principal Holders of Securities ................. a-4
Financial Statements ................................................ a-5
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EV MARATHON STOCK FUND DATED APRIL 1, 1995, AS
SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD
BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED
WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL
UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV TRADITIONAL STOCK FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 1, 1995
Effective August 1, 1995, EV Traditional Stock Fund was reorganized and
became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Securities Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Securities Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE SECURITIES TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE
SPECIAL INVESTMENT TRUST.
August 1, 1995
T-STSAIS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
April 1, 1995
EV TRADITIONAL STOCK FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Traditional Stock Fund (the "Fund") and certain
other series of Eaton Vance Securities Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes cross-
references to the relevant sections of Part II that provide additional, Fund-
specific information.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PART I
Investment Objective, Policies and Restrictions .......................... 2
Other Investment Features ................................................ 3
Trustees and Officers .................................................... 5
Investment Adviser and Administrator ..................................... 6
Custodian ................................................................ 8
Service for Withdrawal ................................................... 8
Determination of Net Asset Value ......................................... 9
Investment Performance ................................................... 9
Taxes .................................................................... 10
Portfolio Security Transactions .......................................... 12
Other Information ........................................................ 14
Independent Accountants .................................................. 15
PART II
Fees and Expenses ....................................................... a-1
Services for Accumulation ............................................... a-1
Principal Underwriter ................................................... a-2
Service Plan ............................................................ a-3
Performance Information ................................................. a-4
Additional Tax Matters .................................................. a-4
Control Persons and Principal Holders of Securities ..................... a-5
Financial Statements .................................................... a-6
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EV TRADITIONAL STOCK FUND DATED APRIL 1, 1995,
AS SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION
SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE
OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE
"PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
The following provides information about the Fund and certain other series
of the Trust.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The investment objective of the Fund, a diversified series of the Trust, is
to provide growth of principal and income for its shareholders. The Fund
currently seeks to achieve its investment objective by investing its assets in
the Stock Portfolio (the "Portfolio"), a separate registered investment company
with the same investment objective as the Fund and substantially the same
investment policies and restrictions as the Fund. The Portfolio seeks to achieve
its investment objective by investing in a number of carefully selected
securities.
The Trustees of the Trust may withdraw the Fund's investment from the
Portfolio at any time, if they determine that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in
another investment company with substantially the same investment objective,
policies and restrictions as those of the Fund or directly in investment
securities in accordance with the Portfolio's investment policies, as described
below. Except as indicated below, the approval of the Fund's shareholders would
not be required to change the Portfolio's investment policies discussed below,
including those concerning security transactions.
The Portfolio represents the best efforts of Boston Management and Research
("BMR" or the "Investment Adviser") to combine in a single investment package
those securities which it considers most appropriate.
The Portfolio may invest in convertible debt securities that are below
investment grade. The lowest investment grade, lower rated and comparable
unrated debt securities in which the Portfolio may invest will have speculative
characteristics in varying degrees. While such securities may have some quality
and protective characteristics, these characteristics can be expected to be
offset or outweighed by uncertainties or major risk exposures to adverse
conditions. Lower rated and comparable unrated securities are subject to the
risk of an issuer's inability to meet principal and interest payments on the
securities (credit risk) and may also be subject to price volatility due to such
factors as interest rate sensitivity, market perception of the creditworthiness
of the issuer and general market liquidity (market risk). Lower rated and
comparable unrated securities are also more likely to react to real or perceived
developments affecting markets and credit risk than are more highly rated
securities, which react primarily to movements in the general level of interest
rates. The Portfolio may retain defaulted securities in its portfolio when such
retention is considered desirable by the Investment Adviser. In the case of a
defaulted security, the Portfolio may incur additional expense seeking recovery
of its investment. The Portfolio's investments in convertible debt securities
that are below investment grade generally will be less than 20% of its net
assets. In the event the rating of a security held by the Portfolio is
downgraded, the Investment Adviser will consider disposing of such security, but
is not obligated to do so.
The following investment restrictions have been adopted by the Fund and may
be changed only by the vote of a majority of the Fund's outstanding voting
securities as defined in the Investment Company Act of 1940 (the "1940 Act").
As a matter of fundamental investment policy, the Fund may not:
(1) With respect to 75% of its total assets, invest more than 5% of its
total assets taken at market value in the securities of any one issuer or in
more than 10% of the outstanding voting securities of any one issuer, except
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and except securities of other investment companies.
(2) Borrow money or issue senior securities, except as permitted by the
Investment Company Act of 1940;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities);
(4) Engage in underwriting securities of other issuers;
(5) Invest in real estate (although it may purchase and sell securities
which are secured by real estate and securities of companies which invest or
deal in real estate);
(6) Invest in commodities or commodity contracts for the purchase and sale
of physical commodities; or
(7) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments, (b) entering into repurchase
agreements or (c) lending portfolio securities.
In addition, the Fund does not intend to concentrate 25% or more of its
assets in any one industry (provided that there is no limitation with respect to
obligations issued or guaranteed by the U.S. Government or any of its agencies
or instrumentalities).
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund.
The Trustees of the Trust and the Portfolio do not intend that the Fund or
the Portfolio borrow money for leveraging or investment purposes.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing numbered investment restrictions adopted by the
Fund; such restrictions cannot be changed without the approval of a "majority of
the outstanding voting securities" of the Portfolio, which as used in this
Statement of Additional Information means the lesser of (a) 67% of the
outstanding voting securities of the Portfolio present or represented by proxy
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented at the meeting or (b)
more than 50% of the outstanding voting securities of the Portfolio. The term
"voting securities" as used in this paragraph has the same meaning as in the
1940 Act. Whenever the Trust is requested to vote on a change in the investment
restrictions of the Portfolio, the Trust will hold a meeting of Fund
shareholders and will cast its vote as instructed by the shareholders.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Trust without approval by the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio with or
without the approval of the Fund or the Portfolio's other investors. As a matter
of nonfundamental policy, neither the Fund nor the Portfolio may: (a) invest
more than 15% of net assets in investments which are not readily marketable,
including restricted securities and repurchase agreements maturing in more than
seven days. Restricted securities for the purposes of this limitation do not
include securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 that the Board of Trustees of the Trust or the Portfolio
or its delegate, determines to be liquid, based upon the trading markets for the
specific security; (b) make short sales of securities or maintain a short
position, unless at all times when a short position is open the Fund or the
Portfolio either owns an equal amount of such securities or owns securities
convertible into or exchangeable for securities of the same issue as, and equal
in amount to, the securities sold short; (c) invest in the securities of any
issuer when any Trustee of the Trust or the Portfolio, the Investment Adviser,
or any officer or trustee of the Investment Adviser owns in excess of 1/2 of 1%
of the issuer's securities if such owners together own more than 5% of such
securities; (d) invest more than 5% of its total assets (taken at current value)
in the securities of issuers which, including their predecessors, have been in
operation for less than three years (unless such security is rated at least B or
a comparable rating at the time of purchase by at least one nationally
recognized rating service), and except for obligations issued or guaranteed by
the U.S. Government or any of its agencies or instrumentalities; (e) deal with
the Trustees of the Trust or the Portfolio, the Investment Adviser or the
Principal Underwriter as principals in making security purchases or sales.
Neither the Trustees nor the Investment Adviser nor any officer or trustee of
the Investment Adviser may make any profit on any transactions for the Fund or
the Portfolio; or (f) invest in interests in oil, gas or other mineral
exploration or development programs (which shall not, however, prevent
investment in securities of companies engaged in such activities).
In order to permit the sale of shares of the Fund in certain states, the
Fund may make commitments more restrictive than the policies described above.
Should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the state(s) involved.
OTHER INVESTMENT FEATURES
LENDING OF PORTFOLIO SECURITIES
The Portfolio may seek to increase its income by lending portfolio
securities. Under present regulatory policies, including those of the Board of
Governors of the Federal Reserve System and the Securities and Exchange
Commission, such loans may be made to member firms of the New York Stock
Exchange, and would be required to be secured continuously by collateral in cash
or cash equivalents maintained on a current basis at an amount at least equal to
the market value of the securities loaned. The Portfolio would have the right to
call a loan and obtain the securities loaned at any time on five days' notice.
During the existence of a loan, the Portfolio would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned and would also receive the interest on investment of the collateral. The
Portfolio 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 of the
securities fail financially. However, the loans would be made only to firms
deemed by the Investment Adviser to be of good standing, and when, in its
judgment, the consideration which can be earned currently from securities loans
of this type justifies the attendant risk.
If the Investment Adviser determines to make securities loans, it is not
intended that the value of the securities loaned would exceed 30% of the
Portfolio's total assets. As of the present time, the Trustees of the Portfolio
have not made a determination to engage in this activity, and have no present
intention of making such a determination during the current fiscal year.
WRITING OF COVERED CALL OPTIONS
The Portfolio may engage in the writing of call option contracts on
securities which are owned by the Portfolio ("covered call options") when, in
the opinion of the Trustees of the Portfolio, such activity is advisable and
appropriate.
A call option written by the Portfolio obligates the Portfolio to sell
specified securities to the holder of the option at a specified price at any
time before the expiration date. The Portfolio will write a covered call option
on a security for the purpose of increasing its return on such security and/or
to partially hedge against a decline in the value of the security. In
particular, when the Portfolio writes an option which expires unexercised or is
closed out by the Portfolio at a profit, it will retain the premium paid for the
option, which will increase its gross income and will offset in part the reduced
value of the portfolio security underlying the option, or the increased cost of
acquiring the security for its portfolio. However, if the price of the
underlying security moves adversely to the Portfolio's position, the option may
be exercised and the Portfolio will be required to sell the underlying security
at a disadvantageous price, which may only be partially offset by the amount of
the premium, if at all. The Portfolio does not intend to write a covered option
on any security if after such transaction more than 25% of its net assets, as
measured by the aggregate value of the securities underlying all covered calls
written by the Portfolio, would be subject to such options.
The Portfolio may terminate its obligations under a call option by
purchasing an option identical to the one it has written. Such purchases are
referred to as "closing purchase transactions."
An options position may be closed out only on an options exchange which
provides a secondary market for an option of the same series. Although the
Portfolio will generally purchase or write only those options for which there
appears to be an active secondary market, there is no assurance that a liquid
secondary market on an exchange will exist for any particular option, or at any
particular time. For some options no secondary market on an exchange may exist.
In such event, it might not be possible to effect closing transactions in
particular options, with the result that the Portfolio would have to exercise
its options in order to realize any profit and would incur transaction costs
upon the sale of underlying securities pursuant to the exercise of put options.
If the Portfolio as a covered call option writer is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
the Options Clearing Corporation may not at all times be adequate to handle
current trading volume; or (vi) one or more exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.
The Portfolio will pay brokerage commissions in connection with writing
options and effecting closing purchase transactions, as well as for sales of
underlying securities. The writing of options could result in significant
increases in the portfolio turnover rate, especially during periods when market
prices of the underlying securities appreciate.
There is no assurance that higher than anticipated trading activity or other
unforeseen events might not, at times, render certain of the facilities of the
Options Clearing Corporation inadequate, and thereby result in the institution
by an exchange of special procedures which may interfere with the timely
execution of customers' orders.
The amount of the premiums which the Portfolio may pay or receive may be
adversely affected as new or existing institutions, including other investment
companies, engage in or increase their option purchasing and writing activities.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Portfolio's investment
adviser, Boston Management and Research ("BMR" or the "Investment Adviser"), a
wholly-owned subsidiary of Eaton Vance Management ("Eaton Vance"); of Eaton
Vance's parent, Eaton Vance Corp. ("EVC"); and of BMR's and Eaton Vance's
trustee, Eaton Vance, Inc. ("EV"). Eaton Vance and EV are both wholly-owned
subsidiaries of EVC. Those Trustees and officers who are "interested persons" of
the Trust, the Portfolio, BMR, Eaton Vance, EVC or EV as defined in the 1940 Act
by virtue of their affiliation with any one or more of the Trust, the Portfolio,
BMR, Eaton Vance, EVC or EV, are indicated by an asterisk (*).
TRUSTEES OF THE TRUST AND THE PORTFOLIO
JAMES B. HAWKES (53), President and Trustee*
Executive Vice President of BMR, Eaton Vance, EVC and EV, and a Director of EVC
and EV. Director or Trustee and officer of various investment companies
managed by Eaton Vance or BMR.
PETER F. KIELY (58), Vice President and Trustee*
Vice President of BMR, Eaton Vance and EV. Director or Trustee and officer of
various investment companies managed by Eaton Vance or BMR. Mr. Kiely was
elected Trustee of the Trust on December 16, 1991.
DONALD R. DWIGHT (64), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New England,
Inc. since 1983. Director or Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (60), Trustee
Jacob J. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration, Soldiers
Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (59), Trustee
President and Director, United Asset Management Corporation (a holding company
owning institutional investment management firms); Chairman, President and
Director, The Regis Fund, Inc. (mutual fund). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (68), Trustee
Director of Fiduciary Company Incorporated. Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (65), Trustee
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE TRUST AND THE PORTFOLIO
A. WALKER MARTIN (49), Vice President*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Martin was elected a Vice
President of the Trust on October 15, 1990.
JAMES L. O'CONNOR (49), Treasurer*
Vice President of BMR, Eaton Vance, and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
WILLIAM J. AUSTIN, JR. (43), Assistant Treasurer*
Assistant Vice President of BMR, Eaton Vance and EV. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Austin was elected
Assistant Treasurer of the Trust on December 16, 1991.
THOMAS OTIS (63), Secretary*
Vice President and Secretary of BMR, Eaton Vance, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (59), Assistant Treasurer and Assistant Secretary*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of Trustees of the Trust and of the Portfolio. The
Special Committee's functions include a continuous review of the Trust's
contractual relationship with the Administrator, the Portfolio's contractual
relationship with the Investment Adviser, making recommendations to the Trustees
regarding the compensation of those Trustees who are not members of the Eaton
Vance organization, and making recommendations to the Trustees regarding
candidates to fill vacancies, as and when they occur, in the ranks of those
Trustees who are not "interested persons" of the Trust, the Portfolio, or the
Eaton Vance organization.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust and of the Portfolio. The Audit Committee's
functions include making recommendations to the Trustees regarding the selection
of the independent accountants, and reviewing with such accountants and the
Treasurer of the Trust and of the Portfolio matters relative to accounting and
auditing practices and procedures, accounting records, internal accounting
controls, and the functions performed by the custodian and transfer agent of the
Trust and of the Portfolio.
Trustees of the Portfolio who are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of a Trustees Deferred Compensation Plan (the "Plan").
Under the Plan, an eligible Trustee may elect to have his deferred fees invested
by the Portfolio in the shares of one or more funds in the Eaton Vance Family of
Funds, and the amount paid to the Trustees under the Plan will be determined
based upon the performance of such investments. Deferral of Trustees' fees in
accordance with the Plan will have a negligible effect on the Portfolio's
assets, liabilities, and net income per share, and will not obligate the
Portfolio to retain the services of any Trustee or obligate the Portfolio to pay
any particular level of compensation to the Trustee.
The fees and expenses of those Trustees of the Trust and the Portfolio who
are not members of the Eaton Vance organization are paid by the Fund (and the
other series of the Trust) and the Portfolio, respectively. For the compensation
earned by the Trustees of the Trust and the Portfolio, see "Fees and Expenses"
in Part II of this Statement of Additional Information.
INVESTMENT ADVISER AND ADMINISTRATOR
The Portfolio engages BMR as its investment adviser pursuant to an
Investment Advisory Agreement dated August 1, 1994. BMR or Eaton Vance acts as
investment adviser to investment companies and various individual and
institutional clients with combined assets under management of approximately $15
billion.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of its clients. The
fixed-income division focuses on all kinds of taxable investment-grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
BMR manages the investments and affairs of the Portfolio subject to the
supervision of the Portfolio's Board of Trustees. BMR furnishes to the Portfolio
investment research, advice and supervision, furnishes an investment program and
determines what securities will be purchased, held or sold by the Portfolio and
what portion, if any, of the Portfolio's assets will be held uninvested. The
Investment Advisory Agreement requires BMR to pay the salaries and fees of all
officers and Trustees of the Portfolio who are members of the BMR organization
and all personnel of BMR performing services relating to research and investment
activities. The Portfolio is responsible for all expenses not expressly stated
to be payable by BMR under the Investment Advisory Agreement, including, without
implied limitation, (i) expenses of maintaining the Portfolio and continuing its
existence, (ii) registration of the Portfolio under the 1940 Act, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of interests in the Portfolio, (viii) expenses of
registering and qualifying the Portfolio and interests in the Portfolio under
Federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to investors, and fees and expenses of registering and
maintaining registrations of the Portfolio and of the Portfolio's placement
agent as broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to investors and of meetings of investors and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Portfolio (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and records, and
determination of net asset values, book capital account balances and tax capital
account balances), (xiv) fees, expenses and disbursements of transfer agents,
dividend disbursing agents, investor servicing agents and registrars for all
services to the Portfolio, (xv) expenses for servicing the accounts of
investors, (xvi) any direct charges to investors approved by the Trustees of the
Portfolio, (xvii) compensation and expenses of Trustees of the Portfolio who are
not members of BMR's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Portfolio to indemnify its Trustees,
officers and investors with respect thereto.
Under the Investment Advisory Agreement with the Portfolio, BMR receives a
monthly advisory fee of 5/96 of 1% (equivalent to 0.625% annually) of the
average daily net assets of the Portfolio. As at December 31, 1994, the
Portfolio had net assets of $85,519,035. For the period from the start of
business, August 1, 1994, to December 31, 1994, BMR received advisory fees of
$230,928 (equivalent to 0.625% (annualized) of the Portfolio's average daily net
assets for such period).
The Investment Advisory Agreement with BMR remains in effect until February
28, 1996. It may be continued indefinitely thereafter so long as such
continuance after February 28, 1996 is approved at least annually (i) by the
vote of a majority of the Trustees of the Portfolio who are not interested
persons of the Portfolio or of BMR cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio. The Agreement may be terminated at any time without
penalty on sixty days' written notice by the Board of Trustees of either party
or by vote of the majority of the outstanding voting securities of the
Portfolio, and the Agreement will terminate automatically in the event of its
assignment. The Agreement provides that BMR may render services to others and
may permit other fund clients and other corporations and organizations to use
the words "Eaton Vance" or "Boston Management and Research" in their names. The
Agreement also provides that BMR shall not be liable for any loss incurred in
connection with the performance of its duties, or action taken or omitted under
that Agreement, in the absence of willful misfeasance, bad faith, gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties thereunder, or for any losses sustained
in the acquisition, holding or disposition of any security or other investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but receives no compensation for providing administrative services to the
Fund. Under its agreement with the Fund, Eaton Vance has been engaged to
administer the Fund's affairs, subject to the supervision of the Trustees of the
Trust, and shall furnish for the use of the Fund office space and all necessary
office facilities, equipment and personnel for administering the affairs of the
Fund.
The Fund pays all of its own expenses including, without limitation, (i)
expenses of maintaining the Fund and continuing its existence, (ii) registration
of the Trust under the 1940 Act, (iii) commissions, fees and other expenses
connected with the purchase or sale of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale, repurchase and redemption of
shares, (viii) expenses of registering and qualifying the Fund and its shares
under federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Eaton Vance organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
A commitment has been made to a state securities authority that Eaton Vance
will take certain actions, if necessary, so that the Fund's expenses will not
exceed expense limitation requirements of such state. The commitment may be
amended or rescinded by Eaton Vance in response to changes in the requirements
of the state or for other reasons.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are both
wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both Massachusetts
business trusts, and EV is the trustee of BMR and Eaton Vance. The Directors of
EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner, James B. Hawkes
and Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons
and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, and Mr.
Gardner is president and chief executive officer, of EVC, BMR, Eaton Vance and
EV. All of the issued and outstanding shares of Eaton Vance and of EV are owned
by EVC. All of the issued and outstanding shares of BMR are owned by Eaton
Vance. All shares of the outstanding Voting Common Stock of EVC are deposited in
a Voting Trust, which expires December 31, 1996, the Voting Trustees of which
are Messrs. Brigham, Clay, Gardner, Hawkes and Rowland. The Voting Trustees have
unrestricted voting rights for the election of Directors of EVC. All of the
outstanding voting trust receipts issued under said Voting Trust are owned by
certain of the officers of BMR and Eaton Vance who are also officers or
Directors of EVC and EV. As of February 28, 1995, Messrs. Clay, Gardner and
Hawkes each owned 24% of such voting trust receipts, and Messrs. Rowland and
Brigham owned 15% and 13%, respectively, of such voting trust receipts. Messrs.
Hawkes and Otis, who are officers or Trustees of the Trust and the Portfolio,
are members of the EVC, Eaton Vance, BMR and EV organizations. Messrs. Austin,
Kiely, Martin and O'Connor and Ms. Sanders are officers or Trustees of the Trust
and the Portfolio and all are also members of the BMR, Eaton Vance and EV
organizations. BMR will receive the fees paid under the Investment Advisory
Agreement.
Eaton Vance owns all of the stock of Energex Corporation, which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy Corp.
(which is engaged in oil and gas operations) and 77.3% of the stock of Investors
Bank & Trust Company, custodian of the Fund and the Portfolio, which provides
custodial, trustee and other fiduciary services to investors, including
individuals, employee benefit plans, corporations, investment companies, savings
banks and other institutions. In addition, Eaton Vance owns all of the stock of
Northeast Properties, Inc., which is engaged in real estate investment,
consulting and management. EVC owns all of the stock of Fulcrum Management, Inc.
and MinVen, Inc., which are engaged in the development of precious metal
properties. EVC, BMR, Eaton Vance and EV may also enter into other businesses.
EVC and its affiliates and its officers and employees from time to time have
transactions with various banks, including the custodian of the Fund and the
Portfolio, Investors Bank & Trust Company. It is Eaton Vance's opinion that the
terms and conditions of such transactions were not and will not be influenced by
existing or potential custodial or other relationships between the Fund and the
Portfolio and such banks.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston,
Massachusetts, (a 77.3% owned subsidiary of EVC) acts as custodian for the Fund
and the Portfolio. IBT has the custody of all cash and securities representing
the Fund's interest in the Portfolio, has custody of all the Portfolio's assets,
maintains the general ledger of the Portfolio and the Fund, and computes the
daily net asset value of interests in the Portfolio and the net asset value of
shares of the Fund. In such capacity it attends to details in connection with
the sale, exchange, substitution, transfer or other dealings with the
Portfolio's investments, receives and disburses all funds, and performs various
other ministerial duties upon receipt of proper instructions from the Fund and
the Portfolio. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of Fund and Portfolio net assets and a portion of the
fee relates to activity charges, primarily the number of portfolio transactions.
These fees are then reduced by a credit for cash balances of the particular
investment company at the custodian equal to 75% of the 91-day, U.S. Treasury
Bill auction rate applied to the particular investment company's average daily
collected balances for the week. In view of the ownership of EVC in IBT, the
Portfolio is treated as a self-custodian pursuant to Rule 17f-2 under the 1940
Act, and the Portfolio's investments held by IBT as custodian are thus subject
to additional examinations by the Portfolio's independent auditors as called for
by such Rule. For the period from the start of business, August 1, 1994, to
December 31, 1994, the Portfolio paid IBT $28,656. For the custody fees that the
Fund paid to IBT, see "Fees and Expenses" in Part II of this Statement of
Additional Information.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Trust's Transfer Agent will send to the
shareholder regular monthly or quarterly payments of any permitted amount
designated by the shareholder (see "Eaton Vance Shareholder Services --
Withdrawal Plan" in the Fund's prospectus) based upon the value of the shares
held. The checks will be drawn from share redemptions and hence are a return of
principal. Income dividends and capital gain distributions in connection with
withdrawal accounts will be credited at net asset value as of the record date
for each distribution. Continued withdrawals in excess of current income will
eventually use up principal, particularly in a period of declining market
prices.
To use this service, at least $5,000 in cash or shares at the public
offering price will have to be deposited with the Transfer Agent. The
maintenance of a withdrawal plan concurrently with purchases of additional Fund
shares would be disadvantageous if a sales charge is included in such purchases.
A shareholder may not have a withdrawal plan in effect at the same time he or
she has authorized Bank Automated Investing or is otherwise making regular
purchases of Fund shares. Either the shareholder, the Transfer Agent or the
Principal Underwriter will be able to terminate the withdrawal plan at any time
without penalty.
DETERMINATION OF NET ASSET VALUE
The net asset value of the Portfolio and of shares of the Fund is determined
by the custodian, IBT, (as agent for the Fund and the Portfolio) in the manner
described under "Valuing Fund Shares" in the Fund's current Prospectus. The Fund
and the Portfolio will be closed for business and will not price their
respective shares or interests on the following business holidays: New Year's
Day, Presidents' Day, Good Friday (a New York Stock Exchange holiday), Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Securities listed on securities exchanges or in the NASDAQ National Market
are valued at closing sale prices. Unlisted or listed securities for which
closing sale prices are not available are valued at the mean between the latest
bid and asked prices. Securities for which market quotations are unavailable,
including any security the disposition of which is restricted under the
Securities Act of 1933, and other assets will be appraised at their fair value
as determined in good faith by or at the direction of the Trustees of the
Portfolio. Short-term obligations maturing in sixty days or less are valued at
original cost which, when combined with amortized discount or accrued interest,
the Trustees of the Portfolio have determined approximates fair market value.
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage, determined on the prior
Portfolio Business Day, which represented that investor's share of the aggregate
interests in the Portfolio on such prior day. Any additions or withdrawals for
the current Portfolio Business Day will then be recorded. Each investor's
percentage of the aggregate interest in the Portfolio will then be recomputed as
a percentage equal to a fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Portfolio Valuation Time on the
prior Portfolio Business Day plus or minus, as the case may be, the amount of
any additions to or withdrawals from the investor's investment in the Portfolio
on the current Portfolio Business Day and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of the Portfolio Valuation Time on
the prior Portfolio Business Day plus or minus, as the case may be, the amount
of the net additions to or withdrawals from the aggregate investment in the
Portfolio on the current Portfolio Business Day by all investors in the
Portfolio. The percentage so determined will then be applied to determine the
value of the investor's interest in the Portfolio for the current Portfolio
Business Day.
INVESTMENT PERFORMANCE
The average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes that all dividends from net investment income and capital
gain distributions are reinvested at net asset value on the reinvestment dates
during the period (and either (i) the deduction of the maximum sales charge from
the initial $1,000 purchase order, or (ii) a complete redemption of the
investment and, if applicable, the deduction of any contingent deferred sales
charge at the end of the period). For information concerning the total return of
the Fund, see "Performance Information" in Part II of this Statement of
Additional Information.
The Fund's total return may be compared to the Consumer Price Index and
various domestic securities indices, for example: Standard & Poor's 400 Stock
Index, Standard & Poor's 500 Stock Index, Merrill Lynch U.S. Treasury (15-year
plus) Index, Lehman Brothers Government/Corporate Bond Index, and the Dow Jones
Industrial Average. The Fund's total return and comparisons with these indices
may be used in advertisements and in information furnished to present or
prospective shareholders.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations, (e.g., Ibbotson Associates, Standard &
Poor's Ratings Group, Merrill Lynch, Pierce, Fenner & Smith, Inc., Bloomberg,
L.P., Dow Jones & Company, Inc., and The Federal Reserve Board) or included in
various publications (e.g., The Wall Street Journal, Barron's and The Decade:
Wealth of Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the
investment performance or returns achieved by various classes and types of
investments (e.g., common stocks, small company stocks, long-term corporate
bonds, long-term government bonds, intermediate-term government bonds, U.S.
Treasury bills) over various periods of time. This information may be used to
illustrate the benefits of long-term investments in common stocks.
From time to time, information about the portfolio allocation and holdings
of the Portfolio may be included in advertisements and other material furnished
to present and prospective shareholders.
The Portfolio's asset allocation on January 31, 1995 was as follows:
PERCENT OF NET ASSETS
---------------------
Equities 80.0%
Convertible preferred stocks 7.9%
Fixed income 7.5%
Cash equivalents 4.6%
------
Total 100.0%
The Portfolio's ten largest common stock holdings on January 31, 1995
were:
COMPANY PERCENT OF NET ASSETS
------- ---------------------
Eastman Kodak Co. 3.5%
Exxon Corp. 3.0
Harcourt General, Inc. 2.8
Great Western Financial 2.5
Reuters Holdings, PLC 2.5
Penney (J.C.) Co. Inc. 2.5
Texas Instruments, Inc. 2.4
MGIC Investment Corp. Wisc. 2.3
Loctite Corp. 2.1
Intel Corp. 2.1
---
Total 25.7%
From time to time, evaluations of the Fund's performance made by independent
sources (e.g., Lipper Analytical Services, Inc., CDA/Wiesenberger and
Morningstar, Inc.) may be used in advertisements and in information furnished to
present or prospective shareholders. See "Performance Information" in Part II of
this Statement of Additional Information.
Information used in advertisements and in materials furnished to present and
prospective shareholders may include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds which may be employed
to meet specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents. These three
financial goals may be referred to in such advertisements or materials as the
"Triple Squeeze."
TAXES
See "Distributions and Taxes" in the Fund's current Prospectus and
"Additional Tax Matters" in Part II of this Statement of Additional Information.
Each series of the Trust is treated as a separate entity for Federal income
tax purposes. The Fund will elect to be treated and intends to qualify each year
as a regulated investment company ("RIC") under the Internal Revenue Code (the
"Code"). Accordingly, the Fund intends to satisfy certain requirements relating
to sources of its income and diversification of its assets and to distribute its
net investment income and net realized capital gains in accordance with the
timing requirements imposed by the Code, so as to avoid any Federal income or
excise tax to the Fund. Because the Fund invests its assets in the Portfolio,
the Portfolio normally must satisfy the applicable source of income and
diversification requirements in order for the Fund to satisfy them. The
Portfolio will allocate at least annually among its investors, including the
Fund, the Portfolio's net investment income, net realized capital gains, and any
other items of income, gain, loss, deduction or credit. The Portfolio will make
allocations to the Fund in accordance with the Code and applicable regulations
and will make moneys available for withdrawal at appropriate times and in
sufficient amounts to enable the Fund to satisfy the tax distribution
requirements that apply to the Fund and that must be satisfied in order to avoid
Federal income and/or excise tax on the Fund. For purposes of applying the
requirements of the Code regarding qualification as a RIC, the Fund will be
deemed (i) to own its proportionate share of each of the assets of the Portfolio
and (ii) to be entitled to the gross income of the Portfolio attributable to
such share.
In order to avoid Federal excise tax, the Code requires that the Fund
distribute by December 31 of each calendar year at least 98% of its ordinary
income (not including tax-exempt income) for such year, and at least 98% of the
excess of its realized capital gains over its realized capital losses, after
reduction by any available capital loss carryforwards, and 100% of any income
from the prior year (as previously computed) that was not paid out during such
year and on which the Fund paid no Federal income tax. Further, under current
law, provided that the Fund qualifies as a RIC for Federal income tax purposes
and the Portfolio is treated as a partnership for Massachusetts and Federal tax
purposes, neither the Fund nor the Portfolio is liable for any income, corporate
excise or franchise tax in the Commonwealth of Massachusetts.
The Portfolio's transactions in options will be subject to special tax rules
that may affect the amount, timing and character of distributions. For example,
certain positions held by the Portfolio that substantially diminish the
Portfolio's risk of loss with respect to other positions in its portfolio may
constitute "straddles," which are subject to tax rules that may cause deferral
of Portfolio losses, adjustments in the holding period of portfolio securities
and conversion of short-term into long-term capital losses.
Distributions of net investment income and the excess of net short-term
capital gains over net long-term capital losses earned by the Portfolio and
allocated to the Fund are taxable to shareholders of the Fund as ordinary income
whether received in cash or in additional shares. Distributions of the excess of
net long-term capital gains over net short-term capital losses (including any
capital losses carried forward from prior years) earned by the Portfolio and
allocated to the Fund by the Portfolio are taxable to shareholders of the Fund
as long-term capital gains, whether received in cash or in additional shares and
regardless of the length of time their shares of the Fund have been held.
Certain distributions declared in October, November or December and paid the
following January will be paid to shareholders as if received on December 31 in
the year in which they are declared.
A portion of distributions made by the Fund which are derived from dividends
received by the Portfolio from domestic corporations and allocated to the Fund
may qualify for the dividends-received deduction for corporations. The
dividends-received deduction for corporate shareholders is reduced to the extent
the shares of the Fund with respect to which the dividends are received are
treated as debt-financed under the Federal income tax law and is eliminated if
the shares are deemed to have been held for less than 46 days. Receipt of
certain distributions qualifying for the deduction may result in reduction of
tax basis of the corporate shareholder's shares. Distributions eligible for the
dividends-received deduction may give rise to or increase an alternative minimum
tax for corporations.
Any loss realized upon the redemption or exchange of shares of the Fund with
a tax holding period of 6 months or less will be treated as a long-term capital
loss to the extent of any distribution of net long-term capital gains with
respect to such shares. In addition, a loss realized on a redemption of Fund
shares may be disallowed under certain "wash sale" rules if other shares of the
Fund are acquired within a period beginning 30 days before and ending 30 days
after the date of such redemption. Any disallowed loss will result in an
adjustment to the shareholder's tax basis in some or all of the other shares
acquired.
The Portfolio may be subject to foreign withholding taxes with respect to
income on certain foreign securities. These taxes may be reduced or eliminated
under the terms of an applicable U.S. income tax treaty. As it is not expected
that more than 50% of the value of the total assets of the Fund, taking into
account its allocable share of the Portfolio's total assets, at the close of any
taxable year of the Fund will consist of securities issued by foreign
corporations, the Fund will not be eligible to pass through to shareholders
their proportionate share of any foreign taxes paid by the Portfolio and
allocated to the Fund, with the result that shareholders of the Fund will not be
entitled to foreign tax credits or deductions for foreign taxes paid by the
Portfolio and allocated to the Fund. Certain foreign exchange gains and lossed
realized by the Portfolio and allocated to the Fund will be treated as ordinary
income and losses. Certain uses of foreign currency and investments by the
Portfolio in certain "passive foreign investment companies" may be limited or a
tax election may be made, if available, in order to preserve the Fund's
qualification as a RIC and/or avoid imposition of a tax on the Fund.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and other
retirement plans and persons investing through such plans should consult their
tax advisers for more information. The deductibility of such contributions may
be restricted or eliminated for particular shareholders.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain required certifications, as well as shareholders with respect to whom
the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of Federal income tax from the
Fund's dividends and distributions and the proceeds of redemptions (including
repurchases and exchanges) at a rate of 31%. An individual's taxpayer
identification number is generally his or her social security number.
Non-resident alien individuals and certain foreign corporations and other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short-term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. Federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to special tax rules that may apply in their
particular situations, as well as the state, local or foreign tax consequences
of investing in the Fund.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions of the
Portfolio, including the selection of the market and the broker-dealer firm, are
made by BMR. BMR is also responsible for the execution of transactions for all
other accounts managed by it.
BMR places the security transactions of the Portfolio and of all other
accounts managed by it for execution with many broker-dealer firms. BMR uses its
best efforts to obtain execution of portfolio transactions at prices which are
advantageous to the Portfolio and (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, BMR will
use its best judgment in evaluating the terms of a transaction, and will give
consideration to various relevant factors, including without limitation the size
and type of the transaction, the general execution and operational capabilities
of the broker-dealer, the nature and character of the market for the security,
the confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, reliability, experience and financial condition of
the broker-dealer, the value and quality of services rendered by the
broker-dealer in other transactions, and the reasonableness of the commission,
if any. Transactions on United States stock exchanges and other agency
transactions involve the payment by the Portfolio of negotiated brokerage
commissions. Such commissions vary among different broker-dealer firms, and a
particular broker-dealer may charge different commissions according to such
factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities usually involve
the payment of fixed brokerage commissions, which are generally higher than
those in the United States. There is generally no stated commission in the case
of securities traded in the over-the-counter markets, but the price paid or
received by the Portfolio usually includes an undisclosed dealer markup or
markdown. In an underwritten offering the price paid by the Portfolio often
includes a disclosed fixed commission or discount retained by the underwriter or
dealer. Although commissions paid on portfolio security transactions will, in
the judgment of BMR, be reasonable in relation to the value of the services
provided, commissions exceeding those which another firm might charge may be
paid to broker-dealers who were selected to execute transactions on behalf of
the Portfolio and BMR's other clients in part for providing brokerage and
research services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Portfolio
may receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if BMR
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided. This determination may be
made on the basis of either that particular transaction or on the basis of the
overall responsibilities which BMR and its affiliates have for accounts over
which they exercise investment discretion. In making any such determination, BMR
will not attempt to place a specific dollar value on the brokerage and research
services provided or to determine what portion of the commission should be
related to such services. Brokerage and research services may include advice as
to the value of securities, the advisability of investing in, purchasing, or
selling securities, and the availability of securities or purchasers or sellers
of securities; furnishing analyses and reports concerning issuers, 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); and the "Research
Services" referred to in the next paragraph.
It is a common practice in the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-dealer firms which
execute portfolio transactions for the clients of such advisers and from third
parties with which these broker-dealers have arrangements. Consistent with this
practice, BMR receives Research Services from many broker-dealer firms with
which BMR places the Portfolio transactions and from third parties with which
these broker-dealers have arrangements. These Research Services include such
matters as general economic and market reviews, industry and company reviews,
evaluations of securities and portfolio strategies and transactions,
recommendations as to the purchase and sale of securities and other portfolio
transactions, financial, industry and trade publications, news and information
services, pricing and quotation equipment and services, and research oriented
computer hardware, software, data bases and services. Any particular Research
Service obtained through a broker-dealer may be used by BMR in connection with
client accounts other than those accounts which pay commissions to such
broker-dealer. Any such Research Service may be broadly useful and of value to
BMR in rendering investment advisory services to all or a significant portion of
its clients, or may be relevant and useful for the management of only one
client's account or of a few clients' accounts, or may be useful for the
management of merely a segment of certain clients' accounts, regardless of
whether any such account or accounts paid commissions to the broker-dealer
through which such Research Service was obtained. The advisory fee paid by the
Portfolio is not reduced because BMR receives such Research Services. BMR
evaluates the nature and quality of the various Research Services obtained
through broker-dealer firms and attempts to allocate sufficient commissions to
such firms to ensure the continued receipt of Research Services which BMR
believes are useful or of value to it in rendering investment advisory services
to its clients.
Subject to the requirement that BMR shall use its best efforts to seek to
execute Portfolio security transactions at advantageous prices and at reasonably
competitive commission rates or spreads, BMR is authorized to consider as a
factor in the selection of any broker-dealer firm with whom Portfolio orders may
be placed the fact that such firm has sold or is selling shares of the Fund or
of other investment companies sponsored by BMR or Eaton Vance. This policy is
not inconsistent with a rule of the National Association of Securities Dealers,
Inc., which rule provides that no firm which is a member of the Association
shall favor or disfavor the distribution of shares of any particular investment
company or group of investment companies on the basis of brokerage commissions
received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates. BMR
will attempt to allocate equitably portfolio security transactions among the
Portfolio and the portfolios of its other investment accounts whenever decisions
are made to purchase or sell securities by the Portfolio and one or more of such
other accounts simultaneously. In making such allocations, the main factors to
be considered are the respective investment objectives of the Portfolio and such
other accounts, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Portfolio
and such accounts, the size of investment commitments generally held by the
Portfolio and such accounts and the opinions of the persons responsible for
recommending investments to the Portfolio and such accounts. While this
procedure could have a detrimental effect on the price or amount of the
securities available to the Portfolio from time to time, it is the opinion of
the Trustees of the Trust and the Portfolio that the benefits available from the
BMR organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions. For the period from the start of business, August 1,
1994, to December 31, 1994, the Portfolio paid brokerage commissions of $83,750
on portfolio securities transactions. Of the total brokerage commissions paid,
approximately $68,432 was paid in respect of portfolio transactions aggregating
approximately $36,120,800 to firms which provided some research services to BMR
(although many of such firms may have been selected in any particular
transaction primarily because of their execution capabilities).
OTHER INFORMATION
On July 27, 1994, the Trust changed its name from Eaton Vance Stock Fund to
Eaton Vance Securities Trust. The Trust is a Massachusetts business trust
established in 1990 as the successor to Eaton Vance Stock Fund, a Massachusetts
business trust that was established under Massachusetts law by an Indenture of
Trust dated August 26, 1931. The Trust changed its name from Eaton & Howard
Stock Fund on April 18, 1989. Eaton Vance, pursuant to its agreement with the
Trust, controls the use of the words "Eaton Vance" in the Trust's name and may
use the words "Eaton Vance" in other connections and for other purposes.
The Trust's Declaration of Trust may be amended by the Trustees when
authorized by vote of a majority of the outstanding voting securities of the
Trust affected by the amendment. The Trustees may also amend the Declaration of
Trust without the vote or consent of shareholders to change the name of the
Trust or to make such other changes as do not have a materially adverse effect
on the rights or interests of shareholders or if they deem it necessary to
conform the Declaration to the requirements of applicable Federal laws or
regulations. The Trust's by-laws provide that the Fund will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with any litigation or proceeding in which they may be involved because of their
offices with the Trust. However, no indemnification will be provided to any
Trustee or officer for any liability to the Trust or its shareholders by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Under Massachusetts law, if certain conditions prevail, shareholders of a
Massachusetts business trust (such as the Trust) could be deemed to have
personal liability for the obligations of the Trust. Numerous investment
companies registered under the 1940 Act have been formed as Massachusetts
business trusts, and management is not aware of an instance where such liability
has been imposed. The Trust's Declaration of Trust contains an express
disclaimer of liability on the part of the Fund shareholders and the Trust's
By-laws provide that the Trust shall assume the defense on behalf of any Fund
shareholders. Moreover, the Trust's By-laws also provide for indemnification out
of the property of the Fund of any shareholder held personally liable solely by
reason of being or having been a shareholder for all loss or expense arising
from such liability. The assets of the Fund are readily marketable and will
ordinarily substantially exceed its liabilities. In light of the nature of the
Fund's business and the nature of its assets, management believes that the
possibility of the Fund's liability exceeding its assets, and therefore the
shareholder's risk of personal liability, is extremely remote.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's By-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Trust's By-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Trust's custodian or
by votes cast at a meeting called for that purpose. The By-laws further provide
that under certain circumstances the shareholders may call a meeting to remove a
Trustee and that the Trust is required to provide assistance in communicating
with shareholders about such a meeting.
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees of the
Portfolio holding office have been elected by investors. In such an event the
Trustees then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interests
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The right to redeem can be suspended and the payment of the redemption price
deferred when the Exchange is closed (other than for customary weekend and
holiday closings), during periods when trading on the Exchange is restricted as
determined by the Securities and Exchange Commission, or during any emergency as
determined by the Commission which makes it impracticable for the Portfolio to
dispose of its securities or value its assets, or during any other period
permitted by order of the Commission for the protection of investors.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts, are
the independent accountants for the Fund and the Portfolio, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the Securities and Exchange Commission.
For the financial statements of the Fund and the Portfolio see "Financial
Statements" in Part II of this Statement of Additional Information.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV CLASSIC STOCK FUND. The Fund
became a series of the Trust on July 27, 1994.
FEES AND EXPENSES
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund. For the period from the start
of business, November 4, 1994, to December 31, 1994, $3,165 of the Fund's
operating expenses were allocated to the Administrator.
DISTRIBUTION PLAN
The Distribution Plan and Distribution Agreement remain in effect until
April 28, 1995 and may be continued as described under "Distribution Plan" in
the Prospectus. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the Trust
as required by Rule 12b-1. For the period from the start of business, November
4, 1994, to December 31, 1994, the Fund accrued sales commission payments under
the Plan aggregating $59, of which $43 was paid to the Principal Underwriter.
The Principal Underwriter paid $9 as sales commissions to Authorized Firms and
the balance was retained by the Principal Underwriter. As at December 31, 1994,
the outstanding uncovered distribution charges of the Principal Underwriter
calculated under the Plan amounted to approximately $8,794 (which amount was
equivalent to 6.04% of the Fund's net assets on such day). For the period from
the start of business, November 4, 1994, to December 31, 1994, the Fund accrued
service fee payments under the Plan aggregating $20, of which $14 was paid to
the Principal Underwriter. The Principal Underwriter paid $3 as service fee
payments to Authorized Firms and the balance was retained by the Principal
Underwriter.
PRINCIPAL UNDERWRITER
For the period from the start of business, November 4, 1994, to December
31, 1994, the Fund paid no repurchase transaction fees to the Principal
Underwriter.
CUSTODIAN
For the period from the start of business, November 4, 1994, to December 31,
1994, the Fund paid IBT $250.
<TABLE>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio
who are not members of the Eaton Vance organization are paid by the Fund (and
the other series of the Trust) and the Portfolio, respectively. During the
fiscal year ended December 31, 1994, the Trustees of the Trust and the Portfolio
earned the following compensation in their capacities as Trustees from the Fund,
the Portfolio and the other funds in the Eaton Vance fund complex<F1>:
<CAPTION>
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
NAME COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
- ---- FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
---------------- ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C>
Donald R. Dwight .... $ -- 0 -- $297<F2> $8,750 $135,000
Samuel L. Hayes, III . -- 0 -- 302<F3> 8,865 142,500
Norton H. Reamer ..... -- 0 -- 318 -- 0 -- 135,000
John L. Thorndike .... -- 0 -- 338 -- 0 -- 140,000
Jack L. Treynor ...... -- 0 -- 301 -- 0 -- 140,000
- ---------
<F1> The Eaton Vance fund complex consists of 201 registered investment
companies or series thereof.
<F2> Includes $98 of deferred compensation.
<F3> Includes $101 of deferred compensation.
</TABLE>
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to Authorized Firms or investors and other selling
literature and of advertising is borne by the Principal Underwriter. The fees
and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under Federal and state securities laws
is borne by the Fund. In addition, the Fund makes payments to the Principal
Underwriter pursuant to its Distribution Plan as described in the Fund's current
Prospectus; the provisions of the plan relating to such payments are included in
the Distribution Agreement. The Distribution Agreement is renewable annually by
the Trust's Board of Trustees (including a majority of its Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Fund's Distribution Plan or the Distribution
Agreement), may be terminated on sixty days' notice either by such Trustees or
by vote of a majority of the outstanding voting securities of the Fund or on six
months' notice by the Principal Underwriter and is automatically terminated upon
assignment. The Principal Underwriter distributes Fund shares on a "best
efforts" basis under which it is required to take and pay for only such shares
as may be sold.
The Fund has authorized Eaton Vance Distributors, Inc. (the "Principal
Underwriter") to act as its agent in repurchasing shares at the rate of $2.50
for each repurchase transaction handled by the Principal Underwriter. The
Principal Underwriter estimates that the expenses incurred by it in acting as
repurchase agent for the Fund will exceed the amounts paid therefor by the Fund.
DISTRIBUTION PLAN
The Distribution Plan ("the Plan") is described in the Prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
In calculating daily the amount of uncovered distribution charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid or payable
under the Plan by the Fund to the Principal Underwriter and contingent deferred
sales charges theretofore paid or payable to the Principal Underwriter will be
subtracted from such distribution charges; if the result of such subtraction is
positive, a distribution fee (computed at 1% over the prime rate then reported
in The Wall Street Journal) will be computed on such amount and added thereto,
with the resulting sum constituting the amount of outstanding uncovered
distribution charges with respect to such day. The amount of outstanding
uncovered distribution charges of the Principal Underwriter calculated on any
day does not constitute a liability recorded on the financial statements of the
Fund.
It is anticipated that the Eaton Vance organization will profit by reason of
the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from sale
of Fund shares and through the amounts paid to the Principal Underwriter,
including contingent deferred sales charges, pursuant to the Plan. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts theretofore received by the Principal
Underwriter under the Plan and from contingent deferred sales charges have
exceeded the total expenses theretofore incurred by such organization in
distributing shares of the Fund. Total expenses for this purpose will include an
allocable portion of the overhead costs of such organization and its branch
offices, which costs will include without limitation leasing expense,
depreciation of building and equipment, utilities, communication and postage
expense, compensation and benefits of personnel, travel and promotional expense,
stationery and supplies, literature and sales aids, interest expense, data
processing fees, consulting and temporary help costs, insurance, taxes other
than income taxes, legal and auditing expense and other miscellaneous overhead
items. Overhead is calculated and allocated for such purpose by the Eaton Vance
organization in a manner deemed equitable to the Fund.
The amount of uncovered distribution charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Classic Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan. (For shares sold prior to January 30, 1995,
Plan payments are as follows: the Principal Underwriter pays monthly sales
commissions and service fee payments to Authorized Firms equivalent to
approximately .75% and .25%, respectively, annualized of the assets maintained
in the Fund by their customers beginning at the time of sale. No payments were
made at the time of sale and there is no contingent deferred sales charge.) For
the sales commission payments made by the Fund and the outstanding uncovered
distribution changes of the Principal Underwriter, see "Fees and Expenses --
Distribution Plan" in this Part II. The Plan also authorizes the Fund to make
payments of service fees. For additional information concerning the service
fees, see "Fees and Expenses -- Distribution Plan" in this Part II.
Under the Plan the President or a Vice President of the Trust shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described therein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees as required by Rule 12b-1. So long as the Plan is in
effect, the selection and nomination of Trustees who are not interested persons
of the Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
The Trustees of the Trust believe that the Plan will be a significant factor
in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from November 4, 1994 to December 31, 1994.
VALUE OF A $1,000 INVESTMENT
Value of Total Return
Investment Amount of Investment ----------------------
Investment Period Date Investment on 12/31/94 Cumulative Annualized
- ------------------------------------------------------------------------------
Life of the Fund* 11/04/94 $1,000.00 $987.00** -1.30%** --
PERCENTAGE CHANGES
NOVEMBER 4, 1994 -- DECEMBER 31, 1994
NET ASSET VALUE TO NET ASSET VALUE
WITH ALL DISTRIBUTIONS REINVESTED
PERIOD -----------------------------------------------
ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL
- -------------------------------------------------------------------------------
12/31/94* -- -1.30%** --
Past performance is not indicative of future results. Investment return and
principal value will fluctuate; shares, when redeemed, may be worth more or less
than their original cost.
- ---------
*Investment operations began on November 4, 1994.
**If a portion of the Fund's expenses had not been subsidized and the contingent
deferred sales charge applicable to shares purchased on or after January 30,
1995 had been imposed, the Fund would have had lower returns.
ADDITIONAL TAX MATTERS
The Fund qualified as a regulated investment company under the Code for its
fiscal year ended December 31, 1994 (see the Notes to Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 28, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
February 28, 1995, Eaton Vance owned 26.9% of the outstanding shares of the
Fund; Eaton Vance is a Massachusetts business trust and a wholly-owned
subsidiary of EVC. In addition, the following shareholders owned beneficially
and of record the percentages of outstanding shares of the Fund indicated after
their names: Frontier Trust Co., FBO West Florida Pharmacies Inc., 401(k)
Savings & Retirement Plan, c/o The Barclay Group, Ambler, PA (20.9%); Frontier
Trust Co., FBO City Bank & Trust Retirement Plan, c/o The Barclay Group, Ambler,
PA (16.6%); Frontier Trust Co., FBO Cotter Cotter & Sohon PC, 401(k) Savings &
Retirement Plan, c/o The Barclay Group, Ambler, PA (16.2%); Frontier Trust Co.,
FBO Panama Pharmacy Inc., 401(k) Savings and Retirement Plan, c/o The Barclay
Group, Ambler, PA (9.7%); and Cheryl Lynn Hawryrliak, Rochester, NY (5.8%). To
the Trust's knowledge, no other person owned of record or beneficially 5% or
more of the Fund's outstanding shares on such date.
<PAGE>
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for the
Fund and the Portfolio contained in the Fund's shareholder report for the fiscal
year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession Number 0000950156-95-000115).
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC
STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-STSAI
EV Classic
Stock
Fund
Statement of
Additional
Information
April 1, 1995
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV MARATHON STOCK FUND. The Fund
became a series of the Trust on July 27, 1994.
FEES AND EXPENSES
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund. For the period from the start
of business, August 17, 1994, to December 31, 1994, $1,369 of the Fund's
operating expenses were allocated to the Administrator.
DISTRIBUTION PLAN
The Distribution Plan and Distribution Agreement remain in effect until
April 28, 1995 and may be continued as described under "Distribution Plan" in
the Prospectus. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the Trust
as required by Rule 12b-1. For the period from the start of business, August 17,
1994, to December 31, 1994, the Fund made sales commission payments under the
Plan to the Principal Underwriter aggregating $1,818, which amount was used by
the Principal Underwriter to partially defray sales commissions aggregating
$4,435 paid during such period by the Principal Underwriter to Authorized Firms
on sales of Fund shares. During such period, contingent deferred sales charges
aggregating approximately $180 were imposed on early redeeming shareholders and
paid to the Principal Underwriter to partially defray such sales commissions. As
at December 31, 1994, the outstanding uncovered distribution charges of the
Principal Underwriter calculated under the Plan amounted to approximately
$39,703 (which amount was equivalent to 3.7% of the Fund's net assets on such
day). For the period ended December 31, 1994, the Fund made no service fee
payments under the Plan. The Fund expects to begin accruing for its service fee
payments during the quarter ending September 30, 1995.
PRINCIPAL UNDERWRITER
For the period from the start of business, August 17, 1994, to December 31,
1994, the Fund paid the Principal Underwriter $2.50 for repurchase transactions
handled (being $2.50 for each such transaction).
CUSTODIAN
For the period from the start of business, August 17, 1994, to December 31,
1994, the Fund paid IBT $250.
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio
who are not members of the Eaton Vance organization are paid by the Fund (and
the other series of the Trust) and the Portfolio, respectively. During the
fiscal year ended December 31, 1994, the Trustees of the Trust and the Portfolio
earned the following compensation in their capacities as Trustees from the Fund,
the Portfolio and the other funds in the Eaton Vance fund complex(1):
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
- ---- ------------ -------------- ----------------- ----------------------
<S> <C> <C> <C> <C>
Donald R. Dwight ........ $--0-- $297<F2> $8,750 $135,000
Samuel L. Hayes, III .... --0-- 302<F2> 8,865 142,500
Norton H. Reamer ........ --0-- 318 -- 0 -- 135,000
John L. Thorndike ....... --0-- 338 -- 0 -- 140,000
Jack L. Treynor ......... --0-- 301 -- 0 -- 140,000
- ---------
<FN>
<F1>The Eaton Vance fund complex consists of 201 registered investment companies or series
thereof.
<F2>Includes $98 of deferred compensation.
<F3>Includes $101 of deferred compensation.
</TABLE>
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as
principal in selling shares of the Fund. The expenses of printing copies of
prospectuses used to offer shares to Authorized Firms or investors and other
selling literature and of advertising is borne by the Principal Underwriter. The
fees and expenses of qualifying and registering and maintaining qualifications
and registrations of the Fund and its shares under Federal and state securities
laws is borne by the Fund. In addition, the Fund makes payments to the Principal
Underwriter pursuant to its Distribution Plan as described in the Fund's current
Prospectus; the provisions of the plan relating to such payments are included in
the Distribution Agreement. The Distribution Agreement is renewable annually by
the Trust's Board of Trustees (including a majority of its Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Fund's Distribution Plan or the Distribution
Agreement), may be terminated on sixty days' notice either by such Trustees or
by vote of a majority of the outstanding voting securities of the Fund or on six
months' notice by the Principal Underwriter and is automatically terminated upon
assignment. The Principal Underwriter distributes Fund shares on a "best
efforts" basis under which it is required to take and pay for only such shares
as may be sold.
The Fund has authorized Eaton Vance Distributors, Inc. (the "Principal
Underwriter") to act as its agent in repurchasing shares at the rate of $2.50
for each repurchase transaction handled by the Principal Underwriter. The
Principal Underwriter estimates that the expenses incurred by it in acting as
repurchase agent for the Fund will exceed the amounts paid therefor by the Fund.
DISTRIBUTION PLAN
The Distribution Plan (the "Plan") is described in the Prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
In calculating daily the amount of uncovered distribution charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid and
payable under the Plan by the Fund to the Principal Underwriter and contingent
deferred sales charges theretofore paid and payable to the Principal Underwriter
will be subtracted from such distribution charges; if the result of such
subtraction is positive, a distribution fee (computed at 1% over the prime rate
then reported in The Wall Street Journal) will be computed on such amount and
added thereto, with the resulting sum constituting the amount of outstanding
uncovered distribution charges with respect to such day. The amount of
outstanding uncovered distribution charges of the Principal Underwriter
calculated on any day does not constitute a liability recorded on the financial
statements of the Fund.
It is anticipated that the Eaton Vance organization will profit by reason
of the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from sale
of Fund shares and through amounts paid to the Principal Underwriter, including
contingent deferred sales charges, pursuant to the Plan. The Eaton Vance
organization may be considered to have realized a profit under the Plan if at
any point in time the aggregate amounts theretofore received by the Principal
Underwriter pursuant to the Plan and from contingent deferred sales charges have
exceeded the total expenses theretofore incurred by such organization in
distributing shares of the Fund. Total expenses for this purpose will include an
allocable portion of the overhead costs of such organization and its branch
offices, which costs will include without limitation leasing expense,
depreciation of building and equipment, utilities, communication and postage
expense, compensation and benefits of personnel, travel and promotional expense,
stationery and supplies, literature and sales aids, interest expense, data
processing fees, consulting and temporary help costs, insurance, taxes other
than income taxes, legal and auditing expense and other miscellaneous overhead
items. Overhead is calculated and allocated for such purpose by the Eaton Vance
organization in a manner deemed equitable to the Fund.
The amount of uncovered distribution charges of the Principal Underwriter
at any particular time depends upon various changing factors, including the
level and timing of sales of Fund shares, the nature of such sales (i.e.,
whether they result from exchange transactions, reinvestments or from cash sales
through Authorized Firms), the level and timing of redemptions of Fund shares
upon which a contingent deferred sales charge will be imposed, the level and
timing of redemptions of Fund shares upon which no contingent deferred sales
charge will be imposed (including redemptions involving exchanges of Fund shares
for shares of another fund in the Eaton Vance Marathon Group of Funds which
result in a reduction of uncovered distribution charges), changes in the level
of the net assets of the Fund, and changes in the interest rate used in the
calculation of the distribution fee under the Plan. For the sales commission
payments made by the Fund and the outstanding uncovered distribution charges of
the Principal Underwriter, see "Fees and Expenses -- Distribution Plan" in this
Part II. The Plan also authorizes the Fund to make payments of service fees. For
additional information concerning the service fees, see "Fees and Expenses --
Distribution Plan" in this Part II.
Under the Plan the President or a Vice President of the Trust shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described therein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees as required by Rule 12b-1. So long as the Plan is in
effect, the selection and nomination of Trustees who are not interested persons
of the Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
The Trustees of the Trust believe that the Plan will be a significant
factor in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from August 17, 1994 to December 31, 1994.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
TOTAL RETURN TOTAL RETURN
VALUE OF INVEST- VALUE OF INVEST- BEFORE DEDUCTING AFTER DEDUCTING
MENT BEFORE DE- MENT AFTER DUCTING THE CONTINGENT THE CONTINGENT
DUCTING THE CON- THE CONTINGENT DEFERRED DEFERRED
TINGENT DEFERRED DEFERRED SALES SALES CHARGE SALES CHARGE<F2>
INVESTMENT INVESTMENT AMOUNT OF SALES CHARGE CHARGE<F2> --------------------------- -------------------------
PERIOD DATE INVESTMENT ON 12/31/94 ON 12/31/94 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ------------- ------------ ----------- --------------- -------------- ------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the
Fund<F1> 8/17/94 $1,000.00 $960.00<F3> $912.00<F3> -4.00%<F3> -- -8.80%<F3> --
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE CHANGES 8/17/94 -- 12/31/94
NET ASSET VALUE TO NET ASSET VALUE NET ASSET VALUE TO NET ASSET VALUE
BEFORE DEDUCTING THE CONTINGENT DEFERRED AFTER DEDUCTING THE CONTINGENT DEFERRED
SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED SALES CHARGE<F2> WITH ALL DISTRIBUTIONS REINVESTED
PERIOD ------------------------------------------------------ ------------------------------------------------------
ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
----- ------ ---------- -------------- ------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
12/31/94<F1> -- -4.00%<F3> -- -- -8.80%<F3> --
Past performance is not indicative of future results. Investment return and principal value will fluctuate; shares, when
redeemed, may be worth more or less than their original cost.
- ---------
<FN>
<F1>Investment operations began on August 17, 1994.
<F2>No contingent deferred sales charge is imposed on shares purchased more than six years prior to the redemption, shares
acquired through the reinvestment of distributions, or any appreciation in value of other shares in the account, and no such
charge is imposed on exchanges of Fund shares for shares of one or more other funds listed under "The Eaton Vance Exchange
Privilege" in the Prospectus.
<F3>If a portion of the Fund's expenses had not been subsidized, the Fund would have had lower returns.
</TABLE>
ADDITIONAL TAX MATTERS
The Fund qualified as a regulated investment company under the Code for its
fiscal year ended December 31, 1994 (see the Notes to Financial Statements).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 28, 1995, the Trustees and officers of the Trust, as a
group, owned in the aggregate less than 1% of the outstanding shares of the
Fund. As of February 28, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc., New
Brunswick, NJ was the record owner of approximately 14.8% of the outstanding
shares, which were held on behalf of its customers who are the beneficial owners
of such shares, and as to which it had voting power under certain limited
circumstances. In addition, as of February 28, 1995, the following shareholders
owned beneficially and of record the percentages of outstanding shares of the
Fund indicated after their names: Allen K. Peckel, General Partner, Peckel
Family Limited Partnership, Croton On Hudson, NY (13.5%); William A. Myers, Jr.,
Cape Mary Point, NJ (7.4%); and George Sertich and Elizabeth Jane Sertich,
Trustees, George Sertich Trust, U/A DTD 12/14/90, Rio Raveho, NM (5.4%). To the
Trust's knowledge, no other person owned of record or beneficially 5% or more of
the Fund's outstanding shares on such date.
<PAGE>
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession Number 0000950156-95-000116).
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EVMARATHON
STOCK
FUND
STATEMENT OF ADDITIONAL INFORMATION
APRIL 1, 1995
EV MARATHON STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-STSAI
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV TRADITIONAL STOCK FUND. On July
27, 1994, the Fund became a series of the Trust and redesignated its name from
Eaton Vance Stock Fund to EV Traditional Stock Fund.
FEES AND EXPENSES
INVESTMENT ADVISER
Prior to the close of business on August 1, 1994 (when the Fund transferred
its assets to the Portfolio in exchange for an interest in the Portfolio), the
Fund retained Eaton Vance as its investment adviser. For the period from January
1, 1994, to August 1, 1994, the Fund paid Eaton Vance advisory fees of $350,884
(equivalent to 0.625% (annualized) of the Fund's average daily net assets for
such period). For the fiscal years ended December 31, 1993 and 1992, the Fund
paid Eaton Vance advisory fees of $560,111 and $558,459, respectively.
SERVICE PLAN
During the fiscal year ended December 31, 1994, the Fund made payments
under the Plan aggregating $44,425, of which $31,213 was paid to Authorized
Firms and the balance was retained by the Principal Underwriter for such
services.
CUSTODIAN
During the fiscal year ended December 31, 1994, the Fund paid IBT $51,898.
BROKERAGE COMMISSIONS
During the period from January 1, 1994, to August 1, 1994, the Fund paid
brokerage commissions of $186,758 on portfolio security transactions, of which
$150,412 was paid in respect of portfolio security transactions aggregating
approximately $82,449,000. During the Fund's fiscal years ended December 31,
1993 and 1992, the Fund paid brokerage commissions of $255,462 and $135,274,
respectively, on portfolio security transactions. Of the total brokerage
commissions of $255,462 paid during the fiscal year ended December 31, 1993,
approximately $222,702 was paid in respect of portfolio security transactions
aggregating approximately $143,198,506 to firms which provided some research
services to Eaton Vance (although many of such firms may have been selected in
any particular transaction primarily because of their execution capabilities).
TRUSTEES
<TABLE>
The fees and expenses of those Trustees of the Trust and of the Portfolio
who are not members of the Eaton Vance organization are paid by the Fund (and
the other series of the Trust) and the Portfolio, respectively. During the
fiscal year ended December 31, 1994, the Trustees of the Trust and the Portfolio
earned the following compensation in their capacities as Trustees from the Fund,
the Portfolio and the other funds in the Eaton Vance fund complex<F1>:
<CAPTION>
Aggregate Aggregate Retirement Total Compensation
Name Compensation Compensation Benefit Accrued from Trust and
- ---- from Fund from Portfolio from Fund Complex Fund Complex
---------------- ---------------- --------------------- ----------------------
<S> <C> <C> <C> <C>
Donald R. Dwight<F2>.. $ 930 $297<F2> $8,750 $135,000
Samuel L. Hayes,
III<F3> ............ 984 302<F3> 8,865 142,500
Norton H. Reamer ..... 986 318 -- 0 -- 135,000
John L. Thorndike .... 1,030 338 -- 0 -- 140,000
Jack L. Treynor ...... 994 301 -- 0 -- 140,000
- ---------
<FN>
<F1> The Eaton Vance fund complex consists of 201 registered investment
companies or series thereof.
<F2> Includes $98 of deferred compensation.
<F3> Includes $101 of deferred compensation.
</TABLE>
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge other than the
sales charge included in the offering price, and may be changed or discontinued
without penalty at any time.
INTENDED QUANTITY INVESTMENT--STATEMENT OF INTENTION. If it is anticipated that
$100,000 or more of Fund shares and shares of the other continuously offered
open-end funds listed under "The Eaton Vance Exchange Privilege" in the current
Prospectus of the Fund will be purchased within a 13-month period, a Statement
of Intention should be signed so that shares may be obtained at the same reduced
sales charge as though the total quantity were invested in one lump sum. Shares
held under Right of Accumulation (see below) as of the date of the Statement
will be included toward the completion of the Statement. The Statement
authorizes the Transfer Agent to hold in escrow sufficient shares (5% of the
dollar amount specified in the Statement) which can be redeemed to make up any
difference in sales charge on the amount intended to be invested and the amount
actually invested. Execution of a Statement does not obligate the shareholder to
purchase or the Fund to sell the full amount indicated in the Statement, and
should the amount actually purchased during the 13-month period be more or less
than that indicated on the Statement, price adjustments will be made. For sales
charges and other information on quantity purchases, see "How to Buy Fund
Shares" in the Fund's current Prospectus. Any investor considering signing a
Statement of Intention should read it carefully.
RIGHT OF ACCUMULATION--CUMULATIVE QUANTITY DISCOUNT. The applicable sales charge
level for the purchase of Fund shares is calculated by taking the dollar amount
of the current purchase and adding it to the value (calculated at the maximum
current offering price) of the shares the shareholder owns in his account(s) in
the Fund and in the other continuously offered open-end funds listed under "The
Eaton Vance Exchange Privilege" in the current Prospectus of the Fund for which
Eaton Vance acts as adviser or administrator at the time of purchase. The sales
charge on the shares being purchased will then be at the rate applicable to the
aggregate. For example, if the shareholder owned shares valued at $80,000 in EV
Traditional Investors Fund, and purchased an additional $20,000 of Fund shares,
the sales charge for the $20,000 purchase would be at the rate of 3.75% of the
offering price (3.90% of the net amount invested) which is the rate applicable
to single transactions of $100,000. For sales charges on quantity purchases, see
"How to Buy Fund Shares" in the Fund's current Prospectus. Shares purchased (i)
by an individual, his spouse and their children under the age of twenty-one, and
(ii) by a trustee, guardian or other fiduciary of a single trust estate or a
single fiduciary account, will be combined for the purpose of determining
whether a purchase will qualify for the Right of Accumulation and if qualifying,
the applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his or her Authorized Firm must provide Eaton Vance Distributors,
Inc. (the "Principal Underwriter") (in the case of a purchase made through a
financial service firm (an "Authorized Firm") or the Transfer Agent (in the case
of an investment made by mail) with sufficient information to permit
verification that the purchase order qualifies for the accumulation privilege.
Corfirmation of the order is subject to such verification. The Right of
Accumulation privilege may be amended or terminated at any time as to purchases
occurring thereafter.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through certain Authorized Firms which have agreements with the Principal
Underwriter. The Principal Underwriter is a wholly-owned subsidiary of Eaton
Vance.
The public offering price is the net asset value next computed after receipt
of the order, plus, where applicable, a variable percentage (sales charge)
depending upon the amount of purchase as indicated by the sales charge table set
forth in the Prospectus.
Such table is applicable to purchases of the Fund alone or in combination
with purchases of the other funds offered by the Principal Underwriter, made at
a single time by (i) an individual, or an individual, his or her spouse and
their children under the age of twenty-one, purchasing shares for his or their
own account; and (ii) a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account.
The table is also presently applicable to (1) purchases of Fund shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter through one dealer aggregating $100,000 or more made by
any of the persons enumerated above within a thirteen-month period starting with
first purchase pursuant to a written Statement of Intention, in the form
provided by the Principal Underwriter, which includes provisions for a price
adjustment depending upon the amount actually purchased within such period (a
purchase not made pursuant to such Statement may be included thereunder if the
Statement is filed within 90 days of such purchase); or (2) purchases of the
Fund pursuant to the Right of Accumulation and declared as such at the time of
purchase.
Subject to the applicable provisions of the 1940 Act, the Fund may issue
shares at net asset value in the event that an investment company (whether a
regulated or private investment company or a personal holding company) is merged
or consolidated with or acquired by the Fund. Normally no sales charges will be
paid in connection with an exchange of Fund shares for the assets of such
investment company.
Shares may be sold at net asset value to any officer, director, trustee,
general partner or employee of the Fund, the Portfolio or any investment company
for which Eaton Vance or BMR acts as investment adviser, any investment
advisory, agency, custodial or trust account managed or administered by Eaton
Vance or by any parent, subsidiary or other affiliate of Eaton Vance, or any
officer, director or employee of any parent, subsidiary or other affiliate of
Eaton Vance. The terms "officer," "director," "trustee," "general partner" or
"employee" as used in this paragraph include any such person's spouse and minor
children, and also retired officers, directors, trustees, general partners and
employees and their spouses and minor children. Shares of the Fund may also be
sold at net asset value to registered representatives and employees of certain
Authorized Firms and to such persons' spouses and children under the age of 21
and their beneficial accounts.
The Trust reserves the right to suspend or limit the offering of shares of
the Fund to the public at any time.
The Principal Underwriter acts as principal in selling shares of the Fund
under the distribution agreement with the Trust on behalf of the Fund. The
expenses of printing copies of prospectuses used to offer shares to financial
service firms or investors and other selling literature and of advertising are
borne by the Principal Underwriter. The fees and expenses of qualifying and
registering and maintaining qualifications and registrations of the Fund and its
shares under Federal and state securities laws are borne by the Fund. The
distribution agreement is renewable annually by the Board of Trustees of the
Trust (including a majority of its Trustees who are not interested persons of
the Principal Underwriter or the Trust), may be terminated on six months' notice
by either party, and is automatically terminated upon assignment. The Principal
Underwriter distributes Fund shares on a "best efforts" basis under which it is
required to take and pay for only such shares as may be sold. The Principal
Underwriter allows Authorized Firms discounts from the applicable public
offering price which are alike for all Firms. In the case of the maximum sales
charge the Authorized Firm retains 4% of the public offering price (4.20% of the
net amount invested) and the Principal Underwriter retains 0.75% of the public
offering price (0.79% of the net amount invested). However, the Principal
Underwriter may allow, upon notice to all Authorized Firms with whom it has
agreements, discounts up to the full sales charge during the periods specified
in the notice. During periods when the discount includes the full sales charge,
such Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The total sales charges for sales of shares of the Fund
during the fiscal years ended December 31, 1994, 1993 and 1992, were $42,731,
$99,605 and $58,813, respectively, of which $6,855, $15,660 and $9,377,
respectively, was received by the Principal Underwriter. For the fiscal years
ended December 31, 1994, 1993 and 1992, Authorized Firms received $35,876,
$83,945 and $49,436, respectively, from the total sales charges.
SERVICE PLAN
The Trust on behalf of the Fund has adopted a Service Plan (the "Plan")
designed to meet the requirements of Rule 12b-1 (the "Rule") under the
Investment Company Act of 1940 and the service fee requirements of the revised
sales charge rule of the National Association of Securities Dealers, Inc.
(Management believes service fee payments are not distribution expenses governed
by the Rule, but has chosen to have the Plan approved as if the Rule were
applicable.) The following supplements the discussion of the Plan contained in
the Fund's Prospectus.
Pursuant to such Rule, the Plan has been approved by the independent
Trustees of the Trust, who have no direct or indirect financial interest in the
Plan, and by all of the Trustees of the Trust on behalf of the Fund. The Plan
amends and replaces the Trust's original distribution plan (which originally
became effective on December 27, 1990 and which was approved by the Fund's
shareholders).
The Plan remains in effect through April 28, 1995, and from year to year
thereafter, provided such continuance is approved by a vote of both a majority
of (i) those 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 any
agreements related to it (the "Rule 12b-1 Trustees") and (ii) all of the
Trustees then in office, cast in person at a meeting (or meetings) called for
the purpose of voting on this Plan. The Plan may be terminated any time by vote
of the Rule 12b-1 Trustees or by a vote of a majority of the outstanding voting
securities of the Fund.
Under the Plan, the President or a Vice President of the Trust shall
provide to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described herein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees of the Trust in the manner described above. So long as
the Plan is in effect, the selection and nomination of Trustees who are not
interested persons of the Trust shall be committed to the discretion of the
Trustees who are not such interested persons. The Trustees have determined that
in their judgment there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders.
PERFORMANCE INFORMATION
The tables below indicate the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the ten, five and one year periods ended December 31, 1994.
<TABLE>
VALUE OF A $1,000 INVESTMENT
<CAPTION>
TOTAL RETURN TOTAL RETURN
EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
VALUE OF ------------------------- -------------------------
INVESTMENT AMOUNT OF INVESTMENT AVERAGE AVERAGE
INVESTMENT PERIOD DATE INVESTMENT<F1> ON 12/31/94 CUMULATIVE ANNUAL CUMULATIVE ANNUAL
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
10 Years Ended 12/31/94 12/31/84 $952.15 $2,868.60 201.28% 11.66% 186.97% 11.12%
5 Years Ended 12/31/94 12/31/89 $952.72 $1,243.31 30.50% 5.47% 24.30% 4.45%
1 Year Ended 12/31/94 12/31/93 $952.71 $ 913.46 -4.12% -4.12% -8.67% -8.67%
- ---------
<FN>
<F1> Initial investment less the current maximum sales charge of 4.75%.
</TABLE>
<TABLE>
PERCENTAGE CHANGES
DECEMBER 31, 1985 -- DECEMBER 31, 1994
<CAPTION>
NET ASSET VALUE TO NET ASSET VALUE MAXIMUM OFFERING PRICE TO NET ASSET VALUE
FISCAL WITH ALL DISTRIBUTIONS REINVESTED WITH ALL DISTRIBUTIONS REINVESTED
YEAR ----------------------------------------------------------- ----------------------------------------------------------
ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
12/31/85 32.26% 32.26% 32.26% 25.98% 25.98% 25.98%
12/31/86 15.43% 52.66% 23.56% 9.94% 45.41% 20.59%
12/31/87 1.99% 55.70% 15.90% -2.85% 48.31% 14.04%
12/31/88 15.01% 79.07% 15.68% 9.55% 70.57% 14.28%
12/31/89 29.92% 130.87% 18.21% 22.80% 119.90% 17.07%
12/31/90 0.59% 132.22% 15.08% -4.19% 121.19% 14.15%
12/31/91 21.45% 182.04% 15.97% 15.68% 168.64% 15.16%
12/31/92 6.93% 201.58% 14.80% 1.85% 187.26% 14.10%
12/31/93 4.19% 214.23% 13.57% -0.76% 199.30% 12.95%
12/31/94 -4.12% 201.28% 11.66% -8.67% 186.97% 11.12%
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate and shares, when redeemed, may be worth more or
less than their original cost.
ADDITIONAL TAX MATTERS
The Fund qualified as a regulated investment company under the Code for its
fiscal year ended December 31, 1994 (see the Notes to Financial Statements).
As of the close of business on August 1, 1994, the Fund contributed its
assets to the Portfolio in exchange for an interest in the Portfolio. The Trust
has obtained an opinion of tax counsel to the effect that, although there is no
judicial authority directly on point, this contribution will not result in the
recognition of gain or loss by the Fund for Federal income tax purposes. The
Trust intends to file the Fund's Federal income tax return for its taxable year
ending December 31, 1994 reporting such contribution of assets in a manner
consistent with such opinion. If it were determined that this contribution by
the Fund was a taxable transaction, the Fund could be required to recognize gain
on the transfer of its assets to the Portfolio and to make additional
distributions to its shareholders in order to avoid Fund-level Federal income
taxes, and any such distributions would be taxable to the shareholders who
receive them; and in such case, the Fund might also be required to pay penalties
and/or interest to the IRS.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 28, 1995, the Trustees and officers of the Trust, as a
group, owned in the aggregate less than 1% of the outstanding shares of the
Fund. To the Trust's knowledge, no person owned of record or beneficially 5% or
more of the Fund's outstanding shares on such date.
<PAGE>
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession Number 0000950156-95-000074).
<PAGE>
INVESTMENT ADVISER OF
STOCK PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL STOCK FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL STOCK FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-STSAI
EV TRADITIONAL
STOCK FUND
STATEMENT OF
ADDITIONAL
INFORMATION
APRIL 1, 1995
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV CLASSIC TOTAL RETURN FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1995
Effective August 1, 1995, EV Classic Total Return Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Total Return Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Total Return Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE TOTAL RETURN TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE
SPECIAL INVESTMENT TRUST.
August 1, 1995
C-TMSAIS
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
May 1, 1995
EV CLASSIC TOTAL RETURN FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Classic Total Return Fund (the "Fund") and certain
other series of Eaton Vance Total Return Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II that provide additional,
Fund-specific information.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS Page
PART I
Investment Objective and Policies .............................. 2
Investment Restrictions ........................................ 4
Trustees and Officers .......................................... 5
Investment Adviser and Administrator ........................... 7
Custodian ...................................................... 9
Service for Withdrawal ......................................... 10
Determination of Net Asset Value ............................... 10
Investment Performance ......................................... 10
Taxes .......................................................... 12
Portfolio Security Transactions ................................ 14
Other Information .............................................. 15
Independent Accountants ........................................ 16
PART II
Fees and Expenses .............................................. a-1
Performance Information ........................................ a-1
Principal Underwriter ......................................... a-3
Distribution Plan .............................................. a-3
Control Persons and Principal Holders of Securities ............ a-5
Financial Statements ........................................... a-5
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED MAY 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV MARATHON TOTAL RETURN FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1995
Effective August 1, 1995, EV Marathon Total Return Fund was reorganized
and became a series of Eaton Vance Special Investment Trust, a business trust
organized under the laws of the Commonwealth of Massachusetts. Prior to the
reorganization, the Fund had been a series of Eaton Vance Total Return Trust,
which was also a Massachusetts business trust. Except for the fact that the Fund
is now a series of Eaton Vance Special Investment Trust, shares of the Fund
represent the same interest in the Fund's assets, are of the same class, are
subject to the same terms and conditions, fees and expenses and confer the same
rights as when the Fund was a series of Eaton Vance Total Return Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE TOTAL RETURN TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE
SPECIAL INVESTMENT TRUST.
August 1, 1995
M-TMSAIS
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
May 1, 1995
EV MARATHON TOTAL RETURN FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Marathon Total Return Fund (the "Fund") and
certain other series of Eaton Vance Total Return Trust (the "Trust"). Part II
provides information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II that provide additional,
Fund-specific information.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS Page
PART I
Investment Objective and Policies .............................. 2
Investment Restrictions ........................................ 4
Trustees and Officers .......................................... 5
Investment Adviser and Administrator ........................... 7
Custodian ...................................................... 9
Service for Withdrawal ......................................... 10
Determination of Net Asset Value ............................... 10
Investment Performance ......................................... 10
Taxes .......................................................... 12
Portfolio Security Transactions ................................ 14
Other Information .............................................. 15
Independent Accountants ........................................ 16
PART II
Fees and Expenses .............................................. a-1
Performance Information ........................................ a-2
Principal Underwriter .......................................... a-3
Distribution Plan .............................................. a-3
Control Persons and Principal Holders of Securities ............ a-5
Financial Statements ........................................... a-5
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED MAY 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
<PAGE>
EATON VANCE SPECIAL INVESTMENT TRUST
EV TRADITIONAL TOTAL RETURN FUND
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1995
Effective August 1, 1995, EV Traditional Total Return Fund was
reorganized and became a series of Eaton Vance Special Investment Trust, a
business trust organized under the laws of the Commonwealth of Massachusetts.
Prior to the reorganization, the Fund had been a series of Eaton Vance Total
Return Trust, which was also a Massachusetts business trust. Except for the fact
that the Fund is now a series of Eaton Vance Special Investment Trust, shares of
the Fund represent the same interest in the Fund's assets, are of the same
class, are subject to the same terms and conditions, fees and expenses and
confer the same rights as when the Fund was a series of Eaton Vance Total Return
Trust.
THE DATE OF THE ATTACHED STATEMENT OF ADDITIONAL INFORMATION IS CHANGED
TO AUGUST 1, 1995. ALL REFERENCES IN THE STATEMENT OF ADDITIONAL INFORMATION TO
EATON VANCE TOTAL RETURN TRUST OR THE TRUST ARE DEFINED TO MEAN EATON VANCE
SPECIAL INVESTMENT TRUST.
August 1, 1995
T-TMSAIS
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
May 1, 1995
EV TRADITIONAL TOTAL RETURN FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Traditional Total Return Fund (the "Fund") and
certain other series of Eaton Vance Total Return Trust (the "Trust"). Part II
provides information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II that provide additional,
Fund-specific information.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS Page
PART I
Investment Objective and Policies ............................. 2
Investment Restrictions ....................................... 4
Trustees and Officers ......................................... 5
Investment Adviser and Administrator .......................... 7
Custodian ..................................................... 9
Service for Withdrawal ........................................ 10
Determination of Net Asset Value .............................. 10
Investment Performance ........................................ 10
Taxes ......................................................... 12
Portfolio Security Transactions ............................... 14
Other Information ............................................. 15
Independent Accountants ....................................... 16
PART II
Fees and Expenses .............................................. a-1
Performance Information ........................................ a-2
Services for Accumulation ...................................... a-3
Principal Underwriter .......................................... a-3
Service Plan ................................................... a-4
Additional Tax Matters ......................................... a-5
Control Persons and Principal Holders of Securities ............ a-5
Financial Statements ........................................... a-5
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUND'S PROSPECTUS DATED MAY 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
This Part I provides information about the Fund and certain other series of
the Trust.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek for its shareholders a high
level of total return, consisting of relatively predictable income in
conjunction with capital appreciation, consistent with prudent management and
preservation of capital. The Fund currently seeks to achieve its investment
objective by investing its assets in the Total Return Portfolio (the
"Portfolio"), a separate registered investment company with the same investment
objective as the Fund and substantially the same investment policies and
restrictions as the Fund. The Portfolio seeks to achieve its investment
objective by investing principally in dividend-paying common stocks with the
potential to increase dividends in the future.
The Trustees of the Trust may withdraw the Fund's investment from the
Portfolio at any time, if they determine that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in
another investment company with substantially the same investment objective,
policies and restrictions as those of the Fund or invested directly in
investment securities in accordance with the Portfolio's investment policies, as
described below. Except as indicated below, the approval of the Fund's
shareholders would not be required to change the Portfolio's investment
objective or any of the Portfolio's investment policies discussed below,
including those concerning security transactions.
Because the investment characteristics of the Fund will correspond directly
to those of the Portfolio, the following is a discussion of the various
investments of and techniques employed by the Portfolio.
LEVERAGE THROUGH BORROWING
The practice of leveraging to enhance investment return may be viewed as a
speculative activity. Leveraging will exaggerate any increase or decrease in the
market value of the securities held by the Portfolio. Money borrowed for
leveraging will be subject to interest costs which may or may not exceed the
dividends for the securities purchased. The Portfolio may also be required to
maintain minimum average balances in connection with such borrowing or to pay a
commitment or other fee to maintain a line of credit; either of these
requirements will increase the cost of borrowing over the stated interest rate.
The Portfolio and the other investment companies managed by Boston
Management and Research ("BMR") or Eaton Vance Management participate in a Line
of Credit Agreement (the "Credit Agreement") with Citibank, N.A. ("Citibank").
Citibank agrees, in the Credit Agreement, to consider requests from the
Portfolio and such other investment companies that Citibank make advances
("Advances") to the Portfolio and such other investment companies from time to
time. The aggregate amount of all such Advances to all such borrowers will not
exceed $120,000,000, of which $100,000,000 is a discretionary facility and
$20,000,000 is a committed facility. The Portfolio has currently determined that
its borrowings under the Credit Agreement will not exceed, at any one time
outstanding, the lesser of (a) 1/3 of the current market value of the net assets
of the Portfolio or (b) $60,000,000 (the "Amount Available to the Portfolio").
The Portfolio is obligated to pay to Citibank, in addition to interest on
Advances made to it, a quarterly fee on the $20,000,000 committed facility and
on the daily unused portion of the Amount Available to the Portfolio at the rate
of 1/4 of 1% per annum. The Credit Agreement may be terminated by Citibank or
the borrowers at any time upon 30 days' prior written notice. The Portfolio
expects to use the proceeds of the Advances primarily for leveraging purposes.
As at December 31, 1994, the Portfolio had no outstanding loans pursuant to the
Credit Agreement.
The Portfolio, like many other investment companies, can also borrow money
for temporary extraordinary or emergency purposes. Such borrowings may not
exceed 5% of the value of the Portfolio's total assets when the loan is made.
The Portfolio may pledge up to 10% of the lesser of cost or value of its total
assets to secure such borrowings.
The ability of the Portfolio to borrow could be partially or entirely
curtailed in the event that the Credit Control Act of 1969 were to be invoked
and the Federal Reserve Board were to limit or prohibit certain extensions of
credit. This Act empowers the Federal Reserve Board, when authorized by the
President, to regulate directly the costs and allocation of funds in the credit
market.
RISKS ASSOCIATED WITH DERIVATIVE INSTRUMENTS
Entering into a derivative instrument involves a risk that the applicable
market will move against the Portfolio's position and that the Portfolio will
incur a loss. For derivative instruments other than purchased options, this loss
may exceed the amount of the initial investment made or the premium received by
the Portfolio. Derivative instruments may sometimes increase or leverage the
Portfolio's exposure to a particular market risk. Leverage enhances the
Portfolio's exposure to the price volatility of derivative instruments it holds.
The Portfolio's success in using derivative instruments to hedge portfolio
assets depends on the degree of price correlation between the derivative
instruments and the hedged asset. Imperfect correlation may be caused by several
factors, including temporary price disparities among the trading markets for the
derivative instrument, the assets underlying the derivative instrument and the
Portfolio assets. Over-the-counter ("OTC") derivative instruments involve an
enhanced risk that the issuer or counterparty will fail to perform its
contractual obligations. Some derivative instruments are not readily marketable
or may become illiquid under adverse market conditions. In addition, during
periods of market volatility, a commodity exchange may suspend or limit trading
in an exchange-traded derivative instrument, which may make the contract
temporarily illiquid and difficult to price. Commodity exchanges may also
establish daily limits on the amount that the price of a futures contract or
futures option can vary from the previous day's settlement price. Once the daily
limit is reached, no trades may be made that day at a price beyond the limit.
This may prevent the Portfolio from closing out positions and limiting its
losses. The staff of the Securities and Exchange Commission ("Commission") takes
the position that purchased OTC options, and assets used as cover for written
OTC options, are subject to the Portfolio's 15% limit on illiquid investments.
The Portfolio's ability to terminate OTC derivative instruments may depend on
the cooperation of the counterparties to such contracts. The Portfolio expects
to purchase and write only exchange-traded options until such time as the
Portfolio's management determines that the OTC options market is sufficiently
developed and the Portfolio has amended its prospectus so that appropriate
disclosure is furnished to prospective and existing shareholders. For thinly
traded derivative instruments, the only source of price quotations may be the
selling dealer or counterparty. In addition, certain provisions of the Internal
Revenue Code of 1986, as amended ("Code"), limit the extent to which the
Portfolio may purchase and sell derivative instruments. The Portfolio will
engage in transactions in futures contracts and related options only to the
extent such transactions are consistent with the requirements of the Code for
maintaining the qualification of the Fund as a regulated investment company for
Federal income tax purposes. See "Taxes."
ASSET COVERAGE FOR DERIVATIVE INSTRUMENTS
Transactions using forward contracts, futures contracts and options (other
than options that the Portfolio has purchased) expose the Portfolio to an
obligation to another party. The Portfolio will not enter into any such
transactions unless it owns either (1) an offsetting ("covered") position in
securities, currencies, or other options or futures contracts or forward
contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. The Portfolio will comply with Commission guidelines
regarding cover for these instruments and, if the guidelines so require, set
aside cash, U.S. Government securities or other liquid, high-grade debt
securities in a segregated account with its custodian in the prescribed amount.
Assets used as cover or held in a segregated account cannot be sold while
the position in the corresponding forward contract, futures contract or option
is open, unless they are replaced with other appropriate assets. As a result,
the commitment of a large portion of the Portfolio's assets to cover or
segregated accounts could impede portfolio management or the Portfolio's ability
to meet redemption requests or other current obligations.
LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS
If the Portfolio has not complied with the 5% CFTC test set forth in the
Fund's prospectus, to evidence its hedging intent, the Portfolio expects that,
on 75% or more of the occasions on which it takes a long futures or option on
futures position, it will have purchased or will be in the process of
purchasing, equivalent amounts of related securities at the time when the
futures or options position is closed out. However, in particular cases, when it
is economically advantageous for the Portfolio to do so, a long futures or
options position may be terminated (or an option may expire) without a
corresponding purchase of securities.
The Portfolio may enter into futures contracts, and options on futures
contracts, traded on an exchange regulated by the CFTC and on foreign exchanges,
but, with respect to foreign exchange-traded futures contracts and options on
such futures contracts, only if the Investment Adviser determines that trading
on each such foreign exchange does not subject the Portfolio to risks, including
credit and liquidity risks, that are materially greater than the risks
associated with training on CFTC-regulated exchanges.
In order to hedge its current or anticipated portfolio positions, the
Portfolio may use futures contracts on securities held in its Portfolio or on
securities with characteristics similar to those of the securities held by the
Portfolio. If, in the opinion of the Investment Adviser, there is a sufficient
degree of correlation between price trends for the securities held by the
Portfolio and futures contracts based on other financial instruments, securities
indices or other indices, the Portfolio may also enter into such futures
contracts as part of its hedging strategy.
All call and put options on securities written by the Portfolio will be
covered. This means that, in the case of a call option, the Portfolio will own
the securities subject to the call option or an offsetting call option so long
as the call option is outstanding. In the case of a put option, the Portfolio
will own an offsetting put option or will have deposited with its custodian cash
or liquid, high-grade debt securities with a value at least equal to the
exercise price of the put option. The Portfolio may only write a put option on a
security that it intends ultimately to acquire for its investment portfolio.
PORTFOLIO TURNOVER
The portfolio turnover rate of the Portfolio is likely to exceed 100%, but
under normal conditions is not likely to exceed 250%. A 100% turnover rate
occurs if all of the securities held by the Portfolio are sold and either
repurchased or replaced within one year. High portfolio turnover involves
correspondingly greater brokerage commissions and other transaction costs, which
will be borne directly by the Portfolio. It may also result in the realization
of capital gains. See "Portfolio Security Transactions" for a discussion of the
Portfolio's brokerage practices.
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Fund and may
be changed only by the vote of a majority of the Fund's outstanding voting
securities as defined in the Investment Company Act of 1940 (the "1940 Act").
As a matter of fundamental policy, the Fund may not:
(1) With respect to 75% of its total assets, invest more than 5% of its
total assets in the securities of any one issuer or purchase more than 10% of
the outstanding voting securities of any one issuer, except obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities and
except securities of other investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities). The deposit or payment by the Fund of initial, maintenance or
variation margin in connection with all types of options and futures contract
transactions is not considered the purchase of a security on margin;
(4) Underwrite or participate in the marketing of securities of others,
except insofar as it may technically be deemed to be an underwriter in selling a
portfolio security under circumstances which may require the registration of the
same under the Securities Act of 1933;
(5) Make an investment in any one industry if such investment would cause
investments in such industry to exceed 25% of the Fund's total assets (taken at
market value) except that the Fund will concentrate at least 25% of its
investments in utility stocks (i.e., principally electric, gas and telephone
companies);
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by real estate and securities of companies which
invest or deal in real estate;
(7) Purchase or sell physical commodities or contracts for the purchase or
sale of physical commodities; or
(8) Make loans to any person except by (a) the acquisition of debt
securities and making portfolio investments, (b) entering into repurchase
agreements and (c) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing numbered investment restrictions adopted by the
Fund; such restrictions cannot be changed without the approval of a "majority of
the outstanding voting securities" of the Portfolio, which as used in this
Statement of Additional Information means the lesser of (a) 67% of the
outstanding voting securities of the Portfolio present or represented by proxy
at a meeting if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented at the meeting or (b)
more than 50% of the outstanding voting securities of the Portfolio. The term
"voting securities" as used in this paragraph has the same meaning as in the
1940 Act. Whenever the Trust is requested to vote on a change in the investment
restrictions of the Portfolio, the Trust will hold a meeting of Fund
shareholders and will cast its vote as instructed by the shareholders.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Trust without approval by the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio with or
without the approval of the Fund or the Portfolio's other investors. As a matter
of nonfundamental policy, neither the Fund nor the Portfolio may: (a) invest
more than 15% of net assets in investments which are not readily marketable,
including restricted securities and repurchase agreements maturing in more than
seven days. Restricted securities for the purposes of this limitation do not
include securities eligible for resale pursuant to Rule 144A of the Securities
Act of 1933 that the Board of Trustees of the Trust or the Portfolio, or its
delegate, determine to be liquid, based upon the trading markets for the
specific security; (b) purchase warrants in excess of 5% of its net assets, of
which 2% may be warrants which are not listed on the New York or American Stock
Exchange; (c) make short sales of securities or maintain a short position,
unless at all times when a short position is open it owns an equal amount of
such securities or securities convertible into or exchangeable, without payment
of any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless no more than 25% of its net
assets (taken at current value) is held as collateral for such sales at any one
time. (It is the present intention of management to make such sales only for the
purpose of deferring realization of gain or loss for Federal income tax
purposes); (d) purchase securities of any issuer which, including predecessors,
has not been in continuous operation for at least three years, except that 5% of
its total assets (taken at market value) may be invested in certain issuers not
in such continuous operation but substantially all of whose assets are (i)
securities of one or more issuers which have had a record of three years'
continuous operation or (ii) assets of an independent division of an issuer
which division has had a record of three years' continuous operation; provided,
however, that exempted from this restriction are U.S. Government securities,
securities of issuers which are rated by at least one nationally recognized
statistical rating organization, municipal obligations and obligations issued or
guaranteed by any foreign government or its agencies or instrumentalities; (e)
purchase or retain in its portfolio any securities issued by an issuer any of
whose officers, directors, trustees or security holders is an officer or trustee
of the Trust or the Portfolio or is a member, officer, director or trustee of
any investment adviser of the Trust or the Portfolio, if after the purchase of
the securities of such issuer by the Fund or the Portfolio one or more of such
persons owns beneficially more than 1/2 of 1% of the shares or securities or
both (all taken at market value) of such issuer and such persons owning more
than 1/2 of 1% of such shares of securities together own beneficially more than
5% of such shares or securities or both (all taken at market value); (f)
purchase oil, gas or other mineral leases or purchase partnership interests in
oil, gas or other mineral exploration or development programs; and (g) invest
more than 5% of its net assets in the securities of foreign issuers. (For
purposes of restriction (g), U.S. dollar denominated ADRs and GDRs traded on a
U.S. exchange shall not be deemed foreign securities.)
It is contrary to the present policy of the Fund and the Portfolio, which
policy may be changed without shareholder or investor approval, as the case may
be, to purchase any voting security of any electric or gas utility company (as
defined by the Public Utility Holding Company Act of 1935) if as a result it
would then hold more than 5% of the outstanding voting securities of such
company.
In order to permit the sale of shares of the Fund in certain states, the
Fund may make commitments more restrictive than the policies described above.
Should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the state(s) involved.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Portfolio's investment
adviser, Boston Management and Research ("BMR" or the "Investment Adviser"), a
wholly-owned subsidiary of Eaton Vance Management ("Eaton Vance"); of Eaton
Vance's parent, Eaton Vance Corp. ("EVC"); and of BMR's and Eaton Vance's
trustee, Eaton Vance, Inc. ("EV"). Eaton Vance and EV are both wholly-owned
subsidiaries of EVC. Those Trustees who are "interested persons" of the Trust,
the Portfolio, BMR, Eaton Vance, EVC or EV, as defined in the 1940 Act, by
virtue of their affiliation with any one or more of the Trust, the Portfolio,
BMR, Eaton Vance, EVC or EV, are indicated by an asterisk(*).
TRUSTEES OF THE TRUST AND THE PORTFOLIO
M. DOZIER GARDNER (61), PRESIDENT AND TRUSTEE*
President and Chief Executive Officer of BMR, Eaton Vance, EVC and EV, and
Director of EVC and EV. Director, Trustee and officer of various investment
companies managed by Eaton Vance or BMR.
LANDON T. CLAY (69), VICE PRESIDENT AND TRUSTEE*
Chairman of BMR, Eaton Vance, EVC and EV and a Director of EVC and EV. Director,
Trustee and officer of various investment companies managed by Eaton Vance or
BMR.
DONALD R. DWIGHT (64), TRUSTEE
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New England,
Inc., since 1983. Director or Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
JAMES B. HAWKES (53), VICE PRESIDENT OF THE PORTFOLIO AND TRUSTEE*
Executive Vice President of BMR, Eaton Vance, EVC and EV, and a Director of EVC
and EV. Director, Trustee and officer of various investment companies managed
by Eaton Vance or BMR. Mr. Hawkes was elected Trustee of the Trust on June 14,
1993.
SAMUEL L. HAYES, III (60), TRUSTEE
Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (59), TRUSTEE
President and Director, United Asset Management Corporation, a holding company
owning institutional investment management firms. Chairman, President and
Director, The Regis Fund, Inc. (mutual fund). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (68), TRUSTEE
Director, Fiduciary Company Incorporated. Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (65), TRUSTEE
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE TRUST AND THE PORTFOLIO
EDWIN W. BRAGDON (72), VICE PRESIDENT
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
A. WALKER MARTIN (49), VICE PRESIDENT
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (50), TREASURER
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
THOMAS OTIS (63), SECRETARY
Vice President and Secretary of BMR, Eaton Vance, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (59), ASSISTANT TREASURER AND ASSISTANT SECRETARY
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
WILLIAM J. AUSTIN, JR. (43), ASSISTANT TREASURER
Assistant Vice President of BMR, Eaton Vance and EV. Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Austin was elected
Assistant Treasurer of the Trust on December 16, 1991.
A. JOHN MURPHY (32), ASSISTANT SECRETARY
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. Officer of various investment
companies managed by Eaton Vance or BMR. State Regulations Supervisor, The
Boston Company (1991 - 1993) and Registration Specialist, Fidelity Management
& Research Co. (1986 - 1991). Mr. Murphy was elected Assistant Secretary of
the Trust and the Portfolio on March 27, 1995.
Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of Trustees of the Trust and of the Portfolio. The
Special Committee's functions include a continuous review of the Trust's
contractual relationship with the Administrator, the Portfolio's contractual
relationship with the Investment Adviser, making recommendations to the Trustees
regarding the compensation of those Trustees who are not members of the Eaton
Vance organization, and making recommendations to the Trustees regarding
candidates to fill vacancies, as and when they occur, in the ranks of those
Trustees who are not "interested persons" of the Trust, the Portfolio, or the
Eaton Vance organization.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust and of the Portfolio. The Audit Committee's
functions include making recommendations to the Trustees regarding the selection
of the independent accountants, and reviewing with such independent accountants
and the Treasurer of the Trust and of the Portfolio matters relative to
accounting and auditing practices and procedures, accounting records, internal
accounting controls, and the functions performed by the custodian and transfer
agent of the Fund and of the Portfolio.
Trustees of the Portfolio who are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of a Trustees Deferred Compensation Plan (the "Plan").
Under the Plan, an eligible Trustee may elect to have his deferred fees invested
by the Portfolio in the shares of one or more funds in the Eaton Vance Family of
Funds, and the amount paid to the Trustees under the Plan will be determined
based upon the performance of such investments. Deferral of Trustees' fees in
accordance with the Plan will have a negligible effect on the Portfolio's
assets, liabilities, and net income per share, and will not obligate the
Portfolio to retain the services of any Trustees or obligate the Portfolio to
pay any particular level of compensation to the Trustees.
The fees and expenses of those Trustees of the Trust and the Portfolio who
are not members of the Eaton Vance organization (the noninterested Trustees) are
paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. For the compensation earned by the noninterested Trustees of the
Trust and the Portfolio, see "Fees and Expenses" in Part II of this Statement of
Additional Information.
INVESTMENT ADVISER AND ADMINISTRATOR
The Portfolio engages BMR as its investment adviser pursuant to an
Investment Advisory Agreement dated October 28, 1993. BMR or Eaton Vance acts as
investment adviser to investment companies and various individual and
institutional clients with combined assets under management of approximately $15
billion.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of their clients. The
fixed-income division focuses on all kinds of taxable investment-grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
BMR manages the investments and affairs of the Portfolio subject to the
supervision of the Portfolio's Board of Trustees. BMR furnishes to the Portfolio
investment research, advice and supervision, furnishes an investment program and
determines what securities will be purchased, held or sold by the Portfolio and
what portion, if any, of the Portfolio's assets will be held uninvested. The
Investment Advisory Agreement requires BMR to pay the salaries and fees of all
officers and Trustees of the Portfolio who are members of the BMR organization
and all personnel of BMR performing services relating to research and investment
activities. The Portfolio is responsible for all expenses not expressly stated
to be payable by BMR under the Investment Advisory Agreement, including, without
implied limitation, (i) expenses of maintaining the Portfolio and continuing its
existence, (ii) registration of the Portfolio under the 1940 Act, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of interests in the Portfolio, (viii) expenses of
registering and qualifying the Portfolio and interests in the Portfolio under
Federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to investors, and fees and expenses of registering and
maintaining registrations of the Portfolio and of the Portfolio's placement
agent as broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to investors and of meetings of investors and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Portfolio (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and records, and
determination of net asset values, book capital account balances and tax capital
account balances), (xiv) fees, expenses and disbursements of transfer agents,
dividend disbursing agents, investor servicing agents and registrars for all
services to the Portfolio, (xv) expenses for servicing the accounts of
investors, (xvi) any direct charges to investors approved by the Trustees of the
Portfolio, (xvii) compensation and expenses of Trustees of the Portfolio who are
not members of BMR's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Portfolio to indemnify its Trustees,
officers and investors with respect thereto.
Under the Investment Advisory Agreement with the Portfolio, BMR receives a
monthly advisory fee of .0625% (equivalent to .75% annually) of the average
daily net assets of the Portfolio up to $500 million. On net assets of $500
million and above the annual fee is reduced as follows:
Average Daily Net Annualized Fee Rate
Assets for the Month (For Each Level)
-------------------- ----------------
$500 million but less than $1 billion .................... 0.6875%
$1 billion but less than $1.5 billion .................... 0.6250%
$1.5 billion but less than $2 billion .................... 0.5625%
$2 billion but less than $3 billion ...................... 0.5000%
$3 billion and over ...................................... 0.4375%
As at December 31, 1994, the Portfolio had net assets of $505,566,892. For
the fiscal year ended December 31, 1994, the Portfolio paid BMR advisory fees of
$4,106,857 (equivalent to 0.74% of the Portfolio's average daily net assets for
such year). For the period from the start of business, October 28, 1993, to
December 31, 1993, the Portfolio paid BMR advisory fees of $841,228 (equivalent
to 0.74% (annualized) of the Portfolio's average daily net assets for such
period).
The Investment Advisory Agreement with BMR remains in effect until February
28, 1996. It may be continued indefinitely thereafter so long as such
continuance after February 28, 1996 is approved at least annually (i) by the
vote of a majority of the Trustees of the Portfolio who are not interested
persons of the Portfolio or of BMR cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio. The Agreement may be terminated at any time without
penalty on sixty (60) days' written notice by the Board of Trustees of either
party, or by vote of the majority of the outstanding voting securities of the
Portfolio, and the Agreement will terminate automatically in the event of its
assignment. The Agreement provides that BMR may render services to others and
engage in other business activities and may permit other fund clients and other
corporations and organizations to use the words "Eaton Vance" or "Boston
Management and Research" in their names. The Agreement also provides that BMR
shall not be liable for any loss incurred in connection with the performance of
its duties, or action taken or omitted under that Agreement, in the absence of
willful misfeasance, bad faith, gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
thereunder, or for any losses sustained in the acquisition, holding or
disposition of any security or other investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but receives no compensation for providing administrative services to the
Fund. Under its agreement with the Fund, Eaton Vance has been engaged to
administer the Fund's affairs, subject to the supervision of the Trustees of the
Trust, and shall furnish for the use of the Fund office space and all necessary
office facilities, equipment and personnel for administering the affairs of the
Fund.
The Fund pays all of its own expenses including, without limitation, (i)
expenses of maintaining the Fund and continuing its existence, (ii) registration
of the Trust under the 1940 Act, (iii) commissions, fees and other expenses
connected with the purchase or sale of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale, repurchase and redemption of
shares, (viii) expenses of registering and qualifying the Fund and its shares
under federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Eaton Vance organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
A commitment has been made to a state securities authority that Eaton Vance
will take certain actions, if necessary, so that the Fund's expenses will not
exceed the expense limitation requirements of such state. The commitment may be
amended or rescinded by Eaton Vance in response to changes in the requirements
of the state or for other reasons.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are both
wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both Massachusetts
business trusts, and EV is the trustee of BMR and Eaton Vance. The Directors of
EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner, James B. Hawkes
and Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons
and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman and Mr. Gardner
is president and chief executive officer of EVC, BMR, Eaton Vance and EV. All of
the issued and outstanding shares of Eaton Vance and EV are owned by EVC. All of
the issued and outstanding shares of BMR are owned by Eaton Vance. All shares of
the outstanding Voting Common Stock of EVC are deposited in a Voting Trust,
which expires on December 31, 1996, the Voting Trustees of which are Messrs.
Clay, Brigham, Gardner, Hawkes and Rowland. The Voting Trustees have
unrestricted voting rights for the election of Directors of EVC. All of the
outstanding voting trust receipts issued under said Voting Trust are owned by
certain of the officers of BMR and Eaton Vance who are also officers and
Directors of EVC and EV. As of March 31, 1995, Messrs. Clay, Gardner and Hawkes
each owned 24% of such voting trust receipts, and Messrs. Rowland and Brigham
owned 15% and 13%, respectively, of such voting trust receipts. Messrs. Clay,
Gardner, Hawkes and Otis are officers or Trustees of the Trust and/or the
Portfolio and are members of the EVC, BMR, Eaton Vance and EV organizations.
Messrs. Austin, Bragdon, Martin, Murphy and O'Connor and Ms. Sanders are
officers of the Trust and the Portfolio and are also members of the BMR, Eaton
Vance and EV organizations. BMR will receive the fees paid under the Investment
Advisory Agreement.
Eaton Vance owns all of the stock of Energex Corporation, which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy Corp.
(which is engaged in oil and gas operations) and 77.3% of the stock of Investors
Bank & Trust Company, custodian of the Fund and the Portfolio, which provides
custodial, trustee and other fiduciary services to investors, including
individuals, employee benefit plans, corporations, investment companies, savings
banks and other institutions. In addition, Eaton Vance owns all of the stock of
Northeast Properties, Inc., which is engaged in real estate investment,
consulting and management. EVC owns all of the stock of Fulcrum Management, Inc.
and MinVen, Inc., which are engaged in the development of precious metal
properties. EVC, BMR, Eaton Vance and EV may also enter into other businesses.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund and
the Portfolio, Investors Bank & Trust Company. It is Eaton Vance's opinion that
the terms and conditions of such transactions were not and will not be
influenced by existing or potential custodial or other relationships between the
Trust or the Portfolio and such banks.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston,
Massachusetts, (a 77.3% owned subsidiary of EVC) acts as custodian for the Fund
and the Portfolio. IBT has the custody of all cash and securities representing
the Fund's interest in the Portfolio, has custody of all the Portfolio's assets,
maintains the general ledger of the Portfolio and the Fund, and computes the
daily net asset value of interests in the Portfolio and the net asset value of
shares of the Fund. In such capacity it attends to details in connection with
the sale, exchange, substitution, transfer or other dealings with the
Portfolio's investments, receives and disburses all funds and performs various
other ministerial duties upon receipt of proper instructions from the Fund and
the Portfolio. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of Fund and Portfolio net assets, and a portion of the
fee relates to activity charges, primarily the number of portfolio transactions.
These fees are then reduced by a credit for cash balances of the particular
investment company at the custodian equal to 75% of the 91-day, U.S. Treasury
Bill auction rate applied to the particular investment company's average daily
collected balances for the week. In view of the ownership of EVC in IBT, the
Portfolio is treated as a self-custodian pursuant to Rule 17f-2 under the 1940
Act, and the Portfolio's investments held by IBT as custodian are thus subject
to additional examinations by the Portfolio's independent accountants as called
for by such Rule. For the fiscal year ended December 31, 1994, the Portfolio
paid IBT $159,872. For the custody fees that the Fund paid to IBT, see "Fees and
Expenses" in Part II of this Statement of Additional Information.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Trust's Transfer Agent will send to the
shareholder regular monthly or quarterly payments of any permitted amount
designated by the shareholder (see "Eaton Vance Shareholder Services --
Withdrawal Plan" in the Fund's prospectus) based upon the value of the shares
held. The checks will be drawn from share redemptions and hence are a return of
principal. Income dividends and capital gain distributions in connection with
withdrawal accounts will be credited at net asset value as of the record date
for each distribution. Continued withdrawals in excess of current income will
eventually use up principal, particularly in a period of declining market
prices.
To use this service, at least $5,000 in cash or shares at the public
offering price will have to be deposited with the Transfer Agent. The
maintenance of a withdrawal plan concurrently with purchases of additional Fund
shares would be disadvantageous if a sales charge is included in such purchases.
A shareholder may not have a withdrawal plan in effect at the same time he or
she has authorized Bank Automated Investing or is otherwise making regular
purchases of Fund shares. Either the shareholder, the Transfer Agent or the
Principal Underwriter will be able to terminate the withdrawal plan at any time
without penalty.
DETERMINATION OF NET ASSET VALUE
The net asset value of the Portfolio and of shares of the Fund is determined
by IBT (as agent and custodian for the Fund and the Portfolio) in the manner
described under "Valuing Fund Shares" in the Fund's current prospectus. The Fund
and the Portfolio will be closed for business and will not price their
respective shares or interests on the following business holidays: New Year's
Day, Presidents' Day, Good Friday (a New York Stock Exchange holiday), Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Securities listed on securities exchanges or in the NASDAQ National Market
are valued at closing sales prices. Unlisted or listed securities for which
closing sales prices are not available are valued at the mean between the latest
available bid and asked prices. An option or futures contract is valued at the
last sale price, as quoted on the principal exchange or board of trade on which
such option or futures contract is traded or, in the absence of a sale, at the
mean between the last bid and asked prices. Short-term obligations maturing in
sixty days or less are valued at amortized cost, which is believed to represent
fair value. Securities for which market quotations are unavailable, including
any security the disposition of which is restricted under the Securities Act of
1933, and other assets will be appraised at their fair value as determined in
good faith by or at the direction of the Trustees of the Portfolio.
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage, determined on the prior
Portfolio Business Day, which represented that investor's share of the aggregate
interests in the Portfolio on such prior day. Any additions or withdrawals for
the current Portfolio Business Day will then be recorded. Each investor's
percentage of the aggregate interest in the Portfolio will then be recomputed as
a percentage equal to a fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Portfolio Valuation Time on the
prior Portfolio Business Day plus or minus, as the case may be, the amount of
any additions to or withdrawals from the investor's investment in the Portfolio
on the current Portfolio Business Day and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of the Portfolio Valuation Time on
the prior Portfolio Business Day plus or minus, as the case may be, the amount
of the net additions to or withdrawals from the aggregate investment in the
Portfolio on the current Portfolio Business Day by all investors in the
Portfolio. The percentage so determined will then be applied to determine the
value of the investor's interest in the Portfolio for the current Portfolio
Business Day.
INVESTMENT PERFORMANCE
The Fund's total return and yield may be compared to the Consumer Price
Index and various domestic securities indices, for example: Standard & Poor's
Utilities Index, Standard & Poor's 400 Stock Index, Standard & Poor's 500 Stock
Index, Standard & Poor's Telephone Index, Standard & Poor's Natural Gas Index,
Standard & Poor's Electric Companies Index, Merrill Lynch U.S. Treasury (15-year
plus) Index, Lehman Brothers Government/Corporate Bond Index, Dow Jones 15
Utility Average, and the Dow Jones Industrial Average. The Fund's total return,
yield and comparisons with these indices may be used in advertisements and in
information furnished to present or prospective shareholders. The Fund's
performance may differ from that of other investors in the Portfolio, including
any other investment companies.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations, (e.g., Ibbotson Associates, Standard &
Poor's Ratings Group, Merrill Lynch, Pierce, Fenner & Smith, Inc., Bloomberg,
L.P., Dow Jones & Company, Inc., and The Federal Reserve Board) or included in
various publications (e.g., The Wall Street Journal, Barron's and The Decade:
Wealth of Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the
investment performance or return achieved by various classes and types of
investments (e.g., common stocks, small company stocks, long-term corporate
bonds, long-term government bonds, intermediate-term government bonds, U.S.
Treasury bills) over various periods of time. This information may be used to
illustrate the benefits of long-term investments in common stocks.
From time to time, information about the portfolio allocation and holdings
of the Portfolio may be included in advertisements and other material furnished
to present and prospective shareholders.
The Portfolio's asset allocation on March 31, 1995 was:
Percent of
net assets
----------
Common Stock 82.99%
Electric Utilities 54.55%
Telephone Utilities 8.38
Natural Gas 0.55
Oil 5.24
REITs 14.12
Other 0.15
Convertible Preferred 2.68
Convertible Bonds 3.51
Cash and Commercial Paper 10.82
----
Total 100.00%
The Portfolio's 10 largest common stock holdings on March 31, 1995 were:
Percent of
Company net assets
------- ----------
Cinergy 4.5%
FPL Group 4.4
DPL Inc. 4.0
Carolina Power & Light 3.3
DQE 2.7
Nipsco Industries 2.5
Ameritech 2.5
Central Louisiana Electric 2.5
Southern Company 2.5
Central Pacific & Southwest 2.4
---
Total 31.3%
From time to time, information, charts and illustrations showing the effect
of compounding interest may be included in advertisements and other material
furnished to present and prospective shareholders. Compounding is the process of
earning income on principal plus income that was earned earlier. Income can be
compounded annually, semi-annually, quarterly or daily, e.g., $1,000 compounded
annually at 9% will grow to $1,090 at the end of the first year and $1,188 at
the end of the second year. The extra $8, which was earned on the $90 income
from the first year, is the compound income. $1,000 compounded annually at 9%
grows to $2,367 at the end of 10 years and $5,604 at the end of 20 years. Other
examples of compounding $1,000 annually are 7% grows to $1,967 at the end of 10
years and $3,870 at the end of 20 years. At 12% the $1,000 grows to $3,106 at
the end of 10 years and $9,646 at the end of 20 years. All of these examples are
for illustrative purposes only and are not meant to indicate the performance of
the Fund.
From time to time, information, charts and illustrations relating to
inflation and the effects of inflation on the dollar may be included in
advertisements and other material furnished to present and prospective
shareholders.
For example: After 10 years, the purchasing power of $25,000 would shrink to
$16,621, $14,968, $13,465 and $12,100, respectively, if the annual rates of
inflation during such period were 4%, 5%, 6% and 7%, respectively. (To calculate
the purchasing power, the value at the end of each year is reduced by the above
inflation rates for 10 consecutive years.)
From time to time, evaluations of the Fund's performance made by independent
sources (e.g., Lipper Analytical Services, Inc., CDA/ Wiesenberger and
Morningstar, Inc.) may be used in advertisements and in information furnished to
present or prospective shareholders.
Information used in advertisements and in materials furnished to present and
prospective shareholders may include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds which may be employed
to meet specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents. These three
financial goals may be referred to in such advertisements or materials as the
"Triple Squeeze."
For additional information on the Fund's investment performance, see
"Performance Information" in Part II of this Statement of Additional
Information.
TAXES
See "Distributions and Taxes" in the Fund's current prospectus.
Each series of the Trust is treated as a separate entity for Federal income
tax purposes. The Fund has elected to be treated, has qualified, and intends to
continue to qualify each year as a regulated investment company ("RIC") under
the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the
Fund intends to satisfy certain requirements relating to sources of its income
and diversification of its assets and to distribute all of its net investment
income and net realized capital gains in accordance with the timing requirements
imposed by the Code, so as to avoid any Federal income or excise tax to the
Fund. The Fund so qualified for its taxable year ended December 31, 1994 (see
the Notes to Financial Statements). Because the Fund invests its assets in the
Portfolio, the Portfolio normally must satisfy the applicable source of income
and diversification requirements in order for the Fund to satisfy them. The
Portfolio will allocate at least annually among its investors, including the
Fund, the Portfolio's net investment income, net realized capital gains, and any
other items of income, gain, loss, deduction or credit. The Portfolio will make
allocations to the Fund in accordance with the Code and applicable regulations
and will make moneys available for withdrawal at appropriate times and in
sufficient amounts to enable the Fund to satisfy the tax distribution
requirements that apply to the Fund and that must be satisfied in order to avoid
Federal income and/or excise tax on the Fund. For purposes of applying the
requirements of the Code regarding qualification as a RIC, the Fund will be
deemed (i) to own its proportionate share of each of the assets of the Portfolio
and (ii) to be entitled to the gross income of the Portfolio attributable to
such share.
In order to avoid Federal excise tax, the Code requires that the Fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses, generally computed on the basis of the one-year period
ending on October 31 of such year or, by election, December 31 of such year,
after reduction by any available capital loss carryforwards, and 100% of any
income from the prior year (as previously computed) that was not paid out during
such year and on which the Fund paid no Federal income tax.
Under current law, provided that the Fund qualifies as a RIC for Federal
income tax purposes and the Portfolio is treated as a partnership for
Massachusetts and Federal tax purposes, neither the Fund nor the Portfolio is
liable for any income, excise or franchise tax in the Commonwealth of
Massachusetts.
Distributions of net investment income and the excess of net short-term
capital gain over net long-term capital loss and certain foreign exchange gains
earned by the Portfolio and allocated to the Fund are taxable to shareholders of
the Fund as ordinary income whether received in cash or reinvested in additional
shares. Distributions of the excess of net long-term capital gain over net
short-term capital loss (including any capital loss carried forward from prior
years) earned by the Portfolio and allocated to the Fund are taxable to
shareholders of the Fund as long-term capital gains, whether received in cash or
reinvested in additional shares, and regardless of the length of time their
shares have been held.
Distributions by the Fund reduce the net asset value of the Fund's shares.
Should a distribution reduce the net asset value below a shareholder's cost
basis, such distribution would be taxable to the shareholder even though, from
an investment standpoint, it may constitute a return of capital. Therefore,
investors should consider the tax implications of buying shares immediately
before a distribution.
A portion of distributions made by the Fund which are derived from dividends
received by the Portfolio from domestic corporations and allocated to the Fund
may qualify for the dividends-received deduction for corporations. The
dividends-received deduction for corporate shareholders is reduced to the extent
the shares of the Fund with respect to which the dividends are received are
treated as debt-financed under Federal income tax law and is eliminated if the
shares are deemed to have been held for less than a minimum period, generally 46
days. Receipt of certain distributions qualifying for the deduction may result
in reduction of the tax basis of the corporate shareholder's shares.
Distributions eligible for the dividends-received deduction may give rise to or
increase an alternative minimum tax for corporations.
Any loss realized upon the redemption or exchange of shares of the Fund with
a tax holding period of 6 months or less will be treated as a long-term capital
loss to the extent of any distribution of net long-term capital gains with
respect to such shares. In addition, all or a portion of a loss realized on a
redemption or other disposition of Fund shares may be disallowed under "wash
sale" rules if other Fund shares are acquired (whether through reinvestment of
dividends or otherwise) within a period beginning 30 days before and ending 30
days after the date of such redemption or other disposition. Any disallowed loss
will result in an adjustment to the shareholder's tax basis in some or all of
the other shares acquired.
The Portfolio's transactions in options and futures contracts will be
subject to special tax rules that may affect the amount, timing and character of
Fund distributions to shareholders. For example, certain positions held by the
Portfolio on the last business day of each taxable year will be marked to market
(i.e., treated as if closed out on such day), and any resulting gain or loss
will generally be treated as 60% long-term and 40% short-term capital gain or
loss. Certain positions held by the Portfolio that substantially diminish the
Portfolio's risk of loss with respect to other positions in its portfolio may
constitute "straddles," which are subject to tax rules that may cause deferral
of Portfolio losses, adjustments in the holding period of Portfolio securities
and conversion of short-term into long-term capital losses. The Portfolio may
have to limit its activities in options and futures contracts in order to enable
the Fund to maintain its qualification as a RIC.
The Portfolio may be subject to foreign withholding or other foreign taxes
with respect to income (possibly including, in some cases, capital gains) on
certain foreign securities. As it is not expected that more than 50% of the
value of the Fund's total assets, taking into account its allocable share of the
Portfolio's total assets at the close of any taxable year of the Fund, will
consist of securities issued by foreign corporations, the Fund will not be
eligible to pass through to shareholders their proportionate share of foreign
taxes paid by the Portfolio and allocated to the Fund, with the result that
shareholders will not include in income, and will not be entitled to take any
foreign tax credits or deductions for, foreign taxes paid by the Portfolio and
allocated to the Fund. However, the Fund may deduct such taxes in calculating
its distributable income earned by the Portfolio and allocated to the Fund.
These taxes may be reduced or eliminated under the terms of an applicable U.S.
income tax treaty. Certain foreign exchange gains and losses realized by the
Portfolio and allocated to the Fund will be treated as ordinary income and
losses. Certain uses of foreign currency and investment by the Portfolio in the
stock of certain "passive foreign investment companies" may be limited or a tax
election may be made, if available, in order to preserve the Fund's
qualification as a RIC and/or avoid imposition of a tax on the Fund.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and other
retirement plans and shareholders investing through IRAs or such plans should
consult their tax advisers for more information.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain required certifications, as well as shareholders with respect to whom
the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of Federal income tax from the
Fund's dividends and distributions and the proceeds of redemptions (including
repurchases and exchanges), at a rate of 31%. An individual's taxpayer
identification number is generally his or her social security number.
Non-resident alien individuals and certain foreign corporations and other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short-term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. Federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as IRAs and other retirement plans,
tax-exempt entities, insurance companies and financial institutions.
Shareholders should consult their own tax advisers with respect to special tax
rules that may apply in their particular situations, as well as the state, local
or foreign tax consequences of investing in the Fund.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions of the
Portfolio, including the selection of the market and the broker-dealer firm, are
made by BMR. BMR is also responsible for the execution of transactions for all
other accounts managed by it.
BMR places the portfolio security transactions of the Portfolio and of all
other accounts managed by it for execution with many broker-dealer firms. BMR
uses its best efforts to obtain execution of portfolio security transactions at
prices which are advantageous to the Portfolio and (when a disclosed commission
is being charged) at reasonably competitive commission rates. In seeking such
execution, BMR will use its best judgment in evaluating the terms of a
transaction, and will give consideration to various relevant factors, including
without limitation the size and type of the transaction, the general execution
and operational capabilities of the broker-dealer, the nature and character of
the market for the security, the confidentiality, speed and certainty of
effective execution required for the transaction, the reputation, reliability,
experience and financial condition of the broker-dealer, the value and quality
of services rendered by the broker-dealer in other transactions, and the
reasonableness of the commission, if any. Transactions on United States stock
exchanges and other agency transactions involve the payment by the Portfolio of
negotiated brokerage commissions. Such commissions vary among different
broker-dealer firms, and a particular broker-dealer may charge different
commissions according to such factors as the difficulty and size of the
transaction and the volume of business done with such broker-dealer.
Transactions in foreign securities usually involve the payment of fixed
brokerage commissions, which are generally higher than those in the United
States. There is generally no stated commission in the case of securities traded
in the over-the-counter markets, but the price paid or received by the Portfolio
usually includes an undisclosed dealer markup or markdown. In an underwritten
offering the price paid by the Portfolio includes a disclosed fixed commission
or discount retained by the underwriter or dealer. Although commissions paid on
portfolio security transactions will, in the judgment of BMR, be reasonable in
relation to the value of the services provided, commissions exceeding those
which another firm might charge may be paid to broker-dealers who were selected
to execute transactions on behalf of the Portfolio and BMR's other clients in
part for providing brokerage and research services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Portfolio
may receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if BMR
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided. This determination may be
made on the basis of either that particular transaction or on the basis of the
overall responsibilities which BMR and its affiliates have for accounts over
which they exercise investment discretion. In making any such determination, BMR
will not attempt to place a specific dollar value on the brokerage and research
services provided or to determine what portion of the commission should be
related to such services. Brokerage and research services may include advice as
to the value of securities, the advisability of investing in, purchasing, or
selling securities, and the availability of securities or purchasers or sellers
of securities; furnishing analyses and reports concerning issuers, 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); and the "Research
Services" referred to in the next paragraph.
It is a common practice in the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-dealer firms whch
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, BMR receives Research Services from many broker-dealer firms with
which BMR places the Portfolio transactions and from third parties with which
these broker-dealers have arrangements. These Research Services include such
matters as general economic and market reviews, industry and company reviews,
evaluations of securities and portfolio strategies and transactions,
recommendations as to the purchase and sale of securities and other portfolio
transactions, financial, industry and trade publications, news and information
services, pricing and quotation equipment and services, and research oriented
computer hardware, software, data bases and services. Any particular Research
Service obtained through a broker-dealer may be used by BMR in connection with
client accounts other than those accounts which pay commissions to such
broker-dealer. Any such Research Service may be broadly useful and of value to
BMR in rendering investment advisory services to all or a significant portion of
its clients, or may be relevant and useful for the management of only one
client's account or of a few clients' accounts, or may be useful for the
management of merely a segment of certain clients' accounts, regardless of
whether any such account or accounts paid commissions to the broker-dealer
through which such Research Service was obtained. The advisory fee paid by the
Portfolio is not reduced because BMR receives such Research Services. BMR
evaluates the nature and quality of the various Research Services obtained
through broker-dealer firms and attempts to allocate sufficient commissions to
such firms to ensure the continued receipt of Research Services which BMR
believes are useful or of value to it in rendering investment advisory services
to its clients.
Subject to the requirement that BMR shall use its best efforts to seek to
execute portfolio security transactions at advantageous prices and at reasonably
competitive commission rates. BMR is authorized to consider as a factor in the
selection of any broker-dealer firm with whom portfolio orders may be placed the
fact that such firm has sold or is selling shares of the Fund or of other
investment companies sponsored by BMR or Eaton Vance. This policy is not
inconsistent with a rule of the National Association of Securities Dealers,
Inc., which rule provides that no firm which is a member of the Association
shall favor or disfavor the distribution of shares of any particular investment
company or group of investment companies on the basis of brokerage commissions
received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates. BMR
will attempt to allocate equitably portfolio security transactions among the
Portfolio and the portfolios of its other investment accounts whenever decisions
are made to purchase or sell securities by the Portfolio and one or more of such
other accounts simultaneously. In making such allocations, the main factors to
be considered are the respective investment objectives of the Portfolio and such
other accounts, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Portfolio
and such accounts, the size of investment commitments generally held by the
Portfolio and such accounts and the opinions of the persons responsible for
recommending investments to the Portfolio and such accounts. While this
procedure could have a detrimental effect on the price or amount of the
securities available to the Portfolio from time to time, it is the opinion of
the Trustees of the Trust and the Portfolio that the benefits available from the
BMR organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions.
For the fiscal year ended December 31, 1994, and for the period from the
start of business, October 28, 1993, to December 31, 1993, the Portfolio paid
brokerage commissions of $1,997,260 and $382,786, respectively, on portfolio
security transactions, of which approximately $1,509,827 and $211,594,
respectively, was paid in respect of portfolio security transactions aggregating
approximately $718,689,809 and $126,205,010, respectively, to firms which
provided some research services to BMR or its affiliates (although many of such
firms may have been selected in any particular transaction primarily because of
their execution capabilities).
OTHER INFORMATION
The Trust, which is a Massachusetts business trust established in 1981, was
originally called Eaton Vance Tax Managed Trust. The Trust changed its name to
Eaton Vance Total Return Trust on August 22, 1986. Eaton Vance, pursuant to its
agreement with the Trust, controls the use of the words "Eaton Vance" in the
Fund's name and may use the words "Eaton Vance" in other connections and for
other purposes.
The Trust's Amended and Restated Declaration of Trust may be amended by the
Trustees when authorized by vote of a majority of the outstanding voting
securities of the Trust, the financial interests of which are affected by the
amendment. The Trustees may also amend the Declaration of Trust without the vote
or consent of shareholders to change the name of the Trust or any series or to
make such other changes as do not have a materially adverse effect on the
financial interests of shareholders or if they deem it necessary to conform it
to applicable Federal or state laws or regulations. The Trust or any series or
class thereof may be terminated by: (1) the affirmative vote of the holders of
not less than two-thirds of the shares outstanding and entitled to vote at any
meeting of shareholders of the Trust or the appropriate series or class thereof,
or by an instrument or instruments in writing without a meeting, consented to by
the holders of two-thirds of the shares of the Trust or a series or class
thereof, provided, however, that, if such termination is recommended by the
Trustees, the vote of a majority of the outstanding voting securities of the
Trust or a series or class thereof entitled to vote thereon shall be sufficient
authorization; or (2) by means of an instrument in writing signed by a majority
of the Trustees, to be followed by a written notice to shareholders stating that
a majority of the Trustees has determined that the continuation of the Trust or
a series or a class thereof is not in the best interest of the Trust, such
series or class or of their respective shareholders.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law; 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. The Trust's by-laws provide that a Trustee may be removed at any special
meeting of the shareholders of the Trust by a vote of two-thirds of the
outstanding shares of beneficial interest of the Trust (the "shares"). The
Trustees will promptly call a meeting of shareholders for the purpose of voting
upon a question of removal of a Trustee when requested so to do by the record
holders of not less than 10 per centum of the outstanding shares.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's by-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interests
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The right to redeem can be suspended and the payment of the redemption price
deferred when the Exchange is closed (other than customary weekend and holiday
closings), during periods when trading on the Exchange is restricted as
determined by the Commission, or during any emergency as determined by the
Commission which makes it impracticable for the Portfolio to dispose of its
securities or value its assets, or during any other period permitted by order of
the Commission for the protection of investors.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts, are
the independent accountants for the Fund and the Portfolio, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the Securities and Exchange Commission.
For the financial statements of the Fund and the Portfolio, see "Financial
Statements" in Part II of this Statement of Additional Information.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV CLASSIC TOTAL RETURN FUND.
FEES AND EXPENSES
INVESTMENT ADVISER
To enhance the net income of the Fund, BMR voluntarily assumed $3,841 of the
Fund's expenses in the period from the start of business, November 1, 1993 to
December 31, 1993.
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund. For the fiscal year ended
December 31, 1994, $51,784 of the Fund's operating expenses were allocated to
the Administrator.
DISTRIBUTION PLAN
For the fiscal year ended December 31, 1994, the Fund accrued sales
commission payments under the Plan aggregating $37,182, of which $36,946 was
paid to the Principal Underwriter. The Principal Underwriter paid $36,758 as
sales commissions to Authorized Firms and the balance was retained by the
Principal Underwriter. As at December 31, 1994, the outstanding uncovered
distribution charges of the Principal Underwriter calculated under the Plan
amounted to approximately $440,459 (which amount was equivalent to 7.9% of the
Fund's net assets on such day). For the fiscal year ended December 31, 1994, the
Fund accrued service fee payments under the Plan aggregating $12,526, of which
$12,218 was paid to the Principal Underwriter. The Principal Underwriter paid
such amount as service fee payments to Authorized Firms.
PRINCIPAL UNDERWRITER
For the fiscal year ended December 31, 1994, the Fund paid the Principal
Underwriter $140 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each such transaction).
CUSTODIAN
For the fiscal year ended December 31, 1994, the Fund paid IBT $10,640.
<TABLE>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton Vance
organization (the noninterested Trustees) are paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. (The Trustees of the Trust and of the Portfolio who are members of the Eaton Vance organization receive no
compensation from the Fund or the Portfolio.) During the fiscal year ended December 31, 1994, the noninterested Trustees of the
Trust and the Portfolio earned the following compensation in their capacities as Trustees from the Fund, the Portfolio and the
other funds in the Eaton Vance fund complex<F1>
<CAPTION>
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
- ---- ------------- -------------- ----------------- -----------
<S> <C> <C> <C> <C>
Donald R. Dwight ............................ $59 $4,119<F2> $8,750 $135,000
Samuel L. Hayes, III ........................ 56 4,079<F3> 8,865 142,500
Noton H. Reamer ............................. 55 4,002 --0-- 135,000
John L. Thorndike ........................... 56 4,140 --0-- 140,000
Jack L. Treynor ............................. 60 4,247 --0-- 140,000
- ----------
<FN>
<F1>Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Includes $331 of deferred compensation.
<F3>Includes $334 of deferred compensation.
</TABLE>
PERFORMANCE INFORMATION
The average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes that all dividends and distributions are reinvested at net
asset value on the reinvestment dates during the period and a complete
redemption of the investment and, if applicable, the deduction of a contingent
deferred sales charge at the end of the period.
The table below indicates the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from November 1, 1993 through December 31,
1994, and the one year period ended December 31, 1994.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF TOTAL RETURN
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT -----------------------
PERIOD DATE INVESTMENT ON 12/31/94 CUMULATIVE ANNUALIZED
- ---------- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Life of the Fund<F1> 11/01/93 $1,000 $ 877.40<F2> - 12.26 - 10.62
1 Year Ended 12/31/94 12/31/93 $1,000 $ 870.16<F2> - 12.98 - 12.98
<CAPTION>
PERCENTAGE CHANGES
NOVEMBER 1, 1993 TO DECEMBER 31, 1994
NET ASSET VALUE TO NET ASSET VALUE
WITH ALL DISTRIBUTIONS REINVESTED
-------------------------------------------------------------------------
FISCAL YEAR ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL
----------------- ------ ---------- --------------
<S> <C> <C> <C>
12/31/93<F1> -- 0.83%<F2> --
12/31/94 - 12.98%<F2> - 12.26%<F2> - 10.62<F2>
Past performance is not indicative of future results. Investment return and principal value will fluctuate and shares, when
redeemed, may be worth more or less than their original cost.
- ------------
<FN>
<F1>Investment operations began on November 1, 1993.
<F2>If a portion of the expenses related to the operation of the Fund had not been allocated to Eaton Vance and the contingent
deferred sales charge applicable to shares purchased on or after January 30, 1995 had been imposed, the Fund would have had
lower returns.
</TABLE>
The Fund's yield is computed pursuant to a standardized formula by dividing
its net investment income per share earned during a recent thirty-day period by
the maximum offering price (net asset value) per share on the last day of the
period and annualizing the resulting figure. Net investment income per share is
calculated using a standardized formula the income component of which is
computed from dividends on equity securities held by the Portfolio based on the
stated annual dividend rates of such securities, exclusive of special or extra
distributions (with all purchases and sales of securities during such period
included in the income calculation on a settlement date basis), and from the
income earned on short-term debt instruments held by the Portfolio, and such
income is then reduced by accrued Fund expenses for the period, with the
resulting number being divided by the average daily number of Fund shares
outstanding and entitled to receive dividends during the period. This yield
figure does not reflect the deduction of the contingent deferred sales charge
imposed on certain redemptions of shares within one year of their purchase. See
"How to Redeem Fund Shares" in the Prospectus. For the thirty-day period ended
December 31, 1994, the yield of the Fund was 3.17%. If a portion of the expenses
related to the operation of the Fund had not been allocated to Eaton Vance, the
Fund would have had a lower yield.
The Fund may publish its distribution rate and/or its effective distribution
rate. The Fund's distribution rate is computed by dividing the most recent
monthly distribution per share annualized, by the current net asset value per
share. The Fund's effective distribution rate is computed by dividing the
distribution rate by 12 and reinvesting the resulting amount for a full year on
a monthly basis. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
Investors should note that the Fund's yield is calculated using a standardized
formula, the income component of which is computed from dividends on equity
securities and from the income earned on short-term debt instruments held by the
Portfolio, whereas the distribution rate is based on the Fund's last monthly
distribution. Monthly distributions tend to be relatively stable and may be more
or less than the amount of net investment income and short-term capital gain
actually earned by the Fund during the month. The Fund's distribution rate
(calculated on December 30, 1994 and based on the Fund's monthly distribution
paid on December 22, 1994) was 3.15%, and the Fund's effective distribution rate
(calculated on the same date and based on the same monthly distribution) was
3.19%. If a portion of the expenses related to the operation of the Fund had not
been allocated to Eaton Vance, the Fund would have had a lower distribution rate
and effective distribution rate.
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to Authorized Firms or investors and other selling
literature and of advertising is borne by the Principal Underwriter. The fees
and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under Federal and state securities laws
is borne by the Fund. In addition, the Fund makes payments to the Principal
Underwriter pursuant to its Distribution Plan as described in the Fund's current
Prospectus; the provisions of the Plan relating to such payments are included in
the Distribution Agreement. The Distribution Agreement is renewable annually by
the Trust's Board of Trustees (including a majority of its Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Fund's Distribution Plan or the Distribution
Agreement), may be terminated on sixty days' notice either by such Trustees or
by vote of a majority of the outstanding voting securities of the Fund or on six
months' notice by the Principal Underwriter, and is automatically terminated
upon assignment. The Principal Underwriter distributes Fund shares on a "best
efforts" basis under which it is required to take and pay for only such shares
as may be sold.
The Fund has authorized the Principal Underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction handled
by the Principal Underwriter. The Principal Underwriter estimates that the
expenses incurred by it in acting as repurchase agent for the Fund will exceed
the amounts paid therefor by the Fund. For the amount paid by the Fund to the
Principal Underwriter for acting as repurchase agent, see "Fees and Expenses" in
this Part II.
DISTRIBUTION PLAN
The Distribution Plan ("the Plan") is described in the prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan as sales commissions and distribution fees with respect to each day will be
accrued on such day as a liability of the Fund and will accordingly reduce the
Fund's net assets upon such accrual, all in accordance with generally accepted
accounting principles. The amount payable on each day is limited to 1/365 of
.75% of the Fund's net assets on such day. The level of the Fund's net assets
changes each day and depends upon the amount of sales and redemptions of Fund
shares, the changes in the value of the investments held by the Portfolio, the
expenses of the Fund and the Portfolio accrued and allocated to the Fund on such
day, income on portfolio investments of the Portfolio accrued and allocated to
the Fund on such day, and any dividends and distributions declared on Fund
shares. The Fund does not accrue possible future payments as a liability of the
Fund or reduce the Fund's current net assets in respect of unknown amounts which
may become payable under the Plan in the future because the standards for
accrual of a liability under such accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
In calculating daily the amount of Uncovered Distribution Charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid or payable
under the Plan by the Fund to the Principal Underwriter and contingent deferred
sales charges theretofore paid or payable to the Principal Underwriter will be
subtracted from such distribution charges; if the result of such subtraction is
positive, a distribution fee (computed at 1% over the prime rate then reported
in The Wall Street Journal ) will be computed on such amount and added thereto,
with the resulting sum constituting the amount of outstanding uncovered
distribution charges with respect to such day. The amount of outstanding
uncovered distribution charges of the Principal Underwriter calculated on any
day does not constitute a liability recorded on the financial statements of the
Fund.
The amount of Uncovered Distribution Charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Classic Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan. (For shares sold prior to January 30, 1995,
Plan payments are as follows: the Principal Underwriter pays monthly sales
commissions and service fee payments to Authorized Firms equivalent to
approximately .75% and .25%, respectively, annualized of the assets maintained
in the Fund by their customers beginning at the time of sale. No payments were
made at the time of sale, and there is no contingent deferred sales charge.)
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions, distribution fees and service fees to the Principal
Underwriter which may be equivalent, on an aggregate basis during any fiscal
year of the Fund, to 1% of the Fund's average daily net assets for such year.
For the sales commission and service fee payments made by the Fund and the
outstanding uncovered distribution changes of the Principal Underwriter, see
"Fees and Expenses--Distribution Plan" in this Part II. The Fund believes that
the combined rate of all these payments may be higher than the rate of payments
made under distribution plans adopted by other investment companies pursuant to
Rule 12b-1. Although the Principal Underwriter will use its own funds (which may
be borrowed from banks) to pay sales commissions and service fees at the time of
sale, it is anticipated that the Eaton Vance organization will profit by reason
of the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from sale
of Fund shares and through the amounts paid to the Principal Underwriter,
including contingent deferred sales charges, pursuant to the Plan. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts theretofore paid to the Principal
Underwriter under the Plan, and from contingent deferred sales charges, have
exceeded the total expenses theretofore incurred by such organization in
distributing shares of the Fund. Total expenses for this purpose will include an
allocable portion of the overhead costs of such organization and its branch
offices, which costs will include without limitation leasing expense,
depreciation of building and equipment, utilities, communication and postage
expense, compensation and benefits of personnel, travel and promotional expense,
stationery and supplies, literature and sales aids, interest expense, data
processing fees, consulting and temporary help costs, insurance, taxes other
than income taxes, legal and auditing expense and other miscellaneous overhead
items. Overhead is calculated and allocated for such purpose by the Eaton Vance
organization in a manner deemed equitable to the Fund.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the
Trust, including the Rule 12b-1 Trustees. The Plan continues in effect through
and including April 28, 1996, and shall continue in effect indefinitely
thereafter for so long as such continuance is approved at least annually by the
vote of both a majority of (i) the Trustees of the Trust who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or any agreements related to the Plan (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office, and the Distribution
Agreement contains a similar provision. The Plan and Distribution Agreement may
be terminated at any time by vote of a majority of the Rule 12b-1 Trustees or by
a vote of a majority of the outstanding voting securities of the Fund. Under the
Plan the President or a Vice President of the Trust shall provide to the
Trustees for their review, and the Trustees shall review at least quarterly, a
written report of the amount expended under the Plan and the purposes for which
such expenditures were made. The Plan may not be amended to increase materially
the payments described therein without approval of the shareholders of the Fund,
and all material amendments of the Plan must also be approved by the Trustees as
required by Rule 12b-1. So long as the Plan is in effect, the selection and
nomination of Trustees who are not interested persons of the Trust shall be
committed to the discretion of the Trustees who are not such interested persons.
The Trustees of the Trust believe that the Plan will be a significant factor
in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of March 31, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
March 31, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc., New Brunswick, NJ
was the record owner of approximately 11.98% of the outstanding shares of the
Fund, which were held on behalf of its customers who are the beneficial owners
of such shares, and as to which it had voting power under certain limited
circumstances. In addition, as of March 31, 1995, Resources Trust Co., Trustee
for the benefit of James L. Farkas IRA under Agreement dated 11/9/93, Denver,
CO, owned beneficially and of record 14.95% of the outstanding shares of the
Fund. To the knowledge of the Trust, no other person owned of record or
beneficially 5% or more of the Fund's outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession No. 0000950156-95-000075).
<PAGE>
PORTFOLIO INVESTMENT ADVISER
Boston Management and Research
24 Federal Street
Boston, MA 02110
FUND ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS 725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV CLASSIC
TOTAL RETURN FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-TRSAI
EV CLASSIC
TOTAL RETURN FUND
STATEMENT OF ADDITIONAL
INFORMATION
MAY 1, 1995
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV MARATHON TOTAL RETURN FUND.
FEES AND EXPENSES
INVESTMENT ADVISER
To enhance the net income of the Fund, BMR voluntarily assumed $14,358 of
the Fund's expenses in the period from the start of business, November 1, 1993,
to December 31, 1993.
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund.
DISTRIBUTION PLAN
During the fiscal year ended December 31, 1994, the Fund paid sales
commissions under the Plan to the Principal Underwriter aggregating $167,071,
which amount was used by the Principal Underwriter to partially defray sales
commissions aggregating $723,532 paid during such period by the Principal
Underwriter to Authorized Firms on sales of shares of the Fund. During such
period contingent deferred sales charges aggregating approximately $118,019 were
imposed on early redeeming shareholders and paid to the Principal Underwriter,
which amount was used by the Principal Underwriter to partially defray such
sales commissions. As at December 31, 1994 the outstanding uncovered
distribution charges of the Principal Underwriter calculated under the Plan
amounted to approximately $1,322,445 (which amount was equivalent to 5.0% of the
Fund's net assets on such day). For the fiscal year ended December 31, 1994, the
Fund did not pay or accrue any service fees under the Plan. The Fund began
accruing for its service fee payments in the quarter ended March 31, 1995.
PRINCIPAL UNDERWRITER
For the fiscal year ended December 31, 1994, the Fund paid the Principal
Underwriter $447.50 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each such transaction).
CUSTODIAN
For the fiscal year ended December 31, 1994, the Fund paid IBT $12,357.
<TABLE>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton Vance organization
(the noninterested Trustees) are paid by the Fund (and the other series of the Trust) and the Portfolio, respectively. (The
Trustees of the Trust and of the Portfolio who are members of the Eaton Vance organization receive no compensation from the Trust
or the Portfolio.) During the fiscal year ended December 31, 1994, the noninterested Trustees of the Trust and the Portfolio
earned the following compensation in their capacities as Trustees from the Fund, the Portfolio and the other funds in the Eaton
Vance fund complex<F1>:
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
- ---- ------------- -------------- ----------------- -----------
<S> <C> <C> <C> <C>
Donald R. Dwight ............................ $68 $4,119<F2> $8,750 $135,000
Samuel L. Hayes, III ........................ 65 4,079<F3> 8,865 142,500
Norton H. Reamer ............................ 63 4,002 --0-- 135,000
John L. Thorndike ........................... 64 4,140 --0-- 140,000
Jack L. Treynor ............................. 68 4,247 --0-- 140,000
- ----------
<F1>Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Includes $331 of deferred compensation.
<F3>Includes $334 of deferred compensation.
</TABLE>
PERFORMANCE INFORMATION
The average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes that all dividends and distributions are reinvested at net
asset value on the reinvestment dates during the period and a complete
redemption of the investment and, if applicable, the deduction of a contingent
deferred sales charge at the end of the period.
The table below indicates the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from November 1, 1993, through December 31,
1994 and the one-year period ended December 31, 1994.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF INVEST- VALUE OF INVEST-
MENT BEFORE DE- MENT AFTER DEDUCT-
DUCTING THE CON- ING THE CONTINGENT TOTAL RETURN BEFORE DEDUCTING TOTAL RETURN AFTER DEDUCTING
TINGENT DEFERRED DEFERRED SALES THE CONTINGENT DEFERRED THE CONTINGENT DEFERRED
INVESTMENT INVESTMENT AMOUNT OF SALES CHARGE CHARGE<F3> SALES CHARGE SALES CHARGE<F3>
PERIOD DATE INVESTMENT ON 12/31/94 ON 12/31/94 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ---------- ---------- ---------- ------------- ------------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of
the Fund<F1> 11/01/93 $1,000 $1,000 $ 872.95<F2> -12.71%<F2> -11.01%<F2> -16.86%<F2> -14.66%<F2>
1 Year
Ended
12/31/94 12/31/93 $1,000 $1,000 $ 832.48 -12.57% -12.57% -16.75% -16.75%
<CAPTION>
PERCENTAGE CHANGES 11/01/93--12/31/94
NET ASSET VALUE TO NET ASSET VALUE NET ASSET VALUE TO NET ASSET VALUE
BEFORE DEDUCTING THE CONTINGENT DEFERRED AFTER DEDUCTING THE CONTINGENT DEFERRED
SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED SALES CHARGE*** WITH ALL DISTRIBUTIONS REINVESTED
------------------------------------------------------- -----------------------------------------------------
FISCAL YEAR ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
- ----------------- ------ ---------- -------------- ------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
12/31/93<F1> -- -0.15%<F2> -- -- -5.12%<F2> --
12/31/94 -12.57% -12.71%<F2> -11.01%<F2> -16.75% -16.86%<F2> -14.66<F2>
Past performance is not indicative of future results. Investment return and principal value will fluctuate; shares, when
redeemed, may be worth more or less than their original cost.
- ----------
<FN>
<F1>Investment operations began on November 1, 1993.
<F2>If a portion of the expenses related to the operation of the Fund had not been allocated to Eaton Vance, the Fund would have had
lower returns.
<F3>No contingent deferred sales charge is imposed on shares purchased more than six years prior to the redemption, shares acquired
through the reinvestment of distributions, or any appreciation in value of other shares in the account, and no such charge is
imposed on exchanges of Fund shares for shares of one or more other funds listed under "The Eaton Vance Exchange Privilege" in
the Prospectus.
</TABLE>
The Fund's yield is computed pursuant to a standardized formula by dividing
its net investment income per share earned during a recent thirty-day period by
the maximum offering price (net asset value) per share on the last day of the
period and annualizing the resulting figure. Net investment income per share is
calculated using a standardized formula the income component of which is
computed from dividends on equity securities held by the Portfolio based on the
stated annual dividend rates of such securities, exclusive of special or extra
distributions (with all purchases and sales of securities during such period
included in the income calculation on a settlement date basis), and from the
income earned on short-term debt instruments held by the Portfolio, and such
income is then reduced by accrued Fund expenses for the period, with the
resulting number being divided by the average daily number of Fund shares
outstanding and entitled to receive dividends during the period. The yield
figure does not reflect the deduction of any contingent deferred sales charges
which are imposed upon certain redemptions of shares at the rates set forth
under "How to Redeem Fund Shares" in the Prospectus. For the thirty-day period
ended December 31, 1994, the yield of the Fund was 3.52%.
The Fund may publish its distribution rate and/or its effective distribution
rate. The Fund's distribution rate is computed by dividing the most recent
monthly distribution per share annualized, by the current net asset value per
share. The Fund's effective distribution rate is computed by dividing the
distribution rate by 12 and reinvesting the resulting amount for a full year on
a monthly basis. The effective distribution rate will be higher than the
distribution rate because of the compounding effect of the assumed reinvestment.
Investors should note that the Fund's yield is calculated using a standardized
formula the income component of which is computed from dividends on equity
securities and from the income earned on short-term debt instruments held by the
Portfolio, whereas the distribution rate is based on the Fund's last monthly
distribution. Monthly distributions tend to be relatively stable and may be more
or less than the amount of net investment income and short-term capital gain
actually earned by the Fund during the month. The Fund's distribution rate
(calculated on December 31, 1994 and based on the Fund's monthly distribution
paid on December 15, 1994) was 3.61%, and the Fund's effective distribution rate
(calculated on the same date and based on the same monthly distribution) was
3.67%.
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to Authorized Firms or investors and other selling
literature and of advertising is borne by the Principal Underwriter. The fees
and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under Federal and state securities laws
is borne by the Fund. In addition, the Fund makes payments to the Principal
Underwriter pursuant to its Distribution Plan as described in the Fund's current
Prospectus; the provisions of the Plan relating to such payments are included in
the Distribution Agreement. The Distribution Agreement is renewable annually by
the Trust's Board of Trustees (including a majority of its Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Fund's Distribution Plan or the Distribution
Agreement), may be terminated on sixty days' notice either by such Trustees or
by vote of a majority of the outstanding voting securities of the Fund or on six
months' notice by the Principal Underwriter, and is automatically terminated
upon assignment. The Principal Underwriter distributes Fund shares on a "best
efforts" basis under which it is required to take and pay for only such shares
as may be sold.
The Fund has authorized the Principal Underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction handled
by the Principal Underwriter. The Principal Underwriter estimates that the
expenses incurred by it in acting as a repurchase agent for the Fund will exceed
the amounts paid therefor by the Fund. For the amount paid by the Fund to the
Principal Underwriter for acting as repurchase agent, see "Fees and Expenses" in
this Part II.
DISTRIBUTION PLAN
The Distribution Plan (the "Plan") is described in the prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's prospectus.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan as sales commissions and distribution fees with respect to each day will be
accrued on such day as a liability of the Fund and will accordingly reduce the
Fund's net assets upon such accrual, all in accordance with generally accepted
accounting principles. The amount payable on each day is limited to 1/365 of
.75% of the Fund's net assets on such day. The level of the Fund's net assets
changes each day and depends upon the amount of sales and redemptions of Fund
shares, the changes in the value of the investments held by the Portfolio, the
expenses of the Fund and the Portfolio accrued and allocated to the Fund on such
day, income on portfolio investments of the Portfolio accrued and allocated to
the Fund on such day, and any dividends and distributions declared on Fund
shares. The Fund does not accrue possible future payments as a liability of the
Fund or reduce the Fund's current net assets in respect of unknown amounts which
may become payable under the Plan in the future because the standards for
accrual of a liability under such accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
In calculating daily the amount of Uncovered Distribution Charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid and
payable under the Plan by the Fund to the Principal Underwriter and contingent
deferred sales charges theretofore paid and payable to the Principal Underwriter
will be subtracted from such distribution charges; if the result of such
subtraction is positive, a distribution fee (computed at 1% over the prime rate
then reported in The Wall Street Journal) will be computed on such amount and
added thereto, with the resulting sum constituting the amount of outstanding
uncovered distribution charges with respect to such day. The amount of
outstanding uncovered distribution charges of the Principal Underwriter
calculated on any day does not constitute a liability recorded on the financial
statements of the Fund.
The amount of Uncovered Distribution Charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Marathon Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan.
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions and distribution fees to the Principal Underwriter and service
fees to the Principal Underwriter and Authorized Firms which may be equivalent,
on an aggregate basis during any fiscal year of the Fund, to 1% of the Fund's
average daily net assets for such year. For the sales commission and service fee
payments made by the Fund and the outstanding uncovered distribution charges of
the Principal Underwriter, see "Fees and Expenses -- Distribution Plan" in this
Part II. The Fund believes that the combined rate of all of these payments may
be higher than the rate of payments made under distributions plans adopted by
other investment companies pursuant to Rule 12b-1. Although the Principal
Underwriter will use its own funds (which may be borrowed from banks) to pay
sales commissions at the time of sale, it is anticipated that the Eaton Vance
organization will profit by reason of the operation of the Plan through an
increase in the Fund's assets (thereby increasing the advisory fee payable to
BMR by the Portfolio) resulting from sale of Fund shares and through the sales
commissions and distribution fees and contingent deferred sales charges paid to
the Principal Underwriter pursuant to the Plan. The Eaton Vance organization may
be considered to have realized a profit under the Plan if at any point in time
the aggregate amounts theretofore received by the Principal Underwriter pursuant
to the Plan and from contingent deferred sales charges have exceeded the total
expenses theretofore incurred by such organization in distributing shares of the
Fund. Total expenses for this purpose will include an allocable portion of the
overhead costs of such organization and its branch offices, which costs will
include without limitation leasing expense, depreciation of building and
equipment, utilities, communication and postage expense, compensation and
benefits of personnel, travel and promotional expense, stationery and supplies,
literature and sales aids, interest expense, data processing fees, consulting
and temporary help costs, insurance, taxes other than income taxes, legal and
auditing expense and other miscellaneous overhead items. Overhead is calculated
and allocated for such purpose by the Eaton Vance organization in a manner
deemed equitable to the Fund.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the
Trust, including the Rule 12b-1 Trustees. The Plan continues in effect through
and including April 28, 1996, and shall continue in effect indefinitely
thereafter for so long as such continuance is approved at least annually by the
vote of both a majority of (i) the Trustees of the Trust who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or any agreement related to the Plan (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office, and the Distribution
Agreement contains a similar provision. The Plan and Distribution Agreement may
be terminated at any time by vote of a majority of the Rule 12b-1 Trustees or by
a vote of a majority of the outstanding voting securities of the Fund. Under the
Plan the President or a Vice President of the Trust shall provide to the
Trustees for their review, and the Trustees shall review at least quarterly, a
written report of the amount expended under the Plan and the purposes for which
such expenditures were made. The Plan may not be amended to increase materially
the payments described therein without approval of the shareholders of the Fund,
and all material amendments of the Plan must also be approved by the Trustees as
required by Rule 12b-1. So long as the Plan is in effect, the selection and
nomination of Trustees who are not interested persons of the Trust shall be
committed to the discretion of the Trustees who are not such interested persons.
The Trustees of the Trust believe that the Plan will be a significant factor
in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of March 31, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
March 31, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc., New Brunswick, NJ
was the record owner of approximately 9.4% of the outstanding shares, which were
held on behalf of its customers who are the beneficial owners of such shares,
and as to which it had voting power under certain limited circumstances. To the
knowledge of the Trust, no other person owned of record or beneficially 5% or
more of the Fund's outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial informatiion for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession No. 0000950156-95-000106).
<PAGE>
INVESTMENT ADVISER OF
TOTAL RETURN PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON TOTAL RETURN FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS 725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV MARATHON TOTAL RETURN FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-TMSAI
EV MARATHON
TOTAL RETURN FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1995
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV TRADITIONAL TOTAL RETURN FUND. On
September 27, 1993, the Fund became a series of the Trust and its name was
redesignated from Eaton Vance Total Return Trust to EV Traditional Total Return
Fund.
FEES AND EXPENSES
INVESTMENT ADVISER
Prior to the close of business on October 27, 1993 (when the Fund
transferred its assets to the Portfolio in exchange for an interest in the
Portfolio), the Fund retained Eaton Vance as its investment adviser. For the
period from January 1, 1993 to October 27, 1993, the Fund paid Eaton Vance
advisory fees of $3,815,225 (equivalent to 0.74% (annualized) of the Fund's
average daily net assets for such period). For the fiscal year ended December
31, 1992, the Fund paid Eaton Vance advisory fees of $4,019,212.
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund.
SERVICE PLAN
During the fiscal year ended December 31, 1994, the Fund made payments under
the Plan to the Principal Underwriter aggregating $1,007,589, of which $905,470
was paid to Authorized Firms and the balance was retained by the Principal
Underwriter.
PRINCIPAL UNDERWRITER
For the fiscal year ended December 31, 1994, the Fund paid the Principal
Underwriter $9,145 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each transaction).
CUSTODIAN
For the fiscal year ended December 31, 1994, the Fund paid IBT $77,499.
BROKERAGE COMMISSIONS
For the period from January 1, 1993 to October 27, 1993, the Fund paid
brokerage commissions of $1,425,293 on portfolio security transactions, of which
$975,594 was paid in respect of portfolio security transactions aggregating
approximately $577,421,080 to firms which provided some Research Services to
Eaton Vance (although many of such firms may have been selected in any
particular transaction primarily because of their execution capabilities).
During the fiscal year ended December 31, 1992, the Fund paid brokerage
commissions of $998,953 on portfolio security transactions.
<TABLE>
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton Vance organization
(the noninterested Trustees) are paid by the Fund (and the other series of the Trust) and the Portfolio, respectively. (The
Trustees of the Trust and of the Portfolio who are members of the Eaton Vance organization receive no compensation from the Fund
or the Portfolio.) During the fiscal year ended December 31, 1994, the noninterested Trustees of the Trust and the Portfolio
earned the following compensation in their capacities as Trustees from the Fund, the Portfolio and the other funds in the Eaton
Vance fund complex<F1>:
<CAPTION>
AGGREGATE AGGREGATE RETIREMENT TOTAL COMPENSATION
COMPENSATION COMPENSATION BENEFIT ACCRUED FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FROM FUND COMPLEX FUND COMPLEX
- ---- ------------- -------------- ----------------- -----------
<S> <C> <C> <C> <C>
Donald R. Dwight ............................ $675 $4,119<F2> $8,750 $135,000
Samuel L. Hayes, III ........................ 653 4,079<F3> 8,865 142,500
Norton H. Reamer ............................ 630 4,002 --0-- 135,000
John L. Thorndike ........................... 647 4,140 --0-- 140,000
Jack L. Treynor ............................. 691 4,247 --0-- 140,000
- ----------
<FN>
<F1>Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Includes $331 of deferred compensation.
<F3>Includes $334 of deferred compensation.
</TABLE>
PERFORMANCE INFORMATION
The average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes the maximum sales charge is deducted from the initial $1,000
purchase order and that all dividends and distributions are reinvested at net
asset value on the reinvestment dates during the period.
The table below indicates the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the one-, five- and ten-year periods ended December 31, 1994.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
TOTAL RETURN TOTAL RETURN
VALUE OF EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT ----------------------- -----------------------
PERIOD DATE INVESTMENT<F1> ON 12/31/94 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ---------- ---------- ---------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
10 Years ended
12/31/94 12/31/84 $952.68 $2,797.54 193.65% 11.37% 179.70% 10.83%
5 Years ended
12/31/94 12/31/89 $952.10 $1,206.72 26.74% 4.83% 20.72% 3.84%
1 Year ended
12/31/94 12/31/93 $952.03 $ 835.10 -12.28% -12.28% -16.45% -16.45%
- ----------
<FN>
<F1>Initial investment less the current maximum sales charge of 4.75%.
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE CHANGES
DECEMBER 31, 1985 -- DECEMBER 31, 1994
NET ASSET VALUE MAXIMUM OFFERING
TO NET ASSET VALUE PRICE TO NET ASSET VALUE
WITH ALL DISTRIBUTIONS REINVESTED WITH ALL DISTRIBUTIONS REINVESTED
-------------------------------- --------------------------------
FISCAL YEAR ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
----------------- ------ ---------- -------------- ------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
12/31/85 40.13% 62.42% 27.45% 33.47% 54.71% 24.38%
12/31/86 31.48% 113.55% 28.78% 25.23% 103.41% 26.70%
12/31/87 -15.82% 79.76% 15.79% -19.82% 71.22% 14.39%
12/31/88 11.94% 101.22% 15.01% 6.62% 91.66% 13.90%
12/31/89 33.46% 168.55% 17.90% 27.12% 155.79% 16.95%
12/31/90 0.15% 168.96% 15.18% -4.61% 156.18% 14.38%
12/31/91 23.61% 232.45% 16.20% 17.74% 216.66% 15.50%
12/31/92 6.60% 254.38% 15.09% 1.53% 237.55% 14.47%
12/31/93 9.49% 288.02% 14.52% 4.29% 269.59% 13.97%
12/31/94 -12.28% 193.65% 11.37% -16.45% 179.70% 10.83%
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate; shares, when redeemed, may be worth more or less
than their original cost.
The Fund's yield is computed pursuant to a standardized formula by dividing
its net investment income per share earned during a recent thirty-day period by
the maximum offering price (including the maximum sales charge) per share on the
last day of the period and annualizing the resulting figure. Net investment
income per share is calculated using a standardized formula the income component
of which is computed from dividends on equity securities held by the Portfolio
based on the stated annual dividend rates of such securities, exclusive of
special or extra distributions (with all purchases and sales of securities
during such period included in the income calculation on a settlement date
basis), and from the income earned on short-term debt instruments held by the
Portfolio, and such income is then reduced by accrued Fund expenses for the
period, with the resulting number being divided by the average daily number of
Fund shares outstanding and entitled to receive dividends during the period.
Yield calculations assume a maximum sales charge equal to 4.75% of the public
offering price. Actual yield may be affected by variations in sales charges on
investments. For the thirty-day period ended December 31, 1994, the yield of the
Fund was 4.08%.
The Fund may publish its distribution rate and/or its effective distribution
rate. The Fund's distribution rate is computed by dividing the most recent
monthly distribution per share annualized, by the current maximum offering price
per share (including the maximum sales charge). The Fund's effective
distribution rate is computed by dividing the distribution rate by 12 and
reinvesting the resulting amount for a full year on a monthly basis. The
effective distribution rate will be higher than the distribution rate because of
the compounding effect of the assumed reinvestment. Investors should note that
the Fund's yield is calculated using a standardized formula the income component
of which is computed from dividends on equity securities and from the income
earned on short-term debt instruments held by the Portfolio, whereas the
distribution rate is based on the Fund's last monthly distribution. Monthly
distributions tend to be relatively stable and may be more or less than the
amount of net investment income and short-term capital gain actually earned by
the Fund during the month. The Fund's distribution rate (calculated on December
31, 1994 and based on the Fund's monthly distribution paid on December 22, 1994)
was 4.34%, and the Fund's effective distribution rate (calculated on the same
date and based on the same monthly distribution) was 4.43%.
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge other than the
sales charge included in the offering price, and may be changed or discontinued
without penalty at any time.
Intended Quantity Investment -- Statement of Intention. If it is anticipated
that $100,000 or more of Fund shares and shares of the other continuously
offered open-end funds listed under "The Eaton Vance Exchange Privilege" in the
current Prospectus of the Fund will be purchased within a 13-month period, a
Statement of Intention should be signed so that shares may be obtained at the
same reduced sales charge as though the total quantity were invested in one lump
sum. Shares held under Right of Accumulation (see below) as of the date of the
Statement will be included toward the completion of the Statement. The Statement
authorizes the Transfer Agent to hold in escrow sufficient shares (5% of the
dollar amount specified in the Statement) which can be redeemed to make up any
difference in sales charge on the amount intended to be invested and the amount
actually invested. Execution of a Statement does not obligate the shareholder to
purchase or the Fund to sell the full amount indicated in the Statement, and
should the amount actually purchased during the 13-month period be more or less
than that indicated on the Statement, price adjustments will be made. For sales
charges and other information on quantity purchases, see "How to Buy Fund
Shares" in the Fund's current Prospectus. Any investor considering signing a
Statement of Intention should read it carefully.
Right of Accumulation -- Cumulative Quantity Discount. The applicable sales
charge level for the purchase of Fund shares is calculated by taking the dollar
amount of the current purchase and adding it to the value (calculated at the
maximum current offering price) of the shares the shareholder owns in his or her
account(s) in the Fund and in the other continuously offered open-end funds
listed under "The Eaton Vance Exchange Privilege" in the current Prospectus of
the Fund for which Eaton Vance acts as adviser or administrator at the time of
purchase. The sales charge on the shares being purchased will then be at the
rate applicable to the aggregate. For example, if the shareholder owned shares
valued at $80,000 in EV Traditional Investors Fund, and purchased an additional
$20,000 of Fund shares, the sales charge for the $20,000 purchase would be at
the rate of 3.75% of the offering price (3.90% of the net amount invested) which
is the rate applicable to single transactions of $100,000. For sales charges on
quantity purchases, see "How to Buy Fund Shares" in the Fund's current
Prospectus. Shares purchased (i) by an individual, his or her spouse and their
children under the age of twenty-one, and (ii) by a trustee, guardian or other
fiduciary of a single trust estate or a single fiduciary account, will be
combined for the purpose of determining whether a purchase will qualify for the
Right of Accumulation and if qualifying, the applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his or her Authorized Firm (defined below) must provide Eaton Vance
Distributors, Inc. (the "Principal Underwriter") (in the case of a purchase made
through an Authorized Firm) or the Transfer Agent (in the case of an investment
made by mail) with sufficient information to permit verification that the
purchase order qualifies for the accumulation privilege. Corfirmation of the
order is subject to such verification. The Right of Accumulation privilege may
be amended or terminated at any time as to purchases occurring thereafter.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through certain financial service firms ("Authorized Firms") which have
agreements with Eaton Vance Distributors, Inc., the Principal Underwriter. The
Principal Underwriter is a wholly-owned subsidiary of Eaton Vance.
The public offering price is the net asset value next computed after receipt
of the order, plus, where applicable, a variable percentage (sales charge)
depending upon the amount of purchase as indicated by the sales charge table set
forth in the prospectus.
Such table is applicable to purchases of the Fund alone or in combination
with purchases of the other funds offered by the Principal Underwriter made at a
single time by (i) an individual, or an individual, his or her spouse and their
children under the age of twenty-one, purchasing shares for his, her or their
own account, and (ii) a trustee, guardian or other fiduciary purchasing shares
for a single trust estate or a single fiduciary account.
The table is also presently applicable to (1) purchases of Fund shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter through one dealer aggregating $100,000 or more made by
any of the persons enumerated above within a thirteen-month period starting with
the first purchase pursuant to a written Statement of Intention, in the form
provided by the Underwriter, which includes provisions for a price adjustment
depending upon the amount actually purchased within such period (a purchase not
made pursuant to such Statement may be included thereunder if the Statement is
filled within 90 days of such purchase); or (2) purchases of the Fund pursuant
to the Right of Accumulation and declared as such at the time of purchase (see
"Services for Accumulation").
Subject to the applicable provisions of the 1940 Act, the Fund may issue
shares at net asset value in the event that an investment company (whether a
regulated or private investment company or a personal holding company) is merged
or consolidated with or acquired by the Fund. Normally no sales charges will be
paid in connection with an exchange of Fund shares for the assets of such
investment company.
Shares may be sold at net asset value to any officer, director, trustee,
general partner or employee of the Fund, the Portfolio or any investment company
for which Eaton Vance or BMR acts as investment adviser, any investment
advisory, agency, custodial or trust account managed or administered by Eaton
Vance or by any parent, subsidiary or other affiliate of Eaton Vance, or any
officer, director or employee or any parent, subsidiary or other affiliate of
Eaton Vance. The terms "officer," "director," "trustee," "general partner" or
"employee" as used in this paragraph include any such person's spouse and minor
children, and also retired officers, directors, trustees, general partners and
employees and their spouses and minor children. Shares of the Fund may also be
sold at net asset value to registered representatives and employees of certain
Authorized Firms and to such persons' spouses and children under the age of 21
and their beneficial accounts.
The Trust reserves the right to suspend or limit the offering of shares of
the Fund to the public at any time.
The Principal Underwriter acts as principal in selling shares of the Fund
under the Distribution Agreement with the Trust on behalf of the Fund. The
expenses of printing copies of prospectuses used to offer shares to financial
securities firms or investors and other selling literature and of advertising is
borne by the Principal Underwriter. The fees and expenses of qualifying and
registering and maintaining qualifications and registrations of the Fund and its
shares under Federal and state securities laws are borne by the Fund. The
Distribution Agreement is renewable annually by the Trust's Board of Trustees
(including a majority of its Trustees who are not interested persons of the
Principal Underwriter or the Trust), may be terminated on six months' notice by
either party and is automatically terminated upon assignment. The Principal
Underwriter distributes Trust shares on a "best efforts" basis under which it is
required to take and pay for only such shares as may be sold. The Principal
Underwriter allows Authorized Firms discounts from the applicable public
offering price which are alike for all Authorized Firms. In the case of the
maximum sales charge the Authorized Firm retains 4% of the offering price (4.20%
of the net amount invested) and the Principal Underwriter retains 0.75% of the
public offering price (0.79% of the net amount invested). However, the Principal
Underwriter may allow, upon notice to all Authorized Firms with whom it has
agreements, discounts up to the full sales charge during the periods specified
in the notice. During periods when the discount includes the full sales charge,
such Authorized Firms may be deemed to be underwriters as that term is defined
in the Securities Act of 1933. The total sales charges for sales of shares of
the Fund during the fiscal years ended December 31, 1994, 1993 and 1992 were
$663,455, $3,942,374 and $2,170,406, respectively, of which $104,373, $377,565
and $175,430, respectively, was received by the Principal Underwriter. For the
fiscal years ended December 31, 1994, 1993 and 1992, Authorized Firms received
$559,082, $3,564,809 and $1,994,976, respectively, from the total sales charges.
SERVICE PLAN
The Trust on behalf of the Fund has adopted a Service Plan (the "Plan")
designed to meet the requirements of Rule 12b-1 (the "Rule") under the 1940 Act
and the service fee requirements of the revised sales charge rule of the
National Association of Securities Dealers, Inc. (Management believes service
fee payments are not distribution expenses governed by the Rule, but has chosen
to have the Plan approved as if the Rule were applicable.) The following
supplements the discussion of the Plan contained in the Fund's prospectus.
Pursuant to such Rule, the Plan has been approved by the independent
Trustees of the Trust, who have no direct or indirect financial interest in the
Plan and by all of the Trustees of the Trust on behalf of the Fund. The Plan
amends and replaces the Trust's original distribution plan, which originally
became effective on July 1, 1987, and which was approved by the Fund's
shareholders.
The Plan remains in effect through April 28, 1996 and from year to year
thereafter, provided such continuance is approved by a vote of both a majority
of (i) those 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 any
agreements related to it (the "Rule 12b-1 Trustees") and (ii) all of the
Trustees then in office, cast in person at a meeting (or meetings) called for
the purpose of voting on this Plan. The Plan may be terminated any time by vote
of the Rule 12b-1 Trustees or by a vote of a majority of the outstanding voting
securities of the Fund.
Under the Plan, the President or a Vice President of the Trust shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described herein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees of the Trust in the manner described above. So long as
the Plan is in effect, the selection and nomination of Trustees who are not
interested persons of the Trust shall be committed to the discretion of the
Trustees who are not such interested persons. The Trustees have determined that
in their judgment there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders. For the service fees paid by the Fund under the
Plan, see "Fees and Expenses" in this Part II.
ADDITIONAL TAX MATTERS
As of the close of business, October 27, 1993, the Fund contributed its
assets to the Portfolio in exchange for an interest in the Portfolio. The Trust
has obtained an opinion of tax counsel to the effect that, although there is no
judicial authority directly on point, this contribution will not result in the
recognition of gain or loss by the Fund for Federal income tax purposes. The
Trust has also applied for a private letter ruling from the Internal Revenue
Service ("IRS") to confirm this result for such series. If it were determined
that this contribution by the Fund was a taxable transaction, the Fund could be
required to recognize gain on the transfer of its assets to the Portfolio and to
make additional distributions to its shareholders in order to avoid Fund-level
Federal income taxes, and any such distributions would be taxable to the
shareholders who receive them; and in such case, the Fund might also be required
to pay penalties and/or interest to the IRS.
For the three taxable years ended December 31, 1984, the Fund was taxed as
an ordinary corporation for Federal income tax purposes and made no
distributions to shareholders. For the taxable year ended December 31, 1985, the
Fund elected to be taxed as a regulated investment company, having previously
distributed a dividend from investment income and a capital gain distribution
from realized capital gains in order to avoid any Federal income tax liability
for such year. The Fund also filed a "determination" with the Internal Revenue
Service to the effect that the Fund is not subject to any interest surcharge
with respect to income or distributions relating to taxable years during which
it did not elect to be treated as a regulated investment company.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of March 31, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
March 31, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc. was the record owner
of approximately 19.2% of the outstanding shares, which it held on behalf of its
customers who are the beneficial owners of such shares, and as to which it had
voting power under certain limited circumstances. To the Trust's knowledge, no
other person owned of record or beneficially 5% or more of the Fund's
outstanding shares on such date.
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Fund and the Portfolio contained in the Fund's shareholder report for the
fiscal year ended December 31, 1994 as previously filed electronically with the
Securities and Exchange Commission (Accession No. 0000950156-95-000094).
<PAGE>
INVESTMENT ADVISER OF
TOTAL RETURN PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV TRADITIONAL TOTAL RETURN FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS 725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL TOTAL RETURN FUND
24 FEDERAL STREET
BOSTON, MA 02110
T-TMSAI
EV TRADITIONAL
TOTAL RETURN FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1995
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
INCLUDED IN PART A:
For EV Classic Investors Fund:
Financial Highlights for the period from the start of business,
November 2, 1993, to January 31, 1994 and for the one year ended
January 31, 1995.
For EV Marathon Investors Fund:
Financial Highlights for the period from the start of business,
November 2, 1993, to January 31, 1994 and for the one year ended
January 31, 1995.
For EV Traditional Investors Fund:
Financial Highlights for the ten years ended January 31, 1995
For EV Classic Stock Fund:
Financial Highlights for the period from the start of business,
November 4, 1994, to December 31, 1994
For EV Marathon Stock Fund:
Financial Highlights for the period from the start of business,
August 17, 1994, to December 31, 1994.
For EV Traditional Stock Fund:
Financial Highlights for the ten years ended December 31, 1994.
For EV Classic Total Return Fund:
Financial Highlights for the period from the start of business,
November 1, 1993, to December 31, 1994.
For EV Marathon Total Return Fund:
Financial Highlights for the period from the start of business,
November 1, 1993, to December 31, 1994.
For EV Traditional Total Return Fund:
Financial Highlights for the ten years ended December 31, 1994.
INCLUDED IN PART B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORTS FOR THE FUNDS, EACH
DATED JANUARY 31, 1995, FILED ELECTRONICALLY PURSUANT TO SECTION
30(B)(2) OF THE INVESTMENT COMPANY ACT OF 1940
FOR EV CLASSIC INVESTORS FUND (ACCESSION NO. 0000950156-95-000182)
EV MARATHON INVESTORS FUND (ACCESSION NO. 0000950156-95-000184)
EV TRADITIONAL INVESTORS FUND (ACCESSION NO. 0000950156-95-
000183)
Financial Statements for the above-referenced Funds for the time
periods set forth in each Fund's Report are as follows:
Statement of Assets and Liabilities as of January 31, 1995
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
Financial Statements for INVESTORS PORTFOLIO are as follows:
Portfolio of Investments as of January 31, 1995
Statement of Assets and Liabilities as of January 31, 1995
Statement of Operations for the year ended January 31, 1995
Statement of Changes in Net Assets for the year ended January
31, 1995 and for the period from the start of business, October
28, 1993, to January 31, 1994
Supplementary Data for the year ended January 31, 1995 and for
the period from the start of business, October 28, 1993, to
January 31, 1994
Notes to Financial Statements
Report of Independent Accountants
INCORPORATED BY REFERENCE TO THE ANNUAL REPORTS FOR THE FUNDS, EACH
DATED DECEMBER 31, 1994, FILED ELECTRONICALLY PURSUANT TO SECTION
30(B)(2) OF THE INVESTMENT COMPANY ACT OF 1940
FOR EV CLASSIC STOCK FUND (ACCESSION NO. 0000950156-95-000115)
EV MARATHON STOCK FUND (ACCESSION NO. 0000950156-95-000116)
EV TRADITIONAL STOCK FUND (ACCESSION NO. 0000950156-95-000074)
EV CLASSIC TOTAL RETURN FUND (ACCESSION NO. 0000950156-95-
000075)
EV MARATHON TOTAL RETURN FUND (ACCESSION NO. 0000950156-95-
000106)
EV TRADITIONAL TOTAL RETURN FUND (ACCESSION NO. 0000950156-95-
000094)
Financial Statements for the above-referenced Funds for the time
periods set forth in each Fund's Report are as follows:
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
Financial Statements for STOCK PORTFOLIO are as follows:
Portfolio of Investments as of December 31, 1994
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations for the period from the start of
business, August 1, 1994, to December 31, 1994
Statement of Changes in Net Assets for the period from the start
of business, August 1, 1994, to December 31, 1994
Supplementary Data for the period from the start of business,
August 1, 1994, to December 31, 1994
Notes to Financial Statements
Report of Independent Accountants
Financial Statements for TOTAL RETURN PORTFOLIO are as follows:
Portfolio of Investments as of December 31, 1994
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations for the year ended December 31, 1994
Statement of Changes in Net Assets for the year ended December
31, 1994 and for the period from the start of business, October
28, 1993, to December 31, 1994
Supplementary Data for the year ended December 31, 1994 and for
the period from the start of business, October 28, 1993, to
December 31, 1993
Notes to Financial Statements
Report of Independent Accountants
<TABLE>
<CAPTION>
(B) EXHIBITS:
<S> <C> <C>
(1)(a) Amended and Restated Declaration of Filed herewith.
Trust dated September 27, 1993.
(b) Amendment and Restatement of Filed herewith.
Establishment and Designation of Series
of Shares dated June 19, 1995.
(2)(a) By-Laws. Filed herewith.
(b) Amendment to By-Laws of Eaton Vance Filed herewith.
Special Investment Trust dated December
13, 1993.
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contract with Eaton Vance Filed herewith.
Management for EV Traditional Emerging
Markets Fund dated March 24, 1994.
(b) Management Contract with Eaton Vance Filed herewith.
Management for EV Marathon Emerging
Markets Fund dated March 24, 1994.
(c) Management Contract with Eaton Vance Filed herewith.
Management for EV Traditional Greater
India Fund dated March 24, 1994.
(d) Management Contract with Eaton Vance Filed herewith.
Management for EV Marathon Greater India
Fund dated March 24, 1994.
(6)(a)(1) Amended Distribution Agreement between Filed herewith.
Eaton Vance Special Investment Trust (on
behalf of its domestic Classic series)
and Eaton Vance Distributors, Inc. dated
June 19, 1995, with attached schedule
pursuant to Rule 8b-31 under the
Investment Company Act of 1940, as
amended, regarding other domestic
Classic series of the Registrant.
(2) Amended Distribution Agreement between Filed herewith.
Eaton Vance Special Investment Trust (on
behalf of its domestic Marathon series)
and Eaton Vance Distributors, Inc. dated
June 19, 1995, with attached schedule
pursuant to Rule 8b-31 under the
Investment Company Act of 1940, as
amended, regarding other domestic
Marathon series of the Registrant.
(3) Amended Distribution Agreement between Filed herewith.
Eaton Vance Special Investment Trust (on
behalf of its domestic Traditional
series) and Eaton Vance Distributors,
Inc. dated June 19, 1995, with attached
schedule pursuant to Rule 8b-31 under
the Investment Company Act of 1940, as
amended, regarding other domestic
Traditional series of the Registrant.
(4) Distribution Agreement with Eaton Vance Filed herewith.
Distributors, Inc. for EV Traditional
Emerging Markets Fund dated March 24,
1994.
(5) Distribution Agreement with Eaton Vance Filed herewith.
Distributors, Inc. for EV Marathon
Emerging Markets Fund dated March
24,1994.
(6) Distribution Agreement with Eaton Vance Filed herewith.
Distributors, Inc. for EV Traditional
Greater India Fund dated March 24, 1994.
(7) Distribution Agreement with Eaton Vance Filed herewith.
Distributors, Inc. for EV Marathon
Greater India Fund dated March 24, 1994.
(b) Selling Group Agreement between Eaton Filed as Exhibit No. (6)(b) to Post-Effective
Vance Distributors, Inc. and Authorized Amendment No. 38 and incorporated herein by
Dealers. reference.
(c) Schedule of Dealer Discounts and Sales Filed as Exhibit No. (6)(c) to Post-Effective
Charges. Amendment No. 38 and incorporated herein by
reference.
(7) The Securities and Exchange Commission
has granted the Registrant an exemptive
order that permits the Registrant to
enter into deferred compensation
arrangements with its independent
Trustees. See in the Matter of Capital
Exchange Fund, Inc., Release No. IC-
20671 (November 1, 1994).
(8) Custodian Agreement with Investors Bank Filed herewith.
& Trust Company dated March 24, 1994.
(9) Amended Administrative Services Filed herewith.
Agreement between Eaton Vance Special
Investment Trust (on behalf of each of
its series) and Eaton Vance Management
dated June 19, 1995, with attached
schedule under Rule 8b-31 under the
Investment Company Act of 1940, as
amended, regarding each series of the
Registrant.
(10) Not applicable.
(11)(a) Consent of Independent Accountants for Filed herewith.
EV Classic Investors Fund.
(b) Consent of Independent Accountants for Filed herewith.
EV Marathon Investors Fund.
(c) Consent of Independent Accountants for Filed herewith.
EV Traditional Investors Fund.
(d) Consent of Independent Accountants for Filed herewith.
EV Classic Stock Fund.
(e) Consent of Independent Accountants for Filed herewith.
EV Marathon Stock Fund.
(f) Consent of Independent Accountants for Filed herewith.
EV Traditional Stock Fund.
(g) Consent of Independent Accountants for Filed herewith.
EV Classic Total Return Fund.
(h) Consent of Independent Accountants for Filed herewith.
EV Marathon Total Return Fund
(i) Consent of Independent Accountants for Filed herewith.
EV Traditional Total Return Fund.
(12) Not applicable.
(13) Not applicable.
(14)(a) Vance, Sanders Profit Sharing Retirement Filed as Exhibit No. (14)(1) to Post-Effective
Plan for Self-Employed Persons with Amendment No. 22 to the Registration Statement
Adoption Agreement and instructions. under the Securities Act of 1933 (File No. 2-
28471) and incorporated herein by reference.
(b) Eaton & Howard, Vance Sanders Defined Filed as Exhibit No. (14)(2) to Post-Effective
Contribution Prototype Plan and Trust Amendment No. 29 to the Registration Statement
with Adoption Agreements: under the Securities Act of 1933 (File No. 2-
22019) and incorporated herein by reference.
(1) Basic Profit-Sharing Retirement Plan.
(2) Basic Money Purchase Pension Plan.
(3) Thrift Plan Qualifying as
Profit-Sharing Plan.
(4) Thrift Plan Qualifying as Money
Purchase Plan.
(5) Integrated Profit-Sharing Retirement
Plan.
(6) Integrated Money Purchase Pension
Plan.
(c) Individual Retirement Custodian Account Filed as Exhibit No. (14)(3) to Post-Effective
(Form 5305A) and Instructions. Amendment No. 21 and incorporated herein by
reference.
(d) Vance, Sanders Variable Pension Filed as Exhibit No. (14)(4) to Post-Effective
Prototype Plan and Trust with Adoption Amendment No. 22 to the Registration Statement
Agreement. under the Securities Act of 1933 (File No. 2-
28471) and incorporated herein by reference.
(15)(a) Amended Distribution Plan pursuant to Filed herewith.
Rule 12b-1 under the Investment Company
Act of 1940, as amended, for Eaton Vance
Special Investment Trust (on behalf of
its domestic Classic series) dated June
19, 1995, with attached schedule
pursuant to Rule 8b-31 under the
Investment Company Act of 1940, as
amended, regarding other domestic
Classic series of the Registrant
(b) Amended Distribution Plan pursuant to Filed herewith.
Rule 12b-1 under the Investment Company
Act of 1940, as amended, for Eaton Vance
Special Investment Trust (on behalf of
its domestic Marathon series) dated June
19, 1995, with attached schedule
pursuant to Rule 8b-31 under the
Investment Company Act of 1940, as
amended, regarding other domestic
Marathon series of the Registrant.
(c) Amended Service Plan pursuant to Rule Filed herewith.
12b-1 under the Investment Company Act
of 1940, as amended, for Eaton Vance
Special Investment Trust (on behalf of
its domestic Traditional series) dated
June 19, 1995, with attached schedule
pursuant to Rule 8b-31 under the
Investment Company Act of 1940, as
amended, regarding other domestic
Traditional series of the Registrant.
(d) Distribution Plan dated March 24, 1994 Filed herewith.
for EV Traditional Emerging Markets Fund
pursuant to Rule 12b-1 under the
Investment Company Act of 1940.
(e) Distribution Plan dated March 24, 1994 Filed herewith.
for EV Marathon Emerging Markets Fund
pursuant to Rule 12b-1 under the
Investment Company Act of 1940.
(f) Distribution Plan dated March 24, 1994 Filed herewith.
for EV Traditional Greater India Fund
pursuant to Rule 12b-1 under the
Investment Company Act of 1940.
(g) Distribution Plan dated March 24, 1994 Filed herewith.
for EV Marathon Greater India Fund
pursuant to Rule 12b-1 under the
Investment Company Act of 1940.
(16) Schedule for Computation of Performance Filed herewith.
Quotations.
(17)(a) Power of Attorney dated February 25, Filed herewith.
1994 for Eaton Vance Special Investment
Trust.
(b) Power of Attorney for Emerging Markets Filed herewith.
Portfolio.
(c) Power of Attorney for South Asia Filed herewith.
Portfolio.
(d) Power of Attorney for Special Investment Filed herewith.
Portfolio.
(e) Power of Attorney for Investors Filed herewith.
Portfolio.
(f) Power of Attorney for Stock Portfolio. Filed herewith.
(g) Power of Attorney for Total Return Filed herewith.
Portfolio.
</TABLE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26. NUMBERS OF HOLDERS OF SECURITIES
(2)
(1) NUMBER OF
TITLE OF CLASS RECORD HOLDERS
-------------- --------------
Shares of beneficial interest
without par value as of June 30, 1995
EV Marathon Emerging Markets Fund 97
EV Traditional Emerging Markets Fund 57
EV Marathon Greater India Fund 3,547
EV Traditional Greater India Fund 1,719
EV Classic Special Equities Fund 17
EV Marathon Special Equities Fund 35
EV Traditional Special Equities Fund 7,017
EV Classic Investors Fund 214
EV Marathon Investors Fund 998
EV Traditional Investors Fund 13,999
EV Classic Stock Fund 18
EV Marathon Stock Fund 180
EV Traditional Stock Fund 5,715
EV Classic Total Return Fund 325
EV Marathon Total Return Fund 1,968
EV Traditional Total Return Fund 22,248
ITEM 27. INDEMNIFICATION
No change from the information set forth in Item 27 of Form N-1A, filed as
Post-Effective Amendment No. 30 to the Registration Statement under the
Securities Act of 1933 and Amendment No. 17 under the Investment Company Act
of 1940, which information is incorporated herein by reference.
Registrant's Trustees and officers are insured under a standard mutual
fund errors and omissions insurance policy covering loss incurred by reason of
negligent errors and omissions committed in their capacities as such.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the information set forth under the caption
"Investment Advisory and Other Services" in the Statement of Additional
Information, which information is incorporated herein by reference.
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITER
<TABLE>
<CAPTION>
(A) Registrant's principal underwriter, Eaton Vance Distributors, Inc., a
wholly-owned subsidiary of Eaton Vance Management, is the principal
underwriter for each of the investment companies named below:
<S> <C>
EV Classic Alabama Tax Free Fund EV Classic Texas Tax Free Fund
EV Classic Arizona Tax Free Fund EV Classic Total Return Fund
EV Classic Arkansas Tax Free Fund EV Classic Virginia Tax Free Fund
EV Classic California Limited Maturity EV Classic West Virginia Tax Free Fund
Tax Free Fund EV Marathon Alabama Tax Free Fund
EV Classic California Municipals Fund EV Marathon Arizona Limited Maturity
EV Classic Colorado Tax Free Fund Tax Free Fund
EV Classic Connecticut Limited Maturity EV Marathon Arizona Tax Free Fund
Tax Free Fund EV Marathon Arkansas Tax Free Fund
EV Classic Connecticut Tax Free Fund EV Marathon California Limited Maturity
EV Classic Florida Insured Tax Free Fund Tax Free Fund
EV Classic Florida Limited Maturity EV Marathon California Municipals Fund
Tax Free Fund EV Marathon Colorado Tax Free Fund
EV Classic Florida Tax Free Fund EV Marathon Connecticut Limited Maturity
EV Classic Georgia Tax Free Fund Tax Free Fund
EV Classic Government Obligations Fund EV Marathon Connecticut Tax Free Fund
EV Classic Greater China Growth Fund EV Marathon Emerging Markets Fund
EV Classic Growth Fund Eaton Vance Equity - Income Trust
EV Classic Hawaii Tax Free Fund EV Marathon Florida Insured Tax Free Fund
EV Classic High Income Fund EV Marathon Florida Limited Maturity
EV Classic Investors Fund Tax Free Fund
EV Classic Kansas Tax Free Fund EV Marathon Florida Tax Free Fund
EV Classic Kentucky Tax Free Fund EV Marathon Georgia Tax Free Fund
EV Classic Louisiana Tax Free Fund EV Marathon Gold & Natural Resources Fund
EV Classic Maryland Tax Free Fund EV Marathon Government Obligations Fund
EV Classic Massachusetts Limited Maturity EV Marathon Greater China Growth Fund
Tax Free Fund EV Marathon Greater India Fund
EV Classic Massachusetts Tax Free Fund EV Marathon Growth Fund
EV Classic Michigan Limited Maturity EV Marathon Hawaii Tax Free Fund
Tax Free Fund EV Marathon High Income Fund
EV Classic Michigan Tax Free Fund EV Marathon Investors Fund
EV Classic Minnesota Tax Free Fund EV Marathon Kansas Tax Free Fund
EV Classic Mississippi Tax Free Fund EV Marathon Kentucky Tax Free Fund
EV Classic Missouri Tax Free Fund EV Marathon Louisiana Tax Free Fund
EV Classic National Limited Maturity EV Marathon Maryland Tax Free Fund
Tax Free Fund EV Marathon Massachusetts Limited Maturity
EV Classic National Municipals Fund Tax Free Fund
EV Classic New Jersey Limited Maturity EV Marathon Massachusetts Tax Free Fund
Tax Free Fund EV Marathon Michigan Limited Maturity
EV Classic New Jersey Tax Free Fund Tax Free Fund
EV Classic New York Limited Maturity EV Marathon Michigan Tax Free Fund
Tax Free Fund EV Marathon Minnesota Tax Free Fund
EV Classic New York Tax Free Fund EV Marathon Mississippi Tax Free Fund
EV Classic North Carolina Tax Free Fund EV Marathon Missouri Tax Free Fund
EV Classic Ohio Limited Maturity EV Marathon National Limited Maturity
Tax Free Fund Tax Free Fund
EV Classic Ohio Tax Free Fund EV Marathon National Municipals Fund
EV Classic Oregon Tax Free Fund EV Marathon New Jersey Limited Maturity
EV Classic Pennsylvania Limited Maturity Tax Free Fund
Tax Free Fund EV Marathon New Jersey Tax Free Fund
EV Classic Pennsylvania Tax Free Fund EV Marathon New York Limited Maturity
EV Classic Rhode Island Tax Free Fund Tax Free Fund
EV Classic Strategic Income Fund EV Marathon New York Tax Free Fund
EV Classic South Carolina Tax Free Fund EV Marathon North Carolina Limited Maturity
EV Classic Special Equities Fund Tax Free Fund
EV Classic Senior Floating-Rate Fund EV Marathon North Carolina Tax Free Fund
EV Classic Stock Fund EV Marathon Ohio Limited Maturity Tax Free Fund
EV Classic Tennessee Tax Free Fund EV Marathon Ohio Tax Free Fund
<PAGE>
EV Marathon Oregon Tax Free Fund EV Traditional Greater China Growth Fund
EV Marathon Pennsylvania Limited Maturity EV Traditional Greater India Fund
Tax Free Fund EV Traditional Growth Fund
EV Marathon Pennsylvania Tax Free Fund Eaton Vance Income Fund of Boston
EV Marathon Rhode Island Tax Free Fund EV Traditional Investors Fund
EV Marathon Strategic Income Fund Eaton Vance Municipal Bond Fund L.P.
EV Marathon South Carolina Tax Free Fund EV Traditional National Limited Maturity
EV Marathon Special Equities Fund Tax Free Fund
EV Marathon Stock Fund EV Traditional National Municipals Fund
EV Marathon Tennessee Tax Free Fund EV Traditional New Jersey Tax Free Fund
EV Marathon Texas Tax Free Fund EV Traditional New York Limited Maturity
EV Marathon Total Return Fund Tax Free Fund
EV Marathon Virginia Limited Maturity EV Traditional New York Tax Free Fund
Tax Free Fund EV Traditional Pennsylvania Tax Free Fund
EV Marathon Virginia Tax Free Fund EV Traditional Special Equities Fund
EV Marathon West Virginia Tax Free Fund EV Traditional Stock Fund
EV Traditional California Municipals Fund EV Traditional Total Return Fund
EV Traditional Connecticut Tax Free Fund Eaton Vance Cash Management Fund
EV Traditional Emerging Markets Fund Eaton Vance Liquid Assets Fund
EV Traditional Florida Insured Tax Free Fund Eaton Vance Money Market Fund
EV Traditional Florida Limited Maturity Eaton Vance Prime Rate Reserves
Tax Free Fund Eaton Vance Short-Term Treasury Fund
EV Traditional Florida Tax Free Fund Eaton Vance Tax Free Reserves
EV Traditional Government Obligations Fund Massachusetts Municipal Bond Portfolio
</TABLE>
<TABLE>
<CAPTION>
(B)
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
------------------ -------------------------- ---------------------
<S> <C> <C>
James B. Hawkes* Vice President and Director President, Principal
Executive Officer
and Trustee
William M. Steul* Vice President and Director None
Wharton P. Whitaker* President and Director None
Howard D. Barr Vice President None
2750 Royal View Court
Oakland, Michigan
Nancy E. Belza Vice President None
463-1 Buena Vista East
San Francisco, California
Chris Berg Vice President None
45 Windsor Lane
Palm Beach Gardens, Florida
H. Day Brigham, Jr.* Vice President None
Susan W. Bukima Vice President None
106 Princess Street
Alexandria, Virginia
Jeffrey W. Butterfield Vice President None
9378 Mirror Road
Columbus, Indiana
Mark A. Carlson* Vice President None
Jeffrey Chernoff Vice President None
115 Concourse West
Bright Waters, New York
William A. Clemmer* Vice President None
James S. Comforti Vice President None
1859 Crest Drive
Encinitas, California
Mark P. Doman Vice President None
107 Pine Street
Philadelphia, Pennsylvania
Michael A. Foster Vice President None
850 Kelsey Court
Centerville, Ohio
William M. Gillen Vice President None
280 Rea Street
North Andover, Massachusetts
Hugh S. Gilmartin Vice President None
1531-184th Avenue, NE
Bellevue, Washington
Richard E. Houghton* Vice President None
Brian Jacobs* Senior Vice President None
Stephen D. Johnson Vice President None
13340 Providence Lake Drive
Alpharetta, Georgia
Thomas J. Marcello Vice President None
553 Belleville Avenue
Glen Ridge, New Jersey
Timothy D. McCarthy Vice President None
9801 Germantown Pike
Lincoln Woods Apt. 416
Lafayette Hill, Pennsylvania
Morgan C. Mohrman* Senior Vice President None
Gregory B. Norris Vice President None
6 Halidon Court
Palm Beach Gardens, Florida
Thomas Otis* Secretary and Clerk Secretary
George D. Owen Vice President None
1911 Wildwood Court
Blue Springs, Missouri
F. Anthony Robinson Vice President None
510 Gravely Hill Road
Wakefield, Rhode Island
Benjamin A. Rowland, Jr.* Vice President, None
Treasurer and Director
John P. Rynne* Vice President None
George V.F. Schwab, Jr. Vice President None
9501 Hampton Oaks Lane
Charlotte, North Carolina
Cornelius J. Sullivan* Vice President None
Maureen C. Tallon Vice President None
518 Armistead Drive
Nashville, Tennessee
David M. Thill Vice President None
126 Albert Drive
Lancaster, New York
William T. Toner Vice President None
747 Lilac Drive
Santa Barbara, California
Chris Volf Vice President None
6517 Thoroughbred Loop
Odessa, Florida
Donald E. Webber* Senior Vice President None
Sue Wilder Vice President None
141 East 89th Street
New York, New York
- ----------
*Address is 24 Federal Street, Boston, MA 02110
</TABLE>
(C) Not applicable.
<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 23 Federal Street,
Boston, MA 02110 and 89 South Street, Boston, MA 02111, and its transfer
agent, The Shareholder Services Group, Inc., 53 State Street, Boston, MA
02104, with the exception of certain corporate documents and portfolio trading
documents which are in the possession and custody of Eaton Vance Management,
24 Federal Street, Boston, MA 02110. The Registrant is informed that all
applicable accounts, books and documents required to be maintained by
registered investment advisers are in the custody and possession of Eaton
Vance Management.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
The Registrant undertakes to furnish to each person to whom a prospectus
is delivered, a copy of the latest annual report to shareholders, upon request
and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Boston, and the
Commonwealth of Massachusetts, on the 14th day of July, 1995.
EATON VANCE SPECIAL INVESTMENT TRUST
By /s/ JAMES B. HAWKES
------------------------------
JAMES B. HAWKES, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
President, Principal Executive
/s/ JAMES B. HAWKES Officer and Trustee July 14, 1995
--------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer July 14, 1995
--------------------------
JAMES L. O'CONNOR
/s/ LANDON T. CLAY Trustee July 14, 1995
--------------------------
LANDON T. CLAY
/s/ DONALD R. DWIGHT Trustee July 14, 1995
--------------------------
DONALD R. DWIGHT
/s/ SAMUEL L. HAYES, III Trustee July 14, 1995
--------------------------
SAMUEL L. HAYES, III
/s/ NORTON H. REAMER Trustee July 14, 1995
--------------------------
NORTON H. REAMER
/s/ JOHN L. THORNDIKE Trustee July 14, 1995
--------------------------
JOHN L. THORNDIKE
/s/ JACK L. TREYNOR Trustee July 14, 1995
--------------------------
JACK L. TREYNOR
</TABLE>
<PAGE>
SIGNATURES
Investors Portfolio has duly caused this Amendment to the Registration
Statement on Form N-1A of Eaton Vance Special Investment Trust (File No. 2-
27962) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and the Commonwealth of Massachusetts on the
14th day of July, 1995.
INVESTORS PORTFOLIO
By: /s/ M. DOZIER GARDNER
------------------------------
M. DOZIER GARDNER, President
This Amendment to the Registration Statement on Form N-1A of Eaton Vance
Special Investment Trust (File No. 2-27962) has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Trustee, President and Principal
/s/ M. DOZIER GARDNER Executive Officer July 14, 1995
--------------------------
M. DOZIER GARDNER
Treasurer and Principal Financial and
/s/ JAMES L. O'CONNOR Accounting Officer July 14, 1995
--------------------------
JAMES L. O'CONNOR
/s/ LANDON T. CLAY Trustee July 14, 1995
--------------------------
LANDON T. CLAY
/s/ DONALD R. DWIGHT Trustee July 14, 1995
--------------------------
DONALD R. DWIGHT
/s/ SAMUEL L. HAYES, III Trustee July 14, 1995
--------------------------
SAMUEL L. HAYES, III
/s/ NORTON H. REAMER Trustee July 14, 1995
--------------------------
NORTON H. REAMER
/s/ JOHN L. THORNDIKE Trustee July 14, 1995
--------------------------
JOHN L. THORNDIKE
/s/ JACK L. TREYNOR Trustee July 14, 1995
--------------------------
JACK L. TREYNOR
</TABLE>
<PAGE>
SIGNATURES
Stock Portfolio has duly caused this Amendment to the Registration
Statement on Form N-1A of Eaton Vance Special Investment Trust (File No. 2-
27962) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and the Commonwealth of Massachusetts on the
14th of July, 1995.
STOCK PORTFOLIO
By: /s/ JAMES B. HAWKES
------------------------------
JAMES B. HAWKES, President
This Amendment to the Registration Statement on Form N-1A of Eaton Vance
Special Investment Trust (File No. 2-27962) has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Trustee, President and Principal
/s/ JAMES B. HAWKES Executive Officer July 14, 1995
--------------------------
JAMES B. HAWKES
Treasurer and Principal Financial and
/s/ JAMES L. O'CONNOR Accounting Officer July 14, 1995
--------------------------
JAMES L. O'CONNOR
/s/ LANDON T. CLAY Trustee July 14, 1995
--------------------------
LANDON T. CLAY
/s/ DONALD R. DWIGHT Trustee July 14, 1995
--------------------------
DONALD R. DWIGHT
/s/ SAMUEL L. HAYES, III Trustee July 14, 1995
--------------------------
SAMUEL L. HAYES, III
/s/ NORTON H. REAMER Trustee July 14, 1995
--------------------------
NORTON H. REAMER
/s/ JOHN L. THORNDIKE Trustee July 14, 1995
--------------------------
JOHN L. THORNDIKE
/s/ JACK L. TREYNOR Trustee July 14, 1995
--------------------------
JACK L. TREYNOR
</TABLE>
<PAGE>
SIGNATURES
Total Return Portfolio has duly caused this Amendment to the Registration
Statement on Form N-1A of Eaton Vance Special Investment Trust (File No. 2-
27962) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and the Commonwealth of Massachusetts on the
14th of July, 1995.
TOTAL RETURN PORTFOLIO
By: /s/ M. DOZIER GARDNER
--------------------------------
M. DOZIER GARDNER, President
This Amendment to the Registration Statement on Form N-1A of Eaton Vance
Special Investment Trust (File No. 2-27962) has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Trustee, President and Principal
/s/ M. DOZIER GARDNER Executive Officer July 14, 1995
--------------------------
M. DOZIER GARDNER
Treasurer and Principal Financial and
/s/ JAMES L. O'CONNOR Accounting Officer July 14, 1995
--------------------------
JAMES L. O'CONNOR
/s/ LANDON T. CLAY Trustee July 14, 1995
--------------------------
LANDON T. CLAY
/s/ DONALD R. DWIGHT Trustee July 14, 1995
--------------------------
DONALD R. DWIGHT
/s/ JAMES B. HAWKES Trustee July 14, 1995
--------------------------
JAMES B. HAWKES
/s/ SAMUEL L. HAYES, III Trustee July 14, 1995
--------------------------
SAMUEL L. HAYES, III
/s/ NORTON H. REAMER Trustee July 14, 1995
--------------------------
NORTON H. REAMER
/s/ JOHN L. THORNDIKE Trustee July 14, 1995
--------------------------
JOHN L. THORNDIKE
/s/ JACK L. TREYNOR Trustee July 14, 1995
--------------------------
JACK L. TREYNOR
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
PAGE IN SEQUENTIAL
EXHIBIT NO. DESCRIPTION NUMBERING SYSTEM
- ----------- ----------- ----------------
<S> <C> <C>
(1)(a) Amended and Restated Declaration of Trust dated September 27,
1993.
(b) Amendment and Restatement of Establishment and Designation of
Series dated June 19, 1995.
(2)(a) By-Laws.
(b) Amendment to By-Laws of Eaton Vance Special Investment Trust
dated December 13, 1993.
(5)(a) Management Contract with Eaton Vance Management for EV
Traditional Emerging Markets Fund dated March 24, 1994.
(b) Management Contract with Eaton Vance Management for EV Marathon
Emerging Markets Fund dated March 24, 1994.
(c) Management Contract with Eaton Vance Management for EV
Traditional Greater India Fund dated March 24, 1994.
(d) Management Contract with Eaton Vance Management for EV Marathon
Greater India Fund dated March 24, 1994.
(6)(a)(1) Amended Distribution Agreement between Special Investment Trust
(on behalf of its domestic Classic series) and Eaton Vance
Distributors, Inc.
(2) Amended Distribution Agreement between Special Investment Trust
(on behalf of its domestic Marathon series) and Eaton Vance
Distributors, Inc.
(3) Amended Distribution Agreement between Special Investment Trust
(on behalf of its domestic Traditional series) and Eaton Vance
Distributors, Inc.
(4) Distribution Agreement with Eaton Vance Distributors, Inc. for
EV Traditional Emerging Markets Fund.
(5) Distribution Agreement with Eaton Vance Distributors, Inc. for
EV Marathon Emerging Markets Fund.
(6) Distribution Agreement with Eaton Vance Distributors, Inc. for
EV Traditional Greater India Fund.
(7) Distribution Agreement with Eaton Vance Distributors, Inc. for
EV Marathon Greater India Fund.
(8) Custodian Agreement with Investors Bank & Trust Company dated
March 24, 1994.
(9) Amended Administrative Services Agreement between Eaton Vance
Special Investment Trust (on behalf of each of its series) and
Eaton Vance Management dated June 19, 1995.
(11)(a) Consent of Independent Accountants for EV Classic Investors
Fund dated July 14, 1995.
(b) Consent of Independent Accountants for EV Marathon Investors
Fund dated July 14, 1995.
(c) Consent of Independent Accountants for EV Traditional Investors
Fund dated July 14, 1995.
(d) Consent of Independent Accountants for EV Classic Stock Fund
dated July 14, 1995.
(e) Consent of Independent Accountants for EV Marathon Stock Fund
dated July 14, 1995.
(f) Consent of Independent Accountants for EV Traditional Stock
Fund dated July 14, 1995.
(g) Consent of Independent Accountants for EV Classic Total Return
Fund dated July 14, 1995.
(h) Consent of Independent Accountants for EV Marathon Total Return
Fund dated July 14, 1995.
(i) Consent of Independent Accountants for EV Traditional Total
Return Fund dated July 14, 1995.
(15)(a) Amended Distribution Plan for Eaton Vance Special Investment
Trust (on behalf of its domestic Classic series) dated June 19,
1995.
(b) Amended Distribution Plan for Eaton Vance Special Investment
Trust (on behalf of its domestic Marathon series) dated June
19, 1995.
(c) Amended Service Plan for Eaton Vance Special Investment Trust
(on behalf of its domestic Traditional series) dated June 19,
1995.
(d) Distribution Plan for EV Traditional Emerging Markets Fund
dated March 24, 1994.
(e) Distribution Plan for EV Marathon Emerging Markets Fund dated
March 24, 1994.
(f) Distribution Plan for EV Traditional Greater India Fund dated
March 24, 1994.
(g) Distribution Plan for EV Marathon Greater India Fund dated
March 24, 1994.
(16) Schedules for Computation of Performance Quotations.
(17)(a) Power of Attorney for Eaton Vance Special Investment Trust
dated February 25,1994.
(b) Power of Attorney for Emerging Markets Portfolio.
(c) Power of Attorney for South Asia Portfolio.
(d) Power of Attorney for Special Investment Portfolio.
(e) Power of Attorney for Investors Portfolio.
(f) Power of Attorney for Stock Portfolio.
(g) Power of Attorney for Total Return Portfolio.
</TABLE>
EXHIBIT 99.1(a)
AMENDED AND RESTATED DECLARATION OF TRUST
OF
EATON VANCE SPECIAL INVESTMENT TRUST
Dated: September 27, 1993
AMENDED AND RESTATED DECLARATION OF TRUST, made September 27, 1993 by
the undersigned Trustees being a majority of the Trustees in office on such
date, Landon T. Clay, Donald R. Dwight, James B. Hawkes, Samuel L. Hayes, III,
Norton H. Reamer, John L. Thorndike and Jack L. Treynor, hereinafter referred to
collectively as the "Trustees" and individually as a "Trustee", which terms
shall include any successor Trustees or Trustee and any present Trustees who are
not signatories to this instrument.
WHEREAS, on March 27, 1989, the initial Trustees established a trust
under a Declaration of Trust as heretofore amended and restated for the
investment and reinvestment of funds contributed thereto; and
WHEREAS, a majority of the Trustees desire to amend and restate said
Declaration of Trust pursuant to the provisions thereof;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed under
this Declaration of Trust as so amended and restated for the benefit of the
holders, from time to time, of the shares of beneficial interest issued
hereunder and subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is Eaton Vance Special
Investment Trust (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following terms
have the following respective meanings:
(a)"Administrator" means the party, other than the Trust, to a contract
described in Section 3.3 hereof.
(b)"By-Laws" means the By-Laws referred to in Section 2.5 hereof, as
from time to time amended.
(c)"Class" means any division or Class of Shares within a Series or
Fund, which Class is or has been established within such Series or Fund in
accordance with the provisions of Article V.
(d)The term "Commission" has the meaning given it in the 1940 Act.
(e)"Custodian" means any person other than he Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f)"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 exclusively to the article or section in which such words appear.
(g)"Fund" or "Funds," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities
belonging and allocated thereto.
(h)"His" shall include the feminine and neuter, as will as the
masculine, genders.
(i)The term "Interested Person" has the meaning specified in the 1940
Act subject, however, to such exceptions and exemptions as my be granted by the
Commission in any rule, regulation or order.
(j)"Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(k)The "1940 Act" means the Investment Company Act of 1940 and the
Rules and Regulations thereunder, as amended from time to time.
(l)"Person" means and includes individuals, corporations, partnerships,
trusts, associations, firms joint ventures and other entities, whether or not
legal entities, as well as governments instrumentalities, and agencies and
political subdivisions thereof, and quasi-governmental agencies and
instrumentalities.
(m)"Principal Underwriter" means the party, other than the Trust, to a
contract described in Section 3.1 hereof.
(n)"Prospectus" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o)"Series" individually or collectively means the separately managed
component(s) of Fund(s) of the Trust (or, if the Trust shall have only one such
component of Fund then that one) as may be established and designated from time
to time by the Trustees pursuant to Section 5.5 hereof.
(p)"Shareholder" means a record owner of Outstanding Shares. A
shareholder of Shares of a Series shall be deemed to own a proportionate
undivided beneficial interest in such Series equal to the number of Shares of
such Series of which he is the record owner divided by the total number of
Outstanding Shares of such Series. A Shareholder of Shares of a Class within a
Series shall be deemed to own a proportionate undivided beneficial interest in
such Class equal to the number of Shares of such Class of which he is the record
owner divided by the total number of Outstanding Shares of such Class. As used
herein the term "Shareholder" shall, when applicable to one or more Series of
Funds or to one or more Classes thereof, refer to the record owners of
Outstanding Shares of such Series, Fund or Funds or of such Class or Classes of
shares.
(q)"Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series or of any Class within any and all
Series of any Class within any Series (as the context may require) which may be
established by the Trustees, and includes fractions of Shares as well as whole
Shares. "Outstanding Shares" means those Shares shown from time to time on the
books of the Trust or its Transfer Agent as then issued and outstanding, but
shall not include Shares which have been redeemed or repurchased by the Trust
and which are at the time held in the treasury of the Trust.
(r)"Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(s)"Trust" means Eaton Vance Special Investment Trust. As used herein
the term Trust shall, when applicable to one or more Series or Funds, refer to
such series or Funds.
(t)The "Trustees" means the persons who have signed this Declaration,
so long as they shall continue in office in accordance with the terms hereof,
and all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee of the
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
(u)"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 any and all assets of or allocated to any Series
or Class, as the context may require.
(v)Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Series or Class of Shares, the term "vote" when
used in connection with an action of Shareholders shall include a vote taken at
a meeting of Shareholders or the consent or consents of Shareholders taken
without such a meeting. Except as such term may be otherwise defined by the
Trustees in connection with any meeting or other action of Shareholders or in
conjunction with the establishment of any Series or Class of Shares, the term
"vote of a majority of the outstanding voting securities" as used in Sections
8.2 and 8.4 shall have the same meaning as is assigned to that term in the 1940
Act.
ARTICLE II
TRUSTEES
Section 2.1. Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees and they shall have all powers and
authority necessary, appropriate or desirable to perform that function. The
number, term of office, manner of election, resignation, filling of vacancies
and procedures with respect to meetings and actions of the Trustees shall be as
prescribed in the By-Laws of the Trust.
Section 2.2. General Powers. The Trustees in all instances shall act as
principals for and on behalf of the Trust and the applicable Series thereof, and
their acts shall bend the Trust and the applicable Series. The Trustees shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments that they may consider necessary, appropriate
or desirable in connection with the management of the Trust. The Trustees shall
not be bound or limited in any way by present or future laws, practices or
customs in regard to trust investments or to other investments which may be made
by fiduciaries, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
promote, implement or accomplish the various objectives and interests of the
Trust and of its Series of Shares. The Trustees shall have full power and
authority to adopt such accounting and tax accounting practices as they consider
appropriate for the Trust and for any Series or Class of Shares. 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, and with such full powers
of delegation as the Trustees may exercise from time to time. 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 of instrumentalities
of the United States of America and of foreign governments, and to do all such
other things as they deem necessary, appropriate or desirable in order to
promote or implement the interests of the Trust or of any Series or Class of
Shares although such things are not herein specifically mentioned. Any
determinations to what is in the interests of the Trust or of any Series or
Class of Shares made by the Trustees in good fait shall be conclusive and
binding upon all Shareholders. In construing the provisions of this Declaration,
the presumption shall be in favor of a grand of plenary power and authority to
the Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
Section 2.3. Investments. The Trustees shall have full power and
authority:
(a)To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b)To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities including, but no limited to, stocks, profit-sharing
interests or participations and all other contracts for or evidences of equity
interests, bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, bills, notes and all other contracts for or
evidences of indebtedness, money market instruments including bank certificates
of deposit, finance paper, commercial paper, bankers' acceptances and other
obligations, and all other negotiable and non-negotiable securities and
instruments, however named or described, issued by corporations, trusts,
associations or any other Persons, domestic or foreign, or issued or guaranteed
by the United States of America or any agency or instrumentality thereof, by the
government of any foreign country, by any State, territory or possession of the
United States, by any political subdivision or agency or instrumentality of any
State or foreign country, or by any other government or other governmental or
quasi-governmental agency or instrumentality, domestic or foreign; to acquire
and dispose of interests in domestic or foreign loans made by banks and other
financial institutions; to deposit any assets of the Trust in any bank, trust
company or banking institution or retain any such assets in domestic or foreign
cash or currency; to purchase and sell gold and silver bullion, precious or
strategic metals, coins and currency of all countries; to engage in "when
issued" and delayed delivery transactions; to enter into repurchase agreements,
reverse repurchase agreements and firm commitment agreements; to employ all
types and kinds of hedging techniques and investment management strategies; and
to change the investments of the Trust and of each Series.
(c)To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any Trust Property or any of
the foregoing securities, instruments or investments; to purchase and sell (or
write) options on securities, currency, precious metals and other commodities,
indices, futures contracts and other financial instruments and assets and inter
into closing and other transactions in connection therewith; to enter into all
types of commodities contracts, including without limitation the purchase and
sale of futures contracts on securities, currency, precious metals and other
commodities, indices and other financial instruments and assets; to enter into
forward foreign currency exchange contracts and other foreign exchange and
currency transactions of all types and kinds; to enter into interest rate,
currency and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d)To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in the Trust Property,
including without limitation the right to vote thereon and otherwise act with
respect thereto; and to do all acts and things for the preservation, protection,
improvement and enhancement in value of all such securities and assets.
(e)To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or kind
of property, real or personal, including domestic or foreign currency, and any
right or interest therein.
(f)To borrow money and in this connection issue notes, commercial paper
or other evidence of indebtedness; to secure borrowings by mortgaging, pledging
or otherwise subjecting as security all or any part of the Trust Property; to
endorse, guarantee, or undertake the performance of any obligation or engagement
of any other Person; and to lend all or any part of the Trust Property to other
Persons.
(g)To aid, support or assist by further investment or other action any
Person, any obligation of or interest in which is included in the Trust Property
or in the affairs of which the Trust or any Series has any direct or indirect
interest; to do all acts and things designed to protect, preserve, improve or
enhance the value of such obligation or interest; and to guarantee or become
surety on any or all of the contracts, securities and other obligations of any
such Person.
(h)To carry on any other business in connection with or incidental to
any of the foregoing powers referred to in this Declaration, to do everything
necessary, appropriate or desirable for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power referred to in this
Declaration, either alone or in association with others, and to do every other
act or thing incidental or appurtenant to or arising out of or connected with
such business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have
full power in their discretion, without any requirement of approval by
Shareholders, to invest part or all of the Trust Property (or part or all of the
assets of any Fund), or to dispose of part or all of the Trust Property (or part
or all of the assets of any Fund) and invest the proceeds of such disposition,
in securities issued by one or more other investment companies registered under
the 1940 Act. Any such other investment company my (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.
Section 2.4. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other 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 any Series, or in
the name of a custodian, subcustodian, agent, securities depository, clearing
agency, system for the central handling of securities or other book-entry
system, or in the name of a nominee or nominees of the Trust of a Series, or in
the name of a nominee or nominees of a custodian, subcustodian, agent,
securities depository, clearing agent, system for the central handling of
securities or other book-entry system, or in the name of any other Person as
nominee. 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 termination of the term of office, 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.
Section 2.5. By-Laws. The Trustees shall have full power and authority
to adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and to amend and repeal such By-Laws. Unless the By-Laws specifically
require that Shareholders authorize or approve the amendment or repeal of a
particular provision of the By-Laws, any provision of the By-Laws my be amended
or repealed by the Trustees without Shareholder authorization or approval.
Section 2.6. Distribution and Repurchase of Shares. The Trustees shall
have full power and authority to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in Shares. Shares may be sold for cash or property or other consideration
whenever and in such amounts and manner as the Trustees deem desirable. The
Trustees shall have full power to provide for the distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both. The
Trustees shall have full power and authority to cause the Trust and any Series
and Class or Shares to finance distribution activities in the manner described
in Section 3.7, and to authorize the Trust, on behalf of one or more Series or
Classes of Shares, to adopt or enter into one or more plans or arrangements
whereby multiple Series and Classes of Shares may be issued and sold to various
types of investors.
Section 2.7. Delegation. The Trustees shall have full power and
authority to delegate from time to time to such of their number or to officers,
employees or agents of the Trust or to other Persons the doing of such things
and the execution of such agreements or other instruments either in the name of
the Trust or any Series of the Trust of the names of the Trustees or otherwise
as the Trustees may deem desirable or expedient.
Section 2.8. Collection and Payment. The Trustees shall have full power
and authority to collect all property due to the Trust; to pay all claims,
including taxes, against the Trust or Trust Property; to prosecute, defend,
compromise, settle or abandon any claims relating to the Trust or 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 2.9. Expenses. The Trustees shall have full power and authority
to incur on behalf of the Trust or any Series or Class of Shares and pay any
costs or expenses which the Trustees deem necessary, appropriate, desirable or
incidental to carry out, implement or enhance the business or operations of the
Trust or any Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Series or Class of Shares, and to credit all or any part of the profit, income
or receipt (including without limitation any deferred sales charge or fee,
whether contingent or otherwise, paid or payable to the Trust or any Series or
Class of Shares on any redemption or repurchase of Shares) to the principal or
capital of the Trust or any Series or Class of Shares.
Section 2.10. Manner of Acting. Except as otherwise provided herein or
in the By-Laws, the Trustees and committees of the Trustees shall have full
power and authority to act in any manner which they deem necessary, appropriate
or desirable to carry out, implement or enhance the business or operations of
the Trust or any Series thereof.
Section 2.11. Miscellaneous Powers. The Trustees shall have full power
and authority to: (a) distribute to Shareholders all or any part of the earnings
or profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Series or Class of Shares, the amount
of such distributions and the manner of payment thereof to be solely at the
discretion of the Trustees; (b) employ, engage or contract with such Persons as
the Trustees may deem desirable for the transaction of the business or
operations of the Trust or any Series thereof; (c) enter into or cause the Trust
or any Series thereof to enter into joint ventures, partnerships (whether as
general partner, limited partner or otherwise) and any other combinations or
associations; (d) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees or other Persons as the 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;
(e) purchase, and pay for out of Trust Property, insurance policies which may
insure such of the Shareholders, Trustees, officers, employees, agents,
investment advisers, administrators, principal underwriters, distributors or
independent contractors of the Trust as the Trustees deem appropriate against
loss or liability 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 loss or liability; (f) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (g)
indemnify or reimburse any Person with whom the Trust or any Series thereof has
dealings, including without limitation the Investment Adviser, Administrator,
Principal Underwriter, Transfer Agent and financial service firms, to such
extent as the Trustees shall determine; (h) guarantee the indebtedness or
contractual obligations of other Persons; (i) determine and change the fiscal
year of the Trust or any Series thereof and the methods by which its and their
books, accounts and records shall be kept; and (j) adopt a seal for the Trust,
but the absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust or any Series thereof.
Section 2.12. Litigation. The Trustees shall have full power and
authority, in the name and on behalf of the Trust, to engage in and to
prosecute, defend, compromise, settle, abandon, or adjust by arbitration or
otherwise, any actions, suits proceedings, disputes, claims and demands relating
to the Trust, and out of the assets of the Trust or any Series thereof to pay or
to satisfy any liabilities, losses, debts, claims or expenses (including without
limitation attorneys' fees) incurred in connection therewith, including those of
litigation, and such power shall include without limitation the power of the
Trustees or any committee thereof, in the exercise of their or its good faith
business judgment, to dismiss or terminate any action, suit, proceeding,
dispute, claim or demand, derivative or otherwise, brought by any Person,
including a Shareholder in his own name or in the name of the Trust or any
Series thereof, whether or not the Trust or any Series thereof or any of the
Trustees may be named individually therein or the subject matter arises by
reason of business for or on behalf of the Trust or any Series thereof.
ARTICLE III
CONTRACTS
Section 3.1. Principal Underwriter. The Trustees may in their
discretion form time to time authorize the Trust to enter into one or more
contracts providing for the sale of the Shares. Pursuant to any such contract
the Trust may either agree to sell the Shares to the other party to the
contractor appoint such other party its sales agent for such Shares. In either
case, any such contract shall be on such terms and conditions as the Trustees
may in their discretion determine; and any such contract may also provide for
the repurchase or sale of Shares by such other party as principal or as agent of
the Trust.
Section 3.2. Investment Adviser. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more investment
advisory agreements, or, if the Trustees establish multiple Series, separate
investment advisory agreements, with respect to one or more Series whereby the
other party or parties to any such agreements shall undertake to furnish the
Trust or such Series investment advisory and research facilities and services
and such other facilities and services, if any, as the Trustees shall consider
desirable and all upon such terms and conditions as the Trustees may in their
discretion determine. Notwithstanding any provisions of this Declaration, the
Trustees may authorize the Investment Adviser, in its discretion and without any
prior consultation with the Trust, to buy, sell, lend and otherwise trade and
deal in any and all securities, commodity contracts and other investments and
assets of the Trust and of each Series and to engage in and employ all types of
transactions and strategies in connection therewith. Any such action take
pursuant to such agreement shall be deemed to have been authorized by all of the
Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as ma be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
Section 3.3. Administrator. The Trustees may in their discretion from
time to time authorize the Trust to enter into an administration agreement or,
if the Trustees establish multiple Series or Classes, separate administration
agreements with respect to one or more Series or Classes, whereby the other
party to such agreement shall undertake to furnish to the Trust or a Series or a
Class thereof with such administrative facilities and services and such other
facilities and services, if any, as the Trustees consider desirable and all upon
such terms and conditions as the Trustees may in their discretion determine.
Section 3.4. Other Service Providers. The Trustees may in their
discretion from time to time authorize the Trust to enter into one or more
agreements with respect to one or more Series or Classes of Shares whereby the
other party or parties to any such agreements will undertake to provide to the
Trust or Series or Class or Shareholders or beneficial owners of Shares such
services as the Trustees consider desirable and all upon such terms and
conditions as the Trustees in their discretion may determine.
Section 3.5. Transfer Agents. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Series
thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
Section 3.6. Custodian. The Trustees may appoint a bank or trust
company having an aggregate capital, surplus and undivided profits (as shown in
its last published report) of at least $2,000,000 as the principal custodian of
the Trust (the "Custodian") with authority as its agent to hold cash and
securities owned by the Trust and to release and deliver the same upon such
terms and conditions as may be agreed upon between the Trust and Custodian.
Section 3.7. Plans of Distribution. The Trustees may in their
discretion authorize the Trust, on behalf of one or more Series or Classes of
Shares, to adopt or enter into a plan or plans of distribution and any related
agreements whereby the Trust or Series or Class may finance directly or
indirectly any activity which is primarily intended to result i sales of Shares
or any distribution activity within the meaning of Rule 12b-1 (or successor
rule) under the 1940 Act. Such plan or plans of distribution and any related
agreements may contain such terms and conditions as the Trustees may in their
discretion determine, subject to the requirements of the 1940 Act and any other
applicable rules and regulations.
Section 3.8. Affiliations. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of or has
any interest in any Person or any parent or affiliate of any such Person, with
which a contract or agreement of the character described in Sections 3.1, 3.2,
3.3, 3.4, 3.5 or 3.6 above has been or will be made or to which payments have
been or will be made pursuant to a plan or related agreement described in
Section 3.7 above, or that any such Person , or any parent or affiliate thereof,
is a Shareholder of or has an interest in the Trust, or that
(ii) any such Person also has similar contracts, agreements or plans
with other investment companies (including, without limitation, the investment
companies referred to in the last paragraph of Section 2.3) or organization, or
has other business activities or interests, shall not affect in any way the
validity of any such contract, agreement or plan or disqualify any Shareholder,
Trustee or officer of the Trust from authorizing, voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Officers
and Employees. 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 or any Series thereof. All Persons dealing
or contracting with the Trustees as such or with the Trust or any Series thereof
shall have recourse only to the Trust or such Series for the payment of their
claims or for the payment or satisfaction of claims, obligations or liabilities
arising out of such dealings or contracts. No Trustee, officer or employee of
the Trust, whether past, present or future, shall be subject to any personal
liability whatsoever to any such Person, and all such Persons shall look solely
to the Trust Property, or the assets of one or more specific Series of the Trust
if the claim arises from the act, omission or other conduct of such Trustee,
officer or employee with respect to only such Series, for satisfaction of claims
of any nature arising in connection with the affairs of the Trust or such
Series. If any Shareholder, Trustee, officer or employee, as such, of the Trust
or any Series thereof, is made a party to any suit or proceeding to enforce any
such liability of the Trust or any Series thereof, he shall not, on account
thereof, be held to any personal liability.
Section 4.2. Trustee's Good Faith Action; Advice of Others; No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, investment adviser or other adviser, administrator,
distributor or principal underwriter, custodian or transfer, dividend
disbursing, shareholder servicing or accounting agent of the Trust, nor shall
any Trustee be responsible for the act or omission of any other Trustee. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration and their duties as Trustees, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. In discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the records, books and
accounts of the Trust and upon reports made to the Trustees by any officer,
employee, agent, consultant, accountant, attorney, investment adviser or other
adviser, principal underwriter, expert, professional firm or independent
contractor. The Trustees as such shall not be required to give any bond or
surety or any other security for the performance of their duties. No provision
of this Declaration shall protect any Trustee or officer of the Trust against
any liability to the Trust of its Shareholders to which he would otherwise be
subject by reason of his own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Indemnification. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Series thereof of the Shareholders, Trustees, officers and
employees of the Trust and of such other Persons as the Trustees in the exercise
of their discretion my deem appropriate or desirable. Any such indemnification
may be mandatory of permissive, and may be insured against by policies
maintained by the Trust.
Section 4.4. No Duty of Investigation. No purchaser, lender or other
Person dealing with the Trustees or any officer, employee or agent of the Trust
or a Series thereof 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 of a Series thereof 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 this Declaration or in their capacity
as officers, employees or agents of the Trust or a Series thereof. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or a Series thereof or undertaking made or issued by the Trustees may
recite that the same is executed or made by them not individually, but as
Trustees under the Declaration, and that the obligations of the Trust of a
Series thereof under any such instrument are not binding upon any of the
Trustees or Shareholders individually, but bind only the Trust Property or the
Trust Property of the applicable Series, and may contain any further recital
which they may deem appropriate, but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.
Section 4.5. Reliance on Records and Experts. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the records,
books and accounts of the Trust or a Series thereof, upon an opinion or other
advice of legal counsel, or upon reports made or advice given to the Trust or a
Series thereof by any Trustee or any of its officers employees or by the
Investment Adviser, the Administrator, The Custodian, The Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited, and the number of Shares of each Series or Class thereof
that may be issued hereunder is unlimited. The Trustees shall have the exclusive
authority without the requirement of Shareholder authorization or approval to
establish and designate one or more Series of Shares and one or more Classes
thereof as the Trustees deem necessary, appropriate or desirable. Each Share of
any series shall represent a beneficial interest only in the assets of that
Series. Subject to the provisions of Section 5.5 hereof, the Trustees may also
authorize the creation of additional Series of Shares (the proceeds of which may
be invested in separate and independent investment portfolios) and additional
Classes of Shares within any Series. All Series issued hereunder including,
without limitation, Shares issued in connection with a dividend or distribution
in Shares or a split in Shares, shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust
property of every description and the right to conduct any business of the Trust
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 or on any Fund nor can they
be called upon to share or assume any losses of the Trust or of any Fund 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 this Declaration. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Series of Class of Shares.
Section 5.3. 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
Massachusetts business trust. Nothing in this Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time and without any authorization or 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, a such time or times and on such
terms as the Trustees may deem appropriate or desirable, except that only Shares
previously contracted to be sold may be issued during any period when the right
of redemption is suspended pursuant to Section 6.9 hereof, 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 and
reissue and resell full and fractional Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares of the Trust or, if the
Shares be divided into Series or Classes, of any Series or any Class thereof of
the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or fractional Shares as the Trustees may in their discretion
determine. The Trustees may authorize the issuance of certificates of beneficial
interest to evidence the ownership of Shares. Shares held in the treasury shall
not be voted nor shall such shares be entitled to any dividends or other
distributions declared with respect thereto.
Section 5.5. Series and Class Designations. Without limiting the
exclusive authority of the Trustees set forth in Section 5.1 to establish and
designate any further Series, it is hereby confirmed that the Trust consists of
the presently Outstanding Shares of the following Series: Eaton Vance Special
Equities Fund (the "Existing Series"). Without limiting the exclusive authority
of the Trustees set forth in Section 5.1 to establish and designate any further
Classes, there are hereby established and designated distinct Classes of Shares
of the Existing Series: (none as of the date of this Declaration). The Shares of
the Existing Series and such Classes thereof herein established and designated
and any Shares of any further Series and Classes thereof that may from time to
time be established and designated by the Trustees shall be established and
designated, and the variations i the relative rights and preferences as between
the different Series and Classes shall be fixed and determined, by the Trustees
(unless the Trustees otherwise determine with respect to further Series or
Classes at the time of establishing and designating the same); provided, that
all Shares shall be identical except that there may be variations so fixed and
determined between different Series or Classes thereof as to investment
objective, policies and restrictions, sales charges, purchase prices,
determination of net asset value, assets, liabilities, expenses, costs, charges
and reserves belonging or allocated thereto, the price, terms and manner of
redemption or repurchase, special and relative rights as to dividends and
distributions and on liquidation, conversion rights, exchange rights, and voting
rights. All references to Shares in this Declaration shall be deemed to be
Shares of any or all Series or Classes as the context may require. As to any
Existing Series and Classes, both heretofore and herein established and
designated, and any further division of the Trust into additional Series or
Classes, the following provisions shall be applicable:
(i)The number of authorized Shares and the number of Shares of each
Series or Class thereof 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 or Class into one or more other Series or one or more
other classes that may be established and designated from time to time. The
Trustees may hold as treasury shares (of the same or some other Series or
Class), reissue for such consideration and on such terms as they may determine,
or cancel any Shares of any Series or Class reacquired by the Trust at their
discretion from time to time.
(ii)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 form 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 except as may otherwise be required by
applicable tax laws, 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 or their delegate shall
allocate them 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 such allocation by the Trustees or
their delegate shall be conclusive and binding upon the Shareholders of all
Series for all purposes. No holder of Shares of any Series shall have any claim
on or right to any assets allocated or belonging to any other Series.
(iii)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 or their delegate 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. The assets belonging to each particular Series shall be
charged with the liabilities, expenses, costs, charges and reserves of the Trust
so allocated to that Series and all liabilities, expenses, costs, charges and
reserves attributable to that Series which are not readily identifiable as
belonging to any particular Class thereof. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees or their delegate shall be
conclusive and binding upon the Shareholders of all Series and Classes for all
purposes. The Trustees shall have full discretion to determine which items are
capital; and each such determination shall be conclusive and binding upon the
Shareholders. The assets of a particular Series of the Trust shall, under no
circumstances, be charged with liabilities, expenses, costs, charges and
reserves attributable to any other Series or Class thereof of the Trust. All
Persons extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that particular
series for payment of such credit, contract or claim.
(iv)Dividends and distributions on Shares of a particular Series or
Class may be paid or credited in such manner and with such frequency as the
Trustees may determine, to the holders of Shares of that Series or Class, from
such of the earnings or profits, surplus (including paid-in surplus), capital
(including paid-in capital) or assets belonging to that Series, as the Trustees
may deem appropriate or desirable, after providing for actual and accrued
liabilities, expenses, costs, charges and reserves belonging and allocated to
that Series or Class. Such dividends and distributions may be paid daily or
otherwise pursuant to the offering prospectus relating to the Shares or pursuant
to a standing vote or votes of the Trustees adopted only once or from time to
time or pursuant to other authorization or instruction of the Trustees. All
dividends and distributions on Shares of a particular Series or Class shall be
distributed pro rata to the Shareholders of that Series or class in proportion
to the number of Shares of that Series or Class held by such Shareholders at the
time of record established for the payment or crediting of such dividends or
distributions.
(v)Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
Class thereof shall be entitled to receive his pro rata share of distributions
of income and capital gains made with respect to such Series or Class net of
liabilities, expenses, costs, charges and reserves belonging and allocated to
such Series or Class. Upon redemption of his Shares of indemnification for
liabilities incurred by reason of his being or having been a Shareholder of a
Series or Class, such Shareholder shall be paid solely out of the funds and
property of such Series of the Trust. Upon liquidation or termination of a
Series or Class thereof of the Trust, a Shareholder of such Series or Class
thereof shall be entitled to receive a pro rata share of the net assets of such
Series based on the net asset value of his Shares. A Share holder of a
particular Series of the Trust shall not be entitled to commence or participate
in a derivative or class action on behalf of any other Series or the
Shareholders of any other Series of the Trust.
(vi)On any matter submitted to a vote of Shareholder, the Shares
entitled to vote thereon and the manner in which such Shares shall be voted
shall be as set forth in the By-Laws or proxy materials for the meeting or other
solicitation materials or as otherwise determined by the Trustees, subject to
any applicable requirements of the 1940 Act. The Trustees shall have full power
and authority to call meetings of the Shareholder of a particular Class of
Classes of Shares or of one or more particular Series of Shares, or otherwise
call for the action of such Shareholders on any particular matter.
(vii)Except as otherwise provided in this Article V, the Trustees shall
have full power and authority to determine the designations, preferences,
privileges, sales charges, purchase prices, assets, liabilities, expenses,
costs, charges and reserves belonging or allocated thereto, limitations and
rights, including without limitation voting, dividend, distribution and
liquidation rights, of each Class and Series of Shares. Subject to any
applicable requirements of the 1940 Act, the Trustees shall have the authority
to provide that Shares of one Class shall be automatically converted into Shares
of another Class of the same Series or that the holders of Shares of any Series
or Class shall have the right to convert or exchange such Shares into shares of
one or more other Series or Classes of Shares, all in accordance with such
requirements, conditions and procedures as may be established by the Trustees.
(viii)The establishment and designation of any Series or Class 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 Class, or as otherwise
provided in such instrument. The Trustees may by an instrument subsequently
executed by a majority of their number amend, restate or rescind any prior
instrument relating to the establishment and designation of any such Series or
Class. Each instrument referred to in this paragraph shall have the status of an
amendment to this Declaration in accordance with Section 8.4 hereof, and a copy
of each such instrument shall be filed in accordance with Section 10.2 hereof.
Section 5.6. Assent to Declaration of Trust and By-Laws. Every
Shareholder, by virtue of having become a Shareholder, shall be held to have
expressly assented and agreed to all the terms and provisions of this
Declaration and of the By-Laws of the Trust.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a)Shares of the Trust shall be
redeemable, at such times and in such manner as may be permitted by the Trustees
from time to time. The trustees shall have full power and authority to vary and
change the right of redemption applicable to the various Series and Classes of
Shares established by the Trustees. Redeemed or repurchased shares may be resold
by the Trust. The Trust may require any shareholder to pay a sales charge to the
Trust, the Principal Underwriter or any other Person designated by the Trustees
upon redemption or repurchase of Shares in such amount and upon such conditions
as shall be determined from time to time by the Trustees.
(b)The Trust shall redeem the Shares of the Trust or any Series or
Class thereof at the price determined as hereinafter set forth, upon the
appropriately verified written application of the record holder thereof (or upon
such other form of request as the Trust may use for the purpose) deposited at
such office or agency as may be designated from time to time for that purpose by
the Trustees. The Trust may from time to time establish additional requirements,
terms, conditions and procedures, not inconsistent with the 1940 Act, relating
to the redemption of Shares.
Section 6.2. Price. Shares shall be redeemed at a price based on their
net asset value determined as set forth in Section 7.1 hereof as of such time as
the Trustees shall prescribe. The amount of any sales charge or redemption fee
payable upon redemption of shares may be deducted from the proceeds of such
redemption.
Section 6.3. Payment. Payment of the redemption price of Shares thereof
shall be made in cash or in property to the Shareholder at such time and in the
manner, not inconsistent with the 1940 Act, as may be specified from time to
time in the then effective prospectus relating to such shares, subject to the
provisions of Sections 6.4 and 6.9 hereof. Notwithstanding the foregoing, the
Trust or its agent may withhold from such redemption proceeds any amount arising
(i) from a liability of the redeeming Shareholder to the Trust or (ii) in
connection with any federal or state tax withholding requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 7.1 hereof, the Trust shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series or Class thereof, the rights of Shareholders (including those who shall
have applied for redemption pursuant to Section 6.1 hereof but who shall not yet
received payment) to have Shares redeemed and paid for by the Trust or a Series
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 at the office or agency
where his application or request for redemption was made, with draw his
application or request and withdraw any Share certificates on deposit.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Principal Underwriter or another agent designated for
the purpose, by agreement with the owner thereof at a price not exceeding the
net asset value per share determined as of such time as the Trustees shall
prescribe. The Trust may from time to time establish the requirements, terms,
conditions and procedures relating to such repurchases, and the amount of any
sales charge or repurchase fee payable on any repurchase of shares may be
deducted from the proceeds of such repurchase.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in
their sole discretion, may cause the Trust to redeem all of the shares of one or
more Series or Class thereof held by any Shareholder if the value of such Shares
held by such Shareholder is less than the minimum amount established from time
to time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. (a)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, 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 or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series 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 or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust or any Series of the
Trust in question would result in such disqualification. The redemption shall be
effected in the manner provided in Section 6.1 and at the redemption price
referred to in Section 6.2.
(b)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, or to comply with the requirements of any other taxing authority.
Section 6.8. Reduction in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series or Class thereof pursuant to the provisions of
Section 7.3.
Section 6.9. 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 a Fund
of securities owned by it is not reasonably practicably or it is not reasonable
practicable for the Trust or a Fund fairly to determine the value of its net
assets, of (iv) as the Commission may by order permit for the protection of
security holders of the Trust. 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 application or request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust or of each Series or class thereof shall be determined on
such days and at or as of such time or times as the Trustees may determine. Any
reference in this Declaration to the time at which a determination of net asset
value is made shall mean the time as of which the determination is made. The
power and duty to determine net asset value may be delegated by the Trustees
from time to time to the Investment Adviser, the Administrator, the Custodian,
the Transfer Agent or such other Person or Persons as the Trustees may
determine. The value of the assets of the Trust or any Series thereof shall be
determined in a manner authorized by the Trustees. From the total value of said
assets, there shall be deducted all indebtedness, interest, taxes, payable or
accrued, including estimated taxes on unrealized book profits, expenses and
management charges accrued to the appraisal date, amounts determined and
declared as a dividend or distribution and all other items in the nature of
liabilities which shall be deemed appropriate, as incurred by or allocated to
the Trust or any series or Class thereof. The resulting amount, which shall
represent the total net assets of the Trust or Series or Class thereof, shall be
divided by the number of Shares of the Trust or series or Class thereof
outstanding at the time and the quotient so obtained shall be deemed to be the
net asset value of the Shares of the Trust or Series or Class thereof. The trust
may declare a suspension of the determination of net asset value to the extent
permitted by the 1940 Act. It shall not be a violation of any provision of this
Declaration if Shares are sold, redeemed or repurchased by the Trust at a price
other than one based on net asset value if the net asset value is affected by
one or more errors inadvertently made in the pricing of portfolio securities or
other investments or in accruing or allocating income, expenses, reserves or
liabilities. No provision of this Declaration shall be construed to restrict or
affect the right or ability of the Trust to employ or authorize the use of
pricing services, appraisers or any other means, methods, procedures, or
techniques in valuing the assets or calculating the liabilities of the Trust or
any Series or Class thereof.
Section 7.2. Dividends and Distributions. (a)The Trustees may from time
to time distribute ratably among the Shareholders of the Trust or of a Series or
Class thereof such proportion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Series held by the Trustees as they may deem appropriate or desirable. Such
distributions may be made in cash, additional Shares or property (including
without limitation any type of obligations of the Trust or Series or Class or
any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time.
The Trustees may always retain from the earnings or profits such amounts as they
may deem appropriate or desirable to pay the expenses and liabilities of the
Trust or a Series or Class thereof or to meet obligations of the Trust or a
Series or Class thereof, together with such amounts as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business or operations of the Trust or such Series. The Trust
may adopt and offer to Shareholders such dividend reinvestment plans, cash
dividend payout plans or other distribution plans as the Trustees may deem
appropriate or desirable. The Trustees may in their discretion determine that an
account administration fee or other similar charge may be deducted directly from
the income and other distributions paid on Shares to a Shareholder's account in
any Series or Class.
(b)The Trustees may prescribe, in their absolute discretion, such bases
and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
(c)Inasmuch as the computation of net income and gains for federal
income tax purposes may vary from the computation thereof on the books of
account, the above provisions shall be interpreted to give the Trustees full
power and authority in their absolute discretion to distribute for any fiscal
year as dividends and as capital gains distributions, respectively, additional
amounts sufficient to enable the Trust or a Series thereof to avoid or reduce
liability for taxes.
Section 7.3. Constant Net Asset Value; Reduction of Outstanding Shares.
The Trustees may determine to maintain the net asset value per Share of any
Series or Class at a designated constant amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Series or Class as dividends payable
in additional Shares of that Series or Class or in cash or in any combination
thereof and for the handling of any losses attributable to that Series or Class.
Such procedures may provide that, if, for any reason, the income of any such
Series or Class determined at any time is a negative amount, the Trust may with
respect to such Series or Class (i) offset each Shareholder's pro rata share of
such negative amount from the accrued dividend account of such Shareholder, or
(ii) reduce the number of Outstanding Shares of such Series or Class by reducing
the number of Shares in the account of such Shareholder by that number of full
and fractional Shares which represents the amount of such excess negative
income, or (iii) cause to be recorded on the books of the Trust an asset account
in the amount of such negative income, which account may be reduced by the
amount, provided that the same shall thereupon become the property of the Trust
with respect to such Series or Class and shall not be paid to any Shareholder,
of dividends declared thereafter upon the Outstanding Shares of such Series or
Class on the day such negative income is experienced, until such asset account
is reduced to zero, or (iv) combine the methods described in clauses (i), (ii)
and (iii) of this sentence, in order to cause the net asset value per Share of
such Series or Class to remain at a constant amount per Outstanding Share
immediately after such determination and declaration. The Trust may also fail to
declare a dividend out of income for the purpose of causing the net asset value
of any such Share to be increased. The Trustees shall have full discretion to
determine whether any cash or property received shall be treated as income or as
principal and whether any item expense shall be charged to the income or the
principal account, and their determination made in good faith shall be
conclusive upon all Shareholders. In the case of stock dividends or similar
distributions received, the Trustees shall have full discretion to determine, in
the light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
provision contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Series or Class thereof or the
income of the Series or Class thereof, or for the declaration and payment of
dividends and distributions on any Series or Class of Shares.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
SERIES OR CLASS; MERGERS; AMENDMENTS
Section 8.1. Duration. The Trust shall continue without limitation of
time but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation of authority pursuant to the terms of this
Declaration or of the By-Laws.
Section 8.2. Termination of the Trust or a Series or a Class. (a) The
Trust or any Series or Class thereof may be terminated by: (1) the affirmative
vote of the holders of not less than two-thirds of the Shares outstanding and
entitled to vote at any meeting of Shareholders of the Trust or the appropriate
Series or Class thereof, or by an instrument or instruments in writing without a
meeting, consented to by the holders of two-thirds of the Shares of the Trust or
a Series or Class thereof, provided, however, that, if such termination is
recommended by the Trustees, the vote of a majority of the outstanding voting
securities of the Trust or a Series or Class thereof entitled to vote thereon
shall be sufficient authorization; or (2) by means of an instrument in writing
signed by a majority of the Trustees, to be followed by a written notice to
Shareholders stating that a majority of the Trustees as determined that the
continuation of the Trust or a Series or a Class thereof is not in the best
interest of the Trust, such Series or Class or of their respective Shareholders.
Such determination may (but need not) be based on factors or events adversely
affecting the ability of the Trust, such Series or Class to conduct its business
and operations in an economically viable manner. Such factors and events may
include (but are not limited to) the inability of a Series or Class or the Trust
to maintain its assets at an appropriate size, changes in laws or regulations
governing the Series or Class or the Trust or affecting assets of the type in
which such Series or Class or the Trust invests, or political, social, legal or
economic developments or trends having an adverse impact on the business or
operations of such Series or Class or the Trust invests, or political, social,
legal or economic developments or trends having an adverse impact on the
business or operations of such Series or Class or the Trust. Upon the
termination of the Trust or the Series or Class,
(i)The Trust, Series or Class 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,
Series or Class and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust, Series or Class shall have been
wound up, including the power to fulfill or discharge the contracts of the
Trust, Series or Class, collect its assets, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part of the remaining Trust Property
or assets allocated or belonging to such Series or Class 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 do all other acts appropriate to liquidate its business.
(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 the remaining property of the
terminated Series or Class, in cash or in kind or in any combination thereof,
among the Shareholders of the Trust or the Series or Class according to their
respective rights.
(b)After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Massachusetts
Secretary of State an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties with respect to the Trust or the terminated Series or
Class, and rights and interests of all Shareholders of the Trust or the
terminated Series or Class shall thereupon cease.
Section 8.3. Merger, Consolidation or Sale of Assets of a Series. A
particular Series may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees and
without any authorization, vote or consent of the Shareholders; 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. The Trustees may also at any time sell and convert into money
all the assets of a particular Series. Upon making provision for the payment of
all outstanding obligations, taxes, and other liabilities, accrued or
contingent, of the particular Series, the Trustees shall distribute the
remaining assets of such Series among the Shareholders of such Series according
to their respective rights. Upon completion of the distribution of the remaining
proceeds or the remaining assets, the Series shall terminate and the Trustees
shall take the action provided in Section 8.2(b) hereof and they shall thereupon
be discharged from all further liabilities and duties with respect to such
Series, and the rights and interests of all Shareholders of the terminated
Series shall thereupon cease.
Section 8.4. Amendments. The execution of an instrument setting forth
the establishment and designation and the relative rights and preferences of any
Series or Class of Shares (or amending, restating or rescinding any such prior
instrument) in accordance with Section 5.5 hereof shall, without any
authorization, consent or vote of the Shareholders, effect an amendment of this
Declaration. Except as otherwise provided in this Section 8.4, if authorized by
vote of a majority of the outstanding voting securities of the Trust the
financial interests of which are affected by the amendment and which are
entitled to vote thereon (which securities shall, unless otherwise provided by
the Trustees, vote together on such amendment as a single class), the Trustees
may amend this Declaration by an instrument signed by a majority of the Trustees
then in office. No Shareholder not so affected by any such amendment shall be
entitled to vote thereon. The Trustees may (by such an instrument) also amend or
otherwise supplement this Declaration of Trust, without any authorization,
consent or vote of the Shareholders, to change the name of the Trust or any Fund
or to make such other changes as do not have a materially adverse effect on the
financial interests of Shareholders hereunder or if they deem it necessary or
desirable to conform this Declaration to the requirements of applicable federal
or state laws or regulations or the requirements of the Internal Revenue Code of
1986, but the Trustees shall not be liable for failing to do so. Any such
amendment or supplemental Declaration of Trust shall be effective as provided in
the instrument containing its terms or, if there is no provision therein with
respect to effectiveness, upon the signing of such instrument by a majority of
the Trustees then in office. Copies of any amendment or of any supplemental
Declaration of Trust shall be filed as specified in Section 10.2 hereof. 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.
Notwithstanding any other provision hereof, until such time as Shares
are issued and sold, this Declaration may be terminated or amended in any
respect by an instrument signed by a majority of the Trustees then in office.
ARTICLE X
MISCELLANEOUS
Section 10.1. Use of the Words "Eaton Vance". Eaton Vance Corp.
(hereinafter referred to as "EVC"), which owns (either directly or through
subsidiaries) all of the capital shares of the Investment Adviser of the Trust
and the Funds (or of the investment adviser or each of the investment companies
referred to in the last paragraph of Section 2.3), has consented to the use by
the Trust and the Funds of the identifying words "Eaton Vance" in the name of
the Trust and in the name of each Fund. Such consent is conditioned upon the
continued employment of EVC or a subsidiary or affiliate of EVC as Investment
Adviser of the Trust and of each such Fund or as the investment adviser of each
of the investment companies referred to in the last paragraph of Section 2.3. As
between the Trust and itself, EVC shall control the use of the name of the Trust
and the name of any Fund insofar as such name contains the identifying words
"Eaton Vance". EVC may from time to time use the identifying words "Eaton Vance'
in other connections and for other purposes, including, without limitation, in
the names of other investment companies, trusts corporations or businesses which
it may manage, advise, sponsor or own or in which it may have a financial
interest. EVC may require the Trust to cease using the identifying words "Eaton
Vance" in the name of the Trust or any Fund if EVC or a subsidiary or affiliate
of EVC ceases to act as investment adviser of the Trust or such Fund or as the
investment adviser of each of the investment companies referred to in the last
paragraph of Section 2.3.
Section 10.2. Filing of Copies, References, Headings and Counterparts.
The original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. A copy of this instrument, of any amendment hereto, and of each
supplemental declaration of trust shall be filed with the Massachusetts
Secretary of State and with any other governmental office where such filing may
from time to time be required. Anyone dealing with the Trust may rely on a
certificate by a Trustee or an officer of the Trust as to whether or not any
such amendments or supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same effect as
if it were the original, may rely on a copy certified by a Trustee or an officer
of the Trust to be a copy of this instrument or of any such amendment hereto or
supplemental declaration of trust.
In this instrument or in any such amendment or supplemental declaration
of trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original, but such counterparts shall constitute one instrument. 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 then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may hereafter be referred to in lieu of the original Declaration and
the various amendments and supplements thereto.
Section 10.3. Applicable Law. The Trust set forth in this instrument is
made in the Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 10.4. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue Code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of this Declaration; provided, however, that such
determination shall not affect an of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination
(b)If any provision of this 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 provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being a majority of the current
Trustees of the Trust, have executed this instrument this 27th day of September,
1993.
/s/ Landon T. Clay
- ------------------------- -------------------------
Landon T. Clay Norton H. Reamer
/s/ Donald R. Dwight /s/ John L. Thorndike
- ------------------------- -------------------------
Donald R. Dwight John L. Thorndike
/s/ James B. Hawkes /s/ Jack L. Treynor
- ------------------------- -------------------------
James B. Hawkes Jack L. Treynor
/s/ Samuel L. Hayes III
- -------------------------
Samuel L. Hayes, III
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, Massachusetts
Then personally appeared the above named Landon T. Clay, Donald R.
Dwight, James B. Hawkes, Samuel L. Hayes, III, John L. Thorndike and Jack L.
Treynor being a majority of the Trustees then in office, who severally
acknowledge the foregoing instrument to be their free act and deed.
Before me,
/s/ Lynne M. Hetu
----------------------------
My commission expires 7/31/98
<PAGE>
The names and addresses of all the Trustees of the Trust are as
follows:
Landon T. Clay Samuel L. Hayes, III
Old Dublin Road 345 Nahatan Street
Hancock, NH 03449 Westwood, MA 02090
Donald R. Dwight Norton H. Reamer
Clover Mill Lane 70 Circuit Road
Lyme, NH 03768 Chestnut Hill, MA 02167
James B. Hawkes John L. Thorndike
11 Quincy Park 10 Main Street
Beverly, MA 01915 Dover, MA 02030
Jack L. Treynor
504 Via Almar
Palos Verdes Estates, CA 90274
Trust Address:
24 Federal St
Boston, MA 021102
EXHIBIT 99.1(b)
EATON VANCE SPECIAL INVESTMENT TRUST
Amendment and Restatement
of
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
(as amended and restated June 19, 1995)
WHEREAS, the Trustees of Eaton Vance Special Investment Trust, a
Massachusetts business trust (the "Trust"), have previously designated separate
series (or "Funds"); and
WHEREAS, the Trustees now desire to further redesignate the series or
Funds pursuant to Section 5.1 of Article V of the Trust's Amended and Restated
Declaration of trust dated September 27, 1993 (the "Declaration of Trust");
NOW, THEREFORE, the undersigned, being at least a majority of the duly
elected and qualified Trustees presently in office of the Trust, hereby divide
the shares of beneficial interest of the Trust into eighteen separate series
("Funds"), each Fund to have the following special and relative rights:
1. The Funds shall be designated as follows:
<TABLE>
<CAPTION>
<S> <C>
EV Classic Emerging Markets Fund EV Classic Special Equities Fund
EV Marathon Emerging Markets Fund EV Marathon Special Equities Fund
EV Traditional Emerging Markets Fund EV Traditional Special Equities Fund
EV Classic Greater India Fund EV Classic Stock Fund
EV Marathon Greater India Fund EV Marathon Stock Fund
EV Traditional Greater India Fund EV Traditional Stock Fund
EV Classic Investors Fund EV Classic Total Return Fund
EV Marathon Investors Fund EV Marathon Total Return Fund
EV Traditional Investors Fund EV Traditional Total Return Fund
</TABLE>
2. Each Fund 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 statements under the Securities Act of
1933 and the Investment Company Act of 1940. Each share of beneficial interest
of each Fund ("share") 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 Fund shall be entitled to vote and shall represent a pro rata beneficial
interest in the assets allocated to that Fund, all as provided in the
Declaration of Trust. The proceeds of sales of shares of each Fund, together
with any income and gain thereon, less any diminution of expenses thereof, shall
irrevocably belong to such Fund, unless otherwise required by law. Each share of
a Fund shall be entitled to receive its pro rata share of net assets of that
Fund upon liquidation of that Fund.
3. Shareholders of each Fund shall vote separately as a class to the
extent provided in Rule 18f-2, as from time to time in effect, under the
Investment Company Act of 1940.
4. The assets and liabilities of the Trust shall be allocated among the
above-referenced Funds as set forth in Section 5.5 of Article V of the
Declaration of Trust, except as provided below:
(a) Costs incurred by each Fund in connection with its organization and
start-up, including Federal and state registration and qualification fees and
expenses of the initial public offering of such Fund's shares, shall (if
applicable) be borne by such Fund and deferred and amortized over the five year
period beginning on the date that such Fund commences operations.
(b) Reimbursement required under any expense limitation applicable to
the Trust shall be allocated among those Funds whose expense ratios exceed such
limitation on the basis of the relative expense ratios of such Funds.
(c) The liabilities, expenses, costs, charges and reserves of the Trust
(other than the management and investment advisory fees or the organizational
expenses paid by the Trust) which are not readily identifiable as belonging to
any particular Fund shall be allocated among the Funds on an equitable basis as
determined by the Trustees.
5. 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 Fund now or hereafter created, or to otherwise change the
special and relative rights of any such Fund, and to terminate any Fund or add
additional Funds as provided in the Declaration of Trust.
6. Any Fund may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees;
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. The Trustees may also at any time sell and
convert into money all the assets of any Fund. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, accrued or
contingent, of such Fund, the Trustees shall distribute the remaining assets of
such Fund ratably among the holders of the outstanding shares. Upon completion
of the distribution of the remaining proceeds or the remaining assets as
provided in this paragraph 6, the Fund shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder with respect
to such Fund and the right, title and interest of all parties with respect to
such Fund shall be cancelled and discharged.
7. It is anticipated that the Declaration of Trust may be revised to
authorize the Trustees to divide each Fund and any other series of share into
two or more classes and to fix and determine the relative rights and preferences
as between, and all provisions applicable to, each of the different classes so
established and designated by the Trustees. The establishment and designation of
any class of any Fund or other 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, and
provisions applicable to, such class, or as otherwise provided in such
instrument.
Dated: June 19, 1995
/s/ Landon T. Clay /s/ Samuel L. Hayes III
- ------------------------- -------------------------
Landon T. Clay Samuel L. Hayes, III
/s/ Donald R. Dwight /s/ Norton H. Reamer
- ------------------------- -------------------------
Donald R. Dwight Norton H. Reamer
/s/ James B. Hawkes /s/ John L. Thorndike
- ------------------------- -------------------------
James B. Hawkes John L. Thorndike
/s/ Jack L. Treynor
-------------------------
Jack L. Treynor
EXHIBIT 99.2(a)
BY-LAWS
OF
EATON VANCE SPECIAL EQUITIES FUND
ARTICLE I
The Trustees
SECTION 1. Initial Trustees, Election and Term of Office. The Trustees named in
the preamble of the Declaration of Trust dated March 27, 1989, as from time to
time amended (the "Declaration of Trust"), and any additional Trustees appointed
pursuant to Section 4 of this Article I, shall serve as Trustees during the
lifetime of the Trust, except as otherwise provided below.
SECTION 2. Number of Trustees. The number of Trustees shall be fixed by the
Trustees, provided, however, that such number shall at no time exceed eighteen.
SECTION 3. Resignation and Removal. Any Trustee may resign his trust by written
instrument 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. Any
Trustee who requests in writing to be retired or who has become incapacitated by
illness or injury may be retired by written instruments signed by a majority of
the other Trustees, specifying the date of his retirement. Any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective.
No natural person shall serve as a Trustee of the Trust after the
holders of record of not less than two-thirds of the outstanding shares of
beneficial interest of the Trust (the "shares") have declared that he be removed
from that office by a declaration in writing signed by such holders and filed
with the Custodian of the assets of the Trust or by votes cast by such holders
in person or by proxy at a meeting called for the purpose. Solicitation of such
a declaration shall be deemed a solicitation of a proxy within the meaning of
Section 20(a) of the Investment Company Act of 1940 (the "Act").
The Trustees of the Trust shall promptly call a meeting of the
shareholders for the purpose of voting upon a question of removal of any such
Trustee or Trustees when requested in writing so to do by the record holders of
not less than 10 per centum of the outstanding shares.
Whenever ten or more shareholders of record of the Trust 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 1 per centum of the outstanding shares, 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 pursuant to this Section 3 and accompanied by a form of
communication and request which they wish to transmit, the Trustees shall within
five business days after receipt of such application either
(1) 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
(2) 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 subparagraph
(2) above of this Section 3, 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 at their addresses as recorded on the
books, unless within five business days after such tender the Trustees shall
mail to such applicants and file with the Securities and Exchange Commission
(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.
After the Commission has had an opportunity for hearing upon the
objections specified in the written statement so filed by the Trustees, the
Trustees or such applicants may demand that the Commission enter an order either
sustaining one or more of such objections or refusing to sustain any of such
objections. If the Commission shall enter an order refusing to sustain any of
such objections, or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all objections so sustained have been met, and shall enter an
order so declaring, the Trustees shall mail copies of such material to all
shareholders with reasonable promptness after the entry of such order and the
renewal of such tender.
Until such provisions become null, void, inoperative and removed from
these By-Laws pursuant to the next sentence, the provisions of all but the first
paragraph of this Section 3 may not be amended or repealed without the vote of a
majority of the Trustees and a majority of the outstanding shares of the Trust.
These same provisions shall be deemed null, void, inoperative and removed from
these By-Laws upon the effectiveness of any amendment to the Act which
eliminates them from Section 16 of the Act or the effectiveness of any successor
Federal law governing the operation of the Trust which does not contain such
provisions.
SECTION 4. Vacancies. In case of the declination, death, resignation,
retirement, removal, or inability of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office whereupon the
appointment shall take effect. Within three months of such appointment the
Trustees shall cause notice of such appointment to be mailed to each shareholder
at his address as recorded on the books of the Trustees. An appointment of a
Trustee may be made by the Trustees then in office and notice thereof mailed to
shareholders as aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder and under the Declaration of Trust. The power of
appointment is subject to the provisions of Section 16(a) of the Act.
Whenever a vacancy among the Trustees shall occur, until such vacancy
is filled, or while any Trustee is absent from the Commonwealth of Massachusetts
or, if not a domiciliary of Massachusetts, is absent from his state of domicile,
or is physically or mentally incapacitated by reason of disease or otherwise,
the other Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy, absence or incapacity shall be conclusive,
provided, however, that no vacancy shall remain unfilled for a period longer
than six calendar months.
SECTION 5. Temporary Absence of Trustee. 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 other powers hereunder except as herein otherwise
expressly provided.
SECTION 5. Effect of Death, Resignation, Removal, Etc. of a Trustee. 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 the Declaration of Trust or these
By-Laws.
ARTICLE II
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers or agents as the Trustees may
from time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in the Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be chosen
annually by the Trustees. The President shall be chosen annually by and from the
Trustees.
Except for the offices of President and Secretary, two or more offices
may be held by a single person. The officers shall hold office until their
successors are chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign by
filing a written resignation with the President or with the Trustees or with the
Secretary, which shall take effect on being so filed or at such time as may
otherwise be specified therein. The Trustees may at any meeting remove an
officer.
ARTICLE III
Powers and Duties of Trustees and Officers
SECTION 1. Trustees. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility, so far as such powers are not inconsistent with the
laws of the Commonwealth of Massachusetts, the Declaration of Trust, or these
By-Laws.
SECTION 2. Executive and Other Committees. The Trustees may elect from their own
number an executive committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, including the purchase and sale of securities,
while the Trustees are not in session, and such other powers and duties as the
Trustees may from time to time delegate to such committee. The Trustees may also
elect from their own number other committees from time to time, the number
composing such committees and the powers conferred upon the same to be
determined by the Trustees.
SECTION 3. Chairman of the Trustees. The Trustees may, but need not, appoint
from among their number a Chairman. When present he shall preside at the
meetings of the shareholders and of the Trustees. He may call meetings of the
Trustees and of any committee thereof whenever he deems it necessary. He shall
be an executive officer of this Trust and shall have, with the President,
general supervision over the business and policies of this Trust, subject to the
limitations imposed upon the President, as provided in Section 4 of this Article
III.
SECTION 4. President. In the absence of the Chairman of the Trustees, the
President shall preside at all meetings of the shareholders. Subject to the
Trustees and to any committees of the Trustees, within their respective spheres,
as provided by the Trustees, he shall at all times exercise a general
supervision and direction over the affairs of the Trust. He 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. He 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
President 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. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company as the
Trustees shall employ as custodian in accordance with Article VII of the
Declaration of Trust. He shall make annual reports in writing of the business
conditions of the Trust, which reports shall be preserved upon its records, and
he shall furnish such other reports regarding the business and condition as the
Trustees may from time to time require. The Treasurer shall perform such duties
additional to foregoing as the Trustees may from time to time designate.
SECTION 6. Secretary. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings. He shall have custody of the seal, if any, of the Trust and
shall perform such duties additional to the foregoing as the Trustees may from
time to time designate.
SECTION 7. Other Officers. Other officers elected by the Trustees shall perform
such duties as the Trustees may from time to time designate.
SECTION 8. Compensation. The Trustees and officers of the Trust may receive such
reasonable compensation from the Trust for the performance of their duties as
the Trustees may from time to time determine.
ARTICLE IV
Meetings of Shareholders
SECTION 1. Meetings. Meetings of the shareholders may be called at any time by
the President, and shall be called by the President or the Secretary at the
request, in writing or by resolution, of a majority of the Trustees, or at the
written request of the holder or holders of ten percent (10%) or more of the
total number of shares of the then issued and outstanding shares of the Trust
entitled to vote at such meeting. Any such request shall state the purposes of
the proposed meeting.
SECTION 2. Place of Meetings. Meetings of the shareholders shall be held at the
principal place of business of the Trust in Boston, Massachusetts, unless a
different place within the United States is designated by the Trustees and
stated as specified in the respective notices or waivers of notice with respect
thereto.
SECTION 3. Notice of Meetings. Notice of all meetings of the shareholders,
stating the time, place and the purposes for which the meetings are called,
shall be given by the Secretary to each shareholder entitled to vote thereat,
and to each shareholder who under the By-Laws is entitled to such notice, by
mailing the same postage paid, addressed to him at his address as it appears
upon the books of the Trust, at least seven (7) days before the time fixed for
the meeting, and the person giving such notice shall make an affidavit with
respect thereto. If any shareholder shall have failed to inform the Trust of his
post office address, no notice need be sent to him. No notice need be given to
any shareholder 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 4. Quorum. Except as otherwise provided by law, to constitute a quorum
for the transaction of any business at any meeting of shareholders, there must
be present, in person or by proxy, holders of a majority of the total number of
shares of the then issued and outstanding shares of the Trust entitled to vote
at such meeting; provided that if a series of shares is entitled to vote as a
separate series on any matter, then in the case of that matter a quorum shall
consist of the holders of a majority of the total number of shares of the then
issued and outstanding shares of that series entitled to vote at the meeting.
Shares owned directly or indirectly by the Trust, if any, shall not be deemed
outstanding for this purpose.
If a quorum, as above defined, shall not be present for the purpose of
any vote that may properly come before any meeting of shareholders at the time
and place of any meeting, the shareholders present in person or by proxy and
entitled to vote at such meeting on such matter holding a majority of the shares
present and entitled to vote on such matter may by vote adjourn the meeting from
time to time to be held at the same place without further notice than by
announcement to be given at the meeting until a quorum, as above defined,
entitled to vote on such matter, shall be present, whereupon any such matter may
be voted upon at the meeting as though held when originally convened.
SECTION 5. Voting. At each meeting of the shareholders every shareholder of the
Trust who shall be entitled to one (1) vote in person or by proxy for each of
the then issued and outstanding shares of the Trust then having voting power in
respect of the matter upon which the vote is to be taken, standing in his name
on the books of the Trust at the time of the closing of the transfer books for
the meeting, or, if the books be not closed for any meeting, on the record date
fixed as provided in Section 4 of Article VI of these By-Laws for determining
the shareholders entitled to vote at such meeting, or if the books be not closed
and no record date be fixed, at the time of the meeting. The record holder of a
fraction of a share shall be entitled in like manner to a corresponding fraction
of a vote. Notwithstanding the foregoing, the Trustees may, in conjunction with
the establishment of any series of shares, establish conditions under which the
several series shall have separate voting rights or no voting rights.
All elections of Trustees shall be conducted in any manner approved at
the meeting of the shareholders at which said election is held, and shall be by
ballot if so requested by any shareholder entitled to vote thereon. The persons
receiving the greatest number of votes shall be deemed and declared elected.
Except as otherwise required by law or by the Declaration of Trust or by these
By-Laws, all matters shall be decided by a majority of the votes cast, as
hereinabove provided, by persons entitled to vote thereon. With respect to the
submission of a management or investment advisory contract or a change in
investment policy to the shareholders for any shareholder approval required by
the Act, such matter shall be deemed to have been effectively acted upon with
respect to any series of shares if the holders of the lesser of
(i) 67 per centum or more of the shares of that series present
or represented at the meeting if the holders of more than 50
per centum of the outstanding shares of that series are
present or represented by proxy at the meeting or
(ii) more than 50 per centum of the outstanding shares of that
series
vote for the approval of such matter, notwithstanding (a) that such matter has
not been approved by the holders of a majority of the outstanding voting
securities of any other series affected by such matter (as described in rule
18f-2 under the Act) or (b) that such matter has not been approved by the vote
of a majority of the outstanding voting securities of the Trust (as defined in
the Act).
SECTION 6. Proxies. Any shareholder entitled to vote upon any matter at any
meeting of the shareholders may so vote by proxy. A proxy may be in writing
subscribed by the shareholder or by his duly authorize representative, agent or
attorney. A written proxy shall be dated; if an undated written proxy solicited
by the management of the Trust is delivered to the Trust or its agent or
representative, such proxy shall be deemed dated by the shareholder on the date
of its receipt by the Trust or its agent or representative. A written proxy need
not be sealed, witnessed or acknowledged. The shareholder may also authorize and
empower the persons named as proxies, representatives, agents or attorneys (or
their duly appointed substitutes), or any one of them on any form of proxy
solicited by the management of the Trust to vote all shares of the Trust which
he is entitled to vote upon any matter at any meeting of the shareholders by
recording his voting instructions on any recording device maintained for the
purpose by the Trust or its agent or representative; such recorded instructions
shall be deemed to constitute a written proxy subscribed by the shareholder and
delivered by him to the Trust or its agent or representative and shall be deemed
to be dated as of the date such instructions were transmitted, and the
shareholder shall be deemed to have approved and ratified all actions taken by
such persons in accordance with the voting instructions so recorded. No proxy
which is dated (or deemed dated) more than six months before the initial session
of the meeting shall be accepted and no such proxy shall be valid after the
final adjournment of the meeting. A proxy solicited by the management of the
Trust purpoting to be executed or transmitted by or on behalf of a shareholder
shall be valid unless challenged at or prior to exercise of the proxy, and the
burden of proving any inalidity shall be borne by the perosn asserting the
challenge. A proxy solicited by the management of the Trust with respect to
shares held in the name of two or more persons shall be valid if executed or
transmitted by one of them unless at or prior to its exercise the Trust receives
a specific written notice to the contrary from any one of them.
SECTION 7. Consents. 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
of Trust 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 consents shall be treated for all purposes as a vote taken at
a meeting of shareholders.
ARTICLE V
Trustees Meetings
SECTION 1. Meetings. The Trustees may in their discretion provide for regular or
stated meetings of the Trustees. Meetings of the Trustees other than regular or
stated meetings shall be held whenever called by the Chairman, President or by
any other Trustee at the time being in office. Any or all of the Trustees may
participate in a meeting by means of a conference telephone or similar
communications equipment through which all persons participating in the meeting
can hear each other at the same time, and participation by such means shall
constitute presence in person at a meeting.
SECTION 2. Notices. Notice of regular or stated meetings need not be given.
Notice of the time and place of each meeting other than regular or stated
meetings shall be given by the Secretary or by the Trustee calling the meeting
and shall be mailed to each Trustee at least two (2) days before the meeting, or
shall be telegraphed, cabled, or wirelessed to each Trustee at his business
address or personally delivered to him at least one (1) day before the meeting.
Such notice may, however, be waived by all the Trustees. 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 special meeting.
SECTION 3. Consents. Any action required or permitted to be taken at any meeting
of the Trustees may be taken by the Trustees without a meeting if a written
consent thereto is signed by all the Trustees and filed with the records of the
Trustees' meetings. Such consent shall be treated as a vote at a meeting for all
purposes.
SECTION 4. Place of Meetings. The Trustees may hold their meetings within or
without the Commonwealth of Massachusetts.
SECTION 5. Quorum and Manner of Acting. A majority of the Trustees in office
shall be present in person at any regular stated 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 the Declaration of Trust, by these
By-Laws or by statute) 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 quorum, a majority of the Trustees present may adjourn the meeting
from time to time until a quorum shall be present. Notice of any adjourned
meeting need not be given.
ARTICLE VI
Shares of Beneficial Interest
SECTION 1. Certificates for Shares of Beneficial Interest. Certificates for
shares of beneficial interest of any series of shares of the Trust, if issued,
shall be in such form as shall be approved by the Trustees. They shall be signed
by, or in the name of, the Trust by the President and by the Treasurer and may,
but need not be, sealed with seal of the Trust; provided, however, that where
such certificate is signed by a transfer agent or a transfer clerk acting on
behalf of the Trust or a registrar other than a Trustee, officer or employee of
the Trust, the signature of the President and Treasurer and the seal may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates, shall cease to be such officer or officers of the Trust whether
because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Trust, such certificate or
certificates may nevertheless be adopted by the Trust and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signatures shall have been used thereon had not
ceased to be such officer or officers of the Trust.
SECTION 2. Transfer of Shares. Transfers of shares of beneficial interest of any
series of shares of the Trust shall be made only on the books of the Trust by
the owner thereof or by his attorney thereunto authorized by a power of attorney
duly executed and filed with the Secretary or a transfer agent, and only upon
the surrender of any certificate or certificates for such shares. The Trust
shall not impose any restrictions upon the transfer of the shares of any series
of the Trust, but this requirement shall not prevent the charging of customary
transfer agent fees.
SECTION 3. Transfer Agent and Registrar; Regulations. The Trust shall, if and
whenever the Trustees shall so determine, maintain one or more transfer offices
or agencies, each in the charge of a transfer agent designated by the Trustees,
where the shares of beneficial interest of the Trust shall be directly
transferable. The Trust shall, if and whenever the Trustees shall so determine,
maintain one or more registry offices, each in the charge of a registrar
designated by the Trustees, where such shares shall be registered, and no
certificate for shares of the Trust in respect of which a transfer agent and/or
registrar shall have been designated shall be valid unless countersigned by such
transfer agent and/or registered by such registrar. The principal transfer agent
may be located within or without the Commonwealth of Massachusetts and shall
have charge of the share transfer books, lists and records, which shall be kept
within or without Massachusetts in an office which shall be deemed to be the
share transfer office of the Trust. The Trustees may also make such additional
rules and regulations as it may deem expedient concerning the issue, transfer
and redemption of certificates for shares of the Trust.
SECTION 4. Closing of Transfer Books and Fixing Record Date. The Trustees may
fix in advance a time which shall be not more than sixty (60) days before the
date of any meeting of shareholders, or the date for the payment of any dividend
or the making of any distribution to shareholders or the last day on which the
consent or dissent of shareholders may be effectively expressed for any purpose,
as the record date for determining the shareholders having the right to notice
of and to vote at such meeting, and any adjournment thereof, or the right to
receive such dividend or distribution or the right to give such consent or
dissent, and in such case only shareholders of record on such record date shall
have such right, notwithstanding any transfer of shares on the books of the
Trust after the record date. The Trustees may, without fixing such record date,
close the transfer books for all or any part of such period for any of the
foregoing purposes.
SECTION 5. Lost, Destroyed or Mutilated Certificates. The holder of any shares
of a series of the Trust shall immediately notify the Trust of any loss,
destruction or mutilation of the certificate therefor, and the Trustees may, in
their discretion, cause new certificate or certificates to be issued to him, in
case of mutilation of the certificate, upon the surrender of the mutilated
certificate, or, in case of loss or destruction of the certificate, upon
satisfactory proof of such loss or destruction and, in any case, if the Trustees
shall so determine, upon the delivery of a bond in such form and in such sum and
with such surety or sureties as the Trustees may direct, to indemnify the Trust
against any claim that may be made against it on account of the alleged loss or
destruction of any such certificate.
SECTION 6. Record Owner of Shares. The Trust shall be entitled to treat the
person in whose name any share of a series of the Trust is registered on the
books of the Trust as the owner thereof, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person.
ARTICLE VII
Fiscal Year
The fiscal year of the Trust shall end on December 31, of each year,
provided, however, that the Trustees may from time to time change the fiscal
year.
ARTICLE VIII
Seal
The Trustees may adopt a seal of the Trust which shall be in such form
and shall have such inscription thereon as the Trustees may from time to time
prescribe.
ARTICLE IX
Inspection of Books
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the shareholders; and no shareholder shall have any right of
inspecting any account or book or document of the Trust except as conferred by
law or authorized by the Trustees or by resolution of the shareholders.
ARTICLE X
Custodian
The following provisions shall apply to the employment of the Custodian
pursuant to Article VII of the Declaration of Trust 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 in completion of a sale, exchange,
transfer, pledge, loan, or other disposition thereof,
against receipt by the Custodian of the consideration
therefor or a certificate of deposit or a receipt of an
issuer or of its transfer agent, or to a securities
depository as defined in Rule 17f-4 under the Act, 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.
(b) In case of the resignation, removal or inability to serve
of any such Custodian, the Trustees shall promptly
appoint another bank or trust company meeting the
requirements of said Article VII 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 Trustees, but may deliver 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 by its last published
report, of not less than $2,000,000, 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
Limitation of Liability and Indemnification
SECTION 1. Limitation of Liability. Provided they have exercised reasonable care
and have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or liable in
any event for neglect or wrongdoing of them or any officer, agent, employee or
investment adviser of the Trust, but nothing contained in the Declaration of
Trust or herein shall protect any 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.
SECTION 2. Indemnification of Trustees and Officers. The Trust shall indemnify
each person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
has been a Trustee, officer, employee or agent of the Trust, or is or has been
serving at the request of the Trust as a Trustee, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, provided that:
(a) such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Trust,
(b) with respect to any criminal action or proceeding, he had
not reasonable cause to believe his conduct was unlawful,
(c) unless ordered by a court, indemnification shall be made
only as authorized in the specific case upon a
determination that indemnification of the Trustee,
officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set
forth in subparagraphs (a) and (b) above and (e) below,
such determination to be made based upon a review of
readily available facts (as opposed to a full trial-type
inquiry) by (i) 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 (ii) by independent legal counsel in a written
opinion.
(d) in the case of an action or suit by or in the right of
the Trust to procure a judgment in its factor, no
indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the
performance of his duty to the Trust unless and only to
the extent that the court in which such action or suit is
brought, or a court of equity in the county in which the
Trust has its principal office, shall determine upon
application that, despite the adjudication of liability
but in view of all the circumstances of the case, he is
fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper, and
(e) no indemnification or other protection shall be made or
given to any Trustee or officer of the Trust against any
liability to the Trust or to its security holders 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.
Expenses (including attorneys' fees) incurred with respect to any
claim, action, suit or proceeding of the character described in the preceding
paragraph shall be paid by the Trust in advance of the final disposition thereof
upon receipt of an undertaking by or on behalf of such person to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Trust as authorized by this Article, provided that either:
(1) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient, or
the Trust shall be insured against losses arising out of
any such advances; or
(2) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested
Trustees 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 2, a "Disinterested Trustee" is one who is not
(i) an "Interested Person", as defined in the Act, of the Trust (including
anyone who has been exempted from being an "Interested Person" by any rule,
regulation, or order of the Securities and Exchange Commission), or (ii)
involved in the claim, action, suit or proceeding.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Trust, or with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
For the purpose of this ARTICLE XI, Trustees, officers, employees and
agents of the Trust shall also mean the Directors, officers, employees and
agents of the Trust's predecessor, Eaton Vance Special Equities Fund, Inc.
SECTION 3. Indemnification of Shareholders. In case any shareholder or former
shareholder shall be held to be personally liable solely by reason of his being
or having been a shareholder and not because of his acts or omissions or for
some other reason, the shareholder or former shareholder (or his heirs,
executors, administrators or other legal representatives or, in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled out of the Trust estate to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust shall, upon
request by the shareholder, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. A holder of shares of a series shall be entitled to indemnification
hereunder only out of assets allocated to that series.
ARTICLE XII
Underwriting Arrangements
Any contract entered into for the sale of shares of the Trust pursuant
to Article VIII, Section 2 of the Declaration of Trust shall require the other
party thereto (hereinafter called the "underwriter") whether acting as principal
or as agent to use reasonable efforts, consistent with the other business of the
underwriter, to secure purchasers for the shares of the Trust.
The underwriter may be granted the right
(a) To purchase as principal, from the Trust, at not less
than net asset value per share, the shares needed, but no
more than the shares needed (except for clerical errors
and errors of transmission), to fill unconditional orders
for shares of the Trust received by the underwriter.
(b) To purchase as principal, from shareholders of the Trust
at not less than net asset value per share (minus any
applicable sales charge payable upon redemption or
repurchase of shares) such shares as may be presented to
the Trust, or the transfer agent of the Trust, for
redemption and as may be determined by the underwriter in
its sole discretion.
(c) to resell any such shares purchased at not less than net
asset value per share (minus any applicable sales charge
payable upon redemption or repurchase of shares).
ARTICLE XIII
Report to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE XIV
Certain Transactions
SECTION 1. Long and Short Positions. Except as hereinafter provided, no officer
or Trustee and no partner, officer, director or shareholder of the manager, or
investment adviser of the Trust or of the underwriter of the Trust, and no
manager, or investment adviser or underwriter of the Trust, shall take long or
short positions in the securities issued by the Trust.
(a) The foregoing provision shall not prevent the underwriter
from purchasing shares of the Trust 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 such shares received by
the underwriter, and provided that orders to purchase
from the Trust are entered with the Trust or the
Custodian promptly upon receipt by the underwriter of
purchase orders for such shares, unless the underwriter
is otherwise instructed by its customer.
(b) The foregoing provision shall not prevent the underwriter
from purchasing shares of the Trust as agent for the
account of the Trust.
(c) The foregoing provision shall not prevent the purchase
from the Trust or from the underwriter of shares issued
by the Trust by any officer or Trustee of the Trust or by
any partner, officer, director or shareholder of the
manager or investment adviser of the Trust at the price
available to the public generally at the moment of such
purchase or, to the extent that any such person is a
shareholder, at the price available to shareholders of
the Trust generally at the moment of such purchase, or as
described in the current Prospectus of the Trust.
SECTION 2. Loans of Trust Assets. The Trust shall not lend assets of the Trust
to any officer or Trustee of the Trust, or to any partner, officer, director or
shareholder of, or person financially interested in, the manager or investment
adviser of the Trust, or the underwriter of the Trust, or to the manager or
investment adviser of the Trust or to the underwriter of the Trust.
SECTION 3. Miscellaneous. The Trust shall not permit any officer or Trustee, or
any officer or director of the manager or investment adviser or underwriter of
the Trust, to deal for or on behalf of the Trust with himself as principal or
agent, or with any partnership, association or corporation in which he has a
financial interest; provided that the foregoing provisions shall not prevent (i)
officers and Trustees of the Trust from buying, holding or selling shares in the
Trust, or from being partners, officers or directors of or otherwise financially
interested in the manager or investment adviser or underwriter of the Trust;
(ii) purchases or sales of securities or other property by the Trust from or to
an affiliated person or to the manager or investment adviser or underwriter of
the Trust if such transaction is exempt from the applicable provisions of the
Act; (iii) purchases of investments from the portfolio of the Trust or sales of
investments owned by the Trust through a security dealer who is, or one or more
of whose partners, shareholders, officers or directors is, an officer or Trustee
of the Trust, if such transactions are handled in the capacity of broker only
and commissions charged do not exceed customary brokerage charges for such
services; (iv) employment of legal counsel, registrar, transfer agent, dividend
disbursing agent or custodian who is, or has a partner, shareholder, officer or
director who is, an officer or Trustee of the Trust if only customary fees are
charged for services to the Trust; (v) sharing statistical, research, legal and
management expenses and office hire and expenses with any other investment
company in which an officer or Trustee of the Trust is an officer,trustee or
director or otherwise financially interested; or (vi) the purchase for the
portfolio of the Trust of securities issued by an issuer having an officer,
director or security holder who is an officer, Trustee or director of the Trust
or of the manager or investment adviser of the Trust, unless such purchase would
violate the Trust's investment policies or restrictions.
References to the manager or investment adviser of the Trust contained
in this Article XIV shall also be deemed to refer to any sub-adviser appointed
in accordance with Article VIII, Section 1 of the Declaration of Trust.
ARTICLE XV
Amendments
Except as provided in Section 3 of Article I of these By-Laws for the
portions of such Section 3 referred to therein, these By-Laws may be amended at
any meeting of the Trustees by a vote of a majority of the Trustees then in
office.
**********
EXHIBIT 99.2(b)
AMENDMENT TO
BY-LAWS
OF
EATON VANCE SPECIAL INVESTMENT TRUST
December 13, 1993
Pursuant to ARTICLE XV of the BY-LAWS of Eaton Vance Special Investment Trust,
(the "Trust") upon vote of a majority of the Trustees of the Trust SECTION 2. of
ARTICLE II of the BY-LAWS of the Trust was amended to read as follows:
SECTION 2. Election of Officers. The President, Treasurer and Secretary shall be
chosen annually by the Trustees.
Except for the offices of President and Secretary, two or more offices
may be held by a single person. The officers shall hold office until their
successors are chosen and qualified.
********************
EXHIBIT 99.5(a)
EATON VANCE SPECIAL INVESTMENT TRUST
MANAGEMENT CONTRACT
on behalf of EV Traditional Emerging Markets Fund
AGREEMENT made this 24 day of March, 1994 between Eaton Vance Special
Investment Trust, a Massachusetts business trust (the "Trust"), on behalf of EV
Traditional Emerging Markets Fund (the "Fund") and Eaton Vance Management, a
Massachusetts business trust (the "Manager"):
1. Duties of the Manager. The Trust hereby employs the Manager to act
as manager for and to manage and administer the affairs of the Fund, subject to
the supervision of the Trustees of the Trust, for the period and on the terms
set forth in this Contract.
The Manager hereby accepts such employment, and agrees to manage and
administer the Fund's business affairs and, in connection therewith, to furnish
for the use of the Fund office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Fund.
The Manager's services include monitoring and providing reports to the
Trustees of the Trust concerning the investment performance achieved by the
investment adviser for Emerging Markets Portfolio, recordkeeping, preparation
and filing of documents required to comply with Federal and state securities
laws, supervising the activities of the transfer agent of the Fund, providing
assistance in connection with Trustees and shareholders' meetings and other
management and administrative services necessary to conduct the business of the
Fund. The Manager shall not provide any investment management or advisory
services to the Fund.
2. Compensation of the Manager. For the services, payments and
facilities to be furnished hereunder by the Manager, the Fund shall pay to the
Manager on the last day of such month a fee computed by applying the annual
asset rate applicable to that portion of the average daily net assets of the
Fund throughout the month in each Category as indicated below:
Annual
Category Average Daily Net Assets Asset Rate
- -------- ------------------------ ----------
1 less than $500 million 0.25000%
2 $500 million but less than $1 billion 0.23333%
3 $1 billion but less than $1.5 billion 0.21667%
4 $1.5 billion but less than $2 billion 0.20000%
5 $2 billion but less than $3 billion 0.18333%
6 $3 billion and over 0.16667%
The average daily net assets of the Fund will be computed in accordance with the
Declaration of Trust, and any applicable votes of the Trustees of the Trust. In
case of initiation or termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
calendar days during which it is in effect and the fee shall be computed upon
the average net assets for the business days it is so in effect for that month.
The Manager may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Fund
will pay all its expenses other than those expressly stated to be payable by the
Manager hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities and other investments, (iv) auditing, accounting and legal
expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses of
issue, sale, repurchase and redemption of shares, (viii) expenses of registering
and qualifying the Fund and its shares under federal and state securities laws
and of preparing and printing prospectuses for such purposes and for
distributing the same to shareholders and investors, and fees and expenses of
registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and other disbursements, if
any, of custodians and sub-custodians for all services to the Fund (including
without limitation safekeeping of funds, securities and other investments,
keeping of books and accounts and determination of net asset value), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses of servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Manager's
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Trust on
behalf of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940 and (xix) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Manager as
Trustees, officers, or employees, or otherwise and that Trustees, officers and
employees of the Manager are or may be or become similarly interested in the
Trust, and that the Manager may be or become interested in the Fund as
shareholder or otherwise. It is also understood that Trustees, officers and
employees of the Manager may be or become interested (as directors, trustees,
officers, employees, stockholders or otherwise) in other companies or entities
(including, without limitation, other investment companies) which the Manager
may organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Manager or its subsidiaries or affiliates may enter into advisory or
management agreements or other contracts or relationships with such other
companies or entities.
5. Limitation of Liability of the Manager. The services of the Manager
of the Fund are not to be deemed to be exclusive, the Manager being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Manager, the
Manager shall not be subject to liability to the Fund or to any shareholder of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security or other instrument, including options and
futures contracts.
6. Duration and Termination of the Contract. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect to and including February 28,
1996 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after February 28, 1996 is specifically
approved at least annually by the Trustees of the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without the payment of any
penalty, by action of its Trustees, and the Trust may, at any time upon such
written notice to the Manager, terminate this Contract by vote of a majority of
the outstanding voting securities of the Fund. This Contract shall terminate
automatically in the event of its assignment.
7. Amendment of the Contract. This Contract may be amended by a writing
signed by both parties hereto, provided that no amendment to this Contract shall
be effective until approved by the vote of a majority of the Trustees of the
Trust.
8. Limitation of Liability. The Fund shall not be responsible for the
obligations of any other series of the Trust. The Manager expressly acknowledges
the provision in the Amended and Restated Declaration of Trust (Article IV,
Section 4.1) limiting the personal liability of shareholders of the Trust, and
the Manager hereby agrees that it shall have recourse only to the assets of the
Fund for payment of claims or obligations as between the Fund and Manager
arising out of this Contract and shall not seek satisfaction from the
shareholders or any shareholder or Trustee of the Fund or the Trust.
9. Use of the Name "Eaton Vance". The Manager hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Manager or one of its affiliates as the manager or investment adviser of the
Fund. The name "Eaton Vance" or any variation thereof may be used from time to
time in other connections and for other purposes by the Manager and its
affiliates and other investment companies that have obtained consent to the use
of the name "Eaton Vance." Eaton Vance shall have the right to require the Fund
to cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Manager or one if its affiliates as the
Fund's manager or investment adviser. Future names adopted by the Fund for
itself, insofar as such names include identifying words requiring the consent of
the Manager, shall be the property of the Manager and shall be subject to the
same terms and conditions.
10. Certain Definitions. The term "assignment" when used herein shall
have the meaning specified in the Investment Company Act of 1940 as now in
effect or as hereafter amended subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order. The term "vote of a majority of the outstanding voting securities of the
Fund" shall mean the vote of the lesser of (a) 67 per centum or more of the
shares of the Fund present or represented by proxy at the meeting if the holders
of more than 50 per centum of the outstanding shares of the Fund are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding shares of the Fund.
EATON VANCE SPECIAL INVESTMENT EATON VANCE MANAGEMENT
TRUST (on behalf of
EV Traditional Emerging Markets Fund)
By/s/ James B. Hawkes By/s/ Curtis H. Jones
- --------------------------- ---------------------------
President Vice President,
and not individually
EXHIBIT 99.5(b)
EATON VANCE SPECIAL INVESTMENT TRUST
MANAGEMENT CONTRACT
on behalf of EV Marathon Emerging Markets Fund
AGREEMENT made this 24th day of March, 1994 between Eaton Vance Special
Investment Trust, a Massachusetts business trust (the "Trust"), on behalf of EV
Marathon Emerging Markets Fund (the "Fund") and Eaton Vance Management, a
Massachusetts business trust (the "Manager"):
1. Duties of the Manager. The Trust hereby employs the Manager to act
as manager for and to manage and administer the affairs of the Fund, subject to
the supervision of the Trustees of the Trust, for the period and on the terms
set forth in this Contract.
The Manager hereby accepts such employment, and agrees to manage and
administer the Fund's business affairs and, in connection therewith, to furnish
for the use of the Fund office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Fund.
The Manager's services include monitoring and providing reports to the
Trustees of the Trust concerning the investment performance achieved by the
investment adviser for Emerging Markets Portfolio, recordkeeping, preparation
and filing of documents required to comply with Federal and state securities
laws, supervising the activities of the transfer agent of the Fund, providing
assistance in connection with Trustees and shareholders' meetings and other
management and administrative services necessary to conduct the business of the
Fund. The Manager shall not provide any investment management or advisory
services to the Fund.
2. Compensation of the Manager. For the services, payments and
facilities to be furnished hereunder by the Manager, the Fund shall pay to the
Manager on the last day of such month a fee computed by applying the annual
asset rate applicable to that portion of the average daily net assets of the
Fund throughout the month in each Category as indicated below:
Annual
Category Average Daily Net Assets Asset Rate
- -------- ------------------------ ----------
1 less than $500 million 0.25000%
2 $500 million but less than $1 billion 0.23333%
3 $1 billion but less than $1.5 billion 0.21667%
4 $1.5 billion but less than $2 billion 0.20000%
5 $2 billion but less than $3 billion 0.18333%
6 $3 billion and over 0.16667%
The average daily net assets of the Fund will be computed in accordance with the
Declaration of Trust, and any applicable votes of the Trustees of the Trust. In
case of initiation or termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
calendar days during which it is in effect and the fee shall be computed upon
the average net assets for the business days it is so in effect for that month.
The Manager may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Fund
will pay all its expenses other than those expressly stated to be payable by the
Manager hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities and other investments, (iv) auditing, accounting and legal
expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses of
issue, sale, repurchase and redemption of shares, (viii) expenses of registering
and qualifying the Fund and its shares under federal and state securities laws
and of preparing and printing prospectuses for such purposes and for
distributing the same to shareholders and investors, and fees and expenses of
registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and other disbursements, if
any, of custodians and sub-custodians for all services to the Fund (including
without limitation safekeeping of funds, securities and other investments,
keeping of books and accounts and determination of net asset value), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses of servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Manager's
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Trust on
behalf of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940 and (xix) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Manager as
Trustees, officers, or employees, or otherwise and that Trustees, officers and
employees of the Manager are or may be or become similarly interested in the
Trust, and that the Manager may be or become interested in the Fund as
shareholder or otherwise. It is also understood that Trustees, officers and
employees of the Manager may be or become interested (as directors, trustees,
officers, employees, stockholders or otherwise) in other companies or entities
(including, without limitation, other investment companies) which the Manager
may organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Manager or its subsidiaries or affiliates may enter into advisory or
management agreements or other contracts or relationships with such other
companies or entities.
5. Limitation of Liability of the Manager. The services of the Manager
of the Fund are not to be deemed to be exclusive, the Manager being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Manager, the
Manager shall not be subject to liability to the Fund or to any shareholder of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security or other instrument, including options and
futures contracts.
6. Duration and Termination of the Contract. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect to and including February 28,
1996 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after February 28, 1996 is specifically
approved at least annually by the Trustees of the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without the payment of any
penalty, by action of its Trustees, and the Trust may, at any time upon such
written notice to the Manager, terminate this Contract by vote of a majority of
the outstanding voting securities of the Fund. This Contract shall terminate
automatically in the event of its assignment.
7. Amendment of the Contract. This Contract may be amended by a writing
signed by both parties hereto, provided that no amendment to this Contract shall
be effective until approved by the vote of a majority of the Trustees of the
Trust.
8. Limitation of Liability. The Fund shall not be responsible for the
obligations of any other series of the Trust. The Manager expressly acknowledges
the provision in the Amended and Restated Declaration of Trust (Article IV,
Section 4.1) limiting the personal liability of shareholders of the Trust, and
the Manager hereby agrees that it shall have recourse only to the assets of the
Fund for payment of claims or obligations as between the Fund and Manager
arising out of this Contract and shall not seek satisfaction from the
shareholders or any shareholder or Trustee of the Fund or the Trust.
9. Use of the Name "Eaton Vance". The Manager hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Manager or one of its affiliates as the manager or investment adviser of the
Fund. The name "Eaton Vance" or any variation thereof may be used from time to
time in other connections and for other purposes by the Manager and its
affiliates and other investment companies that have obtained consent to the use
of the name "Eaton Vance." Eaton Vance shall have the right to require the Fund
to cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Manager or one if its affiliates as the
Fund's manager or investment adviser. Future names adopted by the Fund for
itself, insofar as such names include identifying words requiring the consent of
the Manager, shall be the property of the Manager and shall be subject to the
same terms and conditions.
10. Certain Definitions. The term "assignment" when used herein shall
have the meaning specified in the Investment Company Act of 1940 as now in
effect or as hereafter amended subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order. The term "vote of a majority of the outstanding voting securities of the
Fund" shall mean the vote of the lesser of (a) 67 per centum or more of the
shares of the Fund present or represented by proxy at the meeting if the holders
of more than 50 per centum of the outstanding shares of the Fund are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding shares of the Fund.
EATON VANCE SPECIAL INVESTMENT EATON VANCE MANAGEMENT
TRUST (on behalf of
EV Marathon Emerging Markets Fund)
By/s/ James B. Hawkes By/s/ Curtis H. Jones
- --------------------------- ---------------------------
President Vice President,
and not individually
EXHIBIT 99.5(c)
EATON VANCE SPECIAL INVESTMENT TRUST
MANAGEMENT CONTRACT
on behalf of EV Traditional Greater India Fund
AGREEMENT made this 24th day of March, 1994 between Eaton Vance Special
Investment Trust, a Massachusetts business trust (the "Trust"), on behalf of EV
Traditional Greater India Fund (the "Fund") and Eaton Vance Management, a
Massachusetts business trust (the "Manager"):
1. Duties of the Manager. The Trust hereby employs the Manager to act
as manager for and to manage and administer the affairs of the Fund, subject to
the supervision of the Trustees of the Trust, for the period and on the terms
set forth in this Contract.
The Manager hereby accepts such employment, and agrees to manage and
administer the Fund's business affairs and, in connection therewith, to furnish
for the use of the Fund office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Fund.
The Manager's services include monitoring and providing reports to the
Trustees of the Trust concerning the investment performance achieved by the
investment adviser for Greater India Portfolio, recordkeeping, preparation and
filing of documents required to comply with Federal and state securities laws,
supervising the activities of the transfer agent of the Fund, providing
assistance in connection with Trustees and shareholders' meetings and other
management and administrative services necessary to conduct the business of the
Fund. The Manager shall not provide any investment management or advisory
services to the Fund.
2. Compensation of the Manager. For the services, payments and
facilities to be furnished hereunder by the Manager, the Fund shall pay to the
Manager on the last day of such month a fee computed by applying the annual
asset rate applicable to that portion of the average daily net assets of the
Fund throughout the month in each Category as indicated below:
Annual
Category Average Daily Net Assets Asset Rate
- -------- ------------------------ ----------
1 less than $500 million 0.25000%
2 $500 million but less than $1 billion 0.23333%
3 $1 billion but less than $1.5 billion 0.21667%
4 $1.5 billion but less than $2 billion 0.20000%
5 $2 billion but less than $3 billion 0.18333%
6 $3 billion and over 0.16667%
The average daily net assets of the Fund will be computed in accordance with the
Declaration of Trust, and any applicable votes of the Trustees of the Trust. In
case of initiation or termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
calendar days during which it is in effect and the fee shall be computed upon
the average net assets for the business days it is so in effect for that month.
The Manager may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Fund
will pay all its expenses other than those expressly stated to be payable by the
Manager hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities and other investments, (iv) auditing, accounting and legal
expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses of
issue, sale, repurchase and redemption of shares, (viii) expenses of registering
and qualifying the Fund and its shares under federal and state securities laws
and of preparing and printing prospectuses for such purposes and for
distributing the same to shareholders and investors, and fees and expenses of
registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and other disbursements, if
any, of custodians and sub-custodians for all services to the Fund (including
without limitation safekeeping of funds, securities and other investments,
keeping of books and accounts and determination of net asset value), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses of servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Manager's
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Trust on
behalf of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940 and (xix) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Manager as
Trustees, officers, or employees, or otherwise and that Trustees, officers and
employees of the Manager are or may be or become similarly interested in the
Trust, and that the Manager may be or become interested in the Fund as
shareholder or otherwise. It is also understood that Trustees, officers and
employees of the Manager may be or become interested (as directors, trustees,
officers, employees, stockholders or otherwise) in other companies or entities
(including, without limitation, other investment companies) which the Manager
may organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Manager or its subsidiaries or affiliates may enter into advisory or
management agreements or other contracts or relationships with such other
companies or entities.
5. Limitation of Liability of the Manager. The services of the Manager
of the Fund are not to be deemed to be exclusive, the Manager being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Manager, the
Manager shall not be subject to liability to the Fund or to any shareholder of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security or other instrument, including options and
futures contracts.
6. Duration and Termination of the Contract. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect to and including February 28,
1996 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after February 28, 1996 is specifically
approved at least annually by the Trustees of the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without the payment of any
penalty, by action of its Trustees, and the Trust may, at any time upon such
written notice to the Manager, terminate this Contract by vote of a majority of
the outstanding voting securities of the Fund. This Contract shall terminate
automatically in the event of its assignment.
7. Amendment of the Contract. This Contract may be amended by a writing
signed by both parties hereto, provided that no amendment to this Contract shall
be effective until approved by the vote of a majority of the Trustees of the
Trust.
8. Limitation of Liability. The Fund shall not be responsible for the
obligations of any other series of the Trust. The Manager expressly acknowledges
the provision in the Amended and Restated Declaration of Trust (Article IV,
Section 4.1) limiting the personal liability of shareholders of the Trust, and
the Manager hereby agrees that it shall have recourse only to the assets of the
Fund for payment of claims or obligations as between the Fund and Manager
arising out of this Contract and shall not seek satisfaction from the
shareholders or any shareholder or Trustee of the Fund or the Trust.
9. Use of the Name "Eaton Vance". The Manager hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Manager or one of its affiliates as the manager or investment adviser of the
Fund. The name "Eaton Vance" or any variation thereof may be used from time to
time in other connections and for other purposes by the Manager and its
affiliates and other investment companies that have obtained consent to the use
of the name "Eaton Vance." Eaton Vance shall have the right to require the Fund
to cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Manager or one if its affiliates as the
Fund's manager or investment adviser. Future names adopted by the Fund for
itself, insofar as such names include identifying words requiring the consent of
the Manager, shall be the property of the Manager and shall be subject to the
same terms and conditions.
10. Certain Definitions. The term "assignment" when used herein shall
have the meaning specified in the Investment Company Act of 1940 as now in
effect or as hereafter amended subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order. The term "vote of a majority of the outstanding voting securities of the
Fund" shall mean the vote of the lesser of (a) 67 per centum or more of the
shares of the Fund present or represented by proxy at the meeting if the holders
of more than 50 per centum of the outstanding shares of the Fund are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding shares of the Fund.
EATON VANCE SPECIAL INVESTMENT EATON VANCE MANAGEMENT
TRUST (on behalf of
EV Traditional Greater India Fund)
By/s/ James B. Hawkes By/s/ Curtis H. Jones
- --------------------------- ---------------------------
President Vice President,
and not individually
EXHIBIT 99.5(d)
EATON VANCE SPECIAL INVESTMENT TRUST
MANAGEMENT CONTRACT
on behalf of EV Marathon Greater India Fund
AGREEMENT made this 24th day of March, 1994 between Eaton Vance Special
Investment Trust, a Massachusetts business trust (the "Trust"), on behalf of EV
Marathon Greater India Fund (the "Fund") and Eaton Vance Management, a
Massachusetts business trust (the "Manager"):
1. Duties of the Manager. The Trust hereby employs the Manager to act
as manager for and to manage and administer the affairs of the Fund, subject to
the supervision of the Trustees of the Trust, for the period and on the terms
set forth in this Contract.
The Manager hereby accepts such employment, and agrees to manage and
administer the Fund's business affairs and, in connection therewith, to furnish
for the use of the Fund office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Fund.
The Manager's services include monitoring and providing reports to the
Trustees of the Trust concerning the investment performance achieved by the
investment adviser for Greater India Portfolio, recordkeeping, preparation and
filing of documents required to comply with Federal and state securities laws,
supervising the activities of the transfer agent of the Fund, providing
assistance in connection with Trustees and shareholders' meetings and other
management and administrative services necessary to conduct the business of the
Fund. The Manager shall not provide any investment management or advisory
services to the Fund.
2. Compensation of the Manager. For the services, payments and
facilities to be furnished hereunder by the Manager, the Fund shall pay to the
Manager on the last day of such month a fee computed by applying the annual
asset rate applicable to that portion of the average daily net assets of the
Fund throughout the month in each Category as indicated below:
Annual
Category Average Daily Net Assets Asset Rate
- -------- ------------------------ ----------
1 less than $500 million 0.25000%
2 $500 million but less than $1 billion 0.23333%
3 $1 billion but less than $1.5 billion 0.21667%
4 $1.5 billion but less than $2 billion 0.20000%
5 $2 billion but less than $3 billion 0.18333%
6 $3 billion and over 0.16667%
The average daily net assets of the Fund will be computed in accordance with the
Declaration of Trust, and any applicable votes of the Trustees of the Trust. In
case of initiation or termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
calendar days during which it is in effect and the fee shall be computed upon
the average net assets for the business days it is so in effect for that month.
The Manager may, from time to time, waive all or a part of the above
compensation.
3. Allocation of Charges and Expenses. It is understood that the Fund
will pay all its expenses other than those expressly stated to be payable by the
Manager hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of maintaining the Fund and continuing its
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the purchase or
sale of securities and other investments, (iv) auditing, accounting and legal
expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses of
issue, sale, repurchase and redemption of shares, (viii) expenses of registering
and qualifying the Fund and its shares under federal and state securities laws
and of preparing and printing prospectuses for such purposes and for
distributing the same to shareholders and investors, and fees and expenses of
registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and other disbursements, if
any, of custodians and sub-custodians for all services to the Fund (including
without limitation safekeeping of funds, securities and other investments,
keeping of books and accounts and determination of net asset value), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses of servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Manager's
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Trust on
behalf of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940 and (xix) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with respect
thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Trust are or may be or become interested in the Manager as
Trustees, officers, or employees, or otherwise and that Trustees, officers and
employees of the Manager are or may be or become similarly interested in the
Trust, and that the Manager may be or become interested in the Fund as
shareholder or otherwise. It is also understood that Trustees, officers and
employees of the Manager may be or become interested (as directors, trustees,
officers, employees, stockholders or otherwise) in other companies or entities
(including, without limitation, other investment companies) which the Manager
may organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Manager or its subsidiaries or affiliates may enter into advisory or
management agreements or other contracts or relationships with such other
companies or entities.
5. Limitation of Liability of the Manager. The services of the Manager
of the Fund are not to be deemed to be exclusive, the Manager being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Manager, the
Manager shall not be subject to liability to the Fund or to any shareholder of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the purchase,
holding or sale of any security or other instrument, including options and
futures contracts.
6. Duration and Termination of the Contract. This Contract shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect to and including February 28,
1996 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after February 28, 1996 is specifically
approved at least annually by the Trustees of the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without the payment of any
penalty, by action of its Trustees, and the Trust may, at any time upon such
written notice to the Manager, terminate this Contract by vote of a majority of
the outstanding voting securities of the Fund. This Contract shall terminate
automatically in the event of its assignment.
7. Amendment of the Contract. This Contract may be amended by a writing
signed by both parties hereto, provided that no amendment to this Contract shall
be effective until approved by the vote of a majority of the Trustees of the
Trust.
8. Limitation of Liability. The Fund shall not be responsible for the
obligations of any other series of the Trust. The Manager expressly acknowledges
the provision in the Amended and Restated Declaration of Trust (Article IV,
Section 4.1) limiting the personal liability of shareholders of the Trust, and
the Manager hereby agrees that it shall have recourse only to the assets of the
Fund for payment of claims or obligations as between the Fund and Manager
arising out of this Contract and shall not seek satisfaction from the
shareholders or any shareholder or Trustee of the Fund or the Trust.
9. Use of the Name "Eaton Vance". The Manager hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Manager or one of its affiliates as the manager or investment adviser of the
Fund. The name "Eaton Vance" or any variation thereof may be used from time to
time in other connections and for other purposes by the Manager and its
affiliates and other investment companies that have obtained consent to the use
of the name "Eaton Vance." Eaton Vance shall have the right to require the Fund
to cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Manager or one if its affiliates as the
Fund's manager or investment adviser. Future names adopted by the Fund for
itself, insofar as such names include identifying words requiring the consent of
the Manager, shall be the property of the Manager and shall be subject to the
same terms and conditions.
10. Certain Definitions. The term "assignment" when used herein shall
have the meaning specified in the Investment Company Act of 1940 as now in
effect or as hereafter amended subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order. The term "vote of a majority of the outstanding voting securities of the
Fund" shall mean the vote of the lesser of (a) 67 per centum or more of the
shares of the Fund present or represented by proxy at the meeting if the holders
of more than 50 per centum of the outstanding shares of the Fund are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding shares of the Fund.
EATON VANCE SPECIAL INVESTMENT EATON VANCE MANAGEMENT
TRUST (on behalf of
EV Marathon Greater India Fund)
By/s/ James B. Hawkes By/s/ Curtis H. Jones
- --------------------------- ---------------------------
President Vice President,
and not individually
EXHIBIT 99.6(A)(1)
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION AGREEMENT
(DOMESTIC CLASSIC FUNDS)
AGREEMENT effective as of June 19, 1995 between EATON VANCE SPECIAL
INVESTMENT TRUST, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Trust", on behalf of each of its series listed on Schedule A (the "Funds"), and
EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation having its principal
place of business in said Boston, hereinafter sometimes called the "Principal
Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree with respect to each Fund:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the price paid by investors upon purchasing such shares. The Principal
Underwriter shall notify Investors Bank & Trust Company, Custodian of the Fund
("IBT"), and The Shareholder Services Group, Inc., Transfer Agent of the Fund
("TSSG"), or a successor transfer agent, 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 the Principal Underwriter is to purchase
as principal for resale. The Principal Underwriter shall take down and pay for
shares ordered from the Fund on or before the eleventh business day (excluding
Saturdays) after the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be equal to the net
asset value at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the
Trust or IBT, as the agent of the Fund, as of the close of regular trading on
the New York Stock Exchange on each business day on which said Exchange is open,
or as of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. 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 time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of
1933, as amended from time to time, (the "1933 Act"), to the end that there will
be available for sale such number of shares as the Principal Underwriter may
reasonably be expected to sell. The Trust agrees to indemnify and hold harmless
the Principal Underwriter and each person, if any, who controls the Principal
Underwriter within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any shares of the Fund, which may be based
upon the 1933 Act or on any other statute or at common law, on the ground that
the Registration Statement or Prospectus, 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 such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Trust or the Fund to
be liable under its indemnity agreement contained in this paragraph with respect
to any claim made against the Principal Underwriter or any such controlling
person unless the Principal Underwriter or any such controlling person, as the
case may be, shall have notified the Trust 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 Principal Underwriter or such
controlling person (or after such Principal Underwriter or such controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which the Fund may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate, at the expense of the
Fund, in the defense, or, if the Trust so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Trust elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter 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 Trust does not elect to assume the defense of any such suit, the Fund shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
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 1933 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 acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the Registration Statement or Prospectus, 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, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund 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 Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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, the Fund or upon such
person (or after the Trust, the Fund or such person shall have received notice
of such service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 Principal Underwriter 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
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund 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 or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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 of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act, (as said Registration Statement and Prospectus may be
amended or supplemented from time to time), covering the shares of the Fund.
Neither the Principal Underwriter nor any financial service firm nor any other
person is authorized to act as agent for the Trust or the Fund in connection
with the offering or sale of shares of the Fund to the public or otherwise. All
such sales made by the Principal Underwriter shall be made by it as principal,
for its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter acts as Principal Underwriter or for which an affiliate of the
Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
Investment Company Act of 1940, as amended from time to time, (the "1940 Act")
covering its shares and all amendments and supplements thereto, and preparing
and mailing periodic reports to shareholders (including the expense of setting
up in type any such Registration Statement, Prospectus or periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to financial service firms or investors. The
Principal Underwriter further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by the Principal
Underwriter or furnished by it for use by financial service firms in connection
with the offering of the shares of the Fund for sale to the public and any
expenses of advertising in connection with such offering. The Fund agrees to pay
the expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Trust or the Fund as a dealer or broker,
in such states as shall be selected by the Principal Underwriter and the fees
payable to each such state for continuing the qualification therein until the
Principal Underwriter notifies the Trust that it does not wish such
qualification continued.
(c) In addition, the Trust agrees, in accordance with the Fund's
Amended Distribution Plan (the "Plan"), adopted pursuant to Rule 12b-1 under the
1940 Act with respect to shares, to make certain payments as follows. The
Principal Underwriter shall be entitled to be paid by the Fund a sales
commission equal to an amount not exceeding 6.25% of the price received by the
Fund for each sale of shares (excluding reinvestment of dividends and
distributions), such payment to be made in the manner set forth in this
paragraph 5. The Principal Underwriter shall also be entitled to be paid by the
Fund a separate distribution fee (calculated in accordance with paragraph 5(d)),
such payment to be made in the manner set forth and subject to the terms of this
paragraph 5.
(d) The sales commissions and distribution fees referred to in
paragraph 5(c) shall be accrued and paid by the Fund in the following manner.
The Fund shall accrue daily an amount calculated at the rate of .75% per annum
of the daily net assets of the Fund, which net assets shall be computed as
described in paragraph 2. The daily amounts so accrued throughout the month
shall be paid to the Principal Underwriter on the last day of each month. The
amount of such daily accrual, as so calculated, shall first be applied and
charged to all unpaid sales commissions, and the balance, if any, shall then be
applied and charged to all unpaid distribution fees. No amount shall be accrued
with respect to any day on which there exist no outstanding uncovered
distribution charges of the Principal Underwriter. The amount of such uncovered
distribution charges shall be calculated daily. For purposes of this
calculation, distribution charges of the Principal Underwriter shall include (a)
the aggregate of all sales commissions which the Principal Underwriter has been
paid pursuant to this paragraph (d) (and pursuant to paragraph (d) of the
Original Agreements) plus all sales commissions which it is entitled to be paid
pursuant to paragraph 5(c) (and pursuant to paragraph 5(c) of the Original
Agreements) since inception of the Original Agreements through and including the
day next preceding the date of calculation, and (b) an amount equal to the
aggregate of all distribution fees referred to below which the Principal
Underwriter has been paid pursuant to this paragraph (d) (and pursuant to
paragraph (d) of the Original Agreements) plus all such fees which it is
entitled to be paid pursuant to paragraph 5(c) (and pursuant to paragraph 5(c)
of the Original Agreements) since inception of the Original Agreements through
and including the day next preceding the date of calculation. From this sum
(distribution charges) there shall be subtracted (i) the aggregate amount paid
or payable to the Principal Underwriter pursuant to this paragraph (d) (and
pursuant to paragraph (d) of the Original Agreements) since inception of the
Original Agreements through and including the day next preceding the date of
calculation and (ii) the aggregate amount of all contingent deferred sales
charges paid or payable to the Principal Underwriter since inception of the
Original Agreements through and including the day next preceding the date of
calculation. If the result of such subtraction is a positive amount, a
distribution fee [computed at the rate of 1% per annum above the prime rate
(being the base rate on corporate loans posted by at least 75% of the nation's
30 largest banks) then being reported in the Eastern Edition of The Wall Street
Journal or if such prime rate is not so reported such other rate as may be
designated from time to time by vote or other action of a majority of (i) those
Trustees of the Trust who are not "interested persons" of the Trust (as defined
in the 1940 Act) and have no direct or indirect financial interest in the
operation of the Plan or any agreements related to it (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office] shall be computed on
such amount and added to such amount, with the resulting sum constituting the
amount of outstanding uncovered distribution charges of the Principal
Underwriter with respect to such day for all purposes of this Agreement. If the
result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this paragraph (d) during any fiscal year of the Fund shall not
exceed .75% of the average daily net assets of the Fund for such year.
(e) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. shall be imposed.
(f) The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to the Plan or this Agreement shall be the
President or any Vice President of the Trust. Such persons shall provide to the
Trust's Trustees and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
(g) In addition to the payments to the Principal Underwriter provided
for in paragraph 5(d), the Fund may make payments of service fees to the
Principal Underwriter, Authorized Firms and other persons. The aggregate of such
payments during any fiscal year of the Fund shall not exceed .25% of the Fund's
average daily net assets for such year.
6. The Trust hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Trust to the Principal Underwriter from time to time, as agent of the Fund and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund 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 Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter 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 Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct IBT to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of
any repurchase of shares under the foregoing authorization and appointment as
agent, except for any sales commission, distribution fee or contingent deferred
sales charges payable under paragraph 5.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund 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 Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8. The term "net asset value" as used in this Agreement with reference
to the shares of the Fund shall have the same meaning as used in the Declaration
of Trust, as amended, and calculated in the manner referred to in paragraph 2
above.
9(a). The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter will comply with the Trust's Declaration
of Trust and By-Laws, and the 1940 Act and the rules promulgated thereunder,
insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of an open-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
10. This Agreement shall continue in force indefinitely until
terminated as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect through and including April
28, 1996 (or, if applicable, the next April 28 which follows the day on which
the Fund has become a party hereto by amendment of Schedule A subsequent to
April 28, 1996), and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance is specifically approved at
least annually (i) by the vote of a majority of the Rule 12b-1 Trustees cast in
person at a meeting 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;
(b) this Agreement may be terminated at any time by vote of a majority
of the Rule 12b-1 Trustees or by vote of a majority of the outstanding voting
securities of the Fund on not more than sixty (60) days' notice to the Principal
Underwriter. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day
subsequent to the termination of this Agreement;
(c) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund;
(d) the Trust shall have the right to terminate this Agreement
forthwith in the event that it shall have been established by a court of
competent jurisdiction that the Principal Underwriter or any director or officer
of the Principal Underwriter has taken any action which results in a breach of
the covenants set out in paragraph 9 hereof; and
(e) additional series of the Trust will become parties hereto upon
approval by the Trustees of the Trust and amendment of Schedule A.
11. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
12. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
13. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar service to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
14. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
15. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust. The Principal Underwriter
hereby agrees that it shall have recourse to the Trust or the Fund for payment
of claims or obligations as between the Trust or the Fund and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
the shareholders or any shareholder of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
16. All references in this Agreement to the "Original Agreements" shall
mean the Distribution Agreement referenced on Schedule A hereto between the
Trust on behalf of the Fund and the Principal Underwriter. Such references shall
not be applicable to any additional series of the Trust which becomes a Fund
hereunder by amendment of Schedule A subsequent to the date below.
17. This Agreement shall amend, replace and be substituted for the
Original Agreements as of the opening of business on June 20, 1995, and this
Agreement shall be effective as of such time. The outstanding uncovered
distribution charges of the Principal Underwriter calculated under the Original
Agreements as of the close of business on June 19, 1995 shall be the outstanding
uncovered distribution charges of the Principal Underwriter calculated under
this Agreement as of the opening of business on June 20, 1995.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
on the 19th day of June, 1995.
EATON VANCE SPECIAL INVESTMENT TRUST
By/s/ James B. Hawkes
-------------------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ Wharton P. Whitaker
-------------------------------
President
<PAGE>
SCHEDULE A
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION AGREEMENT
(DOMESTIC CLASSIC FUNDS)
DATED JUNE 19, 1995
Name of Fund Inception Date of Original Agreements
EV Classic Investors Fund October 28, 1993/January 27, 1995
EV Classic Special Equities Fund August 1, 1994/January 27, 1995
EV Classic Stock Fund August 1, 1994/January 27, 1995
EV Classic Total Return Fund October 28, 1993/January 27, 1995
EXHIBIT 99.6(A)(2)
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION AGREEMENT
(DOMESTIC MARATHON FUNDS)
AGREEMENT effective as of June 19, 1995 between EATON VANCE SPECIAL
INVESTMENT TRUST, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Trust", on behalf of each of the series listed on Schedule A (the "Funds"), and
EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation having its principal
place of business in said Boston, hereinafter sometimes called the "Principal
Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree with respect to each Fund:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the price paid by investors upon purchasing such shares. The Principal
Underwriter shall notify Investors Bank & Trust Company, Custodian of the Fund
("IBT"), and The Shareholder Services Group, Inc., Transfer Agent of the Fund
("TSSG"), or successor transfer agent, 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 the Principal Underwriter is to purchase
as principal for resale. The Principal Underwriter shall take down and pay for
shares ordered from the Fund on or before the eleventh business day (excluding
Saturdays) after the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be equal to the net
asset value at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the
Trust or IBT, as the agent of the Fund, as of the close of regular trading on
the New York Stock Exchange on each business day on which said Exchange is open,
or as of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. 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 time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of
1933, as amended from time to time (the "1933 Act"), to the end that there will
be available for sale such number of shares as the Principal Underwriter may
reasonably be expected to sell. The Trust agrees to indemnify and hold harmless
the Principal Underwriter and each person, if any, who controls the Principal
Underwriter within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any shares of the Fund, which may be based
upon the 1933 Act or on any other statute or at common law, on the ground that
the Registration Statement or Prospectus, 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 such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Trust or the Fund to
be liable under its indemnity agreement contained in this paragraph with respect
to any claim made against the Principal Underwriter or any such controlling
person unless the Principal Underwriter or any such controlling person, as the
case may be, shall have notified the Trust 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 Principal Underwriter or such
controlling person (or after such Principal Underwriter or such controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which the Fund may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate, at the expense of the
Fund, in the defense, or, if the Trust so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Trust elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter 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 Trust does not elect to assume the defense of any such suit, the Fund shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
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 1933 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 acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the Registration Statement or Prospectus, 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, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund 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 Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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, the Fund or upon such
person (or after the Trust, the Fund or such person shall have received notice
of such service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 Principal Underwriter 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
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund 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 or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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 of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act (as said Registration Statement and Prospectus may be amended
or supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any financial service firm nor any other person is
authorized to act as agent for the Trust or the Fund in connection with the
offering or sale of shares of the Fund to the public or otherwise. All such
sales made by the Principal Underwriter shall be made by it as principal, for
its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter acts as Principal Underwriter or for which an affiliate of the
Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
Investment Company Act of 1940, as amended from time to time, (the "1940 Act")
covering its shares and all amendments and supplements thereto, and preparing
and mailing periodic reports to shareholders (including the expense of setting
up in type any such Registration Statement, Prospectus or periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to financial service firms or investors. The
Principal Underwriter further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by the Principal
Underwriter or furnished by it for use by financial service firms in connection
with the offering of the shares of the Fund for sale to the public and any
expenses of advertising in connection with such offering. The Fund agrees to pay
the expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Trust or the Fund as a dealer or broker,
in such states as shall be selected by the Principal Underwriter and the fees
payable to each such state for continuing the qualification therein until the
Principal Underwriter notifies the Trust that it does not wish such
qualification continued.
(c) In addition, the Trust agrees, in accordance with the Fund's
Amended Distribution Plan (the "Plan"), adopted pursuant to Rule 12b-1 under the
1940 Act with respect to shares, to make certain payments as follows. The
Principal Underwriter shall be entitled to be paid by the Fund a sales
commission equal to an amount not exceeding 5% of the price received by the Fund
for each sale of shares (excluding reinvestment of dividends and distributions),
such payment to be made in the manner set forth in this paragraph 5. The
Principal Underwriter shall also be entitled to be paid by the Fund a separate
distribution fee (calculated in accordance with paragraph 5(d)), such payment to
be made in the manner set forth and subject to the terms of this paragraph 5.
(d) The sales commissions and distribution fees referred to in
paragraph 5(c) shall be accrued and paid by the Fund in the following manner.
The Fund shall accrue daily an amount calculated at the rate of .75% per annum
of the daily net assets of the Fund, which net assets shall be computed as
described in paragraph 2. The daily amounts so accrued throughout the month
shall be paid to the Principal Underwriter on the last day of each month. The
amount of such daily accrual, as so calculated, shall first be applied and
charged to all unpaid sales commissions, and the balance, if any, shall then be
applied and charged to all unpaid distribution fees. No amount shall be accrued
with respect to any day on which there exist no outstanding uncovered
distribution charges of the Principal Underwriter. The amount of such uncovered
distribution charges shall be calculated daily. For purposes of this
calculation, distribution charges of the Principal Underwriter shall include (a)
the aggregate of all sales commissions which the Principal Underwriter has been
paid pursuant to this paragraph (d) (and pursuant to paragraph (d) of the
Original Agreement) plus all sales commissions which it is entitled to be paid
pursuant to paragraph 5(c) (and pursuant to paragraph 5(c) of the Original
Agreement) since inception of the Original Agreement through and including the
day next preceding the date of calculation, and (b) an amount equal to the
aggregate of all distribution fees referred to below which the Principal
Underwriter has been paid pursuant to this paragraph (d) (and pursuant to
paragraph (d) of the Original Agreement) plus all such fees which it is entitled
to be paid pursuant to paragraph 5(c) (and pursuant to paragraph 5(c) of the
Original Agreement) since inception of the Original Agreement through and
including the day next preceding the date of calculation. From this sum
(distribution charges) there shall be subtracted (i) the aggregate amount paid
or payable to the Principal Underwriter pursuant to this paragraph (d) (and
pursuant to paragraph (d) of the Original Agreement) since inception of the
Original Agreement through and including the day next preceding the date of
calculation and (ii) the aggregate amount of all contingent deferred sales
charges paid or payable to the Principal Underwriter since inception of the
Original Agreement through and including the day next preceding the date of
calculation. If the result of such subtraction is a positive amount, a
distribution fee [computed at the rate of 1% per annum above the prime rate
(being the base rate on corporate loans posted by at least 75% of the nation's
30 largest banks) then being reported in the Eastern Edition of The Wall Street
Journal or if such prime rate is not so reported such other rate as may be
designated from time to time by vote or other action of a majority of (i) those
Trustees of the Trust who are not "interested persons" of the Trust (as defined
in the 1940 Act) and have no direct or indirect financial interest in the
operation of the Plan or any agreements related to it (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office] shall be computed on
such amount and added to such amount, with the resulting sum constituting the
amount of outstanding uncovered distribution charges of the Principal
Underwriter with respect to such day for all purposes of this Agreement. If the
result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this paragraph (d) during any fiscal year of the Fund shall not
exceed .75% of the average daily net assets of the Fund for such year.
(e) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. shall be imposed.
(f) The persons authorized to direct the disposition of monies paid or
payable on behalf of the Fund pursuant to the Plan or this Agreement shall be
the President or any Vice President of the Trust. Such persons shall provide to
the Trust's Trustees and the Trustees shall review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
(g) In addition to the payments to the Principal Underwriter provided
for in paragraph 5(d), the Fund may make payments of service fees to the
Principal Underwriter, Authorized Firms and other persons. The aggregate of such
payments during any fiscal year of the Fund shall not exceed .25% of the Fund's
average daily net assets for such year.
6. The Trust hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Trust to the Principal Underwriter from time to time, as agent of the Fund and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund 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 Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter 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 Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct IBT to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect
of any repurchase of shares under the foregoing authorization and appointment as
agent, except for any sales commission, distribution fee or contingent deferred
sales charges payable under paragraph 5.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund 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 Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8. The term "net asset value" as used in this Agreement with reference
to the shares of the Fund shall have the same meaning as used in the Declaration
of Trust, as amended, and calculated in the manner referred to in paragraph 2
above.
9. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter will comply with the Trust's Declaration
of Trust and By-Laws, and the 1940 Act and the rules promulgated thereunder,
insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States
and preserve therein for such period or periods as the Commission shall
prescribe by rules and regulations applicable to it as Principal Underwriter of
an open-end investment company registered under the 1940 Act such accounts,
books and other documents as are necessary or appropriate to record its
transactions with the Fund. Such accounts, books and other documents shall be
subject at any time and from time to time to such reasonable periodic, special
and other examinations by the Commission or any member or representative thereof
as the Commission may prescribe. The Principal Underwriter shall furnish to the
Commission within such reasonable time as the Commission may prescribe copies of
or extracts from such records which may be prepared without effort, expense or
delay as the Commission may by order require.
10. This Agreement shall continue in force indefinitely until
terminated as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect through and including
April 28, 1996 (or, if applicable, the next April 28 which follows the day on
which the Fund has become a party hereto by amendment of Schedule A subsequent
to April 28, 1996) and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance is specifically approved at
least annually (i) by the vote of a majority of Rule 12b-1 Trustees cast in
person at a meeting 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;
(b) this Agreement may be terminated at any time by vote of a
majority of the Rule 12b-1 Trustees or by vote of a majority of the outstanding
voting securities of the Fund on not more than sixty (60) days' notice to the
Principal Underwriter. The Principal Underwriter shall be entitled to receive
all contingent deferred sales charges paid or payable with respect to any day
subsequent to the termination of this Agreement;
(c) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund;
(d) the Trust shall have the right to terminate this Agreement
forthwith in the event that it shall have been established by a court of
competent jurisdiction that the Principal Underwriter or any director or officer
of the Principal Underwriter has taken any action which results in a breach of
the covenants set out in paragraph 9 hereof; and
(e) additional series of the Trust will become parties hereto upon
approval by the Trustees of the Trust and amendment of Schedule A.
11. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
12. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
13. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or investment
companies, and (b) engage in other business and activities from time to time.
14. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
15. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust. The Principal Underwriter
hereby agrees that it shall have recourse to the Trust or the Fund for payment
of claims or obligations as between the Trust or the Fund and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
the shareholders or any shareholder of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
16. All references in this Agreement to the "Original Agreement" shall
mean the Distribution Agreement referenced on Schedule A hereto between the
Trust on behalf of the Fund and the Principal Underwriter. Such references shall
not be applicable to any additional series of the Trust which becomes a Fund
hereunder by amendment of Schedule A subsequent to the date below.
17. This Agreement shall amend, replace and be substituted for the
Original Agreement as of the opening of business on June 20, 1995, and this
Agreement shall be effective as of such time. The outstanding uncovered
distribution charges of the Principal Underwriter calculated under the Original
Agreement as of the close of business on June 19, 1995 shall be the outstanding
uncovered distribution charges of the Principal Underwriter calculated under
this Agreement as of the opening of business on June 20, 1995.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 19th day of June, 1995.
EATON VANCE SPECIAL INVESTMENT TRUST
By/s/ James B. Hawkes
----------------------------
President
EATON VANCE DISTRIBUTORS, INC.
By/s/ Wharton P. Whitaker
----------------------------
President
<PAGE>
SCHEDULE A
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION AGREEMENT
(DOMESTIC MARATHON FUNDS)
DATED JUNE 19, 1995
NAME OF FUND INCEPTION DATE OF ORIGINAL AGREEMENT
EV Marathon Investors Fund October 28, 1993
EV Marathon Special Equities Fund August 1, 1994
EV Marathon Stock Fund August 1, 1994
EV Marathon Total Return Fund October 28, 1993
EXHIBIT 99.6(A)(3)
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION AGREEMENT
(DOMESTIC TRADITIONAL FUNDS)
AGREEMENT effective as of June 19, 1995 between EATON VANCE SPECIAL
INVESTMENT TRUST, hereinafter called the "Trust", a Massachusetts business trust
having its principal place of business in Boston in the Commonwealth of
Massachusetts, on behalf of each of its series listed on Schedule A (the
"Funds") and EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation having
its principal place of business in said Boston, hereinafter sometimes called the
"Principal Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree with respect to each Fund:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
the net asset value used in determining the public offering price on which such
orders were based. The Principal Underwriter shall notify Investors Bank & Trust
Company, Custodian of the Fund ("IBT"), and The Shareholder Services Group,
Inc., Transfer Agent of the Fund, or a successor transfer agent, ("TSSG"), 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 the
Principal Underwriter is to purchase as principal for resale. The Principal
Underwriter shall take down and pay for shares ordered from the Fund on or
before the eleventh business day (excluding Saturdays) after the shares have
been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be the public
offering price as set forth in the current Prospectus relating to said shares,
but not to exceed the net asset value at which the Principal Underwriter is to
purchase the shares, plus a sales charge not to exceed 7.25% of the public
offering price (the net asset value divided by .9275). If the resulting public
offering price does not come out to an even cent, the public offering price
shall be adjusted to the nearer cent.
The Principal Underwriter may also sell shares at the net asset value
at which the Principal Underwriter is to purchase such shares, provided such
sales are not inconsistent with the provisions of Section 22(d) of the
Investment Company Act of 1940, as amended from time to time (the "1940 Act"),
and the rules thereunder, including any applicable exemptive orders or
administrative interpretations or "no-action" positions with respect thereto.
The net asset value of shares of the Fund shall be determined by the
Trust or IBT, as the agent of the Fund, as of the close of regular trading on
the New York Stock Exchange on each business day on which said Exchange is open,
or as of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. 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 time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust covenants and agrees that it will, from time to time, but
subject to the necessary approval of the Fund's shareholders, take such steps as
may be necessary to register the Fund's shares under the federal Securities Act
of 1933, as amended from time to time (the "1933 Act"), to the end that there
will be available for sale such number of shares as the Principal Underwriter
may reasonably be expected to sell. The Trust covenants and agrees to indemnify
and hold harmless the Principal Underwriter and each person, if any, who
controls the Principal Underwriter within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any person acquiring any shares of the Fund,
which may be based upon the 1933 Act or on any other statute or at common law,
on the ground that the Registration Statement or Prospectus, 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 such statement or
omission was made in reliance upon, and in conformity with, information
furnished in writing to the Trust in connection therewith by or on behalf of the
Principal Underwriter; provided, however, that in no case (i) is the indemnity
of the Trust in favor of the Principal Underwriter and any such controlling
person to be deemed to protect such Principal Underwriter or any such
controlling person against any liability to the Trust or the Fund or its
security holders to which such Principal Underwriter or any such controlling
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Trust or the Fund to be liable under its indemnity agreement contained in
this paragraph with respect to any claim made against the Principal Underwriter
or any such controlling person unless the Principal Underwriter or any such
controlling person, as the case may be, shall have notified the Trust 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 Principal
Underwriter or such controlling person (or after such Principal Underwriter or
such controlling person shall have received notice of such service on any
designated agent), but failure to notify the Trust of any such claim shall not
relieve it from any liability which the Fund may have to the person against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Trust shall be entitled to participate, at the
expense of the Fund, in the defense, or, if the Trust so elects, to assume the
defense of any suit brought to enforce any such liability, but if the Trust
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Principal Underwriter or controlling person or
persons, defendant or defendants in the suit. In the event the Trust elects to
assume the defense of any such suit and retains such counsel, the Principal
Underwriter 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 Trust does not elect to assume the defense of any such
suit, the Fund shall reimburse the Principal Underwriter or controlling person
or persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Trust agrees promptly to notify
the Principal Underwriter of the commencement of any litigation or proceedings
against it or any of its officers or Trustees in connection with the issuance or
sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
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 1933 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 acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, 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, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Trust in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund 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 Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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, the Fund or upon such
person (or after the Trust, the Fund or such person shall have received notice
of such service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 Principal Underwriter 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
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund 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 or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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 of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act (as said Registration Statement and Prospectus may be amended
or supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any financial service firm nor any other person is
authorized to act as agent for the Trust or the Fund in connection with the
offering or sale of shares of the Fund to the public or otherwise. All such
sales made by the Principal Underwriter shall be made by it as principal, for
its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter (or an affiliate thereof) acts as principal underwriter or
investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
1940 Act, covering its shares and all amendments and supplements thereto, and
preparing and distributing periodic reports to shareholders (including the
expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder;
(v) the fees, costs and expenses of the registration or
qualification of shares of the Fund for sale in the various states, territories
or other jurisdictions (including without limitation the registering or
qualifying the Fund as a broker or dealer or any officer of the Fund as agent or
salesman in any state, territory or other jurisdiction); and
(vi) all payments to be made by the Fund pursuant to any
written plan approved in accordance with Rule 12b-1 under the 1940 Act.
(b) The Principal Underwriter agrees that, after the Prospectus (other
than to existing shareholders of the Fund) and periodic reports have been set up
in type, it will bear the expense of printing and distributing any copies
thereof which are to be used in connection with the offering of shares of the
Fund to financial service firms or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by financial service firms in connection with the offering of the shares of
the Fund for sale to the public and any expenses of advertising in connection
with such offering.
(c) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges imposed in accordance with the Prospectus on
early redemptions of Fund shares.
6. The Trust hereby authorizes the Principal Underwriter to
repurchase, upon the terms and conditions set forth in written instructions
given by the Trust to the Principal Underwriter from time to time, as agent of
the Fund and for its account, such shares of the Fund as may be offered for sale
to the Fund from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG, at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund 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 Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter 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 Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct IBT, to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of
any repurchase of shares under the foregoing authorization and appointment as
agent.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund 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 Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of this Agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8(a). The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter covenants that it and its officers and
directors will comply with the Trust's Declaration of Trust and By-Laws, and the
1940 Act and the rules promulgated thereunder, insofar as they are applicable to
the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of an open-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
9. This Agreement shall continue in force indefinitely until terminated
as in this Agreement above provided, except that: greement above
(a) this Agreement shall continue in effect through and including April
28, 1996 (or, if applicable, the next April 28 which follows the day on which
the Fund has become a party hereto by amendment of Schedule A subsequent to
April 28, 1996) and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance 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 Principal Underwriter cast in
person at a meeting 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;
(b) that either party shall have the right to terminate this Agreement
on six (6) months' written notice thereof given in writing to the other; and
nths' written
(c) additional series of the Trust will become parties hereto upon
approval by the Trustees of the Trust and amendment of Schedule A. ustees of the
10. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate. his Agreement
11. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. age Until further
notice to the other party, it is agreed that the record address of the Trust and
that of the Principal Underwriter, shall be 24 Federal Street, Boston,
Massachusetts 02110.
12. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
13. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
14. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust. The Principal Underwriter
hereby agrees that it shall have recourse only to the assets of the Fund for
payment of claims or obligations as between the Trust on behalf of the Fund, and
the Principal Underwriter arising out of this Agreement and shall not seek
satisfaction from any shareholders of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
15. All references in this Agreement to the "Original Agreement" shall
mean the Distribution Agreement referenced on Schedule A hereto between the
Trust on behalf of the Fund and the Principal Underwriter. Such references shall
not be applicable to any additional series of the Trust which becomes a Fund
hereunder by amendment of Schedule A subsequent to the date below.
16. This Agreement shall amend, replace and be substituted for the
Original Agreement as of the opening of business on June 20, 1995, and this
Agreement shall be effective as of such time.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
the 19th day of June, 1995.
EATON VANCE SPECIAL INVESTMENT TRUST
By/s/ James B. Hawkes
-----------------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ H. Day Brigham Jr.
-----------------------------
Vice President
<PAGE>
SCHEDULE A
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION AGREEMENT
(DOMESTIC TRADITIONAL FUNDS)
DATED JUNE 19, 1995
Name of Fund Inception Date of Original Agreement
EV Traditional Investors Fund July 28, 1989
EV Traditional Special Equities Fund June 12, 1989
EV Traditional Stock Fund December 27, 1990
EV Traditional Total Return Fund March 24, 1982
EXHIBIT 99.6(a)(4)
EATON VANCE SPECIAL INVESTMENT TRUST
DISTRIBUTION AGREEMENT
ON BEHALF OF EV TRADITIONAL EMERGING MARKETS FUND
AGREEMENT effective as of March 24, 1994 between EATON VANCE SPECIAL
INVESTMENT TRUST, hereinafter called the "Trust", a Massachusetts business trust
having its principal place of business in Boston in the Commonwealth of
Massachusetts, on behalf of EV Traditional Emerging Markets Fund, hereinafter
called the "Fund" and EATON VANCE DISTRIBUTORS, INC., a Massachusetts
corporation having its principal place of business in said Boston, hereinafter
sometimes called the "Principal Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
the net asset value used in determining the public offering price on which such
orders were based. The Principal Underwriter shall notify Investors Bank & Trust
Company, Custodian of the Fund ("IBT"), and The Shareholder Services Group,
Inc., Transfer Agent of the Fund ("TSSG"), or a successor transfer agent, 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 the
Principal Underwriter is to purchase as principal for resale. The Principal
Underwriter shall take down and pay for shares ordered from the Fund on or
before the eleventh business day (excluding Saturdays) after the shares have
been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be the public
offering price as set forth in the current Prospectus relating to said shares,
but not to exceed the net asset value at which the Principal Underwriter is to
purchase the shares, plus a sales charge not to exceed 7.25% of the public
offering price (the net asset value divided by .9275). If the resulting public
offering price does not come out to an even cent, the public offering price
shall be adjusted to the nearer cent.
The Principal Underwriter may also sell shares at the net asset value
at which the Principal Underwriter is to purchase such shares, provided such
sales are not inconsistent with the provisions of Section 22(d) of the
Investment Company Act of 1940, as amended from time to time (the "1940 Act"),
and the rules thereunder, including any applicable exemptive orders or
administrative interpretations or "no-action" positions with respect thereto.
The net asset value of shares of the Fund shall be determined by the
Trust or IBT, as the agent of the Fund, as of the close of regular trading on
the New York Stock Exchange on each business day on which said Exchange is open,
or as of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. 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 time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust covenants and agrees that it will, from time to time, but
subject to the necessary approval of the Fund's shareholders, take such steps as
may be necessary to register the Fund's shares under the federal Securities Act
of 1933, as amended from time to time (the "1933 Act"), to the end that there
will be available for sale such number of shares as the Principal Underwriter
may reasonably be expected to sell. The Trust covenants and agrees to indemnify
and hold harmless the Principal Underwriter and each person, if any, who
controls the Principal Underwriter within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any person acquiring any shares of the Fund,
which may be based upon the 1933 Act or on any other statute or at common law,
on the ground that the Registration Statement or Prospectus, 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 such statement or
omission was made in reliance upon, and in conformity with, information
furnished in writing to the Trust in connection therewith by or on behalf of the
Principal Underwriter; provided, however, that in no case (i) is the indemnity
of the Trust in favor of the Principal Underwriter and any such controlling
person to be deemed to protect such Principal Underwriter or any such
controlling person against any liability to the Trust or the Fund or its
security holders to which such Principal Underwriter or any such controlling
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Trust or the Fund to be liable under its indemnity agreement contained in
this paragraph with respect to any claim made against the Principal Underwriter
or any such controlling person unless the Principal Underwriter or any such
controlling person, as the case may be, shall have notified the Trust 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 Principal
Underwriter or such controlling person (or after such Principal Underwriter or
such controlling person shall have received notice of such service on any
designated agent), but failure to notify the Trust of any such claim shall not
relieve it from any liability which the Fund may have to the person against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Trust shall be entitled to participate, at the
expense of the Fund, in the defense, or, if the Trust so elects, to assume the
defense of any suit brought to enforce any such liability, but if the Trust
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Principal Underwriter or controlling person or
persons, defendant or defendants in the suit. In the event the Trust elects to
assume the defense of any such suit and retains such counsel, the Principal
Underwriter 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 Trust does not elect to assume the defense of any such
suit, the Fund shall reimburse the Principal Underwriter or controlling person
or persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Trust agrees promptly to notify
the Principal Underwriter of the commencement of any litigation or proceedings
against it or any of its officers or Trustees in connection with the issuance or
sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
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 1933 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 acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, 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, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Trust in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund 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 Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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, the Fund or upon such
person (or after the Trust, the Fund or such person shall have received notice
of such service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 Principal Underwriter 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
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund 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 or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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 of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act (as said Registration Statement and Prospectus may be amended
or supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any financial service firm nor any other person is
authorized to act as agent for the Trust or the Fund in connection with the
offering or sale of shares of the Fund to the public or otherwise. All such
sales made by the Principal Underwriter shall be made by it as principal, for
its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter (or an affiliate thereof) acts as principal underwriter or
investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
1940 Act, covering its shares and all amendments and supplements thereto, and
preparing and distributing periodic reports to shareholders (including the
expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) The cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder;
(v) the fees, costs and expenses of the registration or
qualification of shares of the Fund for sale in the various states, territories
or other jurisdictions (including without limitation the registering or
qualifying the Fund as a broker or dealer or any officer of the Fund as agent or
salesman in any state, territory or other jurisdiction); and
(vi) all payments to be made by the Fund pursuant to any
written plan approved in accordance with Rule 12b-1 under the 1940 Act.
(b) The Principal Underwriter agrees that, after the Prospectus (other
than to existing shareholders of the Fund) and periodic reports have been set up
in type, it will bear the expense of printing and distributing any copies
thereof which are to be used in connection with the offering of shares of the
Fund to financial service firms or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by financial service firms in connection with the offering of the shares of
the Fund for sale to the public and any expenses of advertising in connection
with such offering.
(c) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges imposed in accordance with the Prospectus on
early redemptions of Fund shares.
6. The Trust hereby authorizes the Principal Underwriter to
repurchase, upon the terms and conditions set forth in written instructions
given by the Trust to the Principal Underwriter from time to time, as agent of
the Fund and for its account, such shares of the Fund as may be offered for sale
to the Fund from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG, at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund 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 Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter 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 Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct TSSG, to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect
of any repurchase of shares under the foregoing authorization and appointment as
agent.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund 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 Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of this Agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter covenants that it and its officers and
directors will comply with the Trust's Declaration of Trust and By-Laws, and the
1940 Act and the rules promulgated thereunder, insofar as they are applicable to
the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States
and preserve therein for such period or periods as the Commission shall
prescribe by rules and regulations applicable to it as Principal Underwriter of
an open-end investment company registered under the 1940 Act such accounts,
books and other documents as are necessary or appropriate to record its
transactions with the Fund. Such accounts, books and other documents shall be
subject at any time and from time to time to such reasonable periodic, special
and other examinations by the Commission or any member or representative thereof
as the Commission may prescribe. The Principal Underwriter shall furnish to the
Commission within such reasonable time as the Commission may prescribe copies of
or extracts from such records which may be prepared without effort, expense or
delay as the Commission may by order require.
9. This Agreement shall continue in force indefinitely until terminated
as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect for one year from the
date of its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance 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 Principal Underwriter cast in
person at a meeting 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; and
(b) that either party shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
other.
10. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
11. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
12. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
13. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
14. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust. The Principal Underwriter
hereby agrees that it shall have recourse only to the assets of the Fund for
payment of claims or obligations as between the Trust on behalf of the Fund, and
the Principal Underwriter arising out of this Agreement and shall not seek
satisfaction from any shareholders of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement the
24 day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV TRADITIONAL EMERGING
MARKETS FUND)
By/s/ James B. Hawkes
----------------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ H. Day Brigham Jr.
----------------------------
Vice President
EXHIBIT 99.6(a)(5)
EATON VANCE SPECIAL INVESTMENT TRUST
DISTRIBUTION AGREEMENT
ON BEHALF OF EV MARATHON EMERGING MARKETS FUND
AGREEMENT effective as of March 24, 1994 between EATON VANCE SPECIAL
INVESTMENT TRUST, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Trust", on behalf of EV Marathon Emerging Markets Fund (the "Fund"), and EATON
VANCE DISTRIBUTORS, INC., a Massachusetts corporation having its principal place
of business in said Boston, hereinafter sometimes called the "Principal
Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the price paid by investors upon purchasing such shares. The Principal
Underwriter shall notify Investors Bank & Trust Company, Custodian of the Fund
("IBT"), and The Shareholder Services Group, Inc., Transfer Agent of the Fund
("TSSG"), or a successor transfer agent, 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 the Principal Underwriter is to purchase
as principal for resale. The Principal Underwriter shall take down and pay for
shares ordered from the Fund on or before the eleventh business day (excluding
Saturdays) after the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be equal to the net
asset value at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the
Trust or IBT, as the agent of the Fund, as of the close of regular trading on
the New York Stock Exchange on each business day on which said Exchange is open,
or as of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. 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 time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of
1933, as amended from time to time, (the "1933 Act"), to the end that there will
be available for sale such number of shares as the Principal Underwriter may
reasonably be expected to sell. The Trust agrees to indemnify and hold harmless
the Principal Underwriter and each person, if any, who controls the Principal
Underwriter within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any shares of the Fund, which may be based
upon the 1933 Act or on any other statute or at common law, on the ground that
the Registration Statement or Prospectus, 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 such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its oblig
ations and duties under this Agreement, or (ii) is the Trust or the Fund to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Principal Underwriter or any such controlling person
unless the Principal Underwriter or any such controlling person, as the case may
be, shall have notified the Trust 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 Principal Underwriter or such controlling
person (or after such Principal Underwriter or such controlling person shall
have received notice of such service on any designated agent), but failure to
notify the Trust of any such claim shall not relieve it from any liability which
the Fund may have to the person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Trust shall be entitled to participate, at the expense of the Fund, in the
defense, or, if the Trust so elects, to assume the defense of any suit brought
to enforce any such liability, but if the Trust elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to the
Principal Underwriter or controlling person or persons, defendant or defendants
in the suit. In the event the Trust elects to assume the defense of any such
suit and retains such counsel, the Principal Underwriter 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 Trust does
not elect to assume the defense of any such suit, the Fund shall reimburse the
Principal Underwriter or controlling person or persons, defendant or defendants
in the suit, for the reasonable fees and expenses of any counsel retained by
them. The Trust agrees promptly to notify the Principal Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
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 1933 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 acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, 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, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund 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 Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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, the Fund 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 Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 Principal Underwriter 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
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund 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 or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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 of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act, (as said Registration Statement and Prospectus may be
amended or supplemented from time to time), covering the shares of the Fund.
Neither the Principal Underwriter nor any financial service firm nor any other
person is authorized to act as agent for the Trust or the Fund in connection
with the offering or sale of shares of the Fund to the public or otherwise. All
such sales made by the Principal Underwriter shall be made by it as principal,
for its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter acts as Principal Underwriter or for which an affiliate of the
Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees
and disbursements of its counsel, in connection with the preparation and filing
of any required Registration Statement and/or Prospectus under the 1933 Act, or
the Investment Company Act of 1940, as amended from time to time, (the "1940
Act") covering its shares and all amendments and supplements thereto, and
preparing and mailing periodic reports to shareholders (including the expense of
setting up in type any such Registration Statement, Prospectus or periodic
report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) The cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to financial service firms or investors. The
Principal Underwriter further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by the Principal
Underwriter or furnished by it for use by financial service firms in connection
with the offering of the shares of the Fund for sale to the public and any
expenses of advertising in connection with such offering. The Fund agrees to pay
the expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Trust or the Fund as a dealer or broker,
in such states as shall be selected by the Principal Underwriter and the fees
payable to each such state for continuing the qualification therein until the
Principal Underwriter notifies the Trust that it does not wish such
qualification continued.
(c) In addition, the Trust agrees, in accordance with the Fund's
Distribution Plan (the "Plan"), adopted pursuant to Rule 12b-1 under the 1940
Act with respect to shares, to make certain payments as follows. The Principal
Underwriter shall be entitled to be paid by the Fund a sales commission equal to
an amount not exceeding 5% of the price received by the Fund for each sale of
shares (excluding reinvestment of dividends and distributions), such payment to
be made in the manner set forth in this paragraph 5. The Principal Underwriter
shall also be entitled to be paid by the Fund a separate distribution fee
(calculated in accordance with paragraph 5(d)), such payment to be made in the
manner set forth and subject to the terms of this paragraph 5.
(d) The sales commissions and distribution fees referred to in
paragraph 5(c) shall be accrued and paid by the Fund in the following manner.
The Fund shall accrue daily an amount calculated at the rate of .75% per annum
of the daily net assets of the Fund, which net assets shall be computed in
accordance with the governing documents of the Fund and applicable votes and
determinations of the Trustees of the Trust. The daily amounts so accrued
throughout the month shall be paid to the Principal Underwriter on the last day
of each month. The amount of such daily accrual, as so calculated, shall first
be applied and charged to all unpaid sales commissions, and the balance, if any,
shall then be applied and charged to all unpaid distribution fees. No amount
shall be accrued with respect to any day on which there exist no outstanding
uncovered distribution charges of the Principal Underwriter. The amount of such
uncovered distribution charges shall be calculated daily. For purposes of this
calculation, distribution charges of the Principal Underwriter shall include (a)
the aggregate of all sales commissions which the Principal Underwriter has been
paid pursuant to this paragraph (d) plus all sales commissions which it is
entitled to be paid pursuant to paragraph 5(c) since inception of this Agreement
through and including the day next preceding the date of calculation, and (b) an
amount equal to the aggregate of all distribution fees referred to below which
the Principal Underwriter has been paid pursuant to this paragraph (d) plus all
such fees which it is entitled to be paid pursuant to paragraph 5(c) since
inception of this Agreement through and including the day next preceding the
date of calculation. From this sum (distribution charges) there shall be
subtracted (i) the aggregate amount paid or payable to the Principal Underwriter
pursuant to this paragraph (d) since inception of this Agreement through and
including the day next preceding the date of calculation and (ii) the aggregate
amount of all contingent deferred sales charges paid or payable to the Principal
Underwriter since inception of this Agreement through and including the day next
preceding the date of calculation, and (iii) the aggregate of all amounts paid
or payable to the Principal Underwriter (or any affiliate thereof) by any party
other than the Fund with respect to the sale of shares of the Fund since
inception of this Agreement through and including the day next preceding the
date of calculation. If the result of such subtraction is a positive amount, a
distribution fee [computed at the rate of 1% per annum above the prime rate
(being the base rate on corporate loans posted by at least 75% of the nation's
30 largest banks) then being reported in the Eastern Edition of The Wall Street
Journal or if such prime rate is not so reported such other rate as may be
designated from time to time by vote or other action of a majority of (i) those
Trustees of the Trust who are not "interested persons" of the Trust (as defined
in the 1940 Act) and have no direct or indirect financial interest in the
operation of the Plan or any agreements related to it and (ii) all of the
Trustees then in office] shall be computed on such amount and added to such
amount, with the resulting sum constituting the amount of outstanding uncovered
distribution charges of the Principal Underwriter with respect to such day for
all purposes of this Agreement. If the result of such subtraction is a negative
amount, there shall exist no outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day and no amount shall be accrued or
paid to the Principal Underwriter with respect to such day. The aggregate
amounts accrued and paid pursuant to this paragraph (d) during any fiscal year
of the Fund shall not exceed .75% of the average daily net assets of the Fund
for such year.
(e) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. shall be imposed.
(f) The persons authorized to direct the disposition of monies paid or
payable on behalf of the Fund pursuant to the Plan or this Agreement shall be
the President or any Vice President of the Trust. Such persons shall provide to
the Trust's Trustees and the Trustees shall review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
(g) In addition to the payments to the Principal Underwriter provided
for in paragraph 5(d), the Fund may make payments of service fees to the
Principal Underwriter, Authorized Firms and other persons. The aggregate of such
payments during any fiscal year of the Fund shall not exceed .25% of the Fund's
average daily net assets for such year.
6. The Trust hereby authorizes the Principal Underwriter to
repurchase, upon the terms and conditions set forth in written instructions
given by the Trust to the Principal Underwriter from time to time, as agent of
the Fund and for its account, such shares of the Fund as may be offered for sale
to the Fund from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund 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 Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter 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 Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct TSSG to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of
any repurchase of shares under the foregoing authorization and appointment as
agent, except for any sales commission, distribution fee or contingent deferred
sales charges payable under paragraph 5.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund 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 Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8. The term "net asset value" as used in this Agreement with reference
to the shares of the Fund shall have the same meaning as used in the Declaration
of Trust, as amended, and calculated in the manner referred to in paragraph 2
above.
9. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter will comply with the Trust's Declaration
of Trust and By-Laws, and the 1940 Act and the rules promulgated thereunder,
insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of an open-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
10. This Agreement shall continue in force indefinitely until
terminated as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect for one year from the date of
its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance 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 and who have no direct or indirect
interest in the operation of the Plan or this Agreement (the "Rule 12b-1
Trustees") cast in person at a meeting 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;
(b) this Agreement may be terminated at any time by vote of a majority
of the Rule 12b-1 Trustees or by vote of a majority of the outstanding voting
securities of the Fund on not more than sixty days' notice to the Principal
Underwriter. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day
subsequent to the termination of this Agreement;
(c) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund; and
(d) the Trust shall have the right to terminate this Agreement
forthwith in the event that it shall have been established by a court of
competent jurisdiction that the Principal Underwriter or any director or officer
of the Principal Underwriter has taken any action which results in a breach of
the covenants set out in paragraph 9 hereof.
11. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
12. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
13. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar service to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
14. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
15. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust. The Principal Underwriter
hereby agrees that it shall have recourse to the Trust or the Fund for payment
of claims or obligations as between the Trust or the Fund and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
the shareholders or any shareholder of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 24th day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV MARATHON
EMERGING MARKETS FUND)
By/s/ James B. Hawkes
-----------------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ H. Day Brigham Jr.
-----------------------------
Vice President
EXHIBIT 99.6(a)(6)
EATON VANCE SPECIAL INVESTMENT TRUST
DISTRIBUTION AGREEMENT
ON BEHALF OF EV TRADITIONAL GREATER INDIA FUND
AGREEMENT effective as of March 24, 1994 between EATON VANCE SPECIAL
INVESTMENT TRUST, hereinafter called the "Trust", a Massachusetts business trust
having its principal place of business in Boston in the Commonwealth of
Massachusetts, on behalf of EV Traditional Greater India Fund, hereinafter
called the "Fund" and EATON VANCE DISTRIBUTORS, INC., a Massachusetts
corporation having its principal place of business in said Boston, hereinafter
sometimes called the "Principal Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
the net asset value used in determining the public offering price on which such
orders were based. The Principal Underwriter shall notify Investors Bank & Trust
Company, Custodian of the Fund ("IBT"), and The Shareholder Services Group,
Inc., Transfer Agent of the Fund ("TSSG"), or a successor transfer agent, 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 the
Principal Underwriter is to purchase as principal for resale. The Principal
Underwriter shall take down and pay for shares ordered from the Fund on or
before the eleventh business day (excluding Saturdays) after the shares have
been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be the public
offering price as set forth in the current Prospectus relating to said shares,
but not to exceed the net asset value at which the Principal Underwriter is to
purchase the shares, plus a sales charge not to exceed 7.25% of the public
offering price (the net asset value divided by .9275). If the resulting public
offering price does not come out to an even cent, the public offering price
shall be adjusted to the nearer cent.
The Principal Underwriter may also sell shares at the net asset value
at which the Principal Underwriter is to purchase such shares, provided such
sales are not inconsistent with the provisions of Section 22(d) of the
Investment Company Act of 1940, as amended from time to time (the "1940 Act"),
and the rules thereunder, including any applicable exemptive orders or
administrative interpretations or "no-action" positions with respect thereto.
The net asset value of shares of the Fund shall be determined by the
Trust or IBT, as the agent of the Fund, as of the close of regular trading on
the New York Stock Exchange on each business day on which said Exchange is open,
or as of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. 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 time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust covenants and agrees that it will, from time to time, but
subject to the necessary approval of the Fund's shareholders, take such steps as
may be necessary to register the Fund's shares under the federal Securities Act
of 1933, as amended from time to time (the "1933 Act"), to the end that there
will be available for sale such number of shares as the Principal Underwriter
may reasonably be expected to sell. The Trust covenants and agrees to indemnify
and hold harmless the Principal Underwriter and each person, if any, who
controls the Principal Underwriter within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any person acquiring any shares of the Fund,
which may be based upon the 1933 Act or on any other statute or at common law,
on the ground that the Registration Statement or Prospectus, 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 such statement or
omission was made in reliance upon, and in conformity with, information
furnished in writing to the Trust in connection therewith by or on behalf of the
Principal Underwriter; provided, however, that in no case (i) is the indemnity
of the Trust in favor of the Principal Underwriter and any such controlling
person to be deemed to protect such Principal Underwriter or any such
controlling person against any liability to the Trust or the Fund or its
security holders to which such Principal Underwriter or any such controlling
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Trust or the Fund to be liable under its indemnity agreement contained in
this paragraph with respect to any claim made against the Principal Underwriter
or any such controlling person unless the Principal Underwriter or any such
controlling person, as the case may be, shall have notified the Trust 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 Principal
Underwriter or such controlling person (or after such Principal Underwriter or
such controlling person shall have received notice of such service on any
designated agent), but failure to notify the Trust of any such claim shall not
relieve it from any liability which the Fund may have to the person against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Trust shall be entitled to participate, at the
expense of the Fund, in the defense, or, if the Trust so elects, to assume the
defense of any suit brought to enforce any such liability, but if the Trust
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Principal Underwriter or controlling person or
persons, defendant or defendants in the suit. In the event the Trust elects to
assume the defense of any such suit and retains such counsel, the Principal
Underwriter 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 Trust does not elect to assume the defense of any such
suit, the Fund shall reimburse the Principal Underwriter or controlling person
or persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Trust agrees promptly to notify
the Principal Underwriter of the commencement of any litigation or proceedings
against it or any of its officers or Trustees in connection with the issuance or
sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
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 1933 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 acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, 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, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Trust in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund 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 Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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, the Fund or upon such
person (or after the Trust, the Fund or such person shall have received notice
of such service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 Principal Underwriter 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
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund 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 or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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 of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act (as said Registration Statement and Prospectus may be amended
or supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any financial service firm nor any other person is
authorized to act as agent for the Trust or the Fund in connection with the
offering or sale of shares of the Fund to the public or otherwise. All such
sales made by the Principal Underwriter shall be made by it as principal, for
its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter (or an affiliate thereof) acts as principal underwriter or
investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
1940 Act, covering its shares and all amendments and supplements thereto, and
preparing and distributing periodic reports to shareholders (including the
expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) The cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder;
(v) the fees, costs and expenses of the registration or
qualification of shares of the Fund for sale in the various states, territories
or other jurisdictions (including without limitation the registering or
qualifying the Fund as a broker or dealer or any officer of the Fund as agent or
salesman in any state, territory or other jurisdiction); and
(vi) all payments to be made by the Fund pursuant to any
written plan approved in accordance with Rule 12b-1 under the 1940 Act.
(b) The Principal Underwriter agrees that, after the Prospectus (other
than to existing shareholders of the Fund) and periodic reports have been set up
in type, it will bear the expense of printing and distributing any copies
thereof which are to be used in connection with the offering of shares of the
Fund to financial service firms or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by financial service firms in connection with the offering of the shares of
the Fund for sale to the public and any expenses of advertising in connection
with such offering.
(c) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges imposed in accordance with the Prospectus on
early redemptions of Fund shares.
6. The Trust hereby authorizes the Principal Underwriter to
repurchase, upon the terms and conditions set forth in written instructions
given by the Trust to the Principal Underwriter from time to time, as agent of
the Fund and for its account, such shares of the Fund as may be offered for sale
to the Fund from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG, at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund 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 Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter 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 Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct TSSG, to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect
of any repurchase of shares under the foregoing authorization and appointment as
agent.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund 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 Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of this Agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter covenants that it and its officers and
directors will comply with the Trust's Declaration of Trust and By-Laws, and the
1940 Act and the rules promulgated thereunder, insofar as they are applicable to
the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States
and preserve therein for such period or periods as the Commission shall
prescribe by rules and regulations applicable to it as Principal Underwriter of
an open-end investment company registered under the 1940 Act such accounts,
books and other documents as are necessary or appropriate to record its
transactions with the Fund. Such accounts, books and other documents shall be
subject at any time and from time to time to such reasonable periodic, special
and other examinations by the Commission or any member or representative thereof
as the Commission may prescribe. The Principal Underwriter shall furnish to the
Commission within such reasonable time as the Commission may prescribe copies of
or extracts from such records which may be prepared without effort, expense or
delay as the Commission may by order require.
9. This Agreement shall continue in force indefinitely until terminated
as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect one year from the date
of its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance 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 Principal Underwriter cast in
person at a meeting 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; and
(b) that either party shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
other.
10. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
11. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
12. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
13. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
14. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust. The Principal Underwriter
hereby agrees that it shall have recourse only to the assets of the Fund for
payment of claims or obligations as between the Trust on behalf of the Fund, and
the Principal Underwriter arising out of this Agreement and shall not seek
satisfaction from any shareholders of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement the
24th day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV TRADITIONAL GREATER
INDIA FUND)
By/s/ James B. Hawkes
-----------------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ H. Day Brigham Jr.
-----------------------------
Vice President
EXHIBIT 99.6(a)(7)
EATON VANCE SPECIAL INVESTMENT TRUST
DISTRIBUTION AGREEMENT
ON BEHALF OF EV MARATHON GREATER INDIA FUND
AGREEMENT effective as of March 24, 1994 between EATON VANCE SPECIAL
INVESTMENT TRUST, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Trust", on behalf of EV Marathon Greater India Fund (the "Fund"), and EATON
VANCE DISTRIBUTORS, INC., a Massachusetts corporation having its principal place
of business in said Boston, hereinafter sometimes called the "Principal
Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the price paid by investors upon purchasing such shares. The Principal
Underwriter shall notify Investors Bank & Trust Company, Custodian of the Fund
("IBT"), and The Shareholder Services Group, Inc., Transfer Agent of the Fund
("TSSG"), or a successor transfer agent, 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 the Principal Underwriter is to purchase
as principal for resale. The Principal Underwriter shall take down and pay for
shares ordered from the Fund on or before the eleventh business day (excluding
Saturdays) after the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be equal to the net
asset value at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the
Trust or IBT, as the agent of the Fund, as of the close of regular trading on
the New York Stock Exchange on each business day on which said Exchange is open,
or as of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. 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 time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of
1933, as amended from time to time, (the "1933 Act"), to the end that there will
be available for sale such number of shares as the Principal Underwriter may
reasonably be expected to sell. The Trust agrees to indemnify and hold harmless
the Principal Underwriter and each person, if any, who controls the Principal
Underwriter within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any shares of the Fund, which may be based
upon the 1933 Act or on any other statute or at common law, on the ground that
the Registration Statement or Prospectus, 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 such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its oblig
ations and duties under this Agreement, or (ii) is the Trust or the Fund to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Principal Underwriter or any such controlling person
unless the Principal Underwriter or any such controlling person, as the case may
be, shall have notified the Trust 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 Principal Underwriter or such controlling
person (or after such Principal Underwriter or such controlling person shall
have received notice of such service on any designated agent), but failure to
notify the Trust of any such claim shall not relieve it from any liability which
the Fund may have to the person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Trust shall be entitled to participate, at the expense of the Fund, in the
defense, or, if the Trust so elects, to assume the defense of any suit brought
to enforce any such liability, but if the Trust elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to the
Principal Underwriter or controlling person or persons, defendant or defendants
in the suit. In the event the Trust elects to assume the defense of any such
suit and retains such counsel, the Principal Underwriter 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 Trust does
not elect to assume the defense of any such suit, the Fund shall reimburse the
Principal Underwriter or controlling person or persons, defendant or defendants
in the suit, for the reasonable fees and expenses of any counsel retained by
them. The Trust agrees promptly to notify the Principal Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issuance or sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
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 1933 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 acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, 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, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund 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 Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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, the Fund 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 Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 Principal Underwriter 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
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund 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 or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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 of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act, (as said Registration Statement and Prospectus may be
amended or supplemented from time to time), covering the shares of the Fund.
Neither the Principal Underwriter nor any financial service firm nor any other
person is authorized to act as agent for the Trust or the Fund in connection
with the offering or sale of shares of the Fund to the public or otherwise. All
such sales made by the Principal Underwriter shall be made by it as principal,
for its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter acts as Principal Underwriter or for which an affiliate of the
Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees
and disbursements of its counsel, in connection with the preparation and filing
of any required Registration Statement and/or Prospectus under the 1933 Act, or
the Investment Company Act of 1940, as amended from time to time, (the "1940
Act") covering its shares and all amendments and supplements thereto, and
preparing and mailing periodic reports to shareholders (including the expense of
setting up in type any such Registration Statement, Prospectus or periodic
report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) The cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to financial service firms or investors. The
Principal Underwriter further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by the Principal
Underwriter or furnished by it for use by financial service firms in connection
with the offering of the shares of the Fund for sale to the public and any
expenses of advertising in connection with such offering. The Fund agrees to pay
the expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Trust or the Fund as a dealer or broker,
in such states as shall be selected by the Principal Underwriter and the fees
payable to each such state for continuing the qualification therein until the
Principal Underwriter notifies the Trust that it does not wish such
qualification continued.
(c) In addition, the Trust agrees, in accordance with the Fund's
Distribution Plan (the "Plan"), adopted pursuant to Rule 12b-1 under the 1940
Act with respect to shares, to make certain payments as follows. The Principal
Underwriter shall be entitled to be paid by the Fund a sales commission equal to
an amount not exceeding 5% of the price received by the Fund for each sale of
shares (excluding reinvestment of dividends and distributions), such payment to
be made in the manner set forth in this paragraph 5. The Principal Underwriter
shall also be entitled to be paid by the Fund a separate distribution fee
(calculated in accordance with paragraph 5(d)), such payment to be made in the
manner set forth and subject to the terms of this paragraph 5.
(d) The sales commissions and distribution fees referred to in
paragraph 5(c) shall be accrued and paid by the Fund in the following manner.
The Fund shall accrue daily an amount calculated at the rate of .75% per annum
of the daily net assets of the Fund, which net assets shall be computed in
accordance with the governing documents of the Fund and applicable votes and
determinations of the Trustees of the Trust. The daily amounts so accrued
throughout the month shall be paid to the Principal Underwriter on the last day
of each month. The amount of such daily accrual, as so calculated, shall first
be applied and charged to all unpaid sales commissions, and the balance, if any,
shall then be applied and charged to all unpaid distribution fees. No amount
shall be accrued with respect to any day on which there exist no outstanding
uncovered distribution charges of the Principal Underwriter. The amount of such
uncovered distribution charges shall be calculated daily. For purposes of this
calculation, distribution charges of the Principal Underwriter shall include (a)
the aggregate of all sales commissions which the Principal Underwriter has been
paid pursuant to this paragraph (d) plus all sales commissions which it is
entitled to be paid pursuant to paragraph 5(c) since inception of this Agreement
through and including the day next preceding the date of calculation, and (b) an
amount equal to the aggregate of all distribution fees referred to below which
the Principal Underwriter has been paid pursuant to this paragraph (d) plus all
such fees which it is entitled to be paid pursuant to paragraph 5(c) since
inception of this Agreement through and including the day next preceding the
date of calculation. From this sum (distribution charges) there shall be
subtracted (i) the aggregate amount paid or payable to the Principal Underwriter
pursuant to this paragraph (d) since inception of this Agreement through and
including the day next preceding the date of calculation and (ii) the aggregate
amount of all contingent deferred sales charges paid or payable to the Principal
Underwriter since inception of this Agreement through and including the day next
preceding the date of calculation, and (iii) the aggregate of all amounts paid
or payable to the Principal Underwriter (or any affiliate thereof) by any party
other than the Fund with respect to the sale of shares of the Fund since
inception of this Agreement through and including the day next preceding the
date of calculation. If the result of such subtraction is a positive amount, a
distribution fee [computed at the rate of 1% per annum above the prime rate
(being the base rate on corporate loans posted by at least 75% of the nation's
30 largest banks) then being reported in the Eastern Edition of The Wall Street
Journal or if such prime rate is not so reported such other rate as may be
designated from time to time by vote or other action of a majority of (i) those
Trustees of the Trust who are not "interested persons" of the Trust (as defined
in the 1940 Act) and have no direct or indirect financial interest in the
operation of the Plan or any agreements related to it and (ii) all of the
Trustees then in office] shall be computed on such amount and added to such
amount, with the resulting sum constituting the amount of outstanding uncovered
distribution charges of the Principal Underwriter with respect to such day for
all purposes of this Agreement. If the result of such subtraction is a negative
amount, there shall exist no outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day and no amount shall be accrued or
paid to the Principal Underwriter with respect to such day. The aggregate
amounts accrued and paid pursuant to this paragraph (d) during any fiscal year
of the Fund shall not exceed .75% of the average daily net assets of the Fund
for such year.
(e) The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. shall be imposed.
(f) The persons authorized to direct the disposition of monies paid or
payable on behalf of the Fund pursuant to the Plan or this Agreement shall be
the President or any Vice President of the Trust. Such persons shall provide to
the Trust's Trustees and the Trustees shall review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
(g) In addition to the payments to the Principal Underwriter provided
for in paragraph 5(d), the Fund may make payments of service fees to the
Principal Underwriter, Authorized Firms and other persons. The aggregate of such
payments during any fiscal year of the Fund shall not exceed .25% of the Fund's
average daily net assets for such year.
6. The Trust hereby authorizes the Principal Underwriter to
repurchase, upon the terms and conditions set forth in written instructions
given by the Trust to the Principal Underwriter from time to time, as agent of
the Fund and for its account, such shares of the Fund as may be offered for sale
to the Fund from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG at
the end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund 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 Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter 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 Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct TSSG to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates in proper form for transfer to the Fund or for
cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of
any repurchase of shares under the foregoing authorization and appointment as
agent, except for any sales commission, distribution fee or contingent deferred
sales charges payable under paragraph 5.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund 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 Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8. The term "net asset value" as used in this Agreement with reference
to the shares of the Fund shall have the same meaning as used in the Declaration
of Trust, as amended, and calculated in the manner referred to in paragraph 2
above.
9. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter will comply with the Trust's Declaration
of Trust and By-Laws, and the 1940 Act and the rules promulgated thereunder,
insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of an open-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
10. This Agreement shall continue in force indefinitely until
terminated as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect for one year from the date of
its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance 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 and who have no direct or indirect
interest in the operation of the Plan or this Agreement (the "Rule 12b-1
Trustees") cast in person at a meeting 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;
(b) this Agreement may be terminated at any time by vote of a majority
of the Rule 12b-1 Trustees or by vote of a majority of the outstanding voting
securities of the Fund on not more than sixty days' notice to the Principal
Underwriter. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day
subsequent to the termination of this Agreement;
(c) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund; and
(d) the Trust shall have the right to terminate this Agreement
forthwith in the event that it shall have been established by a court of
competent jurisdiction that the Principal Underwriter or any director or officer
of the Principal Underwriter has taken any action which results in a breach of
the covenants set out in paragraph 9 hereof.
11. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
12. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
13. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar service to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
14. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
15. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust. The Principal Underwriter
hereby agrees that it shall have recourse to the Trust or the Fund for payment
of claims or obligations as between the Trust or the Fund and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
the shareholders or any shareholder of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 24th day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV MARATHON
GREATER INDIA FUND)
By/s/ James B. Hawkes
------------------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ H. Day Brigham Jr.
------------------------------
Vice President
EXHIBIT 99.8
24 Federal Street
Boston, MA 02110
(617) 482-8260
March 24, 1994
Eaton Vance Special Investment Trust hereby adopts and agrees to become a party
to the attached Master Custodian Agreement between the Eaton Vance Group of
Funds and Investors Bank & Trust Company on behalf of the series of the Trust
listed on the attached schedule A.
EATON VANCE SPECIAL INVESTMENT TRUST
BY: /s/ James B. Hawkes
--------------------------
President
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
BY: /s/ Mike Rogers
- ------------------------------------
Title: Senior Vice President
<PAGE>
Schedule A
June 19, 1995
EATON VANCE SPECIAL INVESTMENT TRUST
EV Traditional Special Equities Fund
EV Classic Special Equities Fund
EV Marathon Special Equities Fund
EV Marathon Greater India Fund
EV Traditional Greater India Fund
EV Marathon Emerging Markets Fund
EV Traditional Emerging Markets Fund
EV Classic Investors Fund
EV Marathon Investors Fund
EV Traditional Investors Fund
EV Classic Stock Fund
EV Marathon Stock Fund
EV Traditional Stock Fund
EV Classic Total Return Fund
EV Marathon Total Return Fund
EV Traditional Total Return Fund
<PAGE>
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions 1-3
2. Employment of Custodian and Property to be held by it 3-4
3. Duties of the Custodian with Respect to
Property of the Fund 4
A. Safekeeping and Holding of Property 4
B. Delivery of Securities 4-7
C. Registration of Securities 7
D. Bank Accounts 8
E. Payments for Shares of the Fund 8
F. Investment and Availability of Federal Funds 8
G. Collections 8-9
H. Payment of Fund Moneys 9-11
I. Liability for Payment in Advance of
Receipt of Securities Purchased 11
J. Payments for Repurchases of Redemptions
of Shares of the Fund 11-12
K. Appointment of Agents by the Custodian 12
L. Deposit of Fund Portfolio Securities in Securities Systems 12-14
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper 14-16
N. Segregated Account 17
O. Ownership Certificates for Tax Purposes 17
P. Proxies 17
Q. Communications Relating to Fund Portfolio Securities 18
R. Exercise of Rights; Tender Offers 18
-i-
<PAGE>
S. Depository Receipts 19
T. Interest Bearing Call or Time Deposits 19
U. Options, Futures Contracts and Foreign Currency Transactions 19-21
V. Actions Permitted Without Express Authority 21
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value 22
5. Records and Miscellaneous Duties 22
6. Opinion of Fund`s Independent Public Accountants 23
7. Compensation and Expenses of Bank 23
8. Responsibility of Bank 23-24
9. Persons Having Access to Assets of the Fund 24
10. Effective Period, Termination and Amendment; Successor Custodian 25
11. Interpretive and Additional Provisions 26
12. Notices 26
13. Massachusetts Law to Apply 26
14. Adoption of the Agreement by the Fund 26
-ii-
<PAGE>
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Eaton
Vance Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian of
its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository but
only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for United
States and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but only
if the Custodian has received a certified copy of a vote of the Board approving
the participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by Eaton Vance
Management to the Custodian through the Eaton Vance equity trading system and
the Eaton Vance fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for different
purposes. A certified copy of a vote of the Board may be received and accepted
by the Custodian as conclusive evidence of the authority of any such person to
act and may be considered as in full force and effect until receipt of written
notice to the contrary. Such instructions may be general or specific in terms
and, where appropriate, may be standing instructions. Unless the vote delegating
authority to any person or persons to give a particular class of instructions
specifically requires that the approval of any person, persons or committee
shall first have been obtained before the Custodian may act on instructions of
that class, the Custodian shall be under no obligation to question the right of
the person or persons giving such instructions in so doing. Oral instructions
will be considered proper instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. The Fund authorizes the Custodian to tape record any and
all telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Fund as to the authorization by
the President and the Treasurer of the Fund accompanied by a detailed
description of the communication procedures approved by the President and the
Treasurer of the Fund, "proper instructions" may also include communications
effected directly between electromechanical or electronic devices provided that
the President and Treasurer of the Fund and the Custodian are satisfied that
such procedures afford adequate safeguards for the Fund's assets. In performing
its duties generally, and more particularly in connection with the purchase,
sale and exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.
2. Employment of Custodian and Property to be Held by It
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Fund
A. Safekeeping and Holding of Property The Custodian shall keep safely all
property of the Fund and on behalf of the Fund shall from time to time
receive delivery of Fund property for safekeeping. The Custodian shall
hold, earmark and segregate on its books and records for the account of
the Fund all property of the Fund, including all securities, participation
interests and other assets of the Fund (1) physically held by the
Custodian, (2) held by any subcustodian referred to in Section 2 hereof or
by any agent referred to in Paragraph K hereof, (3) held by or maintained
in The Depository Trust Company or in Participants Trust Company or in an
Approved Clearing Agency or in the Federal Book-Entry System or in an
Approved Foreign Securities Depository, each of which from time to time is
referred to herein as a "Securities System", and (4) held by the Custodian
or by any subcustodian referred to in Section 2 hereof and maintained in
any Approved Book-Entry System for Commercial Paper.
B. Delivery of Securities The Custodian shall release and deliver securities
or participation interests owned by the Fund held (or deemed to be held)
by the Custodian or maintained in a Securities System account or in an
Approved Book-Entry System for Commercial Paper account only upon receipt
of proper instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities or participation interests for the
account of the Fund, but only against receipt of payment therefor; if
delivery is made in Boston or New York City, payment therefor shall be
made in accordance with generally accepted clearing house procedures
or by use of Federal Reserve Wire System procedures; if delivery is
made elsewhere payment therefor shall be in accordance with the then
current "street delivery" custom or in accordance with such procedures
agreed to in writing from time to time by the parties hereto; if the
sale is effected through a Securities System, delivery and payment
therefor shall be made in accordance with the provisions of Paragraph
L hereof; if the sale of commercial paper is to be effected through an
Approved Book-Entry System for Commercial Paper, delivery and payment
therefor shall be made in accordance with the provisions of Paragraph
M hereof; if the securities are to be sold outside the United States,
delivery may be made in accordance with procedures agreed to in
writing from time to time by the parties hereto; for the purposes of
this subparagraph, the term "sale" shall include the disposition of a
portfolio security (i) upon the exercise of an option written by the
Fund and (ii) upon the failure by the Fund to make a successful bid
with respect to a portfolio security, the continued holding of which
is contingent upon the making of such a bid;
2) Upon the receipt of payment in connection with any repurchase
agreement or reverse repurchase agreement relating to such securities
and entered into by the Fund;
3) To the depository agent in connection with tender or other similar
offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or otherwise
become payable; provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name of the
Fund or into the name of any nominee of the Custodian or into the name
or nominee name of any agent appointed pursuant to Paragraph K hereof
or into the name or nominee name of any subcustodian employed pursuant
to Section 2 hereof; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate face
amount or number of units; provided that, in any such case, the new
securities or participation interests are to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance with the
"street delivery" custom; provided that the Custodian shall adopt such
procedures as the Fund from time to time shall approve to ensure their
prompt return to the Custodian by the broker in the event the broker
elects not to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the Issuer of such securities, or pursuant to provisions
for conversion of such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar securities, the surrender
thereof in connection with the exercise of such warrants, rights or
similar securities, or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such case,
the new securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2 hereof;
9) For delivery in connection with any loans of securities made by the
Fund (such loans to be made pursuant to the terms of the Fund's
current registration statement), but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and the
Fund, which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities; except
that in connection with any securities loans for which collateral is
to be credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of Treasury, the Custodian will not
be held liable or responsible for the delivery of securities loaned by
the Fund prior to the receipt of such collateral;
10) For delivery as security in connection with any borrowings by the Fund
requiring a pledge or hypothecation of assets by the Fund (if then
permitted under circumstances described in the current registration
statement of the Fund), provided, that the securities shall be
released only upon payment to the Custodian of the monies borrowed,
except that in cases where additional collateral is required to secure
a borrowing already made, further securities may be released for that
purpose; upon receipt of proper instructions, the Custodian may pay
any such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
11) When required for delivery in connection with any redemption or
repurchase of Shares of the Fund in accordance with the provisions of
Paragraph J hereof;
12) For delivery in accordance with the provisions of any agreement
between the Custodian (or a subcustodian employed pursuant to Section
2 hereof) and a broker-dealer registered under the Securities Exchange
Act of 1934 and, if necessary, the Fund, relating to compliance with
the rules of The Options Clearing Corporation or of any registered
national securities exchange, or of any similar organization or
organizations, regarding deposit or escrow or other arrangements in
connection with options transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement among
the Fund, the Custodian (or a subcustodian employed pursuant to
Section 2 hereof), and a futures commissions merchant, relating to
compliance with the rules of the Commodity Futures Trading Commission
and/or of any contract market or commodities exchange or similar
organization, regarding futures margin account deposits or payments in
connection with futures transactions by the Fund;
14) For any other proper corporate purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a vote of the
Board specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose
to be proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.
C. Registration of Securities Securities held by the Custodian (other than
bearer securities) for the account of the Fund shall be registered in the
name of the Fund or in the name of any nominee of the Fund or of any
nominee of the Custodian, or in the name or nominee name of any agent
appointed pursuant to Paragraph K hereof, or in the name or nominee name
of any subcustodian employed pursuant to Section 2 hereof, or in the name
or nominee name of The Depository Trust Company or Participants Trust
Company or Approved Clearing Agency or Federal Book-Entry System or
Approved Book-Entry System for Commercial Paper; provided, that securities
are held in an account of the Custodian or of such agent or of such
subcustodian containing only assets of the Fund or only assets held by the
Custodian or such agent or such subcustodian as a custodian or
subcustodian or in a fiduciary capacity for customers. All certificates
for securities accepted by the Custodian or any such agent or subcustodian
on behalf of the Fund shall be in "street" or other good delivery form or
shall be returned to the selling broker or dealer who shall be advised of
the reason thereof.
D. Bank Accounts The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or
order by the Custodian acting in pursuant to the terms of this Agreement,
and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Fund other
than cash maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940. Funds
held by the Custodian for the Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such other
banks or trust companies as the Custodian may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds
to be deposited with each such bank or trust company shall be approved in
writing by two officers of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be subject to withdrawal
only by the Custodian in that capacity.
E. Payment for Shares of the Fund The Custodian shall make appropriate
arrangements with the Transfer Agent and the principal underwriter of the
Fund to enable the Custodian to make certain it promptly receives the cash
or other consideration due to the Fund for such new or treasury Shares as
may be issued or sold from time to time by the Fund, in accordance with
the governing documents and offering prospectus and statement of
additional information of the Fund. The Custodian will provide prompt
notification to the Fund of any receipt by it of payments for Shares of
the Fund.
F. Investment and Availability of Federal Funds Upon agreement between the
Fund and the Custodian, the Custodian shall, upon the receipt of proper
instructions, which may be continuing instructions when deemed appropriate
by the parties,
1) invest in such securities and instruments as may be set forth in such
instructions on the same day as received all federal funds received
after a time agreed upon between the Custodian and the Fund; and
2) make federal funds available to the Fund as of specified times agreed
upon from time to time by the Fund and the Custodian in the amount of
checks received in payment for Shares of the Fund which are deposited
into the Fund's account.
G. Collections The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which the
Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall promptly collect all income and other
payments with respect to bearer securities if, on the date of payment by
the issuer, such securities are held by the Custodian or agent thereof and
shall credit such income, as collected, to the Fund's custodian account.
The Custodian shall do all things necessary and proper in connection with
such prompt collections and, without limiting the generality of the
foregoing, the Custodian shall
1) Present for payment all coupons and other income items requiring
presentations;
2) Present for payment all securities which may mature or be called,
redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Fund, checks,
drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities System or in
an Approved Book-Entry System for Commercial Paper at the time funds
become available to the Custodian; in the case of securities maintained
in The Depository Trust Company funds shall be deemed available to the
Fund not later than the opening of business on the first business day
after receipt of such funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably practicable
whenever income due on any security is not promptly collected. In any case
in which the Custodian does not receive any due and unpaid income after it
has made demand for the same, it shall immediately so notify the Fund in
writing, enclosing copies of any demand letter, any written response
thereto, and memoranda of all oral responses thereto and to telephonic
demands, and await instructions from the Fund; the Custodian shall in no
case have any liability for any nonpayment of such income provided the
Custodian meets the standard of care set forth in Section 8 hereof. The
Custodian shall not be obligated to take legal action for collection
unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends, rights
and other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
H. Payment of Fund Moneys Upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases only:
1) Upon the purchase of securities, participation interests, options,
futures contracts, forward contracts and options on futures contracts
purchased for the account of the Fund but only (a) against the receipt
of
(i) such securities registered as provided in Paragraph C hereof or
in proper form for transfer or
(ii) detailed instructions signed by an officer of the Fund
regarding the participation interests to be purchased or
(iii) written confirmation of the purchase by the Fund of the
options, futures contracts, forward contracts or options on futures
contracts
by the Custodian (or by a subcustodian employed pursuant to Section 2
hereof or by a clearing corporation of a national securities exchange
of which the Custodian is a member or by any bank, banking institution
or trust company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940 to act as a
custodian and which has been designated by the Custodian as its agent
for this purpose or by the agent specifically designated in such
instructions as representing the purchasers of a new issue of privately
placed securities); (b) in the case of a purchase effected through a
Securities System, upon receipt of the securities by the Securities
System in accordance with the conditions set forth in Paragraph L
hereof; (c) in the case of a purchase of commercial paper effected
through an Approved Book-Entry System for Commercial Paper, upon
receipt of the paper by the Custodian or subcustodian in accordance
with the conditions set forth in Paragraph M hereof; (d) in the case of
repurchase agreements entered into between the Fund and another bank or
a broker-dealer, against receipt by the Custodian of the securities
underlying the repurchase agreement either in certificate form or
through an entry crediting the Custodian's segregated, non-proprietary
account at the Federal Reserve Bank of Boston with such securities
along with written evidence of the agreement by the bank or
broker-dealer to repurchase such securities from the Fund; or (e) with
respect to securities purchased outside of the United States, in
accordance with written procedures agreed to from time to time in
writing by the parties hereto;
2) When required in connection with the conversion, exchange or surrender
of securities owned by the Fund as set forth in Paragraph B hereof;
3) When required for the redemption or repurchase of Shares of the Fund in
accordance with the provisions of Paragraph J hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of
the Fund: advisory fees, distribution plan payments, interest, taxes,
management compensation and expenses, accounting, transfer agent and
legal fees, and other operating expenses of the Fund whether or not
such expenses are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends or other distributions to holders of
Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a vote of the
Board, specifying the amount of such payment, setting forth the purpose
for which such payment is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom such
payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities Purchased In any
and every case where payment for purchase of securities for the account of
the Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions signed by two
officers of the Fund to so pay in advance, the Custodian shall be
absolutely liable to the Fund for such securities to the same extent as if
the securities had been received by the Custodian; except that in the case
of a repurchase agreement entered into by the Fund with a bank which is a
member of the Federal Reserve System, the Custodian may transfer funds to
the account of such bank prior to the receipt of (i) the securities in
certificate form subject to such repurchase agreement or (ii) written
evidence that the securities subject to such repurchase agreement have
been transferred by book-entry into a segregated non-proprietary account
of the Custodian maintained with the Federal Reserve Bank of Boston or
(iii) the safekeeping receipt, provided that such securities have in fact
been so transfered by book-entry and the written repurchase agreement is
received by the Custodian in due course; and except that if the securities
are to be purchased outside the United States, payment may be made in
accordance with procedures agreed to in writing from time to time by the
parties hereto.
J. Payments for Repurchases or Redemptions of Shares of the Fund From such
funds as may be available for the purpose, but subject to any applicable
votes of the Board and the current redemption and repurchase procedures of
the Fund, the Custodian shall, upon receipt of written instructions from
the Fund or from the Fund's transfer agent or from the principal
underwriter, make funds and/or portfolio securities available for payment
to holders of Shares who have caused their Shares to be redeemed or
repurchased by the Fund or for the Fund`s account by its transfer agent or
principal underwriter.
The Custodian may maintain a special checking account upon which special
checks may be drawn by shareholders of the Fund holding Shares for which
certificates have not been issued. Such checking account and such special
checks shall be subject to such rules and regulations as the Custodian and
the Fund may from time to time adopt. The Custodian or the Fund may
suspend or terminate use of such checking account or such special checks
(either generally or for one or more shareholders) at any time. The
Custodian and the Fund shall notify the other immediately of any such
suspension or termination.
K. Appointment of Agents by the Custodian The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other
bank or trust company (provided such bank or trust company is itself
qualified under the Investment Company Act of 1940 to act as a custodian
or is itself an eligible foreign custodian within the meaning of Rule
17f-5 under said Act) as the agent of the Custodian to carry out such of
the duties and functions of the Custodian described in this Section 3 as
the Custodian may from time to time direct; provided, however, that the
appointment of any such agent shall not relieve the Custodian of any of
its responsibilities or liabilities hereunder, and as between the Fund and
the Custodian the Custodian shall be fully responsible for the acts and
omissions of any such agent. For the purposes of this Agreement, any
property of the Fund held by any such agent shall be deemed to be held by
the Custodian hereunder.
L. Deposit of Fund Portfolio Securities in Securities Systems The Custodian
may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, and at all times
subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2 keep securities of the Fund
in a Securities System provided that such securities are maintained in a
non-proprietary account ("Account") of the Custodian or such subcustodian
in the Securities System which shall not include any assets of the
Custodian or such subcustodian or any other person other than assets held
by the Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry
those securities belonging to the Fund, and the Custodian shall be fully
and completely responsible for maintaining a recordkeeping system capable
of accurately and currently stating the Fund's holdings maintained in each
such Securities System.
(c) The Custodian shall pay for securities purchased in book-entry form
for the account of the Fund only upon (i) receipt of notice or advice from
the Securities System that such securities have been transferred to the
Account, and (ii) the making of any entry on the records of the Custodian
to reflect such payment and transfer for the account of the Fund. The
Custodian shall transfer securities sold for the account of the Fund only
upon (i) receipt of notice or advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of the Fund. Copies of all notices or
advices from the Securities System of transfers of securities for the
account of the Fund shall identify the Fund, be maintained for the Fund by
the Custodian and be promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund confirmation of each transfer to
or from the account of the Fund in the form of a written advice or notice
of each such transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities
System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to the
Securities System's accounting system, system of internal accounting
controls or procedures for safeguarding securities deposited in the
Securities System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding securities deposited
in any Securities System; and the Custodian shall ensure that any agent
appointed pursuant to Paragraph K hereof or any subcustodian employed
pursuant to Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such agent's or
subcustodian's internal accounting controls and procedures for
safeguarding securities deposited in any Securities System. The
Custodian's books and records relating to the Fund's participation in each
Securities System will at all times during regular business hours be open
to the inspection of the Fund's authorized officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an officer of the Fund that the Board has
approved the use of a particular Securities System; the Custodian shall
also obtain appropriate assurance from the officers of the Fund that the
Board has annually reviewed the continued use by the Fund of each
Securities System, and the Fund shall promptly notify the Custodian if the
use of a Securities System is to be discontinued; at the request of the
Fund, the Custodian will terminate the use of any such Securities System
as promptly as practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the Fund
resulting from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or
subcustodians or of any of its or their employees or from any failure of
the Custodian or any such agent or subcustodian to enforce effectively
such rights as it may have against the Securities System or any other
person; at the election of the Fund, it shall be entitled to be subrogated
to the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that the Fund
has not been made whole for any such loss or damage.
M. Deposit of Fund Commercial Paper in an Approved Book-Entry System for
Commercial Paper Upon receipt of proper instructions with respect to each
issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper owned
by the Fund in any Approved Book-Entry System for Commercial Paper, in
each case only in accordance with applicable Securities and Exchange
Commission rules, regulations, and no-action correspondence, and at all
times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep commercial paper of the
Fund in an Approved Book-Entry System for Commercial Paper, provided that
such paper is issued in book entry form by the Custodian or subcustodian
on behalf of an issuer with which the Custodian or subcustodian has
entered into a book-entry agreement and provided further that such paper
is maintained in a non-proprietary account ("Account") of the Custodian or
such subcustodian in an Approved Book-Entry System for Commercial Paper
which shall not include any assets of the Custodian or such subcustodian
or any other person other than assets held by the Custodian or such
subcustodian as a fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of
the Fund which is maintained in an Approved Book-Entry System for
Commercial Paper shall identify by book-entry each specific issue of
commercial paper purchased by the Fund which is included in the System and
shall at all times during regular business hours be open for inspection by
authorized officers, employees or agents of the Fund. The Custodian shall
be fully and completely responsible for maintaining a recordkeeping system
capable of accurately and currently stating the Fund's holdings of
commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Fund only upon contemporaneous (i)
receipt of notice or advice from the issuer that such paper has been
issued, sold and transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such purchase, payment
and transfer for the account of the Fund. The Custodian shall transfer
such commercial paper which is sold or cancel such commercial paper which
is redeemed for the account of the Fund only upon contemporaneous (i)
receipt of notice or advice that payment for such paper has been
transferred to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such transfer or redemption and payment for
the account of the Fund. Copies of all notices, advices and confirmations
of transfers of commercial paper for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian and be
promptly provided to the Fund at its request. The Custodian shall promptly
send to the Fund confirmation of each transfer to or from the account of
the Fund in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transactions in the System for the account of
the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to each
System's accounting system, system of internal accounting controls or
procedures for safeguarding commercial paper deposited in the System; the
Custodian shall promptly send to the Fund any report or other
communication relating to the Custodian's internal accounting controls and
procedures for safeguarding commercial paper deposited in any Approved
Book-Entry System for Commercial Paper; and the Custodian shall ensure
that any agent appointed pursuant to Paragraph K hereof or any
subcustodian employed pursuant to Section 2 hereof shall promptly send to
the Fund and to the Custodian any report or other communication relating
to such agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any Approved
Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence
of receipt of a certificate of an officer of the Fund that the Board has
approved the use of a particular Approved Book-Entry System for Commercial
Paper; the Custodian shall also obtain appropriate assurance from the
officers of the Fund that the Board has annually reviewed the continued
use by the Fund of each Approved Book-Entry System for Commercial Paper,
and the Fund shall promptly notify the Custodian if the use of an Approved
Book-Entry System for Commercial Paper is to be discontinued; at the
request of the Fund, the Custodian will terminate the use of any such
System as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System
for Commercial Paper is maintained by the subcustodian) shall issue
physical commercial paper or promissory notes whenever requested to do so
by the Fund or in the event of an electronic system failure which impedes
issuance, transfer or custody of direct issue commercial paper by
book-entry.
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the Fund
resulting from use of any Approved Book-Entry System for Commercial Paper
by reason of any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their employees or
from any failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the System, the
issuer of the commercial paper or any other person; at the election of the
Fund, it shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the System, the issuer of the commercial
paper or any other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Fund has not been
made whole for any such loss or damage.
N. Segregated Account The Custodian shall upon receipt of proper instructions
establish and maintain a segregated account or accounts for and on behalf
of the Fund, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Paragraph L hereof, (i) in accordance with the provisions of
any agreement among the Fund, the Custodian and any registered
broker-dealer (or any futures commission merchant), relating to compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange (or of the Commodity Futures Trading
Commission or of any contract market or commodities exchange), or of any
similar organization or organizations, regarding escrow or deposit or
other arrangements in connection with transactions by the Fund, (ii) for
purposes of segregating cash or U.S. Government securities in connection
with options purchased, sold or written by the Fund or futures contracts
or options thereon purchased or sold by the Fund, (iii) for the purposes
of compliance by the Fund with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of
the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other
proper purposes, but only, in the case of clause (iv), upon receipt of, in
addition to proper instructions, a certificate signed by two officers of
the Fund, setting forth the purpose such segregated account and declaring
such purpose to be a proper purpose.
O. Ownership Certificates for Tax Purposes The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of the Fund held by it and in connection with
transfers of securities.
P. Proxies The Custodian shall, with respect to the securities held by it
hereunder, cause to be promptly delivered to the Fund all forms of proxies
and all notices of meetings and any other notices or announcements or
other written information affecting or relating to the securities, and
upon receipt of proper instructions shall execute and deliver or cause its
nominee to execute and deliver such proxies or other authorizations as may
be required. Neither the Custodian nor its nominee shall vote upon any of
the securities or execute any proxy to vote thereon or give any consent or
take any other action with respect thereto (except as otherwise herein
provided) unless ordered to do so by proper instructions.
Q. Communications Relating to Fund Portfolio Securities The Custodian shall
deliver promptly to the Fund all written information (including, without
limitation, pendency of call and maturities of securities and
participation interests and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Fund and
the maturity of futures contracts purchased or sold by the Fund) received
by the Custodian from issuers and other persons relating to the securities
and participation interests being held for the Fund. With respect to
tender or exchange offers, the Custodian shall deliver promptly to the
Fund all written information received by the Custodian from issuers and
other persons relating to the securities and participation interests whose
tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer.
R. Exercise of Rights; Tender Offers In the case of tender offers, similar
offers to purchase or exercise rights (including, without limitation,
pendency of calls and maturities of securities and participation interests
and expirations of rights in connection therewith and notices of exercise
of call and put options and the maturity of futures contracts) affecting
or relating to securities and participation interests held by the
Custodian under this Agreement, the Custodian shall have responsibility
for promptly notifying the Fund of all such offers in accordance with the
standard of reasonable care set forth in Section 8 hereof. For all such
offers for which the Custodian is responsible as provided in this
Paragraph R, the Fund shall have responsibility for providing the
Custodian with all necessary instructions in timely fashion. Upon receipt
of proper instructions, the Custodian shall timely deliver to the issuer
or trustee thereof, or to the agent of either, warrants, puts, calls,
rights or similar securities for the purpose of being exercised or sold
upon proper receipt therefor and upon receipt of assurances satisfactory
to the Custodian that the new securities and cash, if any, acquired by
such action are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof. Upon receipt of proper
instructions, the Custodian shall timely deposit securities upon
invitations for tenders of securities upon proper receipt therefor and
upon receipt of assurances satisfactory to the Custodian that the
consideration to be paid or delivered or the tendered securities are to be
returned to the Custodian or subcustodian employed pursuant to Section 2
hereof. Notwithstanding any provision of this Agreement to the contrary,
the Custodian shall take all necessary action, unless otherwise directed
to the contrary by proper instructions, to comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions, or similar
rights of security ownership, and shall thereafter promptly notify the
Fund in writing of such action.
S. Depository Receipts The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities to
the depository used by an issuer of American Depository Receipts or
International Depository Receipts (hereinafter collectively referred to as
"ADRs") for such securities, against a written receipt therefor adequately
describing such securities and written evidence satisfactory to the
Custodian that the depository has acknowledged receipt of instructions to
issue with respect to such securities ADRs in the name of a nominee of the
Custodian or in the name or nominee name of any subcustodian employed
pursuant to Section 2 hereof, for delivery to the Custodian or such
subcustodian at such place as the Custodian or such subcustodian may from
time to time designate. The Custodian shall, upon receipt of proper
instructions, surrender ADRs to the issuer thereof against a written
receipt therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver
the securities underlying such ADRs to the Custodian or to a subcustodian
employed pursuant to Section 2 hereof.
T. Interest Bearing Call or Time Deposits The Custodian shall, upon receipt
of proper instructions, place interest bearing fixed term and call
deposits with the banking department of such banking institution (other
than the Custodian) and in such amounts as the Fund may designate.
Deposits may be denominated in U.S. Dollars or other currencies. The
Custodian shall include in its records with respect to the assets of the
Fund appropriate notation as to the amount and currency of each such
deposit, the accepting banking institution and other appropriate details
and shall retain such forms of advice or receipt evidencing the deposit,
if any, as may be forwarded to the Custodian by the banking institution.
Such deposits shall be deemed portfolio securities of the applicable Fund
for the purposes of this Agreement, and the Custodian shall be responsible
for the collection of income from such accounts and the transmission of
cash to and from such accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
1. Options. The Custodians shall, upon receipt of proper instructions
and in accordance with the provisions of any agreement between the
Custodian, any registered broker-dealer and, if necessary, the Fund,
relating to compliance with the rules of the Options Clearing
Corporation or of any registered national securities exchange or
similar organization or organizations, receive and retain confirmations
or other documents, if any, evidencing the purchase or writing of an
option on a security or securities index or other financial instrument
or index by the Fund; deposit and maintain in a segregated account for
each Fund separately, either physically or by book-entry in a
Securities System, securities subject to a covered call option written
by the Fund; and release and/or transfer such securities or other
assets only in accordance with a notice or other communication
evidencing the expiration, termination or exercise of such covered
option furnished by the Options Clearing Corporation, the securities or
options exchange on which such covered option is traded or such other
organization as may be responsible for handling such options
transactions. The Custodian and the broker-dealer shall be responsible
for the sufficiency of assets held in each Fund's segregated account in
compliance with applicable margin maintenance requirements.
2. Futures Contracts The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other documents, if
any, evidencing the purchase or sale of a futures contract or an option
on a futures contract by the Fund; deposit and maintain in a segregated
account, for the benefit of any futures commission merchant, assets
designated by the Fund as initial, maintenance or variation "margin"
deposits (including mark-to-market payments) intended to secure the
Fund's performance of its obligations under any futures contracts
purchased or sold or any options on futures contracts written by Fund,
in accordance with the provisions of any agreement or agreements among
the Fund, the Custodian and such futures commission merchant, designed
to comply with the rules of the Commodity Futures Trading Commission
and/or of any contract market or commodities exchange or similar
organization regarding such margin deposits or payments; and release
and/or transfer assets in such margin accounts only in accordance with
any such agreements or rules. The Custodian and the futures commission
merchant shall be responsible for the sufficiency of assets held in the
segregated account in compliance with the applicable margin maintenance
and mark-to-market payment requirements.
3. Foreign Exchange Transactions The Custodian shall, pursuant to
proper instructions, enter into or cause a subcustodian to enter into
foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for the account
of the Fund. Such transactions may be undertaken by the Custodian or
subcustodian with such banking or financial institutions or other
currency brokers, as set forth in proper instructions. Foreign exchange
contracts and options shall be deemed to be portfolio securities of the
Fund; and accordingly, the responsibility of the Custodian therefor
shall be the same as and no greater than the Custodian's responsibility
in respect of other portfolio securities of the Fund. The Custodian
shall be responsible for the transmittal to and receipt of cash from
the currency broker or banking or financial institution with which the
contract or option is made, the maintenance of proper records with
respect to the transaction and the maintenance of any segregated
account required in connection with the transaction. The Custodian
shall have no duty with respect to the selection of the currency
brokers or banking or financial institutions with which the Fund deals
or for their failure to comply with the terms of any contract or
option. Without limiting the foregoing, it is agreed that upon receipt
of proper instructions and insofar as funds are made available to the
Custodian for the purpose, the Custodian may (if determined necessary
by the Custodian to consummate a particular transaction on behalf and
for the account of the Fund) make free outgoing payments of cash in the
form of U.S. dollars or foreign currency before receiving confirmation
of a foreign exchange contract or confirmation that the countervalue
currency completing the foreign exchange contact has been delivered or
received. The Custodian shall not be responsible for any costs and
interest charges which may be incurred by the Fund or the Custodian as
a result of the failure or delay of third parties to deliver foreign
exchange; provided that the Custodian shall nevertheless be held to the
standard of care set forth in, and shall be liable to the Fund in
accordance with, the provisions of Section 8.
V. Actions Permitted Without Express Authority The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Agreement, provided, that all such payments shall be accounted for
by the Custodian to the Treasurer of the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Fund except as
otherwise directed by the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net Asset
Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to
its activities and obligations under this Agreement in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services
as Custodian and Agent, as agreed upon from time to time between the Fund and
the Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable
care, the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement but shall be
liable only for its own negligent or bad faith acts or failures to act.
Notwithstanding the foregoing, nothing contained in this paragraph is intended
to nor shall it be construed to modify the standards of care and responsibility
set forth in Section 2 hereof with respect to subcustodians and in subparagraph
f of Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. Persons Having Access to Assets of the Fund
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees, representatives or agents of
the Custodian or other persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, that
the Fund may at any time by action of its Board, (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of The Commonwealth
of Massachusetts or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding Shares of the Fund
vote to have the securities, funds and other properties held hereunder delivered
and paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits, as
shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver 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 by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
12. Notices
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such
other address as the Fund may have designated to the Bank, in writing, or to
Investors Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110,
shall be deemed to have been properly delivered or given hereunder to the
respective addressees.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. Adoption of the Agreement by the Fund
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Fund and the Bank reflecting such adoption,
which letter agreement shall be dated and signed by a duly authorized officer of
the Fund and duly authorized officer of the Bank. This Agreement shall be deemed
to be duly executed and delivered by each of the parties in its name and behalf
by its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
EXHIBIT 99.9
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made this 19th day of June, 1995, between Eaton Vance Special
Investment Trust, a Massachusetts business trust (the "Trust") on behalf of each
of its series listed on Schedule A (the "Funds") and Eaton Vance Management, a
Massachusetts business Trust, (the "Administrator").
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree with respect to each Fund:
1. Duties of the Administrator. The Trust hereby employs the
Administrator to act as administrator of the Fund and to administer its affairs,
subject to the supervision of the Trustees of the Trust, for the period and on
the terms set forth in this Agreement.
The Administrator hereby accepts such employment, and undertakes to
afford to the Trust the advice and assistance of the Administrator's
organization in the administration of the Fund and to furnish for the use of the
Fund office space and all necessary office facilities, equipment and personnel
for administering the affairs of the Fund and to pay the salaries and fees of
all officers and Trustees of the Trust who are members of the Administrator's
organization and all personnel of the Administrator performing services relating
to administrative activities. The Administrator shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares of the Fund, nor
shall the Administrator be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, custodian
or shareholder servicing agent of the Trust or the Fund. It is intended that the
assets of the Fund will be invested in an interest in a registered open-end
investment company having substantially the same investment objective, policies
and restrictions as the Fund (the "Portfolio"). Boston Management and Research
("BMR"), an affiliate of the Administrator, currently acts as investment adviser
to the Portfolio under an Investment Advisory Agreement between the Portfolio
and BMR.
2. Allocation of Charges and Expenses. The Administrator shall pay the
entire salaries and fees of all of the Trust's Trustees and officers who devote
part or all of their time to the affairs of the Administrator, and the salaries
and fees of such persons shall not be deemed to be expenses incurred by the
Trust for purposes of this Section 2. Except as provided in the foregoing
sentence, the Administrator shall not pay any expenses relating to the Trust or
the Fund including, without implied limitation, (i) expenses of maintaining the
Fund and continuing its existence, (ii) registration of the Trust under the
Investment Company Act of 1940, (iii) commissions, fees and other expenses
connected with the acquisition, disposition and valuation of securities and
other investments, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption of shares, (viii) expenses of registering and qualifying the Trust,
the Fund and its shares under federal and state securities laws and of preparing
and printing prospectuses for such purposes and for distributing the same to
shareholders and investors, and fees and expenses of registering and maintaining
registrations of the Fund and of the Fund's principal underwriter, if any, as
broker-dealer or agent under state securities laws, (ix) expenses of reports and
notices to shareholders and of meetings of shareholders and proxy solicitations
therefor, (x) expenses of reports to governmental officers and commissions, (xi)
insurance expenses, (xii) association membership dues (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Adviser's organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
3. Compensation of Administrator. The Board of Trustees of the Trust
have currently determined that, based on the current level of compensation
payable to BMR by the Portfolio under the Portfolio's present Investment
Advisory Agreement with BMR, the Administrator shall receive no compensation
from the Trust or the Fund in respect of the services to be rendered and the
facilities to be provided by the Administrator under this Agreement. If the
Trustees determine that the Trust or Fund, should compensate the Administrator
for such services and facilities, such compensation shall be set forth in a new
agreement or in an amendment to this Agreement to be entered into by the parties
hereto.
4. Other Interests. It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become interested in the
Administrator as trustees, officers, employees, shareholders or otherwise and
that trustees, officers, employees and shareholders of the Administrator are or
may be or become similarly interested in the Fund, and that the Administrator
may be or become interested in the Fund as shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
which may include the words "Eaton Vance" or "Eaton & Howard" or "Vance Sanders"
or any combination thereof as part of their name, and that the Administrator or
its subsidiaries or affiliates may enter into advisory or management or
administration agreements or other contracts or relationships with such other
companies or entities.
5. Limitation of Liability of the Administrator. The services of the
Administrator to the Trust and the Fund are not to be deemed to be exclusive,
the Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Trust or the Fund or to any shareholder of the Fund for any act or omission in
the course of, or connected with, rendering services hereunder or for any losses
which may be sustained in the acquisition, holding or disposition of any
security or other investment.
6. Sub-Administrators. The Administrator may employ one or more
sub-administrators from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators and approved by the
Trustees of the Trust.
7. Duration and Termination of this Agreement. This Agreement shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect through and including
February 28, 1996 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1996 is
specifically approved at least annually (i) by the Board of Trustees of the
Trust and (ii) by the vote of a majority of those Trustees of the Trust who are
not interested persons of the Administrator or the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of Trustees of the Trust or the trustee of the Administrator,
as the case may be, and the Trust may, at any time upon such written notice to
the Administrator, terminate this Agreement by vote of a majority of the
outstanding voting securities of the Fund. This Agreement shall terminate
automatically in the event of its assignment.
8. Amendments of the Agreement. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective until approved (i) by the vote of a majority of
those Trustees of the Trust who are not interested persons of the Administrator
or the Trust, and (ii) by vote of the Board of Trustees of the Trust. Additional
series of the Trust, however, will become a Fund hereunder upon approval by the
Trustees of the Trust and amendment of Schedule A.
9. Limitation of Liability. The Fund shall not be responsible for the
obligations of any other series of the Trust. The Administrator expressly
acknowledges the provision in the Declaration of Trust of the Trust limiting the
personal liability of shareholders of the Fund and of the officers and Trustees
of the Trust, and the Administrator hereby agrees that it shall have recourse to
the Trust or the Fund for payment of claims or obligations as between the Trust
or the Fund and the Administrator arising out of this Agreement and shall not
seek satisfaction from the shareholders or any shareholder of the Fund or from
the officers or Trustees of the Trust.
10. Use of the Name "Eaton Vance." The Administrator hereby consents to
the use by the Fund of the name "Eaton Vance" as part of the Fund's name;
provided, however, that such consent shall be conditioned upon the employment of
the Administrator or one of its affiliates as the administrator of the Fund. The
name "Eaton Vance" or any variation thereof may be used from time to time in
other connections and for other purposes by the Administrator and its affiliates
and other investment companies that have obtained consent to the use of the name
"Eaton Vance." The Administrator shall have the right to require the Fund to
cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Administrator or one of its affiliates as
the Fund's administrator. Future names adopted by the Fund for itself, insofar
as such names include identifying words requiring the consent of the
Administrator, shall be the property of the Administrator and shall be subject
to the same terms and conditions.
11. Certain Definitions. The terms "assignment" and "interested
persons" when used herein shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
EATON VANCE SPECIAL INVESTMENT TRUST EATON VANCE MANAGEMENT
By/s/James B. Hawkes By/s/William M. Steul
President Vice President and
not individually
<PAGE>
SCHEDULE A
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED ADMINISTRATIVE SERVICES AGREEMENT
DATED JUNE 19, 1995
EV Classic Investors Fund
EV Marathon Investors Fund
EV Traditional Investors Fund
EV Classic Special Equities Fund
EV Marathon Special Equities Fund
EV Traditional Special Equities Fund
EV Classic Stock Fund
EV Marathon Stock Fund
EV Traditional Stock Fund
EV Classic Total Return Fund
EV Marathon Total Return Fund
EV Traditional Total Return Fund
EXHIBIT 99.11(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Classic Investors Fund (the "Fund") of our
report dated February 24, 1995 on our audit of the financial statements and
financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Investors Portfolio dated
February 24, 1995, which reports are included in the Annual Report to
Shareholders for the year ended January 31, 1995, which are incorporated by
reference in this Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Marathon Investors Fund (the "Fund") of our
report dated February 24, 1995 on our audit of the financial statements and
financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Investors Portfolio dated
February 24, 1995, which reports are included in the Annual Report to
Shareholders for the year ended January 31, 1995, which are incorporated by
reference in this Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Traditional Investors Fund (the "Fund") of
our report dated February 24, 1995 on our audit of the financial statements
and financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Investors Portfolio dated
February 24, 1995, which reports are included in the Annual Report to
Shareholders for the year ended January 31, 1995, which are incorporated by
reference in this Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(d)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Classic Stock Fund (the "Fund") of our
report dated February 3, 1995 on our audit of the financial statements and
financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Stock Portfolio dated February
3, 1995, which reports are included in the Annual Report to Shareholders for
the year ended December 31, 1994, which are incorporated by reference in this
Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(e)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Marathon Stock Fund (the "Fund") of our
report dated February 3, 1995 on our audit of the financial statements and
financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Stock Portfolio dated February
3, 1995, which reports are included in the Annual Report to Shareholders for
the year ended December 31, 1994, which are incorporated by reference in this
Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(f)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Traditional Stock Fund (the "Fund") of our
report dated February 3, 1995 on our audit of the financial statements and
financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Stock Portfolio dated February
3, 1995, which reports are included in the Annual Report to Shareholders for
the year ended December 31, 1994, which are incorporated by reference in this
Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(g)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Classic Total Return Fund (the "Fund") of
our report dated February 3, 1995 on our audit of the financial statements and
financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Total Return Portfolio dated
February 3, 1995, which reports are included in the Annual Report to
Shareholders for the year ended December 31, 1994, which are incorporated by
reference in this Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(h)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Marathon Total Return Fund (the "Fund") of
our report dated February 3, 1995 on our audit of the financial statements and
financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Total Return Portfolio dated
February 3, 1995, which reports are included in the Annual Report to
Shareholders for the year ended December 31, 1994, which are incorporated by
reference in this Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EXHIBIT 99.11(i)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-27962) of Eaton
Vance Special Investment Trust: EV Traditional Total Return Fund (the "Fund")
of our report dated February 3, 1995 on our audit of the financial statements
and financial highlights of the Fund and of our report on our audit of the
financial statements and supplementary data of Total Return Portfolio dated
February 3, 1995, which reports are included in the Annual Report to
Shareholders for the year ended December 31, 1994, which are incorporated by
reference in this Registration Statement.
We also consent to the reference to our Firm under the caption "The Fund's
Financial Highlights" in the Prospectus and under the caption "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
COOPERS & LYBRAND L.L.P.
--------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 14, 1995
EATON VANCE SPECIAL INVESTMENT TRUST EXHIBIT 99.15(A)
AMENDED DISTRIBUTION PLAN
(DOMESTIC CLASSIC FUNDS)
WHEREAS, Eaton Vance Special Investment Trust (the "Trust") engages in
business as an open-end investment company with multiple series and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust adopted separate Distribution Plans (the "Original
Plans") on behalf of each of its series listed on Schedule A (the "Funds"),
pursuant to which each Fund has made payments in connection with the
distribution of shares of the Fund;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of shares of each Fund, but does
not intend to remunerate the Principal Underwriter unless and until the
Principal Underwriter sells shares of the Fund;
WHEREAS, each Fund will pay the Principal Underwriter sales commissions
and distribution fees only in connection with the sale of shares of the Fund;
WHEREAS, each Fund intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules");
WHEREAS, the Trustees of the Trust have determined that it is desirable
to amend and replace the Original Plans with this Amended Distribution Plan on
behalf of the Funds listed on Schedule A; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Amended Distribution Plan will
benefit each Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Amended Distribution Plan
(this "Plan") on behalf of each Fund in accordance with Rule 12b-1 under the Act
and containing the following terms and conditions:
1. The Fund will pay sales commissions and distribution fees to the
Principal Underwriter only after and as a result of the sales of shares of the
Fund. The Principal Underwriter will provide the Fund with such distribution
services and facilities as the Trust may from time to time consider necessary to
accomplish the sale of shares of the Fund. It is understood that the Principal
Underwriter may pay such sales commissions and make such other payments to
Authorized Firms and other persons as it considers appropriate to encourage
distribution of such shares.
2. On each sale of Fund shares (excluding reinvestment of dividends and
distributions), the Fund shall pay the Principal Underwriter a sales commission
in an amount not exceeding 6.25% of the price received by the Fund therefor,
such payment to be made in the manner set forth and subject to the terms of this
Plan. The amount of the sales commission shall be established from time to time
by vote or other action of a majority of (i) those Trustees of the Trust who are
not "interested persons" (as defined in the Act) of the Trust and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office. The Fund shall also pay the Principal Underwriter a separate
distribution fee (calculated in accordance with Section 3), such payment to be
made in the manner set forth and subject to the terms of this Plan.
3. The sales commissions and distribution fees referred to in Section 2
shall be accrued and paid by the Fund in the following manner. The Fund shall
accrue daily an amount calculated at the rate of .75% per annum of the daily net
assets of the Fund, which net assets shall be computed in accordance with the
governing documents of the Trust and applicable votes and determinations of the
Trustees of the Trust. The daily amounts so accrued throughout the month shall
be paid to the Principal Underwriter on the last day of each month. The amount
of such daily accrual, as so calculated, shall first be applied and charged to
all unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
Section 3 (and pursuant to Section 3 of the Original Plans) plus all sales
commissions which it is entitled to be paid pursuant to Section 2 (and pursuant
to Section 2 of the Original Plans) since inception of the Original Plans
through and including the day next preceding the date of calculation, and (b) an
amount equal to the aggregate of all distribution fees referred to below which
the Principal Underwriter has been paid pursuant to this Section 3 (and pursuant
to Section 3 of the Original Plans) plus all such fees which it is entitled to
be paid pursuant to Section 2 (and pursuant to Section 2 of the Original Plans)
since inception of the Original Plans through and including the day next
preceding the date of calculation. From this sum (distribution charges) there
shall be subtracted (i) the aggregate amount paid or payable to the Principal
Underwriter pursuant to this Section 3 (and pursuant to Section 3 of the
Original Plans) since inception of the Original Plans through and including the
day next preceding the date of calculation and (ii) the aggregate amount of all
contingent deferred sales charges paid or payable to the Principal Underwriter
since inception of the Original Plans through and including the day next
preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
the Rule 12b-1 Trustees and (ii) all of the Trustees then in office] shall be
computed on such amount and added to such amount, with the resulting sum
constituting the amount of outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day for all purposes of this Plan. If
the result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this Section 3 during any fiscal year of the Fund shall not exceed
.75% of the average daily net assets of the Fund for such year.
4. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the NASD Rules shall be imposed.
5. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
6. This Plan shall not take effect until after it has been approved by
both a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees then
in office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
7. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 6.
8. This Plan shall continue in effect through and including April 28,
1996 (or, if applicable, the next April 28 which follows the day on which the
Fund has become a Fund hereunder by amendment of Schedule A subsequent to April
28, 1996), and shall continue in effect indefinitely thereafter, but only for so
long as such continuance after April 28, 1996 (or, if applicable, said next
April 28) is specifically approved at least annually in the manner provided for
Trustee approval of this Plan in Section 6.
9. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
10. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. The Principal Underwriter shall also be entitled to
receive all contingent deferred sales charges paid or payable with respect to
any day subsequent to termination of this Plan on which there exist outstanding
uncovered distribution charges of the Principal Underwriter.
11. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 5 unless such amendment is
approved by a vote of at least a majority of the outstanding voting securities
of the Fund. In addition, all material amendments to this Plan shall be approved
in the manner provided for Trustee approval of this Plan in Section 6.
Additional series of the Trust will be governed hereby upon approval by the
Trustees of the Trust and amendment of Schedule A. All references in this Plan
to the "Original Plans" shall not be applicable to any such additional series of
the Trust which becomes a Fund hereunder by amendment of Schedule A subsequent
to the date below. With respect to such series, this Plan shall, prior to the
initial accrual or payment of any amount hereunder, be approved by a vote of at
least a majority of the outstanding voting securities of the Fund.
12. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
13. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 9, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
14. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Fund, officers or Trustees of the Trust or any other series
of the Trust.
15. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
16. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
17. This Plan shall amend, replace and be substituted for the Original
Plans as of the opening of business on June 20, 1995 and this Plan shall be
effective as of such time. The outstanding uncovered distribution charges of the
Principal Underwriter calculated under the Original Plans as of the close of
business on June 19, 1995 shall be the outstanding uncovered distribution
charges of the Principal Underwriter calculated under this Plan as of the
opening of business on June 20, 1995.
ADOPTED JUNE 19, 1995
* * *
<PAGE>
SCHEDULE A
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION PLAN
(DOMESTIC CLASSIC FUNDS)
DATED JUNE 19, 1995
Name of Fund Inception Date of Original Plans
EV Classic Investors Fund October 28, 1993/January 27, 1995
EV Classic Special Equities Fund August 1, 1994/January 27, 1995
EV Classic Stock Fund August 1, 1994/January 27, 1995
EV Classic Total Return Fund October 28, 1993/January 27, 1995
EXHIBIT 99.15(b)
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION PLAN
(DOMESTIC MARATHON FUNDS)
WHEREAS, Eaton Vance Special Investment Trust (the "Trust") engages in
business as an open-end investment company with multiple series and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust adopted a separate Distribution Plan (the "Original
Plan") on behalf of each of its series listed on Schedule A (the "Funds"),
pursuant to which each Fund has made payments in connection with the
distribution of shares of the Fund;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of shares of each Fund, but does
not intend to remunerate the Principal Underwriter unless and until the
Principal Underwriter sells shares of the Fund;
WHEREAS, each Fund will pay the Principal Underwriter sales commissions
and distribution fees only in connection with the sale of shares of the Fund;
WHEREAS, each Fund intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules");
WHEREAS, the Trustees of the Trust have determined that it is desirable
to amend and replace the Original Plan with this Amended Distribution Plan on
behalf of the Funds listed on Schedule A; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Amended Distribution Plan will
benefit the Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Amended Distribution Plan
(this "Plan") on behalf of each Fund in accordance with Rule 12b-1 under the Act
and containing the following terms and conditions:
1. The Fund will pay sales commissions and distribution fees to the
Principal Underwriter only after and as a result of the sales of shares of the
Fund. The Principal Underwriter will provide the Fund with such distribution
services and facilities as the Trust may from time to time consider necessary to
accomplish the sale of shares of the Fund. It is understood that the Principal
Underwriter may pay such sales commissions and make such other payments to
Authorized Firms and other persons as it considers appropriate to encourage
distribution of such shares.
2. On each sale of Fund shares (excluding reinvestment of dividends and
distributions), the Fund shall pay the Principal Underwriter a sales commission
in an amount not exceeding 5% of the price received by the Fund therefor, such
payment to be made in the manner set forth and subject to the terms of this
Plan. The amount of the sales commission shall be established from time to time
by vote or other action of a majority of (i) those Trustees of the Trust who are
not "interested persons" (as defined in the Act) of the Trust and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office. The Fund shall also pay the Principal Underwriter a separate
distribution fee (calculated in accordance with Section 3), such payment to be
made in the manner set forth and subject to the terms of this Plan.
3. The sales commissions and distribution fees referred to in Section 2
shall be accrued and paid by the Fund in the following manner. The Fund shall
accrue daily an amount calculated at the rate of .75% per annum of the daily net
assets of the Fund, which net assets shall be computed in accordance with the
governing documents of the Trust and applicable votes and determinations of the
Trustees of the Trust. The daily amounts so accrued throughout the month shall
be paid to the Principal Underwriter on the last day of each month. The amount
of such daily accrual, as so calculated, shall first be applied and charged to
all unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
Section 3 (and pursuant to Section 3 of the Original Plan) plus all sales
commissions which it is entitled to be paid pursuant to Section 2 (and pursuant
to Section 2 of the Original Plan) since inception of the Original Plan through
and including the day next preceding the date of calculation, and (b) an amount
equal to the aggregate of all distribution fees referred to below which the
Principal Underwriter has been paid pursuant to this Section 3 (and pursuant to
Section 3 of the Original Plan) plus all such fees which it is entitled to be
paid pursuant to Section 2 (and pursuant to Section 2 of the Original Plan)
since inception of the Original Plan through and including the day next
preceding the date of calculation. From this sum (distribution charges) there
shall be subtracted (i) the aggregate amount paid or payable to the Principal
Underwriter pursuant to this Section 3 (and pursuant to Section 3 of the
Original Plan) since inception of the Original Plan through and including the
day next preceding the date of calculation and (ii) the aggregate amount of all
contingent deferred sales charges paid or payable to the Principal Underwriter
since inception of the Original Plan through and including the day next
preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
the Rule 12b-1 Trustees and (ii) all of the Trustees then in office] shall be
computed on such amount and added to such amount, with the resulting sum
constituting the amount of outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day for all purposes of this Plan. If
the result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this Section 3 during any fiscal year of the Fund shall not exceed
.75% of the average daily net assets of the Fund for such year.
4. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the NASD Rules shall be imposed.
5. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
6. This Plan shall not take effect until after it has been approved by
both a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees then
in office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
7. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 6.
8. This Plan shall continue in effect through and including April 28,
1996 (or, if applicable, the next April 28 which follows the day on which the
Fund has become a Fund hereunder by amendment of Schedule A subsequent to April
28, 1996), and shall continue in effect indefinitely thereafter, but only for so
long as such continuance after April 28, 1996 (or, if applicable, said next
April 28) is specifically approved at least annually in the manner provided for
Trustee approval of this Plan in Section 6.
9. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
10. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. The Principal Underwriter shall also be entitled to
receive all contingent deferred sales charges paid or payable with respect to
any day subsequent to termination of this Plan on which there exist outstanding
uncovered distribution charges of the Principal Underwriter.
11. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 5 unless such amendment is
approved by a vote of at least a majority of the outstanding voting securities
of the Fund. In addition, all material amendments to this Plan shall be approved
in the manner provided for Trustee approval of this Plan in Section 6.
Additional series of the Trust will be governed hereby upon approval by the
Trustees of the Trust and amendment of Schedule A. All references in this Plan
to the "Original Plan" shall not be applicable to any such additional series of
the Trust which becomes a Fund hereunder by amendment of Schedule A subsequent
to the date below. With respect to such series, this Plan shall, prior to the
initial accrual or payment of any amount hereunder, be approved by a vote of at
least a majority of the outstanding voting securities of the Fund.
12. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
13. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 9, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
14. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Fund, officers or Trustees of the Trust or any other series
of the Trust.
15. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
16. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
17. This Plan shall amend, replace and be substituted for the Original
Plan as of the opening of business on June 20, 1995 and this Plan shall be
effective as of such time. The outstanding uncovered distribution charges of the
Principal Underwriter calculated under the Original Plan as of the close of
business on June 19, 1995 shall be the outstanding uncovered distribution
charges of the Principal Underwriter calculated under this Plan as of the
opening of business on June 20, 1995.
ADOPTED JUNE 19, 1995
* * *
<PAGE>
SCHEDULE A
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED DISTRIBUTION PLAN
(DOMESTIC MARATHON FUNDS)
DATED JUNE 19, 1995
NAME OF FUND INCEPTION DATE OF ORIGINAL PLAN
EV Marathon Investors Fund October 28, 1993
EV Marathon Special Equities Fund August 1, 1994
EV Marathon Stock Fund August 1, 1994
EV Marathon Total Return Fund October 28, 1993
EATON VANCE SPECIAL INVESTMENT TRUST EXHIBIT 99.15(c)
AMENDED SERVICE PLAN
(DOMESTIC TRADITIONAL FUNDS)
WHEREAS, Eaton Vance Special Investment Trust (the "Trust") engages in
business as an open-end management investment company with multiple series and
is registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust adopted separate distribution and service plans (the
"Original Plans"), on behalf of its series listed on Schedule A (the "Funds"),
pursuant to which each Fund has made payments in connection with the
distribution of shares of the Fund;
WHEREAS, the Trust desires to adopt this Amended Service Plan pursuant
to which each Fund intends to pay service fees as contemplated in subsections
(b) and (d) of Section 26 of Article III of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. (the "NASD Rules");
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of the shares of each Fund;
WHEREAS, the Trustees of the Trust have determined that it is desirable
to amend and replace the Original Plans with this Amended Service Plan on behalf
of the Funds listed on Schedule A; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Service Plan will benefit each Fund
and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Amended Service Plan (the
"Plan") in accordance with Rule 12b-1 under the Act and containing the following
terms and conditions:
1. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
2. This Plan shall not take effect until after it has been approved by
both a majority of (i) those Trustees of the Trust who are not "interested
persons" of the Trust (as defined in the Act) and have no direct or indirect
financial interest in the operations of this Plan or any agreements related to
it (the "Rule 12b-1 Trustees"), and (ii) all of the Trustees then in office,
cast in person at a meeting (or meetings) called for the purpose of voting on
this Plan.
3. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 2.
4. This Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for Trustee
approval of this Plan in Section 2.
5. The persons authorized to direct the disposition of monies paid or
payable by the Trust pursuant to this Plan or any related agreement made by the
Trust on behalf of the Fund shall be the President or any Vice President of the
Trust. One or more of such persons shall provide to the Trustees of the Trust
and the Trustees shall review, at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
6. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund.
7. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Section 1 unless such amendment, if required
by law, is approved by a vote of at least a majority of the outstanding voting
securities of the Fund. In addition, all material amendments to this Plan shall
be approved in the manner provided for in Section 2. Additional series of the
Trust will become a Fund hereunder upon approval by the Trustees of the Trust
and amendment of Schedule A with respect to such series.
8. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
9. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 5, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
10. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Trust, officers or Trustees of the Trust, or any other
series of the Trust.
11. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities" shall mean the vote of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.
12. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
13. This Plan shall amend, replace and be substituted for the Original
Plans as of the opening of business on June 20, 1995 and this Plan shall be
effective as of such time.
ADOPTED JUNE 19, 1995
* * *
SCHEDULE A
EATON VANCE SPECIAL INVESTMENT TRUST
AMENDED SERVICE PLAN
(DOMESTIC TRADITIONAL FUNDS)
DATED JUNE 19, 1995
NAME OF FUND DATES OF ORIGINAL PLANS
EV Traditional Investors Fund July 28, 1989 / July 7, 1993
EV Traditional Special Equities Fund June 12, 1989 / July 7, 1993
EV Traditional Stock Fund December 27, 1990 / July 7, 1993
EV Traditional Total Return Fund July 1, 1987 / July 7, 1993
DISTRIBUTION PLAN EXHIBIT 99.15(d)
OF
EATON VANCE SPECIAL INVESTMENT TRUST
ON BEHALF OF
EV TRADITIONAL EMERGING MARKETS FUND
WHEREAS, Eaton Vance Special Investment Trust (the "Trust") engages in
business as an open-end management investment company with multiple series and
is registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust desires to adopt a separate Distribution Plan on
behalf of its series, EV Traditional Emerging Markets Fund (the "Fund"),
pursuant to Rule 12b-1 under the Act, pursuant to which the Fund intends to
finance activities which are primarily intended to result in the distribution
and sale of its shares of beneficial interest and to make payments in connection
with the distribution of its shares;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc., to act as
Principal Underwriter (as defined in the Act) of the shares of the Fund;
WHEREAS, the Fund intends to compensate the Principal Underwriter for
its distribution services to the Fund by paying the Principal Underwriter
monthly distribution fees in connection with the sale of shares of the Fund;
WHEREAS, the Fund intends to pay quarterly service fees (as
contemplated in subsections (b) and (d) of Section 26 of Article III of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
(the "NASD Rules")) to the Principal Underwriter (from which the Principal
Underwriter may pay service fees to Authorized Firms and other third parties
based on the amount of Fund shares sold through them and remaining outstanding
for specified periods of time);
WHEREAS, such service fees will compensate the Principal Underwriter,
Authorized Firms and other third parties for providing personal services and/or
the maintenance of shareholder accounts;
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its shareholders.
NOW,THEREFORE, the Trust hereby adopts this Distribution Plan (the
"Plan") on behalf of the Fund in accordance with Rule 12b-1 under the Act and
containing the following terms and conditions:
1. The Principal Underwriter will provide the Fund with such
distribution services and facilities as the Fund may from time to time consider
necessary to enhance the sale of shares of the Fund, and the Principal
Underwriter shall pay such compensation to Authorized Firms and other third
parties as it considers appropriate to encourage distribution of such shares.
The Principal Underwriter will also provide such personal and account
maintenance services as the Fund may from time to time consider necessary to
enhance the provision of personal services and/or the maintenance of shareholder
accounts, and the Principal Underwriter may pay such service fees to Authorized
Firms and other third parties as it considers appropriate to encourage the
provision of personal services and/or the maintenance of shareholder accounts.
2. The Fund shall pay a monthly distribution fee to the Principal
Underwriter on the last day of each month. Such distribution fee shall be in an
amount equal on an annual basis to the aggregate of (a) .50% of that portion of
the Fund's average daily net assets for any fiscal year which is attributable to
shares of the Fund which have remained outstanding for less than one year and
(b) .25% of that portion of the Fund's average daily net assets for any fiscal
year which is attributable to shares of the Fund which have remained outstanding
for more than one year. For the purposes of this Plan, daily net assets of the
Fund shall be computed in accordance with the governing documents of the Fund
and applicable votes and determinations of the Trustees of the Trust. All
distribution fees are being paid in consideration for the distribution services
and facilities to be furnished to the Fund hereunder by the Principal
Underwriter.
3. Appropriate adjustment of payments made pursuant to Section 2 of
this Plan shall be made whenever necessary to ensure that no such payment shall
cause the Fund to exceed the applicable maximum cap imposed on asset-based,
front-end and deferred sales charges by subsection (d) of Section 26 of Article
III of the NASD Rules.
4. In addition to the payments of distribution fees to the Principal
Underwriter provided for in Section 2, the Fund shall pay a quarterly service
fee to the Principal Underwriter on the last day of each calendar quarter of the
Fund. Such service fee shall be in an amount equal on an annual basis to .25% of
that portion of the Fund's average daily net assets for any fiscal year which is
attributable to shares of the Fund which have remained outstanding for more than
one year. All service fees are being paid to the Principal Underwriter hereunder
in consideration for the personal and account maintenance services to be
furnished by the Principal Underwriter and for the payment of service fees by
the Principal Underwriter to Authorized Firms and other third parties in
connection with the provision of personal services and/or the maintenance of
shareholder accounts.
5. This Plan shall not take effect until it has been approved by (a) a
vote of at least a majority of the outstanding voting securities of the Fund and
(b) both a majority of (i) those Trustees of the Trust who y are not "interested
persons" of the Trust or the Fund (as defined in the Act) and have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
6. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for in clause (b) of the first paragraph of
Section 5.
7. This Plan shall continue in effect for one year from the date of its
execution and shall continue indefinitely thereafter, but only for so long as
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in clause (b) of the first paragraph of
Section 5.
8. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trust's Board of Trustees and the Board of
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
9. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. rustees, or by
10. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 4 unless such amendment is
approved in the manner provided for initial approval of the Plan in Section 5,
and all material amendments to this Plan shall be approved in the manner
provided for in clause (b) of the first paragraph of Section 5.
11. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees. tees shall be
12. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 8, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
13. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Trust, officers or Trustees of the Trust or any other series
of the Trust.
14. This Plan shall, prior to the initial accrual or payment of any
amount hereunder, be approved by a vote of at least a majority of the
outstanding voting securities of the Fund.
15. When used in this Plan, the term "service fees" shall have the same
meaning as such term is used in subsections (b) and (d) of Section 26 of Article
III of the NASD Rules. When used in this Plan, the term "vote of a majority of
the outstanding voting securities of the Fund" shall mean the vote of the lesser
of (a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
16. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be le affected
thereby.
IN WITNESS WHEREOF, the Trust has executed this Plan on behalf of the
Fund on the 24th day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV TRADITIONAL EMERGING
MARKETS FUND)
BY/s/ James B. Hawkes
President
Attest:
/s/ Thomas Otis
Secretary
EATON VANCE SPECIAL INVESTMENT TRUST EXHIBIT 99.15(e)
DISTRIBUTION PLAN
ON BEHALF OF
EV MARATHON EMERGING MARKETS FUND
WHEREAS, Eaton Vance Special Investment Trust (the "Trust") engages in
business as an open-end investment company with multiple series and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust desires to adopt a separate Distribution Plan on
behalf of its series, EV Marathon Emerging Markets Fund (the "Fund"), pursuant
to which the Fund will make payments in connection with the distribution of
shares of the Fund;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of shares of the Fund, but does
not intend to remunerate the Principal Underwriter unless and until the
Principal Underwriter sells shares of the Fund;
WHEREAS, the Fund will pay the Principal Underwriter sales commissions
and distribution fees only in connection with the sale of shares of the Fund;
WHEREAS, the Fund intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Distribution Plan (this
"Plan") on behalf of the Fund in accordance with Rule 12b-1 under the Act and
containing the following terms and conditions:
1. The Fund will pay sales commissions and distribution fees to the
Principal Underwriter only after and as a result of the sales of shares of the
Fund. The Principal Underwriter will provide the Fund with such distribution
services and facilities as the Trust may from time to time consider necessary to
accomplish the sale of shares of the Fund. It is understood that the Principal
Underwriter may pay such sales commissions and make such other payments to
Authorized Firms and other persons as it considers appropriate to encourage
distribution of such shares.
2. On each sale of Fund shares (excluding reinvestment of dividends and
distributions), the Fund shall pay the Principal Underwriter a sales commission
in an amount not exceeding 5% of the price received by the Fund therefor, such
payment to be made in the manner set forth and subject to the terms of this
Plan. The amount of the sales commission shall be established from time to time
by vote or other action of a majority of (i) those Trustees of the Trust who are
not "interested persons" (as defined in the Act) of the Trust and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office. The Fund shall also pay the Principal Underwriter a separate
distribution fee (calculated in accordance with Section 3), such payment to be
made in the manner set forth and subject to the terms of this Plan.
3. The sales commissions and distribution fees referred to in Section 2
shall be accrued and paid by the Fund in the following manner. The Fund shall
accrue daily an amount calculated at the rate of .75% per annum of the daily net
assets of the Fund, which net assets shall be computed in accordance with the
governing documents of the Trust and applicable votes and determinations of the
Trustees of the Trust. The daily amounts so accrued throughout the month shall
be paid to the Principal Underwriter on the last day of each month. The amount
of such daily accrual, as so calculated, shall first be applied and charged to
all unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
Section 3 plus all sales commissions which it is entitled to be paid pursuant to
Section 2 since inception of this Plan through and including the day next
preceding the date of calculation, and (b) an amount equal to the aggregate of
all distribution fees referred to below which the Principal Underwriter has been
paid pursuant to this Section 3 plus all such fees which it is entitled to be
paid pursuant to Section 2 since inception of this Plan through and including
the day next preceding the date of calculation. From this sum (distribution
charges) there shall be subtracted (i) the aggregate amount paid or payable to
the Principal Underwriter pursuant to this Section 3 since inception of this
Plan through and including the day next preceding the date of calculation and
(ii) the aggregate amount of all contingent deferred sales charges paid or
payable to the Principal Underwriter since inception of this Plan through and
including the day next preceding the date of calculation, and (iii) the
aggregate of all amounts paid or payable to the Principal Underwriter (or any
affiliate thereof) by any party other than the Fund with respect to the sale of
shares of the Fund since inception of this Plan through and including the day
next preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
the Rule 12b-1 Trustees and (ii) all of the Trustees then in office] shall be
computed on such amount and added to such amount, with the resulting sum
constituting the amount of outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day for all purposes of this Plan. If
the result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this Section 3 during any fiscal year of the Fund shall not exceed
.75% of the average daily net assets of the Fund for such year.
4. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the NASD Rules shall be imposed.
5. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
6. This Plan shall not take effect until after it has been approved by
both a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees then
in office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
7. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 6.
8. This Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for Trustee
approval of this Plan in Section 6.
9. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
10. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. The Principal Underwriter shall also be entitled to
receive all contingent deferred sales charges paid or payable with respect to
any day subsequent to termination of this Plan on which there exist outstanding
uncovered distribution charges of the Principal Underwriter.
11. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 5 unless such amendment is
approved by a vote of at least a majority of the outstanding voting securities
of the Fund. In addition, all material amendments to this Plan shall be approved
in the manner provided for Trustee approval of this Plan in Section 6.
12. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
13. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 9, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
14. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Trust, officers or Trustees of the Trust or any other series
of the Trust.
15. This Plan shall, prior to the initial accrual or payment of any
amount hereunder, be approved by a vote of at least a majority of the
outstanding voting securities of the Fund.
16. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
17. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
IN WITNESS WHEREOF, the Trust has executed this Plan on behalf of the
Fund on the 24th day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV MARATHON
EMERGING MARKETS FUND)
BY/s/ James B. Hawkes
President
Attest:
/s/ Thomas Otis
Secretary
EXHIBIT 99.15(f)
DISTRIBUTION PLAN
OF
EATON VANCE SPECIAL INVESTMENT TRUST
ON BEHALF OF
EV TRADITIONAL GREATER INDIA FUND
WHEREAS, Eaton Vance Special Investment Trust (the "Trust") engages in
business as an open-end management investment company with multiple series and
is registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust desires to adopt a separate Distribution Plan on
behalf of its series, EV Traditional Greater India Fund (the "Fund"), pursuant
to Rule 12b-1 under the Act, pursuant to which the Fund intends to finance
activities which are primarily intended to result in the distribution and sale
of its shares of beneficial interest and to make payments in connection with the
distribution of its shares;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc., to act as
Principal Underwriter (as defined in the Act) of the shares of the Fund;
WHEREAS, the Fund intends to compensate the Principal Underwriter for
its distribution services to the Fund by paying the Principal Underwriter
monthly distribution fees in connection with the sale of shares of the Fund;
WHEREAS, the Fund intends to pay quarterly service fees (as
contemplated in subsections (b) and (d) of Section 26 of Article III of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
(the "NASD Rules")) to the Principal Underwriter (from which the Principal
Underwriter may pay service fees to Authorized Firms and other third parties
based on the amount of Fund shares sold through them and remaining outstanding
for specified periods of time);
WHEREAS, such service fees will compensate the Principal Underwriter,
Authorized Firms and other third parties for providing personal services and/or
the maintenance of shareholder accounts;
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its shareholders.
NOW,THEREFORE, the Trust hereby adopts this Distribution Plan (the
"Plan") on behalf of the Fund in accordance with Rule 12b-1 under the Act and
containing the following terms and conditions:
1. The Principal Underwriter will provide the Fund with such
distribution services and facilities as the Fund may from time to time consider
necessary to enhance the sale of shares of the Fund, and the Principal
Underwriter shall pay such compensation to Authorized Firms and other third
parties as it considers appropriate to encourage distribution of such shares.
The Principal Underwriter will also provide such personal and account
maintenance services as the Fund may from time to time consider necessary to
enhance the provision of personal services and/or the maintenance of shareholder
accounts, and the Principal Underwriter may pay such service fees to Authorized
Firms and other third parties as it considers appropriate to encourage the
provision of personal services and/or the maintenance of shareholder accounts.
2. The Fund shall pay a monthly distribution fee to the Principal
Underwriter on the last day of each month. Such distribution fee shall be in an
amount equal on an annual basis to the aggregate of (a) .50% of that portion of
the Fund's average daily net assets for any fiscal year which is attributable to
shares of the Fund which have remained outstanding for less than one year and
(b) .25% of that portion of the Fund's average daily net assets for any fiscal
year which is attributable to shares of the Fund which have remained outstanding
for more than one year. For the purposes of this Plan, daily net assets of the
Fund shall be computed in accordance with the governing documents of the Fund
and applicable votes and determinations of the Trustees of the Trust. All
distribution fees are being paid in consideration for the distribution services
and facilities to be furnished to the Fund hereunder by the Principal
Underwriter.
3. Appropriate adjustment of payments made pursuant to Section 2 of
this Plan shall be made whenever necessary to ensure that no such payment shall
cause the Fund to exceed the applicable maximum cap imposed on asset-based,
front-end and deferred sales charges by subsection (d) of Section 26 of Article
III of the NASD Rules.
4. In addition to the payments of distribution fees to the Principal
Underwriter provided for in Section 2, the Fund shall pay a quarterly service
fee to the Principal Underwriter on the last day of each calendar quarter of the
Fund. Such service fee shall be in an amount equal on an annual basis to .25% of
that portion of the Fund's average daily net assets for any fiscal year which is
attributable to shares of the Fund which have remained outstanding for more than
one year. All service fees are being paid to the Principal Underwriter hereunder
in consideration for the personal and account maintenance services to be
furnished by the Principal Underwriter and for the payment of service fees by
the Principal Underwriter to Authorized Firms and other third parties in
connection with the provision of personal services and/or the maintenance of
shareholder accounts.
5. This Plan shall not take effect until it has been approved by (a) a
vote of at least a majority of the outstanding voting securities of the Fund and
(b) both a majority of (i) those Trustees of the Trust who y are not "interested
persons" of the Trust or the Fund (as defined in the Act) and have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
6. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for in clause (b) of the first paragraph of
Section 5.
7. This Plan shall continue in effect for one year from the date of its
execution and shall continue indefinitely thereafter, but only for so long as
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in clause (b) of the first paragraph of
Section 5.
8. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trust's Board of Trustees and the Board of
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
9. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. rustees, or by
10. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 4 unless such amendment is
approved in the manner provided for initial approval of the Plan in Section 5,
and all material amendments to this Plan shall be approved in the manner
provided for in clause (b) of the first paragraph of Section 5.
11. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees. tees shall be
12. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 8, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
13. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Trust, officers or Trustees of the Trust or any other series
of the Trust.
14. This Plan shall, prior to the initial accrual or payment of any
amount hereunder, be approved by a vote of at least a majority of the
outstanding voting securities of the Fund.
15. When used in this Plan, the term "service fees" shall have the same
meaning as such term is used in subsections (b) and (d) of Section 26 of Article
III of the NASD Rules. When used in this Plan, the term "vote of a majority of
the outstanding voting securities of the Fund" shall mean the vote of the lesser
of (a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
16. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
IN WITNESS WHEREOF, the Trust has executed this Plan on behalf of the
Fund on the 24th day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV TRADITIONAL
GREATER INDIA FUND)
BY/s/ James B. Hawkes
President
Attest:
/s/ Thomas Otis
Secretary
EATON VANCE SPECIAL INVESTMENT TRUST EXHIBIT 99.15(g)
DISTRIBUTION PLAN
ON BEHALF OF
EV MARATHON GREATER INDIA FUND
WHEREAS, Eaton Vance Special Investment Trust (the "Trust") engages in
business as an open-end investment company with multiple series and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust desires to adopt a separate Distribution Plan on
behalf of its series, EV Marathon Greater India Fund (the "Fund"), pursuant to
which the Fund will make payments in connection with the distribution of shares
of the Fund;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of shares of the Fund, but does
not intend to remunerate the Principal Underwriter unless and until the
Principal Underwriter sells shares of the Fund;
WHEREAS, the Fund will pay the Principal Underwriter sales commissions
and distribution fees only in connection with the sale of shares of the Fund;
WHEREAS, the Fund intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Distribution Plan (this
"Plan") on behalf of the Fund in accordance with Rule 12b-1 under the Act and
containing the following terms and conditions:
1. The Fund will pay sales commissions and distribution fees to the
Principal Underwriter only after and as a result of the sales of shares of the
Fund. The Principal Underwriter will provide the Fund with such distribution
services and facilities as the Trust may from time to time consider necessary to
accomplish the sale of shares of the Fund. It is understood that the Principal
Underwriter may pay such sales commissions and make such other payments to
Authorized Firms and other persons as it considers appropriate to encourage
distribution of such shares.
2. On each sale of Fund shares (excluding reinvestment of dividends and
distributions), the Fund shall pay the Principal Underwriter a sales commission
in an amount not exceeding 5% of the price received by the Fund therefor, such
payment to be made in the manner set forth and subject to the terms of this
Plan. The amount of the sales commission shall be established from time to time
by vote or other action of a majority of (i) those Trustees of the Trust who are
not "interested persons" (as defined in the Act) of the Trust and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office. The Fund shall also pay the Principal Underwriter a separate
distribution fee (calculated in accordance with Section 3), such payment to be
made in the manner set forth and subject to the terms of this Plan.
3. The sales commissions and distribution fees referred to in Section 2
shall be accrued and paid by the Fund in the following manner. The Fund shall
accrue daily an amount calculated at the rate of .75% per annum of the daily net
assets of the Fund, which net assets shall be computed in accordance with the
governing documents of the Trust and applicable votes and determinations of the
Trustees of the Trust. The daily amounts so accrued throughout the month shall
be paid to the Principal Underwriter on the last day of each month. The amount
of such daily accrual, as so calculated, shall first be applied and charged to
all unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
Section 3 plus all sales commissions which it is entitled to be paid pursuant to
Section 2 since inception of this Plan through and including the day next
preceding the date of calculation, and (b) an amount equal to the aggregate of
all distribution fees referred to below which the Principal Underwriter has been
paid pursuant to this Section 3 plus all such fees which it is entitled to be
paid pursuant to Section 2 since inception of this Plan through and including
the day next preceding the date of calculation. From this sum (distribution
charges) there shall be subtracted (i) the aggregate amount paid or payable to
the Principal Underwriter pursuant to this Section 3 since inception of this
Plan through and including the day next preceding the date of calculation and
(ii) the aggregate amount of all contingent deferred sales charges paid or
payable to the Principal Underwriter since inception of this Plan through and
including the day next preceding the date of calculation, and (iii) the
aggregate of all amounts paid or payable to the Principal Underwriter (or any
affiliate thereof) by any party other than the Fund with respect to the sale of
shares of the Fund since inception of this Plan through and including the day
next preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
the Rule 12b-1 Trustees and (ii) all of the Trustees then in office] shall be
computed on such amount and added to such amount, with the resulting sum
constituting the amount of outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day for all purposes of this Plan. If
the result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this Section 3 during any fiscal year of the Fund shall not exceed
.75% of the average daily net assets of the Fund for such year.
4. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the NASD Rules shall be imposed.
5. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
6. This Plan shall not take effect until after it has been approved by
both a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees then
in office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
7. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 6.
8. This Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for Trustee
approval of this Plan in Section 6.
9. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
10. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. The Principal Underwriter shall also be entitled to
receive all contingent deferred sales charges paid or payable with respect to
any day subsequent to termination of this Plan on which there exist outstanding
uncovered distribution charges of the Principal Underwriter.
11. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 5 unless such amendment is
approved by a vote of at least a majority of the outstanding voting securities
of the Fund. In addition, all material amendments to this Plan shall be approved
in the manner provided for Trustee approval of this Plan in Section 6.
12. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
13. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 9, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
14. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Trust, officers or Trustees of the Trust or any other series
of the Trust.
15. This Plan shall, prior to the initial accrual or payment of any
amount hereunder, be approved by a vote of at least a majority of the
outstanding voting securities of the Fund.
16. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
17. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
IN WITNESS WHEREOF, the Trust has executed this Plan on behalf of the
Fund on the 24th day of March, 1994.
EATON VANCE SPECIAL INVESTMENT TRUST
(on behalf of EV MARATHON
GREATER INDIA FUND)
BY/s/ James B. Hawkes
President
Attest:
/s/ Thomas Otis
Secretary
EX 99.16
EV CLASSIC INVESTORS FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of
all distributions) on a hypothetical investment of $1,000 in the Fund covering
the life of the Fund ending January 31, 1995. Past performance is not indicative
of future results. Investment return and principal value will fluctuate and
shares, when redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
NUMBER OF
SHARES GAINED
NET ASSET THROUGH TOTAL
NUMBER VALUE ON REINVESTMENT OF NUMBER OF
INVESTMENT INVESTMENT AMOUNT OF OF SHARES DATE OF ALL DISTRIBUTIONS SHARES AS
PERIOD DATE INVESTMENT PURCHASED INVESTMENT THROUGH 01/31/95 OF 01/31/95
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LIFE OF 11/02/93 $1,000 100.000 $10.00 2.631 102.631
THE FUND
(1.25 YRS)
1 YEAR
ENDING 01/31/94 $1,000 95.602 $10.46 2.514 98.117
01/31/95
<CAPTION>
01/31/95 01/31/95 TOTAL RETURN TOTAL RETURN
VALUE OF VALUE OF THROUGH 01/31/95 THROUGH 01/31/95
01/31/95 INVESTMENT INVESTMENT BEFORE DEDUCTING THE CDSC AFTER DEDUCTING THE CDSC<F1>
INVESTMENT NET ASSET BEFORE DEDUCTING AFTER DEDUCTING ------------------------------ -----------------------------
PERIOD VALUE<F4> THE CDSC THE CDSC<F1> CUMULATAIVE<F2> ANNUALIZED<F5> CUMULATIVE<F3> ANNUALIZED<F5>
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LIFE OF $9.61 $986.28 $986.28 -1.37% -1.10% -1.37% -1.10%
THE FUND
(1.25 YRS)
1 YEAR
ENDING $9.61 $942.90 $933.71 -5.71% -5.71% -6.63% -6.63%
01/31/95
<FN>
<F1> No contingent deferred sales charge (CDSC) is imposed on shares purchased more than one year prior to the redemption, shares
acquired through the reinvestment of dividends and distributions and any appreciation in value of other shares in the account.
<F2> Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
01/31/95 by the initial net asset value.
<F3> Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
01/31/95 by the initial net asset value and subtracting the CDSC.
<F4> 01/31/95 Net Asset Value is an unaudited figure
<F5> Average annual total return is the average annual compounded rate of return based on the cumulative value for each period. It
is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
EV MARATHON INVESTORS FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of
all distributions) on a hypothetical investment of $1,000 in the Fund covering
the life of the Fund ending January 31, 1995. Past performance is not indicative
of future results. Investment return and principal value will fluctuate and
shares, when redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
NUMBER OF
SHARES GAINED
NET ASSET THROUGH TOTAL
NUMBER VALUE ON REINVESTMENT OF NUMBER OF
INVESTMENT INVESTMENT AMOUNT OF OF SHARES DATE OF ALL DISTRIBUTIONS SHARES AS
PERIOD DATE INVESTMENT PURCHASED INVESTMENT THROUGH 01/31/95 OF 01/31/95
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
LIFE OF 11/02/93 $1,000 100.000 $10.00 2.879 102.879
THE FUND
(1.25 YRS)
1 YEAR
ENDING 01/31/94 $1,000 96.246 $10.39 2.768 99.015
01/31/95
<CAPTION>
01/31/95 01/31/95 TOTAL RETURN TOTAL RETURN
VALUE OF VALUE OF THROUGH 01/31/95 THROUGH 01/31/95
01/31/95 INVESTMENT INVESTMENT BEFORE DEDUCTING THE CDSC AFTER DEDUCTING THE CDSC<F1>
INVESTMENT NET ASSET BEFORE DEDUCTING AFTER DEDUCTING ------------------------------ -----------------------------
PERIOD VALUE<F4> THE CDSC THE CDSC<F1> CUMULATAIVE<F2> ANNUALIZED<F5> CUMULATIVE<F3> ANNUALIZED<F5>
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LIFE OF $9.54 $981.47 $933.77 -1.85% -1.49% -6.62% -5.35%
THE FUND
(1.25 YRS)
1 YEAR
ENDING $9.54 $944.60 $898.69 -5.54% -5.54% -10.13% -10.13%
01/31/95
<FN>
<F1> No contingent deferred sales charge (CDSC) is imposed on shares purchased more than one year prior to the redemption, shares
acquired through the reinvestment of dividends and distributions and any appreciation in value of other shares in the account,
and no such charge is imposed on exchanges of fund shares for shares of one or more other funds in the Eaton Vance Marathon
Group of Funds.
<F2> Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
01/31/95 by the initial net asset value.
<F3> Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
01/31/95 by the initial net asset value and subtracting the CDSC.
<F4> 01/31/95 Net Asset Value is an unaudited figure
<F5> Average annual total return is the average annual compounded rate of return based on the cumulative value for each period. It
is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
EV TRADITIONAL INVESTORS FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of
all distributions) on a hypothetical investment of $1,000 in the Fund covering
the ten, five, and one year periods ending January 31, 1995. Past performance is
not indicative of future results. Investment return and principal value will
fluctuate and shares, when redeemed, may be worth more or less than their
original cost.
<TABLE>
<CAPTION>
DOLLAR VALUE NUMBER OF
ON DATE OF SHARES GAINED
OFFERING NET ASSET INVESTMENT THROUGH TOTAL
PRICE ON NUMBER VALUE ON (INITIAL INVESTMENT REINVESTMENT OF NUMBER OF
INVESTMENT INVESTMENT AMOUNT OF DATE OF OF SHARES DATE OF LESS THE SALES ALL DISTRIBUTIONS SHARES AS
PERIOD DATE INVESTMENT INVESTMENT<F1> PURCHASED INVESTMENT CHARGE<F1> THROUGH 01/31/95 OF 01/31/95
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10 YEARS
ENDED 01/31/85 $1,000 $8.20 121.951 $7.81 $952.44 245.794 367.745
01/31/95
5 YEARS
ENDED 01/31/89 $1,000 $7.54 132.626 $7.18 $952.25 77.122 209.748
01/31/95
1 YEAR
ENDED 01/31/94 $1,000 $7.98 125.313 $7.60 $952.38 7.724 133.037
01/31/95
<CAPTION>
TOTAL RETURN TOTAL RETURN
ENDING THROUGH 01/31/95 THROUGH 01/31/95
REDEEMABLE (NET ASSET VALUE (MAXIMUM OFFERING PRICE
01/31/95 DOLLAR VALUE TO NET ASSET VALUE) TO NET ASSET VALUE)
INVESTMENT NET ASSET OF INVESTMENT ------------------------------ -----------------------------
PERIOD VALUE<F4> ON 01/31/95 CUMULATAIVE<F3> ANNUALIZED<F5> CUMULATIVE<F2> ANNUALIZED<F5>
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 YEARS
ENDED $6.84 $2,515.37 164.10% 10.20% 151.55% 9.66%
01/31/95
5 YEARS
ENDED $6.84 $1,434.68 50.66% 8.54% 43.51% 7.49%
01/31/95
1 YEAR
ENDED $6.84 $ 909.97 -4.45% -4.45% -8.99% -8.99%
01/31/95
<FN>
<F1> Reflects the current maximum sales charge of 4.75%.
<F2> Cumulative total return (offering price to net asset value) is calculated by dividing the ending dollar value on 01/31/95 by
the initial investment amount of $1,000.
<F3>Cumulative total return (net asset value to net asset value) is calculated by dividing the ending dollar value on 1/31/95 by
the initial investment less the sales charge.
<F4> 01/31/95 Net Asset Value is an unaudited figure.
<F5> Annualized total return is the average annual compounded rate of return based on the cumulative value for each period. It is
calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
<TABLE>
EV CLASSIC STOCK FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment
of $1,000 in the Fund covering the life of the fund ending December 31, 1994. Past performance is not indicative of future
results. Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than
their original cost.
<CAPTION>
NUMBER OF
SHARES GAINED
NAV THROUGH TOTAL
INVEST- INVEST- AMT OF NUMBER DATE OF REINVESTMENT OF NUMBER OF 12/31/94 12/31/94 TOTAL RETURN
MENT MENT INVEST- OF SHARES INVEST- ALL DISTRIBUTIONS SHARES AS NET ASSET VALUE OF THROUGH 12/31/94
PERIOD DATE MENT PURCHASED MENT THROUGH 12/31/94 OF 12/31/94 VALUE + INVESTMENT CUMULATIVE^ ANNUALIZED ++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 11/04/94 $1,000 100.000 $10.00 0.000 100.000 $9.87 $987.00 -1.30% NA
THE FUND
(0.16 YRS)
^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value.
+ 12/31/94 Net Asset Value is an unaudited figure.
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
<TABLE>
EV MARATHON STOCK FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the life of the Fund ending December 31, 1994. Past performance is not indicative of future results.
Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.
<CAPTION>
TOTAL TOTAL
RETURN RETURN
12/31/94 12/31/94 THROUGH THOUGH
VALUE OF VALUE OF 12/31/94 12/31/94
NO. OF SHARES TOTAL INVEST- INVEST- BEFORE AFTER
NO. OF NAV ON GAINED THROUGH NO. OF MENT MENT DEDUCTING DEDUCTING
INVEST- INVEST- AMT OF SHARES DATE OF REINVESTMENT OF SHARES BEFORE AFTER THE CDSC THE CDSC *
MENT MENT INVEST- PUR- INVEST- ALL DISTRIBUTIONS AS OF 12/31/94 DEDUCTING DEDUCTING
PERIOD DATE MENT CHASED MENT THROUGH 12/31/94 12/31/94 NAV+ THE CDSC THE CDSC* CUMUL^ ANN++ CUMUL^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 08/17/94 $1,000 100.000 $10.00 0.000 100.000 $9.60 $960.00 $912.00 -4.00% NA -8.80% NA
THE FUND
(0.37 YEARS)
* No contingent deferred sales charge (CDSC) is imposed on shares purchased more than six years prior to the redemption,
shares acquired through the reinvestment of dividends and distributions and any appreciation in value of other shares in
the account, and no such charge is imposed on exchanges of fund shares for shares of one or more other funds in the Eaton
Vance Marathon Group of Funds.
^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value and subtracting the CDSC.
+ 12/31/94 Net Asset Value is an unaudited figure
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
<TABLE>
EV TRADITIONAL STOCK FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the ten, five, and one year periods ending December 31, 1994. Past performance is not indicative of
future results. Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than
their original cost.
<CAPTION>
DOLLAR
VALUE ON NUMBER
DATE OF OF SHARES TOTAL
INVEST- GAINED ENDING TOTAL RETURN
OFFER MENT THROUGH REDEEMABLE RETURN THROUGH
PRICE (INITIAL REINVESTMENT TOTAL DOLLAR THROUGH 12/31/94
ON NO. OF NAV ON INVEST- OF ALL DIS- NO. OF VALUE 12/31/94 (MAX OFFERING
INVEST- INVEST- AMT OF DAY OF SHARES DATE OF MENT LESS TRIBUTIONS SHARES OF INVEST- (NAV TO NAV) PRICE TO NAV)
MENT MENT INVEST- INVEST- PUR- INVEST- THE SALES THROUGH AS OF 12/31/94 MENT ON
PERIOD DATE MENT MENT CHASED MENT CHARGE*) 12/31/94 12/31/94 NAV+ 12/31/94 CUMUL^ ANN++ CUMUL^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 YRS
ENDING 12/31/84 $1,000 $12.75 78.431 $12.14 $952.15 184.743 263.174 $10.90 $2,868.60 201.28% 11.66% 186.97% 11.12%
12/31/94
5 YRS
ENDING 12/31/89 $1,000 $15.44 64.767 $14.71 $952.72 49.298 114.065 $10.90 $1,243.31 30.50% 5.47% 24.30% 4.45%
12/31/94
1 YR
ENDING 12/31/93 $1,000 $13.11 76.278 $12.49 $952.71 7.526 83.804 $10.90 $913.46 -4.12% -4.12% -8.67% -8.67%
12/31/94
* Reflects the current maximum sales charge of 4.75%.
^ Cumulative total return (offering price to net asset value) is calculated by dividing the ending dollar amount on
12/31/94 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the ending dollar amount on
12/31/94 by the initial investment less the sales charge.
+ 12/31/94 Net Asset Value is an unaudited figure
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
<TABLE>
EV CLASSIC TOTAL RETURN FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of
all distributions) on a hypothetical investment of $1,000 in the Fund covering
the life of the fund ending December 31, 1994. Past performance is not
indicative of future results. Investment return and principal value will
fluctuate and shares, when redeemed, may be worth more or less than their
original cost.
<CAPTION>
NUMBER OF
SHARES GAINED
NAV ON THROUGH TOTAL
INVEST- INVEST- AMT OF NUMBER DATE OF REINVESTMENT OF NUMBER OF 12/31/94 12/31/94 TOTAL RETURN
MENT MENT INVEST- OF SHARES INVEST- ALL DISTRIBUTIONS SHARES AS NET ASSET VALUE OF THROUGH 12/31/94
PERIOD DATE MENT PURCHASED MENT THROUGH 12/31/94 OF 12/31/94 VALUE<F2> INVESTMENT CUMULATIVE<F1> ANNUALIZED<F3>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 11/01/93 $1,000 100.000 $10.00 4.702 104.702 $8.38 $877.40 -12.26% -10.62%
THE FUND
(1.16 YR)
1 YEAR
ENDING 12/31/93 $1,000 99.701 $10.03 4.137 103.838 $8.38 $870.16 -12.98% -12.98%
12/31/94
<FN>
<F1> Cumulative total return (net asset value to net asset value) is c culated
by dividing the cumulative net asset value on 12/31/94 by the initial net
asset value.
<F2> 12/31/94 Net Asset Value is an unaudited figure.
<F2> Average annual total return is the average annual compounded rate of return
based on the cumulative value for each period. It is calculated by taking
the nth root of 1 + the cumulative total return, where n = the number of
years invested.
</TABLE>
<PAGE>
EXHIBIT 16
EV CLASSIC TOTAL RETURN FUND
CALCULATION OF DISTRIBUTION RATE
AND EFFECTIVE DISTRIBUTION RATE
AS OF 12/31/94
DISTRIBUTION RATE
Annualize
Most Recent
Monthly : $0.022 x 12
Distribution
Divide by
Current Maximum : $8.38
Offering Price
Distribution
Rate Equals : 0.0315 ( or 3.15% )
EFFECTIVE DISTRIBUTION RATE
Divide
Distribution : 0.0315
Rate by 12 ----- + 1
and Add 1. 12
The Resulting
Number Equals : 1.0026
Take this
Number to the 12
12th power : ( 1.0026 ) - 1
and Subtract 1.
Effective
Distribution : 0.0319 ( or 3.19% )
Rate Equals
<PAGE>
EXHIBIT 16
EV CLASSIC TOTAL RETURN FUND
CALCULATION OF YIELD
For the 30 days ended 12/31/94:
Interest Income Earned: $24,828
Plus Dividend Income Earned:
----------
Equal Gross Income: $24,828
Minus Expenses: $10,168
----------
Equal Net Investment Income: $14,660
Divided by Average daily number of shares
outstanding that were entitled
to receive dividends: 666,117
----------
Equal Net Investment Income Earned Per Share: $0.0220
Maximum Offering Price Per Share 12/31/94: $8.39
30 Day Yield*: 3.17%
* Yield is calculated on a bond equivalent rate as follows:
6
2[(($0.0220/$8.39)+1) -1]
<PAGE>
<TABLE>
EV MARATHON TOTAL RETURN FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment
of $1,000 in the Fund covering the life of the Fund ending December 31, 1994. Past performance is not indicative of future
results. Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than their
original cost.
<CAPTION>
TOTAL TOTAL
RETURN RETURN
NO. OF SHARES 12/31/94 12/31/94 THROUGH THOUGH
GAINED THROUGH VALUE OF VALUE OF 12/31/94 12/31/94
REINVESTMENT TOTAL INVEST- INVEST- BEFORE AFTER
NO. OF NAV ON OF ALL NO. OF MENT MENT DEDUCTING DEDUCTING
INVEST- INVEST- AMT OF SHARES DATE OF DISTRIBUTIONS SHARES BEFORE AFTER THE CDSC THE CDSC *
MENT MENT INVEST- PUR- INVEST- THROUGH AS OF 12/31/94 DEDUCTING DEDUCTING
PERIOD DATE MENT CHASED MENT 12/31/94 12/31/94 NAV+ THE CDSC THE CDSC* CUMUL^ ANN++ CUMUL^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 11/01/93 $1,000 100.000 $10.00 5.175 105.175 $8.30 $872.95 $831.45 -12.71% -11.01% -16.86% -14.66%
THE FUND
(1.16 YRS)
1 YEAR
ENDING 12/31/93 $1,000 100.705 $9.93 4.629 105.334 $8.30 $874.27 $832.48 -12.57% -12.57% -16.75% -16.75%
12/31/94
* No contingent deferred sales charge (CDSC) is imposed on shares purchased more than six years prior to the redemption,
shares acquired through the reinvestment of dividends and distributions and any appreciation in value of other shares in
the account, and no such charge is imposed on exchanges of fund shares for shares of one or more other funds in the Eaton
Vance Marathon Group of Funds.
^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
12/31/94 by the initial net asset value and subtracting the CDSC.
+ 12/31/94 Net Asset Value is an unaudited figure
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
EV MARATHON TOTAL RETURN FUND
CALCULATION OF DISTRIBUTION RATE
AND EFFECTIVE DISTRIBUTION RATE
AS OF 12/31/94
DISTRIBUTION RATE
Annualize
Most Recent
Monthly : $0.025 x 12
Distribution
Divide by
Current Maximum : $8.30
Offering Price
Distribution
Rate Equals : 0.0361 ( or 3.61% )
EFFECTIVE DISTRIBUTION RATE
Divide
Distribution : 0.0361
Rate by 12 ----- + 1
and Add 1. 12
The Resulting
Number Equals : 1.0030
Take this
Number to the 12
12th power : ( 1.0030 ) - 1
and Subtract 1.
Effective
Distribution : 0.0367 ( or 3.67% )
Rate Equals
<PAGE>
Exhibit 16
EV MARATHON TOTAL RETURN FUND
CALCULATION OF YIELD
For the 30 days ended 12/31/94:
Interest Income Earned: $116,081
Plus Dividend Income Earned:
----------
Equal Gross Income: $116,081
Minus Expenses: $40,691
----------
Equal Net Investment Income: $75,390
Divided by Average daily number of shares
outstanding that were entitled
to receive dividends: 3,117,085
----------
Equal Net Investment Income Earned Per Share: $0.0242
Maximum Offering Price Per Share 12/31/94: $8.31
30 Day Yield*: 3.52%
* Yield is calculated on a bond equivalent rate as follows:
6
2[(($0.0242/$8.31)+1) -1]
<PAGE>
EV TRADITIONAL TOTAL RETURN FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of
all distributions) on a hypothetical investment of $1,000 in the Fund covering
the ten, five, and one year periods ending December 31, 1994. Past performance
is not indicative of future results. Investment return and principal value will
fluctuate and shares, when redeemed, may be worth more or less than their
original cost.
- -----------
<TABLE>
<CAPTION>
DOLLAR
VALUE ON NUMBER
DATE OF OF SHARES TOTAL
INVEST- GAINED ENDING TOTAL RETURN
OFFER MENT THROUGH REDEEMABLE RETURN THROUGH
PRICE (INITIAL REINVESTMENT TOTAL DOLLAR THROUGH 12/31/94
ON NO. OF NAV ON INVEST- OF ALL DIS- NO. OF VALUE 12/31/94 (MAX OFFERING
INVEST- INVEST- AMT OF DAY OF SHARES DATE OF MENT LESS TRIBUTIONS SHARES OF INVEST- (NAV TO NAV) PRICE TO NAV)
MENT MENT INVEST- INVEST PUR- INVEST- THE SALES THROUGH AS OF 12/31/94 MENT ON
PERIOD DATE MENT MENT CHASED MENT CHARGE*) 12/31/94 12/31/94 NAV+ 12/31/94 CUMUL^ ANN++ CUMUL^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 YRS
ENDING 12/31/84 $1,000 $8.03 124.533 $7.65 $952.68 242.116 366.649 $7.63 $2,797.54 193.65% 11.37% 179.70% 10.83%
12/31/94
5 YRS
ENDING 12/31/89 $1,000 $10.44 95.785 $9.94 $952.10 62.370 158.155 $7.63 $1,206.72 26.74% 4.85% 20.72% 3.84%
12/31/94
1 YR
ENDING 12/31/93 $1,000 $9.59 104.275 $9.13 $952.03 5.175 109.450 $7.63 $835.10 -12.28% -12.28% -16.45% -16.45%
12/31/94
* Reflects the current maximum sales charge of 4.75%.
^ Cumulative total return (offering price to net asset value) is calculated by dividing the ending dollar amount on
12/31/94 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the ending dollar amount on
12/31/94 by the initial investment less the sales charge.
+ 12/31/94 Net Asset Value is an unaudited figure
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
EV TRADITIONAL TOTAL RETURN FUND
CALCULATION OF DISTRIBUTION RATE
AND EFFECTIVE DISTRIBUTION RATE
AS OF 12/31/94
DISTRIBUTION RATE
Annualize
Most Recent
Monthly : $0.029 x 12
Distribution
Divide by
Current Maximum : $8.01
Offering Price
Distribution
Rate Equals : 0.0434 ( or 4.34% )
EFFECTIVE DISTRIBUTION RATE
Divide
Distribution : 0.0434
Rate by 12 ----- + 1
and Add 1. 12
The Resulting
Number Equals : 1.0036
Take this
Number to the 12
12th power : ( 1.0036 ) - 1
and Subtract 1.
Effective
Distribution : 0.0443 ( or 4.43% )
Rate Equals
<PAGE>
Exhibit 16
EV TRADITIONAL TOTAL RETURN FUND
CALCULATION OF YIELD
For the 30 days ended 12/31/94:
Interest Income Earned: $2,030,052
Plus Dividend Income Earned:
----------
Equal Gross Income: $2,030,052
Minus Expenses: $439,179
----------
Equal Net Investment Income: $1,590,873
Divided by Average daily number of shares
outstanding that were entitled
to receive dividends: 58,883,329
----------
Equal Net Investment Income Earned Per Share: $0.0270
Maximum Offering Price Per Share 12/31/94: $8.02
30 Day Yield*: 4.08%
* Yield is calculated on a bond equivalent rate as follows:
6
2[(($0.0270/$8.02)+1) -1]
POWER OF ATTORNEY EXHIBIT 99.17(a)
We, the undersigned officers and Trustees of Eaton Vance Special
Equities Fund, a Massachusetts business trust, do hereby severally constitute
and appoint H. Day Brigham, Jr., James B. Hawkes and Thomas Otis, or any of
them, to be true, sufficient and lawful attorneys, or attorney for each of us,
to sign for each of us, in the name of each of us in the capacities indicated
below, any and all amendments (including post-effective amendments) to the
Registration Statement on Form N-1A filed by Eaton Vance Special Equities Fund
with the Securities and Exchange Commission in respect of shares of beneficial
interest and other documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Signature Title Date
President, Principal
/s/ James B. Hawkes Executive Officer and February 25, 1994
- --------------------- Trustee
James B. Hawkes
Treasurer and Principal
/s/ James L. O'Connor Financial and Accounting February 25, 1994
- --------------------- Officer
James L. O'Connor
/s/ Peter F. Kiely Trustee February 25, 1994
- ---------------------
Peter F. Kiely
/s/ Donald R. Dwight Trustee February 25, 1994
- ---------------------
Donald R. Dwight
/s/ Samuel L. Hayes, III Trustee February 25, 1994
- ------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee February 25, 1994
- ----------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee February 25, 1994
- ----------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee February 25, 1994
- ----------------------
Jack L. Treynor
POWER OF ATTORNEY EXHIBIT 99.17(b)
We, the undersigned officers and Trustees of Emerging Markets
Portfolio, a New York trust, do hereby severally constitute and appoint H. Day
Brigham, Jr., James B. Hawkes and Thomas Otis, or any of them, to be true,
sufficient and lawful attorneys, or attorney for each of us, to sign for each of
us, in the name of each of us in the capacities indicated below, any and all
amendments (including post-effective amendments) to the Registration Statement
on Form N-1A filed by Eaton Vance Special Investment Trust with the Securities
and Exchange Commission in respect of shares of beneficial interest and other
documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Name Capacity Date
/s/ R. Lloyd George Trustee and President of January 21, 1994
- ----------------------- Emerging Markets Portfolio
Robert Lloyd George
- --------------- Trustee of January , 1994
James B. Hawkes Emerging Markets Portfolio
/s/ Samuel L. Hayes III Trustee of January 18, 1994
- ----------------------- Emerging Markets Portfolio
Samuel L. Hayes, III
- ----------------- Treasurer (Principal Financial January , 1994
James L. O'Connor and Principal Accounting Officer)
of Emerging Markets Portfolio
- ---------------- Trustee of January , 1994
Edward K.Y. Chen Emerging Markets Portfolio
- ---------------------- Trustee of January , 1994
Stuart Hamilton Leckie Emerging Markets Portfolio
POWER OF ATTORNEY EXHIBIT 99.17(c)
We, the undersigned officers and Trustees of South Asia Portfolio, a
New York trust, do hereby severally constitute and appoint H. Day Brigham, Jr.,
James B. Hawkes and Thomas Otis, or any of them, to be true, sufficient and
lawful attorneys, or attorney for each of us, to sign for each of us, in the
name of each of us in the capacities indicated below, any and all amendments
(including post-effective amendments) to the Registration Statement on Form N-1A
filed by Eaton Vance Special Investment Trust with the Securities and Exchange
Commission in respect of shares of beneficial interest and other documents and
papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Name Capacity Date
/s/ R. Lloyd George Trustee and President of January 21, 1994
- ------------------- South Asia Portfolio
Robert Lloyd George
- --------------- Trustee of January , 1994
James B. Hawkes South Asia Portfolio
/s/ Samuel L. Hayes III Trustee of January 18, 1994
- ------------------------ South Asia Portfolio
Samuel L. Hayes, III
- ----------------- Treasurer (Principal Financial January , 1994
James L. O'Connor and Principal Accounting Officer)
of South Asia Portfolio
- ---------------- Trustee of January , 1994
Edward K.Y. Chen South Asia Portfolio
- ---------------------- Trustee of January , 1994
Stuart Hamilton Leckie South Asia Portfolio
POWER OF ATTORNEY EXHIBIT 99.17(d)
We, the undersigned officers and Trustees of Special Investment
Portfolio, a New York trust, do hereby severally constitute and appoint H. Day
Brigham, Jr., James B. Hawkes and Thomas Otis, or any of them, to be true,
sufficient and lawful attorneys, or attorney for each of us, to sign for each of
us, in the name of each of us in the capacities indicated below, any and all
amendments (including post-effective amendments) to the Registration Statement
on Form N-1A filed by Eaton Vance Special Investment Trust with the Securities
and Exchange Commission in respect of shares of beneficial interest and other
documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Signature Title Date
/s/ James B. Hawkes President and Trustee May 18, 1994
- -------------------
James B. Hawkes
/s/ Landon T. Clay Trustee May 18, 1994
- -------------------
Landon T. Clay
/s/ Donald R. Dwight Trustee May 18, 1994
- --------------------
Donald R. Dwight
/s/ Samuel L. Hayes III Trustee May 18, 1994
- ------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee May 18, 1994
- ----------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee May 18, 1994
- ----------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee May 18, 1994
- ----------------------
Jack L. Treynor
Treasurer and Principal
/s/ James L. O'Connor Financial and Accounting May 18, 1994
- --------------------- Officer
James L. O'Connor
EXHIBIT 99.(17)(e)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Investors Portfolio, a New
York trust, do hereby severally constitute and appoint H. Day Brigham, Jr., M.
Dozier Gardner and Thomas Otis, or any of them, to be true, sufficient and
lawful attorneys, or attorney for each of us, to sign for each of us, in the
name of each of us in the capacities indicated below, any and all amendments
(including post-effective amendments) to the Registration Statement on Form N-1A
filed by Eaton Vance Special Investment Trust with the Securities and Exchange
Commission in respect of shares of beneficial interest and other documents and
papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Signature Title Date
/s/M. Dozier Gardner President and Trustee June 19, 1995
- ----------------------------
M. Dozier Gardner
/s/Donald R. Dwight Trustee June 19, 1995
- ----------------------------
Donald R. Dwight
/s/James B. Hawkes Trustee June 19, 1995
- ----------------------------
James B. Hawkes
/s/Samuel L. Hayes, III Trustee June 19, 1995
- ----------------------------
Samuel L. Hayes, III
/s/Norton H. Reamer Trustee June 19, 1995
- ----------------------------
Norton H. Reamer
/s/John L. Thorndike Trustee June 19, 1995
- ----------------------------
John L. Thorndike
/s/Jack L. Treynor Trustee June 19, 1995
- ----------------------------
Jack L. Treynor
/s/James L. O'Connor Treasurer and June 19, 1995
- ---------------------------- Principal Financial
James L. O'Connor and Accounting
Officer
EXHIBIT 99.(17(f)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Stock Portfolio, a New
York trust, do hereby severally constitute and appoint H. Day Brigham, Jr.,
James B. Hawkes and Thomas Otis, or any of them, to be true, sufficient and
lawful attorneys, or attorney for each of us, to sign for each of us, in the
name of each of us in the capacities indicated below, any and all amendments
(including post-effective amendments) to the Registration Statement on Form N-1A
filed by Eaton Vance Special Investment Trust with the Securities and Exchange
Commission in respect of shares of beneficial interest and other documents and
papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Signature Title Date
/s/James B. Hawkes President and Trustee June 19, 1995
- ----------------------------
James B. Hawkes
/s/Donald R. Dwight Trustee June 19, 1995
- ----------------------------
Donald R. Dwight
/s/Samuel L. Hayes, III Trustee June 19, 1995
- ----------------------------
Samuel L. Hayes, III
/s/Norton H. Reamer Trustee June 19, 1995
- ----------------------------
Norton H. Reamer
/s/John L. Thorndike Trustee June 19, 1995
- ----------------------------
John L. Thorndike
/s/Jack L. Treynor Trustee June 19, 1995
- ----------------------------
Jack L. Treynor
/s/James L. O'Connor Treasurer and June 19, 1995
- ---------------------------- Principal Financial
James L. O'Connor and Accounting
Officer
EXHIBIT 99.(17)(g)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Total Return Portfolio, a
New York trust, do hereby severally constitute and appoint H. Day Brigham, Jr.,
M. Dozier Gardner and Thomas Otis, or any of them, to be true, sufficient and
lawful attorneys, or attorney for each of us, to sign for each of us, in the
name of each of us in the capacities indicated below, any and all amendments
(including post-effective amendments) to the Registration Statement on Form N-1A
filed by Eaton Vance Special Investment Trust with the Securities and Exchange
Commission in respect of shares of beneficial interest and other documents and
papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
Signature Title Date
/s/M. Dozier Gardner President and Trustee June 19, 1995
- ----------------------------
M. Dozier Gardner
/s/Landon T. Clay Trustee June 19, 1995
- ----------------------------
Landon T. Clay
/s/Donald R. Dwight Trustee June 19, 1995
- ----------------------------
Donald R. Dwight
/s/James B. Hawkes Trustee June 19, 1995
- ----------------------------
James B. Hawkes
/s/Samuel L. Hayes, III Trustee June 19, 1995
- ----------------------------
Samuel L. Hayes, III
/s/Norton H. Reamer Trustee June 19, 1995
- ----------------------------
Norton H. Reamer
/s/John L. Thorndike Trustee June 19, 1995
- ----------------------------
John L. Thorndike
/s/Jack L. Treynor Trustee June 19, 1995
- ----------------------------
Jack L. Treynor
/s/James L. O'Connor Treasurer and June 19, 1995
- ---------------------------- Principal Financial
James L. O'Connor and Accounting
Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000102822
<NAME> EATON VANCE INVESTORS TRUST
<SERIES>
<NUMBER> 2
<NAME> EV CLASSIC INVESTORS FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1,989,330
<RECEIVABLES> 60,976
<ASSETS-OTHER> 31,861
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,082,167
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,951
<TOTAL-LIABILITIES> 8,951
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,176,334
<SHARES-COMMON-STOCK> 215,648
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 34
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (16,270)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (86,882)
<NET-ASSETS> 2,073,216
<DIVIDEND-INCOME> 38,033
<INTEREST-INCOME> 58,442
<OTHER-INCOME> (13,787)
<EXPENSES-NET> 52,187
<NET-INVESTMENT-INCOME> 30,501
<REALIZED-GAINS-CURRENT> (22,258)
<APPREC-INCREASE-CURRENT> (110,008)
<NET-CHANGE-FROM-OPS> (101,765)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 30,501
<DISTRIBUTIONS-OF-GAINS> 420
<DISTRIBUTIONS-OTHER> 16,034
<NUMBER-OF-SHARES-SOLD> 377,194
<NUMBER-OF-SHARES-REDEEMED> 229,784
<SHARES-REINVESTED> 4,769
<NET-CHANGE-IN-ASSETS> 1,409,253
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 99,562
<AVERAGE-NET-ASSETS> 2,042,879
<PER-SHARE-NAV-BEGIN> 10.46
<PER-SHARE-NII> 0.215
<PER-SHARE-GAIN-APPREC> (0.810)
<PER-SHARE-DIVIDEND> (0.166)
<PER-SHARE-DISTRIBUTIONS> (0.076)
<RETURNS-OF-CAPITAL> (0.013)
<PER-SHARE-NAV-END> 9.61
<EXPENSE-RATIO> 3.23
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000102822
<NAME> EATON VANCE INVESTORS TRUST
<SERIES>
<NUMBER> 3
<NAME> EV MARATHON INVESTORS FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 14,460,011
<RECEIVABLES> 27,927
<ASSETS-OTHER> 33,357
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14,521,295
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,325
<TOTAL-LIABILITIES> 13,325
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,746,282
<SHARES-COMMON-STOCK> 1,520,279
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 56,796
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (49,175)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (245,933)
<NET-ASSETS> 14,507,970
<DIVIDEND-INCOME> 166,615
<INTEREST-INCOME> 253,355
<OTHER-INCOME> (58,633)
<EXPENSES-NET> 148,787
<NET-INVESTMENT-INCOME> 212,550
<REALIZED-GAINS-CURRENT> (66,913)
<APPREC-INCREASE-CURRENT> (312,931)
<NET-CHANGE-FROM-OPS> (167,294)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 204,818
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 649
<NUMBER-OF-SHARES-SOLD> 1,591,466
<NUMBER-OF-SHARES-REDEEMED> 329,514
<SHARES-REINVESTED> 18,936
<NET-CHANGE-IN-ASSETS> 12,021,305
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148,787
<AVERAGE-NET-ASSETS> 8,621,119
<PER-SHARE-NAV-BEGIN> 10.39
<PER-SHARE-NII> 0.286
<PER-SHARE-GAIN-APPREC> (0.861)
<PER-SHARE-DIVIDEND> (0.274)
<PER-SHARE-DISTRIBUTIONS> (0.001)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.54
<EXPENSE-RATIO> 2.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000102822
<NAME> EATON VANCE INVESTORS TRUST
<SERIES>
<NUMBER> 1
<NAME> EV TRADITIONAL INVESTORS FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 200,708,153
<RECEIVABLES> 14,571
<ASSETS-OTHER> 16,089
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 200,738,813
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 319,859
<TOTAL-LIABILITIES> 319,859
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 174,660,208
<SHARES-COMMON-STOCK> 29,291,350
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 263,835
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,491,551
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 24,003,360
<NET-ASSETS> 200,418,954
<DIVIDEND-INCOME> 4,181,063
<INTEREST-INCOME> 6,199,563
<OTHER-INCOME> (1,472,705)
<EXPENSES-NET> 437,423
<NET-INVESTMENT-INCOME> 8,470,498
<REALIZED-GAINS-CURRENT> 1,556,290
<APPREC-INCREASE-CURRENT> (20,258,131)
<NET-CHANGE-FROM-OPS> (10,231,343)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,249,107
<DISTRIBUTIONS-OF-GAINS> 4,372,413
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,384,961
<NUMBER-OF-SHARES-REDEEMED> 3,061,441
<SHARES-REINVESTED> 1,050,557
<NET-CHANGE-IN-ASSETS> (26,983,299)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 437,423
<AVERAGE-NET-ASSETS> 437,423
<PER-SHARE-NAV-BEGIN> 7.60
<PER-SHARE-NII> 0.283
<PER-SHARE-GAIN-APPREC> (0.623)
<PER-SHARE-DIVIDEND> (0.275)
<PER-SHARE-DISTRIBUTIONS> (0.145)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.84
<EXPENSE-RATIO> 0.91
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000912749
<NAME> INVESTORS PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-END> JAN-31-1995
<INVESTMENTS-AT-COST> 189,522,806
<INVESTMENTS-AT-VALUE> 213,193,350
<RECEIVABLES> 5,535,266
<ASSETS-OTHER> 11,899
<OTHER-ITEMS-ASSETS> 343
<TOTAL-ASSETS> 218,740,858
<PAYABLE-FOR-SECURITIES> 1,575,205
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,158
<TOTAL-LIABILITIES> 1,583,363
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 193,486,951
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 23,670,544
<NET-ASSETS> 217,157,495
<DIVIDEND-INCOME> 4,385,712
<INTEREST-INCOME> 6,511,359
<OTHER-INCOME> 0
<EXPENSES-NET> 1,545,125
<NET-INVESTMENT-INCOME> 9,351,946
<REALIZED-GAINS-CURRENT> 1,467,119
<APPREC-INCREASE-CURRENT> (20,681,070)
<NET-CHANGE-FROM-OPS> (9,862,005)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,176,334)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,375,751
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,545,125
<AVERAGE-NET-ASSETS> 220,036,185
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000031273
<NAME> EATON VANCE SECURITIES TRUST
<SERIES>
<NUMBER> 2
<NAME> EV CLASSIC STOCK FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 144,544
<RECEIVABLES> 3,165
<ASSETS-OTHER> 36,777
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 184,486
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38,849
<TOTAL-LIABILITIES> 38,849
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 140,845
<SHARES-COMMON-STOCK> 14,749
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 84
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,708
<NET-ASSETS> 145,637
<DIVIDEND-INCOME> 179
<INTEREST-INCOME> 37
<OTHER-INCOME> (53)
<EXPENSES-NET> 3,165
<NET-INVESTMENT-INCOME> 84
<REALIZED-GAINS-CURRENT> 15
<APPREC-INCREASE-CURRENT> 4,708
<NET-CHANGE-FROM-OPS> 140,820
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,749
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 145,627
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,244
<AVERAGE-NET-ASSETS> 52,084
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (0.13)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.87
<EXPENSE-RATIO> 1.59
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000031273
<NAME> EATON VANCE SECURITIES TRUST
<SERIES>
<NUMBER> 3
<NAME> EV MARATHON STOCK FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 1,050,359
<RECEIVABLES> 12,650
<ASSETS-OTHER> 35,118
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,098,127
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,317
<TOTAL-LIABILITIES> 32,317
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,092,804
<SHARES-COMMON-STOCK> 110,932
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 111
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (10,147)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (16,688)
<NET-ASSETS> 1,065,810
<DIVIDEND-INCOME> 6,605
<INTEREST-INCOME> 930
<OTHER-INCOME> (1,768)
<EXPENSES-NET> 6,211
<NET-INVESTMENT-INCOME> (444)
<REALIZED-GAINS-CURRENT> (12,295)
<APPREC-INCREASE-CURRENT> (16,688)
<NET-CHANGE-FROM-OPS> (29,427)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 111,812
<NUMBER-OF-SHARES-REDEEMED> 880
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,065,800
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,580
<AVERAGE-NET-ASSETS> 654,092
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> (0.39)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.60
<EXPENSE-RATIO> 3.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000031273
<NAME> EATON VANCE SECURITIES TRUST
<SERIES>
<NUMBER> 1
<NAME> EV TRADITIONAL STOCK FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 84,324,132
<RECEIVABLES> 148,569
<ASSETS-OTHER> 10,542
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84,483,243
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 184,498
<TOTAL-LIABILITIES> 84,298,745
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77,935,698
<SHARES-COMMON-STOCK> 7,731,141
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 27,508
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,335,539
<NET-ASSETS> 84,298,745
<DIVIDEND-INCOME> 2,617,289
<INTEREST-INCOME> 230,158
<OTHER-INCOME> (267,477)
<EXPENSES-NET> 644,222
<NET-INVESTMENT-INCOME> 1,935,748
<REALIZED-GAINS-CURRENT> 6,033,580
<APPREC-INCREASE-CURRENT> (11,860,323)
<NET-CHANGE-FROM-OPS> (3,890,995)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,865,334
<DISTRIBUTIONS-OF-GAINS> 6,033,580
<DISTRIBUTIONS-OTHER> 68,585
<NUMBER-OF-SHARES-SOLD> 446,055
<NUMBER-OF-SHARES-REDEEMED> 1,045,062
<SHARES-REINVESTED> 521,171
<NET-CHANGE-IN-ASSETS> (13,213,859)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 350,884
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 644,222
<AVERAGE-NET-ASSETS> 92,646,742
<PER-SHARE-NAV-BEGIN> 12.49
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> (0.765)
<PER-SHARE-DIVIDEND> (0.250)
<PER-SHARE-DISTRIBUTIONS> (0.765)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.90
<EXPENSE-RATIO> 0.98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000925460
<NAME> STOCK PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 78,979,782
<INVESTMENTS-AT-VALUE> 85,303,341
<RECEIVABLES> 247,205
<ASSETS-OTHER> 14,967
<OTHER-ITEMS-ASSETS> 285
<TOTAL-ASSETS> 85,565,798
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,763
<TOTAL-LIABILITIES> 46,763
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79,195,476
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,323,559
<NET-ASSETS> 85,519,035
<DIVIDEND-INCOME> 1,049,185
<INTEREST-INCOME> 128,279
<OTHER-INCOME> 0
<EXPENSES-NET> 269,298
<NET-INVESTMENT-INCOME> 908,166
<REALIZED-GAINS-CURRENT> (2,035,741)
<APPREC-INCREASE-CURRENT> (1,601,217)
<NET-CHANGE-FROM-OPS> (2,728,792)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (5,832,543)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 230,928
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 269,298
<AVERAGE-NET-ASSETS> 93,040,671
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000355758
<NAME> EATON VANCE TOTAL RETURN TRUST
<SERIES>
<NUMBER> 2
<NAME> EV CLASSIC TOTAL RETURN FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 5,513,397
<RECEIVABLES> 61,898
<ASSETS-OTHER> 35,595
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,610,890
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,376
<TOTAL-LIABILITIES> 22,376
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,165,520
<SHARES-COMMON-STOCK> 667,204
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 781
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (400,641)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (177,146)
<NET-ASSETS> 5,588,514
<DIVIDEND-INCOME> 287,658
<INTEREST-INCOME> 12,384
<OTHER-INCOME> (42,270)
<EXPENSES-NET> 91,334
<NET-INVESTMENT-INCOME> 166,438
<REALIZED-GAINS-CURRENT> (603,258)
<APPREC-INCREASE-CURRENT> (214,075)
<NET-CHANGE-FROM-OPS> (650,895)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 160,568
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 38,551
<NUMBER-OF-SHARES-SOLD> 418,427
<NUMBER-OF-SHARES-REDEEMED> 116,708
<SHARES-REINVESTED> 20,529
<NET-CHANGE-IN-ASSETS> 2,127,219
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 143,118
<AVERAGE-NET-ASSETS> 5,014,214
<PER-SHARE-NAV-BEGIN> 10.03
<PER-SHARE-NII> 0.317
<PER-SHARE-GAIN-APPREC> (1.608)
<PER-SHARE-DIVIDEND> (0.301)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (0.058)
<PER-SHARE-NAV-END> 8.38
<EXPENSE-RATIO> 2.66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000355758
<NAME> EATON VANCE TOTAL RETURN TRUST
<SERIES>
<NUMBER> 3
<NAME> EV MARATHON TOTAL RETURN FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 26,128,193
<RECEIVABLES> 195,717
<ASSETS-OTHER> 36,595
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,360,505
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 149,617
<TOTAL-LIABILITIES> 149,617
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28,689,291
<SHARES-COMMON-STOCK> 3,158,766
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 3,607
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,761,166)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (720,844)
<NET-ASSETS> 26,210,888
<DIVIDEND-INCOME> 1,287,862
<INTEREST-INCOME> 54,717
<OTHER-INCOME> (188,969)
<EXPENSES-NET> 272,784
<NET-INVESTMENT-INCOME> 880,826
<REALIZED-GAINS-CURRENT> (2,632,623)
<APPREC-INCREASE-CURRENT> (823,963)
<NET-CHANGE-FROM-OPS> (2,575,760)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 866,139
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 131,190
<NUMBER-OF-SHARES-SOLD> 2,631,297
<NUMBER-OF-SHARES-REDEEMED> 723,105
<SHARES-REINVESTED> 90,751
<NET-CHANGE-IN-ASSETS> 14,691,698
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 272,784
<AVERAGE-NET-ASSETS> 22,293,318
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> 0.364
<PER-SHARE-GAIN-APPREC> (1.599)
<PER-SHARE-DIVIDEND> (0.356)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (0.042)
<PER-SHARE-NAV-END> 8.30
<EXPENSE-RATIO> 2.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000355758
<NAME> EATON VANCE TOTAL RETURN TRUST
<SERIES>
<NUMBER> 1
<NAME> EV TRADITIONAL TOTAL RETURN FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 446,300,824
<RECEIVABLES> 310,439
<ASSETS-OTHER> 25,236
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 446,636,499
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,503,129
<TOTAL-LIABILITIES> 1,503,129
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 391,184,213
<SHARES-COMMON-STOCK> 58,322,677
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 53,912,387
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (13,561,327)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,598,097
<NET-ASSETS> 445,133,370
<DIVIDEND-INCOME> 30,142,266
<INTEREST-INCOME> 1,226,212
<OTHER-INCOME> (4,411,175)
<EXPENSES-NET> 1,685,105
<NET-INVESTMENT-INCOME> 25,272,198
<REALIZED-GAINS-CURRENT> (11,690,881)
<APPREC-INCREASE-CURRENT> (89,379,420)
<NET-CHANGE-FROM-OPS> (75,798,103)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 24,976,010
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,279,972
<NUMBER-OF-SHARES-REDEEMED> 16,175,890
<SHARES-REINVESTED> 2,334,236
<NET-CHANGE-IN-ASSETS> (184,380,167)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,685,105
<AVERAGE-NET-ASSETS> 515,742,664
<PER-SHARE-NAV-BEGIN> 9.14
<PER-SHARE-NII> 0.546
<PER-SHARE-GAIN-APPREC> (1.668)
<PER-SHARE-DIVIDEND> (0.388)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.63
<EXPENSE-RATIO> 1.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000912751
<NAME> TOTAL RETURN PORTFOLIO
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 482,187,111
<INVESTMENTS-AT-VALUE> 497,964,811
<RECEIVABLES> 12,389,342
<ASSETS-OTHER> 16,027
<OTHER-ITEMS-ASSETS> 2,597
<TOTAL-ASSETS> 510,372,777
<PAYABLE-FOR-SECURITIES> 4,775,774
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30,111
<TOTAL-LIABILITIES> 4,805,885
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 491,941,692
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,625,200
<NET-ASSETS> 505,566,892
<DIVIDEND-INCOME> 32,158,717
<INTEREST-INCOME> 1,330,065
<OTHER-INCOME> 0
<EXPENSES-NET> 4,702,796
<NET-INVESTMENT-INCOME> 28,785,986
<REALIZED-GAINS-CURRENT> (15,151,998)
<APPREC-INCREASE-CURRENT> (89,492,365)
<NET-CHANGE-FROM-OPS> (75,858,377)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (75,858,377)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,106,857
<INTEREST-EXPENSE> 143,450
<GROSS-EXPENSE> 4,702,796
<AVERAGE-NET-ASSETS> 551,436,458
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
