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. )
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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.
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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
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Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
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the offsetting fee was paid previously. Identify the previous
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THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
225 FRANKLIN STREET, BOSTON, MASS. 02110
December 1, 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.
Sincerely,
/s/Walter B. Prince
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 a new 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
/s/James M. Storey
JAMES M. STOREY
President
December 1, 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
December 1, 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 December 4, 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 2,307,763 Common
Shares, $.01 par value per share ("Common Shares") and 200
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, 1996
or upon approval by shareholders of the Fund'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, Massachusetts, 02110. 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 Fund. (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 the Proposal 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 $30,000 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 the
parent holding company of IBT, Investors Financial Services
Company ("IFSC"). On November 13, such stock was distributed to
the shareholders of EVC in a tax-free transaction in conjunction
with a public offering of IFSC stock. Mr. Clay, a director of
EVC, owns approximately 13% of the stock of IFSC and other
individuals at Eaton Vance received IFSC 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 administration 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 an expense comparison of the current and pro
forma proposed arrangements for the six-months ended June 30,
1995 (annualized):
COMPARATIVE FEE TABLE
Annual Fund Operating Expenses
(as a percentage of average net assets)
Current Projected
Operating Operating
Expenses 1 Expenses 2
Advisory Fees 0.19% 0.35%
Administration, Custody and 0.24% 0.22%
Fund Accounting Fees
Shareholder Servicing and
Transfer Agent Fees 0.02% 0.08%
Miscellaneous Expenses 0.58% 0.35%
Total Fund Operating Expenses 1.03% 1.00%
Example
1 year 3 years 5 years 10 years
Current Expenses 3 $11 $33 $57 $126
Proposed Expenses $10 $32 $55 $122
1 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. If such arrangements were not in effect, the
expenses would have been 0.30% for Advisory Fees, 0.32% for
Administrative, Custody and Fund Accounting Fees, 0.02% for
Shareholder Servicing and Transfer Agent Fees, and 0.58% for
Miscellaneous Expenses; Total Fund Operating Expenses would have
been 1.27%.
2 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.
3 Had the expense arrangements described in footnote (1) not
been in place, expenses would have been $13, $40, $70 and $153
for the 1,3,5 and 10 year periods, respectively.
The following illustrates the expenses on a $1,000 investment
under the current and proposed fees and the expenses stated
above, assuming (1) a 5% annual return and (2) sale of shares at
the end of each time period (not including brokerage
commissions):
The purpose of this example and the table is to assist investors
in understanding the various costs and expenses of investing in
shares of the Fund. The example above should not be considered a
representation of past or future expenses of the Fund. Actual
expenses may vary from year to year and may be higher or lower
than those shown above.
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. To the knowledge of the Fund 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 (30), 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 and IFSC. Because of their positions with Eaton Vance and
EV or their ownership of stock of EVC and IFSC, the officers of
the Fund will benefit from the advisory and administration fees
paid by the Fund to Eaton Vance and the custody and transfer
agency fees paid to IFSC.
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
have been 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
December 1, 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 EDWARD M. MURPHY, 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 Investment Advisory Agreement with Eaton Vance
Management.
With-
For held Against
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 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
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 EDWARD
M. MURPHY, 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 Eaton Vance
Management.
With-
For held Against
RECORD DATE SHARES:
Please be sure to sign and date this Proxy.
Mark Box at right if comments or address change have been noted
on the reverse side 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