SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
The Massachusetts Health & Education Tax-Exempt Trust
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth, the amount
on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
225 FRANKLIN STREET, BOSTON, MASS. 02110
November 30, 1995
Dear Shareholder:
As you may be aware, at a meeting held on October 30, 1995,
the Board of Trustees of The Massachusetts Health & Education Tax-
Exempt Trust (the "Fund") voted to appoint Eaton Vance Management
("Eaton Vance" )as the Fund's Investment Adviser, subject to
shareholder approval. Eaton Vance will succeed Wellington
Management Company in that capacity.
A special meeting of the Fund's shareholders will be held on
Friday, December 29, 1995, to vote upon the new Investment Advisory
Agreement with Eaton Vance. The new Investment Advisory Agreement
is expected to take effect concurrently with the termination of the
prior Agreement, currently expected to take place on or about
January 1, 1996. The proposal in the attached Proxy Statement
relates to this approval.
The Board of Trustees believes that this proposal is in the
best interest of shareholders and has recommended that shareholders
vote to approve the new Investment Advisory Agreement.
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND RETURN THE ENCLOSED
PROXY CARD.
Walter B. Prince,
Chairman
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
Notice of Special Meeting of Shareholders
To Be Held December 29, 1995
A Special Meeting of Shareholders of The Massachusetts Health
& Education Tax-Exempt Trust (the "Fund"), will be held at Goodwin,
Procter & Hoar Conference Center, Second Floor, Exchange Place,
Boston, Massachusetts on Friday, December 29, 1995, commencing at
10:00 A.M. (Boston time), for the following purposes:
1. To approve an Investment Advisory Agreement with Eaton
Vance Management.
2. To consider and act upon any other matters which may
properly come before the meeting or any adjourned session
thereof.
The proposal to approve the new Investment Advisory Agreement is
discussed in greater detail in the following pages.
The Board of Trustees has fixed the close of business on November
24, 1995 as the record date for the determination of the
shareholders of the Fund entitled to notice of and to vote at the
meeting and any adjournments thereof.
By Order of the Board of Trustees
James M. Storey
President
November 30, 1995
Boston, Massachusetts
IMPORTANT - Shareholders can help the Board of Trustees of the Fund
avoid the necessity and additional expense to the Fund of further
solicitations to insure a quorum by promptly returning the enclosed
proxy. The enclosed addressed envelope requires no postage if
mailed in the United States and is intended for your convenience.
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
225 Franklin Street, Boston, Massachusetts 02110
November 30, 1995
PROXY STATEMENT
A proxy is enclosed with the foregoing Notice of a Special
Meeting of Shareholders of The Massachusetts Health & Education
Tax-Exempt Trust (the "Fund"), to be held December 29, 1995 for the
benefit of shareholders who do not expect to be present at the
meeting. This proxy is solicited on behalf of the Board of
Trustees of the Fund, and is revocable by the person giving it
prior to exercise by a signed writing filed with the Fund's
administrator, State Street Bank and Trust Company, or by executing
and delivering a later dated proxy, or by attending the meeting and
voting the shares in person. Each proxy will be voted in
accordance with its instructions; if no instruction is given, an
executed proxy will authorize the persons named as attorneys, or
either of them, to vote in favor of each such matter. This proxy
material is being mailed to shareholders on or about November 30,
1995.
The Board of Trustees of the Fund has fixed the close of
business November 24, 1995, as the record date for the
determination of the shareholders entitled to notice of and to vote
at the meeting and any adjournments thereof. Shareholders at the
close of business on the record date will be entitled to one vote
for each share held. As of November 24, 1995, there were
Common Shares, $.01 par value per share ("Common
Shares") and Auction Preferred Shares, $.01 par value
per share, liquidation preference $50,000 per share ("APS"), of the
Fund outstanding. As of such date, no shareholder beneficially
owned more than 5% of the outstanding Common Shares or APS. The
Trustees and officers of the Fund, as a group, own beneficially
less than 1% of the shares of the Fund.
The Board of Trustees of the Fund knows of no business other
than the proposal to approve the new investment advisory agreement
that will be presented for consideration. If any other matters are
properly presented, it is the intention of the persons named as
attorneys in the enclosed proxy to vote the proxies in accordance
with their judgment on such matters.
PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT
At the meeting, shareholders of the Fund will be asked to
approve an investment advisory agreement (the "Proposed Advisory
Agreement") between the Fund and Eaton Vance Management ("Eaton
Vance"). If approved by shareholders on the meeting date, this
contract will take effect on January 1, 1996.
The current adviser, Wellington Management Company
("Wellington"), 75 State Street, Boston, Massachusetts, 02109 has
served as investment adviser to the Fund since it commenced
operations on July 30, 1993 pursuant to an investment advisory
agreement dated July 23, 1993 (the "Current Advisory Agreement").
The Current Advisory Agreement was approved by the initial
shareholder of the Fund on July 13, 1993. At a meeting held on
October 30, 1995, the Board of Trustees of the Fund voted to
appoint Eaton Vance to succeed Wellington as the Fund's Investment
Adviser, effective as of the later of January 1, 1995 or upon
approval by shareholders of the Trust's contract with Eaton Vance.
This action was prompted primarily by the Trustee's view that the
Fund's performance since inception has not met their expectations
and Wellington's indication to the Trustees that it would not be
willing to continue indefinitely the fee reduction arrangement
currently in effect with respect to its investment advisory fee.
Prior to selecting Eaton Vance as the Fund's successor
investment adviser, the Trustees solicited proposals from a number
of investment advisory organizations with experience in managing
Massachusetts tax-exempt securities. Eaton Vance was selected from
among this group because of its commitment to providing
professional management and administrative services on a cost-
effective basis, while preserving the Fund's mission of
concentrating in securities issued on behalf of Massachusetts
health and educational institutions. In connection with their
deliberations, the Trustees reviewed materials furnished by Eaton
Vance relevant to their decision. Those materials included
information regarding Eaton Vance and its personnel, operations and
financial condition. Representatives of Eaton Vance reviewed with
the Board of Trustees Eaton Vance's philosophy of management,
performance, expectations and method of operation insofar as they
would relate to the Fund. In addition, the Board of Trustees
reviewed and discussed the terms and provisions of the Proposed
Advisory Agreement and the Administration Agreement discussed
below.
Based on their review, the Board of Trustees approved the
Proposed Advisory Agreement as being in the best interest of
shareholders and determined to recommend that shareholders of the
Fund vote to approve the Proposed Advisory Agreement. Subject to
shareholder approval, the Proposed Advisory Agreement is scheduled
to take effect on January 1, 1996, at which time Eaton Vance will
assume the responsibility of making the day-to-day investment
selections for the Fund.
Information about Eaton Vance. Eaton Vance is located at 24
Federal Street, Boston, MA. 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 its
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. Assets under management are
approximately $16 billion, of which $14 billion is in investment
companies and $9 billion is in municipal bonds.
If the Proposed Advisory Agreement is approved, the Fund will
be managed by Robert B. MacIntosh, a Vice President of Eaton Vance.
Mr. MacIntosh serves as portfolio manager of several Eaton Vance
sponsored funds including the Massachusetts Tax Free Portfolio.
Before joining Eaton Vance in 1991, Mr. MacIntosh was a portfolio
manager at Fidelity Management & Research Company.
The corporate structure of Eaton Vance is as follows: Eaton
Vance and Eaton Vance, Inc. ("EV") are both wholly-owned
subsidiaries of Eaton Vance Corp. ("EVC"), a publicly-held company.
Boston Management and Research ("BMR") and Eaton Vance are both
Massachusetts business trusts and registered investment advisers,
EV is a Trustee of BMR and Eaton Vance, and all of the issued and
outstanding shares of BMR are owned by 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
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 October 31, 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.
While the principal business of Eaton Vance and its affiliates
is serving as investment adviser (and often distributor and
administrator as well) to numerous registered investment companies,
Eaton Vance does engage in other businesses. EVC owns all the
stock of Energex Energy Corp., which engages in oil and gas
operations. In addition, Eaton Vance owns all the stock of
Northeast Properties, Inc., which is engaged in real estate
investment, consulting and management. Finally, 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.
Information about the Proposed Advisory Agreement. The
Proposed Advisory Agreement will remain in full force and effect
through February 28, 1997, and will continue in full force and
effect indefinitely thereafter, but only so long as such
continuance is specifically approved at least annually (i) by the
Board of Trustees of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the Investment Company
Act of 1940 (the "1940 Act")) of the Fund, and (ii) by the vote of
a majority of those Trustees of the Fund who are not interested
persons (as defined in the Act) of Eaton Vance or the Fund cast in
person at a meeting called for the purpose of voting on such
approval.
Under the terms of the Proposed Advisory Agreement, the Fund
will employ Eaton Vance to act as investment adviser for and to
manage the investment and reinvestment of the assets of the Fund
and to administer its affairs, subject to the supervision of its
Trustees. Eaton Vance will furnish to the Fund investment advice
and assistance; administrative services, office space, equipment
and clerical personnel related to its investment services; and
investment advisory, statistical and research facilities. Eaton
Vance has arranged for certain members of the Eaton Vance
organization to serve without salary as officers of the Fund.
Pursuant to the Proposed Advisory Agreement, Eaton Vance will
provide the Fund with investment research, advice and supervision,
will furnish an investment program and will determine what
securities will be purchased, held or sold by the Fund and what
portion, if any, of the Fund's assets will be held uninvested. The
Proposed Advisory Agreement requires Eaton Vance to pay the
salaries and fees of all officers of the Fund who are members of
the Eaton Vance organization and all personnel of Eaton Vance
performing services relating to research and investment activities.
The Proposed Advisory Agreement provides that the Fund will pay all
its expenses other than those expressly stated to be payable by
Eaton Vance, which expenses payable by the Fund shall include,
without implied 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 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
listing shares of the Fund with a stock exchange, (viii) expenses
of registering and qualifying the Fund under federal and state
securities laws and of preparing and filing registration statements
and amendments for such purposes, (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
Fund, (xvii) compensation and expenses of Trustees of the Fund who
are not members of the EVC 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, officers and
shareholders with respect thereto.
In consideration of the services, payments and facilities to
be furnished by Eaton Vance under the Proposed Advisory Agreement,
the Fund will pay Eaton Vance a monthly advisory fee equal to 0.35%
annually of the average daily net assets of the Trust. (Net assets
includes the value of assets attributable to both the Common Shares
and the APS outstanding.)
The Proposed Advisory Agreement provides that it may be
terminated at any time without penalty on sixty days' notice by
Eaton Vance or by the Trustees of the Fund or by vote of a majority
of the outstanding voting securities of the Fund, and that it shall
automatically terminate in the event of its assignment. The
Agreement provides that Eaton Vance may render services to others
and engage in other business activities. The Proposed Advisory
Agreement also provides that Eaton Vance shall not be liable for
any loss incurred in connection with the performance of its duties,
or action taken or omitted under the Proposed Advisory Agreement in
the absence of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reason of its reckless
disregard of its obligations or duties thereunder, or for any
losses which may be sustained in the acquisition, holding or
disposition of any security or other investment.
The information in this Proxy Statement with respect to the
Proposed Advisory Agreement is qualified in its entirety by
reference to, and made subject to, such Agreement, a copy of which
is attached to this Proxy Statement as Exhibit A.
Comparison of the Proposed and Current Advisory Agreements. The
Fund's Current Advisory Agreement with Wellington differs from the
Proposed Advisory Agreement in certain respects. First, Wellington
is required to provide to the Fund, subject to availability, office
facilities, equipment, personnel and services at Wellington's cost.
Under the Proposed Advisory Agreement these items are not provided;
rather, they are provided under the Administration Agreement with
Eaton Vance which will become operative if Proposal 1 is approved.
Second, in executing portfolio transactions Wellington must use its
best efforts to obtain the best net results and in doing so
Wellington may obtain research, analysis, advise and similar
services from broker-dealer firms. Under the Proposed Advisory
Agreement, Eaton Vance must use its best efforts to seek to execute
security transactions at advantageous prices and at reasonably
competitive commission rates. Eaton Vance may pay broker-dealers
providing brokerage and research services commissions in excess of
what others would have charged if the commission is reasonable in
relation to the value of services provided. To the extent
permitted by applicable law, Eaton Vance may also consider as a
factor in broker-dealer selection whether the broker-dealer has
sold or is selling shares of any investment company sponsored by
Eaton Vance or its affiliates. Finally, Wellington is paid an
investment advisory fee of .30% of the Fund's average weekly net
assets. This fee is reduced if the annualized expenses of the Fund
(other than expenses attributable solely to the offering or
existence of any preferred shares) exceed, .90% of the average net
assets of the Fund attributable to the Common Shares. The amount
of any reduction shall be equal to the lesser of $30,000 or the
product of excess expenses and a fraction, the numerator of which
is $30,000 and the denominator of which is $76,000 (assuming
expense reduction arrangements are in effect with certain other
service providers). Pursuant to arrangements between the Fund and
Wellington subsequent to the date of the Current Advisory
Agreement, the forgoing expense reduction limit of $30,0000 was
increased to $41,000. Under the Proposed Advisory Agreement, Eaton
Vance will receive 0.35% annually of the average daily net assets
of the Fund. Eaton Vance has agreed to a fee reduction in its
Administration Agreement discussed below.
Additional Benefits of the Proposal to Eaton Vance. If the
Proposed Advisory Agreement is approved, then in addition to
receipt of advisory fees, Eaton Vance may obtain other benefits
from its relationship to the Fund. In an effort to reduce costs,
the Trustees of the Fund will replace State Street Bank and Trust
Company, custodian and transfer agent of the Fund, with Investors
Bank & Trust Company ("IBT"), if this Proposal is approved. Until
November 13, 1995, EVC owned 77.3% of the stock of IBT. On
November 13, such stock was distributed to the shareholders of EVC
in a tax-free transaction in conjunction with a public offering of
IBT stock. Mr. Clay, a director of EVC, owns approximately 13% of
the stock of IBT and other individuals at Eaton Vance received IBT
stock as a result of their ownership of EVC stock in the above
transaction. Under the 1940 Act, however, the Fund and IBT are not
considered affiliated persons.
The Trustees have also approved an Administration Agreement
with Eaton Vance, effective with implementation of the Proposed
Advisory Agreement. Under this agreement, Eaton Vance will manage
and administer the Fund's business affairs and, in connection
therewith, furnish for the use of the Fund office space and all
necessary office facilities, equipment and personnel for
administering the affairs of the Fund. As compensation, Eaton
Vance will receive a fee equivalent to 0.15% annually of the
average daily net assets of the Fund. (Net assets includes the
value of assets attributable to both the Common Shares and the APS
outstanding.) Eaton Vance will, from time to time, waive all or a
part of such fee so that the annual normal operating expenses of
the Fund shall not exceed 1.00% of its average daily net assets for
the year ending December 31, 1996, 0.95% for the year ending
December 31, 1997 or 0.95% for the year ending December 31, 1998;
provided that in no event shall Eaton Vance be obligated to
reimburse the Fund for any amount in excess of its fee. The
Administration Agreement has the same duration and termination
provisions as the Proposed Advisory Agreement. The Trustees
anticipate that the Administration Agreement will reduce overall
expenses to the Fund because certain legal, accounting and
administration services will no longer be required to be furnished
by outside service providers. Shareholder approval of the
Administration Agreement is not required under the 1940 Act.
Expense Comparison with New Service Providers. As set forth above,
if Eaton Vance becomes investment adviser to the Fund, it will also
become administrator and IBT will become custodian and transfer
agent. Shareholders in the Fund's Dividend Reinvestment Plan are
also hereby notified that IBT will become the successor agent under
the Plan. Although the advisory fees payable under the Proposed
Advisory Agreement are higher than those under the Current Advisory
Agreement, it is anticipated that the forgoing changes, combined
with other changes designed to reduce ongoing costs, will reduce
the Fund's overall operating expenses.
The following is a pro forma expense comparison of the current
and proposed arrangements for the six-months ended June 30, 1995
(annualized):
Pro forma Current and Projected Operating Expenses
Current Current
Operating Operating
Expenses Expenses
(net of (before Projectedfee reduc- reduc- Operating
tions)(a) tions)(a) Expenses (b) Advisory Fees 0.19% 0.30% 0.35%
Administration, Custody 0.24% 0.32% 0.22%
and Fund Accounting Fees
Shareholder Servicing 0.02% 0.07% 0.08%
and Transfer Agent Fees
Miscellaneous Expenses 0.58% 0.58% 0.35%
1.03% 1.27% 1.00%
(a) Current expenses were computed as of June 30, 1995
(annualized). Certain of the Fund's current service providers
including its current Investment Adviser have agreed to
certain fee reductions which have had the effect of reducing
current operating expenses.
(b) Projected operating expenses reflect anticipated actual
expenses under the new contractual arrangements. If
necessary, Eaton Vance has agreed to a contractual fee waiver
in its administration agreement under certain circumstances
of up to 0.15% of average daily net assets.
The foregoing comparison is based on anticipated expenses and
actual expenses will vary.
For the fiscal year ended December 31, 1994, Wellington earned
$116,485 in aggregate compensation from the Fund under the Current
Advisory Agreement (although it waived $48,828 of such fees).
Under the Proposed Advisory Agreement, Eaton Vance would have
received $135,899 for advisory services, a 17% increase, reflecting
no fee waivers.
Eaton Vance manages over $9 billion in municipal bond assets.
The other Massachusetts tax-free portfolios managed by Eaton Vance
(or its affiliate adviser) that are registered investment companies
are (1) the Massachusetts Tax Free Portfolio, with net assets of
over $305 million on October 31, 1995 and a current advisory fee
rate of 0.46% of average daily net assets and (2) the Massachusetts
Limited Maturity Tax Free Portfolio, with net assets of over $108
million on October 31, 1995 and a current advisory fee rate of
0.46% of average daily net assets. Eaton Vance receives no
administration fees in connection with these funds.
Required Vote
An affirmative vote of a majority of the outstanding voting
securities of the Fund (within the meaning of the 1940 Act) will be
required to approve the Proposed Advisory Agreement. Under the
1940 Act, a "majority of the outstanding voting securities" of an
issuer means the affirmative vote by holders of the lesser of (a)
67% or more of the issuer's outstanding voting securities present
at a meeting if holders of more than 50% of the issuer's
outstanding voting securities are present in person or by proxy or
(b) more than 50% of the issuer's outstanding voting securities.
Common Shares and APS vote as one class.
The Board of Trustees of the Fund unanimously recommends that
the shareholders vote FOR approval of the Proposed Advisory
Agreement. If the proposal does not receive the requisite
shareholder approval, then the Trustees will meet to consider
possible alternatives, which might include resubmission of the
Proposed Advisory Agreement for approval.
CERTAIN INFORMATION REGARDING
THE TRUSTEES AND OFFICERS OF THE FUND
If the Proposal is approved, certain changes will occur in the
composition of the Board of Trustees and officers of the Fund.
Messrs. James F. Carlin, Thomas H. Green, Walter B. Prince, Edward
M. Murphy and James M. Storey will remain Trustees of the Fund.
Messrs. Herman B. Leonard and Rudolph F. Pierce and Ms. Susan Wayne
will resign, effective upon the commencement of the Proposed
Advisory Agreement. Reducing the size of Trustees from eight to
five will have the effect of reducing the Fund's operating
expenses. None of the five remaining Trustees have any affiliation
with Eaton Vance, although Mr. Murphy will be considered an
"interested person" of the Fund within the meaning of the 1940 Act
as result of his status as an affiliated person of a broker-dealer.
There is no current intention to further alter the composition of
the Board, and any additions would be subject to shareholder
approval to the extent required by law.
The current officers of the Fund are Walter B. Prince,
Chairman; James M. Storey, President and Treasurer; and John R.
LeClaire, Secretary.
If the Proposal is approved, then effective January 1, 1996,
Mr. Prince will continue to serve as Chairman and the other
officers of the Fund, with their ages indicated in parenthesis,
will be as follows: Thomas J. Fetter, (52), President; Robert B.
MacIntosh, (38), Vice President; James L. O'Connor (50), Treasurer;
Douglas C. Miller (33), Assistant Treasurer and Assistant
Secretary; and Eric G. Woodbury (38), Secretary. All of the new
officers of the Fund have been employed by Eaton Vance, or their
predecessors, for more than five years except that Mr. Miller,
Assistant Vice President of Eaton Vance, was an Audit Senior in the
Investment Company Practice Group of Deloitte & Touche LLP from
1987 to 1991; and Mr. Woodbury, Vice President of Eaton Vance since
February 1993, was an associate attorney at Dechert Price & Rhoads
and Gaston Snow & Ely Bartlett prior thereto. All of the new
officers are officers of Eaton Vance and EV, and stockholders of
EVC. Because of their positions with Eaton Vance and EV or their
ownership of stock of EVC, the officers of the Fund will benefit
from the advisory and administration fees paid by the Fund to Eaton
Vance.
NOTICE TO BANKS AND BROKER/DEALERS
The Fund has previously solicited all Nominee and
Broker/Dealer accounts as to the number of additional proxy
statements required to supply owners of shares. Should additional
proxy material be required for beneficial owners, please forward
such requests to 225 Franklin Street, Boston, MA 02110.
ADDITIONAL INFORMATION
The expense of preparing, printing and mailing this Proxy
Statement and enclosures and the cost of soliciting proxies on
behalf of the Board of Trustees of the Fund will be borne by Eaton
Vance. Proxies will be solicited by mail and may be solicited in
person or by telephone or telegraph by officers of the Fund, by
personnel of Eaton Vance, by broker-dealer firms or by a
professional solicitation organization. Eaton Vance will reimburse
banks, broker-dealer firms, and other persons holding shares
registered in their names or in the names of their nominees, for
their expenses incurred in sending proxy material to and obtaining
proxies from the beneficial owners of such shares.
All proxy cards solicited by the Board of Trustees that are
properly executed and received by the Secretary prior to the
meeting, and which are not revoked, will be voted at the meeting.
Shares represented by such proxies will be voted in accordance with
the instructions thereon. If no specification is made on the proxy
card, it will be voted for the matters specified on the proxy card.
All proxies not voted will not be counted toward establishing a
quorum. Shareholders should note that while votes to abstain and
"broker non-votes" will be counted toward establishing a quorum,
passage of any proposal being considered at the meeting will occur
only if a sufficient number of votes are cast for the Proposal.
Accordingly, votes to abstain, broker non-votes and votes against
will have the same effect in determining whether the Proposal is
approved.
In the event that sufficient votes by the shareholders of the
Fund in favor of any Proposal set forth in the Notice of this
meeting are not received by December 29, 1995, the persons named as
attorneys in the enclosed proxy may propose one or more
adjournments of the meeting to permit further solicitation of
proxies. A shareholder vote may be taken on one or more of the
Proposals in this Proxy Statement prior to such adjournment if
sufficient votes have been received and it is otherwise
appropriate. Any such adjournment will require the affirmative
vote of the holders of a majority of the shares present in person
or by proxy at the session of the meeting to be adjourned. The
persons named as attorneys in the enclosed proxy will vote in favor
of such adjournment those proxies which they are entitled to vote
in favor of the Proposal for which further solicitation of proxies
is to be made. They will vote against any such adjournment those
proxies required to be voted against such Proposal. The costs of
any such additional solicitation and of any adjourned session will
be borne by Eaton Vance.
The Fund will furnish, without charge a copy of the Fund's
Annual Report and its most recent Semi-Annual Report to any
shareholder upon request. Shareholders desiring to obtain a copy
of such reports should write to the Fund at 225 Franklin Street,
Boston, MA 02110, or call 1-800-426-5523.
SHAREHOLDER PROPOSALS
As disclosed in the proxy materials for the Fund's 1995 Annual
Meeting, any proposals of shareholders that are intended to be
presented at the Fund's 1996 Annual Meeting of Shareholders must be
received at the Fund's principal offices no later than December 1,
1995 and must comply with all other legal requirements in order to
be included in the Fund's proxy statement and form of proxy for
that meeting.
The Massachusetts Health & Education
Tax-Exempt Trust
November 30, 1995 Exhibit A
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of January, 1996, between The
Massachusetts Health & Education Tax-Exempt Trust, a Massachusetts
business trust (the "Trust"), and Eaton Vance Management, a
Massachusetts business trust (the "Adviser").
1. Duties of the Adviser. The Trust hereby employs the
Adviser to act as investment adviser for and to manage the
investment and reinvestment of the assets of the Trust and to
administer its affairs, subject to the supervision of the Trustees
of the Trust, for the period and on the terms set forth in this
Agreement.
The Adviser hereby accepts such employment, and undertakes to
afford to the Trust the advice and assistance of the Adviser's
organization in the choice of investments and in the purchase and
sale of securities for the Trust and to furnish for the use of the
Trust office space and all necessary office facilities, equipment
and personnel for servicing the investments of the Trust and for
administering its affairs and to pay the salaries and fees of all
officers and Trustees of the Trust who are members of the Adviser's
organization and all personnel of the Adviser performing services
relating to research and investment activities. The Adviser shall
for all purposes herein be deemed to be an independent contractor
and shall, except as otherwise expressly provided or authorized,
have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment
management and supervision as the Trust may from time to time
consider necessary for the proper supervision of the Trust. As
investment adviser to the Trust, the Adviser shall furnish
continuously an investment program and shall determine from time to
time what securities and other investments shall be acquired,
disposed of or exchanged and what portion of the Trust's assets
shall be held uninvested, subject always to the applicable
restrictions of the Declaration of Trust, By-Laws and registration
statement of the Trust under the Investment Company Act of 1940,
all as from time to time amended. Should the Trustees of the Trust
at any time, however, make any specific determination as to
investment policy for the Trust and notify the Adviser thereof in
writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly
notified that such determination has been revoked. The Adviser
shall take, on behalf of the Trust, all actions which it deems
necessary or desirable to implement the investment policies of the
Trust.
The Adviser shall place all orders for the purchase or sale of
portfolio securities for the account of the Trust either directly
with the issuer or with brokers or dealers selected by the Adviser,
and to that end the Adviser is authorized as the agent of the Trust
to give instructions to the custodian of the Trust as to deliveries
of securities and payments of cash for the account of the Trust.
In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall use its best efforts to
seek to execute security transactions at prices which are
advantageous to the Trust and (when a disclosed commission is being
charged) at reasonably competitive commission rates. In selecting
brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Adviser and the Adviser
is expressly authorized to pay any broker or dealer who provides
such brokerage and research services a commission for executing a
security transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the
overall responsibilities which the Adviser and its affiliates have
with respect to accounts over which they exercise investment
discretion. Subject to the requirement set forth in the second
sentence of this paragraph and to the requirement of applicable
law, the Adviser is authorized to consider, as a factor in the
selection of any broker or dealer with whom purchase or sale orders
may be placed, the fact that such broker or dealer has sold or is
selling shares of any one or more investment companies sponsored by
the Adviser or its affiliates.
2. Compensation of the Adviser. For the services, payments
and facilities to be furnished hereunder by the Adviser, the
Adviser shall be entitled to receive from the Trust compensation in
an amount equal to 0.35% annually of the average daily net assets
of the Trust. (Net assets includes assets attributable to all
outstanding securities of the Trust.)
Such compensation shall be paid monthly in arrears on the last
business day of each month. The Trust's daily net assets and gross
income shall be computed in accordance with the Declaration of
Trust of the Trust and any applicable votes and determinations of
the Trustees of the Trust. In case of initiation or termination of
the Agreement during any month with respect to the Trust, the fee
for that month shall be based on the number of calendar days during
which it is in effect. The Adviser may, from time to time, waive
all or a part of the above compensation.
3. Allocation of Charges and Expenses. It is understood
that the Trust will pay all expenses other than those expressly
stated to be payable by the Adviser hereunder, which expenses
payable by the Trust shall include, without implied limitation, (i)
expenses of maintaining the Trust and continuing its existence,
(ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the
acquisition, holding and disposition of securities and other
investments, (iv) auditing, accounting and legal expenses, (v)
taxes and interest, (vi) governmental fees, (vii) expenses of
listing shares of the Trust with a stock exchange, (viii) expenses
of registering and qualifying the Trust under federal and state
securities laws and of preparing and filing registration statements
and amendments for such purposes, (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 Trust (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
Trust, (xv) expenses for servicing shareholder accounts, (xvi) any
direct charges to shareholders approved by the Trustees of the
Trust, (xvii) compensation and expenses of Trustees of the Trust
who are not members of the Adviser's organization, and (xviii) such
non-recurring items as may arise, including expenses incurred in
connection with litigation, proceedings and claims and the
obligation of the Trust to indemnify its Trustees and officers with
respect thereto.
4. Other Interests. It is understood that Trustees and
officers of the Trust and shareholders of the Trust are or may be
or become interested in the Adviser as trustees, shareholders or
otherwise and that trustees, officers and shareholders of the
Adviser are or may be or become similarly interested in the Trust,
and that the Adviser may be or become interested in the Trust as
shareholders or otherwise. It is also understood that trustees,
officers, employees and shareholders of the Adviser may be or
become interested (as directors, trustees, officers, employees,
shareholders or otherwise) in other companies or entities
(including, without limitation, other investment companies) which
the Adviser may organize, sponsor or acquire, or with which it may
merge or consolidate, and which may include the words "Eaton Vance"
or "Boston Management and Research" or any combination thereof as
part of their name, and that the Adviser or its subsidiaries or
affiliates may enter into advisory or management agreements or
other contracts or relationships with such other companies or
entities.
5. Limitation of Liability of the Adviser. The services of
the Adviser to the Trust are not to be deemed to be exclusive, the
Adviser being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Adviser, the Adviser shall not
be subject to liability to the Trust or to any shareholder of the
Trust for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses which may be
sustained in the acquisition, holding or disposition of any
security or other investment.
6. Sub-Investment Advisers. The Adviser may employ one or
more sub-investment advisers from time to time to perform such of
the acts and services of the Adviser, including the selection of
brokers or dealers to execute the Trust's portfolio security
transactions, and upon such terms and conditions as may be agreed
upon between the Adviser and such investment adviser and approved
by the Trustees of the Trust.
7. Duration and Termination of this Agreement. This
Agreement shall become effective upon the date of its execution,
and, unless terminated as herein provided, shall remain in full
force and effect through and including February 28, 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 the Adviser or the
Trust cast in person at a meeting called for the purpose of voting
on such approval.
Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Agreement without the
payment of any penalty, by action of Trustees of the Trust or the
trustees of the Adviser, as the case may be, and the Trust may, at
any time upon such written notice to the Adviser, terminate this
Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate
automatically in the event of its assignment.
8. Amendments of the Agreement. This Agreement may be
amended by a writing signed by both parties hereto, provided that
no amendment to this Agreement shall be effective until approved
(i) by the vote of a majority of those Trustees of the Trust who
are not interested persons of the Adviser or the Trust cast in
person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the outstanding voting
securities of the Trust.
9. Limitation of Liability. The names "The Massachusetts
Health & Education Tax Exempt Trust" and "Trustees of the
Massachusetts Health & Education Tax Exempt Trust" refer,
respectively, to the Trust and the Trustees of the Trust, as
trustees but not individually or personally, acting from time to
time under the Trust's Amended and Restated Agreement and
Declaration of Trust dated April 20, 1993, as amended, which is
hereby referred to and a copy of which is on file at the office of
the Secretary of the Commonwealth of Massachusetts and the
principal office of the Trust. The obligations of "The
Massachusetts Health & Education Tax Exempt Trust" entered into in
the name or on behalf thereof by any of the Trustees,
representatives or agents of the Trust are made not individually,
but in such capacities, and are not binding upon any of the
Trustees, holders of shares of beneficial interest of the Trust or
representatives of the Trustees personally, but bind only the Trust
assets, and all persons dealing with the Trust must look solely to
the Trust property for the enforcement of any claims against the
Trust.
10. 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 of the Trust" shall mean the vote of
the lesser of (a) 67 per centum or more of the shares of the Trust
present or represented by proxy at the meeting if the holders of
more than 50 per centum of the outstanding shares of the Trust are
present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
THE MASSACHUSETTS HEALTH &
EDUCATION TAX-EXEMPT TRUST
By:
President
EATON VANCE MANAGEMENT
By:
Vice President, and not individually
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
Special Meeting of Shareholders, December 29, 1995
Proxy Solicited on Behalf of Board of Trustees
HOLDERS OF AUCTION PREFERRED SHARES
The undersigned holder of Auction Preferred Shares of The
Massachusetts Health & Education Tax-Exempt Trust, a Massachusetts
business trust (the "Trust"), hereby appoints WALTER B. PRINCE and
JAMES M. STOREY, and each of them, with full power of substitution
and revocation, as proxies to represent the undersigned at the
Special Meeting of Shareholders of the Trust to be held at the
Goodwin, Procter & Hoar Conference Center, Second Floor, Exchange
Place, Boston, Massachusetts 02109, on Friday, December 29, 1995 at
10:00 A.M., and at any and all adjournments thereof, and to vote
all Auction Preferred Shares of the Trust which the undersigned
would be entitled to vote, with all powers the undersigned would
possess if personally present, in accordance with the instructions
on this proxy.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE PROPOSAL SET FORTH ON THE REVERSE AND
IN THE DISCRETION OF THE PROXIES WITH RESPECT TO ALL OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE SPECIAL MEETING AND ANY
ADJOURNMENTS THEREOF. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE
ACCOMPANYING NOTICE OF SPECIAL MEETING AND PROXY STATEMENT.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the books of
the Trust. Joint owners should each sign personally. Trustees and
other fiduciaries should indicate the capacity in which they sign,
and where more than one name appears, a majority must sign. If a
corporation, this signature should be that of an authorized officer
who should state his or her title.
HAS YOUR ADDRESS CHANGED?
PLEASE MARK VOTES
AS IN THIS EXAMPLE
To approve an With-
Investment Advisory Agreement For held Against
with Eaton Vance Management.
RECORD DATE SHARES:
Please be sure to sign
and date this Proxy. Mark Box at right if address change
has been noted on the reverse side
Date of this card.
Shareholder sign here Co-owner sign here
DETACH CARD
THE MASSACHUSETTS HEALTH & EDUCATION
TAX-EXEMPT TRUST
Dear Shareholder:
Please take note of the important information enclosed with this
Proxy Ballot. There are issues related to the management and
operation of the Trust that require your immediate attention and
approval. These are discussed in detail in the enclosed proxy
materials.
Your vote counts, and you are strongly encouraged to exercise your
right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your
proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Special Meeting of
Shareholders on December 29, 1995.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
The Massachusetts Health & Education Tax-Exempt Trust
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
Special Meeting of Shareholders, December 29, 1995
Proxy Solicited on Behalf of Board of Trustees
HOLDERS OF COMMON SHARES
The undersigned holder of Common Shares of The Massachusetts Health
& Education Tax-Exempt Trust, a Massachusetts business trust (the
"Trust"), hereby appoints WALTER B. PRINCE and JAMES M. STOREY, and
each of them, with full power of substitution and revocation, as
proxies to represent the undersigned at the Special Meeting of
Shareholders of the Trust to be held at the Goodwin, Procter & Hoar
Conference Center, Second Floor, Exchange Place, Boston,
Massachusetts 02109, on Friday, December 29, 1995 at 10:00 A.M.,
and at any and all adjournments thereof, and to vote all Common
Shares of the Trust which the undersigned would be entitled to
vote, with all powers the undersigned would possess if personally
present, in accordance with the instructions on this proxy.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE PROPOSAL SET FORTH ON THE REVERSE AND
IN THE DISCRETION OF THE PROXIES WITH RESPECT TO ALL OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE SPECIAL MEETING AND ANY
ADJOURNMENTS THEREOF. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE
ACCOMPANYING NOTICE OF SPECIAL MEETING AND PROXY STATEMENT.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the books of
the Trust. Joint owners should each sign personally. Trustees and
other fiduciaries should indicate the capacity in which they sign,
and where more than one name appears, a majority must sign. If a
corporation, this signature should be that of an authorized officer
who should state his or her title.
HAS YOUR ADDRESS CHANGED?
PLEASE MARK VOTES
AS IN THIS EXAMPLE
To approve an Investment
Advisory Agreement With- on Vance
For Held Against
Management
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Mark Box at right if
address change has
been noted on the
of this card.
Date
Shareholder sign here Co-owner sign here
DETACH CARD
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
Dear Shareholder:
Please take note of the important information enclosed with this
Proxy Ballot. There are issues related to the management and
operation of the Trust that require your immediate attention and
approval. These are discussed in detail in the enclosed proxy
materials.
Your vote counts, and you are strongly encouraged to exercise your
right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares
shall be voted. Then sign the card, detach it and return your
proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Special Meeting of
Shareholders on December 29, 1995.
Thank you in advance for your prompt consideration of these
matters.
Sincerely,
The Massachusetts Health & Education Tax-Exempt Trust