AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 1995
1933 ACT FILE NO. 2-90946
1940 ACT FILE NO. 811-4015
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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. 23 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 26 [X]
EATON VANCE MUTUAL FUNDS TRUST
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(FORMERLY EATON VANCE GOVERNMENT OBLIGATIONS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
617-482-8260
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(REGISTRANT'S TELEPHONE NUMBER)
H. DAY BRIGHAM, JR.
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
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(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective on September 27, 1995
pursuant to paragraph (a) of Rule 485 or such earlier date as the Commission may
determine.
The exhibit index required by Rule 483(a) under the Securities Act of 1933
is located on page in the sequential numbering system of the manually
signed copy of this Registration Statement.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
February 23, 1995 filed its "Notice" as required by that Rule for the fiscal
year ended December 31, 1994.
High Income Portfolio has also executed this Registration Statement.
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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 Prospectuses of:
EV Classic High Income Fund
EV Marathon High Income Fund
Part B--The Statements of Additional Information of:
EV Classic High Income Fund
EV Marathon High Income 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 Prospectus and Statement of
Additional Information of any series of the Registrant not identified above.
<PAGE>
EATON VANCE MUTUAL FUNDS TRUST
EV CLASSIC HIGH INCOME FUND
EV MARATHON HIGH INCOME FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------ -----------------------------
1. ............ Cover Page Cover Page
2. ............ Synopsis Shareholder and Fund Expenses
3. ............ Condensed Financial The Fund's Financial
Information Highlights; Performance
Information
4. ............ General Description of The Fund's Investment
Registrant Objective; How the Fund and
the Portfolio Invest their
Assets; Risks Associated With
Investments; Organization of
the Fund and the Portfolio
5. ............ Management of the Fund Management of the Fund and the
Portfolio
5A............. Management's Discussion of Not Applicable
Fund Performance
6. ............ Capital Stock and Other Organization of the Fund and
Securities the Portfolio; Report to
Shareholders; The Lifetime
Investing Account/
Distribution Options;
Distributions and Taxes
7. ............ Purchase of Securities How the Fund and the Portfolio
Being Offered Invest their Assets; Risks
Associated With Investments;
Distribution Plan; Valuing
Fund Shares; How to Buy Fund
Shares; The Lifetime
Investing Account/
Distribution Options;
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
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10. ............ Cover Page Cover Page
11. ............ Table of Contents Table of Contents
12. ............ General Information and Other Information
History
13. ............ Investment Objectives and Investment Objective and
Policies 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 and Investment Adviser and
Other Services Administrator; Fees and
Expenses; Other Information;
Back Cover
17. ............ Brokerage Allocation and Portfolio Security
Other Practices Transactions; Fees and
Expenses
18. ............ Capital Stock and Other Other Information
Securities
19. ............ Purchase, Redemption and Determination of Net Asset
Pricing of Securities Value; Principal Underwriter;
Being Offered Service for Withdrawal;
Distribution Plan; Fees and
Expenses
20. ............ Tax Status Taxes
21. ............ Underwriters Principal Underwriter; Fees and
Expenses
22. ............ Calculation of Performance Investment Performance;
Data Performance Information
23. ............ Financial Statements Financial Statements
<PAGE>
Part A
Information Required in a Prospectus
EV CLASSIC HIGH INCOME FUND
EV CLASSIC HIGH INCOME FUND (THE "FUND") IS A MUTUAL FUND SEEKING TO PROVIDE
A HIGH LEVEL OF CURRENT INCOME. THE FUND INVESTS ITS ASSETS IN HIGH INCOME
PORTFOLIO (THE "PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING
THE SAME INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY INVESTING DIRECTLY IN
AND MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY STRUCTURED
MUTUAL FUNDS. THE FUND IS A SERIES OF EATON VANCE MUTUAL FUNDS TRUST (THE
"TRUST").
THE PORTFOLIO SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING UP TO
100% OF ITS ASSETS IN LOWER-RATED BONDS, COMMONLY KNOWN AS "JUNK BONDS", THAT
ENTAIL GREATER RISKS, INCLUDING DEFAULT, THAN THOSE OF HIGHER-RATED SECURITIES.
INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS AND INVEST FOR THE LONG TERM.
SEE "THE FUND'S INVESTMENT OBJECTIVE" AND "HOW THE FUND AND THE PORTFOLIO INVEST
THEIR ASSETS; RISKS ASSOCIATED WITH INVESTMENTS."
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, or other insured depository institution and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should
know before investing. Please retain this document for future reference. A
Statement of Additional Information dated August 1, 1995 for the Fund, as
supplemented from time to time, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This Statement of
Additional Information is available without charge from the Fund's principal
underwriter, Eaton Vance Distributors, Inc. (the "Principal Underwriter"), 24
Federal Street, Boston, MA 02110 (telephone (800) 225-6265). The Portfolio's
investment adviser is Boston Management and Research (the "Investment
Adviser"), a wholly-owned subsidiary of Eaton Vance Management, and Eaton
Vance Management is the administrator (the "Administrator") of the Fund. The
offices of the Investment Adviser and the Administrator are located at 24
Federal Street, Boston, MA 02110.
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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.
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<TABLE>
TABLE OF CONTENTS
Page Page
<S> <C> <C>
Shareholder and Fund Expenses ............... 2 How to Redeem Fund Shares ........... 18
The Fund's Financial Highlights ............. 4 Reports to Shareholders ............. 20
The Fund's Investment Objective ............. 5 The Lifetime Investing Account/
How the Fund and the Portfolio Invest their Distribution Options .............. 20
Assets; Risks Associated with Investments.. 5 The Eaton Vance Exchange Privilege .. 21
Organization of the Fund and the Portfolio .. 11 Eaton Vance Shareholder Services .... 22
Management of the Fund and the Portfolio .... 13 Distributions and Taxes ............. 23
Distribution Plan ........................... 14 Performance Information ............. 24
Valuing Fund Shares ......................... 16 Appendix A .......................... 26
How to Buy Fund Shares ...................... 17 Appendix B .......................... 29
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PROSPECTUS DATED AUGUST 1, 1995
</TABLE>
<PAGE>
SHAREHOLDER AND FUND EXPENSES
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SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Contingent Deferred Sales Charges Imposed on Redemptions
during the First Year (as a percentage of redemption
proceeds exclusive of all reinvestments and capital
appreciation in the account) 1.00%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.64%
Rule 12b-1 Distribution (and Service) Fees 1.00
Other Expenses (after expense reduction) 0.40
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Total Operating Expenses (after expense reduction) 2.04%
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<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C> <C>
An investor would pay the following expenses (including a contingent
deferred sales charge in the case of redemption during the first year
after purchase) on a $1,000 investment, assuming (a) 5% annual return
and (b) redemption at the end of each period: $31 $64 $110 $237
An investor would pay the following expenses on the same investment,
assuming (a) 5% return and (b) no redemptions: $21 $64 $110 $237
</TABLE>
Notes:
The table and Example summarize the aggregate expenses of the Fund and the
Portfolio and is designed to help investors understand the costs and expenses
they will bear, directly or indirectly, by investing in the Fund. Since the Fund
does not yet have sufficient operating history, the percentages indicated as
Annual Fund and Allocated Portfolio Operating Expenses in the table and the
amounts included in the Example are based on the Fund's and the Portfolio's
projected fees and expenses for the current fiscal year ended March 31, 1995.
The Fund's Other Expenses reflect an expected expense allocation for the current
fiscal year, absent which the Other Expenses would be estimated to be 3.56%.
The Fund invests exclusively in the Portfolio. The Trustees believe that,
over time, the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to, or less than, the per share expenses the Fund would
incur if the Fund were instead to retain the services of an investment adviser
and its assets were invested directly in the types of securities being held by
the Portfolio.
The Example should not be considered a representation of past or future
expenses and actual expenses may be greater or less than those shown. Federal
regulations require the example to assume a 5% annual return, but actual annual
return will vary. For further information regarding the expenses of both the
Fund and the Portfolio see "Organization of the Fund and the Portfolio," and
"How to Redeem Fund Shares." A long-term shareholder in a fund paying Rule 12b-1
Distribution Fees may pay more thant the economic equivalent of the maximum
front-end sales charge permitted by a rule of the National Association of
Securities Dealers, Inc.
The contingent deferred sales charge is imposed on the redemption of shares
purchased on or after January 30, 1995. No contingent deferred sales charge is
imposed on (a) shares purchased more than one year prior to redemption, (b)
shares acquired through the reinvestment of distributions or (c) any
appreciation in value of other shares in the account and no such charge is
imposed on exchanges of Fund shares for shares of one or more other funds listed
under "The Eaton Vance Exchange Privilege." See "How to Redeem Fund Shares".
The Portfolio's monthly advisory fee has two components, a fee based on
daily net assets and a fee based on daily gross income, as set forth in the fee
schedule on page 13.
Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies and investors may
do so in the future. See "Organization of the Fund and the Portfolio".
THE FUND'S FINANCIAL HIGHLIGHTS
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The following information should be read in conjunction with the audited
financial statements included in the Fund's Annual Report to shareholders
which is incorporated by reference into the Statement of Additional
Information in reliance upon the report of Deloitte & Touche LLP, independent
certified public accountants, as experts in accounting and auditing. Further
information regarding the performance of the Fund is contained in the Fund's
annual report to shareholders which may be obtained without charge by contacting
the Principal Underwriter.
- ------------------------------------------------------------------------------
FOR THE PERIOD FROM THE START OF BUSINESS, JUNE 8, 1994, TO MARCH 31, 1995:
NET ASSET VALUE, beginning of period $10.000
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INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.735
Net realized and unrealized loss on investments (0.544)
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Total income from operations $ 0.191
-------
LESS DISTRIBUTIONS:
From net investment income $(0.735)
In excess of net investment income (0.026)
-------
Total distributions $(0.761)
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NET ASSET VALUE, end of period $ 9.430
=======
TOTAL RETURN(1) 1.89%
RATIOS/SUPPLEMENTAL DATA*:
Net assets, end of period (000 omitted) $ 2,076
Ratio of expenses to average daily net assets(2) 2.04%+
Ratio of net investment income to average daily net assets 9.17%+
*For the period from the start of business, June 8, 1994, to March 31, 1995, the
operating expenses of the Fund reflect an allocation of expenses to the
Administrator. Had such action not been taken, net investment income per share
and the ratios would have been as follows:
NET INVESTMENT INCOME PER SHARE $ 0.482
=======
RATIOS (As a percentage of average daily net assets):
Expenses(2) 5.20%+
=======
Net investment income 6.01%+
=======
+ Computed on an annualized basis.
(1)Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the payable date.
(2)Includes the Fund's share of High Income Portfolio's allocated expenses.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
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THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE A HIGH LEVEL OF CURRENT INCOME.
The Fund currently seeks to meet its investment objective by investing its
assets in the High Income Portfolio (the "Portfolio"), a separate registered
investment company which invests primarily in a diversified portfolio of
high-yielding, high risk, fixed-income securities (commonly referred to as "junk
bonds"). The Portfolio may invest up to 20% of its assets in common stock and
other equity securities when consistent with its objective or acquired as a unit
combining fixed-income and equity securities.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS;
RISKS ASSOCIATED WITH INVESTMENTS
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THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN ANOTHER
OPEN-END MANAGEMENT INVESTMENT COMPANY, THE PORTFOLIO, WHICH NORMALLY IS
INVESTED AS FOLLOWS:
* AT LEAST 80% IN FIXED-INCOME SECURITIES, INCLUDING CONVERTIBLE SECURITIES
AND
* UP TO 20% IN COMMON STOCKS AND OTHER EQUITY SECURITIES WHEN CONSISTENT
WITH ITS OBJECTIVE OR ACQUIRED AS PART OF A UNIT COMBINING FIXED-INCOME
AND EQUITY SECURITIES.
The fixed-income securities in which the Portfolio may invest include
preferred and preference stocks and all types of debt obligations of both
domestic and foreign issuers, such as bonds, debentures, notes, equipment lease
certificates, equipment trust certificates, conditional sales contracts,
commercial paper, and obligations issued or guaranteed by the U.S. Government,
any state or territory of the United States, any foreign government or any of
their respective political subdivisions, agencies or instrumentalities. Debt
securities may bear fixed, fixed and contingent, variable or floating rates of
interest.
The Portfolio invests a substantial portion of its assets in high yield,
high risk securities issued in connection with mergers, acquisitions, leveraged
buy-outs, recapitalizations and other highly leveraged transactions. These
securities are subject to substantially greater credit risks than some of the
other fixed-income securities in which the Portfolio may invest. These credit
risks include the possibility of default or bankruptcy of the issuer. The value
of such securities may also be subject to a greater degree of volatility in
response to interest rate fluctuations, economic downturns and changes in the
financial condition of the issuer. These securities are less liquid than other
fixed-income securities. During periods of deteriorating economic conditions and
contraction in the credit markets, the ability of issuers of such securities to
service their debt, meet projected goals, or obtain additional financing may be
impaired.
The Portfolio will normally invest at least 65% of its assets in the lowest
investment grade and lower rated obligations (rated Baa or lower by Moody's
Investors Service, Inc. ("Moody's") or BBB or lower by Standard & Poor's Ratings
Group ("S&P")) and unrated obligations. Fixed-income securities which are in the
lowest investment grade and lower rating categories or which are unrated
generally offer a higher yield than is offered by obligations in the higher
rating categories but also are subject to greater credit risks as indicated
elsewhere in this Prospectus. Since available yields and the yield differential
between higher and lower rated obligations vary over time, no specific level of
income or yield differential can ever be assured. For a description of Moody's
and S&P's ratings of fixed-income securities, see Appendix A to this Prospectus.
Unrated bonds are generally regarded as being speculative and expose the
investor to risks with respect to the issuer's capacity to pay interest and
repay principal which are similar to the risks of lower rated bonds. At March
31, 1995, the Portfolio had approximately 96.8% of its assets invested in high
yield, high risk bonds that were rated lower than investment grade or unrated.
See Appendix B to this Prospectus for the Portfolio's asset composition on March
31, 1995.
The Portfolio may also invest a portion of its assets in debt securities
that are not paying current income in anticipation of possible future income or
capital appreciation. Interest and/or principal payments thereon could be in
arrears when such securities are acquired, and the issuer may be in bankruptcy
or undergoing a debt restructuring or reorganization. Such securities may be
unrated or the lowest rated obligations (rated C by Moody's or D by S&P). Bonds
rated C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Bonds rated D by S&P are in payment
default or a bankruptcy petition has been filed and debt service payments are
jeopardized.
Credit ratings are based largely on the issuer's historical financial
condition and the rating agency's investment analysis at the time of rating, and
the rating assigned to any particular security is not necessarily a reflection
of the issuer's current financial condition. Credit quality in the high yield,
high risk bond market can change from time to time, and recently issued credit
ratings may not fully reflect the actual risks posed by a particular high yield
security. Although the Investment Adviser considers security ratings when making
investment decisions, it performs its own credit and investment analysis and
does not rely primarily on the ratings assigned by the rating services. In
evaluating the quality of a particular issue, whether rated or unrated, the
Investment Adviser will normally take into consideration, among other things,
the issuer's financial resources and operating history, its sensitivity to
economic conditions and trends, the ability of its management, its debt maturity
schedules and borrowing requirements, and relative values based on anticipated
cash flow, interest and asset coverages, and earnings prospects. Because of the
greater number of investment considerations involved in investing in high yield,
high risk bonds, the achievement of the Portfolio's objective depends more on
the Investment Adviser's judgment and analytical abilities than would be the
case if the Portfolio were investing primarily in securities in the higher
rating categories.
The Portfolio may also invest a portion of its assets in loan interests,
which are interests in amounts owed by a corporate, governmental or other
borrower to lenders or lending syndicates. Loan interests purchased by the
Portfolio may have a maturity of any number of days or years, may be secured or
unsecured, and may be of any credit quality. Loan interests, which may take the
form of participation interests in, assignments of or novations of a loan, may
be accquired from U.S. and foreign banks, insurance companies, finance companies
or other financial institutions which have made loans or are members of a
lending syndicate or from the holders of loan interests. Loan interests involve
the risk of loss in case of default or bankruptcy of the borrower and, in the
case of participation interests, involve a risk of insolvency of the agent
lending bank or other financial intermediary. Loan interests are not rated by
any nationally recognized rating service and are, at present, not readily
marketable and may be subject to contractual restrictions on resale. The
Portfolio may also invest in restricted securities and securities eligible for
resale pursuant to Rule 144A of the Securities Act of 1933. An investment in
restricted securities may involve relative greater risk and cost to the
Portfolio because of their illiquidity.
Fixed-income securities that the Portfolio may invest in also include zero
coupon bonds, deferred interest bonds and bonds on which the interest is payable
in kind ("PIK bonds"). Zero coupon and deferred interest bonds are debt
obligations which are issued at a significant discount from face value. The
discount approximates the total amount of interest the bonds will accrue and
compound over the period until maturity or the first interest accrual date at a
rate of interest reflecting the market rate of the security at the time of
issuance. While zero coupon bonds do not require the periodic payment of
interest, deferred interest bonds provide for a period of delay before the
regular payment of interest begins. PIK bonds are debt obligations which provide
that the issuer thereof may, at its option, pay interest on such bonds in cash
or in the form of additional debt obligations. Such investments benefit the
issuer by mitigating its need for cash to meet debt service, but also require a
higher rate of return to attract investors who are willing to defer receipt of
such cash. Such investments may experience greater volatility in market value
due to changes in interest rates than debt obligations which make regular
payments of interest. The Portfolio will accrue income on such investments for
tax and accounting purposes, in accordance with applicable law, which income is
distributable to shareholders. Because no cash is received at the time such
income is accrued, the Portfolio may be required to liquidate other portfolio
securities to satisfy its distribution obligations.
The Portfolio may invest up to 25% of its total assets in foreign
securities, including securities issued or guaranteed by foreign governments or
their agencies or instrumentalities. Investing in foreign securities may
represent a greater degree of risk than investing in domestic securities,
because of the possibility of exchange rate fluctuations, less
publicly-available financial and other information, more volatile and less
liquid markets, less securities regulation, higher brokerage costs, imposition
of foreign withholding and other taxes, war, expropriation or other adverse
governmental actions.
When the Investment Adviser believes that it is appropriate to do so, for
defensive purposes, more than 35% of the Portfolio's assets may be temporarily
invested in securities rated A or better by Moody's or S&P. A portion of the
Portfolio's assets may be invested temporarily in cash or short-term obligations
including, but not limited to, certificates of deposit, commercial paper,
short-term notes, obligations issued or guaranteed by the U.S. Government or any
of its agencies or instrumentalities and repurchase agreements.
The Portfolio may invest up to 25% of its assets in securities of issuers in
each of the electric, gas and telephone utility industries if, in the opinion of
the Investment Adviser, the relative return available from such securities and
the relative risk, marketability, quality or availability of securities of
issuers in such industry justifies such an investment. The value of such
investments may be affected to a greater degree by adverse developments in such
industries. Industry-wide problems include the effects of fluctuating economic
conditions, energy conservation practices, environmental regulations, high
capital expenditures, construction delays due to pollution control and
environmental considerations, uncertainties as to fuel availability and costs,
increased competition in deregulated sectors of such industries and difficulties
in obtaining timely and adequate rate relief from regulatory commissions. If
applications for rate increases are not granted or are not acted upon promptly,
the market prices of and interest or dividend payments on utility securities may
be adversely affected.
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THE FUND AND THE PORTFOLIO HAVE ADOPTED CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS WHICH ARE ENUMERATED IN DETAIL IN THE STATEMENT OF ADDITIONAL
INFORMATION AND WHICH MAY NOT BE CHANGED UNLESS AUTHORIZED BY A SHAREHOLDER
VOTE, AND AN INVESTOR VOTE, RESPECTIVELY. EXCEPT FOR SUCH ENUMERATED
RESTRICTIONS AND AS OTHERWISE INDICATED IN THIS PROSPECTUS, THE INVESTMENT
OBJECTIVE AND POLICIES OF THE FUND AND THE PORTFOLIO ARE NOT FUNDAMENTAL
POLICIES AND ACCORDINGLY MAY BE CHANGED BY THE TRUSTEES OF THE TRUST AND THE
PORTFOLIO WITHOUT OBTAINING THE APPROVAL OF THE FUND'S SHAREHOLDERS OR THE
INVESTORS IN THE PORTFOLIO, AS THE CASE MAY BE. IF ANY CHANGES WERE MADE IN THE
FUND'S INVESTMENT OBJECTIVE, THE FUND MIGHT HAVE AN INVESTMENT OBJECTIVE
DIFFERENT FROM THE OBJECTIVE WHICH AN INVESTOR CONSIDERED APPROPRIATE AT THE
TIME THE INVESTOR BECAME A SHAREHOLDER IN THE FUND.
- -------------------------------------------------------------------------------
FIXED-INCOME OBLIGATIONS. Fixed-income obligations offering the high current
income sought by the Portfolio ordinarily are rated in lower rating categories
by recognized rating agencies or are unrated. Such obligations are subject to
substantially greater credit risks (including, without limitation, the
possibility of default by or bankruptcy of the issuers of such securities and
subordination of such obligations to the prior claims of banks and other senior
creditors) than securities in higher rating categories. The probability of
default for the lower quality and unrated corporate debt in which the Portfolio
invests has increased during recent years. In recent years a number of overly
leveraged companies have defaulted on their long-term debt, and some have filed
for bankruptcy protection. Others have sought to restructure their debt through
security exchanges with bondholders. The takeover activity of the past decade
has resulted in exchanges of debt for equity and a decline in the credit quality
of many U.S. companies.
The lower quality and unrated securities in which the Portfolio will invest
will have speculative characteristics in varying degrees. The value of such
obligations may be more susceptible to real and perceived adverse economic or
industry conditions than is the case of higher quality bonds. While the
Investment Adviser will attempt to reduce the risks of investing in lower rated
or unrated securities through active portfolio management, diversification,
credit analysis and attention to current developments and trends in the economy
and the financial markets, there can be no assurance that a broadly diversified
portfolio of such securities would substantially lessen the risks of defaults
brought about by an economic downturn or recession. The Portfolio will also take
such action as it considers appropriate in the event of anticipated financial
difficulties, default or bankruptcy of the issuer of any such obligation. The
Portfolio will incur additional expenditures in taking protective action with
respect to portfolio obligations in default and assets securing such
obligations. As at March 31, 1995, none of the obligations of the Portfolio's
net assets were in default. The Portfolio may retain defaulted obligations in
its portfolio when such retention is considered desirable by the Investment
Adviser. The Portfolio may also acquire other securities issued in exchange for
such obligations or issued in connection with the debt restructuring or
reorganization of the issuers, or where such acquisition, in the judgment of the
Investment Adviser, may enhance the value of such obligations or would otherwise
be consistent with the Portfolio's investment policies.
NET ASSET VALUE FLUCTUATION. The net asset value of the Fund will change in
response to fluctuations in prevailing interest rates and changes in the value
of the securities held by the Portfolio. When interest rates decline, the value
of securities already held by the Portfolio can be expected to rise. Conversely,
when interest rates rise, the value of existing portfolio security holdings can
be expected to decline. Although the lower rated and unrated obligations in the
Portfolio may provide higher yields, they may also be subject to a greater
degree of market fluctuation and are subject to greater investment risks than
high quality obligations. Furthermore, the net investment income provided by the
Portfolio will fluctuate over time. In addition and as indicated above, the
Portfolio invests in high yield, high risk bonds structured as zero coupon,
deferred interest or pay-in-kind securities; these bonds tend to be more
speculative and may be subject to substantially greater fluctuations in value
due to changes in interest rates than other income bearing obligations.
Therefore, an investment in shares of the Fund will not constitute a complete
investment program and is not appropriate for investors who cannot assume the
substantially greater risk of capital depreciation inherent in seeking higher
yields from high risk bonds.
High yield, high risk corporate bonds are frequently traded in markets where
the number of potential purchasers and sellers is limited. There is no
established resale market for certain of these bonds in which the Portfolio
invests. These considerations may make it difficult for the Portfolio to value
its securities, may affect the choice of securities sold to meet redemption
requests and may have the effect of limiting the ability of the Portfolio to
sell or dispose of such bonds on favorable terms. The secondary market for high
yield, high risk corporate obligations is relatively new, is volatile and may be
disrupted by war, inflation or economic downturns, and is less liquid than the
market for high quality bonds. In the event of an illiquid market or in the
absence of readily available market quotations for certain of these bonds held
by the Portfolio, judgment will play a greater role in the valuation of such
bonds because there is less reliable, objective data available. Adverse market
or economic conditions could make it difficult at times for the Portfolio to
sell or dispose of certain high yield, high risk bonds. The Portfolio may also
be forced to sell these bonds at a significant loss to meet shareholder
redemptions.
SHORT-TERM TRADING. Securities may be sold in anticipation of a market decline
(a rise in interest rates) or purchased in anticipation of a market rise (a
decline in interest rates) and later sold. In addition, a security may be sold
and another purchased at approximately the same time to take advantage of what
the Portfolio believes to be a temporary disparity in the normal yield
relationship between the two securities. Yield disparities may occur for reasons
not directly related to the investment quality of particular issues or the
general movement of interest rates, such as changes in the overall demand for or
supply of various types of fixed-income securities or changes in the investment
objectives of investors. Such trading may be expected to increase the portfolio
turnover rate and the expenses incurred in connection with such trading. The
Portfolio anticipates that its annual portfolio turnover rate will generally not
exceed 100% (excluding turnover of securities having a maturity of one year or
less).
LENDING OF SECURITIES. The Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Securities and Exchange Commission (the
"Commission"), such loans would be required to be secured continuously by
collateral in cash, cash equivalents or U.S. Government securities held by the
Portfolio's custodian and maintained on a current basis at an amount at least
equal to the market value of the securities loaned, which will be marked to
market daily. Cash equivalents include short-term municipal obligations as well
as taxable certificates of deposit, commercial paper and other short-term money
market instruments. The Portfolio would have the right to call a loan and obtain
the securities loaned at any time on up to five business days' notice. During
the existence of a loan, the Portfolio will continue to receive the equivalent
of the interest paid by the issuer on the securities loaned and will also
receive a fee, or all or a portion of the interest on investment of the
collateral, if any. However, the Portfolio may pay lending fees to such
borrowers. The Portfolio would not have the right to vote any securities having
voting rights during the existence of the loan, but would call the loan in
anticipation of an important vote to be taken among holders of the securities or
the giving or withholding of their consent on a material matter affecting the
investment. As with other extensions of credit there are risks of delay in
recovery or even loss of rights in the securities loaned if the borrower of the
securities fails financially. However, the loans would be made only to
organizations deemed by the Portfolio's management to be of good standing and
when, in the judgment of the Portfolio's management, the consideration which can
be earned from securities loans of this type justifies the attendant risk. If
the management of the Portfolio decides to make securities loans, it is intended
that the value of the securities loaned would not exceed 30% of the Portfolio's
total assets.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Portfolio may enter into
forward foreign currency exchange contracts. A forward foreign currency exchange
contract is a contract individually negotiated and privately traded by currency
traders and their customers. A forward contract involves an obligation to
purchase or sell a specific currency for an agreed price at a future date, which
may be any fixed number of days from the date of the contract. The purpose of
entering into these contracts is to minimize the risk to the Portfolio from
adverse changes in the relationship between the U.S. dollar and foreign
currencies. At the same time, such contracts may limit potential gain from a
positive change in the relationship between the U.S. dollar and foreign
currencies. Unanticipated changes in currency prices may result in poorer
overall performance for the Portfolio than if it had not entered into forward
foreign currency exchange contracts.
WRITING AND PURCHASING CALL AND PUT OPTIONS. The Portfolio may write (sell)
covered call and put options with respect to up to 25% of its net assets. All
call options written by the Portfolio are covered, which means that the
Portfolio will own the securities subject to the option or an offsetting call
option so long as the option is outstanding. All put options written by the
Portfolio would be covered, which means that the Portfolio would own offsetting
put options or would have deposited with its custodian cash, U.S. Government
securities or other liquid high-grade debt securities with a value at least
equal to the exercise price of the put option. The Portfolio may purchase put
and call options on any securities in which the Portfolio may invest or options
on any securities index based on securities in which the Portfolio may invest.
RISKS ASSOCIATED WITH OPTIONS TRANSACTIONS. There is no assurance that a liquid
secondary market on an options exchange will exist for any particular option, or
at any particular time. If the Portfolio is unable to effect a closing purchase
transaction with respect to covered options it has written, the Portfolio will
not be able to sell the underlying securities or dispose of assets held in a
segregated account until the options expire or are exercised. Similarly, if the
Portfolio is unable to effect a closing sale transaction with respect to options
it has purchased, it would have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of underlying
securities. The Portfolio expects to purchase and write only exchange traded
options until such time as the Portfolio's management determines that the
over-the-counter market in options is sufficiently developed and the Portfolio
has amended its prospectus so that appropriate disclosure is furnished to
prospective and existing shareholders.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. In the event of unanticipated
changes in securities prices, the Portfolio may recognize losses on call and put
options written by the Portfolio to the extent it is required to sell or
purchase the underlying securities or to terminate the option at a loss. The
Portfolio may recognize a loss of the premium on an option it has purchased to
the extent that the option cannot be profitably exercised before its expiration.
The successful use of put options for hedging purposes depends in part on the
Investment Adviser's ability to predict future price fluctuations and the degree
of correlation between the options and securities markets. The Portfolio pays
brokerage commissions or spreads in connection with its options transactions, as
well as for purchases and sales of underlying securities. The writing of options
could result in significant increases in the portfolio turnover rate of the
Portfolio.
FUTURES AND OPTIONS TRANSACTIONS. To hedge against changes in interest rates or
securities prices, the Portfolio has the authority to purchase and sell various
kinds of futures contracts, and purchase and write call and put options on any
of such futures contracts; it may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various securities (such as U.S. Government
securities), securities indices and other financial instruments and indices. The
Portfolio would engage in futures and related options transactions only for bona
fide hedging or non-hedging purposes as defined in or permitted by regulations
of the Commodity Futures Trading Commission. The Portfolio did not engage in
such transactions during the period from June 1, 1994 (commencement of
operations) to June 30, 1995, and there is no assurance that it will engage in
such transactions in the future.
The Portfolio may not purchase or sell futures contracts or purchase or sell
related options, except for closing purchase or sale transactions, if
immediately thereafter the sum of the amount of initial margin deposits on the
Portfolio's outstanding positions in futures and related options and the amount
of premiums paid for outstanding positions in options on futures would exceed 5%
of the market value of the Portfolio's net assets. These transactions involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating the Portfolio to purchase securities, require the Portfolio
to segregate liquid high grade debt securities in an amount equal to the
underlying value of such contracts and options.
In addition, while transactions in futures contracts and options on futures
may reduce certain risks, such transactions themselves involve (1) liquidity
risk that contractual positions cannot be easily closed out in the event of
market changes, (2) correlation risk that changes in the value of hedging
positions may not match the market fluctuations intended to be hedged
(especially given that the only futures contracts currently available to hedge
corporate fixed income securities are futures on various U.S. Government
securities, stock index futures and on municipal securities indices), (3) market
risk that an incorrect prediction by the Investment Adviser of interest rates
may cause the Portfolio to perform less well than if such positions had not been
entered into, and (4) skills different from those needed to select portfolio
securities. Thus, while the Portfolio may benefit from the use of futures and
options on futures, unanticipated changes in interest rates or securities prices
may result in a poorer overall performance for the Portfolio than if it had not
entered into any futures contracts or options transactions. The loss incurred by
the Portfolio in writing options on futures is potentially unlimited and may
exceed the amount of the premium received. The Portfolio's activities in options
and futures contracts may be limited by the requirements of the Internal Revenue
Code for qualification as a regulated investment company.
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IN SEEKING TO PROVIDE AS MUCH CURRENT INCOME AS POSSIBLE, THE PORTFOLIO INVESTS
A SIGNIFICANT PORTION OF ITS ASSETS IN HIGH YIELD, HIGH RISK CORPORATE BONDS.
THESE OBLIGATIONS CARRY SUBSTANTIALLY GREATER INVESTMENT RISK THAN HIGHER
QUALITY BONDS. ACHIEVEMENT OF THE PORTFOLIO'S OBJECTIVES WHICH CANNOT BE
ASSURED, IS THEREFORE MUCH MORE DEPENDENT UPON THE INVESTMENT ADVISER'S OWN
CREDIT ANALYSIS THAN IS THE CASE FOR HIGHER QUALITY BONDS. INVESTORS ARE URGED
TO CAREFULLY CONSIDER THE SUBSTANTIALLY GREATER RISKS OF INVESTING IN A
PORTFOLIO OF HIGH YIELD, HIGH RISK CORPORATE BONDS BEFORE PURCHASING SHARES OF
THE FUND.
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ORGANIZATION OF THE FUND AND THE PORTFOLIO
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THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE MUTUAL FUNDS TRUST (THE "TRUST")
A BUSINESS TRUST, ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION
OF TRUST DATED MAY 7, 1984, AS AMENDED AND RESTATED. THE TRUST IS A MUTUAL FUND
- -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series, and because the Trust can offer separate series
(such as the Fund) it is known as a series company. Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Risks
Associated with Investments". Further information regarding the investment
practices may also be found in the Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $500 million.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund, or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares within one year
of their purchase because of a change in the nonfundamental objective or
policies of the Fund, those shares may be subject to a contingent deferred sales
charge as described in "How to Redeem Fund Shares". In the event the Fund
withdraws all of its assets from the Portfolio, or the Board of Trustees of the
Trust determines that the investment objective of the Portfolio is no longer
consistent with the investment objective of the Fund, such Trustees would
consider what action might be taken, including investing the assets of the Fund
in another pooled investment entity or retaining an investment adviser to manage
the Fund's assets in accordance with its investment objective. The Fund's
investment performance may be affected by a withdrawal of all its assets from
the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining investors may experience higher pro
rata operating expenses, thereby producing lower returns. Additionally, the
Portfolio may become less diverse, resulting in increased portfolio risk, and
experience decreasing economies of scale. However, this possibility exists as
well for historically structured funds which have large or institutional
investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the disinterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust, and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
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THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee equal to the aggregate of
(a) a daily asset based fee computed by applying the annual asset rate
applicable to that portion of the total daily net assets in each
Category as indicated below, plus
(b) a daily income based fee computed by applying the daily income rate
applicable to that portion of the total daily gross income (which
portion shall bear the same relationship to the total daily gross income
on such day as that portion of the total daily net assets in the same
Category bears to the total daily net assets on such day) in each
Category as indicated below:
ANNUAL DAILY
CATEGORY DAILY NET ASSETS ASSET RATE INCOME RATE
- -------- ---------------- ---------- -----------
1 up to $500 million .................... 0.300% 3.00%
2 $500 million but less than $1 billion . 0.275% 2.75%
3 $1 billion but less than $1.5 billion . 0.250% 2.50%
4 $1.5 billion but less than $2 billion . 0.225% 2.25%
5 $2 billion but less than $3 billion ... 0.200% 2.00%
6 $3 billion and over ................... 0.175% 1.75%
As at March 31, 1995, the Portfolio had net assets of $442,551,815. For the
period from the start of business, June 1, 1994, to March 31, 1995, the
Portfolio paid BMR advisory fees equivalent to 0.64% (annualized) of the
Portfolio's average daily net assets for such period. BMR furnishes for the use
of the Portfolio office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Portfolio.
BMR places the portfolio transactions of the Portfolio for execution with
many broker-dealer firms. Fixed-income securities are normally traded on a net
basis (without commission) through broker-dealers and banks acting for their own
account. Such firms attempt to profit from such transactions by buying at the
bid price and selling at the higher asked price of the market, and the
difference is customarily referred to as the spread. In selecting firms to
execute portfolio transactions, BMR judges their professional ability and
quality of service and uses its best efforts to obtain execution at prices which
are advantageous to the Portfolio and at reasonably competitive spreads. Subject
to the foregoing, BMR may consider sales of shares of the Fund or of other
investment companies sponsored by BMR or Eaton Vance as a factor in the
selection of firms to execute portfolio transactions.
Hooker Talcott, Jr. has acted as the Portfolio's portfolio manager since
it commenced operations. Mr. Talcott has been a Vice President of Eaton Vance
since 1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp. through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for its services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certificates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and the
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees, and, if any,
administrative services fees. The Portfolio and the Fund will also each bear
expenses incurred in connection with litigation in which the Portfolio or the
Fund, as the case may be, is a party and any legal obligation to indemnify its
respective officers or Trustees with respect thereto.
DISTRIBUTION PLAN
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THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 6.25% of the
amount received by the Fund for each share sold and (ii) distribution fees
calculated by applying the rate of 1% over the prime rate then reported in The
Wall Street Journal to the outstanding balance of Uncovered Distribution Charges
(as described below) of the Principal Underwriter. On sales of shares made prior
to January 30, 1995, the Principal Underwriter currently pays monthly sales
commissions to a financial service firm (an "Authorized Firm") in amounts
anticipated to be equivalent to .75%, annualized, of the assets maintained in
the Fund by the customers of such Firm. On sales of shares made on January 30,
1995 and thereafter, the Principal Underwriter currently expects to pay to an
Authorized Firm (a) sales commissions (except on exchange transactions and
reinvestments) at the time of sale equal to .75% of the purchase price of the
shares sold by such Firm, and (b) monthly sales commissions approximately
equivalent to 1/12 of .75% of the value of shares sold by such Firm and
remaining outstanding for at least one year. The Plan is designed to permit an
investor to purchase Fund shares through an Authorized Firm without incurring an
intial sales charge and at the same time permit the Principal Underwriter to
compensate Authorized Firms and other persons in connection with the sale of
Fund shares.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments made to the Principal
Underwriter pursuant to the Plan, including any contingent deferred sales
charges, have exceeded the total expenses theretofore incurred by such
organization in distributing shares of the Fund. Total expenses for this purpose
will include an allocable portion of the overhead costs of such organization and
its branch offices.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commissions attributable to
a sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the period from the start of business,
June 8, 1994, to March 31, 1995, the Fund paid or accrued sales commissions
under its Plan equivalent to 0.75% (annualized) of the Fund's average daily net
assets. As at March 31, 1995, the outstanding Uncovered Distribution Charges of
the Principal Underwriter calculated under the Plan amounted to approximately
$200,000 (which amount was equivalent to 9.6% of the Fund's net assets on such
day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented this provision of the Plan by
authorizing the Fund to make monthly service fee payments to the Principal
Underwriter in amounts not expected to exceed .25% of the Fund's average daily
net assets for any fiscal year. The Fund accrues the service fee daily at the
rate of 1/365 of .25% of the Fund's net assets. On sales of shares made prior to
January 30, 1995, the Principal Underwriter currently makes monthly service fee
payments to an Authorized Firm in amounts anticipated to be equivalent to .25%,
annualized, of the assets maintained in the Fund by the customers of such Firm.
On sales of shares made on January 30, 1995 and thereafter, the Principal
Underwriter currently expects to pay to an Authorized Firm (a) a service fee
(except on exchange transactions and reinvestments) at the time of sale equal to
.25% of the purchase price of the shares sold by such Firm, and (b) monthly
service fees approximately equivalent to 1/12 of .25% of the value of shares
sold by such Firm and remaining outstanding for at least one year. During the
first year after a purchase of Fund shares, the Principal Underwriter will
retain the service fee as reimbursement for the service fee payment made to the
Authorized Firm at the time of sale. As permitted by the NASD Rule, all service
fee payments are made for personal services and/or the maintenance of
shareholder accounts. Service fees are separate and distinct from the sales
commissions and distribution fees payable by the Fund to the Principal
Underwriter, and as such are not subject to automatic discontinuance when there
are no outstanding Uncovered Distribution Charges of the Principal Underwriter.
For the period from the start of business, June 8, 1994, to March 31, 1995, the
Fund paid or accrued service fees under its Plan equivalent to 0.25%
(annualized) of the Fund's average daily net assets for such period.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
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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 IBT Fund Services (Canada) Inc., (as agent for the Fund)
in the manner authorized by the Trustees of the Trust. IBT Fund Services
(Canada), Inc. is a subsidiary of Investors Bank & Trust ("IBT"), the Fund's and
the Portfolio's custodian. Net asset value is computed by dividing the value of
the Fund's total assets, less its liabilities, by the number of shares
outstanding. Because the Fund invests its assets in an interest in the
Portfolio, the Fund's net asset value will reflect the value of its interest in
the Portfolio (which, in turn, reflects an interest in the underlying value of
the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT Fund Services (Canada) Inc. (as agent for
the Portfolio), in the manner authorized by the Trustees of the Portfolio. Net
asset value is computed by subtracting the liabilities of the Portfolio from the
value of its total assets. Fixed-income securities (other than short-term
obligations), including listed securities and securities for which price
quotations are available, will normally be valued on the basis of market
valuations furnished by a pricing service. For further information regarding the
valuation of the Portfolio's assets, see "Determination of Net Asset Value" in
the Statement of Additional Information. Eaton Vance Corp. owns 77.3% of the
outstanding stock of IBT.
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SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE.
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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 net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse an order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent as follows: The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104. The $1,000 minimum initial
investment is waived for Bank Automated Investing accounts, which may be
established with an investment of $50 or more. See "Eaton Vance Shareholder
Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares."
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Classic High Income Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Classic High Income Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
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IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
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HOW TO REDEEM FUND SHARES
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A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any share
certificates with executed stock powers. The redemption price will be based on
the net asset value per share of the Fund next computed after such delivery.
Good order means that all relevant documents must be endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) must be
guaranteed by a member of either the Securities Transfer Association's STAMP
program or the New York Stock Exchange's Medallion Signature Program, or certain
banks, savings and loan institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered securities associations
as required by a regulation of the Securities and Exchange Commission and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the redeemed shares as of the date determined above, reduced by
the amount of any applicable contingent deferred sales charge (described below)
and any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of a redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to fifteen days from the purchase date
when the purchase check has not yet cleared. Redemptions or repurchases may
result in a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required if the cause of the low account
balance was a reduction in the net asset value of Fund shares. No contingent
deferred sales charge will be imposed with respect to such involunatry
redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares purchased on or after January 30, 1995
and redeemed within the first year of their purchase (except shares acquired
through the reinvestment of distributions) generally will be subject to a
contingent deferred sales charge. This contingent deferred sales charge is
imposed on any redemption the amount of which exceeds the aggregate value at the
time of redemption of (a) all shares in the account purchased more than one year
prior to the redemption, (b) all shares in the account acquired through
reinvestment of distributions, and (c) the increase, if any, of value in the
other shares in the account (namely those purchased within the year preceding
the redemption) over the purchase price of such shares. Redemptions are
processed in a manner to maximize the amount of redemption proceeds which will
not be subject to a contingent deferred sales charge. That is, each redemption
will be assumed to have been made first from the exempt amounts referred to in
clauses (a), (b) and (c) above, and second through liquidation of those shares
in the account referred to in clause (c) on a first-in-first out basis. Any
contingent deferred sales charge which is required to be imposed on share
redemptions will be equal to 1% of the net asset value of redeemed shares.
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege," the purchase of Fund shares acquired in
the exchange is deemed to have occurred at the time of the original purchase of
the exchanged shares.
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will also be waived
for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton Vance
Shareholders Services"), (2) as part of a distribution from a retirement plan
qualified under Section 401, 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code"), or (3) as part of a minimum required distribution from
other tax-sheltered retirement plans. The contingent deferred sales charge will
be paid to the Principal Underwriter or the Fund.
REPORTS TO SHAREHOLDERS
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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 certified public accountants. Shortly
after the end of each calendar year, the Fund will furnish all shareholders with
information necessary for preparing Federal and state income tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
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AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current share balance in the account. THE
LIFETIME INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL
INVESTMENTS IN FUND SHARES BY SENDING A CHECK FOR $50 OR MORE TO The Shareholder
Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO LIFETIME INVESTING
ACCOUNTS and may be changed as often as desired by written notice to the Fund's
dividend disbursing agent, The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104. The currently effective option will appear on each
account statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under 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 at the then current net asset value. Further, the
distribution option on the account will be automatically changed to the Share
Option until such time as the shareholder selects a different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
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UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL INVESTMENTS
BY SENDING A CHECK FOR $50 OR MORE.
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THE EATON VANCE EXCHANGE PRIVILEGE
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Shares of the Fund may be exchanged for shares of one or more other funds in the
Eaton Vance Classic Group of Funds or Eaton Vance Money Market Fund, which are
distributed subject to a contingent deferred sales charge, on the basis of the
net asset value per share of each fund at the time of the exchange, provided
that such exchange offers are available only in states where shares of such fund
may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange, the purchase of shares acquired in one or more
exchanges is deemed to have occurred at the time of the original purchase of the
exchanged shares.
Shares of the other funds in the Eaton Vance Classic Group of Funds, (and
shares of Eaton Vance Money Market Fund acquired as the result of an exchange
from an EV Classic Fund) may be exchanged for Fund shares on the basis of the
net asset value per share of each fund at the time of the exchange, but subject
to any restrictions or qualifications set forth in the current prospectus of any
such fund.
Telephone exchanges are accepted by The Shareholder Services Group, provided
that the investor has not disclaimed in writing the use of the privilege. To
effect such exchanges, call The Shareholder Services Group, Inc. at 800-262-1122
or, within Massachusetts, 617-573-9403, Monday through Friday, 9:00 a.m. to 4:00
p.m. (Eastern Standard Time). Shares acquired by telephone exchange must be
registered in the same name(s) and with the same address as the shares being
exchanged. Neither the Fund, the Principal Underwriter nor The Shareholder
Services Group, Inc. will be responsible for the authenticity of exchange
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated are genuine have been followed. Telephone
instructions will be tape recorded. In times of drastic economic or market
changes, a telephone exchange may be difficult to implement. An exchange may
result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
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THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not dividends are reinvested.
The name of the shareholder, the Fund and the account number should accompany
each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 60 days after such repurchase
or redemption, and the privilege has not been used more than once in the prior
12 months. Shares are sold to a reinvesting shareholder at the next determined
net asset value following timely receipt of a written purchase order by the
Principal Underwriter or by the Fund (or by the Fund's Transfer Agent). To the
extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
--Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
--Individual Retirement Account Plans for individuals and their non-
employed spouses; and
--403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements
of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
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SUBSTANTIALLY ALL OF THE INVESTMENT INCOME ALLOCATED TO THE FUND BY THE
PORTFOLIO, LESS THE FUND'S DIRECT AND ALLOCATED EXPENSES, WILL BE DECLARED DAILY
AS A DISTRIBUTION TO FUND SHAREHOLDERS OF RECORD AT THE TIME OF DECLARATION.
Such distributions, whether taken in cash or reinvested in additional shares,
will ordinarily be paid on the twenty-second day of each month or the next
business day thereafter. The Fund anticipates that for tax purposes the entire
distribution, whether paid in cash or reinvested in additional shares of the
Fund, will constitute income to its shareholders. Shareholders reinvesting the
monthly distribution should treat the amount of the entire distribution as the
tax cost basis of the additional shares acquired by reason of such reinvestment.
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.
Distributions of 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. Only a small portion, if any, of such distributions may be
eligible for the dividends-received deduction for corporations subject to
certain limitations.
Capital gains, if any, realized on sales of investments and on options and
futures transactions during the fiscal year, which ends on March 31, will be
offset by any capital loss carryovers and will usually be distributed with the
Fund's first monthly distribution paid after the close of such fiscal year, but
the Fund could make additional distribution of capital gains in any year in
order to comply with the distribution requirements of the Code. Distrbutions of
long-term capital gains are taxable to shareholders as such, whether received in
cash or reinvested in additional shares of the Fund and regardless of the length
of time Fund shares have been owned by the shareholder. Gains and losses
attributable to most transactions of the Fund in options, futures contracts,
options on futures and forward contracts are generally treated as 40% short-term
and 60% long-term for Federal income tax purposes.
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,
income and gains it distributes to shareholders. In satisfying these
requirements, the Fund will treat itself as owning its proportionate share of
each of the Portfolio's assets and as entitled to the income of the Portfolio
properly attributable to such share.
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AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY FEDERAL
INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS ITS NET
INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE TIMING
REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE PORTFOLIO
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
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PERFORMANCE INFORMATION
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FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The Fund's current yield is calculated by dividing the net investment
income per share during a recent 30 day period by the Fund's maximum offering
price per share (net asset value) on the last day of the period and annualizing
the resulting figure. The Fund's average annual total return is determined by
computing the average annual percentage change in value of $1,000 invested at
the maximum public offering price (net asset value) for specified periods ending
with the most recent calendar quarter, assuming reinvestment of all
distributions. The average annual total return calculation assumes a complete
redemption of the investment and the deduction of any applicable contingent
deferred sales charge at the end of the period. The Fund may also publish annual
and cumulative total return figures from time to time.
The Fund may also publish its distribution rate and/or its effective
distribution rate. The Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current maximum offering
price per share (net asset value). The Fund's effective distribution rate is
computed by dividing the distribution rate by the ratio used to annualize the
most recent monthly distribution and reinvesting the resulting amount for a full
year on the basis of such ratio. The effective distribution rate will be higher
than the distribution rate because of the compounding effect of the assumed
reinvestment. Investors should note that the Fund's yield is calculated using a
standardized formula the income component of which is computed from the yields
to maturity of all debt obligations held by the Portfolio based on prescribed
methods (with all purchases and sales of securities during such period included
in the income calculation on a settlement date basis), whereas the distribution
rate is based on the Fund's last monthly distribution which tends to be
relatively stable and may be more or less than the amount of net investment
income and short-term capital gain actually earned by the Fund during the month.
Performance figures published by the Fund which do not include the effect of
any applicable contingent deferred sales charge would be reduced if it were
included.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield, total return
distribution rate or effective distribution rate for any prior period should not
be considered as a representation of what an investment may earn or what the
Fund's yield, total return distribution rate or effective distribution rate may
be in any future period. If the expenses related to the operation of the Fund or
the Portfolio are allocated to Eaton Vance, the Fund's performance will be
higher.
<PAGE>
APPENDIX A
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
SECURITIES IN WHICH THE PORTFOLIO MAY INVEST WILL INCLUDE THOSE
IN THE FOLLOWING CATEGORIES:
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP CORPORATE BOND RATINGS:
INVESTMENT GRADE
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's to
a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
SECURITIES IN WHICH THE PORTFOLIO MAY INVEST WILL INCLUDE THOSE IN THE
FOLLOWING CATEGORIES:
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
SPECULATIVE GRADE
Debt rated "BB", "B", "CCC", "CC" and "C" is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.
The B rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB or BB- rating.
CCC: Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.
The CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC: The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
C1: The Rating C1 is reserved for income bonds on which no interest is being
paid.
D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Bonds may lack a Standard & Poor's rating because no public rating has been
requested, because there is insufficient information on which to base a rating,
or because Standard & Poor's does not rate a particular type of obligation as a
matter of policy.
NOTES: Bonds which are unrated expose the investor to risks with respect to
capacity to pay interest or repay principal which are similar to the risks of
lower-rated speculative obligations. The Portfolio is dependent on the
Investment Adviser's judgment, analysis and experience in the evaluation of such
bonds.
Investors should note that the assignment of a rating to a bond by a rating
service may not reflect the effect of recent developments on the issuer's
ability to make interest and principal payments.
<PAGE>
APPENDIX B
HIGH INCOME PORTFOLIO
ASSET COMPOSITION INFORMATION
FOR THE PERIOD ENDED MARCH 31, 1995
PERCENT OF
NET ASSETS
----------
Preferred Stocks and Other Equity Securities ............. 1.0%
Short-term Obligations ................................... 3.0
Debt Securities -- Moody's Rating
Ba ................................................. 8.2
B1 ................................................. 22.3
B2 ................................................. 27.0
B3 ................................................. 25.1
Caa ................................................ 8.7
Unrated ............................................ 4.7
-----
Total .............................................. 100.00%
The chart above indicates the weighted average composition of the Portfolio
for the period ended March 31, 1995, with the debt securities rated by Moody's
Investors Service, Inc. separated into the indicated categories. The weighted
average indicated above was calculated on a dollar weighted basis and was
computed as at the end of each month during the period. The chart does not
necessarily indicate what the composition of the Portfolio will be in the
current and subsequent fiscal years.
For a description of Moody's Investors Service, Inc. ratings of fixed-
income securities, see Appendix A to this Prospectus.
<PAGE>
INVESTMENT ADVISER OF
HIGH INCOME PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC HIGH INCOME FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EV Classic
High Income
Fund
PROSPECTUS
AUGUST 1, 1995
EV CLASSIC
HIGH INCOME FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-HIP
<PAGE>
Part A
Information Required in a Prospectus
EV MARATHON HIGH INCOME FUND
EV MARATHON HIGH INCOME FUND (THE "FUND") IS A MUTUAL FUND SEEKING TO
PROVIDE A HIGH LEVEL OF CURRENT INCOME. THE FUND INVESTS ITS ASSETS IN HIGH
INCOME PORTFOLIO (THE "PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY
HAVING THE SAME INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY INVESTING
DIRECTLY IN AND MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH HISTORICALLY
STRUCTURED MUTUAL FUNDS. THE FUND IS A SERIES OF EATON VANCE MUTUAL FUNDS TRUST
(THE "TRUST").
THE PORTFOLIO SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING UP TO
100% OF ITS ASSETS IN LOWER-RATED BONDS, COMMONLY KNOWN AS "JUNK BONDS", THAT
ENTAIL GREATER RISKS, INCLUDING DEFAULT, THAN THOSE OF HIGHER-RATED SECURITIES.
INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS AND INVEST FOR THE LONG TERM.
SEE "THE FUND'S INVESTMENT OBJECTIVE" AND "HOW THE FUND AND THE PORTFOLIO INVEST
THEIR ASSETS; RISKS ASSOCIATED WITH INVESTMENTS."
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, or other insured depository institution and are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency. Shares of the Fund involve
investment risks, including fluctuations in value and the possible loss of some
or all of the principal investment.
This Prospectus is designed to provide you with information you should
know before investing. Please retain this document for future reference. A
Statement of Additional Information dated August 1, 1995 for the Fund, as
supplemented from time to time, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. This Statement of
Additional Information is available without charge from the Fund's principal
underwriter, Eaton Vance Distributors, Inc. (the "Principal Underwriter"), 24
Federal Street, Boston, MA 02110 (telephone (800) 225-6265). The Portfolio's
investment adviser is Boston Management and Research (the "Investment
Adviser"), a wholly-owned subsidiary of Eaton Vance Management, and Eaton
Vance Management is the administrator (the "Administrator") of the Fund. The
offices of the Investment Adviser and the Administrator are located at 24
Federal Street, Boston, MA 02110.
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page Page
<S> <C> <C>
Shareholder and Fund Expenses ............... 2 How to Redeem Fund Shares .................. 19
The Fund's Financial Highlights ............. 4 Reports to Shareholders .................... 21
The Fund's Investment Objective ............. 6 The Lifetime Investing Account/Distribution
How the Fund and the Portfolio Invest their Options .................................. 21
Assets; Risks Associated with Investments.. 6 The Eaton Vance Exchange Privilege ......... 22
Organization of the Fund and the Portfolio .. 12 Eaton Vance Shareholder Services ........... 23
Management of the Fund and the Portfolio .... 14 Distributions and Taxes .................... 24
Distribution Plan ........................... 15 Performance Information .................... 25
Valuing Fund Shares ......................... 17 Appendix A ................................. 27
How to Buy Fund Shares ...................... 18 Appendix B ................................. 30
- -------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS DATED AUGUST 1, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES
- ------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Range of Declining Contingent Deferred Sales Charges Imposed on
Redemptions during the First Seven Years (as a percentage of
redemption proceeds exclusive of all reinvestments and
capital appreciation in the account) 5.00%-0%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.64%
Rule 12b-1 Distribution (and Service) Fees 0.91
Other Expenses 0.23
----
Total Operating Expenses 1.78%
====
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An Investor would pay the following contingent deferred sales charge and
expenses on a $1,000 investment, assuming (a) 5% annual return and
(b) redemption at the end of each time period: $68 $96 $116 $209
An Investor would pay the following expenses on the same investment,
assuming (a) 5% annual return and (b) no redemptions: $18 $56 $ 96 $209
</TABLE>
Notes:
The above table and Example summarize the aggregate expenses of the Fund and
the Portfolio and are designed to help investors understand the costs and
expenses that they will bear directly or indirectly, by investing in the Fund.
The percentages indicated as Annual Fund and Allocated Portfolio Operating
Expenses in the table and the amounts included in the Example are based on the
Fund's and Portfolio's results for the fiscal year ended March 31, 1995. The
Fund invests exclusively in the Portfolio. The Trustees believe that, over time,
the aggregate per share expenses of the Fund and the Portfolio should be
approximately equal to, or less than, the per share expenses the Fund would
incur if the Fund were instead to retain the services of an investment adviser
and its assets were invested directly in the types of securities being held by
the Portfolio.
Federal regulations require the Example should not be considered a
representation of past or future expenses and actual expenses may be greater or
less than those shown. The Example assume a 5% annual return, but actual
performance will vary. For further information regarding the expenses of both
the Fund and the Portfolio see "Organization of the Fund and the Portfolio" and
"How to Redeem Fund Shares". A long-term shareholder in a Fund paying Rule 12b-1
Distribution Fees may pay more than the economic equivalent of the maximum
front-end sales charge permitted by a rule of the National Association of
Securities Dealers, Inc. See "Distribution Plan".
No contingent deferred sales charge is imposed on (a) shares purchased more
than six years prior to the redemption, (b) shares acquired through the
reinvestment of dividends and distributions or (c) any appreciation in value of
other shares in the account, and no such charge is imposed on exchanges of Fund
shares for shares of one or more other funds listed under "The Eaton Vance
Exchange Privilege". See "How to Redeem Fund Shares".
Other investment companies with different distribution arrangements and fees
are investing in the Portfolio and additional such companies and investors may
do so in the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the financial
statements included in the Annual Report to Shareholders which is incorporated
by reference into the Statement of Additional Information, in reliance upon
the report of Deloitte & Touche LLP, independent certified public accountants,
as experts in accounting and auditing. Further information regarding the
performance of the Fund is contained in the Fund's annual report to
shareholders which may be obtained without charge by contracting the Principal
Underwriter.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------------------------------------------------------------
1995 1994(b) 1993 1992 1991 1990 1989 1988 1987(a)*
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of year ..................... $ 7.450 $ 7.480 $ 7.380 $ 6.120 $ 7.430 $ 9.230 $ 9.330 $10.380 $10.000
------- ------- ------- ------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income ...... $ 0.671 $ 0.697 $ 0.767 $ 0.825 $ 0.973 $ 1.053 $ 1.054 $ 1.041 $ 0.701
Net realized and
unrealized gain (loss)
on investments ............ (0.507) 0.047 0.170 1.356 (1.187) (1.708) (0.023) (0.916) 0.427
Commissions paid on sale of
Trust shares ............. -- -- -- -- -- -- -- -- (0.046)
------- ------- ------- ------- ------- ------- ------- ------- -------
Total income (loss) from
operations ............. $ 0.164 $ 0.744 $ 0.937 $ 2.181 $(0.214) $(0.655) $ 1.031 $ 0.125 $ 1.082
------- ------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income . $(0.671) $(0.697) $(0.767) $(0.825) $(0.973) $(1.078) $(1.038) $(1.030) $(0.702)
In excess of net investment
income(1)................... (0.023) (0.077) (0.070) (0.096) (0.123) (0.067) (0.093) (0.095) --
From realized capital gains . -- -- -- -- -- -- -- (0.050) --
------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions ...... $(0.694) $(0.774) $(0.837) $(0.921) $(1.096) $(1.145) $(1.131) $(1.125) $(0.702)
------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year . $ 6.920 $ 7.450 $ 7.480 $ 7.380 $ 6.120 $ 7.430 $ 9.230 $ 9.330 $10.380
======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN(2).............. 2.51% 10.28% 13.41% 38.21% (2.84)% (8.14)% 11.58% 1.52% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(000 omitted) .......... $439,171 $399,259 $332,854 $252,967 $170,655 $214,075 $268,080 $231,648 $189,035
Ratio of expenses to
average daily net assets(3) 1.78% 1.82% 2.09% 2.19% 2.37% 2.20% 2.19% 2.02% 1.01%+
Ratio of net investment
income to average daily
net assets ............... 9.52% 9.09% 10.31% 12.00% 14.54% 12.12% 11.28% 10.89% 11.06%+
PORTFOLIO TURNOVER(4) ......... 11% 96% 91% 82% 57% 53% 57% 59% 47%
*Period from the start of business, August 19, 1986, to March 31, 1987.
+Computed on an annualized basis.
</TABLE>
Notes:
(1) Distributions from paid-in capital for the years ended March 31, 1988
through March 31, 1993 have been restated to conform with the treatment
permitted under current financial reporting standards.
(2) Total return is calculated assuming a purchase at the net asset value on the
first day and a sale at the net asset value on the last day of each period
reported. Dividends and distributions, if any, are assumed to be reinvested
at the net asset value on the payable date.
(3) Includes the Fund's share of High Income Portfolio's allocated expenses for
the period from June 1, 1994, to March 31, 1995.
(4) Portfolio turnover represents the rate of portfolio activity for the period
while the Fund was making investments directly in securities. The portfolio
turnover for the period since the Fund transferred substantially all of its
investable assets to the Portfolio is shown in the Portfolio's financial
statements which are included in the Fund's Annual Report.
(a) On June 12, 1987, the Securities and Exchange Commission adopted a new rule
which requires sales commissions paid to the Principal Underwriter under the
Distribution Plan to be treated as an operating expense rather than a charge
to paid-in capital. Accordingly, such commissions for the years ended after
March 31, 1987 are reflected as an expense. As a result, for such periods,
expenses per share are increased and net income per share is decreased, with
no effect on net asset value per share. Also, the ratios of expenses and net
investment income to average net assets are correspondingly affected. Had
the rule been in effect for the period from the start of business, August
19, 1986, to March 31, 1987, the annualized ratios of expenses and net
investment income to average net assets would have been 2.01% and 10.06%,
respectively.
(b) During the period from the start of business, August 19, 1986 to May 31,
1994, the Fund invested directly in securities. As of the close of business,
May 31, 1994, the Fund transferred substantially all of its assets to the
Portfolio in exchange for an interest in the Portfolio.
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE A HIGH LEVEL OF CURRENT INCOME.
The Fund currently seeks to meet its investment objective by investing its
assets in the High Income Portfolio (the "Portfolio"), a separate registered
investment company which invests primarily in a diversified portfolio of
high-yielding, high risk, fixed-income securities (commonly referred to as "junk
bonds"). The Portfolio may invest up to 20% of its assets in common stock and
other equity securities when consistent with its objective or acquired as a unit
combining fixed-income and equity securities.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS; RISKS ASSOCIATED WITH
INVESTMENTS
- ------------------------------------------------------------------------------
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING IN ANOTHER
OPEN-END MANAGEMENT INVESTMENT COMPANY, THE PORTFOLIO, WHICH NORMALLY IS
INVESTED AS FOLLOWS:
* AT LEAST 80% IN FIXED-INCOME SECURITIES, INCLUDING CONVERTIBLE SECURITIES
AND
* UP TO 20% IN COMMON STOCKS AND OTHER EQUITY SECURITIES WHEN CONSISTENT
WITH ITS OBJECTIVE OR ACQUIRED AS PART OF A UNIT COMBINING FIXED-INCOME
AND EQUITY SECURITIES.
The fixed-income securities in which the Portfolio may invest include
preferred and preference stocks and all types of debt obligations of both
domestic and foreign issuers, such as bonds, debentures, notes, equipment lease
certificates, equipment trust certificates, conditional sales contracts,
commercial paper, and obligations issued or guaranteed by the U.S. Government,
any state or territory of the United States, any foreign government or any of
their respective political subdivisions, agencies or instrumentalities. Debt
securities may bear fixed, fixed and contingent, variable or floating rates of
interest.
The Portfolio invests a substantial portion of its assets in high yield,
high risk securities issued in connection with mergers, acquisitions, leveraged
buy-outs, recapitalizations and other highly leveraged transactions. These
securities are subject to substantially greater credit risks than some of the
other fixed-income securities in which the Portfolio may invest. These credit
risks include the possibility of default or bankruptcy of the issuer. The value
of such securities may also be subject to a greater degree of volatility in
response to interest rate fluctuations, economic downturns and changes in the
financial condition of the issuer. These securities are less liquid than other
fixed-income securities. During periods of deteriorating economic conditions and
contraction in the credit markets, the ability of issuers of such securities to
service their debt, meet projected goals, or obtain additional financing may be
impaired.
The Portfolio will normally invest at least 65% of its assets in the lowest
investment grade and lower rated obligations (rated Baa or lower by Moody's
Investors Service, Inc. ("Moody's") or BBB or lower by Standard & Poor's Ratings
Group ("S&P")) and unrated obligations. Fixed-income securities which are in the
lowest investment grade and lower rating categories or which are unrated
generally offer a higher yield than is offered by obligations in the higher
rating categories but also are subject to greater credit risks as indicated
elsewhere in this Prospectus. Since available yields and the yield differential
between higher and lower rated obligations vary over time, no specific level of
income or yield differential can ever be assured. For a description of Moody's
and S&P's ratings of fixed-income securities, see Appendix A to this Prospectus.
Unrated bonds are generally regarded as being speculative and expose the
investor to risks with respect to the issuer's capacity to pay interest and
repay principal which are similar to the risks of lower rated bonds. At March
31, 1995, the Portfolio had approximately 96.8% of its assets invested in high
yield, high risk bonds that were rated lower than investment grade or unrated.
See Appendix B to this Prospectus for the Portfolio's asset composition on March
31, 1995.
The Portfolio may also invest a portion of its assets in debt securities
that are not paying current income in anticipation of possible future income or
capital appreciation. Interest and/or principal payments thereon could be in
arrears when such securities are acquired, and the issuer may be in bankruptcy
or undergoing a debt restructuring or reorganization. Such securities may be
unrated or the lowest rated obligations (rated C by Moody's or D by S&P). Bonds
rated C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Bonds rated D by S&P are in payment
default or a bankruptcy petition has been filed and debt service payments are
jeopardized.
Credit ratings are based largely on the issuer's historical financial
condition and the rating agency's investment analysis at the time of rating, and
the rating assigned to any particular security is not necessarily a reflection
of the issuer's current financial condition. Credit quality in the high yield,
high risk bond market can change from time to time, and recently issued credit
ratings may not fully reflect the actual risks posed by a particular high yield
security. Although the Investment Adviser considers security ratings when making
investment decisions, it performs its own credit and investment analysis and
does not rely primarily on the ratings assigned by the rating services. In
evaluating the quality of a particular issue, whether rated or unrated, the
Investment Adviser will normally take into consideration, among other things,
the issuer's financial resources and operating history, its sensitivity to
economic conditions and trends, the ability of its management, its debt maturity
schedules and borrowing requirements, and relative values based on anticipated
cash flow, interest and asset coverages, and earnings prospects. Because of the
greater number of investment considerations involved in investing in high yield,
high risk bonds, the achievement of the Portfolio's objective depends more on
the Investment Adviser's judgment and analytical abilities than would be the
case if the Portfolio were investing primarily in securities in the higher
rating categories.
The Portfolio may also invest a portion of its assets in loan interests,
which are interests in amounts owed by a corporate, governmental or other
borrower to lenders or lending syndicates. Loan interests purchased by the
Portfolio may have a maturity of any number of days or years, may be secured or
unsecured, and may be of any credit quality. Loan interests, which may take the
form of participation interests in, assignments of or novations of a loan, may
be accquired from U.S. and foreign banks, insurance companies, finance companies
or other financial institutions which have made loans or are members of a
lending syndicate or from the holders of loan interests. Loan interests involve
the risk of loss in case of default or bankruptcy of the borrower and, in the
case of participation interests, involve a risk of insolvency of the agent
lending bank or other financial intermediary. Loan interests are not rated by
any nationally recognized rating service and are, at present, not readily
marketable and may be subject to contractual restrictions on resale. The
Portfolio may also invest in restricted securities and securities eligible for
resale pursuant to Rule 144A of the Securities Act of 1933. An investment in
restricted securities may involve relative greater risk and cost to the
Portfolio because of their illiquidity.
Fixed-income securities that the Portfolio may invest in also include zero
coupon bonds, deferred interest bonds and bonds on which the interest is payable
in kind ("PIK bonds"). Zero coupon and deferred interest bonds are debt
obligations which are issued at a significant discount from face value. The
discount approximates the total amount of interest the bonds will accrue and
compound over the period until maturity or the first interest accrual date at a
rate of interest reflecting the market rate of the security at the time of
issuance. While zero coupon bonds do not require the periodic payment of
interest, deferred interest bonds provide for a period of delay before the
regular payment of interest begins. PIK bonds are debt obligations which provide
that the issuer thereof may, at its option, pay interest on such bonds in cash
or in the form of additional debt obligations. Such investments benefit the
issuer by mitigating its need for cash to meet debt service, but also require a
higher rate of return to attract investors who are willing to defer receipt of
such cash. Such investments may experience greater volatility in market value
due to changes in interest rates than debt obligations which make regular
payments of interest. The Portfolio will accrue income on such investments for
tax and accounting purposes, in accordance with applicable law, which income is
distributable to shareholders. Because no cash is received at the time such
income is accrued, the Portfolio may be required to liquidate other portfolio
securities to satisfy its distribution obligations.
The Portfolio may invest up to 25% of its total assets in foreign
securities, including securities issued or guaranteed by foreign governments or
their agencies or instrumentalities. Investing in foreign securities may
represent a greater degree of risk than investing in domestic securities,
because of the possibility of exchange rate fluctuations, less
publicly-available financial and other information, more volatile and less
liquid markets, less securities regulation, higher brokerage costs, imposition
of foreign withholding and other taxes, war, expropriation or other adverse
governmental actions.
When the Investment Adviser believes that it is appropriate to do so, for
defensive purposes, more than 35% of the Portfolio's assets may be temporarily
invested in securities rated A or better by Moody's or S&P. A portion of the
Portfolio's assets may be invested temporarily in cash or short-term obligations
including, but not limited to, certificates of deposit, commercial paper,
short-term notes, obligations issued or guaranteed by the U.S. Government or any
of its agencies or instrumentalities and repurchase agreements.
The Portfolio may invest up to 25% of its assets in securities of issuers in
each of the electric, gas and telephone utility industries if, in the opinion of
the Investment Adviser, the relative return available from such securities and
the relative risk, marketability, quality or availability of securities of
issuers in such industry justifies such an investment. The value of such
investments may be affected to a greater degree by adverse developments in such
industries. Industry-wide problems include the effects of fluctuating economic
conditions, energy conservation practices, environmental regulations, high
capital expenditures, construction delays due to pollution control and
environmental considerations, uncertainties as to fuel availability and costs,
increased competition in deregulated sectors of such industries and difficulties
in obtaining timely and adequate rate relief from regulatory commissions. If
applications for rate increases are not granted or are not acted upon promptly,
the market prices of and interest or dividend payments on utility securities may
be adversely affected.
- -------------------------------------------------------------------------------
THE FUND AND THE PORTFOLIO HAVE ADOPTED CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS WHICH ARE ENUMERATED IN DETAIL IN THE STATEMENT OF ADDITIONAL
INFORMATION AND WHICH MAY NOT BE CHANGED UNLESS AUTHORIZED BY A SHAREHOLDER
VOTE, AND AN INVESTOR VOTE, RESPECTIVELY. EXCEPT FOR SUCH ENUMERATED
RESTRICTIONS AND AS OTHERWISE INDICATED IN THIS PROSPECTUS, THE INVESTMENT
OBJECTIVE AND POLICIES OF THE FUND AND THE PORTFOLIO ARE NOT FUNDAMENTAL
POLICIES AND ACCORDINGLY MAY BE CHANGED BY THE TRUSTEES OF THE TRUST AND THE
PORTFOLIO WITHOUT OBTAINING THE APPROVAL OF THE FUND'S SHAREHOLDERS OR THE
INVESTORS IN THE PORTFOLIO, AS THE CASE MAY BE. IF ANY CHANGES WERE MADE IN THE
FUND'S INVESTMENT OBJECTIVE, THE FUND MIGHT HAVE AN INVESTMENT OBJECTIVE
DIFFERENT FROM THE OBJECTIVE WHICH AN INVESTOR CONSIDERED APPROPRIATE AT THE
TIME THE INVESTOR BECAME A SHAREHOLDER IN THE FUND.
- -------------------------------------------------------------------------------
FIXED-INCOME OBLIGATIONS. Fixed-income obligations offering the high current
income sought by the Portfolio ordinarily are rated in lower rating categories
by recognized rating agencies or are unrated. Such obligations are subject to
substantially greater credit risks (including, without limitation, the
possibility of default by or bankruptcy of the issuers of such securities and
subordination of such obligations to the prior claims of banks and other senior
creditors) than securities in higher rating categories. The probability of
default for the lower quality and unrated corporate debt in which the Portfolio
invests has increased during recent years. In recent years a number of overly
leveraged companies have defaulted on their long-term debt, and some have filed
for bankruptcy protection. Others have sought to restructure their debt through
security exchanges with bondholders. The takeover activity of the past decade
has resulted in exchanges of debt for equity and a decline in the credit quality
of many U.S. companies.
The lower quality and unrated securities in which the Portfolio will invest
will have speculative characteristics in varying degrees. The value of such
obligations may be more susceptible to real and perceived adverse economic or
industry conditions than is the case of higher quality bonds. While the
Investment Adviser will attempt to reduce the risks of investing in lower rated
or unrated securities through active portfolio management, diversification,
credit analysis and attention to current developments and trends in the economy
and the financial markets, there can be no assurance that a broadly diversified
portfolio of such securities would substantially lessen the risks of defaults
brought about by an economic downturn or recession. The Portfolio will also take
such action as it considers appropriate in the event of anticipated financial
difficulties, default or bankruptcy of the issuer of any such obligation. The
Portfolio will incur additional expenditures in taking protective action with
respect to portfolio obligations in default and assets securing such
obligations. As at March 31, 1995, none of the obligations of the Portfolio's
net assets were in default. The Portfolio may retain defaulted obligations in
its portfolio when such retention is considered desirable by the Investment
Adviser. The Portfolio may also acquire other securities issued in exchange for
such obligations or issued in connection with the debt restructuring or
reorganization of the issuers, or where such acquisition, in the judgment of the
Investment Adviser, may enhance the value of such obligations or would otherwise
be consistent with the Portfolio's investment policies.
NET ASSET VALUE FLUCTUATION. The net asset value of the Fund will change in
response to fluctuations in prevailing interest rates and changes in the value
of the securities held by the Portfolio. When interest rates decline, the value
of securities already held by the Portfolio can be expected to rise. Conversely,
when interest rates rise, the value of existing portfolio security holdings can
be expected to decline. Although the lower rated and unrated obligations in the
Portfolio may provide higher yields, they may also be subject to a greater
degree of market fluctuation and are subject to greater investment risks than
high quality obligations. Furthermore, the net investment income provided by the
Portfolio will fluctuate over time. In addition and as indicated above, the
Portfolio invests in high yield, high risk bonds structured as zero coupon,
deferred interest or pay-in-kind securities; these bonds tend to be more
speculative and may be subject to substantially greater fluctuations in value
due to changes in interest rates than other income bearing obligations.
Therefore, an investment in shares of the Fund will not constitute a complete
investment program and is not appropriate for investors who cannot assume the
substantially greater risk of capital depreciation inherent in seeking higher
yields from high risk bonds.
High yield, high risk corporate bonds are frequently traded in markets where
the number of potential purchasers and sellers is limited. There is no
established resale market for certain of these bonds in which the Portfolio
invests. These considerations may make it difficult for the Portfolio to value
its securities, may affect the choice of securities sold to meet redemption
requests and may have the effect of limiting the ability of the Portfolio to
sell or dispose of such bonds on favorable terms. The secondary market for high
yield, high risk corporate obligations is relatively new, is volatile and may be
disrupted by war, inflation or economic downturns, and is less liquid than the
market for high quality bonds. In the event of an illiquid market or in the
absence of readily available market quotations for certain of these bonds held
by the Portfolio, judgment will play a greater role in the valuation of such
bonds because there is less reliable, objective data available. Adverse market
or economic conditions could make it difficult at times for the Portfolio to
sell or dispose of certain high yield, high risk bonds. The Portfolio may also
be forced to sell these bonds at a significant loss to meet shareholder
redemptions.
SHORT-TERM TRADING. Securities may be sold in anticipation of a market decline
(a rise in interest rates) or purchased in anticipation of a market rise (a
decline in interest rates) and later sold. In addition, a security may be sold
and another purchased at approximately the same time to take advantage of what
the Portfolio believes to be a temporary disparity in the normal yield
relationship between the two securities. Yield disparities may occur for reasons
not directly related to the investment quality of particular issues or the
general movement of interest rates, such as changes in the overall demand for or
supply of various types of fixed-income securities or changes in the investment
objectives of investors. Such trading may be expected to increase the portfolio
turnover rate and the expenses incurred in connection with such trading. The
Portfolio anticipates that its annual portfolio turnover rate will generally not
exceed 100% (excluding turnover of securities having a maturity of one year or
less).
LENDING OF SECURITIES. The Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers. Under
present regulatory policies of the Securities and Exchange Commission (the
"Commission"), such loans would be required to be secured continuously by
collateral in cash, cash equivalents or U.S. Government securities held by the
Portfolio's custodian and maintained on a current basis at an amount at least
equal to the market value of the securities loaned, which will be marked to
market daily. Cash equivalents include short-term municipal obligations as well
as taxable certificates of deposit, commercial paper and other short-term money
market instruments. The Portfolio would have the right to call a loan and obtain
the securities loaned at any time on up to five business days' notice. During
the existence of a loan, the Portfolio will continue to receive the equivalent
of the interest paid by the issuer on the securities loaned and will also
receive a fee, or all or a portion of the interest on investment of the
collateral, if any. However, the Portfolio may pay lending fees to such
borrowers. The Portfolio would not have the right to vote any securities having
voting rights during the existence of the loan, but would call the loan in
anticipation of an important vote to be taken among holders of the securities or
the giving or withholding of their consent on a material matter affecting the
investment. As with other extensions of credit there are risks of delay in
recovery or even loss of rights in the securities loaned if the borrower of the
securities fails financially. However, the loans would be made only to
organizations deemed by the Portfolio's management to be of good standing and
when, in the judgment of the Portfolio's management, the consideration which can
be earned from securities loans of this type justifies the attendant risk. If
the management of the Portfolio decides to make securities loans, it is intended
that the value of the securities loaned would not exceed 30% of the Portfolio's
total assets.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Portfolio may enter into
forward foreign currency exchange contracts. A forward foreign currency exchange
contract is a contract individually negotiated and privately traded by currency
traders and their customers. A forward contract involves an obligation to
purchase or sell a specific currency for an agreed price at a future date, which
may be any fixed number of days from the date of the contract. The purpose of
entering into these contracts is to minimize the risk to the Portfolio from
adverse changes in the relationship between the U.S. dollar and foreign
currencies. At the same time, such contracts may limit potential gain from a
positive change in the relationship between the U.S. dollar and foreign
currencies. Unanticipated changes in currency prices may result in poorer
overall performance for the Portfolio than if it had not entered into forward
foreign currency exchange contracts.
WRITING AND PURCHASING CALL AND PUT OPTIONS. The Portfolio may write (sell)
covered call and put options with respect to up to 25% of its net assets. All
call options written by the Portfolio are covered, which means that the
Portfolio will own the securities subject to the option or an offsetting call
option so long as the option is outstanding. All put options written by the
Portfolio would be covered, which means that the Portfolio would own offsetting
put options or would have deposited with its custodian cash, U.S. Government
securities or other liquid high-grade debt securities with a value at least
equal to the exercise price of the put option. The Portfolio may purchase put
and call options on any securities in which the Portfolio may invest or options
on any securities index based on securities in which the Portfolio may invest.
RISKS ASSOCIATED WITH OPTIONS TRANSACTIONS. There is no assurance that a liquid
secondary market on an options exchange will exist for any particular option, or
at any particular time. If the Portfolio is unable to effect a closing purchase
transaction with respect to covered options it has written, the Portfolio will
not be able to sell the underlying securities or dispose of assets held in a
segregated account until the options expire or are exercised. Similarly, if the
Portfolio is unable to effect a closing sale transaction with respect to options
it has purchased, it would have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of underlying
securities. The Portfolio expects to purchase and write only exchange traded
options until such time as the Portfolio's management determines that the
over-the-counter market in options is sufficiently developed and the Portfolio
has amended its prospectus so that appropriate disclosure is furnished to
prospective and existing shareholders.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. In the event of unanticipated
changes in securities prices, the Portfolio may recognize losses on call and put
options written by the Portfolio to the extent it is required to sell or
purchase the underlying securities or to terminate the option at a loss. The
Portfolio may recognize a loss of the premium on an option it has purchased to
the extent that the option cannot be profitably exercised before its expiration.
The successful use of put options for hedging purposes depends in part on the
Investment Adviser's ability to predict future price fluctuations and the degree
of correlation between the options and securities markets. The Portfolio pays
brokerage commissions or spreads in connection with its options transactions, as
well as for purchases and sales of underlying securities. The writing of options
could result in significant increases in the portfolio turnover rate of the
Portfolio.
FUTURES AND OPTIONS TRANSACTIONS. To hedge against changes in interest rates or
securities prices, the Portfolio has the authority to purchase and sell various
kinds of futures contracts, and purchase and write call and put options on any
of such futures contracts; it may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various securities (such as U.S. Government
securities), securities indices and other financial instruments and indices. The
Portfolio would engage in futures and related options transactions only for bona
fide hedging or non-hedging purposes as defined in or permitted by regulations
of the Commodity Futures Trading Commission. The Portfolio did not engage in
such transactions during the period from June 1, 1994 (commencement of
operations) to June 30, 1995, and there is no assurance that it will engage in
such transactions in the future.
The Portfolio may not purchase or sell futures contracts or purchase or sell
related options, except for closing purchase or sale transactions, if
immediately thereafter the sum of the amount of initial margin deposits on the
Portfolio's outstanding positions in futures and related options and the amount
of premiums paid for outstanding positions in options on futures would exceed 5%
of the market value of the Portfolio's net assets. These transactions involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating the Portfolio to purchase securities, require the Portfolio
to segregate liquid high grade debt securities in an amount equal to the
underlying value of such contracts and options.
In addition, while transactions in futures contracts and options on futures
may reduce certain risks, such transactions themselves involve (1) liquidity
risk that contractual positions cannot be easily closed out in the event of
market changes, (2) correlation risk that changes in the value of hedging
positions may not match the market fluctuations intended to be hedged
(especially given that the only futures contracts currently available to hedge
corporate fixed income securities are futures on various U.S. Government
securities, stock index futures and on municipal securities indices), (3) market
risk that an incorrect prediction by the Investment Adviser of interest rates
may cause the Portfolio to perform less well than if such positions had not been
entered into, and (4) skills different from those needed to select portfolio
securities. Thus, while the Portfolio may benefit from the use of futures and
options on futures, unanticipated changes in interest rates or securities prices
may result in a poorer overall performance for the Portfolio than if it had not
entered into any futures contracts or options transactions. The loss incurred by
the Portfolio in writing options on futures is potentially unlimited and may
exceed the amount of the premium received. The Portfolio's activities in options
and futures contracts may be limited by the requirements of the Internal Revenue
Code for qualification as a regulated investment company.
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IN SEEKING TO PROVIDE AS MUCH CURRENT INCOME AS POSSIBLE, THE PORTFOLIO INVESTS
A SIGNIFICANT PORTION OF ITS ASSETS IN HIGH YIELD, HIGH RISK CORPORATE BONDS.
THESE OBLIGATIONS CARRY SUBSTANTIALLY GREATER INVESTMENT RISK THAN HIGHER
QUALITY BONDS. ACHIEVEMENT OF THE PORTFOLIO'S OBJECTIVES WHICH CANNOT BE
ASSURED, IS THEREFORE MUCH MORE DEPENDENT UPON THE INVESTMENT ADVISER'S OWN
CREDIT ANALYSIS THAN IS THE CASE FOR HIGHER QUALITY BONDS. INVESTORS ARE URGED
TO CAREFULLY CONSIDER THE SUBSTANTIALLY GREATER RISKS OF INVESTING IN A
PORTFOLIO OF HIGH YIELD, HIGH RISK CORPORATE BONDS BEFORE PURCHASING SHARES OF
THE FUND.
- -------------------------------------------------------------------------------
ORGANIZATION OF THE FUND AND THE PORTFOLIO
- ------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE MUTUAL FUNDS TRUST (THE "TRUST")
A BUSINESS TRUST, ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION
OF TRUST DATED MAY 7, 1984, AS AMENDED AND RESTATED. THE TRUST IS A MUTUAL FUND
- -- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series, and because the Trust can offer separate series
(such as the Fund) it is known as a series company. Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may temporarily hold a de minimus amount of cash), which is a
separate investment company with an identical investment objective. Therefore,
the Fund's interest in the securities owned by the Portfolio is indirect. In
addition to selling an interest to the Fund, the Portfolio may sell interests to
other affiliated and non-affiliated mutual funds or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets; Risks
Associated with Investments". Further information regarding the investment
practices may also be found in the Statement of Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund, at
least when the assets of the Portfolio exceed $500 million. The public
shareholders of the Fund have previously approved the policy of investing the
Fund's assets in an interest in the Portfolio.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund, or the investors in the Portfolio, as the case may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares within one year
of their purchase because of a change in the nonfundamental objective or
policies of the Fund, those shares may be subject to a contingent deferred sales
charge as described in "How to Redeem Fund Shares". In the event the Fund
withdraws all of its assets from the Portfolio, or the Board of Trustees of the
Trust determines that the investment objective of the Portfolio is no longer
consistent with the investment objective of the Fund, such Trustees would
consider what action might be taken, including investing the assets of the Fund
in another pooled investment entity or retaining an investment adviser to manage
the Fund's assets in accordance with its investment objective. The Fund's
investment performance may be affected by a withdrawal of all its assets from
the Portfolio.
Information regarding other pooled investment entities or funds which invest
in the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc.
(the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA 02110,
(617) 482-8260. Smaller investors in the Portfolio may be adversely affected by
the actions of larger investors in the Portfolio. For example, if a large fund
withdraws from the Portfolio, the remaining investors may experience higher pro
rata operating expenses, thereby producing lower returns. Additionally, the
Portfolio may become less diverse, resulting in increased portfolio risk, and
experience decreasing economies of scale. However, this possibility exists as
well for historically structured funds which have large or institutional
investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the disinterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that the Trustees of the
Trust, and the Trustees of the Portfolio are the same. Such procedures require
each Board to take actions to resolve any conflict of interest between the Fund
and the Portfolio, and it is possible that the creation of separate Boards may
be considered. For further information concerning the Trustees and officers of
the Trust and the Portfolio, see the Statement of Additional Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
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THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee equal to the aggregate of
(a) a daily asset based fee computed by applying the annual asset rate
applicable to that portion of the total daily net assets in each
Category as indicated below, plus
(b) a daily income based fee computed by applying the daily income rate
applicable to that portion of the total daily gross income (which
portion shall bear the same relationship to the total daily gross income
on such day as that portion of the total daily net assets in the same
Category bears to the total daily net assets on such day) in each
Category as indicated below:
ANNUAL DAILY
CATEGORY DAILY NET ASSETS ASSET RATE INCOME RATE
- -------- ---------------- ---------- -----------
1 up to $500 million .................... 0.300% 3.00%
2 $500 million but less than $1 billion . 0.275% 2.75%
3 $1 billion but less than $1.5 billion . 0.250% 2.50%
4 $1.5 billion but less than $2 billion . 0.225% 2.25%
5 $2 billion but less than $3 billion ... 0.200% 2.00%
6 $3 billion and over ................... 0.175% 1.75%
As at March 31, 1995, the Portfolio had net assets of $442,551,815. For the
period from the start of business, June 1, 1994, to March 31, 1995, the
Portfolio paid BMR advisory fees equivalent to 0.64% (annualized) of the
Portfolio's average daily net assets for such period. BMR furnishes for the use
of the Portfolio office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Portfolio.
BMR places the portfolio transactions of the Portfolio for execution with
many broker-dealer firms. Fixed-income securities are normally traded on a net
basis (without commission) through broker-dealers and banks acting for their own
account. Such firms attempt to profit from such transactions by buying at the
bid price and selling at the higher asked price of the market, and the
difference is customarily referred to as the spread. In selecting firms to
execute portfolio transactions, BMR judges their professional ability and
quality of service and uses its best efforts to obtain execution at prices which
are advantageous to the Portfolio and at reasonably competitive spreads. Subject
to the foregoing, BMR may consider sales of shares of the Fund or of other
investment companies sponsored by BMR or Eaton Vance as a factor in the
selection of firms to execute portfolio transactions.
Hooker Talcott, Jr. has acted as the Portfolio's portfolio manager since
it commenced operations. Mr. Talcott has been a Vice President of Eaton Vance
since 1987 and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly held holding company. Eaton Vance Corp. through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management, and development of precious metals
properties.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services Eaton Vance currently receives no
compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for its services.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement, or by EVD under the distribution agreement.
DISTRIBUTION PLAN
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THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter (i) sales commissions equal to 5% of the amount received by the Fund
for each share sold and (ii) distribution fees calculated by applying the rate
of 1% over the prime rate then reported in The Wall Street Journal to the
outstanding balance of Uncovered Distribution Charges (as described below) of
the Principal Underwriter. The Principal Underwriter currently expects to pay
sales commissions (except on exchange transactions and reinvestments) to a
financial service firm (an "Authorized Firm") at the time of sale equal to 4% of
the purchase price of the shares sold by such Firm. The Principal Underwriter
will use its own funds (which may be borrowed from banks) to pay such
commissions. Because the payment of the sales commissions and distribution fees
to the Principal Underwriter is subject to the NASD Rule described below, it
will take the Principal Underwriter a number of years to recoup the sales
commissions paid by it to Authorized Firms from the payments received by it from
the Fund pursuant to the Plan.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR.
Under its Plan, the Fund accrues daily an amount at the rate of 1/365 of .75% of
the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments received by the
Principal Underwriter from the Fund pursuant to the Plan, including any
contingent deferred sales charges, have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commissions attributable to
a sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan. For the fiscal year ended March 31, 1995, the
Fund paid or accrued sales commissions under its Plan to the Principal
Underwriter equivalent to 0.75% of the Fund's average daily net assets for such
year. As at March 31, 1995, the outstanding Uncovered Distribution Charges of
the Principal Underwriter calculated under the Plan amounted to approximately
$14,688,000 (which amount was equivalent to 3.3% of the Fund's net assets on
such day).
THE PLAN ALSO AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT
EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL YEAR. The
Trustees of the Trust have initially implemented the Plan by authorizing the
Fund to make quarterly service fee payments to the Principal Underwriter and
Authorized Firms in amounts not expected to exceed .25% of the Fund's average
daily net assets for any fiscal year based on the value of Fund shares sold by
such persons and remaining outstanding for at least twelve months. As permitted
by the NASD Rule, such payments are made for personal services and/or the
maintenance of shareholder accounts. Service fees are separate and distinct from
the sales commissions and distribution fees payable by the Fund to the Principal
Underwriter, and as such are not subject to automatic discontinuance when there
are no outstanding Uncovered Distribution Charges of the Principal Underwriter.
For the fiscal year ended to March 31, 1995, the Fund paid or accrued service
fees under the Plan equivalent to 0.16% (annualized) of the Fund's average daily
net assets for such year.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions payable to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares, and the
amount of Uncovered Distribution Charges of the Principal Underwriter. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
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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 IBT Fund Services (Canada) Inc., (as agent for the Fund)
in the manner authorized by the Trustees of the Trust. IBT Fund Services
(Canada), Inc. is a subsidiary of Investors Bank & Trust ("IBT"), the Fund's and
the Portfolio's custodian. Net asset value is computed by dividing the value of
the Fund's total assets, less its liabilities, by the number of shares
outstanding. Because the Fund invests its assets in an interest in the
Portfolio, the Fund's net asset value will reflect the value of its interest in
the Portfolio (which, in turn, reflects an interest in the underlying value of
the Portfolio's assets and liabilities).
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per Fund share. It is the Authorized Firms'
responsibility to transmit orders promptly to the Principal Underwriter, which
is a wholly-owned subsidiary of Eaton Vance.
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT Fund Services (Canada) Inc. (as agent for
the Portfolio), in the manner authorized by the Trustees of the Portfolio. Net
asset value is computed by subtracting the liabilities of the Portfolio from the
value of its total assets. Fixed-income securities (other than short-term
obligations), including listed securities and securities for which price
quotations are available, will normally be valued on the basis of market
valuations furnished by a pricing service. For further information regarding the
valuation of the Portfolio's assets, see "Determination of Net Asset Value" in
the Statement of Additional Information. Eaton Vance Corp. owns 77.3% of the
outstanding stock of IBT.
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SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE.
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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 net asset value per share of the Fund next determined after an order is
effective. The Fund may suspend the offering of shares at any time and may
refuse an order for the purchase of shares.
An initial investment in the Fund must be at least $1,000. Once an account
has been established the investor may send investments of $50 or more at any
time directly to the Fund's Transfer Agent as follows: The Shareholder Services
Group, Inc., BOS725, P.O. Box 1559, Boston, MA 02104. The $1,000 minimum initial
investment is waived for Bank Automated Investing accounts, which may be
established with an investment of $50 or more. See "Eaton Vance Shareholder
Services".
In connection with employee benefit or other continuous group purchase plans
under which the average initial purchase by a participant of the plan is $1,000
or more, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant of
such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described under "How to Redeem
Fund Shares."
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Administrator, in exchange for
Fund shares at their net asset value as determined above. The minimum value of
securities (or securities and cash) accepted for deposit is $5,000. Securities
accepted will be sold by IBT as agent for the account of their owner on the day
of their receipt by IBT or as soon thereafter as possible. The number of Fund
shares to be issued in exchange for securities will be the aggregate proceeds
from the sale of such securities, divided by the applicable net asset value per
Fund share on the day such proceeds are received. Eaton Vance will use
reasonable efforts to obtain the then current market price for such securities
but does not guarantee the best available price. Eaton Vance will absorb any
transaction costs, such as commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry
or physically delivered, in proper form for transfer, through an Authorized
Firm, together with a completed and signed Letter of Transmittal in approved
form (available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C EV Marathon High Income Fund
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: EV Marathon High Income Fund
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, are advised to contact Eaton Vance to determine
whether the securities are acceptable before forwarding such securities to IBT.
Eaton Vance reserves the right to reject any securities. Exchanging securities
for Fund shares may create a taxable gain or loss. Each investor should consult
his or her tax adviser with respect to the particular Federal, state and local
tax consequences of exchanging securities for Fund shares.
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IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
- -------------------------------------------------------------------------------
HOW TO REDEEM FUND SHARES
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A SHAREHOLDER MAY REDEEM HIS FUND SHARES BY DELIVERING TO THE SHAREHOLDER
SERVICES GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during
its business hours a written request for redemption in good order, plus any
share certificates with executed stock powers. The redemption price will be
based on the net asset value per share of the Fund next computed after such
delivery. Good order means that all relevant documents must be endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) must
be guaranteed by a member of either the Securities Transfer Association's STAMP
program or the New York Stock Exchange's Medallion Signature Program, or certain
banks, savings and loan institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered securities associations
as required by a regulation of the Securities and Exchange Commission and
acceptable to The Shareholder Services Group, Inc. In addition, in some cases,
good order may require the furnishing of additional documents such as where
shares are registered in the name of a corporation, partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by The
Shareholder Services Group, Inc., the Fund will make payment in cash for the net
asset value of the redeemed shares as of the date determined above, reduced by
the amount of any applicable contingent deferred sales charge (described below)
and any Federal income tax required to be withheld. Although the Fund normally
expects to make payment in cash for redeemed shares, the Trust, subject to
compliance with applicable regulations, has reserved the right to pay the
redemption price of shares of the Fund, either totally or partially, by a
distribution in kind of readily marketable securities withdrawn by the Fund from
the Portfolio. The securities so distributed would be valued pursuant to the
Portfolio's valuation procedures. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting the
securities to cash.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption (or
repurchase) will not be sent until the check (including a certified or cashier's
check) received for the shares purchased has cleared. Payment for shares
tendered for redemption may be delayed up to fifteen days from the purchase date
when the purchase check has not yet cleared. Redemptions or repurchases may
result in a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required if the cause of the low account
balance was a reduction in the net asset value of Fund shares. No contingent
deferred sales charge will be imposed with respect to such involunatry
redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares redeemed within the first six years of
their purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge.
This contingent deferred sales charge is imposed on any redemption the amount of
which exceeds the aggregate value at the time of redemption of (a) all shares in
the account purchased more than six years prior to the redemption, (b) all
shares in the account acquired through reinvestment of distributions, and (c)
the increase, if any, of value in the other shares in the account (namely those
purchased within six years preceding the redemption) over the purchase price of
such shares. Redemptions are processed in a manner to maximize the amount of
redemption proceeds which will not be subject to a contingent deferred sales
charge. That is, each redemption will be assumed to have been made first from
the exempt amounts referred to in clauses (a), (b) and (c) above, and second
through liquidation of those shares in the account referred to in clause (c) on
a first-in-first out basis. Any contingent deferred sales charge which is
required to be imposed on share redemptions will be made in accordance with the
following schedule:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE CHARGE
--------------- --------------
First .............. 5%
Second ............. 5%
Third .............. 4%
Fourth ............. 3%
Fifth .............. 2%
Sixth .............. 1%
Seventh and following 0%
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund currently listed under
"The Eaton Vance Exchange Privilege", the contingent deferred sales charge
schedule applicable to the shares at the time of purchase will apply and the
purchase of Fund shares acquired in the exchange is deemed to have occurred at
the time of the original purchase of the exchanged shares. The contingent
deferred sales charge will be waived for shares redeemed (1) pursuant to a
Withdrawal Plan (see "Eaton Vance Shareholders Services"), (2) as part of a
required distribution from a tax-sheltered retirement plan, or (3) following the
death of all beneficial owners of such shares, provided the redemption is
requested within one year of death (a death certificate and other applicable
documents may be required).
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will be paid to the
Principal Underwriter or the Fund.
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THE FOLLOWING EXAMPLE ILLUSTRATES THE OPERATION OF THE CONTINGENT DEFERRED SALES
CHARGE. ASSUME THAT AN INVESTOR PURCHASES $10,000 OF THE FUND'S SHARES AND THAT
16 MONTHS LATER THE VALUE OF THE ACCOUNT HAS GROWN THROUGH INVESTMENT
PERFORMANCE AND REINVESTMENT OF DISTRIBUTIONS TO $12,000. THE INVESTOR THEN MAY
REDEEM UP TO $2,000 OF SHARES WITHOUT INCURRING A CONTINGENT DEFERRED SALES
CHARGE. IF THE INVESTOR SHOULD REDEEM $3,000 OF SHARES, A CONTINGENT DEFERRED
SALES CHARGE WOULD BE IMPOSED ON $1,000 OF THE REDEMPTION. THE RATE WOULD BE 5%
BECAUSE THE REDEMPTION WAS MADE IN THE SECOND YEAR AFTER THE PURCHASE WAS MADE
AND THE CHARGE WOULD BE $50.
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REPORTS TO SHAREHOLDERS
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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 certified public accountants. Shortly
after the end of each calendar year, the Fund will furnish all shareholders with
information necessary for preparing Federal and state income tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
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AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. The Fund will not issue share certificates
except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current share balance in the account. THE
LIFETIME INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL
INVESTMENTS IN FUND SHARES BY SENDING A CHECK FOR $50 OR MORE TO The Shareholder
Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO LIFETIME INVESTING
ACCOUNTS and may be changed as often as desired by written notice to the Fund's
dividend disbursing agent, The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104. The currently effective option will appear on each
account statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under 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 at the then current net asset value. Further, the
distribution option on the account will be automatically changed to the Share
Option until such time as the shareholder selects a different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with a
Fund involves special procedures and will require the beneficial owner to obtain
historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
- --------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL INVESTMENTS
BY SENDING A CHECK FOR $50 OR MORE.
- --------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund may be exchanged for shares of one or more other funds in the
Eaton Vance Marathon Group of Funds (which includes Eaton Vance Equity-Income
Trust and any EV Marathon fund except Eaton Vance Prime Rate Reserves) or Eaton
Vance Money Market Fund, which are distributed subject to a contingent deferred
sales charge, on the basis of the net asset value per share of each fund at the
time of the exchange, provided that such exchange offers are available only in
states where shares of such fund may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). Consult The Shareholder Services Group, Inc. for
additional information concerning the exchange privilege. Applications and
prospectuses of other funds are available from Authorized Firms or the Principal
Underwriter. The prospectus for each fund describes its investment objectives
and policies, and shareholders should obtain a prospectus and consider these
objectives and policies carefully before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes of
calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange, the contingent deferred sales charge schedule
applicable to the shares at the time of purchase will apply and the purchase of
shares acquired in one or more exchanges is deemed to have occurred at the time
of the original purchase of the exchanged shares. For the contingent deferred
sales charge schedule applicable to the Eaton Vance Marathon Group of Funds
(except EV Marathon Strategic Income Fund and Class I shares of any EV Marathon
Limited Maturity Fund), see "How to Redeem Fund Shares". The contingent deferred
sales charge schedule applicable to EV Marathon Strategic Income Fund and Class
I shares of any EV Marathon Limited Maturity Fund is 3%, 2.5%, 2% or 1% in the
event of a redemption occurring in the first, second, third or fourth year,
respectively, after the original share purchase.
Shares of the other funds in the Eaton Vance Marathon Group of Funds, and
shares of Eaton Vance Money Market Fund may be exchanged for Fund shares on the
basis of the net asset value per share of each fund at the time of the exchange,
but subject to any restrictions or qualifications set forth in the current
prospectus of any such fund.
Telephone exchanges are accepted by The Shareholder Services Group, provided
that the investor has not disclaimed in writing the use of the privilege. To
effect such exchanges, call The Shareholder Services Group, Inc. at 800-262-1122
or, within Massachusetts, 617-573-9403, Monday through Friday, 9:00 a.m. to 4:00
p.m. (Eastern Standard Time). Shares acquired by telephone exchange must be
registered in the same name(s) and with the same address as the shares being
exchanged. Neither the Fund, the Principal Underwriter nor The Shareholder
Services Group, Inc. will be responsible for the authenticity of exchange
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated are genuine have been followed. Telephone
instructions will be tape recorded. In times of drastic economic or market
changes, a telephone exchange may be difficult to implement. An exchange may
result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
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THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not dividends are reinvested.
The name of the shareholder, the Fund and the account number should accompany
each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares". A minimum deposit of $5,000 in shares is required.
REINVESTMENT PRIVILEGE: A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES MAY
REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REPURCHASED OR REDEEMED SHARES, ANY PORTION OR ALL OF THE REPURCHASE OR
REDEMPTION PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 60 days after such repurchase
or redemption, and the privilege has not been used more than once in the prior
12 months. Shares are sold to a reinvesting shareholder at the next determined
net asset value following timely receipt of a written purchase order by the
Principal Underwriter or by the Fund (or by the Fund's Transfer Agent). To the
extent that any shares of the Fund are sold at a loss and the proceeds are
reinvested in shares of the Fund (or other shares of the Fund are acquired
within the period beginning 30 days before and ending 30 days after the date of
the redemption) some or all of the loss generally will not be allowed as a tax
deduction. Shareholders should consult their tax advisers concerning the tax
consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
--Pension and Profit Sharing Plans for self-employed individuals,
corporations and non-profit organizations;
--Individual Retirement Account Plans for individuals and their non-
employed spouses; and
--403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements
of the Code.
Detailed information concerning these plans, including certain exceptions to
minimum investment requirements, and copies of the plans are available from the
Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
SUBSTANTIALLY ALL OF THE INVESTMENT INCOME ALLOCATED TO THE FUND BY THE
PORTFOLIO, LESS THE FUND'S DIRECT AND ALLOCATED EXPENSES, WILL BE DECLARED DAILY
AS A DISTRIBUTION TO FUND SHAREHOLDERS OF RECORD AT THE TIME OF DECLARATION.
Such distributions, whether taken in cash or reinvested in additional shares,
will ordinarily be paid on the fifteenth day of each month or the next business
day thereafter. The Fund anticipates that for tax purposes the entire
distribution, whether paid in cash or additional shares of the Fund, will
constitute income to its shareholders. Shareholders reinvesting the monthly
distribution should treat the amount of the entire distribution as the tax cost
basis of the additional shares acquired by reason of such reinvestment.
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.
Distributions of 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. Only a small portion, if any, of such distributions may be
eligible for the dividends-received deduction for corporations subject to
certain limitations.
Capital gains, if any, realized on sales of investments and on options and
futures transactions during the fiscal year, which ends on March 31, will be
offset by any capital loss carryovers and will usually be distributed with the
Fund's first monthly distribution paid after the close of such fiscal year, but
the Fund could make additional distribution of capital gains in any year in
order to comply with the distribution requirements of the Code. Distrbutions of
long-term capital gains are taxable to shareholders as such, whether received in
cash or additional shares of the Fund and regardless of the length of time Fund
shares have been owned by the shareholder. Gains and losses attributable to most
transactions of the Fund in options, futures contracts, options on futures and
forward contracts are generally treated as 40% short-term and 60% long-term for
Federal income tax purposes.
The Fund intends to qualify as a regulated investment company under the
Code, and to satisfy all requirements necessary to be relieved of Federal taxes
on income and gains it distributes to shareholders. In satisfying these
requirements, the Fund will treat itself as owning its proportionate share of
each of the Portfolio's assets and as entitled to the income of the Portfolio
properly attributable to such share.
- -------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY FEDERAL
INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO SHAREHOLDERS ITS NET
INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN ACCORDANCE WITH THE TIMING
REQUIREMENTS IMPOSED BY THE CODE. AS A PARTNERSHIP UNDER THE CODE, THE PORTFOLIO
DOES NOT PAY FEDERAL INCOME OR EXCISE TAXES.
- -------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The Fund's current yield is calculated by dividing the net investment
income per share during a recent 30 day period by the Fund's maximum offering
price per share (net asset value) on the last day of the period and annualizing
the resulting figure. The Fund's average annual total return is determined by
computing the average annual percentage change in value of $1,000 invested at
the maximum public offering price (net asset value) for specified periods ending
with the most recent calendar quarter, assuming reinvestment of all
distributions. The average annual total return calculation assumes a complete
redemption of the investment and the deduction of any applicable contingent
deferred sales charge at the end of the period. The Fund may also publish annual
and cumulative total return figures from time to time.
The Fund may also publish its distribution rate and/or its effective
distribution rate. The Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current maximum offering
price per share (net asset value). The Fund's effective distribution rate is
computed by dividing the distribution rate by the ratio used to annualize the
most recent monthly distribution and reinvesting the resulting amount for a full
year on the basis of such ratio. The effective distribution rate will be higher
than the distribution rate because of the compounding effect of the assumed
reinvestment. Investors should note that the Fund's yield is calculated using a
standardized formula the income component of which is computed from the yields
to maturity of all debt obligations held by the Portfolio based on prescribed
methods (with all purchases and sales of securities during such period included
in the income calculation on a settlement date basis), whereas the distribution
rate is based on the Fund's last monthly distribution which tends to be
relatively stable and may be more or less than the amount of net investment
income and short-term capital gain actually earned by the Fund during the month.
Performance figures published by the Fund which do not include the effect of
any contingent deferred sales charge would be reduced if it were included.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield, total return
distribution rate or effective distribution rate for any prior period should not
be considered as a representation of what an investment may earn or what the
Fund's yield, total return distribution rate or effective distribution rate may
be in any future period. If the expenses related to the operation of the Fund or
the Portfolio are allocated to Eaton Vance, the Fund's performance will be
higher.
<PAGE>
APPENDIX A
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
SECURITIES IN WHICH THE PORTFOLIO MAY INVEST WILL INCLUDE THOSE IN THE
FOLLOWING CATEGORIES:
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP CORPORATE BOND RATINGS:
INVESTMENT GRADE
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's to
a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
SECURITIES IN WHICH THE PORTFOLIO MAY INVEST WILL INCLUDE THOSE IN THE
FOLLOWING CATEGORIES:
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
SPECULATIVE GRADE
Debt rated "BB", "B", "CCC", "CC" and "C" is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.
The B rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB or BB- rating.
CCC: Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.
The CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC: The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
C1: The Rating C1 is reserved for income bonds on which no interest is being
paid.
D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Bonds may lack a Standard & Poor's rating because no public rating has been
requested, because there is insufficient information on which to base a rating,
or because Standard & Poor's does not rate a particular type of obligation as a
matter of policy.
NOTES: Bonds which are unrated expose the investor to risks with respect to
capacity to pay interest or repay principal which are similar to the risks of
lower-rated speculative obligations. The Portfolio is dependent on the
Investment Adviser's judgment, analysis and experience in the evaluation of such
bonds.
Investors should note that the assignment of a rating to a bond by a rating
service may not reflect the effect of recent developments on the issuer's
ability to make interest and principal payments.
<PAGE>
APPENDIX B
HIGH INCOME PORTFOLIO
ASSET COMPOSITION INFORMATION
FOR THE PERIOD ENDED MARCH 31, 1995
PERCENT OF
NET ASSETS
----------
Preferred Stocks and Other Equity Securities ............. 1.0%
Short-term Obligations ................................... 3.0
Debt Securities -- Moody's Rating
Ba ................................................. 8.2
B1 ................................................. 22.3
B2 ................................................. 27.0
B3 ................................................. 25.1
Caa ................................................ 8.7
Unrated ............................................ 4.7
-----
Total .............................................. 100.00%
The chart above indicates the weighted average composition of the Portfolio
for the period ended March 31, 1995, with the debt securities rated by Moody's
Investors Service, Inc. separated into the indicated categories. The weighted
average indicated above was calculated on a dollar weighted basis and was
computed as at the end of each month during the period. The chart does not
necessarily indicate what the composition of the Portfolio will be in the
current and subsequent fiscal years.
For a description of Moody's Investors Service, Inc. ratings of fixed-
income securities, see Appendix A to this Prospectus.
<PAGE>
INVESTMENT ADVISER OF
HIGH INCOME PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON HIGH INCOME FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EV MARATHON
HIGH INCOME
FUND
PROSPECTUS
AUGUST 1, 1995
EV MARATHON
HIGH INCOME FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-HIP
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
August 1, 1995
EV CLASSIC HIGH INCOME FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Classic High Income Fund (the "Fund") and certain
other series of Eaton Vance Mutual Funds Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS Page
PART I
Investment Objective and Policies ................................. 2
Investment Restrictions ........................................... 8
Trustees and Officers ............................................. 10
Investment Adviser and Administrator ............................. 12
Custodian ......................................................... 14
Service for Withdrawal ............................................ 14
Determination of Net Asset Value .................................. 15
Investment Performance ............................................ 15
Taxes ............................................................. 16
Principal Underwriter ............................................. 18
Portfolio Security Transactions ................................... 18
Other Information ................................................. 20
Independent Accountants ........................................... 21
Financial Statements .............................................. 21
PART II
Fees and Expenses ................................................. a-1
Performance Information ........................................... a-2
Distribution Plan ................................................. a-3
Control Persons and Principal Holders of Securities ............... a-4
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE FUNDS' PROSPECTUS DATED AUGUST 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
August 1, 1995
EV MARATHON HIGH INCOME FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information consists of two parts. Part I
provides information about EV Marathon High Income Fund (the "Fund") and certain
other series of Eaton Vance Mutual Funds Trust (the "Trust"). Part II provides
information solely about the Fund. Where appropriate, Part I includes
cross-references to the relevant sections of Part II.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS Page
PART I
Investment Objective and Policies ..................................... 2
Investment Restrictions ............................................... 8
Trustees and Officers ................................................. 10
Investment Adviser and Administrator .................................. 12
Custodian ............................................................. 14
Service for Withdrawal ................................................ 14
Determination of Net Asset Value ...................................... 15
Investment Performance ................................................ 15
Taxes ................................................................. 16
Principal Underwriter ................................................. 18
Portfolio Security Transactions ....................................... 18
Other Information ..................................................... 20
Independent Accountants ............................................... 21
Financial Statements .................................................. 21
PART II
Fees and Expenses ..................................................... a-1
Performance Information ............................................... a-1
Distribution Plan ..................................................... a-2
Control Persons and Principal Holders of Securities ................... a-4
- -------------------------------------------------------------------------------
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 AUGUST 1, 1995, AS SUPPLEMENTED FROM
TIME TO TIME. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE
BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE
BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART I
This Part I provides information about the Fund and certain other series of
the Trust.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund, is to seek for its shareholders a
high level of current income by investing in high-yielding, high risk,
fixed-income securities (commonly referred to as "junk bonds"). The Fund
currently seeks to achieve its investment objective by investing its assets in
High Income Portfolio (the "Portfolio"), a separate registered investment
company with the same investment objective as the Fund and substantially the
same investment policies and restrictions as the Fund. The Portfolio may invest
up to 20% of its assets in common stock and other equity securities when
consistent with its objective or acquired as a part of a unit combining
fixed-income and equity securities. The foregoing policy is a nonfundamental
policy of the Fund which may be changed when authorized by a vote of the
Trustees of the Trust. The securities in which the Portfolio may invest are
described in the Prospectus under "How the Fund and the Portfolio Invest their
Assets; Risks Associated with Investments."
The Portfolio may temporarily invest more than 35% of its assets in
securities rated A or better by Moody's Investors Service, Inc., ("Moody's") or
Standard & Poor's Ratings Group ("S&P") for defensive purposes during periods of
abnormal market conditions.
The Trustees of the Trust may withdraw the Fund's investment from the
Portfolio at any time, if they determine that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in
another investment company with substantially the same investment objective,
policies and restrictions as those of the Fund or invested directly in
investment securities in accordance with the Portfolio's investment policies, as
described below. Except as indicated below, the approval of the Fund's
shareholders would not be required to change the Portfolio's investment
objective or any of the Portfolio's investment policies discussed below,
including those concerning security transactions.
Because the investment characteristics of the Fund will correspond directly
to those of the Portfolio, the following is a discussion of the various
investments of and techniques employed by the Portfolio.
OTHER FIXED-INCOME SECURITIES
Included in the fixed-income securities in which the Portfolio may invest
are preferred, preference and convertible stocks, equipment lease certificates,
equipment trust certificates and conditional sales contracts. Preference stocks
are stocks that have many characteristics of preferred stocks, but are typically
junior to an existing class of preferred stocks. Equipment lease certificates
are debt obligations secured by leases on equipment (such as railroad cars,
airplanes or office equipment), with the issuer of the certificate being the
owner and lessor of the equipment. Equipment trust certificates are debt
obligations secured by an interest in property (such as railroad cars or
airplanes), the title of which is held by a trustee while the property is being
used by the borrower. Conditional sales contracts are agreements under which the
seller of property continues to hold title to the property until the purchase
price is fully paid or other conditions are met by the buyer.
The Portfolio may purchase fixed-rate bonds which have a demand feature
allowing the holder to redeem the bonds at specified times. These bonds are more
defensive than conventional long-term bonds (protecting to some degree against a
rise in interest rates) while providing greater opportunity than comparable
intermediate term bonds, since the Portfolio may retain the bond if interest
rates decline. By acquiring these kinds of bonds the Portfolio obtains the
contractual right to require the issuer of the bonds to purchase the security at
an agreed upon price, which right is contained in the obligation itself rather
than in a separate agreement or instrument. Since this right is assignable only
with the bond, the Portfolio will not assign any separate value to such right.
The Portfolio may also purchase floating or variable rate obligations, which it
would anticipate using as short-term investments pending longer term investment
of its funds.
LOAN INTERESTS. A loan in which the Portfolio may acquire a loan interest (a
"Loan Interest") is typically originated, negotiated and structured by a U.S. or
foreign commercial bank, insurance company, finance company or other financial
institution (the "Agent") for a lending syndicate of financial institutions. The
Agent typically administers and enforces the loan on behalf of the other lenders
in the syndicate. In addition, an institution, typically but not always the
Agent (the "Collateral Bank"), holds collateral (if any) on behalf of the
lenders. These Loan Interests may take the form of participation interests in,
assignments of or novations of a loan during its secondary distribution, or
direct interests during a primary distribution. Such Loan Interests may be
acquired from U.S. or foreign banks, insurance companies, finance companies or
other financial institutions who have made loans or are members of a lending
syndicate or from other holders of Loan Interests. The Portfolio may also
acquire Loan Interests under which the Portfolio derives its rights directly
from the borrower. Such Loan Interests are separately enforceable by the
Portfolio against the borrower and all payments of interest and principal are
typically made directly to the Portfolio from the borrower. In the event that
the Portfolio and other lenders become entitled to take possession of shared
collateral, it is anticipated that such collateral would be held in the custody
of a Collateral Bank for their mutual benefit. The Portfolio may not act as an
Agent, a Collateral Bank, a guarantor or sole negotiator or structurer with
respect to a loan.
The Portfolio's investment adviser, Boston Management and Research ("BMR" or
the "Investment Adviser") will analyze and evaluate the financial condition of
the borrower in connection with the acquisition of any Loan Interest. BMR also
analyzes and evaluates the financial condition of the Agent and, in the case of
Loan Interests in which the Portfolio does not have privity with the borrower,
those institutions from or through whom the Portfolio derives its rights in a
loan (the "Intermediate Participants"). From time to time BMR and its affiliates
may borrow money from various banks in connection with their business
activities. Such banks may also sell interests in loans to or acquire such
interests from the Portfolio or may be Intermediate Participants with respect to
loans in which the Portfolio owns interests. Such banks may also act as Agents
for loans in which the Portfolio owns interests.
In a typical loan the Agent administers the terms of the loan agreement. In
such cases, the Agent is normally responsible for the collection of principal
and interest payments from the borrower and the apportionment of these payments
to the credit of all institutions which are parties to the loan agreement. The
Portfolio will generally rely upon the Agent or an Intermediate Participant to
receive and forward to the Portfolio its portion of the principal and interest
payments on the loan. Furthermore, unless under the terms of a participation
agreement the Trust has direct recourse against the borrower, the Portfolio will
rely on the Agent and the other members of the lending syndicate to use
appropriate credit remedies against the borrower. The Agent is typically
responsible for monitoring compliance with covenants contained in the loan
agreement based upon reports prepared by the borrower. The seller of the Loan
Interest usually does, but is often not obligated to, notify holders of Loan
Interests of any failures of compliance. The Agent may monitor the value of the
collateral and, if the value of the collateral declines, may accelerate the
loan, may give the borrower an opportunity to provide additional collateral or
may seek other protection for the benefit of the participants in the loan. The
Agent is compensated by the borrower for providing these services under a loan
agreement, and such compensation may include special fees paid upon structuring
and funding the loan and other fees paid on a continuing basis. With respect to
Loan Interests for which the Agent does not perform such administrative and
enforcement functions, the Portfolio will perform such tasks on its own behalf,
although a Collateral Bank will typically hold any collateral on behalf of the
Portfolio and the other lenders pursuant to the applicable loan agreement.
A financial institution's appointment as Agent may usually be terminated in
the event that it fails to observe the requisite standard of care or becomes
insolvent, enters Federal Deposit Insurance Corporation ("FDIC") receivership,
or, if not FDIC insured, enters into bankruptcy proceedings. A successor Agent
would generally be appointed to replace the terminated Agent, and assets held by
the Agent under the loan agreement should remain available to holders of Loan
Interests. However, if assets held by the Agent for the benefit of the Portfolio
were determined to be subject to the claims of the Agent's general creditors,
the Portfolio might incur certain costs and delays in realizing payment on a
loan interest, or suffer a loss of principal and/or interest. In situations
involving Intermediate Participants similar risks may arise.
Purchasers of loan interests depend primarily upon the creditworthiness of
the borrower for payment of principal and interest. If the Portfolio does not
receive scheduled interest or principal payments on such indebtedness, the
Portfolio's share price and yield could be adversely affected. Loans that are
fully secured offer the Portfolio more protections than an unsecured loan in the
event of non-payment of scheduled interest or principal. However, there is no
assurance that the liquidation of collateral from a secured loan would satisfy
the borrower's obligation, or that the collateral can be liquidated.
Indebtedness of borrowers whose creditworthiness is poor involves substantially
greater risks, and may be highly speculative. Borrowers that are in bankruptcy
or restructuring may never pay off their indebtedness, or may pay only a small
fraction of the amount owed. Direct indebtedness of developing countries will
also involve a risk that the governmental entities responsible for the repayment
of the debt may be unable, or unwilling, to pay interest and repay principal
when due.
The Portfolio limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry. See Investment Restrictions
(1) and (5) below. For purposes of these restrictions, the Portfolio generally
will treat the borrower as the "issuer" of a Loan Interest held by the
Portfolio. In the case of loan participations where the Agent or Intermediate
Participant serves as financial intermediary between the Portfolio and the
borrower, the Portfolio, in appropriate circumstances, will treat both the Agent
or Intermediate Participant and the borrower as "issuers" for the purposes of
determining whether the Portfolio has invested more than 5% of its total assets
in a single issuer. Treating a financial intermediary as an issuer of
indebtedness may restrict the Portfolio's ability to invest in indebtedness
related to a single intermediary, or a group of intermediaries engaged in the
same industry, even if the underlying borrowers represent many different
companies and industries.
FOREIGN INVESTMENTS
Investing in foreign issuers involves certain special considerations,
including those set forth below, which are not typically associated with
investing in U.S. issuers. Since investments in foreign issuers may involve
currencies of foreign countries, and since the Portfolio may temporarily hold
funds in bank deposits in foreign currencies during completion of investment
programs, the Portfolio may be affected favorably or unfavorably by changes in
currency rates and in exchange control regulations and may incur costs in
connection with conversions between various currencies.
Since foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies, there may be less publicly
available information about a foreign company than about a domestic company.
Foreign stock markets, while growing in volume of trading activity, have
substantially less volume than the New York Stock Exchange, and securities of
some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. Similarly, volume and liquidity in most foreign bond
markets is less than in the United States and, at times, volatility of price can
be greater than in the United States. Fixed commissions on foreign stock
exchanges are generally higher than negotiated commissions on U.S. exchanges,
although the Portfolio endeavors to achieve the most favorable net results on
its portfolio transactions. There is generally less government supervision and
regulation of stock exchanges, brokers and listed companies than in the United
States. Mail service between the United States and foreign countries may be
slower or less reliable than within the United States, thus increasing the risk
of delayed settlements of portfolio transactions or loss of certificates for
portfolio securities. In addition, with respect to certain foreign countries,
there is the possibility of expropriation or confiscatory taxation, political or
social instability, or diplomatic developments which could affect the
Portfolio's investments in those countries. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such
respects as growth of gross national product, rate of inflation, capital
reinvestment, resource self-sufficiency and balance of payments position.
The Portfolio may enter into forward foreign currency exchange contracts. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded in the interbank market
conducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades.
At the maturity of a forward contract the Portfolio may either accept or
make delivery of the currency specified in the contract or, at or prior to
maturity, enter into a closing transaction involving the purchase or sale of an
offsetting contract. Closing transactions with respect to forward contracts are
usually effected with the currency trader who is a party to the original forward
contract.
FORWARD FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Portfolio may enter into
forward foreign currency exchange contracts in several circumstances. First,
when the Portfolio enters into a contract for the purchase or sale of a security
denominated in a foreign currency, or when the Portfolio anticipates the receipt
in a foreign currency of dividend or interest payments on such a security which
it holds, the Portfolio may desire to "lock in" the U.S. dollar price of the
security or the U.S. dollar equivalent of such dividend or interest payment, as
the case may be. By entering into a forward contract for the purchase or sale,
for a fixed amount of dollars, of the amount of foreign currency involved in the
underlying transactions, the Portfolio will attempt to protect itself against an
adverse change in the relationship between the U.S. dollar and the subject
foreign currency during the period between the date on which the security is
purchased or sold, or on which the dividend or interest payment is declared, and
the date on which such payments are made or received.
Additionally, when management of the Portfolio believes that the currency of
a particular foreign country may suffer a substantial decline against the U.S.
dollar, it may enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of some or all
of the securities held by the Portfolio denominated in such foreign currency.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. The precise projection of
short-term currency market movements is not possible, and short-term hedging
provides a means of fixing the dollar value of only a portion of the Portfolio's
foreign assets.
The Portfolio does not intend to enter into such forward contracts to
protect the value of its portfolio securities on a regular continuous basis, and
will not do so if, as a result, the Portfolio will have more than 15% of the
value of its total assets committed to the consummation of such contracts. The
Portfolio also will not enter into such forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Portfolio to deliver an amount of foreign currency in excess of the
value of the securities held by the Portfolio's or other assets denominated in
that currency. Under normal circumstances, consideration of the prospect for
currency parities will be incorporated into the long-term investment decisions
made with regard to overall diversification strategies. However, the Portfolio
believes that it is important to have the flexibility to enter into such forward
contracts when it determines that the best interests of the Portfolio will be
served.
The Portfolio's custodian will place cash or liquid high grade debt
securities into a segregated account of the Portfolio in an amount equal to the
value of the Portfolio's total assets committed to the consummation of forward
foreign currency exchange contracts entered into relating to the purchase of
foreign currencies. If the value of the securities placed in the segregated
account declines, additional cash or securities will be placed in the account on
a daily basis so that the value of the account will equal the amount of the
Portfolio's commitments with respect to such contracts.
The Portfolio generally will not enter into a forward contract with a term
of greater than one year. It also should be realized that this method of
protecting the value of the securities held by the Portfolio against a decline
in the value of a currency does not eliminate fluctuations in the underlying
prices of the securities. It simply establishes a rate of exchange which the
Portfolio can achieve at some future point in time.
While the Portfolio will enter into forward contracts to reduce currency
exchange rate risks, transactions in such contracts involve certain other risks.
Thus, while the Portfolio may benefit from such transactions, unanticipated
changes in currency exchange rates may result in a poorer overall performance
for the Portfolio than if it had not engaged in any such transactions. Moreover,
there may be imperfect correlation between the securities held by the Portfolio
denominated in a particular currency and forward contracts entered into by the
Portfolio. Such imperfect correlation may prevent the Portfolio from achieving a
complete hedge or expose the Portfolio to risk of foreign exchange loss.
WRITING AND PURCHASING CALL AND PUT OPTIONS
A call option written by the Portfolio obligates the Portfolio to sell
specified securities to the holder of the option at a specified price at any
time before the expiration date. The Portfolio's purpose in writing covered call
options is to realize greater income than would be realized on portfolio
securities transactions alone. However, the Portfolio may forego the opportunity
to profit from an increase in the market price of the underlying security. A put
option written by the Portfolio would obligate the Portfolio to purchase
specified securities from the option holder at a specified price at any time
before the expiration date.
The purpose of writing such options is to generate additional income for the
Portfolio. However, in return for the option premium, the Portfolio accepts the
risk that it will be required to purchase the underlying securities at a price
in excess of the securities' market value at the time of purchase.
The Portfolio may terminate its obligations under a call or put option by
purchasing an option identical to the one it has written. Such purchases are
referred to as "closing purchase transactions."
The Portfolio would also be able to enter into closing sale transactions in
order to realize gains or minimize losses on options purchased by the Portfolio.
The Portfolio would normally purchase call options in anticipation of an
increase in the market value of securities of the type in which the Portfolio
may invest. The purchase of a call option would entitle the Portfolio, in return
for the premium paid, to purchase specified securities at a specified price
during the option period. The Portfolio would ordinarily realize a gain if,
during the option period, the value of such securities exceeded the sum of the
exercise price, the premium paid and transaction costs; otherwise the Portfolio
would realize a loss on the purchase of the call option.
The Portfolio would normally purchase put options in anticipation of a
decline in the market value of securities in its portfolio ("protective puts")
or securities of the type in which it is permitted to invest. The purchase of a
put option would entitle the Portfolio, in exchange for the premium paid, to
sell specified securities at a specified price during the option period. The
purchase of protective puts is designed merely to offset or hedge against a
decline in the market value of the securities held by the Portfolio. Put options
may also be purchased by the Portfolio for the purpose of affirmatively
benefitting from a decline in the price of securities which the Portfolio does
not own. The Portfolio would ordinarily realize a gain if, during the option
period, the value of the underlying securities decreased below the exercise
price sufficiently to cover the premium and transaction costs; otherwise the
Portfolio would realize a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of underlying portfolio securities.
The Portfolio would purchase put and call options on securities indices for
the same purposes as the purchase of options on securities. Options on
securities indices are similar to options on securities, except that the
exercise of securities index options requires cash payments and does not involve
the actual purchase or sale of securities. In addition, securities index options
are designed to reflect price fluctuations in a group of securities or segment
of the securities market rather than price fluctuations in a single security.
SPECIAL RISKS ASSOCIATED WITH OPTIONS ON SECURITIES
An options position may be closed out only on an options exchange which
provides a secondary market for an option of the same series. Although the
Portfolio will generally purchase or write only those options for which there
appears to be an active secondary market, there is no assurance that a liquid
secondary market on an exchange will exist for any particular option, or at any
particular time. For some options no secondary market on an exchange may exist.
In such event, it might not be possible to effect closing transactions in
particular options, with the result that the Portfolio would have to exercise
its options in order to realize any profit and would incur transaction costs
upon the sale of underlying securities pursuant to the exercise of put options.
If the Portfolio as a covered call option writer is unable to effect a closing
purchase transaction in a secondary market, it will not be able to sell the
underlying security until the option expires or it delivers the underlying
security upon exercise.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
the Options Clearing Corporation may not at all times be adequate to handle
current trading volume; or (vi) one or more exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.
There is no assurance that higher than anticipated trading activity or other
unforeseen events might not, at times, render certain of the facilities of the
Options Clearing Corporation inadequate, and thereby result in the institution
by an exchange of special procedures which may interfere with the timely
execution of customers' orders.
The amount of the premiums which the Portfolio may pay or receive may be
adversely affected as new or existing institutions, including other investment
companies, engage in or increase their option purchasing and writing activities.
FUTURES CONTRACTS
A change in the level of interest rates or securities prices may affect the
value of the securities held by the Portfolio (or of securities that the
Portfolio expects to purchase). To hedge against changes in rates or prices or
for non-hedging purposes, the Portfolio may enter into (i) futures contracts for
the purchase or sale of securities, (ii) futures contracts on securities indices
and (iii) futures contracts on other financial instruments and indices. A
futures contract may generally be described as an agreement between two parties
to buy and sell particular financial instruments for an agreed price during a
designated month (or to deliver the final cash settlement price, in the case of
a contract relating to an index or otherwise not calling for physical delivery
at the end of trading in the contract). All futures contracts entered into by
the Portfolio are traded on exchanges or boards of trade that are licensed and
regulated by the Commodity Futures Trading Commission ("CFTC").
Futures Contracts on Securities. A futures contract on a security is a binding
contractual commitment which, if held to maturity, will result in an obligation
to make or accept delivery, during a particular month, of securities having a
standardized face value and rate of return. By purchasing futures on securities,
the Portfolio will legally obligate itself to accept delivery of the underlying
security and pay the agreed price; by selling futures on securities, it will
legally obligate itself to make delivery of the security against payment of the
agreed price. Open futures positions on securities are valued at the most recent
settlement price, unless such price does not reflect the fair value of the
contract, in which case the positions will be valued by or under the direction
of the Trustees of the Portfolio.
Positions taken in the futures markets are not normally held to maturity,
but are instead liquidated through offsetting transactions which may result in a
profit or a loss. While the Portfolio's futures contracts on securities will
usually be liquidated in this manner, it may instead make or take delivery of
the underlying securities whenever it appears economically advantageous for the
Portfolio to do so. A clearing corporation associated with the exchange on which
futures on securities are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
Futures Contracts on Securities Indices. Futures contracts on securities or
other indices do not require the physical delivery of securities, but merely
provide for profits and losses resulting from changes in the market value of a
contract to be credited or debited at the close of each trading day to the
respective accounts of the parties to the contract. On the contract's expiration
date a final cash settlement occurs and the futures position is simply closed
out. Changes in the market value of a particular futures contract reflect
changes in the level of the index on which the futures contract is based.
Hedging Strategies. Hedging by use of futures contracts seeks to establish more
certainly than would otherwise be possible the effective price or rate of return
on portfolio securities or securities that the Portfolio proposes to acquire.
The Portfolio may, for example, take a "short" position in the futures market by
selling futures contracts in order to hedge against an anticipated rise in
interest rates or a decline in market prices that would adversely affect the
value of the securities held by the Portfolio. Such futures contracts may
include contracts for the future delivery of securities held by the Portfolio or
securities with characteristics similar to those of the securities held by the
Portfolio. If, in the opinion of the Investment Adviser, there is a sufficient
degree of correlation between price trends for the securities held by the
Portfolio and futures contracts based on other financial instruments, securities
indices or other indices, the Trust may also enter into such futures contracts
as part of its hedging strategy. Although under some circumstances prices of
securities held by the Portfolio may be more or less volatile than prices of
such futures contracts, the Investment Adviser will attempt to estimate the
extent of this difference in volatility based on historical patterns and to
compensate for it by having the Portfolio enter into a greater or lesser number
of futures contracts or by attempting to achieve only a partial hedge against
price changes affecting the securities held by the Portfolio. When hedging of
this character is successful, any depreciation in the value of portfolio
securities will substantially be offset by appreciation in the value of the
futures position.
On other occasions, the Portfolio may take a "long" position by purchasing
such futures contracts. This would be done, for example, when the Portfolio
anticipates the subsequent purchase of particular securities when it has the
necessary cash, but expects the prices then available in the securities market
to be less favorable than prices that are currently available.
OPTIONS ON FUTURES CONTRACTS
The Portfolio may purchase and write call and put options on futures
contracts which are traded on a United States exchange or board of trade. An
option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract at a specified exercise
price at any time during the option period. Upon exercise of the option, the
writer of the option is obligated to convey the appropriate futures position to
the holder of the option. If an option is exercised on the last trading day
before the expiration date of the option, a cash settlement will be made in an
amount equal to the difference between the closing price of the futures contract
and the exercise price of the option.
The Portfolio may use options on futures contracts for bona fide hedging
purposes as defined below or for non-hedging purposes subject to the limitations
imposed by CFTC regulations. If the Portfolio purchases a call (put) option on a
futures contract it benefits from any increase (decrease) in the value of the
futures contract, but is subject to the risk of decrease (increase) in value of
the futures contract. The benefits received are reduced by the amount of the
premium and transaction costs paid by the Portfolio for the option. If market
conditions do not favor the exercise of the option, the Portfolio's loss is
limited to the amount of such premium and transaction costs paid by the
Portfolio for the option.
If the Portfolio writes a call (put) option on a futures contract, the
Portfolio receives a premium but assumes the risk of a rise (decline) in value
in the underlying futures contract. If the option is not exercised, the
Portfolio gains the amount of the premium, which may partially offset
unfavorable changes in the value of securities held or to be acquired for the
Portfolio. If the option is exercised, the Portfolio will incur a loss, which
will be reduced by the amount of the premium it receives. However, depending on
the degree of correlation between changes in the value of its portfolio
securities and changes in the value of futures positions, the Portfolio's losses
from writing options on futures may be partially offset by favorable changes in
the value of portfolio securities or in the cost of securities to be acquired.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option of the same series. There
is no guarantee that such closing transactions can be effected. The Portfolio's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
LIMITATIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
The Portfolio will engage in futures and related options transactions for
bona fide hedging or non-hedging purposes as defined in or permitted by CFTC
regulations. The Portfolio will determine that the price fluctuations in the
futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the Portfolio
or which it expects to purchase. Except as stated below, the Portfolio's futures
transactions will be entered into for traditional hedging purposes -- i.e.,
futures contracts will be sold to protect against a decline in the price of
securities that the Portfolio owns, or futures contracts will be purchased to
protect the Portfolio against an increase in the price of securities it intends
to purchase. As evidence of this hedging intent, the Portfolio expects that on
75% or more of the occasions on which it takes a long futures (or option)
position (involving the purchase of futures contracts), the Portfolio will have
purchased, or will be in the process of purchasing, equivalent amounts of
related securities in the cash market at the time when the futures (or option)
position is closed out. However, in particular cases, when it is economically
advantageous for the Portfolio to do so, a long futures position may be
terminated (or an option may expire) without the corresponding purchase of
securities. As an alternative to compliance with the bona fide hedging
definition, a CFTC regulation permits the Portfolio to elect to comply with a
different test, under which the aggregate initial margin and premiums required
to establish non-hedging positions in futures contracts and options on futures
will not exceed 5% of the Portfolio's net asset value after taking into account
unrealized profits and losses on such positions and excluding the in-the-money
amount of such options. The Portfolio will engage in transactions in futures
contracts and related options only to the extent such transactions are
consistent with the requirements of the Internal Revenue Code for maintaining
the qualification of the Fund as a regulated investment company for Federal
income tax purposes (see "Taxes").
The Portfolio will be required, in connection with transactions in futures
contracts and the writing of options on futures, to make margin deposits, which
will be held by the Portfolio's custodian for the benefit of the futures
commission merchant through whom the Portfolio engages in such futures and
options transactions. Cash or liquid high grade debt securities required to be
segregated in connection with a "long" futures position taken by the Portfolio
will also be held by the custodian in a segregated account and will be marked to
market daily.
PORTFOLIO TURNOVER
The Portfolio cannot accurately predict its portfolio turnover rate, but it
is anticipated that the annual turnover rate will generally not exceed 100%
(excluding turnover of securities having a maturity of one year or less). A 100%
annual turnover rate would occur, for example, if all the securities in the
portfolio were replaced once in a period of one year. A high turnover rate (100%
or more) necessarily involves greater expenses to the Portfolio. The Portfolio
engages in portfolio trading (including short-term trading) if it believes that
a transaction including all costs will help in achieving its investment
objective either directly by increasing income or indirectly by enhancing the
Portfolio's net asset value.
INVESTMENT RESTRICTIONS
The following investment restrictions are designated as fundamental policies
and as such cannot be changed without the approval of the holders of a majority
of the Fund's outstanding voting securities, which as used in this Statement of
Additional Information means the lesser of (a) 67% of the shares of the Fund
present or represented by proxy at a meeting if the holders of more than 50% of
the shares are present or represented at the meeting or (b) more than 50% of the
shares of the Fund. Accordingly, the Fund may not:
(1) With respect to 75% of total assets of the Fund, purchase any security
if such purchase, at the time thereof, would cause more than 5% of the total
assets of the Fund (taken at market value) to be invested in the securities of a
single issuer, or cause more than 10% of the total outstanding voting securities
of such issuer to be held by the Fund, except obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities and except securities
of other investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities). The deposit or payment by the Fund of initial, maintenance or
variation margin in connection with all types of options and futures contract
transactions is not considered the purchase of a security on margin;
(4) Underwrite or participate in the marketing of securities of others,
except insofar as it may technically be deemed to be an underwriter in selling a
portfolio security under circumstances which may require the registration of the
same under the Securities Act of 1933;
(5) Purchase any security if such purchase, at the time thereof, would cause
more than 25% of the Fund's total assets to be invested in any single industry,
provided that the electric, gas and telephone utility industries shall be
treated as separate industries for purposes of this restriction and further
provided that there is no limitation with respect to obligations issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities.
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by real estate and securities of companies which
invest or deal in real estate;
(7) Purchase or sell physical commodities or contracts for the purchase or
sale of physical commodities; or
(8) Make loans to any person except by (i) the acquisition of debt
securities and making portfolio investments, (ii) entering into repurchase
agreements or (iii) lending portfolio securities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest all of its investable assets in an open-end management
investment company with substantially the same investment objective, policies
and restrictions as the Fund.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by the Fund; such
restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of the Portfolio, which as used in this Statement
of Additional Information means the lesser or (a) 67% of the outstanding voting
securities of the Portfolio present or represented by proxy at a meeting if the
holders of more than 50% of the outstanding voting securities of the Portfolio
are present or represented at the meeting or (b) more than 50% of the
outstanding voting securities of the Portfolio. The term "voting securities" as
used in this paragraph has the same meaning as in the Investment Company Act of
1940 (the "1940 Act"). Whenever the Trust is requested to vote on a change in
the investment restrictions of the Portfolio, the Trust will hold a meeting of
Fund shareholders and will cast its vote as instructed by the shareholders.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Trust without the approval by the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio without
the approval by the Fund or its other investors. As a matter of nonfundamental
policy, neither the Fund nor the Portfolio may (a) invest more than 15% of its
net assets in investments which are not readily marketable, including restricted
securities and repurchase agreements maturing in more than seven days.
Restricted securities for the purposes of this limitation do not include
securities eligible for resale pursuant to Rule 144A of the Securities Act of
1933 that the Board of Trustees of the Trust or the Portfolio, or its delegate,
determine to be liquid, based upon the trading markets for the specific
security, provided, however, that the Fund may invest without limitation in the
Portfolio or in another investment company with substantially the same
investment objective; (b) invest more than 5% of its total assets (taken at
current value) in the securities of issuers which, including their predecessors,
have been in operation for less than three years; (c) purchase put or call
options on securities only if after such purchase more than 5% of its net
assets, as measured by the aggregate of the premiums paid for such options,
would be so invested; (d) purchase warrants in excess of 5% of net assets, of
which 2% may be warrants which are not listed on the New York or American Stock
Exchanges; (e) make short sales of securities or maintain a short position,
unless at all times when a short position is open the Fund owns an equal amount
of such securities or securities convertible into or exchangeable, without
payment of any further consideration, for securities of the same issuer as, and
equal in amount to, the securities sold short, and unless not more than 25% of
the Fund's net assets (taken at current value) is held as collateral for such
sales at any one time. (The Fund will make such sales only for the purpose of
deferring realization of gain or loss for federal income tax purposes.); (f)
purchase or retain in its portfolio any securities issued by an issuer, any of
whose officers, directors, trustees or security holders is an officer or Trustee
of the Trust or the Portfolio or is a member, officer, director or trustee of an
investment adviser of the Trust or the Portfolio, if after the purchase of the
securities of such issuer by the Fund or the Portfolio one or more of such
persons owns beneficially more than 1/2 of 1% of the shares or securities or
both (all taken at market value) of such issuer and such persons owning more
than 1/2 of 1% of such shares or securities together own beneficially more than
5% of such shares or securities or both (all taken at market value); or (g)
purchase oil, gas or other mineral leases or purchase partnership interests in
oil, gas or other mineral exploration or development programs.
In order to permit the sale of shares of the Fund in certain states, the
Fund may make commitments more restrictive than the policies described above.
Should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the state(s) involved.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Trust's investment
adviser, 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 and officers who are "interested persons" of the Trust, Eaton Vance,
BMR, EV or EVC, as defined in the 1940 Act, by virtue of their affiliation with
any one or more of the Trust, the Portfolio, Eaton Vance, BMR, EVC or EV, are
indicated by an asterisk(*).
TRUSTEES OF THE TRUST AND THE PORTFOLIO
M. DOZIER GARDNER (62), President and Trustee*
President and Chief Executive Officer of BMR, Eaton Vance, EVC and EV, and
Director of EVC and EV. Director, Trustee and officer of various investment
companies managed by Eaton Vance or BMR.
DONALD R. DWIGHT (64), 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
JAMES B. HAWKES (53), Vice President and Trustee*
Executive Vice President of BMR, Eaton Vance, EV and EVC and a Director of EV
and EVC. Director, Trustee and officer of various investment companies managed
by Eaton Vance or BMR.
SAMUEL L. HAYES, III (60), Trustee
Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (59), Trustee
President and Director, United Asset Management Corporation, a holding company
owning institutional investment management firms. Chairman, President and
Director, The Regis Fund, Inc. (mutual fund). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (68), Trustee
Director, Fiduciary Trust Company. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (65), Trustee
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE TRUST AND THE PORTFOLIO
WILLIAM H. AHERN, JR. (36), Vice President of the Trust
Assistant Vice President of BMR, Eaton Vance and EV and an employee of Eaton
Vance since July 17, 1989. Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Ahern was elected Vice President of the Trust on June
19, 1995.
H. DAY BRIGHAM, JR., (68) Vice President of the Trust
Chairman of the Management Committee, Vice President of Eaton Vance, BMR, EVC
and EV and Director of EVC and EV. Director, Trustee and officer of various
investment companies managed by Eaton Vance or BMR.
WILLIAM CHISHOLM ( ), Vice President of the Portfolio
Senior Trust Officer of The Bank of Nova Scotia Trust Company (Cayman)
Limited.
Address: The Bank of Nova Scotia Trust Company (Cayman) Ltd., The Bank of Nova
Scotia Building, P.O. Box 501, George Town, Grand Cayman, Cayman Islands,
British West Indies.
MICHEL NORMANDEAU ( ),Vice President of the Portfolio
of The Bank of Nova Scotia Trust Company (Cayman) Limited.
Address: The Bank of Nova Scotia Trust Company (Cayman) Ltd., The Bank of Nova
Scotia Building, P.O. Box 501, George Town, Grand Cayman, Cayman Islands,
British West Indies.
RAYMOND O'NEILL (33), Vice President of the Portfolio
Managing Director of IBT Trust and Custodian Services (Ireland) Limited since
January, 1995. Vice President, Atlantic Corporate Management Limited,
Warwick, Bermuda 1991-1994. Officer, The Bank of Bermuda Limited, Hamilton,
Bermuda 1987-1991.
HOOKER TALCOTT (52), Jr., Vice President of the Portfolio Vice President of BMR,
Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (50), Treasurer
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
THOMAS OTIS (63), Secretary
Vice President and Secretary of BMR, Eaton Vance, EV and EVC. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (59), Assistant Treasurer and Assistant Secretary
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
A. JOHN MURPHY (32), Assistant Secretary
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. Officer of various investment
companies managed by Eaton Vance or BMR. State Regulations Supervisor, The
Boston Company (1991 - 1993) and Registration Specialist, Fidelity Management
& Research Co. (1986 - 1991). Mr. Murphy was elected Assistant Secretary of
the Trust on March 27, 1995 and of the Portfolio on June 19, 1995.
ERIC G. WOODBURY (38), Assistant Secretary
Vice President of Eaton Vance since February 1993; formerly, associate at
Dechert, Price & Rhoads and Gaston Snow & Ely Bartlett.
Address: Eaton Vance Management, 24 Federal Street, Boston, Massachusetts
02110. Mr. Woodbury was elected Assistant Secretary of the Trust and
Portfolio on June 19, 1995.
Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of Trustees of the Trust and of the Portfolio. The
Special Committee's functions include a continuous review of the Fund's
contractual relationship with the Administrator, the Portfolio's contractual
relationship with the Investment Adviser, making recommendations to the Trustees
regarding the compensation of those Trustees who are not members of the Eaton
Vance organization, and making recommendations to the Trustees regarding
candidates to fill vacancies, as and when they occur, in the ranks of those
Trustees who are not "interested persons" of the Trust, the Portfolio, the Eaton
Vance organization or the investment adviser.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust and of the Portfolio. The Audit Committee's
functions include making recommendations to the Trustees regarding the selection
of the independent public accountants, and reviewing with such accountants and
the Treasurer of the Trust and of the Portfolio matters relative to accounting
and auditing practices and procedures, accounting records, internal accounting
controls, and the functions performed by the custodian and transfer agent of the
Fund and of the Portfolio.
Trustees of the Portfolio who are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of a Trustees Deferred Compensation Plan (the "Plan").
Under the Plan, an eligible Trustee may elect to have his deferred fees invested
by the Portfolio in the shares of one or more funds in the Eaton Vance Family of
Funds, and the amount paid to the Trustees under the Plan will be determined
based upon the performance of such investments. Deferral of Trustees' fees in
accordance with the Plan will have a negligible effect on the Portfolio's
assets, liabilities, and net income per share, and will not obligate the
Portfolio to retain the services of any Trustee or obligate the Portfolio to pay
any particular level of compensation to the Trustee.
The fees and expenses of those Trustees of the Trust and the Portfolio who
are not members of the Eaton Vance organization (the noninterested Trustees) are
paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. For the compensation earned by the noninterested Trustees of the
Trust and the Portfolio, see "Fees and Expenses" in Part II of this Statement of
Additional Information.
INVESTMENT ADVISER AND ADMINISTRATOR
The Portfolio engages BMR as investment adviser pursuant to an Investment
Advisory Agreement dated May 31, 1994. BMR or Eaton Vance acts as investment
adviser to investment companies and various individual and institutional clients
with combined assets under management of approximately $15 billion.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of their clients. The
fixed-income division focuses on all kinds of taxable investment-grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
BMR manages the investments and affairs of the Portfolio subject to the
supervision of the Portfolio's Board of Trustees. BMR furnishes to the Portfolio
investment research, advice and supervision, furnishes an investment program and
determines what securities will be purchased, held or sold by the Portfolio and
what portion, if any, of the Portfolio's assets will be held uninvested. The
Investment Advisory Agreement requires BMR to pay the salaries and fees of all
officers and Trustees of the Portfolio who are members of the BMR organization
and all personnel of BMR performing services relating to research and investment
activities. The Portfolio is responsible for all expenses not expressly stated
to be payable by BMR under the Investment Advisory Agreement, including, without
implied limitation, (i) expenses of maintaining the Portfolio and continuing its
existence, (ii) registration of the Portfolio under the 1940 Act, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of interests in the Portfolio, (viii) expenses of
registering and qualifying the Portfolio and interests in the Portfolio under
Federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to investors, and fees and expenses of registering and
maintaining registrations of the Portfolio and of the Portfolio's placement
agent as broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to investors and of meetings of investors and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Portfolio (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and records, and
determination of net asset values, book capital account balances and tax capital
account balances), (xiv) fees, expenses and disbursements of transfer agents,
dividend disbursing agents, investor servicing agents and registrars for all
services to the Portfolio, (xv) expenses for servicing the accounts of
investors, (xvi) any direct charges to investors approved by the Trustees of the
Portfolio, (xvii) compensation and expenses of Trustees of the Portfolio who are
not members of BMR's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Portfolio to indemnify its Trustees,
officers and investors with respect thereto.
The Portfolio pays BMR as compensation under the Investment Advisory
Agreement a monthly fee equal to the aggregate of (a) a daily asset based fee
computed by applying the annual asset rate applicable to that portion of the
total daily net assets in each Category as indicated below, plus (b) a daily
income based fee computed by applying the daily income rate applicable to that
portion of the total daily gross income (which portion shall bear the same
relationship to the total daily gross income on such day as that portion of the
total daily net assets in the same Category bears to the total daily net assets
on such day) in each Category as indicated below:
ANNUAL DAILY
CATEGORY DAILY NET ASSETS ASSET RATE INCOME RATE
- -------- ---------------- ---------- -----------
1 up to $500 million ..................... 0.300% 3.00%
2 $500 million but less than $1 billion .. 0.275% 2.75%
3 $1 billion but less than $1.5 billion .. 0.250% 2.50%
4 $1.5 billion but less than $2 billion .. 0.225% 2.25%
5 $2 billion but less than $3 billion .... 0.200% 2.00%
6 $3 billion and over .................... 0.175% 1.75%
As at March 31, 1995, the Portfolio had net assets of $442,551,815. For the
period from the Portfolio's start of business, June 1, 1994 to March 31, 1995,
the Portfolio paid BMR advisory fees of $2,260,748 (equivalent to 0.64%
(annualized) of the Portfolio's average daily net assets for such period).
The Investment Advisory Agreement with BMR remains in effect until February
28, 1996. It may be continued indefinitely thereafter so long as such
continuance after February 28, 1996 is approved at least annually (i) by the
vote of a majority of the Trustees of the Portfolio who are not interested
persons of the Portfolio or of BMR cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio. The Agreement may be terminated at any time without
penalty on sixty (60) days' written notice by the Board of Trustees of either
party, or by vote of the majority of the outstanding voting securities of the
Portfolio, and the Agreement will terminate automatically in the event of its
assignment. The Agreement provides that BMR may render services to others and
engage in other business activities and may permit other fund clients and other
corporations and organizations to use the words "Eaton Vance" or "Boston
Management and Research" in their names. The Agreement also provides that BMR
shall not be liable for any loss incurred in connection with the performance of
its duties, or action taken or omitted under that Agreement, in the absence of
willful misfeasance, bad faith, gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
thereunder, or for any losses sustained in the acquisition, holding or
disposition of any security or other investment.
The Bank of Nova Scotia Trust Company (Cayman) Ltd. maintains the
Portfolio's principal office and certain of its records and provides
administrative assistance in connection with meetings of the Portfolio's
Trustees and interestholders, for which services the Portfolio pays $1,500 per
annum.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but receives no compensation for providing administrative services to the
Fund. Under its Administrative Services Agreement with the Fund, Eaton Vance has
been engaged to administer the Fund's affairs, subject to the supervision of the
Trustees of the Trust, and shall furnish for the use of the Fund office space
and all necessary office facilities, equipment and personnel for administering
the affairs of the Fund.
The Fund pays all of its own expenses including, without limitation, (i)
expenses of maintaining the Fund and continuing its existence, (ii) registration
of the Trust under the 1940 Act, (iii) commissions, fees and other expenses
connected with the purchase or sale of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale, repurchase and redemption of
shares, (viii) expenses of registering and qualifying the Fund and its shares
under federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Eaton Vance organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are both
wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both Massachusetts
business trusts, and EV is the trustee of BMR and Eaton Vance. The Directors of
EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner, James B. Hawkes,
and Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons
and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman and Mr. Gardner
is president and chief executive officer of EVC, BMR, Eaton Vance and EV. All of
the issued and outstanding shares of Eaton Vance and EV are owned by EVC. All of
the issued and outstanding shares of BMR are owned by Eaton Vance. All shares of
the outstanding Voting Common Stock of EVC are deposited in a Voting Trust which
expires on December 31, 1996, the Voting Trustees of which are Messrs. Clay,
Brigham, Gardner, Hawkes and Rowland. The Voting Trustees have unrestricted
voting rights for the election of Directors of EVC. All of the outstanding
voting trust receipts issued under said Voting Trust are owned by certain of the
officers of BMR and Eaton Vance who are also officers and Directors of EVC and
EV. As of June 30, 1995, Messrs. Clay, Gardner and Hawkes each owned 24% of such
voting trust receipts, and Messrs. Rowland and Brigham owned 15% and 13%,
respectively, of such voting trust receipts. Messrs. Brigham, Gardner, Hawkes
and Otis are officers or Trustees of the Trust and/or the Portfolio and are
members of the EVC, BMR, Eaton Vance and EV organizations. Messrs. Ahern,
Murphy, O'Connor, Talcott and Woodbury and Ms. Sanders are officers or Trustees
of the Trust and/or the Portfolio and are also members of the BMR, Eaton Vance
and EV organizations. BMR will receive the fees paid under the Investment
Advisory Agreement.
Eaton Vance owns all of the stock of Energex Corporation, which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy Corp.
(which engages in oil and gas operations) and 77.3% of the stock of Investors
Bank & Trust Company, custodian of the Fund and the Portfolio, which provides
custodial, trustee and other fiduciary services to investors, including
individuals, employee benefit plans, corporations, investment companies, savings
banks and other institutions. In addition, Eaton Vance owns all the stock of
Northeast Properties, Inc., which is engaged in real estate investment,
consulting and management. EVC owns all the stock of Fulcrum Management, Inc.
and MinVen, Inc., which are engaged in the development of precious metal
properties. EVC, BMR, Eaton Vance and EV may also enter into other businesses.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund and
the Portfolio, Investors Bank & Trust Company. It is Eaton Vance's opinion that
the terms and conditions of such transactions were not and will not be
influenced by existing or potential custodial or other relationships between the
Fund or the Portfolio and such banks.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston,
Massachusetts (a 77.3% owned subsidiary of EVC) acts as custodian for the Fund
and the Portfolio. IBT has the custody of all cash and securities representing
the Fund's interest in the Portfolio, has custody of all the Portfolio assets,
and its subsidiary, IBT Fund Services (Canada) Inc., First Canadian Place, King
Street West, Toronto, Ontario, Canada, maintains the general ledger of the
Portfolio and the Fund and computes the daily net asset value of interests in
the Portfolio and the net asset value of shares of the Fund. In its capacity as
Custodian, IBT attends to details in connection with the sale, exchange,
substitution, transfer or other dealings with the Portfolio's investments,
receives and disburses all funds and performs various other ministerial duties
upon receipt of proper instructions from the Fund and the Portfolio. IBT charges
custody 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 the Fund and Portfolio net assets, and a portion of the fee
relates to activity charges, primarily the number of portfolio transactions.
These fees are then reduced by a credit for cash balances of the particular
investment company at the custodian equal to 75% of the 91-day, U.S. Treasury
Bill auction rate applied to the particular investment company's average daily
collected balances for the week. In view of the ownership of EVC in IBT, the
Portfolio is treated as a self-custodian pursuant to Rule 17f-2 under the 1940
Act, and the Portfolio's investments held by IBT as custodian are thus subject
to the additional examinations by the Portfolio's independent certified public
accountants as called for by such Rule. For the period from the start of
business, June 1, 1994, to March 31, 1995, the Portfolio paid IBT $147,500. For
the custody fees that the Fund paid to IBT, see "Fees and Expenses" in Part II
of this Statement of Additional Information.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Trust's Transfer Agent will send to the
shareholder regular monthly or quarterly payments of any permitted amount
designated by the shareholder (see "Eaton Vance Shareholder Services
- --Withdrawal Plan" in the Fund's Prospectus) based upon the value of the shares
held. The checks will be drawn from share redemptions and hence, are a return of
principal. Income dividends and capital gains distributions in connection with
withdrawal accounts will be credited at net asset value as of the record date
for each distribution. Continued withdrawals in excess of current income will
eventually use up principal, particularly in a period of declining market
prices.
To use this service, at least $5,000 in cash or shares at the public
offering price will have to be deposited with the Transfer Agent. The
maintenance of a withdrawal plan concurrently with purchases of additional Fund
shares would be disadvantageous if a sales charge is included in such purchases.
A shareholder may not have a withdrawal plan in effect at the same time he has
authorized Bank Automated Investing or is otherwise making regular purchases of
Fund shares. Either the shareholder, the Transfer Agent or the Principal
Underwriter will be able to terminate the withdrawal plan at any time without
penalty.
DETERMINATION OF NET ASSET VALUE
The net asset value of the Portfolio and of shares of the Fund is
determined by the Custodian (as agent for the Fund and the Portfolio) in the
manner described under "Valuing Fund Shares" in the Fund's current prospectus.
The Fund and the Portfolio will be closed for business and will not price their
respective shares or interests on the following business holidays: New Year's
Day, Presidents' Day, Good Friday (a New York Stock Exchange holiday), Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Portfolio's net asset value is also computed by IBT (as agent and
custodian for the Portfolio), by subtracting the liabilities of the Portfolio
from the value of its total assets. Fixed-income securities (other than
short-term obligations), including listed securities and securities for which
price quotations are available, will normally be valued on the basis of market
valuations furnished by a pricing service. The pricing service uses information
with respect to transactions in bonds, quotations from bond dealers, market
transactions in comparable securities, various relationships between securities,
and yield to maturity in determining value. Securities listed on securities
exchanges or in the NASDAQ National Market are valued at closing sale prices.
Unlisted or listed securities for which closing sale prices are not available
are valued at the mean between the latest bid and asked prices. Short-term
obligations maturing in sixty days or less are valued at amortized cost, which
approximates market. Other assets are valued at fair value using methods
determined in good faith by the Trustees.
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage, determined on the prior
Portfolio Business Day, which represented that investor's share of the aggregate
interests in the Portfolio on such prior day. Any additions or withdrawals for
the current Portfolio Business Day will then be recorded. Each investor's
percentage of the aggregate interest in the Portfolio will then be recomputed as
a percentage equal to a fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Portfolio Valuation Time on the
prior Portfolio Business Day plus or minus, as the case may be, the amount of
any additions to or withdrawals from the investor's investment in the Portfolio
on the current Portfolio Business Day and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of the Portfolio Valuation Time on
the prior Portfolio Business Day plus or minus, as the case may be, the amount
of the net additions to or withdrawals from the aggregate investment in the
Portfolio on the current Portfolio Business Day by all investors in the
Portfolio. The percentage so determined will then be applied to determine the
value of the investor's interest in the Portfolio for the current Portfolio
Business Day.
INVESTMENT PERFORMANCE
The average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the results. The
calculation assumes that all dividends and distributions are reinvested at net
asset value on the reinvestment dates during the period and a complete
redemption of the investment and, if applicable, the deduction of a contingent
deferred sales charge at the end of the period.
The Fund's yield is computed pursuant to a standardized formula by dividing
its net investment income per share earned during a recent thirty-day period by
the net asset value per share on the last day of the period and annualizing the
resulting figure. Net investment income per share is calculated from the yields
to maturity of all debt obligations held by the Portfolio based on the market
value of such obligations and from dividends from equity securities based on
stated annual rates, exclusive of special or extra distributions, reduced by
accrued Fund expenses for the period, with the resulting number being divided by
the average daily number of Fund shares outstanding and entitled to receive
dividends during the period. This yield figure does not reflect the deduction of
any contingent deferred sales charges which are imposed upon certain redemptions
of shares at the rates set forth under "How to Redeem Fund Shares" in the
Prospectus. For information concerning the total return of the Fund, see
"Performance Information" in Part II of this Statement of Additional
Information.
The Fund may also publish its distribution rate and/or its effective
distribution rate. The Fund's distribution rate is computed by dividing the most
recent monthly distribution per share annualized by the current net asset value
per share. The Fund's effective distribution rate is computed by dividing the
distribution rate by the ratio used to annualize the distribution and
reinvesting the resulting amount for a full year on the basis of such ratio. The
effective distribution rate will be higher than the distribution rate because of
the compounding effect of the assumed reinvestment. Investors should note that
the Fund's yield is calculated using a standardized formula the income component
of which is computed from the yields to maturity of all debt obligations held by
the Portfolio based on the market value of such obligations and from dividends
from equity securities based on stated annual rates, exclusive of special or
extra distributions, (with all purchases and sales of securities during such
period included in the income calculation on a settlement date basis), whereas
the distribution rate is based on the Fund's last monthly distribution which
tends to be relatively stable and may be more or less than the amount of net
investment income and short-term capital gain actually earned by the Fund during
the month. For further information concerning the Distribution Rate and
Effective Distribution Rate, see "Performance Information" in Part II of this
Statement of Additional Information.
The Fund's total return may be compared to the Consumer Price Index and
various domestic securities indices. The Fund's total return and comparisons
with these indices may be used in advertisements and in information furnished to
present or prospective shareholders. The Fund's performance may differ from that
of other investors in the Portfolio, including the other investment companies.
From time to time, information showing the effects of compounding interest
may be included in advertisements and other material furnished to present and
prospective shareholders. Compounding is the process of earning interest on
principal plus interest that was earned earlier. Interest can be compounded
annually, semi-annually, quarterly or daily, e.g. $1,000 compounded annually at
9 percent will grow to $1,090 at the end of the first year and $1,188 at the end
of the second year. The extra $8, which was earned on the $90 interest from the
first year, is the compound interest. $1,000 compounded annually at 9 percent
grows to $2,367 at the end of 10 years and $5,604 at the end of 20 years. Other
examples of compounding $1,000 annually are 7 percent grows to $1,967 at the end
of 10 years and $3,870 at the end of 20 years. At 12 percent the $1,000 grows to
$3,106 at the end of 10 years and $9,646 at the end of 20 years. All of these
examples are for illustrative purposes only and are not meant to indicate
performance of the Fund.
From time to time, information, charts and illustrations relating to
inflation and the effects of inflation on the dollar may be included in
advertisements and other material furnished to present and prospective
shareholders. For example: After 10 years, the purchasing power of $25,000 would
shrink to $16,621, $14,968, $13,465 and $12,100, respectively, if the annual
rates of inflation during such period were 4%, 5%, 6% and 7%, respectively. (To
calculate the purchasing power, the value at the end of each year is reduced by
the above inflation rates for 10 consecutive years.)
From time to time, information, charts and illustrations showing comparative
historical information of high-yielding bonds as represented by The First Boston
High Yield Index over 10-year U.S. treasury bonds may be used in advertisements
and other material furnished to present or prospective shareholders. The First
Boston High Yield Index is an unmanaged index of 661 high-yielding securities
with an average life of 8.1 years, an average maturity of 8.2 years and an
average coupon of 10.7%. The principal and interest of U.S. Treasury bonds are
guaranteed by the United States government, while high yield bonds, sometimes
referred to as "junk bonds", are of lower quality than investment-grade bonds
and U.S. securities. Rates are given for illustrative purposes only and are not
meant to imply or predict actual results of an investment in the Fund.
From time to time evaluations of the Fund's performance made by independent
sources, e.g. Lipper Analytical Services, Inc., CDA/Wiesenberger and
Morningstar, Inc., may be used in advertisements and in information furnished to
present or prospective shareholders.
Information used in advertisements and in materials furnished to present and
prospective shareholders may include statements or illustrations relating to the
appropriateness of types of securities and/or mutual funds which may be employed
to meet specific financial goals, such as (1) funding retirement, (2) paying for
children's education, and (3) financially supporting aging parents. These three
financial goals may be referred to in such advertisements or materials as the
"Triple Squeeze."
For additional information on the Fund's investment performance, see
"Performance Information" in Part II of this Statement of Additional
Information.
TAXES
FEDERAL INCOME TAXES
See "Distributions and Taxes" in the Fund's current prospectus.
Each series of the Trust is treated as a separate entity for Federal income
tax purposes. The Fund has elected to be treated, and intends to qualify each
year, as a regulated investment company under the Internal Revenue Code (the
"Code"). Accordingly, the Fund intends to satisfy certain requirements relating
to sources of its income and diversification of its assets and to distribute all
of its net investment income and net realized capital gains in accordance with
the timing requirements imposed by the Code, so as to avoid any Federal income
or excise tax to the Fund. Because the Fund invests substantially all of its
assets in the Portfolio, the Portfolio normally must satisfy the applicable
source of income and diversification requirements in order for the Fund to
satisfy them. The Portfolio will allocate at least annually among its investors,
including the Fund, each investor's distributive share of the Portfolio's net
taxable (if any) and tax-exempt investment income, net realized capital gains,
and any other items of income, gain, loss, deduction or credit. For purposes of
applying the requirements of the Code regarding qualification as a regulated
investment company, the Fund will be deemed (i) to own its proportionate share
of each of the assets of the Portfolio and (ii) to be entitled to the gross
income of the Portfolio attributable to such share.
In order to avoid Federal excise tax, the Code requires that the Fund
distribute by December 31 of each calendar year at least 98% of its ordinary
income for such year, at least 98% of the excess of its realized capital gains
over its realized capital losses, generally computed on the basis of the
one-year period ending on October 31 of such year, after reduction by any
available capital loss carryforwards, and 100% of any income from the prior year
(as previously computed) that was not paid out during such year and on which the
Fund was not taxed. Under current law, provided that the Fund qualifies as a
regulated investment company for Federal income tax purposes and the Portfolio
is treated as a partnership for Massachusetts and Federal tax purposes, neither
the Fund nor the Portfolio is liable for any income, excise or franchise tax in
the Commonwealth of Massachusetts.
The Portfolio's transactions in options, futures contracts and forward
contracts will be subject to special tax rules that may affect the amount,
timing and character of distributions to shareholders. For example, certain
positions held by the Portfolio on the last business day of each taxable year
will be marked to market (i.e., treated as if closed out on such day), and any
resulting gain or loss will be treated as 60% long-term and 40% short-term
capital gain or loss. Certain positions held by the Portfolio that substantially
diminish the Portfolio's risk of loss with respect to other positions in its
portfolio may constitute "straddles," which are subject to tax rules that may
cause deferral of Portfolio losses, adjustments in the holding periods of
Portfolio securities and conversion of short-term into long-term capital losses.
The Portfolio may have to limit its activities in options, futures contracts and
forward contracts in order to enable the Fund to maintain its qualification as a
regulated investment company.
The Portfolio may be subject to foreign withholding taxes with respect to
income derived from foreign securities. These taxes may be reduced or eliminated
under the terms of an applicable U.S. income tax treaty. As it is not expected
that more than 50% of the value of the total assets of the Fund at the close of
any taxable year will consist of securities issued by foreign corporations, the
Fund will not be eligible to pass through to shareholders any foreign tax
credits or deductions for foreign taxes paid by the Portfolio. Certain foreign
exchange gains and losses realized by the Fund will be treated as ordinary
income and losses. Certain uses of foreign currency and investment by the
Portfolio in certain "passive foreign investment companies" may be limited as a
tax election may be made, if available, in order to avoid imposition of a tax on
the Portfolio.
The Portfolio's investment in zero coupon and deferred interest securities
and payment in kind securities will cause it to realize income prior to the
receipt of cash payments with respect to these securities. Such income will be
allocated daily to interests in the Portfolio and, in order to enable the Fund
to distribute its proportionate share of this income and avoid a tax payable by
the Fund, the Portfolio may be required to liquidate portfolio securities that
it might otherwise have continued to hold in order to generate cash that the
Fund may withdraw from the Portfolio for subsequent distribution to Fund
shareholders.
Investments in lower-rated or unrated securities may present special tax
issues for the Portfolio and hence for the Fund to the extent actual or
anticipated defaults may be more likely with respect to such securities. Tax
rules are not entirely clear about issues such as when the Portfolio may cease
to accrue interest, original issue discount, or market discount; when and to
what extent deductions may be taken for bad debts or worthless securities; how
payments received on obligations in default should be allocated between
principal and income; and whether exchanges of debt obligations in a workout
context are taxable.
Distributions by the Fund of net investment income, the excess of net
short-term capital gains over net long-term capital losses and certain foreign
exchange gains are taxable to shareholders as ordinary income, whether received
in cash or reinvested in additional shares. Distributions of the excess of net
long-term capital gains over net short-term capital losses (including any
capital losses carried forward from prior years) are taxable to shareholders as
long-term capital gains, whether received in cash or in additional shares and
regardless of the length of time their shares of the Fund have been held.
Certain distributions declared in October, November or December and paid the
following January will be taxable 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. All or a portion of any loss realized upon a taxable
disposition of Fund shares may be disallowed under "wash sale" rules if other
shares of the Fund are purchased (whether through the reinvestment of
distributions or otherwise) within 30 days before or after such disposition.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and to
other retirement plans, and persons investing through such plans should consult
their tax advisers for more information. The deductibility of such contributions
may be restricted or eliminated for particular shareholders.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain required certifications, as well as shareholders with respect to whom
the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of Federal income tax from the
Fund's dividends and distributions and the proceeds of redemptions (including
repurchases and exchanges), at a rate of 31%. An individual's taxpayer
identification number is generally his or her social security number.
Non-resident alien individuals and certain foreign corporations and other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short-term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. Federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to state and local tax consequences of
investing in the Fund. Shareholders should consult their own tax advisers with
respect to special tax rules that may apply in their particular situations, as
well as the state, local or foreign tax consequences of investing in the Fund.
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as principal
in selling shares of the Fund. The expenses of printing copies of prospectuses
used to offer shares to financial service firms or investors and other selling
literature and of advertising is borne by the Principal Underwriter. The fees
and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under Federal and state securities laws
are borne by the Fund. In addition, the Fund makes payments to the Principal
Underwriter pursuant to its Distribution Plan as described in the Fund's current
Prospectus; the provisions of the Distribution Plan relating to such payments
are included in the Distribution Agreement. The Distribution Agreement is
renewable annually by the Trust's Board of Trustees (including a majority of its
Trustees who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Fund's Distribution Plan or
the Distribution Agreement), may be terminated on sixty days" notice either by
such Trustees or by vote of a majority of the outstanding voting securities of
the Fund or on six months' notice by the Principal Underwriter and is
automatically terminated upon assignment. The Principal Underwriter distributes
Fund shares on a "best efforts" basis under which it is required to take and pay
for only such shares as may be sold.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of 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.
BMR places the portfolio security transactions of the Portfolio and of all
other accounts managed by it for execution with many broker-dealer firms. BMR
uses its best efforts to obtain execution of portfolio security transactions at
prices which are advantageous to the Portfolio and (when a disclosed commission
is being charged) at reasonably competitive commission rates. In seeking such
execution, BMR will use its best judgment in evaluating the terms of a
transaction, and will give consideration to various relevant factors including
without limitation the size and type of the transaction, the general execution
and operational capabilities of the broker-dealer, the nature and character of
the market for the security, the confidentiality, speed and certainty of
effective execution required for the transaction, the reputation, reliability,
experience and financial condition of the broker-dealer, the value and quality
of services rendered by the broker-dealer in other transactions, and the
reasonableness of the commission or spread, if any. Transactions on United
States stock exchanges and other agency transactions involve the payment by the
Portfolio of negotiated brokerage commissions. Such commissions vary among
different broker-dealer firms, and a particular broker-dealer may charge
different commissions according to such factors as the difficulty and size of
the transaction and the volume of business done with the broker-dealer.
Transactions in foreign securities usually involve the payment of fixed
brokerage commissions, which are generally higher than those in the United
States. There is generally no stated commission in the case of securities traded
in the over-the-counter markets, but the price paid or received by the Portfolio
usually includes an undisclosed dealer markup or markdown. In an underwritten
offering, the price paid by the Portfolio often includes a disclosed fixed
commission or discount retained by the underwriter or dealer. Although
commissions paid on portfolio security transactions will, in the judgment of
BMR, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to
broker-dealers who were selected to execute transactions on behalf of the
Portfolio and BMR's other clients in part for providing brokerage and research
services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Portfolio
may receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if BMR
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided. This determination may be
made on the basis of either that particular transaction or on the basis of
overall responsibilities which BMR and its affiliates have for accounts over
which they exercise investment discretion. In making any such determination, BMR
will not attempt to place a specific dollar value on the brokerage and research
services provided or to determine what portion of the commission should be
related to such services. Brokerage and research services may include advice as
to the value of securities, the advisability of investing in, purchasing, or
selling securities, and the availability of securities or purchasers or sellers
of securities; furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts; effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement); and the "Research
Services" referred to in the next paragraph.
It is a common practice in the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-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, BMR receives Research Services from many broker-dealer firms with
which BMR places the portfolio transactions and from third parties with which
these broker-dealers have arrangements. These Research Services include such
matters as general economic and market reviews, industry and company reviews,
evaluations of securities and portfolio strategies and transactions,
recommendations as to the purchase and sale of securities and other portfolio
transactions, financial, industry and trade publications, news and information
services, pricing and quotation equipment and services, and research oriented
computer hardware, software, data bases and services. Any particular Research
Service obtained through a broker-dealer may be used by BMR in connection with
client accounts other than those accounts which pay commissions to such
broker-dealer. Any such Research Service may be broadly useful and of value to
BMR in rendering investment advisory services to all or a significant portion of
its clients, or may be relevant and useful for the management of only one
client's account or of a few clients' accounts, or may be useful for the
management of merely a segment of certain clients' accounts, regardless of
whether any such account or accounts paid commissions to the broker-dealer
through which such Research Service was obtained. The advisory fee paid by the
Portfolio is not reduced because BMR receives such Research Services. BMR
evaluates the nature and quality of the various Research Services obtained
through broker-dealer firms and attempts to allocate sufficient commissions to
such firms to ensure the continued receipt of Research Services which BMR
believes are useful or of value to it in rendering investment advisory services
to its clients.
Subject to the requirement that BMR shall use its best efforts to seek to
execute portfolio security transactions at advantageous prices and at reasonably
competitive commission rates or spreads, BMR is authorized to consider as a
factor in the selection of any broker-dealer firm with whom portfolio orders may
be placed the fact that such firm has sold or is selling shares of the Fund or
of other investment companies sponsored by BMR or Eaton Vance. This policy is
not inconsistent with a rule of the National Association of Securities Dealers,
Inc., which rule provides that no firm which is a member of the Association
shall favor or disfavor the distribution of shares of any particular investment
company or group of investment companies on the basis of brokerage commissions
received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or Eaton Vance or its
affiliates. BMR or Eaton Vance will attempt to allocate equitably portfolio
security transactions among the Portfolio and the portfolios of its other
investment accounts whenever decisions are made to purchase or sell securities
by the Portfolio and one or more of such other accounts simultaneously. In
making such allocations, the main factors to be considered are the respective
investment objectives of the Portfolio and such other accounts, the relative
size of portfolio holdings of the same or comparable securities, the
availability of cash for investment by the Portfolio and such accounts, the size
of investment commitments generally held by the Portfolio and such accounts and
the opinions of the persons responsible for recommending investments to the
Portfolio and such accounts. While this procedure could have a detrimental
effect on the price or amount of the securities available to the Portfolio from
time to time, it is the opinion of the Trustees of the Trust that the benefits
available from the BMR organization outweigh any disadvantage that may arise
from exposure to simultaneous transactions. For the period from the start of
business, June 1, 1994, to March 31, 1995, the Portfolio paid brokerage
commissions of $3,684 on portfolio security transactions of which $569 was paid
in respect of portfolio security transactions aggregating approximately $206,198
to firms which provided some research services to BMR or its affiliates
(although many of such firms may have been selected in any particular
transaction primarily because of their execution capabilities).
OTHER INFORMATION
Eaton Vance, pursuant to its agreement with the Trust, controls the use of
the words "Eaton Vance" in the Fund's name and may use the words "Eaton Vance"
in other connections and for other purposes.
The Trust's Declaration of Trust may be amended by the Trustees when
authorized by vote of a majority of the outstanding voting securities of the
Trust, the financial interests of which are affected by the amendment. The
Trustees may also amend the Declaration of Trust without the vote or consent of
shareholders to change the name of the Trust or any series or to make such other
changes as do not have a materially adverse effect on the financial interests of
shareholders or if they deem it necessary to conform it to applicable federal or
state laws or regulations. The Trust or any series or class thereof may be
terminated by: (1) the affirmative vote of the holders of not less than
two-thirds of the Shares outstanding and entitled to vote at any meeting of
shareholders of the Trust or the appropriate series or class thereof, or by an
instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of the shares of the Trust or a series or class thereof,
provided, however, that, if such termination is recommended by the Trustees, the
vote of a majority of the outstanding voting securities of the Trust or a series
or class thereof entitled to vote thereon shall be sufficient authorization; or
(2) by means of an instrument in writing signed by a majority of the Trustees,
to be followed by a written notice to shareholders stating that a majority of
the Trustees has determined that the continuation of the Trust or a series or a
class thereof is not in the best interest of the Trust, such series or class or
of their respective shareholders.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law; but nothing in the
Declaration of Trust protects a Trustee against any liability to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office. The Trust's by-laws provide that a Trustee may be removed at any special
meeting of the Shareholders of the Trust by a vote of two-thirds of the
outstanding shares of beneficial Interest of the Trust (the "Shares"). The
Trustees will promptly call a meeting of Shareholders for the purpose of voting
upon a question of removal of a Trustee when requested so to do by the record
holders of not less than 10 per centum of the outstanding shares.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees of the Trust 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 of the
Trust 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 communication with shareholders about such a meeting.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interests
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The right to redeem shares of the Fund can be suspended and the payment of
the redemption price deferred when the Exchange is closed (other than for
customary weekend and holiday closings), during periods when trading on the
Exchange is restricted as determined by the Securities and Exchange Commission
(the "Commission"), or during any emergency as determined by the Commission
which makes it impracticable for the Portfolio to dispose of its securities or
value its assets, or during any other period permitted by order of the
Commission for the protection of investors.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts, and
Deloitte & Touche, Grand Caymen, Caymen Islands, British West Indies are the
independent certified public accountants of the Fund and the Portfolio,
respectively, providing audit services, tax return preparation, and assistance
and consultation with respect to the preparation of filings with the Securities
and Exchange Commission.
FINANCIAL STATEMENTS
The financial statements of the Fund and the Portfolio, which are included
in the Fund's Annual Report to Shareholders, are incorporated by reference into
this Statement of Additional Information and have been so incorporated in
reliance on the report of Deloitte & Touche LLP, independent certified public
accountants, as experts in accounting and auditing. Registrant incorporates by
reference the audited financial information for the Fund and the Portfolio
contained in the Fund's shareholder report for the fiscal year ended March 31,
1995 as previously filed electronically with the Securities and Exchange
Commission (Accesssion No. 0000950156-95-000403 and 0000950156-95-000404 for EV
Classic High Income Fund and EV Marathon High Income Fund, respectively).
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV CLASSIC HIGH INCOME FUND. The
Fund became a series of the Trust on July 31, 1995. The Trust changed its name
from Eaton Vance Government Obligations Trust on July 31, 1995.
FEES AND EXPENSES
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund. For the period from the start
of business, June 8, 1994, to March 31, 1995, $37,087 of the Fund's operating
expenses were allocated to the Administrator.
DISTRIBUTION PLAN
For the period from the start of business, June 8, 1994, to March 31, 1995,
the Fund accrued sales commission payments under the Plan aggregating $8,783, of
which $8,477 was paid to the Principal Underwriter. The Principal Underwriter
paid $8,084 as sales commissions to Authorized Firms and the balance was
retained by the Principal Underwriter. As at March 31, 1995, the outstanding
uncovered distribution charges of the Principal Underwriter calculated under the
Plan amounted to approximately $200,000 (which amount was equivalent to 9.6% of
the Fund's net assets on such day). For the period from the start of business,
June 8, 1994, to March 31, 1995, the Fund accrued service fee payments under the
Plan aggregating $2,928, of which $2,825 was paid to the Principal Underwriter.
The Principal Underwriter paid $2,670 as service fees to Authorized Firms, and
the balance was retained by the Principal Underwriter.
PRINCIPAL UNDERWRITER
For the period ended March 31, 1995, the Fund paid the Principal Underwriter
$82.50 for repurchase transactions handled by the Principal Underwriter (being
$2.50 for each such transaction).
CUSTODIAN
For the period ended March 31, 1995, the Fund paid IBT $751.
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio
who are not members of the Eaton Vance organization (the noninterested Trustees)
are paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. (The Trustees of the Trust and of the Portfolio who are members of
the Eaton Vance organization receive no compensation from the Trust or the
Portfolio.) During the fiscal year ended March 31, 1995, the noninterested
Trustees of the Trust and the Portfolio earned the following compensation in
their capacities as Trustees from the Fund, the Portfolio and the other funds in
the Eaton Vance fund complex(1):
AGGREGATE AGGREGATE TOTAL COMPENSATION
COMPENSATION COMPENSATION FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FUND COMPLEX
- ---- ------------ -------------- ----------------
Donald R. Dwight .......... -- 0 -- $2,769(2) $135,000(4)
Samuel L. Hayes, III ...... -- 0 -- 2,755(3) 147,500(5)
Norton H. Reamer .......... -- 0 -- 2,728 135,000
John L. Thorndike ......... -- 0 -- 2,816 140,000
Jack L. Treynor ........... -- 0 -- 2,884 140,000
- ----------
(1)The Eaton Vance fund complex consists of 205 registered investment companies
or series thereof.
(2)Includes $609 of deferred compensation.
(3)Includes $1,178 of deferred compensation.
(4)Includes $17,500 of deferred compensation.
(5)Includes $33,750 of deferred compensation.
<PAGE>
PERFORMANCE INFORMATION
The table below indicates the total return (capital changes plus reinvest-
ment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from June 8, 1994 through March 31, 1995.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF INVEST- VALUE OF INVEST-
MENT BEFORE DE- MENT AFTER DEDUCT- TOTAL RETURN BEFORE DEDUCTING TOTAL RETURN AFTER DEDUCTING
DUCTING CON- ING CONTINGENT CONTINGENT DEFERRED CONTINGENT DEFERRED
TINGENT DEFERRED DEFERRED SALES SALES CHARGE SALES CHARGE<F3>
INVESTMENT INVESTMENT AMOUNT OF SALES CHARGE CHARGE<F3> --------------------------- ----------------------------
PERIOD DATE INVESTMENT ON 3/31/95 ON 3/31/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ------------- --------- ----------- --------------- --------------- -------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the
Fund<F1> 6/8/94 $1,000 $1,018.85<F2> $1,009.42<F2> 1.89%<F2> -- 0.94%<F2> --
<CAPTION>
PERCENTAGE CHANGES
6/8/94 -- 3/31/95
NET ASSET VALUE TO NET ASSET VALUE NET ASSET VALUE TO NET ASSET VALUE
BEFORE DEDUCTING THE CONTINGENT DEFERRED AFTER DEDUCTING THE CONTINGENT DEFERRED
SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED SALES CHARGE<F3> WITH ALL DISTRIBUTIONS REINVESTED
---------------------------------------------- -------------------------------------------------
PERIOD ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
- ----------------- ------ ---------- -------------- ------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
3/31/95<F1> -- 1.89%<F2> -- -- 0.94%<F2> --
Past performance is not indicative of future results. Investment return and principal value will fluctuate; shares, when
redeemed, may be worth more or less than their original cost.
- ----------
<FN>
<F1>Investment operations began on June 8, 1994.
<F2>If a portion of the Fund's expenses had not been subsidized, the Fund would have had lower returns.
<F3>No contingent deferred sales charge is imposed on shares purchased more than one year prior to the redemption, shares acquired
through the reinvestment of distributions, or any appreciation in value of other shares in the account, and no such charge is
imposed on exchanges of Fund shares for shares of one or more other funds listed under "The Eaton Vance Exchange Privilege" in
the Prospectus.
</FN>
</TABLE>
For the thirty-day period ended March 31, 1995, the yield of the Fund was
10.24%. If a portion of the Fund's expenses had not been allocated to Eaton
Vance, the Fund would have had a lower yield.
The Fund's distribution rate (calculated on March 31, 1995 and based on the
Fund's monthly distribution paid on March 22, 1995) was 9.49%, and the Fund's
effective distribution rate (calculated on the same date and based on the same
monthly distribution) was 9.92%. If a portion of the Fund's expenses had not
been allocated to Eaton Vance, the Fund would have had a lower distribution rate
and effective distribution rate.
DISTRIBUTION PLAN
The Distribution Plan ("the Plan") is described in the prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's Prospectus.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan as sales commissions and distribution fees with respect to each day will be
accrued on such day as a liability of the Fund and will accordingly reduce the
Fund's net assets upon such accrual, all in accordance with generally accepted
accounting principles. The amount payable on each day is limited to 1/365 of
.75% of the Fund's net assets on such day. The level of the Fund's net assets
changes each day and depends upon the amount of sales and redemptions of Fund
shares, the changes in the value of the investments held by the Portfolio, the
expenses of the Fund and the Portfolio accrued and allocated to the Fund on such
day, income on portfolio investments of the Portfolio accrued and allocated to
the Fund on such day, and any dividends and distributions declared on Fund
shares. The Fund does not accrue possible future payments as a liability of the
Fund or reduce the Fund's current net assets in respect of unknown amounts which
may become payable under the Plan in the future because the standards for
accrual of a liability under such accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
In calculating daily the amount of Uncovered Distribution Charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid or payable
under the Plan by the Fund to the Principal Underwriter and contingent deferred
sales charges theretofore paid or payable to the Principal Underwriter will be
subtracted from such distribution charges; if the result of such subtraction is
positive, a distribution fee (computed at 1% over the prime rate then reported
in The Wall Street Journal ) will be computed on such amount and added thereto,
with the resulting sum constituting the amount of outstanding uncovered
distribution charges with respect to such day. The amount of outstanding
uncovered distribution charges of the Principal Underwriter calculated on any
day does not constitute a liability recorded on the financial statements of the
Fund.
The amount of Uncovered Distribution Charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Classic Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan. (For shares sold prior to January 30, 1995,
Plan payments are as follows: the Principal Underwriter pays monthly sales
commissions and service fee payments to Authorized Firms equivalent to
approximately .75% and .25%, respectively, annualized of the assets maintained
in the Fund by their customers beginning at the time of sale. No payments were
made at the time of sale, and there is no contingent deferred sales charge.)
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions, distribution fees and service fees to the Principal
Underwriter which may be equivalent, on an aggregate basis during any fiscal
year of the Fund, to 1% of the Fund's average daily net assets for such year.
For the sales commission and service fee payments made by the Fund and the
outstanding uncovered distribution charges of the Principal Underwriter, see
"Fees and Expenses--Distribution Plan" in this Part II. The Fund believes that
the combined rate of all these payments may be higher than the rate of payments
made under distribution plans adopted by other investment companies pursuant to
Rule 12b-1. Although the Principal Underwriter will use its own funds (which may
be borrowed from banks) to pay sales commissions and service fees at the time of
sale, it is anticipated that the Eaton Vance organization will profit by reason
of the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from sale
of Fund shares and through the amounts paid to the Principal Underwriter,
including contingent deferred sales charges, pursuant to the Plan. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts theretofore paid to the Principal
Underwriter under the Plan, and from contingent deferred sales charges, have
exceeded the total expenses theretofore incurred by such organization in
distributing shares of the Fund. Total expenses for this purpose will include an
allocable portion of the overhead costs of such organization and its branch
offices, which costs will include without limitation leasing expense,
depreciation of building and equipment, utilities, communication and postage
expense, compensation and benefits of personnel, travel and promotional expense,
stationery and supplies, literature and sales aids, interest expense, data
processing fees, consulting and temporary help costs, insurance, taxes other
than income taxes, legal and auditing expense and other miscellaneous overhead
items. Overhead is calculated and allocated for such purpose by the Eaton Vance
organization in a manner deemed equitable to the Fund.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the
Trust, including the Rule 12b-1 Trustees. The Plan continues in effect through
and including April 28, 1996, and shall continue in effect indefinitely
thereafter for so long as such continuance is approved at least annually by the
vote of both a majority of (i) the Trustees of the Trust who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or any agreements related to the Plan (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office, and the Distribution
Agreement contains a similar provision. The Plan and Distribution Agreement may
be terminated at any time by vote of a majority of the Rule 12b-1 Trustees or by
a vote of a majority of the outstanding voting securities of the Fund. Under the
Plan the President or a Vice President of the Trust shall provide to the
Trustees for their review, and the Trustees shall review at least quarterly, a
written report of the amount expended under the Plan and the purposes for which
such expenditures were made. The Plan may not be amended to increase materially
the payments described therein without approval of the shareholders of the Fund,
and all material amendments of the Plan must also be approved by the Trustees as
required by Rule 12b-1. So long as the Plan is in effect, the selection and
nomination of Trustees who are not interested persons of the Trust shall be
committed to the discretion of the Trustees who are not such interested persons.
The Trustees of the Trust believe that the Plan will be a significant factor
in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of June 30, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
June 30, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc. New Brunswick, NJ was
the record owner of approximately 14.43% of the outstanding shares, which were
held on behalf of its customers' who are the beneficial owners of such shares,
and as to which it had voting power under certain limited circumstances. To the
knowledge of the Trust, no other person owned of record or beneficially 5% or
more of the Fund's outstanding shares on such date.
<PAGE>
INVESTMENT ADVISER OF
HIGH INCOME PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV CLASSIC HIGH INCOME FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EV CLASSIC
HIGH INCOME FUND
24 FEDERAL STREET
BOSTON, MA 02110
C-HISAI
EV Classic
High Income Fund
STATEMENT OF ADDITIONAL
INFORMATION
AUGUST 1, 1995
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PART II
This Part II provides information about EV MARATHON HIGH INCOME FUND. The
Fund became a series of the Trust on July 31, 1995. The Trust changed its name
from Eaton Vance Government Obligations Trust on July 31, 1995.
FEES AND EXPENSES
ADMINISTRATOR
As stated under "Investment Adviser and Administrator" in Part I of this
Statement of Additional Information, the Administrator receives no compensation
for providing administrative services to the Fund.
DISTRIBUTION PLAN
For the fiscal year ended March 31, 1995, the Fund paid sales commissions
under the Plan to the Principal Underwriter aggregating $3,144,405, which amount
was used by the Principal Underwriter to partially defray sales commissions
aggregating $2,918,802 paid during such period by the Principal Underwriter to
Authorized Firms on sales of shares of the Fund and to reduce uncovered
distribution charges. During such period contingent deferred sales charges
aggregating approximately $1,644,000 were imposed on early redeeming
shareholders and paid to the Principal Underwriter, which amount was used by the
Principal Underwriter to reduce uncovered distribution charges. As at March 31,
1995 the outstanding uncovered distribution charges of the Principal Underwriter
calculated under the Plan amounted to approximately $14,688,000 (which amount
was equivalent to 3.3% of the Fund's net assets on such day). For the fiscal
year ended March 31, 1995, the Fund accrued service fee payments under the Plan
aggregating $652,673 of which $622,580 was paid to the Principal Underwriter.
The Principal Underwriter paid $618,188 as service fees to Authorized Firms, and
the balance was retained by the Principal Underwriter.
PRINCIPAL UNDERWRITER
For the fiscal year ended March 31, 1995, the Fund paid the Principal
Underwriter $7,927.50 for repurchase transactions handled by the Principal
Underwriter (being $2.50 for each such transaction).
CUSTODIAN
For the fiscal year ended March 31, 1995, the Fund paid IBT $46,099.
TRUSTEES
The fees and expenses of those Trustees of the Trust and of the Portfolio
who are not members of the Eaton Vance organization (the noninterested Trustees)
are paid by the Fund (and the other series of the Trust) and the Portfolio,
respectively. (The Trustees of the Trust and of the Portfolio who are members of
the Eaton Vance organization receive no compensation from the Trust or the
Portfolio.) During the fiscal year ended March 31, 1995, the noninterested
Trustees of the Trust and the Portfolio earned the following compensation in
their capacities as Trustees from the Fund, the Portfolio and the other funds in
the Eaton Vance fund complex(1):
AGGREGATE AGGREGATE TOTAL COMPENSATION
COMPENSATION COMPENSATION FROM TRUST AND
NAME FROM FUND FROM PORTFOLIO FUND COMPLEX
- ---- ------------ -------------- ----------------
Donald R. Dwight .......... $1,454 $2.769(2) $135,000(4)
Samuel L. Hayes, III ...... 1,438 2,755(3) 147,500(5)
Norton H. Reamer .......... 1,392 2,728 135,000
John L. Thorndike ......... 1,439 2,816 140,000
Jack L. Treynor ........... 1,489 2,884 140,000
- ----------
(1)The Eaton Vance fund complex consists of 205 registered investment companies
or series thereof.
(2)Includes $609 of deferred compensation.
(3)Includes $1,178 of deferred compensation.
(4)Includes $17,500 of deferred compensation.
(5)Includes $33,750 of deferred compensation.
PERFORMANCE INFORMATION
The table below indicates the total return (capital changes plus
reinvestment of all distributions) on a hypothetical investment of $1,000 in the
Fund covering the life of the Fund from August 19, 1986, through March 31, 1995
and for the five and one-year periods ended March 31, 1995.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF INVEST- VALUE OF INVEST-
MENT BEFORE DE- MENT AFTER DEDUCT- TOTAL RETURN BEFORE DEDUCTING TOTAL RETURN AFTER DEDUCTING
DUCTING THE CON- ING THE CONTINGENT THE CONTINGENT DEFERRED THE CONTINGENT DEFERRED
TINGENT DEFERRED DEFERRED SALES SALES CHARGE SALES CHARGE<F2>
INVESTMENT INVESTMENT AMOUNT OF SALES CHARGE CHARGE<F2> --------------------------- ----------------------------
PERIOD DATE INVESTMENT ON 3/31/95 ON 3/31/95 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ------------- --------- ----------- --------------- --------------- -------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Life of the
Fund<F1> 8/19/86 $1,000 $1,983.20 $1,983.20 98.32% 8.27% 98.32% 8.27%
5 Years
Ended
3/31/95 03/31/90 $1,000 $1,721.72 $1,703.09 72.17% 11.48% 70.31% 11.24%
1 Year
Ended
3/31/95 03/31/94 $1,000 $1,025.72 $ 978.63 2.51% 2.51% -2.14% -2.14%
<CAPTION>
PERCENTAGE CHANGES 8/19/86 -- 3/31/95
NET ASSET VALUE TO NET ASSET VALUE NET ASSET VALUE TO NET ASSET VALUE
BEFORE DEDUCTING THE CONTINGENT DEFERRED AFTER DEDUCTING THE CONTINGENT DEFERRED
SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED SALES CHARGE WITH ALL DISTRIBUTIONS REINVESTED<F2>
---------------------------------------------- -------------------------------------------------
FISCAL YEAR ENDED ANNUAL CUMULATIVE AVERAGE ANNUAL ANNUAL CUMULATIVE AVERAGE ANNUAL
- ------------------- ------ ---------- -------------- ------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
3/31/87 --% 10.71% --% --% 5.71% --%
3/31/88 1.52 12.39 7.49 -2.87 7.72 4.71
3/31/89 11.58 25.40 9.04 6.63 21.71 7.80
3/31/90 -8.14 15.19 3.99 -12.17 12.96 3.43
3/31/91 -2.84 11.92 2.47 -6.96 10.70 2.23
3/31/92 38.21 54.69 8.07 33.21 53.95 7.98
3/31/93 13.41 75.43 8.86 8.41 75.43 8.86
3/31/94 10.28 93.47 9.05 5.30 93.47 9.05
3/31/95 2.51 98.32 8.27 -2.14 98.32 8.27
Past performance is not indicative of future results. Investment return and principal value will fluctuate; shares, when
redeemed, may be worth more or less than their original cost.
- ----------
<FN>
<F1>Investment operations began on August 19, 1986.
<F2>No contingent deferred sales charge is imposed on shares purchased more than six years prior to the redemption, shares acquired
through the reinvestment of distributions, or any appreciation in value of other shares in the account, and no such charge is
imposed on exchanges of Fund shares for shares of one or more other funds listed under "The Eaton Vance Exchange Privilege" in
the Prospectus.
</FN>
</TABLE>
For the thirty-day period ended March 31, 1995, the yield of the Fund was
10.88%.
The Fund's distribution rate (calculated on March 31, 1995 and based on the
Fund's monthly distribution paid on March 15, 1995) was 9.51%, and the Fund's
effective distribution rate (calculated on the same date and based on the same
monthly distribution) was 9.94%.
DISTRIBUTION PLAN
The Distribution Plan (the "Plan") is described in the prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's prospectus.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan as sales commissions and distribution fees with respect to each day will be
accrued on such day as a liability of the Fund and will accordingly reduce the
Fund's net assets upon such accrual, all in accordance with generally accepted
accounting principles. The amount payable on each day is limited to 1/365 of
.75% of the Fund's net assets on such day. The level of the Fund's net assets
changes each day and depends upon the amount of sales and redemptions of Fund
shares, the changes in the value of the investments held by the Portfolio, the
expenses of the Fund and the Portfolio accrued and allocated to the Fund on such
day, income on portfolio investments of the Portfolio accrued and allocated to
the Fund on such day, and any dividends and distributions declared on Fund
shares. The Fund does not accrue possible future payments as a liability of the
Fund or reduce the Fund's current net assets in respect of unknown amounts which
may become payable under the Plan in the future because the standards for
accrual of a liability under such accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
Periods with a high level of sales of Fund shares accompanied by a low level
of early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to increase the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter. Conversely,
periods with a low level of sales of Fund shares accompanied by a high level of
early redemptions of Fund shares resulting in the imposition of contingent
deferred sales charges will tend to reduce the time during which there will
exist Uncovered Distribution Charges of the Principal Underwriter.
In calculating daily the amount of Uncovered Distribution Charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid and
payable under the Plan by the Fund to the Principal Underwriter and contingent
deferred sales charges theretofore paid and payable to the Principal Underwriter
will be subtracted from such distribution charges; if the result of such
subtraction is positive, a distribution fee (computed at 1% over the prime rate
then reported in The Wall Street Journal) will be computed on such amount and
added thereto, with the resulting sum constituting the amount of outstanding
uncovered distribution charges with respect to such day. The amount of
outstanding uncovered distribution charges of the Principal Underwriter
calculated on any day does not constitute a liability recorded on the financial
statements of the Fund.
The amount of Uncovered Distribution Charges of the Principal Underwriter at
any particular time depends upon various changing factors, including the level
and timing of sales of Fund shares, the nature of such sales (i.e., whether they
result from exchange transactions, reinvestments or from cash sales through
Authorized Firms), the level and timing of redemptions of Fund shares upon which
a contingent deferred sales charge will be imposed, the level and timing of
redemptions of Fund shares upon which no contingent deferred sales charge will
be imposed (including redemptions involving exchanges of Fund shares for shares
of another fund in the Eaton Vance Marathon Group of Funds which result in a
reduction of uncovered distribution charges), changes in the level of the net
assets of the Fund, and changes in the interest rate used in the calculation of
the distribution fee under the Plan.
As currently implemented by the Trustees, the Plan authorizes payments of
sales commissions and distribution fees to the Principal Underwriter and service
fees to the Principal Underwriter and Authorized Firms which may be equivalent,
on an aggregate basis during any fiscal year of the Fund, to 1% of the Fund's
average daily net assets for such year. For the sales commission and service fee
payments made by the Fund and the outstanding uncovered distribution charges of
the Principal Underwriter, see "Fees and Expenses -- Distribution Plan" in this
Part II. The Fund believes that the combined rate of all of these payments may
be higher than the rate of payments made under distributions plans adopted by
other investment companies pursuant to Rule 12b-1. Although the Principal
Underwriter will use its own funds (which may be borrowed from banks) to pay
sales commissions at the time of sale, it is anticipated that the Eaton Vance
organization will profit by reason of the operation of the Plan through an
increase in the Fund's assets (thereby increasing the advisory fee payable to
BMR by the Portfolio) resulting from sale of Fund shares and through the sales
commissions and distribution fees and contingent deferred sales charges paid to
the Principal Underwriter pursuant to the Plan. The Eaton Vance organization may
be considered to have realized a profit under the Plan if at any point in time
the aggregate amounts theretofore received by the Principal Underwriter pursuant
to the Plan and from contingent deferred sales charges have exceeded the total
expenses theretofore incurred by such organization in distributing shares of the
Fund. Total expenses for this purpose will include an allocable portion of the
overhead costs of such organization and its branch offices, which costs will
include without limitation leasing expense, depreciation of building and
equipment, utilities, communication and postage expense, compensation and
benefits of personnel, travel and promotional expense, stationery and supplies,
literature and sales aids, interest expense, data processing fees, consulting
and temporary help costs, insurance, taxes other than income taxes, legal and
auditing expense and other miscellaneous overhead items. Overhead is calculated
and allocated for such purpose by the Eaton Vance organization in a manner
deemed equitable to the Fund.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. Pursuant to Rule 12b-1, the Plan has been approved by the Fund's
initial sole shareholder (Eaton Vance) and by the Board of Trustees of the
Trust, including the Rule 12b-1 Trustees. The Plan continues in effect through
and including April 28, 1996, and shall continue in effect indefinitely
thereafter for so long as such continuance is approved at least annually by the
vote of both a majority of (i) the Trustees of the Trust who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or any agreement related to the Plan (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office, and the Distribution
Agreement contains a similar provision. The Plan and Distribution Agreement may
be terminated at any time by vote of a majority of the Rule 12b-1 Trustees or by
a vote of a majority of the outstanding voting securities of the Fund. Under the
Plan the President or a Vice President of the Trust shall provide to the
Trustees for their review, and the Trustees shall review at least quarterly, a
written report of the amount expended under the Plan and the purposes for which
such expenditures were made. The Plan may not be amended to increase materially
the payments described therein without approval of the shareholders of the Fund,
and all material amendments of the Plan must also be approved by the Trustees as
required by Rule 12b-1. So long as the Plan is in effect, the selection and
nomination of Trustees who are not interested persons of the Trust shall be
committed to the discretion of the Trustees who are not such interested persons.
The Trustees of the Trust believe that the Plan will be a significant factor
in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of June 30, 1995, the Trustees and officers of the Trust, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
June 30, 1995, Merrill Lynch, Pierce, Fenner & Smith, Inc., New Brunswick, NJ
was the record owner of approximately 25.63% of the outstanding shares, which
were held on behalf of its customers who are the beneficial owners of such
shares, and as to which it had voting power under certain limited circumstances.
To the knowledge of the Trust, no other person owned of record or beneficially
5% or more of the Fund's outstanding shares on such date.
<PAGE>
INVESTMENT ADVISER OF
HIGH INCOME PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EV MARATHON HIGH INCOME FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
EV MARATHON HIGH INCOME FUND
24 FEDERAL STREET
BOSTON, MA 02110
M-HISAI
EV MARATHON HIGH INCOME FUND
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 1, 1995
<PAGE>
PART C
OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
INCLUDED IN PART A:
Financial Highlights for EV Classic High Income Fund for the
period from the start of business, June 8, 1994, to March 31,
1995.
Financial Highlights for EV Marathon High Income Fund for the
period from the start of business, August 19, 1986, to March
31, 1987 and for the eight years ended March 31, 1995.
INCLUDED IN PART B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORTS FOR THE FUNDS,
EACH DATED MARCH 31, 1995, FILED ELECTRONICALLY PURSUANT TO
SECTION 30(B)(2) OF THE INVESTMENT COMPANY ACT OF 1940
FOR EV CLASSIC HIGH INCOME FUND (ACCESSION NO.
0000950156-95-000403)
EV MARATHON HIGH INCOME FUND (ACCESSION NO.
0000950156-95-000404)
Financial Statements for the above-referenced Funds for the
time periods set forth in each Fund's Report are as follows:
Statement of Assets and Liabilities as of March 31, 1995
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Independent Auditors' Report
Financial Statements for HIGH INCOME PORTFOLIO are as follows:
Portfolio of Investments as of March 31, 1995
Statement of Assets and Liabilities as of March 31, 1995
Statement of Operations for the period from the start of
business, June 1, 1994, to March 31, 1995
Statement of Changes in Net Assets for the period from the
start of business, June 1, 1994, to March 31, 1995
Supplementary Data for the period from the start of business,
June 1, 1994, to March 31, 1995
Notes to Financial Statements
Report of Independent Accountants
(B) EXHIBITS:
(1)(a) Amended and Restated Declaration of Trust dated
August 17, 1993 filed herewith.
(b) Amendment and Restatement of Establishment and
Designation of Series dated June 19, 1995 filed
herewith.
(c) Amendment to Declaration of Trust dated July 10, 1995
filed herewith.
(2)(a) By-Laws (As Amended November 3, 1986) filed herewith.
(b) Amendment to By-Laws of Eaton Vance Government
Obligations Trust dated December 13, 1993 filed
herewith.
(3) Not applicable
(4) Not applicable
(5) Investment Advisory Agreement with Eaton Vance
Management for Eaton Vance Short-Term Treasury Fund
dated February 4, 1991 filed herewith.
(6)(a)(1) Distribution Agreement with Eaton Vance Distributors,
Inc. for Eaton Vance Government Obligations Trust
(now EV Traditional Government Obligations Fund)
dated July 9, 1984 filed herewith.
(2) Distribution Agreement with Eaton Vance Distributors,
Inc. for Eaton Vance Short-Term Treasury Fund dated
February 4, 1991 as Amended and Restated February 25,
1991 filed herewith.
(3) Amended Distribution Agreement with Eaton Vance
Distributors, Inc. for EV Classic Government
Obligations Fund dated January 27, 1995 filed as
Exhibit (6)(a)(3) to Post- Effective Amendment No. 22
and incorporated herein by reference.
(4) Distribution Agreement with Eaton Vance Distributors,
Inc. for EV Marathon Government Obligations Fund
dated October 28, 1993 filed herewith.
(5) Amended Distribution Agreement with Eaton Vance
Distributors, Inc. for Eaton Vance High Income Trust
(now EV Marathon High Income Fund) dated July 7, 1993
filed herewith.
(6) Amended Distribution Agreement with Eaton Vance
Distributors, Inc. for EV Classic High Income Fund
dated January 27, 1995 filed herewith.
(b) Selling Group Agreement between Eaton Vance
Distributors, Inc. and Authorized Dealers filed as
Exhibit (6)(b) to Post-Effective Amendment No. 19 and
incorporated herein by reference.
(c) Schedule of Dealer Discounts and Sales Charges filed
as Exhibit (6)(c) to Post- Effective Amendment No. 19
and incorporated by reference.
(7) The Securities and Exchange Commission has granted
the Registrant an exemptive order that permits the
Registrant to enter into deferred compensation
arrangements with its independent Trustees. See in
the Matter of Capital Exchange Fund, Inc., Release
No. IC- 20671 (November 1, 1994).
(8) Custodian Agreement with Investors Bank & Trust
Company dated October 15, 1992 filed herewith.
(9)(a) Administrative Services Agreement with Eaton Vance
Management for EV Traditional Government Obligations
Fund dated October 28, 1993 filed as Exhibit (9)(a)
to Post- Effective Amendment No. 19 and incorporated
herein by reference.
(b) Administrative Services Agreement with Eaton Vance
Management for EV Classic Government Obligations Fund
dated October 28, 1993 filed as Exhibit (9)(b) to
Post-Effective Amendment No. 19 and incorporated
herein by reference.
(c) Administrative Services Agreement with Eaton Vance
Management for EV Marathon Government Obligations
Fund dated October 28, 1993 filed as Exhibit (9)(c)
to Post- Effective Amendment No. 19 and incorporated
herein by reference.
(10) Not applicable
(11)(a) Consent of Independent Auditors for EV Classic High
Income Fund filed herewith.
(b) Consent of Independent Auditors for EV Marathon High
Income Fund filed herewith.
(12) Not applicable
(13) Not applicable
(14)(a) Vance, Sanders Profit Sharing Retirement Plan for
Self-Employed Persons with Adoption Agreement and
instructions filed as Exhibit #14(1) to
Post-Effective Amendment #22 on Form N-1 under the
Securities Act of 1933 (File No. 2-28471) and
incorporated herein by reference.
(b) Eaton & Howard, Vance Sanders Defined Contribution
Prototype Plan and Trust with Adoption Agreements (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 filed as Exhibit 14(2) to Post-Effective
Amendment #22 on Form N-1 under the Securities Act of
1933 (File No. 2-28471) and incorporated herein by
reference.
(c) Individual Retirement Custodial Account (Form 5305-A)
and Investment Instruction Form filed as Exhibit
14(3) to Post-Effective Amendment #22 on Form N-1
under the Securities Act of 1933 (File No. 2-28471)
and incorporated herein by reference.
(d) Eaton & Howard, Vance Sanders Variable Pension
Prototype Plan and Trust with Adoption Agreement
filed as Exhibit 14(b) to Post-Effective Amendment
#22 on Form N-1 under the Securities Act of 1933
(File No. 2-28471) and incorporated herein by
reference.
(15)(a) Service Plan for Eaton Vance Government Obligations
Fund (now EV Traditional Government Obligations Fund)
pursuant to Rule 12b-1 under the Investment Company
Act of 1940 dated July 7, 1993 filed herewith.
(b) Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 for Eaton Vance
Short-Term Treasury Fund dated February 4, 1991 as
Amended and Restated February 25, 1991 filed
herewith.
(c) Amended Distribution Plan for EV Classic Government
Obligations Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940 dated January 27, 1995
filed as Exhibit (15)(c) to Post-Effective Amendment
No. 22 and incorporated herein by reference.
(d) Distribution Plan for EV Marathon Government
Obligations Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940 dated October 28, 1993
filed herewith.
(e) Amended Distribution Plan for Eaton Vance High Income
Trust (now EV Marathon High Income Fund) pursuant to
Rule 12b-1 under the Investment Company Act of 1940
dated July 7, 1993 filed herewith.
(f) Amended Distribution Plan for EV Classic High Income
Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940 dated January 27, 1995 filed
herewith.
(16) Schedules for Computation of Performance Quotations
filed herewith.
(17)(a) Power of Attorney for Eaton Vance Mutual Funds Trust
dated July 11, 1995 filed herewith.
(b) Power of Attorney for Eaton Vance Government
Obligations Portfolio dated June 19, 1995 filed
herewith.
(c) Power of Attorney for High Income Portfolio dated
June 19, 1995 filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of beneficial interest without par value as of June 30, 1995
Eaton Vance Short-Term Treasury Fund 70
EV Classic Government Obligations Fund 1,083
EV Marathon Government Obligations Fund 3,221
EV Traditional Government Obligations Fund 11,512
EV Classic High Income Fund 98
EV Marathon High Income Fund 14,444
ITEM 27. INDEMNIFICATION
No change from the information set forth in Item 4 of Form N-1A filed as
Pre-Effective Amendment No. 1 which information is incorporated herein by
reference.
Registrant's Trustees and officers are insured under a standard mutual fund
errors and omissions insurance policy covering loss incurred by reason of
negligent errors and omissions committed in their capacities as such.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the information set forth under the caption "Investment
Adviser and Administrator" in the Statement of Additional Information which
information is incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(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:
<TABLE>
<S> <C>
EV Classic Alabama Tax Free Fund EV Classic Rhode Island Tax Free Fund
EV Classic Arizona Tax Free Fund EV Classic Strategic Income Fund
EV Classic Arkansas Tax Free Fund EV Classic South Carolina Tax Free Fund
EV Classic California Limited Maturity EV Classic Special Equities Fund
Tax Free Fund EV Classic Stock Fund
EV Classic California Municipals Fund EV Classic Tennessee Tax Free Fund
EV Classic Colorado Tax Free Fund EV Classic Texas Tax Free Fund
EV Classic Connecticut Limited Maturity EV Classic Total Return Fund
Tax Free Fund EV Classic Virginia Tax Free Fund
EV Classic Connecticut Tax Free Fund EV Classic West Virginia Tax Free Fund
EV Classic Florida Insured Tax Free Fund EV Marathon Alabama Tax Free Fund
EV Classic Florida Limited Maturity EV Marathon Arizona Limited Maturity
Tax Free Fund Tax Free Fund
EV Classic Florida Tax Free Fund EV Marathon Arizona Tax Free Fund
EV Classic Georgia Tax Free Fund EV Marathon Arkansas Tax Free Fund
EV Classic Government Obligations Fund EV Marathon California Limited Maturity
EV Classic Greater China Growth Fund Tax Free Fund
EV Classic Growth Fund EV Marathon California Municipals Fund
EV Classic Hawaii Tax Free Fund EV Marathon Colorado Tax Free Fund
EV Classic High Income Fund EV Marathon Connecticut Limited Maturity
EV Classic Investors Fund Tax Free Fund
EV Classic Kansas Tax Free Fund EV Marathon Connecticut Tax Free Fund
EV Classic Kentucky Tax Free Fund EV Marathon Emerging Markets Fund
EV Classic Louisiana Tax Free Fund Eaton Vance Equity - Income Trust
EV Classic Maryland Tax Free Fund EV Marathon Florida Insured Tax Free Fund
EV Classic Massachusetts Limited Maturity V Marathon Florida Limited Maturity
Tax Free Fund Tax Free Fund
EV Classic Massachusetts Tax Free Fund EV Marathon Florida Tax Free Fund
EV Classic Michigan Limited Maturity EV Marathon Georgia Tax Free Fund
Tax Free Fund EV Marathon Gold & Natural Resources Fund
EV Classic Michigan Tax Free Fund EV Marathon Government Obligations Fund
EV Classic Minnesota Tax Free Fund EV Marathon Greater China Growth Fund
EV Classic Mississippi Tax Free Fund EV Marathon Greater India Fund
EV Classic Missouri Tax Free Fund EV Marathon Growth Fund
EV Classic National Limited Maturity EV Marathon Hawaii Tax Free Fund
Tax Free Fund EV Marathon High Income Fund
EV Classic National Municipals Fund EV Marathon Investors Fund
EV Classic New Jersey Limited Maturity EV Marathon Kansas Tax Free Fund
Tax Free Fund EV Marathon Kentucky Tax Free Fund
EV Classic New Jersey Tax Free Fund EV Marathon Louisiana Tax Free Fund
EV Classic New York Limited Maturity EV Marathon Maryland Tax Free Fund
Tax Free Fund EV Marathon Massachusetts Limited Maturity
EV Classic New York Tax Free Fund Tax Free Fund
EV Classic North Carolina Tax Free Fund EV Marathon Massachusetts Tax Free Fund
EV Classic Ohio Limited Maturity Tax Free Fund EV Marathon Michigan Limited Maturity
EV Classic Ohio Tax Free Fund Tax Free Fund
EV Classic Oregon Tax Free Fund EV Marathon Michigan Tax Free Fund
EV Classic Pennsylvania Limited Maturity EV Marathon Minnesota Tax Free Fund
Tax Free Fund EV Marathon Mississippi Tax Free Fund
EV Classic Pennsylvania Tax Free Fund EV Marathon Missouri Tax Free Fund
EV Marathon National Limited Maturity EV Traditional Connecticut Tax Free Fund
Tax Free Fund EV Traditional Emerging Markets Fund
EV Marathon National Municipals Fund EV Traditional Florida Insured Tax Free Fund
EV Marathon New Jersey Limited Maturity EV Traditional Florida Limited Maturity
Tax Free Fund Tax Free Fund
EV Marathon New Jersey Tax Free Fund EV Traditional Florida Tax Free Fund
EV Marathon New York Limited Maturity EV Traditional Government Obligations Fund
Tax Free Fund EV Traditional Greater China Growth Fund
EV Marathon New York Tax Free Fund EV Traditional Greater India Fund
EV Marathon North Carolina Limited Maturity EV Traditional Growth Fund
Tax Free Fund Eaton Vance Income Fund of Boston
EV Marathon North Carolina Tax Free Fund EV Traditional Investors Fund
EV Marathon Ohio Limited Maturity Eaton Vance Municipal Bond Fund L.P.
Tax Free Fund EV Traditional National Limited Maturity
EV Marathon Ohio Tax Free Fund Tax Free Fund
EV Marathon Oregon Tax Free Fund EV Traditional National Municipals Fund
EV Marathon Pennsylvania Limited Maturity EV Traditional New Jersey Tax Free Fund
Tax Free Fund EV Traditional New York Limited Maturity
EV Marathon Pennsylvania Tax Free Fund Tax Free Fund
EV Marathon Rhode Island Tax Free Fund EV Traditional New York Tax Free Fund
EV Marathon Strategic Income Fund EV Traditional Pennsylvania Tax Free Fund
EV Marathon South Carolina Tax Free Fund EV Traditional Special Equities Fund
EV Marathon Special Equities Fund EV Traditional Stock Fund
EV Marathon Stock Fund EV Traditional Total Return Fund
EV Marathon Tennessee Tax Free Fund Eaton Vance Cash Management Fund
EV Marathon Texas Tax Free Fund Eaton Vance Liquid Assets Fund
EV Marathon Total Return Fund Eaton Vance Money Market Fund
EV Marathon Virginia Limited Maturity Eaton Vance Prime Rate Reserves
Tax Free Fund Eaton Vance Short-Term Treasury Fund
EV Marathon Virginia Tax Free Fund Eaton Vance Tax Free Reserves
EV Marathon West Virginia Tax Free Fund Massachusetts Municipal Bond Portfolio
EV Traditional California Municipals Fund
</TABLE>
<TABLE>
<CAPTION>
(B)
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICE
BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
------------------- -------------------------- --------------------
<S> <C> <C>
James B. Hawkes* Vice President and Director Vice President and
Trustee
William M. Steul* Vice President and Director None
Wharton P. Whitaker* President and Director None
Howard D. Barr Vice President None
2750 Royal View Court
Oakland, Michigan
Nancy E. Belza Vice President None
463-1 Buena Vista East
San Francisco, California
Chris Berg Vice President None
45 Windsor Lane
Palm Beach Gardens, Florida
H. Day Brigham, Jr.* Vice President None
Susan W. Bukima Vice President None
106 Princess Street
Alexandria, Virginia
Jeffrey W. Butterfield Vice President None
9378 Mirror Road
Columbus, Indiana
Mark A. Carlson* Vice President None
Jeffrey Chernoff Vice President None
115 Concourse West
Bright Waters, New York
William A. Clemmer* Vice President None
James S. Comforti Vice President None
1859 Crest Drive
Encinitas, California
Mark P. Doman Vice President None
107 Pine Street
Philadelphia, Pennsylvania
Michael A. Foster Vice President None
850 Kelsey Court
Centerville, Ohio
William M. Gillen Vice President None
280 Rea Street
North Andover, Massachusetts
Hugh S. Gilmartin Vice President None
1531-184th Avenue, NE
Bellevue, Washington
Richard E. Houghton* Vice President None
Brian Jacobs* Senior Vice President None
Stephen D. Johnson Vice President None
13340 Providence Lake Drive
Alpharetta, Georgia
Thomas J. Marcello Vice President None
553 Belleville Avenue
Glen Ridge, New Jersey
Timothy D. McCarthy Vice President None
9801 Germantown Pike
Lincoln Woods Apt. 416
Lafayette Hill, Pennsylvania
Morgan C. Mohrman* Senior Vice President None
Gregory B. Norris Vice President None
6 Halidon Court
Palm Beach Gardens, Florida
Thomas Otis* Secretary and Clerk Secretary
George D. Owen Vice President None
1911 Wildwood Court
Blue Springs, Missouri
F. Anthony Robinson Vice President None
510 Gravely Hill Road
Wakefield, Rhode Island
Benjamin A. Rowland, Jr.* Vice President, None
Treasurer and Director
John P. Rynne* Vice President None
George V.F. Schwab, Jr. Vice President None
9501 Hampton Oaks Lane
Charlotte, North Carolina
Cornelius J. Sullivan* Vice President None
Maureen C. Tallon Vice President None
518 Armistead Drive
Nashville, Tennessee
David M. Thill Vice President None
126 Albert Drive
Lancaster, New York
William T. Toner Vice President None
747 Lilac Drive
Santa Barbara, California
Chris Volf Vice President None
6517 Thoroughbred Loop
Odessa, Florida
Donald E. Webber* Senior Vice President None
Sue Wilder Vice President None
141 East 89th Street
New York, New York
- ----------
*Address is 24 Federal Street, Boston, MA 02110
</TABLE>
(C) Not applicable
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, 24 Federal Street,
Boston, MA 02110 and 89 South Street, Boston, MA 02111 and its transfer agent,
The Shareholder Services Group, Inc., 53 State Street, Boston, MA 02104, with
the exception of certain corporate documents and portfolio trading documents
which are in the possession and custody of Eaton Vance Management, 24 Federal
Street, Boston, MA 02110. Certain corporate documents of Government Obligations
Portfolio (the "Portfolio") are also maintained by The Bank of Nova Scotia Trust
Company (Cayman) Ltd., The Bank of Nova Scotia Building, P.O. Box 501, George
Town, Grand Cayman, Cayman Islands, British West Indies, and certain investor
account, Portfolio and the Registrant's accounting records are held by IBT Fund
Services (Canada) Inc., 1 First Canadian Place, King Street West, Suite 2800,
P.O. Box 231, Toronto, Ontario, Canada M5X 1C8. Registrant is informed that all
applicable accounts, books and documents required to be maintained by registered
investment advisers are in the custody and possession of Eaton Vance Management.
ITEM 31. MANAGEMENT SERVICES
Not applicable
ITEM 32. UNDERTAKINGS
The Registrant undertakes to furnish to each person to whom a prospectus is
delivered a copy of the latest annual report to shareholders, upon request and
without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this Post-
Effective 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 12th day of July, 1995.
EATON VANCE MUTUAL FUNDS TRUST
By: /s/ M. DOZIER GARDNER
-------------------------------------
M. DOZIER GARDNER, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
President, Principal
Executive Officer and
/s/ M. DOZIER GARDNER Trustee July 12, 1995
- ------------------------------------
M. DOZIER GARDNER
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer July 12, 1995
- ------------------------------------
JAMES L. O'CONNOR
/s/ JAMES B. HAWKES Trustee July 12, 1995
- ------------------------------------
JAMES B. HAWKES
/s/ DONALD R. DWIGHT Trustee July 12, 1995
- ------------------------------------
DONALD R. DWIGHT
/s/ SAMUEL L. HAYES, III Trustee July 12, 1995
- ------------------------------------
SAMUEL L. HAYES, III
/s/ NORTON H. REAMER Trustee July 12, 1995
- ------------------------------------
NORTON H. REAMER
/s/ JOHN L. THORNDIKE Trustee July 12, 1995
- ------------------------------------
JOHN L. THORNDIKE
/s/ JACK L. TREYNOR Trustee July 12, 1995
- ------------------------------------
JACK L. TREYNOR
</TABLE>
<PAGE>
SIGNATURES
High Income Portfolio has duly caused this Amendment to the Registration
Statement on Form N-1A of Eaton Vance Mutual Funds Trust (File No. 2-90946) to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Hamilton, Bermuda, on the 19th day of June 1995.
HIGH INCOME PORTFOLIO
By: /s/ M. DOZIER GARDNER
---------------------------------------
M. DOZIER GARDNER, President
This Amendment to the Registration Statement on Form N-1A of Eaton Vance
Mutual Funds Trust (File No. 2-90946) has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Trustee, President and
Principal Executive
/s/ M. DOZIER GARDNER Officer June 19, 1995
- ------------------------------------
M. DOZIER GARDNER
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer June 19, 1995
- ------------------------------------
JAMES L. O'CONNOR
/s/ DONALD R. DWIGHT Trustee June 19, 1995
- ------------------------------------
DONALD R. DWIGHT
/s/ JAMES B. HAWKES Trustee June 19, 1995
- ------------------------------------
JAMES B. HAWKES
/s/ SAMUEL L. HAYES, III Trustee June 19, 1995
- ------------------------------------
SAMUEL L. HAYES, III
/s/ NORTON H. REAMER Trustee June 19, 1995
- ------------------------------------
NORTON H. REAMER
/s/ JOHN L. THORNDIKE Trustee June 19, 1995
- ------------------------------------
JOHN L. THORNDIKE
/s/ JACK L. TREYNOR Trustee June 19, 1995
- ------------------------------------
JACK L. TREYNOR
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE IN SEQUENTIAL
EXHIBIT NO. DESCRIPTION NUMBERING SYSTEM
- ----------- ----------- ----------------
<C> <S> <C>
(1)(a) Amended and Restated Declaration of Trust dated August 17, 1993.
(b) Amendment and Restatement of Establishment and Designation of Series
dated June 19, 1995.
(c) Amendment to Declaration of Trust dated June 10, 1995.
(2)(a) By-Laws as amended November 3, 1986.
(b) Amendment to By-Laws of Eaton Vance Government Obligations Trust dated
December 13, 1993.
(5) Investment Advisory Agreement with Eaton Vance Management for Eaton Vance
Short-Term Treasury Fund dated February 4, 1991.
(6)(a)(1) Distribution Agreement with Eaton Vance Distributors, Inc. dated July 9,
1984.
(2) Distribution Agreement with Eaton Vance Distributors, Inc. for Eaton
Vance Short-Term Treasury Fund dated February 4, 1991 as amended and
restated February 25, 1991.
(4) Distribution Agreement with Eaton Vance Distributors, Inc. for EV
Marathon Government Obligations Fund dated October 28, 1993.
(5) Amended Distribution Agreement with Eaton Vance Distributors, Inc. for
Eaton Vance High Income Trust dated July 7, 1993 filed herewith.
(6) Amended Distribution Agreement with Eaton Vance Distributors, Inc. for EV
Classic High Income Fund dated January 27, 1995.
(8) Custodian Agreement with Investors Bank & Trust Company dated October 15,
1992.
(11)(a) Consent of Independent Auditors for EV Classic High Income Fund dated
July 12, 1995.
(b) Consent of Independent Auditors for EV Marathon High Income Fund dated
July 12, 1995.
(15)(a) Service Plan for Eaton Vance Government Obligations Fund dated July 7,
1993.
(b) Distribution Plan for Eaton Vance Short-Term Treasury Fund dated February
4, 1991 as Amended and Restated February 25, 1991.
(d) Distribution Plan for EV Marathon Government Obligations Fund dated
October 28, 1993.
(e) Amended Distribution Plan for Eaton Vance High Income Trust dated July 7,
1993.
(f) Amended Distribution Plan for EV Classic High Income Fund dated January
27, 1995.
(16) Schedules for Computation of Performance Quotations.
(17)(a) Power of Attorney for Eaton Vance Mutual Funds Trust dated July 11, 1995.
(b) Power of Attorney for Government Obligations Portfolio dated June 19,
1995.
(c) Power of Attorney for High Income Portfolio dated June 19, 1995.
</TABLE>
EXHIBIT 99.1(a)
AMENDED AND RESTATED DECLARATION OF TRUST
OF
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
Dated: August 17, 1993
AMENDED AND RESTATED DECLARATION OF TRUST, made August 17, 1993 by the
undersigned Trustees being a majority of the Trustees in office on such date,
Donald R. Dwight, James B. Hawkes, Samuel L. Hayes III, M. Dozier Gardner,
Norton H. Reamer, John L. Thorndike and Jack L. Treynor, hereinafter referred to
collectively as the "Trustees" and individually as a "Trustee", which terms
shall include any successor Trustees or Trustee and any present Trustees who are
not signatories to this instrument).
WHEREAS, on May 7, 1984, the initial Trustees established a trust under
a Declaration of Trust as heretofore amended and restated for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, a majority of the Trustees desire to amend and restate said
Declaration of Trust pursuant to the provisions thereof;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed under
this Declaration of Trust as so amended and restated for the benefit of the
holders, from time to time, of the shares of beneficial interest issued
hereunder and subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is Eaton Vance
Government Obligations Trust (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following terms
have the following respective meanings:
(a)"Administrator" means the party, other than the Trust, to a contract
described in Section 3.3 hereof.
(b)"By-Laws" means the By-Laws referred to in Section 2.5 hereof, as
from time to time amended.
(c)"Class" means any division or Class of Shares within a Series or
Fund, which Class is or has been established within such Series or Fund in
accordance with the provisions of Article V.
(d)The term "Commission" has the meaning given it in the 1940 Act.
(e)"Custodian" means any person other than he Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f)"Declaration" means this Declaration of Trust as amended from time
to time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(g)"Fund" or "Funds," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities
belonging and allocated thereto.
(h)"His" shall include the feminine and neuter, as will as the
masculine, genders.
(i)The term "Interested Person" has the meaning specified in the 1940
Act subject, however, to such exceptions and exemptions as my be granted by the
Commission in any rule, regulation or order.
(j)"Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(k)The "1940 Act" means the Investment Company Act of 1940 and the
Rules and Regulations thereunder, as amended from time to time.
(l)"Person" means and includes individuals, corporations, partnerships,
trusts, associations, firms joint ventures and other entities, whether or not
legal entities, as well as governments instrumentalities, and agencies and
political subdivisions thereof, and quasi-governmental agencies and
instrumentalities.
(m)"Principal Underwriter" means the party, other than the Trust, to a
contract described in Section 3.1 hereof.
(n)"Prospectus" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o)"Series" individually or collectively means the separately managed
component(s) of Fund(s) of the Trust (or, if the Trust shall have only one such
component of Fund then that one) as may be established and designated from time
to time by the Trustees pursuant to Section 5.5 hereof.
(p)"Shareholder" means a record owner of Outstanding Shares. A
shareholder of Shares of a Series shall be deemed to own a proportionate
undivided beneficial interest in such Series equal to the number of Shares of
such Series of which he is the record owner divided by the total number of
Outstanding Shares of such Series. A Shareholder of Shares of a Class within a
Series shall be deemed to own a proportionate undivided beneficial interest in
such Class equal to the number of Shares of such Class of which he is the record
owner divided by the total number of Outstanding Shares of such Class. As used
herein the term "Shareholder" shall, when applicable to one or more Series of
Funds or to one or more Classes thereof, refer to the record owners of
Outstanding Shares of such Series, Fund or Funds or of such Class or Classes of
shares.
(q)"Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series or of any Class within any and all
Series of any Class within any Series (as the context may require) which may be
established by the Trustees, and includes fractions of Shares as well as whole
Shares. "Outstanding Shares" means those Shares shown from time to time on the
books of the Trust or its Transfer Agent as then issued and outstanding, but
shall not include Shares which have been redeemed or repurchased by the Trust
and which are at the time held in the treasury of the Trust.
(r)"Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(s)"Trust" means Eaton Vance Government Obligations Trust. As used
herein the term Trust shall, when applicable to one or more Series or Funds,
refer to such series or Funds.
(t)The "Trustees" means the persons who have signed this Declaration,
so long as they shall continue in office in accordance with the terms hereof,
and all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee of the
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
(u)"Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees including any and all assets of or allocated to any Series
or Class, as the context may require.
(v)Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Series or Class of Shares, the term "vote" when
used in connection with an action of Shareholders shall include a vote taken at
a meeting of Shareholders or the consent or consents of Shareholders taken
without such a meeting. Except as such term may be otherwise defined by the
Trustees in connection with any meeting or other action of Shareholders or in
conjunction with the establishment of any Series or Class of Shares, the term
"vote of a majority of the outstanding voting securities" as used in Sections
8.2 and 8.4 shall have the same meaning as is assigned to that term in the 1940
Act.
ARTICLE II
TRUSTEES
Section 2.1. Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees and they shall have all powers and
authority necessary, appropriate or desirable to perform that function. The
number, term of office, manner of election, resignation, filling of vacancies
and procedures with respect to meetings and actions of the Trustees shall be as
prescribed in the By-Laws of the Trust.
Section 2.2. General Powers. The Trustees in all instances shall act as
principals for and on behalf of the Trust and the applicable Series thereof, and
their acts shall bend the Trust and the applicable Series. The Trustees shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments that they may consider necessary, appropriate
or desirable in connection with the management of the Trust. The Trustees shall
not be bound or limited in any way by present or future laws, practices or
customs in regard to trust investments or to other investments which may be made
by fiduciaries, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
promote, implement or accomplish the various objectives and interests of the
Trust and of its Series of Shares. The Trustees shall have full power and
authority to adopt such accounting and tax accounting practices as they consider
appropriate for the Trust and for any Series or Class of Shares. The Trustees
shall have exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners
of the Trust Property and business in their own right, and with such full powers
of delegation as the Trustees may exercise from time to time. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without the
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies of instrumentalities
of the United States of America and of foreign governments, and to do all such
other things as they deem necessary, appropriate or desirable in order to
promote or implement the interests of the Trust or of any Series or Class of
Shares although such things are not herein specifically mentioned. Any
determinations to what is in the interests of the Trust or of any Series or
Class of Shares made by the Trustees in good fait shall be conclusive and
binding upon all Shareholders. In construing the provisions of this Declaration,
the presumption shall be in favor of a grand of plenary power and authority to
the Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
Section 2.3. Investments. The Trustees shall have full power
and authority:
(a)To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b)To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities including, but no limited to, stocks, profit-sharing
interests or participations and all other contracts for or evidences of equity
interests, bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, bills, notes and all other contracts for or
evidences of indebtedness, money market instruments including bank certificates
of deposit, finance paper, commercial paper, bankers' acceptances and other
obligations, and all other negotiable and non-negotiable securities and
instruments, however named or described, issued by corporations, trusts,
associations or any other Persons, domestic or foreign, or issued or guaranteed
by the United States of America or any agency or instrumentality thereof, by the
government of any foreign country, by any State, territory or possession of the
United States, by any political subdivision or agency or instrumentality of any
State or foreign country, or by any other government or other governmental or
quasi-governmental agency or instrumentality, domestic or foreign; to acquire
and dispose of interests in domestic or foreign loans made by banks and other
financial institutions; to deposit any assets of the Trust in any bank, trust
company or banking institution or retain any such assets in domestic or foreign
cash or currency; to purchase and sell gold and silver bullion, precious or
strategic metals, coins and currency of all countries; to engage in "when
issued" and delayed delivery transactions; to enter into repurchase agreements,
reverse repurchase agreements and firm commitment agreements; to employ all
types and kinds of hedging techniques and investment management strategies; and
to change the investments of the Trust and of each Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any Trust Property or any of
the foregoing securities, instruments or investments; to purchase and sell (or
write) options on securities, currency, precious metals and other commodities,
indices, futures contracts and other financial instruments and assets and inter
into closing and other transactions in connection therewith; to enter into all
types of commodities contracts, including without limitation the purchase and
sale of futures contracts on securities, currency, precious metals and other
commodities, indices and other financial instruments and assets; to enter into
forward foreign currency exchange contracts and other foreign exchange and
currency transactions of all types and kinds; to enter into interest rate,
currency and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in the Trust Property,
including without limitation the right to vote thereon and otherwise act with
respect thereto; and to do all acts and things for the preservation, protection,
improvement and enhancement in value of all such securities and assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or kind
of property, real or personal, including domestic or foreign currency, and any
right or interest therein.
(f) To borrow money and in this connection issue notes, commercial
paper or other evidence of indebtedness; to secure borrowings by mortgaging,
pledging or otherwise subjecting as security all or any part of the Trust
Property; to endorse, guarantee, or undertake the performance of any obligation
or engagement of any other Person; and to lend all or any part of the Trust
Property to other Persons.
(g) To aid, support or assist by further investment or other action any
Person, any obligation of or interest in which is included in the Trust Property
or in the affairs of which the Trust or any Series has any direct or indirect
interest; to do all acts and things designed to protect, preserve, improve or
enhance the value of such obligation or interest; and to guarantee or become
surety on any or all of the contracts, securities and other obligations of any
such Person.
(h) To carry on any other business in connection with or incidental to
any of the foregoing powers referred to in this Declaration, to do everything
necessary, appropriate or desirable for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power referred to in this
Declaration, either alone or in association with others, and to do every other
act or thing incidental or appurtenant to or arising out of or connected with
such business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have
full power in their discretion, without any requirement of approval by
Shareholders, to invest part or all of the Trust Property (or part or all of the
assets of any Fund), or to dispose of part or all of the Trust Property (or part
or all of the assets of any Fund) and invest the proceeds of such disposition,
in securities issued by one or more other investment companies registered under
the 1940 Act. Any such other investment company my (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.
Section 2.4. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Series, or in
the name of a custodian, subcustodian, agent, securities depository, clearing
agency, system for the central handling of securities or other book-entry
system, or in the name of a nominee or nominees of the Trust of a Series, or in
the name of a nominee or nominees of a custodian, subcustodian, agent,
securities depository, clearing agent, system for the central handling of
securities or other book-entry system, or in the name of any other Person as
nominee. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee. Upon
the termination of the term of office, resignation, removal or death of a
Trustee he shall automatically cease to have any right, title or interest in any
of the Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees.
Section 2.5. By-Laws. The Trustees shall have full power and authority
to adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and to amend and repeal such By-Laws. Unless the By-Laws specifically
require that Shareholders authorize or approve the amendment or repeal of a
particular provision of the By-Laws, any provision of the By-Laws my be amended
or repealed by the Trustees without Shareholder authorization or approval.
Section 2.6. Distribution and Repurchase of Shares. The Trustees shall
have full power and authority to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in Shares. Shares may be sold for cash or property or other consideration
whenever and in such amounts and manner as the Trustees deem desirable. The
Trustees shall have full power to provide for the distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both. The
Trustees shall have full power and authority to cause the Trust and any Series
and Class or Shares to finance distribution activities in the manner described
in Section 3.7, and to authorize the Trust, on behalf of one or more Series or
Classes of Shares, to adopt or enter into one or more plans or arrangements
whereby multiple Series and Classes of Shares may be issued and sold to various
types of investors.
Section 2.7. Delegation. The Trustees shall have full power and
authority to delegate from time to time to such of their number or to officers,
employees or agents of the Trust or to other Persons the doing of such things
and the execution of such agreements or other instruments either in the name of
the Trust or any Series of the Trust of the names of the Trustees or otherwise
as the Trustees may deem desirable or expedient.
Section 2.8. Collection and Payment. The Trustees shall have full power
and authority to collect all property due to the Trust; to pay all claims,
including taxes, against the Trust or Trust Property; to prosecute, defend,
compromise, settle or abandon any claims relating to the Trust or Trust
Property; to foreclose any security interest securing any obligations, by virtue
of which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.
Section 2.9. Expenses. The Trustees shall have full power and authority
to incur on behalf of the Trust or any Series or Class of Shares and pay any
costs or expenses which the Trustees deem necessary, appropriate, desirable or
incidental to carry out, implement or enhance the business or operations of the
Trust or any Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Series or Class of Shares, and to credit all or any part of the profit, income
or receipt (including without limitation any deferred sales charge or fee,
whether contingent or otherwise, paid or payable to the Trust or any Series or
Class of Shares on any redemption or repurchase of Shares) to the principal or
capital of the Trust or any Series or Class of Shares.
Section 2.10. Manner of Acting. Except as otherwise provided herein or
in the By-Laws, the Trustees and committees of the Trustees shall have full
power and authority to act in any manner which they deem necessary, appropriate
or desirable to carry out, implement or enhance the business or operations of
the Trust or any Series thereof.
Section 2.11. Miscellaneous Powers. The Trustees shall have full power
and authority to: (a) distribute to Shareholders all or any part of the earnings
or profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Series or Class of Shares, the amount
of such distributions and the manner of payment thereof to be solely at the
discretion of the Trustees; (b) employ, engage or contract with such Persons as
the Trustees may deem desirable for the transaction of the business or
operations of the Trust or any Series thereof; (c) enter into or cause the Trust
or any Series thereof to enter into joint ventures, partnerships (whether as
general partner, limited partner or otherwise) and any other combinations or
associations; (d) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees or other Persons as the consider appropriate, and appoint from their
own number, and terminate, any one or more committees which may exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
(e) purchase, and pay for out of Trust Property, insurance policies which may
insure such of the Shareholders, Trustees, officers, employees, agents,
investment advisers, administrators, principal underwriters, distributors or
independent contractors of the Trust as the Trustees deem appropriate against
loss or liability arising by reason of holding any such position or by reason of
any action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such loss or liability; (f) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (g)
indemnify or reimburse any Person with whom the Trust or any Series thereof has
dealings, including without limitation the Investment Adviser, Administrator,
Principal Underwriter, Transfer Agent and financial service firms, to such
extent as the Trustees shall determine; (h) guarantee the indebtedness or
contractual obligations of other Persons; (i) determine and change the fiscal
year of the Trust or any Series thereof and the methods by which its and their
books, accounts and records shall be kept; and (j) adopt a seal for the Trust,
but the absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust or any Series thereof.
Section 2.12. Litigation. The Trustees shall have full power and
authority, in the name and on behalf of the Trust, to engage in and to
prosecute, defend, compromise, settle, abandon, or adjust by arbitration or
otherwise, any actions, suits proceedings, disputes, claims and demands relating
to the Trust, and out of the assets of the Trust or any Series thereof to pay or
to satisfy any liabilities, losses, debts, claims or expenses (including without
limitation attorneys' fees) incurred in connection therewith, including those of
litigation, and such power shall include without limitation the power of the
Trustees or any committee thereof, in the exercise of their or its good faith
business judgment, to dismiss or terminate any action, suit, proceeding,
dispute, claim or demand, derivative or otherwise, brought by any Person,
including a Shareholder in his own name or in the name of the Trust or any
Series thereof, whether or not the Trust or any Series thereof or any of the
Trustees may be named individually therein or the subject matter arises by
reason of business for or on behalf of the Trust or any Series thereof.
ARTICLE III
CONTRACTS
Section 3.1. Principal Underwriter. The Trustees may in their
discretion form time to time authorize the Trust to enter into one or more
contracts providing for the sale of the Shares. Pursuant to any such contract
the Trust may either agree to sell the Shares to the other party to the
contractor appoint such other party its sales agent for such Shares. In either
case, any such contract shall be on such terms and conditions as the Trustees
may in their discretion determine; and any such contract may also provide for
the repurchase or sale of Shares by such other party as principal or as agent of
the Trust.
Section 3.2. Investment Adviser. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more investment
advisory agreements, or, if the Trustees establish multiple Series, separate
investment advisory agreements, with respect to one or more Series whereby the
other party or parties to any such agreements shall undertake to furnish the
Trust or such Series investment advisory and research facilities and services
and such other facilities and services, if any, as the Trustees shall consider
desirable and all upon such terms and conditions as the Trustees may in their
discretion determine. Notwithstanding any provisions of this Declaration, the
Trustees may authorize the Investment Adviser, in its discretion and without any
prior consultation with the Trust, to buy, sell, lend and otherwise trade and
deal in any and all securities, commodity contracts and other investments and
assets of the Trust and of each Series and to engage in and employ all types of
transactions and strategies in connection therewith. Any such action take
pursuant to such agreement shall be deemed to have been authorized by all of the
Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as ma be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
Section 3.3. Administrator. The Trustees may in their discretion from
time to time authorize the Trust to enter into an administration agreement or,
if the Trustees establish multiple Series or Classes, separate administration
agreements with respect to one or more Series or Classes, whereby the other
party to such agreement shall undertake to furnish to the Trust or a Series or a
Class thereof with such administrative facilities and services and such other
facilities and services, if any, as the Trustees consider desirable and all upon
such terms and conditions as the Trustees may in their discretion determine.
Section 3.4. Other Service Providers. The Trustees may in their
discretion from time to time authorize the Trust to enter into one or more
agreements with respect to one or more Series or Classes of Shares whereby the
other party or parties to any such agreements will undertake to provide to the
Trust or Series or Class or Shareholders or beneficial owners of Shares such
services as the Trustees consider desirable and all upon such terms and
conditions as the Trustees in their discretion may determine.
Section 3.5. Transfer Agents. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Series
thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
Section 3.6. Custodian. The Trustees may appoint a bank or trust
company having an aggregate capital, surplus and undivided profits (as shown in
its last published report) of at least $2,000,000 as the principal custodian of
the Trust (the "Custodian") with authority as its agent to hold cash and
securities owned by the Trust and to release and deliver the same upon such
terms and conditions as may be agreed upon between the Trust and Custodian.
Section 3.7. Plans of Distribution. The Trustees may in their
discretion authorize the Trust, on behalf of one or more Series or Classes of
Shares, to adopt or enter into a plan or plans of distribution and any related
agreements whereby the Trust or Series or Class may finance directly or
indirectly any activity which is primarily intended to result i sales of Shares
or any distribution activity within the meaning of Rule 12b-1 (or successor
rule) under the 1940 Act. Such plan or plans of distribution and any related
agreements may contain such terms and conditions as the Trustees may in their
discretion determine, subject to the requirements of the 1940 Act and any other
applicable rules and regulations.
Section 3.8. Affiliations. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of or has
any interest in any Person or any parent or affiliate of any such Person, with
which a contract or agreement of the character described in Sections 3.1, 3.2,
3.3, 3.4, 3.5 or 3.6 above has been or will be made or to which payments have
been or will be made pursuant to a plan or related agreement described in
Section 3.7 above, or that any such Person , or any parent or affiliate thereof,
is a Shareholder of or has an interest in the Trust, or that
(ii) any such Person also has similar contracts, agreements or plans
with other investment companies (including, without limitation, the investment
companies referred to in the last paragraph of Section 2.3) or organization, or
has other business activities or interests, shall not affect in any way the
validity of any such contract, agreement or plan or disqualify any Shareholder,
Trustee or officer of the Trust from authorizing, voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Officers
and Employees. No Shareholder shall be subject to any personal liability
whatsoever to any Person in connection with Trust Property or the acts,
obligations or affairs of the Trust or any Series thereof. All Persons dealing
or contracting with the Trustees as such or with the Trust or any Series thereof
shall have recourse only to the Trust or such Series for the payment of their
claims or for the payment or satisfaction of claims, obligations or liabilities
arising out of such dealings or contracts. No Trustee, officer or employee of
the Trust, whether past, present or future, shall be subject to any personal
liability whatsoever to any such Person, and all such Persons shall look solely
to the Trust Property, or the assets of one or more specific Series of the Trust
if the claim arises from the act, omission or other conduct of such Trustee,
officer or employee with respect to only such Series, for satisfaction of claims
of any nature arising in connection with the affairs of the Trust or such
Series. If any Shareholder, Trustee, officer or employee, as such, of the Trust
or any Series thereof, is made a party to any suit or proceeding to enforce any
such liability of the Trust or any Series thereof, he shall not, on account
thereof, be held to any personal liability.
Section 4.2. Trustee's Good Faith Action; Advice of Others; No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, investment adviser or other adviser, administrator,
distributor or principal underwriter, custodian or transfer, dividend
disbursing, shareholder servicing or accounting agent of the Trust, nor shall
any Trustee be responsible for the act or omission of any other Trustee. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration and their duties as Trustees, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. In discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the records, books and
accounts of the Trust and upon reports made to the Trustees by any officer,
employee, agent, consultant, accountant, attorney, investment adviser or other
adviser, principal underwriter, expert, professional firm or independent
contractor. The Trustees as such shall not be required to give any bond or
surety or any other security for the performance of their duties. No provision
of this Declaration shall protect any Trustee or officer of the Trust against
any liability to the Trust of its Shareholders to which he would otherwise be
subject by reason of his own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Indemnification. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Series thereof of the Shareholders, Trustees, officers and
employees of the Trust and of such other Persons as the Trustees in the exercise
of their discretion my deem appropriate or desirable. Any such indemnification
may be mandatory of permissive, and may be insured against by policies
maintained by the Trust.
Section 4.4. No Duty of Investigation. No purchaser, lender or other
Person dealing with the Trustees or any officer, employee or agent of the Trust
or a Series thereof shall be bound to make any inquiry concerning the validity
of any transaction purporting to be made by the Trustees or by said officer,
employee or agent or be liable for the application of money or property paid,
loaned, or delivered to or on the order of the Trustees or of said officer,
employee or agent. Every obligation, contract, instrument, certificate, Share,
other security of the Trust of a Series thereof or undertaking, and every other
act or thing whatsoever executed in connection with the Trust shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust or a Series thereof. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or a Series thereof or undertaking made or issued by the Trustees may
recite that the same is executed or made by them not individually, but as
Trustees under the Declaration, and that the obligations of the Trust of a
Series thereof under any such instrument are not binding upon any of the
Trustees or Shareholders individually, but bind only the Trust Property or the
Trust Property of the applicable Series, and may contain any further recital
which they may deem appropriate, but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.
Section 4.5. Reliance on Records and Experts. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the records,
books and accounts of the Trust or a Series thereof, upon an opinion or other
advice of legal counsel, or upon reports made or advice given to the Trust or a
Series thereof by any Trustee or any of its officers employees or by the
Investment Adviser, the Administrator, The Custodian, The Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited, and the number of Shares of each Series or Class thereof
that may be issued hereunder is unlimited. The Trustees shall have the exclusive
authority without the requirement of Shareholder authorization or approval to
establish and designate one or more Series of Shares and one or more Classes
thereof as the Trustees deem necessary, appropriate or desirable. Each Share of
any series shall represent a beneficial interest only in the assets of that
Series. Subject to the provisions of Section 5.5 hereof, the Trustees may also
authorize the creation of additional Series of Shares (the proceeds of which may
be invested in separate and independent investment portfolios) and additional
Classes of Shares within any Series. All Series issued hereunder including,
without limitation, Shares issued in connection with a dividend or distribution
in Shares or a split in Shares, shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust
property of every description and the right to conduct any business of the Trust
are vested exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by their Shares,
and they shall have no right to call for any partition or division of any
property, profits, rights or interests of the Trust or on any Fund nor can they
be called upon to share or assume any losses of the Trust or of any Fund or
suffer an assessment of any kind by virtue of their ownership of Shares. The
Shares shall be personal property giving only the rights specifically set forth
in this Declaration. The Shares shall no entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Series of Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a
Massachusetts business trust. Nothing in this Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time and without any authorization or vote of the Shareholders,
issue Shares, in addition to the then issued and outstanding Shares and Shares
held in the treasury, to such party or parties and for such amount and type of
consideration, including cash or property, a such time or times and on such
terms as the Trustees may deem appropriate or desirable, except that only Shares
previously contracted to be sold may be issued during any period when the right
of redemption is suspended pursuant to Section 6.9 hereof, and may in such
manner acquire other assets (including the acquisition of assets subject to, and
in connection with the assumption of, liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue fractional Shares and
reissue and resell full and fractional Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares of the Trust or, if the
Shares be divided into Series or Classes, of any Series or any Class thereof of
the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or fractional Shares as the Trustees may in their discretion
determine. The Trustees may authorize the issuance of certificates of beneficial
interest to evidence the ownership of Shares. Shares held in the treasury shall
not be voted nor shall such shares be entitled to any dividends or other
distributions declared with respect thereto.
Section 5.5. Series and Class Designations. Without limiting the
exclusive authority of the Trustees set forth in Section 5.1 to establish and
designate any further Series, it is hereby confirmed that the Trust consists of
the presently Outstanding Shares of the following Series: Eaton Vance Government
Obligations Fund and Eaton Vance Short-Term Treasury Fund ( the "Existing
Series). Without limiting the exclusive authority of the Trustees set forth in
Section 5.1 to establish and designate any further Classes, there are hereby
established and designated distinct Classes of Shares of the Existing Series:
(none as of the date of this Declaration). The Shares of the Existing Series and
such Classes thereof herein established and designated and any Shares of any
further Series and Classes thereof that may from time to time be established and
designated by the Trustees shall be established and designate, and the
variations in the relative rights and preferences as between the different
Series and Classes shall be fixed and determined, by the Trustees (unless the
Trustees otherwise determine with respect to further Series or Classes at the
time of establishing and designating the same); provided, that all Shares shall
be identical except that there may be variations so fixed and determined between
different Series or Classes thereof as to investment objective, policies and
restrictions, sales charges, purchase prices, determination of net asset value,
assets, liabilities, expenses, costs, charges and reserves belonging or
allocated thereto, the price, terms and manner of redemption or repurchase,
special and relative rights as to dividends and distributions and on
liquidation, conversion rights, exchange rights, and voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Series or Classes as the context may require. As to any Existing Series and
Classes, both heretofore and herein established and designated, and any further
division of Shares of the Trust into additional Series or Classes, the following
provisions shall be applicable:
(i)The number of authorized Shares and the number of Shares of each
Series or Class thereof that may be issued shall be unlimited. The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more other Series or one or more
other classes that may be established and designated from time to time. The
Trustees may hold as treasury shares (of the same or some other Series or
Class), reissue for such consideration and on such terms as they may determine,
or cancel any Shares of any Series or Class reacquired by the Trust at their
discretion from time to time.
(ii)All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable tax laws, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series, the Trustees or their delegate shall
allocate them among any one or more of the Series established and designated
from time to time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. Each such allocation by the Trustees or
their delegate shall be conclusive and binding upon the Shareholders of all
Series for all purposes. No holder of Shares of any Series shall have any claim
on or right to any assets allocated or belonging to any other Series.
(iii) Any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees or their delegate to and
among any one or more of the Series established and designated from time to time
in such manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The assets belonging to each particular Series shall be
charged with the liabilities, expenses, costs, charges and reserves of the Trust
so allocated to that Series and all liabilities, expenses, costs, charges and
reserves attributable to that Series which are not readily identifiable as
belonging to any particular Class thereof. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees or their delegate shall be
conclusive and binding upon the Shareholders of all Series and Classes for all
purposes. The Trustees shall have full discretion to determine which items are
capital; and each such determination shall be conclusive and binding upon the
Shareholders. The assets of a particular Series of the Trust shall, under no
circumstances, be charged with liabilities, expenses, costs, charges and
reserves attributable to any other Series or Class thereof of the Trust. All
Persons extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that particular
series for payment of such credit, contract or claim.
(iv) Dividends and distributions on Shares of a particular Series or
Class may be paid or credited in such manner and with such frequency as the
Trustees may determine, to the holders of Shares of that Series or Class, from
such of the earnings or profits, surplus (including paid-in surplus), capital
(including paid-in capital) or assets belonging to that Series, as the Trustees
may deem appropriate or desirable, after providing for actual and accrued
liabilities, expenses, costs, charges and reserves belonging and allocated to
that Series or Class. Such dividends and distributions may be paid daily or
otherwise pursuant to the offering prospectus relating to the Shares or pursuant
to a standing vote or votes of the Trustees adopted only once or from time to
time or pursuant to other authorization or instruction of the Trustees. All
dividends and distributions on Shares of a particular Series or Class shall be
distributed pro rata to the Shareholders of that Series or Class in proportion
to the number of Shares of that Series or Class held by such Shareholders at the
time of record established for the payment or crediting of such dividends or
distributions.
(v) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
Class thereof shall be entitled to receive his pro rata share of distributions
of income and capital gains made with respect to such Series or Class net of
liabilities, expenses, costs, charges and reserves belonging and allocated to
such Series or Class. Upon redemption of his Shares of indemnification for
liabilities incurred by reason of his being or having been a Shareholder of a
Series or Class, such Shareholder shall be paid solely out of the funds and
property of such Series of the Trust. Upon liquidation or termination of a
Series or Class thereof of the Trust, a Shareholder of such Series or Class
thereof shall be entitled to receive a pro rata share of the net assets of such
Series based on the net asset value of his Shares. A Shareholder of a particular
Series of the Trust shall not be entitled to commence or participate in a
derivative or class action on behalf of any other Series or the Shareholders of
any other Series of the Trust.
(vi) On any matter submitted to a vote of Shareholder, the Shares
entitled to vote thereon and the manner in which such Shares shall be voted
shall be as set forth in the By-Laws or proxy materials for the meeting or other
solicitation materials or as otherwise determined by the Trustees, subject to
any applicable requirements of the 1940 Act. The Trustees shall have full power
and authority to call meetings of the Shareholder of a particular Class of
Classes of Shares or of one or more particular Series of Shares, or otherwise
call for the action of such Shareholders on any particular matter.
(vii) Except as otherwise provided in this Article V, the Trustees
shall have full power and authority to determine the designations, preferences,
privileges, sales charges, purchase prices, assets, liabilities, expenses,
costs, charges and reserves belonging or allocated thereto, limitations and
rights, including without limitation voting, dividend, distribution and
liquidation rights, of each Class and Series of Shares. Subject to any
applicable requirements of the 1940 Act, the Trustees shall have the authority
to provide that Shares of one Class shall be automatically converted into Shares
of another Class of the same Series or that the holders of Shares of any Series
or Class shall have the right to convert or exchange such Shares into shares of
one or more other Series or Classes of Shares, all in accordance with such
requirements, conditions and procedures as may be established by the Trustees.
(viii) The establishment and designation of any Series or Class of
Shares shall be effective upon the execution by a majority of the then Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such Series or Class, or as otherwise
provided in such instrument. The Trustees may by an instrument subsequently
executed by a majority of their number amend, restate or rescind any prior
instrument relating to the establishment and designation of any such Series or
Class. Each instrument referred to in this paragraph shall have the status of an
amendment to this Declaration in accordance with Section 8.4 hereof, and a copy
of each such instrument shall be filed in accordance with Section 10.2 hereof.
Section 5.6. Assent to Declaration of Trust and By-Laws. Every
Shareholder, by virtue of having become a Shareholder, shall be held to have
expressly assented and agreed to all the terms and provisions of this
Declaration and of the By-Laws of the Trust.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a)Shares of the Trust shall be
redeemable, at such times and in such manner as may be permitted by the Trustees
from time to time. The trustees shall have full power and authority to vary and
change the right of redemption applicable to the various Series and Classes of
Shares established by the Trustees. Redeemed or repurchased shares may be resold
by the Trust. The Trust may require any shareholder to pay a sales charge to the
Trust, the Principal Underwriter or any other Person designated by the Trustees
upon redemption or repurchase of Shares in such amount and upon such conditions
as shall be determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or
Class thereof at the price determined as hereinafter set forth, upon the
appropriately verified written application of the record holder thereof (or upon
such other form of request as the Trust may use for the purpose) deposited at
such office or agency as may be designated from time to time for that purpose by
the Trustees. The Trust may from time to time establish additional requirements,
terms, conditions and procedures, not inconsistent with the 1940 Act, relating
to the redemption of Shares.
Section 6.2. Price. Shares shall be redeemed at a price based on their
net asset value determined as set forth in Section 7.1 hereof as of such time as
the Trustees shall prescribe. The amount of any sales charge or redemption fee
payable upon redemption of shares may be deducted from the proceeds of such
redemption.
Section 6.3. Payment. Payment of the redemption price of Shares thereof
shall be made in cash or in property to the Shareholder at such time and in the
manner, not inconsistent with the 1940 Act, as may be specified from time to
time in the then effective prospectus relating to such shares, subject to the
provisions of Sections 6.4 and 6.9 hereof. Notwithstanding the foregoing, the
Trust or its agent may withhold from such redemption proceeds any amount arising
(i) from a liability of the redeeming Shareholder to the Trust or (ii) in
connection with any federal or state tax withholding requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 7.1 hereof, the Trust shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series or Class thereof, the rights of Shareholders (including those who shall
have applied for redemption pursuant to Section 6.1 hereof but who shall not yet
received payment) to have Shares redeemed and paid for by the Trust or a Series
shall be suspended until the termination of such suspension is declared. Any
record holder who shall have his redemption right so suspended may, during the
period of such suspension, by appropriate written notice at the office or agency
where his application or request for redemption was made, withdraw his
application or request and withdraw any Share certificates on deposit.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Principal Underwriter or another agent designated for
the purpose, by agreement with the owner thereof at a price not exceeding the
net asset value per share determined as of such time as the Trustees shall
prescribe. The Trust may from time to time establish the requirements, terms,
conditions and procedures relating to such repurchases, and the amount of any
sales charge or repurchase fee payable on any repurchase of shares may be
deducted from the proceeds of such repurchase.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in
their sole discretion, may cause the Trust to redeem all of the Shares of one or
more Series or Class thereof held by any Shareholder if the value of such Shares
held by such Shareholder is less than the minimum amount established from time
to time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. (a)If the Trustees shall, at any time
and in good faith, be of the opinion that direct or indirect ownership of Shares
or other securities of the Trust has or may become concentrated in any Person to
an extent which would disqualify the Trust or any Series of the Trust as a
regulated investment company under the Internal Revenue Code of 1986, then the
Trustees shall have the power by lot or other means deemed equitable by them (i)
to call for redemption by any such Person a number, or principal amount, of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust or any Series of the
Trust in question would result in such disqualification. The redemption shall be
effected in the manner provided in Section 6.1 and at the redemption price
referred to in Section 6.2.
(b) The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code of 1986, or to comply with the requirements of any other taxing authority.
Section 6.8. Reduction in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series or Class thereof pursuant to the provisions of
Section 7.3.
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust of a Fund
of securities owned by it is not reasonably practicably or it is not reasonable
practicable for the Trust or a Fund fairly to determine the value of its net
assets, of (iv) as the Commission may by order permit for the protection of
security holders of the Trust. Such suspension shall take effect at such time as
the Trust shall specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter there shall be
no right of redemption or payment on redemption until the Trust shall declare
the suspension at an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall have reopened or the
period specified in (ii) or (iii) shall have expired (as to which in the absence
of an official ruling by the Commission, the determination of the Trust shall be
conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his application or request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust or of each Series or class thereof shall be determined on
such days and at or as of such time or times as the Trustees may determine. Any
reference in this Declaration to the time at which a determination of net asset
value is made shall mean the time as of which the determination is made. The
power and duty to determine net asset value may be delegated by the Trustees
from time to time to the Investment Adviser, the Administrator, the Custodian,
the Transfer Agent or such other Person or Persons as the Trustees may
determine. The value of the assets of the Trust or any Series thereof shall be
determined in a manner authorized by the Trustees. From the total value of said
assets, there shall be deducted all indebtedness, interest, taxes, payable or
accrued, including estimated taxes on unrealized book profits, expenses and
management charges accrued to the appraisal date, amounts determined and
declared as a dividend or distribution and all other items in the nature of
liabilities which shall be deemed appropriate, as incurred by or allocated to
the Trust or any series or Class thereof. The resulting amount, which shall
represent the total net assets of the Trust or Series or Class thereof, shall be
divided by the number of Shares of the Trust or Series or Class thereof
outstanding at the time and the quotient so obtained shall be deemed to be the
net asset value of the Shares of the Trust or Series or Class thereof. The Trust
may declare a suspension of the determination of net asset value to the extent
permitted by the 1940 Act. It shall not be a violation of any provision of this
Declaration if Shares are sold, redeemed or repurchased by the Trust at a price
other than one based on net asset value if the net asset value is affected by
one or more errors inadvertently made in the pricing of portfolio securities or
other investments or in accruing or allocating income, expenses, reserves or
liabilities. No provision of this Declaration shall be construed to restrict or
affect the right or ability of the Trust to employ or authorize the use of
pricing services, appraisers or any other means, methods, procedures, or
techniques in valuing the assets or calculating the liabilities of the Trust or
any Series or Class thereof.
Section 7.2. Dividends and Distributions. (a)The Trustees may from time
to time distribute ratably among the Shareholders of the Trust or of a Series or
Class thereof such proportion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Series held by the Trustees as they may deem appropriate or desirable. Such
distributions may be made in cash, additional Shares or property (including
without limitation any type of obligations of the Trust or Series or Class or
any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time.
The Trustees may always retain from the earnings or profits such amounts as they
may deem appropriate or desirable to pay the expenses and liabilities of the
Trust or a Series or Class thereof or to meet obligations of the Trust or a
Series or Class thereof, together with such amounts as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business or operations of the Trust or such Series. The Trust
may adopt and offer to Shareholders such dividend reinvestment plans, cash
dividend payout plans or other distribution plans as the Trustees may deem
appropriate or desirable. The Trustees may in their discretion determine that an
account administration fee or other similar charge may be deducted directly from
the income and other distributions paid on Shares to a Shareholder's account in
any Series or Class.
(b) The Trustees may prescribe, in their absolute discretion, such
bases and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
(c) Inasmuch as the computation of net income and gains for federal
income tax purposes may vary from the computation thereof on the books of
account, the above provisions shall be interpreted to give the Trustees full
power and authority in their absolute discretion to distribute for any fiscal
year as dividends and as capital gains distributions, respectively, additional
amounts sufficient to enable the Trust or a Series thereof to avoid or reduce
liability for taxes.
Section 7.3. Constant Net Asset Value; Reduction of Outstanding Shares.
The Trustees may determine to maintain the net asset value per Share of any
Series or Class at a designated constant amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Series or Class as dividends payable
in additional Shares of that Series or Class or in cash or in any combination
thereof and for the handling of any losses attributable to that Series or Class.
Such procedures may provide that, if, for any reason, the income of any such
Series or Class determined at any time is a negative amount, the Trust may with
respect to such Series or Class (i) offset each Shareholder's pro rata share of
such negative amount from the accrued dividend account of such Shareholder, or
(ii) reduce the number of Outstanding Shares of such Series or Class by reducing
the number of Shares in the account of such Shareholder by that number of full
and fractional Shares which represents the amount of such excess negative
income, or (iii) cause to be recorded on the books of the Trust an asset account
in the amount of such negative income, which account may be reduced by the
amount, provided that the same shall thereupon become the property of the Trust
with respect to such Series or Class and shall not be paid to any Shareholder,
of dividends declared thereafter upon the Outstanding Shares of such Series or
Class on the day such negative income is experienced, until such asset account
is reduced to zero, or (iv) combine the methods described in clauses (i), (ii)
and (iii) of this sentence, in order to cause the net asset value per Share of
such Series or Class to remain at a constant amount per Outstanding Share
immediately after such determination and declaration. The Trust may also fail to
declare a dividend out of income for the purpose of causing the net asset value
of any such Share to be increased. The Trustees shall have full discretion to
determine whether any cash or property received shall be treated as income or as
principal and whether any item expense shall be charged to the income or the
principal account, and their determination made in good faith shall be
conclusive upon all Shareholders. In the case of stock dividends or similar
distributions received, the Trustees shall have full discretion to determine, in
the light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
provision contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Series or Class thereof or the
income of the Series or Class thereof, or for the declaration and payment of
dividends and distributions on any Series or Class of Shares.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
SERIES OR CLASS; MERGERS; AMENDMENTS
Section 8.1. Duration. The Trust shall continue without limitation of
time but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation of authority pursuant to the terms of this
Declaration or of the By-Laws.
Section 8.2. Termination of the Trust or a Series or a Class. (a) The
Trust or any Series or Class thereof may be terminated by: (1) the affirmative
vote of the holders of not less than two-thirds of the Shares outstanding and
entitled to vote at any meeting of Shareholders of the Trust or the appropriate
Series or Class thereof, or by an instrument or instruments in writing without a
meeting, consented to by the holders of two-thirds of the Shares of the Trust or
a Series or Class thereof, provided, however, that, if such termination is
recommended by the Trustees, the vote of a majority of the outstanding voting
securities of the Trust or a Series or Class thereof entitled to vote thereon
shall be sufficient authorization; or (2) by means of an instrument in writing
signed by a majority of the Trustees, to be followed by a written notice to
Shareholders stating that a majority of the Trustees as determined that the
continuation of the Trust or a Series or a Class thereof is not in the best
interest of the Trust, such Series or Class or of their respective Shareholders.
Such determination may (but need not) be based on factors or events adversely
affecting the ability of the Trust, such Series or Class to conduct its business
and operations in an economically viable manner. Such factors and events may
include (but are not limited to) the inability of a Series or Class or the Trust
to maintain its assets at an appropriate size, changes in laws or regulations
governing the Series or Class or the Trust or affecting assets of the type in
which such Series or Class or the Trust invests, or political, social, legal or
economic developments or trends having an adverse impact on the business or
operations of such Series or Class or the Trust invests, or political, social,
legal or economic developments or trends having an adverse impact on the
business or operations of such Series or Class of the Trust. Upon the
termination of the Trust or the Series or Class,
(i) The Trust, Series or Class shall carry on no business except for
the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust,
Series or Class and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust, Series or Class shall have been
wound up, including the power to fulfill or discharge the contracts of the
Trust, Series or Class, collect its assets, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part of the remaining Trust Property
or assets allocated or belonging to such Series or Class to one or more persons
at public or private sale for consideration which may consist in whole or in
part of cash, securities or other property of any kind, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its business.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property or the remaining property of the
terminated Series or Class, in cash or in kind or in any combination thereof,
among the Shareholders of the Trust or the Series or Class according to their
respective rights.
(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Massachusetts
Secretary of State an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties with respect to the Trust or the terminated Series or
Class, and rights and interests of all Shareholders of the Trust or the
terminated Series or Class shall thereupon cease.
Section 8.3. Merger, Consolidation or Sale of Assets of a Series. A
particular Series may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees and
without any authorization, vote or consent of the Shareholders; and any such
merger, consolidation, sale, lease or exchange shall be deemed for all purposes
to have been accomplished under and pursuant to the statutes of the Commonwealth
of Massachusetts. The Trustees may also at any time sell and convert into money
all the assets of a particular Series. Upon making provision for the payment of
all outstanding obligations, taxes, and other liabilities, accrued or
contingent, of the particular Series, the Trustees shall distribute the
remaining assets of such Series among the Shareholders of such Series according
to their respective rights. Upon completion of the distribution of the remaining
proceeds or the remaining assets, the Series shall terminate and the Trustees
shall take the action provided in Section 8.2(b) hereof and they shall thereupon
be discharged from all further liabilities and duties with respect to such
Series, and the rights and interests of all Shareholders of the terminated
Series shall thereupon cease.
Section 8.4. Amendments. The execution of an instrument setting forth
the establishment and designation and the relative rights and preferences of any
Series or Class of Shares (or amending, restating or rescinding any such prior
instrument) in accordance with Section 5.5 hereof shall, without any
authorization, consent or vote of the Shareholders, effect an amendment of this
Declaration. Except as otherwise provided in this Section 8.4, if authorized by
vote of a majority of the outstanding voting securities of the Trust the
financial interests of which are affected by the amendment and which are
entitled to vote thereon (which securities shall, unless otherwise provided by
the Trustees, vote together on such amendment as a single class), the Trustees
may amend this Declaration by an instrument signed by a majority of the Trustees
then in office. No Shareholder not so affected by any such amendment shall be
entitled to vote thereon. The Trustees may (by such an instrument) also amend or
otherwise supplement this Declaration of Trust, without any authorization,
consent or vote of the Shareholders, to change the name of the Trust or any Fund
or to make such other changes as do not have a materially adverse effect on the
financial interests of Shareholders hereunder or if they deem it necessary or
desirable to conform this Declaration to the requirements of applicable federal
or state laws or regulations or the requirements of the Internal Revenue Code of
1986, but the Trustees shall not be liable for failing to do so. Any such
amendment or supplemental Declaration of Trust shall be effective as provided in
the instrument containing its terms or, if there is no provision therein with
respect to effectiveness, upon the signing of such instrument by a majority of
the Trustees then in office. Copies of any amendment or of any supplemental
Declaration of Trust shall be filed as specified in Section 10.2 hereof. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
Notwithstanding any other provision hereof, until such time as Shares
are issued and sold, this Declaration may be terminated or amended in any
respect by an instrument signed by a majority of the Trustees then in office.
ARTICLE X
MISCELLANEOUS
Section 10.1. Use of the Words "Eaton Vance". Eaton Vance Corp.
(hereinafter referred to as "EVC"), which owns (either directly or through
subsidiaries) all of the capital shares of the Investment Adviser of the Trust
and the Funds (or of the investment adviser or each of the investment companies
referred to in the last paragraph of Section 2.3), has consented to the use by
the Trust and the Funds of the identifying words "Eaton Vance" in the name of
the Trust and in the name of each Fund. Such consent is conditioned upon the
continued employment of EVC or a subsidiary or affiliate of EVC as Investment
Adviser of the Trust and of each such Fund or as the investment adviser of each
of the investment companies referred to in the last paragraph of Section 2.3. As
between the Trust and itself, EVC shall control the use of the name of the Trust
and the name of any Fund insofar as such name contains the identifying words
"Eaton Vance". EVC may from time to time use the identifying words "Eaton Vance"
in other connections and for other purposes, including, without limitation, in
the names of other investment companies, trusts, corporations or businesses
which it may manage, advise, sponsor or own or in which it may have a financial
interest. EVC may require the Trust to cease using the identifying words "Eaton
Vance" in the name of the Trust or any Fund if EVC or a subsidiary or affiliate
of EVC ceases to act as investment adviser of the Trust or such Fund or as the
investment adviser of each of the investment companies referred to in the last
paragraph of Section 2.3.
Section 10.2. Filing of Copies, References, Headings and Counterparts.
The original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. A copy of this instrument, of any amendment hereto, and of each
supplemental declaration of trust shall be filed with the Massachusetts
Secretary of State and with any other governmental office where such filing may
from time to time be required. Anyone dealing with the Trust may rely on a
certificate by a Trustee or an officer of the Trust as to whether or not any
such amendments or supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same effect as
if it were the original, may rely on a copy certified by a Trustee or an officer
of the Trust to be a copy of this instrument or of any such amendment hereto or
supplemental declaration of trust.
In this instrument or in any such amendment or supplemental declaration
of trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may hereafter be referred to in lieu of the original Declaration and
the various amendments and supplements thereto.
Section 10.3. Applicable Law. The Trust set forth in this instrument is
made in the Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 10.4. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being a majority of the current
Trustees of the Trust, have executed this instrument this 17th day of August,
1993.
/s/ Donald R. Dwight
- -------------------- ---------------------
Donald R. Dwight Norton H. Reamer
/s/ James B. Hawkes /s/ John L. Thorndike
- -------------------- ---------------------
James B. Hawkes John L. Thorndike
- -------------------- ---------------------
Samuel L. Hayes Jack L. Treynor
/s/ M. Dozier Gardner
- --------------------
M. Dozier Gardner
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, Massachusetts
Then personally appeared the above named Donald R. Dwight, M. Dozier
Gardner, James B. Hawkes and John L. Thorndike being a majority of the Trustees
then in office, who severally acknowledge the foregoing instrument to be their
free act and deed.
Before me,
/s/ JoAnn M. Hall
------------------------------
My commission expires 12/6/96
-----------
<PAGE>
The names and addresses of all the Trustees of the Trust are as follows:
Donald R. Dwight Samuel L. Hayes, III
Clover Mill Lane 345 Nahatan Street
Lyme, NH 03768 Westwood, MA 02090
M. Dozier Gardner Norton H. Reamer
100 Upland Road 70 Circuit Road
Brookline, MA 02146 Chestnut Hill, MA 02167
James B. Hawkes John L. Thorndike
11 Quincy Park 10 Main Street
Beverly, MA 01915 Dover, MA 02030
Jack L. Treynor
504 Via Almar
Palos Verdes Estates, CA 90274
EXHIBIT 99.1(b)
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
Amendment and Restatement
of
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
(as amended and restated June 19, 1995)
WHEREAS, the Trustees of Eaton Vance Government Obligations 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 August 17, 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 twelve separate series
("Funds"), each Fund to have the following special and relative rights:
1. The Funds shall be designated as follows:
<TABLE>
<S> <C>
EV Classic Government Obligations Fund EV Marathon Strategic Income Fund
EV Marathon Government Obligations Fund Eaton Vance Cash Management Fund
EV Traditional Government Obligations Fund Eaton Vance Liquid Assets Fund
EV Classic High Income Fund Eaton Vance Money Market Fund
EV Marathon High Income Fund Eaton Vance Short-Term Treasury Fund
EV Classic Strategic Income Fund Eaton Vance Tax Free Reserves
</TABLE>
2. Each Fund shall be authorized to invest in cash, securities, instruments
and other property as from time to time described in the Trust's then currently
effective registration statements under the Securities Act of 1933 and the
Investment Company Act of 1940. Each share of beneficial interest of each Fund
("share") shall be redeemable, shall be entitled to one vote (or fraction
thereof in respect of a fractional share) on matters on which shares of that
Fund shall be entitled to vote and shall represent a pro rata beneficial
interest in the assets allocated to that Fund, all as provided in the
Declaration of Trust. The proceeds of sales of shares of each Fund, together
with any income and gain thereon, less any diminution or expenses thereof, shall
irrevocably belong to such Fund, unless otherwise required by law. Each share of
a Fund shall be entitled to receive its pro rata share of net assets of that
Fund upon liquidation of that Fund.
3. Shareholders of each Fund shall vote separately as a class to the extent
provided in Rule 18f-2, as from time to time in effect, under the Investment
Company Act of 1940.
4. The assets and liabilities of the Trust shall be allocated among the
above-referenced Funds as set forth in Section 5.5 of Article V of the
Declaration of Trust, except as provided below:
(a) Costs incurred by each Fund in connection with its organization and
start-up, including Federal and state registration and qualification fees and
expenses of the initial public offering of such Fund's shares, shall (if
applicable) be borne by such Fund and deferred and amortized over the five year
period beginning on the date that such Fund commences operations.
(b) Reimbursement required under any expense limitation applicable to the
Trust shall be allocated among those Funds whose expense ratios exceed such
limitation on the basis of the relative expense ratios of such Funds.
(c) The liabilities, expenses, costs, charges and reserves of the Trust
(other than the management and investment advisory fees or the organizational
expenses paid by the Trust) which are not readily identifiable as belonging to
any particular Fund shall be allocated among the Funds on an equitable basis as
determined by the Trustees.
5. The Trustees (including any successor Trustees) shall have the right at
any time and from time to time to reallocate assets and expenses or to change
the designation of any Fund now or hereafter created, or to otherwise change the
special and relative rights of any such Fund, and to terminate any Fund or add
additional Funds as provided in the Declaration of Trust.
6. Any Fund may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees;
and any such merger, consolidation, sale, lease or exchange shall be deemed for
all purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. The Trustees may also at any time sell and
convert into money all the assets of any Fund. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, accrued or
contingent, of such Fund, the Trustees shall distribute the remaining assets of
such Fund ratably among the holders of the outstanding shares. Upon completion
of the distribution of the remaining proceeds or the remaining assets as
provided in this paragraph 6, the Fund shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder with respect
to such Fund and the right, title and interest of all parties with respect to
such Fund shall be cancelled and discharged.
7. The Declaration of Trust authorizes the Trustees to divide each Fund and
any other series of shares 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 then the Trustees of an
instrument setting forth such establishment and designation and the relative
rights and preferences, and provisions applicable to, such class, or as
otherwise provided in such instrument.
Dated: June 19, 1995
/s/ Donald R. Dwight /s/ Norton H. Reamer
- --------------------- -----------------------
Donald R. Dwight Norton H. Reamer
/s/ M. Dozier Gardner /s/ Samuel L. Hayes III
- --------------------- ------------------------
M. Dozier Gardner Samuel L. Hayes, III
/s/ James B. Hawkes /s/ John L. Thorndike
- --------------------- ------------------------
James B. Hawkes John L. Thorndike
/s/ Jack L. Treynor
---------------------
Jack L. Treynor
EATON WANCE MUTUAL FUNDS TRUST EXHIBIT 99.1(c)
(formerly called Eaton Vance Government Obligations Trust)
AMENDMENT TO DECLARATION OF TRUST
July 10, 1995
AMENDMENT, made July 10, 1995, to the Amended and Restated Declaration
of Trust made August 17, 1993 (hereinafter called the "Declaration") of Eaton
Vance Government Obligations Trust, a Massachusetts business trust (hereinafter
called the "Trust"), by the undersigned being at least a majority of the
Trustees of the Trust in office on June 19, 1995.
WHEREAS, Section 8.4 of Article XIII of the Declaration empowers the
Trustees of the Trust to amend the Declaration without the vote or consent of
Shareholders to change the name of the Trust;
WHEREAS, the Trustees of the Trust have deemed it desirable to amend
the Declaration in the following manner to change the name of the Trust, and a
majority of the Trustees are empowered to make, execute and file this Amendment
to the Declaration;
NOW, THEREFORE, the undersigned Trustees do hereby amend the
Declaration in the following manner:
1. The caption at the head of the Declaration is hereby amended to read
as follows:
EATON VANCE MUTUAL FUNDS TRUST
2. Article I Section 1.1 of the Declaration is hereby amended to read
as follows:
ARTICLE I
Section 1.1. Name. The name of the trust created hereby is Eaton Vance
Mutual Funds Trust (the "Trust").
<PAGE>
IN WITNESS WHEREOF, the undersigned Trustees have executed this instrument this
day of July 10, 1995.
/s/Donald R. Dwight /s/Samuel L. Hayes
- ---------------------------- ---------------------------
Donald R. Dwight Samuel L. Hayes, III
/s/M. Dozier Gardner /s/Norton H. Reamer
- ---------------------------- ---------------------------
M. Dozier Gardner Norton H. Reamer
/s/James B. Hawkes /s/John L. Thorndike
- ---------------------------- ---------------------------
James B. Hawkes John L. Thorndike
/s/Jack L. Treynor
-------------------------------
Jack L. Treynor
EXHIBIT 99.2(a)
BY-LAWS
OF
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
(As Amended November 3, 1986)
ARTICLE I
The Trustees
SECTION 1. Initial Trustees, Election and Term of Office. At a meeting of the
shareholders to be held pursuant to authorization of the Trustees, in the year
1986 or 1987, the shareholders of the Trust shall elect not less than three
Trustees. The initial Trustees named in the Preamble of the Declaration of Trust
dated May 7, 1984, as from time to time amended (the "Declaration of Trust"),
and any additional Trustees appointed pursuant to Section 4 of this ARTICLE I,
shall serve as Trustees until the election of Trustees at the foregoing
shareholders' meeting and until their successors are elected and qualified. The
Trustees elected at the foregoing shareholders' meeting shall serve as Trustees
during the lifetime of the Trust, except as otherwise provided below.
SECTION 2. Number of Trustees. The number of Trustees shall be fixed by the
Trustees, provided, however, that such number shall at no time exceed eighteen.
SECTION 3. Resignation and Removal. Any Trustee may resign his trust by written
instrument signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified therein. Any
Trustee who requests in writing to be retired or who has become incapacitated by
illness or injury may be retired by written instruments signed by a majority of
the other Trustees, specifying the date of his retirement. Any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective.
No natural person shall serve as a Trustee of the Trust after the holders
of record of not less than two-thirds of the outstanding shares of beneficial
interest of the Trust (the "shares") have declared that he be removed from that
office by a declaration in writing signed by such holders and filed with the
Custodian of the assets of the Trust or by votes cast by such holders in person
or by proxy at a meeting called for the purpose. Solicitation of such a
declaration shall be deemed a solicitation of a proxy within the meaning of
Section 20(a) of the Investment Company Act of 1940 (the "Act").
The Trustees of the Trust shall promptly call a meeting of the shareholders
for the purpose of voting upon a question of removal of any such Trustee or
Trustees when requested in writing so to do by the record holders of not less
than 10 per centum of the outstanding shares.
Whenever ten or more shareholders of record of the Trust who have been such
for at least six months preceding the date of application, and who hold in the
aggregate either shares having a net asset value of at least $25,000 or at least
1 per centum of the outstanding shares, whichever is less, shall apply to the
Trustees in writing, stating that they wish to communicate with other
shareholders with a view to obtaining signatures to a request for a meeting of
shareholders pursuant to this Section 3 and accompanied by a form of
communication and request which they wish to transmit, the Trustees shall within
five business days after receipt of such application either
(1) afford to such applicants access to a list of the names and addresses
of all shareholders as recorded on the books of the Trust; or
(2) inform such applicants as to the approximate number of shareholders of
record, and the approximate cost of mailing to them the proposed communication
and form of request.
If the Trustees elect to follow the course specified in subparagraph (2)
above of this Section 3, the Trustees, upon the written request of such
applicants, accompanied by a tender of the material to be mailed and of the
reasonable expenses of mailing, shall, with reasonable promptness, mail such
material to all shareholders of record at their addresses as recorded on the
books, unless within five business days after such tender the Trustees shall
mail to such applicants and file with the Securities and Exchange Commission
(the "Commission"), together with a copy of the material to be mailed, a written
statement signed by at least a majority of the Trustees to the effect that in
their opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion.
After the Commission has had an opportunity for hearing upon the objections
specified in the written statement so filed by the Trustees, the Trustees or
such applicants may demand that the Commission enter an order either sustaining
one or more of such objections or refusing to sustain any of such objections. If
the Commission shall enter an order refusing to sustain any of such objections,
or if, after the entry of an order sustaining one or more of such objections,
the Commission shall find, after notice and opportunity for hearing, that all
objections so sustained have been met, and shall enter an order so declaring,
the Trustees shall mail copies of such material to all shareholders with
reasonable promptness after the entry of such order and the renewal of such
tender.
Until such provisions become null, void, inoperative and removed from these
By-Laws pursuant to the next sentence, the provisions of all but the first
paragraph of this Section 3 may not be amended or repealed without the vote of a
majority of the Trustees and a majority of the outstanding shares of the Trust.
These same provisions shall be deemed null, void, inoperative and removed from
these By-Laws upon the effectiveness of any amendment to the Act which
eliminates them from Section 16 of the Act or the effectiveness of any successor
Federal law governing the operation the Trust which does not contain such
provisions.
SECTION 4. Vacancies. In case of the declination, death, resignation,
retirement, removal, or inability of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office whereupon the
appointment shall take effect. Within three months of such appointment the
Trustees shall cause notice of such appointment to be mailed to each shareholder
at his address as recorded on the books of the Trustees. An appointment of a
Trustee may be made by the Trustees then in office and notice thereof mailed to
shareholders as aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder and under the Declaration of Trust. The power of
appointment is subject to the provisions of Section 16(a) of the Act.
Whenever a vacancy among the Trustees shall occur, until such vacancy is
filled, or while any Trustee is absent from the Commonwealth of Massachusetts
or, if not a domiciliary of Massachusetts, is absent from his state of domicile,
or is physically or mentally incapacitated by reason of disease or otherwise,
the other Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy, absence or incapacity shall be conclusive,
provided, however, that no vacancy shall remain unfilled for a period longer
than six calendar months.
SECTION 5. Temporary Absence of Trustee. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
SECTION 6. Effect of Death, Resignation, Removal, Etc. of a Trustee. The death,
declination, resignation, retirement, removal, or incapacity of the Trustees, or
any one of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of the Declaration of Trust or these
By-Laws.
ARTICLE II
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers or agents as the Trustees may
from time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in the Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be chosen
annually by the Trustees. The President shall be chosen annually by and from the
Trustees.
Except for the offices of President and Secretary, two or more offices may
be held by a single person. The officers shall hold office until their
successors are chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign by
filing a written resignation with the President or with the Trustees or with the
Secretary, which shall take effect on being so filed or at such time as may
otherwise be specified therein. The Trustees may at any meeting remove an
officer.
ARTICLE III
Powers and Duties of Trustees and Officers
SECTION 1. Trustees. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility, so far as such powers are not inconsistent with the
laws of the Commonwealth of Massachusetts, the Declaration of Trust, or these
By-Laws.
SECTION 2. Executive and Other Committees. The Trustees may elect from their own
number an executive committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, including the purchase and sale of securities,
while the Trustees are not in session, and such other powers and duties as the
Trustees may from time to time delegate to such committee. The Trustees may also
elect from their own number other committees from time to time, the number
composing such committees and the powers conferred upon the same to be
determined by vote of the Trustees.
SECTION 3. Chairman of the Trustees. The Trustees may, but need not, appoint
from among their number a Chairman. When present he shall preside at the
meetings of the shareholders and of the Trustees. He may call meetings of the
Trustees and of any committee thereof whenever he deems it necessary. He shall
be an executive officer of this Trust and shall have, with the President,
general supervision over the business and policies of this Trust, subject to the
limitations imposed upon the President, as provided in Section 4 of this Article
III.
SECTION 4. President. In the absence of the Chairman of the Trustees, the
President shall preside at all meetings of the shareholders. Subject to the
Trustees and to any committees of the Trustees, within their respective spheres,
as provided by the Trustees, he shall at all times exercise a general
supervision and direction over the affairs of the Trust. He shall have the power
to employ attorneys and counsel for the Trust and to employ such subordinate
officers, agents, clerks and employees as he may find necessary to transact the
business of the Trust. He shall also have the power to grant, issue, execute or
sign such powers of attorney, proxies or other documents as may be deemed
advisable or necessary in furtherance of the interests of the Trust. The
President shall have such other powers and duties as, from time to time, may be
conferred upon or assigned to him by the Trustees.
SECTION 5. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company as the
Trustees shall employ as custodian in accordance with Article VII of the
Declaration of Trust. He shall make annual reports in writing of the business
conditions of the Trust, which reports shall be preserved upon its records, and
he shall furnish such other reports regarding the business and condition as the
Trustees may from time to time require. The Treasurer shall perform such duties
additional to foregoing as the Trustees may from time to time designate.
SECTION 6. Secretary. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings. He shall have custody of the seal, if any, of the Trust and
shall perform such duties additional to the foregoing as the Trustees may from
time to time designate.
SECTION 7. Other Officers. Other officers elected by the Trustees shall perform
such duties as the Trustees may from time to time designate.
SECTION 8. Compensation. The Trustees and officers of the Trust may receive such
reasonable compensation from the Trust for the performance of their duties as
the Trustees may from time to time determine.
ARTICLE IV
Meetings of Shareholders
SECTION 1. Meetings. Meetings of the shareholders may be called at any time by
the President, and shall be called by the President or the Secretary at the
request, in writing or by resolution, of a majority of the Trustees, or at the
written request of the holder or holders of ten percent (10%) or more of the
total number of shares of the then issued and outstanding shares of the Trust
entitled to vote at such meeting. Any such request shall state the purposes of
the proposed meeting.
SECTION 2. Place of Meetings. Meetings of the shareholders shall be held at the
principal place of business of the Trust in Boston, Massachusetts, unless a
different place within the United States is designated by the Trustees and
stated as specified in the respective notices or waivers of notice with respect
thereto.
SECTION 3. Notice of Meetings. Notice of all meetings of the shareholders,
stating the time, place and the purposes for which the meetings are called,
shall be given by the Secretary to each shareholder entitled to vote thereat,
and to each shareholder who under the By-Laws is entitled to such notice, by
mailing the same postage paid, addressed to him at his address as it appears
upon the books of the Trust, at least seven (7) days before the time fixed for
the meeting, and the person giving such notice shall make an affidavit with
respect thereto. If any shareholder shall have failed to inform the Trust of his
post office address, no notice need be sent to him. No notice need be given to
any shareholder if a written waiver of notice, executed before or after the
meeting by the shareholder or his attorney thereunto authorized, is filed with
the records of the meeting.
SECTION 4. Quorum. Except as otherwise provided by law, to constitute a quorum
for the transaction of any business at any meeting of shareholders, there must
be present, in person or by proxy, holders of a majority of the total number of
shares of the then issued and outstanding shares of the Trust entitled to vote
at such meeting; provided that if a series of shares is entitled to vote as a
separate series on any matter, then in the case of that matter a quorum shall
consist of the holders of a majority of the total number of shares of the then
issued and outstanding shares of that series entitled to vote at the meeting.
Shares owned directly or indirectly by the Trust, if any, shall not be deemed
outstanding for this purpose.
If a quorum, as above defined, shall not be present for the purpose of any
vote that may properly come before any meeting of shareholders at the time and
place of any meeting, the shareholders present in person or by proxy and
entitled to vote at such meeting on such matter holding a majority of the shares
present and entitled to vote on such matter may by vote adjourn the meeting from
time to time to be held at the same place without further notice than by
announcement to be given at the meeting until a quorum, as above defined,
entitled to vote on such matter, shall be present, whereupon any such matter may
be voted upon at the meeting as though held when originally convened.
SECTION 5. Voting. At each meeting of the shareholders every shareholder of the
Trust shall be entitled to one (1) vote in person or by proxy for each of the
then issued and outstanding shares of the Trust then having voting power in
respect of the matter upon which the vote is to be taken, standing in his name
on the books of the Trust at the time of the closing of the transfer books for
the meeting, or, if the books be not closed for any meeting, on the record date
fixed as provided in Section 4 of Article VI of these By-Laws for determining
the shareholders entitled to vote at such meeting, or if the books be not closed
and no record date be fixed, at the time of the meeting. The record holder of a
fraction of a share shall be entitled in like manner to a corresponding fraction
of a vote. Notwithstanding the foregoing, the Trustees may, in conjunction with
the establishment of any series of shares, establish conditions under which the
several series shall have separate voting rights or no voting rights.
All elections of Trustees shall be conducted in any manner approved at the
meeting of the shareholders at which said election is held, and shall be by
ballot if so requested by any shareholder entitled to vote thereon. The persons
receiving the greatest number of votes shall be deemed and declared elected.
Except as otherwise required by law or by the Declaration of Trust or by these
By-Laws, all matters shall be decided by a majority of the votes cast, as
hereinabove provided, by persons entitled to vote thereon. With respect to the
submission of a management or investment advisory contract or a change in
investment policy to the shareholders for any shareholder approval required by
the Act, such matter shall be deemed to have been effectively acted upon with
respect to any series of shares if the holders of the lesser of
(i) 67 per centum or more of the shares of that series present or
represented at the meeting if the holders of more than 50 per centum
of the outstanding shares of that series are present or represented
by proxy at the meeting or
(ii) more than 50 per centum of the outstanding shares of that
series
vote for the approval of such matter, notwithstanding (a) that such matter has
not been approved by the holders of a majority of the outstanding voting
securities of any other series affected by such matter (as described in rule
18f-2 under the Act) or (b) that such matter has not been approved by the vote
of a majority of the outstanding voting securities of the Trust (as defined in
the Act).
SECTION 6. Proxies. Any shareholder entitled to vote upon any matter at any
meeting of the shareholders may so vote by proxy, but no proxy which is dated
more than six months before the meeting named therein shall be accepted and no
such proxy shall be valid after the final adjournment of such meeting. Every
proxy shall be in writing subscribed by the shareholder or his duly authorized
attorney and shall be dated, but need not be sealed, witnessed or acknowledged.
Proxies shall be delivered to the Secretary or person acting as secretary of the
meeting before being voted. A proxy with respect to shares held in the name of
two or more persons shall be valid if executed by one of them unless at or prior
to exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed by or on behalf
of a shareholder shall be deemed valid unless challenged at or prior to its
exercise.
SECTION 7. Consents. Any action which may be taken by shareholders may be taken
without a meeting if a majority of shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by law, the Declaration
of Trust or these By-Laws for approval of such matter) consent to the action in
writing and the written consents are filed with the records of the meetings of
shareholders. Such consents shall be treated for all purposes as a vote taken at
a meeting of shareholders.
ARTICLE V
Trustees Meetings
SECTION 1. Meetings. The Trustees may in their discretion provide for regular or
stated meetings of the Trustees. Meetings of the Trustees other than regular or
stated meetings shall be held whenever called by the Chairman, President or by
any other Trustee at the time being in office. Any or all of the Trustees may
participate in a meeting by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting.
SECTION 2. Notices. Notice of regular or stated meetings need not be given.
Notice of the time and place of each meeting other than regular or stated
meetings shall be given by the Secretary or by the Trustee calling the meeting
and shall be mailed to each Trustee at least two (2) days before the meeting, or
shall be telegraphed, cabled, or wirelessed to each Trustee at his business
address or personally delivered to him at least one (1) day before the meeting.
Such notice may, however, be waived by all the Trustees. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any special meeting.
SECTION 3. Consents. Any action required or permitted to be taken at any meeting
of the Trustees may be taken by the Trustees without a meeting if a written
consent thereto is signed by all the Trustees and filed with the records of the
Trustees' meetings. Such consent shall be treated as a vote at a meeting for all
purposes.
SECTION 4. Place of Meetings. The Trustees may hold their meetings outside of
the Commonwealth of Massachusetts.
SECTION 5. Quorum and Manner of Acting. A majority of the Trustees in office
shall be present in person at any regular stated or special meeting of the
Trustees in order to constitute a quorum for the transaction of business at such
meeting and (except as otherwise required by the Declaration of Trust, by these
By-Laws or by statute) the act of a majority of the Trustees present at any such
meeting, at which a quorum is present, shall be the act of the Trustees. In the
absence of quorum, a majority of the Trustees present may adjourn the meeting
from time to time until a quorum shall be present. Notice of any adjourned
meeting need not be given.
ARTICLE VI
Shares of Beneficial Interest
SECTION 1. Certificates for Shares of Beneficial Interest. Certificates for
shares of beneficial interest of any series of shares of the Trust, if issued,
shall be in such form as shall be approved by the Trustees. They shall be signed
by, or in the name of, the Trust by the President and by the Treasurer and may,
but need not be, sealed with seal of the Trust; provided, however, that where
such certificate is signed by a transfer agent or a transfer clerk acting on
behalf of the Trust or a registrar other than a Trustee, officer or employee of
the Trust, the signature of the President or Treasurer and the seal may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates, shall cease to be such officer or officers of the Trust whether
because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Trust, such certificate or
certificates may nevertheless be adopted by the Trust and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signatures shall have been used thereon had not
ceased to be such officer or officers of the Trust.
SECTION 2. Transfer of Shares. Transfers of shares of beneficial interest of any
series of shares of the Trust shall be made only on the books of the Trust by
the owner thereof or by his attorney thereunto authorized by a power of attorney
duly executed and filed with the Secretary or a transfer agent, and only upon
the surrender of any certificate or certificates for such shares. The Trust
shall not impose any restrictions upon the transfer of the shares of any series
of the Trust, but this requirement shall not prevent the charging of customary
transfer agent fees.
SECTION 3. Transfer Agent and Registrar; Regulations. The Trust shall, if and
whenever the Trustees shall do determine, maintain one or more transfer offices
or agencies, each in the charge of a transfer agent designated by the Trustees,
where the shares of beneficial interest of the Trust shall be directly
transferable. The Trust shall, if and whenever the Trustees shall so determine,
maintain one or more registry offices, each in the charge of a registrar
designated by the Trustees, where such shares shall be registered, and no
certificate for shares of the Trust in respect of which a transfer agent and/or
registrar shall have been designated shall be valid unless countersigned by such
transfer agent and/or registered by such registrar. The principal transfer agent
may be located within or without the Commonwealth of Massachusetts and shall
have charge of the stock transfer books, lists and records, which shall be kept
within or without Massachusetts in an office which shall be deemed to be the
stock transfer office of the Trust. The Trustees may also make such additional
rules and regulations as it may deem expedient concerning the issue, transfer
and registration of certificates for shares of the Trust.
SECTION 4. Closing of Transfer Books and Fixing Record Date. The Trustees may
fix in advance a time which shall be not more than sixty (60) days before the
date of any meeting of shareholders, or the date for the payment of any dividend
or the making of any distribution to shareholders or the last day on which the
consent or dissent of shareholders may be effectively expressed for any purpose,
as the record date for determining the shareholders having the right to notice
of and to vote at such meeting, and any adjournment thereof, or the right to
receive such dividend or distribution or the right to give such consent or
dissent, and in such case only shareholders of record on such record date shall
have such right, notwithstanding any transfer of shares on the books of the
Trust after the record date. The Trustees may, without fixing such record date,
close the transfer books for all or any part of such period for any of the
foregoing purposes.
SECTION 5. Lost, Destroyed or Mutilated Certificates. The holder of any shares
of a series of the Trust shall immediately notify the Trust of any loss,
destruction or mutilation of the certificate therefor, and the Trustees may, in
their discretion, cause a new certificate or certificates to be issued to him,
in case of mutilation of the certificate, upon the surrender of the mutilated
certificate, or, in case of loss or destruction of the certificate, upon
satisfactory proof of such loss or destruction and, in any case, if the Trustees
shall so determine, upon the delivery of a bond in such form and in such sum and
with such surety or sureties as the Trustees may direct, to indemnify the Trust
against any claim that may be made against it on account of the alleged loss or
destruction of any such certificate.
SECTION 6. Record Owner of Shares. The Trust shall be entitled to treat the
person in whose name any share of series of the Trust is registered on the books
of the Trust as the owner thereof, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person.
ARTICLE VII
Fiscal Year
The fiscal year of the Trust shall end on December 31, of each year,
provided, however, that the Trustees may from time to time change the fiscal
year.
ARTICLE VIII
Seal
The Trustees may adopt a seal of the Trust which shall be in such form and
shall have such inscription thereon as the Trustees may from time to time
prescribe.
ARTICLE IX
Inspection of Books
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the inspection
of the shareholders; and no shareholder shall have any right of inspecting any
account or book or document of the Trust except as conferred by law or
authorized by the Trustees or by resolution of the shareholders.
ARTICLE X
Custodian
The following provisions shall apply to the employment of the Custodian
pursuant to Article VII of the Declaration of Trust and to any contract entered
into with the Custodian so employed:
(a) The Trustees shall cause to be delivered to the Custodian all
securities owned by the Trust or to which it may become entitled, and
shall order the same to be delivered by the Custodian only in
completion of a sale, exchange, transfer, pledge, loan, or other
disposition thereof, against receipt by the Custodian of the
consideration therefor or a certificate of deposit or a receipt of an
issuer or of its transfer agent, or to a securities depository as
defined in Rule 17f-4 under the Investment Company Act of 1940, as
amended, all as the Trustees may generally or from time to time require
or approve, or to a successor Custodian; and the Trustees shall cause
all funds owned by the Trust or to which it may become entitled to be
paid to the Custodian, and shall order the same disbursed only for
investment against delivery of the securities acquired, or in payment
of expenses, including management compensation, and liabilities of the
Trust, including distributions to shareholders, or to a successor
Custodian.
(b) In case of the resignation, removal or inability to serve of any such
Custodian, the Trustees shall promptly appoint another bank or trust
company meeting the requirements of said Article VII as successor
Custodian. The agreement with the Custodian shall provide that the
retiring Custodian shall, upon receipt of notice of such appointment,
deliver the funds and property of the Trust in its possession to and
only to such successor, and that pending appointment of a successor
Custodian, or a vote of the shareholders to function without a
Custodian, the Custodian shall not deliver funds and property of the
Trust to the Trustees, but may deliver them to a bank or trust company
doing business in Boston, Massachusetts, of its own selection, having
an aggregate capital, surplus and undivided profits, as shown by its
last published report, of not less than $2,000,000, as the property of
the Trust to be held under terms similar to those on which they were
held by the retiring Custodian.
ARTICLE XI
Limitation of Liability and Indemnification
SECTION 1. Limitation of Liability. Provided they have exercised reasonable care
and have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or liable in
any event for neglect or wrongdoing of them or any officer, agent, employee or
investment adviser of the Trust, but nothing contained in the Declaration of
Trust or herein shall protect any Trustee against any liability to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
SECTION 2. Indemnification of Trustees and Officers. The Trust shall indemnify
each person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
has been a Trustee, officer, employee or agent of the Trust, or is or has been
serving at the request of the Trust as a Trustee, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, provided that:
(a) such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust,
(b) with respect to any criminal action or proceeding, he had no reasonable
cause to believe his conduct was unlawful,
(c) unless ordered by a court, indemnification shall be made only as
authorized in the specific case upon a determination that
indemnification of the Trustee, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct
set forth in subparagraphs (a) and (b) above and (e) below, such
determination to be made based upon a review of readily available facts
(as opposed to a full trial-type inquiry) by (i) vote of a majority of
the Disinterested Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in office act on the
matter) or (ii) by independent legal counsel in a written opinion.
(d) in the case of an action or suit by or in the right of the Trust to
procure a judgment in its favor, no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Trust unless and only to the extent that
the court in which such action or suit is brought, or a court of equity
in the county in which the Trust has its principal office, shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, he is fairly and
reasonably entitled to indemnity for such expenses which such court
shall deem proper, and
(e) no indemnification or other protection shall be made or given to any
Trustee or officer of the Trust against any liability to the Trust or
to its security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
Expenses (including attorneys' fees) incurred with respect to any claim,
action, suit or proceeding of the character described in the preceding paragraph
shall be paid by the Trust in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of such person to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Trust as authorized by this Article, provided that either:
(1) such undertaking is secured by a surety bond or some other appropriate
security provided by the recipient, or the Trust shall be insured
against losses arising out of any such advances; or
(2) a majority of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees act on the matter) or an
independent legal counsel in a written opinion shall determine, based
upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 2, a "Disinterested Trustee" is one who is not (i)
an "Interested Person", as defined in the Act, of the Trust (including anyone
who has been exempted from being an "Interested Person" by any rule, regulation,
or order of the Securities and Exchange Commission), or (ii) involved in the
claim, action, suit or proceeding.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Trust, or with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 3. Indemnification of Shareholders. In case any shareholder or former
shareholder shall be held to be personally liable solely by reason of his being
or having been a shareholder and not because of his acts or omissions or for
some other reason, the shareholder or former shareholder (or his heirs,
executors, administrators or other legal representatives or, in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled out of the Trust estate to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust shall, upon
request by the shareholder, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. A holder of shares of a series shall be entitled to indemnification
hereunder only out of assets allocated to that series.
ARTICLE XII
Underwriting Arrangements
Any contract entered into for the sale of shares of the Trust pursuant to
Article VIII, Section 2 of the Declaration of Trust shall require the other
party thereto (hereinafter called the "underwriter") whether acting as principal
or as agent to use reasonable efforts, consistent with the other business of the
underwriter, to secure purchasers for the shares of the Trust.
The underwriter may be granted the right
(a) To purchase as principal, from the Trust, at not less than net asset
value per share, the shares needed, but no more than the shares needed
(except for clerical errors and errors of transmission), to fill
unconditional orders for shares of the Trust received by the
underwriter.
(b) To purchase as principal, from shareholders of the Trust at not less
than net asset value per share such shares as may be presented to the
Trust, or the transfer agent of the Trust, for redemption and as may be
determined by the underwriter in its sole discretion.
(c) to resell any such shares purchased at not less than net asset value
per share.
ARTICLE XIII
Report to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE XIV
Certain Transactions
SECTION 1. Long and Short Positions. Except as hereinafter provided, no officer
or Trustee and no partner, officer, director or shareholder of the manager,
administrator or investment adviser of the Trust or of the underwriter of the
Trust, and no manager, or investment adviser or underwriter of the Trust, shall
take long or short positions in the securities issued by the Trust.
(a) The foregoing provision shall not prevent the underwriter from
purchasing shares of the Trust from the Trust if such purchases are
limited (except for reasonable allowances for clerical errors, delays
and errors of transmission and cancellation of orders) to purchases for
the purpose of filling orders for such shares received by the
underwriter, and provided that orders to purchase from the Trust are
entered with the Trust or the Custodian promptly upon receipt by the
underwriter of purchase orders for such shares, unless the underwriter
is otherwise instructed by its customer.
(b) The foregoing provision shall not prevent the underwriter from
purchasing shares of the Trust as agent for the account of the Trust.
(c) The foregoing provision shall not prevent the purchase from the Trust
or from the underwriter of shares issued by the Trust by any officer or
Trustee of the Trust or by any partner, officer, director or
shareholder of the manager, administrator or investment adviser of the
Trust at the price available to the public generally at the moment of
such purchase or, to the extent that any such person is a shareholder,
at the price available to shareholders of the Trust generally at the
moment of such purchase, or as described in the current Prospectus of
the Trust.
SECTION 2. Loans of Trust Assets. The Trust shall not lend assets of the Trust
to any officer or Trustee of the Trust, or to any partner, officer, director or
shareholder of, or person financially interested in, the manager, or investment
adviser of the Trust, or the underwriter of the Trust, or to the manager, or
investment adviser of the Trust or to the underwriter of the Trust.
SECTION 3. Miscellaneous. The Trust shall not permit any officer or Trustee, or
any officer or director of the manager or investment adviser or underwriter of
the Trust, to deal for or on behalf of the Trust with himself as principal or
agent, or with any partnership, association or corporation in which he has a
financial interest; provided that the foregoing provisions shall not prevent (i)
officers and Trustees of the Trust from buying, holding or selling shares in the
Trust, or from being partners, officers or directors of or otherwise financially
interested in the manager or investment adviser or underwriter of the Trust;
(ii) purchases or sales of securities or other property by the Trust from or to
an affiliated person or to the manager or investment adviser or underwriter of
the Trust if such transaction is exempt from the applicable provisions of the
Act; (iii) purchases of investments from the portfolio of the Trust or sales of
investments owned by the Trust through a security dealer who is, or one or more
of whose partners, shareholders, officers or directors is, an officer or Trustee
of the Trust, if such transactions are handled in the capacity of broker only
and commissions charged do not exceed customary brokerage charges for such
services; (iv) employment of legal counsel, registrar, transfer agent, dividend
disbursing agent or custodian who is, or has a partner, shareholder, officer or
director who is, an officer or Trustee of the Trust if only customary fees are
charged for services to the Trust; (v) sharing statistical, research, legal and
management expenses and office hire and expenses with any other investment
company in which an officer or Trustee of the Trust is an officer,trustee or
director or otherwise financially interested.
References to the manager or investment adviser of the Trust contained in
this Article XIV shall also be deemed to refer to any sub-adviser appointed in
accordance with Article VIII, Section 1 of the Declaration of Trust.
ARTICLE XV
Amendments
Except as provided in Section 3 of Article I of these By-Laws for the
portions of such Section 3 referred to therein, these By-Laws may be amended at
any meeting of the Trustees by a vote of a majority of the Trustees then in
office.
EXHIBIT 99.2(b)
AMENDMENT TO
BY-LAWS
OF
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
December 13, 1993
Pursuant to ARTICLE XV of the BY-LAWS of Eaton Vance Government Obligations
Trust, (the "Trust") upon vote of a majority of the Trustees of the Trust
SECTION 2. of ARTICLE II of the BY-LAWS of the Trust was amended to read as
follows:
SECTION 2. Election of Officers. The President, Treasurer and Secretary shall be
chosen annually by the Trustees.
Except for the offices of President and Secretary, two or more offices may
be held by a single person. The officers shall hold office until their
successors are chosen and qualified.
EXHIBIT 99.5
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
INVESTMENT ADVISORY AGREEMENT
On behalf of Eaton Vance Short-Term Treasury Fund
AGREEMENT made this 4th day of February, 1991, between Eaton Vance
Government Obligations Trust, a Massachusetts business trust (the "Trust") on
behalf of Eaton Vance Short-Term Treasury 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 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
and for administering its affairs and to pay the salaries and fees of all
officers and Trustees of the Trust who are members of the Adviser's organization
and 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. 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 account of the Fund with brokers or dealers or banks 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 banks 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 (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. 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 of 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 Adviser shall be entitled to
receive from the Fund, on a daily basis, compensation is an amount equal to the
aggregate of:
(a) a daily asset-based fee computed by applying the annual rate applicable
to that portion of the total daily net assets of the Fund in each
Category as indicated below:
Category Daily Net Assets Annual Asset Rate
-------- ---------------- -----------------
1 up to $20 million 0.150%
2 $20 million but less than $40 million 0.200%
3 $40 million but less than $500 million 0.250%
4 $500 million but less than $1 billion 0.225%
5 $1 billion but less than $1.5 billion 0.200%
6 $1.5 billion but less than $2 billion 0.190%
7 $2 billion but less than $3 billion 0.180%
8 $3 billion and over 0.170%, plus
(b) a daily income-based fee computed by applying the daily income rate
applicable to that portion of the total daily gross income of the Fund
(which portion shall bear the same relationship to the total daily
gross income on such day as that portion of the total daily net assets
of the Fund in the same category bears to the total daily net assets on
such day) in each Category as indicated below:
Category Daily Net Assets Daily Income Rate
-------- ------------- -----------------
1 up to $20 million 1.50%
2 $20 million but less than $40 million 2.00%
3 $40 million but less than $500 million 2.50%
4 $500 million but less than $1 billion 2.25%
5 $1 billion but less than $1.5 billion 2.00%
6 $1.5 billion but less than $2 billion 1.90%
7 $2 billion but less than $3 billion 1.80%
8 $3 billion and over 1.70%
Such daily compensation shall be paid monthly in arrears on the last
business day of each month. The Fund's daily net assets and gross income shall
be computed in accordance with the Declaration of Trust of the Trust and any
applicable votes and determinations of the Trustees of the Trust.
In case of initiation or termination of the Agreement during any month with
respect to the Fund, the compensation for that month shall be based on the
number of calendar days during which it is in effect.
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 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 maintaining the Fund and continuing its existence,
(ii) registration of the Trust under the Investment Company Act of 1940, (iii)
commissions, fees and other expenses connected with the purchase or sale of
securities and other interests, (iv) auditing, accounting and legal expenses,
(v) taxes and interest, (vi) governmental fees, (vii) expenses of issue, sale,
repurchase and redemption of shares, (viii) expenses of registering and
qualifying the Trust, the Fund and its shares under federal and state securities
laws and of preparing and printing prospectuses for such purposes and for
distributing the same to shareholders and investors, and fees and expenses of
registering and maintaining registrations of the Trust and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, (x) expenses of reports to
governmental officers and commissions, (xi) insurance expenses, (xii)
association membership dues, (xiii) fees, expenses and disbursements of
custodians and subcustodians for all services to the Fund (including without
limitation safekeeping of funds, securities and other investments, keeping of
books and accounts and determination of net asset values), (xiv) fees, expenses
and disbursements of transfer agents, dividend disbursing agents, shareholder
servicing agents and registrars for all services to the Fund, (xv) expenses for
servicing shareholder accounts, (xvi) any direct charges to shareholders
approved by the Trustees of the Trust, (xvii) compensation of any and expenses
of Trustees of the Trust who are not members of the Adviser's organization, and
(xviii) such non-recurring items as may arise, including expenses incurred in
connection with litigation, proceedings and claims and the obligation of the
Trust to indemnify its Trustees and officers with respect thereto.
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 Trust, and that the Adviser may be or become
interested in the Fund as 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 Fund or to any shareholder of the Fund for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses which may be sustained in the purchase, holding or
sale of any security.
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 to
execute the Fund's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such 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, 1992 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 1992 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 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.
9. Limitation of Liability. The Fund shall not be responsible for
obligations of any other series of the Trust. The Adviser expressly acknowledges
the provision in the Declaration of Trust of the Trust (Article XIV, Section 2)
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 use the name "Eaton Vance".
Eaton Vance shall have the right to require the Fund to cease using the name
"Eaton Vance" as part of the Fund's name if the Fund ceases, for any reason, to
employ the 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 "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
EATON VANCE GOVERNMENT EATON VANCE MANAGEMENT
OBLIGATIONS TRUST (on behalf
of Eaton Vance Short-Term Treasury Fund)
By/s/ M. Dozier Gardner By/s/ Curtis H. Jones
- ---------------------------- -------------------------
President Vice President,
and not individually
EXHIBIT 99.6(a)(1)
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
DISTRIBUTION AGREEMENT
AGREEMENT made this 9th day of July, 1984 between EATON VANCE GOVERNMENT
OBLIGATIONS TRUST, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Fund," and EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation having
its principal place of business in said Boston, hereinafter sometimes called the
"Principal Underwriter".
NOW THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties hereto agree:
1. The Fund grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased from the
Fund shall be the net asset value used in determining the public offering price
on which such orders were based. The Principal Underwriter shall notify
Investors Bank & Trust Company, Custodian of the Fund, at the end of each
business day, or as soon thereafter as the orders placed with it have been
compiled, of the number of shares and the prices thereof which the Principal
Underwriter is to purchase as principal for resale. The Principal Underwriter
shall take down and pay for shares ordered from the Fund on or before the tenth
business day (excluding Saturdays) after the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Fund; nor shall it apply to shares, if any, issued
by the Fund in distribution of income or realized capital gains of the Fund
payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to dealers having
selling group agreements with the Principal Underwriter, and to investors, upon
the following terms and conditions.
The public offering price, i.e., the price per share at which the Principal
Underwriter or financial service firm purchasing shares from the Principal
Underwriter may sell shares to the public, shall be the public offering price as
set forth in the current Prospectus relating to said shares, but not to exceed
the net asset value at which the Principal Underwriter is to purchase the
shares, plus a sales charge not o exceed 6.75% of the public offering price (the
net asset value divided by .724). If the resulting public offering price does
not come out to an even cent, the public offering price shall be adjusted to the
nearer cent.
The Principal Underwriter may also sell shares at the net asset value at
which the Principal Underwriter is to purchase such shares, provided such sales
are not inconsistent with the provisions of Section 22(d) of the Investment
Company Act of 1940, as amended, and the rules thereunder, including any
applicable exemptive orders or administrative interpretations or "no action"
positions with respect thereto.
The net asset value of shares of the Fund shall be determined by the Fund
or Investors Bank & Trust Company, as the agent of the Fund, as of the close of
trading on the New York Stock Exchange on each business day on which said
Exchange is open, or as of such other time on each such business day as may be
determined by the Trustees of the Fund, in accordance with the method referred
to in Article XII of the Declaration of Trust of the Fund. The Trust may also
cause the net asset value to be determined in substantially the same manner or
estimated in such manner and as of such other time or times as may from time to
time be agreed upon by the Fund and Principal Underwriter. The Fund will notify
the Principal Underwriter each time the net asset value of the shares is
determined and when such value is so determined it shall be applicable to
transactions as set forth in the current Prospectus relating to shares.
No shares of its stock shall be sold by the Fund during any period when the
determination of net asset value is suspended pursuant to Article XII of the
Declaration of Trust of the Fund, except to the Principal Underwriter, in the
manner and upon the terms above set forth to cover contracts of sale made by the
Principal Underwriter with its customers prior to any such suspension, and
except as provided in the last paragraph of paragraph 1 hereof. The Fund shall
also have the right to suspend the sale of its shares if in the judgment of the
Fund conditions obtaining at any time render such action advisable. The
Principal Underwriter shall have the right to suspend sales at any time, to
refuse to accept or confirm such order from an investor or dealer, or to accept
or confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Fund agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register its shares under the federal Securities Act of 1933 (as
amended from time to time) to the end that there will be available for sale such
number of shares as the Principal Underwriter may reasonably be expected to
sell. The Fund agrees to indemnify and hold harmless the Principal Underwriter
and each person, if any, who controls the Principal Underwriter within the
meaning of Section 15 of the Securities Act of 1933 against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares of the Fund, which may be based upon the Securities Act of
1933 or on any other statute or at common law, on the ground that the
Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Fund in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Fund in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Fund or its security holders to which such Principal
Underwriter or any such controlling person would otherwise be subject by reason
of willful misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement, or (ii) is the Fund to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made against the
Principal Underwriter or any such controlling person unless the Principal
Underwriter or any such controlling person, as the case may be, shall have
notified the Fund in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon the Principal Underwriter or such controlling person (or after
such Principal Underwriter or such controlling person shall have received notice
of such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve it from any liability which the Fund may have to
the person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Fund shall be entitled to
participate, at its own expense, in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but if the Fund
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Principal Underwriter or controlling person or
persons, defendant or defendants in the suit. In the event the Fund elects to
assume the defense of any such suit and retains such counsel, the Principal
Underwriter or controlling person or persons, defendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained by
them, but, in case the Fund does not assume the defense of any such suit, it
shall reimburse the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Fund agrees promptly to notify the Principal
Underwriter of the commencement of any litigation or proceedings against it or
any of its officers or Trustees in connection with the issuance or sale of the
shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Fund and each of its Trustees
and officers and each person, if any, who controls the Fund within the meaning
of Section 15 of the Securities Act of 1933, against any loss, liability,
damages, claim or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, damages, claim or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares of the Fund, which may be based upon the Securities Act of
1933 or any other statute or at common law, on account of any wrongful act of
the Principal Underwriter or any of its employees (including any failure to
conform with any requirement of any state or federal law relating to the sale of
such shares) or on the ground that the registration statement or Prospectus, as
from time to time amended and supplemented, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, insofar as any
such statement or omission was made in reliance upon, and in conformity with
information furnished in writing to the Fund in connection therewith by or on
behalf of the Principal Underwriter, provided, however, that in no case (i) is
the indemnity of the Principal Underwriter in favor of any person indemnified to
be deemed to protect the Fund or any such person against any liability to which
the Fund or any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its or his
duties or by reason of its or his reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Principal Underwriter to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Fund or any person indemnified unless the Fund or such
person, as the case may be, shall have notified the Principal Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Fund or upon such person (or after the Fund or such person shall have received
notice of such service on any designated agent), but failure to notify the
Principal Underwriter of any such claim shall not relieve it from any liability
which it may have to the Fund or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Principal Underwriter shall be entitled to participate, at its
own expense, in the defense, or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Principal Underwriter
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Fund, or to its officers or Trustees, or to any
controlling person or persons, defendant or defendants in the suit. In the event
that the Principal Underwriter elects to assume the defense of any such suit and
retains such counsel, the Fund or such officers or Trustees or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Principal
Underwriter does not elect to assume the defense of any such suit, it shall
reimburse the Fund, any such officers and Trustees or controlling person or
persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them. The Principal Underwriter agrees
promptly to notify the Fund of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
Neither the Principal Underwriter nor any dealer nor any other person is
authorized by the Fund to give any information or to make any representations,
other than those contained in the Registration Statement or Prospectus filed
with the Securities and Exchange Commission under the Securities Act, as amended
(as said Registration Statement and Prospectus may be amended or supplemented
from time to time), covering the shares of the Fund. Neither the Principal
Underwriter nor any dealer nor any other person is authorized to act as agent
for the Fund in connection with the offering or sale of shares of the Fund to
the public or otherwise. All such sales made by the Principal Underwriter shall
be made by it as principal, for its own account. The Principal Underwriter may,
however, act as agent in connection with the repurchase of shares as provided in
paragraph 6 below, or in connection with "exchanges" between investment
companies for which the Principal Underwriter acts as Principal Underwriter or
investment manager as provided in the agreement among such companies as from
time to time in effect.
5. The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the Securities Act
of 1933, as amended, covering its shares and all amendments and supplements
thereto, and preparing and mailing periodic reports to shareholders (including
the expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent stock certificates (if
any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal Underwriter at
its office in Boston, Massachusetts, all shares purchased by it as principal
hereunder; and
(iv) all the federal and state (if any) issue and/or transfer taxes payable
upon the issue by or (in the case of treasury shares) transfer from the Fund to
the Principal Underwriter of any and all shares of the Fund purchased by the
Principal Underwriter hereunder.
The Principal Underwriter agrees that, after the Prospectus and periodic
reports have been set up in type, it will bear the expense of printing and
distributing any copies thereof which are to be used in connection with the
offering of shares to dealers or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by dealers in connection with the offering of the shares for sale to the
public and any expenses of advertising in connection with such offering. The
Fund agrees to pay the expenses of registration and maintaining registration of
its shares for sale under federal and state securities laws, and, if necessary
or advisable in connection therewith, of qualifying the Trust or the Fund as a
dealer or broker, in such states as shall be selected by the Principal
Underwriter and the fees payable to each such state for continuing the
qualification therein until the Principal Underwriter notifies the Fund that it
does not wish such qualification continued.
6. The Fund hereby authorizes the Principal Underwriter to repurchase, upon
the terms and conditions set forth in written instructions given by the Fund to
the Principal Underwriter from time to time, as agent of the Fund and for its
account, such shares of the Fund as may be offered for sale to the Fund from
time to time.
(a) The Principal Underwriter shall notify in writing the Custodian of the
Fund, at the end of each business day, or as soon thereafter as the repurchases
in each pricing period have been compiled, of the number of shares repurchased
for the account of the Fund since the last previous report, together with the
prices at which such repurchases were made, and upon the request of any officer
or Trustee of the Fund shall furnish similar information with respect to all
repurchases made up to the time of the request on any day.
(b) The Fund reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by an
officer of the Principal Underwriter, by telegraph or by written instrument from
an officer of the Fund duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of
a majority of the Trustees of the Fund.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Fund thirty (30) days' written
notice thereof.
(d) The Fund agrees to authorize and direct Investors Bank & Trust Company,
Custodian, to pay, for the account of the Fund, the purchase price of any shares
so repurchased against delivery of the certificates, if any, in proper form for
transfer to the Fund or for cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of any
repurchase of shares under the foregoing authorization and appointment as agent.
(f) The Fund agrees to reimburse the Principal Underwriter, from time to
time on demand, for any reasonable expenses incurred in connection with the
repurchase of shares pursuant to this paragraph 6.
7. If, at any time during the existence of this Agreement, the Fund shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under Massachusetts or federal tax laws,
and shall notify the Principal Underwriter of the form of amendment which it
deems necessary or advisable and the reasons therefor, and, if the Principal
Underwriter declines to assent to such amendment, the Trust may terminate this
Agreement forthwith by written notice to the Principal Underwriter. If, at any
time during the existence of its agreement upon request by the Principal
Underwriter, the Fund fails (after a reasonable time) to make any changes in its
Declaration of Trust, as amended, or in its methods of doing business which are
necessary in order to comply with any requirement of federal law or regulations
of the Securities and Exchange Commission or of a national securities
association of which the Principal Underwriter is or may be a member, relating
to the sale of the shares of the Fund, the Principal Underwriter may terminate
this Agreement forthwith by written notice to the Fund.
8. In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Principal Underwriter nor any officer or
director of the Principal underwriter shall act as a principal. The Principal
Underwriter covenants that it and its officers and directors shall comply with
the provisions of Article XIV of the Fund's By-Laws applicable to them.
9. The Principal Underwriter agrees that it will not take any long or short
positions in the shares of the Fund except as permitted by paragraphs 1 and 6
hereof, and that, so far as it can control the situation, it will prevent any
officer, Director or owner of voting common stock of the Principal Underwriter
from taking any long or short position in the shares of the Fund, except as
permitted by the By-Laws of the Fund as from time to time in effect.
10. The term "net asset value" as used in this Agreement with reference to
the shares of the Fund shall have the same meaning as the term "asset value" as
used in the Declaration of Trust of the Fund, as amended, and as defined in
Article XII thereof.
11. (a)The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, and during the life of
this Agreement will continue to be so resident in the United States, so
organized and a member in good standing of said Association. The Principal
Underwriter will comply with the Fund's Declaration of Trust and By-Laws, and
the 1940 Act and the rules promulgated thereunder, insofar as they are
applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of an open-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
12. This Agreement shall continue in force indefinitely until terminated as
in this Agreement above provided, except that:
(a) this Agreement shall continue in effect for a period of more than two
(2) years from the date of its execution only so long a such continuance is
specifically approved at least annually (i) by the vote of a majority of the
Trustees of the Fund who are not interested persons (as defined in Section
2(a)(19) of the 1940 Act) of the Fund or of the Principal Underwriter cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by the Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act) of the Fund;
(b) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund; and
(c) the Fund shall have the right to terminate this Agreement forthwith in
the event that it shall have been established by a court of competent
jurisdiction that the Principal Underwriter or any director or officer of the
Principal Underwriter has taken any action which results in a breach of the
covenants set out in section 8 hereof.
13. In the event of the assignment (as defined in Section 2(a)(4) of the
Investment Company Act of 1940) of this Agreement by the Principal Underwriter,
this Agreement shall automatically terminate.
14. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Fund, and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts.
15. The services of the Principal Underwriter to the Fund hereunder are not
to be deemed to be exclusive, the Principal Underwriter being free to (a) render
similar services to, and to act as principal underwriter in connection with the
distribution of shares of, other investment companies, and (b) engage in other
business and activities from time to time.
IN WITNESS WHEREOF, the parties hereto have executed into this Agreement on
the day and year first above written.
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
By/s/ M. Dozier Gardner
----------------------------------
President
EATON VANCE DISTRIBUTORS, INC.
By/s/ Duane E. Waldenburg
----------------------------------
President
EXHIBIT 99.6(a)(2)
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
DISTRIBUTION AGREEMENT
EATON VANCE SHORT-TERM TREASURY FUND
AGREEMENT made this 4th day of February, 1991, as amended and restated
February 25, 1991, between EATON VANCE GOVERNMENT OBLIGATIONS TRUST, a
Massachusetts business trust having its principal place of business in Boston in
the Commonwealth of Massachusetts, hereinafter called the "Trust", on behalf of
Eaton Vance Short-Term Treasury Fund (the "Fund"), and EATON VANCE DISTRIBUTORS,
INC., a Massachusetts corporation having its principal place of business in said
Boston, hereinafter sometimes called the "Principal Underwriter".
In consideration of the mutual promises and undertakings herein contained,
the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by dealers or investors as set forth in
the current Prospectus relating to shares of the Fund. The price which the
Principal Underwriter shall pay for the shares so purchased from the Fund shall
be the net asset value use in determining the public offering price on which
such orders were based. The Principal Underwriter shall notify the Custodian of
the Fund, at the end of each business day, or as soon thereafter as the orders
placed with it have been compiled, of the number of shares and the prices
thereof which the Principal Underwriter is to purchase as principal for resale.
The Principal Underwriter shall take down and pay for shares ordered from the
Fund on or before the tenth business day (excluding Saturdays) after the shares
have been so ordered.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued and sold directly to investors by the Fund and not through any broker or
dealer; shall not apply to shares issued in connection with the merger or
consolidation of any other investment company or personal holding company with
the Fund or the acquisition by purchase or otherwise of all (or substantially
all) the assets or the outstanding shares of any such company, by the Fund; and
shall not apply to shares, if any, issued by the Fund in distribution of
realized capital gains of the Fund payable in shares or in cash at the option of
the shareholder.
2. The shares may be resold by the Principal Underwriter to dealers having
selling group agreements with the Principal Underwriter, and to investors, upon
the following terms and conditions.
The public offering price, i.e., the price per share at which the Principal
Underwriter or financial service firm purchasing shares from the Principal
Underwriter may sell shares to the public, shall be the public offering price as
set forth in the current Prospectus relating to said shares, but not to exceed
the net asset value at which the Principal Underwriter is to purchase the
shares.
The net asset value of shares of the Fund shall be determined by the Trust
or the Custodian, as the agent of the Fund, at noon, Eastern time, and as of the
close of trading on the New York Stock Exchange on each business day on which
said Exchange is open, or as of such other time on each such business day as may
be determined by the Trustees of the Trust, in accordance with the method
referred to in Article XII of the Declaration of Trust of the Trust. The Trust
may also cause the net asset value to be determined in substantially the same
manner or estimated in such manner and as of such other time or times as may
from time to time be agreed upon by the Trust and Principal Underwriter. The
Trust will notify the Principal Underwriter each time the net asset value of
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus relating to shares.
No shares of the Fund shall be sold by the Fund during any period when the
determination of net asset value is suspended pursuant to Article XII of the
Declaration of Trust of the Trust, except to the Principal Underwriter, in the
manner and upon the terms above set forth to cover contracts of sale made by the
Principal Underwriter with its customers prior to any such suspension, and
except as provided in the last paragraph of paragraph 1 hereof. The Trust shall
also have the right to suspend the sale of the Fund's shares if in the judgment
of the Trust conditions obtaining at any time render such action advisable. The
Principal Underwriter shall have the right to suspend sales at any time, to
refuse to accept or confirm any order from an investor or financial service
firm, or to accept or confirm any such order in part only, if in the judgment of
the Principal Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of 1933
(as amended from time to time) to the end that there will be available for sale
such number of shares as the Principal Underwriter may reasonably be expected to
sell. The Trust agrees to indemnify and hold harmless the Principal Underwriter
and each person, if any, who controls the Principal Underwriter within the
meaning of Section 15 of the Securities Act of 1933 against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares of the Fund, which may be based upon the Securities Act of
1933 or on any other statute or at common law, on the ground that the
Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Trust or the Fund to
be liable under its indemnity agreement contained in this paragraph with respect
to any claim made against the Principal Underwriter or any such controlling
person unless the Principal Underwriter or any such controlling person, as the
case may be, shall have notified the Trust in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Principal Underwriter or such
controlling person (or after such Principal Underwriter or such controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which the Fund may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate, at the expense of the
Fund, in the defense, or, if the Trust so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Trust elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Trust does not elect to assume the defense of any such suit, the Fund shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
securities, and will indemnify and hold harmless the Fund, the Trust and each of
its Trustees and officers and each person, if any, who controls the Trust within
the meaning of Section 15 of the Securities Act of 1933, against any loss,
liability, damages, claim or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, damages, claim or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any shares of the Fund, which may be based
upon the Securities Act of 1933 or any other statute or at common law, on
account of any wrongful act of the Principal Underwriter or any of its employees
(including any failure to conform with any requirement of any state or federal
law relating to the sale of such securities) or on the ground that the
registration statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund or any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its or his duties or by reason of its
or his reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Trust, the Fund or upon such
person (or after the Trust or such person shall have received notice of such
service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter shall be entitled to participate, at its own expense, in
the defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Principal Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Trust, or to its officers or Trustees, or to any controlling
person or persons, defendant or defendants in the suit. In the event that the
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund or such officers or Trustees or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any such officers and Trustees or controlling person
or persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them. The Principal Underwriter agrees
promptly to notify the Trust of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any of the
Fund's shares.
Neither the Principal Underwriter nor any dealer nor any other person is
authorized by the Trust to give any information or to make any representations,
other than those contained in the Registration Statement or Prospectus filed
with the Securities and Exchange Commission under the Securities Act, as amended
(as said Registration Statement and Prospectus may be amended or supplemented
from time to time), covering the shares of the Fund. Neither the Principal
Underwriter nor any dealer nor any other person is authorized to act as agent
for the Trust or the Fund in connection with the offering or sale of shares of
the Fund to the public or otherwise. All such sales made by the Principal
Underwriter shall be made by it as principal, for its own account. The Principal
Underwriter may, however, act as agent in connection with the repurchase of
shares as provided in paragraph 6 below, or if the Fund elects to offer an
"exchange privilege", in connection with "exchanges" between investment
companies for which the Principal Underwriter acts as Principal Underwriter or
investment manager as provided in the agreement among such companies as from
time to time in effect.
5. The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the Securities Act
of 1933, as amended, covering its shares and all amendments and supplements
thereto, and preparing and mailing periodic reports to shareholders (including
the expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent stock certificates (if
any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal Underwriter at
its office in Boston, Massachusetts, all shares purchased by it as principal
hereunder; and
(iv) all the federal and state (if any) issue and/or transfer taxes payable
upon the issue by or (in the case of treasury shares) transfer from the Fund to
the Principal Underwriter of any and all shares of the Fund purchased by the
Principal Underwriter hereunder.
The Principal Underwriter agrees that, after the Prospectus and periodic
reports have been set up in type, it will bear the expense of printing and
distributing any copies thereof which are to be used in connection with the
offering of shares to dealers or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by dealers in connection with the offering of the Fund's shares for sale to
the public and any expenses of advertising in connection with such offering. The
Fund agrees to pay the expenses of registration and maintaining registration of
its shares for sale under federal and state securities laws, and, if necessary
or advisable in connection therewith, of qualifying the Trust or the Fund as a
dealer or broker, in such states as shall be selected by the Principal
Underwriter and the fees payable to each such state for continuing the
qualification therein until the Principal Underwriter notifies the Trust that it
does not wish such qualification continued.
6. The Trust hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Trust to the Principal Underwriter from time to time, as agent of the Fund and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing the Custodian of the
Fund, at the end of each business day, or as soon thereafter as the repurchases
in each pricing period have been compiled, of the number of shares repurchased
for the account of the Fund since the last previous report, together with the
prices at which such repurchases were made, and upon the request of any officer
or Trustee of the Trust shall furnish similar information with respect to all
repurchases made up to the time of the request on any day.
(b) The Trust reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by an
officer of the Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of
a majority of the Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct the Custodian, to pay, for the
account of the Fund, the purchase price of any shares so repurchased against
delivery of the certificates, if any, in proper form for transfer to the Fund or
for cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of any
repurchase of shares under the foregoing authorization and appointment as agent.
(f) The Trust agrees to reimburse the Principal Underwriter, from time to
time on demand, for any reasonable expenses incurred in connection with the
repurchase of shares of the Fund pursuant to this paragraph 6.
7. If, at any time during the existence of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission ("the Commission") or
other governmental authority or to obtain any advantage under Massachusetts or
federal tax laws, and shall notify the Principal Underwriter of the form of
amendment which it deems necessary or advisable and the reasons therefor, and,
if the Principal Underwriter declines to assent to such amendment, the Trust may
terminate this Agreement forthwith by written notice to the Principal
Underwriter. If, at any time during the existence of its agreement upon request
by the Principal Underwriter, the Trust fails (after a reasonable time) to make
any changes in its Declaration of Trust, as amended, or in its methods of doing
business which are necessary in order to comply with any requirement of federal
law or regulations of the Commission or of a national securities association of
which the Principal Underwriter is or may be a member, relating to the sale of
the shares of the Fund, the Principal Underwriter may terminate this Agreement
forthwith by written notice to the Trust.
8. In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Principal Underwriter nor any officer or
director of the Principal Underwriter shall act as a principal. The Principal
Underwriter covenants that it and its officers and directors shall comply with
the provisions of Article XIV of the Trust's By-Laws applicable to them.
9. The Principal Underwriter agrees that it will not take any long or short
positions in the shares of the Fund except as permitted by paragraphs 1 and 6
hereof, and that, so far as it can control the situation, it will prevent any
officer, director or owner of voting common stock of the Principal Underwriter
from taking any long or short position in the shares of the Fund, except as
permitted by the By-Laws of the Trust as from time to time in effect.
10. The term "net asset value" as used in this Agreement with reference to
the shares of the Fund shall have the same meaning as the term "asset value" as
used in the Declaration of Trust, as amended, and as defined in Article XII
thereof.
11(a). The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, and during the life of
this Agreement will continue to be so resident in the United States, so
organized and a member in good standing of said Association. The Principal
Underwriter will comply with the Trust's Declaration of Trust and By-Laws, and
the Investment Company Act of 1940 (the "1940 Act") and the rules promulgated
thereunder, insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Securities and Exchange
Commission shall prescribe by rules and regulations applicable to it as
Principal Underwriter of an open-end investment company registered under the
1940 Act such accounts, books and other documents as are necessary or
appropriate to record its transactions with the Fund. Such accounts, books and
other documents shall be subject at any time and from time to time to such
reasonable periodic, special and other examinations by the Commission or any
member thereof as the Commission may prescribe. The Principal Underwriter shall
furnish to the Commission within such reasonable time as the Commission may
prescribe copies of or extracts from such records which may be prepared without
effort, expense or delay as the Commission may by order require.
12. This Agreement shall continue in force indefinitely until terminated as
in this Agreement above provided, except that:
(a) this Agreement shall continue in effect for a period of more than one
(1) year from the date of its execution only so long a such continuance is
specifically approved at least annually (i) by the vote of a majority of the
Trustees of the Trust who are not interested persons (as defined in Section
2(a)(19) of the 1940 Act) of the Trust or of the Principal Underwriter cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by the Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act) of the Fund;
(b) either party shall have the right to terminate this Agreement on six
(6) months' written notice thereof given in writing to the other; and
(c) the Trust shall have the right to terminate this Agreement forthwith in
the event that it shall have been established by a court of competent
jurisdiction that the Principal Underwriter or any director or officer of the
Principal Underwriter has taken any action which results in a breach of the
covenants set out in paragraph 8 hereof.
13. In the event of the assignment (as defined in Section 2(a)(4) of the
1940 Act) of this Agreement by the Principal Underwriter, this Agreement shall
automatically terminate.
14. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
15. The services of the Principal Underwriter to the Fund hereunder are not
to be deemed to be exclusive, the Principal Underwriter being free to (a) render
similar services to, and to act as principal underwriter in connection with the
distribution of shares of, other investment companies, and (b) engage in other
business and activities from time to time.
16. The Principal Underwriter expressly acknowledges the provision in
Article XIV, Section 2 of the Trust's Declaration of Trust limiting the personal
liability of the shareholders of the Fund. The Principal Underwriter hereby
agrees that it shall have recourse to the Trust or the Fund for payment of
claims or obligations as between the Trust or the Fund and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
the shareholders or any shareholder of the Fund. The Fund shall not be
responsible for obligations of any other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
amended and restated, on the day and year first above written.
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
(on behalf of Eaton Vance Short-Term Treasury Fund)
By/s/ M. Dozier Gardner
------------------------------
President
EATON VANCE DISTRIBUTORS, INC.
By/s/ H. Day Brigham Jr.
-------------------------------
Vice President
EXHIBIT 99.6(a)(4)
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
DISTRIBUTION AGREEMENT
ON BEHALF OF EV MARATHON GOVERNMENT OBLIGATIONS FUND
AGREEMENT effective as of October 28, 1993 between EATON VANCE GOVERNMENT
OBLIGATIONS TRUST, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Trust", on behalf of EV Marathon Government Obligations Fund (the "Fund"), and
EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation having its principal
place of business in said Boston, hereinafter sometimes called the "Principal
Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein contained,
the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the price paid by investors upon purchasing such shares. The Principal
Underwriter shall notify Investors Bank & Trust Company, Custodian of the Fund,
at the end of each business day, or as soon thereafter as the orders placed with
it have been compiled, of the number of shares and the prices thereof which the
Principal Underwriter is to purchase as principal for resale. The Principal
Underwriter shall take down and pay for shares ordered from the Fund on or
before the eleventh business day (excluding Saturdays) after the shares have
been so ordered.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Fund; nor shall it apply to shares, if any, issued
by the Fund in distribution of income or realized capital gains of the Fund
payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the Principal
Underwriter or financial service firm purchasing shares from the Principal
Underwriter may sell shares to the public, shall be equal to the net asset value
at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the Trust
or Investors Bank & Trust Company, as the agent of the Fund, as of the close of
regular trading on the New York Stock Exchange on each business day on which
said Exchange is open, or as of such other time on each such business day as may
be determined by the Trustees of the Trust, in accordance with the methodology
and procedures for calculating such net asset value authorized by the Trustees.
The Trust may also cause the net asset value to be determined in substantially
the same manner or estimated in such manner and as of such other time or times
as may from time to time be agreed upon by the Trust and Principal Underwriter.
The Trust will notify the Principal Underwriter each time the net asset value of
the Fund's shares is determined and when such value is so determined it shall be
applicable to transactions as set forth in the current Prospectus relating to
the Fund's shares.
No shares of the Fund shall be sold by the Fund during any period when the
determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of 1933
(as amended from time to time) to the end that there will be available for sale
such number of shares as the Principal Underwriter may reasonably be expected to
sell. The Trust agrees to indemnify and hold harmless the Principal Underwriter
and each person, if any, who controls the Principal Underwriter within the
meaning of Section 15 of the Securities Act of 1933 against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares of the Fund, which may be based upon the Securities Act of
1933 or on any other statute or at common law, on the ground that the
Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Trust or the Fund to
be liable under its indemnity agreement contained in this paragraph with respect
to any claim made against the Principal Underwriter or any such controlling
person unless the Principal Underwriter or any such controlling person, as the
case may be, shall have notified the Trust in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Principal Underwriter or such
controlling person (or after such Principal Underwriter or such controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which the Fund may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate, at the expense of the
Fund, in the defense, or, if the Trust so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Trust elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Trust does not elect to assume the defense of any such suit, the Fund shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Trust and each of its Trustees
and officers and each person, if any, who controls the Trust within the meaning
of Section 15 of the Securities Act of 1933, against any loss, liability,
damages, claim or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, damages, claim or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares of the Fund, which may be based upon the Securities Act of
1933 or any other statute or at common law, on account of any wrongful act of
the Principal Underwriter or any of its employees (including any failure to
conform with any requirement of any state or federal law relating to the sale of
such shares) or on the ground that the registration statement or Prospectus, as
from time to time amended and supplemented, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, insofar as any
such statement or omission was made in reliance upon, and in conformity with
information furnished in writing to the Fund in connection therewith by or on
behalf of the Principal Underwriter, provided, however, that in no case (i) is
the indemnity of the Principal Underwriter in favor of any person indemnified to
be deemed to protect the Fund or any such person against any liability to which
the Fund or any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its or his
duties or by reason of its or his reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Principal Underwriter to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Fund or any person indemnified unless the Trust or such
person, as the case may be, shall have notified the Principal Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Trust, the Fund or upon such person (or after the Trust or such person shall
have received notice of such service on any designated agent), but failure to
notify the Principal Underwriter of any such claim shall not relieve it from any
liability which it may have to the Fund or any person against whom such action
is brought otherwise than on account of its indemnity agreement contained in
this paragraph. The Principal Underwriter shall be entitled to participate, at
its own expense, in the defense, or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but if the Principal Underwriter
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Trust, or to its officers or Trustees, or to any
controlling person or persons, defendant or defendants in the suit. In the event
that the Principal Underwriter elects to assume the defense of any such suit and
retains such counsel, the Fund or such officers or Trustees or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them or the Trust, but, in case
the Principal Underwriter does not elect to assume the defense of any such suit,
it shall reimburse the Fund, any such officers and Trustees or controlling
person or persons, defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by them or the Trust. The Principal
Underwriter agrees promptly to notify the Trust of the commencement of any
litigation or proceedings against it in connection with the issue and sale of
any of the Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor any
other person is authorized by the Trust to give any information or to make any
representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (as said Registration Statement and
Prospectus may be amended or supplemented from time to time), covering the
shares of the Fund. Neither the Principal Underwriter nor any financial service
firm nor any other person is authorized to act as agent for the Trust or the
Fund in connection with the offering or sale of shares of the Fund to the public
or otherwise. All such sales made by the Principal Underwriter shall be made by
it as principal, for its own account. The Principal Underwriter may, however,
act as agent in connection with the repurchase of shares as provided in
paragraph 6 below, or in connection with "exchanges" between investment
companies for which the Principal Underwriter acts as Principal Underwriter or
for which an affiliate of the Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the Securities Act
of 1933, as amended, covering its shares and all amendments and supplements
thereto, and preparing and mailing periodic reports to shareholders (including
the expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share certificates
(if any) for shares of the Fund;
(iii) The cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares) transfer from the
Fund to the Principal Underwriter of any and all shares of the Fund purchased by
the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to financial service firms or investors. The
Principal Underwriter further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by the Principal
Underwriter or furnished by it for use by financial service firms in connection
with the offering of the shares of the Fund for sale to the public and any
expenses of advertising in connection with such offering. The Fund agrees to pay
the expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Trust or the Fund as a dealer or broker,
in such states as shall be selected by the Principal Underwriter and the fees
payable to each such state for continuing the qualification therein until the
Principal Underwriter notifies the Trust that it does not wish such
qualification continued.
(c) In addition, the Trust agrees, in accordance with the Fund's
Distribution Plan (the "Plan"), adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act") with respect to
shares, to make certain payments as follows. The Principal Underwriter shall be
entitled to be paid by the Fund a sales commission equal to an amount not
exceeding 5% of the price received by the Fund for each sale of shares
(excluding reinvestment of dividends and distributions), such payment to be made
in the manner set forth in this paragraph 5. The Principal Underwriter shall
also be entitled to be paid by the Fund a separate distribution fee (calculated
in accordance with paragraph 5(d)), such payment to be made in the manner set
forth and subject to the terms of this paragraph 5.
(d) The sales commissions and distribution fees referred to in paragraph
5(c) shall be accrued and paid by the Fund in the following manner. The Fund
shall accrue daily an amount calculated at the rate of .75% per annum of the
daily net assets of the Fund, which net assets shall be computed in accordance
with the governing documents of the Fund and applicable votes and determinations
of the Trustees of the Trust. The daily amounts so accrued throughout the month
shall be paid to the Principal Underwriter on the last day of each month. The
amount of such daily accrual, as so calculated, shall first be applied and
charged to all unpaid sales commissions, and the balance, if any, shall then be
applied and charged to all unpaid distribution fees. No amount shall be accrued
with respect to any day on which there exist no outstanding uncovered
distribution charges of the Principal Underwriter. The amount of such uncovered
distribution charges shall be calculated daily. For purposes of this
calculation, distribution charges of the Principal Underwriter shall include (a)
the aggregate of all sales commissions which the Principal Underwriter has been
paid pursuant to this paragraph (d) plus all sales commissions which it is
entitled to be paid pursuant to paragraph 5(c) since inception of this Agreement
through and including the day next preceding the date of calculation, and (b) an
amount equal to the aggregate of all distribution fees referred to below which
the Principal Underwriter has been paid pursuant to this paragraph (d) plus all
such fees which it is entitled to be paid pursuant to paragraph 5(c) since
inception of this Agreement through and including the day next preceding the
date of calculation. From this sum (distribution charges) there shall be
subtracted (i) the aggregate amount paid or payable to the Principal Underwriter
pursuant to this paragraph (d) since inception of this Agreement through and
including the day next preceding the date of calculation and (ii) the aggregate
amount of all contingent deferred sales charges paid or payable to the Principal
Underwriter since inception of this Agreement through and including the day next
preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
those Trustees of the Trust who are not "interested persons" of the Trust (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of the Plan or any agreements related to it and (ii) all of the
Trustees then in office] shall be computed on such amount and added to such
amount, with the resulting sum constituting the amount of outstanding uncovered
distribution charges of the Principal Underwriter with respect to such day for
all purposes of this Agreement. If the result of such subtraction is a negative
amount, there shall exist no outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day and no amount shall be accrued or
paid to the Principal Underwriter with respect to such day. The aggregate
amounts accrued and paid pursuant to this paragraph (d) during any fiscal year
of the Fund shall not exceed .75% of the average daily net assets of the Fund
for such year.
(e) The Principal Underwriter shall be entitled to receive all contingent
deferred sales charges paid or payable with respect to any day on which there
exist outstanding uncovered distribution charges of the Principal Underwriter.
The Fund shall be entitled to receive all remaining contingent deferred sales
charges paid or payable by shareholders with respect to any day on which there
exist no outstanding uncovered distribution charges of the Principal
Underwriter, provided that no such sales charge which would cause the Fund to
exceed the maximum applicable cap imposed thereon by paragraph (2) of subsection
(d) of Section 26 of Article III of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. shall be imposed.
(f) The persons authorized to direct the disposition of monies paid or
payable on behalf of the Fund pursuant to the Plan or this Agreement shall be
the President or any Vice President of the Trust. Such persons shall provide to
the Trust's Trustees and the Trustees shall review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
(g) In addition to the payments to the Principal Underwriter provided for
in paragraph 5(d), the Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year.
6. The Trust hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Trust to the Principal Underwriter from time to time, as agent of the Fund and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing Investors Bank &
Trust Company, Custodian of the Fund, at the end of each business day, or as
soon thereafter as the repurchases in each pricing period have been compiled, of
the number of shares repurchased for the account of the Fund since the last
previous report, together with the prices at which such repurchases were made,
and upon the request of any officer or Trustee of the Trust shall furnish
similar information with respect to all repurchases made up to the time of the
request on any day.
(b) The Trust reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by an
officer of the Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of
a majority of the Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct Investors Bank & Trust
Company, Custodian, to pay, for the account of the Fund, the purchase price of
any shares so repurchased against delivery of the certificates in proper form
for transfer to the Fund or for cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of any
repurchase of shares under the foregoing authorization and appointment as agent,
except for any sales commission, distribution fee or contingent deferred sales
charges payable under paragraph 5.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund pursuant to this
paragraph 6.
7. If, at any time during the existence of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under Massachusetts or federal tax laws,
and shall notify the Principal Underwriter of the form of amendment which it
deems necessary or advisable and the reasons therefor, and, if the Principal
Underwriter declines to assent to such amendment, the Trust may terminate this
Agreement forthwith by written notice to the Principal Underwriter. If, at any
time during the existence of its agreement upon request by the Principal
Underwriter, the Trust fails (after a reasonable time) to make any changes in
its Declaration of Trust, as amended, or in its methods of doing business which
are necessary in order to comply with any requirement of federal law or
regulations of the Securities and Exchange Commission or of a national
securities association of which the Principal Underwriter is or may be a member,
relating to the sale of the shares of the Fund, the Principal Underwriter may
terminate this Agreement forthwith by written notice to the Trust.
8. The term "net asset value" as used in this Agreement with reference to
the shares of the Fund shall have the same meaning as used in the Declaration of
Trust, as amended, and calculated in the manner referred to in paragraph 2
above.
9. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, and during the life of
this Agreement will continue to be so resident in the United States, so
organized and a member in good standing of said Association. The Principal
Underwriter will comply with the Trust's Declaration of Trust and By-Laws, and
the 1940 Act and the rules promulgated thereunder, insofar as they are
applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Securities and Exchange
Commission shall prescribe by rules and regulations applicable to it as
Principal Underwriter of an open-end investment company registered under the
1940 Act such accounts, books and other documents as are necessary or
appropriate to record its transactions with the Fund. Such accounts, books and
other documents shall be subject at any time and from time to time to such
reasonable periodic, special and other examinations by the Securities and
Exchange Commission or any member or representative thereof as the Securities
and Exchange Commission may prescribe. The Principal Underwriter shall furnish
to the Securities and Exchange Commission within such reasonable time as the
Securities and Exchange Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Securities
and Exchange Commission may by order require.
10. This Agreement shall continue in force indefinitely until terminated as
in this Agreement above provided, except that:
(a) this Agreement shall remain in effect through and including April 28,
1994 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after April 28, 1994 is specifically approved
at least annually (i) by the vote of a majority of the Trustees of the Trust who
are not "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of
the Trust and who have no direct or indirect interest in the operation of the
Plan or this Agreement (the "Rule 12b-1 Trustees") cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Trustees of
the Trust or by vote of a majority of the outstanding voting securities (as
defined in Section 2(a)(42) of the 1940 Act) of the Fund;
(b) this Agreement may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees or by vote of a majority of the outstanding voting
securities of the Fund on not more than sixty days' notice to the Principal
Underwriter. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day
subsequent to the termination of this Agreement;
(c) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund; and
(d) the Trust shall have the right to terminate this Agreement forthwith in
the event that it shall have been established by a court of competent
jurisdiction that the Principal Underwriter or any director or officer of the
Principal Underwriter has taken any action which results in a breach of the
covenants set out in paragraph 9 hereof.
11. In the event of the assignment (as defined in Section 2(a)(4) of the
1940 Act) of this Agreement by the Principal Underwriter, this Agreement shall
automatically terminate.
12. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
13. The services of the Principal Underwriter to the Fund hereunder are not
to be deemed to be exclusive, the Principal Underwriter being free to (a) render
similar services to, and to act as principal underwriter in connection with the
distribution of shares of, other series of the Trust or investment companies,
and (b) engage in other business and activities from time to time.
14. The Principal Underwriter expressly acknowledges the provision in the
Trust's Declaration of Trust limiting the personal liability of the shareholders
of the Fund or the Trustees of the Trust. The Principal Underwriter hereby
agrees that it shall have recourse to the Trust or the Fund for payment of
claims or obligations as between the Trust or the Fund and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
the shareholders or any shareholder of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 28th day of October, 1993.
EATON VANCE GOVERNMENT
OBLIGATIONS TRUST
(on behalf of EV MARATHON
GOVERNMENT OBLIGATIONS FUND)
By/s/ M. Dozier Gardner
----------------------------
President
EATON VANCE DISTRIBUTORS, INC.
By/s/ H. Day Brigham, Jr.
----------------------------
Vice President
EXHIBIT 99.6(a)(5)
EATON VANCE HIGH INCOME TRUST
AMENDED DISTRIBUTION AGREEMENT
AGREEMENT effective as of July 7, 1993 between EATON VANCE HIGH INCOME
TRUST, a Massachusetts business trust having its principal place of business in
Boston in the Commonwealth of Massachusetts, hereinafter called the "Fund," and
EATON VANCE DISTRIBUTORS INC., a Massachusetts corporation having its principal
place of business in said Boston, hereinafter sometimes called the "Principal
Underwriter."
IN CONSIDERATION of the mutual promises and undertakings herein contained,
the parties hereto agree:
1. The Fund grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the price paid by investors upon purchasing such shares. The Principal
Underwriter shall notify Investors Bank & Trust Company, Custodian of the Fund,
at the end of each business day, or as soon thereafter as the orders placed with
it have been compiled, of the number of shares and the prices thereof which the
Principal Underwriter is to purchase as principal for resale. The Principal
Underwriter shall take down and pay for shares ordered from the Fund on or
before the eleventh business day (excluding Saturdays) after the shares have
been so ordered.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Fund; nor shall it apply to shares, if any, issued
by the Fund in distribution of realized capital gains of the Fund payable in
shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the Principal
Underwriter or financial service firm purchasing shares from the Principal
Underwriter may sell shares to the public, shall be equal to the net asset value
at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the Fund
or Investors Bank & Trust Company, as the agent of the Fund, as of the close of
trading on the New York Stock Exchange on each business day on which said
Exchange is open, or as of such other time on each such business day as may be
determined by the Trustees of the Fund, in accordance with the methodology and
procedures for calculating such net asset value authorized by the Trustees. The
Fund may also cause the net asset value to be determined in substantially the
same manner or estimated in such manner and as of such other time or times as
may from time to time be agreed upon by the Fund and Principal Underwriter. The
Fund will notify the Principal Underwriter each time the net asset value of the
Fund's shares is determined and when such value is so determined it shall be
applicable to transactions as set forth in the current Prospectus relating to
its shares.
No shares of the Fund shall be sold by the Fund during any period when the
determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Fund shall also have the right to
suspend the sale of its shares if in the judgment of the Fund conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Fund agrees that it will, from time to time, but subject to the
necessary approval of the shareholders, take such steps as may be necessary to
register its shares under the Federal Securities Act of 1933 (as amended from
time to time) to the end that there will be available for sale such number of
shares as the Principal Underwriter may reasonably be expected to sell. The Fund
agrees to indemnify and hold harmless the Principal Underwriter and each person,
if any, who controls the Principal Underwriter within the meaning of Section 15
of the Securities Act of 1933 against any loss, liability, claim, damages or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, claim, damages or expense and reasonable counsel fees incurred
in connection therewith), arising by reason of any person acquiring any shares
of the Fund, which may be based upon the Securities Act of 1933 or on any other
statute or at common law, on the ground that the Registration Statement or
Prospectus, as from time to time amended and supplemented, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, unless such statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Fund in connection
therewith by or on behalf of the Principal Underwriter; provided, however, that
in no case (i) is the indemnity of the Fund in favor of the Principal
Underwriter and any such controlling person to be deemed to protect such
Principal Underwriter or any such controlling person against any liability to
the Fund or its security holders to which such Principal Underwriter or any such
controlling person would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Fund to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Principal Underwriter or
any such controlling person unless the Principal Underwriter or any such
controlling person, as the case may be, shall have notified the Fund in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Principal
Underwriter or such controlling person (or after such Principal Underwriter or
such controlling person shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve it from any liability which the Fund may have to the person against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Fund shall be entitled to participate, at its
own expense, in the defense, or, if the Fund so elects, to assume the defense of
any suit brought to enforce any such liability, but if the Fund elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Fund elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Fund does not elect to assume the defense of any such suit, it shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Fund agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Fund and each of its Trustees
and officers and each person, if any, who controls the Fund within the meaning
of Section 15 of the Securities Act of 1933, against any loss, liability,
damages, claim or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, damages, claim or expense and reasonable
counsel fees incurred in connection therewith), arising by reason of any person
acquiring any shares of the Fund, which may be based upon the Securities Act of
1933 or any other statute or at common law, on account of any wrongful act of
the Principal Underwriter or any of its employees (including any failure to
conform with any requirement of any state or federal law relating to the sale of
such shares) or on the ground that the registration statement or Prospectus, as
from time to time amended and supplemented, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, insofar as any
such statement or omission was made in reliance upon, and in conformity with
information furnished in writing to the Fund in connection therewith by or on
behalf of the Principal Underwriter, provided, however, that in no case (i) is
the indemnity of the Principal Underwriter in favor of any person indemnified to
be deemed to protect the Fund or any such person against any liability to which
the Fund or any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its or his
duties or by reason of its or his reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Principal Underwriter to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Fund or any person indemnified unless the Fund or such
person, as the case may be, shall have notified the Principal Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Fund or upon such person (or after the Fund or such person shall have received
notice of such service on any designated agent), but failure to notify the
Principal Underwriter of any such claim shall not relieve it from any liability
which it may have to the Fund or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Principal Underwriter shall be entitled to participate, at its
own expense, in the defense, or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Principal Underwriter
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Fund, or to its officers or Trustees, or to any
controlling person or persons, defendant or defendants in the suit. In the event
that the Principal Underwriter elects to assume the defense of any such suit and
retains such counsel, the Fund or such officers or Trustees or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them or the Fund, but, in case
the Principal Underwriter does not elect to assume the defense of any such suit,
it shall reimburse the Fund, any such officers and Trustees or controlling
person or persons, defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by them or the Fund. The Principal
Underwriter agrees promptly to notify the Fund of the commencement of any
litigation or proceedings against it in connection with the issue and sale of
any of the shares.
Neither the Principal Underwriter nor any financial service firm nor any
other person is authorized by the Fund to give any information or to make any
representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (as said Registration Statement and
Prospectus may be amended or supplemented from time to time), covering the
shares of the Fund. Neither the Principal Underwriter nor any financial service
firm nor any other person is authorized to act as agent for the Fund in
connection with the offering or sale of shares of the Fund to the public or
otherwise. All such sales made by the Principal Underwriter shall be made by it
as principal, for its own account. The Principal Underwriter may, however, act
as agent in connection with the repurchase of shares as provided in paragraph 6
below, or in connection with "exchanges" between investment companies for which
the Principal Underwriter acts as Principal Underwriter or for which an
affiliate of the Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the Securities Act
of 1933, as amended, covering its shares and all amendments and supplements
thereto, and preparing and mailing periodic reports to shareholders (including
the expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share certificates
(if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares) transfer from the
Fund to the Principal Underwriter of any and all shares of the Fund purchased by
the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to financial service firms or investors. The
Principal Underwriter further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by the Principal
Underwriter or furnished by it for use by financial service firms in connection
with the offering of the shares of the Fund for sale to the public and any
expenses of advertising in connection with such offering. The Fund agrees to pay
the expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Fund as a dealer or broker, in such
states as shall be selected by the Principal Underwriter and the fees payable to
each such state for continuing the qualification therein until the Principal
Underwriter notifies the Fund that it does not wish such qualification
continued.
(c) In addition, the Fund agrees, in accordance with the Fund's Amended
Distribution Plan (the "Plan"), adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act") with respect to
shares, to make certain payments as follows. The Principal Underwriter shall be
entitled to be paid by the Fund a sales commission equal to an amount not
exceeding 5% of the price received by the Fund for each sale of Fund shares
(excluding reinvestment of dividends and distributions), such payment to be made
in the manner set forth in this paragraph 5. The Principal Underwriter shall
also be entitled to be paid by the Fund a separate distribution fee (calculated
in accordance with paragraph 5(d)), such payment to be made in the manner set
forth and subject to the terms of this paragraph 5.
(d) The sales commissions and distribution fees referred to in paragraph
5(c) shall be accrued and paid by the Fund in the following manner. The Fund
shall accrue daily an amount calculated at the rate of .75% per annum of the
daily net assets of the Fund, which net assets shall be computed as described in
paragraph 2. The daily amounts so accrued throughout the month shall be paid to
the Principal Underwriter on the last day of each month. The amount of such
daily accrual, as so calculated, shall first be applied and charged to all
unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
paragraph (d) (and pursuant to paragraph (d) of the Original Agreement) plus all
sales commissions which it is entitled to be paid pursuant to paragraph 5(c)
(and pursuant to paragraph 5(c) of the Original Agreement) since inception of
the Original Agreement through and including the day next preceding the date of
calculation, and (b) an amount equal to the aggregate of all distribution fees
referred to below which the Principal Underwriter has been paid pursuant to this
paragraph (d) (and pursuant to paragraph (d) of the Original Agreement) plus all
such fees which it is entitled to be paid pursuant to paragraph 5(c) (and
pursuant to paragraph 5(c) of the Original Agreement) since inception of the
Original Agreement through and including the day next preceding the date of
calculation. From this sum (distribution charges) there shall be subtracted (i)
the aggregate amount paid or payable to the Principal Underwriter pursuant to
this paragraph (d) (and pursuant to paragraph (d) of the Original Agreement)
since inception of the Original Agreement through and including the day next
preceding the date of calculation and (ii) the aggregate amount of all
contingent deferred sales charges paid or payable to the Principal Underwriter
since inception of the Original Agreement through and including the day next
preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
those Trustees of the Fund who are not "interested persons" of the Fund (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of the Plan or any agreements related to it and (ii) all of the
Trustees then in office] shall be computed on such amount and added to such
amount, with the resulting sum constituting the amount of outstanding uncovered
distribution charges of the Principal Underwriter with respect to such day for
all purposes of this Agreement. If the result of such subtraction is a negative
amount, there shall exist no outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day and no amount shall be accrued or
paid to the Principal Underwriter with respect to such day. The aggregate
amounts accrued and paid pursuant to this paragraph (d) during any fiscal year
of the Fund shall not exceed .75% of the average daily net assets of the Fund
for such year.
(e) The Principal Underwriter shall be entitled to receive all contingent
deferred sales charges paid or payable with respect to any day on which there
exist outstanding uncovered distribution charges of the Principal Underwriter.
The Fund shall be entitled to receive all remaining contingent deferred sales
charges paid or payable by shareholders with respect to any day on which there
exist no outstanding uncovered distribution charges of the Principal
Underwriter, provided that no such sales charge which would cause the Fund to
exceed the maximum applicable cap imposed thereon by paragraph (2) of subsection
(d) of Section 26 of Article III of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. shall be imposed.
(f) The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to the Plan or this Agreement shall be the
President or any Vice President of the Fund. Such persons shall provide to the
Fund's Trustees and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
(g) In addition to the payments to the Principal Underwriter provided for
in paragraph 5(d), the Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year.
6. The Fund hereby authorizes the Principal Underwriter to repurchase, upon
the terms and conditions set forth in written instructions given by the Fund to
the Principal Underwriter from time to time, as agent of the Fund and for its
account, such shares of the Fund as may be offered for sale to the Fund from
time to time.
(a) The Principal Underwriter shall notify in writing Investors Bank &
Trust Company, Custodian of the Fund, at the end of each business day, or as
soon thereafter as the repurchases in each pricing period have been compiled, of
the number of shares repurchased for the account of the Fund since the last
previous report, together with the prices at which such repurchases were made,
and upon the request of any officer or Trustee of the Fund shall furnish similar
information with respect to all repurchases made up to the time of the request
on any day.
(b) The Fund reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by an
officer of the Principal Underwriter, by telegraph or by written instrument from
an officer of the Fund duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of
a majority of the Trustees of the Fund.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Fund thirty (30) days' written
notice thereof.
(d) The Fund agrees to authorize and direct Investors Bank & Trust Company,
Custodian, to pay, for the account of the Fund, the purchase price of any shares
so repurchased against delivery of the certificates in proper form for transfer
to the Fund or for cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in respect of any
repurchase of shares under the foregoing authorization and appointment as agent,
except for any sales commission, distribution fee or contingent deferred sales
charges payable under paragraph 5.
(f) The Fund agrees to reimburse the Principal Underwriter, from time to
time on demand, for any reasonable expenses incurred in connection with the
repurchase of shares of the Fund pursuant to this paragraph 6.
7. If, at any time during the existence of this Agreement, the Fund shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under Massachusetts or federal tax laws,
and shall notify the Principal Underwriter of the form of amendment which it
deems necessary or advisable and the reasons therefor, and, if the Principal
Underwriter declines to assent to such amendment, the Fund may terminate this
Agreement forthwith by written notice to the Principal Underwriter. If, at any
time during the existence of its agreement upon request by the Principal
Underwriter, the Fund fails (after a reasonable time) to make any changes in its
Declaration of Trust, as amended, or in its methods of doing business which are
necessary in order to comply with any requirement of federal law or regulations
of the Securities and Exchange Commission or of a national securities
association of which the Principal Underwriter is or may be a member, relating
to the sale of the shares of the Fund, the Principal Underwriter may terminate
this Agreement forthwith by written notice to the Fund.
8. In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Principal Underwriter nor any officer or
director of the Principal Underwriter shall act as a principal. The Principal
Underwriter covenants that it and its officers and directors shall comply with
the provisions of the Fund's By-Laws applicable to them.
9. The Principal Underwriter agrees that it will not take any long or short
positions in the shares of the Fund except as permitted by paragraphs 1 and 6
hereof, and that, so far as it can control the situation, it will prevent any
officer, director or owner of voting common stock of the Principal Underwriter
from taking any long or short position in the shares of the Fund, except as
permitted by the By-Laws of the Fund as from time to time in effect.
10. The term "net asset value" as used in this Agreement with reference to
the shares of the Fund shall have the same meaning as used in the Declaration of
Trust and calculated in the manner referred to in paragraph 2 above.
11. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, and during the life of
this Agreement will continue to be so resident in the United States, so
organized and a member in good standing of said Association. The Principal
Underwriter will comply with the Fund's Declaration of Trust and By-Laws, and
the 1940 Act and the rules promulgated thereunder, insofar as they are
applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Securities and Exchange
Commission shall prescribe by rules and regulations applicable to it as
Principal Underwriter of an open-end investment company registered under the
1940 Act such accounts, books and other documents as are necessary or
appropriate to record its transactions with the Fund. Such accounts, books and
other documents shall be subject at any time and from time to time to such
reasonable periodic, special and other examinations by the Securities and
Exchange Commission or any member or representative thereof as the Securities
and Exchange Commission may prescribe. The Principal Underwriter shall furnish
to the Securities and Exchange Commission within such reasonable time as the
Securities and Exchange Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Securities
and Exchange Commission may by order require.
12. This Agreement shall continue in force indefinitely until terminated as
in this Agreement above provided, except that:
(a) this Agreement shall remain in effect through and including April 28,
1994 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after April 28, 1994 is specifically approved
at least annually (i) by the vote of a majority of the Trustees of the Fund who
are not "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of
the Fund and who have no direct or indirect interest in the operation of the
Plan or this Agreement (the "Rule 12b-1 Trustees") cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Trustees of
the Fund or by vote of a majority of the outstanding voting securities (as
defined in Section 2(a)(42) of the 1940 Act) of the Fund;
(b) this Agreement may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees or by vote of a majority of the outstanding voting
securities of the Fund on not more than sixty (60) days' notice to the Principal
Underwriter. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day
subsequent to the termination of this Agreement;
(c) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund; and
(d) the Fund shall have the right to terminate this Agreement forthwith in
the event that it shall have been established by a court of competent
jurisdiction that the Principal Underwriter or any director or officer of the
Principal Underwriter has taken any action which results in a breach of the
covenants set out in paragraph 8 hereof.
13. In the event of the assignment (as defined in Section 2(a)(4) of the
1940 Act) of this Agreement by the Principal Underwriter, this Agreement shall
automatically terminate.
14. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Fund and that of
the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
15. The services of the Principal Underwriter to the Fund hereunder are not
to be deemed to be exclusive, the Principal Underwriter being free to (a) render
similar service to, and to act as principal underwriter in connection with the
distribution of shares of other investment companies, and (b) engage in other
business and activities from time to time.
16. The Principal Underwriter expressly acknowledges the provision in the
Fund's Declaration of Trust limiting the personal liability of the shareholders
of the Fund or the Trustees of the Fund. The Principal Underwriter hereby agrees
that it shall have recourse to the Fund for payment of claims or obligations as
between the Fund and the Principal Underwriter arising out of this Agreement and
shall not seek satisfaction from the shareholders or any shareholder of the Fund
or from the Trustees or any Trustee of the Fund.
17. All references in this Agreement to the "Original Agreement" shall mean
the Distribution Agreement dated August 1, 1986 between the Fund and the
Principal Underwriter.
18. This Agreement shall replace and be substituted for the Original
Agreement as of the opening of business on July 7, 1993, and this Agreement
shall be effective as of such time. The outstanding uncovered distribution
charges of the Principal Underwriter calculated under the Original Agreement as
of the close of business on July 6, 1993 shall be the outstanding uncovered
distribution charges of the Principal Underwriter calculated under this
Agreement as of the opening of business on July 7, 1993.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 7th day of July, 1993.
EATON VANCE HIGH INCOME TRUST
By/s/ James B. Hawkes
------------------------------
James B. Hawkes, President
EATON VANCE DISTRIBUTORS INC.
By/s/ H. Day Brigham, Jr.
-------------------------------
H. Day Brigham, Vice President
EXHIBIT 99.6(a)(6)
EATON VANCE HIGH INCOME TRUST
AMENDED DISTRIBUTION AGREEMENT
ON BEHALF OF EV CLASSIC HIGH INCOME FUND
AGREEMENT effective as of January 27, 1995 between EATON VANCE HIGH INCOME
TRUST, a Massachusetts business trust having its principal place of business in
Boston in the Commonwealth of Massachusetts, hereinafter called the "Trust", on
behalf of EV Classic High Income Fund (the "Fund"), and EATON VANCE
DISTRIBUTORS, INC., a Massachusetts corporation having its principal place of
business in said Boston, hereinafter sometimes called the "Principal
Underwriter".
IN CONSIDERATION of the mutual promises and undertakings herein contained,
the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the price paid by investors upon purchasing such shares. The Principal
Underwriter shall notify Investors Bank & Trust Company, Custodian of the Fund
("IBT"), and The Shareholder Services Group, Inc., Transfer Agent of the Fund
("TSSG"), or a successor transfer agent, at the end of each business day, or as
soon thereafter as the orders placed with it have been compiled, of the number
of shares and the prices thereof which the Principal Underwriter is to purchase
as principal for resale. The Principal Underwriter shall take down and pay for
shares ordered from the Fund on or before the eleventh business day (excluding
Saturdays) after the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Fund; nor shall it apply to shares, if any, issued
by the Fund in distribution of income or realized capital gains of the Fund
payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the Principal
Underwriter or financial service firm purchasing shares from the Principal
Underwriter may sell shares to the public, shall be equal to the net asset value
at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the Trust
or IBT, as the agent of the Fund, as of the close of regular trading on the New
York Stock Exchange on each business day on which said Exchange is open, or as
of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. The Trust may also
cause the net asset value to be determined in substantially the same manner or
estimated in such manner and as of such other time or times as may from time to
time be agreed upon by the Trust and Principal Underwriter. The Trust will
notify the Principal Underwriter each time the net asset value of the Fund's
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when the
determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Trust shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of
1933, as amended from time to time, (the "1933 Act"), to the end that there will
be available for sale such number of shares as the Principal Underwriter may
reasonably be expected to sell. The Trust agrees to indemnify and hold harmless
the Principal Underwriter and each person, if any, who controls the Principal
Underwriter within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any shares of the Fund, which may be based
upon the 1933 Act or on any other statute or at common law, on the ground that
the Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (i) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability to the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Trust or the Fund to
be liable under its indemnity agreement contained in this paragraph with respect
to any claim made against the Principal Underwriter or any such controlling
person unless the Principal Underwriter or any such controlling person, as the
case may be, shall have notified the Trust in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Principal Underwriter or such
controlling person (or after such Principal Underwriter or such controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which the Fund may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate, at the expense of the
Fund, in the defense, or, if the Trust so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Trust elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Trust does not elect to assume the defense of any such suit, the Fund shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Trust and each of its Trustees
and officers and each person, if any, who controls the Trust within the meaning
of Section 15 of the 1933 Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith), arising by reason of any person acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund or any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its or his duties or by reason of its
or his reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Trust, the Fund or upon such
person (or after the Trust or such person shall have received notice of such
service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter shall be entitled to participate, at its own expense, in
the defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Principal Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Trust, or to its officers or Trustees, or to any controlling
person or persons, defendant or defendants in the suit. In the event that the
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund or such officers or Trustees or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any such officers and Trustees or controlling person
or persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them or the Trust. The Principal Underwriter
agrees promptly to notify the Trust of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor any
other person is authorized by the Trust to give any information or to make any
representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act, (as said Registration Statement and Prospectus may be
amended or supplemented from time to time), covering the shares of the Fund.
Neither the Principal Underwriter nor any financial service firm nor any other
person is authorized to act as agent for the Trust or the Fund in connection
with the offering or sale of shares of the Fund to the public or otherwise. All
such sales made by the Principal Underwriter shall be made by it as principal,
for its own account. The Principal Underwriter may, however, act as agent in
connection with the repurchase of shares as provided in paragraph 6 below, or in
connection with "exchanges" between investment companies for which the Principal
Underwriter acts as Principal Underwriter or for which an affiliate of the
Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
Investment Company Act of 1940, as amended from time to time, (the "1940 Act")
covering its shares and all amendments and supplements thereto, and preparing
and mailing periodic reports to shareholders (including the expense of setting
up in type any such Registration Statement, Prospectus or periodic report);
(ii) the cost of preparing temporary and permanent share certificates
(if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares) transfer from the
Fund to the Principal Underwriter of any and all shares of the Fund purchased by
the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to financial service firms or investors. The
Principal Underwriter further agrees that it will bear the expenses of
preparing, printing and distributing any other literature used by the Principal
Underwriter or furnished by it for use by financial service firms in connection
with the offering of the shares of the Fund for sale to the public and any
expenses of advertising in connection with such offering. The Fund agrees to pay
the expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Trust or the Fund as a dealer or broker,
in such states as shall be selected by the Principal Underwriter and the fees
payable to each such state for continuing the qualification therein until the
Principal Underwriter notifies the Trust that it does not wish such
qualification continued.
(c) In addition, the Trust agrees, in accordance with the Fund's Amended
Distribution Plan (the "Plan"), adopted pursuant to Rule 12b-1 under the 1940
Act with respect to shares, to make certain payments as follows. The Principal
Underwriter shall be entitled to be paid by the Fund a sales commission equal to
an amount not exceeding 6.25% of the price received by the Fund for each sale of
shares (excluding reinvestment of dividends and distributions), such payment to
be made in the manner set forth in this paragraph 5. The Principal Underwriter
shall also be entitled to be paid by the Fund a separate distribution fee
(calculated in accordance with paragraph 5(d)), such payment to be made in the
manner set forth and subject to the terms of this paragraph 5.
(d) The sales commissions and distribution fees referred to in paragraph
5(c) shall be accrued and paid by the Fund in the following manner. The Fund
shall accrue daily an amount calculated at the rate of .75% per annum of the
daily net assets of the Fund, which net assets shall be computed as described in
paragraph 2. The daily amounts so accrued throughout the month shall be paid to
the Principal Underwriter on the last day of each month. The amount of such
daily accrual, as so calculated, shall first be applied and charged to all
unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
paragraph (d) (and pursuant to paragraph (d) of the Original Agreement) plus all
sales commissions which it is entitled to be paid pursuant to paragraph 5(c)
(and pursuant to paragraph 5(c) of the Original Agreement) since inception of
the Original Agreement through and including the day next preceding the date of
calculation, and (b) an amount equal to the aggregate of all distribution fees
referred to below which the Principal Underwriter has been paid pursuant to this
paragraph (d) (and pursuant to paragraph (d) of the Original Agreement) plus all
such fees which it is entitled to be paid pursuant to paragraph 5(c) (and
pursuant to paragraph 5(c) of the Original Agreement) since inception of the
Original Agreement through and including the day next preceding the date of
calculation. From this sum (distribution charges) there shall be subtracted (i)
the aggregate amount paid or payable to the Principal Underwriter pursuant to
this paragraph (d) (and pursuant to paragraph (d) of the Original Agreement)
since inception of the Original Agreement through and including the day next
preceding the date of calculation and (ii) the aggregate amount of all
contingent deferred sales charges paid or payable to the Principal Underwriter
since inception of the Original Agreement through and including the day next
preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
those Trustees of the Trust who are not "interested persons" of the Trust (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of the Plan or any agreements related to it (the "Rule 12b-1
Trustees") and (ii) all of the Trustees then in office] shall be computed on
such amount and added to such amount, with the resulting sum constituting the
amount of outstanding uncovered distribution charges of the Principal
Underwriter with respect to such day for all purposes of this Agreement. If the
result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this paragraph (d) during any fiscal year of the Fund shall not
exceed .75% of the average daily net assets of the Fund for such year.
(e) The Principal Underwriter shall be entitled to receive all contingent
deferred sales charges paid or payable with respect to any day on which there
exist outstanding uncovered distribution charges of the Principal Underwriter.
The Fund shall be entitled to receive all remaining contingent deferred sales
charges paid or payable by shareholders with respect to any day on which there
exist no outstanding uncovered distribution charges of the Principal
Underwriter, provided that no such sales charge which would cause the Fund to
exceed the maximum applicable cap imposed thereon by paragraph (2) of subsection
(d) of Section 26 of Article III of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. shall be imposed.
(f) The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to the Plan or this Agreement shall be the
President or any Vice President of the Trust. Such persons shall provide to the
Trust's Trustees and the Trustees shall review, at least quarterly, a written
report of the amounts so expended and the purposes for which such expenditures
were made.
(g) In addition to the payments to the Principal Underwriter provided for
in paragraph 5(d), the Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year.
6. The Trust hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Trust to the Principal Underwriter from time to time, as agent of the Fund and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing IBT and TSSG at the
end of each business day, or as soon thereafter as the repurchases in each
pricing period have been compiled, of the number of shares repurchased for the
account of the Fund since the last previous report, together with the prices at
which such repurchases were made, and upon the request of any officer or Trustee
of the Trust shall furnish similar information with respect to all repurchases
made up to the time of the request on any day.
(b) The Trust reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by an
officer of the Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of
a majority of the Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct IBT to pay, for the account of
the Fund, the purchase price of any shares so repurchased against delivery of
the certificates in proper form for transfer to the Fund or for cancellation by
the Fund.
(e) The Principal Underwriter shall receive no commission in respect of any
repurchase of shares under the foregoing authorization and appointment as agent,
except for any sales commission, distribution fee or contingent deferred sales
charges payable under paragraph 5.
(f) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund pursuant to this
paragraph 6.
7. If, at any time during the existence of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or Federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of Federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8. The term "net asset value" as used in this Agreement with reference to
the shares of the Fund shall have the same meaning as used in the Declaration of
Trust, as amended, and calculated in the manner referred to in paragraph 2
above.
9(a). The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter will comply with the Trust's Declaration
of Trust and By-Laws, and the 1940 Act and the rules promulgated thereunder,
insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of an open-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
10. This Agreement shall continue in force indefinitely until terminated as
in this Agreement above provided, except that:
(a) this Agreement shall remain in effect through and including April 28,
1995, and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance is specifically approved at least annually (i)
by the vote of a majority of the Rule 12b-1 Trustees cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Trustees of
the Trust or by vote of a majority of the outstanding voting securities of the
Fund;
(b) this Agreement may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees or by vote of a majority of the outstanding voting
securities of the Fund on not more than sixty (60) days' notice to the Principal
Underwriter. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day
subsequent to the termination of this Agreement;
(c) the Principal Underwriter shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
Fund; and
(d) the Trust shall have the right to terminate this Agreement forthwith in
the event that it shall have been established by a court of competent
jurisdiction that the Principal Underwriter or any director or officer of the
Principal Underwriter has taken any action which results in a breach of the
covenants set out in paragraph 9 hereof.
11. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
12. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
13. The services of the Principal Underwriter to the Fund hereunder are not
to be deemed to be exclusive, the Principal Underwriter being free to (a) render
similar service to, and to act as principal underwriter in connection with the
distribution of shares of, other series of the Trust or other investment
companies, and (b) engage in other business and activities from time to time.
14. The terms "vote of a majority of the outstanding voting securities,"
"assignment" and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
15. The Principal Underwriter expressly acknowledges the provision in the
Trust's Declaration of Trust limiting the personal liability of the shareholders
of the Fund or the Trustees of the Trust. The Principal Underwriter hereby
agrees that it shall have recourse to the Trust or the Fund for payment of
claims or obligations as between the Trust or the Fund and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
the shareholders or any shareholder of the Trust or from the Trustees or any
Trustee of the Trust. The Fund shall not be responsible for obligations of any
other series of the Trust.
16. All references in this Agreement to the "Original Agreement" shall mean
the Distribution Agreement dated May 31, 1994 between the Trust on behalf of the
Fund and the Principal Underwriter.
17. This Agreement shall amend, replace and be substituted for the Original
Agreement as of the opening of business on January 30, 1995, and this Agreement
shall be effective as of such time. The outstanding uncovered distribution
charges of the Principal Underwriter calculated under the Original Agreement as
of the close of business on January 29, 1995 shall be the outstanding uncovered
distribution charges of the Principal Underwriter calculated under this
Agreement as of the opening of business on January 30, 1995.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 27th day of January, 1995.
EATON VANCE HIGH INCOME TRUST
(on behalf of EV CLASSIC HIGH INCOME FUND)
By/s/ M. Dozier Gardner
------------------------------------------
President
EATON VANCE DISTRIBUTORS INC.
By/s/ Wharton P. Whitaker
------------------------------------------
President
EXHIBIT 99.8
24 Federal Street
Boston, MA 02110
(617) 482-8260
October 15, 1992
Eaton Vance Government Obligations Trust hereby adopts and agrees to become a
party to the attached Master Custodian Agreement between the Eaton Vance Group
of Funds and Investors Bank & Trust Company on behalf of the series of the Trust
listed on the attached Schedule A.
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
BY: /s/ James L. O'Conner
-------------------------------
Treasurer
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
BY: /s/ Henry M. Joyce
--------------------------
Title
<PAGE>
June 19, 1995
Schedule A
EATON VANCE MUTUAL FUNDS TRUST (formerly Government Obligations Trust)
EV Traditional Government Obligations Fund
EV Marathon Government Obligations
Fund EV Classic Government Obligations Fund
Eaton Vance Short-Term Treasury Fund
EV Classic High Income Fund
EV Marathon High Income Fund
<PAGE>
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions ...................................................... 1-3
2. Employment of Custodian and Property to be held by it ............. 3-4
3. Duties of the Custodian with Respect to
Property of the Fund .............................................. 4
A. Safekeeping and Holding of Property ........................... 4
B. Delivery of Securities ........................................ 4-7
C. Registration of Securities .................................... 7
D. Bank Accounts ................................................. 8
E. Payments for Shares of the Fund ............................... 8
F. Investment and Availability of Federal Funds .................. 8
G. Collections ................................................... 8-9
H. Payment of Fund Moneys ........................................ 9-11
I. Liability for Payment in Advance of
Receipt of Securities Purchased ............................... 11
J. Payments for Repurchases of Redemptions
of Shares of the Fund ......................................... 11-12
K. Appointment of Agents by the Custodian ........................ 12
L. Deposit of Fund Portfolio Securities in Securities Systems .... 12-14
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper ................................... 14-16
N. Segregated Account ............................................ 17
O. Ownership Certificates for Tax Purposes ....................... 17
P. Proxies ....................................................... 17
Q. Communications Relating to Fund Portfolio Securities .......... 18
R. Exercise of Rights; Tender Offers ............................. 18
S. Depository Receipts ........................................... 19
T. Interest Bearing Call or Time Deposits ........................ 19
U. Options, Futures Contracts and Foreign Currency Transactions .. 19-21
V. Actions Permitted Without Express Authority ................... 21
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value ............................... 22
5. Records and Miscellaneous Duties .............................. 22
6. Opinion of Fund`s Independent Public Accountants .............. 23
7. Compensation and Expenses of Bank ............................. 23
8. Responsibility of Bank ........................................ 23-24
9. Persons Having Access to Assets of the Fund ................... 24
10. Effective Period, Termination and Amendment;
Successor Custodian ........................................... 25
11. Interpretive and Additional Provisions ........................ 26
12. Notices ....................................................... 26
13. Massachusetts Law to Apply .................................... 26
14. Adoption of the Agreement by the Fund ......................... 26
<PAGE>
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Eaton
Vance Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository but
only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(f) "Federal Book-Entry System" shall mean the book-entry system referred
to in Rule 17f-4(b) under the Investment Company Act of 1940 for United States
and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a system
maintained by the Custodian or by a subcustodian employed pursuant to Section 2
hereof for the holding of commercial paper in book-entry form but only if the
Custodian has received a certified copy of a vote of the Board approving the
participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper instructions" in
respect of any of the matters referred to in this Agreement upon receipt of
written or facsimile instructions signed by such one or more person or persons
as the Board shall have from time to time authorized to give the particular
class of instructions in question. Electronic instructions for the purchase and
sale of securities which are transmitted by Eaton Vance Management to the
Custodian through the Eaton Vance equity trading system and the Eaton Vance
fixed income trading system shall be deemed to be proper instructions; the Fund
shall cause all such instructions to be confirmed in writing. Different persons
may be authorized to give instructions for different purposes. A certified copy
of a vote of the Board may be received and accepted by the Custodian as
conclusive evidence of the authority of any such person to act and may be
considered as in full force and effect until receipt of written notice to the
contrary. Such instructions may be general or specific in terms and, where
appropriate, may be standing instructions. Unless the vote delegating authority
to any person or persons to give a particular class of instructions specifically
requires that the approval of any person, persons or committee shall first have
been obtained before the Custodian may act on instructions of that class, the
Custodian shall be under no obligation to question the right of the person or
persons giving such instructions in so doing. Oral instructions will be
considered proper instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be confirmed
in writing. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian. Upon receipt of a
certificate signed by two officers of the Fund as to the authorization by the
President and the Treasurer of the Fund accompanied by a detailed description of
the communication procedures approved by the President and the Treasurer of the
Fund, "proper instructions" may also include communications effected directly
between electromechanical or electronic devices provided that the President and
Treasurer of the Fund and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets. In performing its duties
generally, and more particularly in connection with the purchase, sale and
exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.
2. Employment of Custodian and Property to be Held by It
The Fund hereby appoints and employs the Bank as its Custodian and Agent in
accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Fund agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Fund
A. Safekeeping and Holding of Property The Custodian shall keep safely all
property of the Fund and on behalf of the Fund shall from time to time
receive delivery of Fund property for safekeeping. The Custodian shall
hold, earmark and segregate on its books and records for the account of
the Fund all property of the Fund, including all securities,
participation interests and other assets of the Fund (1) physically
held by the Custodian, (2) held by any subcustodian referred to in
Section 2 hereof or by any agent referred to in Paragraph K hereof, (3)
held by or maintained in The Depository Trust Company or in
Participants Trust Company or in an Approved Clearing Agency or in the
Federal Book-Entry System or in an Approved Foreign Securities
Depository, each of which from time to time is referred to herein as a
"Securities System", and (4) held by the Custodian or by any
subcustodian referred to in Section 2 hereof and maintained in any
Approved Book-Entry System for Commercial Paper.
B. Delivery of Securities The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or deemed
to be held) by the Custodian or maintained in a Securities System
account or in an Approved Book-Entry System for Commercial Paper
account only upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, and
only in the following cases:
1) Upon sale of such securities or participation interests for the
account of the Fund, but only against receipt of payment
therefor; if delivery is made in Boston or New York City,
payment therefor shall be made in accordance with generally
accepted clearing house procedures or by use of Federal Reserve
Wire System procedures; if delivery is made elsewhere payment
therefor shall be in accordance with the then current "street
delivery" custom or in accordance with such procedures agreed to
in writing from time to time by the parties hereto; if the sale
is effected through a Securities System, delivery and payment
therefor shall be made in accordance with the provisions of
Paragraph L hereof; if the sale of commercial paper is to be
effected through an Approved Book-Entry System for Commercial
Paper, delivery and payment therefor shall be made in accordance
with the provisions of Paragraph M hereof; if the securities are
to be sold outside the United States, delivery may be made in
accordance with procedures agreed to in writing from time to
time by the parties hereto; for the purposes of this
subparagraph, the term "sale" shall include the disposition of a
portfolio security (i) upon the exercise of an option written by
the Fund and (ii) upon the failure by the Fund to make a
successful bid with respect to a portfolio security, the
continued holding of which is contingent upon the making of such
a bid;
2) Upon the receipt of payment in connection with any repurchase
agreement or reverse repurchase agreement relating to such
securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; provided that, in any such case, the
cash or other consideration is to be delivered to the Custodian
or any subcustodian employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name
of the Fund or into the name of any nominee of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Paragraph K hereof or into the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof; or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number
of units; provided that, in any such case, the new securities or
participation interests are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance
with the "street delivery" custom; provided that the Custodian
shall adopt such procedures as the Fund from time to time shall
approve to ensure their prompt return to the Custodian by the
broker in the event the broker elects not to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the Issuer of such securities, or pursuant
to provisions for conversion of such securities, or pursuant to
any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2
hereof;
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender of
interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;
9) For delivery in connection with any loans of securities made by
the Fund (such loans to be made pursuant to the terms of the
Fund's current registration statement), but only against receipt
of adequate collateral as agreed upon from time to time by the
Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies
or instrumentalities; except that in connection with any
securities loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized by the
U.S. Department of Treasury, the Custodian will not be held
liable or responsible for the delivery of securities loaned by
the Fund prior to the receipt of such collateral;
10) For delivery as security in connection with any borrowings by
the Fund requiring a pledge or hypothecation of assets by the
Fund (if then permitted under circumstances described in the
current registration statement of the Fund), provided, that the
securities shall be released only upon payment to the Custodian
of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made,
further securities may be released for that purpose; upon
receipt of proper instructions, the Custodian may pay any such
loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
11) When required for delivery in connection with any redemption or
repurchase of Shares of the Fund in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any agreement
between the Custodian (or a subcustodian employed pursuant to
Section 2 hereof) and a broker-dealer registered under the
Securities Exchange Act of 1934 and, if necessary, the Fund,
relating to compliance with the rules of The Options Clearing
Corporation or of any registered national securities exchange,
or of any similar organization or organizations, regarding
deposit or escrow or other arrangements in connection with
options transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures commissions
merchant, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or of any contract market or
commodities exchange or similar organization, regarding futures
margin account deposits or payments in connection with futures
transactions by the Fund;
14) For any other proper corporate purpose, but only upon receipt
of, in addition to proper instructions, a certified copy of a
vote of the Board specifying the securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be proper corporate purpose, and
naming the person or persons to whom delivery of such securities
shall be made.
C. Registration of Securities Securities held by the Custodian (other than
bearer securities) for the account of the Fund shall be registered in
the name of the Fund or in the name of any nominee of the Fund or of
any nominee of the Custodian, or in the name or nominee name of any
agent appointed pursuant to Paragraph K hereof, or in the name or
nominee name of any subcustodian employed pursuant to Section 2 hereof,
or in the name or nominee name of The Depository Trust Company or
Participants Trust Company or Approved Clearing Agency or Federal
Book-Entry System or Approved Book-Entry System for Commercial Paper;
provided, that securities are held in an account of the Custodian or of
such agent or of such subcustodian containing only assets of the Fund
or only assets held by the Custodian or such agent or such subcustodian
as a custodian or subcustodian or in a fiduciary capacity for
customers. All certificates for securities accepted by the Custodian or
any such agent or subcustodian on behalf of the Fund shall be in
"street" or other good delivery form or shall be returned to the
selling broker or dealer who shall be advised of the reason thereof.
D. Bank Accounts The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or
order by the Custodian acting in pursuant to the terms of this
Agreement, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of
the Fund other than cash maintained by the Fund in a bank account
established and used in accordance with Rule 17f-3 under the Investment
Company Act of 1940. Funds held by the Custodian for the Fund may be
deposited by it to its credit as Custodian in the Banking Department of
the Custodian or in such other banks or trust companies as the
Custodian may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to
act as a custodian under the Investment Company Act of 1940 and that
each such bank or trust company and the funds to be deposited with each
such bank or trust company shall be approved in writing by two officers
of the Fund. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be subject to withdrawal only by the
Custodian in that capacity.
E. Payment for Shares of the Fund The Custodian shall make appropriate
arrangements with the Transfer Agent and the principal underwriter of
the Fund to enable the Custodian to make certain it promptly receives
the cash or other consideration due to the Fund for such new or
treasury Shares as may be issued or sold from time to time by the Fund,
in accordance with the governing documents and offering prospectus and
statement of additional information of the Fund. The Custodian will
provide prompt notification to the Fund of any receipt by it of
payments for Shares of the Fund.
F. Investment and Availability of Federal Funds Upon agreement between the
Fund and the Custodian, the Custodian shall, upon the receipt of proper
instructions, which may be continuing instructions when deemed
appropriate by the parties,
1) invest in such securities and instruments as may be set forth in
such instructions on the same day as received all federal funds
received after a time agreed upon between the Custodian and the
Fund; and
2) make federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian in
the amount of checks received in payment for Shares of the Fund
which are deposited into the Fund's account.
G. Collections The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which
the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall promptly collect all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or agent
thereof and shall credit such income, as collected, to the Fund's
custodian account.
The Custodian shall do all things necessary and proper in connection
with such prompt collections and, without limiting the generality of
the foregoing, the Custodian shall
1) Present for payment all coupons and other income items requiring
presentations;
2) Present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Fund,
checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities System
or in an Approved Book-Entry System for Commercial Paper at the
time funds become available to the Custodian; in the case of
securities maintained in The Depository Trust Company funds
shall be deemed available to the Fund not later than the opening
of business on the first business day after receipt of such
funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably practicable
whenever income due on any security is not promptly collected. In any
case in which the Custodian does not receive any due and unpaid income
after it has made demand for the same, it shall immediately so notify
the Fund in writing, enclosing copies of any demand letter, any written
response thereto, and memoranda of all oral responses thereto and to
telephonic demands, and await instructions from the Fund; the Custodian
shall in no case have any liability for any nonpayment of such income
provided the Custodian meets the standard of care set forth in Section
8 hereof. The Custodian shall not be obligated to take legal action for
collection unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends,
rights and other items of like nature, and deal with the same pursuant
to proper instructions relative thereto.
H. Payment of Fund Moneys Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases only:
1) Upon the purchase of securities, participation interests,
options, futures contracts, forward contracts and options on
futures contracts purchased for the account of the Fund but only
(a) against the receipt of
(i) such securities registered as provided in Paragraph C
hereof or in proper form for transfer or
(ii) detailed instructions signed by an officer of the Fund
regarding the participation interests to be purchased or
(iii) written confirmation of the purchase by the Fund of the
options, futures contracts, forward contracts or options on
futures contracts
by the Custodian (or by a subcustodian employed pursuant to
Section 2 hereof or by a clearing corporation of a national
securities exchange of which the Custodian is a member or by any
bank, banking institution or trust company doing business in the
United States or abroad which is qualified under the Investment
Company Act of 1940 to act as a custodian and which has been
designated by the Custodian as its agent for this purpose or by
the agent specifically designated in such instructions as
representing the purchasers of a new issue of privately placed
securities); (b) in the case of a purchase effected through a
Securities System, upon receipt of the securities by the
Securities System in accordance with the conditions set forth in
Paragraph L hereof; (c) in the case of a purchase of commercial
paper effected through an Approved Book-Entry System for
Commercial Paper, upon receipt of the paper by the Custodian or
subcustodian in accordance with the conditions set forth in
Paragraph M hereof; (d) in the case of repurchase agreements
entered into between the Fund and another bank or a
broker-dealer, against receipt by the Custodian of the
securities underlying the repurchase agreement either in
certificate form or through an entry crediting the Custodian's
segregated, non-proprietary account at the Federal Reserve Bank
of Boston with such securities along with written evidence of
the agreement by the bank or broker-dealer to repurchase such
securities from the Fund; or (e) with respect to securities
purchased outside of the United States, in accordance with
written procedures agreed to from time to time in writing by the
parties hereto;
2) When required in connection with the conversion, exchange or
surrender of securities owned by the Fund as set forth in
Paragraph B hereof;
3) When required for the redemption or repurchase of Shares of the
Fund in accordance with the provisions of Paragraph J hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: advisory fees, distribution plan
payments, interest, taxes, management compensation and expenses,
accounting, transfer agent and legal fees, and other operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends or other distributions to
holders of Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, but only upon receipt
of, in addition to proper instructions, a certified copy of a
vote of the Board, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper corporate purpose, and
naming the person or persons to whom such payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities Purchased In
any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written
instructions signed by two officers of the Fund to so pay in advance,
the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by
the Custodian; except that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the Federal
Reserve System, the Custodian may transfer funds to the account of such
bank prior to the receipt of (i) the securities in certificate form
subject to such repurchase agreement or (ii) written evidence that the
securities subject to such repurchase agreement have been transferred
by book-entry into a segregated non-proprietary account of the
Custodian maintained with the Federal Reserve Bank of Boston or (iii)
the safekeeping receipt, provided that such securities have in fact
been so transfered by book-entry and the written repurchase agreement
is received by the Custodian in due course; and except that if the
securities are to be purchased outside the United States, payment may
be made in accordance with procedures agreed to in writing from time to
time by the parties hereto.
J. Payments for Repurchases or Redemptions of Shares of the Fund From such
funds as may be available for the purpose, but subject to any
applicable votes of the Board and the current redemption and repurchase
procedures of the Fund, the Custodian shall, upon receipt of written
instructions from the Fund or from the Fund's transfer agent or from
the principal underwriter, make funds and/or portfolio securities
available for payment to holders of Shares who have caused their Shares
to be redeemed or repurchased by the Fund or for the Fund`s account by
its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon which
special checks may be drawn by shareholders of the Fund holding Shares
for which certificates have not been issued. Such checking account and
such special checks shall be subject to such rules and regulations as
the Custodian and the Fund may from time to time adopt. The Custodian
or the Fund may suspend or terminate use of such checking account or
such special checks (either generally or for one or more shareholders)
at any time. The Custodian and the Fund shall notify the other
immediately of any such suspension or termination.
K. Appointment of Agents by the Custodian The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other
bank or trust company (provided such bank or trust company is itself
qualified under the Investment Company Act of 1940 to act as a
custodian or is itself an eligible foreign custodian within the meaning
of Rule 17f-5 under said Act) as the agent of the Custodian to carry
out such of the duties and functions of the Custodian described in this
Section 3 as the Custodian may from time to time direct; provided,
however, that the appointment of any such agent shall not relieve the
Custodian of any of its responsibilities or liabilities hereunder, and
as between the Fund and the Custodian the Custodian shall be fully
responsible for the acts and omissions of any such agent. For the
purposes of this Agreement, any property of the Fund held by any such
agent shall be deemed to be held by the Custodian hereunder.
L. Deposit of Fund Portfolio Securities in Securities Systems The
Custodian may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, and at
all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2 keep securities of the
Fund in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the Custodian or
such subcustodian in the Securities System which shall not include any
assets of the Custodian or such subcustodian or any other person other
than assets held by the Custodian or such subcustodian as a fiduciary,
custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund, and the Custodian
shall be fully and completely responsible for maintaining a
recordkeeping system capable of accurately and currently stating the
Fund's holdings maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Fund only upon (i) receipt of notice or
advice from the Securities System that such securities have been
transferred to the Account, and (ii) the making of any entry on the
records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for
the account of the Fund only upon (i) receipt of notice or advice from
the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all notices or advices from the
Securities System of transfers of securities for the account of the
Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund confirmation of each transfer
to or from the account of the Fund in the form of a written advice or
notice of each such transaction, and shall furnish to the Fund copies
of daily transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or
other communication received or obtained by the Custodian relating to
the Securities System's accounting system, system of internal
accounting controls or procedures for safeguarding securities deposited
in the Securities System; the Custodian shall promptly send to the Fund
any report or other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding securities
deposited in any Securities System; and the Custodian shall ensure that
any agent appointed pursuant to Paragraph K hereof or any subcustodian
employed pursuant to Section 2 hereof shall promptly send to the Fund
and to the Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and procedures
for safeguarding securities deposited in any Securities System. The
Custodian's books and records relating to the Fund's participation in
each Securities System will at all times during regular business hours
be open to the inspection of the Fund's authorized officers, employees
or agents.
(e) The Custodian shall not act under this Paragraph L in the
absence of receipt of a certificate of an officer of the Fund that the
Board has approved the use of a particular Securities System; the
Custodian shall also obtain appropriate assurance from the officers of
the Fund that the Board has annually reviewed the continued use by the
Fund of each Securities System, and the Fund shall promptly notify the
Custodian if the use of a Securities System is to be discontinued; at
the request of the Fund, the Custodian will terminate the use of any
such Securities System as promptly as practicable.
(f) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to enforce
effectively such rights as it may have against the Securities System or
any other person; at the election of the Fund, it shall be entitled to
be subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the Custodian
may have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or
damage.
M. Deposit of Fund Commercial Paper in an Approved Book-Entry System for
Commercial Paper Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper
owned by the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable Securities and
Exchange Commission rules, regulations, and no-action correspondence,
and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep commercial paper of
the Fund in an Approved Book-Entry System for Commercial Paper,
provided that such paper is issued in book entry form by the Custodian
or subcustodian on behalf of an issuer with which the Custodian or
subcustodian has entered into a book-entry agreement and provided
further that such paper is maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in an Approved
Book-Entry System for Commercial Paper which shall not include any
assets of the Custodian or such subcustodian or any other person other
than assets held by the Custodian or such subcustodian as a fiduciary,
custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper
of the Fund which is maintained in an Approved Book-Entry System for
Commercial Paper shall identify by book-entry each specific issue of
commercial paper purchased by the Fund which is included in the System
and shall at all times during regular business hours be open for
inspection by authorized officers, employees or agents of the Fund. The
Custodian shall be fully and completely responsible for maintaining a
recordkeeping system capable of accurately and currently stating the
Fund's holdings of commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Fund only upon contemporaneous
(i) receipt of notice or advice from the issuer that such paper has
been issued, sold and transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such purchase,
payment and transfer for the account of the Fund. The Custodian shall
transfer such commercial paper which is sold or cancel such commercial
paper which is redeemed for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice that payment for such
paper has been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer or
redemption and payment for the account of the Fund. Copies of all
notices, advices and confirmations of transfers of commercial paper for
the account of the Fund shall identify the Fund, be maintained for the
Fund by the Custodian and be promptly provided to the Fund at its
request. The Custodian shall promptly send to the Fund confirmation of
each transfer to or from the account of the Fund in the form of a
written advice or notice of each such transaction, and shall furnish to
the Fund copies of daily transaction sheets reflecting each day's
transactions in the System for the account of the Fund on the next
business day.
(d) The Custodian shall promptly send to the Fund any report or
other communication received or obtained by the Custodian relating to
each System's accounting system, system of internal accounting controls
or procedures for safeguarding commercial paper deposited in the
System; the Custodian shall promptly send to the Fund any report or
other communication relating to the Custodian's internal accounting
controls and procedures for safeguarding commercial paper deposited in
any Approved Book-Entry System for Commercial Paper; and the Custodian
shall ensure that any agent appointed pursuant to Paragraph K hereof or
any subcustodian employed pursuant to Section 2 hereof shall promptly
send to the Fund and to the Custodian any report or other communication
relating to such agent's or subcustodian's internal accounting controls
and procedures for safeguarding securities deposited in any Approved
Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the
absence of receipt of a certificate of an officer of the Fund that the
Board has approved the use of a particular Approved Book-Entry System
for Commercial Paper; the Custodian shall also obtain appropriate
assurance from the officers of the Fund that the Board has annually
reviewed the continued use by the Fund of each Approved Book-Entry
System for Commercial Paper, and the Fund shall promptly notify the
Custodian if the use of an Approved Book-Entry System for Commercial
Paper is to be discontinued; at the request of the Fund, the Custodian
will terminate the use of any such System as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry
System for Commercial Paper is maintained by the subcustodian) shall
issue physical commercial paper or promissory notes whenever requested
to do so by the Fund or in the event of an electronic system failure
which impedes issuance, transfer or custody of direct issue commercial
paper by book-entry.
(g) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of any Approved Book-Entry System for
Commercial Paper by reason of any negligence, misfeasance or misconduct
of the Custodian or any of its agents or subcustodians or of any of its
or their employees or from any failure of the Custodian or any such
agent or subcustodian to enforce effectively such rights as it may have
against the System, the issuer of the commercial paper or any other
person; at the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claim
against the System, the issuer of the commercial paper or any other
person which the Custodian may have as a consequence of any such loss
or damage if and to the extent that the Fund has not been made whole
for any such loss or damage.
N. Segregated Account The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts
for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Paragraph L hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and any registered broker-dealer (or any futures commission
merchant), relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange
(or of the Commodity Futures Trading Commission or of any contract
market or commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other arrangements in
connection with transactions by the Fund, (ii) for purposes of
segregating cash or U.S. Government securities in connection with
options purchased, sold or written by the Fund or futures contracts or
options thereon purchased or sold by the Fund, (iii) for the purposes
of compliance by the Fund with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of
the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper purposes, but only, in the case of clause (iv), upon
receipt of, in addition to proper instructions, a certificate signed by
two officers of the Fund, setting forth the purpose such segregated
account and declaring such purpose to be a proper purpose.
O. Ownership Certificates for Tax Purposes The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of the Fund held by it and in
connection with transfers of securities.
P. Proxies The Custodian shall, with respect to the securities held by it
hereunder, cause to be promptly delivered to the Fund all forms of
proxies and all notices of meetings and any other notices or
announcements or other written information affecting or relating to the
securities, and upon receipt of proper instructions shall execute and
deliver or cause its nominee to execute and deliver such proxies or
other authorizations as may be required. Neither the Custodian nor its
nominee shall vote upon any of the securities or execute any proxy to
vote thereon or give any consent or take any other action with respect
thereto (except as otherwise herein provided) unless ordered to do so
by proper instructions.
Q. Communications Relating to Fund Portfolio Securities The Custodian
shall deliver promptly to the Fund all written information (including,
without limitation, pendency of call and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options written by
the Fund and the maturity of futures contracts purchased or sold by the
Fund) received by the Custodian from issuers and other persons relating
to the securities and participation interests being held for the Fund.
With respect to tender or exchange offers, the Custodian shall deliver
promptly to the Fund all written information received by the Custodian
from issuers and other persons relating to the securities and
participation interests whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
R. Exercise of Rights; Tender Offers In the case of tender offers, similar
offers to purchase or exercise rights (including, without limitation,
pendency of calls and maturities of securities and participation
interests and expirations of rights in connection therewith and notices
of exercise of call and put options and the maturity of futures
contracts) affecting or relating to securities and participation
interests held by the Custodian under this Agreement, the Custodian
shall have responsibility for promptly notifying the Fund of all such
offers in accordance with the standard of reasonable care set forth in
Section 8 hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Fund shall have
responsibility for providing the Custodian with all necessary
instructions in timely fashion. Upon receipt of proper instructions,
the Custodian shall timely deliver to the issuer or trustee thereof, or
to the agent of either, warrants, puts, calls, rights or similar
securities for the purpose of being exercised or sold upon proper
receipt therefor and upon receipt of assurances satisfactory to the
Custodian that the new securities and cash, if any, acquired by such
action are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof. Upon receipt of proper
instructions, the Custodian shall timely deposit securities upon
invitations for tenders of securities upon proper receipt therefor and
upon receipt of assurances satisfactory to the Custodian that the
consideration to be paid or delivered or the tendered securities are to
be returned to the Custodian or subcustodian employed pursuant to
Section 2 hereof. Notwithstanding any provision of this Agreement to
the contrary, the Custodian shall take all necessary action, unless
otherwise directed to the contrary by proper instructions, to comply
with the terms of all mandatory or compulsory exchanges, calls,
tenders, redemptions, or similar rights of security ownership, and
shall thereafter promptly notify the Fund in writing of such action.
S. Depository Receipts The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities
to the depository used by an issuer of American Depository Receipts or
International Depository Receipts (hereinafter collectively referred to
as "ADRs") for such securities, against a written receipt therefor
adequately describing such securities and written evidence satisfactory
to the Custodian that the depository has acknowledged receipt of
instructions to issue with respect to such securities ADRs in the name
of a nominee of the Custodian or in the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof, for delivery to the
Custodian or such subcustodian at such place as the Custodian or such
subcustodian may from time to time designate. The Custodian shall, upon
receipt of proper instructions, surrender ADRs to the issuer thereof
against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the
issuer of the ADRs has acknowledged receipt of instructions to cause
its depository to deliver the securities underlying such ADRs to the
Custodian or to a subcustodian employed pursuant to Section 2 hereof.
T. Interest Bearing Call or Time Deposits The Custodian shall, upon
receipt of proper instructions, place interest bearing fixed term and
call deposits with the banking department of such banking institution
(other than the Custodian) and in such amounts as the Fund may
designate. Deposits may be denominated in U.S. Dollars or other
currencies. The Custodian shall include in its records with respect to
the assets of the Fund appropriate notation as to the amount and
currency of each such deposit, the accepting banking institution and
other appropriate details and shall retain such forms of advice or
receipt evidencing the deposit, if any, as may be forwarded to the
Custodian by the banking institution. Such deposits shall be deemed
portfolio securities of the applicable Fund for the purposes of this
Agreement, and the Custodian shall be responsible for the collection of
income from such accounts and the transmission of cash to and from such
accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
1. Options. The Custodians shall, upon receipt of proper
instructions and in accordance with the provisions of any agreement
between the Custodian, any registered broker-dealer and, if
necessary, the Fund, relating to compliance with the rules of the
Options Clearing Corporation or of any registered national
securities exchange or similar organization or organizations,
receive and retain confirmations or other documents, if any,
evidencing the purchase or writing of an option on a security or
securities index or other financial instrument or index by the
Fund; deposit and maintain in a segregated account for each Fund
separately, either physically or by book-entry in a Securities
System, securities subject to a covered call option written by the
Fund; and release and/or transfer such securities or other assets
only in accordance with a notice or other communication evidencing
the expiration, termination or exercise of such covered option
furnished by the Options Clearing Corporation, the securities or
options exchange on which such covered option is traded or such
other organization as may be responsible for handling such options
transactions. The Custodian and the broker-dealer shall be
responsible for the sufficiency of assets held in each Fund's
segregated account in compliance with applicable margin maintenance
requirements.
2. Futures Contracts The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other documents,
if any, evidencing the purchase or sale of a futures contract or an
option on a futures contract by the Fund; deposit and maintain in a
segregated account, for the benefit of any futures commission
merchant, assets designated by the Fund as initial, maintenance or
variation "margin" deposits (including mark-to-market payments)
intended to secure the Fund's performance of its obligations under
any futures contracts purchased or sold or any options on futures
contracts written by Fund, in accordance with the provisions of any
agreement or agreements among the Fund, the Custodian and such
futures commission merchant, designed to comply with the rules of
the Commodity Futures Trading Commission and/or of any contract
market or commodities exchange or similar organization regarding
such margin deposits or payments; and release and/or transfer
assets in such margin accounts only in accordance with any such
agreements or rules. The Custodian and the futures commission
merchant shall be responsible for the sufficiency of assets held in
the segregated account in compliance with the applicable margin
maintenance and mark-to-market payment requirements.
3. Foreign Exchange Transactions The Custodian shall, pursuant to
proper instructions, enter into or cause a subcustodian to enter
into foreign exchange contracts or options to purchase and sell
foreign currencies for spot and future delivery on behalf and for
the account of the Fund. Such transactions may be undertaken by the
Custodian or subcustodian with such banking or financial
institutions or other currency brokers, as set forth in proper
instructions. Foreign exchange contracts and options shall be
deemed to be portfolio securities of the Fund; and accordingly, the
responsibility of the Custodian therefor shall be the same as and
no greater than the Custodian's responsibility in respect of other
portfolio securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of cash from the
currency broker or banking or financial institution with which the
contract or option is made, the maintenance of proper records with
respect to the transaction and the maintenance of any segregated
account required in connection with the transaction. The Custodian
shall have no duty with respect to the selection of the currency
brokers or banking or financial institutions with which the Fund
deals or for their failure to comply with the terms of any contract
or option. Without limiting the foregoing, it is agreed that upon
receipt of proper instructions and insofar as funds are made
available to the Custodian for the purpose, the Custodian may (if
determined necessary by the Custodian to consummate a particular
transaction on behalf and for the account of the Fund) make free
outgoing payments of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign exchange
contract or confirmation that the countervalue currency completing
the foreign exchange contact has been delivered or received. The
Custodian shall not be responsible for any costs and interest
charges which may be incurred by the Fund or the Custodian as a
result of the failure or delay of third parties to deliver foreign
exchange; provided that the Custodian shall nevertheless be held to
the standard of care set forth in, and shall be liable to the Fund
in accordance with, the provisions of Section 8.
V. Actions Permitted Without Express Authority The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Agreement, provided, that all such payments shall be
accounted for by the Custodian to the Treasurer of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund
except as otherwise directed by the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable care,
the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. Persons Having Access to Assets of the Fund
(i) No trustee, director, general partner, officer, employee or agent of
the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be available to
duly authorized officers, employees, representatives or agents of the Custodian
or other persons or entities for whose actions the Custodian shall be
responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, that
the Fund may at any time by action of its Board, (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of The Commonwealth
of Massachusetts or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding Shares of the Fund vote
to have the securities, funds and other properties held hereunder delivered and
paid over to some other bank or trust company, specified in the vote, having not
less than $2,000,000 of aggregate capital, surplus and undivided profits, as
shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
12. Notices
Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such other
address as the Fund may have designated to the Bank, in writing, or to Investors
Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110, shall be
deemed to have been properly delivered or given hereunder to the respective
addressees.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. Adoption of the Agreement by the Fund
The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement, such adoption to be evidenced by a
letter agreement between the Fund and the Bank reflecting such adoption, which
letter agreement shall be dated and signed by a duly authorized officer of the
Fund and duly authorized officer of the Bank. This Agreement shall be deemed to
be duly executed and delivered by each of the parties in its name and behalf by
its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
EXHIBIT 99.11(A)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 23 to the
Registration Statement (1933 Act File No. 2-90946) of Eaton Vance Mutual Funds
Trust on behalf of EV Classic High Income Fund of our report dated May 5, 1995,
relating to EV Classic High Income Fund and of our report dated May 5, 1995,
relating to High Income Portfolio which reports are incorporated by reference in
the Statement of Additional Information, which is a part of such Registration
Statement. We also consent to the references to us under the heading "The Fund's
Financial Highlights" appearing in the Prospectus and under the heading
"Financial Statements" in the Statement of Additional Information, which are
part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
----------------------------
DELOITTE & TOUCHE LLP
July 12, 1995
Boston, Massachusetts
EXHIBIT 99.11(B)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 23 to the
Registration Statement (1933 Act File No. 2-90946) of Eaton Vance Mutual Funds
Trust on behalf of EV Marathon High Income Fund of our report dated May 5, 1995,
relating to EV Marathon High Income Fund and of our report dated May 5, 1995,
relating to High Income Portfolio which reports are incorporated by reference in
the Statement of Additional Information, which is a part of such Registration
Statement. We also consent to the references to us under the heading "The Fund's
Financial Highlights" appearing in the Prospectus and under the heading
"Financial Statements" in the Statement of Additional Information, which are
part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
----------------------
DELOITTE & TOUCHE LLP
July 12, 1995
Boston, Massachusetts
EXHIBIT 99.15(a)
SERVICE PLAN
OF
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
ON BEHALF OF
EATON VANCE GOVERNMENT OBLIGATIONS FUND
WHEREAS, Eaton Vance Government Obligations Trust (the "Trust") engages
in business as an open-end management investment company with multiple series
and is registered as such under the Investment Company Act of 1940, as amended
(the "Act");
WHEREAS, the Trust adopted a distribution plan dated July 9, 1984 (the
"Original Plan"), on behalf of its series, Eaton Vance Government Obligations
Fund (the "Fund"), pursuant to which the Fund has made payments in connection
with the distribution of shares of the Fund;
WHEREAS, the Trust desires to adopt a Service Plan pursuant to which
the Fund as a series of the Trust intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules");
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of its shares;
WHEREAS, the Trustees of the Trust have determined that it is desirable
to amend and replace the Original Plan with this Service Plan; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Service Plan will benefit the Fund
and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Service Plan (the "Plan")
on behalf of the Fund in accordance with Rule 12b-1 under the Act and containing
the following terms and conditions:
1. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
2. This Plan shall not take effect until after it has been approved by
both a majority of (i) those Trustees of the Trust who are not "interested
persons" of the Trust or the Fund (as defined in the Act) and have no direct or
indirect financial interest in the operations of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees"), and (ii) all of the Trustees then in
office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
3. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 2.
4. This Plan shall continue in effect through and including April 28,
1994 and shall continue indefinitely thereafter, but only so long as such
continuance after April 28, 1994 is specifically approved at least annually in
the manner provided for Trustee approval of this Plan in Section 2.
5. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made by the
Fund shall be the President or any Vice President of the Trust. One or more of
such persons shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
6. This Plan may be terminated at any time by vote of a majority of the
Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund.
7. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Section 1 unless such amendment, if required
by law, is approved by a vote of at least a majority of the outstanding voting
securities of the Fund. In addition, all material amendments to this Plan shall
be approved in the manner provided for in Section 2.
8. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
9. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 5, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
10. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Fund or officers or Trustees of the Trust.
11. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities" shall mean the vote of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.
12. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
13. This Plan shall amend, replace and be substituted for the Original
Plan as of the opening of business on July 7, 1993, and this Plan shall be
effective as of such time.
IN WITNESS WHEREOF, the Trust has executed this Service Plan on behalf
of the Fund on the 7th day of July, 1993.
EATON VANCE GOVERNMENT
OBLIGATIONS TRUST
(on behalf of Eaton Vance
Government Obligations Fund)
By:/s/ M. Dozier Gardner
Attest: President
/s/ Thomas Otis
Secretary
EXHIBIT 99.15(b)
DISTRIBUTION PLAN
OF
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
ON BEHALF OF
EATON VANCE SHORT-TERM TREASURY FUND
Dated February 4, 1991
As Amended and Restated February 25, 1991
WHEREAS, Eaton Vance Government Obligations Trust (the "Trust") engages
in business as an open-end management investment company and is registered as
such under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust desires to adopt a separate Distribution Plan
pursuant to Rule 12b-1 under the Acto on behalf of Eaton Vance Short-Term
Treasury Fund (the "Fund");
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter of shares of beneficial interest as defined in Rule 12b-1
under the Act, and desires to adopt a Distribution Plan pursuant to such Rule;
and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Distribution Plan (the
"Plan") in accordance with Rule 12b-1 under the Act and containing the following
terms and conditions:
1. The Fund may finance activities which are primarily intended to
result in the sale of its shares in accordance with this Plan. The expenses of
such activities shall not exceed .25% on an annual basis of the Fund's average
daily net assets. The procedure will be that the Fund will pay the Principal
Underwriter a quarterly distribution fee equal to .25% on an annual basis of the
Fund's average daily net assets. The Principal Underwriter may pay the entire
amount of the distribution fee to Authorized Dealers for providing services in
assisting investors with their investments and/or their accounts. The maximum
amount which may be paid to any such dealer is .25% (on an annual basis) of the
net asset value of the Fund shares owned by customers of such dealer. The
Principal Underwriter may also pay all or a portion of its distribution fee as
compensation for certain administrative and account maintenance services to (a)
the employees of the Principal Underwriter or any of its affiliates and (b) to
financial services organizations that are not Authorized Dealers and their
employees. Such services may include, without limitation: answering questions
and forwarding or handling correspondence from shareholders about their
accounts; forwarding shareholders' orders and checks to purchase and redeem
shares of the Fund; assisting shareholders in completing application forms and
other paperwork; handling requests for extra copies of annual or semi-annual
reports, account statements and prospectuses; and acting generally as liaison
between shareholders and the Fund, including resolution of problems and
correction of errors, assisting shareholders in coordinating redemption plans
with dividend dates and providing information about shareholders to the Fund and
the Principal Underwriter. To the extent such fee is not paid to such persons,
the Principal Underwriter may use such fee for its other expenses of
distribution of Fund shares.
2. The expenses covered by the Plan may include any direct and indirect
expenses incurred by the Principal Underwriter in activities primarily intended
to result in the sale of shares of the Fund.
3. This Plan shall not take effect until it has been approved by (a) a
vote of at least a majority of the outstanding voting securities of the Fund,
and (b) both a majority of (i) those Trustees of the Trust who are not
"interested persons" of the Trust (as defined in the Act) and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees"), and (ii) all of the Trustees then in
office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
The term "vote of a majority of the outstanding voting securities of
the Fund" shall mean the vote of the lesser (a) 67 per centum or more of the
shares of the Fund present or represented by proxy at the meeting if the holders
of more than 50 per centum of the outstanding shares of the Fund are present or
represented by proxy at the meeting, or (b) more than 50 per centum of the
outstanding shares of the Fund.
4. Any agreements between the Trust and any person relating to this
Plan shall be in writing and shall not take effect until approved in the manner
provided for approval of this Plan in clause (b) of paragraph 3.
5. The plan shall continue in effect for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in clause (b) of paragraph 3.
6. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made by the
Trust shall be the President or any Vice President of the Trust. Such persons
shall provide to the Trust's Trustees and the Trustees shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
7. This Plan may be terminated at any time as to any series by vote of
a majority of the Rule 12b-1 Trustees, or by vote of a majority of the
outstanding voting securities the Fund.
8. This Plan may not be amended to increase materially the limit upon
distribution expenses provided in paragraph 1 or the nature of such expenses
provided in paragraph 2 hereof unless such amendment is approved in the manner
provided for initial approval of the Plan in paragraph 3 hereof, and no material
amendment to the Plan shall be made unless approved in the manner provided for
in clause (b) of paragraph 3 hereof.
9. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
10. The Trust shall preserve copies of the Plan and any related
agreements made by the Trust and all reports made pursuant to paragraph 6
hereof, for a period of not less than six years from the date of this Plan, or
of the agreements or of such report, as the case may be, the first two years in
an easily accessible place.
IN WITNESS WHEREOF, the Trust has executed this Distribution Plan, as
amended and restated, on behalf of the Fund this 25th day of February, 1991.
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
(on behalf of Eaton Vance Short-Term Treasury Fund)
BY/s/ M. Dozier Gardner
-----------------------
President
Attest:
/s/ Thomas Otis
- ------------------------
Secretary
EXHIBIT 99.15(d)
EATON VANCE GOVERNMENT OBLIGATIONS TRUST
DISTRIBUTION PLAN
ON BEHALF OF
EV MARATHON GOVERNMENT OBLIGATIONS FUND
WHEREAS, Eaton Vance Government Obligations Trust (the "Trust") engages
in business as an open-end investment company with multiple series and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust desires to adopt a separate Distribution Plan on
behalf of its series, EV Marathon Government Obligations Fund (the "Fund"),
pursuant to which the Fund will make payments in connection with the
distribution of shares of the Fund;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of shares of the Fund, but does
not intend to remunerate the Principal Underwriter unless and until the
Principal Underwriter sells shares of the Fund;
WHEREAS, the Fund will pay the Principal Underwriter sales commissions
and distribution fees only in connection with the sale of shares of the Fund;
WHEREAS, the Fund intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Distribution Plan will benefit the
Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Distribution Plan (this
"Plan") on behalf of the Fund in accordance with Rule 12b-1 under the Act and
containing the following terms and conditions:
1. The Fund will pay sales commissions and distribution fees to the
Principal Underwriter only after and as a result of the sales of shares of the
Fund. The Principal Underwriter will provide the Fund with such distribution
services and facilities as the Trust may from time to time consider necessary to
accomplish the sale of shares of the Fund. It is understood that the Principal
Underwriter may pay such sales commissions and make such other payments to
Authorized Firms and other persons as it considers appropriate to encourage
distribution of such shares.
2. On each sale of Fund shares (excluding reinvestment of dividends and
distributions), the Fund shall pay the Principal Underwriter a sales commission
in an amount not exceeding 5% of the price received by the Fund therefor, such
payment to be made in the manner set forth and subject to the terms of this
Plan. The amount of the sales commission shall be established from time to time
by vote or other action of a majority of (i) those Trustees of the Trust who are
not "interested persons" (as defined in the Act) of the Trust and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office. The Fund shall also pay the Principal Underwriter a separate
distribution fee (calculated in accordance with Section 3), such payment to be
made in the manner set forth and subject to the terms of this Plan.
3. The sales commissions and distribution fees referred to in Section 2
shall be accrued and paid by the Fund in the following manner. The Fund shall
accrue daily an amount calculated at the rate of .75% per annum of the daily net
assets of the Fund, which net assets shall be computed in accordance with the
governing documents of the Trust and applicable votes and determinations of the
Trustees of the Trust. The daily amounts so accrued throughout the month shall
be paid to the Principal Underwriter on the last day of each month. The amount
of such daily accrual, as so calculated, shall first be applied and charged to
all unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
Section 3 plus all sales commissions which it is entitled to be paid pursuant to
Section 2 since inception of this Plan through and including the day next
preceding the date of calculation, and (b) an amount equal to the aggregate of
all distribution fees referred to below which the Principal Underwriter has been
paid pursuant to this Section 3 plus all such fees which it is entitled to be
paid pursuant to Section 2 since inception of this Plan through and including
the day next preceding the date of calculation. From this sum (distribution
charges) there shall be subtracted (i) the aggregate amount paid or payable to
the Principal Underwriter pursuant to this Section 3 since inception of this
Plan through and including the day next preceding the date of calculation and
(ii) the aggregate amount of all contingent deferred sales charges paid or
payable to the Principal Underwriter since inception of this Plan through and
including the day next preceding the date of calculation. If the result of such
subtraction is a positive amount, a distribution fee [computed at the rate of 1%
per annum above the prime rate (being the base rate on corporate loans posted by
at least 75% of the nation's 30 largest banks) then being reported in the
Eastern Edition of The Wall Street Journal or if such prime rate is not so
reported such other rate as may be designated from time to time by vote or other
action of a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees
then in office] shall be computed on such amount and added to such amount, with
the resulting sum constituting the amount of outstanding uncovered distribution
charges of the Principal Underwriter with respect to such day for all purposes
of this Plan. If the result of such subtraction is a negative amount, there
shall exist no outstanding uncovered distribution charges of the Principal
Underwriter with respect to such day and no amount shall be accrued or paid to
the Principal Underwriter with respect to such day. The aggregate amounts
accrued and paid pursuant to this Section 3 during any fiscal year of the Fund
shall not exceed .75% of the average daily net assets of the Fund for such year.
4. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the NASD Rules shall be imposed.
5. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
6. This Plan shall not take effect until after it has been approved by
both a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees then
in office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
7. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 6.
8. This Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for Trustee
approval of this Plan in Section 6.
9. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
10. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. The Principal Underwriter shall also be entitled to
receive all contingent deferred sales charges paid or payable with respect to
any day subsequent to termination of this Plan on which there exist outstanding
uncovered distribution charges of the Principal Underwriter.
11. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 5 unless such amendment is
approved by a vote of at least a majority of the outstanding voting securities
of the Fund. In addition, all material amendments to this Plan shall be approved
in the manner provided for Trustee approval of this Plan in Section 6.
12. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
13. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 9, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
14. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Trust, officers or Trustees of the Trust or any other series
of the Trust.
15. This Plan shall, prior to the initial accrual or payment of any
amount hereunder, be approved by a vote of at least a majority of the
outstanding voting securities of the Fund.
16. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
17. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
IN WITNESS WHEREOF, the Trust has executed this Plan on behalf of the
Fund on the 28th day of October, 1993.
EATON VANCE GOVERNMENT
OBLIGATIONS TRUST
(on behalf of EV MARATHON
GOVERNMENT OBLIGATIONS FUND)
BY/s/ M. Dozier Gardner
---------------------------
President
Attest:
/s/ Thomas Otis
- -----------------------
Secretary
EXHIBIT 99.15(e)
EATON VANCE HIGH INCOME TRUST
AMENDED DISTRIBUTION PLAN
WHEREAS, Eaton Vance High Income Trust (the "Fund") engages in business
as an open-end investment company with multiple series and is registered as such
under the Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Fund adopted a separate distribution plan dated August 1,
1986 (the "Original Plan"), pursuant to which the Fund has made payments in
connection with the distribution of shares of the Fund;
WHEREAS, the Fund employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of shares of the Fund, but does
not intend to remunerate the Principal Underwriter unless and until the
Principal Underwriter sells shares of the Fund;
WHEREAS, the Fund will pay the Principal Underwriter sales commissions
and distribution fees only in connection with the sale of shares of the Fund;
WHEREAS, the Fund intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules");
WHEREAS, the Trustees of the Fund have determined that it is desirable
to amend and replace the Original Plan with this Amended Distribution Plan; and
WHEREAS, the Trustees of the Fund have determined that there is a
reasonable likelihood that adoption of this Amended Distribution Plan will
benefit the Fund and its shareholders.
NOW, THEREFORE, the Fund hereby adopts this Amended Distribution Plan
(this "Plan") in accordance with Rule 12b-1 under the Act and containing the
following terms and conditions:
1. The Fund will pay sales commissions and distribution fees to the
Principal Underwriter only after and as a result of the sale of shares of the
Fund. The Principal Underwriter will provide the Fund with such distribution
services and facilities as the Fund may from time to time consider necessary to
accomplish the sale of shares of the Fund. It is understood that the Principal
Underwriter may pay such sales commissions and make such other payments to
Authorized Firms and other persons as it considers appropriate to encourage
distribution of such shares.
2. On each sale of Fund shares (excluding reinvestment of dividends and
distributions), the Fund shall pay the Principal Underwriter a sales commission
in an amount not exceeding 5% of the price received by the Fund therefor, such
payment to be made in the manner set forth and subject to the terms of this
Plan. The amount of the sales commission shall be established from time to time
by vote or other action of a majority of (i) those Trustees of the Fund who are
not "interested persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office. The Fund shall also pay the Principal Underwriter a separate
distribution fee (calculated in accordance with Section 3), such payment to be
made in the manner set forth and subject to the terms of this Plan.
3. The sales commissions and distribution fees referred to in Section 2
shall be accrued and paid by the Fund in the following manner. The Fund shall
accrue daily an amount calculated at the rate of .75% per annum of the daily net
assets of the Fund, which net assets shall be computed in accordance with the
governing documents of the Fund and applicable votes and determinations of the
Trustees of the Fund. The daily amounts so accrued throughout the month shall be
paid to the Principal Underwriter on the last day of each month. The amount of
such daily accrual, as so calculated, shall first be applied and charged to all
unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
Section 3 (and pursuant to Section 3 of the Original Plan) plus all sales
commissions which it is entitled to be paid pursuant to Section 2 (and pursuant
to Section 2 of the Original Plan) since inception of the Original Plan through
and including the day next preceding the date of calculation, and (b) an amount
equal to the aggregate of all distribution fees referred to below which the
Principal Underwriter has been paid pursuant to this Section 3 (and pursuant to
Section 3 of the Original Plan) plus all such fees which it is entitled to be
paid pursuant to Section 2 (and pursuant to Section 2 of the Original Plan)
since inception of the Original Plan through and including the day next
preceding the date of calculation. From this sum (distribution charges) there
shall be subtracted (i) the aggregate amount paid or payable to the Principal
Underwriter pursuant to this Section 3 (and pursuant to Section 3 of the
Original Plan) since inception of the Original Plan through and including the
day next preceding the date of calculation and (ii) the aggregate amount of all
contingent deferred sales charges paid or payable to the Principal Underwriter
since inception of the Original Plan through and including the day next
preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
the Rule 12b-1 Trustees and (ii) all of the Trustees then in office] shall be
computed on such amount and added to such amount, with the resulting sum
constituting the amount of outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day for all purposes of this Plan. If
the result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this Section 3 during any fiscal year of the Fund shall not exceed
.75% of the average daily net assets of the Fund for such year.
4. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the NASD Rules shall be imposed.
5. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
6. This Plan shall not take effect until after it has been approved by
both a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees then
in office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
7. Any agreements between the Fund and any person relating to this Plan
shall be in writing and shall not take effect until approved in the manner
provided for approval of this Plan in Section 6.
8. This Plan shall continue in effect through and including April 28,
1994 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance is specifically approved at least annually in
the manner provided for approval of this Plan in Section 6.
9. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made by the
Fund shall be the President or any Vice President of the Fund.
Such persons shall provide to the Trustees of the Fund and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
10. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. The Principal Underwriter shall be entitled to receive
all contingent deferred sales charges paid or payable with respect to any day
subsequent to termination of this Plan on which there exist outstanding
uncovered distribution charges of the Principal Underwriter.
11. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 5 unless such amendment is
approved by a vote of at least a majority of the outstanding voting securities
of the Fund. In addition, all material amendments to this Plan shall be approved
in the manner provided for approval of this Plan in Section 6.
12. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees.
13. The Fund shall preserve copies of this Plan and any related
agreements made by the Fund and all reports made pursuant to Section 9, for a
period of not less than six years from the date of this Plan, or of the
agreements or of such report, as the case may be, the first two years in an
easily accessible place.
14. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Fund's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders, officers or Trustees of the Fund.
15. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser (a)
67 per centum or more of the shares of the Fund present or represented by proxy
at the meeting if the holders of more than 50 per centum of the outstanding
shares of the Fund are present or represented by proxy at the meeting, or (b)
more than 50 per centum of the outstanding shares of the Fund.
16. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be affected
thereby.
17. This Plan shall replace and be substituted for the Original Plan as
of the opening of business on July 7, 1993, and this Plan shall be effective as
of such time. The outstanding uncovered distribution charges of the Principal
Underwriter calculated under the Original Plan as of the close of business on
July 6, 1993 shall be the outstanding uncovered distribution charges of the
Principal Underwriter calculated under this Plan as of the opening of business
on July 7, 1993.
IN WITNESS WHEREOF, the Fund has executed this Amended Distribution
Plan on the 7th day of July, 1993.
EATON VANCE HIGH INCOME TRUST
BY/s/ James B. Hawkes
----------------------------
President
Attest:
/s/ Thomas Otis
- ----------------------
Secretary
EXHIBIT 99.15(f)
EATON VANCE HIGH INCOME TRUST
AMENDED DISTRIBUTION PLAN
ON BEHALF OF
EV CLASSIC HIGH INCOME FUND
WHEREAS, Eaton Vance High Income Trust (the "Trust") engages in
business as an open-end investment company with multiple series and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust adopted a separate Distribution Plan (the "Original
Plan") on behalf of its series, EV Classic High Income Fund (the "Fund"),
pursuant to which the Fund has made payments in connection with the distribution
of shares of the Fund;
WHEREAS, the Trust employs Eaton Vance Distributors, Inc. to act as
Principal Underwriter (as defined in the Act) of shares of the Fund, but does
not intend to remunerate the Principal Underwriter unless and until the
Principal Underwriter sells shares of the Fund;
WHEREAS, the Fund will pay the Principal Underwriter sales commissions
and distribution fees only in connection with the sale of shares of the Fund;
WHEREAS, the Fund intends to pay service fees as contemplated in
subsections (b) and (d) of Section 26 of Article III of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. (the "NASD
Rules");
WHEREAS, the Trustees of the Trust have determined that it is desirable
to amend and replace the Original Plan with this Amended Distribution Plan; and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that adoption of this Amended Distribution Plan will
benefit the Fund and its shareholders.
NOW, THEREFORE, the Trust hereby adopts this Amended Distribution Plan
(this "Plan") on behalf of the Fund in accordance with Rule 12b-1 under the Act
and containing the following terms and conditions:
1. The Fund will pay sales commissions and distribution fees to the
Principal Underwriter only after and as a result of the sales of shares of the
Fund. The Principal Underwriter will provide the Fund with such distribution
services and facilities as the Trust may from time to time consider necessary to
accomplish the sale of shares of the Fund. It is understood that the Principal
Underwriter may pay such sales commissions and make such other payments to
Authorized Firms and other persons as it considers appropriate to encourage
distribution of such shares.
2. On each sale of Fund shares (excluding reinvestment of dividends and
distributions), the Fund shall pay the Principal Underwriter a sales commission
in an amount not exceeding 6.25% of the price received by the Fund therefor,
such payment to be made in the manner set forth and subject to the terms of this
Plan. The amount of the sales commission shall be established from time to time
by vote or other action of a majority of (i) those Trustees of the Trust who are
not "interested persons" (as defined in the Act) of the Trust and have no direct
or indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Trustees") and (ii) all of the Trustees then in
office. The Fund shall also pay the Principal Underwriter a separate
distribution fee (calculated in accordance with Section 3), such payment to be
made in the manner set forth and subject to the terms of this Plan.
3. The sales commissions and distribution fees referred to in Section 2 shall be
accrued and paid by the Fund in the following manner. The Fund shall accrue
daily an amount calculated at the rate of .75% per d annum of the daily net
assets of the Fund, which net assets shall be computed in accordance with the
governing documents of the Trust and applicable votes and determinations of the
Trustees of the Trust. The daily amounts so accrued throughout the month shall
be paid to the Principal Underwriter on the last day of each month. The amount
of such daily accrual, as so calculated, shall first be applied and charged to
all unpaid sales commissions, and the balance, if any, shall then be applied and
charged to all unpaid distribution fees. No amount shall be accrued with respect
to any day on which there exist no outstanding uncovered distribution charges of
the Principal Underwriter. The amount of such uncovered distribution charges
shall be calculated daily. For purposes of this calculation, distribution
charges of the Principal Underwriter shall include (a) the aggregate of all
sales commissions which the Principal Underwriter has been paid pursuant to this
Section 3 (and pursuant to Section 3 of the Original Plan) plus all sales
commissions which it is entitled to be paid pursuant to Section 2 (and pursuant
to Section 2 of the Original Plan) since inception of the Original Plan through
and including the day next preceding the date of calculation, and (b) an amount
equal to the aggregate of all distribution fees referred to below which the
Principal Underwriter has been paid pursuant to this Section 3 (and pursuant to
Section 3 of the Original Plan) plus all such fees which it is entitled to be
paid pursuant to Section 2 (and pursuant to Section 2 of the Original Plan)
since inception of the Original Plan through and including the day next
preceding the date of calculation. From this sum (distribution charges) there
shall be subtracted (i) the aggregate amount paid or payable to the Principal
Underwriter pursuant to this Section 3 (and pursuant to Section 3 of the
Original Plan) since inception of the Original Plan through and including the
day next preceding the date of calculation and (ii) the aggregate amount of all
contingent deferred sales charges paid or payable to the Principal Underwriter
since inception of the Original Plan through and including the day next
preceding the date of calculation. If the result of such subtraction is a
positive amount, a distribution fee [computed at the rate of 1% per annum above
the prime rate (being the base rate on corporate loans posted by at least 75% of
the nation's 30 largest banks) then being reported in the Eastern Edition of The
Wall Street Journal or if such prime rate is not so reported such other rate as
may be designated from time to time by vote or other action of a majority of (i)
the Rule 12b-1 Trustees and (ii) all of the Trustees then in office] shall be
computed on such amount and added to such amount, with the resulting sum
constituting the amount of outstanding uncovered distribution charges of the
Principal Underwriter with respect to such day for all purposes of this Plan. If
the result of such subtraction is a negative amount, there shall exist no
outstanding uncovered distribution charges of the Principal Underwriter with
respect to such day and no amount shall be accrued or paid to the Principal
Underwriter with respect to such day. The aggregate amounts accrued and paid
pursuant to this Section 3 during any fiscal year of the Fund shall not exceed
.75% of the average daily net assets of the Fund for such year.
4. The Principal Underwriter shall be entitled to receive all
contingent deferred sales charges paid or payable with respect to any day on
which there exist outstanding uncovered distribution charges of the Principal
Underwriter. The Fund shall be entitled to receive all remaining contingent
deferred sales charges paid or payable by shareholders with respect to any day
on which there exist no outstanding uncovered distribution charges of the
Principal Underwriter, provided that no such sales charge which would cause the
Fund to exceed the maximum applicable cap imposed thereon by paragraph (2) of
subsection (d) of Section 26 of Article III of the NASD Rules shall be imposed.
5. The Fund may make payments of service fees to the Principal
Underwriter, Authorized Firms and other persons. The aggregate of such payments
during any fiscal year of the Fund shall not exceed .25% of the Fund's average
daily net assets for such year. Appropriate adjustment of service fee payments
shall be made whenever necessary to ensure that no such payment shall cause the
Fund to exceed the applicable maximum cap imposed thereon by paragraph (5) of
subsection (d) of Section 26 of Article III of the NASD Rules.
6. This Plan shall not take effect until after it has been approved by
both a majority of (i) the Rule 12b-1 Trustees and (ii) all of the Trustees then
in office, cast in person at a meeting (or meetings) called for the purpose of
voting on this Plan.
7. Any agreements between the Trust on behalf of the Fund and any
person relating to this Plan shall be in writing and shall not take effect until
approved in the manner provided for Trustee approval of this Plan in Section 6.
8. This Plan shall continue in effect through and including April 28,
1995, and shall continue in effect indefinitely thereafter, but only for so long
as such continuance after April 28, 1995 is specifically in approved at least
annually in the manner provided for Trustee approval of this Plan in Section 6.
9. The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to this Plan or any related agreement made on
behalf of the Fund shall be the President or any Vice President of the Trust.
Such persons shall provide to the Trustees of the Trust and the Trustees shall
review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
10. This Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting
securities of the Fund. The Principal Underwriter shall also be by entitled to
receive all contingent deferred sales charges paid or payable with respect to
any day subsequent to y termination of this Plan on which there exist
outstanding uncovered distribution charges of the Principal Underwriter.
11. This Plan may not be amended to increase materially the payments to
be made by the Fund as provided in Sections 2, 3 and 5 unless such amendment is
approved by a vote of at least a majority of the outstanding voting securities
of the Fund. In addition, all material amendments to this Plan shall be approved
in the manner provided for Trustee approval of this Plan in Section 6.
12. While this Plan is in effect, the selection and nomination of the
Rule 12b-1 Trustees shall be committed to the discretion of the Rule 12b-1
Trustees. tees shall be committed to the discretion of the Rule 12b-1 Trustees.
13. The Trust shall preserve copies of this Plan and any related
agreements made by the Trust on behalf of the Fund and all reports made pursuant
to Section 9, for a period of not less than six years from the date of this
Plan, or of the agreements or of such report, as the case may be, the first two
years in an easily accessible place.
14. Consistent with the limitation of shareholder, officer and Trustee
liability as set forth in the Trust's Declaration of Trust, any obligations
assumed by the Fund pursuant to this Plan shall be limited in all cases to the
assets of the Fund and no person shall seek satisfaction thereof from the
shareholders of the Trust, officers or Trustees of the Trust or any other series
of the Trust.
15. When used in this Plan, the term "service fees" shall have the same
meaning as such term has in subsections (b) and (d) of Section 26 of Article III
of the NASD Rules. When used in this Plan, the term "vote of a majority of the
outstanding voting securities of the Fund" shall mean the vote of the lesser of
(a) 67 per centum or more of the shares of the Fund present or represented by
proxy at the meeting if the holders of more than 50 per centum of the
outstanding shares of the Fund are present or represented by proxy at the
meeting, or (b) more than 50 per centum of the outstanding shares of the Fund.
16. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or regulation of the Securities and Exchange
Commission or otherwise, the remainder of this Plan shall not be le affected
thereby.
17. This Plan shall amend, replace and be substituted for the Original
Plan as of the opening of business on January 30, 1995 and this Plan shall be
effective as of such time. The outstanding uncovered distribution charges of the
Principal Underwriter calculated under the Original Plan as of the close of
business on January 29, 1995 shall be the outstanding uncovered distribution
charges of the Principal Underwriter calculated under this Plan as of the
opening of business on January 30, 1995.
IN WITNESS WHEREOF, the Trust has executed this Plan on behalf of the
Fund on the 27th day of January, 1995.
EATON VANCE HIGH INCOME TRUST
(on behalf of EV CLASSIC HIGH INCOME FUND)
BY/s/ M. Dozier Gardner
--------------------------------------
President
Attest:
/s/ Thomas Otis
- ---------------------------
Secretary
EXHIBIT 99.16
<TABLE>
EV CLASSIC HIGH INCOME FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the life of the Fund ending March 31, 1995. Past performance is not indicative of future results.
Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.
<CAPTION>
TOTAL TOTAL
RETURN RETURN
03/31/95 03/31/95 THROUGH THOUGH
VALUE OF VALUE OF 03/31/95 03/31/95
NO. OF SHARES TOTAL INVEST- INVEST- BEFORE AFTER
NO. OF NAV ON GAINED THROUGH NO. OF MENT MENT DEDUCTING DEDUCTING
INVEST- INVEST- AMT OF SHARES DATE OF REINVESTMENT OF SHARES BEFORE AFTER THE CDSC THE CDSC *
MENT MENT INVEST- PUR- INVEST- ALL DISTRIBUTIONS AS OF 03/31/95 DEDUCTING DEDUCTING ------------ -----------
PERIOD DATE MENT CHASED MENT THROUGH 03/31/95 03/31/95 NAV THE CDSC THE CDSC* CUM^ ANN++ CUM^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 06/08/94 $1,000 100.000 $10.00 8.043 108.043 $9.43 $1,018.85 $1,009.42 1.89% NA 0.94% NA
THE FUND
(0.81 YRS)
* No contingent deferred sales charge (CDSC) is imposed on shares purchased more than one year prior to the redemption,
shares acquired through the reinvestment of dividends and distributions and any appreciation in value of other shares in
the account, and no such charge is imposed on exchanges of fund shares for shares of one or more other funds in the Eaton
Vance Classic Group of Funds.
^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
03/31/95 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
03/31/95 by the initial net asset value and subtracting the CDSC.
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
EV CLASSIC HIGH INCOME FUND
CALCULATION OF YIELD
For the 30 days ended 3/31/95:
Interest Income Earned: $21,980
Plus Dividend Income Earned: $0
------------
Equal Gross Income: $21,980
Minus Expenses: $4,043
------------
Equal Net Investment Income: $17,937
Divided by Average daily number of shares
outstanding that were entitled
to receive dividends: 227,716
------------
Equal Net Investment Income Earned Per Share: $0.0788
Net Asset Value Price Per Share 3/31/95: $9.4300
30 Day Yield*: 10.24%
* Yield is calculated on a bond equivalent rate as follows:
6
2[(($0.0788/$9.43)+1) -1]
<PAGE>
EV CLASSIC HIGH INCOME FUND
CALCULATION OF DISTRIBUTION RATE
AND EFFECTIVE DISTRIBUTION RATE
AS OF 03/31/95
DISTRIBUTION RATE
---------------------------------------------------------
Annualize
Most Recent
Monthly : ( $0.068657540 / 28) x 365
Distribution
Divide by
Current Maximum : $9.43
Offering Price
Distribution
Rate Equals : 0.0949 ( or 9.49% )
EFFECTIVE DISTRIBUTION RATE
----------------------------------------------------------
Divide
Distribution : 0.0949
Rate by 365/28 ------ + 1
( or 13.036 ) 13.036
and Add 1.
The Resulting
Number Equals : 1.0073
Take this
Number to the 13.036
365/28th ( or : ( 1.0073 ) - 1
13.036 ) power
and Subtract 1.
Effective
Distribution : 0.0992 ( or 9.92% )
Rate Equals
<PAGE>
<TABLE>
EV MARATHON HIGH INCOME FUND
INVESTMENT PERFORMANCE
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the life of the Fund ending March 31, 1995. Past performance is not indicative of future results.
Investment return and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost.
<CAPTION>
TOTAL
RETURN RETURN
NO. OF SHARES 03/31/95 03/31/95 THROUGH THOUGH
GAINED THROUGH VALUE OF VALUE OF 03/31/95 03/31/95
REINVESTMENT TOTAL INVEST- INVEST- BEFORE AFTER
NO. OF NAV ON OF ALL NO. OF MENT MENT DEDUCTING DEDUCTING
INVEST- INVEST- AMT OF SHARES DATE OF DISTRIBUTIONS SHARES BEFORE AFTER THE CDSC THE CDSC *
MENT MENT INVEST- PUR- INVEST- THROUGH AS OF 03/31/95 DEDUCTING DEDUCTING ------------- -------------
PERIOD DATE MENT CHASED MENT 03/31/95 03/31/95 NAV THE CDSC THE CDSC* CUMUL^ ANN++ CUMUL^^ ANN++
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIFE OF 08/19/86 $1,000 100.000 $10.00 186.590 286.590 $6.92 $1,983.20 $1,983.20 98.32% 8.27% 98.32% 8.27%
THE FUND
(8.62 YRS)
5 YEARS
ENDING 03/31/90 $1,000 134.590 $7.43 114.214 248.803 $6.92 $1,721.72 $1,703.09 72.17% 11.48% 70.31% 11.24%
03/31/95
1 YEAR
ENDING 03/31/94 $1,000 134.228 $7.45 13.903 148.132 $6.92 $1,025.07 $978.63 2.51% 2.51% -2.14% -2.14%
03/31/95
* No contingent deferred sales charge (CDSC) is imposed on shares purchased more than six years prior to the redemption,
shares acquired through the reinvestment of dividends and distributions and any appreciation in value of other shares in
the account, and no such charge is imposed on exchanges of fund shares for shares of one or more other funds in the Eaton
Vance Marathon Group of Funds.
^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
03/31/95 by the initial net asset value.
^^ Cumulative total return (net asset value to net asset value) is calculated by dividing the cumulative net asset value on
03/31/95 by the initial net asset value and subtracting the CDSC.
++ Average annual total return is the average annual compounded rate of return based on the cumulative value for each period.
It is calculated by taking the nth root of 1 + the cumulative total return, where n = the number of years invested.
</TABLE>
<PAGE>
EV MARATHON HIGH INCOME FUND
CALCULATION OF YIELD
For the 30 days ended 3/31/95:
Interest Income Earned: $4,545,940
Plus Dividend Income Earned: $0
------------
Equal Gross Income: $4,545,940
Minus Expenses: $655,292
------------
Equal Net Investment Income: $3,890,648
Divided by Average daily number of shares
outstanding that were entitled
to receive dividends: 63,409,373
------------
Equal Net Investment Income Earned Per Share: $0.0614
Net Asset Value Price Per Share 3/31/95: $6.9200
30 Day Yield*: 10.88%
* Yield is calculated on a bond equivalent rate as follows:
6
2[(($0.0614/$6.92)+1) -1]
<PAGE>
EV MARATHON HIGH INCOME FUND
CALCULATION OF DISTRIBUTION RATE
AND EFFECTIVE DISTRIBUTION RATE
AS OF 03/31/95
DISTRIBUTION RATE
-------------------------------------------------------
Annualize
Most Recent
Monthly : ( $0.050476720 / 28) x 365
Distribution
Divide by
Current Maximum : $6.92
Offering Price
Distribution
Rate Equals : 0.0951 ( or 9.51% )
EFFECTIVE DISTRIBUTION RATE
-------------------------------------------------------
Divide
Distribution : 0.0951
Rate by 365/28 ------ + 1
( or 13.036 ) 13.036
and Add 1.
The Resulting
Number Equals : 1.0073
Take this
Number to the 13.036
365/28th ( or : ( 1.0073 ) - 1
13.036 ) power
and Subtract 1.
Effective
Distribution : 0.0994 ( or 9.94% )
Rate Equals
EXHIBIT 99.17(a)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Eaton Vance Mutual Funds
Trust, a Massachusetts business trust, do hereby severally constitute and
appoint H. Day Brigham, Jr., M. Dozier Gardner and Thomas Otis, or any of them,
to be true, sufficient and lawful attorneys, or attorney for each of us, to sign
for each of us, in the name of each of us in the capacities indicated below, any
and all amendments (including post-effective amendments) to the Registration
Statement on Form N-1A filed by Eaton Vance Mutual Funds Trust with the
Securities and Exchange Commission in respect of shares of beneficial interest
and other documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
President, Principal
/s/ M. Dozier Gardner Executive Officer and July 11, 1995
- --------------------------------------------- Trustee
M. Dozier Gardner
Treasurer and Principal
/s/ James L. O'Connor Financial and Accounting July 11, 1995
- --------------------------------------------- Officer
James L. O'Connor
/s/ Donald R. Dwight Trustee July 11, 1995
- ---------------------------------------------
Donald R. Dwight
/s/ James B. Hawkes Trustee July 11, 1995
- ---------------------------------------------
James B. Hawkes
/s/ Samuel L. Hayes, III Trustee July 11, 1995
- ---------------------------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee July 11, 1995
- ---------------------------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee July 11, 1995
- ---------------------------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee July 11, 1995
- ---------------------------------------------
Jack L. Treynor
</TABLE>
EXHIBIT 99.17(b)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Government Obligations
Portfolio and Short-Term Treasury Portfolio, each a New York trust, do hereby
severally constitute and appoint H. Day Brigham, Jr., M. Dozier Gardner and
Thomas Otis, or any of them, to be true, sufficient and lawful attorneys, or
attorney for each of us, to sign for each of us, in the name of each of us in
the capacities indicated below, any and all amendments (including post-effective
amendments) to the Registration Statement on Form N-1A filed by Eaton Vance
Mutual Funds Trust with the Securities and Exchange Commission in respect of
shares of beneficial interest and other documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ M. Dozier Gardner President and Trustee June 19, 1995
- ---------------------------------------------
M. Dozier Gardner
/s/ Donald R. Dwight Trustee June 19, 1995
- ---------------------------------------------
Donald R. Dwight
/s/ James B. Hawkes Trustee June 19, 1995
- ---------------------------------------------
James B. Hawkes
/s/ Samuel L. Hayes, III Trustee June 19, 1995
- ---------------------------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee June 19, 1995
- ---------------------------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee June 19, 1995
- ---------------------------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee June 19, 1995
- ---------------------------------------------
Jack L. Treynor
/s/ James L. O'Connor Treasurer and February 25, 1994
- --------------------------------------------- Principal Financial
James L. O'Connor and Accounting Officer
</TABLE>
EXHIBIT 99.17(c)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of High Income Portfolio, a
New York trust, do hereby severally constitute and appoint H. Day Brigham, Jr.,
M. Dozier Gardner and Thomas Otis, or any of them, to be true, sufficient and
lawful attorneys, or attorney for each of us, to sign for each of us, in the
name of each of us in the capacities indicated below, any and all amendments
(including post-effective amendments) to the Registration Statement on Form N-1A
filed by Eaton Vance Mutual Funds Trust with the Securities and Exchange
Commission in respect of shares of beneficial interest and other documents and
papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set
opposite our respective signatures.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ M. Dozier Gardner President and Trustee June 19, 1995
- ---------------------------------------------
M. Dozier Gardner
/s/ Donald R. Dwight Trustee June 19, 1995
- ---------------------------------------------
Donald R. Dwight
/s/ James B. Hawkes Trustee June 19, 1995
- ---------------------------------------------
James B. Hawkes
/s/ Samuel L. Hayes, III Trustee June 19, 1995
- ---------------------------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee June 19, 1995
- ---------------------------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee June 19, 1995
- ---------------------------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee June 19, 1995
- ---------------------------------------------
Jack L. Treynor
/s/ James L. O'Connor Treasurer and June 19, 1995
- --------------------------------------------- Principal Financial
James L. O'Connor and Accounting
Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> EV CLASSIC HIGH INCOME FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> JUN-08-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 2141
<INVESTMENTS-AT-VALUE> 2112
<RECEIVABLES> 159
<ASSETS-OTHER> 40
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2311
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 235
<TOTAL-LIABILITIES> 235
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2119
<SHARES-COMMON-STOCK> 220
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 315
<ACCUMULATED-NET-GAINS> (12)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (30)
<NET-ASSETS> 2076
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 123
<EXPENSES-NET> 16
<NET-INVESTMENT-INCOME> 107
<REALIZED-GAINS-CURRENT> (12)
<APPREC-INCREASE-CURRENT> (30)
<NET-CHANGE-FROM-OPS> 65
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 107
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 4
<NUMBER-OF-SHARES-SOLD> 4486
<NUMBER-OF-SHARES-REDEEMED> 2426
<SHARES-REINVESTED> 62
<NET-CHANGE-IN-ASSETS> 2076
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 53
<AVERAGE-NET-ASSETS> 1475
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.735
<PER-SHARE-GAIN-APPREC> (0.544)
<PER-SHARE-DIVIDEND> 0.735
<PER-SHARE-DISTRIBUTIONS> 0.026
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.43
<EXPENSE-RATIO> 2.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> EV MARATHON HIGH INCOME FUND
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 460292
<INVESTMENTS-AT-VALUE> 440440
<RECEIVABLES> 1419
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 441859
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2688
<TOTAL-LIABILITIES> 2688
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 522994
<SHARES-COMMON-STOCK> 63483
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1375
<ACCUMULATED-NET-GAINS> (62597)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (19852)
<NET-ASSETS> 439171
<DIVIDEND-INCOME> 33
<INTEREST-INCOME> 7324
<OTHER-INCOME> 37521
<EXPENSES-NET> 4968
<NET-INVESTMENT-INCOME> 39910
<REALIZED-GAINS-CURRENT> (18301)
<APPREC-INCREASE-CURRENT> (11002)
<NET-CHANGE-FROM-OPS> 10607
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 39910
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1366
<NUMBER-OF-SHARES-SOLD> 207324
<NUMBER-OF-SHARES-REDEEMED> 149819
<SHARES-REINVESTED> 13076
<NET-CHANGE-IN-ASSETS> 39912
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 423
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4968
<AVERAGE-NET-ASSETS> 419348
<PER-SHARE-NAV-BEGIN> 7.45
<PER-SHARE-NII> 0.671
<PER-SHARE-GAIN-APPREC> (0.507)
<PER-SHARE-DIVIDEND> 0.671
<PER-SHARE-DISTRIBUTIONS> 0.023
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.92
<EXPENSE-RATIO> 1.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 10-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> JUN-01-1994
<PERIOD-END> MAR-31-1995
<INVESTMENTS-AT-COST> 449792
<INVESTMENTS-AT-VALUE> 429923
<RECEIVABLES> 20942
<ASSETS-OTHER> 4
<OTHER-ITEMS-ASSETS> 11
<TOTAL-ASSETS> 450880
<PAYABLE-FOR-SECURITIES> 8315
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13
<TOTAL-LIABILITIES> 8328
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 462433
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (19881)
<NET-ASSETS> 442552
<DIVIDEND-INCOME> 33
<INTEREST-INCOME> 40108
<OTHER-INCOME> 0
<EXPENSES-NET> 2497
<NET-INVESTMENT-INCOME> 37644
<REALIZED-GAINS-CURRENT> (13222)
<APPREC-INCREASE-CURRENT> (7038)
<NET-CHANGE-FROM-OPS> 17384
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 575199
<NUMBER-OF-SHARES-REDEEMED> 150132
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 442452
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2261
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2497
<AVERAGE-NET-ASSETS> 425227
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.70
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
