<PAGE>
As filed with the Securities and Exchange Commission 0n September 22, 1999.
1933 Act File No. 33-1121
1940 Act File No. 811-4443
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 ___
PRE-EFFECTIVE AMENDMENT NO. 1 _X_
POST-EFFECTIVE AMENDMENT NO. ___ ___
EATON VANCE INVESTMENT TRUST
----------------------------
(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, MA 02109
------------------------------------------------------------
(Address of Principal Executive Offices)
(617) 482-8260
-------------------------------
(Registrant's Telephone Number)
ALAN R. DYNNER
The Eaton Vance Building, 255 State Street, Boston, MA 02109
------------------------------------------------------------
(Name and Address of Agent for Service)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Registrant incorporates by reference all the documents contained in its
registration statement filed on August 24, 1999 (Accession No.
0000950156-99-000550) except the prospectus/proxy statement and Part C, which
are filed herewith.
Pursuant to Rule 488 under the Securities Act of 1933, the registration
statement will become effective on September 23, 1999.
<PAGE>
EATON VANCE CONNECTICUT
LIMITED MATURITY MUNICIPALS FUND
EATON VANCE MICHIGAN
LIMITED MATURITY MUNICIPALS FUND
THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
- --------------------------------------------------------------------------------
September 23, 1999
Dear Shareholder:
A Special Meeting of Shareholders of Eaton Vance Connecticut and Michigan
Limited Maturity Municipals Funds (the "State Funds"), series of Eaton Vance
Investment Trust, is to be held at 1:30 p.m., Eastern Standard Time, on October
29, 1999 at the above location. Enclosed is a Prospectus/Proxy Statement
regarding the meeting, a proxy to allow you to vote, and a postage prepaid
envelope in which to return your proxy.
At the Special Meeting, action will be taken to approve or disapprove two
separate transactions (the "Reorganizations"), each involving one of the State
Funds and Eaton Vance National Limited Maturity Municipals Fund ("National
Fund"), also a series of Eaton Vance Investment Trust. A Reorganization will
result in the conversion of State Fund shares into corresponding shares of
National Fund of equal value. National Fund has an investment objective and
policies different from the State Funds and the risks of an investment in
National Fund also differ. The enclosed Prospectus/Proxy Statement describes the
Reorganizations in detail. Please review the enclosed materials, complete and
return your proxy in the postage prepaid envelope provided.
The number of shares of a State Fund that will be voted in accordance with
your instructions appears on your proxy.
The management and Trustees of the State Funds believe that the
Reorganization will benefit State Funds shareholders and recommend that you vote
IN FAVOR of the applicable Reorganization. NATIONAL FUND CURRENTLY HAS A HIGHER
PRE-TAX AND AFTER-TAX YIELD FOR STATE FUND SHAREHOLDERS, BASED ON REGULAR
FEDERAL, STATE AND LOCAL INCOME TAXES. THIS YIELD ADVANTAGE MAY CHANGE OVER
TIME. Every vote counts, so please return your proxy today in the postage
prepaid envelope provided for your convenience.
Should you have questions regarding the proposed Reorganization, please
call (800) 225-6265 any time between 9 a.m. and 5 p.m. Eastern Standard Time.
Sincerely,
Thomas J. Fetter
President
Shareholders are urged to sign and mail the enclosed proxy in the enclosed
postage prepaid envelope so as to ensure a quorum at the Meeting. This is
important whether you own a few shares or many shares.
<PAGE>
EATON VANCE CONNECTICUT
LIMITED MATURITY MUNICIPALS FUND
EATON VANCE MICHIGAN
LIMITED MATURITY MUNICIPALS FUND
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, OCTOBER 29, 1999
To Shareholders:
Please note that a Special Meeting of Shareholders of each of the above
Funds (the "State Funds") has been called to be held at the Funds' offices, The
Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109 on Friday,
October 29, 1999 at 1:30 p.m., Eastern Standard Time, for the following
purposes:
(1) To approve an Agreement and Plan of Reorganization (the
"Plan") providing for the acquisition by Eaton Vance National
Limited Maturity Municipals Fund ("National Fund"), of all of
the net assets of the State Fund, in exchange for the issuance
of shares of National Fund to the State Fund, the distribution
of such shares to the shareholders of the State Fund and the
termination of the State Fund, all as described in the
accompanying Prospectus/Proxy Statement. A copy of the Plan is
attached as Exhibit A thereto.
(2) To consider and act upon such other matters as may properly
come before the Meeting or any adjournments thereof.
Shareholders of record at the close of business on September 15, 1999 are
entitled to vote at the meeting or any adjournments thereof.
By Order of the Trustees
Alan R. Dynner
Secretary
September 23, 1999
IMPORTANT - WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT USING
THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE AND IS INTENDED FOR
YOUR CONVENIENCE. YOUR PROMPT RETURN OF YOUR ENCLOSED PROXY WILL SAVE THE STATE
FUNDS THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO OBTAIN A QUORUM AT
THE SPECIAL MEETING. IF YOU CAN ATTEND THE MEETING AND WISH TO VOTE YOUR SHARES
IN PERSON AT THAT TIME, YOU WILL BE ABLE TO DO SO.
<PAGE>
PROSPECTUS/PROXY STATEMENT DATED SEPTEMBER 23, 1999
Acquisition of the Assets of
EATON VANCE CONNECTICUT LIMITED MATURITY MUNICIPALS FUND
and
EATON VANCE MICHIGAN LIMITED MATURITY MUNICIPALS FUND
By and in Exchange for Shares of
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND
The Eaton Vance Building
255 State Street
Boston, Massachusetts 02109
(800) 225-6265
This Prospectus/Proxy Statement relates to the proposed acquisition of the
assets of Eaton Vance Connecticut and Michigan Limited Maturity Municipals Funds
(the "State Funds"), series of Eaton Vance Investment Trust (the "Trust"), which
is a Massachusetts business trust, by Eaton Vance National Limited Maturity Fund
("National Fund"), also a series of the Trust, in exchange for the issuance of
shares, without par value, of National Fund ("National Fund Shares") to the
State Funds and the assumption of all of the State Funds' liabilities by the
National Fund. Following each of the two transfers, National Fund Shares will be
distributed to shareholders of a State Fund in liquidation of that State Fund
and that State Fund will be terminated. As a result, each shareholder of a State
Fund will receive National Fund Shares equal in value to the value of such
shareholder's shares, in each case calculated as of the close of regular trading
on the New York Stock Exchange on the business day immediately prior to the
exchange. This document serves as a Proxy Statement for the Special Meeting of
Shareholders of each State Fund to be held on October 29, 1999 at 1:30 p.m. and
any adjournments and postponements thereof and is being used by the Board of
Trustees of the Funds to solicit the proxies of shareholders in connection
therewith. This document also serves as a Prospectus of National Fund and covers
the proposed issuance of National Fund Shares.
National Fund seeks to provide a high level of current income exempt from
regular federal income tax and limited principal fluctuation.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about National Fund that a
prospective investor should know before investing. This Prospectus/Proxy
Statement is accompanied by the Prospectus of National Fund dated August 1,
1999, which is incorporated by reference herein. A Statement of Additional
Information dated September 23, 1999 containing additional information about
National Fund and the proposed transaction has been filed with the Securities
and Exchange Commission and is incorporated by reference into this
Prospectus/Proxy Statement. A copy of such Statement may be obtained without
charge by writing to the distributor of National Fund, Eaton Vance Distributors,
Inc. ("EVD"), The Eaton Vance Building, 255 State Street, Boston, MA 02109; or
by calling (800) 225-6265.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
PAGE
----
SUMMARY...................................................................... 2
FUND EXPENSES................................................................ 5
PRINCIPAL RISK FACTORS....................................................... 6
REASONS FOR THE REORGANIZATIONS.............................................. 6
INFORMATION ABOUT THE REORGANIZATIONS ....................................... 7
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES............................. 10
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS......................... 12
SHAREHOLDER SERVICES......................................................... 14
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS................................ 14
INFORMATION ABOUT THE FUNDS.................................................. 14
VOTING INFORMATION........................................................... 15
DISSENTERS RIGHTS............................................................ 18
NATIONAL FUND FINANCIAL HIGHLIGHTS........................................... 18
STATE FUNDS FINANCIAL HIGHLIGHTS............................................. 20
EXPERTS...................................................................... 22
OTHER MATTERS................................................................ 22
<PAGE>
SUMMARY
The following is a summary of certain information contained in or
incorporated by reference in this Prospectus/Proxy Statement. This summary is
not intended to be a complete statement of all material features of the proposed
Reorganizations and is qualified in its entirety by reference to the full text
of this Prospectus/Proxy Statement and the documents referred to herein.
PROPOSED TRANSACTIONS. The Trustees of State Funds have approved an
Agreement and Plan of Reorganization for each State Fund (the "Plans"), each
providing for the transfer of all of the assets of a State Fund to National Fund
in exchange for the issuance of National Fund Shares to that State Fund and the
assumption of all of that State Fund's liabilities by the National Fund at a
closing to be held following the satisfaction of the conditions to the
Reorganization (the "Closing"). The form of Plan of Reorganization is attached
hereto as Exhibit A. The value of shares to be issued to a State Fund and its
shareholders will be identical in value to that State Fund's outstanding shares
on the Closing Date. National Fund Shares will be distributed to shareholders of
a State Fund in liquidation of the State Fund and the State Fund will be
terminated. (Each proposed transaction is referred to in this Prospectus/Proxy
Statement as a "Reorganization.") As a result of the Reorganizations, each
shareholder of State Funds will receive full and fractional National Fund Shares
equal in value at the close of regular trading on the New York Stock Exchange on
the Closing Date to the value of such shareholder's shares of a State Fund. At
or prior to the Closing, each State Fund shall declare a dividend or dividends
which, together with all previous such dividends, shall have the effect of
distributing to its shareholders all of its investment company taxable income,
its net tax-exempt interest income, and all of its net capital gains, if any,
realized for the taxable year ending at the Closing. The Trustees, including the
Trustees who are not "interested persons" of the Trust as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), have determined
that the interests of existing shareholders of the Funds will not be diluted as
a result of the transactions contemplated by the Reorganizations and that each
Reorganization is in the best interests of such shareholders.
BACKGROUND FOR THE PROPOSED TRANSACTIONS. The Board of Trustees of the
Funds considered a number of factors, including the proposed terms of the
Reorganizations. The Trustees considered that combining the Funds would produce
economies of scale, which will be reflected in reduced costs per share,
currently resulting in higher pre-tax and after-tax yields for shareholders,
based on regular federal, state and local income taxes. Moreover, the Trustees
considered that, in light of the State Funds' small size, they were not
economically viable for Eaton Vance Management ("Eaton Vance") to sponsor and
manage, and the Reorganizations were a better alternative than liquidation.
THE BOARD OF TRUSTEES OF THE TRUST BELIEVES THAT EACH PROPOSED
REORGANIZATION IS IN THE BEST INTERESTS OF SHAREHOLDERS AND HAS RECOMMENDED THAT
STATE FUND SHAREHOLDERS VOTE FOR THEIR APPLICABLE REORGANIZATION.
2
<PAGE>
PRINCIPAL DIFFERENCES BETWEEN THE FUNDS. There are three differences
between each State Fund and the National Fund in their investment policies.
First, the National Fund can invest in municipal obligations of any state,
although it does not currently intend to invest more than 25% of net assets in
securities of any one state. THE NATIONAL FUND, THEREFORE, WILL GENERALLY NOT
PROVIDE ANY SIGNIFICANT CONNECTICUT OR MICHIGAN TAX-EXEMPT INCOME AND WILL BE
EXPOSED TO THE POLITICAL AND ECONOMIC RISKS OF OTHER STATES AND REGIONS OF THE
UNITED STATES. Moreover, from time to time certain types of municipal securities
may be more available outside Connecticut and Michigan, and, therefore,
shareholders of National Fund will be exposed to the risks of such securities if
National Fund invests in them.
Another difference in investment policies is that the National Fund is
required to invest only 65% of its assets (as opposed to 75% in a State Fund) in
securities of at least investment grade quality (rated Baa by Moody's Investors
Services, Inc. ("Moody's") or BBB by Standard & Poors Ratings Group ("S&P") or
Fitch IBCA ("Fitch")). No Fund, however, can invest more than 10% of its net
assets in obligations rated below B by Moody's, S&P or Fitch. Obligations rated
Baa/BBB have speculative characteristics, while lower rated obligations
(so-called "junk bonds") are predominantly speculative. The ability of National
Fund to invest 10% more of its assets than a State Fund in below investment
grade quality municipal bonds may adversely affect the performance of the
National Fund. It may also provide for higher yields and greater opportunity for
price appreciation.
A final difference is that the National Fund is required to diversify its
assets to a greater extent than a State Fund. As a diversified fund under the
1940 Act, the National Fund with respect to 75% of its total assets may not
invest more than 5% of its total assets in the securities of any one issuer (or
own more than 10% of the outstanding voting securities of any one issuer). The
State Funds must comply with these tests only with respect to 50% of their
assets. Greater diversification generally reduces investment risk, but can limit
potential returns.
The State Funds and the National Fund utilize the master-feeder structure,
whereby they invest all of their assets in separate corresponding investment
companies registered under the Investment Company Act of 1940 (the "1940 Act").
These master funds are referred to herein as the "State Portfolio," the
"National Portfolio" or the "Portfolios."
ADVISORY FEES AND EXPENSES. The Portfolios pay Boston Management and
Research ("BMR"), a wholly-owned subsidiary of Eaton Vance, their investment
adviser, an investment advisory fee based on the same fee schedule according to
assets and income earned.
The expense ratio of each State Fund is substantially higher than that of
National Fund. For the year ended March 31, 1999, the ratio of expenses to net
assets was 1.39% and 2.04% for Class A and B of Connecticut Fund, 1.32% and
2.02% for Class A and Class B of Michigan Fund, and 0.98% and 1.73% for Class A
and Class B of National Fund. Thus, State Fund shareholders will experience an
immediate and substantial reduction in expenses if the Reorganization is
approved. The actual amount of reduction cannot be determined until the Closing.
See "Fund Expenses" below.
3
<PAGE>
DISTRIBUTION ARRANGEMENTS. Shares of each Fund are sold on a continuous
basis by EVD, the Trust's distributor. Class A shares of each Fund are sold at
net asset value per share plus a sales charge; Class B shares of each Fund are
sold at net asset value subject to a contingent deferred sales charge ("CDSC").
The sales charge schedules are identical. In each Reorganization, State Fund
shareholders will receive shares of the corresponding class of National Fund.
Class B shareholders will be given credit for their holding period in a State
Fund in determining any applicable CDSC and the conversion of those shares to
Class A. National Fund offers Class C shares but these shares will not be
affected by the Reorganization.
REDEMPTION PROCEDURES AND EXCHANGE PRIVILEGES. Each Fund offers the same
redemption features pursuant to which proceeds of a redemption are remitted by
wire or check after receipt of proper documents including signature guaranties.
Each Fund has the same exchange privileges. For example, shareholders can
exchange into Eaton Vance Connecticut Municipals Fund or Eaton Vance Michigan
Municipals Fund to receive state specific tax-exempt income. Call Eaton Vance at
1-800-225-6265 for a prospectus.
TAX CONSEQUENCES. The Reorganizations are not expected to result in the
recognition of capital gain or loss to State Fund shareholders or State Funds.
Hale and Dorr LLP is expected to issue tax opinions to that effect.
Nevertheless, each Reorganization will be consummated even if it is taxable,
which means that State Fund shareholders may be required to recognize for tax
purposes a gain or loss depending upon their tax basis (generally, the original
purchase price) for State Fund shares, which includes the amounts paid for
shares issued in reinvested distributions, and the net asset value of the shares
of National Fund received from the Reorganization. Shareholders should consult
their tax advisers. See "INFORMATION ABOUT THE REORGANIZATION - Federal Income
Tax Consequences."
4
<PAGE>
FUND EXPENSES
<TABLE>
SHAREHOLDER AND FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES FOR ALL FUNDS
Class A Class B
Shares Shares
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Charge (Load) (as a percentage of offering price) 2.25% None
Maximum Deferred Sales Charge (Load) None 3.00%
Maximum Sales Charge (Load) Imposed on Reinvested Distributions None None
Exchange Fee None None
</TABLE>
<TABLE>
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
Distribution Total
and Service Annual Fund
Management (12b-1) Other Operating
Fees Fees** Expenses*** Expenses
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Connecticut Fund*
Class A shares 0.46% 0.00% 0.93% 1.39%
Class B shares 0.46 0.84 0.74 2.04
Michigan Fund
Class A shares 0.47% 0.00% 0.85% 1.32%
Class B shares 0.47 0.85 0.70 2.02
National Fund
Class A shares 0.48% 0.00% 0.50% 0.98%
Class B shares 0.48 0.89 0.36 1.73
</TABLE>
* Management Fees payable by the Connecticut Fund were reduced to 0.23% by
the investment adviser.
** Long-term holders of Class B 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 for Class A includes a service fee of 0.19% for the
Connecticut Fund, 0.15% for the Michigan Fund and 0.14% for the National
Fund.
EXAMPLE
This example is intended to help you compare the cost of investing in each Fund
with the cost of investing in other mutual funds. An investor would pay the
following expenses and, in the case of Class A shares, maximum initial sales
charge, or, in the case of Class B shares, the applicable contingent deferred
sales charge on a $10,000 investment, assuming (a) 5% annual return and (b)
redemption at the end of each period (and, for Class B, no redemption):
<TABLE>
1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Connecticut Fund
Class A shares $363 $655 $ 968 $1,856
Class B shares* 507 840 1,098 2,369
Class B shares (no redemption)* 207 640 1,098 2,369
Michigan Fund
Class A shares $356 $634 $ 932 $1,779
Class B shares* 505 834 1,088 2,348
Class B shares (no redemption)* 205 634 1,088 2,348
National Fund
Class A shares $323 $530 $754 $1,399
Class B shares* 476 745 939 2,041
Class B shares (no redemption)* 176 545 939 2,041
</TABLE>
* Costs for 5 years and 10 years reflect the expenses of Class A because
Class B shares generally convert to class A after four years.
5
<PAGE>
PRINCIPAL RISK FACTORS
As discussed above under "Principal Differences Between the Funds," the
National Fund has three investment policies that differ from each State Fund.
These differences relate to concentration in state issuers, credit quality and
diversification. These differences will affect returns to State Fund
shareholders if the Reorganizations are consummated.
The current investment portfolios are different. It is anticipated most of
each State Fund's portfolio securities will be retained after its
Reorganization, but such securities will constitute only a small part of the
overall investment portfolio of National Portfolio.
REASONS FOR THE REORGANIZATIONS
The Reorganizations have been considered by the Board of Trustees of the
Funds. In reaching the decision to recommend that the shareholders of each State
Fund vote to approve the Reorganizations, the Trustees, including the Trustees
who are not interested persons of the Trust, concluded that the Reorganizations
would be in the best interests of Fund shareholders and that the interests of
existing shareholders would not be diluted as a consequence thereof. In making
this determination, the Trustees considered a number of factors, including the
proposed terms of the Reorganizations.
PROJECTED AFTER-TAX RETURNS FOR STATE FUND SHAREHOLDERS
The Trustees considered that combining the Funds would produce economies of
scale, which will be reflected in higher pre-tax and after-tax yields for
shareholders of each Fund. Based on annualized yields for the 30-day period
ended August 31, 1999, most State Fund shareholders would realize the following
increase in income:
<TABLE>
CONNECTICUT LIMITED FUND MICHIGAN LIMITED FUND
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
<S> <C> <C> <C> <C>
National Fund Yield 4.78% 4.14% 4.78% 4.14%
State Tax Liability1 (0.13%) (0.11%) (0.16%) (0.14%)
After Tax Yield 4.65% 4.03% 4.62% 4.00%
Current State Fund Yield 3.59% 2.94% 3.35% 2.73%
Net Increase in Income 1.06% 1.09% 1.27% 1.27%
</TABLE>
___________________
1 Assumes maximum state and local income tax rates, and no portion of the
income of National Fund is exempt from Connecticut or Michigan taxes. Does
not take into account the effect of federal alternative minimum tax or net
Connecticut minimum tax.
6
<PAGE>
For current yield information, call EVD at 800-225-6265. Yield will vary and is
only one component of total return. Shareholders should consider their own
circumstances which may result in the Reorganization not being advantageous to
them. For example, as of August 31, 1999, 29.5% of the income of National Fund
was subject to the federal alternative minimum tax, as opposed to 4.3% for
Connecticut and 18.5% for Michigan.
Moreover, the Board of Trustees considered that, in light of the State
Funds small size, they may not be economically viable for Eaton Vance to
continue sponsor and manage, and the Reorganizations were a better alternative
than liquidation.
THE BOARD OF TRUSTEES OF THE FUNDS BELIEVES THAT EACH PROPOSED
REORGANIZATION IS IN THE BEST INTERESTS OF SHAREHOLDERS AND RECOMMENDS THAT
STATE FUND SHAREHOLDERS VOTE FOR THEIR APPLICABLE REORGANIZATION.
INFORMATION ABOUT THE REORGANIZATIONS
At a meeting held on August 16, 1999, the Board of Trustees of the Funds
approved a Plan for each State Fund in the form set forth as Exhibit A to this
Prospectus.
AGREEMENTS AND PLANS OF REORGANIZATION. The Agreement and Plan of
Reorganization for each Fund provides that, at the Closing, National Fund will
acquire all of the assets of a State Fund in exchange for the issuance of
National Fund Shares to that State Fund and the National Fund will assume all of
the liabilities of the State Fund reflected on its unaudited statement of assets
and liabilities. The State Fund assets to be acquired will consist of each State
Fund's share of the securities and other assets held by the corresponding State
Portfolio, withdrawn by the State Fund from that Portfolio at or immediately
prior to the Closing. Immediately upon receipt of these assets, National Fund
will contribute them to the National Portfolio. The value of Class A and/or
Class B shares issued to a State Fund by National Fund will be the same as the
value of Class A and/or Class B shares that the State Fund has outstanding on
the Closing Date. The National Fund shares received by the State Fund will be
distributed to State Fund shareholders, and each State Fund shareholder will
receive shares of the corresponding class of National Fund equal in value to
those of State Fund held by such shareholder.
National Fund will assume all liabilities, expenses, costs, charges and
reserves of State Fund on the Closing Date. At or prior to the Closing, each
State Fund shall declare a dividend or dividends which, together with all
previous such dividends, shall have the effect of distributing to that State
Fund's shareholders all of State Fund's investment company taxable income, net
tax-exempt interest income, and net capital gain, if any, realized (after
reduction for any available capital loss carry-forward) in all taxable years
ending at or prior to the Closing.
At or as soon as practicable after a Closing, the relevant State Fund will
liquidate and distribute pro rata to its shareholders of record as of the Close
of Trading on the New York Stock Exchange on the Closing Date the full and
fractional National Fund Class A and/or Class B Shares equal in value to the
7
<PAGE>
State Fund shares exchanged. Such liquidation and distribution will be
accomplished by the establishment of shareholder accounts on the share records
of National Fund in the name of each such shareholder of State Fund,
representing the respective pro rata number of full and fractional National Fund
Class A and/or Class B Shares due such shareholder. All of National Fund's
future distributions attributable to the shares issued in the Reorganization
will be paid to shareholders in cash or invested in additional shares of
National Fund at the price in effect as described in National Fund's prospectus
on the respective payment dates in accordance with instructions previously given
by the shareholder to the Trust's transfer agent.
The consummation of each Plan is subject to the conditions set forth
therein. Notwithstanding approval by shareholders of a State Fund, a Plan may be
terminated at any time prior to the consummation of the Reorganization without
liability on the part of either party or its respective officers, trustees or
shareholders, by either party on written notice to the other party if certain
specified representations and warranties or conditions have not been performed
or do not exist on or before February 28, 2000. The Plan may be amended by
written agreement of its parties without approval of the shareholders of a State
Fund and a party may waive without shareholder approval any default by the other
or any failure to satisfy any of the conditions to its obligations; provided,
however, that following the Special Meeting, no such amendment or waiver may
have the effect of changing the provision for determining the number of National
Fund Shares to be issued to State Fund shareholders to the detriment of such
shareholders without their further approval.
Each Fund will bear its expenses related to the Reorganization.
DESCRIPTION OF NATIONAL FUND SHARES. Full and fractional Class A and/or
Class B shares of National Fund will be distributed to State Funds shareholders
in accordance with the procedures under the Plans as described above. Each share
will be fully paid, non-assessable when issued and transferable without
restrictions and will have no preemptive or cumulative voting rights and have
only such conversion or exchange rights as the Board of Trustees of the Trust
may grant in its discretion.
FEDERAL INCOME TAX CONSEQUENCES. It is expected that each Reorganization
should qualify as a tax-free transaction under Section 368(a) of the Internal
Revenue Code, which is expected to be confirmed by the legal opinion of Hale and
Dorr LLP at the Closing. Accordingly, shareholders of State Funds should not
recognize any capital gain or loss and State Funds' assets and capital loss
carryforwards should be transferred to National Fund without recognition of gain
or loss.
It is possible, however, that a Reorganization may fail to satisfy all of
the requirements necessary for tax-free treatment, in which event the
transaction will nevertheless proceed on a taxable basis. In this event, a
Reorganization will result in the recognition of gain or loss to State Funds'
shareholders depending upon their tax basis (generally, the original purchase
price) for their State Funds shares, which includes the amounts paid for shares
8
<PAGE>
issued in reinvested distributions, and the net asset value of shares of
National Fund received in a Reorganization. Shareholders of State Funds would,
in the event of a taxable transaction, receive a new tax basis in the shares
they receive of National Fund (equal to their initial value) for calculation of
gain or loss upon their ultimate disposition and would start a new holding
period for such shares.
Shareholders should consult their tax advisers regarding the effect, if
any, of a proposed Reorganization in light of their individual circumstances.
Because the foregoing discussion relates only to the federal income tax
consequences of the Reorganizations, shareholders should also consult their tax
advisers as to state and local tax consequences, if any.
CAPITALIZATION. The following table (which is unaudited) sets forth the
capitalization of State Funds and National Fund as of August 31, 1999, and on a
pro forma basis as of that date giving effect to the proposed acquisition of
assets of both State Funds at net asset value.
<TABLE>
Pro Forma
Combined After
Connecticut Fund Michigan Fund National Fund Reorganization
(Class A) (Class B) (Class A) (Class B) (Class A) (Class B) (Class A) (Class B)
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets $7,042,143 $1,186,656 $9,348,699 $ 575,284 $68,042,839 $5,183,126 $84,433,681 $6,945,066
Net asset value per share $ 9.77 $ 9.76 $ 9.50 $ 9.50 $ 10.13 $ 10.12 $ 10.13 $ 10.12
Shares outstanding 695,177 117,258 922,873 56,846 6,719,656 511,982 8,337,706 686,086
</TABLE>
INVESTMENT PERFORMANCE. Average annual total return is determined by
multiplying a hypothetical initial purchase order of $1,000 by the average
annual compound rate of return (including capital appreciation/depreciation, and
dividends and distributions paid and reinvested) for the stated period and
annualizing the result. The calculation assumes that all dividends and
distributions are reinvested at net asset value on the reinvestment dates.
The table below indicates the average annual total return (excluding a
sales charge) (capital change plus reinvestment of all distributions) on a
hypothetical investment of $1,000 in each Fund, covering the one and five year
periods and life of Fund ended March 31, 1999.
<TABLE>
VALUE OF A $l,000 INVESTMENT
Connecticut Fund Michigan Fund National Fund
Total Return Total Return Total Return
------------ ------------ ------------
Class A Class B Class A Class B Class A Class B
Investment Average Average Average Average Average Average
Period Annual Annual Annual Annual Annual Annual
- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
1 Year 4.45% 3.90% 3.53% 3.06% 3.89% 3.29%
5 Years 5.10% 4.79% 5.03% 4.70% 5.38% 4.99%
Life of Fund* 4.39% 4.13% 4.27% 3.99% 5.53% 5.24%
</TABLE>
- ------
* Inception of Connecticut Fund Class A and Class B was January 21, 1997 and
April 16, 1993, respectively; of Michigan Fund Class A and Class B was
October 22, 1996 and April 16, 1993, respectively; and of National Fund
Class A and Class B was June 27, 1996 and May 22, 1992, respectively.
9
<PAGE>
Investment results will fluctuate over time, and prior performance should
not be considered as a representation of what an investment may earn or what an
investor's total return may be in any future period.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The total returns of National
Fund and the factors that materially affected the Fund's performance during the
most recent fiscal year are contained in the Fund's annual report dated March
31, 1999, relevant portions of which are attached hereto as Exhibit B and such
portions are incorporated by reference herein.
The performance of State Funds is described under the caption "Management's
Discussion" in the Annual Report of State Funds for the year ended March 31,
1999, which was previously mailed to State Funds shareholders.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of each Fund are identical except as
set forth in the "Summary" above. Summary information about the investment
objectives and policies of each State Fund and National Fund is set forth below.
More complete information regarding the same is set forth in the Prospectus
dated August 1, 1999 of National Fund, enclosed herewith, in the Statement of
Additional Information also dated August 1, 1999 of National Fund, and the
Prospectus and Statement of Additional Information each dated August 1, 1999 of
State Funds, each of which has been filed with the Securities and Exchange
Commission. Shareholders should consult such Prospectuses and Statements of
Additional Information, as supplemented, for a more thorough comparison.
INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT POLICIES AND RISKS OF STATE
FUNDS. The investment objective of each State Fund is to provide a high level of
current income exempt from regular federal income tax and from particular state
or local income or other taxes, and limited principal fluctuation. Each State
Fund primarily invests in investment grade municipal obligations (those rated
BBB or Baa or higher), but may also invest in lower quality obligations. Each
Fund invests in obligations having a dollar weighted average duration of between
three and nine years, although individual municipal obligations may be of any
maturity. Duration represents the dollar weighted average maturity of expected
cash flows (i.e., interest and principal payments) on one or more municipal
obligations, discounted to their present values.
Each Fund may concentrate in certain types of municipal obligations (such
as industrial development bonds, housing bonds, hospital bonds or utility
bonds), so Fund shares could be affected by events that adversely affect a
particular sector. Each Fund may purchase derivative instruments (such as
futures contracts and options thereon), bonds that do not require the periodic
payment of interest, bonds issued on a "when issued" basis and municipal leases.
A portion of each Fund's distributions generally will be subject to federal
alternative minimum tax.
10
<PAGE>
The portfolio manager purchases and sells securities to maintain a
competitive yield and to enhance return based upon the relative value of the
securities in the marketplace. The portfolio manager may also trade securities
to minimize taxable capital gains to shareholders. The manager attempts to limit
principal fluctuation by investing in a portfolio of obligations having a dollar
weighted average duration of between three and nine years.
Each Fund currently invests its assets in a separate registered investment
company with the same investment objective and policies as that Fund.
Because a significant portion of assets is invested in obligations of
issuers located in a single state, each Fund is sensitive to factors affecting
that state, such as changes in the economy, decreases in tax collection or the
tax base, legislation which limits taxes and changes in issuer credit ratings.
Each Fund is non-diversified, which means that it may invest a larger portion of
its assets in the obligations of a limited number of issuers than a diversified
fund, and may be adversely affected by developments affecting a particular
issuer.
Because obligations rated BBB or Baa and below (so-called "junk bonds") are
more sensitive to the financial soundness of their issuers than higher quality
obligations, Fund shares may fluctuate more in value than shares of a fund
investing solely in higher quality obligations. Obligations rated BBB or Baa
have speculative characteristics, while lower rated obligations are
predominantly speculative.
The value of Fund shares may change when interest rates change. When
interest rates rise, the value of Fund shares typically will decline. Fund
yields will also fluctuate over time. A Fund's use of derivatives is subject to
certain limitations and may expose the Funds to increased risk of principal loss
due to imperfect correlation, failure of the counterparty and unexpected price
or interest rate movements.
When-issued securities are subject to the risk that when delivered to the
Fund they will be worth less than the price the Fund agreed to pay for them.
Municipal leases often require a legislative appropriation of funds for payment.
If the necessary appropriation is not made, the issuer of the lease may not be
able to meet its obligations.
INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT POLICIES AND RISKS OF
NATIONAL FUND. The investment objective of National Fund is to provide a high
level of current income exempt from regular federal income tax and limited
principal fluctuation. The Fund primarily invests in investment grade municipal
obligations (those rated BBB or Baa or higher), but may also invest in lower
quality obligations. The Fund invests in obligations having a dollar weighted
average duration of between three and nine years, although individual municipal
obligations may be of any maturity. Duration represents the dollar weighted
average maturity of expected cash flows (i.e., interest and principal payments)
on one or more municipal obligations, discounted to their present values.
11
<PAGE>
The Fund may concentrate in certain types of municipal obligations (such as
industrial development bonds, housing bonds, hospital bonds or utility bonds),
so Fund shares could be affected by events that adversely affect a particular
sector. The Fund may purchase derivative instruments (such as futures
contracts), bonds that do not require the periodic payment of interest, bonds
issued on a "when issued" basis and municipal leases. A portion of the Fund's
distributions generally will be subject to federal alternative minimum tax.
The portfolio manager purchases and sells securities to maintain a
competitive yield and to enhance return based upon the relative value of the
securities in the marketplace. The portfolio manager may also trade securities
to minimize taxable capital gains to shareholders. The manager attempts to limit
principal fluctuation by investing in a portfolio of obligations having a dollar
weighted average duration of between three and nine years.
The Fund currently invests its assets in National Limited Maturity
Municipals Portfolio, a separate registered investment company with the same
investment objective and policies as the Fund.
Because obligations rated BBB or Baa and below are more sensitive to the
financial soundness of their issuers than higher quality obligations, Fund
shares may fluctuate more in value than shares of a fund investing solely in
higher quality obligations. Obligations rated BBB or Baa have speculative
characteristics, while lower rated obligations (so-called "junk bonds") are
predominantly speculative.
The value of Fund shares may change when interest rates change. When
interest rates rise, the value of Fund shares typically will decline. Fund
yields will also fluctuate over time. The Fund's use of derivatives is subject
to certain limitations and may expose the Fund to increased risk of principal
loss due to imperfect correlation, failure of the counterparty and unexpected
price or interest rate movements.
When-issued securities are subject to the risk that when delivered to the
Fund they will be worth less than the price the Fund agreed to pay for them.
Municipal leases often require a legislative appropriation of funds for payment.
If the necessary appropriation is not made, the issuer of the lease may not be
able to meet its obligations.
INVESTMENT ADVISER AND PORTFOLIO MANAGER. Boston Management and Research
("BMR"), a wholly-owned subsidiary of Eaton Vance, serves as investment adviser
to each Portfolio. William H. Ahern, Jr. is the portfolio manager of each
Portfolio. He also manages other Eaton Vance portfolios, and has been an Eaton
Vance portfolio manager for more than 5 years, and is a Vice President of Eaton
Vance and BMR.
COMPARATIVE INFORMATION ON DISTRIBUTION ARRANGEMENTS
EVD serves as distributor (principal underwriter) for all Funds, pursuant
to Distribution Agreements. For its services as underwriter, EVD generally
receives fees for sales of shares. With respect to Class A shares, these fees
are paid by investors at the time they purchase shares. Class A shares are sold
12
<PAGE>
on a continuous basis at net asset value plus a sales charge as set forth in the
Prospectus. The applicable sales charge depends upon a number of factors and is
subject to a number of waivers. No sales charge will be imposed with respect to
the National Fund Shares received by the State Fund shareholders pursuant to the
Reorganization. Class B shares are sold at net asset value but are subject to a
declining CDSC (3% maximum) if redeemed within four years of purchase. National
Fund also offers Class C shares, which are sold at net asset value subject to a
1% CDSC if redeemed within one year of purchase. Because neither State Fund
offers Class C shares, no Class C shares of National Fund will be issued in
connection with the Reorganization.
Each Fund is authorized under a Service Plan (the "Service Plan") for the
Class A Shares to make payments for personal services and/or the maintenance of
shareholder accounts. The Plan provides that each Fund may pay service fees to
EVD, financial service firms ("Authorized Firms") and other persons in amounts
not exceeding .25% of a Fund's average daily net assets for any fiscal year. The
Trustees have initially implemented the Service Plan by authorizing the Funds to
make quarterly service fee payments to EVD and Authorized Firms in amounts not
expected to exceed .15% of the Fund's average daily net assets for any fiscal
year based on the value of each Fund's shares sold by such persons and remaining
outstanding for at least twelve months.
Each Fund has also adopted a Distribution Plan pursuant to Rule 12b-1 under
the 1940 Act for its Class B shares. The Plan is designed to permit an investor
to purchase shares through an Authorized Firm without incurring an initial sales
charge and at the same time permit the Principal Underwriter to compensate
Authorized Firms in connection therewith. Under such Plans, Class B 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 Authorized Firms on the sale of Class B shares and for
interest expenses. Under each Class B Plan, the Principal Underwriter uses its
own funds to pay sales commissions (except on exchange transactions and
reinvestments) to Authorized Firms at the time of sale equal to 2.5% of the
purchase price of the Class B shares sold by such Firms. CDSCs paid to the
Principal Underwriter will be used to reduce amounts owed to it. Because
payments to the Principal Underwriter under the Plan are limited, uncovered
distribution charges (sales commissions due the Principal Underwriter plus
interest, less the above fees and CDSCs received by it) may exist indefinitely.
Through August 31, 1999, the outstanding uncovered distribution charges
calculated under the Plan for the Connecticut and Michigan Funds amounted to
approximately $222,000 and $382,000, respectively. An amount equal to the
contingent deferred sales charge that would be assessed on State Fund Class B
shares if redeemed on the Closing Date will become a liability of National Fund
Class B if the Reorganization is consummated. As of August 31, 1999, this amount
would have been $24,869 being $12,482 and $12,387 for the Connecticut and
Michigan Funds, respectively.
The Class B Plan also authorizes each Class B to make payments of service
fees to the Principal Underwriter, Authorized Firms and other persons in amounts
not exceeding .15% of its average daily net assets for personal services, and/or
the maintenance of shareholder accounts. Under the Class B Plan, this fee is
paid quarterly in arrears based on the value of Class B shares sold by such
persons and remaining outstanding for at least twelve months.
13
<PAGE>
SHAREHOLDER SERVICES
SHAREHOLDER SERVICES. There are no differences in the shareholder services
offered by the Funds.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
GENERAL. Each Fund is a separate series of Eaton Vance Investment Trust
(the "Trust"), a Massachusetts business trust, governed by an Amended and
Restated Declaration of Trust dated January 11, 1993, as amended and applicable
Massachusetts law.
SHAREHOLDER LIABILITY. Under Massachusetts law, shareholders of a
Massachusetts business trust could, under certain circumstances, be held
personally liable for the obligations of the trust, including its other series.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the trust and other series of the trust and requires that notice
of such disclaimer be given in each agreement, obligation, or instrument entered
into or executed by the trust or the trustees. Indemnification out of the trust
property for all losses and expenses of any shareholder held personally liable
by virtue of his status as such for the obligations of the trust is provided for
in the Declaration of Trust and By-laws. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is considered to be
remote since it is limited to circumstances in which the respective disclaimers
are inoperative and the series would be unable to meeting their respective
obligations.
Copies of the Declaration of Trust may be obtained from the Trust upon
written request at its principal office or from the Secretary of State of the
Commonwealth of Massachusetts.
INFORMATION ABOUT THE FUNDS
Information about National Fund is included in its current Prospectus dated
August 1, 1999, a copy of which is included herewith and incorporated by
reference herein. Additional information about National Fund is included in the
Statement of Additional Information dated August 1, 1999. This Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated by reference herein. Copies of this Statement may
be obtained without charge by writing to Eaton Vance Distributors, Inc., The
Eaton Vance Building, 255 State Street, Boston, MA 02109. Information concerning
the operations and management of the State Funds is incorporated herein by
reference from their current Prospectus and Statement of Additional Information,
each dated August 1, 1999, copies of which may be obtained without charge by
writing Eaton Vance Investment Trust at The Eaton Vance Building, 255 State
Street, Boston, MA 02109 or by calling (800) 225-6265.
The Trust, on behalf of each Fund, is currently subject to the
informational requirements of the Securities Exchange Act of 1934, an amended
(the "1934 Act"), and in accordance therewith files proxy material, reports and
other information with the Securities and Exchange Commission. These reports can
be inspected and copied at the Public Reference Facilities maintained by the
Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
14
<PAGE>
Washington, DC 20549, as well as at the following regional offices: Northeast
Regional Office, 7 World Trade Center, Suite 1300 New York, NY 10048; and
Midwest Regional Office, Citicorp Center, 500 W. Madison Street, Suite 1400,
Chicago, IL 60661-2511. Copies of such material can also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington DC 20549 at prescribed rates.
EATON VANCE. Eaton Vance, its affiliates and predecessor companies have
been managing assets of individuals and institutions since 1924 and of
investment companies since 1931. Eaton Vance manages assets of over $39 billion.
Eaton Vance is a wholly-owned subsidiary of Eaton Vance Corp., a holding company
with publicly traded stock. Eaton Vance Corp., through its subsidiaries and
affiliates, engages in investment management, administration and marketing
activities.
Eaton Vance's advisory fee revenue is likely to increase slightly if the
Reorganizations are consummated. This is because Eaton Vance has voluntarily
waived one-half of its advisory fee to which it is contractually entitled from
the Connecticut Portfolio. In addition, because advisory fees are based, in
part, on income earned and the National Portfolio's holdings normally generate a
higher yield than the State Portfolios, advisory fee revenues will be higher.
Based on assets and yields on August 31, 1999, the total additional revenues to
Eaton Vance would be approximately $22,000 per annum.
VOTING INFORMATION
Proxies from the shareholders of the State Funds are being solicited by the
Trust's Board of Trustees for the Special Meeting of Shareholders and any
adjournments thereof (the "Special Meeting"). The Special Meeting is scheduled
to be held at the offices of the Trust, The Eaton Vance Building, 255 State
Street, Boston, Massachusetts on October 29, 1999 at 1:30 p.m. At the Special
Meeting, shareholders of each State Fund will be asked to consider and vote upon
their Plan. The approval of the Reorganization by shareholders of National Fund
is not required under the Declaration of Trust or By-laws or under Massachusetts
law, and accordingly, shareholders of National Fund will not be voting in
connection with the Reorganization.
Any person giving a proxy may revoke it at any time prior to its use. A
shareholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Trust at its
address set forth above; by filing a duly executed proxy bearing a later date;
or by appearing in person, notifying the Secretary and voting by ballot at the
Special Meeting. A written proxy may be delivered to the Fund or its transfer
agent prior to the meeting by facsimile machine, graphic communication equipment
or similar electronic equipment. Any shareholder of record as of the record date
attending the Special Meeting may vote in person whether or not a proxy has been
previously given, but the presence (without further action) of a shareholder at
15
<PAGE>
the Special Meeting will not constitute revocation of a previously given proxy.
The enclosed form of proxy, if properly executed and received by the Board of
Trustees in time for voting and not so revoked, will be voted in accordance with
the instructions noted thereon. If no instructions are given, the proxy will be
voted FOR approval of the Agreement and Plan of Reorganization, and, at the
discretion of the proxy holders, on any other matters that may properly come
before the Special Meeting.
The affirmative vote of the holders of a majority of the outstanding shares
of a State Fund as defined in the 1940 Act is required to approve its Plan. Such
"majority" vote is the vote of the holders of the lesser of (a) 67% or more of
the shares present or represented by proxy at the Special Meeting, if the
holders of more than 50% of the outstanding shares are present or represented by
proxy, or (b) 50% of the outstanding shares of the State Fund. Class A and Class
B shareholders will vote together as a class. Approval of the Agreement and Plan
of Reorganization by the shareholders of a State Fund is a condition of the
consummation of the Reorganization. Each State Fund will vote separately and
their reorganizations could be consummated on different days.
For purposes of determining the presence of a quorum for transacting
business at the Special Meeting and for determining whether sufficient votes
have been received for approval of the proposal to be acted upon at the Special
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have discretionary power)
will be treated as shares that are present at the Special Meeting and entitled
to vote on the matter, but which have not been voted. For this reason,
abstentions and broker non-votes will assist State Funds in obtaining a quorum;
both have the practical effect of a "no" vote for purposes of obtaining the
requisite vote for approval of the proposal to be acted upon at the Special
Meeting.
If the Reorganization is consummated, legal fees and the costs of
soliciting proxies (comprised of printing and postage expenses) estimated at
$20,000 per State Fund will be considered as part of the total expenses of the
Reorganization. The Board of Trustees expects that this solicitation will be
made primarily by mail. Additional solicitations may be made, without
remuneration, personally or by telephone by officers or employees of Eaton Vance
or its affiliates, or for remuneration by a solicitation firm.
Shareholders of the State Funds of record at the close of business on
September 15, 1999 (the "record date") will be entitled to vote at the Special
Meeting. The holders of a majority of the shares of a State Fund outstanding at
the close of business on the record date present in person or represented by
proxy will constitute a quorum for the meeting; however, as noted above, the
affirmative vote of a majority of the shares of a Fund (as defined in the 1940
Act) is required to approve the Reorganization. In the event a quorum is not
present at the Special Meeting or in the event a quorum is present at the
Special Meeting but sufficient votes to approve the Agreement and Plan of
Reorganization are not received, the persons named as proxies may propose one or
16
<PAGE>
more adjournments of the Special Meeting to permit further solicitation of
proxies, provided they determine such an adjournment and additional solicitation
is reasonable and in the interest of shareholders based on a consideration of
all relevant factors, including the percentage of votes then cast, the
percentage of negative votes then cast, the nature of the proposed solicitation
activities and the nature of the reasons for such further solicitation.
Shareholders are entitled to the number of votes equal to the number of
shares held by such shareholder. As of September 15, 1999, there were
838,653.675 and 1,037,743.054 issued and outstanding shares of beneficial
interest of the Connecticut and Michigan Funds, respectively. As of the record
date, the following record owners held the amounts of shares indicated below,
which were held either (i) individually or (ii) on behalf of their customers who
are the beneficial owners of such shares and as to which they have voting power
under certain limited circumstances: Class A shares Connecticut Fund - Merrill
Lynch, Pierce, Fenner & Smith, Inc., Jacksonville, FL, 17.3% and PaineWebber FBO
Catharine W. Reid RMA, Bloomfield, CT, 7.9%; Class A shares Michigan Fund -
Merrill Lynch, Pierce, Fenner & Smith, Inc., Jacksonville, FL, 15.3%; Class B
shares Connecticut Fund - Merrill Lynch, Pierce, Fenner & Smith, Inc.,
Jacksonville, FL, 33.9%, Prudential Securities FBO Mrs. Catherine Calia, New
Haven, CT, 9.2% and Andrew L. MacWhinney & Dorothy P. MacWhinney, Essex, CT,
7.3%; and Class B shares Michigan Fund - Donaldson Lufkin Jenrette Securities
Corporation, Inc., Jersey City, NJ, 17%, Donaldson Lufkin Jenrette Securities
Corporation, Inc., Jersey City, NJ, 12.2%, Harley M. Robinette and Margaret C.
Robinette, JTWROS, Adrian, MI, 11.5% and Pat Marrocca & Ruby Marrocca, JTWROS,
Taylor, MI, 6.7%.
As of the record date, the Trustees and officers of the Trust as a group
owned less than one percent of the outstanding shares of the Connecticut,
Michigan and National Funds.
THE TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES,
RECOMMEND APPROVAL OF THE PLANS OF REORGANIZATION.
17
<PAGE>
DISSENTERS RIGHTS
Neither the Declaration of Trust nor Massachusetts law grants the
shareholders of State Funds any rights in the nature of dissenters rights of
appraisal with respect to any action upon which such shareholders may be
entitled to vote; however, the normal right of mutual fund shareholders to
redeem their shares is not affected by the proposed Reorganization.
NATIONAL FUND FINANCIAL HIGHLIGHTS
The financial highlights are intended to help you understand a Fund's
financial performance for the past five years. Certain information in the table
reflects the financial results for a single Fund share. The total returns in the
table represents the rate an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all distributions and not
taking into account a sales charge). This information has been audited by
Deloitte & Touche LLP, independent accountants. The report of Deloitte & Touche
LLP and the National Fund's financial statements are incorporated herein by
reference and included in the annual report, which is available on request. The
National Fund began offering three class of shares on April 1, 1998. Prior to
that date, the National Fund offered only Class A and Class B shares and Class C
existed as a separate fund.
<TABLE>
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A(1) CLASS B CLASS B CLASS B
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF YEAR $10.580 $10.580 $10.070 $10.070 $10.030 $10.170 $10.130 $10.160
------- ------- ------- ------- ------- ------- ------- --------
Income from operations
Net investment income $ 0.519 $ 0.412 $ 0.527 $ 0.454(2) $ 0.393 $ 0.428 $ 0.413 $ 0.400
Net realized and unrealized gain (loss) (0.090) (0.066) 0.488 0.488 0.033(3) (0.098) 0.040 0.033
-------- -------- -------- -------- ------- ------- ------- --------
TOTAL INCOME FROM OPERATIONS $ 0.429 $ 0.346 $ 1.105 $ 0.942 $ 0.426 $ 0.330 $ 0.453 $ 0.433
------- ------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment income $(0.519) $ (0.436) $ (0.505) $ (0.432) $ (0.386) $ (0.430) $ (0.413) $ (0.400)
In excess of net investment income --- --- --- --- --- --- --- (0.058)
From net realized gain on investments --- --- --- --- --- --- --- (0.005)
-------- --------- --------- --------- --------- --------- --------- --------
TOTAL DISTRIBUTIONS $(0.519) $ (0.436) $ (0.505) $ (0.432) $ (0.386) $ (0.430) $ (0.413) $ (0.463)
--------- --------- --------- --------- --------- --------- --------- --------
NET ASSET VALUE - END OF YEAR $10.490 $10.490 $10.580 $10.580 $10.070 $10.070 $10.170 $10.130
======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN (4) 3.89% 3.29% 10.50% 9.52% 4.06% 3.30% 4.51% 4.43%
Ratios / Supplemental Data
Net assets, end of year (000's omitted) $73,048 $5,450 $59,992 $11,538 $37,072 $48,692 $112,027 $141,289
Ratios (as a percentage of average
daily net assets):
Expenses (5)(6) 0.98% 1.73% 0.99% 1.73% 0.99%(7) 1.69% 1.64% 1.57%
Expenses after custodian fee 0.97% 1.72% 0.98% 1.72% 0.97%(7) 1.67% 1.63% ---
reduction (5)
Net investment income 4.96% 4.23% 5.16% 4.42% 5.14%(7) 4.37% 4.04% 3.99%
Portfolio Turnover of the Portfolio 26% 26% 41% 41% 68% 68% 68% 56%
</TABLE>
18
<PAGE>
(1) For the period from the start of business, June 27, 1996, to March 31,
1997.
(2) Net investment income per share was computed using average shares
outstanding.
(3) The per share amount is not in accord with the net realized and unrealized
gain (loss) on investments for the period because of the timing of sales of
Fund shares and the amount of the per share realized and unrealized gains
and losses at such time.
(4) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Distributions, if any, are assumed to be reinvested at the
net asset value on the reinvestment date. Total return is not computed on
an annualized basis.
(5) Includes the Fund's share of the Portfolio's allocated expenses.
(6) The expense ratios for the year ended March 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as the Portfolio, to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratio for the year ended March 31,
1995 has not been adjusted to reflect this change.
(7) Annualized.
19
<PAGE>
STATE FUNDS FINANCIAL HIGHLIGHTS
The financial highlights are intended to help you understand a Fund's
financial performance for the past five years. Certain information in the tables
reflects the financial results for a single Fund share. The total returns in the
tables represent the rate an investor would have earned (or lost) on an
investment in the State Funds (assuming reinvestment of all distributions and
not taking into account a sales charge). This information has been audited by
Deloitte & Touche LLP, independent accountants. The report of Deloitte & Touche
LLP and the State Funds' financial statements are incorporated herein by
reference and included in the State Funds' annual report, which is available on
request. Connecticut Fund and Michigan Fund began offering Class A and Class B
shares in 1997 and 1996, respectively.
<TABLE>
CONNECTICUT FUND
-------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF YEAR $10.110 $10.110 $ 9.790 $ 9.790 $ 9.870 $ 9.850 $ 9.690 $ 9.690
------- ------- -------- -------- -------- -------- -------- --------
Income (loss) from operations
Net investment income $ 0.431 $ 0.365 $ 0.429 $ 0.357(1) $ 0.087 $ 0.398 $ 0.379 $ 0.373
Net realized and unrealized gain (loss) 0.031 0.025 0.333 0.333 (0.082) (0.089) 0.150 0.026
-------- -------- -------- -------- --------- --------- ------- --------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.462 $ 0.390 $ 0.762 $ 0.690 $ 0.005 $ 0.309 $ 0.529 $ 0.399
------- ------- ------- ------- ------- ------- ------- -------
Less distributions
From net investment income $(0.431) $ (0.370) $ (0.429) $ (0.370) $ (0.085) $ (0.369) $ (0.369) $ (0.373)
In excess of net investment income (0.011) --- (0.013) --- --- --- --- (0.026)
-------- --------- ---------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS $(0.442) $ (0.370) $ (0.442) $ (0.370) $ (0.085) $ (0.369) $ (0.369) $ (0.399)
--------- --------- --------- --------- --------- --------- --------- --------
NET ASSET VALUE - END OF YEAR $10.130 $ 10.130 $10.110 $10.110 $ 9.790 $ 9.790 $ 9.850 $ 9.690
======= ======= ======= ======= ======== ======== ======== ========
TOTAL RETURN (5) 4.45% 3.90% 7.99% 7.02% (0.13)% 3.21% 5.50% 4.27%
Ratios / Supplemental Data
Net assets, end of year (000's omitted) $ 7,514 $ 1,410 $ 6,034 $ 2,531 $ 586 $ 10,227 $13,014 $15,613
Ratios (as a percentage of average
daily net assets):
Expenses (6)(7) 1.16% 1.81% 1.20% 1.92% 0.70%(8) 1.72% 1.53% 1.23%
Expenses after custodian fee reduction(5) 1.13% 1.78% 1.18% 1.90% 0.66%(8) 1.68% 1.49% ---
Net investment income 4.25% 3.60% 4.26% 3.62% 5.06%(8) 3.93% 3.78% 3.89%
Portfolio Turnover of the Portfolio 5% 5% 23% 23% 46% 46% 52% 73%
+ The operating expenses of the Fund reflect a reduction of the investment
adviser fee, an allocation of expenses to the adviser or administrator, or
both. Had such action not been taken, the ratios and investment income per
share would have been as follows:
Ratios (as a percentage of average daily
net assets):
Expenses (6)(7) 1.39% 2.04% 1.43% 2.15% 0.94%(8) 1.96% 1.86% 1.81%
Expenses after custodian fee
reduction (6) 1.36% 2.01% 1.41% 2.13% 0.90%(8) 1.92% --- ---
Net investment income 4.02% 3.37% 4.03% 3.39% 4.82%(8) 3.69% 3.45% 3.31%
Net investment income per share $ 0.408 $ 0.342 $ 0.406 $ 0.334 $ 0.083 $ 0.374 $ 0.346 $ 0.317
</TABLE>
20
<PAGE>
<TABLE>
MICHIGAN FUND
-------------------------------------------------------------------------------------------
YEAR ENDED MARCH 31,
-------------------------------------------------------------------------------------------
1999(1) 1998 1997 1996 1995
-------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A(2) CLASS B CLASS B CLASS B
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF YEAR $10.040 $10.040 $ 9.740 $ 9.740 $ 9.740 $ 9.730 $ 9.630 $ 9.650
------- ------- -------- -------- -------- -------- -------- --------
Income (loss) from operations
Net investment income $ 0.424 $ 0.356 $ 0.430 $ 0.357(1) $ 0.201 $ 0.382 $ 0.383 $ 0.364
Net realized and unrealized gain (loss) (0.056) (0.053) 0.329 0.329 0.001 0.012 0.090 0.030
---------- --------- --------- --------- --------- --------- --------- ---------
TOTAL INCOME (LOSS) FROM OPERATIONS $ 0.368 $ 0.303 $ 0.759 $ 0.686 $ 0.202 $ 0.394 $ 0.473 $ 0.394
-------- -------- -------- -------- -------- -------- -------- --------
Less distributions
From net investment income $(0.424) $ (0.368) $ (0.430) $ (0.386) $ (0.201) $ (0.384) $ (0.373) $(0.364)
In excess of net investment income (0.014) (0.005) (0.029) --- (0.001) --- --- (0.050)
-------- --------- --------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS $(0.438) $ (0.373) $ (0.459) $ (0.386) $ (0.202) $ (0.384) $ (0.373) $(0.414)
--------- --------- --------- -------- --------- --------- --------- ---------
NET ASSET VALUE - END OF YEAR $ 9.970 $ 9.970 $ 10.040 $10.040 $ 9.740 $ 9.740 $ 9.730 $ 9.630
======== ======== ======= ======= ======== ======== ======== ========
TOTAL RETURN (4) 3.53% 3.06% 8.23% 7.24% 1.89% 4.14% 4.95% 4.24%
Ratios / Supplemental Data
Net assets, end of year (000's omitted) $ 9,786 $ 654 $ 9,177 $ 1,839 $ 406 $ 13,431 $ 18,705 $ 26,048
Ratios (as a percentage of average
daily net assets):
Expenses (6)(7) 1.32% 2.02% 1.36% 2.04% 1.18%(8) 1.99% 1.78% 1.55%
Expenses after custodian fee
reduction (5) 1.29% 1.99% 1.32% 2.00% 1.15%(8) 1.96% 1.75% ---
Net investment income 4.23% 3.56% 4.32% 3.72% 4.56%(8) 3.91% 3.92% 3.82%
Portfolio Turnover of the Portfolio 16% 16% 21% 21% 28% 28% 40% 111%
+ The operating expenses of the Fund reflect a reduction of the investment
adviser fee, an allocation of expenses to the adviser or administrator, or
both. Had such action not been taken, the ratios and investment income per
share would have been as follows:
Ratios (as a percentage of average daily net assets):
Expenses (6) --- --- --- --- --- --- --- 1.66%
Net investment income --- --- --- --- --- --- --- 3.71%
Net investment income per share --- --- --- --- --- --- --- $0.354
</TABLE>
(1) Net investment income per share was computed using average shares
outstanding.
(2) For the period from the start of business of Class A shares to the fiscal
year end March 31, 1997. The start of business of Class A shares for the
Connecticut Fund and Michigan Fund is January 21, 1997 and October 22,
1996, respectively.
(3) The per share amount is not in accord with the net realized and unrealized
gain (loss) on investments for the period because of the timing of sales of
Fund shares and the amount of the per share realized and unrealized gains
and losses at such time.
(4) Distributions in excess of net investment income are less than $0.001 per
share.
(5) Total return is calculated assuming a purchase at the net asset value on
the first day and a sale at the net asset value on the last day of each
period reported. Distributions, if any, are assumed to be reinvested at the
net asset value on the reinvestment date. Total return is not computed on
an annualized basis.
(6) Includes the Fund's share of its corresponding Portfolio's allocated
expenses.
(7) The expense ratios for the year ended March 31, 1996 and periods thereafter
have been adjusted to reflect a change in reporting requirements. The new
reporting guidelines require the Fund, as well as its corresponding
Portfolio, to increase its expense ratio by the effect of any expense
offset arrangements with its service providers. The expense ratios for each
of the prior periods have not been adjusted to reflect this change.
(8) Annualized.
21
<PAGE>
EXPERTS
The statement of assets and liabilities, including the statement of
investment securities, of National Fund as of March 31, 1999, the related
statement of operations for the year then ended, the related statement of
changes in net assets for the year then ended and the financial highlights
included in its Statement of Additional Information have been incorporated
herein in reliance on the report of Deloitte & Touche LLP, independent public
accountants, given on the authority of that firm as experts in accounting and
auditing.
OTHER MATTERS
The Board of Trustees does not know of any other matters to be considered
at the Special Meeting other than approval of the Plans. If any other matters
are properly presented to the Special Meeting, it is the intention of proxy
holders to vote such proxies on such matters in accordance with their judgment.
22
<PAGE>
EXHIBIT A
AGREEMENT
AND
PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
this 16th day of August, 1999, by and among Eaton Vance Investment Trust, a
Massachusetts business trust ("Investment Trust") on behalf of its series Eaton
Vance [Connecticut / Michigan] Limited Maturity Municipals Fund ("State Fund")
and Eaton Vance National Limited Maturity Municipals Fund ("National Fund").
WITNESSETH
WHEREAS, Investment Trust is registered under the Investment Company
Act of 1940, as amended (the "1940 Act") as an open-end management investment
company authorized to issue an unlimited number of shares of beneficial interest
without par value in one or more series (such as National Fund), and the
Trustees of Investment Trust have divided the shares of State and National Fund
into multiple classes, including Class A and Class B shares ("State Fund Shares"
and "National Fund Shares");
WHEREAS, State Fund currently invests all of its assets in Connecticut
/ Michigan Limited Maturity Municipals Portfolio (the "Limited Portfolio"), a
New York trust registered under the 1940 Act as an open-end management
investment company;
WHEREAS, the National Fund currently invests all of its assets in
National Limited Maturity Municipals Portfolio (the "National Portfolio"), a New
York trust registered under the 1940 Act as an open-end management investment
company;
WHEREAS, Boston Management and Research, a wholly owned subsidiary of
Eaton Vance Management, serves as investment adviser to the Portfolios; and
WHEREAS, Investment Trust desires to provide for the reorganization of
State Fund through the acquisition by National Fund of substantially all of the
assets of State Fund in exchange for National Fund Shares in the manner set
forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.1 The term "1933 Act" shall mean the Securities Act of 1933,
as amended.
1.2 The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
1.3 The term "Agreement" shall mean this Agreement and Plan of
Reorganization.
1.4 The term "Assumed Liabilities" shall mean all liabilities,
expenses, costs, charges and receivables of State Fund as of
the Close of Trading on the New York Stock Exchange on the
Valuation Date.
<PAGE>
1.5 The term "Business Day" shall mean any day that is not a
Saturday or Sunday and that the New York Stock Exchange is
open.
1.6 The term "Close of Trading on the NYSE" shall mean the close
of regular trading, which is usually 4:00 p.m. Eastern time.
1.7 The term "Closing" shall mean the closing of the transaction
contemplated by this Agreement.
1.8 The term "Closing Date" shall mean the first Monday following
receipt of all necessary regulatory approvals and the final
adjournment of the meeting of State Fund shareholders at which
this Agreement is considered, or such other date as may be
agreed by the parties on which the Closing is to take place.
1.9 The term "Commission" shall mean the Securities and Exchange
Commission.
1.10 The term "Custodian" shall mean Investors Bank & Trust
Company.
1.11 The term "Delivery Date" shall mean the date contemplated by
Section 3.3 of this Agreement.
1.12 The term "Investment Trust N-14" shall mean Investment Trust's
registration statement on Form N-14, as may be amended, that
describes the transactions contemplated by this Agreement and
the National Fund Shares.
1.13 The term "National Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to National Fund in effect on the date
hereof or on the Closing Date, as the context may require.
1.14 The term "NYSE" shall mean the New York Stock Exchange.
1.15 The term "Proxy Statement" shall mean the combined prospectus
and proxy statement furnished to the State Fund shareholders
in connection with this transaction.
1.16 The term "Securities List" shall mean the list of those
securities (and other assets) owned by Investment Trust, on
behalf of State Fund, on the Delivery Date.
1.17 The term "State Investment Trust N-1A" shall mean the
registration statement, as amended, on Form N-1A of Investment
Trust with respect to State Fund in effect on the date hereof
or on the Closing Date, as the context may require.
1.18 The term "Valuation Date" shall mean the Business Day
preceding the Closing Date.
2. TRANSFER AND EXCHANGE OF ASSETS
2.1 Reorganization of State Fund. At the Closing, Investment Trust
shall transfer all of the assets of State Fund received from
the State Portfolio, and assign all Assumed Liabilities to
National Fund, and National Fund shall acquire such assets and
shall assume such Assumed Liabilities upon delivery by
National Fund to State Fund on the Closing Date of Class A and
Class B National Fund Shares (including, if applicable,
fractional shares) having an aggregate net asset value equal
-2-
<PAGE>
to the value of the assets so transferred, assigned and
delivered, less the Assumed Liabilities, all determined and
adjusted as provided in Section 2.2. National Fund shall
transfer such assets and liabilities to National Portfolio on
the Closing Date.
2.2 Computation of Net Asset Value. The net asset value per share
of the National Fund Shares and the net value of the assets of
State Fund subject to this Agreement shall, in each case, be
determined as of the Close of Trading on the NYSE on the
Valuation Date, after the declaration and payment of any
dividend on that date. The net asset value of the National
Fund Shares shall be computed in the manner set forth in the
National Investment Trust Form N-1A.
In determining the value of the securities
transferred by State Fund to National Fund, each security
shall be priced in accordance with the policies and procedures
described in the National Investment Trust N-1A. All such
computations shall be subject to review, in the discretion of
Investment Trust's Treasurer, by Deloitte & Touche LLP,
Investment Trust auditors.
3. CLOSING DATE, VALUATION DATE AND DELIVERY
3.1 Closing Date. The Closing shall be at the offices of Eaton
Vance, The Eaton Vance Building, 255 State Street, Boston, MA
02109 immediately prior to the opening of Eaton Vance's
business on the Closing Date. All acts taking place at Closing
shall be deemed to take place simultaneously as of 9:00 a.m.
Eastern time on the Closing Date unless otherwise agreed in
writing by the parties.
3.2 Valuation Date. Pursuant to Section 2.2, the net value of the
assets of State Fund and the net asset value per share of
National Fund shall be determined as of the Close of Trading
on the NYSE on the Valuation Date, after the declaration and
payment of any dividend on that date. The stock transfer books
of Investment Trust with respect to State Fund will be
permanently closed, and sales of State Fund Shares shall be
suspended, as of the close of business of Investment Trust on
the Valuation Date. Redemption requests thereafter received by
Investment Trust with respect to State Fund shall be deemed to
be redemption requests for National Fund Shares to be
distributed to shareholders of State Fund under this Agreement
provided that the transactions contemplated by this Agreement
are consummated.
In the event that trading on the NYSE or on another
exchange or market on which securities held by State or
National Portfolio, shall be disrupted on the Valuation Date
so that, in the judgment of the Trust, accurate appraisal of
the net assets of State Fund to be transferred hereunder or
the assets of National Fund is impracticable, the Valuation
Date shall be postponed until the first Business Day after the
day on which trading on such exchange or in such market shall,
in the judgment of the Trust, have been resumed without
disruption. In such event, the Closing Date shall be postponed
until one Business Day after the Valuation Date.
3.3 Delivery of Securities and other Assets. After the close of
business on the Valuation Date, Investment Trust shall issue
instructions providing for the delivery of all securities held
on behalf of State Fund together with other non-cash assets of
State Fund to the Custodian to be held for the account of
National Fund, effective as of the Closing. National Fund may
inspect such securities at the offices of the Custodian prior
to the Valuation Date.
-3-
<PAGE>
Securities so delivered shall be in proper form for
transfer in such condition as to constitute a good delivery
thereof, in accordance with the custom of brokers, and shall
be accompanied by all necessary stock transfer stamps (or
other documentation evidencing payment of local taxes), if
any, or a check for the appropriate purchase price of such
stamps (or payment of such local tax). Unless otherwise
directed by Investment Trust in writing on or before the
Delivery Date, cash held by and to be delivered, on behalf of
State Fund, shall be delivered on the Closing Date and shall
be in the form of wire transfer in Federal Funds, payable to
the order of the account of National Fund at the Custodian. A
confirmation for the National Fund Shares registered in the
name of State Fund shall be delivered on the Closing Date.
4. STATE FUND DISTRIBUTIONS AND TERMINATION
As soon as reasonably practicable after the Closing Date,
Investment Trust shall pay or make provisions for the payment of all of
the debts and taxes of State Fund and distribute all remaining assets,
if any, to shareholders of State Fund, and State Fund shall thereafter
be terminated under Massachusetts law. The State Portfolio shall
liquidate and deregister under the 1940 Act.
At, or as soon as may be practicable following the Closing
Date, Investment Trust on behalf of State Fund shall instruct National
Fund as to the amount of the pro rata interest of each of State Fund's
shareholders as of the close of business on the Valuation Date (such
shareholders to be certified as such by the transfer agent for
Investment Trust), to be registered on the books of National Fund, in
full and fractional National Fund Shares, in the name of each such
shareholder, and National Fund agrees promptly to transfer the National
Fund Shares then credited to the account of State Fund on the books of
National Fund to open accounts on the share records of National Fund in
the names of State Fund shareholders in accordance with said
instruction. Each State Fund shareholder shall receive shares of the
corresponding class of National Fund to the class of State Fund held by
such shareholder. All issued and outstanding State Fund Shares shall
thereupon be canceled on the books of Investment Trust. National Fund
shall have no obligation to inquire as to the correctness of any such
instruction, but shall, in each case, assume that such instruction is
valid, proper and correct.
5. STATE FUND SECURITIES
On the Delivery Date, State Portfolio shall deliver the
Securities List and tax records. Such records shall be made available
by State Portfolio prior to the Closing Date for inspection by the
Treasurer (or his designee) and the auditors of National Fund and
National Portfolio upon reasonable request. Notwithstanding the
foregoing, it is expressly understood that State Portfolio may
hereafter until the close of business on the Valuation Date sell any
securities owned by it in the ordinary course of its business as an
open-end, management investment company.
6. LIABILITIES AND EXPENSES
National Fund shall acquire all liabilities of State Fund,
whether known or unknown, or contingent or determined. Investment Trust
will discharge all known liabilities of State Fund, so far as may be
possible, prior to the Closing Date. State Fund and National Fund shall
bear their respective expenses, in connection with carrying out this
Agreement.
-4-
<PAGE>
7. STATE AND NATIONAL PORTFOLIO REPRESENTATIONS AND WARRANTIES
Each of the State and National Portfolio hereby represents,
warrants and agrees as follows:
7.1 Legal Existence. The Portfolio is a trust duly organized and
validly existing under the laws of the State of New York.
7.2 Registration under 1940 Act. The Portfolio is duly registered
with the Commission as an open-end management investment
company under the 1940 Act and such registration is in full
force and effect.
7.3 Financial Statements. The statement of assets and liabilities,
schedule of portfolio investments and related statements of
operations and changes in net assets dated March 31, 1999
(audited) fairly present the financial condition of the
Portfolio as of said date in conformity with generally
accepted accounting principles.
7.4 No Material Events. There are no legal, administrative or
other proceedings pending, or to its knowledge, threatened
against the Portfolio which would materially affect its
financial condition.
7.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein have been authorized by the Portfolio's
Board of Trustees by vote taken at a meeting of such Board
duly called and held on August 16, 1999.
7.6 No Material Violations. The Portfolio is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
the Portfolio or of any agreement, indenture, instrument,
contract, lease or other undertaking to which it is a party or
by which it is bound.
7.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on the Portfolio, the
Portfolio has filed and will file or obtain valid extensions
of filing dates for all required federal, state and local tax
returns and reports for all taxable years through and
including the taxable year ended March 31, 1999, and no such
filings or reports are currently being audited or contested by
the Internal Revenue Service or state or local taxing
authority and all federal, state and local income, franchise,
property, sales, employment or other taxes or penalties
payable have been paid or will be paid, so far as due. The
Portfolio is classified as a partnership for federal tax
purposes, has qualified as such for each taxable year of its
operations, and will qualify as such as of the Closing Date.
7.8 Good and Marketable Title. On the Closing Date, the Portfolio
will have good and marketable title to its assets, free and
clear of all liens, mortgages, pledges, encumbrances, charges,
claims and equities whatsoever, and full right, power and
authority to sell, assign, transfer and deliver such assets
and shall deliver such assets to State Fund. Upon delivery of
such assets, State Fund will receive good and marketable title
to such assets, free and clear of all liens, mortgages,
pledges, encumbrances,
-5-
<PAGE>
charges, claims, restrictions (including such restrictions as
might arise under the 1933 Act) and equities, except as to
adverse claims under Article 8 of the Uniform Commercial Code
of which National Fund has notice and necessary documentation
at or prior to the time of delivery.
7.9 Books and Records. The Portfolio has maintained all records
required under Section 31 of the 1940 Act and rules
thereunder.
8. INVESTMENT TRUST REPRESENTATIONS AND WARRANTIES
Investment Trust, on behalf of State and National Funds,
hereby represents, warrants and agrees as follows:
8.1 Legal Existence. Investment Trust is a business trust duly
organized and validly existing under the laws of the
Commonwealth of Massachusetts. Each of State Fund and National
Fund is a validly existing series of Investment Trust.
Investment Trust is authorized to issue an unlimited number of
shares of beneficial interest of National Fund.
8.2 Registration under 1940 Act. Investment Trust is duly
registered as an open-end management investment company under
the 1940 Act and such registration is in full force and
effect.
8.3 Financial Statements. The statement of assets and liabilities
and the schedule of portfolio investments and the related
statements of operations and changes in net assets of State
Fund and National Fund dated March 31, 1999, fairly present
the financial condition of State Fund and National Fund as of
said dates in conformity with generally accepted accounting
principles.
8.4 No Contingent Liabilities. There are no known contingent
liabilities of State Fund or National Fund not disclosed and
there are no legal, administrative or other proceedings
pending, or to the knowledge of Investment Trust threatened,
against State Fund or National Fund which would materially
affect its financial condition.
8.5 Requisite Approvals. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein, have been authorized by the Board of
Trustees of Investment Trust by vote taken at a meeting of
such Board duly called and held on August 16, 1999. No
approval of the shareholders of National Fund is required in
connection with this Agreement or the transaction contemplated
hereby.
8.6 No Material Violations. Investment Trust is not, and the
execution, delivery and performance of this Agreement will not
result, in a material violation of any provision of its
Declaration of Trust or By-Laws, as each may be amended, of
Investment Trust or of any agreement, indenture, instrument,
contract, lease or other undertaking to which Investment Trust
is a party or by which it is bound.
-6-
<PAGE>
8.7 Taxes and Related Filings. Except where failure to do so would
not have a material adverse effect on State Fund or National
Fund (i) each of State Fund and National Fund has filed or
will file (or has obtained valid extensions of filing dates
for) all required federal, state and local tax returns and
reports for all taxable years through the taxable year ended
March 31, 1999 and no such filings are currently being audited
or contested by the Internal Revenue Service or state or local
taxing authority; and (ii) all federal, state and local
income, franchise, property, sales, employment or other taxes
or penalties payable pursuant to such returns have been paid
or will be paid, so far as due. Each of State Fund and
National Fund has elected to be treated as a regulated
investment company for federal tax purposes, has qualified as
such for each taxable year of its operations and will qualify
as such as of the Closing Date.
8.8 National Investment Trust N-1A Not Misleading. The National
Investment Trust N-1A conforms on the date of the Agreement,
and will conform on the date of the Proxy Statement and the
Closing Date, in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not materially
misleading.
8.9 Proxy Materials. The Proxy Statement delivered to the State
Fund shareholders in connection with this transaction (both at
the time of delivery to such shareholders in connection with
the meeting of shareholders and at all times subsequent
thereto and including the Closing Date) in all material
respects, conforms to the applicable requirements of the 1934
Act and the 1940 Act and the rules and regulations of the
Commission thereunder, and will not include any untrue
statement of a material fact or omit to state any material
fact required to be stated thereon or necessary to make
statements therein, in light of the circumstances under which
they were made, not materially misleading.
9. CONDITIONS PRECEDENT TO CLOSING
The obligations of the parties hereto shall be conditioned on
the following:
9.1 Representations and Warranties. The representations and
warranties of the parties made herein will be true and correct
on the Closing Date.
9.2 Shareholder Approval. The Agreement and the transactions
contemplated herein shall have been approved by the requisite
vote of the holders of State Fund Shares in accordance with
the 1940 Act and the Declaration of Trust and By-Laws, each as
amended, of Investment Trust.
9.3 Pending or Threatened Proceedings. On the Closing Date, no
action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions
contemplated herein.
-7-
<PAGE>
9.4 Registration Statement. The Investment Trust N-14 shall have
become effective under the 1933 Act; no stop orders suspending
the effectiveness of such Investment Trust N-14 shall have
been issued; and, to the best knowledge of the parties hereto,
no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated
under the 1933 Act.
9.5 Declaration of Dividend. Investment Trust shall have declared
a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to State Fund
shareholders all of State Fund' investment company taxable
income for the final taxable period of State Fund, all of its
net capital gain realized in the final taxable period of State
Fund (after reduction for any capital loss carryforward) and
all of the excess of (i) its interest income excludable from
gross income under Section 103(a) of the Internal Revenue Code
of 1986, as amended, over (ii) its deductions disallowed under
Sections 265 and 171(a)(2) of said Code for the final taxable
period of State Fund.
9.6 State Securities Laws. The parties shall have received all
permits and other authorizations necessary under state
securities laws to consummate the transactions contemplated
herein.
9.7 Performance of Covenants. Each party shall have performed and
complied in all material respects with each of the agreements
and covenants required by this Agreement to be performed or
complied with by each such party prior to or at the Valuation
Date and the Closing Date.
9.8 Due Diligence. Investment Trust shall have had reasonable
opportunity to have its officers and agents review the records
of State Portfolio.
9.9 No Material Adverse Change. From the date of this Agreement,
through the Closing Date, there shall not have been:
(1) any change in the business, results of operations,
assets or financial condition or the manner of
conducting the business of State Fund or National
Fund (other than changes in the ordinary course of
its business, including, without limitation,
dividends and distributions in the ordinary course
and changes in the net asset value per share) which
has had a material adverse effect on such business,
results of operations, assets or financial condition,
except in all instances as set forth in the financial
statements;
(2) any loss (whether or not covered by insurance)
suffered by State Fund or National Fund materially
and adversely affecting of State Fund or National
Fund, other than depreciation of securities;
(3) issued by Investment Trust to any person any option
to purchase or other right to acquire shares of any
class of State Fund or National Fund Shares (other
than in the ordinary course of Investment Trust's
business as an open-end management investment
company);
(4) any indebtedness incurred by State Portfolio or
National Portfolio for borrowed money or any
commitment to borrow money entered into by State
Portfolio or National Portfolio except as permitted
in State Investment Trust N-1A or National Investment
Trust N-1A and disclosed in financial statements
required to be provided under this Agreement;
-8-
<PAGE>
(5) any amendment to the Declaration of Trust or By-Laws
of Investment Trust that will adversely affect the
ability of Investment Trust to comply with the terms
of this Agreement; or
(6) any grant or imposition of any lien, claim, charge or
encumbrance upon any asset of State Portfolio except
as provided in State Investment Trust N-1A so long as
it will not prevent Investment Trust from complying
with Section 7.8.
9.11 Lawful Sale of Shares. On the Closing Date, National Fund
Shares to be issued pursuant to Section 2.1 of this Agreement
will be duly authorized, duly and validly issued and
outstanding, and fully paid and non-assessable by Investment
Trust, and conform in all substantial respects to the
description thereof contained in the Investment Trust N-14 and
Proxy Statement furnished to the State Fund shareholders and
the National Fund Shares to be issued pursuant to paragraph
2.1 of this Agreement will be duly registered under the 1933
Act by the Investment Trust N-14 and will be offered and sold
in compliance with all applicable state securities laws.
10. ADDRESSES
All notices required or permitted to be given under this
Agreement shall be given in writing to The Eaton Vance Building, 255
State Street, Boston, MA 02109 (Attention: Eric G. Woodbury, Esq.), or
at such other place as shall be specified in written notice given by
either party to the other party to this Agreement and shall be validly
given if mailed by first-class mail, postage prepaid.
11. TERMINATION
This Agreement may be terminated by either party upon the
giving of written notice to the other, if any of the representations,
warranties or conditions specified in Section 7, 8 or 9 hereof have not
been performed or do not exist on or before February 28, 2000. In the
event of termination of this Agreement pursuant to this provision,
neither party (nor its officers, Trustees or shareholders) shall have
any liability to the other.
12. MISCELLANEOUS
This Agreement shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
Investment Trust represents that there are no brokers or finders
entitled to receive any payments in connection with the transactions
provided for herein. Investment Trust represents that this Agreement
constitutes the entire agreement between the parties as to the subject
matter hereof. The representations, warranties and covenants contained
in this Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder. The Section headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. This Agreement
shall be executed in any number of counterparts, each of which shall be
deemed an original. Whenever used herein, the use of any gender shall
include all genders.
-9-
<PAGE>
13. PUBLICITY
Any announcements or similar publicity with respect to this
Agreement or the transactions contemplated herein will be made at such
time and in such manner as Investment Trust shall determine.
14. AMENDMENTS
At any time prior to or after approval of this Agreement by
State Fund shareholders (i) the parties hereto may, by written
agreement and without shareholder approval, amend any of the provisions
of this Agreement, and (ii) either party may waive without such
approval any default by the other party or the failure to satisfy any
of the conditions to its obligations (such waiver to be in writing);
provided, however, that following shareholder approval, no such
amendment may have the effect of changing the provisions for
determining the number of National Fund Shares to be received by State
Fund shareholders under this Agreement to the detriment of such
shareholders without their further approval. The failure of a party
hereto to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part hereof
or the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to
be a waiver of any other or subsequent breach.
15. MASSACHUSETTS BUSINESS TRUST
References in this Agreement to Investment Trust mean and
refer to the Trustees, from time to time serving under its Declarations
of Trust on file with the Secretary of the Commonwealth of
Massachusetts, as the same may be amended from time to time, pursuant
to which they conduct their businesses. It is expressly agreed that the
obligations of Investment Trust hereunder shall not be binding upon any
of the trustees, shareholders, nominees, officers, agents or employees
of the Trust personally, but bind only the trust property of Investment
Trust as provided in said Declaration of Trust. The execution and
delivery of this Agreement has been authorized by the respective
trustees and signed by an authorized officer of Investment Trust,
acting as such, and neither such authorization by such trustees nor
such execution and delivery by such officer shall be deemed to have
been made by any of them but shall bind only the trust property of
Investment Trust as provided in such Declaration of Trust. No series of
Investment Trust shall be liable for the obligations of any other
series.
-10-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and its seal affixed hereto by their officers thereunto
duly authorized, as of the day and year first above written.
ATTEST: EATON VANCE INVESTMENT TRUST
(on behalf of Eaton Vance [Connecticut /
Michigan] Limited Maturity Municipals
Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
EATON VANCE INVESTMENT TRUST
(on behalf of Eaton Vance National
Limited Maturity Municipals Fund)
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
[CONNECTICUT / MICHIGAN] LIMITED
MATURITY MUNICIPALS PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
NATIONAL LIMITED MATURITY
MUNICIPALS PORTFOLIO
/s/ Eric G. Woodbury By: /s/ Thomas J. Fetter
- -------------------- --------------------
Assistant Secretary President
-11-
<PAGE>
Exhibit B
Management's Discussion of National Fund's Performance
for the Year Ended March 31, 1999
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
LETTER TO SHAREHOLDERS
[PHOTO] Eaton Vance National Limited Maturity Municipals Fund, Class
A, had a total return of 3.9% for the year ended March 31,
1999. That return was the result of a decline in net asset
value (NAV) to $10.49 on March 31, 1999 from $10.58 on March
Thomas J. Fetter 31, 1998, and the reinvestment of $0.519 in dividends exempt
President from regular federal income tax.(1)
Class B shares had a total return of 3.3% for the year ended March 31, 1999,
the result of a decline in NAV to $10.49 from $10.58, and the reinvestment of
$0.436 in dividends exempt from regular federal income tax.(1)
Class C shares had a total return of 3.2% for the year ended March 31, 1999,
the result of a decline in NAV to $9.82 from $9.92, and the reinvestment of
$0.418 in dividends exempt from regular federal income tax.(1)
Based on the Fund's most recent dividends and net asset values of $10.49,
$10.49, and $9.82, respectively, the Fund's Class A, B, and C shares had
distribution rates of 5.10%, 4.29%, and 4.28%, respectively, at March 31,
1999.(2) SEC 30-day yields for Classes A, B, and C shares were 4.26%, 3.61%,
and 3.50%, respectively, at March 31, 1999.(3)
Municipal bonds trailed Treasuries through most of 1998, but rallied in the
first quarter of 1999...
Through much of 1998, the Treasury bond market advanced strongly, amid
continued low inflation and fears that an Asian financial crisis could
provoke an economic slowdown. Municipal bonds trailed the Treasury market
through much of 1998, but gained ground in the first quarter of 1999. A heavy
new issue calendar produced supply pressures for the tax-exempt market, with
more than $300 billion in new municipal issues coming to market in 1998.
However, in the first three months of 1999, supply eased somewhat.
Taxes remain high, while tax reform is again stalled in Congress...
The election year promises of tax cuts appear to have reached a roadblock in
Washington. Meanwhile, it is estimated that the average American worked until
May 10 to pay his or her taxes in 1998, according to the Tax Foundation. That
poses an enormous financial burden - and an increasing challenge for those
who may be simultaneously paying for college tuition, caring for elderly
parents, or trying to plan for their own retirement.
Amid low inflation and growing federal budget surpluses, we believe that the
outlook for bonds remains favorable. At their recent levels, municipal bonds
are especially attractive. Moreover, municipal bonds remain an excellent
fixed-income alternative - to diversify one's investment portfolio and to
help lower one's tax burden.
Sincerely,
/s/ Thomas J. Fetter
Thomas J. Fetter
President
May 9, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Fund Information
as of March 31, 1999
Performance(4) Class A Class B Class C Five Largest Sector Weightings(5)
- ---------------------------------------------------------------------------------- --------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
One Year 3.9% 3.3% 3.2% ESCROWED/PREREFUNDED 19.1%
Five Years N.A. 5.0 4.7
Life of Fund+ 6.6 5.2 3.8 INDUSTRIAL DEVELOPMENT BONDS 14.8%
SEC Average Annual Total Returns (including sales charge or applicable CDSC) GENERAL OBLIGATIONS 9.6%
- ---------------------------------------------------------------------------------- COGENERATION 8.8%
One Year 1.6% 0.3% 2.3%
Five Years N.A. 5.0 4.7 HOSPITAL 7.1%
Life of Fund+ 5.8 5.2 3.8
+Inception dates: Class A: 6/27/96; Class B: 5/22/92; Class C: 12/8/93
- -------------------------------------------------------------------------------
Federal income tax information on distributions. For federal income tax
purposes, 99.76% of the total dividends paid by the Fund from net investment
income during the year ended March 31, 1999 was designated as an
exempt-interest dividend.
- -------------------------------------------------------------------------------
(1) These returns do not include the 2.25% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charge (CDSC) for
Class B or C shares. A portion of the Fund's income may be subject to federal
income and/or alternative minimum tax. Income may be subject to state tax.
(2) The Fund's distribution rate represents actual distributions paid to
shareholders and is calculated by dividing the last distribution per share
(annualized) by the net asset value. (3) The Fund's SEC yield is calculated by
dividing the net investment income per share for the 30-day period by the
offering price at the end of the period and annualizing the result. (4) Returns
are historical and are calculated by determining the percentage change in net
asset value with all distributions reinvested. SEC returns for Class A
reflect the maximum 2.25% sales charge. SEC returns for Class B reflect
applicable CDSC based on the following schedule: 3% - 1st year; 2.5% - 2nd
year; 2% - 3rd year; 1% - 4th year. Class C 1-year SEC return reflects 1%
CDSC. (5) Five largest sector weightings account for 59.4% of the Portfolio's
investments, determined by dividing the total market value of the holdings by
the total investments of the Portfolio. Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
</TABLE>
B-1
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
MANAGEMENT DISCUSSION
[Photo] An interview with
William H. Ahern,
William H. Ahern portfolio manager of
Portfolio Manager Eaton Vance National Limited
Maturity Municipals Fund.
Q: Bill, the financial markets featured a good deal
of volatility in the past year. How did the
intermediate segment of the municipal bond market
fare in this volatile climate?
A: The past fiscal year proved a very challenging climate for fixed-income
investors, with global currency crises brewing and growing economic
concerns over Russia and Brazil. Intermediate-term municipals (i.e., those
with maturities of between 3 and nine years) generally produced slightly
lower returns than longer-term bonds for the entire year. However, when the
financial markets were at their MOST volatile, intermediate-term bonds once
again showed less volatility than bonds with longer-term maturities.
The numbers tell the story. In October, financial worries in Asia, Russia
and Latin America combined with the Long-Term Capital debacle to drive
investors to the Treasury market. That trend significantly weakened
non-Treasury markets - including municipal bonds. In the October flight to
Treasuries, yields on existing 30-year municipal bonds rose from 4.97% to
5.03%. However, yields on existing five-year municipal bond yields actually
DECLINED during the same period, falling from 3.92% to 3.81%. The
outperformance of the intermediate sector in a period of financial turmoil
demonstrated a major reason they appeal to conservative investors.
Q: How did the market's volatility affect your strategy?
A: The Portfolio was well-positioned to weather the market's volatility. In an
uncertain economic environment, fixed-income investors may seek to shorten
the duration of their investments. Consistent with its investment mandate,
the Portfolio maintained a shorter duration than those typically maintained
by long-term funds. At March 31, the Portfolio's average dollar-weighted
duration was 6.5 years. In addition, the Portfolio was extremely well
diversified along market sectors and industries. Finally, the Portfolio was
well-served by its premium bonds. Typically, these high-coupon issues have
provided an extra measure of protection in a difficult market environment.
Q: How have you positioned the Portfolio in recent months?
A: Escrowed bonds - bonds that have been prerefunded in anticipation of their
call date and backed by Treasury bonds were the Portfolio's largest sector
weighting at March 31, constituting 19.1% of the Portfolio. Industrial
develop-
<TABLE>
<CAPTION>
Portfolio Quality Weightings(1) Portfolio Overview(1) (1)Because the Fund is actively managed, Portfolio
- ----------------------------- ------------------- Ratings and Portfolio Overview are subject to change.
<S> <C> <C>
AAA 12.9% Number of Issues 87
AA 7.7% Average Rating BBB+
[Pie Chart] A 17.1% Duration 6.5 Yrs.
Not rated 42.3% Effective Maturity 9.1 Yrs.
B 1.0% Average Call 8.0 Yrs.
BB 3.3% Average Dollar Price $102.00
BBB 20.5%
</TABLE>
- -------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED.
- -------------------------------------------------------------------------------
B-2
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
MANAGEMENT DISCUSSION CONT'D
ment bonds (IDB) represented another 14.8% of the Portfolio. General
obligations of city, state, and agency issuers were the third largest
weighting, at 9.6% of the Portfolio.
Q: Could you define industrial development bonds and indicate why you like
them?
A: Certainly. Various development agencies at the state and local levels issue
industrial development bonds to help promote economic and industrial
development. The bonds finance public works, such as airports or port
facilities; industrial developments for private companies; and pollution
control facilities designed to promote a cleaner environment.
These bonds benefit the public because they typically finance industrial
projects and promote job creation; they are popular with private
enterprise because they provide vital financial support; and they're
appealing to investors because they may offer very attractive tax-exempt
yields.
We made a major effort to further diversify the Portfolio's IDB holdings,
especially in light of an uncertain economic climate. The Portfolio's bonds
financed projects for companies that included International Paper Co.,
American Airlines, and consumer products leader Proctor & Gamble.
- -------------------------------------------------------------------------------
Your Investment at Work [GRAPHIC]
New Jersey Economic
Development Authority
The Chelsea at East Brunswick
- - These bonds were issued to finance the construction costs of an assisted
living facility in East Brunswick run by the Chelsea Management Group.
- - The facility provides senior citizens with an attractive living
alternative, featuring a wide array of services, including meals,
housekeeping, transportation, exercise and leisure activities.
- - The bond carries an exceptional 8.00% coupon. This issue was representative
of the Portfolio's efforts to find good income opportunities in
research-intensive, non-rated bonds.
- -------------------------------------------------------------------------------
Q: How did the Portfolio benefit from its escrowed bond holdings?
A: Escrowed bonds are bonds that have been pre-refunded by their issuers.
Typically, issuers take advantage of a significant decline in interest
rates, such as we've seen in recent years, to refinance outstanding debt.
While the issuer is able to lower its interest costs, the outstanding bonds
are backed by U.S. Treasury bonds and therefore regarded as very high
quality. The Portfolio benefited because the value of these bonds increased
significantly following their pre-refunding.
Q: Are you still seeing value in the non-rated segment of the market?
A: Yes, we've continued to find value among non-rated bonds, although we've
become more selective. There has been an ongoing trend in recent years
toward the issuance of insured bonds. That, in turn, has created an
increasingly generic municipal bond market, with fewer opportunities
among single-A and double-A rated bonds. As a result, quality spreads
have narrowed dramatically. Lower-rated and non-rated rated bonds have
subsequently outperformed higher-rated issues such as insured bonds.
In that changing marketplace, we have made the non-rated segment a
specialty at Eaton Vance. By increasing our research and resources in
this part of the market, we've been able to uncover promising non-rated
opportunities. However, at this advanced state of the economic
expansion, we believe it is prudent to become increasingly selective
about the projects in which we participate.
Q: In what sectors have you found opportunities in non-rated bonds?
A: Our non-rated bond holdings are very well diversified, including housing
bonds, general obligations, hospitals, industrial development bonds, and
senior living/life care bonds.
B-3
<PAGE>
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPALS FUND AS OF MARCH 31, 1999
MANAGEMENT DISCUSSION CONT'D
Senior living and life care facilities have continued to play an
important role in the Portfolio. With the aging of the population,
providing housing and ongoing care for senior citizens has become a
growth industry.
Senior living facilities provide a range of services that can be tailored
to the particular needs of individual residents. Facilities may include
apartments for those who are able to live independently, as well as more
advanced care for those who need day-to-day assistance. This concept has
become so popular in recent years that there is a danger of overbuilding in
some areas. That is where our research and experience have given us a
distinct advantage.
Q: Bill, what is your outlook for the municipal market in the coming year?
A: For several years running, the economy has registered fairly strong growth
while inflation has not posed a significant threat. That suggests a good
climate for the bond market. In addition, the elimination of federal budget
deficits should result in a reduced supply of bonds in coming years -
another positive trend.
As for the municipal market, there appears to be unusually good value in
municipal bonds. Clearly, while many investors have enjoyed the
unprecedented returns the equity market has produced in recent years, we
believe it is a prudent move to re-allocate some assets to fixed-income
investments, especially with increasing global tensions. The uncertainties
of global politics could well contribute to more market volatility in the
future. For risk-averse investors who want a competitive level of tax-free
income, I believe the intermediate-term municipals merit some attention.1
(1) A portion of the Fund's income may be subject to federal income and/or
alternative minimum tax. Income may be subject to state tax.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN EATON VANCE NATIONAL
LIMITED MATURITY MUNCIPALS FUND, CLASS B VS. LEHMAN BROTHERS 7-YEAR MUNICIPAL
BOND INDEX*
MAY 31, 1992 - MARCH 31, 1999
<TABLE>
<CAPTION>
DATE FUND/NAV LB7YMBI
<S> <C> <C> <C>
5/31/92 $10,000 $10,000
6/30/92 $10,120 $10,159
7/31/92 $10,459 $10,462
8/31/92 $10,327 $10,354
9/30/92 $10,391 $10,438
10/31/92 $10,274 $10,368
11/30/92 $10,517 $10,522
12/31/92 $10,613 $10,608
1/31/92 $10,722 $10,763
2/28/93 $11,041 $11,093
3/31/93 $10,905 $10,947
4/30/93 $10,983 $11,015
5/31/93 $11,031 $11,048
6/30/93 $11,157 $11,250
7/31/93 $11,180 $11,252
8/31/93 $11,344 $11,451
9/30/93 $11,441 $11,577
10/31/93 $11,464 $11,607
11/30/93 $11,391 $11,505
12/31/93 $11,549 $11,716
1/31/94 $11,652 $11,840
2/28/94 $11,465 $11,583
3/31/94 $11,134 $11,274
4/30/94 $11,193 $11,356
5/31/94 $11,258 $11,413
6/30/94 $11,224 $11,392
7/31/94 $11,357 $11,553
8/31/94 $11,381 $11,613
9/30/94 $11,281 $11,502
10/31/94 $11,171 $11,387
11/30/94 $11,023 $11,221
12/31/94 $11,180 $11,391
1/31/95 $11,369 $11,604
2/28/95 $11,556 $11,866
3/31/95 $11,627 $11,989
4/30/95 $11,635 $12,021
5/31/95 $11,821 $12,341
6/30/95 $11,780 $12,330
7/31/95 $11,880 $12,487
8/31/95 $11,965 $12,634
9/30/95 $12,029 $12,683
10/31/95 $12,117 $12,793
11/30/95 $12,227 $12,934
12/31/95 $12,279 $13,003
1/31/96 $12,368 $13,129
2/28/96 $12,302 $13,084
3/31/96 $12,151 $12,956
4/30/96 $12,133 $12,932
5/31/96 $12,113 $12,913
6/30/96 $12,148 $13,012
7/31/96 $12,201 $13,120
8/31/96 $12,232 $13,127
9/30/96 $12,351 $13,246
10/31/96 $12,442 $13,388
11/30/96 $12,647 $13,612
12/31/96 $12,569 $13,570
1/31/97 $12,538 $13,619
2/28/97 $12,662 $13,732
3/31/97 $12,553 $13,554
4/30/97 $12,658 $13,624
5/31/97 $12,803 $13,795
6/30/97 $12,900 $13,927
7/31/97 $13,133 $14,249
8/31/97 $13,053 $14,149
9/30/97 $13,163 $14,298
10/31/97 $13,221 $14,383
11/30/97 $13,296 $14,434
12/31/97 $13,493 $14,610
1/31/98 $13,669 $14,763
2/28/98 $13,719 $14,777
3/31/98 $13,747 $14,777
4/30/98 $13,702 $14,691
5/31/98 $13,852 $14,907
6/30/98 $13,899 $14,949
7/31/98 $13,905 $14,999
8/31/98 $14,048 $15,227
9/30/98 $14,132 $15,423
10/31/98 $14,112 $15,445
11/30/98 $14,125 $15,487
12/31/98 $14,159 $15,520
1/31/99 $14,250 $15,747
2/28/99 $14,196 $15,657
3/31/99 $14,200 $15,652
</TABLE>
<TABLE>
<CAPTION>
Performance** Class A Class B Class C
- ----------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------
<S> <C> <C> <C>
One Year 3.9% 3.3% 3.2%
Five Years N.A. 5.0 4.7
Life of Fund+ 6.6 5.2 3.8
SEC Average Annual Total Returns (including sales charge or
applicable CDSC)
- -----------------------------------------------------------
One Year 1.6% 0.3% 2.3%
Five Years N.A. 5.0 4.7
Life of Fund+ 5.8 5.2 3.8
</TABLE>
+Inception dates: Class A: 6/27/96; Class B: 5/22/92; Class C: 12/8/93
* Source: TowersData, Bethesda, MD.
The chart compares the total return of the Fund's Class B shares with that of
the Lehman Brothers 7-Year Municipal Bond Index, a broad-based, unmanaged
market index of intermediate-term municipal bonds. Returns are calculated by
determining the percentage change in net asset value (NAV) with all
distributions reinvested. The lines on the chart represent the total returns
of $10,000 hypothetical investments in the Fund and the Index. The Index's
total return does not reflect commissions or expenses that would have been
incurred if an investor individually purchased or sold the securities
represented in the Index. It is not possible to invest directly in an Index.
An investment in the Fund's Class A shares on 6/30/96 at net asset value would
have been worth $11,911 on March 31, 1999; $11,645, including the Fund's 2.25%
maximum sales charge. An investment in the Fund's Class C shares on 12/31/93
at net asset value would have been worth $12,165 on March 31, 1999.
**Returns are calculated by determining the percentage change in net asset value
(NAV) with all distributions reinvested. SEC returns for Class A reflect the
maximum 2.25% sales charge. SEC returns for Class B reflect applicable CDSC
based on the following schedule: 3% - 1st year; 2.5% - 2nd year; 2% - 3rd
year; 1% - 4th year. SEC 1-Year return for Class C reflects
1% CDSC.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
B-4
<PAGE>
PART C.
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
No change from the information set forth in Item 25 of Form N-1A filed as
Post-Effective Amendment No. 42 to the Registration Statement under the
Securities Act of 1933 (File No. 33-1121) and Amendment No. 45 to the
Registration Statement under the Investment Company Act of 1940 (File No.
811-4443) (Accession No. 0000950156-99-000469) (the "Registrant's N-1A"), which
information is incorporated herewith by reference.
Registrant's Trustees and officers are insured under a standard mutual fund
errors and omissions insurance policy covering insured by reason of negligent
errors and omissions committed in their capacities as such.
ITEM 16. EXHIBITS
(1) (a) Amended and Restated Declaration of Trust of Eaton Vance
Investment Trust dated January 11, 1993 filed as Exhibit (1)(a) to
Post-Effective Amendment No. 34 to Registrant's N-1A and
incorporated herein by reference.
(b) Amendment to Declaration of Trust dated June 23, 1997 filed as
Exhibit (1)(b) to Post-Effective Amendment No. 41 to Registrant's
N-1A and incorporated herein by reference.
(c) Establishment and Designation of Classes of Shares of Beneficial
Interest, without Par Value, dated June 26, 1996 filed as Exhibit
(a)(3) to Post-Effective Amendment No. 41 to Registrant's N-1A and
incorporated herein by reference.
(2) (a) By-Laws as amended March 30, 1992 filed as Exhibit (2)(a) to
Post-Effective Amendment No. 34 to Registrant's N-1A and
incorporated herein by reference.
(b) Amendment to By-Laws dated December 13, 1993 filed as Exhibit
(2)(b) to Post-Effective Amendment No. 34 to Registrant's N-1A and
incorporated herein by reference.
(3) Not applicable.
(4) (a) Agreement and Plan of Reorganization by and among Eaton Vance
Investment Trust, on behalf of its series Eaton Vance Connecticut
Limited Maturity Municipals Fund and Eaton Vance National Limited
Maturity Municipals Fund filed as Exhibit (4)(a) to the
Registant's N-14 and incorporated herein by reference.
(b) Agreement and Plan of Reorganization by and among Eaton Vance
Investment Trust, on behalf of its series Eaton Vance Michigan
Limited Maturity Municipals Fund and Eaton Vance National Limited
Maturity Municipals Fund filed as Exhibit (4)(b) to the
Registrant's N-14 and incorporated herein by reference.
(5) Not applicable.
<PAGE>
(6) Not applicable.
(7) (a) Distribution Agreement between Eaton Vance Investment Trust
and Eaton Vance Distributors, Inc., dated June 23, 1997 with
attached Schedule A filed as Exhibit (6)(a) to Post-Effective
Amendment No. 39 to Registrant's N-1A and incorporated herein by
reference.
(b) Selling Group Agreement between Eaton Vance Distributors, Inc. and
Authorized Dealers filed as Exhibit (6)(b) to the Registration
Statement of Eaton Vance Growth Trust (File Nos. 2-22019,
811-1241) Post-Effective Amendment No. 61 and incorporated herein
by reference.
(8) 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).
(9) (a) Custodian Agreement with Investors Bank & Trust Company dated
April 15, 1994 filed as Exhibit (8) to Post-Effective Amendment
No. 34 to Registrant's N-1A and incorporated herein by reference.
(b) Amendment to Custodian Agreement with Investors Bank & Trust
Company dated October 23, 1995 filed as exhibit (8)(b) to
Post-Effective Amendment No. 35 to Registrant's N-1A and
incorporated herein by reference.
(c) 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.
(10) (a) Eaton Vance Investment Trust Class A Service Plan adopted June 23,
1997 with attached Schedule A effective June 23, 1997 filed as
Exhibit (15)(a) to Post-Effective Amendment No. 39 to Registrant's
N-1A and incorporated herein by reference.
(b) Eaton Vance Investment Trust Class B Distribution Plan adopted
June 23, 1997 with attached Schedule A effective June 23, 1997
filed as Exhibit (15)(b) to Post-Effective Amendment No. 39 to
Registrant's N-1A and incorporated herein by reference.
(c) Eaton Vance Investment Trust Class C Distribution Plan adopted
June 23, 1997 with attached Schedule A effective June 23, 1997
filed as Exhibit (15)(c) to Post-Effective Amendment No. 39 to
Registrant's N-1A and incorporated herein by reference.
(d) Multiple Class Plan for Eaton Vance Funds dated June 23, 1997
filed as Exhibit (18) to Post-Effective Amendment No. 39 to
Registrant's N-1A and incorporated herein by reference.
(11) Opinion and Consent of Counsel as to legality of securities being
issued filed as Exhibit (11) to the Registrant's N-14 and
incorporated herein by reference.
<PAGE>
(12) Form of Tax Opinion of Hale and Dorr LLP filed as Exhibit (12) to
the Registrant's N-14 and incorporated herein by reference.
(13)(a) Amended Administrative Services Agreement between Eaton Vance
Investment Trust (on behalf of certain of its series) and Eaton
Vance Management dated June 19, 1995, with attached schedules
(including Amended Schedule A) filed as Exhibit (9) to
Post-Effective Amendment No. 34 to Registrant's N-1A and
incorporated herein by reference.
(a)(1) Amendment to Schedule A dated June 23, 1997 to the Amended
Administrative Services Agreement dated June 19, 1995 filed as
Exhibit (9)(a)(1) to Post-Effective Amendment No. 39 to
Registrant's N-1A and incorporated herein by reference.
(b) 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.
(14) (a) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance Connecticut Limited Maturity
Municipals Funds filed as Exhibit (14)(a) to the Registrant's N-14
and incorporated herein by reference.
(b) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance Michigan Limited Maturity
Municipals Funds filed as Exhibit (14)(b) to the Registrant's N-14
and incorporated herein by reference.
(c) Consent of Deloitte & Touche LLP regarding financial statements of
Registrant on behalf of Eaton Vance National Limited Maturity
Municipals Fund filed as Exhibit (14)(c) to the Registrant's N-14
and incorporated herein by reference.
(15) Not Applicable.
(16) Power of Attorney for the Registrant dated August 16, 1999 filed
as Exhibit (16) to the Registrant's N-14 and incorporated herein
by reference.
(17) Rule 24f-2 Election of Registrant filed as Exhibit (17) to the
Registrant's N-14 and incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) under the Securities Act of 1933
(the "1933 Act"), the reoffering prospectus will contain the information called
for by the applicable registration form for reofferings by persons who may be
deemed underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant has duly caused
this Pre-Effective Amendment No. 1 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Boston,
and the Commonwealth of Massachusetts on the 21st day of September, 1999.
EATON VANCE INVESTMENT TRUST
/s/ THOMAS J. FETTER
Thomas J. Fetter, President
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in their capacities on September 21, 1999.
Signature Title
/s/ Thomas J. Fetter President and Principal Executive Officer
Thomas J. Fetter
/s/ James L. O'Connor Treasurer and Principal Financial and
James L. O'Connor Accounting Officer
Jessica M. Bibliowicz* Trustee
Jessica M. Bibliowicz
Donald R. Dwight* Trustee
Donald R. Dwight
/s/ James B. Hawkes Trustee
James B. Hawkes
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/ Eric G. Woodbury
Eric G. Woodbury
As Attorney-in-fact
