As filed with the Securities and Exchange Commission on December 23, 1996
File No. 811-7214
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 4 [X]
VIRGINIA MUNICIPALS PORTFOLIO
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(formerly called Virginia Tax Free Portfolio)
(Exact Name of Registrant as Specified in Charter)
24 Federal Street
Boston, Massachusetts 02110
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (617) 482-8260
Alan R. Dynner
24 Federal Street, Boston, Massachusetts 02110
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(Name and Address of Agent for Service)
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Throughout this Registration Statement, information concerning the
Portfolio is incorporated by reference from Amendment No. 63 to the Registration
Statement of Eaton Vance Municipals Trust (File No. 33-572 under the Securities
Act of 1933 (the "1933 Act")) (the "Amendment"), which was filed electronically
with the Securities and Exchange Commission on December 20, 1996 (Accession No.
0000950156-96-000965). The Amendment contains the prospectus and statement of
additional information ("SAI") of EV Marathon Virginia Municipals Fund (the
"Feeder Fund"), which invests substantially all of its assets in the Portfolio.
PART A
Responses to Items 1 through 3 and 5A have been omitted pursuant to
Paragraph 4 of Instruction F of the General Instructions to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT
Virginia Municipals Portfolio (the "Portfolio") is a non-diversified,
open-end management investment company which was organized as a trust under the
laws of the State of New York on May 1, 1992. Interests in the Portfolio are
issued solely in private placement transactions that do not involve any "public
offering" within the meaning of Section 4(2) of the 1933 Act. Investments in the
Portfolio may be made only by U.S. and foreign investment companies, common or
commingled trust funds, or similar organizations or entities that are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement, as amended, does not constitute an offer to sell,
or the solicitation of an offer to buy, any "security" within the meaning of the
1933 Act.
Additional information about the investment policies of the Portfolio
appears in Part B. The Portfolio is not intended to be a complete investment
program, and a prospective investor should take into account its objectives and
other investments when considering the purchase of an interest in the Portfolio.
The Portfolio cannot assure achievement of its investment objective.
Registrant incorporates by reference information concerning the
Portfolio's investment objective and investment practices from "The Funds'
Investment Objectives" and "Investment Policies and Risks" in the Feeder Fund
prospectus.
ITEM 5. MANAGEMENT OF THE PORTFOLIO
Registrant incorporates by reference information concerning the
Portfolio's management from "Management of the Funds and the Portfolios" in the
Feeder Fund prospectus.
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ITEM 6. CAPITAL STOCK AND OTHER SECURITIES
An interest in the Portfolio has no preemptive or conversion rights and
is fully paid and nonassessable by the Portfolio, except as described in the
Feeder Fund prospectus.
Registrant incorporates by reference information concerning the
Portfolio's capital stock from "Organization of the Funds and the Portfolios"
in the Feeder Fund prospectus and "Other Information" in Part I of the Feeder
Fund SAI.
As of December 2, 1996, EV Marathon Virginia Municipals Fund, a series
of Eaton Vance Municipals Trust, controlled the Portfolio by virtue of owning
approximately 99.3% of the outstanding voting interests in the Portfolio.
The net asset value of the Portfolio is determined each day on which
the New York Stock Exchange (the "Exchange") is open for trading ("Portfolio
Business Day"). This determination is made each Portfolio Business Day as of the
close of regular trading on the Exchange (currently 4:00 p.m., New York time)
(the "Portfolio Valuation Time").
Each investor in the Portfolio may add to or reduce its investment in
the Portfolio on each Portfolio Business Day as of the Portfolio Valuation Time.
The value of each investor's interest in the Portfolio will be determined by
multiplying the net asset value of the Portfolio by the percentage, determined
on the prior Portfolio Business Day, which represents that investor's share of
the aggregate interests in the Portfolio on such prior day. Any additions or
withdrawals for the current Portfolio Business Day will then be recorded. Each
investor's percentage of the aggregate interest in the Portfolio will then be
recomputed as a percentage equal to a fraction (i) the numerator of which is the
value of such investor's investment in the Portfolio as of the Portfolio
Valuation Time on the prior Portfolio Business Day plus or minus, as the case
may be, the amount of any additions to or withdrawals from the investor's
investment in the Portfolio on the current Portfolio Business Day and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of the
Portfolio Valuation Time on the prior Portfolio Business Day plus or minus, as
the case may be, the amount of the net additions to or withdrawals from the
aggregate investment in the Portfolio on the current Portfolio Business Day by
all investors in the Portfolio. The percentage so determined will then be
applied to determine the value of the investor's interest in the Portfolio for
the current Portfolio Business Day.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net taxable (if any) and
tax-exempt investment income, net realized capital gains, and any other items of
income, gain, loss, deduction or credit. The Portfolio's net investment income
consists of all income accrued on the Portfolio's assets, less all actual and
accrued expenses of the Portfolio, determined in accordance with generally
accepted accounting principles.
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Under the anticipated method of operation of the Portfolio, the
Portfolio will not be subject to any federal income tax. (See Part B, Item 20.)
However, each investor in the Portfolio will take into account its allocable
share of the Portfolio's ordinary income and capital gain in determining its
federal income tax liability. The determination of each such share will be made
in accordance with the governing instruments of the Portfolio, which are
intended to comply with the requirements of the Internal Revenue Code of 1986,
as amended (the "Code") and the regulations promulgated thereunder.
It is intended that the Portfolio's assets and income will be managed
in such a way that an investor in the Portfolio which seeks to qualify as a
regulated investment company under the Code will be able to satisfy the
requirements for such qualification.
ITEM 7. PURCHASE OF INTERESTS IN THE PORTFOLIO
Interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. See "General Description of Registrant" above.
Registrant incorporates by reference information concerning the
computation of net asset value and valuation of Portfolio securities from
"Valuing Fund Shares" in the Feeder Fund prospectus. For further information,
see Item 19 of Part B.
The Portfolio's net asset value is determined by Investors Bank & Trust
Company (as custodian and agent for the Portfolio) based on market or fair value
in the manner authorized by the Trustees of the Portfolio. Net asset value is
computed by subtracting the liabilities of the Portfolio from the value of its
total assets. Municipal obligations will normally be valued on the basis of
valuations furnished by a pricing service. For further information regarding the
valuation of the Portfolio's assets, see Part B, Item 19.
There is no minimum initial or subsequent investment in the Portfolio.
The Portfolio reserves the right to cease accepting investments at any time or
to reject any investment order.
The placement agent for the Portfolio is Eaton Vance Distributors, Inc.
("EVD"), a wholly-owned subsidiary of Eaton Vance Management. The principal
business address of EVD is 24 Federal Street, Boston, Massachusetts 02110. EVD
receives no compensation for serving as the placement agent for the Portfolio.
ITEM 8. REDEMPTION OR DECREASE OF INTEREST
An investor in the Portfolio may withdraw all of (redeem) or any
portion of (decrease) its interest in the Portfolio if a withdrawal request in
proper form is furnished by the investor to the Portfolio. All withdrawals will
be effected as of the next Portfolio Valuation Time. The proceeds of a
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withdrawal will be paid by the Portfolio normally on the Portfolio Business
Day the withdrawal is effected, but in any event within seven days. The
Portfolio reserves the right to pay the proceeds of a withdrawal (whether a
redemption or decrease) by a distribution in kind of portfolio securities
(instead of cash). The securities so distributed would be valued at the same
amount as that assigned to them in calculating the net asset value for the
interest (whether complete or partial) being withdrawn. If an investor received
a distribution in kind upon such withdrawal, the investor could incur brokerage
and other charges in converting the securities to cash. The Portfolio has filed
with the Securities and Exchange Commission (the "Commission") a notification of
election on Form N-18F-1 committing to pay in cash all requests for withdrawals
by any investor, limited in amount with respect to such investor during any 90
day period to the lesser of (a) $250,000 or (b) 1% of the net asset value of the
Portfolio at the beginning of such period.
Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the Exchange is closed (other than weekends or
holidays) or trading on the Exchange is restricted or, to the extent otherwise
permitted by the 1940 Act, if an emergency exists, or during any other period
permitted by order of the Commission for the protection of investors.
ITEM 9. PENDING LEGAL PROCEEDINGS
Not applicable.
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PART B
ITEM 10. COVER PAGE
Not applicable.
ITEM 11. TABLE OF CONTENTS
Page
General Information and History ..........................................B-1
Investment Objectives and Policies .......................................B-1
Management of the Portfolio ..............................................B-1
Control Persons and Principal Holder of Securities .......................B-1
Investment Advisory and Other Services ...................................B-2
Brokerage Allocation and Other Practices..................................B-2
Capital Stock and Other Securities .......................................B-2
Purchase, Redemption and Pricing of Securities............................B-4
Tax Status................................................................B-4
Underwriters..............................................................B-8
Calculation of Performance Data...........................................B-9
Financial Statements......................................................B-9
ITEM 12. GENERAL INFORMATION AND HISTORY
Effective January 1, 1996, the Portfolio's name was changed from
"Virginia Tax Free Portfolio" to "Virginia Municipals Portfolio".
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES
Registrant incorporates by reference additional information concerning
the investment policies of the Portfolio as well as information concerning the
investment restrictions of the Portfolio from "Additional Information about
Investment Policies", "Appendix - Description of Bond Ratings" and "Investment
Restrictions" in Part I of the Feeder Fund SAI. The Portfolio's portfolio
turnover rates for the fiscal years ended August 31, 1996 and 1995 were
30% and 38%, respectively.
ITEM 14. MANAGEMENT OF THE PORTFOLIO
Registrant incorporates by reference additional information concerning
the management of the Portfolio from "Trustees and Officers" in Part I of the
Feeder Fund SAI and "Fees and Expenses" in Part II of the Feeder Fund SAI.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDER OF SECURITIES
As of December 2, 1996, EV Marathon Virginia Municipals Fund (the
"Marathon Fund"), a series of Eaton Vance Municipals Trust, owned approximately
99.3% of the value of the outstanding interests in the Portfolio. Because the
Marathon Fund controls the Portfolio, it may take actions without the approval
of any other investor. The Marathon Fund has informed the Portfolio that
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whenever it is requested to vote on matters pertaining to the fundamental
policies of the Portfolio, it will hold a meeting of shareholders and will cast
its votes as instructed by its shareholders. It is anticipated that any other
investor in the Portfolio which is an investment company registered under the
1940 Act would follow the same or a similar practice. Eaton Vance Municipals
Trust is an open-end management investment company organized as a business trust
under the laws of the Commonwealth of Massachusetts.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES
Registrant incorporates by reference information concerning investment
advisory and other services provided to the Portfolio from "Investment Adviser
and Administrator", "Custodian" and "Independent Certified Public Accountants"
in Part I of the Feeder Fund SAI and from "Fees and Expenses" in Part II of the
Feeder Fund SAI.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the
brokerage practices of the Portfolio from "Portfolio Security Transactions" in
Part I of the Feeder Fund SAI and "Fees and Expenses" in Part II of the Feeder
Fund SAI.
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES
Under the Portfolio's Declaration of Trust, the Trustees are authorized
to issue interests in the Portfolio. Investors are entitled to participate pro
rata in distributions of taxable income, loss, gain and credit of the Portfolio.
Upon dissolution of the Portfolio, the Trustees shall liquidate the assets of
the Portfolio and apply and distribute the proceeds thereof as follows: (a)
first, to the payment of all debts and obligations of the Portfolio to third
parties including, without limitation, the retirement of outstanding debt,
including any debt owed to holders of record of interests in the Portfolio
("Holders") or their affiliates, and the expenses of liquidation, and to the
setting up of any reserves for contingencies which may be necessary; and (b)
second, in accordance with the Holders' positive Book Capital Account balances
after adjusting Book Capital Accounts for certain allocations provided in the
Declaration of Trust and in accordance with the requirements described in
Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2). Notwithstanding the
foregoing, if the Trustees shall determine that an immediate sale of part or all
of the assets of the Portfolio would cause undue loss to the Holders, the
Trustees, in order to avoid such loss, may, after having given notification
to all the Holders, to the extent not then prohibited by the law of any
jurisdiction in which the Portfolio is then formed or qualified and applicable
in the circumstances, either defer liquidation of and withhold from distribution
for a reasonable time any assets of the Portfolio except those necessary to
satisfy the Portfolio's debts and obligations or distribute the Portfolio's
assets to the Holders in liquidation. Interests in the Portfolio have no
preference, preemptive, conversion or similar rights and are fully paid and
nonassessable, except as set forth below. Interests in the Portfolio may not be
transferred. Certificates representing an investor's interest in the Portfolio
are issued only upon the written request of a Holder.
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Each Holder is entitled to vote in proportion to the amount of its
interest in the Portfolio. Holders do not have cumulative voting rights. The
Portfolio is not required and has no current intention to hold annual meetings
of Holders, but the Portfolio will hold meetings of Holders when in the judgment
of the Portfolio's Trustees it is necessary or desirable to submit matters to a
vote of Holders at a meeting. Any action which may be taken by Holders may be
taken without a meeting if Holders holding more than 50% of all interests
entitled to vote (or such larger proportion thereof as shall be required by any
express provision of the Declaration of Trust of the Portfolio) consent to the
action in writing and the consents are filed with the records of meetings of
Holders.
The Portfolio's Declaration of Trust may be amended by vote of Holders
of more than 50% of all interests in the Portfolio at any meeting of Holders or
by an instrument in writing without a meeting, executed by a majority of the
Trustees and consented to by the Holders of more than 50% of all interests. The
Trustees may also amend the Declaration of Trust (without the vote or consent of
Holders) to change the Portfolio's name or the state or other jurisdiction whose
law shall be the governing law, to supply any omission or cure, correct or
supplement any ambiguous, defective or inconsistent provision, to conform the
Declaration of Trust to applicable federal law or regulations or to the
requirements of the Code, or to change, modify or rescind any provision,
provided that such change, modification or rescission is determined by the
Trustees to be necessary or appropriate and not to have a materially adverse
effect on the financial interests of the Holders. No amendment of the
Declaration of Trust which would change any rights with respect to any Holder's
interest in the Portfolio by reducing the amount payable thereon upon
liquidation of the Portfolio may be made, except with the vote or consent of the
Holders of two-thirds of all interests. References in the Declaration of Trust
and in Part A or this Part B to a specified percentage of, or fraction of,
interests in the Portfolio, means Holders whose combined Book Capital Account
balances represent such specified percentage or fraction of the combined Book
Capital Account balance of all, or a specified group of, Holders.
The Portfolio may merge or consolidate with any other corporation,
association, trust or other organization or may sell or exchange all or
substantially all of its assets upon such terms and conditions and for such
consideration when and as authorized by the Holders of (a) 67% or more of the
interests in the Portfolio present or represented at the meeting of Holders, if
Holders of more than 50% of all interests are present or represented by
proxy, or (b) more than 50% of all interests, whichever is less. The Portfolio
may be terminated (i) by the affirmative vote of Holders of not less than
two-thirds of all interests at any meeting of Holders or by an instrument in
writing without a meeting, executed by a majority of the Trustees and consented
to by Holders of not less than two-thirds of all interests, or (ii) by the
Trustees by written notice to the Holders.
In accordance with the Declaration of Trust, there normally will 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 holding office have been
elected by investors. In such an event, the Trustees of the Portfolio 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.
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The Declaration of Trust 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 Portfolio is organized as a trust under the laws of the State of
New York. Investors in the Portfolio will be held personally liable for its
obligations and liabilities, subject, however, to indemnification by the
Portfolio in the event that there is imposed upon an investor a greater portion
of the liabilities and obligations of the Portfolio than its proportionate
interest in the Portfolio. The Portfolio intends to maintain fidelity and errors
and omissions insurance deemed adequate by the Trustees. Therefore, the risk of
an investor incurring financial loss on account of investor liability is limited
to circumstances in which both inadequate insurance exists and the Portfolio
itself is unable to meet its obligations.
The Declaration of Trust further provides that obligations of the
Portfolio are not binding upon the Trustees individually but only upon the
property of the Portfolio and that the Trustees will not be liable for any
action or failure to act, 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.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES
Interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the Securities Act of 1933. See "Purchase of Interests in the
Portfolio" and "Redemption or Decrease of Interest" in Part A.
Registrant incorporates by reference information concerning valuation
of the Portfolio's assets from "Determination of Net Asset Value" in Part I of
the Feeder Fund SAI.
ITEM 20. TAX STATUS
The Portfolio has been advised by tax counsel that, provided the
Portfolio is operated at all times during its existence in accordance with
certain organizational and operational documents, the Portfolio should be
classified as a partnership under the Code, and it should not be a "publicly
traded partnership" within the meaning of Section 7704 of the Code.
Consequently, the Portfolio does not expect that it will be required to pay any
federal income tax, and a Holder will be required to take into account in
determining its federal income tax liability its share of the Portfolio's
income, gains, losses, deductions and tax preference items.
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Under Subchapter K of the Code, a partnership is considered to be
either an aggregate of its members or a separate entity depending upon the
factual and legal context in which the question arises. Under the aggregate
approach, each partner is treated as an owner of an undivided interest in
partnership assets and operations. Under the entity approach, the partnership is
treated as a separate entity in which partners have no direct interest in
partnership assets and operations. The Portfolio has been advised by tax counsel
that, in the case of a Holder that seeks to qualify as a regulated investment
company (a "RIC"), the aggregate approach should apply, and each such Holder
should accordingly be deemed to own a proportionate share of each of the assets
of the Portfolio and to be entitled to the gross income of the Portfolio
attributable to that share for purposes of all requirements of Sections 851(b)
and 852(b)(5) of the Code. Further, the Portfolio has been advised by tax
counsel that each Holder that seeks to qualify as a RIC should be deemed to hold
its proportionate share of the Portfolio's assets for the period the Portfolio
has held the assets or for the period the Holder has been an investor in the
Portfolio, whichever is shorter. Investors should consult their tax advisers
regarding whether the entity or the aggregate approach applies to their
investment in the Portfolio in light of their particular tax status and any
special tax rules applicable to them.
In order to enable a Holder in the Portfolio that is otherwise eligible
to qualify as a RIC, the Portfolio intends to satisfy the requirements of
Subchapter M of the Code relating to sources of income and diversification of
assets as if they were applicable to the Portfolio and to allocate and permit
withdrawals in a manner that will enable a Holder which is a RIC to comply with
those requirements. The Portfolio will allocate at least annually to each Holder
its distributive share of the Portfolio's net taxable (if any) and tax-exempt
investment income, net realized capital gains, and any other items of income,
gain, loss, deduction or credit in a manner intended to comply with the Code and
applicable Treasury regulations. Tax counsel has advised the Portfolio that the
Portfolio's allocations of taxable income and loss should have "economic effect"
under applicable Treasury regulations.
To the extent the cash proceeds of any withdrawal (or, under certain
circumstances, such proceeds plus the value of any marketable securities
distributed to an investor) ("liquid proceeds") exceed a Holder's adjusted basis
of his interest in the Portfolio, the Holder will generally realize a gain for
federal income tax purposes. If, upon a complete withdrawal (redemption of the
entire interest), the Holder's adjusted basis of his interest exceeds the liquid
proceeds of such withdrawal, the Holder will generally realize a loss for
federal income tax purposes. The tax consequences of a withdrawal of property
(instead of or in addition to liquid proceeds) will be different and will depend
on the specific factual circumstances. A Holder's adjusted basis of an interest
in the Portfolio will generally be the aggregate prices paid therefor (including
the adjusted basis of contributed property and any gain recognized on such
contribution), increased by the amounts of the Holder's distributive share of
items of income (including interest income exempt from federal income tax) and
realized net gain of the Portfolio, and reduced, but not below zero, by (i) the
amounts of the Holder's distributive share of items of Portfolio loss, and (ii)
the amount of any cash distributions (including distributions of interest income
exempt from federal income tax and cash distributions on withdrawals from the
Portfolio) and the basis to the Holder of any property received by such Holder
other than in liquidation, and (iii) the Holder's distributive share of the
Portfolio's nondeductible expenditures not properly chargeable to capital
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account. Increases or decreases in a Holder's share of the Portfolio's
liabilities may also result in corresponding increases or decreases in such
adjusted basis. Distributions of liquid proceeds in excess of a Holder's
adjusted basis in its interest in the Portfolio immediately prior thereto
generally will result in the recognition of gain to the Holder in the amount of
such excess.
The Portfolio may acquire zero coupon or other securities issued with
original issue discount. As the holder of those securities, the Portfolio must
account for the original issue discount (even on municipal securities) that
accrues on the securities during the taxable year, even if it receives no
corresponding payment on the securities during the year. Because each Holder
that is a RIC annually must distribute substantially all of its investment
company taxable income and net tax-exempt income, including any original issue
discount, to qualify for treatment as a RIC, any such Holder may be required in
a particular year to distribute as an "exempt-interest dividend" an amount that
is greater than its proportionate share of the total amount of cash the
Portfolio actually receives. Those distributions will be made from the Holder's
cash assets, if any, or from its proportionate share of the Portfolio's cash
assets or the proceeds of sales of the Portfolio's securities, if necessary. The
Portfolio may realize capital gains or losses from those sales, which would
increase or decrease the investment company taxable income and/or net capital
gain (the excess of net long-term capital gain over net short-term capital loss)
of a Holder that is a RIC. In addition, any such gains may be realized on the
disposition of securities held for less than three months. Because of the
Short-Short Limitation (defined below), any such gains would reduce the
Portfolio's ability to sell other securities, or options or futures contracts,
held for less than three months that it might wish to sell in the ordinary
course of its portfolio management.
Investments in lower rated or unrated securities may present special
tax issues for the Portfolio and hence to an investor in the Portfolio to the
extent actual or anticipated defaults may be more likely with respect to such
securities. Tax rules are not entirely clear about issues such as when the
Portfolio may cease to accrue interest, original issue discount, or market
discount; when and to what extent deductions may be taken for bad debts or
worthless securities; how payments received on obligations in default should be
allocated between principal and income; and whether exchanges of debt
obligations in a workout context are taxable.
In order for a Holder that is a RIC to be entitled to pay the
tax-exempt interest income the Portfolio allocates to it as exempt-interest
dividends to its shareholders, the Holder must satisfy certain requirements,
including the requirement that, at the close of each quarter of its taxable
year, at least 50% of the value of its total assets consists of obligations the
interest on which is excludable from gross income under Section 103(a) of the
Code. The Portfolio intends to concentrate its investments in such tax-exempt
obligations to an extent that will enable a RIC that invests its investable
assets in the Portfolio to satisfy this 50% requirement.
Interest on certain municipal obligations is treated as a tax
preference item for purposes of the federal alternative minimum tax. Holders
that are required to file federal income tax returns are required to report
tax-exempt interest allocated to them by the Portfolio on such returns.
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From time to time proposals have been introduced before Congress for
the purpose of restricting or eliminating the federal income tax exemption for
interest on certain types of municipal obligations, and it can be expected that
similar proposals may be introduced in the future. Under Federal tax legislation
enacted in 1986, the Federal income tax exemption for interest on certain
municipal obligations was eliminated or restricted. As a result of such
legislation, the availability of municipal obligations for investment by the
Portfolio and the value of the Portfolio may be affected.
In the course of managing its investments, the Portfolio may realize
some short-term and long-term capital gains (and/or losses) as a result of
market transactions, including sales of portfolio securities and rights to
when-issued securities and options and futures transactions. The Portfolio may
also realize taxable income from certain short-term taxable obligations,
securities loans, a portion of discount with respect to certain stripped
municipal obligations or their stripped coupons and certain realized gains or
income attributable to accrued market discount. Any allocations of such capital
gains or other taxable income to Holders would be taxable to Holders that are
subject to tax. However, it is expected that such amounts, if any, would
normally be insubstantial in relation to the tax-exempt interest earned by the
Portfolio.
The Portfolio's transactions in options and futures contracts will be
subject to special tax rules that may affect the amount, timing and character of
its items of income, gain or loss and hence the allocations of such items to
investors. For example, certain positions held by the Portfolio on the last
business day of each taxable year will be marked to market (i.e., treated as if
closed out on such day), and any resulting gain or loss will generally be
treated as 60% long-term and 40% short-term capital gain or loss. Certain
positions held by the Portfolio that substantially diminish the Portfolio's risk
of loss with respect to other positions in its portfolio may constitute
"straddles," which are subject to tax rules that may cause deferral of Portfolio
losses, adjustments in the holding periods of Portfolio securities and
conversion of short-term into long-term capital losses.
Income from transactions in options and futures contracts derived by
the Portfolio with respect to its business of investing in securities will
qualify as permissible income for its Holders that are RICs under the
requirement that at least 90% of a RIC's gross income each taxable year consist
of specified types of income. However, income from the disposition by the
Portfolio of options and futures contracts held for less than three months will
be subject to the requirement applicable to those Holders that less than 30% of
a RIC's gross income each taxable year consist of certain short-term gains
("Short-Short Limitation").
If the Portfolio satisfies certain requirements, any increase in value
of a position that is part of a "designated hedge" will be offset by any
decrease in value (whether realized or not) of the offsetting hedging position
during the period of the hedge for purposes of determining whether the Holders
that are RICs satisfy the Short-Short Limitation. Thus, only the net gain (if
any) from the designated hedge will be included in gross income for purposes of
that limitation. The Portfolio will consider whether it should seek to qualify
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for this treatment for its hedging transactions. To the extent the Portfolio
does not so qualify, it may be forced to defer the closing out of options and
futures contracts beyond the time when it otherwise would be advantageous to do
so, in order for Holders that are RICs to continue to qualify as such.
Interest on indebtedness incurred or continued by an investor to
purchase or carry an investment in the Portfolio is not deductible to the extent
it is deemed attributable to the investor's investment, through the Portfolio,
in tax-exempt obligations. Further, persons who are "substantial users" (or
persons related to "substantial users") of facilities financed by industrial
development or private activity bonds should consult their tax advisers before
investing in the Portfolio. "Substantial user" is defined in applicable Treasury
regulations to include a "non-exempt person" who regularly uses in trade or
business a part of a facility financed from the proceeds of industrial
development bonds and would likely be interpreted to include private activity
bonds issued to finance similar facilities.
An entity that is treated as a partnership under the Code, such as the
Portfolio, is generally treated as a partnership under state and local tax laws,
but certain states may have different entity classification criteria and may
therefore reach a different conclusion. Entities that are classified as
partnerships are not treated as separate taxable entities under most state and
local tax laws, and the income of a partnership is considered to be income of
partners both in timing and in character. The exemption of interest income for
Federal income tax purposes does not necessarily result in exemption under the
income or tax laws of any state or local taxing authority. The laws of the
various states and local taxing authorities vary with respect to the taxation of
such interest income, as well as to the status of a partnership interest under
state and local tax laws, and each holder of an interest in the Portfolio is
advised to consult his own tax adviser.
The foregoing discussion does not address the special tax rules
applicable to certain classes of investors, such as tax-exempt entities,
insurance companies and financial institutions. Investors should consult their
own tax advisers with respect to special tax rules that may apply in their
particular situations, as well as the state, local or foreign tax consequences
of investing in the Portfolio.
ITEM 21. UNDERWRITERS
The placement agent for the Portfolio is Eaton Vance Distributors,
Inc., which receives no compensation for serving in this capacity. Investment
companies, common and commingled trust funds and similar organizations and
entities may continuously invest in the Portfolio.
ITEM 22. CALCULATION OF PERFORMANCE DATA
Not applicable.
B-8
<PAGE>
ITEM 23. FINANCIAL STATEMENTS
The following audited financial statements of the Portfolio, are
incorporated by reference into this Part B and have been so incorporated in
reliance upon the report of Deloitte & Touche LLP, independent certified public
accountants, as experts in accounting and auditing.
Portfolio of Investments as of August 31, 1996
Statement of Assets and Liabilities as of August 31, 1996
Statement of Operations for the fiscal year ended August 31, 1996
Statement of Changes in Net Assets for the fiscal years ended August
31, 1996 and 1995
Supplementary Data for the fiscal years ended August 31, 1996 and 1995,
for the eleven months ended August 31, 1994, and for the period from
the start of business, February 1, 1993, to September 30, 1993
Notes to Financial Statements
Independent Auditors' Report
For purposes of the EDGAR filing of this amendment to the Portfolio's
registration statement, the Portfolio incorporates by reference the above
audited financial statements as previously filed electronically with the
Commission (Accession Number 0000950135-96- 004502).
B-9
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
The financial statements called for by this Item are incorporated by
reference in Part B and listed in Item 23 hereof.
(b) Exhibits
1. (a) Declaration of Trust dated May 1, 1992 filed as Exhibit No. 1(a)
to Amendment No. 3 (filed electronically with the Commission on
December 21, 1995) (Accession No. 0000898432-95-000441) and
incorporated herein by reference.
(b) Amendment to the Declaration of Trust dated June 13, 1994 filed
as Exhibit No. 1(b) to Amendment No. 3 and incorporated herein by
reference.
(c) Amendment to the Declaration of Trust dated January 1, 1996 filed
herewith.
2. By-Laws of the Registrant dated May 1, 1992 filed as Exhibit No. 2 to
Amendment No. 3 and incorporated herein by reference.
5. Investment Advisory Agreement between the Registrant and Boston
Management and Research dated October 13, 1992 filed as Exhibit No.
5 to Amendment No. 3 and incorporated herein by reference.
6. Placement Agent Agreement with Eaton Vance Distributors, Inc. dated
November 1, 1996 filed herewith.
7. The Securities and Exchange Commission has granted the Registrant an
exemptive order that permits the Registrant to enter into deferred
compensation arrangements with its independent Trustees. See In the
Matter of Capital Exchange Fund, Inc., Release No. IC-20671
(November 1, 1994).
8. (a) Custodian Agreement with Investors Bank & Trust Company dated
January 29, 1993 filed as Exhibit No. 8(a) to Amendment No. 3 and
incorporated herein by reference.
C-1
<PAGE>
(b) Amendment to the Custodian Agreement dated October 23, 1995
filed as Exhibit No. 8(b) to Amendment No. 3 and incorporated
herein by reference.
13. Investment representation letter of Eaton Vance Municipals Trust (on
behalf of Eaton Vance Virginia Tax Free Fund) dated January 21, 1993
filed as Exhibit No. 13 to Amendment No. 3 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)
Number of
Title of Class Record Holders
As of December 2, 1996
Interests 4
ITEM 27. INDEMNIFICATION
Reference is hereby made to Article V of the Registrant's Declaration
of Trust, filed as Exhibit 1(a) to Amendment No. 3 and incorporated herein by
reference.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser are insured under an errors and omissions
liability insurance policy. The Registrant and its officers are also insured
under the fidelity bond required by Rule 17g-1 under the Investment Company Act
of 1940.
ITEM 28. BUSINESS AND OTHER CONNECTIONS
To the knowledge of the Portfolio, none of the trustees or officers of
the Portfolio's investment adviser, except as set forth on its Form ADV as filed
with the Securities and Exchange Commission, is engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
trustees and officers also hold various positions with and engage in business
for affiliates of the investment adviser.
ITEM 29. PRINCIPAL UNDERWRITERS
Not applicable.
C-2
<PAGE>
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, 89 South Street, Boston,
MA 02111, with the exception of certain corporate documents and portfolio
trading documents which are in the possession and custody of the Registrant's
investment adviser at 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 the Registrant's investment adviser.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment No. 4 to the Registration Statement on
Form N-1A to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Boston and Commonwealth of Massachusetts on the 23rd
day of December, 1996.
VIRGINIA MUNICIPALS PORTFOLIO
By: /s/ Thomas J. Fetter
--------------------------------
Thomas J. Fetter
President
C-4
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ----------- ----------------------
1. (c) Amendment to the Declaration of Trust dated January 1, 1996
6. Placement Agent Agreement with Eaton Vance Distributors, Inc. dated
November 1, 1996
C-5
VIRGINIA MUNICIPALS PORTFOLIO
(formerly called Virginia Tax Free Portfolio)
AMENDMENT TO DECLARATION OF TRUST
January 1, 1996
AMENDMENT, made January 1, 1996 to the Declaration of Trust made May 1,
1992, as amended June 13, 1994, (hereinafter called the "Declaration") of
Virginia Tax Free Portfolio, a New York trust (hereinafter called the "Trust")
by the undersigned, being at least a majority of the Trustees of the Trust in
office on January 1, 1996.
WHEREAS, Section 10.4 of Article X of the Declaration empowers a
majority of the Trustees of the Trust to amend the Declaration without the vote
or consent of Holders to change the name of the Trust;
NOW, THEREFORE, the undersigned Trustees, do hereby amend the
Declaration in the following manner:
1. The caption at the head of the Declaration is hereby amended to
read as follows:
VIRGINIA MUNICIPALS PORTFOLIO
2. Section 1.1 of Article I of the Declaration is hereby amended to
read as follows:
ARTICLE I
1.1. Name. The name of the trust created hereby (the "Trust") shall be
Virginia Municipals Portfolio and so far as may be practicable the Trustees
shall conduct the Trust's activities, execute all documents and sue or be sued
under that name, which name (and the word "Trust" wherever hereinafter used)
shall refer to the Trustees as Trustees, and not individually, and shall not
refer to the officers, employees, agents or independent contractors of the Trust
or holders of interests in the Trust.
IN WITNESS WHEREOF, the undersigned Trustees have executed this
instrument this 1st day of January, 1996.
/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/ Samuel L. Hayes, III /s/ Jack L. Treynor
- ------------------------------- ----------------------------
Samuel L. Hayes, III Jack L. Treynor
PLACEMENT AGENT AGREEMENT
November 1, 1996
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, Massachusetts 02110
Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Virginia Municipals Portfolio (the "Trust"), an
open-end non-diversified management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), organized as a New
York trust, has agreed that Eaton Vance Distributors, Inc. ("EVD"), formerly
named EV Distributors, Inc., shall be the placement agent (the "Placement
Agent") of Interests in the Trust ("Trust Interests").
1. Services as Placement Agent.
1.1 EVD will act as Placement Agent of the Trust Interests covered by
the Trust's registration statement then in effect under the 1940 Act. In acting
as Placement Agent under this Placement Agent Agreement, neither EVD nor its
employees or any agents thereof shall make any offer or sale of Trust Interests
in a manner which would require the Trust Interests to be registered under the
Securities Act of 1933, as amended (the "1933 Act").
1.2 All activities by EVD and its agents and employees as Placement
Agent of Trust Interests shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations adopted
pursuant to the 1940 Act by the Securities and Exchange Commission (the
"Commission").
1.3 Nothing herein shall be construed to require the Trust to accept
any offer to purchase any Trust Interests, all of which shall be subject to
approval by the Board of Trustees.
1.4 The Portfolio shall furnish from time to time for use in connection
with the sale of Trust Interests such information with respect to the Trust and
Trust Interests as EVD may reasonably request. The Trust shall also furnish EVD
upon request with: (a) unaudited semiannual statements of the Trust's books and
accounts prepared by the Trust, and (b) from time to time such additional
information regarding the Trust's financial or regulatory condition as EVD may
reasonably request.
1.5 The Trust represents to EVD that all registration statements filed
by the Trust with the Commission under the 1940 Act with respect to Trust
Interests have been prepared in conformity with the requirements of such statute
and the rules and regulations of the Commission thereunder. As used in this
Agreement the term "registration statement" shall mean any registration
statement filed with the Commission as modified by any amendments thereto that
at any time shall have been filed with the Commission by or on behalf of the
Trust. The Trust represents and warrants to EVD that any registration statement
will contain all statements required to be stated therein in conformity with
both such statute and the rules and regulations of the Commission; that all
statements of fact contained in any registration statement will be true and
<PAGE>
correct in all material respects at the time of filing of such registration
statement or amendment thereto; and that no registration statement will include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
to a purchaser of Trust Interests. The Trust may but shall not be obligated to
propose from time to time such amendment to any registration statement as in the
light of future developments may, in the opinion of the Trust's counsel, be
necessary or advisable. If the Trust shall not propose such amendment and/or
supplement within fifteen days after receipt by the Trust of a written request
from EVD to do so, EVD may, at its option, terminate this Agreement. The Trust
shall not file any amendment to any registration statement without giving EVD
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Trust's right to file at any time
such amendment to any registration statement as the Trust may deem advisable,
such right being in all respects absolute and unconditional.
1.6 The Trust agrees to indemnify, defend and hold EVD, its several
officers and directors, and any person who controls EVD within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities and Exchange Act of
1934 (the "1934 Act") (for purposes of this paragraph 1.6, collectively,
"Covered Persons") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which any Covered Person may incur under the 1933 Act, the
1934 Act, common law or otherwise, arising out of or based on any untrue
statement of a material fact contained in any registration statement, private
placement memorandum or other offering material ("Offering Material") or arising
out of or based on any omission to state a material fact required to be stated
in any Offering Material or necessary to make the statements in any Offering
Material not misleading; provided, however, that the Trust's agreement to
indemnify Covered Persons shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any financial and other statements as are
furnished in writing to the Trust by EVD in its capacity as Placement Agent for
use in the answers to any items of any registration statement or in any
statements made in any Offering Material, or arising out of or based on any
omission or alleged omission to state a material fact in connection with the
giving of such information required to be stated in such answers or necessary to
make the answers not misleading; and further provided that the Trust's agreement
to indemnify EVD and the Trust's representations and warranties hereinbefore set
forth in this paragraph 1.6 shall not be deemed to cover any liability to the
Trust or its investors to which a Covered Person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of a Covered Person's reckless disregard of its
obligations and duties under this Agreement. The Trust should be notified of any
action brought against a Covered Person, such notification to be given by a
writing addressed to the Trust, 24 Federal Street Boston, Massachusetts 02110,
with a copy to the Adviser of the Portfolio, Boston Management and Research, at
the same address, promptly after the summons or other first legal process shall
have been duly and completely served upon such Covered Person. The failure to so
notify the Trust of any such action shall not relieve the Trust from any
liability except to the extent the Trust shall have been prejudiced by such
failure, or from any liability that the Trust may have to the Covered Person
against whom such action is brought by reason of any such untrue statement or
omission, otherwise than on account of the Trust's indemnity agreement contained
in this paragraph. The Trust will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but in such case such
defense shall be conducted by counsel of good standing chosen by the Trust and
approved by EVD, which approval shall not be unreasonably withheld. In the event
the Trust elects to assume the defense of any such suit and retain counsel of
good standing approved by EVD, the defendant or defendants in such suit shall
<PAGE>
bear the fees and expenses of any additional counsel retained by any of them;
but in case the Trust does not elect to assume the defense of any such suit or
in case EVD reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse the Covered Person named as defendant in such suit, for the
fees and expenses of any counsel retained by EVD or it. The Trust's
indemnification agreement contained in this paragraph and the Trust's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Covered Persons, and shall survive the delivery of any Trust Interests. This
agreement of indemnity will inure exclusively to Covered Persons and their
successors. The Trust agrees to notify EVD promptly of the commencement of any
litigation or proceedings against the Trust or any of its officers or Trustees
in connection with the issue and sale of any Trust Interests.
1.7 EVD agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for purposes of
this paragraph 1.7, collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons may incur
under the 1933 Act, the 1934 Act or common law or otherwise, but only to the
extent that such liability or expense incurred by a Covered Person resulting
from such claims or demands shall arise out of or be based on any untrue
statement of a material fact contained in information furnished in writing by
EVD in its capacity as Placement Agent to the Trust for use in the answers to
any of the items of any registration statement or in any statements in any other
Offering Material or shall arise out of or be based on any omission to state a
material fact in connection with such information furnished in writing by EVD to
the Trust required to be stated in such answers or necessary to make such
information not misleading. EVD shall be notified of any action brought against
a Covered Person, such notification to be given by a writing addressed to EVD at
24 Federal Street, Boston, Massachusetts 02110, promptly after the summons or
other first legal process shall have been duly and completely served upon such
Covered Person. EVD shall have the right of first control of the defense of the
action with counsel of its own choosing satisfactory to the Trust if such action
is based solely on such alleged misstatement or omission on EVD's part, and in
any other event each Covered Person shall have the right to participate in the
defense or preparation of the defense of any such action. The failure to so
notify EVD of any such action shall not relieve EVD from any liability except to
the extent the Trust shall have been prejudiced by such failure, or from any
liability that EVD may have to Covered Persons by reason of any such untrue or
alleged untrue statement, or omission or alleged omission, otherwise than on
account of EVD's indemnity agreement contained in this paragraph.
1.8 No Trust Interests shall be offered by either EVD or the Trust
under any of the provisions of this Agreement and no orders for the purchase or
sale of Trust Interests hereunder shall be accepted by the Trust if and so long
as the effectiveness of the registration statement or any necessary amendments
thereto shall be suspended under any of the provisions of the 1933 Act or the
1940 Act; provided, however, that nothing contained in this paragraph shall in
any way restrict or have an application to or bearing on the Trust's obligation
to redeem Trust Interests from any investor in accordance with the provisions of
the Trust's registration statement or Declaration of Trust, as amended from time
to time.
<PAGE>
1.9 The Trust agrees to advise EVD as soon as reasonably practical by a
notice in writing delivered to EVD or its counsel:
(a) of any request by the Commission for amendments to the registration
statement then in effect or for additional information;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement then in effect or the
initiation by service of process on the Trust of any proceeding for that
purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement then in effect or that requires
the making of a change in such registration statement in order to make the
statements therein not misleading; and
(d) of all action of the Commission with respect to any amendment to
any registration statement that may from time to time be filed with the
Commission.
For purposes of this paragraph 1.9, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.10 EVD agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information not otherwise publicly available relative to the Trust and its
prior, present or potential investors and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably withheld and may not be
withheld where EVD may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
2. Duration and Termination of this Agreement.
This Agreement shall become effective upon the date of its execution,
and, unless terminated as herein provided, shall remain in full force and effect
through and including February 28, 1997 and shall continue in full force and
effect indefinitely thereafter, but only so long as such continuance after
February 28, 1997 is specifically approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Trust and (ii) by the vote of a majority of those Trustees of
the Trust who are not interested persons of EVD or the Trust cast in person at a
meeting called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this agreement without the payment of any
penalty, by action of Trustees of the Trust or the Directors of EVD, as the case
may be, and the Trust may, at any time upon such written notice to EVD,
terminate this Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate automatically in the
event of its assignment.
3. Representations and Warranties.
EVD and the Trust each hereby represents and warrants to the other that
it has all requisite authority to enter into, execute, deliver and perform its
obligations under this Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with its terms.
<PAGE>
4. Limitation of Liability.
EVD expressly acknowledges the provision in the Declaration of Trust of
the Trust (Sections 5.2 and 5.6) limiting the personal liability of the Trustees
and officers of the Trust, and EVD hereby agrees that it shall have recourse to
the Trust for payment of claims or obligations as between the Trust and EVD
arising out of this Agreement and shall not seek satisfaction from any Trustee
or officer of the Trust.
5. Certain Definitions.
The terms "assignment" and "interested persons" when used herein shall
have the respective meanings specified in the Investment Company Act of
1940 as now in effect or as hereafter amended subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission by any
rule, regulation or order. The term "vote of a majority of the outstanding
voting securities" shall mean the vote, at a meeting of Holders, of the lesser
of (a) 67 per centum or more of the Interests in the Trust present or
represented by proxy at the meeting if the Holders of more than 50 per centum of
the outstanding Interests in the Trust are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the outstanding Interests in the
Trust. The terms "Holders" and "Interests" when used herein shall have the
respective meanings specified in the Declaration of Trust of the Trust.
6. Concerning Applicable Provisions of Law, etc.
This Agreement shall be subject to all applicable provisions of law,
including the applicable provisions of the 1940 Act and to the extent that any
provisions herein contained conflict with any such applicable provisions of law,
the latter shall control.
The laws of the Commonwealth of Massachusetts shall, except to the
extent that any applicable provisions of federal law shall be controlling,
govern the construction, validity and effect of this Agreement, without
reference to principles of conflicts of law.
If the contract set forth herein is acceptable to you, please so
indicate by executing the enclosed copy of this Agreement and returning the same
to the undersigned, whereupon this Agreement shall constitute a binding contract
between the parties hereto effective at the closing of business on the date
hereof.
Yours very truly,
VIRGINIA MUNICIPALS PORTFOLIO
By: /s/ Thomas J. Fetter
------------------------------
President
Accepted:
EATON VANCE DISTRIBUTORS, INC.
By: /s/ Wharton P. Whitaker
- -----------------------------------
President
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 166591
<INVESTMENTS-AT-VALUE> 174179
<RECEIVABLES> 4033
<ASSETS-OTHER> 4
<OTHER-ITEMS-ASSETS> 394
<TOTAL-ASSETS> 178610
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<TOTAL-LIABILITIES> 966
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 170101
<SHARES-COMMON-STOCK> 0
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<EXPENSES-NET> 898
<NET-INVESTMENT-INCOME> 10484
<REALIZED-GAINS-CURRENT> 179
<APPREC-INCREASE-CURRENT> 149
<NET-CHANGE-FROM-OPS> 10812
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (14104)
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 812
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 968
<AVERAGE-NET-ASSETS> 188729
<PER-SHARE-NAV-BEGIN> 0
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</TABLE>
