AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 1995
1933 ACT FILE NO. 33-14532
1940 ACT FILE NO. 811-5176
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 10 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 9 [X]
EATON VANCE LIQUID ASSETS TRUST
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
617 482-8260
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(REGISTRANT'S TELEPHONE NUMBER)
H. DAY BRIGHAM, JR.
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
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(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective on April 3, 1995
pursuant to paragraph (b) of Rule 485.
The exhibit index required by Rule 483(a) under the Securities Act of 1933
is located on page in the sequential numbering system of the manually signed
copy of this Registration Statement.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
February 27, 1995 filed its "Notice" as required by that Rule for the fiscal
year ended December 31, 1994.
Cash Management Portfolio has also executed this Registration Statement.
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<PAGE>
This Amendment to the registration statement on Form N-1A consists of the
following documents and papers:
Cross Reference Sheet required by Rule 481(a) under the Securities Act of
1933
Part A--The Prospectus of:
Eaton Vance Money Market Fund
Part B--The Statement of Additional Information of:
Eaton Vance Money Market Fund
Part C--Other Information
Signatures
Exhibit Index Required by Rule 483(b) under the Securities Act of 1933
Exhibits
This Amendment is not intended to amend the Prospectuses and Statements of
Additional Information of any other Fund of the Registrant not identified above.
<PAGE>
EATON VANCE LIQUID ASSETS TRUST
Eaton Vance Money Market Fund
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
------------ -------- ---------------------------
1. .............. Cover Page Cover Page
2. .............. Synopsis Shareholder and Fund
Expenses
3. .............. Condensed Financial Performance Information
Information
4. .............. General Description of The Fund's Investment
Registrant Objective; How the Fund
and the Portfolio Invest
their Assets;
Organization of the Fund
and the Portfolio
5. .............. Management of the Fund Management of the Fund and
the Portfolio
5A. .............. Management's Discussion of Not Applicable
Fund Performance
6. .............. Capital Stock and Other Organization of the Fund
Securities and the Portfolio; The
Lifetime Investing
Account/Distribution
Options; Distributions
and Taxes
7. .............. Purchase of Securities Being Valuing Fund Shares; How to
Offered Buy Fund Shares; The
Lifetime Investing
Account/Distribution
Options; Distribution
Plan; The Eaton Vance
Exchange Privilege; Eaton
Vance Shareholder
Services
8. .............. Redemption or Repurchase How to Redeem Fund Shares
9. .............. Pending Legal Proceedings Not Applicable
PART B
ITEM NO. ITEM CAPTION STATEMENT OF ADDITIONAL
INFORMATION CAPTION
------------ -------- ---------------------------
10. ............... Cover Page Cover Page
11. ............... Table of Contents Table of Contents
12. ............... General Information and Not Applicable
History
13. ............... Investment Objectives and Investment Objective and
Policies Policies; Investment
Restrictions
14. ............... Management of the Fund Trustees and Officers
15. ............... Control Persons and Control Persons and
Principal Holders of Principal Holders of
Securities Securities
16. ............... Investment Advisory and Investment Adviser and
Other Administrator; Other
Services Information
17. ............... Brokerage Allocation and Portfolio Security
Other Transactions
Practices
18. ............... Capital Stock and Other Other Information
Securities
19. ............... Purchase, Redemption and Determination of Net Asset
Pricing of Securities Value; Principal
Being Offered Underwriter; Distribution
Plan
20. ............... Tax Status Taxes
21. ............... Underwriters Principal Underwriter
22. ............... Calculation of Yield Calculation of Yield
Quotations of Quotations
Money Market Funds
23. ............... Financial Statements Financial Statements
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EATON VANCE MONEY MARKET FUND
EATON VANCE MONEY MARKET FUND (THE "FUND") IS A MONEY MARKET MUTUAL FUND
SEEKING HIGH INCOME CONSISTENT WITH PRESERVATION OF CAPITAL AND MAINTENANCE OF
LIQUIDITY. THE FUND INVESTS ITS ASSETS IN CASH MANAGEMENT PORTFOLIO (THE
"PORTFOLIO"), A DIVERSIFIED OPEN-END INVESTMENT COMPANY HAVING THE SAME
INVESTMENT OBJECTIVE AS THE FUND, RATHER THAN BY DIRECTLY INVESTING IN AND
MANAGING ITS OWN PORTFOLIO OF SECURITIES AS WITH AN HISTORICALLY STRUCTURED
MUTUAL FUND. THE FUND IS A SERIES OF EATON VANCE LIQUID ASSETS TRUST (THE
"TRUST").
AN INVESTMENT IN THE FUND IS NOT GUARANTEED OR INSURED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENT AGENCY. SHARES OF THE FUND ARE NOT OBLIGATIONS OR
DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER INSURED DEPOSITORY
INSTITUTION. THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE. SHARES OF THE FUND INVOLVE INVESTMENT
RISKS, INCLUDING FLUCTUATIONS IN VALUE AND THE POSSIBLE LOSS OF SOME OR ALL OF
THE PRINCIPAL INVESTMENT.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated April 3, 1995 for the Fund, as supplemented from
time to time, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. This Statement of Additional Information is
available without charge from the Fund's principal underwriter, Eaton Vance
Distributors, Inc. (the "Principal Underwriter"), 24 Federal Street, Boston, MA
02110 (telephone (800) 225-6265). The Portfolio's investment adviser is Boston
Management and Research (the "Investment Adviser"), a wholly-owned subsidiary of
Eaton Vance Management, and Eaton Vance Management is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURI-
TIES 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 PROS-
PECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PAGE PAGE
<S> <C> <C> <C>
Shareholder and Fund Expenses ..................... 2 How to Redeem Fund Shares ..................... 13
The Fund's Investment Objective ................... 3 Reports to Shareholders ....................... 15
How the Fund and the Portfolio Invest The Lifetime Investing Account/
their Assets .................................... 3 Distribution Options ........................ 16
Organization of the Fund and the Portfolio ........ 5 The Eaton Vance Exchange Privilege ............ 17
Management of the Fund and the Portfolio .......... 7 Eaton Vance Shareholder Services .............. 18
Distribution Plan ................................. 8 Distributions and Taxes ....................... 19
Valuing Fund Shares ............................... 11 Performance Information ....................... 20
How to Buy Fund Shares ............................ 12 Appendix ...................................... 21
</TABLE>
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PROSPECTUS DATED APRIL 3, 1995
<PAGE>
SHAREHOLDER AND FUND EXPENSES\1/
SHAREHOLDER TRANSACTION EXPENSES
Sales Charges Imposed on Purchases of Shares None
Sales Charges Imposed on Reinvested Distributions None
Fees to Exchange Shares None
Range of Declining Contingent Deferred Sales Charges
Imposed on Redemption During the First Seven Years
(as a percentage of redemption proceeds exclusive of all
reinvestments and capital appreciation in the account)\2/ 5.00% - 0%
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(as a percentage of average daily net assets)
Investment Adviser Fee 0.50%
Rule 12b-1 Distribution (and Service) Fees 0.85
Other Expenses 0.25
---
Total Operating Expenses 1.60%
===
EXAMPLE 1 YEAR 3 YEARS
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An investor would pay the following contingent deferred
sales charge and expenses on a $1,000 investment,
assuming (a) 5% annual return and (b) redemption at
the end of each period: $66 $90
An investor would pay the following expenses on the
same investment, assuming (a) 5% annual return and
(b) no redemptions: $16 $70
Notes:
\1/ The purpose of the above table and Example is to summarize the aggregate
expenses of the Fund and the Portfolio and to assist investors in
understanding the various costs and expenses that investors in the Fund will
bear directly or indirectly. The Trustees of the Trust believe that over
time the aggregate per share expenses of the Fund and the Portfolio should
be approximately equal to the per share expenses which the Fund would incur
if the Trust retained the services of an investment adviser and the Fund's
assets were invested directly in the type of securities being held by the
Portfolio. Since the Fund does not yet have a sufficient operating history,
the percentages indicated as Annual Fund and Allocated Portfolio Operating
Expenses in the table and the amounts included in the Example are estimates
based on the Fund's and the Portfolio's projected fees and expenses for the
current fiscal year ending December 31, 1995. The Example should not be
considered a representation of past or future expenses and actual expenses
may be greater or less than those shown. The Example assumes a 5% annual
return and the Fund's actual performance may result in an annual return
greater or less than 5%. For further information regarding the expenses of
both the Fund and the Portfolio see "Organization of the Fund and the
Portfolio", "Management of the Fund and the Portfolio", and "How to Redeem
Fund Shares". Because the Fund makes payments under its Distribution Plan
adopted under Rule 12b-1, a long-term shareholder may pay more than the
economic equivalent of the maximum front-end sales charge permitted by a
rule of the National Association of Securities Dealers, Inc. See
"Distribution Plan".
\2/ No contingent deferred sales charge is imposed on (a) shares purchased more
than six years prior to redemption, (b) shares acquired through the
reinvestment of distributions or (c) any appreciation in value of other
shares in the account (see "How to Redeem Fund Shares"), and no such charge
is imposed on exchanges of Fund shares for shares of one or more other funds
listed under "The Eaton Vance Exchange Privilege".
\3/ Other investment companies with different distribution arrangements and fees
are currently investing in the Portfolio and additional investors may do so
in the future. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
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EATON VANCE MONEY MARKET FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE AS HIGH A
RATE OF INCOME AS MAY BE CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE
MAINTENANCE OF LIQUIDITY.The Fund is a money market fund offering the advantages
of professional management, portfolio diversification, daily liquidity,
principal stability and current income. The Fund seeks to maintain a constant
net asset value of $1.00 per share and declares dividends daily. There is no
assurance that the Fund will achieve its investment objective or be able to
maintain a constant net asset value per share.
The Fund seeks to meet its investment objective by investing its assets in
the Cash Management Portfolio, a separate registered investment company which
invests in a diversified portfolio of money market instruments. The Fund's and
the Portfolio's investment objectives are nonfundamental and may be changed when
authorized by a vote of the Trustees of the Fund or the Portfolio, respectively,
without obtaining the approval of the Fund's shareholders or the investors in
the Portfolio, as the case may be. The Trustees of the Fund have no present
intention to change the Fund's objective and intend to submit any proposed
material change in the investment objective to shareholders in advance for their
approval.
The Fund was established as an exchange vehicle for shareholders of the
Eaton Vance Marathon and Eaton Vance Classic Groups of Funds, and its
shareholders will consist primarily of investors who have exchanged out of one
or more of such funds into the Fund and investors who purchased shares of the
Fund with the intention of exchanging into one or more of such EV Marathon or EV
Classic funds. See "The Eaton Vance Exchange Privilege." The Fund may not be a
suitable investment for investors who do not intend to use it as an exchange
vehicle.
HOW THE FUND AND THE PORTFOLIO INVEST THEIR ASSETS
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THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING EITHER DIRECTLY
OR INDIRECTLY THROUGH ANOTHER OPEN-END MANAGEMENT INVESTMENT COMPANY IN A
DIVERSIFIED PORTFOLIO OF MONEY MARKET INSTRUMENTS. The Portfolio invests its
assets in the following types of high quality, U.S. dollar-denominated money
market instruments of domestic and foreign issuers:
* obligations issued, guaranteed, insured or otherwise backed by governments
or their agencies or instrumentalities.
* obligations of financial institutions, such as banks, savings and loan
institutions, insurance companies and mortgage bankers. These obligations
include but are not limited to certificates of deposits, bankers'
acceptances and time deposits.
* short-term obligations of corporations or other entities, including
commercial paper, notes, bonds and other debt instruments.
* other debt obligations with remaining maturities of 397 calendar days or
less.
The Portfolio's current policy is to purchase short-term debt obligations,
including commercial paper, which (at the time of acquisition) are rated (or
which have been issued by an issuer that is rated with respect to a class of
short-term debt obligations that is comparable in priority and security with the
obligation being purchased) in the highest rating category for short-term debt
obligations (within which there may be sub-categories or gradations indicating
relative standing) assigned by at least two of the following nationally
recognized statistical rating organizations: Standard & Poor's Ratings Group,
Moody's Investors Service, Inc., Duff & Phelps Credit Rating Co. or Fitch
Investors Service, Inc. For a description of various obligations and certain
ratings assigned by such rating organizations, see the Appendix to the Statement
of Additional Information.
The Portfolio may enter into repurchase agreements (described below) and
reverse repurchase agreements (described in the Appendix). The Portfolio may
also invest in when-issued securities, whose market value may include an
unrealized gain or loss prior to settlement.
The Portfolio may invest in obligations of U.S. banks, foreign branches of
U.S. banks (Eurodollars), U.S. branches of foreign banks (Yankee dollars), and
foreign branches of foreign banks. Euro and Yankee dollar investments involve
risks that are different from investments in securities of U.S. banks. These
risks may include future unfavorable political and economic developments,
possible withholding taxes, seizure of foreign deposits, interest limitations or
other governmental restrictions which might affect payment of principal or
interest. Additionally, there may be less public information available about
foreign banks and their branches. Foreign branches of foreign banks are not
regulated by U.S. banking authorities, and generally are not bound by
accounting, auditing and financial reporting standards comparable to U.S. banks.
Although the Portfolio's Investment Adviser carefully considers these factors
when making investments, the Portfolio does not limit the amount of its assets
which can be invested in one type of instrument or in any foreign country.
The Portfolio may invest up to 100% of its total assets (taken at current
value) in all finance companies as a group, or in all banking and thrift
institutions and their holding companies as a group, whenever in the opinion of
the Investment Adviser yield differentials and money market conditions indicate
that such investments may be appropriate and when cash is available for such
investments and instruments are available for purchase which are consistent with
the Portfolio's investment objective and policies.
THE PORTFOLIO FOLLOWS VARIOUS POLICIES TO PROVIDE INVESTORS WITH A
CONVENIENTLY LIQUID INVESTMENT. Its investment practices are designed to enable
the Fund and other investors in the Portfolio to maintain a constant net asset
value of $1.00 per share. The Portfolio invests in high quality money market
instruments with minimal credit risks which have remaining maturities of 397
calendar days or less. The average maturity of its investments varies with the
Investment Adviser's perception of conditions in the money markets, but is
always 90 days or less. The maturity of instruments held by the Portfolio will
be determined in accordance with Rule 2a-7 under the Investment Company Act of
1940 (the "1940 Act"). Of course the Portfolio cannot guarantee a constant $1.00
share price, but these practices help to minimize any price fluctuations that
might result from rising or declining interest rates. While the Portfolio
invests in high quality money market instruments, a shareholder in the Fund
should be aware that his or her investment is not without risk even if all the
securities held by the Portfolio are paid in full at maturity. All money market
instruments, including U.S. Government obligations, can change in value when
interest rates or an issuer's creditworthiness changes. As with any short-term
investment, the Fund's income will fluctuate with changes in interest rates. The
Portfolio's net investment income will also be affected by its level of
operating expenses, which expenses are expected to be higher than those of most
other money market funds.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions which are enumerated in detail in the Statement of Additional
Information and which may not be changed unless authorized by a shareholder vote
and an investor vote, respectively. Except for such enumerated restrictions, the
investment objective and policies of the Fund and the Portfolio are not
fundamental policies and accordingly may be changed by the Trustees of the Fund
or the Portfolio, respectively, without obtaining the approval of the Fund's
shareholders or the investors in the Portfolio, as the case may be. If any
changes were made in the Fund's investment objective, the Fund might have
investment objectives different from the objectives which an investor considered
appropriate at the time the investor became a shareholder in the Fund.
The Portfolio may enter into repurchase agreements only if each repurchase
agreement (i) is collateralized fully by U.S. Government securities, (ii) is
determined by the Investment Adviser to present minimal credit risks (which
determination must be based on the factors pertaining to credit quality set
forth in Credit Quality Guidelines adopted by the Trustees), and (iii) is
entered into with a firm approved by the Trustees. In all cases the Portfolio's
Investment Adviser must be satisfied with the creditworthiness of the other
party to the agreement before entering into a repurchase agreement. In the event
of the bankruptcy of the other party to a repurchase agreement, the Portfolio
might experience delays in recovering its cash. To the extent that, in the
meantime, the value of the securities the Portfolio purchased may have
decreased, the Portfolio could experience a loss. Repurchase agreements are
discussed in more detail in the Statement of Additional Information.
The Portfolio may purchase securities on a "when-issued" basis, which means
that payment and delivery occur on a future settlement date. The price and yield
are generally fixed on the date of commitment to purchase. However, the market
value of the securities may fluctuate prior to delivery and upon delivery the
securities may be worth more or less than the Portfolio agreed to pay for them.
The Portfolio will maintain in a segregated account sufficient assets to cover
its purchase obligations as long as such obligations continue.
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THE FUND IS NOT INTENDED TO BE A COMPLETE INVESTMENT PROGRAM, AND
PROSPECTIVE INVESTORS SHOULD TAKE INTO ACCOUNT THEIR OBJECTIVES AND OTHER
INVESTMENTS WHEN CONSIDERING THE PURCHASE OF FUND SHARES. THE FUND CANNOT
ELIMINATE RISK OR ASSURE ACHIEVEMENT OF ITS INVESTMENT OBJECTIVE.
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ORGANIZATION OF THE FUND AND THE PORTFOLIO
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THE FUND IS A DIVERSIFIED SERIES OF EATON VANCE LIQUID ASSETS TRUST (THE
"TRUST"), A BUSINESS TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A
DECLARATION OF TRUST DATED MAY 11, 1987, AS AMENDED. THE TRUST IS A MUTUAL FUND
-- AN OPEN-END MANAGEMENT INVESTMENT COMPANY. The Trustees of the Trust are
responsible for the overall management and supervision of its affairs. The Trust
may issue an unlimited number of shares of beneficial interest (no par value per
share) in one or more series and because the Trust can offer separate series
(such as the Fund) it is known as a "series company." Each share represents an
equal proportionate beneficial interest in the Fund. When issued and
outstanding, the shares are fully paid and nonassessable by the Trust and
redeemable as described under "How to Redeem Fund Shares". Shareholders are
entitled to one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW
YORK AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. The
Portfolio, as well as the Trust, intends to comply with all applicable Federal
and state securities laws. The Portfolio's Declaration of Trust provides that
the Fund and other entities permitted to invest in the Portfolio (e.g., other
U.S. and foreign investment companies, and common and commingled trust funds)
will each be liable for all obligations of the Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Trust
believe that neither the Fund nor its shareholders will be adversely affected by
reason of the Fund investing in the Portfolio.
SPECIAL INFORMATION ON THE FUND/PORTFOLIO INVESTMENT STRUCTURE. An investor in
the Fund should be aware that the Fund, unlike mutual funds which directly
acquire and manage their own portfolios of securities, seeks to achieve its
investment objective by investing its assets in an interest in the Portfolio
(although the Fund may hold a de minimus amount of cash), which is a separate
investment company with an identical investment objective. Therefore, the Fund's
interest in the securities owned by the Portfolio is indirect. In addition to
selling an interest to the Fund, the Portfolio may sell interests to other
affiliated and non-affiliated mutual funds or institutional investors. Such
investors will invest in the Portfolio on the same terms and conditions and will
pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, investors in the Fund
should be aware that these differences may result in differences in returns
experienced by investors in the various funds that invest in the Portfolio. Such
differences in returns are also present in other mutual fund structures,
including funds that have multiple classes of shares. For information regarding
the investment objective, policies and restrictions, see "The Fund's Investment
Objective" and "How the Fund and the Portfolio Invest their Assets". Further
information regarding investment practices may be found in the Statement of
Additional Information.
The Trustees of the Trust have considered the advantages and disadvantages
of investing the assets of the Fund in the Portfolio, as well as the advantages
and disadvantages of the two-tier format. The Trustees believe that the
structure offers opportunities for substantial growth in the assets of the
Portfolio, and affords the potential for economies of scale for the Fund.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. The investment objective and the
nonfundamental investment policies of the Fund and the Portfolio may be changed
by the Trustees of the Trust and the Portfolio without obtaining the approval of
the shareholders of the Fund or the investors in the Portfolio, as the cash may
be. Any such change of the investment objective will be preceded by thirty days'
advance written notice to the shareholders of the Fund or the investors in the
Portfolio, as the case may be. If a shareholder redeems shares because of a
change in the nonfundamental objective or policies of the Fund, those shares may
be subject to a contingent deferred sales charge, as described in "How to Redeem
Fund Shares". In the event the Fund withdraws all of its assets from the
Portfolio, or the Board of Trustees of the Fund determines that the investment
objective of the Portfolio is no longer consistent with the investment objective
of the Fund, such Trustees would consider what action might be taken, including
investing the assets of the Fund in another pooled investment entity or
retaining an investment adviser to manage the Fund's assets in accordance with
its investment objective. The Fund's investment performance may be affected by a
withdrawal of all its assets from the Portfolio.
Information regarding other pooled investment entities or funds which
invest in the Portfolio may be obtained by contacting Eaton Vance Distributors,
Inc. (the "Principal Underwriter" or "EVD"), 24 Federal Street, Boston, MA
02110, (617) 482-8260. Smaller investors in the Portfolio may be adversely
affected by the actions of larger investors in the Portfolio. For example, if a
large investor withdraws from the Portfolio, the remaining investors may
experience higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio may become less diverse, resulting in increased
portfolio risk, and experience decreasing economies of scale. However, this
possibility exists as well for historically structured funds which have large or
institutional investors.
Until recently, the Administrator sponsored and advised historically
structured funds. Funds which invest all their assets in interests in a separate
investment company are a relatively new development in the mutual fund industry
and, therefore, the Fund may be subject to additional regulations than
historically structured funds.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for Federal income tax purposes. See
"Distributions and Taxes" for further information. Whenever the Fund as an
investor in the Portfolio is requested to vote on matters pertaining to the
Portfolio (other than the termination of the Portfolio's business, which may be
determined by the Trustees of the Portfolio without investor approval), the Fund
will hold a meeting of Fund shareholders and will vote its interest in the
Portfolio for or against such matters proportionately to the instructions to
vote for or against such matters received from Fund shareholders. The Fund shall
vote shares for which it receives no voting instructions in the same proportion
as the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Fund to withdraw its investment in the Portfolio or take other
appropriate action. Any such withdrawal could result in a distribution "in kind"
of portfolio securities (as opposed to a cash distribution from the Portfolio).
If securities are distributed, the Fund could incur brokerage, tax or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Fund. Notwithstanding the above, there are other
means for meeting shareholder redemption requests, such as borrowing.
The Trustees of the Trust, including a majority of the noninterested
Trustees, have approved written procedures designed to identify and address any
potential conflicts of interest arising from the fact that some of the Trustees
of the Trust and the Trustees of the Portfolio are the same. Such procedures
require each Board to take action to resolve any conflict of interest between
the Fund and the Portfolio, and it is possible that the creation of separate
Boards may be considered. For further information concerning the Trustees and
officers of the Trust and the Portfolio, see the Statement of Additional
Information.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
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THE PORTFOLIO ENGAGES BOSTON MANAGEMENT AND RESEARCH ("BMR"), A WHOLLY-OWNED
SUBSIDIARY OF EATON VANCE MANAGEMENT ("EATON VANCE"), AS ITS INVESTMENT ADVISER.
EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN MANAGING
ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING INVESTMENT
COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the
Portfolio, BMR manages the Portfolio's investments and affairs. Under its
investment advisory agreement with the Portfolio, BMR receives a monthly
advisory fee of 1/24 of 1% (equivalent to 0.50% annually) of the average daily
net assets of the Portfolio. For the period from the start of business, May 2,
1994, to December 31, 1994, the Portfolio paid BMR advisory fees equivalent to
0.50% (annualized) of the Portfolio's average daily net assets for such period.
BMR also furnishes for the use of the Portfolio office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Portfolio.
Money market instruments are often acquired directly from the issuers
thereof or otherwise are normally traded on a net basis (without commission)
through broker-dealers and banks acting for their own account. Such firms
attempt to profit from such transactions by buying at the bid price and selling
at the higher asked price of the market, and the difference is customarily
referred to as the spread. In selecting firms which will execute portfolio
transactions of the Portfolio, BMR judges their professional ability and quality
of service and uses its best efforts to obtain execution at prices which are
advantageous to the Portfolio and at reasonably competitive spreads. Subject to
the foregoing, BMR may consider sales of shares of the Fund or of other
investment companies sponsored by BMR or Eaton Vance as a factor in the
selection of firms to execute portfolio transactions.
Michael B. Terry has acted as the portfolio manager of the Portfolio since
it commenced operations. He has been a Vice President of Eaton Vance since 1984
and of BMR since 1992.
BMR OR EATON VANCE ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES AND
VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
APPROXIMATELY $15 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton
Vance Corp., a publicly-held holding company. Eaton Vance Corp., through its
subsidiaries and affiliates, engages in investment management and marketing
activities, fiduciary and banking services, oil and gas operations, real estate
investment, consulting and management and development of precious metals
properties. EVD is a wholly-owned subsidiary of Eaton Vance.
The Trust has retained the services of Eaton Vance to act as Administrator
of the Fund. The Trust has not retained the services of an investment adviser
since the Trust seeks to achieve the investment objective of the Fund by
investing the Fund's assets in the Portfolio. As Administrator, Eaton Vance
provides the Fund with general office facilities and supervises the overall
administration of the Fund. For these services, Eaton Vance currently receives
no compensation. The Trustees of the Trust may determine, in the future, to
compensate Eaton Vance for such services.
The Portfolio and the Fund, as the case may be, will each be responsible
for all of its respective costs and expenses not expressly stated to be payable
by BMR under the investment advisory agreement, by Eaton Vance under the
administrative services agreement or by EVD under the distribution agreement.
Such costs and expenses to be borne by the Portfolio and the Fund, as the case
may be, include, without limitation: custody and transfer agency fees and
expenses, including those incurred for determining net asset value and keeping
accounting books and records; expenses of pricing and valuation services; the
cost of share certificates; membership dues in investment company organizations;
expenses of acquiring, holding and disposing of securities and other
investments; fees and expenses of registering under the securities laws and
governmental fees; expenses of reporting to shareholders and investors; proxy
statements and other expenses of shareholders' or investors' meetings; insurance
premiums; printing and mailing expenses; interest, taxes and corporate fees;
legal and accounting expenses; compensation and expenses of Trustees not
affiliated with BMR or Eaton Vance; and investment advisory fees and, if any,
administrative services fees. The Portfolio or the Fund, as the case may be,
will also each bear expenses incurred in connection with litigation in which the
Portfolio or the Fund, as the case may be, is a party and any legal obligation
to indemnify its respective officers and Trustees with respect thereto.
DISTRIBUTION PLAN
--------------------------------------------------------------------------------
THE FUND FINANCES DISTRIBUTION ACTIVITIES AND HAS ADOPTED A DISTRIBUTION PLAN
(THE "PLAN") PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
Rule 12b-1 permits a mutual fund, such as the Fund, to finance distribution
activities and bear expenses associated with the distribution of its shares
provided that any payments made by the Fund are made pursuant to a written plan
adopted in accordance with the Rule. The Plan is subject to, and complies with,
the sales charge rule of the National Association of Securities Dealers, Inc.
(the "NASD Rule"). The Plan is described further in the Statement of Additional
Information, and the following is a description of the salient features of the
Plan. The Plan provides that the Fund, subject to the NASD Rule, will pay sales
commissions and distribution fees to the Principal Underwriter only after and as
a result of the sale of shares of the Fund. On each sale of Fund shares
(excluding reinvestment of distributions) the Fund will pay the Principal
Underwriter amounts representing (i) sales commissions equal to 6.25% of the
amount received by the Fund for each share sold and (ii) distribution fees
calculated by applying the rate of 1% over the prime rate then reported in The
Wall Street Journal to the outstanding balance of Uncovered Distribution Charges
(as described below) of the Principal Underwriter. The Principal Underwriter
currently expects to pay sales commissions (except on exchange transactions and
reinvestments) to a financial service firm (an "Authorized Firm") at the time of
sale equal to 4% of the purchase price of the shares sold by such Firm. The
Principal Underwriter will use its own funds (which may be borrowed from banks)
to pay such commissions. With respect to Fund shares acquired as a result of an
exchange from one or more funds in the Eaton Vance Classic Group of Funds, the
Principal Underwriter currently expects to pay monthly sales commissions to an
Authorized Firm approximately equivalent to 1/12 of .75% of the value of such
shares sold by such Firm and remaining outstanding for at least one year from
the date of original purchase of the EV Classic fund shares. Because the payment
of the sales commissions and distribution fees to the Principal Underwriter is
subject to the NASD Rule described below, it will take the Principal Underwriter
a number of years to recoup the sales commissions paid by it to Authorized Firms
from the payments received by it from the Fund pursuant to the Plan.
THE NASD RULE REQUIRES THE FUND TO LIMIT ITS ANNUAL PAYMENTS OF SALES
COMMISSIONS AND DISTRIBUTION FEES TO THE PRINCIPAL UNDERWRITER TO AN AMOUNT NOT
EXCEEDING .75% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR EACH FISCAL
YEAR. Accordingly, the Fund accrues daily an amount at the rate of 1/365 of .75%
of the Fund's net assets, and pays such accrued amounts monthly to the Principal
Underwriter. The Plan requires such accruals to be automatically discontinued
during any period in which there are no outstanding Uncovered Distribution
Charges under the Plan. Uncovered Distribution Charges are calculated daily and,
briefly, are equivalent to all unpaid sales commissions and distribution fees to
which the Principal Underwriter is entitled under the Plan less all contingent
deferred sales charges theretofore paid to the Principal Underwriter. The Eaton
Vance organization may be considered to have realized a profit under the Plan if
at any point in time the aggregate amounts of all payments received by the
Principal Underwriter from the Fund pursuant to the Plan, including any
contingent deferred sales charges, have exceeded the total expenses theretofore
incurred by such organization in distributing shares of the Fund. Total expenses
for this purpose will include an allocable portion of the overhead costs of such
organization and its branch offices.
The amount payable by the Fund to the Principal Underwriter pursuant to the
Plan with respect to each day will be accrued on such day as a liability of the
Fund and will accordingly reduce the Fund's net assets upon such accrual, all in
accordance with generally accepted accounting principles. The amount payable on
each day is limited to 1/365 of .75% of the Fund's net assets on such day. The
level of the Fund's net assets changes each day and depends upon the amount of
sales and redemptions of Fund shares, the changes in the value of the
investments held by the Portfolio, expenses (including the Fund's allocated
share of Portfolio expenses) accrued by the Fund on such day, income on
portfolio investments of the Portfolio accrued and allocated to the Fund on such
day, and any dividends and distributions declared on Fund shares. The Fund does
not accrue possible future payments as a liability of the Fund or reduce the
Fund's current net assets in respect of unknown amounts which may become payable
under the Plan in the future because the standards for accrual of a liability
under such accounting principles have not been satisfied.
The Plan provides that the Fund will receive all contingent deferred sales
charges and will make no payments to the Principal Underwriter in respect of any
day on which there are no outstanding Uncovered Distribution Charges of the
Principal Underwriter. Contingent deferred sales charges and accrued amounts
will be paid by the Fund to the Principal Underwriter whenever there exist
Uncovered Distribution Charges under the Plan.
The provisions of the Plan relating to payments of sales commissions and
distribution fees to the Principal Underwriter are also included in the
Distribution Agreement between the Trust on behalf of the Fund and the Principal
Underwriter. The Plan continues in effect through and including April 28, 1995,
and shall continue in effect indefinitely thereafter for so long as such
continuance is approved at least annually by the vote of both a majority of (i)
the Trustees of the Trust who are not interested persons of the Trust and who
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to the Plan (the "Rule 12b-1 Trustees") and (ii) all of
the Trustees then in office, and the Distribution Agreement contains a similar
provision. The Plan and Distribution Agreement may be terminated at any time by
vote of a majority of the Rule 12b-1 Trustees, or by a vote of a majority of the
outstanding voting securities of the Fund.
Periods with a high level of sales of Fund shares accompanied by a low
level of early redemptions of Fund shares resulting in the imposition of
contingent deferred sales charges will tend to increase the time during which
there will exist Uncovered Distribution Charges of the Principal Underwriter.
Conversely, periods with a low level of sales of Fund shares accompanied by a
high level of early redemptions of Fund shares resulting in the imposition of
contingent deferred sales charges will tend to reduce the time during which
there will exist Uncovered Distribution Charges of the Principal Underwriter.
Because of the NASD Rule limitation on the amount of sales commissions and
distribution fees paid to the Principal Underwriter during any fiscal year, a
high level of sales of Fund shares during the initial years of the Fund's
operations would cause a large portion of the sales commissions attributable to
a sale of Fund shares to be accrued and paid by the Fund to the Principal
Underwriter in fiscal years subsequent to the year in which such shares were
sold. This spreading of sales commissions payments under the Plan over an
extended period would result in the incurrence and payment of increased
distribution fees under the Plan.
THE PLAN AUTHORIZES THE FUND TO MAKE PAYMENTS OF SERVICE FEES TO THE
PRINCIPAL UNDERWRITER, AUTHORIZED FIRMS AND OTHER PERSONS. THE AGGREGATE OF SUCH
PAYMENTS DURING ANY FISCAL YEAR OF THE FUND SHALL NOT EXCEED .25% OF THE FUND'S
AVERAGE DAILY NET ASSETS FOR SUCH YEAR. The Trustees of the Trust have initially
implemented the Plan by authorizing the Fund to pay service fees to the
Principal Underwriter and Authorized Firms in amounts up to .15% per annum of
the Fund's average daily net assets based on the value of Fund shares sold by
such persons and remaining outstanding for at least one year (including in such
holding period the prior holding of any EV Marathon or EV Classic fund shares
exchanged for Fund shares). However, the Plan authorizes the Trustees of the
Trust on behalf of the Fund to increase payments to the Principal Underwriter,
Authorized Firms and other persons from time to time without further action by
shareholders of the Fund, provided that the aggregate amount of payments made to
such persons under the Plan in any fiscal year of the Fund does not exceed .25%
of the Fund's average daily net assets. As permitted by the NASD Rule, such
payments are made for personal services and/or the maintenance of shareholder
accounts. Service fees are separate and distinct from the sales commissions and
distribution fees payable by the Fund to the Principal Underwriter, and as such
are not subject to automatic discontinuance when there are no outstanding
Uncovered Distribution Charges of the Principal Underwriter. The Fund expects to
begin accruing for its service fee payments during the quarter ending June 30,
1995.
As currently implemented by the Trustees, the Fund's Plan authorizes
payments by the Fund of sales commissions and distribution fees to the Principal
Underwriter and service fees to the Principal Underwriter and Authorized Firms
which may be equivalent, on an aggregate basis during any fiscal year of the
Fund, to .90% of the Fund's average daily net assets for such year. The Fund
believes that the combined rate of all these payments may be higher than the
rate of payments made under distribution plans adopted by other investment
companies pursuant to Rule 12b-1. It is anticipated that the Eaton Vance
organization will profit by reason of the operation of the Plan through
increases in the Fund's assets (thereby increasing the advisory fees payable to
BMR by the Portfolio) resulting from sales of Fund shares and through amounts
paid under the Plan to the Principal Underwriter and contingent deferred sales
charges paid to the Principal Underwriter.
The Principal Underwriter may, from time to time, at its own expense,
provide additional incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. In some
instances, such additional incentives may be offered only to certain Authorized
Firms whose representatives are expected to sell significant amounts of shares.
In addition, the Principal Underwriter may from time to time increase or
decrease the sales commissions paid by it to Authorized Firms.
The Fund may, in its absolute discretion, suspend, discontinue or limit the
offering of its shares at any time. In determining whether any such action
should be taken, the Fund's management intends to consider all relevant factors,
including without limitation the size of the Fund, the investment climate and
market conditions, the volume of sales and redemptions of Fund shares. The Plan
may continue in effect and payments may be made under the Plan following any
such suspension, discontinuance or limitation of the offering of Fund shares;
however, the Fund is not contractually obligated to continue the Plan for any
particular period of time. Suspension of the offering of Fund shares would not,
of course, affect a shareholder's ability to redeem shares.
VALUING FUND SHARES
-------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value is
determined by its custodian, Investors Bank & Trust Company ("IBT"), (as agent
for the Fund) in the manner authorized by the Trustees of the Trust. Net asset
value per share is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Because the Fund
invests its assets in an interest in the Portfolio, the Fund's net asset value
will reflect the value of its interest in the Portfolio (which, in turn,
reflects the underlying value of the Portfolio's assets and liabilities).
The Portfolio's net asset value is also determined as of the close of
regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by adding the value of all securities and all other assets and
subtracting liabilities. The Trustees have determined that the best method
currently available for valuing the securities held by the Portfolio is the
amortized cost method. The Trustees and BMR will periodically review this method
of valuation and the Portfolio will continue to use such method only so long as
the Trustees believe that it fairly reflects the market-based net asset value.
The Portfolio's use of the amortized cost method to value its securities is
permitted by a rule promulgated under the 1940 Act (the "Rule"). Under the Rule,
the Trustees are obligated, as a particular responsibility within the overall
duty of care owed to the shareholders, to establish procedures reasonably
designed, taking into account current market conditions and the Portfolio's
investment objective, to stabilize the net asset value and enable the Fund to
maintain its per share net asset value at $1.00 for the purpose of purchases,
redemptions and repurchases of shares.
The Trustees' procedures include periodically monitoring, as they deem
appropriate and at such intervals as are reasonable in light of current market
conditions, the extent of deviation between the amortized cost value per Fund
share and a net asset value based upon available indications of market value, as
well as review of the methods used to calculate the deviation. The Trustees of
the Trust have also adopted procedures for the Fund under the Rule. The Trustees
of each entity will consider what steps, if any, should be taken in the event of
a difference of more than 1/2 of 1% between such two values. The Trustees will
take such steps, if any, as they consider appropriate (e.g., redemption in kind,
selling prior to maturity to realize gains or losses or to shorten the average
portfolio maturity, withholding dividends or using market quotations) to
minimize any material dilution or other unfair results which might arise from
differences between the two. The Rule requires that the Portfolio limit its
investments, including puts and repurchase agreements, to those U.S.
dollar-denominated instruments which the Trustees determine present minimal
credit risks and which are, at the time of acquisition, rated by the requisite
number of nationally recognized statistical rating organizations in one of the
two highest applicable rating categories or, in the case of any instrument that
is not so rated, of comparable quality as determined by the Trustees. The Rule
also requires the Portfolio to comply with certain portfolio diversification
requirements and to maintain a dollar-weighted average portfolio maturity (not
more than 90 days) appropriate to its objective of enabling the Fund to maintain
a stable net asset value of $1.00 per Fund share. In addition, the Rule
precludes the purchase of any instrument with a remaining maturity of more than
397 calendar days. Should the disposition of a portfolio security result in a
dollar-weighted average portfolio maturity of more than 90 days, the Portfolio
will invest its available cash in such a manner as to reduce such maturity to 90
days or less as soon as reasonably practicable.
It is the normal practice of the Portfolio to hold securities to maturity
and realize their face value unless their sale or disposition is mandated by
redemption requirements or other extraordinary circumstances. Under the
amortized cost method of valuation, traditionally employed by institutions for
valuation of money market instruments, neither the amount of daily income nor
the net asset value is affected by any unrealized appreciation or depreciation
of the securities held by the Portfolio. For further information regarding the
valuation of each interest in the Portfolio, see "Determination of Net Asset
Value" in the Statement of Additional Information. Eaton Vance Corp. owns 77.3%
of the outstanding stock of IBT, the Fund's and Portfolio's custqdian.
HOW TO BUY FUND SHARES
--------------------------------------------------------------------------------
INVESTORS MAY PURCHASE SHARES OF THE FUND THROUGH AUTHORIZED FIRMS AT THE NET
ASSET VALUE PER SHARE OF THE FUND NEXT DETERMINED AFTER SUCH PURCHASE. An
initial investment in the Fund must be at least $1,000. Once an account has been
established the investor may send investments of $50 or more at any time
directly to the Fund's Transfer Agent (the "Transfer Agent") as follows: The
Shareholder Services Group, Inc. BOS725, P.O. Box 1559, Boston, MA 02104. The
$1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services" below. The Fund may suspend the offering of shares
at any time and may refuse an order for the purchase of shares. If you don't
have an Authorized Firm, Eaton Vance can recommend one.
BY MAIL: Initial Purchases -- The Account Application form which
accompanies this prospectus should be completed, signed and mailed with a check,
Federal Reserve Draft, or other negotiable bank draft, drawn on a U.S. bank and
payable in U.S. dollars, to the order of Eaton Vance Money Market Fund and
mailed to:
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
Subsequent Purchases -- Additional purchases may be made at any time by
mailing a check drawn on a U.S. bank and payable in U.S. dollars, to the order
of Eaton Vance Money Market Fund to the Transfer Agent at the above address. The
account to which the subsequent purchase is to be credited should be identified
as to the name(s) of the registered owner(s) and by account number.
BY WIRE: Investors may purchase shares by requesting their bank to transmit
immediately available funds (Federal funds) by wire to:
ABA #011001438
Federal Reserve Bank of Boston
A/C Investors Bank & Trust Company
Further Credit Eaton Vance Money Market Fund
A/C # [Insert your account number -- see below]
Initial Purchases -- Upon making an initial investment by wire, you must
first telephone the Order Department of the Fund 800-225-6265 (extension 3) to
advise of your action and to be assigned an account number. If you neglect to
make the telephone call, it may not be possible to process your order promptly.
In addition, the Account Application form which accompanies this prospectus
should be promptly forwarded to The Shareholder Services Group, Inc., at the
above address.
Subsequent Purchases -- Additional investments may be made at any time
through the wire procedure described above. The Fund's Order Department must be
immediately advised by telephone 800-225-6265 (extension 3) of each transmission
of funds by wire.
Transactions in the money market instruments in which the Portfolio invests
on behalf of the Fund normally require immediate settlement in Federal funds.
The Portfolio intends at all times to be as fully invested as is feasible in
order to maximize its earnings. Accordingly, purchase orders will be executed at
the net asset value next determined after their receipt by the Fund only if the
Fund has received payment in cash or in Federal funds. If remitted in other than
the foregoing manner, such as by money order or personal check, purchase orders
will be executed as of the close of business on the second Boston business day
after receipt. Information on how to procure a Federal Reserve Draft or to
transmit Federal funds by wire is available at banks. A bank may charge for
these services.
In connection with employee benefit or other continuous group purchase
plans under which the average initial purchase by a participant of the plan is
$1,000 or more, the Fund may accept initial investments of less than $1,000 on
the part of an individual participant. In the event a shareholder who is a
participant of such a plan terminates participation in the plan, his or her
shares will be transferred to a regular individual account. However, such
account will be subject to the right of redemption by the Fund as described
below under "How to Redeem Fund Shares."
HOW TO REDEEM FUND SHARES
--------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES BY DELIVERING TO THE SHAREHOLDER SERVICES
GROUP, INC., BOS725, P.O. BOX 1559, BOSTON, MASSACHUSETTS 02104, during its
business hours a written request for redemption in good order, plus any executed
stock powers. The redemption price will be based on the net asset value per Fund
share next computed after such delivery. Good order means that all relevant
documents must be endorsed by the record owner(s) exactly as the shares are
registered and the signature(s) must be guaranteed by a member of either the
Securities Transfer Association's STAMP program or the New York Stock Exchange's
Medallion Signature Program, or certain banks, savings and loan institutions,
credit unions, securities dealers, securities exchanges, clearing agencies and
registered securities associations as required by a regulation of the Securities
and Exchange Commission and acceptable to The Shareholder Services Group, Inc.
In addition, in some cases, good order may require the furnishing of additional
documents such as where shares are registered in the name of a corporation,
partnership or fiduciary.
Within seven days after receipt of a redemption request in good order by
The Shareholder Services Group, Inc., the Fund will make payment in cash for the
net asset value of the redeemed shares as of the date determined above, reduced
by the amount of any applicable contingent deferred sales charges (described
below) and any Federal income tax required to be withheld. Although the Fund
normally expects to make payment in cash for redeemed shares, it has, subject to
compliance with applicable regulations, reserved the right to pay the redemption
price of shares of the Fund, either totally or partially, by a distribution in
kind of readily marketable securities withdrawn by it from the Portfolio. The
securities so distributed would be valued pursuant to the Portfolio's valuation
procedures. If a shareholder received a distribution in kind, the shareholder
could incur brokerage or other charges in converting the securities to cash.
Shareholders who have given specific written authorization in advance (on a
form available from the Principal Underwriter) may request that redemption
proceeds of $1,000 or more be wired to a bank account. See "Eaton Vance
Shareholder Services -- Wire Transfer to a Bank Account" below.
To sell shares at their net asset value through an Authorized Firm (a
repurchase), a shareholder can place a repurchase order with the Authorized
Firm, which may charge a fee. The value of such shares is based upon the net
asset value calculated after EVD, as the Fund's agent, receives the order. It is
the Authorized Firm's responsibility to transmit promptly repurchase orders to
EVD. Throughout this Prospectus, the word "redemption" is generally meant to
include a repurchase.
If shares were recently purchased, the proceeds of redemption will not be
sent until the check (including a certified or cashier's check) received for the
shares purchased has cleared. Payment for shares tendered for redemption may be
delayed up to 15 days from the purchase date when the purchase check has not yet
cleared. If the net asset value of Fund shares is not maintained at $1.00 per
share or if a contingent deferred sales charge (described below) is imposed on
the redemption, a redemption may result in a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem accounts with balances of less than $1,000. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. Thus, an investor making an initial investment of $1,000
would not be able to redeem shares without being subject to this policy.
However, no such redemption would be required by the Fund if the cause of the
low account balance was a reduction in the net asset value of Fund shares. No
contingent deferred sales charge will be imposed with respect to such
involuntary redemptions.
CONTINGENT DEFERRED SALES CHARGE. Shares redeemed within the first six years of
their purchase (except shares acquired through the reinvestment of
distributions) generally will be subject to a contingent deferred sales charge.
This contingent deferred sales charge is imposed on any redemption the amount of
which exceeds the aggregate value at the time of redemption of (a) all shares in
the account purchased more than six years prior to the redemption, (b) all
shares in the account acquired through reinvestment of distributions, and (c)
the increase, if any, in value of all other shares in the account (namely those
purchased within the six years preceding the redemption) over the purchase price
of such shares. Redemptions are processed in a manner to maximize the amount of
redemption proceeds which will not be subject to a contingent deferred sales
charge. That is, each redemption will be assumed to have been made first from
the exempt amounts referred to in clauses (a), (b) and (c) above, and second
through liquidation of those shares in the account referred to in clause (c) on
a first-in-first-out basis. Any contingent deferred sales charge which is
required to be imposed on share redemptions will be made in accordance with the
following schedule:
YEAR OF CONTINGENT
REDEMPTION DEFERRED SALES
AFTER PURCHASE --------------
-------------- CHARGE
First ............................................... 5%*
Second .............................................. 5%
Third ............................................... 4%
Fourth .............................................. 3%
Fifth ............................................... 2%
Sixth ............................................... 1%
Seventh and following ............................... 0%
*For shares originally purchased prior to August 1, 1994, the contingent
deferred sales charge for redemptions within the first year after purchase
is 6%.
In calculating the contingent deferred sales charge upon the redemption of
Fund shares acquired in an exchange for shares of a fund in the Eaton Vance
Marathon Group of Funds or the Eaton Vance Classic Group of Funds (see "The
Eaton Vance Exchange Privilege" below), the contingent deferred sales charge
schedule applicable to the shares at the time of purchase will apply and the
purchase of Fund shares acquired in the exchange is deemed to have occurred at
the time of the original purchase of the exchanged shares. See "The Eaton Vance
Exchange Privilege" for the contingent deferred sales charge schedules
applicable to Fund shares acquired in an exchange.
No contingent deferred sales charge will be imposed on Fund shares which
have been sold to Eaton Vance or its affiliates, or to their respective
employees or clients. The contingent deferred sales charge will also be waived
for shares redeemed (1) pursuant to a Withdrawal Plan (see "Eaton Vance
Shareholder Services"), (2) as part of a required distribution from a
tax-sheltered retirement plan or (3) following the death of all beneficial
owners of such shares, provided the redemption is requested within one year of
death (a death certificate and other applicable documents may be required). The
contingent deferred sales charge will be paid to the Principal Underwriter or
the Fund. When paid to the Principal Underwriter it will reduce the amount of
Uncovered Distribution Charges calculated under the Fund's Distribution Plan.
See "Distribution Plan".
--------------------------------------------------------------------------------
THE FOLLOWING EXAMPLE ILLUSTRATES THE OPERATION OF THE CONTINGENT DEFERRED
SALES CHARGE. ASSUME THAT AN INVESTOR PURCHASES $10,000 OF THE FUND'S SHARES
AND THAT 25 MONTHS LATER THE VALUE OF THE ACCOUNT HAS GROWN THROUGH THE
REINVESTMENT OF DIVIDENDS TO $11,000. THE INVESTOR THEN MAY REDEEM UP TO
$1,000 OF SHARES WITHOUT INCURRING A CONTINGENT DEFERRED SALES CHARGE. IF
THE INVESTOR SHOULD REDEEM $2,000 OF SHARES, A CONTINGENT DEFERRED SALES
CHARGE WOULD BE IMPOSED ON $1,000 OF THE REDEMPTION. THE RATE WOULD BE 4%
BECAUSE THE REDEMPTION WAS MADE IN THE THIRD YEAR AFTER THE PURCHASE WAS
MADE AND THE CHARGE WOULD BE $40.
--------------------------------------------------------------------------------
REPORTS TO SHAREHOLDERS
--------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing Federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
--------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE FUND'S TRANSFER
AGENT, THE SHAREHOLDER SERVICES GROUP, INC., WILL SET UP A LIFETIME INVESTING
ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This account is a complete
record of all transactions between the investor and the Fund which at all times
shows the balance of shares owned. All shares are held in non-certificate form
by the Fund's Transfer Agent for the account of the shareholder, and the Fund
will not issue share certificates.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current share balance in the account. THE
LIFETIME INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE to The Shareholder
Services Group, Inc.
Any questions concerning a shareholder's account or services available may
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265
extension 2, or in writing to The Shareholder Services Group, Inc., BOS725, P.O.
Box 1559, Boston, MA 02104 (please provide the name of the shareholder, the Fund
and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME
INVESTING ACCOUNTS and may be changed as often as desired by written notice to
the Fund's dividend disbursing agent, The Shareholder Services Group. Inc.,
BOS725, P.O. Box 1559, Boston, MA 02104. The currently effective option will
appear on each account statement.
Share Option -- All distributions will be reinvested in additional shares.
Cash Option -- All distributions will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under Federal income tax laws.
If the Cash Option has been selected, distribution checks which are
returned by the United States Postal Service as not deliverable or which remain
uncashed for six months or more will be reinvested in the account in shares at
the then current net asset value. Furthermore, the distribution option on the
account will be automatically changed to the Share Option until such time as the
shareholder selects a different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, distributions may be invested in additional shares of another Eaton
Vance fund. Before selecting this option, a shareholder should obtain a
prospectus of the other Eaton Vance fund and consider its objectives and
policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
--------------------------------------------------------------------------------
UNDER A LIFETIME INVESTING ACCOUNT A SHAREHOLDER CAN MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE.
--------------------------------------------------------------------------------
THE EATON VANCE EXCHANGE PRIVILEGE
--------------------------------------------------------------------------------
Fund shares currently may be exchanged for shares of one or more funds in the
Eaton Vance Marathon Group of Funds (currently Eaton Vance Equity-Income Trust
and any of the EV Marathon funds) which are distributed with a contingent
deferred sales charge. Only shares subject to a contingent deferred sales charge
schedule equal to that of Eaton Vance Prime Rate Reserves, EV Marathon Strategic
Income Fund or an EV Marathon Limited Maturity Tax Free Fund (Class I), or
shares not subject to such a charge, may be exchanged from the Fund to Eaton
Vance Prime Rate Reserves. If Fund shares were acquired in exchange for shares
of one or more funds in the Eaton Vance Classic Group of Funds, such shares may
be exchanged only for shares of one or more funds in the Eaton Vance Classic
Group of Funds. Exchanges are made on the basis of the net asset value per share
of each fund at the time of the exchange, provided that such offers are
available only in states where shares of the fund being acquired may be legally
sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more than two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
The Shareholder Services Group, Inc. makes exchanges at the next determined
net asset value after receiving an exchange request in good order (see "How to
Redeem Fund Shares"). The Shareholder Services Group, Inc. may require
additional documentation if shares are registered in the name of a corporation,
partnership or fiduciary. Applications and prospectuses of the other funds are
available from Authorized Firms or the Principal Underwriter. The prospectus for
each fund describes its investment objectives and policies and shareholders
should obtain a prospectus and consider these objectives and policies carefully
before requesting an exchange.
No contingent deferred sales charge is imposed on exchanges. For purposes
of calculating the contingent deferred sales charge upon the redemption of Fund
shares acquired in an exchange, the purchase of shares acquired in one or more
exchanges is deemed to have occurred at the time of the original purchase of the
exchanged shares. Fund shares acquired as the result of an exchange from an EV
Marathon fund will be subject to the contingent deferred sales charge schedule
set forth under "How to Redeem Fund Shares" above, except Fund shares acquired
as the result of an exchange from an EV Marathon Limited Maturity Tax Free fund
which shares will be subject to a declining contingent deferred sales charge of
3.0%-0%. Fund shares acquired as the result of an exchange from an EV Classic
fund will be subject to a contingent deferred sales charge of 1% in the event of
redemption within one year from the date of their original purchase, except
those shares purchased prior to January 30, 1995, which will not be subject to
any such charge.
Shares of the funds in the Eaton Vance Marathon and Eaton Vance Classic
Groups of Funds may be exchanged for Fund shares on the basis of the net asset
value per share of each fund at the time of the exchange, but subject to any
restrictions or qualifications set forth in the current prospectus of any such
fund.
Telephone exchanges are accepted by The Shareholder Services Group, Inc.,
provided the investor has not disclaimed in writing the use of the privilege. To
effect such exchanges, call The Shareholder Services Group, Inc. at 800-
262-1122 or, within Massachusetts, 617-573-9403 Monday through Friday, 9:00 a.m.
to 4:00 p.m. (Eastern Standard Time). Shares acquired by telephone exchange must
be registered in the same name(s) and with the same address as the shares being
exchanged. Neither the Fund, the Principal Underwriter nor The Shareholder
Services Group, Inc. will be responsible for the authenticity of exchange
instructions received by telephone; provided that reasonable procedures to
confirm that instructions communicated are genuine have been followed. Telephone
instructions will be tape recorded. In times of drastic economic or market
changes, a telephone exchange may be difficult to implement. As long as the net
asset value of Fund shares is maintained at $1.00 per share, an exchange will
not result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
--------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of the Fund
may be mailed directly to The Shareholder Services Group, Inc., BOS725, P.O. Box
1559, Boston, MA 02104 at any time -- whether or not distributions are
reinvested. The name of the shareholder, the Fund and the account number should
accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from a shareholder's
bank account. The $1,000 minimum initial investment and small account redemption
policy are waived for these accounts.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an aggregate amount that does not exceed annually
12% of the account balance at the time the Plan is established. Such amount will
not be subject to a contingent deferred sales charge. See "How to Redeem Fund
Shares".
REINVESTMENT PRIVILEGE -- A SHAREHOLDER WHO HAS REPURCHASED OR REDEEMED SHARES
MAY REINVEST, WITH CREDIT FOR ANY CONTINGENT DEFERRED SALES CHARGES PAID ON THE
REDEEMED OR REPURCHASED SHARES, ANY PORTION OR ALL OF HIS REDEMPTION OR
REPURCHASE PROCEEDS (PLUS THAT AMOUNT NECESSARY TO ACQUIRE A FRACTIONAL SHARE TO
ROUND OFF THE PURCHASE TO THE NEAREST FULL SHARE) IN SHARES OF THE FUND,
provided that the reinvestment is effected within 30 days after such redemption
or repurchase. Shares are sold to a reinvesting shareholder at the next
determined net asset value following timely receipt of a written purchase order
by the Principal Underwriter or by the Fund (or by the Fund's Transfer Agent).
To the extent that any shares of the Fund are sold at a loss and the proceeds
are reinvested in Fund shares (or other Fund shares are acquired within the
period beginning 30 days before and ending 30 days after the date of redemption)
some or all of the loss generally will not be allowed as a tax deduction.
Shareholders should consult their tax advisers concerning the tax consequences
of reinvestments.
WIRE TRANSFER TO A BANK ACCOUNT: Shareholders who have given specific written
authorization in advance (on a form available from the Principal Underwriter)
may request that redemption proceeds of $1,000 or more be wired directly to
their bank account. The request may be made by letter or telephone to The
Shareholder Services Group, Inc. at 800-262-1122.
To use this service a shareholder must designate a bank and bank account
number on the form used to establish this service. The bank designated may be
any bank in the United States.
Redemption proceeds, less any applicable contingent deferred sales charge
and the amount of any Federal income tax required to be withheld, will be wired
on the next business day following receipt of the redemption request. The
shareholder will be required to pay any costs of such transaction. The Fund may
limit this method of payment to shares purchased with cash, Federal Reserve
Draft or by wire with Federal funds. The Fund reserves the right at any time to
suspend or terminate this wire transfer procedure. The Fund will not be
responsible for the authenticity of redemption instructions received by
telephone; provided that reasonable procedures to confirm that instructions
communicated are genuine have been followed. Telephone instructions will be tape
recorded. In times of drastic economic or market changes, a telephone redemption
may be difficult to implement.
TAX-SHELTERED RETIREMENT PLANS --Shares of the Fund are available for purchase
in connection with the following tax-sheltered retirement plans:
-- Pension and Profit Sharing Plans for self-employed individuals, corporations
and non-profit organizations;
-- Individual Retirement Account Plans for individuals and their non-employed
spouses; and
-- 403(b) Retirement Plans for employees of public school systems, hospitals,
colleges and other non-profit organizations meeting certain requirements of
the Internal Revenue Code of 1986, as amended (the "Code").
Detailed information concerning these plans, including certain exceptions
to minimum investment requirements, and copies of the plans are available from
the Principal Underwriter. This information should be read carefully and
consultation with an attorney or tax adviser may be advisable. The information
sets forth the service fee charged for retirement plans and describes the
Federal income tax consequences of establishing a plan. Under all plans,
dividends and distributions will be automatically reinvested in additional
shares.
DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------
DIVIDENDS ARE PAID MONTHLY BY THE FUND FROM NET INVESTMENT INCOME. Dividends,
whether taken in cash or reinvested, will ordinarily be paid on the fifteenth
day of each month or the next business day thereafter. Net investment income
allocated to the Fund by the Portfolio, less the Fund's direct and allocated
expenses, will be declared daily as a dividend to Fund shareholders of record at
the time of declaration. For Federal income tax purposes, the shareholder's
proportionate share of the Fund's distributions from net investment income and
net short-term capital gains allocated to the Fund by the Portfolio is taxable
as ordinary income, whether received in cash or reinvested in additional shares.
Distributions of capital gains, if any, realized on sales of investments during
the taxable year, which ends on December 31, will usually be distributed with
the Fund's first monthly dividend paid after the close of such taxable year, but
the Fund could make an additional distribution of capital gains in any year in
order to comply with the distribution requirements of the Code. Distributions of
long-term capital gains (if any) included therein are taxable to shareholders as
long-term capital gains for Federal income tax purposes, whether paid in cash or
additional shares of the Fund and regardless of the length of time Fund shares
have been owned by the shareholder. Certain distributions of the Fund which are
declared in October, November or December and paid the following January will be
reportable by shareholders as if received on December 31 of the year in which
they are declared.
Since it is anticipated that virtually all of the Fund's income will be
derived from interest income rather than dividends, it is unlikely that any
portion of the dividends paid by the Fund will be eligible for the
dividends-received deduction for corporate shareholders.
In order to qualify as a regulated investment company under the Code, the
Fund must satisfy certain requirements relating to the sources of its income,
the distribution of its income, and the diversification of its assets. In
satisfying these requirements, the Fund will treat itself as owning its
proportionate share of each of the Portfolio's assets and as entitled to the
income of the Portfolio properly attributable to such share.
Shareholders will receive annually tax information notices and Forms 1099
to assist in the preparation of their Federal and state tax returns for the
prior calendar year's distributions, proceeds from the redemption or exchange of
Fund shares, and Federal income tax (if any) withheld by the Fund's Transfer
Agent. Shareholders should consult their tax adviser about any state or local
taxes that may apply to such distributions.
An individual may make an aggregate annual contribution to an Individual
Retirement Account in an amount equal to the lesser of his or her earned income
or $2,000 ($2,250 for an individual and his or her nonearning spouse). The
deductibility of such contributions on the individual's tax return may be
restricted or eliminated for particular shareholders.
--------------------------------------------------------------------------------
AS A REGULATED INVESTMENT COMPANY UNDER THE CODE, THE FUND DOES NOT PAY
FEDERAL INCOME OR EXCISE TAXES TO THE EXTENT THAT IT DISTRIBUTES TO
SHAREHOLDERS ITS NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS IN
ACCORDANCE WITH THE TIMING REQUIREMENTS IMPOSED BY THE CODE. AS A
PARTNERSHIP UNDER THE CODE, THE PORTFOLIO DOES NOT PAY FEDERAL INCOME OR
EXCISE TAXES.
--------------------------------------------------------------------------------
PERFORMANCE INFORMATION
--------------------------------------------------------------------------------
FROM TIME TO TIME THE FUND ADVERTISES ITS "YIELD" AND "EFFECTIVE YIELD." Both
yield figures are based on historical earnings and are not intended to indicate
future performance. The "yield" of the Fund refers to the income generated by an
investment in the Fund over a seven-day period (which period will be stated in
the advertisement). This income is then "annualized." That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The "effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "Yield" because of the compounding
effect of this assumed reinvestment.
APPENDIX
-------------------------------------------------------------------------------
MONEY MARKET: Refers to the marketplace where short-term, high grade debt
instruments are traded and includes, but is not limited to, U.S. Government
obligations, commercial paper, certificates of deposit, bankers' acceptances,
time deposits and short-term corporate obligations. Money market instruments may
carry fixed rates of return or have variable or floating interest rates.
U.S. GOVERNMENT OBLIGATIONS: Debt securities issued or guaranteed by the U.S.
Treasury, including bills, certificates of indebtedness, notes and bonds, or by
an agency or instrumentality of the U.S. Government established under the
authority of an act of Congress. Not all U.S. Government obligations are backed
by the full faith and credit of the United States. For example, securities
issued by the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the agency's right to borrow money from the U.S.
Treasury under certain circumstances. Securities issued by the Federal Home Loan
Bank are supported only by the credit of the agency. There is no guarantee that
the U.S. Government will support these types of securities, and therefore they
involve more risk than "full faith and credit" government obligations.
COMMERCIAL PAPER: Short-term unsecured promissory notes of corporations and
other business organizations issued to finance their current operations.
CERTIFICATES OF DEPOSIT: Negotiable certificates representing deposits in
banking and thrift institutions, earning specified rates of interest over
periods of time.
TIME DEPOSITS: Non-negotiable deposits in banking and thrift institutions,
earning specified interest rates over periods of time.
BANKERS' ACCEPTANCES: Negotiable obligations of a bank to pay a draft which has
been drawn on it by a customer. These are obligations of the accepting bank and
are usually backed by goods in international trade.
CORPORATE OBLIGATIONS: Bonds, notes and other obligations issued by corporations
and other business organizations in order to finance their longer-term credit
needs.
REVERSE REPURCHASE AGREEMENTS: Transactions whereby the Portfolio temporarily
transfers possession of a security to another party, such as a bank or
broker-dealer, in return for cash, and agrees to buy the security back at a
specified future date and price. The Portfolio can invest the cash it receives
or use it to meet redemption requests. If the Portfolio reinvests the cash at a
rate higher than the cost of the agreement, it may earn additional income. At
the same time, the Portfolio is exposed to greater potential fluctuations in the
value of its assets when entering into reverse repurchase agreements. Reverse
repurchase agreements are discussed in more detail in the Statement of
Additional Information.
<PAGE>
INVESTMENT ADVISER OF
CASH MANAGEMENT PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF
EATON VANCE MONEY MARKET FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EATON VANCE MONEY MARKET FUND
24 FEDERAL STREET
BOSTON, MA 02110
MMFP
EATON VANCE
MONEY MARKET
FUND
PROSPECTUS
APRIL 3, 1995
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
April 3, 1995
EATON VANCE MONEY MARKET FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
------------------------------------------------------------------------------
TABLE OF CONTENTS Page
Investment Objective and Policies ............................. 2
Investment Restrictions ....................................... 4
Trustees and Officers ......................................... 5
Control Persons and Principal Holders of Securities ........... 7
Investment Adviser and Administrator .......................... 7
Service for Withdrawal ........................................ 9
Custodian ..................................................... 9
Determination of Net Asset Value .............................. 10
Calculation of Yield Quotations ............................... 11
Taxes ......................................................... 11
Principal Underwriter ......................................... 12
Distribution Plan ............................................. 13
Portfolio Security Transactions ............................... 14
Other Information ............................................. 15
Independent Accountants ....................................... 16
Appendix ...................................................... 17
Financial Statements .......................................... 20
-------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EATON VANCE MONEY MARKET FUND (THE "FUND")
DATED APRIL 3, 1995, AS SUPPLEMENTED FROM TIME TO TIME. THIS STATEMENT OF
ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A
COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE
DISTRIBUTORS, INC. (THE "PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND
PHONE NUMBER).
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of Eaton Vance Money Market Fund (the "Fund"), a
series of Eaton Vance Liquid Assets Trust (the "Trust"), is to provide as high a
rate of income as may be considered consistent with the preservation of capital
and the maintenance of liquidity. The Fund seeks to meet its investment
objective by investing its assets in the Cash Management Portfolio (the
"Portfolio"), a separate registered investment company with the same investment
objective as the Fund. The Portfolio seeks to achieve its investment objective
by investing in a diversified portfolio of money market instruments. The
Portfolio's investment objective is a nonfundamental policy and may be changed
by authorized vote of the Trustees of the Portfolio.
The Trustees of the Trust may withdraw the Fund's investment from the
Portfolio at any time, if they determine that it is in the best interests of the
Fund to do so. Upon any such withdrawal, the Fund's assets would be invested in
another investment company with substantially the same investment objective,
policies and restrictions as those of the Fund or directly in investment
securities in accordance with the Portfolio's investment policies, as described
below. The approval of the Fund's shareholders would not be required to change
the Portfolio's investment objective or any of the Portfolio's investment
policies discussed below, including those concerning security transactions.
Since the investment characteristics of the Fund will correspond directly to
those of the Portfolio, the following is a discussion of the various investments
of and techniques employed by the Portfolio.
MONEY MARKET INSTRUMENTS. The Portfolio will invest only in those money market
securities and corporate obligations determined by the Trustees of the Portfolio
to present minimal credit risks and which are at the time of acquisition rated
by the requisite number of nationally recognized statistical rating
organizations in one of the two highest applicable rating categories or, in the
case of an instrument not so rated, of comparable quality as determined by the
Trustees. At such time or times as the Trustees deem appropriate and in the best
interests of the Portfolio, assets of the Portfolio may be invested
substantially in certificates of deposit of federally insured banks and/or U.S.
Government and agency obligations. The Portfolio intends to limit its
investments to money market instruments maturing in 397 calendar days or less
and to maintain a dollar-weighted average maturity of not more than 90 days. In
addition, Rule 2a-7 promulgated under the Investment Company Act of 1940 (the
"1940 Act") provides that the Portfolio (so long as it uses the amortized cost
method of valuing its securities or holds itself out to investors as a money
market fund) may not acquire a Second Tier Security (as defined in the Rule) if,
immediately after such acquisition: (a) more than 5% of its total assets (taken
at amortized cost) would be invested in securities which, when acquired by the
Portfolio (either initially or upon any subsequent rollover) were Second Tier
Securities; or (b) more than the greater of 1% of its total assets (taken at
amortized cost) or $1,000,000 would be invested in securities issued by a single
issuer which, when acquired by the Portfolio (either initially or upon any
subsequent rollover) were Second Tier Securities.
OBLIGATIONS OF U.S. AND FOREIGN BANKS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit and bankers'
acceptances of U.S. banks and their branches located outside of the U.S., of
U.S. branches of foreign banks, and foreign branches of foreign banks. The
Portfolio may also invest in U.S. dollar-denominated securities issued or
guaranteed by other domestic or foreign issuers, including domestic and foreign
corporations or other business organizations, foreign governments and foreign
government agencies or instrumentalities, and domestic and foreign financial
institutions, including but not limited to savings and loan institutions,
insurance companies, mortgage bankers and real estate investment trusts, as well
as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental regulation.
Payment of interest and principal upon these obligations may also be affected by
governmental action in the country of domicile of the branch (generally referred
to as sovereign risk). In addition, evidences of ownership of portfolio
securities may be held outside of the U.S. and the Portfolio may be subject to
the risks associated with the holding of such property overseas. Various
provisions of Federal law governing the establishment and operation of domestic
branches do not apply to foreign branches of domestic banks.
The obligations of U.S. branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by Federal and state
regulation as well as by governmental action in the country in which the foreign
bank has its head office.
The obligations of foreign issuers also involve certain additional risks,
including the risks of adverse political, social and economic developments, the
imposition of withholding taxes on interest income, seizure or nationalization
of foreign deposits, exchange controls, and the adoption of foreign governmental
restrictions which might adversely affect the payment of principal and interest
on such obligations. Foreign issuers may be subject to less governmental
regulation and supervision than U.S. issuers. Foreign issuers also generally are
not bound by uniform accounting, auditing and financial reporting requirements
comparable to those applicable to domestic issuers.
In connection with its investments in bank obligations and instruments
secured thereby, the Portfolio will invest in certificates of deposit and
bankers' acceptances if they are obligations of a domestic bank or a savings and
loan association having total assets of $1,000,000,000 or more.
REPURCHASE AGREEMENTS. Repurchase agreements are transactions in which the
Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed upon price on an agreed upon date within a
number of days (usually not more than seven) from the date of purchase. The
resale price reflects the purchase price plus an agreed upon market rate of
interest which is unrelated to the coupon rate or maturity of the purchased
security. A repurchase agreement involves the obligation of the seller to pay
the agreed upon price, which obligation is in effect secured by the value (at
least equal to the amount of the agreed upon resale price and marked to market
daily) of the underlying security. The Portfolio may enter into a repurchase
agreement with respect to any security in which the Portfolio is authorized to
invest even though the underlying security matures in more than 397 calendar
days. Other than for Federal tax purposes, whether a repurchase agreement is the
purchase and sale of a security or a collateralized loan has not been
definitively established. This might become an issue in the event of the
bankruptcy of the other party to the transaction. While it does not presently
appear possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities, as
well as delay and costs to the Portfolio in connection with bankruptcy
proceedings), it is the policy of the Portfolio to enter into repurchase
agreements only with those member banks of the Federal Reserve System and
primary dealers in U.S. Government securities whose creditworthiness has been
reviewed and found satisfactory by the Portfolio's investment adviser, Boston
Management and Research (the "Investment Adviser" or "BMR").
REVERSE REPURCHASE AGREEMENTS. The Portfolio may also enter into reverse
repurchase agreements. Under a reverse repurchase agreement, the Portfolio
temporarily transfers possession of a portfolio instrument to another party,
such as a bank or broker-dealer, in return for cash. At the same time, the
Portfolio agrees to repurchase the instrument at an agreed upon time (normally
within seven days) and price, which reflects an interest payment. The Portfolio
expects that it will enter into reverse repurchase agreements when it is able to
invest the cash so acquired at a rate higher than the cost of the agreement,
which would increase the income earned by the Portfolio. The Portfolio could
also enter into reverse repurchase agreements as a means of raising cash to
satisfy redemption requests without the necessity of selling portfolio
instruments.
When the Portfolio enters into a reverse repurchase agreement, any
fluctuations in the market value of either the securities transferred to another
party or the securities in which the proceeds may be invested would affect the
market value of the Portfolio's assets. As a result, such transactions may
increase fluctuations in the market value of the Portfolio's assets (although
not affecting the amortized cost value of its assets used in determining the
Fund's net asset value per share). While there is a risk that large fluctuations
in the market value of the Portfolio's assets could affect the Fund's net asset
value per share, this risk is not significantly increased by entering into
reverse repurchase agreements, in the opinion of the Portfolio's Investment
Adviser. Because reverse repurchase agreements may be considered to be the
practical equivalent of borrowing funds, they constitute a form of leverage. If
the Portfolio reinvests the proceeds of a reverse repurchase agreement at a rate
lower than the cost of the agreement, entering into the agreement will lower the
Fund's yield.
While BMR does not consider reverse repurchase agreements to involve a
traditional borrowing of money, reverse repurchase agreements will be included
within the aggregate limitation on "borrowings" contained in the Fund's
investment restriction (3) set forth below. The Portfolio does not intend to
purchase securities for investment while temporary borrowings (described in the
investment restriction (3) set forth below) in excess of 5% of its total assets
are outstanding.
LENDING OF PORTFOLIO SECURITIES. The Portfolio may seek to increase its income
by lending portfolio securities. Under present regulatory policies, including
those of the Board of Governors of the Federal Reserve System, and the
Securities and Exchange Commission, such loans may be made to member firms of
the New York Stock Exchange, and would be required to be secured continuously by
collateral in cash or cash equivalents maintained on a current basis at an
amount at least equal to the market value of the securities loaned. The
Portfolio would have the right to call a loan and obtain the securities loaned
at any time on five days' notice. During the existence of a loan, the Portfolio
would continue to receive the equivalent of the interest or dividends paid by
the issuer on the securities loaned and would also receive the interest on
investment of the collateral. The Portfolio would not, however, have the right
to vote any securities having voting rights during the existence of the loan,
but would call the loan in anticipation of an important vote to be taken among
holders of the securities or of the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit
there are risks of delay in recovery or even loss of rights in the collateral
should the borrower of the securities fail financially. However, the loans would
be made only to firms deemed by the Portfolio's management to be of good
standing, and when, in the judgment of the Portfolio's management, the
consideration which can be earned currently from securities loans of this type
justifies the attendant risk.
If the management of the Portfolio determines to make securities loans, it
is not intended that the value of the securities loaned would exceed 30% of the
Portfolio's total assets, or that the payments received on such loans, including
amounts received during the existence of a loan on account of interest and
dividends on the securities loaned, would exceed in the aggregate 10% of the
Portfolio's annual gross income (without offset for realized capital gains)
unless counsel for the Portfolio determines that such amounts are qualifying
income under Federal income tax provisions applicable to regulated investment
companies.
OTHER INVESTMENT POLICIES. Although the Portfolio usually intends to hold
securities purchased until maturity, at which time they will be redeemable at
their full principal value plus accrued interest, it may, at times, engage in
short-term trading to attempt to take advantage of yield variations in the
short-term market. The Portfolio may also sell portfolio securities prior to
maturity based on a revised evaluation of the creditworthiness of the issuer or
to meet redemptions of Fund shares. In the event there are unusually heavy
redemption requests due to changes in interest rates or otherwise, the Portfolio
may have to sell a portion of its investment portfolio at a time when it may be
disadvantageous to do so. However, the Portfolio believes that its ability to
borrow funds to accommodate redemption requests may mitigate in part the
necessity for such portfolio sales during these periods.
The rate of return to shareholders of the Fund will vary with the general
levels of interest rates applicable to the money market instruments in which the
Portfolio invests on behalf of the Fund. The rate will also be affected by the
level of the Fund's operating expenses, which expenses (because of expenditures
under its distribution plan) are expected to be higher than those of most other
money market funds.
INVESTMENT RESTRICTIONS
The following investment restrictions are designated as fundamental
policies and as such cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities, which as used in this
Statement of Additional Information means the lesser of (a) 67% of the shares of
the Fund present or represented by proxy at a meeting if the holders of more
than 50% of the shares are present or represented at the meeting or (b) more
than 50% of the shares of the Fund. Accordingly, the Fund will not:
(1) With respect to 75% of its total assets, invest more than 5% of its
total assets taken at current market value in the securities of any one issuer
or purchase more than 10% of the outstanding voting securities of any one issuer
other than obligations issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities and except securities of other investment
companies. The 5% restriction does not apply to or limit the Fund's investments
in certificates of deposit, bankers' acceptances or time deposits of banking and
thrift institutions;
(2) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities);
(3) Borrow money or issue senior securities, except as permitted by the
Investment Company Act of 1940;
(4) Underwrite securities issued by other persons, except insofar as it may
technically be deemed to be an underwriter under the Securities Act of 1933 in
selling or disposing of a portfolio security;
(5) Purchase any security if, as a result of such purchase, more than 25%
of the Fund's total assets (taken at current value) would be invested in the
securities of issuers having their principal business activities in the same
industry; provided that there is no limitation with respect to (a) investments
by the Fund in certificates of deposit, bankers' acceptances or time deposits of
banking and thrift institutions or (b) obligations issued or guaranteed by the
U. S. Government or any of its agencies or instrumentalities; and provided
further that banking and thrift institutions and their holding companies as a
group, finance companies as a group and utility companies as a group will not be
considered single industries;
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by interests in real estate and securities of
issuers which invest or deal in real estate;
(7) Purchase or sell physical commodities or contracts for the repurchase
or sale of physical commodities; or
(8) Make loans to other persons, except by (a) the acquisition of money
market instruments, debt securities and other obligations in which the Fund is
authorized to invest in accordance with its investment objective and policies,
(b) entering into repurchase agreements and (c) lending its portfolio
securities.
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its assets in an open-end management investment company with
substantially the same investment objective, policies and restrictions as the
Fund. When so invested, the Fund's investment restrictions shall be construed to
be consistent with those of the Portfolio, to the extent applicable.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by the Fund; such
restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of the Portfolio, which as used in this Statement
of Additional Information means the lesser of (a) 67% of the outstanding voting
securities of the Portfolio present or represented by proxy at a meeting if the
holders of more than 50% of the outstanding voting securities of the Portfolio
are present or represented at the meeting or (b) more than 50% of the
outstanding voting securities of the Portfolio. The term "voting securities" as
used in this paragraph has the same meaning as in the 1940 Act. Whenever the
Fund is requested to vote on a change in the investment restrictions of the
Portfolio, the Fund will hold a meeting of its shareholders and will cast its
vote as instructed by the shareholders.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policies which may be changed with respect to the Fund by the
Trustees of the Trust without approval of the Fund's shareholders or may be
changed with respect to the Portfolio by the Trustees of the Portfolio without
the approval of the Fund or the Portfolio's other investors. As a matter of
nonfundamental policy, neither the Fund nor the Portfolio may: (a) purchase
securities of any issuer with a record of less than three years' continuous
operation, including predecessors, except investments in obligations issued or
guaranteed by the U.S. Government or its agencies, municipal obligations,
securities of issuers which are rated by at least one nationally recognized
statistical rating organization, and obligations issued or guaranteed by any
foreign government or its agencies or instrumentalities, if such purchase would
cause its investments in all such issuers to exceed 5% of its total assets taken
at market value; (b) purchase or retain securities of any issuer if 5% of the
issuer's securities are owned by those officers and Trustees of the Portfolio or
the investment adviser of the Portfolio who own individually more than 1/2 of 1%
of the issuer's securities; (c) make short sales except where, because of
ownership of other securities, it has the right to obtain securities equivalent
in kind and amount to those sold; (d) write or purchase or sell any put or call
options or combinations thereof; (e) purchase warrants; (f) invest in interests
in oil, gas or other mineral exploration or development programs unless acquired
as a result of ownership of securities; or (g) knowingly purchase a security
which is subject to legal or contractual restrictions on resale or for which
there is no readily available market or enter into a repurchase agreement
maturing in more than seven days if, as a result thereof, more than 10% of its
total assets (taken at current value) would be invested in such securities. (The
Portfolio may not be able to liquidate such securities when deemed most
advantageous.)
In order to permit the sale of shares of the Fund in certain states, the
Fund may make commitments more restrictive than the policies described above.
Should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the state(s) involved.
TRUSTEES AND OFFICERS
The Trustees and officers of the Trust and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the Portfolio's Investment
Adviser, Boston Management and Research ("BMR"), which is a wholly-owned
subsidiary of Eaton Vance Management ("Eaton Vance"); of Eaton Vance's parent,
Eaton Vance Corp. ("EVC"); and of BMR's and Eaton Vance's trustee, Eaton Vance,
Inc. ("EV"). Eaton Vance and EV are both wholly-owned subsidiaries of EVC. Those
Trustees and officers who are "interested persons" of the Fund, the Portfolio,
BMR, Eaton Vance, EVC or EV, as defined in the 1940 Act, by virtue of their
affiliation with any one or more of the Fund, the Portfolio, BMR, Eaton Vance,
EVC or EV, are indicated by an asterisk(*).
TRUSTEES OF THE TRUST AND THE PORTFOLIO
JAMES B. HAWKES (53), President of the Trust and Vice President of the Portfolio
and Trustee*
Executive Vice President of BMR, Eaton Vance, EVC and EV, and a Director of EVC
and EV. Director, Trustee and officer of various investment companies managed
by Eaton Vance or BMR.
M. DOZIER GARDNER (61), President and Trustee of the Portfolio*
President and Chief Executive Officer of BMR, Eaton Vance, EVC and EV, and a
Director of EVC and EV. Director, Trustee and officer of various investment
companies managed by Eaton Vance or BMR.
H. DAY BRIGHAM, JR. (68), Trustee of the Portfolio*
Chairman of the Management Committee, Vice President of BMR, Eaton Vance, EVC
and EV, and a Director of EVC and EV. Director, Trustee and officer of various
investment companies managed by Eaton Vance or BMR.
DONALD R. DWIGHT (64), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New England,
Inc., since 1983. Director or Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (60), Trustee
Jacob H. Schiff, Professor of Investment Banking, at Harvard University Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration, Soldiers
Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (59), Trustee
President and Director, United Asset Management Corporation, a holding company
owning institutional investment management firms. Chairman, President and
Director, The Regis Fund, Inc. (mutual fund). Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (68), Trustee
Director, Fiduciary Company Incorporated. Director or Trustee of various
investment companies manged by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (65), Trustee
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE TRUST AND THE PORTFOLIO
MICHAEL B. TERRY (52), Vice President*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (50), Treasurer*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
THOMAS OTIS (63), Secretary*
Vice President and Secretary of BMR, Eaton Vance, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (59), Assistant Treasurer and Assistant Secretary*
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
Messrs. Thorndike (Chairman), Hayes and Reamer are members of the Special
Committee of the Board of Trustees of the Trust and of the Portfolio. The
Special Committee's functions include a continuous review of the Fund's
contractual relationship with the Administrator, the Portfolio's contractual
relationship with the Investment Adviser, making recommendations to the Trustees
regarding the compensation of those Trustees who are not members of the Eaton
Vance organization, and making recommendations to the Trustees regarding
candidates to fill vacancies, as and when they occur, in the ranks of those
Trustees who are not "interested persons" of the Trust, the Portfolio, or the
Eaton Vance organization.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust and of the Portfolio. The Audit Committee's
functions include making recommendations to the Trustees regarding the selection
of the independent accountants, and reviewing with such accountants and the
Treasurer of the Fund and of the Portfolio matters relative to accounting and
auditing practices and procedures, accounting records, internal accounting
controls, and the functions performed by the custodian and transfer agent of the
Fund and of the Portfolio.
<TABLE>
<CAPTION>
The fees and expenses of those Trustees of the Trust and of the Portfolio who are not members of the Eaton Vance organization
are paid by the Fund (and the other series of the Trust) and the Portfolio, respectively. During the fiscal year ended December
31, 1994, the Trustees of the Portfolio earned the following compensation, and during the fiscal year ending December 31, 1995 it
is anticipated that the Trustees of the Trust will earn the following compensation, in their capacities as Trustees from the
Trust, the Portfolio and the other funds in the Eaton Vance fund complex<F1>:
AGGREGATE AGGREGATE RETIREMENT BENEFIT TOTAL COMPENSATION
COMPENSATION COMPENSATION ACCRUED FROM FROM TRUST AND
NAME FROM FUND<F2> FROM PORTFOLIO FUND COMPLEX FUND COMPLEX
---- ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C>
Donald R. Dwight $250 $1,041 $8,750 $135,000
Samuel L. Hayes, III 250 1,055 8,865 142,500
Norton H. Reamer 250 1,059 --0-- 135,000
John L. Thorndike 250 1,107 --0-- 140,000
Jack L. Treynor 250 1,088 --0-- 140,000
----------
<FN>
<F1>The Eaton Vance fund complex consists of 201 registered investment companies or series thereof.
<F2>Estimated compensation for the fiscal year ending December 31, 1995.
</TABLE>
Trustees of the Portfolio who are not affiliated with the Investment
Adviser may elect to defer receipt of all or a percentage of their annual fees
in accordance with the terms of a Trustees Deferred Compensation Plan (the
"Plan"). Under the Plan, an eligible Trustee may elect to have his deferred fees
invested by the Portfolio in the shares of one or more funds in the Eaton Vance
Family of Funds, and the amount paid to the Trustees under the Plan will be
determined based upon the performance of such investments. Deferral of Trustees'
fees in accordance with the Plan will have a negligible effect on the
Portfolio's assets, liabilities, and net income per share, and will not obligate
the Portfolio to retain the services of any Trustee or obligate the Portfolio to
pay any particular level of compensation to the Trustee.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of March 15, 1995, Eaton Vance owned all of the shares of the Fund
outstanding on such date. Eaton Vance is a Massachusetts business trust and a
wholly-owned subsidiary of EVC.
INVESTMENT ADVISER AND ADMINISTRATOR
The Portfolio engages BMR as investment adviser pursuant to an Investment
Advisory Agreement dated April 29, 1994. BMR or Eaton Vance acts as investment
adviser to investment companies and various individual and institutional clients
with combined assets under management of approximately $15 billion.
Eaton Vance, its affiliates and its predecessor companies have been
managing assets of individuals and institutions since 1924 and managing
investment companies since 1931. They maintain a large staff of experienced
fixed-income and equity investment professionals to service the needs of their
clients. The fixed-income division focuses on all kinds of taxable investment-
grade and high-yield securities, tax-exempt investment-grade and high-yield
securities, and U.S. Government securities. The equity division covers stocks
ranging from blue chip to emerging growth companies.
BMR manages the investments and affairs of the Portfolio subject to the
supervision of the Portfolio's Board of Trustees. BMR furnishes to the Portfolio
investment research, advice and supervision, furnishes an investment program and
determines what securities will be purchased, held or sold by the Portfolio and
what portion, if any, of the Portfolio's assets will be held uninvested. The
Investment Advisory Agreement requires BMR to pay the salaries and fees of all
officers and Trustees of the Portfolio who are members of the BMR organization
and all personnel of BMR performing services relating to research and investment
activities. The Portfolio is responsible for all expenses not expressly stated
to be payable by BMR under the Investment Advisory Agreement, including, without
implied limitation, (i) expenses of maintaining the Portfolio and continuing its
existence, (ii) registration of the Portfolio under the 1940 Act, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of interests in the Portfolio, (viii) expenses of
registering and qualifying the Portfolio and interests in the Portfolio under
Federal and state securities laws and of preparing and printing registration
statements or other offering statements or memoranda for such purposes and for
distributing the same to investors, and fees and expenses of registering and
maintaining registrations of the Portfolio and of the Portfolio's placement
agent as broker-dealer or agent under state securities laws, (ix) expenses of
reports and notices to investors and of meetings of investors and proxy
solicitations therefor, (x) expenses of reports to governmental officers and
commissions, (xi) insurance expenses, (xii) association membership dues, (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Portfolio (including without limitation safekeeping of funds,
securities and other investments, keeping of books, accounts and records, and
determination of net asset values, book capital account balances and tax capital
account balances), (xiv) fees, expenses and disbursements of transfer agents,
dividend disbursing agents, investor servicing agents and registrars for all
services to the Portfolio, (xv) expenses for servicing the accounts of
investors, (xvi) any direct charges to investors approved by the Trustees of the
Portfolio, (xvii) compensation and expenses of Trustees of the Portfolio who are
not members of BMR's organization, and (xviii) such non-recurring items as may
arise, including expenses incurred in connection with litigation, proceedings
and claims and the obligation of the Portfolio to indemnify its Trustees,
officers and investors with respect thereto.
Under the Investment Advisory Agreement with the Portfolio, BMR receives a
monthly fee of 1/24 of 1% (equivalent to 0.50% annually) of the average daily
net assets of the Portfolio. As at December 31, 1994, the Portfolio had net
assets of $222,813,455. For the period from the start of business, May 2, 1994,
to December 31, 1994, the Portfolio paid BMR advisory fees of $597,131
(equivalent to 0.50% (annualized) of the Portfolio's average daily net assets
for such period).
The Investment Advisory Agreement with BMR remains in effect until February
28, 1996. It may be continued indefinitely thereafter so long as such
continuance after February 28, 1996 is approved at least annually (i) by the
vote of a majority of the Trustees of the Portfolio who are not interested
persons of the Portfolio or of BMR cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio. The Agreement may be terminated at any time without
penalty on sixty (60) days' written notice by the Board of Trustees of either
party, or by vote of the majority of the outstanding voting securities of the
Portfolio, and the Agreement will terminate automatically in the event of its
assignment. The Agreement provides that BMR may render services to others and
engage in other business activities and may permit other fund clients and other
corporations and organizations to use the words "Eaton Vance" or "Boston
Management and Research" in their names. The Agreement also provides that BMR
shall not be liable for any loss incurred in connection with the performance of
its duties, or action taken or omitted under that Agreement, in the absence of
willful misfeasance, bad faith, gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
thereunder, or for any losses sustained in the acquisition, holding or
disposition of any security or other investment.
As indicated in the Prospectus, Eaton Vance serves as Administrator of the
Fund, but receives no compensation for providing administrative services to the
Fund. Under its agreement with the Fund, Eaton Vance has been engaged to
administer the Fund's affairs, subject to the supervision of the Trustees of the
Trust, and shall furnish for the use of the Fund office space and all necessary
office facilities, equipment and personnel for administering the affairs of the
Fund.
The Fund pays all of its own expenses including, without limitation, (i)
expenses of maintaining the Fund and continuing its existence, (ii) registration
of the Fund under the 1940 Act, (iii) commissions, fees and other expenses
connected with the purchase or sale of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale, repurchase and redemption of
shares, (viii) expenses of registering and qualifying the Fund and its shares
under Federal and state securities laws and of preparing and printing
prospectuses for such purposes and for distributing the same to shareholders and
investors, and fees and expenses of registering and maintaining registrations of
the Fund and of the Fund's principal underwriter, if any, as broker-dealer or
agent under state securities laws, (ix) expenses of reports and notices to
shareholders and of meetings of shareholders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Fund
(including without limitation safekeeping of funds, securities and other
investments, keeping of books and accounts and determination of net asset
values), (xiv) fees, expenses and disbursements of transfer agents, dividend
disbursing agents, shareholder servicing agents and registrars for all services
to the Fund, (xv) expenses for servicing shareholder accounts, (xvi) any direct
charges to shareholders approved by the Trustees of the Trust, (xvii)
compensation and expenses of Trustees of the Trust who are not members of the
Eaton Vance organization, and (xviii) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Fund to indemnify its Trustees and officers
with respect thereto.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are
both wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both
Massachusetts business trusts, and EV is the trustee of BMR and Eaton Vance. The
Directors of EV are Landon T. Clay, H. Day Brigham, Jr., M. Dozier Gardner,
James B. Hawkes and Benjamin A. Rowland, Jr. The Directors of EVC consist of the
same persons and John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman
and Mr. Gardner is president and chief executive officer of EVC, BMR, Eaton
Vance and EV. All of the issued and outstanding shares of Eaton Vance and EV are
owned by EVC. All of the issued and outstanding shares of BMR are owned by Eaton
Vance. All shares of the outstanding Voting Common Stock of EVC are deposited in
a Voting Trust which expires on December 31, 1996, the Voting Trustees of which
are Messrs. Clay, Brigham, Gardner, Hawkes and Rowland. The Voting Trustees have
unrestricted voting rights for the election of Directors of EVC. All of the
outstanding voting trust receipts issued under said Voting Trust are owned by
certain of the officers of BMR and Eaton Vance who are also officers and
Directors of EVC and EV. As of February 28, 1995, Messrs. Clay, Gardner and
Hawkes each owned 24% of such voting trust receipts, and Messrs. Rowland and
Brigham owned 15% and 13%, respectively, of such voting trust receipts. Messrs.
Gardner, Hawkes and Otis are officers or Trustees of the Trust and/or the
Portfolio and are members of the EVC, BMR, Eaton Vance and EV organizations.
Messrs. O'Connor and Terry and Ms. Sanders, are officers or Trustees of the
Trust and the Portfolio and are also members of the BMR, Eaton Vance and EV
organizations. BMR will receive the fees paid under the Investment Advisory
Agreement.
Eaton Vance owns all of the stock of Energex Corporation, which is engaged
in oil and gas operations. EVC owns all of the stock of Marblehead Energy Corp.
(which is engaged in oil and gas operations) and 77.3% of the stock of Investors
Bank & Trust Company, the custodian of the Fund and the Portfolio, which
provides custodial, trustee and other fiduciary services to investors, including
individuals, employee benefit plans, corporations, investment companies, savings
banks and other institutions. In addition, Eaton Vance owns all of the stock of
Northeast Properties, Inc., which is engaged in real estate investment,
management and consulting. EVC owns all of the stock of Fulcrum Management, Inc.
and MinVen, Inc., which are engaged in the development of precious metal
properties. EVC, BMR, Eaton Vance and EV may also enter into other businesses.
EVC and its affiliates and its officers and employees from time to time
have transactions with various banks, including the custodian of the Fund and
the Portfolio, Investors Bank & Trust Company. It is Eaton Vance's opinion that
the terms and conditions of such transactions were not and will not be
influenced by existing or potential custodial or other relationships between the
Fund or the Portfolio and such banks.
SERVICE FOR WITHDRAWAL
By a standard agreement, the Trust's Transfer Agent will send to the
shareholder regular monthly or quarterly payments of any designated amount based
upon the value of the shares held. The checks will be drawn from share
redemptions and hence, although they are a return of principal may give rise to
gain or loss for tax purposes. Income dividends and capital gains distributions
in connection with withdrawal accounts will be credited at net asset value as of
the record date for each distribution. Continued withdrawals in excess of
current income will eventually use up principal, particularly in a period of
declining market prices.
To use this service, at least $5,000 in cash or shares at the public
offering price (i.e., net asset value) will have to be deposited with the
Transfer Agent. A shareholder may not have a withdrawal plan in effect at the
same time he has authorized Bank Draft Investing or is otherwise making regular
purchases of Fund shares. Either the shareholder, the Transfer Agent or the
Principal Underwriter will be able to terminate the withdrawal plan at any time
without penalty.
CUSTODIAN
Investors Bank & Trust Company ("IBT"), 24 Federal Street, Boston,
Massachusetts, (a 77.3% owned subsidiary of EVC) acts as custodian for the Fund
and the Portfolio. IBT has the custody of all cash and securities representing
the Fund's interest in the Portfolio, has custody of all the Portfolio's assets,
maintains the general ledger of the Portfolio and the Fund, and computes the
daily net asset value of interests in the Portfolio and the net asset value of
shares of the Fund. In such capacity it attends to details in connection with
the sale, exchange, substitution, transfer or other dealings with the
Portfolio's investments, receives and disburses all funds and performs various
other ministerial duties upon receipt of proper instructions from the Fund and
the Portfolio. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of Fund and Portfolio net assets and a portion of the
fee relates to activity charges, primarily the number of portfolio transactions.
These fees are then reduced by a credit for cash balances of the particular
investment company at the custodian equal to 75% of the 91-day, U.S. Treasury
Bill auction rate applied to the particular investment company's average daily
collected balances for the week. In view of the ownership of EVC in IBT, the
Portfolio is treated as a self-custodian pursuant to Rule 17f-2 under the 1940
Act, and the Portfolio's investments held by IBT as custodian are thus subject
to the additional examinations by the Portfolio's independent accountants as
called for by such Rule. For the period from the start of business, May 2, 1994,
to December 31, 1994, the Portfolio paid IBT $69,593.
DETERMINATION OF NET ASSET VALUE
The net asset value of the Portfolio and of shares of the Fund is
determined by the custodian, IBT, (as agent for the Fund and the Portfolio) in
the manner described under "Valuing Fund Shares" in the Fund's current
prospectus. The Fund and the Portfolio will be closed for business and will not
price their respective shares or interests on the following business holidays:
New Year's Day, President's Day, Good Friday (a New York Stock Exchange
holiday), Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The valuation of the instruments held by the Portfolio at
amortized cost is permitted in accordance with Rule 2a-7 under the 1940 Act and
certain procedures established by the Trustees of the Trust and the Portfolio
thereunder.
The amortized cost of an instrument is determined by valuing it at cost
originally and thereafter accreting any discount or amortizing any premium from
its face value at a constant rate until maturity, regardless of the effect of
fluctuating interest rates on the market value of the instrument. Although the
amortized cost method provides certainty in valuation, it may result at times in
determinations of value that are higher or lower than the price the Portfolio
would receive if the instruments were sold. Consequently, changes in the market
value of instruments held by the Portfolio during periods of rising or falling
interest rates will not be reflected either in the computation of net asset
value of the Portfolio or in the daily computation of its net investment income.
The Trustees of the Trust and the Portfolio have also established
procedures designed to facilitate, to the extent reasonably possible, the
maintenance of the Fund's price per share, as computed for the purpose of
distribution and redemption of shares, at $1.00. These procedures include review
of the Portfolio's holdings by the Trustees, at such intervals as they may deem
appropriate, to determine whether the Portfolio's net asset value calculated by
using readily available market quotations deviates from the valuation based on
amortized cost, and, if so, whether such deviation may result in material
dilution or is otherwise unfair to existing interest holders. In the event the
Trustees determine that such a deviation exists, they will take such corrective
action as they consider to be necessary or appropriate, which action could
include the sale of instruments held by the Portfolio prior to maturity (to
realize capital gains or losses); the shortening of average portfolio maturity;
withholding dividends; redemption of shares in kind; or establishing a net asset
value per share by using readily available market quotations.
Since the net investment income of the Fund is declared as a dividend each
time such income is determined, the net asset value per share of the Fund
remains at $1.00 per share immediately after such determination and dividend
declaration. It is expected that the Fund's net investment income will be
positive each time it is determined. However, if because of realized losses on
sales of portfolio investments, a sudden rise in interest rates, default by an
issuer of a portfolio security, or for any other reason the net investment
income of the Portfolio determined at any time is a negative amount, the
Portfolio will offset such amount allocable to each then interest holder's
account from dividends accrued with respect to such account. If at the time of
payment of a dividend (either at the regular dividend payment date, or, in the
case of an interest holder who is withdrawing all or substantially all of its
interest in an account, at the time of redemption), such negative amount exceeds
an interest holder's accrued dividends, the Portfolio will reduce the interest
by treating the interest holder as having contributed to the capital of the
Portfolio that amount of its interest which represents the amount of the excess.
Each shareholder is deemed to have agreed to such contribution in these
circumstances by his or her investment in the Fund.
Should the Portfolio incur or anticipate any unusual or unexpected
significant expense, loss or depreciation which would affect disproportionately
the Fund's net investment income for a particular period, the Trustees would at
that time consider whether to adhere to its daily dividend policy or to revise
it in the light of the then prevailing circumstances. Such expenses, losses or
depreciation may nevertheless result in a shareholder's receiving no dividends
for the period during which the shares are held and in receiving upon redemption
a price per share lower than the purchase price of such shares.
CALCULATION OF YIELD QUOTATIONS
From time to time, the Fund quotes a current yield based on a specific
seven calendar day period which is calculated by first dividing the net change
in the value of an account having a balance of one share at the beginning of the
period by the value of the account at such time to determine the seven day base
period return, and then multiplying such return by 365/7 with the resulting
yield figure carried to at least the nearest hundredth of one percent. The net
change in account value is determined by the value of additional shares
purchased with dividends declared on the original share and dividends declared
on both the original share and any such additional shares, but does not include
any realized gains or losses from the sales of securities or any unrealized
appreciation or depreciation on portfolio securities. In addition to the current
yield, the Fund also quotes an effective yield based on a specific seven day
period, carried to at least the nearest hundredth of one percent, computed by
determining the net change, exclusive of capital changes, in the value of a
hypothetical preexisting account having a balance of one share at the beginning
of the period, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula: Effective yield = [(Base period return +1)365/7]-1.
Yields will fluctuate from time to time and are not necessarily
representative of future results. A shareholder should remember that yield is a
function of the type and quality of the instruments held by the Portfolio.
TAXES
Each series of the Trust (including the Fund) is treated as a separate
entity for Federal income tax purposes. The Fund will elect to be treated and
intends to qualify each year as a regulated investment company ("RIC") under the
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the Fund
intends to satisfy certain requirements relating to sources of its income and
diversification of its assets and to distribute its net investment income and
net realized capital gains to its shareholders in accordance with the timing
requirements imposed by the Code, so as to avoid any Federal income or excise
tax to the Fund. Because the Fund invests its assets in the Portfolio, the
Portfolio normally must satisfy the applicable source of income and
diversification requirements in order for the Fund to satisfy them. The
Portfolio will allocate at least annually among its investors, including the
Fund, the Portfolio's net investment income, net realized capital gains, and any
other items of income, gain, loss, deduction or credit. The Portfolio will make
allocations to the Fund in accordance with the Code and applicable regulations
and will make moneys available for withdrawal at appropriate times and in
sufficient amounts to enable the Fund to satisfy the tax distribution
requirements that apply to the Fund and that must be satisfied in order to avoid
Federal income and/or excise tax on the Fund. For purposes of applying the
requirements of the Code regarding qualification as a RIC, the Fund will be
deemed (i) to own its proportionate share of each of the assets of the Portfolio
and (ii) to be entitled to the gross income of the Portfolio attributable to
such share.
In order to avoid a Federal excise tax, the Code requires that the Fund
distribute by December 31 of each calendar year at least 98% of its ordinary
income (not including tax-exempt income) for such year, at least 98% of the
excess of its realized capital gains over its realized capital losses (computed
on the basis of the one-year period ending on October 31 of such year after
reduction by any available capital loss carryforwards) and 100% of any income
from the prior year (as previously computed) that was not paid out during such
year and on which the Fund paid no Federal income tax. Further, under current
law, provided that the Fund qualifies as a RIC for Federal income tax purposes
and the Portfolio is treated as a partnership for Massachusetts and Federal tax
purposes, neither the Fund nor the Portfolio is liable for any income, corporate
excise or franchise tax in the Commonwealth of Massachusetts.
The Portfolio may be subject to foreign withholding taxes with respect to
investments in certain foreign securities. These taxes may be reduced or
eliminated under the terms of an applicable U.S. income tax treaty. The Fund
will not be eligible to pass through to shareholders their proportionate share
of foreign taxes paid by the Portfolio and allocated to the Fund, with the
result that shareholders will not be required to include in income, and will not
be entitled to take any foreign tax credits or deductions for foreign taxes paid
by the Portfolio and allocated to the Fund. However, such taxes may be deducted
in determining the income the Fund is required to distribute.
A shareholder may realize a gain or loss for Federal tax purposes as a
result of a redemption (including an exchange) of Fund shares, if the net asset
value of Fund shares has not been maintained at $1.00 per share or if a
contingent deferred sales charge is imposed on the redemption. In such case, any
loss realized upon the redemption of shares with a tax holding period of 6
months or less will be treated as a long-term capital loss to the extent of any
distribution of net long-term capital gains during such 6-month period.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and to
other special classes of shareholders, such as tax-exempt organizations, banks
and insurance companies, and such shareholders should consult their tax advisers
for more information. An individual may make an aggregate annual contribution to
an IRA in an amount equal to the lesser of his or her earned income or $2,000
($2,250 for an individual and his or her nonearning spouse). The deductibility
of such contributions may be restricted or eliminated for particular
shareholders.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain required certifications, as well as shareholders with respect to whom
the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of Federal income tax. Backup
withholding, if required, would be withheld from the Fund's dividends and
distibutions and, unless the Fund maintains a constant net asset value per
share, the proceeds of redemptions (including repurchases and exchanges), at a
rate of 31%, An individual's taxpayer identification number is generally his or
her social security number.
Non-resident alien individuals and certain foreign corporations and other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Fund's distributions from its ordinary income and the excess of
its net short-term capital gain over its net long-term capital loss, unless the
tax is reduced or eliminated by an applicable tax treaty. Distributions from the
excess of the Fund's net long-term capital gain over its net short-term capital
loss received by such shareholders and any gain from the sale or other
disposition of shares of the Fund generally will not be subject to U.S. Federal
income taxation, provided that non-resident alien status has been certified by
the shareholder. Different U.S. tax consequences may result if the shareholder
is engaged in a trade or business in the United States, is present in the United
States for a sufficient period of time during a taxable year to be treated as a
U.S. resident, or fails to provide any required certifications regarding status
as a non-resident alien investor. Foreign shareholders should consult their tax
advisers regarding the U.S. and foreign tax consequences of an investment in the
Fund.
Distributions of the Fund may also be subject to state and local taxes. A
state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the Fund's distributions are
derived from interest on (or, in the case of intangible taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in some
states that certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. Shareholders should consult their tax advisers with
respect to state and local tax consequences of investing in the Fund.
PRINCIPAL UNDERWRITER
Under the Distribution Agreement the Principal Underwriter acts as
principal in selling shares of the Fund. The expenses of printing copies of
prospectuses used to offer shares to Authorized Firms or investors and other
selling literature and of advertising is borne by the Principal Underwriter. The
fees and expenses of qualifying and registering and maintaining qualifications
and registrations of the Fund and its shares under Federal and state securities
laws is borne by the Fund. In addition, the Fund makes payments to the Principal
Underwriter pursuant to its Distribution Plan as described in the Fund's current
Prospectus; the provisions of the plan relating to such payments are included in
the Distribution Agreement. The Distribution Agreement is renewable annually by
the Trust's Board of Trustees (including a majority of its Trustees who are not
interested persons of the Trust and who have no direct or indirect financial
interest in the operation of the Fund's Distribution Plan or the Distribution
Agreement), may be terminated on sixty days' notice either by such Trustees or
by vote of a majority of the outstanding voting securities of the Fund or on six
months' notice by the Principal Underwriter and is automatically terminated upon
assignment. The Principal Underwriter currently distributes Fund shares on a
"best efforts" basis under which it is required to take and pay for only such
shares as may be sold.
DISTRIBUTION PLAN
The Distribution Plan (the "Plan") is described in the prospectus and is
designed to meet the requirements of Rule 12b-1 under the 1940 Act and the sales
charge rule of the National Association of Securities Dealers, Inc. (the "NASD
Rule"). The purpose of the Plan is to compensate the Principal Underwriter for
its distribution services and facilities provided to the Fund by paying the
Principal Underwriter sales commissions and a separate distribution fee in
connection with sales of Fund shares. The following supplements the discussion
of the Plan contained in the Fund's prospectus.
In calculating daily the amount of uncovered distribution charges,
distribution charges will include the aggregate amount of sales commissions and
distribution fees theretofore paid plus the aggregate amount of sales
commissions and distribution fees which the Principal Underwriter is entitled to
be paid under the Plan since its inception. Payments theretofore paid and
payable under the Plan by the Fund to the Principal Underwriter and contingent
deferred sales charges theretofore paid and payable to the Principal Underwriter
will be subtracted from such distribution charges; if the result of such
subtraction is positive, a distribution fee (computed at 1% over the prime rate
then reported in The Wall Street Journal) will be computed on such amount and
added thereto, with the resulting sum constituting the amount of outstanding
uncovered distribution charges with respect to such day. The amount of
outstanding uncovered distribution charges of the Principal Underwriter
calculated on any day does not constitute a liability recorded on the financial
statements of the Fund.
It is anticipated that the Eaton Vance organization will profit by reason
of the operation of the Plan through an increase in the Fund's assets (thereby
increasing the advisory fee payable to BMR by the Portfolio) resulting from
sales of Fund shares and through the sales commissions and distribution fees and
contingent deferred sales charges paid to the Principal Underwriter pursuant to
the Plan. The Eaton Vance organization may be considered to have realized a
profit under the Plan if at any point in time the aggregate amounts theretofore
received by the Principal Underwriter pursuant to the Plan and from contingent
deferred sales charges have exceeded the total expenses theretofore incurred by
such organization in distributing shares of the Fund. Total expenses for this
purpose will include an allocable portion of the overhead costs of such
organization and its branch offices, which costs will include without limitation
leasing expense, depreciation of building and equipment, utilities,
communication and postage expense, compensation and benefits of personnel,
travel and promotional expense, stationery and supplies, literature and sales
aids, interest expense, data processing fees, consulting and temporary help
costs, insurance, taxes other than income taxes, legal and auditing expense and
other miscellaneous overhead items. Overhead is calculated and allocated for
such purpose by the Eaton Vance organization in a manner deemed equitable to the
Fund.
The amount of uncovered distribution charges of the Principal Underwriter
at any particular time depends upon various changing factors, including the
level and timing of sales of Fund shares, the nature of such sales (i.e.,
whether they result from exchange transactions, reinvestments or from cash sales
through Authorized Firms), the level and timing of redemptions of Fund shares
upon which a contingent deferred sales charge will be imposed, the level and
timing of redemptions of Fund shares upon which no contingent deferred sales
charge will be imposed (including redemptions involving exchanges of Fund shares
for shares of another fund in the Eaton Vance Marathon or Eaton Vance Classic
Group Funds which result in a reduction of uncovered distribution charges),
changes in the level of the net assets of the Fund, and changes in the interest
rate used in the calculation of the distribution fee under the Plan. The Plan
also authorizes the Fund to make payments of service fees.
Pursuant to Rule 12b-1, the Plan has been approved by the Fund's initial
sole shareholder (Eaton Vance) and by the Board of Trustees of the Trust,
including the Rule 12b-1 Trustees. Under the Plan the President or a Vice
President of the Trust shall provide to the Trustees for their review, and the
Trustees shall review at least quarterly, a written report of the amount
expended under the Plan and the purposes for which such expenditures were made.
The Plan may not be amended to increase materially the payments described
therein without approval of the shareholders of the Fund, and all material
amendments of the Plan must also be approved by the Trustees as required by Rule
12b-1. So long as the Plan is in effect, the selection and nomination of the
Trustees who are not interested persons of the Trust shall be committed to the
discretion of the Trustees who are not such interested persons.
The Trustees of the Trust believe that the Plan will be a significant
factor in the expected growth of the Fund's assets, and will result in increased
investment flexibility and advantages which will benefit the Fund and its
shareholders. Payments for sales commissions and distribution fees made to the
Principal Underwriter under the Plan will compensate the Principal Underwriter
for its services and expenses in distributing shares of the Fund. Service fee
payments made to the Principal Underwriter and Authorized Firms under the Plan
provide incentives to provide continuing personal services to investors and the
maintenance of shareholder accounts. By providing incentives to the Principal
Underwriter and Authorized Firms, the Plan is expected to result in the
maintenance of, and possible future growth in, the assets of the Fund. Based on
the foregoing and other relevant factors, the Trustees of the Trust have
determined that in their judgment there is a reasonable likelihood that the Plan
will benefit the Fund and its shareholders.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of portfolio security transactions of
the Portfolio, including the selection of the market and the firm, are made by
BMR. BMR is also responsible for the execution of transactions for all other
accounts managed by it.
BMR places the portfolio security transactions of the Portfolio and of all
other accounts managed by it for execution with many firms. Eaton Vance uses its
best efforts to obtain execution of portfolio security transactions at prices
which are advantageous to the Portfolio and at reasonably competitive spreads or
(when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking such execution, BMR will use its best judgment in
evaluating the terms of a transaction, and will give consideration to various
relevant factors, including without limitation the size and type of the
transaction, the general execution and operational capabilities of the executing
firm, the nature and character of the market for the security, the
confidentiality, speed and certainty of effective execution required for the
transaction, the reputation, reliability, experience and financial condition of
the firm, the value and quality of the services rendered by the firm in other
transactions, and the reasonableness of the commission or spread, if any. The
money market instruments purchased and sold by the Portfolio are generally
traded in the over-the-counter market on a net basis (i.e., without commission)
through dealers and banks acting for their own accounts rather than as brokers
and the Portfolio may also acquire such investments directly from the issuers.
Firms acting for their own account attempt to profit from such transactions by
buying at one price and selling at a higher price, and the difference between
such prices is customarily referred to as the spread which generally is not
disclosed. While it is anticipated that the Portfolio will not pay significant
brokerage commissions in connection with such portfolio security transactions,
on occasion it may be necessary or appropriate to purchase or sell a security
through a broker on an agency basis, in which case the Portfolio will incur a
brokerage commission. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of BMR, be reasonable in relation to the
value of the services provided, spreads or commissions exceeding those which
another firm might charge may be paid to firms who were selected to execute
transactions on behalf of the Portfolio and BMR's other clients for providing
brokerage and research services to BMR.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio security transaction on behalf of the
Portfolio may receive compensation which is in excess of the amount of
compensation another broker or dealer would have charged for effecting that
transaction if BMR determines in good faith that such compensation was
reasonable in relation to the value of the brokerage and research services
provided. This determination may be made on the basis of either that particular
transaction or on the basis of overall responsibilities which BMR and its
affiliates have for accounts over which they exercise investment discretion. In
making any such determination, BMR will not attempt to place a specific dollar
value on the brokerage and research services provided or to determine what
portion of the compensation should be related to such services. Brokerage and
research services may include advice as to the value of securities, the
advisability of investing in, purchasing, or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, portfolio strategy and the performance of accounts;
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement); and the "Research Services" referred to in
the next paragraph.
It is a common practice of the investment advisory industry for the
advisers of investment companies, institutions and other investors to receive
research, statistical and quotation services, data, information and other
services, products and materials which assist such advisers in the performance
of their investment responsibilities ("Research Services") from broker-dealer
firms which execute portfolio transactions for the clients of such advisers and
from third parties with which such broker-dealers have arrangements. Consistent
with this practice, BMR receives Research Services from many broker-dealer firms
with which BMR places the Portfolio transactions and from third parties with
which these broker-dealers have arrangements. These Research Services include
such matters as general economic and market reviews, industry and company
reviews, evaluations of securities and portfolio strategies and transactions,
recommendations as to the purchase and sale of securities and other portfolio
transactions, financial, industry and trade publications, news and information
services, pricing and quotation equipment and services, and research oriented
computer hardware, software, data bases and services. Any particular Research
Service obtained through a broker-dealer may be used by BMR in connection with
client accounts other than those accounts which pay commissions to such
broker-dealer. Any such Research Service may be broadly useful and of value to
BMR in rendering investment advisory services to all or a significant portion of
its clients, or may be relevant and useful for the management of only one
client's account or of a few clients' accounts, or may be useful for the
management of merely a segment of certain clients' accounts, regardless of
whether any such account or accounts paid commissions to the broker-dealer
through which such Research Service was obtained. The advisory fee paid by the
Portfolio is not reduced because BMR receives such Research Services. BMR
evaluates the nature and quality of the various Research Services obtained
through broker-dealer firms and attempts to allocate sufficient commissions to
such firms to ensure the continued receipt of Research Services which BMR
believes are useful or of value to it in rendering investment advisory services
to its clients.
Subject to the requirement that BMR shall use its best efforts to seek to
execute portfolio security transactions at advantageous prices and at reasonably
competitive spreads or commission rates, BMR is authorized to consider as a
factor in the selection of any broker-dealer firm with whom portfolio orders may
be placed the fact that such firm has sold or is selling shares of the Fund or
of other investment companies sponsored by BMR or Eaton Vance. This policy is
not inconsistent with a rule of the National Association of Securities Dealers,
Inc., which rule provides that no firm which is a member of the Association
shall favor or disfavor the distribution of shares of any particular investment
company or group of investment companies on the basis of brokerage commissions
received or expected by such firm from any source.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates. BMR
will attempt to allocate equitably portfolio security transactions among the
Portfolio and the portfolios of its other investment accounts whenever decisions
are made to purchase or sell securities by the Portfolio and one or more of such
other accounts simultaneously. In making such allocations, the main factors to
be considered are the respective investment objectives of the Portfolio and such
other accounts, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Portfolio
and such accounts, the size of investment commitments generally held by the
Portfolio and such accounts and the opinions of the persons responsible for
recommending investments to the Portfolio and such accounts. While this
procedure could have a detrimental effect on the price or amount of the
securities available to the Portfolio from time to time, it is the opinion of
the Trustees of the Trust and the Portfolio that the benefits available from the
BMR organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions.
For the period from the start of business, May 2, 1994, to the fiscal year
ended December 31, 1994, the purchases and sales of portfolio investments were
with the issuer or with major dealers in money market instruments acting as
principal. The cost of securities purchased from underwriters includes a
disclosed, fixed underwriting commission or concession, and the prices for which
securities are purchased from and sold to dealers usually include an undisclosed
dealer mark-up or mark-down. The Portfolio paid no brokerage commissions on
portfolio transactions during the period from the start of business, May 2,
1994, to December 31, 1994.
OTHER INFORMATION
Eaton Vance, pursuant to its agreement with the Fund, controls the use of
the words "Eaton Vance" in the Fund's name and may use the words "Eaton Vance"
in other connections and for other purposes.
The Trust's Declaration of Trust may be amended by the Trustees when
authorized by vote of a majority of the outstanding voting securities of the
Trust, the financial interests of which are affected by the amendment. The
Trustees may also amend the Declaration of Trust without the vote or consent of
shareholders to change the name of the Trust or any series or to make such other
changes as do not have a materially adverse effect on the financial interests of
shareholders or if they deem it necessary to conform it to applicable Federal or
state laws or regulations. The Trust or any series or class thereof may be
terminated by: (1) the affirmative vote of the holders of not less than
two-thirds of the shares outstanding and entitled to vote at any meeting of
shareholders of the Trust or the appropriate series or class thereof, or by an
instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of the shares of the Trust or a series or class thereof,
provided, however, that, if such termination is recommended by the Trustees, the
vote of a majority of the outstanding voting securities of the Trust or a series
or class thereof entitled to vote thereon shall be sufficient authorization; or
(2) by means of an instrument in writing signed by a majority of the Trustees,
to be followed by a written notice to shareholders stating that a majority of
the Trustees has determined that the continuation of the Trust or a series or a
class thereof is not in the best interest of the Trust, such series or class or
of their respective shareholders.
As permitted by Massachusetts law, there will normally be no meeting of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees of the Trust holding office have been
elected by shareholders. In such an event the Trustees then in office will call
a shareholders' meeting for the election of Trustees. The By-Laws provide that a
Trustee may be removed at any special meeting of the shareholders of the Trust
by a vote of two-thirds of the outstanding shares of beneficial interest of the
Trust (the "shares"). The Trustees shall promptly call a meeting of shareholders
for the purpose of voting upon a question of removal of a Trustee when requested
so to do by the record holders of not less than 10 per centum of the outstanding
shares. Except for the foregoing circumstances and unless removed by action of
the shareholders in accordance with the Trust's By-Laws, the Trustees shall
continue to hold office and may appoint successor Trustees. The Declaration of
Trust further provides that the Trustees will not be liable for errors of
judgment or mistakes of fact or law; but nothing in the Declaration of Trust
protects a Trustee against any liability to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees of the
Portfolio holding office have been elected by investors. In such an event the
Trustees then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interests
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The right to redeem can be suspended and the payment of the redemption
price deferred when the New York Stock Exchange (the "Exchange") is closed
(other than for customary weekend and holiday closings), during periods when
trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), or during any emergency as determined by
the Commission which makes it impracticable for the Portfolio to dispose of its
securities or value its assets, or during any other period permitted by order of
the Commission for the protection of investors.
INDEPENDENT ACCOUNTANTS
Coopers and Lybrand L.L.P., One Post Office Square, Boston, Massachusetts,
are the independent accountants for the Fund and the Portfolio, providing audit
services, tax return preparation, and assistance and consultation with respect
to the preparation of filings with the Securities and Exchange Commission.
<PAGE>
APPENDIX
MOODY'S INVESTORS SERVICE, INC.
DESCRIPTION OF RATINGS OF CORPORATE DEBT
MOODY'S SHORT-TERM DEBT RATINGS
Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations which have an original maturity not
exceeding one year. Obligations relying upon support mechanisms such as
letters-of-credit and bonds of indemnity are excluded unless explicitly rated.
Moody's employs three designations, all judged to be investment grade, to
indicate the relative repayment ability of issuers. The two highest designations
are as follows:
PRIME-1 -- Issuers (or supporting institutions) rated Prime-1 or (P-1) have
a superior ability for repayment of senior short-term debt obligations. P-1
repayment ability will often be evidenced by many of the following
characteristics:
* Leading market positions in well-established industries.
* High rates of return on funds employed.
* Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
* Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
* Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 -- Issuers (or supporting institutions) rated Prime-2 or (P-2) have
a strong ability for repayment of senior short-term obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
MOODY'S BOND RATINGS
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
STANDARD & POOR'S RATINGS GROUP
DESCRIPTION OF RATINGS OF CORPORATE DEBT
S&P'S COMMERCIAL PAPER RATLNGS
A Standard & Poor's Commercial Paper Rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days.
Ratings are graded into several categories, ranging from "A-1" for the
highest quality obligations to "D" for the lowest. The two highest rating
categories are as follows:
"A-1" This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to Possess extremely strong
safety characteristics are denoted with a plus sign ( + ) designation.
"A-2" Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".
S&P'S CORPORATE DEBT RATINGS
AAA -- Debt rated "AAA" has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA -- Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
Note: The AA rating may be modified by the addition of a plus or minus sign
to show the relative standing within this category.
DUFF & PHELPS CREDIT RATING CO.
DESCRIPTION OF RATINGS OF CORPORATE DEBT
DUFF & PHELPS COMMERCLAL PAPER RATLNGS
Duff & Phelps' commercial paper ratings are consistent with the short-term
rating criteria utilized by money market participants. The ratings, in effect,
apply to all obligations with maturities (when issued) or under one year.
The distinguishing feature of Duff & Phelps' commercial paper ratings is
the refinement of the traditional "1" category. The majority of commercial paper
issuers carry the highest short-term rating yet significant quality differences
within that tier do exist. As a consequence, Duff & Phelps has incorporated
gradations of "1+ " (one plus) and "1-" (one minus), to assist investors in
recognizing those differences. The Duff 2 and Duff 3 categories have not been
similarly refined but could be at some later date.
CATEGORY 1: TOP GRADE
DUFF 1+ -- Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or ready access to alternative sources
of funds, is clearly outstanding, and safety is just below risk-free U.S.
Treasury short-term obligations.
DUFF 1 -- Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk factors are
minor.
DUFF 1- -- High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk factors are very
small.
CATEGORY 2: GOOD GRADE
DUFF 2--Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing internal funds needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
DUFF & PHELPS' BOND RATINGS
AAA -- Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+ AA Aa -- High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of economic conditions.
FITCH INVESTORS SERVICE, INC.
DESCRIPTION OF RATINGS OF CORPORATE DEBT
FITCH'S SHORT-TERM DEBT RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.
The short-term rating places greater emphasis than a long-term rating on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
Fitch short-term ratings are as follows:
F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.
F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect
an assurance of timely payment only slightly less in degree than issues rated
"F-1+".
F-2 -- Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as for issues assigned "F-1+" and "F-1" ratings.
FITCH'S INVESTMENT GRADE BOND RATINGS
AAA -- Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA -- Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA". Because bonds rated
in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable
future development, short-term debt of these issuers is generally rated "F-1+".
FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Portfolio contained in the Eaton Vance Liquid Assets Fund's shareholder
report for the fiscal year ended December 31, 1994 as previously filed
electronically with the Securities and Exchange Commission (Accession Number:
0000950156-95-000079).
<PAGE>
INVESTMENT ADVISER OF
CASH MANAGEMENT PORTFOLIO
Boston Management and Research
24 Federal Street
Boston, MA 02110
ADMINISTRATOR OF EATON VANCE
MONEY MARKET FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, MA 02109
EATON VANCE MONEY MARKET FUND
24 FEDERAL STREET
BOSTON, MA 02110
MMFSAI
EATON VANCE
MONEY MARKET
FUND
STATEMENT OF
ADDITIONAL
INFORMATION
APRIL 3, 1995
<PAGE>
PART C
OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
Included in Part A:
For Eaton Vance Money Market Fund:
Not Applicable
Included in Part B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORT FOR EATON VANCE LIQUID
ASSETS FUND DATED DECEMBER 31, 1994, FILED ELECTRONICALLY PURSUANT TO
SECTION 30(B) (2) OF THE INVESTMENT COMPANY ACT OF 1940
For Eaton Vance Money Market Fund:
Not Applicable
For Cash Management Portfolio (Accession No. 0000950156-95-000079):
Financial Statements for Cash Management Portfolio:
Portfolio of Investments as of December 31, 1994
Statement of Assets and Liabilities as of December 31, 1994
Statement of Operations for the period from the start of
business, May 2, 1994, to December 31, 1994
Statement of Changes in Net Assets for the period from the start
of business, May 2, 1994, to December 31, 1994
Supplementary Data for the period from the start of business,
May 2,1994, to December 31, 1994
Notes to Financial Statements
Independent Auditors' Report
(B) EXHIBITS:
(1)(a) Amended and Restated Declaration of Trust dated October 25,
1993 filed herewith.
(b) Establishment and Designation of Series of Shares dated
March 31, 1995 filed herewith.
(2)(a) By-Laws as amended June 14, 1993 filed as Exhibit (2) to
Post-Effective Amendment No. 6 and incorporated herein by
reference.
(b) Amendment to By-laws dated December 13, 1993 filed as
Exhibit (2)(b) to Post- Effective Amendment No. 7 and
incorporated herein by reference.
(3) Not applicable
(4) Not applicable
(5) Amended Investment Advisory Agreement with Eaton Vance
Management, originally dated January 30, 1990 and
re-executed November 1, 1990 filed as Exhibit (5) to Post-
Effective Amendment No. 4 and incorporated herein by
reference.
(6)(a)(1) Amended and Restated Distribution Agreement with Eaton
Vance Distributors, Inc. for Liquid Assets Trust, dated
June 14, 1993 filed as Exhibit (6)(a) to Post-Effective
Amendment No. 6 and incorporated herein by reference.
(2) Form of Distribution Agreement with Eaton Vance
Distributors, Inc. for Eaton Vance Money Market Fund filed
as Exhibit (6)(a)(2) to Post-Effective Amendment No. 9 and
incorporated herein by reference.
(b) Selling Group Agreement between Eaton Vance Distributors,
Inc. and Authorized Dealers filed as Exhibit (6)(b) to
Post-Effective Amendment No. 9 and incorporated herein by
reference.
(c) Schedule of Dealer Discounts and Sales Charges filed as
Exhibit (6)(c) to Post-Effective Amendment No. 9 and
incorporated herein by reference.
(7) Not applicable
(8) Custodian Agreement with Investors Bank & Trust Company
dated December 17, 1990 filed as Exhibit (8) to
Post-Effective Amendment No. 4 and incorporated herein by
reference.
(9)(a) Administrative Services Agreement with Eaton Vance
Management for Liquid Assets Trust filed as Exhibit (9)(a)
to Post-Effective Amendment No. 9 and incorporated herein
by reference.
(b) Form of Administrative Services Agreement with Eaton Vance
Management for Eaton Vance Money Market Fund filed as
Exhibit (9)(b) to Post-Effective Amendment No. 9 and
incorporated herein by reference.
(10) Not applicable
(11) Consent of Independent Accountants filed herewith.
(12) Not applicable
(13) Letter Agreement with Eaton Vance Management, Inc. filed as
Exhibit (13) to original Registration Statement and
incorporated herein by reference.
(14)(a) Vance, Sanders Profit Sharing Retirement Plan for
Self-Employed Persons with Adoption Agreement and
instructions filed as Exhibit No. 14(1) to Post-Effective
Amendment No. 22 to the Registration Statement under the
Securities Act of 1933 (File No. 2-28471) and incorporated
herein by reference.
(b) Eaton & Howard, Vance Sanders Defined Contribution
Prototype Plan and Trust with Adoption Agreements filed
with Form N-1 as Exhibit No. 14(2) to Post-Effective
Amendment No. 29 to the Registration Statement (File No.
2-22019) and incorporated herein by reference.
(1) Basic Profit-Sharing Retirement Plan.
(2) Basic Money Purchase Pension Plan.
(3) Thrift Plan Qualifying as Profit-Sharing Plan.
(4) Thrift Plan Qualifying as Money Purchase Plan.
(5) Integrated Profit-Sharing Retirement Plan.
(6) Integrated Money Purchase Pension Plan.
(c) Individual Retirement Custodian Account (Form 5305A) and
Instructions filed as Exhibit No. 14(3) to Post-Effective
Amendment No. 53 and incorporated herein by reference.
(d) Vance, Sanders Variable Pension Prototype Plan and Trust
with Adoption Agreement filed as Exhibit No. 14(4) to
Post-Effective Amendment No. 22 to the Registration
Statement under the Securities Act of 1933 (File No.
2-28471) and incorporated herein by reference.
(15)(a) Amended and Restated Distribution Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 dated June
14, 1993 filed as Exhibit No. (15) to Post-Effective
Amendment No. 6 and incorporated herein by reference.
(b) Form of Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 for Eaton Vance Money Market
Fund filed as Exhibit (15)(b) to Post-Effective Amendment
No. 9 and incorporated herein by reference.
(16) Not applicable.
(17)(a) Power of Attorney for Eaton Vance Liquid Assets Trust dated
February 25, 1994 filed as Exhibit 17(a) to Post-Effective
Amendment No. 7 and incorporated herein by reference.
(b) Power of Attorney for Cash Management Portfolio dated
February 25, 1994 filed as Exhibit 17(b) to Post-Effective
Amendment No. 7 and incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of beneficial interest as of March 1, 1995
Eaton Vance Liquid Assets Fund 1,653
Eaton Vance Money Market Fund 1
ITEM 27. INDEMNIFICATION
No change over the original filing has been made.
Registrant's Trustees and officers are insured under a standard mutual fund
errors and omissions insurance policy covering loss incurred by reason of
negligent errors and omissions committed in their capacities as such.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the information set forth under the caption
"Investment Adviser and Administrator" in the Statement of Additional
Information, which information is incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Registrant's principal underwriter, Eaton Vance Distributors, Inc., a
wholly-owned subsidiary of Eaton Vance Management, is the principal
underwriter for each of the mutual funds named below:
<TABLE>
<S> <C>
EV Classic Alabama Tax Free Fund EV Classic Massachusetts Tax Free Fund
EV Classic Arizona Tax Free Fund EV Classic Michigan Limited Maturity
EV Classic Arkansas Tax Free Fund Tax Free Fund
EV Classic California Limited Maturity EV Classic Michigan Tax Free Fund
Tax Free Fund EV Classic Minnesota Tax Free Fund
EV Classic California Municipals Fund EV Classic Mississippi Tax Free Fund
EV Classic Colorado Tax Free Fund EV Classic Missouri Tax Free Fund
EV Classic Connecticut Limited Maturity EV Classic National Limited Maturity
Tax Free Fund Tax Free Fund
EV Classic Connecticut Tax Free Fund EV Classic National Municipals Fund
EV Classic Florida Insured Tax Free Fund EV Classic New Jersey Limited Maturity
EV Classic Florida Limited Maturity Tax Free Fund
Tax Free Fund EV Classic New Jersey Tax Free Fund
EV Classic Florida Tax Free Fund EV Classic New York Limited Maturity
EV Classic Georgia Tax Free Fund Tax Free Fund
EV Classic Government Obligations Fund EV Classic New York Tax Free Fund
EV Classic Greater China Growth Fund EV Classic North Carolina Tax Free Fund
EV Classic Growth Fund EV Classic Ohio Limited Maturity
EV Classic Hawaii Tax Free Fund Tax Free Fund
EV Classic High Income Fund EV Classic Ohio Tax Free Fund
EV Classic Investors Fund EV Classic Oregon Tax Free Fund
EV Classic Kansas Tax Free Fund EV Classic Pennsylvania Limited Maturity
EV Classic Kentucky Tax Free Fund Tax Free Fund
EV Classic Louisiana Tax Free Fund EV Classic Pennsylvania Tax Free Fund
EV Classic Maryland Tax Free Fund EV Classic Rhode Island Tax Free Fund
EV Classic Massachusetts Limited Maturity EV Classic Senior Floating-Rate Fund
Tax Free Fund EV Classic South Carolina Tax Free Fund
EV Classic Special Equities Fund EV Marathon New York Tax Free Fund
EV Classic Stock Fund EV Marathon North Carolina Limited Maturity
EV Classic Strategic Income Fund Tax Free Fund
EV Classic Tennessee Tax Free Fund EV Marathon North Carolina Tax Free Fund
EV Classic Texas Tax Free Fund EV Marathon Ohio Limited Maturity
EV Classic Total Return Fund Tax Free Fund
EV Classic Virginia Tax Free Fund EV Marathon Ohio Tax Free Fund
EV Classic West Virginia Tax Free Fund EV Marathon Oregon Tax Free Fund
EV Marathon Alabama Tax Free Fund EV Marathon Pennsylvania Limited Maturity
EV Marathon Arizona Limited Maturity Tax Free Fund
Tax Free Fund EV Marathon Pennsylvania Tax Free Fund
EV Marathon Arizona Tax Free Fund EV Marathon Rhode Island Tax Free Fund
EV Marathon Arkansas Tax Free Fund EV Marathon South Carolina Tax Free Fund
EV Marathon California Limited Maturity EV Marathon Special Equities Fund
Tax Free Fund EV Marathon Stock Fund
EV Marathon California Municipals Fund EV Marathon Strategic Income Fund
EV Marathon Colorado Tax Free Fund EV Marathon Tennessee Tax Free Fund
EV Marathon Connecticut Limited Maturity EV Marathon Texas Tax Free Fund
Tax Free Fund EV Marathon Total Return Fund
EV Marathon Connecticut Tax Free Fund EV Marathon Virginia Limited Maturity
EV Marathon Emerging Markets Fund Tax Free Fund
Eaton Vance Equity - Income Trust EV Marathon Virginia Tax Free Fund
EV Marathon Florida Insured Tax Free Fund EV Marathon West Virginia Tax Free Fund
EV Marathon Florida Limited Maturity EV Traditional California Municipals Fund
Tax Free Fund EV Traditional Connecticut Tax Free Fund
EV Marathon Florida Tax Free Fund EV Traditional Emerging Markets Fund
EV Marathon Georgia Tax Free Fund EV Traditional Florida Insured Tax Free Fund
EV Marathon Gold & Natural Resources Fund EV Traditional Florida Limited Maturity
EV Marathon Government Obligations Fund Tax Free Fund
EV Marathon Greater China Growth Fund EV Traditional Florida Tax Free Fund
EV Marathon Greater India Fund EV Traditional Government Obligations Fund
EV Marathon Growth Fund EV Traditional Greater China Growth Fund
EV Marathon Hawaii Tax Free Fund EV Traditional Greater India Fund
EV Marathon High Income Fund EV Traditional Growth Fund
EV Marathon Investors Fund Eaton Vance Income Fund of Boston
EV Marathon Kansas Tax Free Fund EV Traditional Investors Fund
EV Marathon Kentucky Tax Free Fund Eaton Vance Municipal Bond Fund L.P.
EV Marathon Louisiana Tax Free Fund EV Traditional National Limited Maturity
EV Marathon Maryland Tax Free Fund Tax Free Fund
EV Marathon Massachusetts Limited Maturity EV Traditional National Municipals Fund
Tax Free Fund EV Traditional New Jersey Tax Free Fund
EV Marathon Massachusetts Tax Free Fund EV Traditional New York Limited Maturity
EV Marathon Michigan Limited Maturity Tax Free Fund
Tax Free Fund EV Traditional New York Tax Free Fund
EV Marathon Michigan Tax Free Fund EV Traditional Pennsylvania Tax Free Fund
EV Marathon Minnesota Tax Free Fund EV Traditional Special Equities Fund
EV Marathon Mississippi Tax Free Fund EV Traditional Stock Fund
EV Marathon Missouri Tax Free Fund EV Traditional Total Return Fund
EV Marathon National Limited Maturity Eaton Vance Cash Management Fund
Tax Free Fund Eaton Vance Liquid Assets Fund
EV Marathon National Municipals Fund Eaton Vance Money Market Fund
EV Marathon New Jersey Limited Maturity Eaton Vance Prime Rate Reserves
Tax Free Fund Eaton Vance Short-Term Treasury Fund
EV Marathon New Jersey Tax Free Fund Eaton Vance Tax Free Reserves
EV Marathon New York Limited Maturity Massachusetts Municipal Bond Portfolio
Tax Free Fund
</TABLE>
(b)
<TABLE>
<CAPTION>
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICE
BUSINESS ADDRESS WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
------------------ -------------------------- --------------------
<S> <C> <C>
James B. Hawkes<F1> Vice President and Director President and
Trustee
William M. Steul<F1> Vice President and Director None
Wharton P. Whitaker<F1> President and Director None
Howard D. Barr Vice President None
2750 Royal View Court
Oakland, Michigan
Nancy E. Belza Vice President None
463-1 Buena Vista East
San Francisco, California
Chris Berg Vice President None
45 Windsor Lane
Palm Beach Gardens, Florida
H. Day Brigham, Jr.<F1> Vice President None
Susan W. Bukima Vice President None
106 Princess Street
Alexandria, Virginia
Jeffrey W. Butterfield Vice President None
9378 Mirror Road
Columbus, Indiana
Mark A. Carlson<F1> Vice President None
Jeffrey Chernoff Vice President None
115 Concourse West
Bright Waters, New York
William A. Clemmer<F1> Vice President None
James S. Comforti Vice President None
1859 Crest Drive
Encinitas, California
Mark P. Doman Vice President None
107 Pine Street
Philadelphia, Pennsylvania
Michael A. Foster Vice President None
850 Kelsey Court
Centerville, Ohio
William M. Gillen Vice President None
280 Rea Street
North Andover, Massachusetts
Hugh S. Gilmartin Vice President None
1531-184th Avenue, NE
Bellevue, Washington
Richard E. Houghton<F1> Vice President None
Brian Jacobs<F1> Senior Vice President None
Stephen D. Johnson Vice President None
13340 Providence Lake Drive
Alpharetta, Georgia
Thomas J. Marcello Vice President None
553 Belleville Avenue
Glen Ridge, New Jersey
Timothy D. McCarthy Vice President None
9801 Germantown Pike
Lincoln Woods Apt. 416
Lafayette Hill, Pennsylvania
Morgan C. Mohrman<F1> Senior Vice President None
Gregory B. Norris Vice President None
6 Halidon Court
Palm Beach Gardens, Florida
Thomas Otis<F1> Secretary and Clerk Secretary
George D. Owen Vice President None
1911 Wildwood Court
Blue Springs, Missouri
F. Anthony Robinson Vice President None
510 Gravely Hill Road
Wakefield, Rhode Island
Benjamin A. Rowland, Jr.<F1> Vice President, None
Treasurer and Director
John P. Rynne<F1> Vice President None
George V.F. Schwab, Jr. Vice President None
9501 Hampton Oaks Lane
Charlotte, North Carolina
Cornelius J. Sullivan<F1> Vice President None
Maureen C. Tallon Vice President None
518 Armistead Drive
Nashville, Tennessee
David M. Thill Vice President None
126 Albert Drive
Lancaster, New York
William T. Toner Vice President None
747 Lilac Drive
Santa Barbara, California
Chris Volf Vice President None
6517 Thoroughbred Loop
Odessa, Florida
Donald E. Webber<F1> Senior Vice President None
Sue Wilder Vice President None
141 East 89th Street
New York, New York
<FN>
----------
<F1> Address is 24 Federal Street, Boston, MA 02110
</TABLE>
(c) Not applicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and
the Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 24 Federal Street,
Boston, MA 02110 and 89 South Street, Boston, MA 02111, and its transfer
agent, The Shareholder Services Group, Inc., 53 State Street, Boston, MA
02104, with the exception of certain corporate documents and portfolio
trading documents which are in the possession and custody of Eaton Vance
Management, 24 Federal Street, Boston, MA 02110. The Registrant is informed
that all applicable accounts, books and documents required to be maintained
by registered investment advisers are in the custody and possession of Eaton
Vance Management.
ITEM 31. MANAGEMENT SERVICES
Not applicable
ITEM 32. UNDERTAKINGS
The Registrant undertakes to file a Post-Effective Amendment, using
financial statements which need not be certified, within four to six months
from the effective date of any prior post-effective amendment which made
effective the registration of shares of a series of the Registrant, unless
such filing on behalf of that series has already been made.
The Registrant undertakes to furnish to each person to whom a prospectus
is delivered a copy of the latest annual report to shareholders, upon
request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Boston, and the
Commonwealth of Massachusetts, on the 28th day of March, 1995.
EATON VANCE LIQUID ASSETS TRUST
By /s/ JAMES B. HAWKES
----------------------------------
JAMES B. HAWKES, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
President, Principal
Executive Officer and
/s/ JAMES B. HAWKES Trustee March 28, 1995
---------------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer March 28, 1995
---------------------------------
JAMES L. O'CONNOR
DONALD R. DWIGHT* Trustee March 28, 1995
---------------------------------
DONALD R. DWIGHT
SAMUEL L. HAYES, III* Trustee March 28, 1995
---------------------------------
SAMUEL L. HAYES, III
NORTON H. REAMER* Trustee March 28, 1995
---------------------------------
NORTON H. REAMER
JOHN L. THORNDIKE* Trustee March 28, 1995
---------------------------------
JOHN L. THORNDIKE
JACK L. TREYNOR* Trustee March 28, 1995
---------------------------------
JACK L. TREYNOR
*By: /s/ H. DAY BRIGHAM, JR.
----------------------------
As Attorney-in-fact
<PAGE>
SIGNATURES
Cash Management Portfolio has duly caused this Post-Effective Amendment to
the Registration Statement on Form N-1A of Eaton Vance Liquid Assets Trust (File
No. 33-14532) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, and the Commonwealth of Massachusetts, on the
28th day of March, 1995.
CASH MANAGEMENT PORTFOLIO
By /s/ M. DOZIER GARDNER
----------------------------------
M. DOZIER GARDNER, President
This Post-Effective Amendment to the Registration Statement on Form N-1A of
Eaton Vance Liquid Assets Trust (File No. 33-14532) has been signed below by the
following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
Trustee, President, and
Principal Executive
/s/ M. DOZIER GARDNER Officer March 28, 1995
---------------------------------
M. DOZIER GARDNER
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer March 28, 1995
---------------------------------
JAMES L. O'CONNOR
/s/ H. DAY BRIGHAM, JR. Trustee March 28, 1995
---------------------------------
H. DAY BRIGHAM, JR.
DONALD R. DWIGHT* Trustee March 28, 1995
---------------------------------
DONALD R. DWIGHT
/s/ JAMES B. HAWKES Trustee March 28, 1995
---------------------------------
JAMES B. HAWKES
SAMUEL L. HAYES, III* Trustee March 28, 1995
---------------------------------
SAMUEL L. HAYES, III
NORTON H. REAMER* Trustee March 28, 1995
---------------------------------
NORTON H. REAMER
JOHN L. THORNDIKE* Trustee March 28, 1995
---------------------------------
JOHN L. THORNDIKE
JACK L. TREYNOR* Trustee March 28, 1995
---------------------------------
JACK L. TREYNOR
*By: /s/ H. DAY BRIGHAM, JR.
----------------------------
As Attorney-in-fact
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE IN SEQUENTIAL
EXHIBIT NO. DESCRIPTION NUMBERING SYSTEM
----------- ----------- ----------------
<S> <C> <C>
(1)(a) Amended and Restated Declaration of Trust
(1)(b) Establishment and Designation of Series of Shares
(11) Consent of Independent Accountants
</TABLE>
<PAGE>
EXHIBIT 99.(1)(a)
AMENDED AND RESTATED DECLARATION OF TRUST
OF
EATON VANCE LIQUID ASSETS TRUST
DATED: OCTOBER 25, 1993
AMENDED AND RESTATED DECLARATION OF TRUST, made October 25, 1993 by the
undersigned Trustees being a majority of the Trustees in office on such date,
James G. Baur, Donald R. Dwight, James B. Hawkes, Samuel L. Hayes, III, Norton
H. Reamer, John L. Thorndike and Jack L. Treynor, hereinafter referred to
collectively as the "Trustees" and individually as a "Trustee", which terms
shall include any successor Trustees or Trustee and any present Trustees who
are not signatories to this instrument.
WHEREAS, on May 11, 1987, the initial Trustees established a trust under a
Declaration of Trust as heretofore amended and restated for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, a majority of the Trustees desire to amend and restate said
Declaration of Trust pursuant to the provisions thereof;
NOW THEREFORE, the Trustees declare that all money and property contributed
to the trust established hereunder shall be held and managed under this
Declaration of Trust as so amended and restated for the benefit of the holders,
from time to time, of the shares of beneficial interest issued hereunder and
subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is Eaton Vance
Liquid Assets Trust (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to a
contract described in Section 3.3. hereof.
(b) "By-Laws" means the By-Laws referred to in Section 2.5 hereof, as
from time to time amended.
(c) "Class" means any division or Class of Shares within a Series or
Fund, which Class is or has been established within such Series or Fund in
accordance with the provisions of Article V.
(d) The term "Commission" has the meaning given it in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but
does not include a system for the central handling of securities described
in said Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time
to time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein," and "hereunder" shall be deemed to refer to this Declaration
rather than exclusively to the article or section in which such words
appear.
(g) "Fund" or "Funds," individually or collectively, means the
separate Series of Shares of the Trust, together with the assets and
liabilities belonging and allocated thereto.
(h) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(i) The term "Interested Person" has the meaning specified in the 1940
Act subject, however, to such exceptions and exemptions as may be granted
by the Commission in any rule, regulation or order.
(j) "Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(k) The "1940 Act" means the Investment Company Act of 1940 and the
Rules and Regulations thereunder, as amended from time to time.
(l) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, firms, joint ventures and other
entities, whether or not legal entities, as well as governments,
instrumentalities, and agencies and political subdivisions thereof, and
quasi-governmental agencies and instrumentalities.
(m) "Principal Underwriter" means the party, other than the Trust, to
a contract described in Section 3.1 hereof.
(n) "Prospectus" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission
from time to time.
(o) "Series" individually or collectively means the separately managed
component(s) or Fund(s) of the Trust (or, if the Trust shall have only one
such component or Fund, then that one) as may be established and designated
from time to time by the Trustees pursuant to Section 5.5 hereof.
(p) "Shareholder" means a record owner of Outstanding Shares. A
Shareholder of Shares of a Series shall be deemed to own a proportionate
undivided beneficial interest in such Series equal to the number of Shares
of such Series of which he is the record owner divided by the total number
of Outstanding Shares of such Series. A Shareholder of Shares of a Class
within a Series shall be deemed to own a proportionate undivided beneficial
interest in such Class equal to the number of Shares of such Class of which
he is the record owner divided by the total number of Outstanding Shares of
such Class. As used herein the term "Shareholder" shall, when applicable to
one or more Series or Funds or to one or more Classes thereof, refer to the
record owners of Outstanding Shares of such Series, Fund or Funds or of
such Class or Classes of Shares.
(q) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time to
time, including the Shares of any and all Series or of any Class within any
Series (as the context may require) which may be established by the
Trustees, and includes fractions of Shares as well as whole Shares.
"Outstanding Shares" means those Shares shown from time to time on the
books of the Trust or its Transfer Agent as then issued and outstanding but
shall not include Shares which have been redeemed or repurchased by the
Trust and which are at the time held in the treasury of the Trust.
(r) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(s) "Trust" means Eaton Vance Liquid Assets Trust. As used herein the
term Trust shall, when applicable to one or more Series or Funds, refer to
such Series or Funds.
(t) The "Trustees" means the persons who have signed this Declaration,
so long as they shall continue in office in accordance with the terms
hereof, and all other persons who now serve or may from time to time be
duly elected, qualified and serving as Trustees in accordance with the
provisions of Article II hereof and the By-Laws of the Trust, and reference
herein to a Trustee or the Trustees shall refer to such person or persons
in this capacity or their capacities as trustees hereunder.
(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees, including any and all assets of or allocated to any
Series or Class, as the context may require.
(v) Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in
conjunction with the establishment of any Series or Class of Shares, the
term "vote" when used in connection with an action of Shareholders shall
include a vote taken at a meeting of Shareholders or the consent or
consents of Shareholders taken without such a meeting. Except as such term
may be otherwise defined by the Trustee in connection with any meeting or
other action of Shareholders or in conjunction with the establishment of
any Series or Class of Shares, the term "vote of a majority of the
outstanding voting securities" as used in Section 8.2 and 8.4 shall have
the same meaning as is assigned to that term in the 1940 Act.
ARTICLE II
TRUSTEES
Section 2.1. Management of the Trust. The business and affairs of the Trust
shall be managed by the Trustees and they shall have all powers and authority
necessary, appropriate or desirable to perform that function. The number, term
of office, manner of election, resignation, filling of vacancies and procedures
with respect to meetings and actions of the Trustees shall be as prescribed in
the By-Laws of the Trust.
Section 2.2. General Powers. The Trustees in all instances shall act as
principals for and on behalf of the Trust and the applicable Series thereof, and
their acts shall bind the Trust and the applicable Series. The Trustees shall
have full power and authority to do any and all acts and to make and execute any
an all contracts and instruments that they may consider necessary, appropriate
or desirable in connection with the management of the Trust. The Trustees shall
not be bound or limited in any way by present or future laws, practices or
customs in regard to trust investments or to other investments which may be made
by fiduciaries, but shall have fully authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
promote, implement or accomplish the various objectives and interests of the
Trust and of its Series of Shares. The Trustees shall have full power and
authority to adopt such accounting and tax accounting practices as they consider
appropriate for the Trust and for any Series or Class of Shares. The Trustees
shall have exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners
of the Trust Property and business in their own right, and with such full powers
of delegation as the Trustees may exercise from time to time. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without the
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies of instrumentalities
of the United States of America and of foreign governments, and to do all such
other things as they deem necessary, appropriate or desirable in order to
promote or implement the interests of the Trust or of any Series or Class of
Shares although such things are not herein specifically mentioned. Any
determination as to what is in the interest of the Trust or of any Series or
Class of Shares made by the Trustees in good faith shall be conclusive and
binding upon all Shareholders. In construing the provisions of this Declaration,
the presumption shall be in favor of a grant of plenary power and authority to
the Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
Section 2.3. Investments. The Trustees shall have full power and
authority:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of
such operations.
(b) To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities including, but not limited to, stocks, profit-sharing
interests or participations and all other contracts for or evidences of
equity interests, bonds, debentures, warrants and rights to purchase
securities, certificates of beneficial interest, bills, notes and all other
contracts for or evidence of indebtedness, money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and other obligations, and all other negotiable and
non-negotiable securities and instruments, however named or described,
issued by corporations, trusts, associations or any other Persons, domestic
or foreign, or issued or guaranteed by the United States of America or any
agency or instrumentality thereof, by the government of any foreign
country, by any State, territory or possession of the United States, by any
political subdivision or agency or instrumentality of any State or foreign
country, or by any other government or other governmental or
quasi-governmental agency or instrumentality, domestic or foreign; to
acquire and dispose of interest in domestic or foreign loans made by banks
and other financial institutions; to deposit any assets of the Trust in any
bank, trust company or banking institution or retain any such assets in
domestic or foreign cash or currency; to purchase and sell gold and silver
bullion, precious or strategic metals, coins and currency of all countries;
to engage in "when issued" and delayed delivery transactions; to enter into
repurchase agreements, reverse repurchase agreements and firm commitment
agreements; to employ all types and kinds of hedging techniques and
investment management strategies; and to change the investments of the
Trust and of each Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell,
to sell or otherwise dispose of, to lend and to pledge any Trust Property
or any of the foregoing securities, instruments or investments; to purchase
and sell (or write) options on securities, currency, precious metals and
other commodities, indices, futures contracts and other financial
instruments and assets and enter into closing and other transactions in
connection therewith; to enter into all types of commodities contracts,
including without limitation the purchase and sale of futures contracts on
securities, currency, precious metals and other commodities, indices and
other financial instruments and assets; to enter into forward foreign
currency exchange contracts and other foreign exchange and currency
transactions of all types and kinds; to enter into interest rate, currency
and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in the Trust Property,
including without limitation the right to vote thereon and otherwise act
with respect thereto; and to do all acts and things for the preservation,
protection, improvement and enhancement in value of all such securities and
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or
kind of property, real or personal, including domestic or foreign currency,
and any right or interest therein.
(f) To borrow money and in this connection issue notes, commercial
paper or other evidence of indebtedness; to secure borrowings by
mortgaging, pledging or otherwise subjecting as security all or any part of
the Trust Property; to endorse, guarantee, or undertake the performance of
any obligation or engagement of any other Person; and to lend all or any
part of the Trust Property to other Persons.
(g) To aid, support or assist by further investment or other action
any Person, any obligation of or interest in which is included in the Trust
Property or in the affairs of which the Trust or any Series has any direct
or indirect interest; to do all acts and things designed to protect,
preserve, improve or enhance the value of such obligation or interest; and
to guarantee or become surety on any or all of the contracts, securities
and other obligations of any such Person.
(h) To carry on any other business in connection with or incidental to
any of the foregoing powers referred to in this Declaration, to do
everything necessary, appropriate or desirable for the accomplishment of
any purpose or the attainment of any object or the furtherance of any power
referred to in this Declaration, either alone or in association with
others, and to do every other act or thing incidental or appurtenant to or
arising out of or connected with such business or purposes, objects or
powers.
The foregoing clauses shall be construed both as objects and powers, and
shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have full
power in their discretion, without any requirement of approval by Shareholders,
to invest part or all of the Trust Property (or part or all of the assets of any
Fund), or to dispose of part or all of the Trust Property (or part or all of the
assets of any Fund) and invest the proceeds of such disposition, in securities
issued by one or more other investment companies registered under the 1940 Act.
Any such other investment company may (but need not ) be a trust (formed under
the laws of the State of New York or of any other state) which is classified as
a partnership for federal income tax purposes.
Section 2.4. Legal Title. Legal title to all the Trust Property shall be
vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Series, or in
the name of a custodian, subcustodian, agent, securities depository, clearing
agency, system for the central handling of securities or other book-entry
system, or in the name of a nominee or nominees of the Trust or a Series, or in
the name of a nominee or nominees of a custodian, subcustodian, agent,
securities depository, clearing agent, system for the central handling of
securities or other book-entry system, or in the name of any other Person as
nominee. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee. Upon
the termination of the term of office, resignation, removal or death of a
Trustee he shall automatically cease to have any right, title or interest in any
of the Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees.
Section 2.5. By-Laws. The Trustees shall have full power and authority to
adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and to amend and repeal such By-Laws. Unless the By-Laws specifically
require that Shareholders authorize or approve the amendment or repeal of a
particular provision of the By-Laws, any provision of the By-Laws may be amended
or repealed by the Trustees without Shareholder authorization or approval.
Section 2.6. Distribution and Repurchase of Shares. The Trustees shall have
full power and authority to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in
Shares. Shares may be sold for cash or property or other consideration whenever
and in such amounts and manner as the Trustees deem desirable. The Trustees
shall have full power to provide for the distribution of Shares either through
one or more principal underwriters or by the Trust itself, or both. The Trustees
shall have full power and authority to cause the Trust and any Series and Class
of Shares to finance distribution activities in the manner described in Section
3.7, and to authorize the Trust, on behalf of one or more Series or Classes of
Shares, to adopt or enter into one or more plans or arrangements whereby
multiple Series and Classes of Shares may be issued and sold to various types of
investors.
Section 2.7. Delegation. The Trustees shall have full power and authority
to delegate from time to time to such of their number or to officers, employees
or agents of the Trust or to other Persons the doing of such things and the
execution of such agreements or other instruments either in the name of the
Trust or any Series of the Trust or the names of the Trustees or otherwise as
the Trustees may deem desirable or expedient.
Section 2.8. Collection and Payment. The Trustees shall have full power and
authority to collect all property due to the Trust; to pay all claims, including
taxes, against the Trust or Trust Property; to prosecute, defend, compromise,
settle or abandon any claims relating to the Trust or Trust Property; to
foreclose any security interest securing any obligations, by virtue of which any
property is owed to the Trust; and to enter into releases, agreements and other
instruments.
Section 2.9. Expenses. The Trustees shall have full power and authority to
incur on behalf of the Trust or any Series or Class of Shares and pay any costs
or expenses which the Trustees deem necessary, appropriate, desirable or
incidental to carry out, implement or enhance the business or operations of the
Trust or any Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Series or Class of Shares, and to credit all or any part of the profit, income
or receipt (including without limitation any deferred sales charge or fee,
whether contingent or otherwise, paid or payable to the Trust or any Series or
Class of Shares on any redemption or repurchase of Shares) to the principal or
capital of the Trust or any Series or Class of Shares.
Section 2.10. Manner of Acting. Except as otherwise provided herein or in
the By-Laws, the Trustees and committees of the Trustees shall have full power
and authority to act in any manner which they deem necessary, appropriate or
desirable to carry out, implement or enhance the business or operations of the
Trust or any Series thereof.
Section 2.11. Miscellaneous Powers. The Trustees shall have full power and
authority to: (a) distribute to Shareholders all or any part of the earnings or
profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Series or Class of Shares, the amount
of such distributions and the manner of payment thereof to be solely at the
discretion of the Trustees; (b) employ, engage or contract with such Persons as
the Trustees may deem desirable for the transaction of the business or
operations of the Trust or any Series thereof; (c) enter into or cause the Trust
or any Series thereof to enter into joint ventures, partnerships (whether as
general partner, limited partner or otherwise) and any other combinations or
associations; (d) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees or other Persons as they consider appropriate, and appoint from their
own number, and terminate, any one or more committees which may exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
(e) purchase, and pay for out of Trust Property, insurance policies which may
insure such of the Shareholders, Trustees, officers, employees, agents,
investment advisers, administrators, principal underwriters, distributors or
independent contractors of the Trust as the Trustees deem appropriate against
loss or liability arising by reason of holding any such position or by reason of
any action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such loss or liability; (f) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (g)
indemnify or reimburse any Person with whom the Trust or any Series thereof has
dealings, including without limitation the Investment Adviser, Administrator,
Principal Underwriter, Transfer Agent and financial service firms, to such
extent as the Trustees shall determine; (h) guarantee the indebtedness or
contractual obligations of other Persons; (i) determine and change the fiscal
year of the Trust or any Series thereof and the methods by which its and their
books, accounts and records shall be kept; and (j) adopt a seal for the Trust,
but the absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust or any Series thereof.
Section 2.12. Litigation. The Trustees shall have full power and authority,
in the name and on behalf of the Trust, to engage in and to prosecute, defend,
compromise, settle, abandon, or adjust by arbitration or otherwise, any actions,
suits, proceedings, disputes, claims and demands relating to the Trust, and out
of the assets of the Trust or any Series thereof to pay or to satisfy any
liabilities, losses, debts, claims or expenses (including without limitation
attorneys' fees) incurred in connection therewith, including those of
litigation, and such power shall include without limitation the power of the
Trustees or any committee thereof, in the exercise of their or its good faith
business judgment, to dismiss or terminate any action, suit, proceeding,
dispute, claim or demand, derivative or otherwise, brought by any Person,
including a Shareholder in his own name or in the name of the Trust or any
Series thereof, whether or not the Trust or any Series thereof or any of the
Trustees may be named individually therein or the subject matter arises by
reason of business for or on behalf of the Trust or any Series thereof.
ARTICLE III
CONTRACTS
Section 3.1. Principal Underwriter. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more contracts
providing for the sale of the Shares. Pursuant to any such contract the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may in their
discretion determine; and any such contract may also provide for the repurchase
or sale of Shares by such other party as principal or as agent of the Trust.
Section 3.2. Investment Adviser. The Trustees may in their discretion from
time to time authorize the Trust to enter into one or more investment advisory
agreements, or, if the Trustees establish multiple Series, separate investment
advisory agreements, with respect to one or more Series whereby the other party
or parties to any such agreements shall undertake to furnish the Trust or such
Series investment advisory and research facilities and services and such other
facilities and services, if any, as the Trustees shall consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration, the Trustees may
authorize the Investment Adviser, in its discretion and without any prior
consultation with the Trust, to buy, sell, lend and otherwise trade and deal in
any and all securities, commodity contracts and other investments and assets of
the Trust and of each Series and to engage in and employ all types of
transactions and strategies in connection therewith. Any such action taken
pursuant to such agreement shall be deemed to have been authorized by all of the
Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
Section 3.3. Administrator. The Trustees may in their discretion from time
to time authorize the Trust to enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to one or more Series or Classes, whereby the other
party to such agreement shall undertake to furnish to the Trust or a Series or a
Class thereof with such administrative facilities and services and such other
facilities and services, if any, as the Trustees consider desirable and all upon
such terms and conditions as the Trustees may in their discretion determine.
Section 3.4. Other Service Providers. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more agreements with
respect to one or more Series or Classes of Shares whereby the other party or
parties to any such agreements will undertake to provide to the Trust or Series
or Class or Shareholders or beneficial owners of Shares such services as the
Trustees consider desirable and all upon such terms and conditions as the
Trustees in their discretion may determine.
Section 3.5. Transfer Agents. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Series
thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
Section 3.6. Custodian. The Trustees may appoint a bank or trust company
having an aggregate capital, surplus and undivided profits (as shown in its last
published report) of at least $2,000,000 as the principal custodian of the Trust
(the "Custodian") with authority as its agent to hold cash and securities owned
by the Trust and to release and deliver the same upon such terms and conditions
as may be agreed upon between the Trust and the Custodian.
Section 3.7. Plans of Distribution. The Trustees may in their discretion
authorize the Trust, on behalf of one or more Series or Classes of Shares, to
adopt or enter into a plan or plans of distribution and any related agreements
whereby the Trust or Series or Class may finance directly or indirectly any
activity which is primarily intended to result in sales of Shares or any
distribution activity within the meaning of Rule 12b-1 (or successor rule) under
the 1940 Act. Such plan or plans of distribution and any related agreements may
contain such terms and conditions as the Trustees may in their discretion
determine, subject to the requirements of the 1940 Act and any other applicable
rules and regulations.
Section 3.8. Affiliations. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of
or has any interest in any Person or any parent or affiliate of any such
Person, with which a contract or agreement of the character described in
Sections 3.1, 3.2, 3.3, 3.4, 3.5 or 3.6 above has been or will be made or
to which payments have been or will be made pursuant to a plan or related
agreement described in Section 3.7 above, or that any such Person, or any
parent or affiliate thereof, is a Shareholder of or has an interest in the
Trust, or that
(ii) any such Person also has similar contracts, agreements or plans
with other investment companies (including, without limitation, the
investment companies referred to in the last paragraph of Section 2.3) or
organizations, or has other business activities or interests, shall not
affect in any way the validity of any such contract, agreement or plan or
disqualify any Shareholder, Trustee or officer of the Trust from
authorizing, voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Officers and
Employees. No Shareholder shall be subject to any personal liability whatsoever
to any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust or any Series thereof. All Persons dealing or contracting
with the Trustees as such or with the Trust or any Series thereof shall have
recourse only to the Trust or such Series for the payment of their claims or for
the payment or satisfaction of claims, obligations or liabilities arising out of
such dealings or contracts. No Trustee, officer or employee of the Trust,
whether past, present or future, shall be subject to any personal liability
whatsoever to any such Person, and all such Persons shall look solely to the
Trust Property, or to the assets of one or more specific Series of the Trust if
the claim arises from the act, omission or other conduct of such Trustee,
officer or employee with respect to only such Series, for satisfaction of claims
of any nature arising in connection with the affairs of the Trust or such
Series. If any Shareholder, Trustee, officer or employee, as such, of the Trust
or any Series thereof, is made a party to any suit or proceeding to enforce any
such liability of the Trust or any Series thereof, he shall not, on account
thereof, be held to any personal liability.
Section 4.2. Trustee's Good Faith Action; Advice of Others; No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, investment adviser or other adviser, administrator,
distributor or principal underwriter, custodian or transfer, dividend
disbursing, shareholder servicing or accounting agent of the Trust, nor shall
any Trustee be responsible for the act or omission of any other Trustee. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration and their duties as Trustees, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. In discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the records, books and
accounts of the Trust and upon reports made to the Trustees by any officer,
employee, agent, consultant, accountant, attorney, investment adviser or other
adviser, principal underwriter, expert, professional firm or independent
contractor. The Trustees as such shall not be required to give any bond or
surety or any other security for the performance of their duties. No provision
of this Declaration shall protect any Trustee or officer of the Trust against
any liability to the Trust or its Shareholders to which he would otherwise be
subject by reason of his own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Indemnification. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Series thereof of the Shareholders, Trustees, officers and
employees of the Trust and of such other Persons as the Trustees in the exercise
of their discretion may deem appropriate or desirable. Any such indemnification
may be mandatory or permissive, and may be insured against by policies
maintained by the Trust.
Section 4.4. No Duty of Investigation. No purchaser, lender or other Person
dealing with the Trustees or any officer, employee or agent of the Trust or a
Series thereof shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by said officer, employee
or agent or be liable for the application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of said officer, employee or
agent. Every obligation, contract, instrument, certificate, Share, other
security of the Trust or a Series thereof or undertaking, and every other act or
thing whatsoever executed in connection with the Trust shall be conclusively
presumed to have been executed or done by the executors thereof only in their
capacity as Trustees under this Declaration or in their capacity as officers,
employees or agents of the Trust or a Series thereof. Every written obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking made or issued by the Trustees may recite that the
same is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees or Shareholders
individually, but bind only the Trust Property or the Trust Property of the
applicable Series, and may contain any further recital which they may deem
appropriate, but the omission of any such recital shall not operate to bind the
Trustees or Shareholders individually.
Section 4.5. Reliance on Records and Experts. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the records,
books and accounts of the Trust or a Series thereof, upon an opinion or other
advice of legal counsel, or upon reports made or advice given to the Trust or a
Series thereof by any Trustee or any of its officers or employees or by the
Investment Adviser, the Administrator, the Custodian, the Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited, and the number of Shares of each Series or Class thereof
that may be issued hereunder is unlimited. The Trustees shall have the exclusive
authority without the requirement of Shareholder authorization or approval to
establish and designate one or more Series of Shares and one or more Classes
thereof as the Trustees deem necessary, appropriate or desirable. Each Share of
any Series shall represent a beneficial interest only in the assets of that
Series. Subject to the provisions of Section 5.5 hereof, the Trustees may also
authorize the creation of additional Series of Shares (the proceeds of which may
be invested in separate and independent investment portfolios) and additional
Classes of Shares within any Series. All Shares issued hereunder including,
without limitation, Shares issued in connection with a dividend or distribution
in Shares or a split in Shares, shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust Property of
every description and the right to conduct any business of the Trust are vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and they shall
have no right to call for any partition or division of any property, profits,
rights or interests of the Trust or of any Fund nor can they be called upon to
share or assume any losses of the Trust or of any Fund or suffer an assessment
of any kind by virtue of their ownership of Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Declaration. The
Shares shall not entitle the holder to preference, preemptive, appraisal,
conversion or exchange rights, except as the Trustees may specifically determine
with respect to any Series or Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a
Massachusetts business trust. Nothing in this Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may, from
time to time and without any authorization or vote of the Shareholders, issue
Shares, in addition to the then issued and outstanding Shares and Shares held in
the treasury, to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times and on such
terms as the Trustees may deem appropriate or desirable, except that only Shares
previously contracted to be sold may be issued during any period when the right
of redemption is suspended pursuant to Section 6.9 hereof, and may in such
manner acquire other assets (including the acquisition of assets subject to, and
in connection with the assumption of, liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue fractional Shares and
reissue and resell full and fractional Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares of the Trust or, if the
Shares be divided into Series or Classes, of any Series or any Class thereof of
the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or fractional Shares as the Trustees may in their discretion
determine. The Trustees may authorize the issuance of certificates of beneficial
interest to evidence the ownership of Shares. Shares held in the treasury shall
not be voted nor shall such Shares be entitled to any dividends or other
distributions declared with respect thereto.
Section 5.5. Series and Class Designations. Without limiting the exclusive
authority of the Trustees set forth in Section 5.1 to establish and designate
any further Series, it is hereby confirmed that the Trust consists of no
outstanding Series and no distinct classes of Shares of any Series. The Shares
of any Series and Classes thereof that may from time to time be established and
designated by the Trustees shall be established and designated, and the
variations in the relative rights and preferences as between the different
Series and Classes shall be fixed and determined, by the Trustees (unless the
Trustees otherwise determine with respect to Series or Classes at the time of
establishing and designating the same); provided, that all Shares shall be
identical except that there may be variations so fixed and determined between
different Series or Classes thereof as to investment objective, policies and
restrictions, sales charges, purchase prices, determination of net asset value,
assets, liabilities, expenses, costs, charges and reserves belonging or
allocated thereto, the price, terms and manner of redemption or repurchase,
special and relative rights as to dividends and distributions and on
liquidation, conversion rights, exchange rights, and voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Series or Classes as the context may require. As to any division of Shares
of the Trust into Series or Classes, the following provisions shall be
applicable:
(i) The number of authorized Shares and the number of Shares of each
Series or Class thereof that may be issued shall be unlimited. The Trustees
may classify or reclassify any unissued Shares or any Shares previously
issued and reacquired of any Series or Class into one or more other Series
or one or more other Classes that may be established and designated from
time to time. The Trustees may hold as treasury shares (of the same or some
other Series or Class), reissue for such consideration and on such terms as
they may determine, or cancel any Shares of any Series or Class reacquired
by the Trust at their discretion from time to time.
(ii) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the
rights of creditors of such Series and except as may otherwise be required
by applicable tax laws, and shall be so recorded upon the books of account
of the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series, the Trustees or their
delegate shall allocate them among any one or more of the Series
established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable.
Each such allocation by the Trustees or their delegate shall be conclusive
and binding upon the Shareholders of all Series for all purposes. No holder
of Shares of any Series shall have any claim on or right to any assets
allocated or belonging to any other Series.
(iii) Any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees or their delegate to
and among any one or more of the Series established and designated from
time to time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. The assets belonging to each particular
Series shall be charged with the liabilities, expenses, costs, charges and
reserves of the Trust so allocated to that Series and all liabilities,
expenses, costs, charges and reserves attributable to that Series which are
not readily identifiable as belonging to any particular Class thereof. Each
allocation of liabilities, expenses, costs, charges and reserves by the
Trustees or their delegate shall be conclusive and binding upon the
Shareholders of all Series and Classes for all purposes. The Trustees shall
have full discretion to determine which items are capital; and each such
determination shall be conclusive and binding upon the Shareholders. The
assets of a particular Series of the Trust shall, under no circumstances,
be charged with liabilities, expenses, costs, charges and reserves
attributable to any other Series or Class thereof of the Trust. All Persons
extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that
particular Series for payment of such credit, contract or claim.
(iv) Dividends and distributions of Shares of a particular Series or
Class may be paid or credited in such manner and with such frequency as the
Trustees may determine, to the holders of Shares of that Series or Class,
from such of the earnings or profits, surplus (including paid-in surplus),
capital (including paid-in capital) or assets belonging to that Series, as
the Trustees may deem appropriate or desirable, after providing for actual
and accrued liabilities, expenses, costs, charges and reserves belonging
and allocated to that Series or Class. Such dividends and distributions may
be paid daily or otherwise pursuant to the offering prospectus relating to
the Shares or pursuant to a standing vote or votes of the Trustees adopted
only once or from time to time or pursuant to other authorization or
instruction of the Trustees. All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the
Shareholders of that Series or Class in proportion to the number of Shares
of that Series or Class held by such Shareholders at the time of record
established for the payment or crediting of such dividends or
distributions.
(v) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a
Series or Class thereof shall be entitled to receive his pro rata share of
distributions of income and capital gains made with respect to such Series
or Class net of liabilities, expenses, costs, charges and reserves
belonging and allocated to such Series or Class. Upon redemption of his
Shares or indemnification for liabilities incurred by reason of his being
or having been a Shareholder of a Series or Class, such Shareholder shall
be paid solely out of the funds and property of such Series of the Trust.
Upon liquidation or termination of a Series or Class thereof of the Trust,
a Shareholder of such Series or Class thereof shall be entitled to receive
a pro rata share of the net assets of such Series based on the net asset
value of his Shares. A Shareholder of a particular Series of the Trust
shall not be entitled to commence or participate in a derivative or class
action on behalf of any other Series or the Shareholders of any other
Series of the Trust.
(vi) On any matter submitted to a vote of Shareholders, the Shares
entitled to vote thereon and the manner in which such Shares shall be voted
shall be as set forth in the By-Laws or proxy materials for the meeting or
other solicitation materials or as otherwise determined by the Trustees,
subject to any applicable requirements of the 1940 Act. The Trustees shall
have full power and authority to call meetings of the Shareholders of a
particular Class or Classes of Shares or of one or more particular Series
of Shares, or otherwise call for the action of such Shareholders on any
particular matter.
(vii) Except as otherwise provided in this Article V, the Trustees
shall have full power and authority to determine the designations,
preferences, privileges, sales charges, purchase prices, assets,
liabilities, expenses, costs, charges and reserves belonging or allocated
thereto, limitations and rights, including without limitation voting,
dividend, distribution and liquidation rights, of each Class and Series of
Shares. Subject to any applicable requirements of the 1940 Act, the
Trustees shall have the authority to provide that Shares of one Class shall
be automatically converted into Shares of another Class of the same Series
or that the holders of Shares of any Series or Class shall have the right
to convert or exchange such Shares into Shares of one or more other Series
or Classes of Shares, all in accordance with such requirements, conditions
and procedures as may be established by the Trustees.
(viii) The establishment and designation of any Series or Class of
Shares shall be effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation
and the relative rights and preferences of such Series or Class, or as
otherwise provided in such instrument. The Trustees may by an instrument
subsequently executed by a majority of their number amend, restate or
rescind any prior instrument relating to the establishment and designation
of any such Series or Class. Each instrument referred to in this paragraph
shall have the status of an amendment to this Declaration in accordance
with Section 8.4 hereof, and a copy of such instrument shall be filed in
accordance with Section 10.2 hereof.
Section 5.6. Assent to Declaration of Trust and By-Laws. Every Shareholder,
by virtue of having become a Shareholder, shall be held to have expressly
assented and agreed to all the terms and provisions of this Declaration and of
the By-Laws of the Trust.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) Shares of the Trust shall be
redeemable, at such times and in such manner as may be permitted by the Trustees
from time to time. The Trustees shall have full power and authority to vary and
change the right of redemption applicable to the various Series and Classes of
Shares established by the Trustees. Redeemed or repurchased Shares may be resold
by the Trust. The Trust may require any Shareholder to pay a sales charge to the
Trust, the Principal Underwriter or any other Person designated by the Trustees
upon redemption or repurchase of Shares in such amount and upon such conditions
as shall be determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or Class
thereof at the price determined as hereinafter set forth, upon the appropriately
verified written application of the record holder thereof (or upon such other
form of request as the Trust may use for the purpose) deposited at such office
or agency as may be designated from time to time for that purpose by the
Trustees. The Trust may from time to time establish additional requirements,
terms, conditions and procedures, not inconsistent with the 1940 Act, relating
to the redemption of Shares.
Section 6.2. Price. Shares shall be redeemed at a price based on their net
asset value determined as set forth in Section 7.1 hereof as of such time as the
Trustees shall prescribe. The amount of any sales charge or redemption fee
payable upon redemption of Shares may be deducted from the proceeds of such
redemption.
Section 6.3. Payment. Payment of the redemption price of Shares thereof
shall be made in cash or in property to the Shareholder at such time and in the
manner, not inconsistent with the 1940 Act, as may be specified from time to
time in the then effective prospectus relating to such Shares, subject to the
provisions of Sections 6.4 and 6.9 hereof. Notwithstanding the foregoing, the
Trust or its agent may withhold from such redemption proceeds any amount arising
(i) from a liability of the redeeming Shareholder to the Trust or (ii) in
connection with any federal or state tax withholding requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value. If,
pursuant to Section 7.1 hereof, the Trust shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series or Class thereof, the rights of Shareholders (including those who shall
have applied for redemption pursuant to Section 6.1 hereof but who shall not yet
have received payment) to have Shares redeemed and paid for by the Trust or a
Series shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice at the office or
agency where his application or request for redemption was made, withdraw his
application or request and withdraw any Share certificates on deposit.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Principal Underwriter or another agent designated for
the purpose, by agreement with the owner thereof at a price not exceeding the
net asset value per share determined as of such time as the Trustees shall
prescribe. The Trust may from time to time establish the requirements, terms,
conditions and procedures relating to such repurchases, and the amount of any
sales charge or repurchase fee payable on any repurchase of Shares may be
deducted from the proceeds of such repurchase.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in their
sole discretion, may cause the Trust to redeem all of the Shares of one or more
Series or Class thereof held by any Shareholder if the value of such Shares held
by such Shareholder is less than the minimum amount established from time to
time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. (a) If the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
Shares or other securities of the Trust has or may become concentrated in any
Person to an extent which would disqualify the Trust or any Series of the Trust
as a regulated investment company under the Internal Revenue Code of 1986, then
the Trustees shall have the power by lot or other means deemed equitable by them
(i) to call for redemption by any such Person a number, or principal amount, of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust in question would
result in such disqualification. The redemption shall be effected in the manner
provided in Section 6.1 and at the redemption price referred to in Section 6.2.
(b) The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code of 1986, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series or Class thereof pursuant to the provisions of
Section 7.3.
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Fund
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust or a Fund fairly to determine the value of its net
assets, or (iv) as the Commission may by order permit for the protection of
security holders of the Trust. Such suspension shall take effect at such time as
the Trust shall specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter there shall be
no right of redemption or payment on redemption until the Trust shall declare
the suspension at an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall have reopened or the
period specified in (ii) or (iii) shall have expired (as to which in the absence
of an official ruling by the Commission, the determination of the Trust shall be
conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his application or request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding Share
of the Trust or of each Series or Class thereof shall be determined on such days
and at or as of such time or times as the Trustees may determine. Any reference
in this Declaration to the time at which a determination of net asset value is
made shall mean the time as of which the determination is made. The power and
duty to determine net asset value may be delegated by the Trustees from time to
time to the Investment Adviser, the Administrator, the Custodian, the Transfer
Agent or such other Person or Persons as the Trustees may determine. The value
of the assets of the Trust or any Series thereof shall be determined in a manner
authorized by the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management charges
accrued to the appraisal date, amounts determined and declared as a dividend or
distribution and all other items in the nature of liabilities which shall be
deemed appropriate, as incurred by or allocated to the Trust or any Series or
Class thereof. The resulting amount, which shall represent the total net assets
of the Trust or Series or Class thereof, shall be divided by the number of
Shares of the Trust or Series or Class thereof outstanding at the time and the
quotient so obtained shall be deemed to be the net asset value of the Shares of
the Trust or Series or Class thereof. The Trust may declare a suspension of the
determination of net asset value to the extent permitted by the 1940 Act. It
shall not be a violation of any provision of this Declaration if Shares are
sold, redeemed or repurchased by the Trust at a price other than one based on
net asset value if the net asset value is affected by one or more errors
inadvertently made in the pricing of portfolio securities or other investments
or in accruing or allocating income, expenses, reserves or liabilities. No
provision of this Declaration shall be construed to restrict or affect the right
or ability of the Trust to employ or authorize the use of pricing services,
appraisers or any other means, methods, procedures, or techniques in valuing the
assets or calculating the liabilities of the Trust or any Series or Class
thereof.
Section 7.2. Dividends and Distributions. (a) The Trustees may from time to
time distribute ratably among the Shareholders of the Trust or of a Series or
Class thereof such proportion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Series held by the Trustees as they may deem appropriate or desirable. Such
distributions may be made in cash, additional Shares or property (including
without limitation any type of obligations of the Trust or Series or Class or
any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time.
The Trustees may always retain from the earnings or profits such amounts as they
may deem appropriate or desirable to pay the expenses and liabilities of the
Trust or a Series or Class thereof or to meet obligations of the Trust or a
Series or Class thereof, together with such amounts as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business or operations of the Trust or such Series. The Trust
may adopt and offer to Shareholders such dividend reinvestment plans, cash
dividend payout plans or other distribution plans as the Trustees may deem
appropriate or desirable. The Trustees may in their discretion determine that an
account administration fee or other similar charge may be deducted directly from
the income and other distributions paid on Shares to a Shareholders account in
any Series or Class.
(b) The Trustees may prescribe, in their discretion, such bases and times
for determining the amounts for the declaration and payment of dividends and
distributions as they may deem necessary, appropriate or desirable.
(c) Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of account, the
above provisions shall be interpreted to give the Trustees full power and
authority in their absolute discretion to distribute for any fiscal year as
dividends and as capital gains distributions, respectively, additional amounts
sufficient to enable the Trust or a Series thereof to avoid or reduce liability
for taxes.
Section 7.3. Constant Net Asset Value; Reduction of Outstanding Shares. The
Trustees may determine to maintain the net asset value per Share of any Series
or Class at a designated constant amount and in connection therewith may adopt
procedures not inconsistent with the 1940 Act for the continuing declarations of
income attributable to that Series or Class as dividends payable in additional
Shares of that Series or Class or in cash or in any combination thereof and for
the handling of any losses attributable to that Series or Class. Such procedures
may provide that, if, for any reason, the income of any such Series or Class
determined at any time is a negative amount, the Trust may with respect to such
Series or Class (i) offset each Shareholder's pro rata share of such negative
amount from the accrued dividend account of such Shareholder, or (ii) reduce the
number of Outstanding Shares of such Series or Class by reducing the number of
Shares in the account of such Shareholder by that number of full and fractional
Shares which represents the amount of such excess negative income, or (iii)
cause to be recorded on the books of the Trust an asset account in the amount of
such negative income, which account may be reduced by the amount, provided that
the same shall thereupon become the property of the Trust with respect to such
Series or Class and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of such Series or Class on the day such
negative income is experienced, until such asset account is reduced to zero, or
(iv) combine the methods described in clauses (i), (ii) and (iii) of this
sentence, in order to cause the net asset value per Share of such Series or
Class to remain at a constant amount per Outstanding Share immediately after
such determination and declaration. The Trust may also fail to declare a
dividend out of income for the purpose of causing the net asset value of any
such Share to be increased. The Trustees shall have full discretion to determine
whether any cash or property received shall be treated as income or as principal
and whether any item of expense shall be charged to the income or the principal
account, and their determination made in good faith shall be conclusive upon all
Shareholders. In the case of stock dividends or similar distributions received,
the Trustees shall have full discretion to determine, in the light of the
particular circumstances, how much if any of the value thereof shall be treated
as income, the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
provision contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Series or Class thereof or the
income of the Series or Class thereof, or for the declaration and payment of
dividends and distributions on any Series or Class of Shares.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
SERIES OR CLASS; MERGERS; AMENDMENTS
Section 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation of authority pursuant to the terms of this
Declaration or of the By-Laws.
Section 8.2. Termination of the Trust or a Series or a Class. (a) The Trust
or any Series or Class thereof may be terminated by: (1) the affirmative vote of
the holders of not less than two-thirds of the Shares outstanding and entitled
to vote at any meeting of Shareholders of the Trust or the appropriate Series or
Class thereof, or by an instrument or instruments in writing without a meeting,
consented to by the holder of two-thirds of the Shares of the Trust or a Series
or Class thereof, provided, however, that, if such termination is recommended by
the Trustees, the vote of a majority of the outstanding voting securities of the
Trust or a Series or Class thereof entitled to vote thereon shall be sufficient
authorization; or (2) by means of an instrument in writing signed by a majority
of the Trustees, to be followed by a written notice to Shareholders stating that
a majority of the Trustees has determined that the continuation of the Trust or
a Series or Class thereof is not in the best interest of the Trust, such Series
or Class or of their respective Shareholders. Such determination may (but need
not) be based on factors or events adversely affecting the ability of the Trust,
such Series or Class to conduct its business and operations in an economically
viable manner. Such factors and events may include (but are not limited to) the
inability of a Series or Class or the Trust to maintain its assets at an
appropriate size, changes in laws or regulations governing the Series or Class
or the Trust or affecting assets of the type in which such Series or Class or
the Trust invests, or political, social, legal or economic developments or
trends having an adverse impact on the business or operations of such Series or
Class or the Trust. Upon the termination of the Trust or the Series or Class,
(i) The Trust, Series or Class shall carry on no business except for
the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust,
Series or Class and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust, Series or Class
shall have been wound up, including the power to fulfill or discharge the
contracts of the Trust, Series or Class, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part of the
remaining Trust Property or assets allocated or belonging to such Series or
Class to one or more persons at public or private sale for consideration
which may consist in whole or in part of cash, securities or other property
of any kind, discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustee may
distribute the remaining Trust Property or the remaining property of the
terminated Series or Class, in cash or in kind or in any combination
thereof, among the Shareholders of the Trust or the Series or Class
according to their respective rights.
(b) After termination of the Trust, Series or Class and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust and file with the Massachusetts Secretary
of State an instrument in writing setting forth the fact of such termination,
and the Trustees shall thereupon be discharged from all further liabilities and
duties with respect to the Trust or the terminated Series or Class, and the
rights and interests of all Shareholders of the Trust or the terminated Series
or Class shall thereupon cease.
Section 8.3. Merger, Consolidation or Sale of Assets of a Series. A
particular Series may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees and
without any authorization, vote or consent of the Shareholders; and any such
merger, consolidation, sale, lease or exchange shall be deemed for all purposes
to have been accomplished under and pursuant to the statutes of the Commonwealth
of Massachusetts. The Trustees may also at any time sell and convert into money
all the assets of a particular Series. Upon making provision for the payment of
all outstanding obligations, taxes, and other liabilities, accrued or
contingent, of the particular Series, the Trustees shall distribute the
remaining assets of such Series among the Shareholders of such Series according
to their respective rights. Upon completion of the distribution of the remaining
proceeds or the remaining assets, the Series shall terminate and the Trustees
shall take the action provided in Section 8.2(b) hereof and they shall thereupon
be discharged from all further liabilities and duties with respect to such
Series, and the rights and interests of all Shareholders of the terminated
Series shall thereupon cease.
Section 8.4. Amendments. The execution of an instrument setting forth the
establishment and designation and the relative rights and preferences of any
Series or Class of Shares (or amending, restating or rescinding any such prior
instrument) in accordance with Section 5.5 hereof shall, without any
authorization, consent or vote of the Shareholders, effect an amendment of this
Declaration. Except as otherwise provided in this Section 8.4, if authorized by
vote of a majority of the outstanding voting securities of the Trust the
financial interests of which are affected by the amendment and which are
entitled to vote thereon (which securities shall, unless otherwise provided by
the Trustees, vote together on such amendment as a single class), the Trustees
may amend this Declaration by an instrument signed by a majority of the Trustees
then in office. No Shareholder not so affected by any such amendment shall be
entitled to vote thereon. The Trustees may (by such an instrument) also amend or
otherwise supplement this Declaration of Trust, without any authorization,
consent or vote of the Shareholders, to change the name of the Trust or any Fund
or to make such other changes as do not have a materially adverse effect on the
financial interests of Shareholders hereunder or if they deem it necessary or
desirable to conform this Declaration to the requirements of applicable federal
or state laws or regulations or the requirements of the Internal Revenue Code of
1986, but the Trustees shall not be liable for failing to do so. Any such
amendment or supplemental Declaration of Trust shall be effective as provided in
the instrument containing its terms or, if there is no provision therein with
respect to effectiveness, upon the signing of such instrument by a majority of
the Trustees then in office. Copies of any amendment or of any supplemental
Declaration of Trust shall be filed as specified in Section 10.2 hereof. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
Notwithstanding any other provision hereof, until such time as Shares are
issued and sold, this Declaration may be terminated or amended in any respect by
an instrument signed by a majority of the Trustees then in office.
ARTICLE IX
MISCELLANEOUS
Section 10.1. Use of the Words "Eaton Vance". Eaton Vance Corp.
(hereinafter referred to as "EVC"), which owns (either directly or through
subsidiaries) all of the capital shares of the Investment Adviser of the Trust
and the Funds (or of the investment adviser of each of the investment companies
referred to in the last paragraph of Section 2.3), has consented to the use by
the Trust and the Funds of the identifying words "Eaton Vance" in the name of
the Trust and in the name of each Fund. Such consent is conditioned upon the
continued employment of EVC or a subsidiary or affiliate of EVC as Investment
Adviser of the Trust and of each such Fund or as the investment adviser of each
of the investment companies referred to in the last paragraph of Section 2.3. As
between the Trust and itself, EVC shall control the use of the name of the Trust
and the name of any Fund insofar as such name contains the identifying words
"Eaton Vance". EVC may from time to time use the identifying words "Eaton Vance"
in other connections and for other purposes, including, without limitation, in
the names of other investment companies, trusts, corporations or businesses
which it may manage, advise, sponsor or own or in which it may have a financial
interest. EVC may require the Trust to cease using the identifying words "Eaton
Vance" in the name of the Trust or any Fund if EVC or a subsidiary or affiliate
of EVC ceases to act as investment adviser of the Trust or such Fund or as the
investment adviser of each of the investment companies referred to in the last
paragraph of Section 2.3.
Section 10.2. Filing of Copies, References, Headings and Counterparts. The
original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. A copy of this instrument, of any amendment hereto, and of each
supplemental declaration of trust shall be filed with the Massachusetts
Secretary of State and with any other governmental office where such filing may
from time to time be required. Anyone dealing with the Trust may rely on a
certificate by a Trustee or an officer of the Trust as to whether or not any
such amendments or supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same effect as
if it were the original, may rely on a copy certified by a Trustee or an officer
of the Trust to be a copy of this instrument or of any such amendment hereto or
supplemental declaration of trust.
In this instrument or in any such amendment or supplemental declaration of
trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may hereafter be referred to in lieu of the original Declaration and
various amendments thereto.
Section 10.3. Applicable Law. The Trust set forth in this instrument is
made in the Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 10.4. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue Code of 1986 or with other
applicable laws and regulations, the conflicting provisions shall be deemed
never to have constituted a part of this Declaration; provided, however, that
such determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being a majority of the current
Trustees of the Trust, have executed this instrument this 25th day of October,
1993.
/S/ JAMES G. BAUR
------------------------------------------
JAMES G. BAUR
/S/ DONALD R. DWIGHT
------------------------------------------
DONALD R. DWIGHT
/S/ JAMES B. HAWKES
------------------------------------------
JAMES B. HAWKES
/S/ SAMUEL L. HAYES, III
------------------------------------------
SAMUEL L. HAYES, III
/S/ NORTON H. REAMER
------------------------------------------
NORTON H. REAMER
/S/ JOHN L. THORNDIKE
------------------------------------------
JOHN L. THORNDIKE
/S/ JACK L. TREYNOR
------------------------------------------
JACK L. TREYNOR
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, Massachusetts
Then personally appeared the above named Donald R. Dwight, James G.
Baur, James B. Hawkes, Samuel L. Hayes, III, Norton H. Reamer, Jack L. Treynor
and John L. Thorndike being a majority of the Trustees then in office, who
severally acknowledge the foregoing instrument to be their free act and deed.
Before me,
/s/Lynn W. Ostberg
My commission expires 12/27/96
<PAGE>
The names and addresses of all the Trustees of the Trust are as follows:
Donald R. Dwight Samuel L. Hayes, III
Clover Mill Lane 345 Nahatan Street
Lyme, NH 03768 Westwood, MA 02090
James G. Baur Norton H. Reamer
2 King George Drive 70 Circuit Road
Boxford, MA 01921 Chestnut Hill, MA 02167
James B. Hawkes John L. Thorndike
11 Quincy Park 10 Main Street
Beverly, MA 01915 Dover, MA 02030
Jack L. Treynor
504 Via Almar
Palos Verdes Estates, CA 90274
TRUST ADDRESS
24 Federal Street
Boston, MA 02110
EXHIBIT 99.(1)(b)
EATON VANCE LIQUID ASSETS TRUST
Establishment and Designation of Series of Shares
of Beneficial Interest, Without Par Value
Dated: March 31, 1995
The undersigned, being at least a majority of the duly elected and
qualified Trustees presently in office of Eaton Vance Liquid Assets Trust, a
Massachusetts business trust (the "Trust"), acting pursuant to Section 5.1 of
Article V of the Amended and Restated Declaration of Trust dated October 25,
1993 (the "Declaration of Trust"), hereby divide the shares of beneficial
interest of the Trust into two separate series ("Funds"), each Fund to have the
following special and relative rights:
1. The Funds shall be designated as follows:
Eaton Vance Liquid Assets Fund
Eaton Vance Money Market Fund
2. Each Fund shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the Trust's
then currently effective registration statements under the Securities Act of
1933 and the Investment Company Act of 1940. Each share of beneficial interest
of each Fund ("share") shall be redeemable, shall be entitled to one vote (or
fraction thereof in respect of a fractional share) on matters on which shares of
that Fund shall be entitled to vote and shall represent a pro rata beneficial
interest in the assets allocated to that Fund, all as provided in the
Declaration of Trust. The assets and liabilities of the Trust as at the date
hereof shall be allocated to Eaton Vance Liquid Assets Fund. The proceeds of
sales of shares of each Fund, together with any income and gain thereon, less
any diminution or expenses thereof, shall irrevocably belong to such Fund,
unless otherwise required by law. Each share of a Fund shall be entitled to
receive its pro rata share of net assets of that Fund upon liquidation of that
Fund.
3. Shareholders of each Fund shall vote separately as a class to the
extent provided in Rule 18f-2, as from time to time in effect, under the
Investment Company Act of 1940.
4. The assets and liabilities of the Trust shall be allocated among the
above-referenced Funds as set forth in Section 5.5 of Article V of the
Declaration of Trust, except as provided below.
(a) Costs incurred by Eaton Vance Money Market Fund in connection with
its organization and start-up, including Federal and state registration and
qualification fees and expenses of the initial public offering of such Fund's
shares, shall be borne by such Fund and deferred and amortized over the five
year period beginning on the date that such Fund commences operations.
(b) Reimbursement required under any expense limitation applicable to
the Trust shall be allocated among those Funds whose expense ratios exceed such
limitation on the basis of the relative expense ratios of such Funds.
(c) The liabilities, expenses, costs, charges and reserves of the Trust
(other than the management and investment advisory fees or the organizational
expenses paid by the Trust) which are not readily identifiable as belonging to
any particular Fund shall be allocated among the Funds on an equitable basis as
determined by the Trustees.
<PAGE>
5. The Trustees (including any successor Trustees) shall have the right
at any time and from time to time to reallocate assets and expenses or to change
the designation of any Fund now or hereafter created, or to otherwise change the
special and relative rights of any such Fund, and to terminate any Fund or add
additional Funds as provided in the Declaration of Trust.
6. Any Fund may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees;
and any such merger, consolidation, sale, lease or exchange shall be deemed for
all purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. The Trustees may also at any time sell and
convert into money all the assets of any Fund. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, accrued or
contingent, of such Fund, the Trustees shall distribute the remaining assets of
such Fund ratably among the holders of the outstanding shares. Upon completion
of the distribution of the remaining proceeds or the remaining assets as
provided in this paragraph 6, the Fund shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties hereunder with respect
to such Fund and the right, title and interest of all parties with respect to
such Fund shall be cancelled and discharged.
7. The Declaration of Trust authorizes the Trustees to divide each Fund
and any other series of shares into two or more classes and to fix and determine
the relative rights and preferences as between, and all provisions applicable
to, each of the different classes so established and designated by the Trustees.
The establishment and designation of any class of any Fund or other series of
shares shall be effective upon the execution by a majority of the then Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences, and provisions applicable to, such class, or as
otherwise provided in such instrument.
Dated: March 31, 1995
/s/ Donald R. Dwight /s/ Norton H. Reamer
Donald R. Dwight Norton H. Reamer
/s/ James B. Hawkes /s/ John L. Thorndike
James B. Hawkes John L. Thorndike
/s/ Jack L. Treynor
Samuel L. Hayes, III Jack L. Treynor
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss Boston, Massachusetts
Then personally appeared the above named Donald R. Dwight, James B.
Hawkes, Norton H. Reamer, John L. Thorndike and Jack L. Treynor being a majority
of the Trustees then in office, who severally acknowledged the foregoing
instrument to be their free act and deed.
Before me,
/s/ JoAnn M. Hall
Notary Public
My commission expires Dec. 6, 1996
<PAGE>
EXHIBIT 99.11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A (1933 Act File Number 33-14532) of Eaton
Vance Liquid Assets Trust (the "Trust") of our report dated February 3, 1995 on
our audit of the financial statements and supplementary data of Cash Management
Portfolio, which report is included in the Trust's Annual Report to Shareholders
for the year ended December 31, 1994, which is incorporated by reference in this
Registration Statement.
We also consent to the reference to our Firm under the capital "Independent
Accountants" in the Statement of Additional Information of the Registration
Statement.
/S/ COOPERS & LYBRAND L.L.P.
----------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 28, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ARTICLE> 6
<CIK> 0000919971
<NAME> CASH MANAGEMENT PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 222738
<INVESTMENTS-AT-VALUE> 222738
<RECEIVABLES> 0
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 73
<TOTAL-ASSETS> 222824
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11
<TOTAL-LIABILITIES> 11
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<EXPENSES-NET> 698
<NET-INVESTMENT-INCOME> 5036
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 5036
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 222713
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 597
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<GROSS-EXPENSE> 698
<AVERAGE-NET-ASSETS> 178418
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
