<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 3, 1997
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. 35 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 38 [X]
EATON VANCE MUTUAL FUNDS TRUST
----------------------------------------------------
(FORMERLY EATON VANCE GOVERNMENT OBLIGATIONS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
617-482-8260
-------------------------------------
(REGISTRANT'S TELEPHONE NUMBER)
ALAN R. DYNNER
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
--------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective pursuant to Rule 485
(check appropriate box):
[ ] immediately upon filing [ ] on (date) pursuant
pursuant to paragraph(b) to paragraph (a)(1)
[ ] on (date) pursuant to [X] 75 days after filing
paragraph (b) pursuant to paragraph (a)(2)
[ ] 60 days after filing [ ] on (date) pursuant to
pursuant to paragraph (a)(1) paragraph (a)(2).
If appropriate, check the following box:
[] this post effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on May
15, 1997 filed its "Notice" as required by that Rule for the series of the
Registrant with a fiscal year end of March 31, 1997, on February 20, 1997
filed its "Notice" for the series of the Registrant with a fiscal year end of
December 31, 1996 and on December 23, 1996 filed its "Notice" for the series
of the Registrant with a fiscal year end of October 31, 1996. Registrant
continues its election to register an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2.
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<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
Cross Reference Sheet required by Rule 481(a) under the Securities Act of
1933
Part A--The Prospectus of:
Eaton Vance Tax-Managed Emerging Growth Fund
Part B--The Statement of Additional Information of:
Eaton Vance Tax-Managed Emerging Growth Fund
Part C--Other Information
Signatures
Exhibit Index Required by Rule 483(b) 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
CROSS REFERENCE SHEET FOR
EATON VANCE TAX-MANAGED EMERGING GROWTH FUND
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 Not Applicable
Information
4. ............ General Description of The Fund's Investment
Registrant Objective; The Tax-Managed
Mutual Fund Advantage;
Investment Policies and
Risks; Organization of the
Fund
5. ............ Management of the Fund Management of the Fund
5A............. Management's Discussion of Not Applicable
Fund Performance
6. ............ Capital Stock and Other Organization of the Fund;
Securities Reports to Shareholders; The
Lifetime Investing Account/
Distribution Options;
Distributions and Taxes
7. ............ Purchase of Securities Valuing Shares; Distribution
Being Offered and Service Plans; How to Buy
Shares; The Lifetime
Investing Account/
Distribution Options; The
Eaton Vance Exchange
Privilege; Eaton Vance
Shareholder Services
8. ............ Redemption or Repurchase How to Redeem Shares
9. ............ Pending Legal Proceedings Not Applicable
PART B
STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
------ ------------- -----------------------
10. ............ Cover Page Cover Page
11. ............ Table of Contents Table of Contents
12. ............ General Information and Other Information
History
13. ............ Investment Objectives and Additional Information about
Policies Investment Policies;
Investment Restrictions
14. ............ Management of the Fund Trustees and Officers
15. ............ Control Persons and Control Persons and Principal
Principal Holders of Holders of Securities
Securities
16. ............ Investment Advisory and Investment Adviser and
Other Services Administrator; Service Plan
-- Class A Shares;
Distribution Plan -- Class
B and Class C Shares;
Custodian; Independent
Certified Public Accountants;
Other Information
17. ............ Brokerage Allocation and Not Applicable
Other Practices
18. ............ Capital Stock and Other Other Information
Securities
19. ............ Purchase, Redemption and Determination of Net Asset
Pricing of Securities Value; Principal Underwriter;
Being Offered Services for Accumulation --
Class A Shares; Service for
Withdrawal; Service Plan --
Class A Shares; Distribution
Plan -- Class B and Class C
Shares
20. ............ Tax Status Taxes
21. ............ Underwriters Principal Underwriter
22. ............ Calculation of Performance Investment Performance
Data
23. ............ Financial Statements Not Applicable
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EATON VANCE TAX-MANAGED
EMERGING GROWTH FUND
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EATON VANCE TAX-MANAGED EMERGING GROWTH FUND (THE "FUND") IS A MUTUAL FUND
SEEKING LONG-TERM, AFTER-TAX RETURNS FOR ITS SHAREHOLDERS THROUGH INVESTING IN A
DIVERSIFIED PORTFOLIO OF EQUITY SECURITIES OF EMERGING GROWTH COMPANIES. THE
FUND IS A SEPARATE SERIES OF EATON VANCE MUTUAL FUNDS TRUST (THE "TRUST").
Shares of the Fund are not deposits or obligations of, or guaranteed or endorsed
by, any bank or other insured depository institution, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other government agency. Shares of the Fund involve investment risks,
including fluctuations in value and the possible loss of some or all of the
principal investment.
This Prospectus is designed to provide you with information you should know
before investing in the Fund. Please retain this document for future
reference. A Statement of Additional Information for the Fund dated September
16, 1997, as supplemented from time to time, has been filed with the
Securities and Exchange Commission (the "Commission") and is incorporated
herein by reference. The Statement of Additional Information is available
without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston,
MA 02110 (telephone (800) 225-6265). The Fund's investment adviser is Eaton
Vance Management (the "Investment Adviser"), which is located at the same
address. Eaton Vance Management also acts as the administrator (the
"Administrator") of the Fund.
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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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ......................... 2 How to Buy Shares ..................................... 10
The Fund's Investment Objective ....................... 4 How to Redeem Shares .................................. 12
The Tax-Managed Mutual Fund Advantage ................. 4 Reports to Shareholders ............................... 15
Investment Policies and Risks ......................... 4 The Lifetime Investing Account/Distribution Options 15
Organization of the Fund .............................. 7 The Eaton Vance Exchange Privilege .................... 16
Management of the Fund ................................ 7 Eaton Vance Shareholder Services ...................... 17
Distribution and Service Plans ........................ 8 Distributions and Taxes ............................... 18
Valuing Shares ........................................ 9 Performance Information ............................... 19
</TABLE>
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PROSPECTUS DATED SEPTEMBER 16, 1997
<PAGE>
<TABLE>
SHAREHOLDER AND FUND EXPENSES
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
- -----------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases of Shares
(as a percentage of offering price) 5.75% None None
Sales Charges Imposed on Reinvested Distributions None None None
Fees to Exchange Shares None None None
Maximum Contingent Deferred Sales Charge None 5.00% 1.00%
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (as a percentage of average daily net assets)
- -----------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
Investment Adviser Fee 0.625% 0.625% 0.625%
Rule 12b-1 Distribution and/or Service Fees 0.000% 0.750% 1.000%
Other Expenses 0.250% 0.250% 0.250%
----- ----- -----
Total Operating Expenses 0.875% 1.625% 1.875%
===== ===== =====
EXAMPLES
An investor would pay the following expenses and, in the case of Class A shares, maximum initial sales charge and in the case of
Class B and Class C shares, a contingent deferred sales charge (for Class C shares only for redemptions 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:
<CAPTION>
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
1 Year $66 $67 $29
3 Years $84 $91 $59
An investor would pay the following expenses on the same investment, assuming (a) 5% annual return and (b) no redemptions:
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
------ ------ ------
<S> <C> <C> <C>
1 Year $66 $17 $19
3 Years $84 $51 $59
</TABLE>
NOTES:
The table and Examples summarize the aggregate expenses of each Class of shares
of the Fund and are designed to help investors understand the costs and expenses
they will bear, directly or indirectly, by investing in the Fund. Information
for each Class is based on its estimated expenses for the current fiscal year
because the Fund has only recently been organized.
The Fund offers three classes of shares. Class A shares are sold subject to a
sales charge imposed at the time of purchase. No sales charge is payable at the
time of purchase on investments in Class A shares of $1 million or more.
However, a contingent deferred sales charge of 1% will be imposed on such
investments in the event of certain redemptions within 12 months of purchase.
Class B shares are sold subject to a declining contingent deferred sales charge
if redeemed within six years after purchase equaling a percentage of the
purchase price of the shares being redeemed. Class C shares are sold subject to
a 1% contingent deferred sales charge if redeemed within one year after
purchase. The contingent deferred sales charge on Class B shares (maximum 5%)
and on Class C shares (1%) is imposed on any redemption the amount of which
exceeds the aggregate net asset value at the time of redemption of (a) shares
purchased more than six years prior to redemption in the case of Class B shares
and shares purchased more than one year prior to redemption in the case of Class
C shares, (b) shares acquired through the reinvestment of distributions or (c)
any appreciation in value of other shares in the account. See "How to Buy
Shares", and "How to Redeem Shares".
THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal
regulations require the Example to assume a 5% annual return, but actual annual
return will vary. Long-term shareholders in Class B and Class C shares 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. For
further information regarding the expenses of the Fund see "Management of the
Fund", "Distribution and Service Plans" and "How to Redeem Shares."
For Class A and Class B shares sold by Authorized Firms and remaining
outstanding for at least one year, the Fund will pay service fees not exceeding
.25% per annum of its average daily net assets. The Fund expects to begin making
service fee payments during the quarter ending December 31, 1998. Therefore,
expenses after year one will be higher. See "Distribution and Service Plans."
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
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THE FUND'S INVESTMENT OBJECTIVE IS TO ACHIEVE LONG-TERM, AFTER-TAX RETURNS FOR
ITS SHAREHOLDERS THROUGH INVESTING IN A DIVERSIFIED PORTFOLIO OF EQUITY
SECURITIES OF EMERGING GROWTH COMPANIES.
In its operations, the Fund seeks to achieve after-tax returns for its
shareholders in part by minimizing the taxes they incur in connection with the
Fund's investment income and realized capital gains. Taxes on investment income
are minimized by investing primarily in lower yielding securities. Taxes on
realized capital gains are minimized by maintaining relatively low portfolio
turnover, by generally avoiding realized short-term gains and by employing a
variety of tax-efficient management techniques. See "Investment Policies and
Risks" for further information.
The Fund is designed for long-term taxable investors. The Fund is not intended
to be a complete investment program. Prospective investors should take into
account their objectives and other investments when considering the purchase of
Fund shares. The Fund cannot assure achievement of its investment objective.
While the Fund seeks to minimize investor taxes associated with the Fund's
investment income and realized capital gains, the Fund may have taxable
investment income and may realize taxable gains from time to time. The
investment objective of the Fund is fundamental, and may not be changed without
obtaining the approval of the Fund's shareholders.
THE TAX-MANAGED MUTUAL FUND ADVANTAGE
- --------------------------------------------------------------------------------
Taxes are a major influence on the net returns that investors receive on their
taxable investments. There are four components of the returns of an equity
mutual fund -- price appreciation, long-term and short-term capital gains
distributions, and income distributions -- which are treated differently for
federal income tax purposes. Distributions of net investment income and realized
short-term gains are taxed as ordinary income. Distributions of net realized
long-term gains are taxed as capital gains. Price appreciation, or unrealized
gains, are not subject to current tax. Most equity mutual funds are managed to
maximize PRE-TAX returns and largely ignore the different tax treatment of the
various components of fund returns. In contrast, the Fund seeks to achieve
long-term, AFTER-TAX returns for its shareholders by managing its investments so
as to minimize and defer the taxes incurred by shareholders as a consequence of
their investment in the Fund. The Fund seeks to achieve returns primarily in the
form of unrealized capital gains, which do not give rise to current tax
obligations for shareholders.
The Fund is similar to retirement planning products such as IRAs and variable
annuities in that it is a vehicle for long-term, tax-deferred investing. As a
mutual fund, however, the Fund avoids a number of structural disadvantages
inherent in an IRA or a variable annuity--including the limitations and
penalties on early withdrawals, the taxing of all income and gain upon
withdrawal at ordinary income rates, and the inability to gain a step up in
basis at death. A variable annuity may also have higher annual expenses than the
Fund due to the embedded insurance features. Annual contributions to IRAs are
limited.
An analysis of long-term hypothetical returns achievable from a tax-managed
equity fund compared to a conventional equity mutual fund and a variable annuity
can illustrate the fundamental soundness of a tax-managed equity fund
investment. Assuming identical annual pre-tax returns, over a holding period of
several years a tax-managed fund can generate liquidation proceeds higher than a
conventional managed equity mutual fund and a variable annuity. If the
investments are passed into an estate (thereby triggering a step-up in basis),
the relative performance advantage of a tax-managed fund compared to a
conventional fund or to a variable annuity can be substantial, again assuming
equivalent annual returns before taxes. Of course, actual returns achieved by
long-term investors in the Fund cannot be predicted.
INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------
The Fund invests in a broadly diversified selection of publicly-traded equity
securities of emerging growth companies that are believed to have superior
long-term earnings growth prospects. In the view of the Investment Adviser,
"emerging growth companies" are companies that are expected to demonstrate
earnings growth rates and profit margins over the long term that are
substantially in excess of the average of all publicly-traded companies in the
U.S. It is expected that most emerging growth companies invested in by the Fund
will have annual revenues of between $50 million and $2 billion at the time of
acquisition, but the Fund may also invest in larger and smaller companies
identified as having characteristics of emerging growth. The Investment Adviser
believes that investing in emerging growth companies offers significant
opportunities for long-term capital appreciation, particularly if the Fund can
invest in such companies before their potential is broadly recognized by
investors.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST AT LEAST 65% OF ITS TOTAL
ASSETS IN EQUITY SECURITIES OF EMERGING GROWTH COMPANIES. For this purpose,
equity securities include common stocks and securities convertible into common
stocks. In selecting companies for investment, the Investment Adviser may
consider overall growth prospects, financial condition, competitive position,
technology, marketing expertise, profit margins, return on investment, capital
resources, management and other factors. The Fund may invest up to 35% of its
assets in preferred stocks, warrants, money market instruments (to meet
anticipated redemption requests or while investment of cash is pending) and
other securities and instruments described in this Prospectus. For temporary
defensive purposes, such as during abnormal market or economic conditions, the
Fund may also invest without limitation in various money market instruments and
high grade debt obligations. The Fund may also temporarily borrow up to 5% of
the value of its total assets to satisfy redemption requests or settle
securities transactions.
In its operations, the Fund seeks to achieve after-tax returns for its
shareholders in part by minimizing the taxes they incur in connection with the
Fund's investment income and realized capital gains. Taxes on investment income
are minimized by investing primarily in lower yielding securities. The Fund can
be expected to distribute relatively low levels of taxable investment income, if
any.
Taxes on realized capital gains are minimized in part by maintaining relatively
low portfolio turnover, investing primarily in emerging companies with
characteristics of above-average growth and profit potential that are acquired
with the expectation of being held for a period of years. The Fund will
generally seek to avoid realizing short-term capital gains. When a decision is
made to sell a particular appreciated security, the Fund will select for sale
those share lots with holding periods sufficient to qualify for long-term
capital gains treatment and among those, the share lots with the highest cost
basis. The Fund may, when prudent, sell securities to realize capital losses
that can be used to offset realized capital gains.
To protect against price declines in securities holdings that have developed
large accumulated capital gains, the Fund may use tax-advantaged hedging
techniques including, but not limited to, the purchase of put options and the
sale of stock index futures contracts. By using these techniques rather than
selling such securities the Fund can reduce its exposure to price declines in
the securities without realizing substantial capital gains under current tax
law. In addition, while the Fund currently meets redemptions solely in cash, it
may adopt in the future a policy of meeting shareholder redemptions in whole or
in part through the distribution of readily marketable securities. Such a policy
would only be adopted after giving notice to the shareholders and only in
conjunction with putting in place a program whereby redeeming shareholders who
receive securities could elect to sell the securities received to an affiliate
of the Fund's custodian (or a designated broker-dealer) at no cost and at a
price equal to the price used in determining the redemption value of the
distributed securities. See "How to Redeem Shares." A redeeming shareholder of
the Fund who received securities would incur no more or less taxable gain than
if the redemption had been paid in cash. By distributing appreciated securities
the Fund can reduce its position in such securities without realizing capital
gains.
It is expected that by employing the various tax-efficient management strategies
described herein, the Fund can minimize the extent to which shareholders incur
taxes on Fund distributions of income and net realized gains. The Fund may
nevertheless make taxable income or gains distributions from time to time.
An investment in the Fund entails risk that the principal value of Fund shares
may not increase or may decline. The Fund's investments will include investments
in smaller companies for which there is less publicly available information than
larger, more established companies. The securities of these companies, which may
include legally restricted securities, are generally subject to greater price
fluctuations, limited liquidity, higher transaction costs and higher investment
risk. These companies may have limited product lines, markets or financial
resources, or they may be dependent on a limited management group. Investments
in smaller companies may involve a higher degree of business and financial risk
that can result in substantial losses. The portfolio will be managed for
long-term, after-tax returns. In managing the Fund, the Investment Adviser will
generally avoid selling securities with large accumulated capital gains. Over
time, such securities may comprise a substantial portion of the assets of the
Fund. Although the Fund may utilize certain hedging strategies in lieu of
selling appreciated securities, the Fund's exposure to losses during stock
market declines may nonetheless become higher than that of other funds that do
not follow a general policy of avoiding sales of highly-appreciated securities.
INVESTING IN FOREIGN SECURITIES. The Fund may invest up to 20% of its assets in
securities issued by foreign companies (including American Depository Receipts
and Global Depository Receipts). Investing in securities issued by foreign
companies involves considerations and possible risks not typically associated
with investing in securities issued by U.S. companies. The value of foreign
investments to U.S. investors may be adversely affected by changes in currency
exchange rates. Foreign brokerage commissions, custody fees and other costs of
investing are generally higher than in the United States, and foreign securities
markets may be less liquid, more volatile and less subject to government
supervision than in the United States. Investments in foreign securities could
be adversely affected by other factors not present in the United States,
including expropriation, confiscatory taxation, lack of uniform accounting and
auditing standards, armed conflict, and potential difficulties in enforcing
contractual obligations.
RESTRICTED SECURITIES. Securities that are not freely tradable or which are
subject to restrictions on sale under the Securities Act of 1933 are considered
restricted. Such securities may be illiquid and may be difficult to properly
value. The Fund's holdings of illiquid securities may not exceed 15% of its net
assets. Illiquid securities include securities legally restricted as to resale,
such as commercial paper issued pursuant to Section 4(2) of the Securities Act
of 1933 and securities eligible for resale pursuant to Rule 144A thereunder.
Section 4(2) and Rule 144A securities may, however, be treated as liquid by the
Investment Adviser pursuant to procedures adopted by the Trustees, which require
consideration of factors such as trading activity, availability of market
quotations and number of dealers willing to purchase the security. Such
securities may increase the level of fund illiquidity to the extent qualified
institutional buyers become uninterested in purchasing such securities.
DERIVATIVE INVESTMENTS. The Fund may purchase or sell derivative instruments to
hedge against securities price declines and currency movements and to enhance
returns. The Fund may engage in transactions in derivative instruments (which
derive their value by reference to other securities, indices, instruments, or
currencies) in the U.S. and abroad. Such transactions may include the purchase
and sale of stock index futures contracts and options on stock index futures;
the purchase of put options and the sale of call options on securities held in
the Fund; equity swaps; and the purchase and sale of forward currency exchange
contracts and currency futures. The Fund may use transactions in derivative
instruments as a substitute for the purchase and sale of securities. Derivative
transactions may be more advantageous in a given circumstance than transactions
involving securities due to more favorable current tax treatment, lower
transaction costs, or greater liquidity. While many derivative instruments have
built-in leveraging characteristics, the Fund will not use them to leverage its
net assets.
The purchase and sale of derivative instruments is a highly specialized activity
that can expose the Fund to a significant risk of loss. The built-in leveraging
inherent to many derivative instruments can result in losses that substantially
exceed the initial amount paid or received. Equity swaps and over-the-counter
options are private contracts in which there is a risk of loss in the event of a
default on an obligation to pay by a counterparty. Derivative instruments may be
difficult to value, may be illiquid, and may be subject to wide swings in
valuation caused by changes in the value of an underlying security, index,
instrument, or currency. There can be no assurance that the use of derivative
instruments will be advantageous to the Fund.
The Fund will only enter into swaps and over-the-counter options contracts with
counterparties whose credit quality or claims paying ability are considered to
be investment grade by the Investment Adviser. In addition, at the time of
entering into a transaction, the Fund's credit exposure to any one counterparty
will be limited to 5% or less of the net assets of the Fund. The Fund's
investment in illiquid assets, which will include certain equity swaps and
over-the-counter options, may not represent more than 15% of net assets at the
time any such illiquid assets are acquired.
All futures contracts entered into by the Fund will be traded on exchanges or
boards of trade that are licensed and regulated by the Commodities Futures
Trading Commission (the "CFTC") and must be executed through a futures
commission merchant or brokerage firm that is a member of the relevant exchange.
Under CFTC regulations, the Fund may only enter into futures contracts if,
immediately thereafter, the value of the aggregate initial margin with respect
to all currently outstanding non-hedging positions in futures contracts does not
exceed 5% of the Fund's net asset value, after taking into account unrealized
profits and losses on such positions.
LENDING OF PORTFOLIO SECURITIES. The Fund may seek to earn income by lending
portfolio securities to broker-dealers or other institutional borrowers. As with
other extensions of credit there are risks of delay in recovery or even loss of
rights in the securities loaned if the borrower of the securities fails
financially. However, the loans will be made only to organizations deemed by the
Investment Adviser to be sufficiently creditworthy and when, in the judgment of
the Investment Adviser, the consideration which can be earned from securities
loans of this type, net of administrative expenses and finders' fees, justifies
the attendant risk.
CERTAIN INVESTMENT POLICIES. The Fund has adopted certain fundamental investment
restrictions and policies which are enumerated in detail in the Statement of
Additional Information and which may not be changed unless authorized by a
shareholder vote. Among the fundamental restrictions, the Fund may not (a)
borrow money, except as permitted by the Investment Company Act of 1940, as
amended (the "1940 Act"), or (b) with respect to 75% of its total assets, invest
more than 5% of total assets (taken at current value) in the securities of any
one issuer, or invest in more than 10% of total assets in the outstanding voting
securities of any one issuer, except obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities and except securities of
other investment companies. Investment restrictions (except with respect to the
borrowing of money and issuing senior securities) are considered at the time of
acquisition of assets; the sale of portfolio assets is not required in the event
of a subsequent change in circumstances.
Except for the fundamental investment restrictions and policies specifically
identified above and enumerated in the Statement of Additional Information, the
policies of the Fund are not fundamental policies and accordingly may be changed
by the Trustees of the Trust without obtaining the approval of the shareholders
of the Fund.
ORGANIZATION OF THE FUND
- --------------------------------------------------------------------------------
THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE MUTUAL FUNDS TRUST, A BUSINESS
TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A DECLARATION OF TRUST
DATED MAY 7, 1984, AS AMENDED. The Trustees of the Trust are responsible for the
overall management and supervision of its affairs. The Trust may issue an
unlimited number of shares of beneficial interest (no par value per share) in
one or more series (such as the Fund). The Trustees of the Trust have divided
the shares of the Fund into multiple classes, including Class A, Class B and
Class C shares. Each Class represents an interest in the Fund, but is subject to
different expenses, rights and privileges. See "Distribution and Service Plans"
and "How to Buy Shares". The Trustees have the authority under the Declaration
of Trust to create additional classes of shares with differing rights and
privileges.
When issued and outstanding, the shares are fully paid and nonassessable by the
Trust and redeemable as described under "How to Redeem Shares." There are no
annual meetings of shareholders, but special meetings may be held as required by
law to elect Trustees and consider certain other matters. Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders of each
class are entitled to share pro rata in the net assets attributable to that
class available for distribution to shareholders.
The Fund's investment policies include a fundamental investment provision
allowing the Fund to invest its assets in an open-end management investment
company having substantially the same investment policies and restrictions at
the Fund. This investment company would be advised by the Investment Adviser (or
an affiliate) and pay an advisory fee no higher than the advisory fee paid by
the Fund. The Board of Trustees may implement the new investment policy without
shareholder approval at any time. This structure is commonly referred to as
"master-feeder."
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
THE TRUST ENGAGES EATON VANCE MANAGEMENT ("EATON VANCE"), AS THE FUND'S
INVESTMENT ADVISER. EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES
HAVE BEEN MANAGING ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND
MANAGING INVESTMENT COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the Trust,
Eaton Vance manages the Fund's investments and affairs. Eaton Vance also
furnishes for the use of the Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund.
Under the investment advisory agreement with the Trust on behalf of the Fund,
Eaton Vance receives a monthly advisory fee of 5/96 of 1% (equivalent to 0.625%
annually) of the average daily net assets of the Fund up to $500 million. On net
assets of $500 million and over the annual fee is reduced and the advisory fee
is computed as follows:
ANNUALIZED FEE RATE
AVERAGE DAILY NET ASSETS FOR THE MONTH (FOR EACH LEVEL)
- -------------------------------------------------------------------------------
$500 million but less than $1 billion 0.5625%
$1 billion but less than $1.5 billion 0.5000%
$1.5 billion and over 0.4375%
EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND VARIOUS
INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF OVER $17
BILLION. EATON VANCE HAS BEEN MANAGING INVESTMENT COMPANIES WITH OBJECTIVES
SIMILAR TO THAT OF THE FUND SINCE 1961. Eaton Vance is a wholly-owned subsidiary
of Eaton Vance Corp., a publicly-held holding company which through its
subsidiaries and affiliates engages primarily in investment management,
administration and marketing activities. The Principal Underwriter is a
wholly-owned subsidiary of Eaton Vance.
Edward E. Smiley, Jr. has acted as the portfolio manager of the Fund since it
commenced operations. He has been a Vice President of Eaton Vance and Boston
Management and Research ("BMR") since 1996. Prior to joining Eaton Vance, he
was a Senior Product Manager, Equity Management for Trade Street Investment
Associates, Inc., a wholly-owned subsidiary of NationsBank.
Eaton Vance places the portfolio securities transactions of the Fund with many
broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Fund and at reasonably
competitive commission rates. Subject to the foregoing, Eaton Vance may consider
sales of shares of the Fund or of other investment companies sponsored by Eaton
Vance as a factor in the selection of broker-dealer firms to execute portfolio
transactions. The Trust, the Fund and Eaton Vance have adopted Codes of Ethics
relating to personal securities transactions. The Codes permit Eaton Vance
personnel to invest in securities (including securities that may be purchased or
held by the Fund) for their own accounts, subject to certain pre-clearance,
reporting and other restrictions and procedures contained in such Codes.
The Trust has retained the services of Eaton Vance to act as Administrator of
the Fund. As Administrator, Eaton Vance provides the Fund with general office
facilities and supervises the overall administration of the Fund. For these
services Eaton Vance currently receives no compensation. The Trustees of the
Trust may determine, in the future, to compensate Eaton Vance for such services.
The Fund will be responsible for all respective costs and expenses not expressly
stated to be payable by Eaton Vance under the investment advisory agreement or
the administrative services agreement, or by the Principal Underwriter under the
distribution agreement. Such costs and expenses to be borne by the Fund,
include, without limitation: custody and transfer agency fees and expenses,
including those incurred for determining net asset value and keeping accounting
books and records; expenses of pricing and valuation services; the cost of share
certificates; membership dues in investment company organizations; brokerage
commissions and fees; fees and expenses of registering under the securities
laws; expenses of reports to shareholders and investors; proxy statements, and
other expenses of shareholders' or investors' meetings; insurance premiums,
printing and mailing expenses; interest, taxes and corporate fees; legal and
accounting expenses; compensation and expenses of Trustees not affiliated with
Eaton Vance; and investment advisory fees, and, if any, administrative services
fees. The Fund will also bear expenses incurred in connection with any
litigation in which the Fund is a party and any legal obligation to indemnify
its respective officers and Trustees with respect thereto, to the extent not
covered by insurance.
DISTRIBUTION AND SERVICE PLANS
- -------------------------------------------------------------------------------
The Trust has adopted Distribution Plans ("Class B Plan" and "Class C Plan")
pursuant to Rule 12b-1 under the 1940 Act for its Class B and Class C shares.
Each Plan is designed to permit an investor to purchase shares through an
Authorized Firm without incurring an initial sales charge and at the same time
permit the Principal Underwriter to compensate Authorized Firms in connection
therewith. UNDER SUCH PLANS, EACH OF CLASS B AND CLASS C PAY THE PRINCIPAL
UNDERWRITER A FEE, ACCRUED DAILY AND PAID MONTHLY, AT AN ANNUAL RATE NOT
EXCEEDING .75% OF ITS AVERAGE DAILY NET ASSETS TO FINANCE THE DISTRIBUTION OF
ITS SHARES. Such fees compensate the Principal Underwriter for sales commissions
paid by it to financial services firms ("Authorized Firms") on the sale of Class
B and Class C shares and for interest expenses. Under the Class B Plan, the
Principal Underwriter uses its own funds to pay sales commissions (except on
exchange transactions and reinvestments) to Authorized Firms at the time of sale
equal to 4% of the purchase price of the Class B shares sold by such Firms.
Under the Class C Plan, 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
Class C shares sold by such Firm, and (b) monthly sales commissions
approximately equivalent to 1/12 of .75% of the value of Class C shares sold by
such Firm and remaining outstanding for at least one year. During the first year
after a purchase of Class C shares, the Principal Underwriter will retain the
sales commission as reimbursement for the sales commissions made to Authorized
Firms at the time of sale. Contingent deferred sales charges paid to the
Principal Underwriter will be used to reduce amounts owed to it. Because
payments to the Principal Underwriter under the two Plans are limited, uncovered
distribution charges (sales commissions paid by the Principal Underwriter plus
interest, less contingent deferred sales charges received by it) may exist
indefinitely. For more information see the Statement of Additional Information.
THE CLASS B AND CLASS C PLANS ALSO AUTHORIZE EACH CLASS TO MAKE PAYMENTS OF
SERVICE FEES TO THE PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN
AMOUNTS NOT EXCEEDING .25% OF ITS AVERAGE DAILY NET ASSETS FOR PERSONAL
SERVICES, AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS. Under the Class B
Plan, this fee is paid quarterly in arrears based on the value of Class B shares
sold by such persons and remaining outstanding for at least twelve months. Class
B expects to begin accruing for its service fees during the quarter ending
December 31, 1998. Under the Class C Plan, 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 Class C shares sold by such Firm, and (b) monthly service
fees approximately equivalent to 1/12 of .25% of the value of Class C shares
sold by such Firm and remaining outstanding for at least one year. During the
first year after a purchase of Class C shares, the Principal Underwriter will
retain the service fee as reimbursement for the service fee payment made to
Authorized Firms at the time of sale.
Class A shares of the Fund pay service fees pursuant to a Service Plan (the
"Class A Plan") designed to meet the service fee requirements of the sales
charge rule of the National Association of Securities Dealers, Inc. THE CLASS A
PLAN PROVIDES THAT EACH CLASS A MAY MAKE SERVICE FEE PAYMENTS FOR PERSONAL
SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO THE PRINCIPAL
UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS IN AMOUNTS NOT EXCEEDING .25% OF
ITS AVERAGE DAILY NET ASSETS FOR ANY FISCAL YEAR. The Trustees of the Trust have
initially implemented the Class A Plan by authorizing each Class A to make
quarterly service fee payments to the Principal Underwriter and Authorized Firms
in amounts not expected to exceed .25% of the average daily net assets for any
fiscal year which is based on the value of Class A shares sold by such persons
and remaining outstanding for at least twelve months. Class A expects to begin
accruing for its service fees during the quarter ending December 31, 1998. The
Class A Plan is described further in the Statement of Additional Information.
The Principal Underwriter may, from time to time, at its own expense, provide
additional incentives to Authorized Firms which employ registered
representatives who sell Fund shares and/or shares of other funds distributed by
the Principal Underwriter. In some instances, such additional incentives may be
offered only to certain Authorized Firms whose representatives sell or are
expected to sell significant amounts of shares. In addition, the Principal
Underwriter may from time to time increase or decrease the sales commissions
payable to Authorized Firms.
The Trust may, in its absolute discretion, suspend, discontinue or limit the
offering of one or more of its classes of 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 or class, the investment climate and market conditions, the volume of sales
and redemptions of Fund shares, the accumulated unrealized capital gains of the
Fund and in the case of Class B and Class C shares the amount of uncovered
distribution charges of the Principal Underwriter. The Plans may continue in
effect and payments may be made under the Plans following any such suspension,
discontinuance or limitation of the offering of shares; however, there is no
contractual obligation to continue the Plans for any particular period of time.
Suspension of the offering of shares would not, of course, affect a
shareholder's ability to redeem shares.
VALUING SHARES
- --------------------------------------------------------------------------------
EACH CLASS 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). Each Class's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Trust) in the manner authorized by the Trustees of the Trust.
Net asset value is computed by dividing the value of the Class's total assets,
less its liabilities, by the number of shares outstanding.
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 share, and, for Class A shares, the
public offering price based thereon. It is the Authorized Firms' responsibility
to transmit orders promptly to the Principal Underwriter.
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Class A shares are purchased at the effective public offering price,
which price is based on the effective net asset value per share plus the
applicable sales charge. The sales charge is divided between the Authorized Firm
and the Principal Underwriter. Class B and Class C shares are purchased at the
net asset value per share next determined after an order is effective. An
Authorized Firm may charge its customers a fee in connection with transactions
executed by that Firm. The Trust may suspend the offering of shares at any time
and may refuse an order for the purchase of shares.
An initial investment 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 Trust's transfer agent (the "Transfer Agent") as follows:
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123.
The $1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See
"Eaton Vance Shareholder Services."
In connection with employee benefit or other continuous group purchase plans,
the Fund may accept initial investments from Class B and C shares 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 Shares."
CLASS A SHARES. The sales charge may vary depending on the size of the purchase
and the number of shares of Class A shares of Eaton Vance funds the investor may
already own, any arrangement to purchase additional shares during a 13-month
period or special purchase programs. Complete details of how investors may
purchase shares at reduced sales charges under a Statement of Intention, Right
of Accumulation or various employee benefit plans are available from Authorized
Firms or the Principal Underwriter.
The current sales charges and dealer commissions are:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER COMMISSION
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.75 4.99 4.00
$100,000 but less than $250,000 3.75 3.90 3.00
$250,000 but less than $500,000 3.00 3.10 2.50
$500,000 but less than $1,000,000 2.00 2.04 1.75
$1,000,000 or more 0.00* 0.00* See Below**
* No sales charge is payable at the time of purchase on investments of $1 million or more. A contingent deferred sales charge
("CDSC") of 1% will be imposed on such investments in the event of certain redemptions within 12 months of purchase.
**A commission on sales of $1 million or more will be paid as follows: 1.00% on amounts of $1 million or more but less than
$3 million; plus 0.50% on amounts from $3 million but less than $5 million; plus 0.25% on amounts of $5 million or more.
Purchases of $1 million or more will be aggregated over a 12-month period for purposes of determining the commission to be paid.
</TABLE>
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge,
Authorized Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The Principal Underwriter may, from time to time, at its
own expense, provide additional incentives to Authorized Firms which employ
registered representatives who sell Fund shares and/or shares of other funds
distributed by the Principal Underwriter. In some instances, such additional
incentives may be offered only to certain Authorized Firms whose representatives
sell or are expected to sell significant amounts of shares.
Class A shares may be sold at net asset value to current and retired Directors
and Trustees of Eaton Vance funds; to clients and current and retired officers
and employees of Eaton Vance, its affiliates and other investment advisers of
Eaton Vance sponsored funds; to registered representatives and employees of
Authorized Firms and bank employees who refer customers to registered
representatives of Authorized Firms; to officers and employees of IBT and the
Transfer Agent; and to such persons' spouses and children under the age of 21
and their beneficial accounts. Class A shares may also be issued at net asset
value (1) in connection with the merger of an investment company or series
thereof with the Fund, (2) to investors making an investment as part of a fixed
fee program whereby an entity unaffiliated with the Investment Adviser provides
multiple investment services, such as management, brokerage and custody, and (3)
to investment advisors, financial planners or other intermediaries who place
trades for their own accounts or the accounts of their clients and who charge a
management, consulting or other fee for their services; clients of such
investment advisors, financial planners or other intermediaries who place trades
for their own accounts if the accounts are linked to the master account of such
investment advisor, financial planner or other intermediary on the books and
records of the broker or agent; and retirement and deferred compensation plans
and trusts used to fund those plans, including, but not limited to, those
defined in Section 401(a), 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code") and "rabbi trusts". The Principal Underwriter may pay
commissions to Authorized Firms who initiate and are responsible for purchases
of Class A shares of the Fund by Eligible Plans of up to 1.00% of the amount
invested in such shares.
No sales charge is payable at the time of purchase where the amount invested
represents redemption proceeds from a mutual fund unaffiliated with Eaton Vance
if the redemption occurred no more than 60 days prior to the purchase of Class A
shares and the redeemed shares were subject to a sales charge. A CDSC of 0.50%
will be imposed on such investments in the event of certain redemptions within
12 months of purchase and the Authorized Firm will be paid a commission on such
sales of 0.50% of the amount invested.
STATEMENT OF INTENTION AND ESCROW AGREEMENT. If the investor, on an application,
makes a Statement of Intention to invest a specified amount over a thirteen
month period in Class A shares, then out of the initial purchase (or subsequent
purchases if necessary) 6% of the dollar amount specified on the application
shall be held in escrow by the escrow agent in the form of such shares (computed
to the nearest full share at the public offering price applicable to the initial
purchase hereunder) registered in the investor's name. All income dividends and
capital gains distributions on escrowed shares will be paid to the investor or
to the investor's order. When the minimum investment so specified is completed,
the escrowed shares will be delivered to the investor. If the investor has an
accumulation account the shares will remain on deposit under the investor's
account.
If total purchases under this Statement of Intention are less than the amount
specified, the investor will promptly remit to the Principal Underwriter any
difference between the sales charge on the amount specified and on the amount
actually purchased. If the investor does not within 20 days after written
request by the Principal Underwriter or the Authorized Firm pay such difference
in sales charge, the escrow agent will redeem an appropriate number of the
escrowed shares in order to realize such difference. Full shares remaining after
any such redemption together with any excess cash proceeds of the shares so
redeemed will be delivered to the investor or to the investor's order by the
escrow agent.
If total purchases made under this Statement are large enough to qualify for a
lower sales charge than that applicable to the amount specified, all
transactions will be computed at the expiration date of this Statement to give
effect to the lower charge. Any difference in sales charge will be refunded to
the investor in cash, or applied to the purchase of additional shares at the
lower charge if specified by the investor. This refund will be made by the
Authorized Firm and by the Principal Underwriter. If at the time of the
recomputation an Authorized Firm other than the original Firm is placing the
orders, the adjustment will be made only on those shares purchased through the
Firm then handling the investor's account.
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. The minimum value of securities (or securities and cash) accepted
for deposit is $5,000. Securities accepted will be sold on the day of their
receipt or as soon thereafter as possible. The number of Fund shares to be
issued in exchange for securities will be the aggregate value of or proceeds
from the sale of such securities, divided by the applicable public offering
price of Class A shares or net asset value of Class B and Class C shares 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 Eaton Vance Tax-Managed Emerging Growth Fund (State Class)
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: Eaton Vance Tax-Managed Emerging Growth Fund (State Class)
Physical Securities Processing Settlement Area
200 Clarendon Street
Boston, MA 02116
Investors who are contemplating an exchange of securities for shares, or their
representatives, must contact Eaton Vance to determine whether the securities
are acceptable before forwarding such securities. Eaton Vance reserves the right
to reject any securities. Exchanging securities for 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.
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
HOW TO REDEEM SHARES
- -------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES IN ONE OF THREE WAYS -- BY MAIL, BY
TELEPHONE OR THROUGH AN AUTHORIZED FIRM. The redemption price will be based on
the net asset value per share next computed after a redemption request is
received in the proper form as described below.
REDEMPTION BY MAIL: Shares may be redeemed by delivering to the Transfer Agent,
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123,
during its business hours a written request for redemption in good order, plus
any share certificates with executed stock powers. Good order means that all
relevant documents must be endorsed by the record owner(s) exactly as the shares
are registered and the signature(s) must be guaranteed by a member of either the
Securities Transfer Association's STAMP program or the New York Stock Exchange's
Medallion Signature Program, or certain banks, savings and loan institutions,
credit unions, securities dealers, securities exchanges, clearing agencies and
registered securities associations as required by a Commission regulation and
acceptable to the Transfer Agent. In addition, in some cases, good order may
require the furnishing of additional documents such as where shares are
registered in the name of a corporation, partnership or fiduciary.
REDEMPTION BY TELEPHONE: Shares may be redeemed by telephone provided the
investor has not disclaimed in writing the use of the privilege. Such
redemptions can be effected by calling the Transfer Agent at 800-262-1122,
Monday through Friday, 9:00 a.m. to 4:00 p.m. (Eastern Standard Time). The
proceeds of a telephone redemption may be no greater than the maximum amount
established by the Principal Underwriter (currently $50,000) and may be mailed
only to the account address of record. Shares held by corporations, trusts or
certain other entities, or subject to fiduciary arrangements, may not be
redeemed by telephone. Neither the Trust, the Principal Underwriter nor the
Transfer Agent will be responsible for the authenticity of redemption
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated by telephone are genuine have been
followed. Telephone instructions will be tape recorded. In times of drastic
economic or market changes, a telephone redemption may be difficult to
implement.
REDEMPTION THROUGH AN AUTHORIZED FIRM: To sell shares at their net asset value
through an Authorized Firm (a repurchase), a shareholder can place a repurchase
order with the Authorized Firm, which may charge a fee. The value of such shares
is based upon the net asset value next computed after the Principal Underwriter,
as the Trust's agent, receives the order. It is the Authorized Firm's
responsibility to transmit promptly repurchase orders to the Principal
Underwriter. Throughout this Prospectus, the word "redemption" is generally
meant to include a repurchase.
Within seven days after receipt of a redemption request in good order by the
Transfer Agent, the Trust will make payment for the net asset value of the
shares as of the date determined above, reduced by the amount of any applicable
CDSC (described below) and any federal income tax required to be withheld.
If shares were recently purchased, the proceeds of a redemption will not be sent
until the check (including a certified or cashier's check) received for the
shares purchased has cleared. Payment for shares tendered for redemption may be
delayed up to 15 days from the purchase date when the purchase check has not yet
cleared. Redemptions may result in a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Trust reserves the right
to redeem accounts with balances of less than $750. Prior to such a redemption,
shareholders will be given 60 days' written notice to make an additional
purchase. However, no such redemption would be required by the Trust if the
cause of the low account balance was a reduction in the net asset value of
shares. No CDSC will be imposed with respect to such involuntary redemptions.
MEETING REDEMPTIONS BY DISTRIBUTING PORTFOLIO SECURITIES. The Fund currently
will meet redemptions entirely in cash, but in the future may adopt a policy of
meeting redemption requests in whole or in part by distributing appreciated
securities held in the Fund's portfolio as chosen by the Investment Adviser. The
Fund would only distribute readily marketable securities, which would be valued
pursuant to its valuation procedures. As described under "Investment Policies
and Risks," the practice of distributing appreciated securities to meet
redemptions can be a useful tool for the tax-efficient management of the Fund. A
policy of meeting redemptions in whole or in part through the distribution of
securities will only be established in conjunction with putting in place a
program whereby redeeming shareholders who receive securities could elect to
sell the securities received to the Fund's custodian (or a designated
broker-dealer) at no cost and at a price equal to the price used in determining
the redemption value of the distributed securities. Redeeming shareholders who
receive securities and who elect to participate in this program would receive
the same amount of cash as if the redemption had been paid directly in cash and
would incur no more or less taxable gain than if the redemption had been paid
directly in cash. This election would need to be made in a letter of instruction
which would be provided to shareholders before the policy was implemented.
Shareholders not making an affirmative election to sell distributed securities
to the custodian, would be required to take delivery of any securities
distributed upon a redemption of shares. Such shareholders could incur brokerage
charges and other costs and may be exposed to market risk in selling the
distributed securities.
If the Fund does adopt a policy of using distributions of securities to meet
redemptions, it may continue to meet redemptions in whole or in part using cash.
At certain times, the Fund may not have sufficient quantities of appreciated
securities available to meet redemptions by shareholders. Moreover, during
periods of volatile market conditions the Fund can be expected to meet
redemptions primarily through distributions of cash.
CONTINGENT DEFERRED SALES CHARGE -- CLASS A. If Class A shares have been
purchased at net asset value with no initial sales charge by virtue of the
purchase having been in the amount of $1 million or more and are redeemed within
12 months of purchase, a CDSC of 1% will be imposed on such redemption. If
shares were purchased at net asset value because the amount invested represents
redemption proceeds from a mutual fund unaffiliated with Eaton Vance (as
described under "How to Buy Shares"), and are redeemed within 12 months of
purchase, a CDSC of 0.50% will be imposed on such redemption. The CDSC will be
imposed on an amount equal to the lesser of the current market value or the
original purchase price of the shares redeemed. Accordingly, no CDSC will be
imposed on increases in account value above the initial purchase price,
including any distributions that have been reinvested in additional shares. In
determining whether a CDSC is applicable to a redemption, it will be assumed
that redemptions are made first from any shares in the shareholder's account
that are not subject to a CDSC. The CDSC will be retained by the Principal
Underwriter.
The CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds in accordance with the conditions set forth under
"Eaton Vance Shareholder Services -- Reinvestment Privilege", the shareholder's
account will be credited with the amount of any CDSC paid on such redeemed
shares.
CONTINGENT DEFERRED SALES CHARGE -- CLASS B. Class B shares redeemed within the
first six years of their purchase (except shares acquired through the
reinvestment of distributions) generally will be subject to a CDSC. This CDSC is
imposed on any redemption the amount of which exceeds the aggregate value at the
time of redemption of (a) all shares in the account purchased more than six
years prior to the redemption, (b) all shares in the account acquired through
reinvestment of distributions, and (c) the increase, if any, in the value of all
other shares in the account (namely those purchased within the six years
preceding the redemption) over the purchase price of such shares. Redemptions
are processed in a manner to maximize the amount of redemption proceeds which
will not be subject to a CDSC. 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. As described under "Distribution
and Service Plans," the CDSC will be paid to the Principal Underwriter or a
Class. Any CDSC which is required to be imposed on Class B share redemptions
will be made in accordance with the following schedule:
YEAR OF
REDEMPTION
AFTER PURCHASE CDSC
- ------------------------------------------------------------------------------
First or Second 5%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and following 0%
In calculating the CDSC upon the redemption of Class B shares acquired in an
exchange for shares of a fund currently listed under "The Eaton Vance Exchange
Privilege," the CDSC schedule applicable to the shares at the time of purchase
will apply and the purchase of shares acquired in the exchange is deemed to have
occurred at the time of the original purchase of the exchanged shares.
No CDSC will be imposed on Class B shares which have been sold to Eaton Vance or
its affiliates, or to their respective employees or clients. The CDSC will also
be waived for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton
Vance Shareholder Services"), (2) as part of a required distribution from a
tax-sheltered retirement plan, or (3) following the death of all beneficial
owners of such shares, provided the redemption is requested within one year of
death (a death certificate and other applicable documents may be required). In
addition, shares acquired as a result of a merger or liquidation of another
Eaton Vance sponsored fund will have a CDSC imposed at the same rate as would
have been imposed in the prior fund.
CONTINGENT DEFERRED SALES CHARGE -- CLASS C. Class C shares 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
("CDSC") equal to 1% of the net asset value of the redeemed shares. This CDSC 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 CDSC. 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. As described under "Distribution
and Service Plans", the CDSC will be paid to the Principal Underwriter or a
Class.
In calculating the CDSC upon the redemption of Class C shares acquired in an
exchange for shares of a fund currently listed under "The Eaton Vance Exchange
Privilege," the purchase of shares acquired in the exchange is deemed to have
occurred at the time of the original purchase of the exchanged shares.
No CDSC will be imposed on Class C shares which have been sold to Eaton Vance or
its affiliates, or to their respective employees or clients. The CDSC will also
be waived for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton
Vance Shareholder Services"), (2) as part of a distribution from a retirement
plan qualified under Section 401, 403(b) or 457 of the Code, or (3) as part of a
minimum required distribution from other tax-sheltered retirement plans.
REPORTS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent 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.
Consistent with applicable law, duplicate mailings of shareholder reports and
certain other Fund information to shareholders residing at the same address may
be eliminated.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- --------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE TRANSFER AGENT
WILL SET UP A LIFETIME INVESTING ACCOUNT FOR THE INVESTOR ON THE TRUST'S
RECORDS. This account is a complete record of all transactions which at all
times shows the balance of shares owned. The Trust will not issue share
certificates except upon request.
Each time a transaction takes place in a shareholder's account, the shareholder
will receive a statement showing complete details of the transaction and the
current balance in the account. (Under certain investment plans, statements may
be sent only quarterly.) THE LIFETIME INVESTING ACCOUNT PERMITS A SHAREHOLDER TO
MAKE ADDITIONAL INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE to the
Transfer Agent.
Any questions concerning a shareholder's account or services available may be
directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to the Transfer Agent, First Data Investor Services
Group, P.O. Box 5123, Westborough, MA 01581-5123 (please provide the name of the
shareholder, the Fund and Class and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME INVESTING
ACCOUNTS and may be changed as often as desired by written notice to the Trust's
dividend disbursing agent, First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123. The currently effective option will appear on each
account statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or capital
gains distribution checks which are returned by the United States Postal Service
as not deliverable or which remain uncashed for six months or more will be
reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains, if any, 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 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 Trust and its Transfer Agent. Since the
Trust 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 Authorized Firm or to an account directly with the
Trust 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
Authorized Firm, or transferring the account to another investment Authorized
Firm, an investor wishing to reinvest distributions should determine whether the
Authorized Firm which will hold the shares allows reinvestment of distributions
in "street name" accounts.
THE EATON VANCE EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of the same class of
one or more other funds in the Eaton Vance Group of Funds. Class A shares may
also be exchanged for shares of Eaton Vance Cash Management Fund, Eaton Vance
Income Fund of Boston, Eaton Vance Municipal Bond Fund L.P., and Eaton Vance Tax
Free Reserves. Class B shares may also be exchanged for shares of Eaton Vance
Prime Rate Reserves, which are subject to an early withdrawal charge, Class B
shares of any Limited Maturity Fund or shares of Eaton Vance Money Market Fund,
which are subject to a CDSC, and shares of a money market fund sponsored by an
Authorized Firm and approved by the Principal Underwriter (an "Authorized Firm
fund"). Class C shares may also be exchanged for shares of Eaton Vance Money
Market Fund. Any such exchange will be made on the basis of the net asset value
per share of each fund/class at the time of the exchange (plus, in the case of
an exchange made within six months of the date of purchase of Class A shares
subject to an initial sales charge, an amount equal to the difference, if any,
between the sales charge previously paid on the shares being exchanged and the
sales charge payable on the shares being acquired). Exchange offers are
available only in states where shares of the fund being acquired may be legally
sold. Exchanges are subject to any restrictions or qualifications set forth in
the current prospectus of any such fund.
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 Trust 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 Transfer Agent makes exchanges at the next determined net asset value after
receiving an exchange request in good order (see "How to Redeem Shares").
Consult the Transfer Agent for additional information concerning the exchange
privilege. Applications and prospectuses of other funds are available from
Authorized Firms or the Principal Underwriter. The prospectus for each fund
describes its investment objectives and policies, and shareholders should obtain
a prospectus and consider these objectives and policies carefully before
requesting an exchange.
No CDSC is imposed on exchanges. For purposes of calculating the CDSC upon
redemption of shares acquired in an exchange, the CDSC 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, except that time during which shares
are held in an Authorized Firm fund will not be credited toward completion of
the CDSC period. For the CDSC schedule applicable to the Eaton Vance Class B
Funds (except Eaton Vance Prime Rate Reserves and Class B shares of the Limited
Maturity Funds), see "How to Redeem Shares". The CDSC or early withdrawal charge
schedule applicable to Eaton Vance Prime Rate Reserves and Class B shares of the
Limited Maturity Funds 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.
Telephone exchanges are accepted by the Transfer Agent provided that the
investor has not disclaimed in writing the use of the privilege. To effect such
exchanges, call the Transfer Agent at 800-262-1122, Monday through Friday, 9:00
a.m. to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone exchange
must be registered in the same name(s) and with the same address as the shares
being exchanged. Neither the Trust, the Principal Underwriter nor the Transfer
Agent will be responsible for the authenticity of exchange instructions received
by telephone, provided that reasonable procedures to confirm that instructions
communicated are genuine have been followed. Telephone instructions will be tape
recorded. In times of drastic economic or market changes, a telephone exchange
may be difficult to implement. An exchange may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
THE TRUST 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 applicable Fund or Class 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
and Class being purchased may be mailed directly to the Transfer Agent, First
Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123 at any
time -- whether or not distributions are reinvested. The name of the
shareholder, the Fund and Class 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: The Fund will make available to shareholders making a deposit
of at least $5,000 a systematic withdrawal plan through which they can make
regular quarterly redemptions to yield them either a specified dollar amount of
at least $200 per year or a specified percentage of net asset value of at least
4% but not more than 12% annually. Such amount will not be subject to a CDSC.
See "How to Redeem Shares." Such distributions would be paid at the option of
each shareholder and would reduce the number of shares held by any shareholder
electing to receive them. Distributions would consist of an untaxed return of
capital component and a taxable capital gain or capital loss. The all-in tax
rate on the amount of cash received in such redemptions (for shares held more
than one year equal to the capital gains rate multiplied by the percentage of
the distribution that is gain rather than return of capital) would be
substantially below the rate payable by mutual fund investors on dividend
distributions (equal to the ordinary income tax rate). The maintenance of a
withdrawal plan concurrently with purchases of additional Class A shares would
be disadvantageous because of the sales charge included in such purchases.
STATEMENT OF INTENTION: Purchases of $50,000 or more of Class A shares made
over a 13-month period are eligible for reduced sales charges. See "How to Buy
Shares -- Statement of Intention and Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges on Class
A shares when the current market value of holdings (shares at current offering
price), plus new purchases, reaches $50,000 or more. Class A shares of the Eaton
Vance funds listed under "The Eaton Vance Exchange Privilege" may be combined
under the Statement of Intention and Right of Accumulation.
REINVESTMENT PRIVILEGE: A shareholder who has redeemed shares may reinvest, with
credit for any CDSC paid on the redeemed shares, any portion or all of the
redemption proceeds (plus that amount necessary to acquire a fractional share to
round off the purchase to the nearest full share) in the same shares (or for
Class A shares in Class A shares of any other Eaton Vance fund), provided that
the reinvestment is effected within 60 days after such redemption, and the
privilege has not been used more than once in the prior 12 months. Shares are
sold to a reinvesting shareholder at the next determined net asset value
following timely receipt of a written purchase order by the Principal
Underwriter or by the Trust (or by the Trust's Transfer Agent). To the extent
that any shares are sold at a loss and the proceeds are reinvested in shares (or
other shares 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: Class A and Class C shares of the Fund are
available for purchase in connection with certain tax-sheltered retirement
plans. Detailed information concerning these plans, including certain exceptions
to minimum investment requirements, and copies of the plans are available from
the Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
federal income tax consequences of establishing a plan. Participant accounting
services (including trust fund reconciliation services) will be offered only
through third party recordkeepers and not by the Principal Underwriter. Under
all plans, dividends and distributions will be automatically reinvested in
additional shares.
DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
The Fund will be managed toward an objective of achieving long-term, after-tax
returns in part by minimizing shareholders taxes. Because distributions of net
investment income and realized capital gains give rise to shareholder taxes, the
Fund will generally seek to select and manage its investments so as to minimize
net investment income and net realized gains and associated distributions. The
Fund can be expected to generally distribute a lesser percentage of returns each
year than other equity mutual funds. There can be no assurance, however, that
the Fund's portfolio can be managed to avoid taxable distributions. The Fund's
ability to utilize or the desirability of various tax management techniques and
securities lending may be reduced or eliminated by future tax and other
legislation, regulations, administrative interpretations, or court decisions. As
of the date of this Prospectus, proposed legislation would have the effect of
substantially eliminating the tax advantages of equity swaps and certain options
transactions. If legislation similar in effect were to be enacted at some future
time, use of these techniques by the Fund would effectively be precluded.
DISTRIBUTIONS. To the extent that the Fund has net investment income and net
realized capital gains in any year, the Fund's present policy is to make (A) at
least one distribution annually (normally in December) of all or substantially
all of the investment income and (B) at least one distribution annually of all
or substantially all of the net realized capital gains (reduced by any available
capital loss carryforwards from prior years). Shareholders may reinvest all
distributions in shares of the Fund without a sales charge at the net asset
value per share as of the close of business on the record date.
The Fund's net investment income consists of the Fund's and its Classes net
investment income, less all actual and accrued expenses of the Fund and its
Classes as determined in accordance with generally accepted accounting
principles. The Fund's net realized capital gains, if any, consist of the net
realized capital gains (if any) allocated to the Fund for tax purposes, after
taking into account any available capital loss carryovers.
TAXES. Distributions by the Fund which are derived from net investment income,
net short-term capital gains and certain foreign exchange gains are taxable to
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. The Fund's distributions will generally not
qualify for the dividends-received deduction for corporate shareholders.
Capital gains referred to in clause (B) above, if any, realized by the Fund for
its fiscal year, which ends on October 31, will usually be distributed by the
Fund prior to the end of December. Distributions by the Fund of long-term
capital gains are taxable to shareholders as long-term capital gains, whether
paid in cash or reinvested in additional shares of the Fund and regardless of
the length of time Fund shares have been owned by the shareholder.
If shares are purchased shortly before the record date of a distribution, the
shareholder will pay the full price for the shares and then receive some portion
of the price back as a taxable distribution. The amount, timing and character of
the Fund's distributions to shareholders may be affected by special tax rules
governing its activities in options, futures and forward foreign currency
exchange transactions or certain other investments. Certain distributions, if
declared by the Fund in October, November or December and paid the following
January, will be taxable to shareholders as if received on December 31 of the
year in which they are declared.
Sales charges paid upon a purchase of Class A shares cannot be taken into
account for purposes of determining gain or loss on a redemption or exchange of
the shares before the 91st day after their purchase to the extent a sales charge
is reduced or eliminated in a subsequent acquisition of such shares of the Fund
or of another fund pursuant to the Fund's reinvestment or exchange privilege. In
addition, losses realized on a redemption of Class A shares may be disallowed
under certain "wash sale" rules if within a period beginning 30 days before and
ending 30 days after the date of redemption other Class A shares are acquired.
Any disregarded amounts will result in an adjustment to the shareholder's tax
basis in some or all of any other shares acquired.
The Fund intends to qualify as a regulated investment company under the Code and
to satisfy all requirements necessary to be relieved of federal taxes on income
and gains it distributes to shareholders.
As a regulated investment company under the Code, the Fund does not pay federal
income or excise taxes to the extent that it distributes to shareholders its net
investment income and net realized capital gains in accordance with the timing
requirements imposed by the Code.
Shareholders should consult their tax advisors concerning the applicability of
state, local or other taxes to an investment in the Fund.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
FROM TIME TO TIME, EACH CLASS MAY ADVERTISE ITS AVERAGE ANNUAL TOTAL RETURN.
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 (including maximum sales charge for Class A; net asset value for Class B
and Class C) for specified periods, assuming reinvestment of all distributions.
The average annual total return calculation assumes a complete redemption of the
investment and the deduction of any applicable CDSC at the end of the period.
The Fund may also publish annual and cumulative total return figures from time
to time. The Fund may use such total return figures, together with comparisons
with the Consumer Price Index, various domestic and foreign securities indices
and performance studies prepared by independent organizations, in advertisements
and in information furnished to present or prospective shareholders. The Fund
may use total return figures showing after-tax returns, including comparisons to
tax-deferred vehicles.
The Fund and each Class may also publish total return figures which do not take
into account any sales charge. Any performance figure which does not take into
account a sales charge would be reduced to the extent such charge is imposed
upon a redemption.
Investors should note that investment results will fluctuate over time, and any
presentation of total return for any prior period should not be considered a
representation of what an investment may earn or what the total return may be in
any future period. Investment results are based on many factors, including
market conditions, the composition of the security holdings of the Fund and the
operating expenses of the Fund. Investment results also often reflect the risks
associated with the particular investment objective and policies of the Fund.
Among others, these factors should be considered when comparing investment
results to those of other mutual funds and other investment vehicles.
<PAGE>
[LOGO}
EATON VANCE TAX-MANAGED
EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
PROSPECTUS
SEPTEMBER 16, 1997
EATON VANCE TAX-MANAGED
EMERGING GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
Eaton Vance Management, 24 Federal Street, Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123
(800) 262-1122
AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
September 16, 1997
EATON VANCE TAX-MANAGED
EMERGING GROWTH FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
This Statement of Additional Information provides information about Eaton
Vance Tax-Managed Emerging Growth Fund (the "Fund"). This Statement of
Additional Information is sometimes referred herein to as the "SAI."
TABLE OF CONTENTS
Page
Additional Information about Investment Policies ........................... 2
Investment Restrictions .................................................... 4
Trustees and Officers ...................................................... 5
Control Persons and Principal Holders of Securities ........................ 7
Investment Adviser and Administrator ....................................... 7
Custodian .................................................................. 8
Services for Accumulation -- Class A Shares ................................ 9
Service for Withdrawal ..................................................... 9
Determination of Net Asset Value ........................................... 9
Investment Performance ..................................................... 10
Taxes ...................................................................... 12
Principal Underwriter ...................................................... 13
Service Plan -- Class A Shares ............................................. 14
Distribution Plan -- Class B and Class C Shares ............................ 15
Portfolio Security Transactions ............................................ 16
Other Information .......................................................... 18
Independent Certified Public Accountants ................................... 19
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 SEPTEMBER 16, 1997, AS SUPPLEMENTED
FROM TIME TO TIME, WHICH IS INCORPORATED HEREIN BY REFERENCE. THIS STATEMENT OF
ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A
COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE
DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND
PHONE NUMBER).
<PAGE>
This SAI provides information about the Fund. Capitalized terms used in
this SAI and not otherwise defined have the meanings given to them in the
Prospectus.
ADDITIONAL INFORMATION ABOUT INVESTMENT POLICIES
Foreign Securities. Investing in securities issued by companies whose principal
business activities are outside the United States may involve significant risks
not present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those not
subject to the disclosure and reporting requirements of the U.S. securities
laws. Foreign issuers are generally not bound by uniform accounting, auditing,
and financial reporting requirements and standards of practice comparable to
those applicable to domestic issuers. Investments in foreign securities also
involve the risk of possible adverse changes in investment or exchange control
regulations, expropriation or confiscatory taxation, limitation on the removal
of funds or other assets of the Fund, political or financial instability or
diplomatic and other developments which could affect such investments. Further,
economies of particular countries or areas of the world may differ favorably or
unfavorably from the economy of the United States. It is anticipated that in
most cases the best available market for foreign securities will be on exchanges
or in over-the-counter markets located outside of the United States. Foreign
stock markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and more
volatile than securities of comparable U.S. companies. In addition, foreign
brokerage commissions are generally higher than commissions on securities traded
in the United States and may be non-negotiable. In general, there is less
overall governmental supervision and regulation of foreign securities markets,
broker- dealers, and issuers than in the United States.
Foreign Currency Transactions. The value of foreign assets of the Fund as
measured in U.S. dollars may be affected favorably or unfavorably by changes in
foreign currency exchange rates and exchange control regulations. Currency
exchange rates can also be affected unpredictably by intervention by U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the U.S. or abroad. The Fund may
conduct its foreign currency exchange transactions on a spot (i.e., cash) basis
at the spot rate prevailing in the foreign currency exchange market or through
entering into swaps, forward contracts, options or futures on currency. On spot
transactions, foreign exchange dealers do not charge a fee for conversion, but
they do realize a profit based on the difference (the "spread") between the
prices at which they are buying and selling various currencies. Thus, a dealer
may offer to sell a foreign currency to the Fund at one rate, while offering a
lesser rate of exchange should the Fund desire to resell that currency to the
dealer.
Forward Foreign Currency Exchange Contracts and Currency Futures. Forward
foreign currency contracts ("forward contracts") are individually negotiated and
privately traded by currency traders and their customers. A forward contract
involves an obligation to purchase or sell a specific currency (or basket of
currencies) for an agreed price at a future date, which may be any fixed number
of days from the date of the contract. The Fund may enter into a forward
contract in connection with the purchase or sale of a security denominated in a
foreign currency, or when the Fund anticipates the receipt in a foreign currency
of dividend or interest payments on such a security which it holds, 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. Additionally, when the
Investment Adviser 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 Fund's securities
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. The Fund generally will not enter into a forward contract with a term
of greater than one year.
Currency futures contracts are exchange traded instruments that may be used
by the Fund for the purposes described in the preceding paragraphs as an
alternative to the purchase or sale of forward currency exchange contracts.
Currency futures contracts are similar in structure to stock index futures
contracts, but change in value to reflect the movements of a currency or basket
of currencies rather than a stock index. The Fund's investments in currency
contracts are subject to limitations and restrictions similar to those set forth
for the Fund's investments in stock index futures and options on stock index
futures.
Risks Associated With Derivative Instruments. Entering into a derivative
instrument involves a risk that the applicable market will move against the
Fund's position and that the Fund will incur a loss. For derivative instruments
other than purchased options, this loss may exceed the amount of the initial
investment made or the premium received by the Fund. Derivative instruments may
sometimes increase or leverage the Fund's exposure to a particular market risk.
Leverage enhances the Fund's exposure to the price volatility of derivative
instruments it holds. The Fund's success in using derivative instruments to
hedge portfolio assets depends on the degree of price correlation between the
derivative instruments and the hedged asset. Imperfect correlation may be caused
by several factors, including temporary price disparities among the trading
markets for the derivative instrument, the assets underlying the derivative
instrument and the Fund's assets. Over-the- counter ("OTC") derivative
instruments involve an enhanced risk that the issuer or counterparty will fail
to perform its contractual obligations. Some derivative instruments are not
readily marketable or may become illiquid under adverse market conditions. In
addition, during periods of market volatility, a commodity exchange may suspend
or limit trading in an exchange-traded derivative instrument, which may make the
contract temporarily illiquid and difficult to price. Commodity exchanges may
also establish daily limits on the amount that the price of a futures contract
or futures option can vary from the previous day's settlement price. Once the
daily limit is reached, no trades may be made that day at a price beyond the
limit. This may prevent the Fund from closing out positions and limiting its
losses. The staff of the Commission takes the position that certain purchased
OTC options, and assets used as cover for written OTC options, are subject to
the Fund's 15% limit on illiquid investments. The Fund's ability to terminate
OTC derivative instruments may depend on the cooperation of the counterparties
to such contracts. For thinly traded derivative instruments, the only source of
price quotations may be the selling dealer or counterparty. In addition, certain
provisions of the Code limit the extent to which the Fund may purchase and sell
derivative instruments. The Fund will engage in transactions in futures
contracts and related options only to the extent such transactions are
consistent with the requirements of the Code for maintaining the qualification
of the Fund as a regulated investment company for federal income tax purposes.
See "Taxes".
Asset Coverage Requirements. Transactions involving swaps, forward contracts,
futures contracts and options (other than options that the Fund has purchased)
expose the Fund to an obligation to another party. The Fund will not enter into
any such transactions unless it owns either (1) an offsetting ("covered")
position in securities, currencies, swaps, or other options, futures contracts
or forward contracts, or (2) cash or liquid securities (such as readily
marketable common stock and money market instruments) with a value sufficient at
all times to cover its potential obligations not covered as provided in (1)
above. Only the net obligation of a swap will be covered. Assets used as cover
or held in a segregated account maintained by the Fund's custodian cannot be
sold while the position in the corresponding instrument is open, unless they are
replaced with other appropriate assets. As a result, the commitment of a large
portion of the Fund's assets to segregated accounts or to cover could impede
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
Limitations on Futures Contracts and Options. The Fund may enter into futures
contracts, and options on futures contracts, traded on an exchange regulated by
the CFTC and on foreign exchanges, but, with respect to foreign exchange- traded
futures contracts and options on such futures contracts, only if the Investment
Adviser determines that trading on each such foreign exchange does not subject
the Fund to risks, including credit and liquidity risks, that are materially
greater than the risks associated with trading on CFTC-regulated exchanges.
In order to hedge its current or anticipated portfolio positions, the Fund
may use futures contracts on securities held in its portfolio or on securities
with characteristics similar to those of the securities held by the Fund. If, in
the opinion of the Investment Adviser, there is a sufficient degree of
correlation between price trends for the securities held by the Fund and futures
contracts based on other financial instruments, securities indices or other
indices, the Fund may also enter into such futures contracts as part of its
hedging strategy.
All call options on securities written by the Fund will be covered. This
means that, the Fund will own the securities subject to the call option or an
offsetting call option so long as the call option is outstanding.
Lending Portfolio Securities. Under present regulatory policies of the
Commission, securities loans are required to be secured continuously by
collateral in cash, cash equivalents or U.S. Government securities held by the
Fund'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 certificates of deposit, commercial paper and
other short-term money market instruments. The Fund will only lend securities to
borrowers whose credit quality or claims paying ability is considered to be
investment grade by the Investment Adviser. The financial condition of the
borrower will be monitored by the Investment Adviser on an ongoing basis. If a
borrower of securities from the Fund defaults on a securities loan, the Fund
will, under proposed Treasury Regulations, be considered to have disposed of the
securities in a taxable transaction. The Fund may experience delays in the
recovery or loss of rights in loaned securities if a borrower of securities
fails financially. The Fund would continue to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned and would also
receive a fee, or all or a portion of the interest on investment of the
collateral. The Fund would have the right to call a loan and obtain the
securities loaned at any time on up to five business days' notice. The Fund
would not have the right to vote any securities having voting rights during the
existence of a loan, but could call the loan in anticipation of an important
vote to be taken among holder of the securities or the giving or withholding of
their consent on a material matter affecting the investment. Securities lending
involves administrative expenses, including finders' fees. If the Investment
Adviser decides to make securities loans, it is intended that the value of the
securities loaned would not exceed 30% of the Fund's total assets.
Portfolio Turnover. The Fund cannot accurately predict its portfolio turnover
rate, but it is anticipated that the annual turnover rate will generally be
lower than that of most other equity mutual funds and will generally not
exceed 20% (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
Fund.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as used
in this SAI means the lesser of (a) 67% of the shares of the Fund, present or
represented by proxy at a meeting if the holders of more than 50% of the shares
are present or represented at the meeting or (b) more than 50% of the shares of
the Fund. Accordinglly, the Fund may not:
(1) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940;
(2) Purchase any securities or evidences of interest therein on
"margin," that is to say in a transaction in which it has borrowed all or a
portion of the purchase price and pledged the purchased securities or
evidences of interest therein as collateral for the amount so borrowed;
(3) Engage in the underwriting of securities; or
(4) Buy 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), commodities or commodity contracts for
the purchase or sale of physical commodities;
(5) Make loans to other persons, except by (a) the acquisition of debt
securities and making portfolio investments, (b) entering into repurchase
agreements and (c) lending portfolio securities;
(6) With respect to 75% of its total assets, invest more than 5% of its
total assets (taken at current value) in the securities of any one issuer,
or invest in more than 10% of the outstanding voting securities of any one
issuer, except obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and except securities of other investment
companies; or
(7) Concentrate its investments in any particular industry, but, if
deemed appropriate for the Fund's objective, up to 25% of the value of its
assets may be invested in any one industry.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its investable assets in an open-end management investment
company with substantially the same investment objective, policies and
restrictions as the Fund.
The Fund has adopted the following investment policies which may be changed
without shareholder approval. As a matter of nonfundamental policy, the Fund
will not: (a) invest more than 15% of its net assets in investments which are
not readily marketable, including restricted securities and repurchase
agreements with a maturity longer than seven days. Restricted securities for the
purposes of this limitation do not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 and commercial paper
issued pursuant to Section 4(2) of said Act that the Board of Trustees of the
Trust, or its delegate, determines to be liquid; or (b) sell or contract to sell
any security which it does not own unless by virtue of its ownership of other
securities it has at the time of sale a right to obtain securities equivalent in
kind and amount to the securities sold and provided that if such right is
conditional the sale is made upon the same conditions.
Whenever an investment policy or investment restriction set forth in the
Prospectus or this SAI states a maximum percentage of assets that may be
invested in any security or other asset, such percentage limitation shall be
determined immediately after and as a result of the Fund's acquisition of such
security or asset. Accordingly, any later increase or decrease resulting from a
change in values, assets or other circumstances, will not compel the Fund to
dispose of such security or other asset. Notwithstanding the foregoing, under
normal market conditions the Fund must take actions necessary to comply with the
policy of investing at least 65% of total assets in equity securities of
emerging growth companies. Moreover, the Fund must always be in compliance with
the borrowing policy set forth above.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust are listed below. Except as
indicated, each individual has held the office shown or other offices in the
same company for the last five years. Unless otherwise noted, the business
address of each Trustee and officer is 24 Federal Street, Boston, Massachusetts
02110, which is also the address of the Investment Adviser, Eaton Vance; Eaton
Vance's wholly-owned subsidiary BMR; of 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, as defined in the 1940 Act
by virtue of their affiliation with Eaton Vance, BMR, EVC or EV, are indicated
by an asterisk(*).
TRUSTEES OF THE TRUST
M. DOZIER GARDNER (64), President and Trustee*
Vice Chairman of BMR, Eaton Vance, EVC and EV, and a Director of EVC and EV.
Director or Trustee and officer of various investment companies managed by
Eaton Vance or BMR.
JAMES B. HAWKES (55), Vice President and Trustee*
President and Chief Executive Officer of Eaton Vance, BMR, EVC and EV, and a
Director of EVC and EV. Director or Trustee and officer of various
investment companies managed by Eaton Vance or BMR.
DONALD R. DWIGHT (66), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company), Chairman of the Board of Newspapers of New England, Inc. Director
or Trustee of various investment companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (62), Trustee
Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (61), Trustee
President and Director, United Asset Management Corporation (a holding company
owning institutional investment management firms); Chairman, President and
Director, UAM Funds (mutual funds). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (70), Trustee
Former Director of Fiduciary Company Incorporated. Director or Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (67), 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
EDWARD E. SMILEY, JR. (52), Vice President
Vice President of Eaton Vance and BMR since November 1, 1996; Senior Product
Manager, Equity Management for Trade Street Investment Associates, Inc., a
wholly-owned subsidiary of Nations Bank (1992-1996). Officer of various
investment companies managed by Eaton Vance or BMR. Mr. Smiley was elected
Vice President of the Trust on October 18, 1996.
WILLIAM H. AHERN, JR. (38), Vice President of the Trust
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR. Mr. Ahern was elected Vice President of the
Trust on June 19, 1995.
MICHAEL B. TERRY (55), Vice President of the Trust
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (52), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
ALAN R. DYNNER (56), Secretary
Vice President and Chief Legal Officer of Eaton Vance, BMR, EVC and EV since
November 1, 1996. Previously, he was a Partner of the law firm of
Kirkpatrick & Lockhart LLP, New York and Washington, D.C., and was Executive
Vice President of Neuberger & Berman Management, Inc., a mutual fund
management company. Officer of various investment companies managed by Eaton
Vance or BMR. Mr. Dynner was elected Secretary of the Trust on June 23,
1997.
JANET E. SANDERS (61), Assistant Treasurer and Assistant Secretary
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
A. JOHN MURPHY (34), Assistant Secretary
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993). Officer of various investment companies managed
by Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the
Trust on March 27, 1995.
JOHN P. RYNNE (55), Assistant Secretary
Corporate Controller and Vice President of EVC. Vice President of Eaton Vance,
EVD and BMR. Mr. Rynne became an officer of the Trust on June 19, 1995.
ERIC G. WOODBURY (40), Assistant Secretary
Vice President of BMR, Eaton Vance and EV since February 1993; formerly,
associate attorney at Dechert, Price & Rhoads. Mr. Woodbury was elected
Assistant Secretary of the Trust on June 19, 1995.
Messrs. Hayes (Chairman), Reamer and Thorndike are members of the Special
Committee of the Board of Trustees of the Trust. The purpose of the Special
Committee is to consider, evaluate and make recommendations to the full Board of
Trustees concerning (i) all contractual arrangements with service providers to
the Fund, including investment advisory, administrative, transfer agency,
custodial and fund accounting and distribution services, and (ii) all other
matters in which Eaton Vance or its affiliates has any actual or potential
conflict of interest with the Fund or its shareholders.
The Nominating Committee of the Board of Trustees of the Trust is comprised
of four Trustees who are not "interested persons" as that term is defined under
the 1940 Act ("noninterested Trustees"). The Committee has four- year staggered
terms, with one member rotating off the Committee to be replaced by another
noninterested Trustee of the Trust. The purpose of the Committee is to recommend
to the Board nominees for the position of noninterested Trustee and to assure
that at least a majority of the Board of Trustees is independent of Eaton Vance
and its affiliates.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust. The Audit Committee's functions include
making recommendations to the Board of Trustees regarding the selection of the
independent certified public accountants, and reviewing matters relative to
trading and brokerage policies and practices, accounting and auditing practices
and procedures, accounting records, internal accounting controls, and the
functions performed by the custodian, transfer agent and dividend disbursing
agent of the Trust.
The fees and expenses of the noninterested Trustees of the Trust are paid
by the Fund (and the other series of the Trust). (The Trustees of the Trust who
are members of the Eaton Vance organization receive no compensation from the
Trust.) For the fiscal year ending October 31, 1997, it is estimated that the
noninterested Trustees of the Trust will receive the following compensation in
their capacities as Trustees from the Trust and for the year ended June 30,
1997, the noninterested Trustees earned the following compensation in their
capacities as Trustees of the funds in the Eaton Vance fund complex(1):
<TABLE>
ESTIMATED
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM TRUST AND
NAME FROM TRUST(2) FUND COMPLEX
- ---- ------------ ------------------
<S> <C> <C>
Donald R. Dwight ..................................... $25 $145,000(3)
Samuel L. Hayes, III ................................. 25 152,500(4)
Norton H. Reamer ..................................... 25 145,000
John L. Thorndike .................................... 25 147,500(5)
Jack L. Treynor ...................................... 25 150,000
</TABLE>
- ------------
(1) The Eaton Vance fund complex consists of 215 registered investment
companies or series thereof.
(2) It is estimated the Trust will consist of 16 Funds as of October 31, 1997.
(3) Includes $45,000 of deferred compensation.
(4) Includes $28,750 of deferred compensation.
(5) Includes $82,384 of deferred compensation.
Trustees of the Trust who not affiliated with the Investment Adviser may
elect to defer receipt of all or a percentage of their annual fees in accordance
with the terms of a Trustees Deferred Compensation Plan (the "Trustees" Plan").
Under the Trustees' Plan, an eligible Trustee may elect to have his deferred
fees invested by the Fund in the shares of one or more funds in the Eaton Vance
Family of Funds, and the amount paid to the Trustees under the Trustees' Plan
will be determined based upon the performance of such investments. Deferral of
Trustees' fees in accordance with the Trustees' Plan will have a negligible
effect on the Fund's assets, liabilities, and net income per share, and will not
obligate the Fund to retain the services of any Trustee or obligate the Fund to
pay any particular level of compensation to the Trustee. The Trust does not have
a retirement plan for its Trustees.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the date of this SAI, there were no security holders of the Fund's
shares.
INVESTMENT ADVISER AND ADMINISTRATOR
The Trust on behalf of the Fund engages Eaton Vance as investment adviser
pursuant to an Investment Advisory Agreement dated September 16, 1997. Eaton
Vance or its affiliates acts as investment adviser to investment companies and
various individual and institutional clients with combined assets under
management of over $17 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 cover stocks
ranging from blue chip to emerging growth companies.
Eaton Vance and its affiliates act as adviser to over 150 mutual funds, and
individual and various institutional accounts, including corporations,
hospitals, retirement plans, universities, foundations and trusts. Eaton Vance
mutual funds feature international equities, domestic equities, tax-free
municipal bonds, and U.S. government and corporate bonds. Lloyd George
Management has advised Eaton Vance's international equity funds since 1992.
Founded in 1991, Lloyd George is headquartered in Hong Kong with offices in
London and Mumbai, India. It has established itself as a leader in investment
management in Asian equities and other global markets. Lloyd George features an
experienced team of investment professionals that began working together in the
mid-1980s. Lloyd George analysts cover East Asia, the India subcontinent, Russia
and Eastern Europe, Latin America, Australia and New Zealand from offices in
Hong Kong, London and Mumbai. Together Eaton Vance and Lloyd George manage over
$18 billion in assets. Eaton Vance mutual funds are distributed by the Principal
Underwriter both within the United States and offshore.
The Principal Underwriter believes that an investment professional can
provide valuable services to you to help you reach your investment goals.
Meeting investment goals requires time, objectivity and investment savvy. Before
making an investment recommendation, a representative can help you carefully
consider your "short-term" and "long-term" financial goals, your tolerance for
investment risk, your investment time frame, and other investments you may
already own. Your professional investment representatives are knowledgeable
about financial markets, as well as the wide range of investment opportunities
available. A representative can provide you with tailored financial advice and
help you decide when to buy, sell or persevere with your investments.
Eaton Vance manages the investments and affairs of the Fund subject to the
supervision of the Trust's Board of Trustees. Eaton Vance furnishes to the Fund
investment research, advice and assistance, administrative services, office
space, equipment and clerical personnel, and investment advisory, statistical
and research facilities, and has arranged for certain members of the Eaton Vance
organization to serve without salary as officers or Trustees of the Trust. The
Fund is responsible for all expenses not expressly stated to be payable by Eaton
Vance under the Investment Advisory Agreement, including, without limitation,
the fees and expenses of its custodian and transfer agent, including those
incurred for determining the Fund's net asset value and keeping its books; the
cost of share certificates; membership dues in investment company organizations;
brokerage commissions and fees; fees and expenses of registering its shares;
expenses of reports to shareholders, proxy statements, and other expenses of
shareholders' meetings; insurance premiums; printing and mailing expenses;
interest, taxes and corporate fees; legal and accounting expenses; and
compensation and expenses of Trustees not affiliated with Eaton Vance. The Fund
will also bear expenses incurred in connection with litigation, proceedings and
claims and any legal obligation of the Trust to indemnify its officers and
Trustees with respect thereto, to the extent not covered by insurance.
For a description of the compensation that the Fund pays Eaton Vance under
the Investment Advisory Agreement, see the Fund's current Prospectus.
The Investment Advisory Agreement with Eaton Vance continues in effect from
year to year so long as such continuance is approved at least annually (i) by
the vote of a majority of the noninterested Trustees of the Trust cast in person
at a meeting specifically called for the purpose of voting on such approval and
(ii) by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Fund. The Agreement may be terminated at
any time without penalty on sixty (60) days' written notice by the Board of
Trustees of either party, or by vote of the majority of the outstanding voting
securities of the Fund, and the Agreement will terminate automatically in the
event of its assignment. The Agreement provides that Eaton Vance may render
services to others. The Agreement also provides that Eaton Vance shall not be
liable for any loss incurred in connection with the performance of its duties,
or action taken or omitted under that Agreement, in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties thereunder, or
for any losses sustained in the acquisition, holding or disposition of any
security or other investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but currently receives no compensation for providing administrative
services to the Fund. Under its agreement with the Trust, Eaton Vance has been
engaged to administer the Fund's affairs, subject to the supervision of the
Trustees of the Trust, and shall furnish for the use of the Fund office space
and all necessary office facilities, equipment and personnel for administering
the affairs of the Fund.
Eaton Vance and EV are both wholly-owned subsidiaries of EVC. BMR is a
wholly-owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, M. Dozier Gardner, James B. Hawkes and
Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons and
John G.L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, Mr. Gardner is vice
chairman and Mr. Hawkes is president and chief executive officer of EVC, Eaton
Vance, BMR and EV. All of the issued and outstanding shares of Eaton Vance and
of EV are owned by EVC. All of the issued and outstanding shares of BMR are
owned by Eaton Vance. All shares of the outstanding Voting Common Stock of EVC
are deposited in a Voting Trust which expires December 31, 1997, the Voting
Trustees of which are Messrs. Clay, Gardner, Hawkes and Rowland and Thomas E.
Faust, Jr. The Voting Trustees have unrestricted voting rights for the election
of Directors of EVC. All of the outstanding voting trust receipts issued under
said Voting Trust are owned by certain of the officers or officers and Directors
of Eaton Vance and BMR who are also officers and Directors of EVC and EV. As of
August 31, 1997, Messrs. Clay, Gardner and Hawkes each owned 24% of such voting
trust receipts and Messrs. Rowland and Faust owned 15% and 13%, respectively, of
such voting trust receipts. Messrs. Dynner, Gardner and Hawkes, who are officers
or Trustees of the Trust, are members of the EVC, Eaton Vance, BMR and EV
organizations. Messrs. Ahern, Murphy, O'Connor, Rynne, Smiley, Terry and
Woodbury, and Ms. Sanders are officers of the Trust and are also members of the
Eaton Vance, BMR and EV organizations.
Eaton Vance owns all the stock of Northeast Properties, Inc., which is
engaged in real estate investment. EVC owns all the stock of Fulcrum Management,
Inc. and MinVen, Inc., which are engaged in the development of precious metal
mining, venture investment and management. EVC also owns 22% of the Class A
shares of Lloyd George Management (B.V.I.) Limited, a registered investment
adviser. EVC, Eaton Vance, BMR and EV may also enter into other businesses.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund, IBT.
It is Eaton Vance's opinion that the terms and conditions of such transactions
will not be influenced by existing or potential custodial or other relationships
between the Trust and such banks.
CUSTODIAN
IBT acts as custodian for the Trust. IBT has the custody of all cash and
securities of the Fund, maintains the Fund's general ledger and computes the
daily net asset value of shares of the Fund. In such capacity it attends to
details in connection with the sale, exchange, substitution, transfer or other
dealings with the Fund's investments, receives and disburses all funds and
performs various other ministerial duties upon receipt of proper instruction
from the Trust. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of Fund net assets and a portion of the fee relates to
activity charges, primarily the number of portfolio transactions. These fees are
then reduced by a credit for cash balances of the particular investment company
at the custodian equal to 75% of the 91-day, U.S. Treasury Bill auction rate
applied to the particular investment company's average daily collected balances
for the week. Landon T. Clay, a Director of EVC and an officer, Trustee or
Director of other entities in the Eaton Vance organization, owns approximately
13% of the voting stock of Investors Financial Services Corp., the holding
company parent of IBT. Management believes that such ownership does not create
an affiliated person relationship between the Trust and IBT under the 1940 Act.
IBT also provides services in connection with the preparation of
shareholder reports and the electronic filing of such reports with the
Commission for which it receives a separate fee.
SERVICES FOR ACCUMULATION -- CLASS A SHARES
The following services are voluntary, involve no extra charge, other than
the sales charge included in the offering price, and may be changed or
discontinued without penalty at any time.
Intended Quantity Investment -- Statement of Intention. If it is anticipated
that $50,000 or more of Fund shares and shares of the other continuously offered
open-end funds listed under "The Eaton Vance Exchange Privilege" in the
Prospectus will be purchased within a 13-month period, a Statement of Intention
should be signed so that shares may be obtained at the same reduced sales charge
as though the total quantity were invested in one lump sum. Shares held under
Right of Accumulation (see below) as of the date of the Statement will be
included toward the completion of the Statement. The Statement authorizes the
Transfer Agent to hold in escrow sufficient shares (6% of the dollar amount
specified in the Statement) which can be redeemed to make up any difference in
sales charge on the amount intended to be invested and the amount actually
invested. Execution of a Statement does not obligate the shareholder to purchase
or the Fund to sell the full amount indicated in the Statement, and should the
amount actually purchased during the 13-month period be more or less than that
indicated on the Statement, price adjustments will be made. For sales charges
and other information on quantity purchases, see "How to Buy Shares" in the
Prospectus. Any investor considering signing a Statement of Intention should
read it carefully.
Right of Accumulation -- Cumulative Quantity Discount. The applicable sales
charge level for the purchase of Fund shares is calculated by taking the dollar
amount of the current purchase and adding it to the value (calculated at the
maximum current offering price) of the shares the shareholder owns in his or her
account(s) in the Fund and in the other continuously offered open- end funds
listed under "The Eaton Vance Exchange Privilege" in the Prospectus for which
Eaton Vance acts as adviser or administrator at the time of purchase. The sales
charge on the shares being purchased will then be at the rate applicable to the
aggregate. For sales charges on quantity purchases, see "How to Buy Shares" in
the Prospectus. Shares purchased (i) by an individual, his or her spouse and
their children under the age of twenty-one, and (ii) by a trustee, guardian or
other fiduciary of a single trust estate or a single fiduciary account, will be
combined for the purpose of determining whether a purchase will qualify for the
Right of Accumulation and if qualifying, the applicable sales charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his or her Authorized Firm must provide the Principal Underwriter
(in the case of a purchase made through an Authorized Firm) or the Transfer
Agent (in the case of an investment made by mail) with sufficient information to
permit verification that the purchase order qualifies for the accumulation
privilege. Confirmation of the order is subject to such verification. The Right
of Accumulation privilege may be amended or terminated at any time as to
purchases occurring thereafter.
SERVICE FOR WITHDRAWAL
The Transfer Agent will send to the shareholder regular monthly or
quarterly payments of any permitted amount designated by the shareholder (see
"Eaton Vance Shareholder Services -- Withdrawal Plan" in the Prospectus) based
upon the value of the shares held. The checks will be drawn from share
redemptions and hence, although they are a return of principal may require the
recognition of taxable gain or loss. Income dividends and capital gain
distributions in connection with withdrawal plan 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. A shareholder may not have
a withdrawal plan in effect at the same time he or she has authorized Bank
Automated Investing or is otherwise making regular purchases of Fund shares. 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 Trustees of the Trust have established the following procedures for the
fair valuation of the Fund's assets under normal market conditions. Securities
listed on foreign or U.S. securities exchanges or in the NASDAQ National Market
System generally are valued at the last sale prices or, if there were no sales
on a particular day, at the mean between the closing bid and asked prices
therefor on the exchange where such securities are principally traded or on such
National Market System. Unlisted or listed securities for which closing sale
prices are not available are valued at the mean between the latest bid and asked
prices. An option is valued at the last sale price as quoted on the principal
exchange or board of trade on which such option or contract is traded, or in the
absence of a sale, at the mean between the last bid and asked prices. Futures
positions on securities or currencies are generally valued at closing settlement
prices. Short-term debt securities with a remaining maturity of 60 days or less
are valued at amortized cost. If securities were acquired with a remaining
maturity of more than 60 days, their amortized cost value will be based on their
value on the sixty-first day prior to maturity. Other fixed income and debt
securities, including listed securities and securities for which price
quotations are available, will normally be valued on the basis of valuations
furnished by a pricing service. All other securities are valued at fair value as
determined in good faith by or at the direction of the Trustees. The Fund will
be closed for business and will not price its shares on the following business
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Generally, trading in the foreign securities owned by the Fund is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset value
of the Fund's shares are computed as of such times. Occasionally, events
affecting the value of foreign securities may occur between such times and the
close of the Exchange which will not be reflected in the computation of the
Fund's net asset value (unless the Fund deems that such events would materially
affect its net asset value, in which case an adjustment would be made and
reflected in such computation). Foreign securities and currency held by the Fund
will be valued in U.S. dollars; such values will be computed by the custodian
based on foreign currency exchange rate quotations supplied by an independent
quotation service.
INVESTMENT PERFORMANCE
Average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and distributions paid and
reinvested) for the stated period and annualizing the result. The calculation
assumes that all distributions are reinvested at net asset value on the
reinvestment dates during the period, and either (i) the deduction of the
maximum sales charge from the initial $1,000 purchase order or (ii) a complete
redemption of the investment and, if applicable, the deduction of the CDSC at
the end of the period.
The Fund may use total return figures showing after-tax returns, including
comparisons to tax-deferred vehicles such as Individual Retirement Accounts
("IRAs") and variable annuities. In calculating after-tax returns, the Fund
will, in general, assume that its shareholders are U.S. individual taxpayers
subject to federal income taxes at the highest marginal rate then applicable to
ordinary income and long-term capital gains. After-tax returns may also be
calculated using different tax rate assumptions and taking into account state
and local income taxes as well as federal taxes. In calculating after-tax
returns, distributions made by the Fund are assumed to be reduced by the amount
of taxes payable on the distribution, and the after-tax proceeds of the
distribution are reinvested in the Fund at net asset value on the reinvestment
date.
The Fund's total return may be compared to relevant indices, such as the
Consumer Price Index and various domestic and foreign securities indices, for
example: Standard & Poor's Index of 400 Common Stocks, Standard & Poor's Index
of 500 Common Stocks, Merrill Lynch U.S. Treasury (15-year plus) Index, Lehman
Brothers Government/Corporate Bond Index, the Dow Jones Industrial Average and
Morgan Stanley Global Equity. The Fund's total return and comparisons with these
indices may be used in advertisements and in information furnished to present or
prospective shareholders.
Information used in advertisements and in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations (e.g. Ibbotson Associates, Standard &
Poor's Ratings Group, Merrill Lynch Private Client Group, Bloomberg, L.P., Dow
Jones & Company, Inc., and the Federal Reserve Board) or included in various
publications (e.g. The Wall Street Journal, Barron's and The Decade: Wealth of
Investments in U.S. Stocks, Bonds, Bills & Inflation) reflecting the investment
performance or return achieved by various classes and types of investments (e.g.
common stocks, small company stocks, long-term corporate bonds, long-term
government bonds, intermediate-term government bonds, U.S. Treasury bills) over
various periods of time. This information may be used to illustrate the benefits
of long-term investments in common stocks.
Evaluations of the Fund's performance or rankings of mutual funds (which
include the Fund) made by independent sources (e.g., Lipper Analytical Services,
Inc., CDA/Weisenberger and Morningstar, Inc.) may be used in advertisements and
in information furnished to present or prospective shareholders. Information,
charts and illustrations showing the effect of compounding interest or relating
to inflation and taxes (including their effects on the dollar and the return on
stocks and other investment vehicles) may also be included in advertisements and
materials furnished to present and prospective investors.
Information used in advertisements and materials furnished to present and
prospective investors may include statements or illustrations relating to the
appropriateness of certain types of securities and/or mutual funds to meet
specific financial goals. Such information may address:
-- costs associated with aging parents;
-- funding a college education (including its actual and estimated cost);
-- health care expenses (including actual and projected expenses);
-- long-term disabilities (including the availability of, and coverage
provided by, disability insurance); and
-- retirement (including the availability of social security benefits, the
tax treatment of such benefits and statistics and other information
relating to maintaining a particular standard of living and outliving
existing assets).
Such information may also address different methods for saving money and
the results of such methods, as well as the benefits of investing in equity
securities. Such information may describe: the potential for growth; the
performance of equities as compared to other investment vehicles; and the value
of investing as early as possible and regularly, as well as staying invested.
The benefits of investing in equity securities by means of a mutual fund may
also be included (such benefits may include diversification, professional
management and the variety of equity mutual fund products).
Information in advertisements and materials furnished to present and
prospective investors may include profiles of different types of investors
(i.e., investors with different goals and assets) and different investment
strategies for meeting specific financial goals. Such information may provide
hypothetical illustrations which include: results of various investment
strategies; performance of an investment in the Fund over various time periods;
and results of diversifying assets among several investments with varying
performance. Information in advertisements and materials furnished to present
and prospective investors may also include quotations (including editorial
comments) and statistics concerning investing in securities, as well as
investing in particular types of securities and the performance of such
securities.
The Fund may provide information about Eaton Vance, its affiliates and
other investment advisers to the funds in the Eaton Vance Family of Funds in
sales material or advertisements provided to investors or prospective investors.
Such material or advertisements may also provide information on the use of
investment professionals by such investors.
HYPOTHETICAL RETURNS
The following analysis compares the after-tax returns achieved from three
hypothetical investments with identical pre-tax returns of 10% per year. The
first hypothetical investment is a tax-managed equity mutual fund whose returns
consist entirely of deferred gains (no dividend income and no realized capital
gains). Note - It is anticipated the Fund will distribute some net investment
income and capital gains in some years, so the hypothetical may not be entirely
applicable. The second hypothetical investment is a conventional equity mutual
fund, managed without regard to investor tax considerations, whose 10% annual
returns consist of 2% return from dividend income and 8% return from realized
capital gains, three-quarters of which are long-term gains and one-quarter of
which are short-term gains. The third hypothetical investment is a variable
annuity fund, which by its structure defers taxation on all income and gains.
The third hypothetical investment is a variable annuity fund, which by its
structure defers taxation on all income and gains. The investor is assumed to
pay federal taxes at the highest rate applicable to individual income and gains,
including the effect of the itemized deduction phaseout. This rate is 40.8% for
dividend income and short-term capital gains and 29.2% for long-term capital
gains. The investor is assumed to pay no state or local taxes.
An initial investment of $10,000 in each of the three hypothetical funds
would grow in value to:
<TABLE>
CONVENTIONAL EQUITY VARIABLE
TAX-MANAGED FUND MUTUAL FUND ANNUITY FUND
---------------- ------------------- ------------
<S> <C> <C> <C>
After 10 years: $25,937 $18,942 $25,937
After 20 years: $67,275 $35,881 $67,275
</TABLE>
The returns from the tax-managed fund and the variable annuity fund are the
same since the pre-tax returns are assumed to be identical and no taxes have
been paid in either case. The returns from the conventional fund are
substantially lower due to the taxes paid each year in connection with the funds
dividend income and realized long-term and short-term capital gains.
If the hypothetical fund investments were each to be sold, the amount
realized from the sale, net of taxes, would be:
<TABLE>
CONVENTIONAL EQUITY VARIABLE
TAX-MANAGED FUND MUTUAL FUND ANNUITY FUND
---------------- ------------------- ------------
<S> <C> <C> <C>
After 10 years: $21,286 $18,942 $19,437
After 20 years: $50,558 $35,881 $43,914
</TABLE>
The proceeds from selling the conventional fund, net of taxes, equals the
value of the shares (from above), since no gain is recognized at sale. The
net-of-tax proceeds of the tax-managed fund position is reduced by the capital
gains taxes due on the accumulated gain. The net-of-tax proceeds of the variable
annuity is reduced by taxes on the accumulated income and gain, all of which is
taxed as ordinary income.
If the holder of the hypothetical fund investments were to die, the value
of the investment passing to the estate would be:
<TABLE>
CONVENTIONAL EQUITY VARIABLE
TAX-MANAGED FUND MUTUAL FUND ANNUITY FUND
---------------- ------------------- ------------
<S> <C> <C> <C>
After 10 years: $25,937 $18,942 $19,437
After 20 years: $67,275 $35,881 $43,914
</TABLE>
The value of the tax-managed fund and the conventional fund would pass
through to the estate without being taxed and their tax basis would be adjusted
upward to the value at the time of death. The value of the variable annuity
would be reduced by taxes at the ordinary income rate on the accumulated income
and gain, as if the investor had sold the position.
TAXES
Each series of the Trust, is treated as a separate entity for federal
income tax purposes. The Fund intends to elect to be treated, and to qualify
each year as a regulated investment company ("RIC") under the Code. Accordingly,
the Fund intends to satisfy certain requirements relating to sources of its
income and diversification of its assets and to distribute all of its net
investment income and net realized capital gains in accordance with the timing
requirements imposed by the Code, so as to avoid any federal income or excise
tax on the Fund.
In order to avoid federal excise tax, the Code requires that the Fund
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses, generally computed on the basis of the one-year period
ending on October 31 of such year, after reduction by any available capital loss
carryforwards, and 100% of any income and capital gains from the prior year (as
previously computed) that was not paid out during such year and on which the
Fund paid no federal income tax. Under current law, provided that the Fund
qualifies as a RIC for federal income tax purposes, the Fund is not liable for
any income, corporate excise or franchise tax in the Commonwealth of
Massachusetts.
Foreign exchange gains and losses realized by the Fund in connection with
its investments in foreign securities and certain options, futures or forward
contracts or foreign currency may be treated as ordinary income and losses under
special tax rules. Certain options, futures or forward contracts of the Fund may
be required to be marked to market (i.e., treated as if closed out) on the last
day of each taxable year, and any gain or loss realized with respect to these
contracts may be required to be treated as 60% long-term and 40% short-term gain
or loss. Positions of the Fund in securities and offsetting options, swaps,
futures or forward contracts may be treated as "straddles" and be subject to
other special rules that may affect the amount, timing and character of the
Fund's distributions to shareholders. Certain uses of foreign currency and
foreign currency derivatives such as options, futures, forward contracts and
swaps and investment by the Fund in certain "passive foreign investment
companies" may be limited or a tax election may be made, if available, in order
to preserve the Fund's qualification as a RIC or avoid imposition of a tax on
the Fund.
Distributions by the Fund of the excess of net long-term capital gains over
short-term capital losses earned by the Fund, taking into account any capital
loss carryforwards that may be available to the Fund in years after its first
taxable year, are taxable to shareholders of the Fund as long-term capital
gains, whether received in cash or in additional shares and regardless of the
length of time their shares have been held. Certain distributions, if declared
in October, November or December and paid the following January, will be taxed
to shareholders as if received on December 31 of the year in which they are
declared.
Any loss realized upon the redemption or exchange of shares 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 a loss realized upon a taxable disposition of
Fund shares may be disallowed under "wash sale" rules if other Fund shares are
purchased (whether through reinvestment of dividends or otherwise) within 30
days before or after the disposition. Any disallowed loss will result in an
adjustment to the shareholder's tax basis in some or all of the other shares
acquired.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain certifications required by the Internal Revenue Service (the "IRS"), as
well as shareholders with respect to whom the Fund has received notification
from the IRS or a broker, may be subject to "backup" withholding of federal
income tax from the Fund's taxable dividends and distributions and the proceeds
of redemptions (including repurchases and exchanges) at a rate of 31%. An
individual's taxpayer identification number is generally his or her social
security number.
Non-resident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short- term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. Federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
The foregoing discussion does not describe many of the tax rules applicable
to IRAs nor does it address the special tax rules applicable to certain other
classes of investors, such as other retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to these or other special tax rules that may
apply in their particular situations, as well as the state, local or foreign tax
consequences of investing in the Fund.
PRINCIPAL UNDERWRITER
CLASS A SHARES. Class A shares of the Fund may be continuously purchased at
the public offering price through Authorized Firms which have agreements with
the Principal Underwriter. The Trust reserves the right to suspend or limit the
offering of its shares to the public at any time. The public offering price is
the net asset value next computed after receipt of the order, plus, where
applicable, a variable percentage (sales charge) depending upon the amount of
purchase as indicated by the sales charge table set forth in the Prospectus (see
"How to Buy Shares"). Such table is applicable to purchases of the Fund alone or
in combination with purchases of certain other funds offered by the Principal
Underwriter, made at a single time by (i) an individual, or an individual, his
spouse and their children under the age of twenty-one, purchasing shares for his
or their own account, and (ii) a trustee or other fiduciary purchasing shares
for a single trust estate or a single fiduciary account.
The table is also presently applicable to (1) purchases of Class A shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter, through one dealer aggregating $50,000 or more made by
any of the persons enumerated above within a thirteen-month period starting with
the first purchase pursuant to a written Statement of Intention, in the form
provided by the Principal Underwriter, which includes provisions for a price
adjustment depending upon the amount actually purchased within such period (a
purchase not made pursuant to such Statement may be included thereunder if the
Statement is filed within 90 days of such purchase); or (2) purchases of Class A
shares pursuant to the Right of Accumulation and declared as such at the time of
purchase.
Subject to the applicable provisions of the 1940 Act, the Trust may issue
Class A shares at net asset value in the event that an investment company
(whether a regulated or private investment company or a personal holding
company) is merged or consolidated with or acquired by the Class. Normally no
sales charges will be paid in connection with an exchange of Class A shares for
the assets of such investment company. Class A shares may be sold at net asset
value to any officer, director, trustee, general partner or employee of the
Trust or any investment company for which Eaton Vance or BMR acts as investment
adviser, any investment advisory, agency, custodial or trust account managed or
administered by Eaton Vance or by any parent, subsidiary or other affiliate of
Eaton Vance, or any officer, director or employee of any parent, subsidiary or
other affiliate of Eaton Vance. The terms "officer," "director," "trustee,"
"general partner" or "employee" as used in this paragraph include any such
person's spouse and minor children, and also retired officers, directors,
trustees, general partners and employees and their spouses and minor children.
Class A shares may also be sold at net asset value to registered representatives
and employees of Authorized Firms and to the spouses and children under the age
of 21 and beneficial accounts of such persons.
The Principal Underwriter acts as principal in selling Class A shares under
a Distribution Agreement with the Trust. The expenses of printing copies of
prospectuses used to offer shares to Authorized Firms or investors and other
selling literature and of advertising are borne by the Principal Underwriter.
The fees and expenses of qualifying and registering and maintaining
qualifications and registrations of the Fund and its Class A shares under
federal and state securities laws are borne by the Class. The Distribution
Agreement is renewable annually by the Board of Trustees of the Trust (including
a majority of the noninterested Trustees) may be terminated on six months'
notice by either party and is automatically terminated upon assignment. The
Principal Underwriter distributes Class A shares on a "best efforts" basis under
which it is required to take and pay for only such shares as may be sold. The
Principal Underwriter allows Authorized Firms discounts from the applicable
public offering price which are alike for all Authorized Firms. The Principal
Underwriter may allow, upon notice to all Authorized Firms with whom it has
agreements, discounts up to the full sales charge during the periods specified
in the notice. During periods when the discount includes the full sales charge,
such Authorized Firms may be deemed to be underwriters as that term is defined
in the Securities Act of 1933.
The Trust has authorized the Principal Underwriter to act as its agent in
repurchasing shares at the rate of $2.50 for each repurchase transaction handled
by the Principal Underwriter. The Principal Underwriter estimates that the
expenses incurred by it in acting as repurchase agent for the Trust will exceed
the amounts paid therefor.
CLASS B AND CLASS C SHARES. Under a Distribution Agreement the Principal
Underwriter acts as principal in selling Class B and Class C shares. The
expenses of printing copies of prospectuses used to offer shares to Authorized
Firms or investors and other selling literature and of advertising is borne by
the Principal Underwriter. The fees and expenses of qualifying and registering
and maintaining qualifications and registrations of the Fund and its Class B and
Class C shares under federal and state securities laws are borne by the Class.
In addition, each Class makes payments to the Principal Underwriter pursuant to
a Distribution Plan as described in the Prospectus; the provisions of the plan
relating to such payments are included in the Distribution Agreement. The
Distribution Agreement is renewable annually by the Trust's Board of Trustees
(including a majority of the noninterested Trustees who have no direct or
indirect financial interest in the operation of the 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 Class B or Class C shares
or on six months' notice by the Principal Underwriter and is automatically
terminated upon assignment. The Principal Underwriter distributes Class B and
Class C shares on a "best efforts" basis under which it is required to take and
pay for only such shares as may be sold.
SERVICE PLAN -- CLASS A SHARES
The Trust on behalf of each Class A share has adopted a Service Plan (the
"Plan") designed to meet the service fee requirements of the sales charge rule
of the National Association of Securities Dealers, Inc. (the "NASD").
(Management believes service fee payments are not distribution expenses governed
by Rule 12b-1 under the 1940 Act, but has chosen to have the Plan approved as if
that Rule were applicable.) The following supplements the discussion of the Plan
contained in the Prospectus.
The Plan continues in effect from year to year, for so long as such
continuance is approved by a vote of both a majority of (i) the noninterested
Trustees who have no direct or indirect financial interest in the operation of
the Plan or any agreements related to it (the "Plan Trustees") and (ii) all of
the Trustees then in office, cast in person at a meeting (or meetings) called
for the purpose of voting on this Plan. The Plan may be terminated any time by
vote of the Plan Trustees or by a vote of a majority of the outstanding Class A
shares of the Fund. The Plan has been approved by the Board of Trustees of the
Trust, including the Plan Trustees.
Under the Plan, the President or a Vice President of the Trust shall
provide to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described herein without approval of the
shareholders of Class A shares, and all material amendments of the Plan must
also be approved by the Trustees of the Trust in the manner described above. So
long as the Plan is in effect, the selection and nomination of Trustees who are
not interested persons of the Trust shall be committed to the discretion of the
Trustees who are not such interested persons. The Trustees have determined that
in their judgment there is a reasonable likelihood that the Plan will benefit
the Fund and its Class A shareholders.
DISTRIBUTION PLAN -- CLASS B AND CLASS C SHARES
Each Plan is designed to meet the requirements of Rule 12b-1 under the 1940
Act and the sales charge rule of the NASD. The purpose of the Plans is to
compensate the Principal Underwriter for its distribution services and
facilities provided to the Fund.
The Plans provide that 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. On each sale of Fund shares (excluding reinvestment of
distributions) the Fund will pay the Principal Underwriter amounts representing
(i) sales commissions equal to 5% on sales of Class B shares and 6.25% on sales
of Class C shares 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 amount payable by the Fund to the Principal Underwriter pursuant to the
Plans 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 by the Fund 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 Fund, the expenses of the Fund accrued and allocated to the Fund on such
day, income on portfolio investments 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 Plans in the future because the standards for accrual of such a
liability under accounting principles have not been satisfied.
The Plans provide that the Fund will receive all CDSCs 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.
CDSCs and accrued amounts will be paid by the Fund to the Principal Underwriter
whenever there exist uncovered distribution charges.
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 Plans since their inception. Payments theretofore paid or
payable under the Plans by the Fund to the Principal Underwriter and CDSCs
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 CDSC will be imposed, the level and timing of redemptions of Fund
shares upon which no CDSC will be imposed (including redemptions of Fund shares
pursuant to the exchange privilege 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. 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
CDSCs will tend to increase the time during which there will exist uncovered
distribution charges of the Principal Underwriter.
Currently, payments of sales commissions and distribution fees and of
service fees may equal 1% of the Fund's average daily net assets per annum. For
actual payments made by the Fund and the outstanding uncovered distribution
charges of the Principal Underwriter. 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 (in the case of Class C
shares) at the time of sale, it is anticipated that the Eaton Vance organization
will profit by reason of the operation of the Plans through an increase in the
Fund's assets (thereby increasing the advisory fee payable to Eaton Vance by the
Fund) resulting from sale of Fund shares and through the amounts paid to the
Principal Underwriter, including CDSCs, 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 CDSCs 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.
Each Plan continues in effect from year to year so long as such continuance
is approved at least annually by the vote of both a majority of (i) the
noninterested Trustees of the Trust who have no direct or indirect financial
interest in the operation of the Plan or any agreements related to the Plan (the
"Rule 12b-1 Trustees") and (ii) all of the Trustees then in office, and the
Distribution Agreement contains a similar provision. The Plan and Distribution
Agreement may be terminated at any time by vote of a majority of the Rule 12b-1
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund. The Plan requires quarterly Trustee review of 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 the Trustees. So
long as the Plan is in effect, the selection and nomination of the noninterested
Trustees shall be committed to the discretion of such Trustees.
The Trustees of the Trust believe that the Plans 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.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the executing firm, are made by Eaton
Vance. Eaton Vance is also responsible for the execution of transactions for all
other accounts managed by it.
Eaton Vance places the portfolio security transactions of the Fund and of
certain other accounts managed by it for execution with many firms. Eaton Vance
uses its best efforts to obtain execution of portfolio transactions at prices
which are advantageous to the Fund and (when a disclosed commission is being
charged) at reasonably competitive commission rates. In seeking such execution,
Eaton Vance will use its best judgment in evaluating the terms of a transaction,
and will give consideration to various relevant factors, including without
limitation the size and type of the transaction, the nature and character of the
market for the security, the confidentiality, speed and certainty of effective
execution required for the transaction, the general execution and operational
capabilities of the executing firm, the reputation, reliability, experience and
financial condition of the firm, the value and quality of services rendered by
the firm in this and other transactions, and the reasonableness of the
commission, if any. Transactions on stock exchanges and other agency
transactions involve the payment by the Fund of negotiated brokerage
commissions. Such commissions vary among different firms, and a particular
broker-dealer may charge different commissions according to such factors as the
difficulty and size of the transaction and the volume of business done with such
broker-dealer. Transactions in foreign securities usually involve the payment of
fixed brokerage commissions, which are generally higher than those in the United
States. There is generally no stated commission in the case of securities traded
in the over-the-counter markets, but the price paid or received by the Fund
usually includes an undisclosed dealer markup or markdown. In an underwritten
offering the price paid by the Fund includes a disclosed fixed commission or
discount retained by the underwriter or dealer. Although commissions paid on
portfolio transactions will, in the judgment of Eaton Vance, be reasonable in
relation to the value of the services provided, commissions exceeding those
which another firm might charge may be paid to firms who were selected to
execute transactions on behalf of the Fund and Eaton Vance's other clients
providing brokerage and research services to Eaton Vance.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Fund may
receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if Eaton
Vance determines in good faith that such commission was reasonable in relation
to the value of the brokerage and research services provided. This determination
may be made either on the basis of that particular transaction or on the basis
of overall responsibilities which Eaton Vance and its affiliates have for
accounts over which it exercises investment discretion. In making any such
determination, Eaton Vance will not attempt to place a specific dollar value on
the brokerage and research services provided or to determine what portion of the
commission should be related to such services. Brokerage and research services
may include advice as to the value of securities, the advisability of investing
in, purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement); and
the "Research Services" referred to in the next paragraph.
It is a common practice of the investment advisory industry for the
advisers of investment companies, institutions and other investors to receive
research, statistical and quotation services, data, information and other
services, products and materials which assist such advisers in the performance
of their investment responsibilities ("Research Services") from broker-dealers
which execute portfolio transactions for the clients of such advisers and from
third parties with which such broker-dealers have arrangements. Consistent with
this practice, Eaton Vance may receive Research Services from broker- dealer
firms with which Eaton Vance places the portfolio transactions of the Fund and
from third parties with which these broker-dealers have arrangements. These
Research Services may include such matters as general economic and market
reviews, industry and company reviews, evaluations of securities and portfolio
strategies and transactions and recommendations as to the purchase and sale of
securities and other portfolio transactions, financial, industry and trade
publications, news and information services, pricing and quotation equipment and
services, and research oriented computer hardware, software, data bases and
services. Any particular Research Service obtained through a broker-dealer may
be used by Eaton Vance in connection with client accounts other than those
accounts which pay commissions to such broker-dealer. Any such Research Service
may be broadly useful and of value to Eaton Vance in rendering investment
advisory services to all or a significant portion of its clients, or may be
relevant and useful for the management of only one client's account or of a few
clients' accounts, or may be useful for the management of merely a segment of
certain clients' accounts, regardless of whether any such account or accounts
paid commissions to the broker-dealer through which such Research Service was
obtained. The advisory fee paid by the Fund is not reduced because Eaton Vance
receives such Research Services. Eaton Vance evaluates the nature and quality of
the various Research Services obtained through broker-dealer firms and attempts
to allocate sufficient commissions to such firms to ensure the continued receipt
of Research Services which Eaton Vance believes are useful or of value to it in
rendering investment advisory services to its clients.
Subject to the requirement that Eaton Vance shall use its best efforts to
seek to execute portfolio security transactions of the Fund at advantageous
prices and at reasonably competitive commission rates or spreads, Eaton Vance is
authorized to consider as a factor in the selection of any broker-dealer firm
with whom Fund orders may be placed the fact that such firm has sold or is
selling shares of the Fund or of other investment companies sponsored by Eaton
Vance. This policy is not inconsistent with a rule of the NASD, which rule
provides that no firm which is a member of the NASD shall favor or disfavor the
distribution of shares of any particular investment company or group of
investment companies on the basis of brokerage commissions received or expected
by such firm from any source.
Securities considered as investments for the Fund may also be appropriate
for other investment accounts managed by Eaton Vance or its affiliates. Eaton
Vance will attempt to allocate equitably portfolio transactions among the Fund
and the portfolios of its other investment accounts whenever decisions are made
to purchase or sell securities by the Fund and one or more of such other
accounts simultaneously. In making such allocations, the main factors to be
considered are the respective investment objectives of the Fund and such other
accounts, the relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment by the Fund and such
accounts, the size of investment commitments generally held by the Fund and such
accounts and the opinions of the persons responsible for recommending
investments to the Fund and such accounts. While this procedure could have a
detrimental effect on the price or amount of the securities available to the
Fund from time to time, it is the opinion of the Trustees of the Trust that the
benefits available from Eaton Vance's organization outweigh any disadvantage
that may arise from exposure to simultaneous transactions.
OTHER INFORMATION
On July 10, 1995, the Trust changed its name from Eaton Vance Government
Obligations Trust to Eaton Vance Mutual Funds Trust. The Trust is organized as a
business trust under the laws of the Commonwealth of Massachusetts under a
Declaration of Trust dated May 7, 1984, as amended. Eaton Vance, pursuant to its
agreement with the Trust, controls the use of the words "Eaton Vance" and "EV"
in the Fund's name and may use the words "Eaton Vance" or "EV" in other
connections and for other purposes.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholder's meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Trust's By-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The 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's By-laws provide that the Trust will
indemnify its Trustees and officers against liabilities and expenses incurred in
connection with any litigation or proceeding in which they may be involved
because of their offices with the Trust. However, no indemnification will be
provided to any Trustee or officer for any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office. 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.
Under Massachusetts law, if certain conditions prevail, shareholders of a
Massachusetts business trust (such as the Trust) could be deemed to have
personal liability for the obligations of the Trust. Numerous investment
companies registered under the 1940 Act have been formed as Massachusetts
business trusts, and management is not aware of an instance where such liability
has been imposed. The Trust's Declaration of Trust contains an express
disclaimer of liability on the part of the Fund shareholders and the Trust's
By-laws provide that the Trust shall assume the defense on behalf of any Fund
shareholders. Moreover, the Trust's By-laws also provide for indemnification out
of the property of the Fund of any shareholder held personally liable solely by
reason of being or having been a shareholder for all loss or expense arising
from such liability. The assets of the Fund are readily marketable and will
ordinarily substantially exceed its liabilities. In light of the nature of the
Fund's business and the nature of its assets, management believes that the
possibility of the Fund's liability exceeding its assets, and therefore the
shareholder's risk of personal liability, is extremely remote.
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 Commission, or during any emergency
as determined by the Commission which makes it impracticable for the Fund to
dispose of its securities or value its assets, or during any other period
permitted by order of the Commission for the protection of investors.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts, are the
independent certified public accountants of the Fund, providing audit services,
tax return preparation, and assistance and consultation with respect to the
preparation of filings with the Commission.
<PAGE>
[LOGO}
EATON VANCE TAX-MANAGED
EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
STATEMENT OF
ADDITIONAL INFORMATION
SEPTEMBER 16, 1997
EATON VANCE TAX-MANAGED
EMERGING GROWTH FUND
24 FEDERAL STREET
BOSTON, MA 02110
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
Eaton Vance Management, 24 Federal Street, Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123
(800) 262-1122
AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110
<PAGE>
PART C
OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
Not applicable
(b) EXHIBITS:
(1)(a) Amended and Restated Declaration of Trust dated
August 17, 1993 filed as Exhibit (1)(a) to
Post-Effective Amendment No. 23 and incorporated
herein by reference.
(b) Amendment to Declaration of Trust dated July 10,
1995 filed as Exhibit (1)(b) to Post- Effective
Amendment No. 23 and incorporated herein by
reference.
(c) Amendment and Restatement of Establishment and
Designation of Series of Shares dated May 7, 1996
filed as Exhibit (1)(d) to Post-Effective Amendment
No. 30 and incorporated herein by reference.
(d) Establishment and Designation of Classes of Shares
of Beneficial Interest dated November 18, 1996 filed
as Exhibit 1(e) to Post-Effective Amendment No. 31
and incorporated herein by reference.
(e) Form of Amendment and Restatement of Establishment
and Designation of Series of Shares to be filed by
amendment.
(2)(a) By-Laws (As Amended November 3, 1986) filed as
Exhibit (2)(a) to Post-Effective Amendment No. 23
and incorporated herein by reference.
(b) Amendment to By-Laws dated December 13, 1993 filed
as Exhibit (2)(b) to Post-Effective Amendment No. 23
and incorporated herein by reference.
(3) Not applicable
(4) Not applicable
(5)(a) Investment Advisory Agreement with Eaton Vance
Management for Eaton Vance Short-Term Treasury Fund
dated February 4, 1991 filed as Exhibit (5)(a) to
Post-Effective Amendment No. 23 and incorporated
herein by reference.
(b) Investment Advisory Agreement with Eaton Vance
Management for Eaton Vance Tax Free Reserves dated
August 15, 1995 filed as Exhibit (5)(b) to
Post-Effective Amendment No. 25 and incorporated
herein by reference.
(c) Form of Investment Advisory Agreement with Eaton
Vance Management for Eaton Vance Tax- Managed
Emerging Growth Fund filed herewith.
(6)(a)(1) Distribution Agreement between Eaton Vance Mutual
Funds Trust (on behalf of its Classic series) and
Eaton Vance Distributors, Inc. effective November 1,
1996 (with attached Schedule A effective November 1,
1996) filed as Exhibit No. (6)(a)(1) to
Post-Effective Amendment No. 34 and incorporated
herein by reference.
(2) Distribution Agreement between Eaton Vance Mutual
Funds Trust (on behalf of its Marathon series) and
Eaton Vance Distributors, Inc. effective November 1,
1996 (with attached Schedule A effective November 1,
1996) filed as Exhibit (6)(a)(2) to Post- Effective
Amendment No. 34 and incorporated herein by
reference.
(3) Distribution Agreement between Eaton Vance Mutual
Funds Trust (on behalf of its Traditional series)
and Eaton Vance Distributors, Inc. effective
November 1, 1996 (with attached Schedule A effective
November 1, 1996) filed as Exhibit No. (6)(a)(3) to
Post-Effective Amendment No. 34 and incorporated
herein by reference.
(4) Distribution Agreement between Eaton Vance Mutual
Funds Trust, on behalf of Eaton Vance Cash
Management Fund, and Eaton Vance Distributors, Inc.
effective November 1, 1996 filed as Exhibit No.
(6)(a)(4) to Post-Effective Amendment No. 34 and
incorporated herein by reference.
(5) Distribution Agreement between Eaton Vance Mutual
Funds Trust, on behalf of Eaton Vance Liquid Assets
Fund, and Eaton Vance Distributors, Inc. effective
November 1, 1996 filed as Exhibit No. (6)(a)(5) to
Post-Effective Amendment No. 34 and incorporated
herein by reference.
(6) Distribution Agreement between Eaton Vance Mutual
Funds Trust, on behalf of Eaton Vance Money Market
Fund, and Eaton Vance Distributors, Inc. effective
November 1, 1996 filed as Exhibit No. (6)(a)(6) to
Post-Effective Amendment No. 34 and incorporated
herein by reference.
(7) Distribution Agreement between Eaton Vance Mutual
Funds Trust, on behalf of Eaton Vance Tax Free
Reserves, and Eaton Vance Distributors, Inc.
effective November 1, 1996 filed as Exhibit No.
(6)(a)(7) to Post-Effective Amendment No. 34 and
incorporated herein by reference.
(8) Form of Distribution Agreement between Eaton Vance
Mutual Funds Trust and Eaton Vance Distributors,
Inc. to be filed by amendment.
(b) Selling Group Agreement between Eaton Vance
Distributors, Inc. and Authorized Dealers filed as
Exhibit (6)(b) to the Registration Statement of
Eaton Vance Growth Trust Post- Effective Amendment
No. 61 and incorporated herein by reference.
(c) Schedule of Dealer Discounts and Sales Charges filed
as Exhibit (6)(c) to the Registration Statement of
Eaton Vance Growth Trust Post-Effective Amendment
No. 59 and incorporated herein by reference.
(7) The Securities and Exchange Commission has granted
the Registrant an exemptive order that permits the
Registrant to enter into deferred compensation
arrangements with its independent Trustees. See in
the Matter of Capital Exchange Fund, Inc., Release
No. IC-20671 (November 1, 1994).
(8)(a) Custodian Agreement with Investors Bank & Trust
Company dated October 15, 1992 filed as Exhibit (8)
to Post-Effective Amendment No. 23 and incorporated
herein by reference.
(b) Amendment to Custodian Agreement with Investors Bank
& Trust Company dated October 23, 1995 filed as
Exhibit (8)(b) to Post-Effective Amendment No. 27
and incorporated herein by reference.
(9)(a) Amended Administrative Services Agreement between
Eaton Vance Mutual Funds Trust (on behalf of each of
its series) and Eaton Vance Management dated July
31, 1995, with attached schedules (including Amended
Schedule A dated May 7, 1996) filed as Exhibit
(9)(a) to Post-Effective Amendment No. 24 and
incorporated herein by reference.
(b) Transfer Agency Agreement dated June 7, 1989 filed
as Exhibit 9(d) to Post-Effective Amendment No. 65
to the Registration Statement of Eaton Vance Growth
Trust (File Nos. 2-22019, 811-1241) and incorporated
herein by reference.
(c) Amendment to Transfer Agency Agreement dated
February 1, 1993 filed as Exhibit 9(e) to
Post-Effective Amendment No. 65 to the Registration
Statement of Eaton Vance Growth Trust (File Nos.
2-22019, 811-1241) and incorporated herein by
reference.
(10) Not applicable.
(11) Not applicable.
(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 No. 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 No. 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 No. 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
No. 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) dated July 7, 1993 filed as Exhibit (15)(a) to
Post-Effective Amendment No. 23 and incorporated
herein by reference.
(1) Amendment to Service Plan for Eaton Vance Mutual
Funds Trust on behalf of EV Traditional Government
Obligations Fund adopted June 24, 1996 filed as
Exhibit No. (15)(a)(1) to Post-Effective Amendment
No. 34 and incorporated herein by reference.
(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 as
Exhibit (15)(b) to Post-Effective Amendment No. 23
and incorporated herein by reference.
(1) Amendment to Distribution Plan for Eaton Vance
Mutual Funds Trust on behalf of Eaton Vance
Short-Term Treasury Fund adopted June 24, 1996 filed
as Exhibit No. (15)(b)(1) to Post-Effective
Amendment No. 34 and incorporated herein by
reference.
(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.
(1) Amendment to Amended Distribution Plan for Eaton
Vance Mutual Funds Trust on behalf of EV Classic
Government Obligations Fund adopted June 24, 1996
filed as Exhibit No. (15)(c)(1) to Post-Effective
Amendment No. 34 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 as Exhibit (15)(d) to Post-Effective
Amendment No. 23 and incorporated herein by
reference.
(1) Amendment to Distribution Plan for Eaton Vance
Mutual Funds Trust on behalf of EV Marathon
Government Obligations Fund adopted June 24, 1996
filed as Exhibit No. (15)(d) (1) to Post-Effective
Amendment No. 34 and incorporated herein by
reference.
(e) Distribution Plan for EV Marathon High Income Fund
pursuant to Rule 12b-1 under the Investment Company
Act of 1940 dated June 19, 1995 filed as Exhibit
(15)(e) to Post-Effective Amendment No. 25 and
incorporated herein by reference.
(f) Distribution Plan for EV Classic High Income
Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940 dated June 19, 1995 filed as
Exhibit (15)(f) to Post-Effective Amendment No. 25
and incorporated herein by reference.
(g) Distribution Plan for EV Classic Strategic Income
Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940 dated June 19, 1995 filed as
Exhibit (15)(g) to Post- Effective Amendment No. 24
and incorporated herein by reference.
(h) Distribution Plan for EV Marathon Strategic Income
Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940 dated June 19, 1995 filed as
Exhibit (15)(h) to Post-Effective Amendment No. 24
and incorporated herein by reference.
(i) Distribution Plan for Eaton Vance Liquid Assets Fund
pursuant to Rule 12b-1 under the Investment Company
Act of 1940 dated June 19, 1995 filed as Exhibit
(15)(i) to Post- Effective Amendment No. 25 and
incorporated herein by reference.
(1) Amendment to Distribution Plan for Eaton Vance
Mutual Funds Trust on behalf of Eaton Vance Liquid
Assets Fund adopted June 24, 1996 filed as Exhibit
No. (15)(i)(1) to Post- Effective Amendment No. 34
and incorporated herein by reference.
(j) Distribution Plan for Eaton Vance Money Market Fund
pursuant to Rule 12b-1 under the Investment Company
Act of 1940 dated June 19, 1995 filed as Exhibit
(15)(j) to Post- Effective Amendment No. 25 and
incorporated herein by reference.
(1) Amendment to Distribution Plan for Eaton Vance
Mutual Funds Trust on behalf of Eaton Vance Money
Market Fund adopted June 24, 1996 filed as Exhibit
No. (15)(j)(1) to Post- Effective Amendment No. 34
and incorporated herein by reference.
(k) Distribution Plan for EV Marathon Tax-Managed Growth
Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940 dated March 20, 1996 filed as
Exhibit (15)(k) to Post-Effective Amendment No. 28
and incorporated herein by reference.
(l) Service Plan for EV Traditional Tax-Managed Growth
Fund dated March 20, 1996 filed as Exhibit (15)(l)
to Post-Effective Amendment No. 28 and incorporated
herein by reference.
(m) Distribution Plan for EV Classic Tax-Managed Growth
Fund pursuant to Rule 12b-1 under the Investment
Company Act of 1940 dated August 1, 1996 filed as
Exhibit (15)(m) to Post-Effective Amendment No. 30
and incorporated herein by reference.
(n) Form of Class A Service Plan to be filed by
amendment.
(o) Form of Class B Distribution Plan to be filed by
amendment.
(p) Form of Class C Distribution Plan to be filed by
amendment.
(16) Not applicable.
(17)(a) Power of Attorney for Eaton Vance Mutual Funds Trust
dated June 23, 1997 filed herewith.
(b) Power of Attorney for Government Obligations
Portfolio dated June 19, 1995 filed as Exhibit
(17)(b) to Post-Effective Amendment No. 23 and
incorporated herein by reference.
(c) Power of Attorney for High Income Portfolio dated
June 19, 1995 filed as Exhibit (17)(c) to
Post-Effective Amendment No. 23 and incorporated
herein by reference.
(d) Power of Attorney for Strategic Income Portfolio
dated August 7, 1995 filed as Exhibit (17)(d) to
Post-Effective Amendment No. 24 and incorporated
herein by reference.
(e) Power of Attorney for Cash Management Portfolio
dated August 7, 1995 filed as Exhibit (17)(e) to
Post-Effective Amendment No. 25 and incorporated
herein by reference.
(f) Power of Attorney for Tax-Managed Growth Portfolio
dated October 23, 1995 filed as Exhibit (17)(f) to
Post-Effective Amendment No. 26 and incorporated
herein by reference.
(18)(a) Multiple Class Plan for Institutional Shares dated
November 18, 1996 filed as Exhibit (18) to
Post-Effective Amendment No. 31 and incorporated
herein by reference.
(b) Form of Multiple Class Plan to be filed by
amendment.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
<S> <C>
Shares of beneficial interest without par value as of June 2, 1997
Eaton Vance Short-Term Treasury Fund 72
EV Classic Government Obligations Fund 3,348
EV Marathon Government Obligations Fund 3,303
EV Traditional Government Obligations Fund 8,900
EV Classic High Income Fund 438
EV Marathon High Income Fund 16,328
EV Classic Strategic Income Fund 33
EV Marathon Strategic Income Fund 5,430
EV Classic Tax-Managed Growth Fund 4,176
EV Marathon Tax-Managed Growth Fund 8,944
EV Traditional Tax-Managed Growth Fund 3,422
Eaton Vance Cash Management Fund 2,171
Eaton Vance Liquid Assets Fund 488
Eaton Vance Money Market Fund 768
Eaton Vance Tax Free Reserves 184
</TABLE>
ITEM 27. INDEMNIFICATION
Article IV of the Trust's Amended and Restated Declaration of Trust
permits Trustee and officer indemnification by By-law, contract and vote.
Article XI of the By-laws contains indemnification provisions. Registrant's
Trustees and officers are insured under a standard mutual fund errors and
omissions insurance policy covering insured by reason of negligent errors and
omissions committed in their capacities as such.
The distribution agreements of the Trust also provide for reciprocal
indemnity of the Principal Underwriter, on the one hand, and the Trustees and
officers, on the other.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the information set forth under the captions
"Investment Adviser and Administrator" or "Investment Adiviser" in the
Statements 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:
Eaton Vance Growth Trust Eaton Vance Municipal Bond Fund L.P.
Eaton Vance Income Fund of Boston Eaton Vance Mutual Funds Trust
Eaton Vance Investment Trust Eaton Vance Prime Rate Reserves
Eaton Vance Municipals Trust Eaton Vance Special Investment Trust
Eaton Vance Municipals Trust II EV Classic Senior Floating-Rate Fund
(b)
<TABLE>
<CAPTION>
(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
Chris Berg Vice President None
Kate Bradshaw Vice President None
David B. Carle Vice President None
Daniel C. Cataldo Vice President None
Raymond Cox Vice President None
Mark P. Doman Vice President None
Alan R. Dynner Vice President None
James Foley Vice President None
Michael A. Foster Vice President None
William M. Gillen Senior Vice President None
Hugh S. Gilmartin Vice President None
Perry D. Hooker Vice President None
Brian Jacobs Senior Vice President None
Thomas P. Luka Vice President None
John Macejka Vice President None
Timothy D. McCarthy Vice President None
Joseph T. McMenamin Vice President None
Morgan C. Mohrman Senior Vice President None
James A. Naughton Vice President None
Mark D. Nelson Vice President None
Linda D. Newkirk Vice President None
James L. O'Connor Vice President Treasurer
Thomas Otis Secretary and Clerk Secretary
George D. Owen, II Vice President None
F. Anthony Robinson Vice President None
Jay S. Rosoff Vice President None
Benjamin A. Rowland, Jr. Vice President, Treasurer and Director None
Stephen M. Rudman Vice President None
John P. Rynne Vice President None
Kevin Schrader Vice President None
George V.F. Schwab, Jr. Vice President None
Cornelius J. Sullivan Vice President None
David M. Thill Vice President None
John M. Trotsky Vice President None
Chris Volf Vice President None
Sue Wilder Vice President None
</TABLE>
- ------------
*Address is 24 Federal Street, Boston, MA 02110
(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, 600 Clarendon Street,
16th Floor Mail Code ADM27, Boston, MA 02116 and its transfer agent, First
Data Investor Services Group, 4400 Computer Drive, Westborough, MA 01581, 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 High Income Portfolio
(the "HI Portfolio") are also maintained by IBT 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 accounts and HI
Portfolio and the Registrant's accounting records are held by IBT Fund
Services (Canada) Inc., 1 First Canadian Place, Kingstreet 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 file a Post-Effective Amendment on behalf of
Eaton Vance Tax-Managed Emerging Growth Fund, using financial statements which
need not be certified, within four to six months from the effective date of
this Post-Effective Amendment No. 35.
The Registrant undertakes to furnish to each person to whom a prospectus
is delivered a copy of the latest annual report to shareholders, upon request
and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it has duly
caused this 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 1st day of July,
1997.
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 1, 1997
- --------------------------------------
M. DOZIER GARDNER
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer July 1, 1997
- --------------------------------------
JAMES L. O'CONNOR
/s/ JAMES B. HAWKES Vice President, Trustee July 1, 1997
- --------------------------------------
JAMES B. HAWKES
DONALD R. DWIGHT* Trustee July 1, 1997
- --------------------------------------
DONALD R. DWIGHT
SAMUEL L. HAYES, III* Trustee July 1, 1997
- --------------------------------------
SAMUEL L. HAYES, III
NORTON H. REAMER* Trustee July 1, 1997
- --------------------------------------
NORTON H. REAMER
JOHN L. THORNDIKE* Trustee July 1, 1997
- --------------------------------------
JOHN L. THORNDIKE
JACK L. TREYNOR* Trustee July 1, 1997
- --------------------------------------
JACK L. TREYNOR
*By: /s/ ALAN R. DYNNER
----------------------------------
ALAN R. DYNNER
As Attorney-in-fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE IN SEQUENTIAL
EXHIBIT NO. DESCRIPTION NUMBERING SYSTEM
- ----------- ----------- ------------------
<S> <C> <C>
(5)(c) Form of Investment Advisory Agreement with Eaton Vance Management for Eaton Vance
Tax-Managed Emerging Growth Fund.
(17)(a) Power of Attorney for Eaton Vance Mutual Funds Trust dated June 23, 1997.
</TABLE>
<PAGE>
EXHIBIT (5)(c)
FORM OF
EATON VANCE MUTUAL FUNDS TRUST
INVESTMENT ADVISORY AGREEMENT
ON BEHALF OF EATON VANCE TAX-MANAGED EMERGING GROWTH FUND
AGREEMENT made this __th day of September, 1997, between Eaton Vance
Mutual Funds Trust, a Massachusetts business trust (the "Trust"), on behalf of
Eaton Vance Tax-Managed Emerging Growth Fund (the "Fund") and Eaton Vance
Management, a Massachusetts business trust (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 and other investments shall be acquired, disposed of or
exchanged and what portion of the Fund's assets shall be held uninvested,
subject always to the applicable restrictions of the Declaration of Trust,
By-Laws and registration statement of the Trust under the Investment Company Act
of 1940, all as from time to time amended. The Adviser is authorized, in its
discretion and without prior consultation with the Trust, to buy, sell, and
otherwise trade in any and all types of securities, commodities and investment
instruments on behalf of the Fund. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the Fund
and notify the Adviser thereof in writing, the Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Trust, all actions which it deems necessary or desirable
to implement the investment policies of the Trust and of the Fund.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of the Fund either directly with the issuer or with
brokers or dealers 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 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 and the Adviser is expressly
authorized to pay any broker or dealer who provides such brokerage and research
services a commission for executing a security transaction which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities which the Adviser
and its affiliates have with respect to accounts over which they exercise
investment discretion. Subject to the requirement set forth in the second
sentence of this paragraph, the Adviser is authorized to consider, as a factor
in the selection of any broker or dealer with whom purchase or sale orders may
be placed, the fact that such broker or dealer has sold or is selling shares of
the Fund, or any other series of the Trust, or of any one or more investment
companies sponsored by the Adviser or its affiliates.
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 Trust compensation in an amount equal to the
following of the average daily net assets of the Fund throughout each month:
Average Daily Net Annual Fee Rate
Assets for the Month (For Each Level)
-------------------- ----------------
Up to $500 million 0.625%
$500 million but less than $1 billion 0.5625%
$1 billion but less than $1.5 billion 0.50%
$1.5 billion and over 0.4375%
Such compensation shall be paid monthly in arrears on the last business day of
each month. The Fund's daily net assets 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 fee 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 organizing and maintaining the Fund and
continuing its existence, (ii) registration of the Trust under the Investment
Company Act of 1940, (iii) commissions, spreads, fees and other expenses
connected with the 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 shares, (viii) expenses of registering and qualifying the Fund and its shares
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 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, accounts and records, and determination of net asset values), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (xv)
expenses for servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Adviser's
organization, (xviii) all payments to be made and expenses to be assumed by the
Fund pursuant to any one or more distribution plans adopted by the Trust on
behalf of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940, and (xix) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees, officers and shareholders
with respect thereto.
4. Other Interests. It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become interested in the
Adviser as trustees, officers, employees, shareholders or otherwise and that
trustees, officers, employees and shareholders of the Adviser are or may be or
become similarly interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise. It is also understood that
trustees, officers, employees and shareholders of the Adviser may be or become
interested (as directors, trustees, officers, employees, shareholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which the Adviser may organize, sponsor or acquire, or
with which it may merge or consolidate, and which may include the words "Eaton
Vance" or any combination thereof as part of their name, and that the Adviser or
its subsidiaries or affiliates may enter into advisory or management agreements
or other contracts or relationships with such other companies or entities.
5. Limitation of Liability of the Adviser. The services of the Adviser
to the Trust are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other business activities. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser, the
Adviser shall not be subject to liability to the Trust or to any shareholder of
the Fund for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the acquisition,
holding or disposition of any security or other investment.
6. Sub-Investment Advisers. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers or other
persons to execute the Fund's portfolio security transactions, and upon such
terms and conditions as may be agreed upon between the Adviser and such
sub-investment adviser and approved by the Trustees of the Trust, all as
permitted by the Investment Company Act of 1940.
7. Duration and Termination of this Agreement. This Agreement shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect through and including
February 28, 1998 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1998 is
specifically approved at least annually (i) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the Fund
and (ii) by the vote of a majority of those Trustees of the Trust who are not
interested persons of the Adviser or the Trust cast in person at a meeting
called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of 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 Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of shareholders of the Fund, and the Adviser hereby agrees that it
shall have recourse to the Trust or the Fund for payment of claims or
obligations as between the Trust or the Fund and the Adviser arising out of this
Agreement and shall not seek satisfaction from the shareholders or any
shareholder of the Fund.
10. Use of the Name "Eaton Vance". The Adviser hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Adviser or one of its affiliates as the investment adviser of the Fund. The name
"Eaton Vance" or any variation thereof may be used from time to time in other
connections and for other purposes by the Adviser and its affiliates and other
investment companies that have obtained consent to the use of the name "Eaton
Vance". The Adviser shall have the right to require the Fund to cease using the
name "Eaton Vance" as part of the Fund's name if the Fund ceases, for any
reason, to employ the Adviser or one of its affiliates as the Fund's investment
adviser. Future names adopted by the Fund for itself, insofar as such names
include identifying words requiring the consent of the Adviser, shall be the
property of the Adviser and shall be subject to the same terms and conditions.
11. Certain Definitions. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of
shareholders, 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 shares of the Fund are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the 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 MUTUAL FUNDS TRUST
(on behalf of Eaton Vance Tax-Managed Emerging Growth Fund)
By: /s/ M. Dozier Gardner
---------------------------
M. Dozier Gardner
President
EATON VANCE MANAGEMENT
By: /s/ Alan R. Dynner
---------------------------
Alan R. Dynner
Vice President
and not individually
<PAGE>
EXHIBIT (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 Alan R. Dynner, James B. Hawkes and Eric G. Woodbury, 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.
Signature Title Date
--------- ----- ----
President, Principal
/s/ M. Dozier Gardner Executive Officer and June 23, 1997
- ------------------------------- Trustee
M. Dozier Gardner
Treasurer and Principal
/s/ James L. O'Connor Financial and Accounting June 23, 1997
- ------------------------------- Officer
James L. O'Connor
/s/ Donald R. Dwight Trustee June 23, 1997
- -----------------------------
Donald R. Dwight
/s/ James B. Hawkes Trustee June 23, 1997
- -----------------------------
James B. Hawkes
/s/ Samuel L. Hayes, III Trustee June 23, 1997
- -----------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee June 23, 1997
- -----------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee June 23, 1997
- -----------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee June 23, 1997
- -----------------------------
Jack L. Treynor
