<PAGE>
As filed with the Securities and Exchange Commission on August 26, 1999
1933 Act File No. 02-90946
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. 54 [x]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [x]
AMENDMENT NO. 57 [x]
EATON VANCE MUTUAL FUNDS TRUST
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(617) 482-8260
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(REGISTRANT'S TELEPHONE NUMBER)
ALAN R. DYNNER
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THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
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(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 pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[x] on November 9, 1999 pursuant to paragraph (a)(2)
If appropriate, check the following box:
[ ] this post effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
{LOGO} Mutual Funds
EATON VANCE for People
Mutual Funds Who Pay
Taxes
Eaton Vance
Tax-Managed
Value Fund
A mutual fund seeking long-term, after-tax returns for investors
by investing in value stocks
Prospectus Dated
November 9, 1999
The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Information in this prospectus
Page Page
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Fund Summary 2 Sales Charges 6
Investment Objective & Principal Redeeming Shares 8
Policies and Risks 4 Shareholder Account
Management and Organization 5 Features 9
Valuing Shares 6 Tax Information 10
Purchasing Shares 6
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This prospectus contains important information about the Fund and the services
available to shareholders. Please save it for reference.
<PAGE>
FUND SUMMARY
Investment Objective and Principal Strategies. The Fund's investment objective
is to achieve long-term, after-tax returns for its shareholders. The Fund
invests in a diversified portfolio of value stocks. Value stocks are common
stocks that are inexpensive relative to the overall stock market. The Fund
invests primarily in large and well-established U.S. companies. Although it
invests primarily in domestic companies, the Fund may invest up to 25% of its
assets in foreign companies. The Fund may engage in derivative transactions to
protect against price declines, to enhance returns or as a substitute for
purchasing or selling securities.
Tax-Managed Investing. Most mutual funds focus on pre-tax returns and largely
ignore shareholder tax considerations. By contrast, the Fund attempts to achieve
high after-tax returns for its shareholders by balancing investment
considerations and tax considerations. The Fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax). The Fund seeks to minimize income distributions and distributions of
realized short-term gains (taxed as ordinary income), as well as distributions
of realized long-term gains (taxed as long-term capital gains). Among the
techniques and strategies used in the tax-efficient management of the Fund are
the following:
* where appropriate, emphasizing lower-yielding value stocks;
* employing a long-term, low turnover approach to investing;
* attempting to avoid net realized short-term gains;
* where appropriate, selling stocks trading below cost to realize losses;
* in selling appreciated stocks, selecting the most tax-favored share lots;
and
* selectively using tax-advantaged hedging techniques as an alternative to
taxable sales.
The Fund can generally be expected to distribute a smaller percentage of returns
each year than similar equity mutual funds that are managed without regard to
tax considerations. There can be no assurance, however, that taxable
distributions can always be avoided.
Principal Risk Factors. The value of Fund shares is sensitive to stock market
volatility. If there is a general decline in the value of U.S. stocks, the value
of the Fund's shares will also likely decline. Changes in stock market values
can be sudden and unpredictable. Also, although stock values can rebound, there
is no assurance that values will return to previous levels. The Fund seeks to
minimize stock-specific risk by diversifying its holdings among many companies
and industries. The Fund's success in achieving its investment objective will be
determined by the portfolio manager's ability to develop and maintain a
portfolio of value stocks that performs well over the long-term on an after-tax
basis.
Because the Fund invests in foreign securities, the value of Fund shares may be
affected by changes in currency exchange rates and other developments abroad.
The use of derivative transactions is subject to certain limitations and may
expose a Fund to increased risk of principal loss due to imperfect correlation,
failure of a counterparty and unexpected price or interest rate movements. Some
of the securities held by the Fund may be subject to restrictions on resale,
making them less liquid and more difficult to value.
The Fund is not a complete investment program and you may lose money by
investing. An investment in the Fund is not a deposit in a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
2
<PAGE>
Fund Fees and Expenses. These tables describe the fees and expenses that you may
pay if you buy and hold shares.
Shareholder Fees
(fees paid directly from your investment) Class A Class B Class C
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Maximum Sales Charge (Load) (as a
percentage of offering price) 5.75% None None
Maximum Deferred Sales Charge (Load)(as
a percentage of the lower of net
asset value at time of purchase or
redemption) None 5.00% 1.00%
Maximum Sales Charge (Load)Imposed on
Reinvested Distributions None None None
Exchange Fee None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets) Class A Class B Class C
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Management Fees 0.80% 0.80% 0.80%
Distribution and Service (12b-1) Fees* 0.00% 1.00% 1.00%
Other Expenses** 0.50% 0.25% 0.25%
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Total Annual Fund Operating Expenses 1.30% 2.05% 2.05%
* Long-term shareholders of Class B and Class C shares may pay more than the
economic equivalent of the front-end sales charge permitted by the National
Association of Securities Dealers, Inc.
** Other Expenses are based on estimates and for Class A shares include a
service fee of 0.25%.
Example. This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 Year 3 Years
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Class A shares $ 700 $ 963
Class B shares $ 708 $ 1,043
Class C shares $ 308 $ 643
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years
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Class A shares $ 700 $ 963
Class B shares $ 208 $ 643
Class C shares $ 208 $ 643
3
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INVESTMENT OBJECTIVE & PRINCIPAL POLICIES AND RISKS
The Fund's investment objective is to achieve long-term, after-tax returns for
its shareholders. The investment adviser seeks to achieve this objective by
investing in a diversified portfolio of value stocks. In the view of the Fund's
investment adviser, value stocks are common stocks that are inexpensive relative
to the overall stock market in terms of their earnings or cash flow
capabilities, or in relation to the value of their net assets. The Fund invests
primarily in value stocks of issuers that are large and well-established U.S.
companies. The Fund's investment objective may not be changed without
shareholder approval. Certain of the Fund's policies may be changed by the
Trustees without shareholder approval.
The Fund approaches its investments from the perspective of a taxpaying
shareholder. Buy and sell decisions are made by balancing investment
considerations and tax considerations, taking into account the taxes payable by
Fund shareholders in connection with distributions of investment income and net
realized capital gains. The Fund can be expected to generally distribute a
smaller percentage of its annual returns than similar equity funds that are
managed without regard to tax considerations.
The Fund invests at least 65% of its total assets in value stocks, which are
common stocks of primarily large and well-established U.S. companies that the
portfolio manager considers to have favorable long-term prospects and which may
be undervalued in relation to the overall market due to adverse economic
conditions or other near-term difficulties that cause them not to achieve their
financial potential. Undervaluation may also arise because companies are
misunderstood by investors or because they are out of step with favored market
themes. The Fund's portfolio manager seeks to build and maintain an investment
portfolio of value stocks that will perform well over the long-term on an
after-tax basis. The primary basis upon which the Fund's portfolio is
constructed and managed is fundamental analysis. In analyzing potential Fund
investments, the portfolio manager relies in part on the research staff of the
investment adviser. The Fund's holdings will represent a number of different
industries, and less than 25% of the Fund's total assets will be invested in
any one industry. Stocks generally are acquired with the expectation of being
held for the long-term.
The Fund seeks to achieve long-term, after-tax returns in part by minimizing the
taxes incurred by shareholders in connection with the Fund's investment income
and realized capital gains. Fund distributions that are taxed as ordinary income
are minimized by emphasizing, where appropriate, investments in lower-yielding
value stocks and by generally avoiding net realized short-term capital gains.
Fund distributions taxed as long-term capital gains are minimized by maintaining
relatively low portfolio turnover and avoiding or minimizing the sale of
securities with large accumulated capital gains. When a decision is made to sell
a particular appreciated security, the portfolio manager will select for sale
the share lots resulting in the most favorable tax treatment, generally those
with holding periods sufficient to qualify for long-term capital gains treatment
that have the highest cost basis. The portfolio manager may sell securities to
realize capital losses that can be used to offset realized gains.
To protect against price declines in securities holdings with large accumulated
gains, the Fund may use various hedging techniques (such as purchased put
options, equity collars (combining the purchase of a put option and the sale of
a call option), equity swaps, covered short sales, and the purchase or sale of
stock index futures contracts). By using these techniques rather than selling
appreciated securities, the Fund can reduce its exposure to price declines in
the securities without realizing substantial capital gains under current tax
law. These derivative instruments may also be used by the Fund to enhance return
or as a substitute for the purchase or sale of securities. The use of
derivatives is highly specialized. The built-in leverage inherent to many
derivative instruments can result in losses that substantially exceed the
initial amount paid or received by the Fund. Equity swaps and over-the-counter
options are private contracts in which there is a risk of loss in the event of a
counterparty's default. 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 the underlying security.
The Fund may invest up to 25% of assets in securities of foreign companies
located in developed countries and traded in established markets. The value of
foreign securities is affected by changes in currency rates, foreign tax laws
(including withholding tax), government policies (in this country or abroad),
relations between nations and trading, settlement, custodial and other
operational risks. In addition, the costs of investing abroad are generally
higher than in the United States, and foreign securities markets may be less
liquid, more volatile and less subject to governmental supervision than markets
in the United States. As an alternative to holding foreign stocks directly, the
Fund may invest in dollar-denominated depositary receipts which evidence
ownership in underlying foreign stocks.
The Fund may invest not more than 15% of its net assets in illiquid securities,
which may be difficult to value properly and may involve greater risks than
liquid securities. Illiquid securities include those legally restricted as to
resale, and may include commercial paper issued pursuant to Section 4(2) of the
Securities Act of 1933 and securities eligible for resale pursuant to Rule 144A
thereunder. Certain Section 4(2) and Rule 144A securities may be treated as
4
<PAGE>
liquid securities if the investment adviser determines that such treatment is
warranted. Even if determined to be liquid, holdings of these securities may
increase the level of Fund illiquidity if eligible buyers become uninterested in
purchasing them.
During defensive periods in which the investment adviser believes that returns
on common stock investments may be unfavorable, the Fund may temporarily invest
up to 65% of its assets in cash and cash equivalents. While temporarily
invested, the Fund may not achieve its investment objective. The Fund may also
borrow amounts up to one-third of the value of its total assets, but it will not
borrow more than 5% of the value of its total assets except to satisfy
redemption requests or for other temporary purposes. Such borrowings would
result in increased expense to the Fund and, while they are outstanding, would
magnify increases or decreases in the value of Fund shares. The Fund will not
purchase additional portfolio securities while outstanding borrowings exceed 5%
of the value of its total assets.
The Fund's investment policies include a fundamental investment provision
allowing the Fund to invest its assets in one or more open-end management
investment companies having substantially the same investment policies and
restrictions as the Fund. Any such company or companies would be advised by the
Fund's investment adviser (or an affiliate) and the Fund would not pay directly
any advisory fee with respect to the assets so invested. The Fund may initiate
investments in one or more investment companies without shareholder approval at
any time.
Like most mutual funds, the Fund relys on computers in conducting daily business
and processing information. There is a concern that on January 1, 2000 some
computer programs will be unable to recognize the new year and as a consequence
computer malfunctions will occur. Eaton Vance is taking steps that it believes
are reasonably designed to address this potential problem and to obtain
satisfactory assurance from other service providers to the Fund that they are
also taking steps to address the issue. There can, however, be no assurance that
these steps will be sufficient to avoid any adverse impact on the Fund or
shareholders. The Year 2000 concern may also adversely impact issuers of
securities held by the Fund and the markets in which these securities trade. The
foregoing statement is subject to the Year 2000 Information and Readiness
Disclosure Act, which may protect Eaton Vance and the Fund from liability
arising from the statement.
MANAGEMENT AND ORGANIZATION
Management. The Fund's investment adviser is Eaton Vance Management ("Eaton
Vance"), with offices at The Eaton Vance Building, 255 State Street, Boston,
Massachusetts 02109. Eaton Vance has been managing assets since 1924 and
managing mutual funds since 1931. Eaton Vance and its subsidiaries currently
manage over $39 billion on behalf of mutual funds, institutional clients and
individuals.
The investment adviser manages the investments of the Fund and provides related
office facilities and personnel. Under its investment advisory agreement with
the Fund, Eaton Vance receives a monthly advisory fee of 13/240 of 1%
(equivalent to 0.650% annually) of the average daily net assets of the Fund up
to and including $500 million. On net assets of $500 million and over the annual
fee is reduced.
[________________] is the portfolio manager of the Fund (since inception).
He/she has been a Vice President of Eaton Vance and BMR since joining Eaton
Vance in [ ]. Prior to joining Eaton Vance, he/she was [ ].
The investment adviser and the Fund have adopted Codes of Ethics governing
personal securities transactions. Under the Codes, Eaton Vance employees may
purchase and sell securities (including securities held by the Fund) subject to
certain pre-clearance and reporting requirements and other procedures.
Eaton Vance serves as administrator of the Fund, providing the Fund with
administrative services and related office facilities. In return, the Fund is
authorized to pay Eaton Vance a fee in the amount of 0.15% of average daily net
assets.
Organization. The Fund is a series of Eaton Vance Mutual Funds Trust, a
Massachusetts business trust. The Fund offers multiple classes of shares. Each
class represents a pro rata interest in the Fund, but is subject to different
expenses and rights. The Fund does not hold annual shareholder meetings, but may
hold special meetings for matters that require shareholder approval (like
electing or removing trustees, approving management contracts or changing
investment policies that may only be changed with shareholder approval).
5
<PAGE>
VALUING SHARES
The Fund values its shares once each day only when the New York Stock Exchange
is open for trading (typically Monday through Friday), as of the close of
regular trading on the Exchange (normally 4:00 p.m. eastern time). The purchase
price of Fund shares is their net asset value (plus a sales charge for Class A
shares). Exchange-listed securities are generally valued at closing sale prices.
When purchasing or redeeming Fund shares, your investment dealer must
communicate your order to the principal underwriter by a specific time each day
in order for the purchase price or the redemption price to be based on that
day's net asset value per share. It is the investment dealer's responsibility to
transmit orders promptly. The Fund may accept purchase and redemption orders as
of the time of their receipt by certain investment dealers (or their designated
intermediaries).
PURCHASING SHARES
You may purchase shares through your investment dealer or by mailing the account
application form included in this prospectus to the transfer agent (see back
cover for address). Your initial investment must be at least $1,000. The price
of Class A shares is the net asset value plus a sales charge. The price of Class
B and Class C shares is the net asset value; however, you may be subject to a
sales charge (called a "contingent deferred sales charge" or "CDSC") if you
redeem Class B shares within six years of purchase and Class C shares within one
year of purchase. The sales charges are described below. Your investment dealer
can help you decide which class of shares suits your investment needs.
After your initial investment, additional investments of $50 or more may be made
at any time by sending a check payable to the order of the Fund or the transfer
agent directly to the transfer agent (see back cover for address). Please
include your name and account number and the name of the Fund and Class with
each investment.
You may also make automatic investments of $50 or more each month or each
quarter from your bank account. You can establish bank automated investing on
the account application or by calling 1-800-262-1122. The minimum initial
investment amount and Fund policy of redeeming accounts with low account
balances are waived for bank automated investing accounts and certain group
purchase plans.
You may purchase Fund shares in exchange for securities. Please call
1-800-225-6265 for information about exchanging securities for Fund shares. If
you purchase shares through an investment dealer (which includes brokers,
dealers and other financial institutions), that dealer may charge you a fee for
executing the purchase for you. The Fund may suspend the sale of its shares at
any time and any purchase order may be refused.
SALES CHARGES
Front-End Sales Charge. Class A shares are offered at net asset value per share
plus a sales charge that is determined by the amount of your investment. The
current sales charge schedule is:
<TABLE>
Sales Charge Sales Charge Dealer Commission
as Percentage of as Percentage of Net as a Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
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<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% 3.09% 2.50%
$500,000 but less than $1,000,000 2.00% 2.04% 1.75%
$1,000,00 or more 0.00* 0.00* See Below
</TABLE>
* No sales charge is payable at the time of purchase on investments of $1
million or more. A CDSC of 1.00% will be imposed on such investments (as
described below) in the event of redemptions within 12 months of purchase.
The principal underwriter will pay a commission to investment dealers on sales
of $1 million or more as follows: 1.00% on amounts of $1 million or more but
less than $3 million; plus 0.50% on amounts over $3 million but less than $5
million; plus 0.25% on amounts over $5 million. Purchases totalling $1 million
or more will be aggregated over a 12-month period for purposes of determining
the commission. The principal underwriter may also pay commissions of up to
1.00% on sales of Class A shares made at net asset value to certain tax-deferred
retirement plans.
6
<PAGE>
Contingent Deferred Sales Charge. Each class of shares is subject to a CDSC on
certain redemptions. Class A shares purchased at net asset value in amounts of
$1 million or more are subject to a 1.00% CDSC if redeemed within 12 months of
purchase. Class C shares are subject to a 1.00% CDSC if redeemed within 12
months of purchase. Class B shares are subject to the following CDSC schedule:
Year of Redemption After Purchase CDSC
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First or Second 5%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh or following 0%
The CDSC is based on the lower of the net asset value at the time of purchase or
at the time of redemption. Shares acquired through the reinvestment of
distributions are exempt from the CDSC. Redemptions are made first from shares
that are not subject to a CDSC.
The principal underwriter pays commissions to investment dealers on sales of
Class B and Class C shares (except exchange transactions and reinvestments). The
sales commission on Class B shares equals 4% of the purchase price of the
shares. The sales commission on Class C shares equals 0.75% of the purchase
price of the shares. After the first year, investment dealers also receive 0.75%
of the value of Class C shares in distribution fees.
Reducing or Eliminating Sales Charges. Front-end sales charges on purchases of
Class A shares may be reduced under the right of accumulation or under a
statement of intention. Under the right of accumulation, the sales charges you
pay are reduced if the current market value of your current holdings (based on
current offering price), plus your new purchases, total $50,000 or more. Class A
shares of other Eaton Vance funds owned by you can be included as part of your
current holdings for this purpose. Under a statement of intention, purchases of
$50,000 or more made over a 13-month period are eligible for reduced sales
charges. Under a statement of intention, the principal underwriter may hold 5%
of the dollar amount to be purchased in escrow in the form of shares registered
in your name until you satisfy the statement or the 13-month period expires. See
the account application for details.
Class A shares are offered at net asset value to clients of financial
intermediaries who charge a fee for their services; accounts affiliated with
those financial intermediaries; tax-deferred retirement plans; investment and
institutional clients of Eaton Vance; certain persons affiliated with Eaton
Vance; and certain Eaton Vance and fund service providers. Ask your investment
dealer for details.
CDSCs are waived for redemptions pursuant to a Withdrawal Plan (see "Shareholder
Account Features") and in connection with certain redemptions from tax-sheltered
retirement plans. Call 1-800-225-6265 for details. The Class B CDSC is also
waived following the death of all beneficial owners of shares, but only if the
redemption is requested within one year after death (a death certificate and
other applicable documents may be required).
If you redeem shares, you may reinvest at net asset value all or any portion of
the redemption proceeds in the same class of shares of the Fund (or, for Class A
shares, in Class A shares of any other Eaton Vance fund), provided that the
reinvestment occurs within 60 days of the redemption, and the privilege has not
been used more than once in the prior 12 months. Under these circumstances, your
account will be credited with any CDSC paid in connection with the redemption.
Reinvestment requests must be in writing. If you reinvest, you will be sold
shares at the next determined net asset value following receipt of your request.
Distribution and Service Fees. Class B and Class C shares have adopted a plan
under Rule 12b-1 that allows the Fund to pay distribution fees for the sale and
distribution of shares (so-called "12b-1 fees"). Class B and Class C shares pay
distribution fees of 0.75% of average daily net assets annually. Because these
fees are paid from Fund assets on an ongoing basis, they will increase your cost
over time and may cost you more than paying other types of sales charges. All
classes pay service fees for personal and/or account services equal to 0.25% of
average daily net assets annually.
Class B and Class C distribution fees are subject to termination when payments
under the Rule 12b-1 plans are sufficient to extinguish uncovered distribution
charges. As described more fully in the Statement of Additional Information,
uncovered distribution charges of a Class are increased by a sales commission
payable by the Class to the principal underwriter in connection with sales of
shares of that Class and by an interest factor tied to the U.S. Prime Rate.
Uncovered distribution charges are reduced by the distribution fees paid by the
Class and by CDSCs paid to the Fund by redeeming shareholders. The amount of the
sales commission payable by Class B to the principal underwriter in connection
with sales of Class B shares is significantly less than the maximum permitted by
the sales charge rule of the National Association of Securities Dealer, Inc.
7
<PAGE>
REDEEMING SHARES
You can redeem shares in any of the following ways:
By Mail Send your request to the transfer agent along with any
certificates and stock powers. The request must be
signed exactly as your account is registered and
signature guaranteed. You can obtain a signature
guarantee at certain banks, savings and loan
institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered
securities associations. You may be asked to provide
additional documents if your shares are registered in
the name of a corporation, partnership or fiduciary.
By Telephone You can redeem up to $50,000 by calling the transfer
agent at 1-800-262-1122 on Monday through Friday, 9:00
a.m. to 4:00 p.m. (eastern time). Proceeds of a
telephone redemption can be mailed only to the account
address. Shares held by corporations, trusts or certain
other entities, and shares subject to fiduciary
arrangements, cannot be redeemed by telephone.
Through an
Investment Dealer Your investment dealer is responsible for transmitting
the order promptly. A dealer may charge a fee for this
service.
If you redeem shares, your redemption price will be based on the net asset value
per share next computed after the redemption request is received. Your
redemption proceeds will be paid in cash within seven days, reduced by the
amount of any applicable CDSC and any federal income tax required to be
withheld. Payments will be sent by mail unless you complete the Bank Wire
Redemptions section of the account application.
If you recently purchased shares, the proceeds of a redemption will not be sent
until the purchase check (including a certified or cashier's check) has cleared.
If the purchase check has not cleared, redemption proceeds may be delayed up to
15 days from the purchase date. If your account value falls below $750 (other
than due to market decline), you may be asked to either add to your account or
redeem it within 60 days. If you take no action, your account will be redeemed
and the proceeds sent to you.
Meeting Redemptions by Distributing Portfolio Securities. The Fund currently
pays shareholder 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 chosen by the investment adviser. The Fund would only
distribute readily marketable securities, which would be valued pursuant to the
Fund's valuation procedures. The practice of distributing appreciated securities
to meet redemptions can be a useful tool for tax-efficient management. A policy
of meeting redemptions in whole or in part through the distribution of
securities will only be established after any necessary regulatory approvals are
received and in conjunction with putting in place a program whereby redeeming
shareholders who receive securities could elect to sell the securities received
to Eaton Vance, the Fund's custodian or a designated agent without transaction
costs 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.
Redeeming shareholders electing not to participate in the program would be
required to take delivery of any securities distributed upon redemption. Such
shareholders could incur brokerage charges and other costs and may be exposed to
market risk in selling the distributed securities.
If the Fund adopts a policy of distributing securities to meet redemptions, it
may continue to meet redemptions in whole or in part with cash. During periods
of volatile market conditions, the Fund could be expected to meet redemptions
primarily with cash.
8
<PAGE>
SHAREHOLDER ACCOUNT FEATURES
Once you purchase shares, the transfer agent establishes a Lifetime Investing
Account(R)for you. Share certificates are issued only on request.
Distributions. You may have your Fund distributions paid in one of the following
ways:
* Full
Reinvest
Option Dividends and capital gains are reinvested in additional
shares. This option will be assigned if you do not specify
an option.
* Partial
Reinvest
Option Dividends are paid in cash and capital gains are reinvested
in additional shares.
* Cash
Option Dividends and capital gains are paid in cash.
* Exchange
Option Dividends and/or capital gains are reinvested in additional
shares of another Eaton Vance fund chosen by you. Before
selecting this option, you must obtain a prospectus of the
other fund and consider its objectives and policies
carefully.
Information from the Fund. From time to time, you may be mailed the following:
* Annual and Semi-Annual Reports, containing performance information and
financial statements.
* Periodic account statements, showing recent activity and total share
balance.
* Form 1099 and tax information needed to prepare your income tax returns.
* Proxy materials, in the event a shareholder vote is required.
* Special notices about significant events affecting your Fund.
Withdrawal Plan. You may redeem shares on a regular quarterly basis by
establishing a systematic withdrawal plan. Withdrawal amounts must be at least
$200 per year, or a specified percentage of net asset value of at least 4% but
not more than 12% annually. These withdrawals will not be subject to a CDSC. A
minimum account size of $5,000 is required to establish a systematic withdrawal
plan. Because purchases of Class A shares are generally subject to an initial
sales charge, you should not make withdrawals from your account while you are
making purchases.
Exchange Privilege. You may exchange your Fund shares for shares of the same
class of another Eaton Vance fund. Exchanges are generally made at net asset
value. If you hold Class A shares for less than six months and exchange them for
shares subject to a higher sales charge, you will be charged the difference
between the two sales charges. If your shares are subject to a CDSC, the CDSC
will continue to apply to your new shares at the same CDSC rate. For purposes of
the CDSC, your shares will continue to age from the date of your original
purchase.
Before exchanging, you should read the prospectus of the new fund carefully. If
you wish to exchange shares, write to the transfer agent (address on back cover)
or call 1-800-262-1122. Periodic automatic exchanges are also available. The
exchange privilege may be changed or discontinued at any time. You will receive
60 days' notice of any material change to the privilege. This privilege may not
be used for "market timing". If an account (or group of accounts) makes more
than two round-trip exchanges within 12 months, it will be deemed to be market
timing. The exchange privilege may be terminated for market timing accounts.
Telephone Transactions. You can redeem or exchange shares by telephone as
described in this prospectus. The transfer agent and the principal underwriter
have procedures in place to authenticate telephone instructions (such as
verifying personal account information). As long as the transfer agent and
principal underwriter follow these procedures, they will not be responsible for
unauthorized telephone transactions and you bear the risk of possible loss
resulting from telephone transactions. You may decline the telephone redemption
option on the account application. Telephone instructions are tape recorded.
"Street Name" Accounts. If your shares are held in a "street name" account at an
investment dealer, that dealer (and not the Fund or its transfer agent) will
perform all recordkeeping, transaction processing and distribution payments.
Because the Fund will have no record of your transactions, you should contact
your investment dealer to purchase, redeem or exchange shares, to make changes
in your account, or to obtain account information. The transfer of shares in a
"street name" account to an account with another investment dealer or to an
account directly with the Fund involves special procedures and you will be
required to obtain historical information about your shares prior to the
transfer. Before establishing a "street name" account with an investment dealer,
you should determine whether that dealer allows reinvestment of distributions in
"street name" accounts.
9
<PAGE>
Account Questions. If you have any questions about your account or the services
available, please call Eaton Vance Shareholder Services at 1-800-225-6265, or
write to the transfer agent (see back cover for address).
TAX INFORMATION
The Fund is managed with an objective of achieving long-term, after-tax returns
for its shareholders. Consistent with this objective, the Fund attempts to
minimize the taxes its shareholders pay in connection with their investment in
the Fund. Because distributions of net investment income and net realized
capital gains give rise to shareholder taxes, the Fund generally seeks to
minimize net investment income and net realized capital gains. The Fund can be
expected to generally distribute a smaller percentage of its annual returns than
similar equity funds that are managed without regard to tax considerations.
While the Fund attempts to minimize taxable distributions, there can be no
assurance that taxable distributions can be avoided. Distributions of investment
income and net realized short-term capital gains will be taxable as ordinary
income. Distributions of net realized long-term capital gains are taxable as
long-term gains. The Fund expects to pay any distributions annually.
Investors who purchase shares shortly before the record date of a distribution
will pay the full price for the shares and then receive some portion of the
purchase price back as a taxable distribution. Certain distributions paid in
January (if any) will be taxable to shareholders as if received on December 31
of the prior year. A redemption of Fund shares, including an exchange for shares
of another fund, is a taxable transaction.
Shareholders should consult with their advisers concerning the applicability of
state, local and other taxes to an investment.
10
<PAGE>
{LOGO} Mutual Funds
EATON VANCE for People
Mutual Funds Who Pay
Taxes
More Information
- --------------------------------------------------------------------------------
About the Fund: More information is available in the statement of
additional information. The statement of additional information is
incorporated by reference into this prospectus. Additional information
about the Fund's investments is available in the annual and semi-annual
reports to shareholders. In the annual report, you will find a discussion
of the market conditions and investment strategies that significantly
affected the Fund's performance during the past year. You may obtain free
copies of the statement of additional information and the shareholder
reports by contacting:
EATON VANCE DISTRIBUTORS, INC.
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265
website: www.eatonvance.com
You will find and may copy information about the Fund at the Securities and
Exchange Commission's public reference room in Washington, DC (call
1-800-SEC-0330 for information); on the SEC's Internet site
(http://www.sec.gov); or upon payment of copying fees by writing to the
SEC's public reference room in Washington, DC 20549-6009.
About Shareholder Accounts: You can obtain more information from Eaton
Vance Share- holder Services (1-800-225-6265). If you own shares and would
like to add to, redeem or change your account, please write or call the
transfer agent:
- --------------------------------------------------------------------------------
FIRST DATA INVESTOR SERVICES GROUP
P.O. BOX 5123
WESTBOROUGH, MA 01581-5123
1-800-262-1122
SEC File No. 811-4015 TMVP
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
November 9, 1999
EATON VANCE TAX-MANAGED VALUE FUND
The Eaton Vance Building
255 State Street
Boston, Massachusetts 02109
(800) 225-6265
This Statement of Additional Information ("SAI") provides general
information about the Fund and the Portfolio. The Fund is a series of Eaton
Vance Mutual Funds Trust. Capitalized terms used in this SAI and not otherwise
defined have the meanings given to them in the prospectus. This SAI contains
additional information about:
Page
Strategies and Risks ............................................ 2
Investment Restrictions ......................................... 5
Management and Organization ..................................... 6
Investment Advisory and Administrative Services ................. 9
Other Service Providers ......................................... 10
Purchasing and Redeeming Shares ................................. 11
Sales Charges ................................................... 12
Performance ..................................................... 16
Control Persons and Principal Holders of Shares ................. 17
Taxes ........................................................... 17
Portfolio Security Transactions ................................. 18
THIS SAI IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY THE FUND'S PROSPECTUS
DATED NOVEMBER 9, 1999, AS SUPPLEMENTED FROM TIME TO TIME, WHICH IS
INCORPORATED HEREIN BY REFERENCE. THIS SAI SHOULD BE READ IN CONJUNCTION WITH
THE PROSPECTUS, WHICH MAY BE OBTAINED BY CALLING 1-800-225-6265.
<PAGE>
STRATEGIES AND RISKS
Under normal market conditions, the Fund will invest at least 65% of its
total assets in value stocks as described in the prospectus. 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.
TAX-MANAGED INVESTING. 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, distributions of
income and distributions of realized short-term and long-term capital gains --
which are treated differently for federal income tax purposes. Distributions
of net investment income and net realized short-term gains (on stocks held
less than 12 months) are taxed as ordinary income, at federal rates as high as
39.6%. Distributions of realized long-term gains (on stocks held at least 12
months) are taxed at federal rates up to 20%. Returns derived from price
appreciation are untaxed until the shareholder redeems. Upon redemption, a
capital gain equal to the difference between the net proceeds of the
redemption and the shareholder's adjusted tax basis is realized.
The Fund is similar to retirement planning products such as variable
annuities and IRAs in that they are vehicles for long-term, tax-deferred
investing. As a mutual fund, however, the Fund avoids a number of structural
disadvantages inherent in 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. Variable annuities offer tax-free exchanges and a death
benefit, which are not offered by the Fund. Eligibility to invest in IRAs and
annual contributions to IRAs are limited. Contributions to deductible IRAs can
be made from pre-tax dollars and distributions from Roth IRAs are not taxed if
certain requirements are met.
An analysis of long-term hypothetical returns achievable from a tax-
managed equity fund that achieves returns predominantly from unrealized gains
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.
FOREIGN SECURITIES. Investing in securities issued by foreign-domiciled
companies 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, 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.
DERIVATIVE INVESTMENTS. The Fund may purchase or sell derivative instruments
to hedge against securities price declines and currency movements, to enhance
returns and as a substitute for the purchase and sale of securities.
Transactions in derivative instruments (which derive their value by reference
to other securities, indices, instruments, or currencies) may be conducted 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; equity swaps;
and the purchase and sale of forward currency exchange contracts and currency
futures. 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 for the purpose of leverage. The purchase and sale of
derivative instruments is a highly specialized activity that can expose the
Fund to a significant risk of loss. The use of futures for nonhedging purposes
is limited by regulations of the Commodity Futures Trading Commission
("CFTC"). There can be no assurance that the use of derivative instruments
will be advantageous.
EQUITY SWAPS AND OTC OPTIONS. Equity swaps and over-the-counter options
contracts will only be entered into 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 net assets. As described below, the Fund's investment in illiquid
assets, which may 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.
FOREIGN CURRENCY TRANSACTIONS. The value of foreign assets 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. Foreign currency
exchange transactions may be conducted 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 generally 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 at one rate,
while offering a lesser rate of exchange should the investment adviser 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 investment adviser may
enter into a forward contract in connection with the purchase or sale of a
security denominated in a foreign currency, or when it 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 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. Forward contracts with a term of greater than one
year generally will not be entered into.
Currency futures contracts are exchange-traded instruments that may be
used 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. Investments in currency contracts are
subject to limitations and restrictions similar to those set forth for
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
position held and that a loss will result. For derivative instruments other
than purchased options, this loss may exceed the amount of the initial
investment made or the premium received. Derivative instruments may sometimes
increase or leverage exposure to a particular market risk. Leverage enhances
exposure to the price volatility of derivative instruments. 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 other assets held in the
portfolio. 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 closing out of positions and limiting losses. The staff of the
Securities and Exchange Commission (the "SEC") takes the position that certain
purchased OTC options, and assets used as cover for written OTC options, are
subject to the 15% limit on illiquid investments. The 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 derivative
instruments may be purchased and sold. Transactions in futures contracts and
related options will be entered into only to the extent such transactions are
consistent with the requirements of the Code for maintaining qualification as
a regulated investment company for federal income tax purposes.
LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS. All futures contracts will be
traded on exchanges or boards of trade that are licensed and regulated by 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,
futures contracts may only be entered into 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
net asset value, after taking into account unrealized profits and losses on
such positions.
In order to hedge current or anticipated portfolio positions, futures
contracts on securities held or on securities with characteristics similar to
those of the securities held may be used. If, in the opinion of the investment
adviser, there is a sufficient degree of correlation between price trends for
the securities held and futures contracts based on other financial instruments,
securities indices or other indices, such futures contracts may also be entered
into as part of its hedging strategy.
All call options on securities written 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.
SHORT SALES AGAINST-THE-BOX. The Fund may sell securities short where it owns
at least an equal amount of the security sold short or another security
convertible or exchangeable for an equal amount of the security sold short
without payment of further compensation (a short sale against-the-box). A
short sale against-the-box requires that the short seller absorb certain costs
so long as the position is open. In a short sale against-the-box, the short
seller is exposed to the risk of being forced to deliver appreciated stock to
close the position if the borrowed stock is called in, causing a gain to be
recognized. The investment adviser expects normally to close short sale
against-the-box transactions by delivering newly-acquired stock. No more than
25% of assets is expected to be subject to short-sales against-the-box at any
one time.
The ability to use short sales against-the-box, certain equity swaps and
certain equity collar strategies as a tax-efficient management technique with
respect to holdings of appreciated securities is limited to circumstances in
which the hedging transaction is closed out within thirty days after the end
of the taxable year and the underlying appreciated securities position is held
unhedged for at least the next sixty days after the hedging transaction is
closed.
LENDING 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. Under present regulatory policies
of the SEC, securities loans are required to be secured continuously by
collateral in cash, cash equivalents or U.S. Government securities held by the
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. Securities will be loaned only 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 defaults on a securities loan, the lender (i.e., the
Fund will, under proposed Treasury Regulations, be considered to have disposed
of the securities in a taxable transaction. Delays may be experienced in the
recovery or loss of rights in loaned securities if a borrower of securities
fails financially. The lender of the securities 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 lender of the securities would have the
right to call a loan and obtain the securities loaned at any time on up to
five business days' notice. The lender 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 holders 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
one-third of the Fund's total assets.
ASSET COVERAGE REQUIREMENTS. Transactions involving swaps, short sales,
forward contracts, futures contracts and options (other than options that the
Fund has purchased) create 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 obligations of a swap will be covered.)
The Fund will comply with SEC guidelines regarding cover for these instruments
and, if the guidelines so require, set aside cash or liquid securities in a
segregated account with its custodian in the prescribed amount. The securities
in the segregated account will be marked to market daily.
Assets used as cover or held in a segregated account maintained by the
custodian cannot be sold while the position requiring coverage or segregation
is outstanding unless they are replaced with other appropriate assets. As a
result, the commitment of a large portion of assets to segregated accounts or
to cover could impede portfolio management or the ability to meet redemption
requests or other current obligations.
DIVERSIFIED STATUS. The Fund is a "diversified" investment company under the
1940 Act. This means that with respect to 75% of its total assets (1) the Fund
may not invest more than 5% of its total assets in the securities of any one
issuer (except U.S. Government obligations) and (2) the Fund may not own more
than 10% of the outstanding voting securities of any one issuer.
TEMPORARY INVESTMENTS. Under unusual market conditions, the Fund may invest
temporarily in cash or cash equivalents. Cash equivalents are highly liquid,
short-term securities such as commercial paper, certificates of deposit,
short-term notes and short-term U.S. Government obligations.
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, except to the extent the
Fund sells securities in order to generate capital losses. Selling securities
to generate capital losses will increase the Fund's turnover rate, resulting
in more commission.
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
outstanding shares are present or represented at the meeting or (b) more than
50% of the outstanding shares of the Fund. Accordingly, 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;
(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, the Fund may
invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund; moreover, subject to Trustee approval, the Fund may invest its
investable assets in other open-end management investment companies in the
same group of investment companies with the same placement agent or investment
adviser as the Fund (or an affiliate thereof) if, with respect to such assets,
the other companies' permitted investments are substantially the same as those
of the Fund.
The Fund has adopted the following investment policies which may be
changed by the Trustees without shareholder approval. 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.
Any such determination by a delegate will be made pursuant to procedures
adopted by the Board. If the Fund invests in Rule 144A Securities, the
level of portfolio illiquidity may be increased to the extent that
eligible buyers become uninterested in purchasing such securities; 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 action to comply with its policy
of investing at least 65% of total assets in value stocks (as described in the
prospectus). Moreover, the Fund must always be in compliance with the
borrowing policy and 15% limitation on investing in illiquid securities set
forth above.
MANAGEMENT AND ORGANIZATION
FUND MANAGEMENT. The Trustees of the Trust are responsible for the overall
management and supervision of the Trust's affairs. 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
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109. Those
Trustees who are "interested persons" of the Trust, as defined in the 1940
Act, are indicated by an asterisk(*).
JAMES B. HAWKES (58), President and Trustee*
Chairman, President and Chief Executive Officer of Eaton Vance, BMR and their
corporate parent and trustee (EVC and EV). Director of EVC and EV. Trustee
and officer of various investment companies managed by Eaton Vance or BMR.
JESSICA M. BIBLIOWICZ (39), Trustee
President and Chief Operating Officer of National Financial Partners (a
financial services company) (since April, 1999). President and Chief
Operating Officer of John A. Levin & Co. (a registered investment advisor)
(July, 1997 to April, 1999) and a Director of Baker, Fentress & Company
which owns John A. Levin & Co. (July, 1997 to April, 1999). Executive Vice
President of Smith Barney Mutual Funds (from July, 1994 to June, 1997).
Elected Trustee October 30, 1998. Trustee of various investment companies
managed by Eaton Vance or BMR since October 30, 1998.
Address: 1301 Avenue of the Americas, New York, New York 10019
DONALD R. DWIGHT (68), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company). Trustee/Director of the Royce Funds (mutual funds). Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (64), Trustee
Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University
Graduate School of Business Administration. Trustee of the Kobrick
Investment Trust (mutual funds). Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 345 Nahatan Road, Westwood, Massachusetts 02090
NORTON H. REAMER (64), Trustee
Chairman of the Board and Chief Executive Officer, United Asset Management
Corporation (a holding company owning institutional investment management
firms); Chairman, President and Director, UAM Funds (mutual funds). Trustee
of various investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
LYNN A. STOUT (42), Trustee
Professor of Law, Georgetown University Law Center. Elected Trustee October
30, 1998. Trustee of various investment companies managed by Eaton Vance or
BMR since October 30, 1998.
Address: 600 New Jersey Avenue, NW, Washington, DC 20001
JACK L. TREYNOR (69), Trustee
Investment adviser and Consultant. Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
WILLIAM H. AHERN, JR. (40), Vice President
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
THOMAS J. FETTER (56), Vice President
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
ROBERT B. MACINTOSH (42), Vice President
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
MICHAEL B. TERRY (57), Vice President
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (54), Treasurer
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
ALAN R. DYNNER (59), 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.
JANET E. SANDERS (63), Assistant Treasurer and Assistant Secretary
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
A. JOHN MURPHY (36), Assistant Secretary
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
ERIC G. WOODBURY (42), Assistant Secretary
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
The Nominating Committee of the Board of Trustees of the Trust is
comprised of the Trustees who are not "interested persons" as that term is
defined under the 1940 Act ("noninterested Trustees"). 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. Hayes (Chairman), Dwight and Reamer are members of the Special
Committee of the Board of Trustees of the Trust. The purpose of the Special
Committee is to consider, evaluate and make recommendations to the full Board
of Trustees concerning (i) all contractual arrangements with service providers
to the Fund, including 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.
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 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.
Trustees of the Trust who are not affiliated with the investment adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of a Trustees Deferred Compensation Plan (the
"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 Trustees. The Trust does not have a retirement plan for its Trustees.
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.) During the fiscal year ended October 31, 1998, the noninterested
Trustees of the Trust earned the following compensation in their capacities as
Trustees of the Trust and for the year ended December 31, 1998, earned the
following compensation in their capacities as Trustees of all of the funds in
the Eaton Vance fund complex(1):
<TABLE>
<CAPTION>
SOURCE OF JESSICA M. DONALD R. SAMUEL L. NORTON H. LYNN A. JACK L.
COMPENSATION BIBLIOWICZ(5) DWIGHT HAYES, III REAMER STOUT(5) TREYNOR
------------ ------------- ------ ---------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C>
Trust(2) $ -- $ 7,534 $ 7,910 $ 7,427 $ -- $ 8,311
Trust and Fund Complex $33,000 $160,000(3) $170,000(4) $160,000 $33,333 $170,000
- ----------
(1) As of March 1, 1999, the Eaton Vance complex consists of 152 registered investment companies or series thereof.
(2) The Trust consisted of 12 Funds as of October 31, 1998.
(3) Includes $60,000 of deferred compensation.
(4) Includes $41,563 of deferred compensation.
(5) Ms. Bibliowicz and Ms. Stout were elected Trustees on October 30, 1998.
</TABLE>
ORGANIZATION. The Fund is a series of the Trust, which is organized under
Massachusetts law, and is operated as an open-end management investment
company. 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. Each class represents an interest in the Fund, but is subject to
different expenses, rights and privileges. 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, shares are fully
paid and nonassessable by the Trust. Shareholders are entitled to one vote for
each full share held. Fractional shares may be voted proportionately. Shares
of the Fund will be voted together except that only shareholders of a
particular class may vote on matters affecting only that class. 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.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time
as less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will
call a shareholders' meeting for the election of Trustees. Except for the
foregoing circumstances and unless removed by action of the shareholders in
accordance with the Trust's By-laws, the Trustees shall continue to hold
office and may appoint successor Trustees.
The Declaration of Trust 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 (such as reclassifying series or classes of shares or
restructuring the Trust) as do not have a materially adverse effect on the
rights or 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. The Declaration of Trust also contains provisions limiting the
liability of a series or class to that series or class. 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 remote.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
INVESTMENT ADVISORY SERVICES. The Trust has engaged Eaton Vance to act as the
Fund's investment adviser. As investment adviser to the Fund, Eaton Vance
manages the Fund's investments, subject to the supervision of the Board of
Trustees of the Trust. Eaton Vance is also responsible for effecting all
security transactions on behalf of the Fund, including the allocation of
principal transactions and portfolio brokerage and the negotiation of
commissions.
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 Fund pays Eaton Vance under the
Investment Advisory Agreement on average daily net assets up to $500 million,
see the prospectus. 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 0.625%
$1 billion but less than $2.5 billion 0.600%
The Investment Advisory Agreement 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 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 the investment adviser
may render services to others. The Agreement also provides that the investment
adviser shall not be liable for any loss incurred in connection with the
performance of its duties, or action taken or omitted under the 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.
ADMINISTRATIVE SERVICES. As indicated in the prospectus, Eaton Vance serves
as administrator of the Fund, and the Fund is authorized to pay Eaton Vance a
fee in the amount of 0.15% of average daily net assets for providing
administrative services to the Fund. Under its Administrative Services
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.
INFORMATION ABOUT EATON VANCE. Eaton Vance and Eaton Vance, Inc. ("EV") are
wholly-owned subsidiaries of Eaton Vance Corporation ("EVC"), a Maryland
corporation and publicly-held holding company. Eaton Vance is a Massachusetts
business trust, and EV is the trustee of Eaton Vance. EVC through its
subsidiaries and affiliates engages primarily in investment management,
administration and marketing activities. The Directors of EVC are James B.
Hawkes, Benjamin A. Rowland, Jr., John G.L. Cabot, John M. Nelson, Vincent M.
O'Reilly and Ralph Z. Sorenson. All of the issued and outstanding shares of
Eaton Vance are owned by EVC. All shares of the outstanding Voting Common
Stock of EVC are deposited in a Voting Trust, the Voting Trustees of which are
Messrs. Hawkes and Rowland, Alan R. Dynner, Thomas E. Faust, Jr., Thomas J.
Fetter, Duncan W. Richardson, William M. Steul, and Wharton P. Whitaker (all
of whom are officers of Eaton Vance). The Voting Trustees have unrestricted
voting rights for the election of Directors of EVC. All of the outstanding
voting trust receipts issued under said Voting Trust are owned by certain of
the officers of Eaton Vance who are also officers, or officers and Directors
of EVC and EV. As indicated under "Management and Organization," all of the
officers of the Trust (as well as Mr. Hawkes who is also a Trustee) hold
positions in the Eaton Vance organization.
EXPENSES. The Fund is responsible for all expenses not expressly stated to be
payable by another party (such as the investment adviser under the Investment
Advisory Agreement, Eaton Vance under the Administrative Services Agreement or
the principal underwriter under the Distribution Agreement). In the case of
expenses incurred by the Trust, the Fund is responsible for its pro rata share
of those expenses. The only expenses of the Fund allocated to a particular
class are those incurred under the Distribution or Service Plan applicable to
that class and those resulting from the fee paid to the principal underwriter
for repurchase transactions.
OTHER SERVICE PROVIDERS
PRINCIPAL UNDERWRITER. Eaton Vance Distributors, Inc. ("EVD"), The Eaton
Vance Building, 255 State Street, Boston, MA 02109, is the Fund's principal
underwriter. The principal underwriter acts as principal in selling shares
under a Distribution Agreement with the Trust. The expenses of printing copies
of prospectuses used to offer shares and other selling literature and of
advertising are borne by the principal underwriter. The fees and expenses of
qualifying and registering and maintaining qualifications and registrations of
the Fund and its shares under federal and state securities laws are borne by
the Fund. The Distribution Agreement as it applies to Class A shares 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 Distribution
Agreement as it applies to Class B and Class C shares 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 shares of the relevant class or on six months' notice by the
principal underwriter and is automatically terminated upon assignment. The
principal underwriter distributes 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 investment dealers discounts from the applicable
public offering price which are alike for all investment dealers. See "Sales
Charges". EVD is a wholly-owned subsidiary of EVC. Mr. Hawkes is a Vice
President and Director and Messrs. Dynner and O'Connor are Vice Presidents of
EVD.
CUSTODIAN. Investors Bank & Trust Company ("IBT"), 200 Clarendon Street,
Boston, MA 02116, serves as custodian to the Fund. IBT has the custody of all
cash and securities of the Fund, maintains the Fund's general ledger and
computes the daily net asset value of 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 instructions
from the Trust. IBT also provides services in connection with the preparation
of shareholder reports and the electronic filing of such reports with the SEC.
EVC and its affiliates and their officers and employees from time to time have
transactions with various banks, including IBT. It is Eaton Vance's opinion
that the terms and conditions of such transactions were not and will not be
influenced by existing or potential custodial or other relationships between
the Fund and such banks.
INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP, 200 Berkeley Street, Boston,
MA 02116, are the independent accountants of the Fund, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the SEC.
TRANSFER AGENT. First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123, serves as transfer and dividend disbursing agent
for the Fund.
PURCHASING AND REDEEMING SHARES
CALCULATION OF NET ASSET VALUE. The net asset value of the Fund is computed
by IBT (as agent and custodian for the Fund) in the manner described in the
prospectus. The Fund will be closed for business and will not price their
respective shares on the following business holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
The Trustees of the Trust have established the following procedures for
the fair valuation of the Fund's assets under normal market conditions.
Securities listed on foreign or U.S. securities exchanges or in the NASDAQ
National Market System generally are valued at 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.
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 generally 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.
ADDITIONAL INFORMATION ABOUT PURCHASES. Fund shares are continuously offered
through investment dealers which have entered agreements with the principal
underwriter. The public offering price is the net asset value next computed
after receipt of the order, plus, in the case of Class A shares, a variable
percentage (sales charge) depending upon the amount of purchase as indicated
by the sales charge table set forth in the prospectus. The sales charge is
divided between the principal underwriter and the investment dealer. The
sales charge 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 pursuant to a
written Statement of Intention; or (2) purchases of Class A shares pursuant to
the Right of Accumulation and declared as such at the time of purchase. See
"Sales Charges".
In connection with employee benefit or other continuous group purchase
plans, the Fund may accept initial investments of less than $1,000 on the part
of an individual participant. In the event a shareholder who is a participant
of such a plan terminates participation in the plan, his or her shares will be
transferred to a regular individual account. However, such account will be
subject to the right of redemption by the Fund as described below.
SUSPENSION OF SALES. 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 Trust'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 shares, and in the case of
Class B and Class C shares, the amount of uncovered distribution charges of
the principal underwriter. The Class B and Class C Distribution 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 any Plan for any particular
period of time. Suspension of the offering of shares would not, of course,
affect a shareholder's ability to redeem shares.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as administrator, in exchange
for Fund shares. The minimum value of securities (or securities and cash)
accepted for deposit is $5,000. Securities accepted will be sold on the day of
their receipt or as soon thereafter as possible. The number of Fund shares to
be issued in exchange for securities will be the aggregate proceeds from the
sale of such securities, divided by the applicable public offering price 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 securities. Securities determined to be acceptable
should be transferred via book entry or physically delivered, in proper form
for transfer, through an investment dealer, together with a completed and
signed Letter of Transmittal in approved form (available from investment
dealers). 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.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS. 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 SEC, or during any emergency as determined by the SEC 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 SEC for the
protection of investors.
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.
SYSTEMATIC WITHDRAWAL PLAN. The transfer agent will send to the shareholder
regular monthly or quarterly payments of any permitted amount designated by
the shareholder based upon the value of the shares held. The checks will be
drawn from share redemptions and hence, may require the recognition of taxable
gain or loss. Income dividends and capital gains 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.
SALES CHARGES
DEALER COMMISSIONS. The principal underwriter may, from time to time, at its own
expense, provide additional incentives to investment dealers 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 investment dealers 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 investment dealers. The principal underwriter
may allow, upon notice to all investment dealers 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
investment dealers may be deemed to be underwriters as that term is defined in
the Securities Act of 1933.
SALES CHARGE WAIVERS. 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 investment dealers and bank employees who
refer customers to registered representatives of investment dealers; to
officers and employees of IBT and the transfer agent; to persons associated
with law firms, accounting firms and consulting firms providing services to
Eaton Vance and the Eaton Vance funds; and to such persons' spouses, parents,
siblings and children and their beneficial accounts. Such shares may also be
issued at net asset value (1) in connection with the merger of an investment
company (or series or class thereof) with the Fund (or class thereof), (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. Class A shares may also be sold at
net asset value to registered representatives and employees of investment
dealers and bank employees who refer customers to registered representatives
of investment dealers and to 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". Class A shares may be sold at net
asset value to 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. Class A shares are offered at net asset value to the
foregoing persons and in the foregoing situations because either (i) there is
no sales effort involved in the sale of shares or (ii) the investor is paying
a fee (other than the sales charge) to the investment dealer involved in the
sale.
The CDSC applicable to Class B shares will be waived in connection with
minimum required distributions from tax-sheltered retirement plans by applying
the rate required to be withdrawn under the applicable rules and regulations
of the Internal Revenue Service to the balance of Class B shares in your
account.
STATEMENT OF INTENTION. If it is anticipated that $50,000 or more of Class A
shares and shares of other funds exchangeable for Class A shares of another
Eaton Vance fund will be purchased within a 13-month period, a Statement of
Intention should be signed so that shares may be obtained at the same reduced
sales charge as though the total quantity were invested in one lump sum.
Shares held under Right of Accumulation (see below) as of the date of the
Statement will be included toward the completion of the Statement. The
Statement authorizes the transfer agent to hold in escrow sufficient shares
(5% of the dollar amount specified in the Statement) which can be redeemed to
make up any difference in sales charge on the amount intended to be invested
and the amount actually invested. Execution of a Statement does not obligate
the shareholder to purchase or the Fund to sell the full amount indicated in
the Statement, and should the amount actually purchased during the 13-month
period be more or less than that indicated on the Statement, price adjustments
will be made. Any investor considering signing a Statement of Intention should
read it carefully.
RIGHT OF ACCUMULATION. The applicable sales charge level for the purchase of
Class A 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 Class A shares the shareholder owns in his or her
account(s) in the Fund, and shares of other funds exchangeable for Class A
shares. The sales charge on the shares being purchased will then be at the
rate applicable to the aggregate. 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 investment dealer must provide
the principal underwriter (in the case of a purchase made through an
investment dealer) 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.
TAX-SHELTERED RETIREMENT PLANS. Class A and Class C shares 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.
DISTRIBUTION AND SERVICE PLANS. The Trust has adopted a Service Plan (the
"Class A Plan") for the Fund's Class A shares that is 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 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, investment dealers and other persons in amounts
not exceeding .25% of its average daily net assets for any fiscal year.
The Trust has also adopted compensation-type Distribution Plans (the
"Class B and Class C Plans") pursuant to Rule 12b-1 under the 1940 Act for the
Fund's Class B and Class C shares. The Class B and Class C Plans are designed
to permit an investor to purchase shares through an investment dealer without
incurring an initial sales charge and at the same time permit the principal
underwriter to compensate investment dealers in connection therewith. The
Class B and Class C 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. On each sale of shares (excluding reinvestment of
distributions), the Fund will pay the principal underwriter amounts
representing (i) sales commissions equal to 5% for Class B shares and 6.25%
for 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. To pay these amounts, each Class pays 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
investment dealers on the sale of shares and for interest expenses. For sales
of Class B shares, the principal underwriter uses its own funds to pay sales
commissions (except on exchange transactions and reinvestments) to investment
dealers at the time of sale equal to 4% of the purchase price of the Class B
shares sold by such dealers. For Class C shares, the principal underwriter
currently expects to pay to an investment dealer (a) sales commissions (except
on exchange transactions and reinvestments) at the time of sale equal to .75%
of the purchase price of the shares sold by such dealer, and (b) monthly sales
commissions approximately equivalent to 1/12 of .75% of the value of shares
sold by such dealer 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
paid to investment dealers at the time of sale. CDSCs paid to the principal
underwriter will be used to reduce amounts owed to it. The Class B and Class C
Plans provide that the Fund 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 Trust to the principal underwriter whenever there exist uncovered
distribution charges. Because payments to the principal underwriter under the
Class B and Class C Plans are limited, uncovered distribution charges (sales
commissions paid by the principal underwriter plus interest, less the above
fees and CDSCs received by it) may exist indefinitely.
In calculating daily the amount of uncovered distribution charges,
distribution charges will include the aggregate amount of sales commissions
and distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the principal underwriter is entitled
to be paid under the Plan since its inception. Payments theretofore paid or
payable under the Class B and Class C Plans by the Trust 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 shares, the nature of such sales (i.e., whether
they result from exchange transactions, reinvestments or from cash sales
through investment dealers), the level and timing of redemptions of shares
upon which a CDSC will be imposed, the level and timing of redemptions of
shares upon which no CDSC will be imposed (including redemptions of 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 Class,
and changes in the interest rate used in the calculation of the distribution
fee under the Class B and Class C Plans.
The Class B and Class C Plans also authorize each Class to make payments
of service fees to the principal underwriter, investment dealers and other
persons in amounts not exceeding .25% of its average daily net assets for
personal services, and/or the maintenance of shareholder accounts. This fee is
paid quarterly in arrears based on the value of Class B shares sold by such
persons. For Class C, investment dealers currently receive (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 dealer, and
(b) monthly service fees approximately equivalent to 1/12 of .25% of the
value of Class C shares sold by such dealer 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 investment dealers at the time of sale.
Currently, payments of sales commissions and distribution fees and of
service fees may equal 1% of a Class's average daily net assets per annum. The
Trust believes that the combined rate of all these payments may be higher than
the rate of payments made under distribution plans adopted by other investment
companies pursuant to Rule 12b-1. Although the principal underwriter will use
its own funds (which may be borrowed from banks) to pay sales commissions at
the time of sale, it is anticipated that the Eaton Vance organization will
profit by reason of the operation of the Class B and Class C 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 shares and through the amounts
paid to the principal underwriter, including CDSCs, pursuant to the Plans. The
Eaton Vance organization may be considered to have realized a profit under the
Class B and Class C Plans if at any point in time the aggregate amounts
theretofore received by the principal underwriter pursuant to the Class B or
Class C Plan and from CDSCs have exceeded the total expenses theretofore
incurred by such organization in distributing shares. 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 Trust.
The Class A and Class B and Class C Plans continue 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 "Plan Trustees") and (ii) all of the
Trustees then in office. Each Plan may be terminated at any time by vote of a
majority of the Plan Trustees or by a vote of a majority of the outstanding
voting securities of the applicable Class. Each 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 Plans may not be
amended to increase materially the payments described therein without approval
of the shareholders of the affected Class and the Trustees. So long as a Plan
is in effect, the selection and nomination of the noninterested Trustees shall
be committed to the discretion of such Trustees. The Class A, Class B and
Class C Plans were initially approved by the Trustees on August 16, 1999.
The Trustees of the Trust believe that each Plan will be a significant
factor in the expected growth of the Fund's assets, and will result in
increased investment flexibility and advantages which have benefitted and will
continue to benefit the Fund and its shareholders. Payments for sales
commissions and distribution fees made to the principal underwriter under the
Class B and Class C Plans will compensate the principal underwriter for its
services and expenses in distributing those classes of shares. Service fee
payments made to the principal underwriter and investment dealers provide
incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the principal
underwriter and investment dealers, each 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 each
Plan will benefit the Fund and its shareholders.
PERFORMANCE
Average annual total return is determined seperately for each Class of the
Fund 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 (i) that all distributions are
reinvested at net asset value on the reinvestment dates during the period,
(ii) the deduction of the maximum sales charge from the initial $1,000
purchase order for Class A shares, (iii) a complete redemption of the
investment and, (iv) the deduction of any CDSC at the end of the period. The
Fund may also publish total return figures for each class based on reduced
sales charges or a net asset value. These returns would be lower if the full
sales charge was imposed.
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.
Total return may be compared to relevant indices, such as the Consumer
Price Index and various domestic and foreign securities indices. The Fund's
total return and companies with these indices may be used in advertisements
and in information furnished to present or prospective shareholders. In
addition, evaluations of the Fund's performance or rankings of mutual funds
(which include the Fund) made by independent sources 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 in materials furnished to present or
prospective shareholders may include statistics, data and performance studies
prepared by independent organizations or included in various publications
reflecting the investment performance or return achieved by various classes and
types of investments (e.g. common stocks, small company stocks, long-term
corporate bonds, long-term government bonds, intermediate- term government
bonds, U.S. Treasury bills) over various periods of time. This information may
be used to illustrate the benefits of long-term investments in common stocks.
Information used in advertisements and in materials provided to present
and prospective shareholders may include descriptions of Eaton Vance and other
Fund service providers, their investment styles, other investment products,
personnel and Fund distribution channels.
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 Trust (or principal underwriter) 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.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the date hereof, Eaton Vance owned one share of the Fund, being the
only shares of the Fund outstanding on such date. Eaton Vance is a
Massachusetts business trust and a wholly-owned subsidiary of EVC.
TAXES
Each series of the Trust is treated as a separate entity for federal
income tax purposes. The Fund has elected 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 a sufficient amount
of any investment company taxable income so as to effect such qualification.
The Fund may also distribute part or all of any net investment income and net
realized capital gains in accordance with the timing requirements imposed by
the Code, so as to reduce or avoid any federal income or excise tax.
In order to avoid incurring a federal excise tax obligation, 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 for such
year, at least 98% of its capital gain net income (which is 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 (i) any available capital loss carryforwards and (ii) 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 the Fund qualifies as a RIC for federal
income tax purposes, the Fund should not be liable for any income, corporate
excise or franchise tax in the Commonwealth of Massachusetts.
The Fund may retain for investment its net capital gain. However, if the
Fund does so, it will be subject to a tax of 35% on the amount retained. In
that event, the Fund expects to designate the retained amount as undistributed
capital gain in a notice to its Shareholders, who (i) will be required to
include in income for tax purposes, as long-term capital gain, their
proportionate shares of such undistributed amount, (ii) will be entitled to
credit their proportionate shares of the 35% tax paid by the Fund against
their federal income tax liabilities, if any, and to claim refunds to the
extent the credit exceeds those liabilities, and (iii) will increase the tax
basis of their Fund Shares by an amount equal to 65% of the amount of
undistributed capital gain included in their gross income.
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 of the Fund
with a tax holding period of 6 months or less will be treated as a long-term
capital loss to the extent of any distribution of net long-term capital gains
with respect to such shares. All or a portion of 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
("TIN") and certain certifications required by the Internal Revenue Service
(the "IRS"), as well as shareholders with respect to whom the Fund has
received certain information from the IRS or a broker, may be subject to
"backup" withholding of federal income tax arising from the Fund's taxable
dividends and other distributions as well as the proceeds of redemption
transactions (including repurchases and exchanges) at a rate of 31%. An
individual's TIN 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 convention.
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 arise if: (i) the shareholder is engaged in a trade or business in the
United States; (ii) the shareholder is present in the United States for a
sufficient period of time during a taxable year to be treated as a U.S.
resident (generally 180 days or more); or (iii) the shareholder fails to
provide any required certifications regarding its status as a non-resident
alien investor. Foreign shareholders should consult their tax advisers
regarding the U.S. and foreign tax consequences of an investment in the Fund.
The foregoing discussion does not address the special tax rules applicable
to certain 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 special tax rules that
may apply in their particular situations, as well as the state, local, and,
where applicable, foreign tax consequences of investing in the Fund.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of Fund portfolio security
transactions, including the selection of the market and the broker-dealer
firm, are made by Eaton Vance. Eaton Vance is also responsible for the
execution of transactions for all other accounts managed by it.
Eaton Vance places the portfolio security transactions of the Fund and of
certain other accounts managed by it for execution with many broker-dealer
firms. Eaton Vance uses its best efforts to obtain execution of portfolio
security 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 full range and quality of
the broker-dealer's services, the value of the brokerage and research services
provided, the responsiveness of the broker-dealer to Eaton Vance, the size and
type of the transaction, the general execution and operational capabilities of
the broker-dealer, the nature and character of the market for the security,
the confidentiality, speed and certainty of effective execution required for
the transaction, the reputation, reliability, experience and financial
condition of the broker-dealer, the value and quality of services rendered by
the broker-dealer in this and other transactions, and the reasonableness of
the commission or spread, if any. Transactions on stock exchanges and other
agency transactions involve the payment of negotiated brokerage commissions.
Such commissions vary among different broker-dealer firms, and a particular
broker-dealer may charge different commissions according to such factors as
the difficulty and size of the transaction and the volume of business done
with such broker-dealer. Transactions in foreign securities usually involve
the payment of fixed brokerage commissions, which are generally higher than
those in the United States. There is generally no stated commission in the
case of securities traded in the over-the-counter markets, but the price paid
or received usually includes an undisclosed dealer markup or markdown. In an
underwritten offering the price paid includes a disclosed fixed commission or
discount retained by the underwriter or dealer. Although commissions paid on
portfolio transactions will, in the judgment of Eaton Vance, be reasonable in
relation to the value of the services provided, commissions exceeding those
which another firm might charge may be paid to broker-dealers who were
selected to execute transactions on behalf of the Fund and Eaton Vance's other
clients in part for providing brokerage and research services to Eaton Vance.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction 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 compensation was reasonable in relation to the value of the
brokerage and research services provided. This determination may be made on
the basis of either that particular transaction or on the basis of overall
responsibilities which Eaton Vance and its affiliates have for accounts over
which it exercises investment discretion. In making any such determination,
Eaton 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, analytical, 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 portfolio
transactions and from third parties with which these broker-dealers have
arrangements. These Research Services may include such matters as general
economic, political, business and market information, industry and company
reviews, evaluations of securities and portfolio strategies and transactions,
proxy voting data and analysis services, technical analysis of various aspects
of the securities markets, 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 portfolio security transactions 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.
The Fund and Eaton Vance may also receive Research Services from
underwriters and dealers in fixed price offerings, which Research Services are
reviewed and evaluated by Eaton Vance in connection with its investment
responsibilities. The investment companies sponsored by Eaton Vance or BMR may
allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other mutual funds, which
information is used by the Trustees of such companies to fulfill their
responsibility to oversee the quality of the services provided by various
entities, including Eaton Vance, to such companies. Such companies may also
pay cash for such information.
Subject to the requirement that Eaton Vance shall use its best efforts to
seek to execute Fund portfolio security transactions at advantageous prices
and at reasonably competitive commission rates or spreads, Eaton Vance is
authorized to consider as a factor in the selection of any broker-dealer firm
with whom Fund portfolio orders may be placed the fact that such firm has sold
or is selling shares of the Fund or of other investment companies sponsored by
Eaton Vance. This policy is not inconsistent with a rule of the 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.
Whenever decisions are made to buy or sell securities for the Fund and one or
more of such other accounts simultaneously, Eaton Vance will allocate the
security transactions (including "hot" issues) in a manner which it believes
to be equitable under the circumstances. As a result of such allocations,
there may be instances where the Fund will not participate in a transaction
that is allocated among other accounts. If an aggregated order cannot be
filled completely, allocations will generally be made on a pro rata basis. An
order may not be allocated on a pro rata basis where, for example: (i)
consideration is given to portfolio managers who have been instrumental in
developing or negotiating a particular investment; (ii) consideration is given
to an account with specialized investment policies that coincide with the
particulars of a specific investment; (iii) pro rata allocation would result
in odd-lot or de minimis amounts being allocated to a portfolio or other
client; or (iv) where Eaton Vance reasonably determines that departure from a
pro rata allocation is advisable. While these aggregation and allocation
policies 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 from Eaton Vance's organization
outweigh any disadvantage that may arise from exposure to simultaneous
transactions.
<PAGE>
PART C - OTHER INFORMATION
ITEM 23. EXHIBITS
(a)(1) Amended and Restated Declaration of Trust of Eaton Vance Mutual
Funds Trust dated August 17, 1993, filed as Exhibit (1)(a) to
Post-Effective Amendment No. 23 and incorporated herein by
reference.
(2) Amendment dated July 10, 1995 to the Declaration of Trust filed
as Exhibit (1)(b) to Post-Effective Amendment No. 23 and
incorporated herein by reference.
(3) Amendment dated June 23, 1997 to the Declaration of Trust filed
as Exhibit (1)(c) to Post-Effective Amendment No. 38 and
incorporated herein by reference.
(4) Amendment and Restatement of Establishment and Designation of
Series of Shares dated August 16, 1999 filed herewith.
(b)(1) By-Laws as amended November 3, 1986 filed as Exhibit (2)(a) to
Post-Effective Amendment No. 23 and incorporated herein by
reference.
(2) Amendment to By-Laws of Eaton Vance Mutual Funds Trust dated
December 13, 1993 filed as Exhibit (2)(b) to Post-Effective
Amendment No. 23 and incorporated herein by reference.
(c) Reference is made to Item 23(a) and 23(b) above.
(d)(1) 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.
(2) Investment Advisory Agreement with Eaton Vance Management for
Eaton Vance Tax-Managed Emerging Growth Fund dated September 16,
1997 filed as Exhibit (5)(c) to Post-Effective Amendment No. 37
and incorporated herein by reference.
(3) Investment Advisory Agreement with Eaton Vance Management for
Eaton Vance Municipal Bond Fund dated October 17, 1997 filed as
Exhibit (5)(d) to Post-Effective Amendment No. 37 and
incorporated herein by reference.
(4) Investment Advisory Agreement with Eaton Vance Management for
Eaton Vance Tax-Managed International Growth Fund dated March 4,
1998 filed as Exhibit (5)(e) to Post-Effective Amendment No. 42
and incorporated herein by reference.
(5) Investment Advisory Agreement with Eaton Vance Management for
Eaton Vance Tax-Managed Value Fund dated August 16, 1999 filed
herewith.
(e)(1) 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
(6)(a)(4) to Post-Effective Amendment No. 34 and incorporated
herein by reference.
(2) 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
(6)(a)(5) to Post-Effective Amendment No. 34 and incorporated
herein by reference.
C-1
<PAGE>
(3) 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
(6)(a)(6) 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 Tax Free Reserves, and Eaton Vance
Distributors, Inc. effective November 1, 1996 filed as Exhibit
(6)(a)(7) to Post-Effective Amendment No. 34 and incorporated
herein by reference.
(5) Distribution Agreement between Eaton Vance Mutual Funds Trust (on
behalf of certain of its series), and Eaton Vance Distributors,
Inc. effective June 23, 1997 with attached Schedules (A, A-1 and
A-2) filed as Exhibit (6)(a)(8) to Post-Effective Amendment No.
38 and incorporated herein by reference.
(i) Amendment to Distribution Agreement dated October 17, 1997 filed
as Exhibit (6)(a)(9) to Post-Effective Amendment No. 38 and
incorporated herein by reference.
(ii) Schedules A-3, A-4 and A-5 to Distribution Agreement filed
herewith.
(6) Selling Group Agreement between Eaton Vance Distributors, Inc.
and Authorized Dealers filed as Exhibit (6)(b) to the
Post-Effective Amendment No. 61 to the Registration Statement of
Eaton Vance Growth Trust (File Nos. 2-22019, 811-1241) and
incorporated herein by reference.
(f) 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).
(g)(1) 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.
(2) 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.
(3) Amendment to Master Custodian Agreement with Investors Bank &
Trust Company dated December 21, 1998 filed as Exhibit (g)(3) to
the Registration Statement of Eaton Vance Municipals Trust (File
Nos. 33-572, 811-4409)(Accession No. 0000950156-99-000050) and
incorporated herein by reference.
(h)(1)(a) Amended Administrative Services Agreement between Eaton Vance
Mutual Funds Trust (on behalf of certain 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) Amendment to Schedule A dated June 23, 1997 to the Amended
Administrative Services Agreement dated July 31, 1995 filed as
Exhibit (9)(a)(1) to Post-Effective Amendment No. 38 and
incorporated herein by reference.
(2) Administrative Services Agreement between Eaton Vance Mutual
Funds Trust (on behalf of certain of its series) and Eaton Vance
Management dated August 16, 1999 with attached Schedule A dated
August 16, 1999 filed herewith.
C-2
<PAGE>
(3) Transfer Agency Agreement dated January 1, 1998 filed as Exhibit
(k)(b) to the Registration Statement on Form N-2 of Eaton Vance
Advisers Senior Floating-Rate Fund (File Nos. 333-46853,
811-08671) (Accession No. 0000950156-98-000172) and incorporated
herein by reference.
(i)(1) Opinion of Internal Counsel dated August 25, 1999 filed herewith.
(j) Not applicable
(k) Not applicable
(l) Not applicable
(m)(1)(a) 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)(g) to Post-Effective Amendment No.
25 and incorporated herein by reference.
(b) 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 (15)(g)(1) to Post-Effective Amendment No. 34
and incorporated herein by reference.
(2)(a) 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)(h) to Post-Effective Amendment No.
25 and incorporated herein by reference.
(b) 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 (15)(h)(1) to Post-Effective Amendment No. 34
and incorporated herein by reference.
(3)(a) Eaton Vance Mutual Funds Trust Class A Service Plan adopted June
23, 1997 with attached Schedules (A, A-1 and A-2) filed as
Exhibit (15)(i) to Post-Effective Amendment No. 38 and
incorporated herein by reference.
(b) Schedules A-3, A-4 and A-5 to Class A Service Plan filed
herewith.
(c) Eaton Vance Mutual Funds Trust Class S Service Plan adopted
February 22, 1999 filed as Exhibit (m)(3)(c) to Post-Effective
Amendment No. 53 and incorporated herein by reference.
(4)(a) Eaton Vance Mutual Funds Trust Class B Distribution Plan adopted
June 23, 1997 with attached Schedules (A, A-1 and A-2) filed as
Exhibit (15)(j) to Post-Effective Amendment No. 38 and
incorporated herein by reference.
(b) Schedules A-3, A-4 and A-5 to Class B Distribution Plan filed
herewith.
(5)(a) Eaton Vance Mutual Funds Trust Class C Distribution Plan adopted
June 23, 1997 with attached Schedules (A and A-1) filed as
Exhibit (15)(k) to Post-Effective Amendment No. 38 and
incorporated herein by reference.
(b) Schedules A-2, A-3, A-4 and A-5 to Class C Distribution Plan
filed herewith.
C-3
<PAGE>
(n) Not applicable
(o)(1)(a) Multiple Class Plan for Eaton Vance Funds dated June 23, 1997
filed as Exhibit (18) to Post-Effective Amendment No. 37 and
incorporated herein by reference.
(b) Schedule A-4 to Multiple Class Plan dated January 6, 1998 filed
as Exhibit (18)(a)(1) to Post-Effective Amendment No. 42 and
incorporated herein by reference.
(c) Amendment to Multiple Class Plan for Eaton Vance Mutual Funds
Trust dated February 22, 1999 filed as Exhibit (o)(1)(c) to
Post-Effective Amendment No. 53 and incorporated herein by
reference.
(d) Schedule A-6 to Multiple Class Plan dated August 16, 1999 filed
herewith.
(p)(1) Power of Attorney for Eaton Vance Mutual Funds Trust dated June
23, 1997 filed as Exhibit No. (17)(a) to Post-Effective Amendment
No. 35 and incorporated herein by reference.
(a) Power of Attorney for Eaton Vance Mutual Funds Trust dated
November 16, 1998 filed as Exhibit (p)(1) to Post-Effective
Amendment No. 47 and incorporated herein by reference.
(2) Power of Attorney for Government Obligations Portfolio dated
April 22, 1997 filed as Exhibit (17)(b) to Post-Effective
Amendment No. 36 and incorporated herein by reference.
(a) Power of Attorney for Government Obligations Portfolio dated
November 16, 1998 filed as Exhibit (p)(2)(a) to Post-Effective
Amendment No. 48 and incorporated herein by reference.
(3) Power of Attorney for High Income Portfolio dated February 14,
1997 filed as Exhibit No. (17)(c) to Post-Effective Amendment No.
36 and incorporated herein by reference.
(a) Power of Attorney for High Income Portfolio dated November 16,
1998 filed as Exhibit (p)(3) to Post-Effective Amendment No. 47
and incorporated herein by reference.
(4) Power of Attorney for Strategic Income Portfolio dated April 22,
1997 filed as Exhibit No. (17)(d) to Post-Effective Amendment No.
36 and incorporated herein by reference.
(a) Power of Attorney for Strategic Income Portfolio dated November
16, 1998 filed as Exhibit (p)(4) to Post-Effective Amendment No.
47 and incorporated herein by reference.
(5) Power of Attorney for Cash Management Portfolio dated April 22,
1997 filed as Exhibit (17)(e) to Post-Effective Amendment No. 36
and incorporated herein by reference.
(a) Power of Attorney for Cash Management Portfolio dated November
16, 1998 filed as Exhibit (p)(5)(a) to Post-Effective Amendment
No. 48 and incorporated herein by reference.
(6) Power of Attorney for Tax-Managed Growth Portfolio dated February
20, 1998 filed as Exhibit No. (17)(f) to Post-Effective Amendment
No. 41 and incorporated herein by reference.
(a) Power of Attorney for Tax-Managed Growth Portfolio dated November
16, 1998 filed as Exhibit (p)(6) to Post-Effective Amendment No.
47 and incorporated herein by reference.
C-4
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
Not applicable
ITEM 25. INDEMNIFICATION
Article IV of the Registrant'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 loss incurred by reason of negligent errors
and omissions committed in their capacities as such.
The distribution agreements of the Registrant also provide for reciprocal
indemnity of the principal underwriter, on the one hand, and the Trustees and
officers, on the other.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT Adviser
Reference is made to: (i) the information set forth under the caption
"Management and Organization" in the Statement of Additional Information; (ii)
the Eaton Vance Corp. 10-K filed under the Securities Exchange Act of 1934 (File
No. 1-8100); and (iii) the Form ADV of Eaton Vance Management (File No.
801-15930) and Boston Management and Research (File No. 801-43127) filed with
the Commission, all of which are incorporated herein by reference.
ITEM 27. 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 Advisers Senior Floating-Rate Fund
Eaton Vance Growth Trust
Eaton Vance Income Fund of Boston
Eaton Vance Institutional Senior Floating-Rate Fund
Eaton Vance Investment Trust
Eaton Vance Municipals Trust
Eaton Vance Municipals Trust II
Eaton Vance Mutual Funds Trust
Eaton Vance Prime Rate Reserves
Eaton Vance Special Investment Trust
EV Classic Senior Floating-Rate Fund
(b)
<TABLE>
<CAPTION>
<S> <C> <C>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Principal Underwriter with Registrant
-----------------
Albert F. Barbaro Vice President None
Chris Berg Vice President None
Kate B. Bradshaw Vice President None
Mark Carlson Vice President None
Daniel C. Cataldo Vice President None
Raymond Cox Vice President None
Peter Crowley Vice President None
Anthony DeVille Vice President None
Alan R. Dynner Vice President Secretary
Richard A. Finelli Vice President None
Kelly Flynn 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
James B. Hawkes Vice President and Director PRESIDENT AND TRUSTEE
Perry D. Hooker Vice President None
C-5
<PAGE>
Brian Jacobs Senior Vice President None
Thomas P. Luka Vice President None
John Macejka Vice President None
Stephen Marks Vice President None
Joseph T. McMenamin Vice President None
Morgan C. Mohrman Senior Vice President None
James A. Naughton Vice President None
Joseph Nelson Vice President None
Mark D. Nelson Vice President None
Linda D. Newkirk Vice President None
James L. O'Connor Vice President Treasurer
Andrew Ogren Vice President None
Thomas Otis Secretary and Clerk None
George D. Owen, II Vice President None
Margaret Pier Vice President None
Enrique M. Pineda Vice President None
F. Anthony Robinson Vice President None
Frances Rogell 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
Kevin Schrader Vice President None
Teresa A. Sheehan Vice President None
William M. Steul Vice President and Director None
Cornelius J. Sullivan Senior Vice President None
Peter Sykes Vice President None
David M. Thill Vice President None
John M. Trotsky Vice President None
Jerry Vainisi Vice President None
Chris Volf Vice President None
Wharton P. Whitaker President and Director None
Sue Wilder Vice President None
</TABLE>
- ------------------------------------------
* Address is The Eaton Vance Building, 255 State Street, Boston, MA 02109
(c) Not applicable
ITEM 28. 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, 200 Clarendon Street,
16th Floor, Mail Code ADM27, Boston, MA 02116, and its transfer agent, First
Data Investor Services Group, 4400 Computer Drive, Westborough, MA 01581-5120,
with the exception of certain corporate documents and portfolio trading
documents which are in the possession and custody of the administrator and
investment adviser. 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 and Boston Management and
Research.
ITEM 29. MANAGEMENT SERVICES
Not applicable
ITEM 30. UNDERTAKINGS
Not applicable
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this 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 August 20, 1999.
EATON VANCE MUTUAL FUNDS TRUST
By: JAMES B. HAWKES*
-------------------------------------
James B. Hawkes, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in their capacities on August 20, 1999.
Signature Title
- --------- -----
James B. Hawkes* President (Chief Executive Officer) and Trustee
- --------------------------
James B. Hawkes
/s/ James L. O'Connor Treasurer (Principal Financial and Accounting
- -------------------------- Officer)
James L. O'Connor
Jessica M. Bibliowicz* Trustee
- --------------------------
Jessica M. Bibliowicz
Donald R. Dwight* Trustee
- --------------------------
Donald R. Dwight
Samuel L. Hayes, III* Trustee
- --------------------------
Samuel L. Hayes, III
Norton H. Reamer* Trustee
- --------------------------
Norton H. Reamer
Lynn A. Stout* Trustee
- --------------------------
Lynn A. Stout
Jack L. Treynor* Trustee
- --------------------------
Jack L. Treynor
*By: /s/ Alan R. Dynner
-------------------------------------
Alan R. Dynner (As attorney-in-fact)
C-7
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to Rule 483 of Regulation C.
Exhibit No. Description
- ----------- -----------
(a)(4) Amendment and Restatement of Establishment and Designation of
Shares dated August 16, 1999
(d)(5) Investment Advisory Agreement with Eaton Vance Management for
Eaton Vance Tax-Managed Value Fund dated August 16, 1999
(e)(5)(ii) Schedules A-3, A-4 and A-5 to the Distribution Agreement
(h)(2) Administrative Services Agreement between Eaton Vance Mutual
Funds Trust (on behalf of certain series) and Eaton Vance
Management dated August 16, 1999
(i)(1) Opinion of Counsel dated August 25, 1999
(m)(3)(b) Schedules A-3, A-4 and A-5 to the Class A Service Plan
(m)(4)(b) Schedules A-3, A-4 and A-5 to the Class B Distribution Plan
(m)(5)(b) Schedules A-2, A-3, A-4 and A-5 to the Class C Distribution Plan
(o)(1)(d) Schedule A-6 for Eaton Vance Tax-Managed Value Fund to the
Multiple Class Plan
C-8
<PAGE>
Exhibit (a)(4)
EATON VANCE MUTUAL FUNDS TRUST
Amendment and Restatement
of
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
(as amended and restated August 16, 1999)
WHEREAS, the Trustees of Eaton Vance Mutual Funds Trust, a Massachusetts
business trust (the "Trust"), have previously designated separate series (or
"Funds"); and
WHEREAS, the Trustees now desire to add an additional series (i.e., Eaton
Vance Tax-Managed Value Fund) and to further redesignate the series or Funds
pursuant to Section 5.1 of Article V of the Trust's Amended and Restated
Declaration of Trust dated August 17, 1993 (as further Amended) (the
"Declaration of Trust");
NOW, THEREFORE, the undersigned, being at least a majority of the duly
elected and qualified Trustees presently in office of the Trust, hereby divide
the shares of beneficial interest of the Trust into sixteen separate series
("Funds"), each Fund to have the following special and relative rights:
1. The Funds shall be designated as follows:
Eaton Vance Government Obligations Fund
Eaton Vance High Income Fund
Eaton Vance Strategic Income Fund
Eaton Vance Tax-Managed Growth Fund
Eaton Vance Cash Management Fund
Eaton Vance Liquid Assets Fund
Eaton Vance Money Market Fund
Eaton Vance Municipal Bond Fund
Eaton Vance Tax Free Reserves
Eaton Vance Tax-Managed Emerging Growth Fund
Eaton Vance Tax-Managed International Growth Fund
Eaton Vance Tax-Managed Value Fund
Eaton Vance Insured Tax-Managed Growth Fund
Eaton Vance Insured Tax-Managed Emerging Growth Fund
Eaton Vance Insured Tax-Managed International Growth Fund
Eaton Vance Insured High Income Fund
2. Each Fund shall be authorized to invest in cash, securities, instruments
and other property as from time to time described in the Trust's then currently
effective registration statements under the Securities Act of 1933 and the
Investment Company Act of 1940. Each share of beneficial interest of each Fund
("share") shall be redeemable, shall be entitled to one vote (or fraction
thereof in respect of a fractional share) on matters on which shares of that
Fund shall be entitled to vote and shall represent a pro rata beneficial
<PAGE>
interest in the assets allocated to that Fund, all as provided in the
Declaration of Trust. The proceeds of sales of shares of each Fund, together
with any income and gain thereon, less any diminution or expenses thereof, shall
irrevocably belong to such Fund, unless otherwise required by law. Each share of
a Fund shall be entitled to receive its pro rata share of net assets of that
Fund upon liquidation of that Fund.
3. Shareholders of each Fund shall vote separately as a class to the extent
provided in Rule 18f-2, as from time to time in effect, under the Investment
Company Act of 1940.
4. The assets and liabilities of the Trust shall be allocated among the
above-referenced Funds as set forth in Section 5.5 of Article V of the
Declaration of Trust, except as provided below:
(a) Costs incurred by each Fund in connection with its organization and
start-up, including Federal and state registration and qualification fees and
expenses of the initial public offering of such Fund's shares, shall (if
applicable) be borne by such Fund.
(b) Reimbursement required under any expense limitation applicable to the
Trust shall be allocated among those Funds whose expense ratios exceed such
limitation on the basis of the relative expense ratios of such Funds.
(c) The liabilities, expenses, costs, charges and reserves of the Trust
(other than the management and investment advisory fees or the organizational
expenses paid by the Trust) which are not readily identifiable as belonging to
any particular Fund shall be allocated among the Funds on an equitable basis as
determined by the Trustees.
5. The Trustees (including any successor Trustees) shall have the right at
any time and from time to time to reallocate assets and expenses or to change
the designation of any Fund now or hereafter created, or to otherwise change the
special and relative rights of any such Fund, and to terminate any Fund or add
additional Funds as provided in the Declaration of Trust.
6. Any Fund may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees;
and any such merger, consolidation, sale, lease or exchange shall be deemed for
all purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. The Trustees may also at any time sell and
convert into money all the assets of any Fund. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, accrued or
contingent, of such Fund, the Trustees shall distribute the remaining assets of
such Fund ratably among the holders of the outstanding shares. Upon completion
of the distribution of the remaining proceeds or the remaining assets as
provided in this paragraph 6, the Fund shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder with respect
to such Fund and the right, title and interest of all parties with respect to
such Fund shall be canceled and discharged.
7. The Declaration of Trust authorizes the Trustees to divide each Fund and
any other series of shares into two or more classes and to fix and determine the
relative rights and preferences as between, and all provisions applicable to,
each of the different classes so established and designated by the Trustees. The
following Funds (Eaton Vance Government Obligations Fund, Eaton Vance High
Income Fund, Eaton Vance Strategic Income Fund, Eaton Vance Municipal Bond Fund,
Eaton Vance Tax-Managed Emerging Growth Fund, Eaton Vance Tax-Managed
International Growth Fund and Eaton Vance Tax-Managed Value Fund) shall have
2
<PAGE>
classes of shares established and designated as Class A, Class B, Class C and
Class I shares, and the Trustees may designate additional classes in the future.
Eaton Vance Tax-Managed Growth Fund shall have classes of shares established and
designated as Class A, Class B, Class C, Class I and Class S shares and the
Trustees may designate additional classes in the future. In addition, the
following Funds (Eaton Vance Insured Tax-Managed Growth Fund, Eaton Vance
Insured Tax-Managed Emerging Growth Fund, Eaton Vance Insured Tax-Managed
International Growth Fund and Eaton Vance Insured High Income Fund) shall have
classes of shares established and designated as Class A and Class B shares, and
the Trustees may designate additional classes in the future. For purposes of
allocating liabilities among classes, each class of that Fund shall be treated
in the same manner as a separate series.
Dated: August 16, 1999
/s/ Jessica M. Bibliowicz /s/ Norton H. Reamer
- ---------------------------- -----------------------------
Jessica M. Bibliowicz Norton H. Reamer
/s/ Donald R. Dwight /s/ Lynn A. Stout
- ---------------------------- -----------------------------
Donald R. Dwight Lynn A. Stout
/s/ James B. Hawkes /s/ Jack L. Treynor
- ---------------------------- -----------------------------
James B. Hawkes Jack L. Treynor
- ----------------------------
Samuel L. Hayes, III
3
<PAGE>
Exhibit (d)(5)
EATON VANCE MUTUAL FUNDS TRUST
INVESTMENT ADVISORY AGREEMENT
ON BEHALF OF EATON VANCE TAX-MANAGED VALUE FUND
AGREEMENT made this 16th day of August, 1999, between Eaton Vance Mutual
Funds Trust, a Massachusetts business trust (the "Trust"), on behalf of Eaton
Vance Tax-Managed Value 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
<PAGE>
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 0.650%
$500 million but less than $1 billion 0.625%
$1 billion but less than $2.5 billion 0.600%
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)
2
<PAGE>
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, 2001 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 2001 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.
3
<PAGE>
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.
4
<PAGE>
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 Value Fund)
By: /s/ James B. Hawkes
--------------------------------
James B. Hawkes
President
EATON VANCE MANAGEMENT
By: /s/ Alan R. Dynner
-------------------------------
Alan R. Dynner
Vice President
and not individually
5
<PAGE>
Exhibit (e)(5)(ii)
SCHEDULE A-3
------------
EATON VANCE MUTUAL FUNDS TRUST
DISTRIBUTION AGREEMENT
EFFECTIVE: MARCH 2, 1998
Sales Commissions
Name of Fund Adopting This Plan On Class B Shares Prior Agreements
------------------------------- ----------------- ----------------
Eaton Vance Tax-Managed International 5% N/A
Growth Fund
<PAGE>
Exhibit (e)(5)(ii)
SCHEDULE A-4
------------
EATON VANCE MUTUAL FUNDS TRUST
DISTRIBUTION AGREEMENT
EFFECTIVE: JUNE 22, 1998
<TABLE>
Sales Commissions
Name of Fund Adopting This Plan On Class B Shares Prior Agreements
------------------------------- ----------------- ----------------
<S> <C> <C>
Eaton Vance Insured Tax-Managed Growth Fund 6.25% N/A
Eaton Vance Insured Tax-Managed Emerging Growth Fund 6.25% N/A
Eaton Vance Insured Tax-Managed International Growth Fund 6.25% N/A
Eaton Vance Insured High Income Fund 6.25% N/A
</TABLE>
<PAGE>
Exhibit (e)(5)(ii)
SCHEDULE A-5
------------
EATON VANCE MUTUAL FUNDS TRUST
DISTRIBUTION AGREEMENT
EFFECTIVE: AUGUST 16, 1999
Sales Commissions
Name of Fund Adopting This Plan On Class B Shares Prior Agreements
------------------------------- ----------------- ----------------
Eaton Vance Tax-Managed Value Fund 5% N/A
<PAGE>
Exhibit (h)(2)
EATON VANCE MUTUAL FUNDS TRUST
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made this 16th day of August, 1999, between Eaton Vance Mutual
Funds Trust, a Massachusetts business trust (the "Trust") on behalf of each of
its series listed on Schedule A (the "Funds") and Eaton Vance Management, a
Massachusetts business Trust, (the "Administrator").
IN CONSIDERATION of the mutual promises and undertakings herein contained,
the parties hereto agree with respect to each Fund:
1. DUTIES OF THE ADMINISTRATOR. The Trust hereby employs the Administrator
to act as administrator of the Fund and to administer its affairs, subject to
the supervision of the Trustees of the Trust, for the period and on the terms
set forth in this Agreement.
The Administrator hereby accepts such employment, and undertakes to afford
to the Trust the advice and assistance of the Administrator's organization in
the administration of the Fund and to furnish for the use of the Fund office
space and all necessary office facilities, equipment and personnel for
administering the affairs of the Fund and to pay the salaries and fees of all
officers and Trustees of the Trust who are members of the Administrator's
organization and all personnel of the Administrator performing services relating
to administrative activities. The Administrator shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares of the Fund, nor
shall the Administrator be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, custodian
or shareholder servicing agent of the Trust or the Fund.
2. ALLOCATION OF CHARGES AND EXPENSES. The Administrator shall pay the
entire salaries and fees of all of the Trust's Trustees and officers who devote
part or all of their time to the affairs of the Administrator, and the salaries
and fees of such persons shall not be deemed to be expenses incurred by the
Trust for purposes of this Section 2. Except as provided in the foregoing
sentence, the Administrator shall not pay any expenses relating to the Trust or
the Fund including, without implied limitation, (i) expenses of maintaining the
Fund and continuing its existence, (ii) registration of the Trust under the
Investment Company Act of 1940, (iii) commissions, fees and other expenses
connected with the acquisition, disposition and valuation of securities and
other investments, (iv) auditing, accounting and legal expenses, (v) taxes and
interest, (vi) governmental fees, (vii) expenses of issue, sale, repurchase and
redemption of shares, (viii) expenses of registering and qualifying the Trust,
the Fund and its shares under federal and state securities laws and of preparing
and printing prospectuses for such purposes and for distributing the same to
shareholders and investors, and fees and expenses of registering and maintaining
registrations of the Fund and of the Fund's principal underwriter, if any, as
<PAGE>
broker-dealer or agent under state securities laws, (ix) expenses of reports and
notices to shareholders and of meetings of shareholders and proxy solicitations
therefor, (x) expenses of reports to governmental officers and commissions, (xi)
insurance expenses, (xii) association membership dues (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Administrator's organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees and officers
with respect thereto.
3. COMPENSATION OF ADMINISTRATOR. The Administrator shall receive
compensation from the Trust on behalf of the Fund in respect of the services to
be rendered and the facilities to be provided by the Administrator under this
Agreement in an amount equal to that set forth in the Schedule(s) attached
hereto.
4. OTHER INTERESTS. It is understood that Trustees and officers of the
Trust and shareholders of the Fund are or may be or become interested in the
Administrator as trustees, officers, employees, shareholders or otherwise and
that trustees, officers, employees and shareholders of the Administrator are or
may be or become similarly interested in the Fund, and that the Administrator
may be or become interested in the Fund as shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, shareholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
which may include the words "Eaton Vance" or any combination thereof as part of
their name, and that the Administrator or its subsidiaries or affiliates may
enter into advisory or management or administration agreements or other
contracts or relationships with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The services of the
Administrator to the Trust and the Fund are not to be deemed to be exclusive,
the Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Trust or the Fund or to any shareholder of the Fund for any act or omission in
the course of, or connected with, rendering services hereunder or for any losses
which may be sustained in the acquisition, holding or disposition of any
security or other investment.
6. SUB-ADMINISTRATORS. The Administrator may employ one or more
sub-administrators from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators and approved by the
Trustees of the Trust, 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, 2001 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 2001 is specifically
approved at least annually (i) by the Board of Trustees of the Trust and (ii) by
the vote of a majority of those Trustees of the Trust who are not interested
persons of the Administrator or the Trust.
-2-
<PAGE>
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of Trustees of the Trust or the trustee of the Administrator,
as the case may be, and the Trust may, at any time upon such written notice to
the Administrator, terminate this Agreement by vote of a majority of the
outstanding voting securities of the Fund. This Agreement shall terminate
automatically in the event of its assignment.
8. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Administrator or the
Trust, and (ii) by vote of the Board of Trustees of the Trust. Additional series
of the Trust, however, will become a Fund hereunder upon approval by the
Trustees of the Trust and amendment of Schedule A.
9. LIMITATION OF LIABILITY. The Fund shall not be responsible for the
obligations of any other series of the Trust. Each party expressly acknowledges
the provision in the other party's Declaration of Trust limiting the personal
liability of trustees, officers and shareholders, and each party hereby agrees
that it shall only have recourse to the assets of the other party for payment of
claims or obligations arising out of this Agreement.
10. USE OF THE NAME "EATON VANCE". The Administrator hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Administrator or one of its affiliates as the administrator of the Fund. The
name "Eaton Vance" or any variation thereof may be used from time to time in
other connections and for other purposes by the Administrator and its affiliates
and other investment companies that have obtained consent to the use of the name
"Eaton Vance." The Administrator shall have the right to require the Fund to
cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Administrator or one of its affiliates as
the Fund's administrator. Future names adopted by the Fund for itself, insofar
as such names include identifying words requiring the consent of the
Administrator, shall be the property of the Administrator and shall be subject
to the same terms and conditions.
11. CERTAIN DEFINITIONS. The term "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.
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 EATON VANCE MANAGEMENT
By /s/ James B. Hawkes By /s/ Alan R. Dynner
---------------------------- ---------------------------
James B. Hawkes Alan R. Dynner
President Vice President
-3-
<PAGE>
SCHEDULE A
EATON VANCE MUTUAL FUNDS TRUST
------------------------------
ADMINISTRATIVE SERVICES AGREEMENT
EFFECTIVE: AUGUST 16, 1999
Eaton Vance Tax-Managed Value Fund
Fee: 0.15% of average daily net assets per annum,
computed and paid monthly
<PAGE>
Exhibit (i)(1)
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
Telephone: (617) 482-8260
Telecopy: (617) 338-8054
August 25, 1999
Eaton Vance Mutual Funds Trust
255 State Street
Boston, MA 02109
Ladies and Gentlemen:
Eaton Vance Mutual Funds Trust (the "Trust") is a voluntary association
(commonly referred to as a "business trust") established under Massachusetts law
with the powers and authority set forth under its Declaration of Trust dated
August 17, 1993, as amended (the "Declaration of Trust").
I am of the opinion that all legal requirements have been complied with in
the creation of the Trust, and that said Declaration of Trust is legal and
valid.
The Trustees of the Trust have the powers set forth in the Declaration of
Trust, subject to the terms, provisions and conditions therein provided. As
provided in the Declaration of Trust, the Trustees may authorize one or more
series or classes of shares, without par value, and the number of shares of each
series or class authorized is unlimited. The series and classes of shares
established and designated as of the date hereof are identified on Appendix A
hereto.
Under the Declaration of Trust, the Trustees may from time to time issue
and sell or cause to be issued and sold shares of the Trust for cash or for
property. All such shares, when so issued, shall be fully paid and nonassessable
by the Trust.
I have examined originals, or copies, certified or otherwise identified to
my satisfaction, of such certificates, records and other documents as we have
deemed necessary or appropriate for the purpose of this opinion.
Based upon the foregoing, and with respect to Massachusetts law (other than
the Massachusetts Uniform Securities Act), only to the extent that Massachusetts
law may be applicable and without reference to the laws of the other several
states or of the United States of America, I am of the opinion that under
existing law:
1. The Trust is a trust with transferable shares of beneficial interest
organized in compliance with the laws of the Commonwealth of Massachusetts, and
the Declaration of Trust is legal and valid under the laws of the Commonwealth
of Massachusetts.
2. Shares of beneficial interest of the Trust registered by Form N-1A may
be legally and validly issued in accordance with the Declaration of Trust upon
receipt of payment in compliance with the Declaration of Trust and, when so
issued and sold, will be fully paid and nonassessable by the Trust.
<PAGE>
Eaton Vance Mutual Funds Trust
August 25, 1999
Page Two
I am a member of the Massachusetts bar and have acted as internal legal
counsel to the Trust in connection with the registration of shares.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to Post-Effective Amendment No. 54 to the
Trust's Registration Statement on Form N-1A pursuant to the Securities Act of
1933, as amended.
Very truly yours,
/s/ Eric G. Woodbury
--------------------------------
Eric G. Woodbury, Esq.
Vice President
<PAGE>
Appendix A
Established and Designated Series* of the Trust
Eaton Vance Cash Management Fund
Eaton Vance Government Obligations Fund
Eaton Vance High Income Fund
Eaton Vance Liquid Assets Fund
Eaton Vance Money Market Fund
Eaton Vance Municipal Bond Fund
Eaton Vance Strategic Income Fund
Eaton Vance Tax Free Reserves
Eaton Vance Tax-Managed Emerging Growth Fund
Eaton Vance Tax-Managed Growth Fund
Eaton Vance Tax-Managed International Growth Fund
Eaton Vance Tax-Managed Value Fund
Eaton Vance Insured Tax-Managed Emerging Growth Fund
Eaton Vance Insured Tax-Managed Growth Fund
Eaton Vance Insured Tax-Managed International Growth Fund
Eaton Vance Insured High Income Fund
- ----------------------------
*Each Series is authorized to issue Class A, Class B, Class C and Class I
shares. Eaton Vance Tax-Managed Growth Fund is also authorized to issue Class S
shares.
<PAGE>
Exhibit (m)(3)(b)
SCHEDULE A-3
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS A SERVICE PLAN
EFFECTIVE: MARCH 2, 1998
Name of Fund Adopting This Plan
-------------------------------
Eaton Vance Tax-Managed International Growth Fund
<PAGE>
Exhibit (m)(3)(b)
SCHEDULE A-4
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS A SERVICE PLAN
EFFECTIVE: JUNE 22, 1998
Name of Fund Adopting This Plan
-------------------------------
Eaton Vance Insured Tax-Managed Growth Fund
Eaton Vance Insured Tax-Managed Emerging Growth Fund
Eaton Vance Insured Tax-Managed International Growth Fund
Eaton Vance Insured High Income Fund
<PAGE>
Exhibit (m)(3)(b)
SCHEDULE A-5
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS A SERVICE PLAN
EFFECTIVE: AUGUST 16, 1999
NAME OF FUND ADOPTING THIS PLAN
-------------------------------
Eaton Vance Tax-Managed Value Fund
<PAGE>
Exhibit (m)(4)(b)
SCHEDULE A-3
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS B DISTRIBUTION PLAN
EFFECTIVE: MARCH 2, 1998
<TABLE>
Sales
Name of Fund Adopting This Plan Commission Date of Original Plans (Inception Date)
- ------------------------------- ---------- ---------------------------------------
<S> <C> <C>
Eaton Vance Tax-Managed 5% N/A
International Growth Fund
</TABLE>
<PAGE>
Exhibit (m)(4)(b)
SCHEDULE A-4
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS B DISTRIBUTION PLAN
EFFECTIVE: JUNE 22, 1998
<TABLE>
Sales Date of Original Plans
Name of Fund Adopting This Plan Commission (Inception Date)
- ------------------------------- ---------- ----------------
<S> <C> <C>
Eaton Vance Insured Tax-Managed Growth Fund 6.25% N/A
Eaton Vance Insured Tax-Managed Emerging Growth Fund 6.25% N/A
Eaton Vance Insured Tax-Managed International Growth Fund 6.25% N/A
Eaton Vance Insured High Income Fund 6.25% N/A
</TABLE>
<PAGE>
Exhibit (m)(4)(b)
SCHEDULE A-5
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS B DISTRIBUTION PLAN
EFFECTIVE: AUGUST 16, 1999
Sales Date of Original Plans
Name of Fund Adopting This Plan Commission (Inception Date)
- ------------------------------- ---------- ----------------
Eaton Vance Tax-Managed Value Fund 5% N/A
<PAGE>
Exhibit (m)(5)(b)
SCHEDULE A-2
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS C DISTRIBUTION PLAN
EFFECTIVE: OCTOBER 17, 1997
Name of Fund Adopting This Plan Date of Original Plans (Inception Date)
- ------------------------------- ---------------------------------------
Eaton Vance Municipal Bond Fund N/A
<PAGE>
Exhibit (m)(5)(b)
SCHEDULE A-3
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS C DISTRIBUTION PLAN
EFFECTIVE: MARCH 2, 1998
Name of Fund Adopting This Plan Date of Original Plans (Inception Date)
- ------------------------------- ---------------------------------------
Eaton Vance Tax-Managed International N/A
Growth Fund
<PAGE>
Exhibit (m)(5)(b)
SCHEDULE A-4
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS C DISTRIBUTION PLAN
Effective: June 22, 1998
<TABLE>
Name of Fund Adopting this Plan Date of Original Plans (Inception Date)
- ------------------------------- ---------------------------------------
<S> <C>
Eaton Vance Insured Tax-Managed Growth Fund N/A
Eaton Vance Insured Tax-Managed Emerging Growth Fund N/A
Eaton Vance Insured Tax-Managed International N/A
Growth Fund
Eaton Vance Insured High Income Fund N/A
</TABLE>
<PAGE>
Exhibit (m)(5)(b)
SCHEDULE A-5
------------
EATON VANCE MUTUAL FUNDS TRUST
CLASS C DISTRIBUTION PLAN
EFFECTIVE: AUGUST 16, 1999
Name of Fund Adopting This Plan Date of Original Plans (Inception Date)
- ------------------------------- ---------------------------------------
Eaton Vance Tax-Managed Value Fund N/A
<PAGE>
Exhibit (o)(1)(d)
August 16, 1999
SCHEDULE A-6
------------
EATON VANCE MUTUAL FUNDS TRUST
------------------------------
Eaton Vance Tax-Managed Value Fund
