As filed with the Securities and Exchange Commission on December 31, 1996
1933 Act File No. 2-27962
1940 Act File No. 811-1545
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 45 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 32 [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)
ALAN R. DYNNER
24 Federal Street, Boston, Massachusetts 02110
(Name and Address of Agent for Service)
It is proposed that this filing will become effective pursuant to rule 485
(check appropriate box)
[ X ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2).
If appropriate, check the following box:
[ ] this post effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
February 27, 1996 filed its "Notice" as required by that Rule for the fiscal
year ended December 31, 1995.
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<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 Prospectus of:
EV Traditional Emerging Growth Fund
Part B -- The Statement of Additional Information of:
EV Traditional Emerging Growth 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 Traditional Emerging Growth Fund
Cross Reference Sheet
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Items Required by Form N-14
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PART A.
Item No. Item Caption Prospectus Caption
- -------- ------------ ------------------
1.............. Cover Page Cover Page
2.............. Synopsis Shareholder and Fund Expenses
3.............. Condensed Financial Not Applicable
Information
4.............. General Description of The Fund's Investment Objective;
Registrant Investment Policies and Risks;
Organization of the Fund and
the Portfolio
5.............. Management of the Fund Management of the Fund and the
Portfolio
5A............ Management's Discussion Not Applicable
of Fund Performance
6.............. Capital Stock and Other Organization of the Fund and the
Securities Portfolio; Reports to
Shareholders; The Lifetime
Investing Account/Distribution
Options; Distributions and Taxes
7.............. Purchase of Securities Valuing Fund Shares; How to Buy
Fund Shares; 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
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 Investment
Objectives and
Policies
13.............. Investment Objectives Additional Information about
Policies Investment Policies; Investment
Restrictions
14.............. Management of the Fund Trustees and Officers
15.............. Control Persons and Control Persons and Principal
Principal Holders of Holders of Securities
Securities
16.............. Investment Advisory Investment Adviser and
and Other Services Administrator; Service Plan
Custodian; Independent
Accountants
17.............. Brokerage Allocation Portfolio Security Transactions
and Other Practices Other Information
18.............. Capital Stock and Other
Securities
19.............. Purchase, Redemption and Determination of Net Asst Value;
Pricing of Securities Principal Underwriter; Services
Being Offered for Accumulation; Service for
Withdrawal; Service Plan
20............... Tax Status Taxes
21............... Underwriters Principal Underwriter
22............... Calculation of Investment Performance
Performance
23............... Financial Statements Not Applicable
<PAGE>
Part A
Information Required in a Prospectus
EV TRADITIONAL EMERGING GROWTH FUND
EV TRADITIONAL EMERGING GROWTH FUND (THE "FUND") IS A MUTUAL FUND
SEEKING LONG-TERM CAPITAL APPRECIATION BY INVESTING IN A DIVERSIFIED PORTFOLIO
OF EMERGING GROWTH COMPANIES THAT ARE BELIEVED TO HAVE SUPERIOR LONG-TERM
EARNINGS GROWTH PROSPECTS. THE FUND IS A SEPARATE SERIES OF EATON VANCE SPECIAL
INVESTMENT 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 in the Fund. Please retain this document for future
reference. A Statement of Additional Information for the Fund dated January 1,
1997, as supplemented from time to time, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The 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 Fund's
investment adviser is Eaton Vance Management (the "Investment Adviser") which is
located at the same address. Eaton Vance Management also acts as the
administrator to the Fund (the "Administrator").
-------------------------------------------------------
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.
-------------------------------------------------------
Page Page
---- ----
Shareholder and Fund Expenses............ 2 Reports to Shareholders...........13
The Fund's Investment Objective.......... 3 The Lifetime Investing Account/
Investment Policies and Risks............ 3 Distribution Options............14
Organization of the Fund ................ 6 The Eaton Vance Exchange
Management of the Fund .................. 7 Privilege.......................15
Service Plan............................. 8 Eaton Vance Shareholder Services..16
Valuing Fund Shares...................... 8 Distributions and Taxes...........18
How to Buy Fund Shares................... 9 Performance Information...........19
How to Redeem Fund Shares................12
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PROSPECTUS DATED JANUARY 1, 1997
<PAGE>
SHAREHOLDER AND FUND EXPENSES
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SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charges Imposed on Purchases (as a percentage
of offering price) 4.75%
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average daily
net assets)
Investment Adviser Fee 0.75%
Other Expenses 0.40%
----
Total Operating Expenses 1.15%
====
EXAMPLE
An investor would pay the following maximum initial sales 1 YEAR 3 YEARS
charge and expenses on a $1,000 investment, assuming
(a) 5% annual return and (b) redemption at the end of
each period: $59 $82
Notes:
The table and Example summarize the aggregate expenses of the Fund are
designed to help investors understand the costs and expenses they will bear
directly or indirectly by investing in the Fund. Other Expenses are estimated
because the Fund was only recently organized.
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
return will vary. For further information regarding the expenses of the Fund
see "Management of the Fund" and "Service Plan."
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 12
months of purchase. See "How to Buy Fund Shares" and "How to Redeem Fund
Shares."
For shares sold by Authorized Firms and remaining outstanding for at least
one year, the Fund will pay service fees not exceeding .25% per annum of its
average daily net assets. The Fund expects to begin making service fee
payments during the quarter ending March 31, 1998. After such date, Other
Expenses will be higher. See "Service Plan."
- 2 -
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
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EV TRADITIONAL EMERGING GROWTH FUND (THE "FUND") IS A DIVERSIFIED SERIES OF
EATON VANCE SPECIAL INVESTMENT TRUST (THE "TRUST"). THE FUND'S INVESTMENT
OBJECTIVE IS TO SEEK LONG-TERM CAPITAL APPRECIATION. THE FUND INTENDS TO ACHIEVE
ITS OBJECTIVE BY INVESTING IN A DIVERSIFIED PORTFOLIO OF EMERGING GROWTH
COMPANIES THAT ARE BELIEVED TO HAVE SUPERIOR LONG-TERM EARNINGS GROWTH
PROSPECTS.
The Fund is designed for long-term investors. The Fund is not intended
to be a complete investment program. Prospective investors should take into
account their objectives and other investments when considering the purchase of
Fund shares. The Fund cannot assure achievement of its investment objective. The
Fund's investment objective is fundamental and may not be changed without
obtaining the approval of the Fund's shareholders.
INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------
The Fund invests in a broadly diversified selection of publicly-traded equity
securities of emerging growth companies. In the view of the Adviser, "emerging
growth companies" are companies that are expected to demonstrate earnings growth
rates and profit margins that are substantially in excess of the average of all
publicly-traded companies in the U.S. It is expected that most emerging growth
companies invested in by the Fund will have annual revenues of between $50
million and $2 billion, but the Fund may also invest in larger and smaller
companies identified as having characteristics of emerging growth. The Adviser
believes that investing in emerging growth companies offers significant
opportunities for long-term capital appreciation, particularly if the Fund can
invest in such companies before their potential is broadly recognized by
investors.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST AT LEAST 65% OF
ITS TOTAL ASSETS IN EQUITY SECURITIES OF EMERGING GROWTH COMPANIES. For this
purpose, equity securities include common stocks and securities convertible into
common stocks. In selecting companies for investment, the Investment Adviser may
consider overall growth prospects, financial condition, competitive position,
technology, marketing expertise, profit margins, return on investment, capital
resources, management and other factors. The Fund may invest up to 35% of its
assets in preferred stocks, warrants, money market instruments (to meet
anticipated redemption requests or while investment of cash is pending)and other
securities and instruments described in this prospectus.
For temporary defensive purposes, such as during abnormal market or
economic conditions, the Fund may also invest without limitation in various
money market instruments and high grade debt obligations. The Fund may also
temporarily borrow up to 5% of the value of its total assets to satisfy
redemption requests or settle securities transactions.
AN INVESTMENT IN THE FUND ENTAILS THE RISK THAT THE PRINCIPAL VALUE OF
FUND SHARES MAY NOT INCREASE OR MAY DECLINE. The Fund's investments will include
investments in smaller, less seasoned companies for which there is less publicly
available information than larger, more established companies. The securities of
these companies, which may include legally restricted securities, are generally
subject to greater price fluctuations, limited liquidity, higher transaction
costs and higher investment risk. These companies may have limited product
lines, markets or financial resources, or they may be dependent on a limited
management group. Investments in smaller companies may involve a higher degree
of business and financial risk that can result in substantial losses.
-3-
<PAGE>
The Fund may invest up to 20% of its assets in securities issued by
foreign companies (including American Depository Receipts and Global Depository
Receipts). Investing in securities issued by foreign companies involves
considerations and possible risks not typically associated with investing in
securities issued by U.S. companies. The value of foreign investments to U.S.
investors may be adversely affected by changes in currency exchange rates.
Foreign brokerage commissions, custody fees and other costs of investing are
generally higher than in the United States, and foreign securities markets may
be less liquid, more volatile and less subject to government supervision than in
the United States. Investments in foreign securities could be adversely affected
by other factors not present in the United States, including expropriation,
confiscatory taxation, lack of uniform accounting and auditing standards, and
potential difficulties in enforcing contractual obligations.
RESTRICTED SECURITIES. Securities that are not freely tradeable or which are
subject to restrictions on sale under the Securities Act of 1933 are considered
restricted. Such securities may be illiquid and may be difficult to properly
value. The Fund's holdings of illiquid securities may not exceed 15% of its net
assets. Illiquid securities include securities legally restricted as to resale
such as commercial paper issued pursuant to Section 4(2) of the Securities Act
of 1933 and securities eligible for resale pursuant to Rule 144A thereunder.
Section 4(2) and Rule 144A securities may, however, be treated as liquid by
the Investment Adviser pursuant to procedures adopted by the Trustees, which
require consideration of factors such as trading activity, availability of
market quotations and number of dealers willing to purchase the security. Such
securities may increase the level of fund illiquidity to the extent qualified
institutional buyers become uninterested in purchasing such securities.
DERIVATIVE INSTRUMENTS. The Fund may purchase or sell derivative instruments to
hedge against securities price declines and currency movements. The Fund may
engage in transactions in derivative instruments (which derive their value by
reference to other securities, indices, instruments, or currencies) in the U.S.
and abroad. Such transactions may include the purchase and sale of stock index
futures contracts and options on stock index futures; the purchase of put
options and the sale of call options on securities (including index options) and
options on foreign currency; equity and currency swaps; and the purchase and
sale of forward currency exchange contracts and currency futures. The Fund'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; default by the counterparty; imperfect correlation between
a position and the desired hedge; tax constraints on closing out positions; and
portfolio management constraints on securities subject to such transactions. The
Fund may use transactions in derivative instruments as a substitute for the
purchase and sale of securities. Derivative transactions may be more
advantageous in a given circumstance than transactions involving securities due
to more favorable current tax treatment, lower transaction costs, or greater
liquidity. While many derivative instruments have built-in leveraging
characteristics, the Fund will not use them to leverage its net assets.
The purchase and sale of derivative instruments is a highly specialized
activity that can expose the Fund to a significant risk of loss. The built-in
leveraging inherent to many derivative instruments can result in losses that
substantially exceed the initial amount paid or received. Equity swaps and
- 4 -
<PAGE>
over-the-counter options are private contracts in which there is a risk of loss
in the event of a default on an obligation to pay by a counterparty. Derivative
instruments may be difficult to value, may be illiquid, and may be subject to
wide swings in valuation caused by changes in the value of an underlying
security, index, instrument, or currency. There can be no assurance that the use
of derivative instruments will be advantageous to the Fund.
The Fund will only enter into equity swaps and over-the-counter options
contracts with counterparties whose credit quality or claims paying ability are
considered to be investment grade by the Investment Adviser. In addition, at the
time of entering into a transaction, the Fund's credit exposure to any one
counterparty will be limited to 5% or less of the net assets of the Fund. Some
of the Fund's investment in equity swaps and over-the-counter options may be
treated as illiquid assets. All futures contracts entered into by the Fund
will be traded on exchanges or boards of trade that are licensed and regulated
by the Commodities Futures Trading Commission and must be executed through a
futures commission merchant or brokerage firm that is a member of the relevant
exchange.
Currency swaps involve the exchange of rights to make or receive
payments in specified currencies. Since currency swaps are individually
negotiated, the Fund expects to achieve an acceptable degree of correlation
between its portfolio investments and its currency swap positions. Currency
swaps usually involve the delivery of the entire principal value of one
designated currency in exchange for the other designated currency. Therefore,
the entire principal value of a currency swap is subject to the risk that the
other party to the swap will default on its contractual delivery obligations. If
the Investment Adviser is incorrect in its forecasts of market values and
currency exchange rates, the Fund's performance will be adversely affected.
SHORT SALES AGAINST-THE-BOX. The Fund may sell securities short if it owns at
least an equal amount of the security sold short or another security convertible
or exchangeable for an equal amount of the security sold short without payment
of further compensation (a short sale against-the-box). Under current tax law,
short sales against-the-box enable the Fund to hedge its exposure to securities
that it holds without selling the securities and recognizing gains. A short sale
against-the- box requires that the short seller absorb certain costs so long as
the position is open. In a short sale against-the-box, the short seller is
exposed to the risk of being forced to deliver appreciated stock to close the
position if the borrowed stock is called in, causing a taxable gain to be
recognized. The Fund expects normally to close its short sales against-the-box
by delivering newly-acquired stock. No more than 20% of the Fund's assets will
be subject to short sales at any one time.
LENDING OF PORTFOLIO SECURITIES. The Fund may seek to earn income by lending
portfolio securities to broker-dealers or other institutional borrowers. 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 will be made only to organizations deemed by the
Investment Adviser to be sufficiently creditworthy and when, in the judgment of
the Investment Adviser, the consideration which can be earned from securities
loans of this type, net of administrative expenses and any finders fees,
justifies the attendant risk.
- 5 -
<PAGE>
CERTAIN INVESTMENT POLICIES. The Fund has adopted certain fundamental investment
restrictions and policies which are enumerated in detail in the Statement of
Additional Information and which may not be changed unless authorized by a
shareholder vote. Among the fundamental restrictions, the Fund may not (a)
borrow money, except as permitted by the Investment Company Act of 1940 (the
"1940 Act"), (b) invest 25% or more of its assets in securities of companies in
any one industry, or (c) with respect to 75% of its total assets, invest more
than 5% of total assets (taken at current value) in the securities of any one
issuer, or invest 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. Except with respect to the borrowing restriction, investment
restrictions are considered at the time of acquisition of assets; the sale of
portfolio assets is not required in the event of a subsequent change in
circumstances.
Except for the investment objective and the fundamental investment
restrictions and policies specifically identified above and enumerated in the
Statement of Additional Information, the policies of the Fund are not
fundamental policies and accordingly may be changed by the Trustees of the Trust
without obtaining the approval of the shareholders of the Fund.
ORGANIZATION OF THE FUND
- --------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE SPECIAL INVESTMENT TRUST (THE
"TRUST"), A BUSINESS TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A
DECLARATION OF TRUST DATED MARCH 27, 1989. 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 (such as the Fund). 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." There are no annual meetings of shareholders,
but special meetings may be held as required by law to elect Trustees and
consider certain other matters. 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. As of the date of
this Prospectus, the Adviser owned 100% of the Fund's shares, but over time is
not expected to retain control.
The Fund's investment policies include a fundamental investment
provision allowing the Fund to invest its assets in an open-end management
investment company having substantially the same investment policies and
restrictions as the Fund. This investment company would be advised by the
Investment Adviser (or an affiliate) and pay an advisory fee no higher than the
advisory fee paid by the Fund. The Board of Trustees may implement the new
investment policy without shareholder approval at any time. This structure is
commonly referred to as "master-feeder."
- 6 -
<PAGE>
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE TRUST ENGAGES EATON VANCE MANAGEMENT ("EATON VANCE") AS THE FUND'S
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
Trust, Eaton Vance manages the Fund's investments and affairs. Eaton Vance also
furnishes for the use of the Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund.
Under the investment advisory agreement with the Trust on behalf of the Fund,
Eaton Vance receives a monthly advisory fee of .0625% (equivalent to .75%
annually) of the average daily net assets of the Fund up to $500 million; the
fee will be reduced at various asset levels over $500 million.
EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
OVER $16 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton Vance Corp.,
a publicly-held holding company which through its subsidiaries and affiliates
engages primarily in investment management, administration and marketing
activities. The Principal Underwriter is a wholly-owned subsidiary of Eaton
Vance.
Edward E. Smiley, Jr. has acted as the portfolio manager of the Fund
since it commenced operations. He has been a Vice President of Eaton Vance
and BMR since 1996. Prior to joining Eaton Vance, he was a Senior Product
Manager, Equity Management for TradeStreet Investment Associates, Inc., a
wholly-owned subsidiary of Nations Bank.
Mr.Smiley was a portfolio manager of a mutual fund with his prior employer.
The total return of that fund for the one-year period ended September 19, 1996
and for the entire period during which Mr. Smiley managed the fund was as
follows:
One year 18.60%
December 10, 1992 (inception of fund)
through September 19, 1996 15.31%(average annual)
The foregoing information is provided to illustrate past performance of Mr.
Smiley in managing a portfolio similar to the Fund. The foregoing information is
considered relevant because the other mutual fund was managed by Mr. Smiley
using substantially the same investment objective, policies and strategies as
those of the Fund. Of course, past performance is not indicative of future
performance and investment returns will fluctuate reflecting market conditions
and changes in company-specific fundamentals of portfolio securities.
Eaton Vance places the portfolio securities transactions of the Fund
with many broker-dealer firms and uses its best efforts to obtain execution of
such transactions at prices which are advantageous to the Fund and at reasonably
competitive commission rates. Subject to the foregoing, Eaton Vance may consider
sales of shares of the Fund or of other investment companies sponsored by Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions. The Fund and Eaton Vance have adopted Codes of Ethics relating to
personal securities transactions. The Codes permit Eaton Vance personnel to
invest in securities (including securities that may be purchased or held by the
Fund) for their own accounts, subject to certain pre-clearance, reporting and
other restrictions and procedures contained in such Codes.
The Trust has retained the services of Eaton Vance to act as
Administrator of the Fund. As Administrator, Eaton Vance 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 Fund will be responsible for all of its respective costs and
expenses not expressly stated to be payable by Eaton Vance under the investment
advisory agreement or the administration agreement, or by the Principal
Underwriter under the distribution agreement. Such costs and expenses to be
borne by the Fund 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 certificates; membership dues in investment company
- 7 -
<PAGE>
organizations; brokerage commissions and fees; fees and expenses of
registering under the securities laws; expenses of reports 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 Eaton Vance; and investment advisory fees, and, if
any, administrative services fees. The Fund will also bear expenses incurred in
connection with any litigation in which the Fund is a party and any legal
obligation to indemnify its officers and Trustees with respect thereto, to the
extent not covered by insurance.
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 service fee
requirements of the sales charge rule of the National Association of Securities
Dealers, Inc. (the "NASD Rule"). 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 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. The Fund expects to begin making service
fee payments during the quarter ending March 31, 1998.
VALUING FUND SHARES
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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 Fund shares outstanding. Securities listed on
securities exchanges or in the NASDAQ National Market are valued at closing sale
prices. See "Determination of Net Asset Value" in the Statement of Additional
Information.
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.
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
- 8 -
<PAGE>
HOW TO BUY FUND SHARES
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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. An Authorized Firm may charge its customers
a fee in connection with transactions executed by that Firm. 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 and dealer commissions are:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER DISCOUNT
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ------------------ -------------- --------------- --------------
<S> <C> <C> <C>
Less than $100,000................................ 4.75% 4.99% 4.00%
$100,000 but less than $250,000................... 3.75% 3.90% 3.15%
$250,000 but less than $500,000................... 2.75% 2.83% 2.30%
$500,000 but less than $1,000,000................. 2.00% 2.04% 1.70%
$1,000,000 or more................................ 0%* 0%* See Below**
</TABLE>
* No sales charge is payable at the time of purchase on investments of $1
million or more or 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. A contingent deferred sales charge
("CDSC") of 1% will be imposed on such investments in the event of
certain redemptions within 12 months of purchase. The CDSC will be waived
on redemptions by employee retirement plans organized under the Internal
Revenue Code of 1986, as amended (the "Code") relating to
distributions to plan participants or beneficiaries upon retirement,
disability or death.
** A commission on sales of $1 million or more will be paid as follows: 1.00%
on amounts of $1 million or more but less than $3 million, plus 0.50% on
amounts from $3 million but less than $5 million, plus 0.25% on amounts
from $5 million or more. Purchases of $1 million or more will be aggregated
over a 12-month period for purposes of determining the commission to be
paid.
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 Fund 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
sell or 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
- 9 -
<PAGE>
follows: First Data Investor Services Group, P.O. Box 5123 Westborough, MA
01581-5123. 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; to clients and current and
retired officers and employees of Eaton Vance, its affiliates and other
investment advisers of Eaton Vance sponsored funds; to registered
representatives and employees of Authorized Firms; to bank employees who refer
customers to registered representatives of Authorized Firms; to officers
and employees of IBT and the Transfer Agent; 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 Eaton Vance provides multiple
investment services, such as management, brokerage and custody, and (3) to
investment advisors, financial planners or other intermediaries who place trades
for their own accounts or the accounts of their clients and who charge a
management, consulting or other fee for their services; clients of such
investment advisors, financial planners or other intermediaries who place trades
for their own accounts if the accounts are linked to the master account of such
investment advisor, financial planner or other intermediary on the books and
records of the broker or agent; and retirement and deferred compensation plans
and trusts used to fund those plans, including, but not limited to, those
defined in Section 401(a), 403(b) or 457 of the Code ("Eligible Plans") and
"rabbi trusts." The Principal Underwriter may pay commissions to Authorized
Firms who initiate and are responsible for purchases of shares of the Fund by
eligible retirement plans of up to 1.00% of the amount invested in such shares.
No sales charge is payable at the time of purchase 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. A CDSC of 0.50%
will be imposed on such investments in the event of certain redemptions within
12 months of purchase and the Authorized Firm will be paid a commission on such
sales of 0.50% of the amount invested.
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 determined above. The
minimum value of securities (or securities and cash) accepted for deposit is
$5,000. Securities accepted will be sold on the day of their receipt 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.
- 10 -
<PAGE>
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 Emerging Growth Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Traditional Emerging Growth 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. 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.
STATEMENT OF INTENTION AND ESCROW AGREEMENT. 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 the Principal Underwriter
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 the Principal Underwriter 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.
- 11 -
<PAGE>
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 the 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 the Principal Underwriter. 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 investor's account.
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
HOW TO REDEEM FUND SHARES
- --------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES IN ONE OF THREE WAYS - BY MAIL, BY
TELEPHONE OR THROUGH AN AUTHORIZED FIRM. The redemption price will be based on
the net asset value per Fund share next computed after a redemption request is
received in the proper form as described below.
REDEMPTION BY MAIL: Shares may be redeemed by delivering to the Transfer Agent,
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123,
during its business hours a written request for redemption in good order,
plus any share certificates with executed stock powers. 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
Transfer Agent. 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.
REDEMPTION BY TELEPHONE: Shares may be redeemed by telephone provided the
investor has not disclaimed in writing the use of the privilege. Such
redemptions can be effected by calling the Transfer Agent at 800-262-1122,
Monday through Friday, 9:00 a.m. to 4:00 p.m. (Eastern Standard Time). The
proceeds of a telephone redemption may be no greater than the maximum amount
established by the Principal Underwriter (currently $50,000) and may be mailed
only to the account address of record. Shares held by corporations, trusts or
certain other entities, or subject to fiduciary arrangements, may not be
redeemed by telephone. Neither the Fund, the Principal Underwriter nor the
Transfer Agent will be responsible for the authenticity of redemption
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated by telephone are genuine have been
followed. Telephone instructions will be tape recorded. In times of drastic
economic or market changes, a telephone redemption may be difficult to
implement.
REDEMPTION THROUGH AN AUTHORIZED FIRM: 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 Principal Underwriter, as the
- 12 -
<PAGE>
Fund's agent, receives the order. It is the Authorized Firm's responsibility to
transmit promptly repurchase orders to Principal Underwriter. Throughout this
Prospectus, the word "redemption" is generally meant to include a repurchase.
Within seven days after receipt of a redemption request in good order
by the Transfer Agent, the Fund will make payment 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.
If shares were recently purchased, the proceeds of a redemption 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 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 $750. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. 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.
If shares have been purchased at net asset value with no initial sale
charge by virtue of the purchase having been in the amount of $1 million or more
and are redeemed within 12 months of purchase, a CDSC of 1% will be imposed
on such redemption. If shares have been purchased at net asset value because the
amount invested represents redemption proceeds from a mutual fund unaffiliated
with Eaton Vance (as described under "How to Buy Fund Shares") and are redeemed
within 12 months of purchase, a CDSC of 0.50% will be imposed on such
redemption. 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. 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 will be retained by the Principal Underwriter.
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 its shareholders with information necessary
for preparing federal and state income tax returns. Consistent with applicable
law, duplicate mailings of shareholder reports and certain other Fund
information to shareholders residing at the same address may be eliminated.
- 13 -
<PAGE>
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE TRANSFER AGENT
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 PERMITS A
SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50
OR MORE to the Transfer Agent.
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 4, or in writing to the Transfer Agent, First Data
Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123 (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, First Data Investor Services Group, P.O.
Box 5123, Westborough, MA 01581-5123. 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 the 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.
- 14 -
<PAGE>
"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.
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 (plus, in the case of
an exchange made within six months of the date of purchase of shares subject to
an initial sales charge, 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 shares being acquired). 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 Transfer Agent 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 Transfer Agent 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.
- 15 -
<PAGE>
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 Transfer Agent provided that
the investor has not disclaimed in writing the use of the privilege. To effect
such exchanges, call the Transfer Agent at 800-262-1122, 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
Transfer Agent 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 Emerging Growth Fund may be mailed directly to the Transfer Agent,
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123 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 "How to Buy Fund Shares --
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.
- 16 -
<PAGE>
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. The maintenance
of a withdrawal plan concurrently with purchases of additional shares would be
disadvantageous because of the sales charge included in such purchases.
REINVESTMENT PRIVILEGE: A shareholder who has redeemed shares may reinvest at
net asset value any portion or all of the 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 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 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
the shares of which are being purchased (or by such fund's transfer agent). The
privilege is also available to shareholders of the funds listed under
"The Eaton Vance Exchange Privilege" who wish to reinvest such 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. 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 certain tax-sheltered retirement plans. 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. Participant accounting
services (including trust fund reconciliation services) will be offered only
through third party record-keepers and not by the Principal Underwriter. Under
all plans, dividends and distributions will be automatically reinvested in
additional shares.
- 17 -
<PAGE>
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
DISTRIBUTIONS. The Fund makes distributions of any net investment income at
least annually (usually in December) and any net realized capital gains
(including net short-term capital gains) at least annually. Distributions from
capital gains are made after applying any available capital loss carryovers.
Shareholders may reinvest all distributions in shares of the Fund without a
sales charge at the net asset value per share as of the close of business on the
record date for the distribution.
The Fund's net investment income consists of all income accrued on the
Fund's assets, less all actual and accrued expenses of the Fund determined in
accordance with generally accepted accounting principles. The Fund's net
realized capital gains, if any, consist of the net realized capital gains (if
any) allocated to the Fund for tax purposes, after taking into account any
available capital loss carryovers.
TAXES. Distributions by the Fund which are derived from net investment income,
net short-term capital gains and certain foreign exchange gains are taxable to
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. The Fund's distributions will generally not
qualify for the dividends-received deduction for corporate shareholders.
Distributions by the Fund of 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 the shareholder.
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. The amount,
timing and character of the Fund's distributions to shareholders may be affected
by special tax rules governing its activities in options, futures and forward
foreign currency exchange transactions or certain other investments. 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 a
sales charge is reduced or eliminated in a subsequent acquisition of shares of
the Fund or of another fund pursuant to the Fund's reinvestment or exchange
privilege. 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.
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.
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.
- 18 -
<PAGE>
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.
Shareholders should consult with their tax advisors concerning the
applicability of state, local or other taxes to an investment in the Fund.
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 the average annual
percentage change in value of $1,000 invested at the maximum public offering
price (which includes the maximum sales charge) for specified periods, assuming
reinvestment of all distributions. The Fund may also publish annual and
cumulative total return figures from time to time. The Fund may use such total
return figures, together with comparisons with the Consumer Price Index, various
domestic and foreign securities indices and performance studies prepared by
independent organizations, in advertisements and in information furnished to
present or prospective shareholders.
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
lower if a sales charge were taken into account. The Fund's performance may be
compared in publications to the performance of various indices and investments
for which reliable data is available, and to averages, performance rankings, or
other information prepared by recognized mutual fund statistical services.
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 a representation of what an investment may
earn or what the Fund's total return may be in any future period. The Fund's
investment results are based on many factors, including market conditions, the
composition of the security holdings of the Fund and the operating expenses of
the Fund. Investment results also often reflect the risks associated with the
particular investment objective and policies of the Fund. Among others, these
factors should be considered when comparing the Fund's investment results to
those of other mutual funds and other investment vehicles. If the expenses
related to the operation of the Fund are allocated to Eaton Vance, the Fund's
performance will be higher.
- 19 -
<PAGE>
INVESTMENT ADVISER AND
ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc. EV TRADITIONAL EMERGING
24 Federal Street GROWTH FUND
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
TRANSFER AGENT
First Data Investor Services Group
P.O. Box 5123
Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
PROSPECTUS
JANUARY 1, 1997
EV TRADITIONAL EMERGING GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110 T -EGP
<PAGE>
Part B
Information Required in a Statement of
Additional Information
STATEMENT OF
ADDITIONAL INFORMATION
January 1, 1997
EV TRADITIONAL EMERGING GROWTH FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
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TABLE OF CONTENTS
PAGE
Additional Information about Investment Policies................... 2
Investment Restrictions............................................ 4
Trustees and Officers.............................................. 6
Control Persons and Principal Holders of Securities................ 8
Investment Adviser and Administrator............................... 8
Custodian.......................................................... 11
Services for Accumulation.......................................... 11
Service for Withdrawal............................................. 12
Determination of Net Asset Value................................... 13
Investment Performance............................................. 14
Taxes .......................................................... 15
Principal Underwriter.............................................. 17
Service Plan....................................................... 18
Portfolio Security Transactions.................................... 19
Other Information.................................................. 21
Independent Accountants............................................ 22
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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 JANUARY 1, 1997, AS SUPPLEMENTED FROM
TIME TO TIME, WHICH IS INCORPORATED BY REFERENCE. 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>
ADDITIONAL INFORMATION ABOUT INVESTMENT POLICIES
Capitalized terms used in this Statement of Additional Information
("SAI") and not otherwise defined have the meanings given to them in the Fund's
Prospectus.
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 U.S. 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 Fund, political or financial instability or
diplomatic and other developments which could affect such investments. Further,
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.
FOREIGN CURRENCY TRANSACTIONS. The value of foreign assets of the Fund as
measured in U.S. dollars may be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations. Currency
exchange rates can also be affected unpredictably by intervention by U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the U.S. or abroad. The Fund 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 swaps, forward contracts, options or futures on currency. On spot
transactions, foreign exchange dealers do not charge a fee for conversion, but
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 Fund at one rate, while offering a
lesser rate of exchange should the Fund desire to resell that currency to the
dealer.
RISKS ASSOCIATED WITH DERIVATIVE INSTRUMENTS. Entering into a derivative
instrument involves a risk that the applicable market will move against the
Fund's position and that the Fund 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 Fund. Derivative instruments may
sometimes increase or leverage the Fund's exposure to a particular market risk.
Leverage enhances the Fund's exposure to the price volatility of derivative
instruments it holds. The Fund's success in using derivative instruments to
hedge portfolio assets depends on the degree of price correlation between the
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<PAGE>
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 Fund 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 Fund from closing out positions and limiting its
losses. The staff of the Securities and Exchange Commission (the "Commission")
takes the position that purchased OTC options, and assets used as cover for
written OTC options, are subject to the Fund's 15% limit on illiquid
investments. However, with respect to options written with primary dealers in
U.S. Government securities pursuant to an agreement requiring a closing purchase
transaction at a formula price, the amount of illiquid securities may be
calculated with reference to the formula price. The Fund's ability to terminate
OTC derivative instruments may depend on the cooperation of the counterparties
to such contracts. The Fund expects to purchase and write only exchange-traded
options until such time as the Fund's management determines that the OTC options
market is sufficiently developed and the Fund 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 (the "Code"), limit the extent to
which the Fund may purchase and sell derivative instruments. The Fund 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, swaps, futures contracts and options (other than options that the
Fund has purchased) expose the Fund to an obligation to another party. The Fund
will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, currencies, swaps or other
options or futures contracts or forward contracts, or (2) cash and liquid
securities (such as readily marketable common stock and money market
instruments) with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. (Only the net obligation of a
swap will be covered.) Assets used as cover or held in a segregated account
maintained by the Fund's custodian cannot be sold while the position in the
corresponding instrument is open, unless they are replaced with other
appropriate assets. As a result, the commitment of a large portion of the Fund's
assets to cover or segregated accounts could impede portfolio management or the
Fund's ability to meet redemption requests or other current obligations.
LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS. The Fund 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 Fund to risks, including credit and liquidity risks, that are materially
greater than the risks associated with trading on CFTC-regulated exchanges.
- 3 -
<PAGE>
In order to hedge its current or anticipated portfolio positions, the
Fund may use futures contracts on securities held in its portfolio or on
securities with characteristics similar to those of the securities held by the
Fund. If, in the opinion of the Investment Adviser, there is a sufficient degree
of correlation between price trends for the securities held by the Fund and
futures contracts based on other financial instruments, securities indices or
other indices, the Fund may also enter into such futures contracts as part of
its hedging strategy.
LENDING PORTFOLIO SECURITIES. The Fund 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 Commission, such
loans may be made to member firms of the 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 Fund 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
Fund 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 Fund would not, however, have the right to
vote any securities having voting rights during the existence of the loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit
there are risks of delay in recovery or even loss of rights in the collateral
should the borrower 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. Securities lending
involves administration expenses, including finders' fees. 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 Fund's total assets.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund 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 SAI 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, invest more than 5% of its
total assets (taken at current 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;
- 4 -
<PAGE>
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(3) Purchase any 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) Underwrite securities of other issuers;
(5) Invest more than 25% of its assets in any particular industry,
but, if deemed appropriate for the Fund's objective, up to 25% of the value of
its assets may be invested in securities of companies in any one industry
(although more than 25% may be invested in securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities);
(6) 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);
(7) Invest in commodities or commodity 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 investable assets in an open-end management investment
company with substantially the same investment objective, policies and
restrictions as the Fund.
The Fund has adopted the following investment policies which may be
changed without shareholder approval. As a matter of nonfundamental policy, the
Fund will not: (a) invest more than 15% of net assets in investments which are
not readily marketable, including restricted securities and repurchase
agreements with a maturity longer 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 and commercial paper
issued pursuant to Section 4(2) of said Act that the Board of Trustees of the
Trust, or its delegate, determines to be liquid; or (b) sell or contract to sell
a 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.
Whenever an investment policy or investment restriction set forth in
the Prospectus or this SAI states a maximum percentage of assets that may be
invested in any security or other asset, such percentage limitation shall be
determined immediately after and as a result of the Fund's acquisition of such
security or asset. Accordingly, any later increase or decrease resulting from a
change in values, assets or other circumstances, will not compel the Fund to
dispose of such security or other asset. Notwithstanding the foregoing, under
normal market conditions the Fund must take actions necessary to comply with the
policy of investing at least 65% of total assets in equity securities of
emerging growth companies. Moreover, the Fund must always be in compliance with
the borrowing policies set forth above.
- 5 -
<PAGE>
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust 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 Eaton Vance Management ("Eaton Vance");
Eaton Vance's wholly-owned subsidiary Boston Management and Research ("BMR");
Eaton Vance's parent, Eaton Vance Corp. ("EVC"); and of Eaton Vance's and BMR'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,
as defined in the 1940 Act by virtue of their affiliation with Eaton Vance, BMR,
EVC or EV, are indicated by an asterisk(*).
JAMES B. HAWKES (55), President and Trustee*
President and Chief Executive Officer of Eaton Vance, BMR, 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.
M. DOZIER GARDNER (63), Trustee*
Vice Chairman 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 (65), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988. 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 (61), 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 (61), Trustee
President and Director, United Asset Management Corporation, a holding
company owning institutional investment management firms). Chairman, President
and Director, UAM Funds (mutual funds). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (70), 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 (66), 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
CLIFFORD H. KRAUSS (42), Vice President
Vice President of BMR, Eaton Vance and EV.
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<PAGE>
EDWARD E. SMILEY, JR. (52), Vice President
Vice President of Eaton Vance and BMR since November 1, 1996; Senior
Product Manager, Equity Management for TradeStreet Investment Associates, Inc.,
a wholly-owned subsidiary of Nations Bank (1992-1996). Mr. Smiley was elected
Vice President of the Trust on October 18, 1996.
JAMES L. O'CONNOR (51), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
THOMAS OTIS (65), Secretary
Vice President and Secretary of Eaton Vance, BMR, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (61), Assistant Treasurer and Assistant Secretary
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
A. JOHN MURPHY (34), 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). Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the Trust on
March 27, 1995 and of the Portfolio on October 23, 1995.
ERIC G. WOODBURY (39), Assistant Secretary
Vice President of BMR, Eaton Vance and EV since February 1993; formerly,
associate attorney at Dechert, Price & Rhoads and Gaston & Snow. Mr. Woodbury
was elected Assistant Secretary of the Trust on June 19, 1995 and of the
Portfolio on October 23, 1995.
Messrs. Hayes (Chairman), Thorndike and Reamer are members of the
Special Committee of the Board of Trustees of the Trust. The purpose of the
Special Committee is to consider, evaluate and make recommendations to the full
Board of Trustees concerning (i) all contractual arrangements with service
providers to the Fund, including administrative services, transfer agency,
custodial and fund accounting and distribution services, and (ii) all other
matters in which Eaton Vance or its affiliates has any actual or potential
conflict of interest with the Fund or its shareholders.
The Nominating Committee is comprised of four Trustees who are not
"interested persons" as that term is defined under the 1940 Act ("noninterested
Trustees"). The Committee has four-year staggered terms, with one member
rotating off the Committee to be replaced by another noninterested Trustee of
the Trust. The purpose of the Committee is to recommend to the Board nominees
for the position of noninterested Trustee and to assure that at least a
majority of the Board of Trustees is independent of Eaton Vance and its
affiliates.
Messrs. Treynor (Chairman) and Dwight are members of the Audit
Committee of the Board of Trustees of the Trust. The Audit Committee's functions
include making recommendations to the Board of Trustees regarding the selection
of the independent accountants, and reviewing with such accountants and the
Treasurer of the Trust matters relative to trading and brokerage policies and
practices, accounting and auditing practices and procedures, accounting records,
internal accounting controls, and the functions performed by the custodian and
transfer agent of the Fund.
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<PAGE>
The fees and expenses of those Trustees of the Trust who are not
members of the Eaton Vance organization (the noninterested Trustees) are paid by
the Fund (and the other series of the Trust). (The Trustees of the Trust who are
members of the Eaton Vance organization receive no compensation from the Fund.)
For the fiscal year ending December 31, 1997, it is estimated that the
noninterested Trustees of the Trust will receive the following compensation in
their capacities as Trustees from the Fund and, for the year ended September 30,
1996, earned the following compensation in their capacities as Trustees of the
funds in the Eaton Vance fund complex(1):
Estimated Total Compensation
Compensation from Trust and
Name from Fund Fund Complex
- ---- --------- ------------
Donald R. Dwight $35 $ 142,500(2)
Samuel L. Hayes, III 35 153,750(3)
Norton H. Reamer 35 142,500
John L. Thorndike 35 147,500
Jack L. Treynor 35 147,500
(1) The Eaton Vance fund complex consists of 228 registered investment
companies or series thereof.
(2) Includes $42,500 of deferred compensation.
(3) Includes $37,500 of deferred compensation.
Trustees of the Trust who 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
"Trustees Plan"). Under the Trustees Plan, an eligible Trustee may elect to have
his deferred fees invested by the Fund in the shares of one or more funds in
the Eaton Vance Family of Funds, and the amount paid to the Trustees under
the Trustees Plan will be determined based upon the performance of such
investments. Deferral of Trustees' fees in accordance with the Trustees Plan
will have a negligible effect on the Fund's assets, liabilities, and net income
per share, and will not obligate the Fund to retain the services of any Trustee
or obligate the Fund to pay any particular level of compensation to the Trustee.
The Fund does not have retirement plan for its Trustees.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of December 31, 1996, Eaton Vance owned one share of the Fund, being
the only share of the Fund outstanding on such date. Eaton Vance is a
Massachusetts business trust and a wholly-owned subsidiary of EVC.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust on behalf of the Fund engages Eaton Vance as investment
adviser pursuant to an Investment Advisory Agreement dated December 31, 1996.
Eaton Vance or its affiliates acts as investment adviser to investment companies
and various individual and institutional clients with combined assets under
management of over $16 billion.
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<PAGE>
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 cover
stocks ranging from blue chip to emerging growth companies.
Eaton Vance and its affiliates act as adviser to over 150 mutual funds,
individual and various institutional accounts, including corporations,
hospitals, retirement plans, universities, foundations and trusts. Eaton Vance
mutual funds feature international equities, domestic equities, tax-free
municipal bonds and U.S. government and corporate bonds. Lloyd George Management
has advised Eaton Vance's international equity funds since 1992. Founded in
1991, Lloyd George is headquartered in Hong Kong with offices in London and
Mumbai, India. It has established itself as a leader in investment management in
Asian equities and other global markets. Lloyd George features an experienced
team of investment professionals that began working together in the mid-1980s.
Lloyd George analysts cover East Asia, the India subcontinent, Russia and
Eastern Europe, Latin America, Australia and New Zealand from offices in Hong
Kong, London and Bombay. Together Eaton Vance and Lloyd George manage over $18
billion in assets. Eaton Vance mutual funds are distributed by Eaton Vance
Distributors both within the United States and offshore.
Eaton Vance Distributors believes that an investment professional can
provide valuable services to you to help you reach your investment goals.
Meeting investment goals requires time, objectivity and investment savvy. Before
making an investment recommendation, a representative can help you carefully
consider your short- and long-term financial goals, your tolerance for
investment risk, your investment time frame, and other investments you may
already own. Your professional investment representatives are knowledgeable
about financial markets, as well as the wide range of investment opportunities
available. A representative can provide you with tailored financial advice and
help you decide when to buy, sell or persevere with your investments.
Eaton Vance manages the investments and affairs of the Fund subject to
the supervision of the Trust's Board of Trustees. Eaton Vance furnishes to the
Fund investment research, advice and assistance, administrative services, office
space, equipment and clerical personnel, and investment advisory, statistical
and research facilities, and has arranged for certain members of the Eaton Vance
organization to serve without salary as officers or Trustees of the Trust. The
Fund is responsible for all expenses not expressly stated to be payable by Eaton
Vance under the Investment Advisory Agreement, including, without limitation,
the fees and expenses of its custodian and transfer agent, including those
incurred for determining the Fund's net asset value and keeping its books; the
cost of share certificates; membership dues in investment company organizations;
brokerage commissions and fees; fees and expenses of registering its shares;
expenses of reports to shareholders, proxy statements, and other expenses of
shareholders' meetings; insurance premiums; printing and mailing expenses;
interest, taxes and corporate fees; legal and accounting expenses; and
compensation and expenses of Trustees not affiliated with Eaton Vance. The Fund
will also bear expenses incurred in connection with litigation, proceedings and
claims and any legal obligation of the Trust to indemnify its officers and
Trustees with respect thereto, to the extent not covered by insurance.
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<PAGE>
The Fund pays Eaton Vance as compensation under the Investment Advisory
Agreement a monthly fee based on average daily net assets as follows:
AVERAGE DAILY NET ANNUALIZED FEE RATE MONTHLY FEE RATE
ASSETS FOR THE MONTH (FOR EACH LEVEL) (FOR EACH LEVEL)
-------------------- ---------------- ----------------
Up to $500 million....................... 0.7500% 1/16 of 1%
$500 million but less than $1 billion.... 0.6875% 11/192 of 1%
$1 billion but less than $1.5 billion.... 0.6250% 5/96 of 1%
$1.5 billion but less than $2 billion.... 0.5625% 3/64 of 1%
$2 billion but less than $3 billion...... 0.5000% 1/24 of 1%
$3 billion and over...................... 0.4375% 7/192 of 1%
The Investment Advisory Agreement with Eaton Vance remains in effect
until February 28, 1998. It may be continued indefinitely thereafter so long as
such continuance after February 28, 1998 is 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 Eaton Vance 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 Trust or by vote of a majority of the outstanding voting
securities of the Fund. 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
Fund, and the Agreement will terminate automatically in the event of its
assignment. The Agreement provides that Eaton Vance may render services to
others. The Agreement also provides that Eaton Vance 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 currently 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.
Eaton Vance and EV are both wholly-owned subsidiaries of EVC. BMR
is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and BMR are
both Massachusetts business trusts, and EV is the trustee of Eaton Vance and
BMR. The Directors of EV are Landon T. Clay, 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, Mr. Gardner is
vice chairman and Mr. Hawkes is president and chief executive officer of EVC,
Eaton Vance, BMR 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, 1997, the Voting
Trustees of which are Messrs. Clay, Gardner, Hawkes and Rowland and
Thomas E. Faust, Jr.. 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
- 10 -
<PAGE>
are owned by certain of the officers of Eaton Vance and BMR who are also
officers or officers and Directors of EVC and EV. As of January 1, 1997, Messrs.
Clay, Gardner and Hawkes each owned 24% of such voting trust receipts and
Messrs. Rowland and Faust owned 15% and 13%, respectively, of such voting trust
receipts. Messrs. Gardner, Hawkes and Otis, who are officers or Trustees of the
Trust, are members of the EVC, Eaton Vance, BMR and EV organizations. Messrs.
Krauss, Murphy, O'Connor and Woodbury, and Ms. Sanders are officers of the Trust
and are also members of the Eaton Vance, BMR and EV organizations. Eaton Vance
will receive the fees paid under the Investment Advisory Agreement.
EVC owns all of the stock of Energex Energy Corporation, which
is engaged in oil and gas exploration and development. In addition, Eaton Vance
owns all the stock of Northeast Properties, Inc., which is engaged in real
estate investment. EVC also owns 24% of the Class A shares of Lloyd George
Management (B.V.I.) Limited, a registered investment adviser. EVC owns all of
the stock of Fulcrum Management, Inc. and MinVen, Inc., which are engaged in
precious metal mining venture investment and management. EVC, Eaton Vance, BMR
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,
Investors Bank & Trust Company. It is Eaton Vance's opinion that the terms and
conditions of such transactions will not be influenced by existing or potential
custodial or other relationships between the Trust and such banks.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 89 South Street, Boston,
Massachusetts acts as custodian for the Fund. IBT has the custody of all cash
and securities of the Fund, maintains the Fund's general ledger and computes the
daily 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 Fund's investments, receives and disburses all funds and
performs various other ministerial duties upon receipt of proper instruction
from the Fund. 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 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. IBT also provides services in connection with the preparation of
shareholder reports and the electronic filing of such reports with the
Commission, for which it receives a separate fee. Landon T. Clay, a Director of
EVC and an officer, Trustee or Director of other entities in the Eaton Vance
organization, owns approximately 13% of the voting stock of Investors Financial
Services Corp., the holding company parent of IBT. Management believes that
such ownership does not create an affiliated person relationship between the
Fund and IBT.
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.
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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 Prospectus 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 the 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 Fund's 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 accordingly. For sales charges and other information on
quantity purchases, see "How to Buy Fund Shares" in the 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 Prospectus. The sales
charge on the shares being purchase will then be at the rate applicable to the
aggregate. For example, if the shareholder owned shares valued at $80,000 of the
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 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 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.
SERVICE FOR WITHDRAWAL
The 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 current
Prospectus) based upon the value of the shares held. The checks will be drawn
from share redemptions and hence, although they are a return of principal may
require the recognition of taxable gain or loss. 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
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current income will eventually use up principal, particularly in a period
of declining market prices. 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,
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 shares of the Fund is determined by IBT (as
agent and custodian for the Fund) in the manner described under "Valuing Fund
Shares" in the Fund's current Prospectus. The Fund will be closed for business
and will not price its shares 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 Trustees of the Trust have established the following procedures for
the fair valuation of the Fund's assets under normal market conditions.
Securities listed on foreign or U.S. securities exchanges or in the NASDAQ
National Market System generally are valued at closing sale prices or, if there
were no sales, at the mean between the closing bid and asked prices therefor on
the exchange where such securities are principally traded or on such National
Market System. Unlisted or listed securities for which closing sale prices are
not available are valued at the mean between the latest bid and asked prices on
the principal market where the security was traded. An option is valued at the
last sale price as quoted on the principal exchange or board of trade on which
such option or contract is traded or, in the absence of a sale, at the mean
between the last bid and asked prices. Futures positions on securities or
currencies are generally valued at closing settlement prices. Short-term debt
securities with a remaining maturity of 60 days or less are valued at amortized
cost. If securities were acquired with a remaining maturity of more than 60
days, their amortized cost value will be based on their value on the sixty-first
day prior to maturity. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing service.
All other securities are valued at fair value as determined in good faith by or
at the direction of the Trustees.
Short term debt securities are valued at amortized cost, which
approximates value. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing service.
Generally, trading in the foreign securities owned by the Fund is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset value
of the Fund's shares are computed as of such times. Occasionally, events
affecting the value of foreign securities may occur between such times and the
close of the Exchange which will not be reflected in the computation of the
Fund's net asset value (unless the Fund deems that such events would materially
affect its net asset value, in which case an adjustment would be made and
reflected in such computation). Foreign securities and currency held by the Fund
will be valued in U.S. dollars; such values will be computed by the custodian
based on foreign currency exchange rate quotations.
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<PAGE>
INVESTMENT PERFORMANCE
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 annualizing the result. The calculation
assumes that all distributions are reinvested at net asset value on the
reinvestment dates during the period.
The Fund's total return may be compared to relevant indices, such as
the Consumer Price Index and various domestic and foreign securities indices,
for example: Standard & Poor's Index of 400 Common Stocks, Standard & Poor's
Index of 500 Common Stocks, Merrill Lynch U.S. Treasury (15- year plus) Index,
Lehman Brothers Government/Corporate Bond Index, the Dow Jones Industrial
Average and Morgan Stanley Global Equity. 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 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 Private Client Group, 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. Information
about the allocation and holdings of investments in the Fund's portfolio may be
included in advertisements and other material furnished to present and
prospective shareholders.
From time to time, evaluations of the Fund's performance or rankings of
mutual funds (which include the Fund) made by independent sources (E.G., Lipper
Analytical Services, Inc., CDA/Weisenberger and Morningstar, Inc.) may be used
in advertisements and in information furnished to present or prospective
shareholders. Information, charts and illustrations showing the effect of
compounding interest or relating to inflation and taxes (including their effects
on the dollar and the return on stocks and other investment vehicles) may also
be included in advertisements and materials furnished to present and prospective
investors.
Information used in advertisements and materials furnished to present
and prospective investors may include statements or illustrations relating to
the appropriateness of certain types of securities and/or mutual funds to meet
specific financial goals. Such information may address:
--- cost associated with aging parents;
--- funding a college education (including its actual and estimated
cost);
--- health care expenses (including actual and projected expenses);
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<PAGE>
--- long-term disabilities (including the availability of, and
coverage provided by, disability insurance); and
--- retirement (including the availability of social security
benefits, the tax treatment of such benefits and statistics
and other information relating to maintaining a particular
standard of living and outliving existing assets).
Such information may also address different methods for saving money
and the results of such methods, as well as the benefits of investing in equity
securities. Such information may describe: the potential for growth; the
performance of equities as compared to other investment vehicles; and the value
of investing as early as possible and regularly, as well as staying invested.
The benefits of investing in equity securities by means of a mutual fund may
also be included (such benefits may include diversification, professional
management and the variety of equity mutual fund products).
The Fund may provide information about Eaton Vance, its affiliates and
other investment advisers to the funds in the Eaton Vance Family of Funds in
sales material or advertisements provided to investors or prospective investors.
Such material or advertisements may also provide information on the use of
investment professionals by such investors.
TAXES
See also "Distribution and Taxes" in the Fund's current Prospectus.
The Fund, as a series of a Massachusetts business trust, will be
treated as a separate entity for accounting and tax purposes. The Fund intends
to elect to be treated, and to qualify each year as a regulated investment
company ("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 on the Fund.
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 and capital gains from the prior year (as
previously computed) that was not paid out during such year and on which the
Fund was not taxed. Further, under current law, provided that the Fund qualifies
as a RIC for federal income tax purposes, the Fund is not liable for any income,
corporate excise or franchise tax in the Commonwealth of Massachusetts.
Foreign exchange gains and losses realized by the Fund in connection
with the its investments in foreign securities and certain options, futures or
forward contracts or foreign currency may be treated as ordinary income and
losses under special tax rules. Certain options, futures or forward contracts of
the Fund may be required to be marked to market (i.e., treated as if closed out)
on the last day of each taxable year, and any gain or loss realized with respect
to these contracts may be required to be treated as 60% long-term and 40% short-
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<PAGE>
- -term gain or loss. Positions of the Fund in securities and offsetting
options, swaps, futures or forward contracts may be treated as "straddles" and
be subject to other special rules that may affect the amount, timing and
character of the Fund's distributions to shareholders. Certain uses of foreign
currency and foreign currency derivatives such as options, futures, forward
contracts and swaps and investment by the Fund 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 or avoid
imposition of a tax on the Fund.
Distributions of the excess of net long-term capital gains over
short-term capital losses earned by the Fund, taking into account any capital
loss carryforwards that may be available to the Fund in years after its first
taxable year, 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 have been held. 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.
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 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. Any disallowed loss will result in an adjustment to the
shareholder's tax basis in some or all of the other shares acquired.
The Fund will not be subject to Massachusetts income, corporate excise
or franchise taxation as long as it qualifies as a RIC under the Code.
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 certifications required by the Internal Revenue Service (the "IRS"),
as well as shareholders with respect to whom the Fund has received notification
from the IRS or a broker, may be subject to "backup" withholding of federal
income tax from the Fund's taxable 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, foreign corporations and certain 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
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<PAGE>
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 describe many of the tax rules
applicable to IRAs nor does it address the special tax rules applicable to
certain other classes of investors, such as other retirement plans, tax-exempt
entities, insurance companies and financial institutions. Shareholders should
consult their own tax advisers with respect to these or other 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.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through 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 certain 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 her 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
the 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 if 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 also be sold at net asset value to any
officer, director, trustee, general partner or employee of the Fund or any
investment company for which Eaton Vance or its affiliates 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, trustee 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
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<PAGE>
spouse and minor children, and also retired officers, directors, trustees,
general partners and employees and their spouses and minor children. Shares may
also be sold at net asset value to registered representatives and employees of
certain investment dealers and to such person's 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
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 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. See "How to Buy Fund
Shares" in the Fund's current Prospectus for the discounts allowed to Authorized
Firms. 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 Fund has authorized the Principal Underwriter to act as its agent
in repurchasing shares and will pay the Principal Underwriter $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.
SERVICE PLAN
The Trust on behalf of the Fund has adopted a Service Plan (the "Plan")
designed to meet the service fee requirements of the NASD Rule (Management
believes service fee payments are not distribution expenses governed by Rule
12b-1 under the 1940 Act, but has chosen to have the Plan approved as if that
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, 1997 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 "Non-interested 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 Non-interested Trustees or by 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
Non-interested 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
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<PAGE>
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 three is a reasonable likelihood that the Plan will benefit
the Fund and its shareholder.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of Fund portfolio security
transactions, including the selection of the market and the broker-dealer firm,
are made by Eaton Vance. Eaton Vance is also responsible for the execution of
transactions for all other accounts managed by it.
Eaton Vance places the portfolio security transactions of the Fund and
of certain other accounts managed by it for execution with many broker-dealer
firms. Eaton Vance uses its best efforts to obtain execution of portfolio
transactions at prices which are advantageous to the Fund and (when a disclosed
commission is being charged) at reasonably competitive commission rates. In
seeking such execution, Eaton Vance 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 stock exchanges
and other agency transactions involve the payment by the Fund 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 Fund usually includes an undisclosed dealer markup or
markdown. In an underwritten offering the price paid by the Fund includes a
disclosed fixed commission or discount retained by the underwriter or dealer.
Although commissions paid on portfolio transactions will, in the judgment of
Eaton Vance, 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 Fund
and Eaton Vance's other clients in part for providing brokerage and research
services to Eaton Vance.
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 Fund
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 Eaton
Vance 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 overall responsibilities which Eaton Vance and its affiliates have for
accounts over which it exercises investment discretion. In making any such
determination, Eaton
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Vance 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-dealers
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, Eaton Vance may receive Research Services from broker-dealer
firms with which Eaton Vance places the portfolio transactions of the Fund and
from third parties with which these broker-dealers have arrangements. These
Research Services may 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 Eaton Vance 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 Eaton Vance 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 Fund is not reduced because Eaton Vance
receives such Research Services. Eaton Vance 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 Eaton Vance believes are useful or of value to it in
rendering investment advisory services to its clients.
Subject to the requirement that Eaton Vance shall use its best efforts
to seek to execute portfolio security transactions at advantageous prices and at
reasonably competitive commission rates or spreads, Eaton Vance is authorized to
consider as a factor in the selection of any broker-dealer firm with whom Fund
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 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 Fund may also be
appropriate for other investment accounts managed by Eaton Vance or its
affiliates. Eaton Vance will attempt to allocate in a manner it deems equitable
- 20 -
<PAGE>
portfolio security transactions among the Fund and the portfolios of its
other investment accounts whenever decisions are made to purchase or sell
securities by the Fund 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 Fund and such other accounts, the relative size of
portfolio holdings of the same or comparable securities, the availability of
cash for investment by the Fund and such accounts, the size of investment
commitments generally held by the Fund and such accounts and the opinions of the
persons responsible for recommending investments to the Fund and such accounts.
However, there may be instances when the Fund will not participate in a
securities transaction that is allocated among other accounts. While these
procedures could have a detrimental effect on the price or amount of the
securities available to the Fund from time to time, it is the opinion of the
Trustees of the Trust that the benefits available from the Eaton Vance
organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions.
OTHER INFORMATION
The Trust is organized as a business trust under the laws of the
Commonwealth of Massachusetts under a Declaration of Trust dated March 27, 1989,
as amended. On July 21, 1992, the Trust changed its name from Eaton Vance
Special Equities Fund to Eaton Vance Special Investment Trust. Eaton Vance,
pursuant to its agreement with the Trust, controls the use of the words "Eaton
Vance" and "EV" in the Fund's name and may use the words "Eaton Vance" or "EV"
in other connections and for other purposes.
The Declaration of Trust may be amended by the Trustees when authorized
by 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.
- 21 -
<PAGE>
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 shareholder's 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.
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 Commission, or during any emergency as determined by the
Commission which makes it impracticable for the Fund 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 of the Fund, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the Commission.
- 22 -
<PAGE>
INVESTMENT ADVISER AND EV TRADITIONAL
ADMINISTRATOR
Eaton Vance Management EMERGING GROWTH FUND
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN STATEMENT OF ADDITIONAL
Investors Bank & Trust Company
89 South Street INFORMATION
Boston, MA 02111
TRANSFER AGENT
First Data Investor Services Group JANUARY 1, 1997
P.O. Box 5123
Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EV TRADITIONAL EMERGING GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110 T-EGSAI
<PAGE>
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
Not Applicable
(B) EXHIBITS
(1)(a) Amended and Restated Filed as Exhibit (1)(a) to Post-
Declaration of Trust dated Effective Amendment No. 42 and
September 27, 1993. incorporated herein by reference.
(b) Amendment and Restatement Filed herewith.
of Establishment and
Designation of Series of
Shares dated October 18, 1996.
(2)(a) By-Laws. Filed as Exhibit (2)(a) to Post-
Effective Amendment No. 42 and
incorporated herein by reference.
(b) Amendment to By-Laws of Filed as Exhibit (2)(b) to Post-
Eaton Vance Special Effective Amendment No. 42 and
Investment Trust dated incorporated herein by reference.
December 13, 1993.
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contract with Filed as Exhibit No.(5)(a) to
Eaton Vance Management for Post-Effective Amendment No. 42
EV Traditional Emerging and incorporated herein by
Markets Fund dated March 24, reference.
1994.
(b) Management Contract with Filed as Exhibit No. (5)(b) to
Eaton Vance Management for Post-Effective Amendment No. 42
EV Marathon Emerging and incorporated herein by
Markets Fund dated March 24, reference.
1994.
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<PAGE>
(c) Management Contract with Filed as Exhibit No. (5)(c) to
Eaton Vance Management for Post-Effective Amendment No. 42
EV Traditional Greater India and incorporated herein by
Fund dated March 24, 1994. reference.
(d) Management Contract with Filed as Exhibit No. (5)(d) to
Eaton Vance Management for Post-Effective Amendment No. 42
EV Marathon Greater India and incorporated herein by
Fund dated March 24, 1994. reference.
(e) Investment Advisory Filed herewith.
Agreement with Eaton Vance
Management for EV
Traditional Emerging Growth
Fund dated December 31, 1996.
(6)(a)(1)Amended Distribution Filed as Exhibit No. (6)(a)(1) to
Agreement between Eaton Post-Effective Amendment No. 42
Vance Special Investment and incorporated herein by
Trust (on behalf of its reference.
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 Filed as Exhibit No. (6)(a)(2) to
Agreement between Eaton Post-Effective Amendment No. 42
Vance Special Investment and incorporated herein by
Trust (on behalf of its by reference.
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.
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<PAGE>
(3)Amended Distribution Filed as Exhibit No. (6)(a)(3) to
Agreement between Eaton Post-Effective Amendment No. 42
Vance Special Investment and incorporated herein by
Trust (on behalf of its reference.
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 Filed as Exhibit No. (6)(a)(4) to
Eaton Vance Distributors, Post-Effective Amendment No. 42
Inc. for EV Traditional and incorporated herein by
Emerging Markets Fund dated reference.
March 24, 1994.
(5)Distribution Agreement with Filed as Exhibit No. (6)(a)(5) to
Eaton Vance Distributors, Post-Effective Amendment No. 42
Inc. for EV Marathon and incorporated herein by
Emerging Markets Fund dated reference.
March 24, 1994.
(6)Distribution Agreement with Filed as Exhibit No. (6)(a)(6) to
Eaton Vance Distributors, Post-Effective Amendment No. 42
Inc. for EV Traditional and incorporated herein by
Greater India Fund dated reference.
March 24, 1994.
(7)Distribution Agreement with Filed as Exhibit No. (6)(a)(7) to
Eaton Vance Distributors, Post-Effective Amendment No. 42
Inc. for EV Marathon Greater and incorporated herein by
India Fund dated March 24, reference.
1994.
(b) Selling Group Agreement Filed as Exhibit (6)(b) to the
between Eaton Vance Registration Statement of Eaton
Distributors, Inc. and Vance Growth Trust Post-Effective
Authorized Dealers. Amendment No. 61 and incorporated
herein by reference.
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<PAGE>
(c) Schedule of Dealer Filed as Exhibit (6)(c) to the
Discounts and Sales Registration Statement of Eaton
Charges. Vance Growth Trust Post-Effective
Amendment No. 59 and incorporated
herein by reference.
(7) Bonus, profit sharing The Securities and Exchange
pension or other similar Commission has granted the
contracts for the benefit Registrant an exemptive order
of Trustees. 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)(a) Custodian Agreement with Filed as Exhibit No. (8) to Post-
Investors Bank & Trust Effective Amendment No. 42 and
Company dated March 24, incorporated herein by reference.
1994.
(b) Amendment to Custodian Filed as Exhibit No. (8)(b) to
Agreement with Investors Post-Effective Amendment No. 43
Bank & Trust Company and incorporated herein by
dated October 23, 1995. reference.
(9) Amended Administrative Filed as Exhibit No. (9) to Post-
Services Agreement between Effective Amendment No. 42 and
Eaton Vance Special incorporated herein by reference.
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) Not applicable.
(12) Not applicable.
(13) Not applicable.
c-4
(14)(a) Vance, Sanders Profit Filed as Exhibit (14)(1) to Post-
Sharing Retirement Plan for Effective Amendment No. 22 to the
Self-Employed Persons with Registration Statement under the
Adoption Agreement and Securities Act of 1933 (File No.
instructions. 2-28471) and incorporated herein
by reference.
(b) Eaton & Howard, Vance Filed as Exhibit No. (14)(2) to
Sanders Defined Post-Effective Amendment No. 29
Contribution Prototype to the Registration Statement
Plan and Trust with under the Securities Act of 1933
Adoption Agreements: (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 Filed as Exhibit (14)(3) to Post-
Custodian Account (Form Effective Amendment No. 21 and
5305A) and Instructions. incorporated herein by reference.
(d) Vance, Sanders Variable Filed as Exhibit No. 14(4) to
Pension Prototype Plan and Post-Effective Amendment No. 22 to
Trust with Adoption the Registration Statement under
Agreement. the Securities Act of 1933 (File
No. 2-28471) and incorporated
herein by reference.
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<PAGE>
(15)(a) Amended Distribution Plan Filed as Exhibit No. (15)(a) to
pursuant to Rule 12b-1 under Post-Effective Amendment No. 42
the Investment Company Act and incorporated herein by
of 1940, as amended, for reference.
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 Filed as Exhibit No. (15)(b) to
pursuant to Rule 12b-1 under Post-Effective Amendment No. 42
the Investment Company Act and incorporated herein by
of 1940, as amended, for reference.
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 Filed as Exhibit (15)(c) to Post-
pursuant to Rule 12b-1 under Effective Amendment No. 42 and
the Investment Company Act incorporated herein by reference.
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 Filed as Exhibit No. (15)(d) to
March 24, 1994 for EV Post-Effective Amendment No. 42
Traditional Emerging and incorporated herein by
Markets Fund pursuant to reference.
Rule 12b-1 under the
Investment Company Act
of 1940.
c-6
<PAGE>
(e) Distribution Plan dated Filed as Exhibit No. (15)(e) to
March 24, 1994 for EV Post-Effective Amendment No. 42
Marathon Emerging Markets and incorporated herein by
Fund pursuant to Rule 12b-1 reference.
under the Investment Company
Act of 1940.
(f) Distribution Plan dated Filed as Exhibit No. (15)(f) to
March 24, 1994 for EV Post-Effective Amendment No. 42
Traditional Greater India and incorporated herein by
Fund pursuant to Rule 12b-1 reference.
under the Investment
Company Act of 1940.
(g) Distribution Plan dated Filed as Exhibit No. (15)(g) to
March 24, 1994 for EV Post-Effective Amendment No. 42
Marathon Greater India and incorporated herein by
Fund pursuant to Rule reference.
12b-1 under the Investment
Company Act of 1940.
(16) Schedule for Computation of Filed herewith.
Performance Quotations.
(17)(a) Power of Attorney dated Filed as Exhibit No. (17)(a) to
February 25, 1994 for Eaton Post-Effective Amendment No. 42
Vance Special Investment and incorporated herein by
Trust. reference.
(b) Power of Attorney for Filed as Exhibit No. (17)(b) to
Emerging Markets Portfolio. Post-Effective Amendment No. 42
and incorporated herein by
reference.
(c) Power of Attorney for South Filed as Exhibit No. (17)(c) to
Asia Portfolio. Post-Effective Amendment No. 42
and incorporated herein by
reference.
(d) Power of Attorney for Filed as Exhibit No. (17)(d) to
Special Investment Post-Effective Amendment No. 42
Portfolio. and incorporated herein by
reference.
(e) Power of Attorney for Filed as Exhibit No. (17)(e) to
Investors Portfolio. Post-Effective Amendment No. 42
and incorporated herein by
reference.
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<PAGE>
(f) Power of Attorney for Stock Filed as Exhibit No. (17)(f) to
Portfolio. Post-Effective Amendment No. 42
and incorporated herein by
reference.
(g) Power of Attorney for Total Filed as Exhibit No. (17)(g) to
Return Portfolio. Post-Effective Amendment No. 42
and incorporated herein by
reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(2)
(1) Number of
Title of Class Record Holders
-------------- --------------
Shares of beneficial interest
without par value as of December 2, 1996
EV Marathon Emerging Markets Fund 462
EV Traditional Emerging Markets Fund 166
EV Marathon Greater India Fund 9,371
EV Traditional Greater India Fund 2,095
EV Classic Special Equities Fund 31
EV Marathon Special Equities Fund 180
EV Traditional Special Equities Fund 6,462
EV Classic Investors Fund 294
EV Marathon Investors Fund 2,062
EV Traditional Investors Fund 13,188
EV Classic Stock Fund 68
EV Marathon Stock Fund 611
EV Traditional Stock Fund 5,421
EV Classic Total Return Fund 282
EV Marathon Total Return Fund 3,010
EV Traditional Total Return Fund 17,548
ITEM 27. INDEMNIFICATION
Article IV of the Trust's Amended and Restated Declaration of Trust
dated September 27, 1993, permits Trustee and officer indemnification by By-law,
contract and vote. Article XI of the By-laws contains indemnification
provisions. 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.
The distribution agreements of the Trust also provide for reciprocal
indemnity of the principal underwriter on the one hand, and the Trustees and
officers, on the other.
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<PAGE>
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the information set forth under the caption
"Investment Adviser and Administrator" in the Statement of Additional
Information, which information is incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITER
(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:
EV Classic California Municipals Fund EV Marathon Arkansas Municipals Fund
EV Classic Connecticut Municipals Fund EV Marathon Asian Small Companies Fund
EV Classic Florida Insured Municipals EV Marathon California Limited
Fund Maturity Municipals Fund
EV Classic Florida Limited Maturity EV Marathon Californa Municipals Fund
Municipals Fund EV Marathon Colorado Municipals Fund
EV Classic Florida Municipals Fund EV Marathon Connecticut Limited
EV Classic Government Obligations Fund Maturity Municipals Fund
EV Classic Greater China Growth Fund EV Marathon Connecticut Municipals
EV Classic Growth Fund Fund
EV Classic High Income Fund EV Marathon Emerging Markets Fund
EV Classic Information Age Fund EV Marathon Florida Insured Municipals
EV Classic Investors Fund Fund
EV Classic Massachusetts Limited EV Marathon Florida Limited Maturity
Maturity Municipals Fund Municipals Fund
EV Classic National Limited Maturity EV Marathon Florida Municipals Fund
Municipals Fund EV Marathon Georgia Municipals Fund
EV Classic National Municipals Fund EV Marathon Gold & Natural Resources
EV Classic New Jersey Municipals Fund Fund
EV Classic New York Limited Maturity EV Marathon Government Obligations
Municipals Fund Fund
EV Classic New York Municipals Fund EV Marathon Greater China Growth Fund
EV Classic Pennsylvania Limited Maturity EV Marathon Greater India Fund
Municipals Fund EV Marathon Growth Fund
EV Classic Pennsylvania Municipals Fund EV Marathon Hawaii Municipals Fund
EV Classic Senior-Floating Rate Fund EV Marathon High Income Fund
EV Classic Strategic Income Fund EV Marathon High Yield Municipals Fund
EV Classic Special Equities Fund EV Marathon Information Age Fund
EV Classic Stock Fund EV Marathon Investors Fund
EV Classic Tax-Managed Growth Fund EV Marathon Kansas Municipals Fund
EV Classic Total Return Fund EV Marathon Kentucky Municipals Fund
EV Marathon Alabama Municipals Fund EV Marathon Louisiana Municipals Fund
EV Marathon Arizona Municipals Fund EV Marathon Maryland Municipals Fund
c-9
<PAGE>
EV Marathon Massachusetts Limited EV Traditional Florida Insured
Maturity Municipals Fund Municipals Fund
EV Marathon Massachusetts Municipals EV Traditional Florida Limited
Fund Maturity Municipals Fund
EV Marathon Michigan Limited Maturity EV Traditional Florida Municipals Fund
Municipals Fund EV Traditional Georgia Municipals Fund
EV Marathon Michigan Municipals Fund EV Traditional Government Obligations
EV Marathon Minnesota Municipals Fund Fund
EV Marathon Mississippi Municipals EV Traditional Greater China China
Fund Growth Fund
EV Marathon Missouri Municipals Fund EV Traditional Greater India Fund
EV Marathon National Limited Maturity EV Traditional Growth Fund
Municipals Fund EV Traditional Hawaii Municipals Fund
EV Marathon National Municipals Fund EV Traditional High Yield Municipals
EV Marathon New Jersey Limited Fund
Maturity Municipals Fund Eaton Vance Income Fund of Boston
EV Traditional Information Age Fund
EV Traditional Investors Fund
EV Traditional Kansas Municipals Fund
EV Marathon New Jersey Municipals EV Traditional Kentucky Municipals
Fund Fund
EV Marathon New York Limited EV Traditional Louisiana Municipals
Maturity Municipals Fund Fund
EV Marathon New York Municipals EV Traditional Maryland Municipals
Fund Fund
EV Marathon North Carolina Municipals EV Traditional Massachusetts
Fund Municipals Fund
EV Marathon Ohio Limited Maturity EV Traditional Michigan Limited
Municipals Fund Maturity Municipals Fund
EV Marathon Ohio Municipals Fund EV Traditional Michigan Municipals
EV Marathon Oregon Municipals Fund Fund
EV Marathon Pennsylvania Limited EV Traditional Minnesota Municipals
Maturity Municipals Fund Fund
EV Marathon Pennsylvania Municipals EV Traditional Mississippi Municipals
Fund Fund
EV Marathon Rhode Island Municipals EV Traditional Missouri Municipals
Fund Fund
EV Marathon Strategic Income Fund Eaton Vance Municipal Bond Fund L.P.
EV Marathon South Carolina Municipals EV Traditional National Limited
Fund Maturity Municipals Fund
EV Marathon Special Equities Fund EV Traditional National Municipals
EV Marathon Stock Fund Fund
EV Marathon Tax-Managed Growth Fund EV Traditional New Jersey Limited
EV Marathon Tennessee Municipals Fund Maturity Municipals Fund
EV Marathon Texas Municipals Fund EV Traditional New Jersey Municipals
EV Marathon Total Return Fund Fund
EV Marathon Virginia Municipals Fund EV Traditional New York Limited
EV Marathon West Virginia Municipals Maturity Municipals Fund
Fund EV Traditional New York Municipals
EV Marathon Worldwide Health Sciences Fund
Fund EV Traditional North Carolina
EV Traditional Alabama Municipals Fund Municipals Fund
EV Traditional Arizona Municipals Fund EV Traditional Ohio Limited Maturity
EV Traditional Arkansas Municipals Fund Municipals Fund
EV Traditional Asian Small Companies EV Traditional Ohio Municipals Fund
Fund EV Traditional Oregon Municipals Fund
EV Traditional California Limited EV Traditional Pennsylvania Municipals
Maturity Municipals Fund Fund
EV Traditional Rhode Island Municipals
Fund
EV Traditional California Municipals EV Traditional South Carolina
Fund Municipals Fund
EV Traditional Colorado Municipals EV Traditional Special Equities Fund
Fund EV Traditional Stock Fund
EV Traditional Connecticut Limited EV Traditional Tax-Managed Growth Fund
Maturity Municipals Fund EV Traditional Tennessee Municipals
EV Traditional Connecticut Municipals Fund
Fund EV Traditional Texas Municipals Fund
EV Traditional Emerging Markets Fund EV Traditional Total Return Fund
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<PAGE>
EV Traditional Virginia Municipals Fund
EV Traditional West Virginia Municipals
Fund
EV Traditional Worldwide Health Sciences
Fund, Inc.
Eaton Vance Cash Management Fund
Eaton Vance Liquid Assets Trust
Eaton Vance Money Market Fund
Eaton Vance Prime Rate Reserves
Eaton Vance Short-Term Treasury Fund
Eaton Vance Tax Free Reserves
Massachusetts Municipal Bond Portfolio
(B)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Principal Underwriter with Registrant
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
Chris Berg* Vice President None
Kate Bradshaw Vice President None
Susan W. Bukima Vice President None
Jeffrey W. Butterfield Vice President None
David B. Carle Vice President None
James S. Comforti Vice President None
Raymond Cox Vice President None
Mark P. Doman Vice President None
Alan R. Dynner Vice President None
James Foley Vice President None
Michael A. Foster Vice President None
William M. Gillen Vice President None
Hugh S. Gilmartin Vice President None
Perry D. Hooker Vice President None
Brian Jacobs Senior Vice President None
Thomas P. Luka Vice President None
John Macejka Vice President None
Timothy D. McCarthy Vice President None
Joseph T. McMenamin Vice President None
Morgan C. Mohrman Senior Vice President None
James A. Naughton Vice President None
Mark D. Nelson Vice President None
Linda D. Newkirk Vice President None
James L. O'Connor Vice President Treasurer
Thomas Otis Secretary and Clerk Secretary
George D. Owen Vice President None
F. Anthony Robinson Vice President None
Jay S. Rosoff Vice President None
Benjamin A. Rowland, Jr. Vice President, None
Treasurer and Director
John P. Rynne Vice President None
Kevin Schrader Vice President None
George V.F. Schwab, Jr. Vice President None
Cornelius J. Sullivan Vice President None
David M. Thill Vice President None
Chris Volf Vice President None
Sue Wilder Vice President None
*Address is 24 Federal Street, Boston, MA 02110
(c) Not Applicable.
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<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, 89 South Street, Boston,
MA 02111, and its transfer agent, First Data Investor Services Group, 4400
Computer Drive, Westborough, MA 01581-5120, 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 file a Post-Effective Amendment, using
financial statements which need not be certified, within four to six months from
the effective date of Post-Effective Amendment No. 44.
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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of the Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and 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 30th day of December, 1996.
EATON VANCE SPECIAL INVESTMENT TRUST
/s/ James B. Hawkes
By:_____________________________________
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.
SIGNATURE TITLE DATE
President, Principal
Executive Officer and
/s/ James B. Hawkes Trustee December 30, 1996
- -----------------------------
James B. Hawkes Treasurer and Principal
Financial and Accounting
/s/ James L. O'Connor Officer December 30, 1996
- -----------------------------
James L. O'Connor
/s/ M. Dozier Gardner Trustee December 30, 1996
- -----------------------------
M. Dozier Gardner
Donald R. Dwight* Trustee December 30, 1996
- -----------------------------
Donald R. Dwight
Samuel L. Hayes, III* Trustee December 30, 1996
- -----------------------------
Samuel L. Hayes, III
Norton H. Reamer* Trustee December 30, 1996
- -----------------------------
Norton H. Reamer
John L. Thorndike* Trustee December 30, 1996
- -----------------------------
John L. Thorndike
Jack L. Treynor* Trustee December 30, 1996
- -----------------------------
Jack L. Treynor
/s/ H. Day Brigham, Jr.
*By:___________________________________
H. Day Brigham, Jr.
As attorney-in-fact
<PAGE>
EXHIBIT INDEX
PAGE IN SEQUENTIAL
EXHIBIT NO. DESCRIPTION NUMBERING SYSTEM
(1)(c) Amendment and Restatement of
Establishment and Designation of Series
of Shares dated October 18, 1996.
(5)(e) Investment Advisory Agreement with
Eaton Vance Management for EV
Traditional Emerging Growth Fund dated
December 31, 1996.
(16) Schedule for Computation of Performance
Quotations.
EXHIBIT 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 October 18, 1996)
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 nineteen separate series
("Funds"), each Fund to have the following special and relative rights:
1. The Funds shall be designated as follows:
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
EV Traditional Emerging Growth Fund
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.
<PAGE>
(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: October 18, 1996
/s/ M. Dozier Gardner /s/ Samuel L. Hayes, III
- ------------------------ --------------------------
M. Dozier Gardner 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
-2-
EXHIBIT 5(c)
EATON VANCE SPECIAL INVESTMENT TRUST
INVESTMENT ADVISORY AGREEMENT
ON BEHALF OF EV TRADITIONAL EMERGING GROWTH FUND
AGREEMENT made on the 31st day of December, 1996, by and between Eaton
Vance Special Investment Trust, a Massachusetts business trust (the "Trust") on
behalf of EV Traditional Emerging Growth Fund (the "Fund"), and Eaton Vance
Management, a Massachusetts business trust (hereinafter sometimes called the
"Adviser").
1. DUTIES OF THE ADVISER. The Trust hereby employs the Adviser to act
as investment adviser for and to manage the investment and reinvestment of the
assets of the Fund and to administer its affairs, subject to the supervision of
the Board of Trustees of the Trust, for the period and on the terms set forth in
this Agreement.
The Adviser hereby accepts such employment, and undertakes to afford to
the Trust the advice and assistance of the Adviser's organization in the choice
of investments and in the purchase and sale of securities for the Fund and to
furnish for the use of the Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund.
The Adviser shall pay the salaries and fees of all officers and Trustees of the
Trust who are members of the Adviser's organization and of all personnel of the
Adviser performing services relating to research and investment activities. The
Adviser 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.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Fund. As investment adviser to the Trust, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of the
Fund's assets shall be held uninvested, subject always to the applicable
restrictions of the Declaration of Trust, By-Laws and registration statement of
the Trust under the Investment Company Act of 1940, all as from time to time
amended. The Adviser is authorized, in its discretion and without prior
consultation with the Trust, to buy, sell, lend and otherwise trade in any and
all types of securities, commodities and investment instruments on behalf of the
Fund. Should the Trustees of the Trust at any time, however, make any specific
determination as to investment policy for the Fund and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Adviser shall take, on behalf of the Trust,
all actions which it deems necessary or desirable to implement the investment
policies of the Trust and of the Fund.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the Fund's account with brokers or dealers or other
persons selected by the Adviser, and to that end the Adviser is authorized as
the agent of the Fund to give instructions to the custodian of the Fund as to
deliveries of securities and payments of cash for the account of the Fund. In
connection with the selection of such brokers or dealers or other persons and
the placing of such orders, the Adviser shall use its best efforts to seek to
execute security transactions at prices which are advantageous to the Fund and
at reasonably competitive spreads or (when a disclosed commission is being
charged) at reasonably competitive commission rates. In selecting brokers or
dealers qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to the Adviser,
<PAGE>
and the Adviser is expressly authorized to pay any broker or dealer who
provides such brokerage and research services a commission for executing a
security transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
overall responsibilities which the Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. Subject to the
requirement set forth in the second sentence of this paragraph, the Adviser is
authorized to consider, as a factor in the selection of any broker or dealer
with whom purchase or sale orders may be placed, the fact that such broker or
dealer has sold or is selling shares of the Fund, or any other series of the
Trust, or of other investment companies sponsored by the Adviser.
2. COMPENSATION OF THE ADVISER. For the services, payments and
facilities to be furnished hereunder by the Adviser, the Fund shall pay to the
Adviser on the last day of such month a monthly fee based on the average daily
net assets of the Fund for the month, computed in accordance with the
Declaration of Trust of the Trust and any applicable votes of the Trustees of
the Trust.
Average Daily Net Monthly Fee Rate
Assets for the Month (For Each Level)
-------------------- ----------------
Up to $500 million 1/16 of 1%
$500 million but less than $1 billion 11/192 of 1%
$1 billion but less than $1.5 billion 5/96 of 1%
$1.5 billion but less than $2 billion 3/64 of 1%
$2 billion but less than $3 billion 1/24 of 1%
$3 billion and over 7/192 of 1%
In case of initiation or termination of the Agreement during any month with
respect to the Fund, 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 basis of the average of valuations made
throughout such period.
The Adviser 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
Adviser hereunder, which expenses payable by the Fund shall include, without
implied limitation, (i) expenses of organizing and maintaining the Fund and
continuing its existence, (ii) registration of the Trust under the Investment
Company Act of 1940, (iii) commissions, spreads, fees and other expenses
connected with the purchase or sale of securities, (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 and securities, 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
-2-
<PAGE>
members of the Adviser'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 and officers of the
Trust and shareholders of the Fund are or may be or become interested in the
Adviser as trustees, officers, employees, shareholders or otherwise and that
trustees, officers, employees and shareholders of the Adviser are or may be or
become similarly interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise. It is also understood that
trustees, officers, employees and shareholders of the Adviser 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 Adviser may organize, sponsor or acquire, or
with which it may merge or consolidate, and which may include the words "Eaton
Vance" or any combination thereof as part of their name, and that the Adviser 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 ADVISER. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others 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 Adviser, the
Adviser shall not be subject to liability to the Trust 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.
6. SUB-INVESTMENT ADVISERS. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers or other
persons to execute the Fund's portfolio security transactions, and upon such
terms and conditions as may be agreed upon between the Adviser and such
sub-investment adviser 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, 1998 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1998 is
specifically approved at least annually (i) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the Fund
and (ii) by the vote of a majority of those Trustees of the Trust who are not
interested persons of the Adviser or the Trust cast in person at a meeting
called for the purpose of voting on such approval.
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 the Trustees of the Trust or the trustees of the Adviser,
as the case may be, and the Trust may, at any time upon such written notice to
the Adviser, 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 Adviser or the
Trust cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the outstanding voting securities of
the Fund.
-3-
<PAGE>
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of shareholders of the Fund, and the Adviser 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 Adviser arising out of this
Agreement and shall not seek satisfaction from the shareholders or any
shareholder of the Fund.
10. USE OF THE NAME "EATON VANCE". The Adviser 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
Adviser or one of its affiliates as the 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 Adviser and its affiliates and other
investment companies that have obtained consent to the use the name "Eaton
Vance". The Adviser 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 Adviser or one of its affiliates as the Fund's investment
adviser. Future names adopted by the Fund for itself, insofar as such names
include identifying words requiring the consent of the Adviser, shall be the
property of the Adviser and shall be subject to the same terms and conditions.
11. CERTAIN DEFINITIONS. 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 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.
EATON VANCE SPECIAL INVESTMENT TRUST EATON VANCE MANAGEMENT
(on behalf of EV Traditional
Emerging Growth Fund)
by /s/ James B. Hawkes by /s/ William M. Steul
------------------------- ------------------------
President Vice President,
and not individually
-4-
<TABLE>
INVESTMENT PERFORMANCE -- NATIONS EMERGING GROWTH FUND
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 period from December 10, 1992 through September 19, 1996 and
for the 1 year period ended September 19, 1996.
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF
INVESTMENT INVESTMENT INVESTMENT TOTAL RETURN
PERIOD DATE ON 09/19/96 CUMULATIVE ANNUALIZED
- ------ ---- ----------- ---------- ----------
<S> <C> <C> <C> <C>
LIFE OF
FUND 12/10/92 $1,740.63 74.06% 15.31%
1 YEAR ENDED
09/19/96 09/21/96 $1,185.96 18.60% 18.60%
Source: Lipper Analytical Services
</TABLE>
