AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1998.
1933 ACT FILE NO.
1940 ACT FILE NO. 811-09155
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [ X ]
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO.
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ X ]
AMENDMENT NO.
(CHECK APPROPRIATE BOX OR BOXES)
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
----------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(617) 482-8260
--------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
ALAN R. DYNNER
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
MARK P. GOSHKO, ESQ. THOMAS A. HALE, ESQ.
KIRKPATRICK & LOCKHART LLP SKADDEN, ARPS, SLATE, MEAGHER
ONE INTERNATIONAL PLACE & FLOM LLP (ILLINOIS)
BOSTON, MASSACHUSETTS 02110 333 WACKER DRIVE
CHICAGO, ILLINOIS 60606
Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box.[ ]
It is proposed that this filing will become effective (check appropriate
box):
[X] when declared effective pursuant to Section 8(c)
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED(2) PER UNIT(1) OFFERING PRICE(1)(2) FEE(1)(2)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of Beneficial Interest 2,666,667 $15.00 $40,000,000 $11,120
- --------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Includes shares which may be offered by the Underwriters pursuant to an option to cover over-allotments.
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
<TABLE>
<CAPTION>
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-2
--------------------------
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------ ------------------
<S> <C> <C>
1..................... Outside Front Cover Front Cover Page
2..................... Inside Front and Outside Back Cover Page Front and Back Cover Page
3..................... Fee Table and Synopsis Prospectus Summary; Trust Expenses
4..................... Financial Highlights Not Applicable
5..................... Plan of Distribution Front Cover Page; Prospectus Summary;
Underwriting; Dividend Reinvestment
Plan
6..................... Selling Shareholders Not Applicable
7..................... Use of Proceeds Use of Proceeds; Investment Objective,
Policies and Risks
8..................... General Description of the Registrant Management of the Trust; Investment
Objective, Policies and Risks; Description
of Capital Structure
9..................... Management Management of the Trust; Shareholder Servicing
Agent, Custodian and Transfer Agent
10...................... Capital Stock, Long-Term Debt, Distributions and Taxes; Dividend
and Other Securities Reinvestment Plan; Description of Capital
Structure
11...................... Defaults and Arrears on Senior Not Applicable
Securities
12...................... Legal Proceedings Not Applicable
13...................... Table of Contents of the Table of Contents of the
Statement of Additional Statement of Additional
Information Information
PART B STATEMENT OF
ITEM NO. ITEM CAPTION ADDITIONAL INFORMATION CAPTION
- -------- ------------ ------------------------------
14...................... Cover Page Cover Page
15...................... Table of Contents Table of Contents
16...................... General Information and History Not Applicable
17...................... Investment Objective and Additional Investment Information and
Policies Restrictions
18...................... Management Trustees and Officers;
Investment Advisory and
Other Services
19...................... Control Persons and Principal Other Information
Holders of Securities
20...................... Investment Advisory and Other Investment Advisory and Other
Services Services
21...................... Brokerage Allocation and Other Portfolio Trading
Practices
22...................... Tax Status Taxes
23...................... Financial Statements Financial Statements
</TABLE>
<PAGE>
[LOGO]
SUBJECT TO COMPLETION - DATED DECEMBER _____ , 1998
_______________ SHARES
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
---------------
Eaton Vance New Jersey Municipal Income Trust (the "Trust") is a newly
organized closed-end fund. The Trust's investment objective is to provide
current income exempt from regular federal income tax and New Jersey state
personal income taxes. This income will be earned by investing primarily in
investment grade New Jersey municipal securities. The Trust may also invest a
portion of its assets in higher yielding municipal securities of lesser quality.
The Trust's net asset value and distribution rate will vary, and may be affected
by several factors, including changes in interest rates and the credit quality
of New Jersey municipal issuers. Fluctuations in net asset value may be
magnified as a result of the Trust's use of leverage. An investment in the Trust
may not be appropriate for all investors, particularly those subject to the
federal alternative minimum tax. There is no assurance that the Trust will
achieve its investment objective. See "Investment Objective, Policies and Risks"
beginning at page _____.
The Trust's investment adviser is Eaton Vance Management (the "Eaton
Vance" or "Adviser"). Eaton Vance manages 44 different municipal bond funds with
combined assets of over $8 billion.
(CONTINUED ON THE FOLLOWING PAGE)
---------------
PER SHARE TOTAL
--------- -----
Public Offering Price.................................... $15.00 $ 15.00
Underwriting Discounts and Commissions................... None $ 0
Proceeds, before expenses, to the Trust.................. $15.00 $
It is expected that delivery of the Shares will be made in New York
City on or about January ________, 1999.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------
PAINEWEBBER INCORPORATED
---------------
THE DATE OF THIS PROSPECTUS IS ________________, 1999.
RED HERRING LANGUAGE: THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
(CONTINUED FROM THE COVER PAGE)
The Trust is offering shares of beneficial interest, par value $0.01
per share ("Shares"). The underwriters may also purchase up to an additional
_____________ Shares at the public offering price within 45 days from the date
of this Prospectus. Assuming these additional Shares are purchased, the total
proceeds to the Trust would be $_____________. Eaton Vance Management or an
affiliate (not the Trust) from its own assets will pay a commission to the
Underwriters in the amount of ____% of the Public Offering Price per Share for
the sale of the Shares. Offering expenses of $______________ ($_____________ if
the Underwriters' over-allotment option is exercised in full) will be deducted
from net proceeds. Offering expenses include $_________ payment to the
Underwriters in partial reimbursement of their expenses. Eaton Vance or an
affiliate will pay all offering expenses that exceed $0.03 per Share.
Prior to this offering, there has been no market for the Shares. The
Trust has applied for listing of the Shares on the New York Stock Exchange under
the symbol "____." THE SHARES OF CLOSED-END INVESTMENT COMPANIES, SUCH AS THE
TRUST, HAVE FREQUENTLY TRADED AT A DISCOUNT TO THEIR NET ASSET VALUES. INVESTORS
IN THIS OFFERING SHOULD NOTE THAT THE SHARES MAY LIKEWISE TRADE AT A DISCOUNT TO
NET ASSET VALUE. THIS RISK MAY BE GREATER FOR INVESTORS WHO SELL THEIR SHARES IN
A RELATIVELY SHORT PERIOD AFTER COMPLETION OF THE PUBLIC OFFERING.
The Trust expects to use financial leverage through the issuance of
preferred shares, initially equal to approximately 35% of its total assets
(including the amount obtained through leverage). The Trust intends to use
leverage if it is expected to result in higher income to Shareholders over time.
Use of financial leverage creates an opportunity for increased income but, at
the same time, creates special risks. There can be no assurance that a
leveraging strategy will be successful. SEE "INVESTMENT OBJECTIVE, POLICIES AND
RISKS -- USE Of LEVERAGE AND RELATED RISKS" AT PAGE ____ AND "DESCRIPTION OF
CAPITAL STRUCTURE" AT PAGE ____.
This Prospectus sets forth concisely information you should know
before investing in the Shares of the Trust. Please read and retain this
Prospectus for future reference. A Statement of Additional Information dated ,
1998, has been filed with the Securities and Exchange Commission ("SEC") and can
be obtained without charge by calling 1-800-225-6265 or by writing to the Trust.
A table of contents to the Statement of Additional Information is located at
page of this Prospectus. This Prospectus incorporates by reference the entire
Statement of Additional Information. The Statement of Additional Information is
available along with other Trust-related materials at the SEC's internet web
site (http://www.sec.gov). The securities of the Trust may not be sold until the
registration statement on file with the Securities and Exchange Commission
becomes effective. The Trust's address is 24 Federal Street, Boston,
Massachusetts 02110 and its telephone number is 1-800-225-6265.
THE TRUST'S SHARES DO NOT REPRESENT A DEPOSIT OR OBLIGATION OF, AND ARE
NOT GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION,
AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
<TABLE>
TABLE OF CONTENTS
PAGE PAGE
<S> <C>
Prospectus Summary.............................. Description of Capital Structure...............................
Trust Expenses.................................. Underwriting...................................................
The Trust....................................... Shareholder Servicing Agent, Custodian
Use of Proceeds................................. and Transfer Agent..........................................
Investment Objective, Policies and Risks........ Legal Opinions.................................................
Management of the Trust......................... Additional Information.........................................
Distributions and Taxes......................... Table of Contents for the
Dividend Reinvestment Plan...................... Statement of Additional Information.........................
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
NEITHER THE TRUST NOR THE UNDERWRITERS HAVE AUTHORIZED ANY OTHER PERSON TO
PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. NEITHER THE TRUST NOR THE
UNDERWRITERS ARE MAKING AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION
WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION
APPEARING IN THIS PROSPECTUS IS ACCURATE AS OF THE DATE ON THE FRONT COVER ONLY.
1
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MORE DETAILED INFORMATION INCLUDED ELSEWHERE IN THIS PROSPECTUS AND THE
STATEMENT OF ADDITIONAL INFORMATION.
THE TRUST...... Eaton Vance New Jersey Municipal Income Trust (the "Trust")
is a newly organized closed-end fund. The Trust offers
investors the opportunity to receive current income exempt
from regular federal income tax and New Jersey state
personal income taxes through a professionally managed
portfolio of New Jersey municipal obligations. Investments
are based on Eaton Vance Management's ("Eaton Vance" or the
"Adviser") research and ongoing credit analysis, the
underlying materials for which are generally not available
to individual investors. An investment in the Trust may not
be appropriate for all investors, and there is no assurance
that the Trust will achieve its investment objective.
THE OFFERING... The Trust is offering __________ shares of beneficial
interest, par value $0.01 per share (the "Shares"), through
a group of underwriters (the "Underwriters") led by
PaineWebber Incorporated. The Underwriters have been granted
an option to purchase up to ____________ additional Shares
solely to cover over-allotments, if any. The initial public
offering price is $15.00 per share. The minimum purchase in
this offering is 100 Shares ($1,500).
NO SALES CHARGE.. The Shares will be sold in the initial public offering
without any sales load or underwriting discounts payable by
investors or the Trust. Eaton Vance or an affiliate (not the
Trust) from its own assets will pay a commission to the
Underwriters in connection with sales of the Shares in this
offering. See "Underwriting."
INVESTMENT
OBJECTIVE AND
POLICIES........ The Trust's investment objective is to provide current
income exempt from regular federal income tax and New Jersey
state personal income taxes. Securities will be purchased
and sold in an effort to maintain a competitive yield and to
enhance return based upon the relative value of the
securities available in the marketplace.
During normal market conditions substantially all of the
Trust's assets (at least 80%) will be invested in debt
obligations, the interest on which is exempt from regular
federal income tax and New Jersey state personal income
taxes ("municipal obligations"). At least 65% of assets of
the Trust normally will be invested in municipal obligations
(i) issued by New Jersey or its political subdivisions,
agencies, authorities and instrumentalities and (ii) rated
at least investment grade at the time of investment (which
are those rated Baa or higher by Moody's Investors Service,
Inc. ("Moody's") or BBB or higher by either Standard &
Poor's Ratings Group ("S&P") or by FitchIBCA ("Fitch")), or,
if unrated, determined by Eaton Vance to be of at least
investment grade quality. From time to time, the Trust may
hold a significant number of municipal obligations not rated
by a nationally recognized statistical rating organization
("Rating Agency"). When the Trust invests in unrated
municipal obligations it may be more dependent on Eaton
Vance's research capacities than when it invests in rated
municipal obligations.
2
<PAGE>
The Trust may invest up to 35% of its net assets in
municipal obligations rated below investment grade (but not,
with respect to more than 30% of Trust assets, lower than B
by all Rating Agencies rating the obligation) and unrated
municipal obligations considered to be of comparable quality
by Eaton Vance. Investment in municipal obligations of below
investment grade quality involves special risks as compared
with investment in higher grade municipal obligations. These
risks include greater sensitivity to a general economic
downturn, greater market price volatility and less secondary
market trading. Securities rated below investment grade are
commonly known as "junk bonds". Such securities are
regarded, on balance, as predominantly speculative with
respect to the issuer's ability to pay interest and repay
principal owed.
The Trust may invest to a significant extent in residual
interest municipal bonds known as inverse floaters. Compared
to similar fixed rate municipal bonds, the value of these
bonds will fluctuate to a greater extent in response to
changes in prevailing long-term interest rates. Moreover,
the income earned on residual interest municipal bonds will
fluctuate in response to changes in prevailing short-term
interest rates. Thus, when such bonds are held by the Trust,
an increase in short- or long-term market interest rates
will adversely affect the income received from such bonds or
the net asset value of Trust shares. To the extent the Trust
has preferred shares outstanding, an increase in short-term
rates would also result in an increased cost of leverage,
which would adversely affect the Trusts' income available
for distribution.
Interest income from certain types of municipal obligations
may be a tax preference item for purposes of the federal
alternative minimum tax (the "AMT") for individual
investors. Distributions to corporate investors of certain
interest income may also be indirectly subject to the AMT.
THE FUND MAY NOT BE SUITABLE FOR INVESTORS SUBJECT TO THE
AMT.
LISTING.... The Trust has applied for listing of the Shares on the New
York Stock Exchange under the symbol "____."
LEVERAGE...... The Trust expects to use financial leverage through the
issuance of preferred shares. The Trust intends initially to
use financial leverage of approximately 35% of its total
assets (including the amount obtained through leverage). The
Trust generally will not use leverage if it anticipates that
it would result in a lower return to Shareholders over time.
Use of financial leverage creates an opportunity for
increased income for Shareholders but, at the same time,
creates special risks (including the likelihood of greater
volatility of net asset value and market price of the
Shares), and there can be no assurance that a leveraging
strategy will be successful during any period in which it is
employed. See "Investment Objective, Policies and Risks--
Use of Leverage and Related Risks."
INVESTMENT
ADVISER AND
ADMINISTRATOR.. Eaton Vance, a wholly-owned subsidiary of Eaton Vance Corp.,
is the Trust's investment adviser and administrator. The
Adviser manages 3 national municipal funds, 32 single state
municipal funds, 9 limited maturity municipal funds and 1
money market municipal fund. Among such funds, Eaton Vance
currently sponsors Eaton Vance New Jersey Municipals Fund -
3
<PAGE>
Class A (the "NJ Fund") which invests primarily in
investment grade New Jersey municipal obligations.
Morningstar, Inc. awarded National Municipals Fund four
stars for the three-year period, ended November 30, 1998.
The NJ Fund is managed by the same portfolio manager
employed by the Adviser who will manage the Trust's assets.
Morningstar is an independent evaluator of public investment
companies and publishes proprietary ratings reflecting
historical risk-adjusted performance. Morningstar ratings
are calculated from a fund's annual returns in excess of the
90-day U.S. Treasury bill returns with appropriate fee
adjustments, and a risk factor that reflects fund
performance below 90-day Treasury bill returns. The NJ Fund
is in the Morningstar Municipal Bond Fund category, which
includes 1572 (for such three year period) other funds. A
fund receives four stars if its risk-adjusted performance is
in the top 32.5% of its rating category. Ratings are subject
to change every month. (The Eaton Vance New Jersey
Municipals Fund Class B, which has higher expenses, received
a three star rating for the three-year period and a two star
rating for the five-year period ended November 30, 1998.)
Certain investment policies and restrictions of the NJ Fund
differs from those of the Trust. The portfolio holdings and
investment performance of such funds are expected to differ
from those of the Trust. Past performance of such funds is
not indicative of the Trust's performance. See "Management
of the Trust."
SHAREHOLDER
SERVICING AGENT.. PaineWebber Incorporated has been retained by the
Administrator to act as the Shareholder Servicing Agent of
the Trust. See "Shareholder Servicing Agent, Custodian and
Transfer Agent."
DISTRIBUTIONS... The Trust's policy will be to make monthly distributions to
Shareholders. Distributions to Shareholders cannot be
assured, and the amount of each monthly distribution will
vary. The initial distribution to Shareholders is expected
to be paid approximately 60 days after the completion of
this offering. See "Distributions and Taxes," "Dividend
Reinvestment Plan" and "Use of Proceeds."
DIVIDEND
REINVESTMENT
PLAN.......... The Trust has established a Dividend Reinvestment Plan (the
"Plan"). Under the Plan, all dividend and capital gain
distributions will be automatically reinvested in additional
Shares either purchased in the open market, or newly issued
by the Trust if the Shares are trading at or above their net
asset value, in either case unless a Shareholder elects to
receive cash. Shareholders who intend to hold their Shares
through a broker or nominee should contact such broker or
nominee to determine whether or how they may participate in
the Plan. See "Dividend Reinvestment Plan."
CLOSED-END
STRUCTURE.... Closed-end funds differ from open-end management investment
companies (commonly referred to as mutual funds) in that
closed-end funds generally list their shares for trading on
a securities exchange and do not redeem their shares at the
option of the shareholder. By comparison, mutual funds issue
securities redeemable at net asset value at the option of
the shareholder and typically engage in a continuous
offering of their shares. Mutual funds are subject to
continuous asset in-flows and out-flows that can complicate
portfolio management, whereas closed-end funds generally can
stay more fully invested in securities consistent with the
4
<PAGE>
closed-end fund's investment objective and policies. In
addition, in comparison to open-end funds, closed-end funds
have greater flexibility in the employment of financial
leverage and in the ability to make certain types of
investments, including investments in illiquid securities.
However, shares of closed-end funds frequently trade at a
discount from their net asset value. In recognition of the
possibility that the Shares might trade at a discount to net
asset value and that any such discount may not be in the
interest of Shareholders, the Trust's Board of Trustees (the
"Board"), in consultation with Eaton Vance, from time to
time may review possible actions to reduce any such
discount. The Board might consider open market repurchases
or tender offers for Shares at net asset value. There can be
no assurance that the Board will decide to undertake any of
these actions or that, if undertaken, such actions would
result in the Shares trading at a price equal to or close to
net asset value per Share. The Board might also consider the
conversion of the Trust to an open-end mutual fund. The
Board of Trustees believes, however, that the closed-end
structure is desirable, given the Trust's investment
objective and policies. Investors should assume, therefore,
that it is highly unlikely that the Board would vote to
convert the Trust to an open-end investment company. See
"Description of Capital Structure."
SPECIAL RISK
CONSIDERATIONS... NO OPERATING HISTORY. The Trust is a closed-end investment
company with no history of operations and is designed for
long-term investors and not as a trading vehicle.
CONCENTRATION. The Trust normally will invest 65% or more of
its total assets in municipal obligations of issuers located
in New Jersey, and may invest 25% or more of its total
assets in a U.S. territory or in the same economic sector,
such as revenue obligations of health care facilities or
hospitals, airport revenue obligations or industrial
development bonds. This may make the Trust more susceptible
to adverse economic, political or regulatory occurrences
affecting New Jersey, a particular territory or economic
sector. New Jersey general obligation bonds currently are
rated Aa1, AA+ and AA+ by Moody's, S&P and Fitch,
respectively.
INTEREST RATE AND MARKET RISK. The prices of municipal
obligations tend to fall as interest rates rise. Securities
that have longer maturities tend to fluctuate more in price
in response to changes in market interest rates. A decline
in the prices of the municipal obligations owned by the
Trust would cause a decline in the net asset value of the
Trust, which could adversely affect the trading price of the
Trust's Shares. This risk is usually greater among municipal
obligations with longer maturities or durations and when
residual interest municipal bonds are held by the Trust.
Although the Trust has no policy governing the maturities or
durations of its investments, the Trust expects that it will
invest in a portfolio of longer term securities. This means
that the Trust will be subject to greater market risk (other
things being equal) than a fund investing solely in
shorter-term securities. Market risk is often greater among
certain types of income securities, such as zero-coupon
bonds, which do not make regular interest payments. As
interest rates change, these bonds often fluctuate in price
more than higher quality bonds that make regular interest
payments. Because the Trust may invest in these types of
income securities, it may be subject to greater market risk
than a fund that invests only in current interest paying
securities.
5
<PAGE>
INCOME RISK. The income investors receive from the Trust is
based primarily on the interest it earns from its
investments, which can vary widely over the short and
long-term. If interest rates drop, investors' income from
the Trust over time could drop as well if the Trust
purchases securities with lower interest coupons. This risk
is magnified when prevailing short-term interest rates
increase and the Trust holds residual interest municipal
bonds.
CALL RISK. If interest rates fall, it is possible that
issuers of callable bonds with high interest coupons will
"call" (or prepay) their bonds before their maturity date.
If a call were exercised by the issuer during a period of
declining interest rates, the Trust is likely to replace
such called security with a lower yielding security. If that
were to happen, it would decrease the Trust's dividends.
CREDIT RISK. Credit risk refers to an issuer's ability to
make payments of principal and interest when they are due.
Because the Trust may invest up to 35% of its assets in
below investment grade securities, it will be subject to a
high level of credit risk. The credit quality of such
securities is considered speculative by Rating Agencies with
respect to the issuer's ability to pay interest or
principal. The prices of lower grade securities are more
sensitive to negative corporate developments, such as a
decline in profits, or adverse economic conditions, such as
a recession, than are the prices of higher grade securities.
Securities that have longer maturities also fluctuate more
in price in response to negative corporate or economic news.
Therefore, lower grade securities may experience high
default rates, which would mean that the Trust may lose some
of its investment in such securities, which would adversely
affect the Trust's net asset value and ability to make
distributions.
LIQUIDITY RISK. The Trust may invest in securities for which
there is no readily available trading market or which are
otherwise illiquid, which includes residual interest
municipal bonds. The Trust may not be able to readily
dispose of such securities at prices that approximate those
at which the Trust could sell such securities if they were
more widely traded and, as a result of such illiquidity, the
Trust may have to sell other investments or engage in
borrowing transactions if necessary to raise cash to meet
its obligations. In addition, the limited liquidity could
affect the market price of the securities, thereby adversely
affecting the Trust's net asset value and ability to make
dividend distributions.
MUNICIPAL BOND MARKET. Many obligations in which the Trust
will invest may not be rated by a Rating Agency, will not be
registered with the Securities and Exchange Commission or
any state securities commission, and will not be listed on
any national securities exchange. Therefore, the amount of
public information available about portfolio securities will
be limited, and the performance of the Trust is more
dependent on the analytical abilities of Eaton Vance than
would be the case for an investment company that invests
primarily in more widely rated, registered or
exchange-listed securities.
6
<PAGE>
EFFECTS OF LEVERAGE. The use of leverage through issuance of
preferred shares by the Trust creates an opportunity for
increased net income, but, at the same time, creates special
risks. There can be no assurance that a leveraging strategy
will be successful during any period in which it is
employed. The Trust intends to use leverage to provide the
holders of Shares with a potentially higher return. Leverage
creates risks for holders of Shares, including the
likelihood of greater volatility of net asset value and
market price of the Shares and the risk that fluctuations in
dividend rates on any preferred shares may affect the return
to Shareholders. It is anticipated that preferred share
dividends will be based on the yields of short-term
municipal obligations, while the proceeds of any preferred
share offering will be invested in longer-term municipal
obligations, which typically have higher yields. To the
extent the income derived from securities purchased with
funds received from leverage exceeds the cost of leverage,
the Trust's return will be greater than if leverage had not
been used. Conversely, if the income from the securities
purchased with such funds is not sufficient to cover the
cost of leverage, the return to the Trust will be less than
if leverage had not been used, and therefore the amount
available for distribution to Shareholders as dividends and
other distributions will be reduced. In the latter case,
Eaton Vance in its best judgment may nevertheless determine
to maintain the Trust's leveraged position if it deems such
action to be appropriate in the circumstances. In addition,
under current federal income tax law, the Trust is required
to allocate a portion of any net realized capital gains or
other taxable income to holders of preferred shares. The
terms of any preferred shares are expected to require the
Trust to pay to any preferred shareholders additional
dividends intended to compensate the preferred shareholders
for taxes payable on any capital gains or other taxable
income allocated to the preferred shares. Any such
additional dividends will reduce the amount available for
distribution to the Shareholders. As discussed under
"Management of the Trust," the fee paid to Eaton Vance will
be calculated on the basis of the Trust's total assets,
including proceeds from the issuance of preferred shares, so
the fees will be higher when leverage is utilized. See
"Investment Objective, Policies and Risks -- Use of Leverage
and Related Risks."
The Trust currently intends to seek an investment grade
rating on any preferred shares from a Rating Agency. The
Trust may be subject to investment restrictions of the
Rating Agency as a result. These restrictions may impose
asset coverage or portfolio composition requirements that
are more stringent than those imposed on the Trust by the
Investment Company Act of 1940, as amended (the "Investment
Company Act" or "1940 Act"). It is not anticipated that
these covenants or guidelines will impede Eaton Vance in
managing the Trust's portfolio in accordance with its
investment objective and policies. See "Description of
Capital Structure - Preferred Shares."
Financial leverage may also be achieved through the purchase
of certain derivative instruments. The Trust's use of
residual interest municipal bonds and futures contracts
expose the Trust to special risks. Such transactions may
result in the Trust earning taxable income or gains. See
"Investment Objective, Policies and Risks."
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MARKET PRICE OF SHARES. The shares of closed-end investment
companies often trade at a discount from their net asset
value, and the Trust's Shares may likewise trade at a
discount from net asset value. The trading price of the
Trust's Shares may be less than the public offering price.
This risk may be greater for investors who sell their Shares
in a relatively short period after completion of the public
offering.
NON-DIVERSIFICATION. The Trust has registered as a
"non-diversified" investment company under the 1940 Act. For
federal income tax purposes the Trust, with respect to up to
50% of its total assets, will be able to invest more than 5%
(but not more than 25%) of the value of its total assets in
the obligations of any single issuer, although it has no
current intention to do so. To the extent the Trust invests
a relatively high percentage of its assets in obligations of
a limited number of issuers, the Trust may be more
susceptible than a more widely diversified investment
company to any single economic, political or regulatory
occurrence.
ALTERNATIVE MINIMUM TAX. Interest on certain "private
activity" municipal obligations is treated as a tax
preference item for purposes of the AMT. In addition, for
corporations income subject to the AMT includes interest on
all tax-exempt obligations. There is no specific limitation
on the amount of the Trust's assets that may be invested in
municipal obligations that pay interest that is treated as a
tax preference item. Accordingly, an investment in the Trust
may not be appropriate for investors who are already subject
to the AMT who would become subject thereto as a result of
owning Shares. See "Distributions and Taxes."
ANTI-TAKEOVER PROVISIONS. The Trust's Agreement and
Declaration of Trust includes provisions that could have the
effect of limiting the ability of other persons or entities
to acquire control of the Trust or to change the composition
of its Board of Trustees. See "Description of Capital
Structure -- Anti-Takeover Provisions in the Declaration of
Trust."
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TRUST EXPENSES
The following tables are intended to assist investors in understanding
the various costs and expenses that an investor in the Trust will bear, directly
or indirectly.
NET ASSETS
PLUS
LEVERAGE(1)
-----------
SHAREHOLDER TRANSACTION EXPENSES
Sales Load..................................................... None
Dividend Reinvestment Plan Fees................................ None
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF NET ASSETS
ATTRIBUTABLE TO SHARES)(1)
Investment Advisory Fee(2)..................................... 1.07%
Dividend Payments on Preferred Shares.......................... 1.71%
Other Expenses (including administration fee of .31%)(2)....... 0.69%
-----
Total Annual Operating Expenses................................ 3.47%
=====
- ---------
(1) The Trust intends to utilize leverage only if the Adviser believes that it
would result in higher income to Shareholders over time. See "Investment
Objective, Policies and Risks -- Use of Leverage and Related Risks." Assumes
preferred shares outstanding of 35% of total assets (including preferred
shares) at a dividend rate of 3.2%, which is based upon the Trust's
estimation of current market conditions. At times when the Trust does not
utilize leverage, the estimated annual operating expenses would be:
Investment Advisory Fee......................................... .70%
Dividend Payments on Preferred Shares........................... None
Other Expenses (including administration fee of .20%)(2)........ .45%
------
Total Annual Operating Expenses................................. 1.15%
=====
(2) Reflects estimated amounts for the Trust's first year of operations,
including organizational expenses.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Trust, assuming a 5% annual return:
ONE THREE FIVE TEN
YEAR(*) YEARS YEARS YEARS
Assuming No Leverage......... $12 $37 $63 $140
Assuming 35% Leverage........ $35 $107 $180 $375
- ----------
* This Example assumes that all dividends and other distributions are
reinvested at net asset value and that the percentage amounts listed under
Total Annual Operating Expenses remain the same in the years shown, except
for amounts for the Three Years, Five Years and Ten Years periods which are
after the deduction of organization expenses in the first year. The above
tables and the assumption in the Example of a 5% annual return and
reinvestment at net asset value are required by regulations of the SEC; the
assumed 5% annual return is not a prediction of, and does not represent,
the projected or actual performance of Trust Shares. THIS EXAMPLE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES, AS THE TRUST'S
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
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THE TRUST
Eaton Vance New Jersey Municipal Income Trust (the "Trust") is a newly
organized, non-diversified, closed-end management investment company that was
organized as a Massachusetts business trust on December _____, 1998 and has no
operating history. The Trust's principal office is located at 24 Federal Street,
Boston, MA 02110 and its telephone number is 1-800-225-6265.
This Prospectus relates to the initial public offering of the Trust's
shares of beneficial interest, $.01 par value (the "Shares"). The Shares will be
sold during the initial public offering without any sales load or underwriting
discounts payable by investors or the Trust. Eaton Vance Management (the
"Adviser" or "Eaton Vance") or an affiliate (not the Trust) from its own assets
will pay a commission to the Underwriters in connection with sales of the Shares
in this offering. See "Underwriting."
USE OF PROCEEDS
The proceeds of this offering, before deduction of offering expenses,
estimated to be $_______________ (or $____________ assuming exercise of the
Underwriters' over-allotment option in full), will be invested in accordance
with the Trust's investment objective and policies as soon as practicable, but
in no event, under normal market conditions, later than three months after the
receipt thereof. Pending such investment, the proceeds may be invested in
high-quality, short-term municipal debt securities. Eaton Vance has agreed to
pay all offering expenses of the Trust that exceed $0.03 per Share.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
INVESTMENT OBJECTIVE
The Trust's investment objective is to provide current income exempt
from regular federal income tax and New Jersey state personal income taxes. This
income will be earned by investing primarily in investment grade municipal
obligations. Securities will be purchased and sold in an effort to maintain a
competitive yield and to enhance return based upon the relative value of the
securities available in the marketplace. Investments are based on Eaton Vance's
research and ongoing credit analysis, the underlying materials for which are
generally not available to individual investors.
Eaton Vance seeks to find municipal obligations of high quality that
have been undervalued in the marketplace. Eaton Vance's research specialists
examine credit histories, revenue sources, total debt histories, capital
structures and other datum. This research capability is important because many
obligations in which the Trust will invest will not be rated or listed on a
national securities exchange, and the amount of public information available
about such securities will be limited. The Trust intends to emphasize the
research that is critical to discovering value while avoiding undue credit risk.
The Trust will attempt to enhance performance opportunities by seeking to remain
fully invested.
INVESTMENT POLICIES - GENERAL COMPOSITION OF THE TRUST
During normal market conditions, substantially all of the Trust's total
assets (at least 80%) will be invested in debt obligations, the interest on
which is exempt from regular federal income tax and New Jersey state personal
income taxes ("municipal obligations"). At least 65% of the assets of the Trust
will normally be invested in municipal obligations (i) issued by New Jersey or
its political subdivisions, agencies, authorities and instrumentalities and (ii)
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<PAGE>
rated at least investment grade at the time of investment (which are those rated
Baa or higher by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by
either Standard & Poor's Ratings Group ("S&P") or by FitchIBCA ("Fitch")), or,
if unrated, determined by Eaton Vance to be of at least investment grade
quality. From time to time, the Trust may hold a significant amount of municipal
obligations not rated by a nationally recognized statistical rating organization
("Rating Agency"). When the Trust invests in unrated municipal obligations, it
may be more dependent on Eaton Vance's research capacities than when it invests
in rated municipal obligations.
The Trust may invest up to 35% of its assets in municipal obligations
rated below investment grade (but not, with respect to more than 30% of Trust
assets, lower than B by all Rating Agencies rating the obligation) and unrated
municipal obligations considered to be of comparable quality by Eaton Vance. No
such securities will be in default at the time of purchase. Investment in
municipal obligations of below investment grade quality involves special risks
as compared with investment in higher grade municipal obligations. These risks
include greater sensitivity to a general economic downturn, greater market price
volatility and less secondary market trading. Securities rated below investment
grade are commonly known as "junk bonds". Such securities are regarded, on
balance, as predominantly speculative with respect to the issuer's ability to
pay interest and repay principal owed. See "- Additional Risk Considerations."
For a description of municipal obligation ratings, see the Appendix to the
Statement of Additional Information.
The foregoing credit quality policies apply only at the time a security
is purchased, and the Trust is not required to dispose of a security in the
event that a Rating Agency downgrades its assessment of the credit
characteristics of a particular issue. In determining whether to retain or sell
such a security, Eaton Vance may consider such factors as Eaton Vance's
assessment of the credit quality of the issuer of such security, the price at
which such security could be sold and the rating, if any, assigned to such
security by other Rating Agencies.
Municipal obligations include bonds, notes and commercial paper issued
by a municipality for a wide variety of both public and private purposes, the
interest on which is, in the opinion of issuer's counsel (or on the basis of
other reliable authority), exempt from regular federal income tax. Public
purpose municipal bonds include general obligation and revenue bonds. General
obligation bonds are backed by the taxing power of the issuing municipality.
Revenue bonds are backed by the revenues of a project or facility, or from the
proceeds of a specific revenue source. Some revenue bonds are payable solely or
partly from funds which are subject to annual appropriations by a state's
legislature. Municipal notes include bond anticipation, tax anticipation and
revenue anticipation notes. Bond, tax and revenue anticipation notes are
short-term obligations that will be retired with the proceeds of an anticipated
bond issue, tax revenue or facility revenue, respectively.
Some of the securities in which the Trust invests may include so-called
"zero-coupon" bonds, whose values are subject to greater fluctuation in response
to changes in market interest rates than bonds that pay interest currently.
Zero-coupon bonds are issued at a significant discount from face value and pay
interest only at maturity rather than at intervals during the life of the
security. The Trust is required to take into account income from zero-coupon
bonds on a current basis, even though it does not receive that income currently
in cash, and the Trust is required to distribute substantially all of its income
for each taxable year. Thus, the Trust may have to sell other investments to
obtain cash needed to make income distributions.
The Trust may invest in residual interest municipal bonds whose
interest rates bear an inverse relationship to the interest rate on another
security or the value of an index ("inverse floaters"). An investment in inverse
floaters may involve greater risk than an investment in a fixed rate bond.
Because changes in the interest rate on the other security or index inversely
affect the residual interest paid on the inverse floater, the value of an
inverse floater is generally more volatile than that of a fixed rate bond.
Inverse floaters have interest rate adjustment formulas which generally reduce
or, in the extreme, eliminate the interest paid to the Trust when short-term
interest rates rise, and increase the interest paid to the Trust when short-term
interest rates fall. Inverse floaters have varying degrees of liquidity, and the
market for these securities is relatively new and volatile. These securities
11
<PAGE>
tend to underperform the market for fixed rate bonds in a rising interest rate
environment, but tend to outperform the market for fixed rate bonds when
interest rates decline. Shifts in long-term interest rates may, however, alter
this tendency. Although volatile, inverse floaters typically offer the potential
for yields exceeding the yields available on fixed rate bonds with comparable
credit quality, coupon, call provisions and maturity. These securities usually
permit the investor to convert the floating rate to a fixed rate (normally
adjusted downward), and this optional conversion feature may provide a partial
hedge against rising rates if exercised at an opportune time. Inverse floaters
are leveraged because they provide two or more dollars of bond market exposure
for every dollar invested.
The Trust may purchase municipal bonds that are additionally secured by
insurance, bank credit agreements, or escrow accounts. The credit quality of
companies which provide such credit enhancements will affect the value of those
securities. Although the insurance feature reduces certain financial risks, the
premiums for insurance and the higher market price paid for insured obligations
may reduce the Trust's current yield. Insurance generally will be obtained from
insurers with a claims-paying ability rated Aaa by Moody's or AAA by S&P or
Fitch. The insurance feature does not guarantee the market value of the insured
obligations or the net asset value of the Trust's shares.
Interest income from certain types of municipal obligations may be a
tax preference item for purposes of the federal alternative minimum tax (the
"AMT") for individual investors. Distributions to corporate investors of certain
interest income may also be indirectly subject to the AMT. THE TRUST MAY NOT BE
SUITABLE FOR INVESTORS SUBJECT TO THE AMT.
The Trust has adopted certain fundamental investment restrictions set
forth in the Statement of Additional Information which may not be changed
without a Shareholder vote. Except for such restrictions and the 80% requirement
set forth above, the investment objective and policies of the Trust may be
changed by the Board of Trustees without Shareholder action.
ADDITIONAL INVESTMENT PRACTICES
WHEN-ISSUED SECURITIES. The Trust may purchase securities on a
"when-issued" basis, which means that payment and delivery occur on a future
settlement date. The price and yield of such securities are generally fixed on
the date of commitment to purchase. However, the market value of the securities
may fluctuate prior to delivery and upon delivery the securities may be worth
more or less than the Trust agreed to pay for them. The Trust may be required to
maintain a segregated account of liquid assets equal to outstanding purchase
commitments. The Trust may also purchase instruments that give the Trust the
option to purchase a municipal obligation when and if issued.
FUTURES TRANSACTIONS. The Trust may purchase and sell various kinds of
financial futures contracts and options thereon to seek to hedge against changes
in interest rates or as a substitute for the purchase of securities. For
example, futures contracts can be used to reduce the additional long-term
interest rate risk the Trust bears by holding residual interest municipal bonds.
Futures contracts may be based on various debt securities and securities indices
(such as the Municipal Bond Index traded on the Chicago Board of Trade). Such
transactions involve a risk of loss or depreciation due to unanticipated adverse
changes in securities prices, which may exceed the Trust's initial investment in
these contracts. The Trust will only purchase or sell futures contracts or
related options, in compliance with the rules of the Commodity Futures Trading
Commission. These transactions involve transaction costs. There can be no
assurance that the Eaton Vance's use of futures will be advantageous to the
Trust. Distributions by the Trust of any gains realized on the Trust's
transactions in futures and options on futures will be taxable. Rating agency
guidelines on any preferred shares issued by the Trust may limit use of these
transactions.
INVESTMENT COMPANY SECURITIES. The Trust may purchase common shares of
closed-end investment companies that have a similar investment objective and
policies to the Trust. In addition to providing tax-exempt income, such
securities may provide capital appreciation. Such investments, which may also be
leveraged and subject to the same risks as the Trust, will not exceed 10% of
total assets, and no such company will be affiliated with Eaton Vance. These
companies bear fees and expenses that the Trust will incur indirectly.
12
<PAGE>
USE OF LEVERAGE AND RELATED RISKS
The Trust expects to use leverage through the issuance of preferred
shares. The Trust initially intends to use leverage of approximately 35% of its
total assets (including the amount obtained from leverage). The Trust generally
will not use leverage if the Adviser anticipates that it would result in a lower
return to Shareholders for any significant amount of time. The Trust also may
borrow money as a temporary measure for extraordinary or emergency purposes,
including the payment of dividends and the settlement of securities transactions
which otherwise might require untimely dispositions of Trust securities.
Leverage creates risks for holders of the Shares, including the
likelihood of greater volatility of net asset value and market price of the
Shares. There is a risk that fluctuations in the dividend rates on any preferred
shares may adversely affect the return to the holders of the Shares. If the
income from the securities purchased with such funds is not sufficient to cover
the cost of leverage, the return on the Trust will be less than if leverage had
not been used, and therefore the amount available for distribution to
Shareholders as dividends and other distributions will be reduced. The Adviser
in its best judgment nevertheless may determine to maintain the Trust's
leveraged position if it deems such action to be appropriate in the
circumstances. As discussed under "Management of the Trust," during periods in
which the Trust is using leverage the fees paid to Eaton Vance for investment
advisory and administrative services will be higher than if the Trust did not
use leverage because the fees paid will be calculated on the basis of the
Trust's total assets, including proceeds from the issuance of preferred shares.
Capital raised through leverage will be subject to dividend payments
which may exceed the income and appreciation on the assets purchased. The
issuance of preferred shares involves offering expenses and other costs and may
limit the Trust's freedom to pay dividends on Shares or to engage in other
activities. The issuance of a class of preferred shares having priority over the
Trust's Shares create an opportunity for greater return per Share, but at the
same time such leveraging is a speculative technique in that it will increase
the Trust's exposure to capital risk. Unless the income and appreciation, if
any, on assets acquired with offering proceeds exceed the cost of issuing
additional classes of securities (and other Trust expenses), the use of leverage
will diminish the investment performance of the Trust's Shares compared with
what it would have been without leverage.
The Trust may be subject to certain restrictions on investments imposed
by guidelines of one or more Rating Agencies which may issue ratings for any
preferred shares issued by the Trust. These guidelines may impose asset coverage
or Trust composition requirements that are more stringent than those imposed on
the Trust by the Investment Company Act of 1940 (the "Investment Company Act" or
"1940 Act"). It is not anticipated that these covenants or guidelines will
impede the Adviser from managing the Trust's portfolio in accordance with the
Trust's investment objective and policies.
Under the Investment Company Act, the Trust is not permitted to issue
preferred shares unless immediately after such issuance the net asset value of
the Trust's portfolio is at least 200% of the liquidation value of the
outstanding preferred shares (I.E., such liquidation value may not exceed 50% of
the Trust's total assets). In addition, the Trust is not permitted to declare
any cash dividend or other distribution on its Shares unless, at the time of
such declaration, the net asset value of the Trust's portfolio (determined after
deducting the amount of such dividend or other distribution) is at least 200% of
such liquidation value. If preferred shares are issued, the Trust intends, to
the extent possible, to purchase or redeem preferred shares from time to time to
maintain coverage of any preferred shares of at least 200%. In addition, under
current federal income tax law, the Trust is required to allocate a portion of
any net realized capital gains or other taxable income to holders of preferred
shares. The terms of any preferred shares are expected to require the Trust to
pay to any preferred shareholders additional dividends intended to compensate
the preferred shareholders for taxes payable on any capital gains or other
taxable income allocated to the preferred shares. Any such additional dividends
will reduce the amount available for distribution to the Shareholders. Normally,
holders of the Shares will elect four of the Trustees of the Trust and holders
of any preferred shares will elect two. In the event the Trust failed to pay
dividends on its preferred shares for two years, preferred shareholders would be
entitled to elect a majority of the Trustees until the dividends had been paid.
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To qualify for federal income taxation as a "regulated investment
company", the Trust must distribute in each taxable year at least 90% of its net
investment income (including tax-exempt interest and net short-term gain). The
Trust also will be required to distribute annually at least 98% of its taxable
income and capital gain net income, if any, to avoid imposition of a
nondeductible 4% federal excise tax. To the extent dividends on any preferred
shares constitute less than 90% of such income and gains, the remainder must be
distributed to the holders of the Shares. If the Trust is precluded from making
distributions on the Shares because of any applicable asset coverage
requirements, the terms of the preferred shares may provide that any amounts so
precluded from being distributed, but required to be distributed for the Fund to
meet the distribution requirements for federal tax purposes, will be paid to the
holders of the preferred shares as a special dividend. This dividend can be
expected to decrease the amount that holders of preferred shares would be
entitled to receive upon redemption or liquidation of the those shares.
The Trust's willingness to issue new securities for investment
purposes, and the amount the Trust will issue, will depend on many factors, the
most important of which are market conditions and interest rates. Successful use
of a leveraging strategy may depend on the Adviser's ability to predict
correctly interest rates and market movements, and there is no assurance that a
leveraging strategy will be successful during any period in which it is
employed.
Assuming the utilization of leverage in the amount of approximately 35%
of the Trust's total assets and an annual dividend rate on preferred shares of
3.2% payable on such leverage based on market rates as of the date of this
Prospectus, the annual return that the total assets in the Trust's portfolio
must experience (net of expenses) in order to cover such dividend payments would
be 1.11%. The Trust's actual cost of leverage will be based on market rates at
the time the Trust undertakes a leveraging strategy, and such actual cost of
leverage may be higher or lower than that assumed in the previous example.
The following table is designed to illustrate the effect on the return
to a holder of the Trust's Shares of leverage in the amount of approximately 35%
of the Trust's total assets, assuming hypothetical annual returns of the Trust's
portfolio of minus 10% to plus 10%. As the table shows, leverage generally
increases the return to Shareholders when portfolio return is positive and
greater than the cost of leverage and decreases the return when the portfolio
return is negative or less than the cost of leverage. The figures appearing in
the table are hypothetical and actual returns may be greater or less than those
appearing in the table.
Assuming Portfolio Return
(net of expenses).................. (10)% (5)% 0% 5% 10%
Corresponding Share Return Assuming
35% Leverage.......................(17.04)% (9.37)% (1.71)% 5.96% 13.63%
Until the Trust issues preferred shares, the Shares will not be
leveraged, and the risks and special considerations related to leverage
described in this Prospectus will not apply. Such leveraging of the Shares
cannot be achieved until the proceeds resulting from the use of leverage have
been invested in accordance with the Trust's investment objective and policies.
ADDITIONAL RISK CONSIDERATIONS
CONCENTRATION. The Trust normally will invest 65% or more of its total
assets in municipal obligations of issuers located in New Jersey, and may invest
25% or more of its total assets in a U.S. territory or in municipal obligations
in the same economic sector, including without limitation the following: lease
rental obligations of state and local authorities; obligations dependent on
annual appropriations by a state's legislature for payment; obligations of state
14
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and local housing finance authorities, municipal utilities systems or public
housing authorities; obligations of hospitals or life care facilities; or
industrial development or pollution control bonds issued for electric utility
systems, steel companies, paper companies or other purposes. This may make the
Trust more susceptible to adverse economic, political, or regulatory occurrences
affecting New Jersey, a particular state or economic sector. For example, health
care related issuers are susceptible to Medicaid reimbursement policies, and
national and state health care legislation. As concentration increases, so does
the potential for fluctuation in the net asset value of Trust Shares.
INTEREST RATE AND MARKET RISK. The prices of municipal obligations tend
to fall as interest rates rise. Securities that have longer maturities tend to
fluctuate more in price in response to changes in market interest rates. A
decline in the prices of the municipal obligations owned by the Trust would
cause a decline in the net asset value of the Trust, which could adversely
affect the trading price of the Trust's Shares. This risk is usually greater
among municipal obligations with longer maturities or durations and when
residual interest municipal bonds are held by the Trust. Although the Trust has
no policy governing the maturities or durations of its investments, the Trust
expects that it will invest in a portfolio of longer term securities. This means
that the Trust will be subject to greater market risk (other things being equal)
than a fund investing solely in shorter-term securities. Market risk is often
greater among certain types of income securities, such as zero-coupon bonds,
which do not make regular interest payments. As interest rates change, these
bonds often fluctuate in price more than higher quality bonds that make regular
interest payments. Because the Trust may invest in these types of income
securities, it may be subject to greater market risk than a fund that invests
only in current interest paying securities.
The Trust may invest to a significant extent in residual interest
municipal bonds known as inverse floaters. Compared to similar fixed rate
municipal bonds, the value of these bonds will fluctuate to a greater extent in
response to changes in prevailing long-term interest rates. Moreover, the income
earned on residual interest municipal bonds will fluctuate in response to
changes in prevailing short-term interest rates. Thus, when such bonds are held
by the Trust, an increase in short- or long-term market interest rates will
adversely affect the income received from such bonds or the net asset value of
Trust shares. To the extent the Trust has preferred shares outstanding, an
increase in short-term rates would also result in an increase cost of leverage,
which would adversely affect the Trust's income available for distribution.
INCOME RISK. The income investors receive from the Trust is based
primarily on the interest it earns from its investments, which can vary widely
over the short and long-term. If interest rates drop, investors' income from the
Trust over time could drop as well if the Trust purchases securities with lower
interest coupons. This risk is magnified when prevailing short-term interest
rates increase and the Trust holds residual interest municipal bonds.
CALL RISK. If interest rates fall, it is possible that issuers of
callable bonds with high interest coupons will "call" (or prepay) their bonds
before their maturity date. If a call were exercised by the issuer during a
period of declining interest rates, the Trust is likely to replace such called
security with a lower yielding security. If that were to happen, it would
decrease the Trust's dividends.
Certain securities held by the Trust may permit the issuer at its
option to "call," or redeem, its securities. If an issuer redeems securities
held by the Trust during a time of declining interest rates, the Trust may not
be able to reinvest the proceeds in securities providing the same investment
return as the securities redeemed.
CREDIT RISK. Municipal debt obligations are subject to the risk of
non-payment of scheduled interest and/or principal. Such non-payment would
result in a reduction of income to the Trust, a reduction in the value of the
security experiencing non-payment and a potential decrease in the net asset
value of the Trust. Securities rated below investment grade or unrated
securities of comparable quality ("lower quality securities") are subject to the
risk of an issuer's inability to meet principal and interest payments on the
obligations (credit risk) and may also be subject to price volatility due to
such factors as interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity (market risk). The
prices of lower quality securities are also more likely to react to real or
perceived developments affecting market and credit risk than are prices of
investment grade quality securities ("higher quality securities"), which react
primarily to movements in the general level of interest rates. The investments
in the Trust's portfolio will have speculative characteristics.
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As indicated above, the Trust may invest up to 35% of its total assets
in municipal obligations rated below investment grade (but not, with respect to
more than 30% of its total assets, lower than B by all Rating Agencies rating
the obligation) and comparable unrated obligations. Such obligations are
commonly called "junk bonds" and will have speculative characteristics in
varying degrees. While such obligations may have some quality and protective
characteristics, these characteristics can be expected to be offset or
outweighed by uncertainties or major risk exposures to adverse conditions. Eaton
Vance seeks to minimize the risks of investing in below investment grade
securities through professional investment analysis, attention to current
developments in interest rates and economic conditions, and industry and
geographic diversification. When the Trust invests in lower rated or unrated
municipal obligations, the achievement of the Trust's goals is more dependent on
the Eaton Vance's ability than would be the case if the Trust were investing in
municipal obligations in the higher rating categories. In evaluating the credit
quality of a particular issue, whether rated or unrated, Eaton Vance will
normally take into consideration, among other things, the financial resources of
the issuer (or, as appropriate, of the underlying source of funds for debt
service), its sensitivity to economic conditions and trends, any operating
history of and the community support for the facility financed by the issue, the
ability of the issuer's management and regulatory matters. Eaton Vance will
attempt to reduce the risks of investing in the lowest investment grade, below
investment grade and comparable unrated obligations through active portfolio
management, credit analysis and attention to current developments and trends in
the economy and the financial markets.
Increases in interest rates and changes in the economy may adversely
affect the ability of issuers of lower grade municipal securities to pay
interest and to repay principal, to meet projected financial goals and to obtain
additional financing. In the event that an issuer of securities held by the
Trust experiences difficulties in the timely payment of principal or interest
and such issuer seeks to restructure the terms of its borrowings, the Trust may
incur additional expenses and may determine to invest additional assets with
respect to such issuer or the project or projects to which the Trust's portfolio
securities relate. Further, the Trust may incur additional expenses to the
extent that it is required to seek recovery upon a default in the payment of
interest or the repayment of principal on its portfolio holdings, and the Trust
may be unable to obtain full recovery thereof.
To the extent that there is no established retail market for some of
the lower grade municipal securities in which the Trust may invest, trading in
such securities may be relatively inactive. The Adviser is responsible for
determining the net asset value of the Trust, subject to the supervision of the
Board of Trustees of the Trust. During periods of reduced market liquidity and
in the absence of readily available market quotations for lower grade municipal
securities held in the Trust's portfolio, the ability of the Adviser to value
the Trust's securities becomes more difficult and the Adviser's use of judgment
may play a greater role in the valuation of the Trust's securities due to the
reduced availability of reliable objective data. The effects of adverse
publicity and investor perceptions may be more pronounced for securities for
which no established retail market exists as compared with the effects on
securities for which such a market does exist. Further, the Trust may have more
difficulty selling such securities in a timely manner and at their stated value
than would be the case for securities for which an established retail market
does exist
Municipal obligations held by the Trust that are of below investment
grade quality but which, subsequent to the assignment of such rating, are backed
by escrow accounts containing U.S. Government obligations may be determined by
Eaton Vance to be of investment grade quality for purposes of the Trust's
investment policies. The Trust may retain in its portfolio an obligation that
declines in quality, including defaulted obligations, if such retention is
considered desirable by Eaton Vance. In the case of a defaulted obligation, the
Trust may incur additional expense seeking recovery of its investment.
Changes in the credit quality of the issuers of municipal obligations
held by the Trust will affect the principal value of (and possibly the income
earned on) such obligations. In addition, the value of such securities are
affected by changes in general economic conditions and business conditions
affecting the relevant economic sectors. Changes by Rating Agencies in their
ratings of a security and in the ability of the issuer to make payments of
principal and interest may also affect the value of the Trust's investments. The
amount of information about the financial condition of an issuer of municipal
obligations may not be as extensive as that made available by corporations whose
securities are publicly traded.
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The Trust may invest in municipal leases, and participations in
municipal leases. The obligation of the issuer to meet its obligations under
such leases is often subject to the appropriation by the appropriate legislative
body, on an annual or other basis, of funds for the payment of the obligations.
Investments in municipal leases are thus subject to the risk that the
legislative body will not make the necessary appropriation and the issuer will
not otherwise be willing or able to meet its obligation.
LIQUIDITY RISK. At times, a substantial portion of the Trust's assets
may be invested in securities as to which the Trust, by itself or together with
other accounts managed by Eaton Vance and its affiliates, holds a major portion
of all of such securities. Under adverse market or economic conditions or in the
event of adverse changes in the financial condition of the issuer, the Trust
could find it more difficult to sell such securities when Eaton Vance believes
it advisable to do so or may be able to sell such securities only at prices
lower than if such securities were more widely held. Under such circumstances,
it may also be more difficult to determine the fair value of such securities for
purposes of computing the Trust's net asset value.
The secondary market for some municipal obligations (including issues
which are privately placed with the Trust) is less liquid than that for taxable
debt obligations or other more widely traded municipal obligations. These
include residual interest municipal bonds. No established resale market exists
for certain of the municipal obligations in which the Trust may invest. The
market for obligations rated below investment grade is also likely to be less
liquid than the market for higher rated obligations. As a result, the Trust may
be unable to dispose of these municipal obligations at times when it would
otherwise wish to do so at the prices at which they are valued.
A secondary market may be subject to irregular trading activity, wide
bid/ask spreads and extended trade settlement periods. The Trust has no
limitation on the amount of its assets which may be invested in securities which
are not readily marketable or are subject to restrictions on resale. The risks
associated with illiquidity are particularly acute in situations where the
Trust's operations require cash, such as if the Trust tenders for its Shares,
and may result in the Trust borrowing to meet short-term cash requirements.
CLOSED-END FUNDS. The Trust is a closed-end investment company with no
history of operations and is designed primarily for long-term investors and not
as a trading vehicle. The shares of closed-end investment companies often trade
at a discount from their net asset value, and the Shares may likewise trade at a
discount from net asset value. The trading price of the Trust's Shares may be
less than the initial public offering price, creating a risk of loss for
investors purchasing in the initial public offering of the Shares. This market
price risk may be greater for investors who sell their Shares within a
relatively short period after completion of this offering.
NON-DIVERSIFICATION. The Trust has registered as a "non-diversified"
investment company under the 1940 Act so that, subject to its investment
restrictions and applicable federal income tax diversification requirements,
with respect to 50% of its total assets, it will be able to invest more than 5%
of the value of its total assets in the obligations of any single issuer,
although it has no current intention to do so. The Trust will not invest more
than 10% of the value of its assets in securities of any single issuer. To the
extent the Trust invests a relatively high percentage of its assets in
obligations of a limited number of issuers, the Trust will be more susceptible
than a more widely diversified investment company to any single corporate,
economic, political or regulatory occurrence.
YEAR 2000 COMPLIANCE. The Trust could be adversely affected if the
computer systems used by the Adviser and other service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Problem." Eaton Vance is
taking steps that it believes are reasonably designed to address the Year 2000
Problem with respect to computer systems that it uses and to obtain reasonable
assurances that comparable steps are being taken by the Trust's other major
service providers. At this time, there can be no assurance that these steps will
be sufficient to avoid any adverse impact to the Trust.
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In addition, it is possible that the markets for municipal securities
in which the Trust invests may be detrimentally affected by computer failures
throughout the financial services industry beginning on or before January 1,
2000. Improperly functioning trading systems may result in settlement problems
and liquidity issues. In addition, corporate and governmental data processing
errors may result in production problems for individual issuers and overall
economic uncertainties. Earnings of individual issuers will be affected by
remediation costs, which may be substantial and may be reported inconsistently
in financial statements. Accordingly, the Trust's investments may be adversely
affected.
POSSIBLE BENEFITS OF INVESTING IN THE FUND
Potential investors may wish to consider the following current benefits
to investing in the Fund. There is no guarantee these benefits will continue.
RELATIVE VALUE OF MUNICIPAL OBLIGATIONS. Yields on AAA rated 30-year
municipal obligations were about 99% of yields on 30-year U.S. Treasury bonds on
November 30, 1998. Over the last ten years, this difference has been only about
85%. Therefore, at the 39.6% federal income tax rate, a taxable investment would
have to yield 8.29% to equal a tax-exempt yield of 5.01%. SOURCE: Fact Set.
Based on the Municipal Bond Buyer Index, which is unmanaged and contains 20
long-term general obligation municipal bonds. This index carries no management
fees, account charges or other expenses, as will the Trust. U.S. Treasury bonds
offer a government guarantee as to timely payment of interest and repayment of
principal on maturity; income is tax-exempt at the state and local level.
Municipal bonds are not guaranteed by the U.S. government. It is not possible to
invest directly in an index.
GREATER AFTER-TAX INCOME. Based on a 5.5% tax-exempt yield versus an 6%
taxable yield (compounded monthly), an investor paying a 36% and 39.6% federal
income tax on a $100,000 investment would receive $5,116 in tax-exempt income
versus $3,908 and $3,685, respectively.
CLOSED-END STRUCTURE MAY ENHANCE RETURNS. For the one-month period
ended November 30, 1998, the current yield and current taxable equivalent yield
for closed-end municipal bonds funds was 5.64% and 9.34%, for open-end municipal
bond funds was 4.74% and 7.85%, for general obligation municipal bonds was 5.01%
and 8.29% and for 30-year U.S. Treasury Bonds was 5.07% and 5.07%. SOURCE:
Closed-End Municipal Average calculated as an average of the reported yields of
the 93 national leveraged and non-leveraged closed-end municipal funds tracked
by CDA Weisenburger; Open-End Municipal Fund Average Class A shares is the
Lipper General Municipal Average as calculated on the reported yields of the 86
national open-end funds tracked by Lipper Analytical Services; U.S. Treasury and
General Obligation Bond Buyer Index - FactSet. Current Taxable Equivalent Yields
are calculated by assuming a maximum 39.6% tax rate and do not take into account
state and local taxes. It is not possible to invest directly in an average or
index. The Trust will not seek to match the composition or performance of any
such indices or averages. Performance of the various indices should not be
viewed as indicative of the performance of the Trust.
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The management of the Trust, including general supervision of the
duties performed by the Adviser under the Advisory Agreement, is the
responsibility of the Trust's Board of Trustees under the laws of The
Commonwealth of Massachusetts.
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THE ADVISER
Eaton Vance Management acts as the Trust's investment adviser under an
Investment Advisory Agreement ("Advisory Agreement"). The Adviser's principal
office is located at 24 Federal Street, Boston, MA 02110. Eaton Vance, its
affiliates and predecessor companies have been managing assets of individuals
and institutions since 1924 and of investment companies since 1931. Eaton Vance
(or its affiliates) currently serves as the investment adviser to investment
companies and various individual and institutional clients with combined assets
under management of over $30 billion, of which approximately $28 billion is in
investment companies. Eaton Vance is a wholly-owned subsidiary of Eaton Vance
Corp., a publicly held holding company which through its subsidiaries and
affiliates engages primarily in investment management, administration and
marketing activities.
Eaton Vance employs 24 personnel in its municipal bond department,
including six portfolio managers, two traders and eleven credit analysts. Eaton
Vance was one of the first advisory firms to manage a registered municipal bond
investment company, and has done so continuously since 1978. Eaton Vance
currently manages 3 national municipal investment companies, 32 single state
municipal investment companies, 9 limited maturity municipal investment
companies and 1 money market municipal investment company, with assets of over
$8 billion. Among such funds, Eaton Vance currently offers Eaton Vance New
Jersey Municipals Fund - Class A (the "NJ Fund") which invests primarily in
investment grade New Jersey municipal obligations. Morningstar, Inc. awarded the
NJ Fund four stars for the three-year period ended November 30, 1998.
Morningstar is an independent evaluator of public investment companies and
publishes proprietary ratings reflecting historical risk-adjusted performance.
Morningstar ratings are calculated from a fund's annual returns in excess of the
90-day U.S. Treasury bill returns, with appropriate fee adjustments a risk
factor that reflects fund performance below 90-day Treasury bill returns. The NJ
Fund is in the Morningstar Municipal Bond Fund category, which includes 1572
(for such three year period) other investment companies. A fund receives four
stars if its risk-adjusted performance is in the top 32.5% of its rating
category. Ratings are subject to change every month. (The Eaton Vance New Jersey
Municipal Fund - Class B, which has higher expenses, received a three star
rating for the three-year period and a two star rating for the five-year period
ended November 30, 1998.) Although the NJ Fund has substantially similar
investment objectives and policies as the Trust, certain investment policies and
restrictions of the NJ Fund differs from those of the Trust. For example, the NJ
Fund has not employed financial leverage for investment purposes, can hold no
more than 15% of its net assets in illiquid securities and cannot invest in
obligations of below B in credit quality. Moreover, such fund is continuously
offered and makes daily redemptions so it has not been fully invested at all
times. The portfolio holdings and investment performance of such fund will
differ from those of the Trust. Past performance of such fund is not indicative
of the Trust's performance.
Under the general supervision of the Trust's Board of Trustees, the
Adviser will carry out the investment and reinvestment of the assets of the
Trust, will furnish continuously an investment program with respect to the
Trust, will determine which securities should be purchased, sold or exchanged,
and will implement such determinations. The Adviser will furnish to the Trust
investment advice and office facilities, equipment and personnel for servicing
the investments of the Trust. The Adviser will compensate all Trustees and
officers of the Trust who are members of the Adviser's organization and who
render investment services to the Trust, and will also compensate all other
Adviser personnel who provide research and investment services to the Trust. In
return for these services, facilities and payments, the Trust has agreed to pay
the Adviser as compensation under the Advisory Agreement a fee in the amount of
.70% of the average weekly gross assets of the Trust. Gross assets of the Trust
shall be calculated by deducting accrued liabilities of the Trust not including
the amount of any preferred shares outstanding.
Robert B. MacIntosh is the portfolio manager of the Trust and is
responsible for day-to-day management of the Trust's investments. Mr. MacIntosh
has been an employee of Eaton Vance since ______ and a Vice President of Eaton
Vance since ______. He currently manages six municipal bond investment companies
(including the NJ Fund) with combined assets of over $ billion.
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The Trust and the Adviser have adopted Codes of Ethics relating to
personal securities transactions. The Codes permit Adviser personnel to invest
in securities (including securities that may be purchased or held by the Trust)
for their own accounts, subject to certain pre-clearance, reporting and other
restrictions and procedures contained in such Codes.
The Trust has engaged Eaton Vance to act as its administrator under an
Administration Agreement (the "Administration Agreement"). Under the
Administration Agreement, Eaton Vance is responsible for managing the business
affairs of the Trust, subject to the supervision of the Trust's Board of
Trustees. Eaton Vance will furnish to the Trust all office facilities, equipment
and personnel for administering the affairs of the Trust. Eaton Vance's
administrative services include recordkeeping, preparation and filing of
documents required to comply with federal and state securities laws, supervising
the activities of the Trust's custodian and transfer agent, providing assistance
in connection with the Trustees' and shareholders' meetings, providing service
in connection with any repurchase offers and other administrative services
necessary to conduct the Trust's business. In return for these services,
facilities and payments, the Trust is authorized to pay Eaton Vance as
compensation under the Administration Agreement a fee in the amount of .20% of
the average weekly gross assets of the Trust.
Eaton Vance has agreed to bear all ordinary and organizational expenses
of the Trust that exceed 5% of average weekly net assets (taking into account
the deduction of any preferred shares and related expenses) for the first year
of operations. In return for this arrangement, the Trust will reimburse Eaton
Vance over the first year of operations for organizational expenses of the Trust
borne by Eaton Vance at the onset of operations.
DISTRIBUTIONS AND TAXES
The Trust intends to make monthly distributions of net investment
income, after payment of any dividends on any outstanding preferred shares. The
Trust will distribute annually any net short-term capital gain and any net
capital gain (which is the excess of net long-term capital gain over net
short-term capital loss). Distributions to Shareholders cannot be assured, and
the amount of each monthly distribution is likely to vary. Initial distributions
to Shareholders are expected to be paid approximately 60 days after the
completion of this offering. While there are any preferred shares outstanding,
the Trust might not be permitted to declare any cash dividend or other
distribution on its Shares in certain circumstances. See "Description of Capital
Structure."
Each dividend distribution, whether paid in cash or reinvested in
additional Shares, ordinarily will constitute income exempt from regular federal
income tax. Distributions of interest on certain municipal obligations, however,
are a tax preference item under the AMT. Moreover, distributions of any taxable
net investment income and net short-term capital gain are taxable as ordinary
income. Finally, distributions of the Trust's net capital gain ("capital gain
dividends"), if any, are taxable to Shareholders as long-term capital gains,
regardless of the length of time Shares have been held by Shareholders.
Distributions, if any, in excess of the Trust's earnings and profits will first
reduce the adjusted tax basis of a holder's Shares and, after that basis has
been reduced to zero, will constitute capital gains to the Shareholder (assuming
the Shares are held as a capital asset). See below for a summary of the maximum
tax rates applicable to capital gains (including capital gain dividends).
The Trust will inform Shareholders of the source and tax status of all
distributions promptly after the close of each calendar year.
Selling Shareholders will generally recognize gain or loss in an amount
equal to the difference between the Shareholder's adjusted tax basis in the
Shares and the amount received. If the Shares are held as a capital asset, the
gain or loss will be a capital gain or loss. The maximum tax rate applicable to
net capital gains recognized by individuals and other non-corporate taxpayers is
(i) the same as the maximum ordinary income tax rate for gains recognized on the
sale of capital assets held for one year or less or (ii) 20% for gains
recognized on the sale of capital assets held for more than one year (as well as
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capital gain dividends). Any loss recognized on a disposition of Shares held for
six months or less will be treated as a long-term capital loss to the extent of
any capital gain dividends received with respect to those Shares. For purposes
of determining whether Shares have been held for six months or less, the holding
period is suspended for any periods during which the Shareholder's risk of loss
is diminished as a result of holding one or more other positions in
substantially similar or related property, or through certain options or short
sales. Any loss realized on a sale or exchange of Shares will be disallowed to
the extent those Shares are replaced by other Shares within a period of 61 days
beginning 30 days before and ending 30 days after the date of disposition of the
Shares (which could occur, for example, if the Shareholder is a participant in
the Plan (as defined below)). In that event, the basis of the replacement Shares
will be adjusted to reflect the disallowed loss.
An investor should be aware that if Shares are purchased shortly before
the record date for any taxable dividend (including a capital gain dividend),
the purchase price likely will reflect the value of the dividend and the
investor then would receive a taxable distribution likely to reduce the trading
value of such Shares, in effect resulting in a taxable return of some of the
purchase price. Taxable distributions to individuals and certain other
non-corporate Shareholders, including those who have not provided their correct
taxpayer identification number and other required certifications, may be subject
to "backup" federal income tax withholding at the rate of 31%.
NEW JERSEY TAXES. The Trust intends to satisfy New Jersey's statutory
requirements for treatment as a "Qualified Investment Fund". The Trust has
obtained an opinion of its New Jersey special tax counsel that, provided the New
Jersey Trust limits its investment to those described in this Prospectus and
otherwise satisfies such statutory requirements, shareholders of the Trust which
are individuals, estates or trusts will not be required to include in their New
Jersey gross income distributions from the Trust that are attributable to
interest or gain realized by the Trust from obligations the interest on which is
exempt from regular federal income tax and is exempt from New Jersey State
personal income tax or other obligations statutorily free from New Jersey
taxation. However, with regard to corporate shareholders, such counsel is also
of the opinion that distributions from the Trust will not be excluded from net
income and shares of the New Jersey Fund will not be excluded from investment
capital in determining New Jersey corporation business (franchise) and
corporation income taxes for corporate shareholders.
The foregoing briefly summarizes some of the important federal income
tax consequences to Shareholders of investing in Shares, reflects the federal
and state tax law, as of the date of this Prospectus, and does not address
special tax rules applicable to certain types of investors, such as corporate
investors. There may be other federal, state or local tax considerations
applicable to a particular investor. Investors should consult their tax
advisers.
DIVIDEND REINVESTMENT PLAN
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), unless
a Shareholder otherwise elects, all distributions of dividends (including all
capital gain dividends) will be automatically reinvested in Shares.
First Data Investor Services Group (the "Plan Agent") serves as agent
for the Shareholders in administering the Plan. Shareholders who elect not to
participate in the Plan will receive all distributions of dividends in cash paid
by check mailed directly to the Shareholder of record (or if the Shares are held
in street or other nominee name, then to the nominee) by First Data Investor
Services Group as disbursing agent. Participation in the Plan is completely
voluntary and may be terminated or resumed at any time without penalty by
written notice if received by the Plan Agent not less than ten days prior to any
dividend record date.
Shares will be acquired by the Plan Agent or an independent
broker-dealer for the participants' accounts, depending upon the circumstances
described below, either (i) through receipt of additional previously authorized
but unissued Shares from the Trust ("newly issued Shares") or (ii) by purchase
of outstanding Shares on the open market ("open-market purchases") on the New
York Stock Exchange or elsewhere. If on the payment date for the dividend, the
net asset value per Share is equal to or less than the market price per Share
plus estimated brokerage commissions (such condition being referred to herein as
"market premium"), the Plan Agent will invest the dividend amount in newly
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issued Shares on behalf of the participants. The number of newly issued Shares
to be credited to each participant's account will be determined by dividing the
dollar amount of the dividend by the net asset value per Share on the date the
Shares are issued, provided that the maximum discount from the then current
market price per Share on the date of issuance may not exceed 5%. If on the
dividend payment date the net asset value per Share is greater than the market
value plus estimated brokerage commissions (such condition being referred to
herein as "market discount"), the Plan Agent will invest the dividend amount in
Shares acquired on behalf of the participants in open-market purchases.
In the event of a market discount on the dividend payment date, the
Plan Agent will have up to 30 days after the dividend payment date to invest the
dividend amount in Shares acquired in open-market purchases. If, before the Plan
Agent has completed its open-market purchases, the market price of a Share
exceeds the net asset value per Share, the average per Share purchase price paid
by the Plan Agent may exceed the net asset value of the Trust's Shares,
resulting in the acquisition of fewer Shares than if the dividend had been paid
in newly issued Shares on the dividend payment date. Therefore, the Plan
provides that if the Plan Agent is unable to invest the full dividend amount in
open-market purchases during the purchase period or if the market discount
shifts to a market premium during the purchase period, the Plan Agent will cease
making open-market purchases and will invest the uninvested portion of the
dividend amount in newly issued Shares.
The Plan Agent maintains all Shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by Shareholders for tax records. Shares in the account of
each Plan participant will be held by the Plan Agent on behalf of the Plan
participant, and each Shareholder proxy will include those Shares purchased or
received pursuant to the Plan. The Plan Agent will forward all proxy
solicitation materials to participants and vote proxies for Shares held pursuant
to the Plan in accordance with the instructions of the participants.
In the case of Shareholders such as banks, brokers or nominees that
hold Shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of Shares certified from time to
time by the record Shareholder's name and held for the account of beneficial
owners who participate in the Plan.
There will be no brokerage charges with respect to Shares issued
directly by the Trust as a result of dividends payable either in Shares or in
cash. However, each participant will pay a pro rata share of brokerage
commissions incurred with respect to the Plan Agent's open-market purchases in
connection with the reinvestment of dividends.
Shareholders participating in the Plan may receive benefits not
available to Shareholders not participating in the Plan. If the market price
(plus commissions) of the Trust's Shares is above their net asset value,
participants in the Plan will receive Shares of the Trust at less than they
could otherwise purchase them and will have Shares with a cash value greater
than the value of any cash distribution they would have received on their
Shares. If the market price plus commissions is below the net asset value,
participants will receive distributions in Shares with a net asset value greater
than the per Share value of any cash distribution they would have received on
their Shares. However, there may be insufficient Shares available in the market
to make distributions in Shares at prices below the net asset value. Also, since
the Trust does not redeem its Shares, the price on resale may be more or less
than the net asset value.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan. There
is no direct service charge to participants in the Plan; however, the Trust
reserves the right to amend the Plan to include a service charge payable by the
participants.
All correspondence concerning the Plan should be directed to the Plan
Agent at P. O. Box 8030, Boston, MA 02266-8030. Please call 1-800-331-1710
between the hours of 9:00 a.m. and 5:00 p.m. Eastern Standard Time if you have
questions regarding the Plan.
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DESCRIPTION OF CAPITAL STRUCTURE
The Trust is an unincorporated business trust established under the
laws of the Commonwealth of Massachusetts by an Agreement and Declaration of
Trust dated December 10, 1998 (the "Declaration of Trust"). The Declaration of
Trust provides that the Trustees of the Trust may authorize separate classes of
shares of beneficial interest. The Trustees have authorized an unlimited number
of Shares. The Trust intends to hold annual meetings of Shareholders in
compliance with the requirements of the New York Stock Exchange.
SHARES. The Declaration of Trust permits the Trust to issue an
unlimited number of full and fractional Shares of beneficial interest, $0.01 par
value per Share. Each Share represents an equal proportionate interest in the
assets of the Trust with each other Share in the Trust. Holders of Shares will
be entitled to the payment of dividends when, as and if declared by the Board of
Trustees. The 1940 Act or the terms of any borrowings or preferred shares may
limit the payment of dividends to the holders of Shares. Each whole Share shall
be entitled to one vote as to matters on which it is entitled to vote pursuant
to the terms of the Declaration of Trust on file with the SEC. Upon liquidation
of the Trust, after paying or adequately providing for the payment of all
liabilities of the Trust and the liquidation preference with respect to any
outstanding preferred shares, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the Trustees
may distribute the remaining assets of the Trust among the holders of the
Shares. The Declaration of Trust provides that Shareholders are not liable for
any liabilities of the Trust, requires inclusion of a clause to that effect in
every agreement entered into by the Trust and indemnifies shareholders against
any such liability. Although shareholders of an unincorporated business trust
established under Massachusetts law, in certain limited circumstances, may be
held personally liable for the obligations of the Trust as though they were
general partners, the provisions of the Declaration of Trust described in the
foregoing sentence make the likelihood of such personal liability remote.
While there are any borrowings or preferred shares outstanding, the
Trust may not be permitted to declare any cash dividend or other distribution on
its Shares, unless at the time of such declaration, (i) all accrued dividends on
preferred shares or accrued interest on borrowings has been paid and (2) the
value of the Trust's total assets (determined after deducting the amount of such
dividend or other distribution), less all liabilities and indebtedness of the
Trust not represented by senior securities, is at least 300% of the aggregate
amount of such securities representing indebtedness and at least 200% of the
aggregate amount of securities representing indebtedness plus the aggregate
liquidation value of the outstanding preferred shares (expected to equal the
aggregate original purchase price of the outstanding preferred shares plus
redemption premium, if any, together with any accrued and unpaid dividends
thereon, whether or not earned or declared and on a cumulative basis). In
addition to the requirements of the 1940 Act, the Trust may be required to
comply with other asset coverage requirements as a condition of the Trust
obtaining a rating of the preferred shares from a Rating Agency. These
requirements may include an asset coverage test more stringent than under the
1940 Act. This limitation on the Trust's ability to make distributions on its
Shares could in certain circumstances impair the ability of the Trust to
maintain its qualification for taxation as a regulated investment company. The
Trust intends, however, to the extent possible to purchase or redeem preferred
shares from time to time to maintain compliance with such asset coverage
requirements and may pay special dividends to the holders of the preferred
shares in certain circumstances in connection with any such impairment of the
Trust's status as a regulated investment company. See "Investment Objective,
Policies and Risks" and "Distributions and Taxes." Depending on the timing of
any such redemption or repayment, the Trust may be required to pay a premium in
addition to the liquidation preference of the preferred shares to the holders
thereof. See "-Borrowings" below.
The Trust has no present intention of offering additional Shares,
except as described herein. Other offerings of its Shares, if made, will require
approval of the Board of Trustees. Any additional offering will not be sold at a
price per Share below the then current net asset value (exclusive of
underwriting discounts and commissions) except in connection with an offering to
existing Shareholders or with the consent of a majority of the Trust's
outstanding Shares. The Shares have no preemptive rights.
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The Trust generally will not issue Share certificates. However, upon
written request to the Trust's transfer agent, a share certificate will be
issued for any or all of the full Shares credited to an investor's account.
Share certificates which have been issued to an investor may be returned at any
time.
REPURCHASE OF SHARES AND OTHER DISCOUNT MEASURES. Because shares of
closed-end management investment companies frequently trade at a discount to
their net asset values, the Board of Trustees has determined that from time to
time it may be in the interest of Shareholders for the Trust to take corrective
actions. The Board of Trustees, in consultation with Eaton Vance, will review at
least annually the possibility of open market repurchases and/or tender offers
for the Shares and will consider such factors as the market price of the Shares,
the net asset value of the Shares, the liquidity of the assets of the Trust,
effect on the Trust's expenses, whether such transactions would impair the
Trust's status as a regulated investment company or result in a failure to
comply with applicable asset coverage requirements, general economic conditions
and such other events or conditions which may have a material effect on the
Trust's ability to consummate such transactions. There are no assurances that
the Board of Trustees will, in fact, decide to undertake either of these actions
or if undertaken, that such actions will result in the Trust's Shares trading at
a price which is equal to or approximates their net asset value. In recognition
of the possibility that the Shares might trade at a discount to net asset value
and that any such discount may not be in the interest of Shareholders, the Board
of Trustees, in consultation with Eaton Vance, from time to time may review
possible actions to reduce any such discount.
PREFERRED SHARES. The Declaration of Trust authorizes the issuance of
an unlimited number of shares of beneficial interest with preference rights,
including preferred shares (the "Preferred Shares"), having a par value of $0.01
per share, in one or more series, with rights as determined by the Board of
Trustees, by action of the Board of Trustees without the approval of the
Shareholders.
Under the requirements of the 1940 Act, the Trust must, immediately
after the issuance of any Preferred Shares, have an "asset coverage" of at least
200%. Asset coverage means the ratio which the value of the total assets of the
Trust, less all liability and indebtedness not represented by senior securities
(as defined in the 1940 Act), bears to the aggregate amount of senior securities
representing indebtedness of the Trust, if any, plus the aggregate liquidation
preference of the Preferred Shares. If the Trust seeks a rating of the Preferred
Shares, asset coverage requirements, in addition to those set forth in the 1940
Act, may be imposed. The liquidation value of the Preferred Shares is expected
to equal their aggregate original purchase price plus redemption premium, if
any, together with any accrued and unpaid dividends thereon (on a cumulative
basis), whether or not earned or declared. The terms of the Preferred Shares,
including their dividend rate, voting rights, liquidation preference and
redemption provisions, will be determined by the Board of Trustees (subject to
applicable law and the Trust's Declaration of Trust) if and when it authorizes
the Preferred Shares. The Trust may issue Preferred Shares that provide for the
periodic redetermination of the dividend rate at relatively short intervals
through an auction or remarketing procedure, although the terms of the Preferred
Shares may also enable the Trust to lengthen such intervals. At times, the
dividend rate as redetermined on the Trust's Preferred Shares may approach or
exceed the Trust's return after expenses on the investment of proceeds from the
Preferred Shares and the Trust's leverage structure would result in a lower rate
of return to Shareholders than if the Trust were not so structured.
In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Trust, the terms of any Preferred Shares may entitle the
holders of Preferred Shares to receive a preferential liquidating distribution
(expected to equal the original purchase price per share plus redemption
premium, if any, together with accrued and unpaid dividends, whether or not
earned or declared and on a cumulative basis) before any distribution of assets
is made to holders of Shares. After payment of the full amount of the
liquidating distribution to which they are entitled, the Preferred Shareholders
would not be entitled to any further participation in any distribution of assets
by the Trust.
Holders of preferred shares, voting as a class, shall be entitled to
elect two of the Fund's Trustees. Under the 1940 Act, if at any time dividends
on the preferred shares are unpaid in an amount equal to a full years' dividends
thereon, the holders of all outstanding preferred shares, voting as a class,
will be allowed to elect a majority of the Fund's Trustees until all dividends
in default have been paid or declared and set apart for payment. In addition, if
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required by the Rating Agency rating the preferred shares or if the Board of
Trustees determines it to be in the best interests of the common shareholders,
issuance of the preferred shares may result in more restrictive provisions than
required by the 1940 Act being imposed. In this regard, holders of the preferred
shares may be entitled to elect a majority of the Trust's Board of Trustees in
other circumstances, for example, if one payment on the preferred shares is in
arrears.
The Trust currently intends to seek an investment grade rating for the
Preferred Shares from one Rating Agency. The Trust intends that, as long as
Preferred Shares are outstanding, the composition of its portfolio will reflect
guidelines established by such Rating Agency. Although, as of the date hereof,
no such Rating Agency has established guidelines relating to the Preferred
Shares, based on previous guidelines established by such Rating Agencies for the
securities of other issuers, the Trust anticipates that the guidelines with
respect to the Preferred Shares will establish a set of tests for portfolio
composition and asset coverage that supplement (and in some cases are more
restrictive than) the applicable requirements under the 1940 Act. Although, at
this time, no assurance can be given as to the nature or extent of the
guidelines which may be imposed in connection with obtaining a rating of the
Preferred Shares, the Trust currently anticipates that such guidelines will
include asset coverage requirements which are more restrictive than those under
the 1940 Act, restrictions on certain portfolio investments and investment
practices, requirements that the Trust maintain a portion of its assets in
short-term, high-quality, fixed-income securities and certain mandatory
redemption requirements relating to the Preferred Shares. No assurance can be
given that the guidelines actually imposed with respect to the Preferred Shares
by such Rating Agency will be more or less restrictive than as described in this
Prospectus.
ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST. The Declaration
of Trust includes provisions that could have the effect of limiting the ability
of other entities or persons to acquire control of the Trust or to change the
composition of its Board of Trustees, and could have the effect of depriving
Shareholders of an opportunity to sell their Shares at a premium over prevailing
market prices by discouraging a third party from seeking to obtain control of
the Trust. These provisions may have the effect of discouraging attempts to
acquire control of the Trust, which attempts could have the effect of increasing
the expenses of the Trust and interfering with the normal operation of the
Trust. The Board of Trustees is divided into three classes, with the term of one
class expiring at each annual meeting of Shareholders. At each annual meeting,
one class of Trustees is elected to a three-year term. This provision could
delay for up to two years the replacement of a majority of the Board of
Trustees. A Trustee may be removed from office only for cause by a written
instrument signed by the remaining Trustees or by a vote of the holders of at
least two-thirds of the class of Shares of the Trust that elected such Trustee
and is entitled to vote on the matter.
In addition, the Declaration of Trust requires the favorable vote of
the holders of at least 75% of the outstanding shares of each class of the
Trust, voting as a class, then entitled to vote to approve, adopt or authorize
certain transactions with 5%-or-greater holders of a class of shares and their
associates, unless the Board of Trustees shall by resolution have approved a
memorandum of understanding with such holders, in which case normal voting
requirements would be in effect. For purposes of these provisions, a
5%-or-greater holder of a class of shares (a "Principal Shareholder") refers to
any person who, whether directly or indirectly and whether alone or together
with its affiliates and associates, beneficially owns 5% or more of the
outstanding shares of any class of beneficial interest of the Trust. The
transactions subject to these special approval requirements are: (i) the merger
or consolidation of the Trust or any subsidiary of the Trust with or into any
Principal Shareholder; (ii) the issuance of any securities of the Trust to any
Principal Shareholder for cash; (iii) the sale, lease or exchange of all or any
substantial part of the assets of the Trust to any Principal Shareholder (except
assets having an aggregate fair market value of less than $1,000,000,
aggregating for the purpose of such computation all assets sold, leased or
exchanged in any series of similar transactions within a twelve-month period);
or (iv) the sale, lease or exchange to the Trust or any subsidiary thereof, in
exchange for securities of the Trust, of any assets of any Principal Shareholder
(except assets having an aggregate fair market value of less than $1,000,000,
aggregating for the purposes of such computation all assets sold, leased or
exchanged in any series of similar transactions within a twelve-month period).
The Board of Trustees has determined that provisions with respect to
the Board and the 75% voting requirements described above, which voting
requirements are greater than the minimum requirements under Massachusetts law
or the 1940 Act, are in the best interest of Shareholders generally. Reference
should be made to the Declaration of Trust on file with the SEC for the full
text of these provisions.
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CONVERSION TO OPEN-END FUND. The Trust may be converted to an open-end
investment company at any time if approved by the lesser of (i) 2/3 or more of
the Trust's then outstanding Shares and preferred shares (if any), each voting
separately as a class, or (ii) more than 50% of the then outstanding Shares and
preferred shares (if any), voting separately as a class if such conversion is
recommended by at least 75% of the Trustees then in office. If approved in the
foregoing manner, conversion of the Trust could not occur until 90 days after
the Shareholders' meeting at which such conversion was approved and would also
require at least 30 days' prior notice to all Shareholders. The composition of
the Trust's portfolio likely would prohibit the Trust from complying with
regulations of the SEC applicable to open-end investment companies. Accordingly,
conversion likely would require significant changes in the Trust's investment
policies and liquidation of a substantial portion of its relatively illiquid
portfolio. Conversion of the Trust to an open-end investment company also would
require the redemption of any outstanding Preferred Shares and could require the
repayment of borrowings, which would eliminate the leveraged capital structure
of the Trust with respect to the Shares. In the event of conversion, the Shares
would cease to be listed on the New York Stock Exchange or other national
securities exchange or market system. The Board of Trustees believes, however,
that the closed-end structure is desirable, given the Trust's investment
objective and policies. Investors should assume, therefore, that it is unlikely
that the Board of Trustees would vote to convert the Trust to an open-end
investment company. Shareholders of an open-end investment company may require
the company to redeem their shares at any time (except in certain circumstances
as authorized by or under the 1940 Act) at their net asset value, less such
redemption charge, if any, as might be in effect at the time of a redemption.
The Trust expects to pay all such redemption requests in cash, but intends to
reserve the right to pay redemption requests in a combination of cash or
securities. If such partial payment in securities were made, investors may incur
brokerage costs in converting such securities to cash. If the Trust were
converted to an open-end fund, it is likely that new Shares would be sold at net
asset value plus a sales load.
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<PAGE>
UNDERWRITING
The underwriters named below (the "Underwriters"), acting through
PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New York, as
their representatives (the "Representatives"), have severally agreed, subject to
the terms and conditions of the Underwriting Agreement with the Trust and Eaton
Vance (the "Underwriting Agreement"), to purchase from the Trust the number of
Shares set forth opposite their respective names. The Underwriters are committed
to purchase all of such Shares if any are purchased.
UNDERWRITER NUMBER
----------- ------
OF SHARES
---------
PaineWebber Incorporated................................
Total......................................... ____________
The Trust has granted to the Underwriters an option, exercisable for 45
days from the date of this Prospectus to purchase up to an additional
______________ Shares to cover over-allotments, if any, at the initial offering
price. The Underwriters may exercise such option solely for the purpose of
covering over-allotments incurred in the sale of the Shares offered hereby. To
the extent that the Underwriters exercise this option, each of the Underwriters
will have a firm commitment, subject to certain conditions, to purchase an
additional number of Shares proportionate to such Underwriter's initial
commitment.
The Shares are offered by the Underwriters, subject to prior sale,
when, as and if delivered to and accepted by the Underwriters and subject to
their right to reject orders in whole or in part. As set forth in the notes to
the table on the cover page of this Prospectus, Eaton Vance or an affiliate (not
the Trust) from its own assets has agreed to pay a commission to the
Underwriters in the amount of $0.___ per Share (_____% of the public offering
price per Share) or an aggregate amount of $______________ ($______________
assuming full exercise of the over-allotment option) for all Shares covered by
this Prospectus. Such payment will be the legal obligation of Eaton Vance or an
affiliate and made out of its own assets and will not in any way represent an
obligation of the Trust or its Shareholders. The Representatives have advised
the Trust that the Underwriters may pay up to $0.3 per Share from such payment
received from Eaton Vance to selected dealers who sell the Shares and that the
Underwriters and such dealers may reallow a concession of up to $0. per Share to
certain other dealers who sell Shares. Eaton Vance (or an affiliate) has agreed
to pay all offering expenses of the Trust that exceed $0.03 per share. Offering
expenses include $________________ payment to the Underwriters in partial
reimbursement of their expenses.
Prior to this offering, there has been no public market for the Shares
or any other securities of the Trust. The Trust has applied for listing of the
Shares on the New York Stock Exchange under the symbol "______." In order to
meet the requirements for listing the Shares on the New York Stock Exchange, the
Underwriters have undertaken to sell lots of 100 or more Shares to a minimum of
2,000 beneficial holders. The minimum investment requirement is 100 Shares
($1,500).
The Trust and Eaton Vance have each agreed to indemnify the several
Underwriters for or to contribute to the losses arising out of certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Trust has agreed not to offer or sell any additional Shares of the
Trust, other than as contemplated by this Prospectus, for a period of 180 days
after the date of the Underwriting Agreement without the prior written consent
of the Underwriters.
The Representatives have informed the Trust that the Underwriters do
not intend to confirm sale to any accounts over which they exercise
discretionary authority.
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<PAGE>
In connection with this offering, the underwriters may purchase and
sell Shares in the open market. These transactions my include over-allotment and
stabilizing transactions and purchases to cover syndicate short positions
created in connection with this offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Shares and syndicate short positions involve the sale
by the underwriters of a greater number of Shares than they are required to
purchase from the Trust in this offering. The underwriters also may impose a
penalty bid, whereby selling concessions allowed to syndicate members or other
broker-dealers in respect of the Shares sold in this offering for their account,
may be reclaimed by the syndicate if such Shares are repurchased by the
syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Shares, which
may be higher than the price that might otherwise prevail in the open market;
and these activities, if commenced, may be discontinued at any time without
notice. These transactions may be effected on the New York Stock Exchange or
otherwise.
Under the terms of and subject to the conditions of the Underwriting
Agreement, the Underwriters are committed to purchase and pay for all Shares
offered hereby if any are purchased. The Underwriting Agreement provides that it
may be terminated at or prior to the closing date for the purchase of the Shares
if, in the judgement of the Representatives, payment for the delivery of the
Shares is rendered impracticable or inadvisable because (1) trading in the
equity securities of the Trust is suspended by the SEC, by an exchange that
lists the Shares, or by the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQ"), (2) trading in securities generally
on the New York Stock Exchange or NASDAQ shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such exchange
or over-the-counter market, (3) additional material governmental restrictions,
not in force on the date of the Underwriting Agreement, have been imposed upon
trading in securities generally or trading in securities generally has been
suspended on any U.S. securities exchange, (4) a general banking moratorium has
been established by federal or New York authorities, or (5) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or other calamity or crisis occurs, the
effect of which is such as to make it impracticable to market any or all of the
Shares. The Underwriting Agreement also may be terminated if any of the
conditions specified in the Underwriting Agreement have not been fulfilled when
and as required by such agreement.
The Trust anticipates that the Representatives and certain other
Underwriters may from time to time act as brokers or dealers in connection with
the execution of its Trust transactions after they have ceased to be
Underwriters and, subject to certain restrictions, may act as such brokers while
they are Underwriters.
As described below under "Shareholder Servicing Agent, Custodian and
Transfer Agent," PaineWebber Incorporated will provide shareholder services to
the Trust pursuant to a Shareholder Servicing Agreement with Eaton Vance. Eaton
Vance will pay a monthly fee on an annual basis equal to .10% of the average
weekly net assets of the Trust for such services.
SHAREHOLDER SERVICING AGENT, CUSTODIAN AND TRANSFER AGENT
Pursuant to a Shareholder Servicing Agreement between PaineWebber
Incorporated (the "Shareholder Servicing Agent") and Eaton Vance, the
Shareholder Servicing Agent will (i) undertake to make public information
pertaining to the Trust on an ongoing basis and to communicate to investors and
prospective investors the Trust's features and benefits (including periodic
seminars or conference calls, responses to questions from current or prospective
shareholders and specific shareholder contact where appropriate); (ii) make
available to investors and prospective investors market price, net asset value,
yield and other information regarding the Trust, if reasonably obtainable, for
the purpose of maintaining the visibility of the Trust in the investor
community; (iii) at the request of Eaton Vance, provide certain economic
research and statistical information and reports, if reasonably obtainable, on
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<PAGE>
behalf of the Trust, and consult with representatives and Trustees of the Trust
in connection therewith, which information and reports shall include: (a)
statistical and financial market information with respect to the Trust's market
performance and (b) comparative information regarding the Trust and other
closed-end management investment companies with respect to (1) the net asset
value of their respective shares, (2) the respective market performance of the
Trust and such other companies and (3) other relevant performance indicators;
and (iv) at the request of Eaton Vance, provide information to and consult with
the Board of Trustees with respect to applicable modifications to dividend
policies or capital structure, repositioning or restructuring of the Trust,
conversion of the Trust to an open-end investment company, liquidation or
merger; provided, however, that under the terms of the Shareholder Servicing
Agreement, the Shareholder Servicing Agent is not obligated to render any
opinions, valuations or recommendations of any kind or to perform any such
similar services. For these services, Eaton Vance will pay the Shareholder
Servicing Agent a fee equal on an annual basis to .10% of the Trust's average
weekly net assets, payable in arrears at the end of each calendar month. Under
the terms of the Shareholder Servicing Agreement, the Shareholder Servicing
Agent is relieved from liability to Eaton Vance for any act or omission in the
course of its performances under the Shareholder Servicing Agreement in the
absence of gross negligence or willful misconduct by the Shareholder Servicing
Agent. The Shareholder Servicing Agreement will continue for an initial term of
two years and thereafter for successive one-year periods unless terminated by
either party upon 60 days written notice.
Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston,
MA 02116 is the custodian of the Trust and will maintain custody of the
securities and cash of the Trust. IBT maintains the Trust's general ledger and
computes net asset value per share at least weekly. IBT also attends to details
in connection with the sale, exchange, substitution, transfer and other dealings
with the Trust's investments, and receives and disburses all funds. IBT also
assists in preparation of shareholder reports and the electronic filing of such
reports with the SEC.
First Data Investor Services Group, P.O. Box 5123, Westborough, MA
01581-5123 is the transfer agent and dividend disbursing agent of the Trust.
LEGAL OPINIONS
It is expected that certain legal matters in connection with the Shares
offered hereby will be passed upon for the Trust by Kirkpatrick & Lockhart LLP,
and for the Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP and its
affiliated entities.
ADDITIONAL INFORMATION
The Prospectus and the Statement of Additional Information do not
contain all of the information set forth in the Registration Statement that the
Trust has filed with the SEC. The complete Registration Statement may be
obtained from the SEC upon payment of the fee prescribed by its rules and
regulations. The Statement of Additional Information can be obtained without
charge by calling 1-800-225-6265.
Statements contained in this Prospectus as to the contents of any
contract or other documents referred to are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part, each such statement being qualified in all respects by such reference.
29
<PAGE>
TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION
PAGE
Additional Investment Information and Restrictions................... B-2
Trustees and Officers................................................ B-8
Investment Advisory and Other Services............................... B-10
Determination of Net Asset Value..................................... B-12
Portfolio Trading.................................................... B-12
Taxes................................................................ B-14
Other Information.................................................... B-17
Auditors............................................................. B-17
Independent Auditors Report.......................................... B-18
Financial Statements................................................. B-19
Appendix A: Ratings of Municipal Bonds............................... B-21
Appendix B: Tax Equivalent Yield Table............................... B-27
Appendix C: New Jersey and U.S. Territory Information................ B-28
30
<PAGE>
_________________________ SHARES
EATON VANCE NEW JERSEY
MUNICIPAL INCOME TRUST
[LOGO]
---------------
PROSPECTUS
---------------
PAINEWEBBER INCORPORATED
---------------
___________________ , 1999
UNTIL ____________________ , 1999, ALL DEALERS EFFECTING TRANSACTIONS IN
THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION,
MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION
OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
31
<PAGE>
SUBJECT TO COMPLETION - DECEMBER , 1998
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
24 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(800) 225-6265
TABLE OF CONTENTS
PAGE
Additional Investment Information and Restrictions....................B-2
Trustees and Officers.................................................B-8
Investment Advisory and Other Services................................B-10
Determination of Net Asset Value......................................B-12
Portfolio Trading.....................................................B-12
Taxes.................................................................B-14
Other Information.....................................................B-17
Auditors..............................................................B-17
Independent Auditors Report...........................................B-18
Financial Statements..................................................B-19
Appendix A: Ratings of Municipal Bonds................................B-21
Appendix B: Tax Equivalent Yield Table................................B-27
Appendix C: New Jersey and U.S. Territory Information.................B-29
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
(THE "TRUST") DATED ________________, 1999, AS SUPPLEMENTED FROM TIME TO TIME,
WHICH IS INCORPORATED HEREIN BY REFERENCE. THIS STATEMENT OF ADDITIONAL
INFORMATION SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH
MAY BE OBTAINED WITHOUT CHARGE BY CONTACTING YOUR FINANCIAL INTERMEDIARY OR
CALLING THE TRUST AT 1-800-225-6265.
RED HERRING LANGUAGE: THE INFORMATION IN THIS STATEMENT OF ADDITIONAL
INFORMATION IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION, WHICH IS NOT
A PROSPECTUS, IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
<PAGE>
Capitalized terms used in this Statement of Additional Information and not
otherwise defined have the meanings given them in the Trust's Prospectus.
ADDITIONAL INVESTMENT INFORMATION AND RESTRICTIONS
MUNICIPAL OBLIGATIONS. Municipal obligations are issued to obtain funds for
various public and private purposes. Municipal obligations include long-term
obligations, which are often called municipal bonds, as well as tax-exempt
commercial paper, project notes and municipal notes such as tax, revenue and
bond anticipation notes of short maturity, generally less than three years.
Market rates of interest available with respect to municipal obligations may be
lower than those available with respect to taxable securities, although such
differences may be partially or wholly offset by the effects of federal income
tax on income derived from such taxable securities. While most municipal bonds
pay a fixed rate of interest semi-annually in cash, some bonds pay no periodic
cash interest but instead make a single payment at maturity representing both
principal and interest. Municipal obligations may be issued or subsequently
offered with interest coupons materially greater or less than those then
prevailing, with price adjustments reflecting such deviation.
In general, there are three categories of municipal obligations the interest on
which is exempt from federal income tax and is not a tax preference item for
purposes of the AMT: (i) certain "public purpose" obligations (whenever issued),
which include obligations issued directly by state and local governments or
their agencies to fulfill essential governmental functions; (ii) certain
obligations issued before August 8, 1986 for the benefit of non-governmental
persons or entities; and (iii) certain "private activity bonds" issued after
August 7, 1986 which include "qualified Section 501(c)(3) bonds" or refundings
of certain obligations included in the second category. Interest on certain
"private activity bonds" issued after August 7, 1986 is exempt from regular
federal income tax, but is treated as a tax preference item that could subject
the recipient to or increase the recipient's liability for the AMT. For
corporate shareholders, the Trust's distributions derived from interest on all
municipal obligations (whenever issued) is included in "adjusted current
earnings" for purposes of the AMT as applied to corporations (to the extent not
already included in alternative minimum taxable income as income attributable to
private activity bonds). In assessing the federal income tax treatment of
interest on any such obligation, the Trust will rely on an opinion of the
issuer's counsel (when available) obtained by the issuer or other reliable
authority and will not undertake any independent verification thereof.
The two principal classifications of municipal bonds are "general obligation"
and "revenue" bonds. Issuers of general obligation bonds include states,
counties, cities, towns and regional districts. The proceeds of these
obligations are used to fund a wide range of public projects including the
construction or improvement of schools, highways and roads, water and sewer
systems and a variety of other public purposes. The basic security of general
obligation bonds is the issuer's pledge of its faith, credit, and taxing power
for the payment of principal and interest. The taxes that can be levied for the
payment of debt service may be limited or unlimited as to rate and amount.
Revenue bonds are generally secured by the net revenues derived from a
particular facility or group of facilities or, in some cases, from the proceeds
of a special excise or other specific revenue source. Revenue bonds have been
issued to fund a wide variety of capital projects including: electric, gas,
water, sewer and solid waste disposal systems; highways, bridges and tunnels;
port, airport and parking facilities; transportation systems; housing
facilities, colleges and universities and hospitals. Although the principal
security behind these bonds varies widely, many provide additional security in
the form of a debt service reserve fund whose monies may be used to make
principal and interest payments on the issuer's obligations. Housing finance
B-2
<PAGE>
authorities have a wide range of security including partially or fully insured,
rent subsidized and/or collateralized mortgages, and/or the net revenues from
housing or other public projects. In addition to a debt service reserve fund,
some authorities provide further security in the form of a state's ability
(without legal obligation) to make up deficiencies in the debt service reserve
fund. Lease rental revenue bonds issued by a state or local authority for
capital projects are normally secured by annual lease rental payments from the
state or locality to the authority sufficient to cover debt service on the
authority's obligations. Such payments are usually subject to annual
appropriations by the state or locality. Industrial development and pollution
control bonds, although nominally issued by municipal authorities, are in most
cases revenue bonds and are generally not secured by the taxing power of the
municipality, but are usually secured by the revenues derived by the authority
from payments of the industrial user or users. The Trust may on occasion acquire
revenue bonds which carry warrants or similar rights covering equity securities.
Such warrants or rights may be held indefinitely, but if exercised, the Trust
anticipates that it would, under normal circumstances, dispose of any equity
securities so acquired within a reasonable period of time.
The obligations of any person or entity to pay the principal of and interest
on a municipal obligation are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Act, and laws, if any, which may be enacted by
Congress or state legislatures extending the time for payment of principal or
interest, or both, or imposing other constraints upon enforcement of such
obligations. There is also the possibility that as a result of litigation or
other conditions the power or ability of any person or entity to pay when due
principal of and interest on a municipal obligation may be materially affected.
There have been recent instances of defaults and bankruptcies involving
municipal obligations which were not foreseen by the financial and investment
communities. The Trust will take whatever action it considers appropriate in the
event of anticipated financial difficulties, default or bankruptcy of either the
issuer of any municipal obligation or of the underlying source of funds for debt
service. Such action may include retaining the services of various persons or
firms (including affiliates of the Adviser) to evaluate or protect any real
estate, facilities or other assets securing any such obligation or acquired by
the Trust as a result of any such event, and the Trust may also manage (or
engage other persons to manage) or otherwise deal with any real estate,
facilities or other assets so acquired. The Trust anticipates that real estate
consulting and management services may be required with respect to properties
securing various municipal obligations in its portfolio or subsequently acquired
by the Trust. The Trust will incur additional expenditures in taking protective
action with respect to portfolio obligations in default and assets securing such
obligations. To enforce its rights in the event of a default in the payment of
interest or repayment of principal, or both, the Trust may take possession of
and manage the assets or have a receiver appointed to collect and disburse
pledged revenues securing the issuer's obligations on such securities, which may
increase the operating expenses and adversely affect the net asset value of the
Trust. Any income derived from the ownership of operation of such assets may not
be tax-exempt. In addition, the Trust's intention to qualify as a "regulated
investment company" ("RIC") under the Code may limit the extent to which the
Trust may exercise its rights by taking possession of such assets, because as a
regulated investment company, the Trust is subject to certain limitations on its
investments and on the nature of its income.
The yields on municipal obligations are dependent on a variety of factors,
including purposes of issue and source of funds for repayment, general money
market conditions, general conditions of the municipal bond market, size of a
particular offering, maturity of the obligation and rating of the issue. The
ratings of Moody's, S&P and Fitch represent their opinions as to the quality of
the municipal obligations which they undertake to rate. It should be emphasized,
however, that ratings are based on judgment and are not absolute standards of
quality. Consequently, municipal obligations with the same maturity, coupon and
rating may have different yields while obligations of the same maturity and
coupon with different ratings may have the same yield. In addition, the market
price of municipal obligations will normally fluctuate with changes in interest
rates, and therefore the net asset value of the Trust will be affected by such
changes.
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<PAGE>
STATE CONCENTRATION. The Trust normally will invest 65% or more of its total
assets in municipal obligations of issuers located in New Jersey, and may invest
25% or more of its total assets in a U.S. territory (Puerto Rico, the U.S.
Virgin Islands and Guam). When the Trust does so, it will be sensitive to
factors affecting that jurisdiction, such as changes in the economy, decreases
in tax collection or the tax base, legislation which limits taxes and changes in
issuer credit ratings. Moody's currently rates Puerto Rico general obligations
Baa, while S&P rates them A.
ECONOMIC SECTOR CONCENTRATION. The Trust may invest 25% or more of its total
assets in municipal obligations of issuers in the same economic sector. There
could be economic, business or political developments which might affect all
municipal obligations in a particular economic sector. In particular,
investments in the industrial revenue bonds listed above might involve (without
limitation) the following risks.
Hospital bond ratings are often based on feasibility studies which contain
projections of expenses, revenues and occupancy levels. Among the influences
affecting a hospital's gross receipts and net income available to service its
debt are demand for hospital services, the ability of the hospital to provide
the services required, management capabilities, economic developments in the
service area, efforts by insurers and government agencies to limit rates and
expenses, confidence in the hospital, service area economic developments,
competition, availability and expense of malpractice insurance, Medicaid and
Medicare funding and possible federal legislation limiting the rates of increase
of hospital charges.
Electric utilities face problems in financing large construction programs in
an inflationary period, cost increases and delay occasioned by safety and
environmental considerations (particularly with respect to nuclear facilities),
difficulty in obtaining fuel at reasonable prices and in achieving timely and
adequate rate relief from regulatory commissions, effects of energy conservation
and limitations on the capacity of the capital market to absorb utility debt.
Bonds to finance life care facilities are normally secured only by the
revenues of each facility and not by state or local government tax payments,
they are subject to a wide variety of risks. Primarily, the projects must
maintain adequate occupancy levels to be able to provide revenues sufficient to
meet debt service payments. Moreover, since a portion of housing, medical care
and other services may be financed by an initial deposit, it is important that
the facility maintain adequate financial reserves to secure estimated actuarial
liabilities. The ability of management to accurately forecast inflationary cost
pressures is an important factor in this process. The facilities may also be
affected adversely by regulatory cost restrictions applied to health care
delivery in general, particularly state regulations or changes in Medicare and
Medicaid payments or qualifications, or restrictions imposed by medical
insurance companies. They may also face competition from alternative health care
or conventional housing facilities in the private or public sector.
MUNICIPAL LEASES. The Trust may invest in municipal leases and
participations therein, which arrangements frequently involve special risks.
Municipal leases are obligations in the form of a lease or installment purchase
arrangement which is issued by state or local governments to acquire equipment
and facilities. Interest income from such obligations is generally exempt from
local and state taxes in the state of issuance. "Participations" in such leases
are undivided interests in a portion of the total obligation. Participations
entitle their holders to receive a pro rata share of all payments under the
lease. The obligation of the issuer to meet its obligations under such leases is
often subject to the appropriation by the appropriate legislative body, on an
annual or other basis, of funds for the payment of the obligations. Investments
in municipal leases are thus subject to the risk that the legislative body will
not make the necessary appropriation and the issuer will not otherwise be
willing or able to meet its obligation. Certain municipal lease obligations are
illiquid.
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<PAGE>
WHEN-ISSUED SECURITIES. New issues of municipal obligations are sometimes
offered on a "when-issued" basis, that is, delivery and payment for the
securities normally take place within a specified number of days after the date
of the Trust's commitment and are subject to certain conditions such as the
issuance of satisfactory legal opinions. The Trust may also purchase securities
on a when-issued basis pursuant to refunding contracts in connection with the
refinancing of an issuer's outstanding indebtedness. Refunding contracts
generally require the issuer to sell and the Trust to buy such securities on a
settlement date that could be several months or several years in the future. The
Trust may also purchase instruments that give the Trust the option to purchase a
municipal obligation when and if issued.
The Trust will make commitments to purchase when-issued securities only with
the intention of actually acquiring the securities, but may sell such securities
before the settlement date if it is deemed advisable as a matter of investment
strategy. The payment obligation and the interest rate that will be received on
the securities are fixed at the time the Trust enters into the purchase
commitment. When the Trust commits to purchase a security on a when-issued basis
it records the transaction and reflects the value of the security in determining
its net asset value. Securities purchased on a when-issued basis and the
securities held by the Trust are subject to changes in value based upon the
perception of the creditworthiness of the issuer and changes in the level of
interest rates (I.E. appreciation when interest rates decline and depreciation
when interest rates rise). Therefore, to the extent that the Trust remains
substantially fully invested at the same time that it has purchased securities
on a when-issued basis, there will be greater fluctuations in the Trust's net
asset value than if it set aside cash to pay for when-issued securities.
REDEMPTION, DEMAND AND PUT FEATURES AND PUT OPTIONS. Issuers of municipal
obligations reserve the right to call (redeem) the bond. If an issuer redeems
securities held by the Trust during a time of declining interest rates, the
Trust may not be able to reinvest the proceeds in securities providing the same
investment return as the securities redeemed. Also, some bonds may have "put" or
"demand" features that allow early redemption by the bondholder. Longer term
fixed-rate bonds may give the holder a right to request redemption at certain
times (often annually after the lapse of an intermediate term). These bonds are
more defensive than conventional long term bonds because they may protect to
some degree against a rise in interest rates.
LIQUIDITY AND PROTECTIVE PUT OPTIONS. The Trust may also enter into a
separate agreement with the seller of a security or some other person granting
the Trust the right to put the security to the seller thereof or the other
person at an agreed upon price. Such agreements are subject to the risk of
default by the other party, although the Trust intends to limit this type of
transaction to institutions (such as banks or securities dealers) which the
Adviser believes present minimal credit risks. The Trust would engage in this
type of transaction to facilitate portfolio liquidity or (if the seller so
agrees) to hedge against rising interest rates. There is no assurance that this
kind of put option will be available to the Trust or that selling institutions
will be willing to permit the Trust to exercise a put to hedge against rising
interest rates. The Trust does not expect to assign any value to any separate
put option which may be acquired to facilitate portfolio liquidity, inasmuch as
the value (if any) of the put will be reflected in the value assigned to the
associated security; any put acquired for hedging purposes would be valued in
good faith under methods or procedures established by the Trustees of the Trust
after consideration of all relevant factors, including its expiration date, the
price volatility of the associated security, the difference between the market
price of the associated security and the exercise price of the put, the
creditworthiness of the issuer of the put and the market prices of comparable
put options. Interest income generated by certain bonds having put or demand
features may be taxable.
ILLIQUID OBLIGATIONS. At times, a substantial portion of the Trust's assets
may be invested in securities as to which the Trust, by itself or together with
other accounts managed by the Adviser and its affiliates, holds a major portion
or all of such securities. Under adverse market or economic conditions or in the
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<PAGE>
event of adverse changes in the financial condition of the issuer, the Trust
could find it more difficult to sell such securities when the Adviser believes
it advisable to do so or may be able to sell such securities only at prices
lower than if such securities were more widely held. Under such circumstances,
it may also be more difficult to determine the fair value of such securities for
purposes of computing the Trust's net asset value.
The secondary market for some municipal obligations issued within a state
(including issues which are privately placed with the Trust) is less liquid than
that for taxable debt obligations or other more widely traded municipal
obligations. No established resale market exists for certain of the municipal
obligations in which the Trust may invest. The market for obligations rated
below investment grade is also likely to be less liquid than the market for
higher rated obligations. As a result, the Trust may be unable to dispose of
these municipal obligations at times when it would otherwise wish to do so at
the prices at which they are valued.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. A change in the level of
interest rates may affect the value of the securities held by the Trust (or of
securities that the Trust expects to purchase). To hedge against changes in
rates or as a substitute for the purchase of securities, the Trust may enter
into (i) futures contracts for the purchase or sale of debt securities and (ii)
futures contracts on securities indices. All futures contracts entered into by
the Trust are traded on exchanges or boards of trade that are licensed and
regulated by the Commodity Futures Trading Commission ("CFTC") and must be
executed through a futures commission merchant or brokerage firm which is a
member of the relevant exchange. The Trust may purchase and write call and put
options on futures contracts which are traded on a United States or foreign
exchange or board of trade. The Trust will be required, in connection with
transactions in futures contracts and the writing of options on futures, to make
margin deposits, which will be held by the Trust's custodian for the benefit of
the futures commission merchant through whom the Trust engages in such futures
and options transactions.
Some futures contracts and options thereon may become illiquid under adverse
market conditions. In addition, during periods of market volatility, a commodity
exchange may suspend or limit transactions in an exchange-traded instrument,
which may make the instrument temporarily illiquid and difficult to price.
Commodity exchanges may also establish daily limits on the amount that the price
of a futures contract or futures option can vary from the previous day's
settlement price. Once the daily limit is reached, no trades may be made that
day at a price beyond the limit. This may prevent the Trust from closing out
positions and limiting its losses.
The Trust will engage in futures and related options transactions for BONA
FIDE hedging purposes or non-hedging purposes as defined in or permitted by CFTC
regulations. The Trust will determine that the price fluctuations in the futures
contracts and options on futures used for hedging purposes are substantially
related to price fluctuations in securities held by the Trust or which it
expects to purchase. The Trust will engage in transactions in futures and
related options contracts only to the extent such transactions are consistent
with the requirements of the Code for maintaining its qualification as a RIC for
federal income tax purposes.
INVESTMENT RESTRICTIONS. The following investment restrictions of the Trust
are designated as fundamental policies and as such cannot be changed without the
approval of the holders of a majority of the Trust's outstanding voting
securities, which as used in this Statement of Additional Information means the
lesser of (a) 67% of the shares of the Trust present or represented by proxy at
a meeting if the holders of more than 50% of the shares are present or
represented at the meeting or (b) more than 50% of the shares of the Trust. As a
matter of fundamental policy the Trust may not:
(1) Borrow money, except as permitted by the 1940 Act;
B-6
<PAGE>
(2) Issue senior securities, as defined in the 1940 Act, other than
(i) preferred shares which immediately after issuance will have asset
coverage of at least 200%, (ii) indebtedness which immediately after
issuance will have asset coverage of at least 300%, or (iii) the borrowings
permitted by investment restriction (1) above;
(3) Purchase securities on margin (but the Trust may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities). The purchase of investment assets with the proceeds
of a permitted borrowing or securities offering will not be deemed to be
the purchase of securities on margin;
(4) Underwrite securities issued by other persons, except insofar as
it may technically be deemed to be an underwriter under the Securities Act
of 1933 in selling or disposing of a portfolio investment;
(5) Make loans to other persons, except by (a) the acquisition of loan
interests, debt securities and other obligations in which the Trust is
authorized to invest in accordance with its investment objective and
policies, (b) entering into repurchase agreements, and (c) lending its
portfolio securities;
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by interests in real estate and securities of
issuers which invest or deal in real estate. The Trust reserves the freedom
of action to hold and to sell real estate acquired as a result of the
ownership of securities; or
(7) Purchase or sell physical commodities or contracts for the
purchase or sale of physical commodities. Physical commodities do not
include futures contracts with respect to securities, securities indices or
other financial instruments.
For purposes of the Trust's investment restrictions, the determination of
the "issuer" of a municipal obligation which is not a general obligation bond
will be made by the Adviser on the basis of the characteristics of the
obligation and other relevant factors, the most significant of which is the
source of funds committed to meeting interest and principal payments of such
obligation.
The Trust has adopted the following nonfundamental investment policy which
may be changed by the Trustees without approval of the Trust's shareholders. As
a matter of nonfundamental policy, the Trust may not make short sales of
securities or maintain a short position, unless at all times when a short
position is open it either owns an equal amount of such securities or owns
securities convertible into or exchangeable, without payment of any further
consideration, for securities of the same issue as, and equal in amount to, the
securities sold short.
Upon Board of Trustee approval the Trust may invest more than 10% of its
total assets in one or more other management investment companies (or may invest
in affiliated investment companies) to the extent permitted by the 1940 Act and
rules thereunder.
Whenever an investment policy or investment restriction set forth in the
Prospectus or this Statement of Additional Information states a maximum
percentage of assets that may be invested in any security or other asset or
describes a policy regarding quality standards, such percentage limitation or
standard shall be determined immediately after and as a result of the Trust's
acquisition of such security or asset. Accordingly, any later increase or
decrease resulting from a change in values, assets or other circumstances will
not compel the Trust to dispose of such security or other asset. Notwithstanding
the foregoing, the Trust must always be in compliance with the borrowing
policies set forth above.
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<PAGE>
TRUSTEES AND OFFICERS
The Trust's Trustees and officers are listed below. Except as indicated,
each individual has held the office shown or other offices in the same company
for the last five years. Unless otherwise noted, the business address of each
Trustee and officer is 24 Federal Street, Boston, Massachusetts 02110. Those
Trustees who are "interested persons" of the Trust as defined in the 1940 Act by
virtue of their affiliation with Eaton Vance, BMR, EVC or EV, are indicated by
an asterisk(*).
JESSICA M. BIBLIOWICZ (38), TRUSTEE (1)
President and Chief Operating Officer of John A. Levin & Co. (a registered
investment advisor) (since July 1997) and a Director of Baker, Fentress &
Company which owns John A. Levin & Co. (since July 1997). Executive Vice
President of Smith Barney Mutual Funds (from July 1994 to June 1997). Elected
Trustee October 30, 1998. Trustee of various investment companies managed by
Eaton Vance or BMR since October 30, 1998.
DONALD R. DWIGHT (67), TRUSTEE (1)
President of Dwight Partners, Inc. (a corporate relations and communications
company). Trustee of various investment companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
JAMES B. HAWKES (57), TRUSTEE* (2)
Chairman, President and Chief Executive Officer of Eaton Vance, BMR and their
corporate parent and trustee (EVC and EV). Director of EVC and EV. Trustee and
officer of various investment companies managed by Eaton Vance or BMR.
SAMUEL L. HAYES, III (63), TRUSTEE (2)
Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University
Graduate School of Business Administration. Trustee of Kobrick-Cendant
Investment Trust (mutual funds). Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: 345 Nahatan Road, Westwood, Massachusetts 02090
NORTON H. REAMER (63), TRUSTEE (3)
Chairman of the Board and Chief Executive Officer, United Asset Management
Corporation (a holding company owning institutional investment management
firms); Chairman, President and Director of UAM Funds (mutual funds). Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
LYNN A. STOUT (41), TRUSTEE (3)
Professor of Law, Georgetown University Law Center. Elected Trustee October 30,
1998. Trustee of various investment companies managed by Eaton Vance or BMR
since October 30, 1998.
Address: 600 New Jersey, NW, Washington, DC 20001.
JACK L. TREYNOR (68), TRUSTEE (3)
Investment Adviser and Consultant. Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
THOMAS J. FETTER (55), PRESIDENT
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
B-8
<PAGE>
ROBERT B. MACINTOSH (41), VICE PRESIDENT
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
THOMAS M. METZOLD (39), VICE PRESIDENT
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (53), TREASURER
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
ALAN R. DYNNER (58), SECRETARY
Vice President and Chief Legal Officer of Eaton Vance, BMR, EVC and EV since
November 1, 1996. Previously, he was a Partner of the law firm of Kirkpatrick &
Lockhart LLP, New York and Washington, D.C., and was Executive Vice President of
Neuberger & Berman Management, Inc., a mutual fund management company. Officer
of various investment companies managed by Eaton Vance or BMR.
JANET E. SANDERS (62), ASSISTANT TREASURER AND ASSISTANT SECRETARY
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
A. JOHN MURPHY (35), ASSISTANT SECRETARY
Assistant Vice President of Eaton Vance and BMR. Officer of various investment
companies managed by Eaton Vance or BMR.
ERIC G. WOODBURY (41), ASSISTANT SECRETARY
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
- ----------
(1) Class I Trustee whose term expires in 1999.
(2) Class II Trustee whose term expires in 2000.
(3) Class III Trustee whose term expires in 2001.
Messrs. Hayes (Chairman), Reamer and Thorndike are members of the Special
Committee of the Board of Trustees of the Trust. The purpose of the Special
Committee is to consider, evaluate and make recommendations to the full Board of
Trustees concerning (i) all contractual arrangements with service providers to
the Trust, including investment advisory, administrative, transfer agency,
custodial and fund accounting and distribution services, and (ii) all other
matters in which Eaton Vance or its affiliates has any actual or potential
conflict of interest with the Trust or its shareholders.
The Nominating Committee of the Board of Trustees of the Trust is comprised
of four Trustees who are not "interested persons" as that term is defined under
the 1940 Act ("noninterested Trustees"). The Committee has four-year staggered
terms, with one member rotating off the Committee to be replaced by another
noninterested Trustee. The purpose of the Committee is to recommend to the Board
nominees for the position of noninterested Trustee and to assure that at least a
majority of the Board of Trustees is independent of Eaton Vance and its
affiliates.
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<PAGE>
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Trust. The Audit Committee's functions include
making recommendations to the Trustees regarding the selection of the
independent certified public accountants, and reviewing matters relative to
trading and brokerage policies and practices, accounting and auditing practices
and procedures, accounting records, internal accounting controls, and the
functions performed by the custodian, transfer agent and dividend disbursing
agent of the Trust.
Trustees of the Trust who are not affiliated with the Adviser may elect to
defer receipt of all or a percentage of their annual fees in accordance with the
terms of a Trustees Deferred Compensation Plan (the "Trustees' Plan"). Under the
Trustees' Plan, an eligible Trustee may elect to have his deferred fees invested
by the Trust in the shares of one or more funds in the Eaton Vance Family of
Funds, and the amount paid to the Trustees under the Trustees' Plan will be
determined based upon the performance of such investments. Deferral of Trustees'
fees in accordance with the Trustees' Plan will have a negligible effect on the
Trust's assets, liabilities, and net income per share, and will not obligate the
Trust to retain the services of any Trustee or obligate the Trust to pay any
particular level of compensation to the Trustee. The Trust does not have a
retirement plan for its Trustees.
The fees and expenses of the noninterested Trustees of the Trust are paid by
the Trust. (The Trustees of the Trust who are members of the Eaton Vance
organization receive no compensation from the Trust.) During the year ended
December 31, 1997, the noninterested Trustees of the Trust earned the
compensation set forth below in their capacities as Trustees from the funds in
the Eaton Vance fund complex(1). It is estimated that the noninterested Trustees
will receive from the Trust the amounts set forth below for the fiscal year
ending November 30, 1999.
<TABLE>
TOTAL
ESTIMATED COMPENSATION
NAME COMPENSATION FROM
FROM TRUST FUND COMPLEX
<S> <C> <C>
Jessica M. Bibliowicz.............................................. $385 N/A
Donald R. Dwight................................................... 385 $ 145,000(2)
Samuel L. Hayes, III............................................... 381 153,750(3)
Norton H. Reamer................................................... 374 145,000
Lynn A. Stout...................................................... 385 N/A
Jack L. Treynor.................................................... 422 150,000
</TABLE>
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(1) As of January 1, 1998 the Eaton Vance fund complex consists of 159
registered investment companies or series thereof.
(2) Includes $45,000 of deferred compensation.
(3) Includes $38,438 of deferred compensation.
INVESTMENT ADVISORY AND OTHER SERVICES
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and of investment companies
since 1931. They maintain a large staff of experienced fixed-income and equity
investment professionals to service the needs of their clients. The fixed-income
division focuses on all kinds of taxable investment-grade and high-yield
securities, tax-exempt investment-grade and high-yield securities, and U.S.
Government securities. The equity division covers stocks ranging from blue chip
to emerging growth companies. Eaton Vance and its affiliates act as adviser to a
family of mutual funds, and individual and various institutional accounts,
including corporations, hospitals, retirement plans, universities, foundations
and trusts.
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<PAGE>
The Trust will be responsible for all of its costs and expenses not
expressly stated to be payable by Eaton Vance under the Advisory Agreement or
Administration Agreement. Such costs and expenses to be borne by the Trust
include, without limitation: custody and transfer agency fees and expenses,
including those incurred for determining net asset value and keeping accounting
books and records; expenses of pricing and valuation services; the cost of share
certificates; membership dues in investment company organizations; expenses of
acquiring, holding and disposing of securities and other investments; fees and
expenses of registering under the securities laws, stock exchange listing fees
and governmental fees; rating agency fees and preferred share remarketing
expenses; expenses of reports to shareholders, proxy statements and other
expenses of shareholders' meetings; insurance premiums; printing and mailing
expenses; interest, taxes and corporate fees; legal and accounting expenses;
compensation and expenses of Trustees not affiliated with Eaton Vance; expenses
of conducting repurchase offers for the purpose of repurchasing Trust shares;
and investment advisory and administration fees. The Trust will also bear
expenses incurred in connection with any litigation in which the Trust is a
party and any legal obligation to indemnify its officers and Trustees with
respect thereto, to the extent not covered by insurance.
The Advisory Agreement with the Adviser continues in effect to February 28,
2000 and from year to year so long as such continuance is approved at least
annually (i) by the vote of a majority of the noninterested Trustees of the
Trust or of the Adviser cast in person at a meeting specifically called for the
purpose of voting on such approval and (ii) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding interests of the Trust. The
Trust's Administration Agreement continues in effect from year to year so long
as such continuance is approved at least annually by the vote of a majority of
the Trust's Trustees. Each agreement may be terminated at any time without
penalty on sixty (60) days' written notice by the Trustees of the Trust or Eaton
Vance, as applicable, or by vote of the majority of the outstanding shares of
the Trust. Each agreement will terminate automatically in the event of its
assignment. Each agreement provides that, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or duties
to the Trust under such agreements on the part of Eaton Vance, Eaton Vance shall
not be liable to the Trust for any loss incurred, to the extent not covered by
insurance.
BMR and Eaton Vance are business trusts organized under Massachusetts law.
Eaton Vance, Inc. ("EV") serves as trustee of BMR and Eaton Vance. BMR, Eaton
Vance and EV are wholly-owned subsidiaries of Eaton Vance Corporation ("EVC"), a
Maryland corporation and publicly-held holding company. EVC through its
subsidiaries and affiliates engages primarily in investment management,
administration and marketing activities. The Directors of EVC are James B.
Hawkes, Benjamin A. Rowland, Jr., John G.L. Cabot, John M. Nelson, Vincent M.
O'Reilly and Ralph Z. Sorenson. All of the issued and outstanding shares of
Eaton Vance are owned by EVC. All of the issued and outstanding shares of BMR
are owned by Eaton Vance. All shares of the outstanding Voting Common Stock of
EVC are deposited in a Voting Trust, the Voting Trustees of which are Messrs.
Hawkes, Rowland, and Alan R. Dynner, Thomas E. Faust, Jr., Thomas J. Fetter,
Duncan Richardson, William M. Steul and Wharton P. Whitaker. 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, or
officers and Directors of EVC and EV. As indicated under "Trustees and
Officers", all of the officers of the Trust (as well as Mr. Hawkes who is also a
Trustee) hold positions in the Eaton Vance organization.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Trust, IBT.
It is Eaton Vance's opinion that the terms and conditions of such transactions
were not and will not be influenced by existing or potential custodial or other
relationships between the Trust and such banks.
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<PAGE>
DETERMINATION OF NET ASSET VALUE
The net asset value per Share of the Trust is determined no less frequently
than weekly, generally on the last day of the week that the New York Stock
Exchange (the "Exchange") is open for trading, as of the close of regular
trading on the Exchange (normally 4:00 p.m. New York time). The Trust's net
asset value per Share is determined by IBT, in the manner authorized by the
Trustees of the Trust. Net asset value is computed by dividing the value of the
Trust's total assets, less its liabilities by the number of shares outstanding.
Inasmuch as the market for municipal obligations is a dealer market with no
central trading location or continuous quotation system, it is not feasible to
obtain last transaction prices for most municipal obligations held by the Trust,
and such obligations, including those purchased on a when-issued basis, will
normally be valued on the basis of valuations furnished by a pricing service.
The pricing service uses information with respect to transactions in bonds,
quotations from bond dealers, market transactions in comparable securities,
various relationships between securities, and yield to maturity in determining
value. Taxable obligations for which price quotations are readily available
normally will be valued at the mean between the latest available bid and asked
prices. Open futures positions on debt securities are valued at the most recent
settlement prices, unless such price does not reflect the fair value of the
contract, in which case the positions will be valued by or at the direction of
the Trustees. Other assets are valued at fair value using methods determined in
good faith by the Trustees.
PORTFOLIO TRADING
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the executing firm, are made by the
Adviser. The Adviser is also responsible for the execution of transactions for
all other accounts managed by it. The Adviser places the portfolio security
transactions of the Trust and of all other accounts managed by it for execution
with many firms. The Adviser uses its best efforts to obtain execution of
portfolio security transactions at prices which are advantageous to the Trust
and at reasonably competitive spreads or (when a disclosed commission is being
charged) at reasonably competitive commission rates. In seeking such execution,
the Adviser will use its best judgment in evaluating the terms of a transaction,
and will give consideration to various relevant factors, including without
limitation the full range and quality of the executing firm's services, the
value of the brokerage and research services provided, the responsiveness of the
firm to the Adviser, the size and type of the transaction, the nature and
character of the market for the security, the confidentiality, speed and
certainty of effective execution required for the transaction, the general
execution and operational capabilities of the executing firm, the reputation,
reliability, experience and financial condition of the firm, the value and
quality of the services rendered by the firm in this and other transactions, and
the reasonableness of the spread or commission, if any. Municipal obligations,
including state obligations, purchased and sold by the Trust are generally
traded in the over-the-counter market on a net basis (I.E., without commission)
through broker-dealers and banks acting for their own account rather than as
brokers, or otherwise involve transactions directly with the issuer of such
obligations. Such firms attempt to profit from such transactions by buying at
the bid price and selling at the higher asked price of the market for such
obligations, and the difference between the bid and asked price is customarily
referred to as the spread. The Trust may also purchase municipal obligations
from underwriters, and dealers in fixed price offerings, the cost of which may
include undisclosed fees and concessions to the underwriters. On occasion it may
be necessary or appropriate to purchase or sell a security through a broker on
an agency basis, in which case the Trust will incur a brokerage commission.
Although spreads or commissions on portfolio security transactions will, in the
judgment of the Adviser, be reasonable in relation to the value of the services
provided, spreads or commissions exceeding those which another firm might charge
may be paid to firms who were selected to execute transactions on behalf of the
Trust and the Adviser's other clients for providing brokerage and research
services to the Adviser.
B-12
<PAGE>
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Trust may
receive a commission 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 compensation was reasonable in
relation to the value of the brokerage and research services provided. This
determination may be made on the basis of that particular transaction or on the
basis of overall responsibilities which the Adviser and its affiliates have for
accounts over which they exercise investment discretion. In making any such
determination, the Adviser will not attempt to place a specific dollar value on
the brokerage and research services provided or to determine what portion of the
commission should be related to such services. Brokerage and research services
may include advice as to the value of securities, the advisability of investing
in, purchasing, or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts; effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement); and
the "Research Services" referred to in the next paragraph.
It is a common practice of the investment advisory industry and of the
Advisers of investment companies, institutions and other investors to receive
research, analytical, statistical and quotation services, data, information and
other services, products and materials which assist such advisers in the
performance of their investment responsibilities ("Research Services") from
broker-dealer firms which execute portfolio transactions for the clients of such
advisers and from third parties with which such broker-dealers have
arrangements. Consistent with this practice, the Adviser receives Research
Services from many broker-dealer firms with which the Adviser places the Trust's
transactions and from third parties with which these broker-dealers have
arrangements. These Research Services include such matters as general economic,
political, business and market information, industry and company reviews,
evaluations of securities and portfolio strategies and transactions, proxy
voting data and analysis services, technical analysis of various aspects of the
securities market, recommendations as to the purchase and sale of securities and
other portfolio transactions, financial, industry and trade publications, news
and information services, pricing and quotation equipment and services, and
research oriented computer hardware, software, data bases and services. Any
particular Research Service obtained through a broker-dealer may be used by the
Adviser in connection with client accounts other than those accounts which pay
commissions to such broker-dealer. Any such Research Service may be broadly
useful and of value to the Adviser in rendering investment advisory services to
all or a significant portion of its clients, or may be relevant and useful for
the management of only one client's account or of a few clients' accounts, or
may be useful for the management of merely a segment of certain clients'
accounts, regardless of whether any such account or accounts paid commissions to
the broker-dealer through which such Research Service was obtained. The advisory
fee paid by the Trust is not reduced because the Adviser receives such Research
Services. The Adviser evaluates the nature and quality of the various Research
Services obtained through broker-dealer firms and attempts to allocate
sufficient portfolio security transactions to such firms to ensure the continued
receipt of Research Services which the Adviser believes are useful or of value
to it in rendering investment advisory services to its clients.
The Trust and the Adviser may also receive Research Services from
underwriters and dealers in fixed-price offerings, which Research Services are
reviewed and evaluated by the Adviser in connection with its investment
responsibilities. The investment companies sponsored by the Adviser or BMR may
allocate trades in such offerings to acquire information relating to the
performance, fees and expenses of such companies and other mutual funds, which
information is used by the Trustees of such companies to fulfill their
responsibility to oversee the quality of the services provided by various
entities, including the Adviser, to such companies. Such companies may also pay
cash for such information.
B-13
<PAGE>
Subject to the requirement that the Adviser shall use its best efforts to
seek and execute portfolio security transactions at advantageous prices and at
reasonably competitive spreads or commission rates, the Adviser is authorized to
consider as a factor in the selection of any broker-dealer firm with whom
portfolio orders may be placed the fact that such firm has sold or is selling
shares of the Trust or of other investment companies sponsored by the Adviser.
This policy is not inconsistent with a rule of the National Association of
Securities Dealers, Inc. ("NASD"), which rule provides that no firm which is a
member of the NASD shall favor or disfavor the distribution of shares of any
particular investment company or group of investment companies on the basis of
brokerage commissions received or expected by such firm from any source.
Municipal obligations considered as investments for the Trust may also be
appropriate for other investment accounts managed by the Adviser or its
affiliates. Whenever decisions are made to buy or sell securities by the Trust
and one or more of such other accounts simultaneously, the Adviser will allocate
the security transactions (including "hot" issues) in a manner which it believes
to be equitable under the circumstances. As a result of such allocations, there
may be instances where the Trust will not participate in a transaction that is
allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order may
not be allocated on a pro rata basis where, for example: (i) consideration is
given to portfolio managers who have been instrumental in developing or
negotiating a particular investment; (ii) consideration is given to an account
with specialized investment policies that coincide with the particulars of a
specific investment; (iii) pro rata allocation would result in odd-lot or de
minimis amounts being allocated to a portfolio or other client; or (iv) where
the Adviser reasonably determines that departure from a pro rata allocation is
advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to the
Trust from time to time, it is the opinion of the Trustees of the Trust that the
benefits from the Adviser's organization outweigh any disadvantage that may
arise from exposure to simultaneous transactions.
TAXES
The Trust has elected to be, and intends to qualify for treatment each year,
as a RIC under the Code. Accordingly, the Trust intends to satisfy certain
requirements relating to sources of its income and diversification of its assets
and to distribute substantially all of its net investment income (including
tax-exempt income) and net capital gains in accordance with the timing
requirements imposed by the Code, so as to maintain its RIC status. By doing so,
the Trust will avoid any federal income tax on any income and gains it
distributes to its shareholders. If the Trust failed to qualify as a RIC for any
taxable year, it would be taxed on the full amount of its taxable income for
that year without being able to deduct the distributions it makes to its
shareholders and the shareholders would treat all distributions, including those
that otherwise would qualify as "exempt-interest dividends" (described below),
as dividends (that is, ordinary income) to the extent of the Trusts' earnings
and profits.
To avoid incurring a federal excise tax obligation, the Trust must
distribute (or be deemed to have distributed) each calendar year (i) at least
98% of its ordinary income (not including tax-exempt income) for that year, (ii)
at least 98% of its capital gain net income (which is the excess of its realized
capital gains over its realized capital losses), generally computed on the basis
of the one-year period ending on October 31 of that year, after reduction by any
available capital loss carryforwards and (iii) 100% of certain other amounts.
Under current law, provided that the Trust qualifies as a RIC, it should not be
liable for any income, corporate excise or franchise tax in the Commonwealth of
Massachusetts.
B-14
<PAGE>
The Trust's investment in zero coupon and certain other securities will
cause it to realize income prior to the receipt of cash payments with respect to
these securities. The Trust may be required to liquidate securities that it
might otherwise have continued to hold in order to generate cash to enable it to
distribute that income to Trust shareholders and thereby remain qualified for
treatment as a RIC and avoid imposition of the excise tax described above.
Investments in lower-rated or unrated securities may present special tax
issues for the Trust to the extent that the issuers of these securities default
on their obligations pertaining thereto. The federal tax law is not entirely
clear regarding the consequences of the Trust's taking certain positions in
connection with ownership of distressed securities. For example, there is
uncertainty regarding: (i) when the Trust may or must cease to accrue interest,
original issue discount, or market discount on these securities; (ii) when and
to what extent deductions may be taken for bad debts or worthless securities;
(iii) how payments received on obligations in default should be allocated
between principal and income; and (iv) whether exchanges of debt obligations in
a workout context are taxable.
Distributions by the Trust of net tax-exempt interest income that are
properly designated as "exempt-interest dividends" may be treated by
shareholders as interest excludable from gross income under Section 103(a) of
the Code. For the Trust to be able to pay exempt-interest dividends, the Trust
must, and intends to, satisfy the requirement that, at the close of each quarter
of its taxable year, at least 50% of the value of its total assets consists of
obligations the interest on which is exempt from regular federal income tax
under Code Section 103(a). The portion of exempt-interest dividends attributable
to interest on certain municipal obligations is treated as a tax preference item
for purposes of the AMT. Shareholders are required to report tax-exempt interest
dividends on their federal income tax returns.
If the Trust issues preferred shares, the Trust will designate distributions
made to holders of Shares and to holders of those preferred shares in accordance
with each class's proportionate share of each item of Trust income (such as
tax-exempt interest, net capital gains and other taxable income).
A portion of exempt-interest dividends paid by the Trust will not be
tax-exempt to any shareholder who is a "substantial user" of the facilities
financed by tax-exempt obligations held by the Trust or "related persons" of
such substantial users.
Any recognized gain or other income attributable to market discount on
long-term tax-exempt municipal obligations (i.e., obligations with a term of
more than one year) other than, in general, at their original issue, is taxable
as ordinary income. Such an obligation is generally treated as acquired at a
market discount if purchased after its original issue at a price less than (i)
the stated principal amount payable at maturity, in the case of an obligation
that does not have original issue discount, or (ii) in the case of an obligation
that does have original issue discount, the sum of the issue price and any
original issue discount that accrued before the obligation was purchased,
subject to a DE MINIMIS exclusion.
From time to time proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on certain types of municipal obligations, and it can be expected that
similar proposals may be introduced in the future. If any such proposals were
enacted, the availability of municipal obligations for investment by the Trust
and the value of the securities it held may be affected.
The Trust may realize some capital gains (and/or losses) as a result of
market transactions, including sales of portfolio securities and rights to
when-issued securities and options and futures transactions. The Trust may also
realize taxable income from certain short-term taxable obligations, securities
loans, a portion of discount with respect to certain stripped municipal
obligations or their stripped coupons, and certain realized gains or income
B-15
<PAGE>
attributable to accrued market discount. Any distributions by the Trust of those
capital gains or taxable income would be taxable to its shareholders. However,
it is expected that such amounts, if any, would normally be insubstantial in
relation to the tax-exempt interest earned by the Trust. Certain distributions
declared in October, November or December and paid the following January may be
taxed to shareholders as if received on December 31 of the year in which they
are declared.
The Trust's transactions in options and futures contracts will be subject to
special tax rules that may affect the amount, timing and character of Trust
distributions to shareholders. For example, certain positions held by the Trust
on the last business day of each taxable year will be "marked to market" (I.E.,
treated as if closed out on that day), and any resulting gain or loss (in
addition to gain or loss from actual dispositions of such positions) will
generally be treated as 60% long-term and 40% short-term capital gain or loss.
Certain positions held by the Trust that substantially diminish the Trust's risk
of loss with respect to other positions in its portfolio may constitute
"straddles," which are subject to tax rules that may cause deferral of Trust
losses, adjustments in the holding period of portfolio securities, and
conversion of short-term capital losses into long-term capital losses. The Trust
may have to limit its activities in options and futures contracts in order to
enable it to maintain its RIC status.
Any loss realized upon the sale or exchange of Shares held by a Shareholder
for six months or less will be disallowed to the extent the shareholder has
received exempt-interest dividends with respect to those shares, and any such
loss that exceeds the disallowed amount will be treated as a long-term capital
loss to the extent of any distribution of net capital gain with respect to those
shares. In addition, a loss realized on a sale of Shares will be disallowed to
the extent the shareholder acquires other Shares (whether through the
reinvestment of distributions or otherwise) within the period beginning 30 days
before the sale and ending 30 days after the sale.
Taxable dividends (including capital gain dividends) payable by the Trust to
individuals and certain other non-corporate shareholders who have not provided
the Trust with their correct taxpayer identification number ("TIN") and certain
certifications required by the Internal Revenue Service ("IRS"), as well as
shareholders with respect to whom the Trust has received certain notifications
from the IRS are subject to "backup" withholding of federal income tax at a rate
of 31%. An individual's TIN is generally his or her social security number.
The Trust is not appropriate for non-U.S. investors or as a retirement plan
investment.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as insurance companies and financial
institutions. Shareholders should consult their own tax advisers with respect to
special tax rules that may apply in their particular situations, as well as the
state or local tax consequences of investing in the Trust.
B-16
<PAGE>
OTHER INFORMATION
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, Shareholders of such a trust may, in
certain circumstances, be held personally liable as partners for the obligations
of the trust. The Declaration of Trust contains an express disclaimer of
Shareholder liability in connection with the Trust property or the acts,
obligations or affairs of the Trust. The Declaration of Trust also provides for
indemnification out of the Trust property of any Shareholder held personally
liable for the claims and liabilities to which a Shareholder may become subject
by reason of being or having been a Shareholder. Thus, the risk of a Shareholder
incurring financial loss on account of Shareholder liability is limited to
circumstances in which the Trust itself is unable to meet its obligations. The
Trust believes the risk of any Shareholder incurring any liability for the
obligations of the Trust is remote.
The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes of fact or law; but nothing in the Declaration of
Trust protects a Trustee against any liability to the Trust or its shareholders
to which he would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his office. Voting rights are not cumulative, which means that the
holders of more than 50% of the shares voting for the election of Trustees can
elect 100% of the Trustees and, in such event, the holders of the remaining less
than 50% of the shares voting on the matter will not be able to elect any
Trustees.
The Declaration of Trust provides that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Trust's custodian or
by votes cast at a meeting called for that purpose. The Declaration of Trust
further provides that the Trustees of the Trust shall promptly call a meeting of
the shareholders for the purpose of voting upon a question of removal of any
such Trustee or Trustees when requested in writing so to do by the record
holders of not less than 10 per centum of the outstanding shares.
The Trust's Prospectus and this Statement of Additional Information do not
contain all of the information set forth in the Registration Statement that the
Fund has filed with the SEC. The complete Registration Statement may be obtained
from the SEC upon payment of the fee prescribed by its Rules and Regulations.
AUDITORS
_____________________, Boston, Massachusetts, are the independent
accountants for the Trust, providing audit services, tax return preparation, and
assistance and consultation with respect to the preparation of filings with the
SEC.
B-17
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholder of
Eaton Vance New Jersey Municipal Income Trust:
We have audited the accompanying statement of assets and liabilities of
Eaton Vance New Jersey Municipal Income Trust (the "Fund") as of _____________,
199____ and the related statement of operations for the one day period ended
_________, 199____ . These financial statements are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements referred to above presents fairly,
in all material respects, the financial position of Eaton Vance New Jersey
Municipal Income Trust as of ___________, 199__, and the results of its
operations for the stated period, in conformity with generally accepted
accounting principles.
Boston, Massachusetts
_______________ , 199____
B-18
<PAGE>
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
_____________, 199____
ASSETS:
Cash................................................... $
Deferred initial offering expenses.....................
Total assets........................................... $
----------
LIABILITIES:
Initial offering expenses accrued...................... $
----------
Total liabilities...................................... $
----------
Net assets applicable to ____________ common shares of
beneficial interest
issued and outstanding.................................... $
==========
NET ASSET VALUE AND OFFERING PRICE PER SHARE................ $ 15.00
==========
NOTE TO FINANCIAL STATEMENT
Eaton Vance New Jersey Municipal Income Trust was formed under an Agreement
and Declaration of Trust dated December 10, 1998 and has been inactive since
that date except for matters relating to its organization and registration as an
investment company under the Investment Company Act of 1940 and the sale of
____________ shares of its beneficial interest to Eaton Vance Management, the
Fund's administrator. The initial offering expenses, including federal and state
registration and qualification fees, will be deducted from net proceeds, and
will not exceed $0.03 per share, as Eaton Vance Management or an affiliate will
pay any such expenses in excess of $0.03 per share. The initial offering
expenses reflected above assume the initial sale of _________ shares.
B-19
<PAGE>
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
STATEMENT OF OPERATIONS
FOR THE ONE DAY ____________, 199___
INCOME: $
EXPENSES:
Organization expenses $
Total Expenses $
Preliminary reduction of expenses $
Net expenses $
Net investment loss $
NOTE OF FINANCIAL STATEMENT
Eaton Vance Management, the Trust's administrator, has agreed to bear all
ordinary and organizational expenses of the Trust that exceed 5% of average
weekly net assets (taking into account the deduction of any preferred shares and
related expenses) for the first fiscal year of operations. In return for this
arrangement, the Trust will reimburse Eaton Vance over the first year of
operations for organizational expenses of the Trust borne by the administrator
at the onset of operations.
B-20
<PAGE>
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS+
MOODY'S INVESTORS SERVICE, INC.
MUNICIPAL BONDS
AAA: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risk appear somewhat larger than the Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA: Bonds which are rated Baa are considered as medium-grade obligations (I.E.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during other good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
- ----------
+ The ratings indicated herein are believed to be the most recent ratings
available at the date of this SAI for the securities listed. Ratings
are generally given to securities at the time of issuance. While the
rating agencies may from time to time revise such ratings, they
undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which would be given to these securities
on the date of the Trust's fiscal year end.
B-21
<PAGE>
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or
issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
NOTE: Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classification from Aa through B in its municipal bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
MUNICIPAL SHORT-TERM OBLIGATIONS
RATINGS: Moody's ratings for state and municipal short-term obligations will be
designated Moody's Investment Grade or (MIG). Such rating recognizes the
differences between short term credit risk and long term risk. Factors effecting
the liquidity of the borrower and short term cyclical elements are critical in
short term ratings, while other factors of major importance in bond risk, long
term secular trends for example, may be less important over the short run.
A short term rating may also be assigned on an issue having a demand feature,
variable rate demand obligation (VRDO). Such ratings will be designated as
VMIG1, SG or if the demand feature is not rated, NR. A short term rating on
issues with demand features are differentiated by the use of the VMIG1 symbol to
reflect such characteristics as payment upon periodic demand rather than fixed
maturity dates and payment relying on external liquidity. Additionally,
investors should be alert to the fact that the source of payment may be limited
to the external liquidity with no or limited legal recourse to the issuer in the
event the demand is not met.
STANDARD & POOR'S RATINGS GROUP
INVESTMENT GRADE
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the highest rated issues only in small degree.
A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
B-22
<PAGE>
BBB: Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
SPECULATIVE GRADE
Debt rated BB, B, CCC, CC, and C is regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal. BB
indicates the least degree of speculation and C the highest. While such debt
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major exposures to adverse conditions.
BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
CCC: Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
CC: The rating CC is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC debt rating.
C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
C1: The Rating C1 is reserved for income bonds on which no interest is being
paid.
D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
P: The letter "p" indicates that the rating is provisional. A provisional rating
assumes the successful completion of the project being financed by the debt
being rated and indicates that payment of debt service requirements is largely
or entirely dependent upon the successful and timely completion of the project.
This rating, however, while addressing credit quality subsequent to completion
of the project, makes no comment on the likelihood of, or the risk of default
upon failure of such completion. The investor should exercise his own judgment
with respect to such likelihood and risk.
B-23
<PAGE>
L: The letter "L" indicates that the rating pertains to the principal amount of
those bonds to the extent that the underlying deposit collateral is insured by
the Federal Deposit Insurance Corp. and interest is adequately collateralized.
In the case of certificates of deposit, the letter "L" indicates that the
deposit, combined with other deposits being held in the same right and capacity,
will be honored for principal and accrued pre-default interest up to the federal
insurance limits within 30 days after closing of the insured institution or, in
the event that the deposit is assumed by a successor insured institution, upon
maturity.
NR: NR indicates no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy.
MUNICIPAL NOTES
S&P note ratings reflect the liquidity concerns and market access risks unique
to notes. Notes due in 3 years or less will likely receive a note rating. Notes
maturing beyond 3 years will most likely receive a long-term debt rating. The
following criteria will be used in making that assessment:
-- Amortization schedule (the larger the final maturity relative
to other maturities the more likely it will be treated as a
note).
-- Sources of payment (the more dependent the issue is on the
market for its refinancing, the more likely it will be treated
as a note).
Note rating symbols are as follows:
SP-1: Strong capacity to pay principal and interest. Those issues
determined to possess very strong characteristics will be given a
plus(+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term
of the notes.
SP-3: Speculative capacity to pay principal and interest.
FITCHIBCA
INVESTMENT GRADE BOND RATINGS
AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated `AAA'. Because bonds rated in the `AAA' and
`AA' categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated `F-1+'.
A: Bonds considered to be investment grade and of high credit quality. The
obligors ability to pay interest and repay principal is considered to be strong,
but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
B-24
<PAGE>
BBB: Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however, are
more likely to have adverse impact on these bonds, and therefore, impair timely
payment. The likelihood that the ratings of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
HIGH YIELD BOND RATINGS
BB: Bonds are considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified that could assist the
obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.
CCC: Bonds have certain identifiable characteristics which, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, AND D: Bonds are in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. `DDD'
represents the highest potential for recovery on these bonds, and `D' represents
the lowest potential for recovery.
PLUS (+) OR MINUS (-): The ratings from AA to C may be modified by the addition
of a plus or minus sign to indicate the relative position of a credit within the
rating category.
NR: Indicates that Fitch does not rate the specific issue.
CONDITIONAL: A conditional rating is premised on the successful completion of a
project or the occurrence of a specific event.
INVESTMENT GRADE SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
`F-1+'.
F-2: Good Credit Quality. Issues carrying this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as the
`F-1+' and `F-1' categories.
B-25
<PAGE>
F-3: Fair Credit Quality. Issues carrying this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate, however,
near-term adverse change could cause these securities to be rated below
investment grade.
* * * * * * * *
NOTES: Bonds which are unrated expose the investor to risks with respect to
capacity to pay interest or repay principal which are similar to the risks of
lower-rated speculative bonds. The Portfolio is dependent on the Investment
Adviser's judgment, analysis and experience in the evaluation of such bonds.
Investors should note that the assignment of a rating to a bond by a rating
service may not reflect the effect of recent developments on the issuer's
ability to make interest and principal payments.
B-26
<PAGE>
APPENDIX B
TAX EQUIVALENT YIELD TABLE
The table below gives the approximate yield a taxable security must
earn at various income brackets to produce after-tax yields equivalent to those
of tax-exempt bonds yielding from 4.75% to 5.50% under the regular federal
income tax law and New Jersey state personal income taxes, and tax rates
applicable to individuals for 1999.
<TABLE>
Combined Tax Exempt Yield of:
Single Return Joint Return Federal and 4.75% 5.00% 5.25% 5.50%
- ------------------ ------------- NJ State ------------------------------------------------
(Taxable Income*) Tax Bracket is Equivalent to a Fully Taxable Yield Of:
- ---------------------------------------- ----------- ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Up to $25,350 Up to $42,350 16.49% 5.69% 5.99% 6.29% 6.59%
$25,351 - $61,400 $42,351 - $102,300 31.98 6.98 7.35 7.72 8.09
$61,401 - $128,100 $102,301 - $155,950 35.48 7.35 7.74 8.13 8.51
$128,101 - $278,450 $155,951 - $278,450 40.04 7.93 8.34 8.76 9.18
Over $278,450 Over $278,450 43.45 8.40 8.84 9.28 9.73
</TABLE>
* NET AMOUNT SUBJECT TO FEDERAL AND NEW JERSEY PERSONAL INCOME TAX AFTER
DEDUCTIONS AND EXEMPTIONS.
Note: The combined federal and New Jersey tax brackets are calculated using the
highest New Jersey tax rate applicable within each bracket. Taxpayers with
taxable income within such brackets may have lower combined tax brackets and
taxable equivalent yields than indicated above. The combined tax brackets assume
that New Jersey taxes are itemized deductions for federal income tax purposes.
Investors who do not itemize deductions on their federal income tax return will
have a higher combined bracket and higher taxable equivalent yield than those
indicated above. The applicable federal tax rates within the brackets are 15%,
28%, 31%, 36% and 39.6%, over the same ranges of income.
Yields shown are for illustration purposes only and are not meant to represent
the Trust's actual yield. No assurance can be given that the Trust will achieve
any specific tax-exempt yield. While it is expected that the Trust will invest
principally in obligations the interest from which is exempt from the regular
federal income tax and New Jersey state personal income taxes, other income
received by the Trust may be taxable. It should also be noted that the interest
earned on certain "private activity bonds", while exempt from the regular
federal income tax, is treated as a tax preference item which could subject the
recipient to the AMT. The illustrations assume that the AMT is not applicable
and do not take into account any tax credits that may be available.
The information set forth above is as of the date of this Statement of
Additional Information. Subsequent tax law changes could result in prospective
or retroactive changes in the tax brackets, tax rates, and tax-equivalent yields
set forth above. Investors should consult their tax adviser for additional
information.
B-27
<PAGE>
APPENDIX C
NEW JERSEY AND U.S. TERRITORY INFORMATION
NEW JERSEY
In June 1997, the New Jersey Economic Development Authority issued
$2.75 billion of State Pension Funding Bonds. Proceeds of this issue were used
to fully fund the state's unfunded accrued pension liability and will result in
a reduction of the General Fund costs for fiscal years 1997 and 1998 of $590
million.
Other state-related obligations include those created pursuant to the
New Jersey Building Authority Act, which has the power to construct facilities
for leasing to the state. On September 1, 1997, the New Jersey Building
Authority issued $224 million in refunding and new state revenue bonds. The
funds were applied for various projects including restoration of the State House
Complex, construction of South Woods State Prison, and several renovations of
municipal buildings.
The authorizing legislation for various state entities provides for
specific budgetary procedures with respect to certain obligations issued by such
entities. Bonds issued pursuant to authorizing legislation of this type are
sometimes referred to as "moral obligation" bonds. There is no statutory
limitation on the amount of moral obligation bonds which may be issued by
eligible state entities. Currently, there are two such entities available for
state appropriations to meet moral obligations. The New Jersey Housing and
Mortgagee Finance Agency has not had a deficiency in a debt service reserve
which required New Jersey to appropriate funds. It is anticipated that the
agency's revenue will continue to be sufficient to cover debt service on its
bonds. The state provides the South Jersey Port Corporation with funds to cover
all debt service and property tax requirements when earned revenues are
anticipated to be insufficient to cover these obligations. In the past,
anticipated revenues have, in some cases, been insufficient to cover debt
service and/or all property tax requirements. There are numerous other
state-created entities with outstanding debt. This debt is supported by revenues
derived from or assets of the various projects financed by such entities.
The Local Budget Law impose specific budgetary procedures upon counties
and municipalities, subject to review by the Director of the Division of Local
Government Services. State law also regulates the issuance of debt by counties
and municipalities by limiting the amount of tax anticipation notes that may be
issued and requiring their repayment within 120 days of the end of the fiscal
year in which they are issued. The Local Bond Law governs the issuance of bonds
and notes and bars the issuance of bonds for the payment of current expenses or
to pay outstanding obligations, except where permitted by the Local Finance
Board. State law also authorizes state officials to supervise fiscal
administration in any municipality facing financial difficulties.
PUERTO RICO, THE U.S. VIRGIN ISLANDS AND GUAM
PUERTO RICO. Puerto Rico has a diversified economy dominated by the
manufacturing and service sectors. The North American Free Trade Agreement
("NAFTA"), which became effective January 1, 1994, has led to loss of lower wage
jobs such as textiles, but economic growth in other areas, particularly the high
technology area has compensated for that loss.
The Commonwealth of Puerto Rico differs from the states in its
relationship with the federal government. Most federal taxes, except those such
as social security taxes that are imposed by mutual consent, are not levied in
Puerto Rico. However, in conjunction with the 1993 U.S. budget plan, Section 936
of the Code was amended and provided for two alternative limitations to the
Section 936 credit. The first option limited the credit against such income to
40% of the credit allowable under then current law, with a five year phase-in
B-28
<PAGE>
period starting at 60% of the allowable credit. The second option was a wage and
depreciation based credit. Additional amendments to Section 936 in 1996 imposed
caps on these credits, beginning in 1998 for the first option and beginning in
2002 for the second option. More importantly, the 1996 amendments eliminated
both options for taxable years beginning in 2006. The eventual elimination of
tax benefits to those U.S. companies with operations in Puerto Rico may lead to
slower growth in the future. There can be no assurance that this will not lead
to a weakened economy, a lower rating on Puerto Rico's debt or lower prices for
Puerto Rican bonds that may be held by the Portfolio in the long-term.
Puerto Ricans have periodically considered conversion to statehood and
such a vote is likely again in the future.
THE U.S. VIRGIN ISLANDS. The United States Virgin Islands (USVI) is
heavily reliant on the tourism industry, with roughly 43% of non-agricultural
employment in tourist-related trade and services. The tourism industry is
economically sensitive and would likely be adversely affected by a recession in
either the United States or Europe.
An important component of the USVI revenue base is the federal excise
tax on rum exports. Tax revenues rebated by the federal government to the USVI
provide the primary security of many outstanding USVI bonds. Since more than 90%
of the rum distilled in the USVI is distilled at one plant, any interruption in
its operations (as occurred after Hurricane Hugo in 1989) would adversely affect
these revenues. Consequently, there can be no assurance that rum exports to the
United States and the rebate of tax revenues to the USVI will continue at their
present levels. The preferential tariff treatment the USVI rum industry
currently enjoys could be reduced under NAFTA. Increased competition from
Mexican rum producers could reduce USVI rum imported to the U.S., decreasing
excise tax revenues generated. The USVI is periodically hit by hurricanes.
Several hurricanes have caused extensive damage, which has had a negative impact
on revenue collections. There is currently no rated, unenhanced Virgin Islands
debt outstanding (although there is unrated debt outstanding).
GUAM. The U.S. military is a key component of Guam's economy. The
federal government directly comprises more than 10% of the employment base, with
a substantial component of the service sector to support these personnel. The
Naval Air Station, one of several U.S. military facilities on the island, has
been slated for closure by the Defense Base Closure and Realignment Committee;
however, the administration plans to use these facilities to expand the Island's
commercial airport. Guam is also heavily reliant on tourists, particularly the
Japanese. Guam's general obligation debt is rated BBB by S&P with a negative
outlook.
B-29
<PAGE>
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
STATEMENT OF ADDITIONAL INFORMATION
________________ , 1999
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group
P.O. Box 5123
Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
___________________________
___________________________
Boston, MA_________________
MITSAI
B-30
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(1) FINANCIAL STATEMENTS:
INCLUDED IN PART A: Not Applicable
INCLUDED IN PART B: Not Applicable
(2) EXHIBITS:
(a) Agreement and Declaration of Trust dated December 10, 1998 filed
herewith.
(b) By-Laws filed herewith.
(c) Not applicable
(d) Form of Specimen Certificate of Common Shares of Beneficial Interest
filed herewith.
(e) Form of Dividend Reinvestment Plan filed herewith.
(f) Not applicable
(g) Form of Investment Advisory Agreement dated December ____, 1998 filed
herewith.
(h) (1) Form of Underwriting Agreement dated December ____, 1998 to be
filed by amendment.
(2) Form of Master Agreement Among Underwriters to be filed by
amendment.
(3) Form of Master Selected Dealers Agreement to be filed by
amendment.
(i) The Securities and Exchange Commission has granted the Registrant an
exemptive order that permits the Registrant to enter into deferred
compensation arrangements with its independent Trustees. See in the
Matter of Capital Exchange Fund, Inc., Release No. IC-20671 (November
1, 1994).
(j) Custodian Agreement dated December ____, 1998 to be filed by
amendment.
(k) (1) Form of Transfer Agency and Services Agreement dated as of
December ____, 1998 filed herewith.
(2) Form of Administration Agreement dated December ____, 1998 filed
herewith.
(3) Form of Shareholder Servicing Agreement dated as of December ____,
1998 to be filed by amendment.
(l) Opinion and Consent of Counsel to be filed by amendment.
(m) Not applicable
(n) Consent of Independent Auditors' to be filed by amendment.
(o) Not applicable
(p) Letter Agreement with Eaton Vance Management to be filed by amendment.
(q) Not applicable
(r) Financial Data Schedule to be filed by amendment.
(s) Power of Attorney to be filed by amendment.
<PAGE>
ITEM 25. MARKETING ARRANGEMENTS
See the Underwriting Agreement to be filed as Exhibit (h).
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the approximate expenses incurred in
connection with the offerings of Registrant (some of which will be borne by the
Investment Adviser):
Registration fees........................................... $ 11,120
New York Stock Exchange Listing Fee......................... $ 73,700
National Association of Securities Dealers, Inc. Fees....... $ 4,500
Printing (other than stock certificates).................... $225,000
Engraving and printing stock certificates................... $ 19,000
Accounting fees and expenses................................ $ 10,000
Legal fees and expenses..................................... $ 50,000
--------
Total..................................................... $393,320
========
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
None.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Common Shares of beneficial interest, 0
par value $.01 per share as of
December 11, 1998
ITEM 29. INDEMNIFICATION
The Registrant's By-Laws filed herewith and the Underwriting Agreement to
be filed contain provisions limiting the liability, and providing for
indemnification, of the Trustees and officers under certain circumstances.
Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their capacities as such.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant and the Adviser and any underwriter to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer, or
controlling person or the Registrant and the Underwriters in connection with the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such trustee, officer or controlling person or the Distributor in
connection with the Common Shares being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.
<PAGE>
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Reference is made to: (i) the information set forth under the caption
"Investment Advisory and Other Services" in the Statement of Additional
Information; (ii) the Eaton Vance Corp. 10-K filed under the Securities Exchange
Act of 1934 (File No. 1-8100); and (iii) the Form ADV of Eaton Vance Management
(File No. 801-15930) filed with the Commission, all of which are incorporated
herein by reference.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 200 Clarendon Street,
Boston, MA 02116, and its transfer agent, First Data Investor Services Group,
4400 Computer Drive, Westborough, MA 01581-5120, with the exception of certain
corporate documents and portfolio trading documents which are in the possession
and custody of Eaton Vance Management, 24 Federal Street, Boston, MA 02110.
Registrant is informed that all applicable accounts, books and documents
required to be maintained by registered investment advisers are in the custody
and possession of Eaton Vance Management.
ITEM 32. MANAGEMENT SERVICES
None.
ITEM 33. UNDERTAKINGS
(1) Registrant undertakes to suspend offering of its Common Shares until
it amends its prospectus if (a) subsequent to the effective date of
its Registration Statement, the net asset value declines more than 10
percent from its net asset value as of the effective date of the
Registration Statement, or (b) the net asset value increases to an
amount greater than its net proceeds as stated in the prospectus.
(2) Not applicable
(3) Not applicable
(4) Not applicable
(5) (a) For purpose of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as
part of a registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant pursuant
to Rule 497(h) under the Securities Act of 1933, shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be initial bona fide offering thereof.
(6) The registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days
of receipt of a written or oral request, its Statement of Additional
Information.
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust of Eaton Vance New Jersey
Municipal Income Trust is on file with the Secretary of State of the
Commonwealth of Massachusetts and notice is hereby given that this instrument is
executed on behalf of the Registrant by an officer of the Registrant as an
officer and not individually and that the obligations of or arising out of this
instrument are not binding upon any of the Trustees, officers or shareholders
individually, but are binding only upon the assets and property of the
Registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and Commonwealth of Massachusetts, on the
10th day of December, 1998.
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
By: /s/ Thomas J. Fetter
--------------------------------
Thomas J. Fetter, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
President (Chief Executive
/s/ Thomas J. Fetter Officer) and Trustee December 10, 1998
- --------------------------
Thomas J. Fetter
Treasurer (Principal
/s/ James L. O'Connor Financial and Accounting December 10, 1998
- -------------------------- Officer)
James L. O'Connor
/s/ James B. Hawkes Trustee December 10, 1998
- --------------------------
James B. Hawkes
<PAGE>
EXHIBIT INDEX
EXHIBITS DESCRIPTION PAGE
- -------- ----------- ----
(a) Agreement and Declaration of Trust dated December 10, 1998
(b) By-Laws
(d) Form of Specimen Certificate of Common Shares of Beneficial
Interest
(e) Form of Dividend Reinvestment Plan
(g) Form of Investment Advisory Agreement dated December ____, 1998
(k)(1) Form of Transfer Agency and Services Agreement dated
as of December ____, 1998
(2) Form of Administration Agreement dated December ____, 1998
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
-------------------
AGREEMENT AND DECLARATION OF TRUST
Dated December 10, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS......................................1
Section 1.1. Name.................................................1
Section 1.2. Definitions..........................................1
ARTICLE II - TRUSTEES.................................................3
Section 2.1. Management of the Trust..............................3
Section 2.2 Number of Trustees...................................3
Section 2.3 Terms of Office of Trustee...........................3
Section 2.4 Resignation and Appointment of Trustees..............4
Section 2.5 Vacancies............................................4
Section 2.6 Delegation of Power to Other Trustees................4
Section 2.7 Removal of Trustees..................................4
Section 2.8. General Powers.......................................4
Section 2.9. Investments..........................................5
Section 2.10. Legal Title..........................................7
Section 2.11. By-Laws..............................................7
Section 2.12. Distribution and Repurchase of Shares................7
Section 2.13. Delegation...........................................7
Section 2.14. Collection and Payment...............................7
Section 2.15. Expenses.............................................7
Section 2.16. Committees...........................................8
Section 2.17. Miscellaneous Powers.................................8
Section 2.18. Litigation...........................................8
ARTICLE III - CONTRACTS...............................................9
Section 3.1. Principal Underwriter................................9
Section 3.2. Investment Adviser...................................9
Section 3.3. Administrator........................................9
Section 3.4. Other Service Providers..............................9
Section 3.5. Transfer Agents......................................9
Section 3.6. Custodian............................................9
Section 3.7. Affiliations........................................10
ARTICLE IV - LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES
AND OTHERS..............................................10
Section 4.1. No Personal Liability of Shareholders, Trustees,
Officers and Employees..............................10
Section 4.2. Trustee's Good Faith Action; Advice to Others;
No Bond or Surety...................................10
Section 4.3. Indemnification.....................................11
Section 4.4. No Duty of Investigation............................11
Section 4.5. Reliance on Records and Experts.....................11
i
<PAGE>
ARTICLE V - SHARES OF BENEFICIAL INTEREST............................11
Section 5.1. Shares of Beneficial Interest.......................11
Section 5.2. Voting Powers.......................................12
Section 5.3. Rights of Shareholders..............................12
Section 5.4. Trust Only..........................................12
Section 5.5. Issuance of Shares..................................13
ARTICLE VI - REDEMPTIONS AND REPURCHASES.............................13
Section 6.1. Redemptions and Repurchases of Shares...............13
Section 6.2. Manner of Payment...................................13
Section 6.3. Involuntary Redemption..............................13
ARTICLE VII - DETERMINATION OF NET ASSET VALUE, NET INCOME
AND DISTRIBUTIONS......................................14
Section 7.1. Net Asset Value.....................................14
Section 7.2. Dividends and Distributions.........................14
Section 7.3. Power to Modify Foregoing Procedures................15
ARTICLE VIII - DURATION; TERMINATION OF TRUST OR A CLASS OR
SERIES; MERGERS; AMENDMENTS...........................15
Section 8.1. Duration............................................15
Section 8.2. Merger or Termination of the Trust or a
Series or a Class...................................15
Section 8.3. Amendments..........................................16
Section 8.4. Certain Transactions................................17
Section 8.5. Conversion..........................................18
ARTICLE IX - MISCELLANEOUS...........................................18
Section 9.1. Use of the Words "Eaton Vance"......................18
Section 9.2. Notices.............................................18
Section 9.3. Filing of Copies, References, Headings and
Counterparts........................................19
Section 9.4. Applicable Law......................................19
Section 9.5. Provisions in Conflict with Law or Regulations......19
ii
<PAGE>
AGREEMENT AND DECLARATION OF TRUST, made December 10, 1998 by the Trustees
hereunder and by the holders of beneficial interest to be issued hereunder as
hereinafter provided and
WITNESSETH:
WHEREAS, the Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
shares in accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed under
this Agreement and Declaration of Trust for the benefit of the holders, from
time to time, of the shares of beneficial interest to be issued hereunder and
subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1. NAME. The name of the trust created hereby is Eaton Vance
New Jersey Municipal Income Trust.
SECTION 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to a contract
described in Section 3.3 hereof.
(b) "By-Laws" means the By-Laws referred to in Section 2.11 hereof, as from
time to time amended.
(c) "Class" means any class of Shares designated by the Trustees as such
following any division of Shares of the Trust into two or more Classes as
provided in Section 5.1 hereof.
(d) The term "Commission" has the meaning given the term in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time to
time.
(g) "His" shall include the feminine and neuter, as well as the masculine,
genders.
<PAGE>
(h) The term "Interested Person" has the meaning specified in the 1940 Act
subject, however, to such exceptions and exemptions as may be granted by the
Commission in any rule, regulation or order.
(i) "Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(j) The "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations thereunder, as amended from time to time.
(k) "Outstanding Shares" means those Shares shown from time to time on the
books of the Trust or its Transfer Agent as then issued and outstanding.
(l) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, firms, joint ventures and other entities, whether or not
legal entities, as well as governments, instrumentalities, and agencies and
political subdivisions thereof, and quasi-governmental agencies and
instrumentalities.
(m) "Principal Underwriter" means a party, other than the Trust, to a
contract described in Section 3.1 hereof.
(n) "Prospectus" means the Prospectus and Statement of Additional
Information, if any, included in the Registration Statement of the Trust under
the Securities Act of 1933 as such Prospectus and Statement of Additional
Information, if any, may be amended or supplemented and filed with the
Commission from time to time.
(o) "Registration Statement" means the Registration Statement of the Trust
under the Securities Act of 1933 as such Registration Statement may be amended
and filed with the Commission from time to time.
(p) "Series" means any series of Shares designated by the Trustees as such
following the division of Shares of any Class into two or more Series as
provided in Section 5.1 hereof.
(q) "Shareholder" means a record owner of Outstanding Shares.
(r) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest in the Trust shall be divided from time to
time, or, if more than one Class or Series is authorized by the Trustees, the
equal proportionate transferable units into which each Class or Series shall be
divided from time to time.
(s) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(t) "Trust" means the Trust named in Section 1.1.
(u) The "Trustees" means the persons who have signed this Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in his capacity or their
capacities as trustees hereunder.
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(v) "Trust Property" means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the account of the Trust or the
Trustees, including any and all assets of or allocated to any Class or Series,
as the context may require.
(w) Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Class or Series, the term "vote" when used in
connection with an action of Shareholders shall include a vote taken at a
meeting of Shareholders or the consent or consents of Shareholders taken without
such a meeting.
ARTICLE II
TRUSTEES
SECTION 2.1. MANAGEMENT OF THE TRUST. The business and affairs of the Trust
shall be managed by the Trustees and they shall have all powers and authority
necessary, appropriate or desirable to perform that function.
SECTION 2.2. NUMBER OF TRUSTEES. The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than two (2) nor more than fifteen (15). No reduction in the
number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his term unless the Trustee is specifically removed
pursuant to Section 2.2 of this Article II at the time of decrease.
SECTION 2.3. TERM OF OFFICE OF TRUSTEES. The Board of Trustees shall be
divided into three classes. Within the limits above specified, the number of the
Trustees in each class and the class which each Trustee is assigned shall be
determined by resolution of the Board of Trustees. The term of office of the
first class shall expire on the date of the first annual meeting of Shareholders
or special meeting in lieu thereof following the effective date of the
Registration Statement. The term of office of the second class shall expire on
the date of the second annual meeting of Shareholders or special meeting in lieu
thereof following the effective date of the Registration Statement. The term of
office of the third class shall expire on the date of the third annual meeting
of Shareholders or special meeting in lieu thereof following the effective date
of the Registration Statement. Upon expiration of the term of office of each
class as set forth above, the number of Trustees in such class, as determined by
the Board of Trustees, shall be elected for a term expiring on the date of the
third annual meeting of Shareholders or special meeting in lieu thereof
following such expiration to succeed the Trustees whose terms of office expire.
The Trustees shall be elected at an annual meeting of the Shareholders or
special meeting in lieu thereof called for that purpose, except as provided in
Section 2.3 of this Article and each Trustee elected shall hold office until his
successor shall have been elected and shall have qualified; except (a) that any
Trustee may resign his trust (without need for prior or subsequent accounting)
by an instrument in writing signed by him and delivered to the other Trustees,
which shall take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed (provided the aggregate
number of Trustees after such removal shall not be less than the number required
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by Section 2.1 hereof) for cause, at any time by written instrument, signed by
the remaining Trustees, specifying the date when such removal shall become
effective; and (c) that any Trustee who requests in writing to be retired or who
has become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees, and he shall execute and
deliver such documents as the remaining Trustees shall require for the purpose
of conveying to the Fund or the remaining Trustees any Fund property held in the
name of the resigning or removed Trustee. Upon the incapacity or death of any
Trustee, his legal representative shall execute and deliver on his behalf such
document as the remaining Trustees shall require as provided in the preceding
sentence.
SECTION 2.4. RESIGNATION AND APPOINTMENT OF TRUSTEES. In case of the
declination, death, resignation, retirement, removal or inability of any of the
Trustees, or in case a vacancy shall, by reason of any increase in number, or
for any other reason, exist, the remaining Trustees or, prior to the public
offering of Shares of the Fund, if only one Trustee shall then remain in office,
the remaining Trustee, shall fill such vacancy by appointing such other person
as they, or anyone of them, in their discretion, shall see fit. Such appointment
shall be evidenced by a written instrument signed by a majority of the remaining
Trustees or by the remaining Trustee, as the case may be. Any such appointment
shall not become effective, however, until the person named in the written
instrument or appointment shall have accepted in writing such appointment and
agreed in writing to be bound by the terms of the Declaration. Within twelve
months of such appointment, the Trustees shall cause notice of such appointment
to be mailed to each Shareholder at his address as recorded on the books of the
Fund. An appointment of a Trustee may be made by the Trustees then in office and
notice thereof mailed to Shareholders as aforesaid in anticipation of a vacancy
to occur by reason of retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall become effective
only at or after the effective date of said retirement, resignation or increase
in number of Trustees. The power of appointment is subject to the provisions of
Section 16(a) of the 1940 Act.
SECTION 2.5. VACANCIES. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any one of them, shall not operate to
annul the Fund or to remove any existing agency created pursuant to the terms of
this Declaration. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided in Section 2.3, the Trustees in office,
regardless of their number, shall have all the duties imposed upon the Trustees
by the Declaration. A written instrument certifying the existence of such
vacancy signed by a majority of the Trustees shall be conclusive evidence of the
existence of such vacancy.
SECTION 2.6. DELEGATION OF POWER TO OTHER TRUSTEES. Subject to the
provisions of the 1940 Act, any Trustee may, by power of attorney, delegate his
power for a period not exceeding six (6) months at any one time to any other
Trustee or Trustees; provided that in no case shall less than two (2) Trustees
personally exercise the powers grated to the Trustees under the Declaration
except as herein otherwise expressly provided.
SECTION 2.7. REMOVAL OF TRUSTEES. The Fund shall comply with the provisions
of Section 16(c) of the 1940 Act as though applicable to the Fund, and with
interpretations hereof by the Commission staff, insofar as such provisions and
interpretations provide for the removal of trustees of common-law trusts and the
calling of Shareholder meetings for such purpose; provided, however, that the
Fund may at any time or from time to time apply to the Commission for one or
more exemptions from all or part of said Section 16(c) or a staff interpretation
thereof and, if exemptive order(s) or interpretation(s) are issued or provided
by the Commission or its staff, such order(s) or interpretation(s) shall be
deemed part of Section 16(c) for the purpose of applying this Section 2.6.
SECTION 2.8. GENERAL POWERS. The Trustees in all instances shall act as
principals for and on behalf of the Trust and their acts shall bind the Trust.
The business and affairs of the Trust shall be managed by the Trustees and they
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider necessary,
appropriate or desirable in connection with the management of the Trust. The
Trustees shall not be bound or limited in any way by present or future laws,
practices or customs in regard to trust investments or to other investments
which may be made by fiduciaries, but shall have full authority and power to
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make any and all investments which they, in their uncontrolled discretion, shall
deem proper to promote, implement or accomplish the various objectives and
interests of the Trust and of its Classes and Series. The Trustees shall have
full power and authority to adopt such accounting and tax accounting practices
as they consider appropriate for the Trust and for any Class or Series. The
Trustees shall have exclusive and absolute control over the Trust Property and
over the business of the Trust to the same extent as if the Trustees were the
sole owners of the Trust Property and business in their own right, and with such
full powers of delegation as the Trustees may exercise from time to time. The
Trustees shall have power to conduct the business of the Trust and carry on its
operations in any and all of its branches and maintain offices both within and
without The Commonwealth of Massachusetts, in any and all states of the United
States of America, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions, agencies, and
instrumentalities of the United States of America and of foreign governments,
and to do all such other things as they deem necessary, appropriate or desirable
in order to promote or implement the interests of the Trust or of any Class or
Series although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust or of any Class or
Series made by the Trustees in good faith shall be conclusive and binding upon
all Shareholders. In construing the provisions of this Declaration, the
presumption shall be in favor of a grant of plenary power and authority to the
Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
SECTION 2.9. INVESTMENTS. The Trustees shall have full power and authority:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of
such operations.
(b) To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities and investments of any kind including, but not limited
to, stocks, profit-sharing interests or participations and all other
contracts for or evidences of equity interests, bonds, debentures, warrants
and rights to purchase securities, and interests in loans, certificates of
beneficial interest, bills, notes and all other contracts for or evidences
of indebtedness, money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and other
obligations, and all other negotiable and non-negotiable securities and
instruments, however named or described, issued by corporations, trusts,
associations or any other Persons, domestic or foreign, or issued or
guaranteed by the United States of America or any agency or instrumentality
thereof, by the government of any foreign country, by any State, territory
or possession of the United States, by any political subdivision or agency
or instrumentality of any state or foreign country, or by any other
government or other governmental or quasi-governmental agency or
instrumentality, domestic or foreign; to acquire and dispose of interests
in domestic or foreign loans made by banks and other financial
institutions; to deposit any assets of the Trust in any bank, trust company
or banking institution or retain any such assets in domestic or foreign
cash or currency; to purchase and sell gold and silver bullion, precious or
strategic metals, and coins and currency of all countries; to engage in
"when issued" and delayed delivery transactions; to enter into repurchase
agreements, reverse repurchase agreements and firm commitment agreements;
to employ all types and kinds of hedging techniques and investment
management strategies; and to change the investments of the Trust and of
each Class or Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell,
to sell or otherwise dispose of, to lend and to pledge any Trust Property
or any of the foregoing securities, instruments or investments; to purchase
and sell options on securities, currency, precious metals and other
commodities, indices, futures contracts and other financial instruments and
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assets and enter into closing and other transactions in connection
therewith; to enter into all types of commodities contracts, including
without limitation the purchase and sale of futures contracts on
securities, currency, precious metals and other commodities, indices and
other financial instruments and assets; to enter into forward foreign
currency exchange contracts and other foreign exchange and currency
transactions of all types and kinds; to enter into interest rate, currency
and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in the Trust Property,
including without limitation the right to vote thereon and otherwise act
with respect thereto; and to do all acts and things for the preservation,
protection, improvement and enhancement in value of all such securities and
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or
kind of property, real or personal, including domestic or foreign currency,
and any right or interest therein.
(f) To borrow money and in this connection issue notes, commercial
paper or other evidence of indebtedness; to secure borrowings by
mortgaging, pledging or otherwise subjecting as security all or any part of
the Trust Property; to endorse, guarantee, or undertake the performance of
any obligation or engagement of any other Person; to lend all or any part
of the Trust Property to other Persons; and to issue general unsecured or
other obligations of the Trust, and enter into indentures or agreements
relating thereto.
(g) To aid, support or assist by further investment or other action
any Person, any obligation of or interest which is included in the Trust
Property or in the affairs of which the Trust or any Class or Series has
any direct or indirect interest; to do all acts and things designed to
protect, preserve, improve or enhance the value of such obligation or
interest; and to guarantee or become surety on any or all of the contracts,
securities and other obligations of any such Person.
(h) To join other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper.
(i) To carry on any other business in connection with or incidental to
any of the foregoing powers referred to in this Declaration, to do
everything necessary, appropriate or desirable for the accomplishment of
any purpose or the attainment of any object or the furtherance of any power
referred to in this Declaration, either alone or in association with
others, and to do every other act or thing incidental or appurtenant to or
arising out of or connected with such business or purposes, objects or
powers.
(j) To the extent necessary or appropriate to give effect to the
preferences, special or relative rights and privileges of any Class or
Series, to allocate assets, liabilities, income and expenses of the Trust
to particular Classes or Series or to apportion the same among two or more
Classes or Series.
The foregoing clauses shall be construed both as objects and powers, and
shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
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Notwithstanding any other provision herein, the Trustees shall have full
power in their discretion, without any requirement of approval by Shareholders,
to invest part or all of the Trust Property (or part or all of the assets of any
Class or Series), or to dispose of part or all of the Trust Property (or part or
all of the assets of any Class or Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act. Any such other investment company may (but need
not) be a trust (formed under the laws of the State of New York or of any other
state) which is classified as a partnership for federal income tax purposes.
SECTION 2.10. LEGAL TITLE. Legal title to all the Trust Property shall be
vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Class or
Series, or in the name of a custodian, subcustodian, agent, securities
depository, clearing agency, system for the central handling of securities or
other book-entry system, or in the name of a nominee or nominees of the Trust or
a Class or Series, or in the name of a nominee or nominees of a custodian,
subcustodian, agent, securities depository, clearing agent, system for the
central handling of securities or other book-entry system, or in the name of any
other Person as nominee. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may hereafter become
a Trustee. Upon the termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property, and the right, title and interest of such
Trustee in the Trust Property shall vest automatically in the remaining
Trustees.
SECTION 2.11. BY-LAWS. The Trustees shall have full power and authority to
adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and, subject to the voting powers of one or more Classes or Series,
to amend and repeal such By-Laws. Unless the By-Laws specifically require that
Shareholders authorize or approve the amendment or repeal of a particular
provision of the By-Laws, any provision of the By-Laws may be amended or
repealed by the Trustees without Shareholder authorization or approval.
SECTION 2.12. DISTRIBUTION AND REPURCHASE OF SHARES. The Trustees shall
have full power and authority to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in Shares. Shares may be sold for cash or property or other consideration
whenever and in such amounts and manner as the Trustees deem desirable. The
Trustees shall have full power to provide for the distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both.
SECTION 2.13. DELEGATION. The Trustees shall have full power and authority
to delegate from time to time to such of their number or to officers, employees
or agents of the Trust or to other Persons the doing of such things and
execution of such agreements or other instruments either in the name of the
Trust or any Class or Series of the Trust or the names of the Trustees or
otherwise as the Trustees may deem desirable or expedient.
SECTION 2.14. COLLECTION AND PAYMENT. The Trustees shall have full power
and authority to collect all property due to the Trust; to pay all claims,
including taxes, against the Trust or Trust Property; to prosecute, defend,
compromise, settle or abandon any claims relating to the Trust or Trust
Property; to foreclose any security interest securing any obligations, by virtue
of which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.
SECTION 2.15. EXPENSES. The Trustees shall have full power and authority to
incur on behalf of the Trust or any Class or Series and pay any costs or
expenses which the Trustees deem necessary, appropriate, desirable or incidental
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to carry out, implement or enhance the business or operations of the Trust or
any Class or Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Class or Series, and to credit all or any part of the profit, income or receipt
to the principal or capital of the Trust or any Class or Series.
SECTION 2.16. COMMITTEES. The Trustees may appoint from their own number,
and terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees as the
Trustees may determine.
SECTION 2.17. MISCELLANEOUS POWERS. The Trustees shall have full power and
authority to: (a) distribute to Shareholders all or any part of the earnings or
profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Class or Series, the amount of such
distributions and the manner of payment thereof to be solely at the discretion
of the Trustees; (b) employ, engage or contract with such Persons as the
Trustees may deem desirable for the transaction of the business or operations of
the Trust or any Class or Series thereof; (c) enter into or cause the Trust or
any Class or Series thereof to enter into joint ventures, partnerships (whether
as general partner, limited partner or otherwise) and any other combinations or
associations; (d) purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or manager, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability; (e) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (f)
indemnify or reimburse any Person with whom the Trust or any Class or Series
thereof has dealings, including without limitation the Investment Adviser,
Administrator, Principal Underwriter, Transfer Agent, financial service firms
and other agents, to such extent as the Trustees shall determine; (g) guarantee
the indebtedness or contractual obligations of other Persons; (h) determine and
change the fiscal year of the Trust and the methods by which its books, accounts
and records shall be kept; and (i) adopt a seal for the Trust, but the absence
of such seal shall not impair the validity of any instrument executed on behalf
of the Trust.
SECTION 2.18. LITIGATION. The Trustees shall have full power and authority,
in the name and on behalf of the Trust, to engage in and to prosecute, defend,
compromise, settle, abandon, or adjust by arbitration or otherwise, any actions,
suits, proceedings, disputes, claims and demands relating to the Trust, and out
of the assets of the Trust or any Class or Series thereof to pay or to satisfy
any liabilities, losses, debts, claims or expenses (including without limitation
attorneys' fees) incurred in connection therewith, including those of
litigation, and such power shall include without limitation the power of the
Trustees or any committee thereof, in the exercise of their or its good faith
business judgment, to dismiss or terminate any action, suit, proceeding,
dispute, claim or demand, derivative or otherwise, brought by any Person,
including a Shareholder in his own name or in the name of the Trust or any Class
or Series thereof, whether or not the Trust or any Class or Series thereof or
any of the Trustees may be named individually therein or the subject matter
arises by reason of business for or on behalf of the Trust or any Class or
Series thereof.
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ARTICLE III
CONTRACTS
SECTION 3.1. PRINCIPAL UNDERWRITER. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more contracts
providing for the sale of the Shares. Pursuant to any such contract the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may in their
discretion determine; and any such contract may also provide for the sale of
Shares by such other party as principal or as agent of the Trust.
SECTION 3.2. INVESTMENT ADVISER. The Trustees may, subject to any approvals
by Shareholders required by applicable law, in their discretion from time to
time authorize the Trust to enter into one or more investment advisory
agreements whereby the other party or parties to any such agreements shall
undertake to furnish the Trust investment advisory and research facilities and
services and such other facilities and services, if any, as the Trustees shall
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine. Notwithstanding any provisions of this Declaration,
the Trustees may authorize the Investment Adviser, in its discretion and without
any prior consultation with the Trust, to buy, sell, lend and otherwise trade
and deal in any and all securities, commodity contracts and other investments
and assets of the Trust and to engage in and employ all types of transactions
and strategies in connection therewith. Any such action taken pursuant to such
agreement shall be deemed to have been authorized by all of the Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
SECTION 3.3. ADMINISTRATOR. The Trustees may in their discretion from time
to time authorize the Trust to enter into one or more administration agreements,
whereby the other party to such agreement shall undertake to furnish to the
Trust or a Series or a Class thereof such administrative facilities and services
and such other facilities and services, if any, as the Trustees consider
desirable and all upon such terms and conditions as the Trustees may in their
discretion determine.
The Trustees may also authorize the Trust to employ or authorize the
Administrator to employ one or more sub-administrators from time to time to
perform such of the acts and services of the Administrator and upon such terms
and conditions as may be agreed upon between the Administrator and such
sub-administrator and approved by the Trustees.
SECTION 3.4. OTHER SERVICE PROVIDERS. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more agreements
whereby the other party or parties to any such agreements will undertake to
provide to the Trust or any Class or Series or Shareholders or beneficial owners
of Shares such services as the Trustees consider desirable and all upon such
terms and conditions as the Trustees in their discretion may determine.
SECTION 3.5. TRANSFER AGENTS. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Class or
Series thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
SECTION 3.6. CUSTODIAN. The Trustees may appoint a bank or trust company
having an aggregate capital, surplus and undivided profits (as shown in its last
published report) of at least $2,000,000 as a custodian of the Trust or any
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Class or Series with authority as its agent to hold cash and securities owned by
the Trust or the Class or Series and to release and deliver the same and
otherwise to perform such duties as the Trustees may specify, all upon such
terms and conditions as may be agreed upon between the Trust and the Custodian.
SECTION 3.7. AFFILIATIONS. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of
or has any interest in any Person or any parent or affiliate of any such
Person, with which a contract or agreement of the character described in
this Article III has been or will be made, or that any such Person, or any
parent or affiliate thereof, is a Shareholder of or has an interest in the
Trust, or that
(ii) any such Person also has similar contracts, agreements or plans
with other investment companies (including, without limitation, the
investment companies referred to in the last paragraph of Section 2.9) or
Persons, or has other business activities or interests,
shall not affect in any way the validity of any such contract, agreement or plan
or disqualify any Shareholder, Trustee or officer of the Trust from authorizing,
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
SECTION 4.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS AND
EMPLOYEES. No Shareholder shall be subject to any personal liability whatsoever
to any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust or any Class or Series thereof. All Persons dealing or
contracting with the Trustees as such or with the Trust or any Class or Series
thereof or having any claim against the Trust or any Class or Series thereof
shall have recourse only to the Trust or such Class or Series for the payment of
their claims or for the payment or satisfaction of claims, obligations or
liabilities arising out of such dealings or contracts. No Trustee, officer or
employee of the Trust, whether past, present or future, shall be subject to any
personal liability whatsoever to any such Person, and all such Persons shall
look solely to the Trust Property, or to the assets of one or more specific
Class or Series of the Trust if the claim arises from the act, omission or other
conduct of such Trustee, officer or employee with respect to only such Class or
Series, for satisfaction of claims of any nature arising in connection with the
affairs of the Trust or such Class or Series. If any Shareholder, Trustee,
officer or employee, as such, of the Trust is made a party to any suit or
proceeding to enforce any such liability of the Trust or any Class or Series
thereof, he shall not, on account thereof, be held to any personal liability.
SECTION 4.2. TRUSTEE'S GOOD FAITH ACTION; ADVICE TO OTHERS; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon all Interested Parties. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of them or of
any officer, agent, employee, consultant, investment adviser or other adviser,
administrator, distributor or principal underwriter, custodian or transfer,
dividend disbursing, shareholder servicing or accounting agent of the Trust, nor
shall any Trustee be responsible for the act or omission of any other Trustee.
The Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration and their duties as Trustees, and
shall be under no liability for any act or omission in accordance with such
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advice or for failing to follow such advice. In discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the records,
books and accounts of the Trust and upon reports made to the Trustees by any
officer, employee, agent, consultant, accountant, attorney, investment adviser
or other adviser, principal underwriter, expert, professional firm or
independent contractor. The Trustees as such shall not be required to give any
bond or surety or any other security for the performance of their duties. No
provision of this Declaration shall protect any Trustee or officer of the Trust
against any liability to the Trust or its Shareholders to which he would
otherwise be subject by reason of his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
SECTION 4.3. INDEMNIFICATION. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Class or Series thereof of the Shareholders, Trustees, officers
and employees of the Trust and of such other Persons as the Trustees in the
exercise of their discretion may deem appropriate or desirable. Any such
indemnification may be mandatory or permissive, and may be insured against by
policies maintained by the Trust.
SECTION 4.4. NO DUTY OF INVESTIGATION. No purchaser, lender or other Person
dealing with the Trustees or any officer, employee or agent of the Trust or a
Class or Series thereof shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees or by said
officer, employee or agent or be liable for the application of money or property
paid, loaned, or delivered to or on the order of the Trustees or of said
officer, employee or agent. Every obligation, contract, instrument, certificate,
Share, other security or undertaking of the Trust or a Class or Series, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security or undertaking of the
Trust or a Class or Series made or issued by the Trustees may recite that the
same is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Class or Series thereof
under any such instrument are not binding upon any of the Trustees or
Shareholders individually, but bind only the Trust Property or the Trust
Property of the applicable Class or Series, and may contain any further recital
which they may deem appropriate, but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.
SECTION 4.5. RELIANCE ON RECORDS AND EXPERTS. Each Trustee, officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the records, books and accounts of
the Trust or a Class or Series thereof, upon an opinion or other advice of legal
counsel, or upon reports made or advice given to the Trust or a Class or Series
thereof by any Trustee or any of the Trust's officers or employees or by the
Investment Adviser, the Administrator, the Custodian, a Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
SECTION 5.1. SHARES OF BENEFICIAL INTEREST. The interest of the
beneficiaries of the Trust initially shall be divided into common shares of
beneficial interest of $.01 par value. The number of common shares authorized
hereunder is unlimited. All shares issued, including, without limitation, those
issued in connection with a dividend or distribution or a share split, shall be
fully paid and nonassessable. The Trustees may, without Shareholder approval,
authorize one or more Classes of Shares (which Classes may without Shareholder
approval be divided by the Trustees into two or more Series), Shares of each
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such Class or Series having such preferences, voting powers and special or
relative rights or privileges (including conversion rights, if any) as the
Trustees may determine and as shall be set forth in a resolution adopted in
accordance with the By-Laws. The number of Shares of each Class or Series
authorized shall be unlimited except as the By-Laws may otherwise provide. The
Trustees may from time to time divide or combine the Shares of any Class or
Series into a greater or lesser number without thereby changing the
proportionate beneficial interest in the Class or Series.
The ownership of Shares shall be recorded on the books of the Trust or a
transfer or similar agent. No certificates certifying the ownership of Shares
shall be issued except as the Trustees may otherwise determine from time to
time. The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates, the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders of each
Class or Series and as to the number of Shares of each Class or Series held from
time to time by each Shareholder. The Trustees may at any time discontinue the
issuance of Share certificates and may, by written notice to each Shareholder,
require the surrender of Share certificates to the Trust for cancellation. Such
surrender and cancellation shall not affect the ownership of Shares in the
Trust.
SECTION 5.2. VOTING POWERS. Subject to the voting powers of one or more
Classes or Series, the Shareholders shall have power to vote only (i) with
respect to the election of Trustees, (ii) for the removal of Trustees as
provided for herein, (iii) with respect to any Investment Adviser as required by
applicable law, (iv) with respect to any termination or amendment of this Trust,
or with respect to certain transactions, to the extent and as provided in
Article VIII, (v) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, and (vi) with respect to such
additional matters relating to the Trust as may be required by law, this
Declaration, the By-Laws or any registration of the Trust with the Securities
and Exchange Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote. Notwithstanding any
other provision of this Declaration, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall, except as
otherwise provided in the By-Laws or required by applicable law, be voted in the
aggregate as a single Class without regard to Classes or Series. There shall be
no cumulative voting in the election of Trustees.
SECTION 5.3. RIGHTS OF SHAREHOLDERS. The ownership of the Trust Property of
every description and the right to conduct any business of the Trust are vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and they shall
have no right to call for any partition or division of any property, profits,
rights or interests of the Trust or of any Class or Series nor can they be
called upon to share or assume any losses of the Trust or of any Class or Series
or suffer an assessment of any kind by virtue of their ownership of Shares. The
Shares shall be personal property giving only the rights specifically set forth
in this Declaration. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Class or Series.
Every Shareholder by virtue of having become a Shareholder shall be held to
have expressly assented and agreed to the terms of this Declaration and the
Bylaws and to have become a party hereto and thereto. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust.
SECTION 5.4. TRUST ONLY. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
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Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a
Massachusetts business trust. Nothing in this Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
SECTION 5.5. ISSUANCE OF SHARES. The Trustees in their discretion may, from
time to time and without any authorization or vote of the Shareholders, issue
Shares of any Class or Series, in addition to the then issued and Outstanding
Shares, to such party or parties and for such amount and type of consideration,
including cash or property, at such time or times and on such terms as the
Trustees may deem appropriate or desirable, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with
the assumption of, liabilities) and businesses. In connection with any issuance
of Shares, the Trustees may issue fractional Shares and reissue and resell full
and fractional Shares held in the treasury. The Trustees may authorize the
issuance of certificates of beneficial interest to evidence the ownership of
Shares. Shares held in the treasury shall not be voted nor shall such Shares be
entitled to any dividends or other distributions declared with respect thereto.
The Trustees in their discretion may also, from time to time and without any
authorization or vote of the Shareholders, issue to the extent consistent with
applicable law securities of the Trust convertible into Shares of the Trust and
warrants to purchase securities of the Trust, in each case pursuant to such
terms and under such conditions as the Trustees may specify in their discretion.
Shares of any Class or Series, in addition to the then issued and outstanding
Shares, and such warrants or convertible securities, may be issued to such party
or parties and for such amount and type of consideration, including cash or
property, at such time or times and on such terms as the Trustees may deem
appropriate or desirable, and may in such manner acquire other assets (including
the acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. The officers of the Trust are severally authorized
to take all such actions as may be necessary or desirable to carry out this
Section 5.5.
ARTICLE VI
REDEMPTIONS AND REPURCHASES
SECTION 6.1. REDEMPTIONS AND REPURCHASES OF SHARES. From time to time the
Trust may redeem or repurchase its Shares, all upon such terms and conditions as
may be determined by the Trustees and subject to any applicable provisions of
the 1940 Act. The Trust may require Shareholders to pay a withdrawal charge, a
sales charge, or any other form of charge to the Trust, to the underwriter or to
any other person designated by the Trustees upon redemption or repurchase of
Trust Shares in such amount as shall be determined from time to time by the
Trustees. The Trust may also charge a redemption or repurchase fee in such
amount as may be determined from time to time by the Trustees.
SECTION 6.2 MANNER OF PAYMENT. Payment of Shares redeemed or repurchased
may at the option of the Trustees or such officer or officers as they may duly
authorize for the purpose, in their complete discretion, be made in cash, or in
kind, or partially in cash and partially in kind. In case of payment in kind the
Trustees, or their delegate, shall have absolute discretion as to what security
or securities shall be distributed in kind and the amount of the same, and the
securities shall be valued for purposes of distribution at the figure at which
they were appraised in computing the net asset value of the Shares, provided
that any Shareholder who cannot legally acquire securities so distributed in
kind by reason of the prohibitions of the 1940 Act shall receive cash.
SECTION 6.3. INVOLUNTARY REDEMPTION. If the Trustees shall, at any time and
in good faith, be of the opinion that direct or indirect ownership of Shares of
any Class or Series or other securities of the Trust has or may become
concentrated in any person to an extent which would disqualify the Trust as a
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regulated investment company under the Internal Revenue Code, then the Trustees
shall have the power by lot or other means deemed equitable by them (i) to call
for redemption by any such person a number, or principal amount, of Shares or
other securities of the Trust sufficient to maintain or bring the direct or
indirect ownership of Shares or other securities of the Trust into conformity
with the requirements for such qualification and (ii) to refuse to transfer or
issue Shares or other securities of the Trust to any person whose acquisition of
the Shares or other securities of the Trust in question would result in such
disqualification. The redemption shall be effected upon such terms and
conditions as shall be determined by the Trustees.
The holders of Shares or other securities of the Trust shall upon demand
disclose to the Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
SECTION 7.1. NET ASSET VALUE. The net asset value of each outstanding Share
of the Trust or of any Class or Series thereof shall be determined on such days
and at or as of such time or times as the Trustees may determine. Any reference
in this Declaration to the time at which a determination of net asset value is
made shall mean the time as of which the determination is made. The power and
duty to determine and method of determination of net asset value may be
delegated by the Trustees from time to time to the Investment Adviser, the
Administrator, the Custodian, the Transfer Agent or such other Person or Persons
as the Trustees may determine. The value of the assets of the Trust or any Class
or Series thereof shall be determined in a manner authorized by the Trustees.
From the total value of said assets, there shall be deducted all indebtedness,
interest, taxes, payable or accrued, including estimated taxes on unrealized
book profits, expenses and management charges accrued to the appraisal date, and
all other items in the nature of liabilities which shall be deemed appropriate
by the Trustees, as incurred by or allocated to the Trust or any Class or Series
thereof. The resulting amount, which shall represent the total net assets of the
Trust or Class or Series thereof, shall be divided by the number of Outstanding
Shares of the Trust or Class or Series thereof at that time and the quotient so
obtained shall be deemed to be the net asset value of the Shares of the Trust or
Class or Series thereof. The Trust may declare a suspension of the determination
of net asset value to the extent permitted by the 1940 Act. It shall not be a
violation of any provision of this Declaration if Shares are sold, redeemed or
repurchased by the Trust at a price other than one based on net asset value if
the net asset value is affected by one or more errors inadvertently made in the
pricing of portfolio securities or other investments or in accruing or
allocating income, expenses, reserves or liabilities. No provision of this
Declaration shall be construed to restrict or affect the right or ability of the
Trust to employ or authorize the use of pricing services, appraisers or any
other means, methods, procedures, or techniques in valuing the assets or
calculating the liabilities of the Trust or any Class or Series thereof.
SECTION 7.2. DIVIDENDS AND DISTRIBUTIONS. (a) The Trustees may from time to
time distribute ratably among the Shareholders of the Trust or of a Class or
Series thereof such portion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Class or Series held by the Trustees as they may deem appropriate or
desirable. Such distributions may be made in cash, additional Shares or property
(including without limitation any type of obligations of the Trust or Class or
Series or any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Class or Series thereof additional Shares of the
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Trust or Class or Series thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Class or Series
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Class or Series thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may always retain from the earnings
or profits such amounts as they may deem appropriate or desirable to pay the
expenses and liabilities of the Trust or a Class or Series thereof or to meet
obligations of the Trust or a Class or Series thereof, together with such
amounts as they may deem desirable to use in the conduct of its affairs or to
retain for future requirements or extensions of the business or operations of
the Trust or such Class or Series. The Trust may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans or other
distribution plans as the Trustees may deem appropriate or desirable. The
Trustees may in their discretion determine that an account administration fee or
other similar charge may be deducted directly from the income and other
distributions paid on Shares to a Shareholder's account in any Class or Series.
(b) The Trustees may prescribe, in their absolute discretion, such bases
and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
(c) Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of account, the
above provisions shall be interpreted to give the Trustees full power and
authority in their absolute discretion to distribute for any fiscal year as
dividends and as capital gains distributions, respectively, additional amounts
sufficient to enable the Trust or a Class or Series thereof to avoid or reduce
liability for taxes.
SECTION 7.3. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any
provision contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Class or Series thereof or the
income of the Class or Series thereof, or for the declaration and payment of
dividends and distributions on any Class or Series.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
CLASS OR SERIES; MERGERS; AMENDMENTS
SECTION 8.1. DURATION. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation or authority pursuant to the terms of this
Declaration or of the By-Laws.
SECTION 8.2. MERGER OR TERMINATION OF THE TRUST OR A SERIES OR A CLASS. The
Trust may merge or consolidate with any other corporation, association, trust or
other organization or may sell, lease or exchange all or substantially all of
the Trust property, including its good will, upon such terms and conditions and
for such consideration when and as authorized at a meeting of Shareholders
called for the purpose by the affirmative vote of the holders of two-thirds of
each Class and Series of Shares outstanding and entitled to vote (with each such
class and series separately voting thereon as a separate Class or Series), or by
an instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of each Class and Series of Shares (with each such Class
and Series separately consenting thereto as a separate Class or Series);
provided, however, that if such merger, consolidation, sale, lease or exchange
is recommended by the Trustees, the vote or written consent of the holders of a
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majority of the Shares outstanding and entitled to vote shall be sufficient
authorization; and any such merger, consolidation, sale, lease or exchange shall
be deemed for all purposes to have been accomplished under and pursuant to the
statutes of the Commonwealth of Massachusetts. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, (whether
accrued or contingent) of the Trust, the Trustees shall distribute the remaining
assets of the Trust ratably among the holders of the outstanding Shares, except
as may be otherwise provided by the Trustees with respect to any Class or Series
of Shares thereof.
Subject to authorization by the Shareholders as indicated below in this
paragraph, the Trust may at any time sell and convert into money all of the
assets of the Trust, and, upon making provision for the payment of all
outstanding obligations, taxes and other liabilities (whether accrued or
contingent) of the Trust, the Trustees shall distribute the remaining assets of
the Trust ratably among the holders of the outstanding Shares, except as may be
otherwise provided by the Trustees with respect to any Class or Series of
Shares. Such action shall first have been authorized at a meeting of
Shareholders called for the purpose by the affirmative vote of the holders of
two-thirds of each Class and Series of Shares outstanding and entitled to vote
(with each such Class and Series separately voting thereon as a separate Class
or Series), or by an instrument or instruments in writing without a meeting,
consented to by the holders of two-thirds of each Class and Series of Shares
(with each such Class and Series separately consenting thereto as a separate
Class or Series); provided, however, that if such action is recommended by the
Trustees, the vote or written consent of the holders of a majority of the Shares
outstanding and entitled to vote shall be sufficient authorization.
Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in this section, the Trust shall terminate and the
Trustees shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be cancelled
and discharged.
SECTION 8.3. AMENDMENTS. The execution of an instrument setting forth the
establishment and designation and the relative rights of any Class or Series of
Shares in accordance with Section 5.1 hereof shall, without any authorization,
consent or vote of the Shareholders, effect an amendment of this Declaration.
Except as otherwise provided in this Section, if authorized by a majority of the
Trustees and by vote of a majority of the outstanding voting securities of the
Trust affected by the amendment (which voting securities shall, unless otherwise
provided by the Trustees, vote together on such amendment as a single class), or
by any larger vote which may be required by applicable law or this Declaration
of Trust in any particular case, the Trustees may amend or otherwise supplement
this Declaration. The Trustees may also amend this Declaration without the vote
or consent of Shareholders to change the name of the Trust or to make such other
changes as do not have a materially adverse effect on the rights or interests of
Shareholders hereunder or if they deem it necessary to conform this Declaration
to the requirements of applicable Federal laws or regulations or the
requirements of the regulated investment company provisions of the Internal
Revenue Code, but the Trustees shall not be liable for failing so to do.
No amendment may be made under this Section which shall amend, alter,
change or repeal any of the provisions of Article VIII unless the amendment
effecting such amendment, alteration, change or repeal shall receive the
affirmative vote or consent of the holders of two-thirds of each Class and
Series of Shares outstanding and entitled to vote (with each such Class and
Series separately voting thereon on consenting thereto as a separate Class or
Series). Such affirmative vote or consent shall be in addition to the vote or
consent of the holders of Shares otherwise required by law or by any agreement
between the Trust and any national securities exchange.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the Shareholders,
Trustees, officers, employees and agents of the Trust or to permit assessments
upon Shareholders.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
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the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
SECTION 8.4. CERTAIN TRANSACTIONS. (a) Notwithstanding any other provision
of this Declaration and subject to the exceptions provided in sub-section (d) of
this Section 8.4, the types of transactions described in sub-section (c) of this
Section 8.4 shall require the affirmative vote or consent of the holders of
seventy-five percent (75%) of each Class of Shares outstanding (with each such
Class voting separately thereon), when a Principal Shareholder (as defined in
sub-section (b) of this Section 8.4) is determined by the Trustees to be a party
to the transaction. Such affirmative vote or consent shall be in addition to the
vote or consent of the holders of Shares otherwise required by law or by the
terms of any Class or Series, whether now or hereafter authorized, or by any
agreement between the Trust and any national securities exchange.
(b) The term "Principal Shareholder" shall mean any Person which is the
beneficial owner, directly or indirectly, of more than five percent (5%) of the
Outstanding Shares of the Trust or of any Class and shall include any
"affiliate" or "associate", as such terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934. For the
purpose of this Section 8.4, in addition to the Shares which a Person
beneficially owns directly, (a) a Person shall be deemed to be the beneficial
owner of any Shares (i) which the Trustees determine it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warrants, or
otherwise (but excluding Share options granted by the Trust) or (ii) which the
Trustees determine are beneficially owned, directly or indirectly (including
Shares deemed owned through application of clause (i) above), by any other
Person with which it or its "affiliate" or "associate" (as defined above) has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of Shares, or which is its affiliate or associate,
and (b) the outstanding Shares shall include Shares deemed owned through
application of clauses (i) and (ii) above but shall not include any other Shares
which are not at the time issued and outstanding but may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section 8.4 shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any subsidiary of the
Trust with or into any Principal Shareholder.
(ii) The issuance of any securities of the Trust to any Principal
Shareholder for cash.
(iii) The sale, lease or exchange of all or any substantial part of
the assets of the Trust to any Principal Shareholder (except assets
determined by the Trustees to have an aggregate fair market value of
less than $1,000,000, aggregating for the purpose of such computation
all assets sold, leased or exchanged in any series of similar
transactions within a twelve-month period or assets sold in the
ordinary course of business).
(iv) The sale, lease or exchange to or with the Trust or any
subsidiary thereof, in exchange for securities of the Trust, of any
assets of any Principal Shareholder (except assets determined by the
Trustees to have an aggregate fair market value of less than
$1,000,000 aggregating for the purpose of such computation all assets
sold, leased or exchanged in any series of similar transactions within
a twelve-month period).
For purposes of this sub-section 8.4(c), the term "Principal Shareholder"
shall include all subsidiaries, affiliates, associates, or other persons acting
in concert with any Principal Shareholder.
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(d) The provisions of this Section 8.4 shall not be applicable to (i) any
of the transactions described in sub-section (c) of this Section 8.4 if the
Trustees shall by resolution have approved a memorandum of understanding with
such Principal Shareholder with respect to and substantially consistent with
such transaction, or (ii) any such transaction with any Person of which a
majority of the outstanding shares of all classes of stock normally entitled to
vote in the election of directors is owned of record or beneficially by the
Trust and its subsidiaries.
(e) The Trustees shall have the power to determine for the purposes of this
Section 8.4 on the basis of information known to the Trust, whether (i) a Person
beneficially owns more than five percent (5%) of the outstanding Shares or is
otherwise a Principal Shareholder, (ii) a Person is an "affiliate" or
"associate" (as defined above) of another, (iii) the assets being acquired or
leased to or by the Trust or any subsidiary thereof constitute a substantial
part or the assets of the Trust and have an aggregate fair market value of less
than $1,000,000, (iv) the memorandum of understanding referred to in sub-section
(d) hereof is substantially consistent with the transaction covered thereby, and
(v) the provisions of the Section 8.5 otherwise apply to any Person or
transaction. Any such determination shall be conclusive and binding for all
purposes of this Section 8.4.
SECTION 8.5. CONVERSION. Notwithstanding any other provisions of this
Declaration, the conversion of the Trust from a "closed-end company" to an
"open-end company," as those terms are defined in Section 5(a)(2) and 5(a)(1),
respectively, of the 1940 Act shall require the affirmative vote or consent of
the holders of two-thirds of each Class outstanding (with each Class separately
voting thereon or consenting thereto as a separate Class). Such affirmative vote
or consent shall be in addition to the vote or consent of the holders of the
Shares otherwise required by law or by the terms of any Class or Series, whether
now or hereafter authorized, or by any agreement between the Trust and any
national securities exchange. However, if such conversion is recommended by at
least 75% of the Trustees then in office, the vote or written consent of the
holders of a majority of the outstanding voting securities of the Trust (which
voting securities shall vote separately on the matter by class) shall be
sufficient to authorize such conversion.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. USE OF THE WORDS "EATON VANCE". Eaton Vance Corp. (hereinafter
referred to as "EVC"), which owns (either directly or through subsidiaries) all
of the capital shares of the Investment Adviser of the Trust (or of the
investment adviser of each of the investment companies referred to in the last
paragraph of Section 2.3), has consented to the use by the Trust of the
identifying words "Eaton Vance" in the name of the Trust. Such consent is
conditioned upon the continued employment of EVC or a subsidiary or affiliate of
EVC as Investment Adviser of the Trust or as the investment adviser of each of
the investment companies referred to in the last paragraph of Section 2.3. As
between the Trust and itself, EVC shall control the use of the name of the Trust
insofar as such name contains the identifying words "Eaton Vance". EVC may from
time to time use the identifying words "Eaton Vance" in other connections and
for other purposes, including, without limitation, the names of other investment
companies, trusts, corporations or businesses which it may manage, advise,
sponsor or own or in which it may have a financial interest. EVC may require the
Trust to cease using the identifying words "Eaton Vance" in the name of the
Trust if EVC or a subsidiary or affiliate of EVC ceases to act as investment
adviser of the Trust or as the investment adviser of each of the investment
companies referred to in the last paragraph of Section 2.3.
SECTION 9.2. NOTICES. Notwithstanding any other provision of this
Declaration, any and all notices to which any Shareholder may be entitled and
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any and all communications shall be deemed duly served or given if mailed,
postage prepaid, addressed to any Shareholder of record at his last known
address as recorded on the register of the Trust. If and to the extent
consistent with applicable law, a notice of a meeting, an annual report, and any
other communication to Shareholders need not be sent to a Shareholder (i) if an
annual report and a proxy statement for two consecutive shareholder meetings
have been mailed to such Shareholder's address and have been returned as
undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of distributions on Shares during a twelve-month period have
been mailed to such Shareholder's address and have been returned as
undeliverable or (iii) in any other case in which a proxy statement concerning a
meeting of security holders is not required to be given pursuant to the
Commission's proxy rules as from time to time in effect under the Securities
Exchange Act of 1934, as amended. However, delivery of such proxy statements,
annual reports and other communications shall resume if and when such
Shareholder delivers or causes to be delivered to the Trust written notice
setting forth such Shareholder's then current address.
SECTION 9.3. FILING OF COPIES, REFERENCES, HEADINGS AND COUNTERPARTS. The
original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. Anyone dealing with the Trust may rely on a certificate by a Trustee or
an officer of the Trust as to whether or not any such amendments or supplemental
declarations of trust have been made and as to any matters in connection with
the Trust hereunder, and, with the same effect as if it were the original, may
rely on a copy certified by a Trustee or an officer of the Trust to be a copy of
this instrument or of any such amendment hereto or supplemental declaration of
trust.
In this instrument or in any such amendment or supplemental declaration of
trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may thereafter be referred to in lieu of the original Declaration
and the various amendments and supplements thereto.
SECTION 9.4. APPLICABLE LAW. The Trust set forth in this instrument is made
in The Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
SECTION 9.5. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue Code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be construed in
such a manner consistent with such law as may most closely reflect the intention
of the offending provision; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
19
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IN WITNESS WHEREOF, the undersigned, being all of the current Trustees of
the Trust, have executed this instrument this 10th day of December, 1998.
/s/ Thomas J. Fetter /s/ James B. Hawkes
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Thomas J. Fetter, as Trustee James B. Hawkes, as Trustee
and not Individually and not Individually
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, Massachusetts
Then personally appeared the above named Thomas J. Fetter and James B.
Hawkes, each of whom acknowledged the foregoing instrument to be his free act
and deed.
Before me,
/s/ Lynn W. Ostberg
--------------------------------
My commission expires: 11/27/2003
20
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The names and addresses of all the Trustees of the Trust are as follows:
Thomas J. Fetter
4 Camelot Court
Cumberland, RI 02864
James B. Hawkes
11 Quincy Park
Beverly, MA 01915
Trust Address:
24 Federal Street
Boston, MA 02110
21
BY-LAWS
OF
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
ARTICLE I
The Trustees
SECTION 1. NUMBER OF TRUSTEES. The number of Trustees shall be fixed by the
Trustees, provided, however, that such number shall at no time be less than two
or exceed eighteen.
ARTICLE II
Officers and Their Election
SECTION 1. OFFICERS. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers or agents as the Trustees may
from time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in the Trust.
SECTION 2. ELECTION OF OFFICERS. The Treasurer and Secretary shall be chosen
annually by the Trustees. The President shall be chosen annually by and from the
Trustees. Except for the offices of the President and Secretary, two or more
offices may be held by a single person. The officers shall hold office until
their successors are chosen and qualified.
SECTION 3. RESIGNATIONS AND REMOVALS. Any officer of the Trust may resign by
filing a written resignation with the President or with the Trustees or with the
Secretary, which shall take effect on being so filed or at such time as may
otherwise be specified therein. The Trustees may at any meeting remove an
officer.
ARTICLE III
Powers and Duties of Trustees and Officers
SECTION 1. TRUSTEES. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility, so far as such powers are not inconsistent with the
laws of the Commonwealth of Massachusetts, the Declaration of Trust, or these
By-Laws.
<PAGE>
SECTION 2. EXECUTIVE AND OTHER COMMITTEES. The Trustees may elect from their own
number an executive committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust while the Trustees are not in session, and such
other powers and duties as the Trustees may from time to time delegate to such
committee. The Trustees may also elect from their own number other committees
from time to time, the number composing such committees and the powers conferred
upon the same to be determined by the Trustees. Without limiting the generality
of the foregoing, the Trustees may appoint a committee consisting of less than
the whole number of Trustees then in office, which committee may be empowered to
act for and bind the Trustees and the Trust, as if the acts of such committee
were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review, investigation or other
disposition of any dispute, claim, action, suit or proceeding which shall be
pending or threatened to be brought before any court, administrative agency or
other adjudicatory body.
SECTION 3. CHAIRMAN OF THE TRUSTEES. The Trustees may, but need not, appoint
from among their number a Chairman. When present he shall preside at the
meetings of the shareholders and of the Trustees. He may call meetings of the
Trustees and of any committee thereof whenever he deems it necessary. He shall
be an executive officer of this Trust and shall have, with the President,
general supervision over the business and policies of this Trust, subject to the
limitations imposed upon the President, as provided in Section 4 of this Article
III.
SECTION 4. PRESIDENT. In the absence of the Chairman of the Trustees, the
President shall preside at all meetings of the shareholders. Subject to the
Trustees and to any committees of the Trustees, within their respective spheres,
as provided by the Trustees, he shall at all times exercise a general
supervision and direction over the affairs of the Trust. He shall have the power
to employ attorneys and counsel for the Trust and to employ such subordinate
officers, agents, clerks and employees as he may find necessary to transact the
business of the Trust. He shall also have the power to grant, issue, execute or
sign such powers of attorney, proxies or other documents as may be deemed
advisable or necessary in furtherance of the interests of the Trust. The
President shall have such other powers and duties as, from time to time, may be
conferred upon or assigned to him by the Trustees.
SECTION 5. TREASURER. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company as the
Trustees shall employ as custodian in accordance with Article III of the
Declaration of Trust. He shall make annual reports in writing of the business
conditions of the Trust, which reports shall be preserved upon its records, and
he shall furnish such other reports regarding the business and condition as the
Trustees may from time to time require. The Treasurer shall perform such duties
additional to foregoing as the Trustees may from time to time designate.
SECTION 6. SECRETARY. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings. He shall have custody of the seal, if any, of the Trust and
shall perform such duties additional to the foregoing as the Trustees may from
time to time designate.
SECTION 7. OTHER OFFICERS. Other officers elected by the Trustees shall perform
such duties as the Trustees may from time to time designate.
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SECTION 8. COMPENSATION. The Trustees and officers of the Trust may receive such
reasonable compensation from the Trust for the performance of their duties as
the Trustees may from time to time determine.
ARTICLE IV
Meetings of Shareholders
SECTION 1. MEETINGS. Meetings of shareholders, at which the shareholders shall
elect Trustees and transact such other business as may properly come before the
meeting, shall be held annually so long as required by the New York Stock
Exchange or such other exchange or trading system on which shares are
principally traded. Meetings of the shareholders (or any class or series) may be
called at any time by the President, and shall be called by the President or the
Secretary at the request, in writing or by resolution, of a majority of the
Trustees, or at the written request of the holder or holders of twenty-five
percent (25%) or more of the total number of the then issued and outstanding
shares of the Trust entitled to vote at such meeting. Any such request shall
state the purposes of the proposed meeting.
SECTION 2. PLACE OF MEETINGS. Meetings of the shareholders shall be held at the
principal place of business of the Trust in Boston, Massachusetts, unless a
different place within the United States is designated by the Trustees and
stated as specified in the respective notices or waivers of notice with respect
thereto.
SECTION 3. NOTICE OF MEETINGS. Notice of all meetings of the shareholders,
stating the time, place and the purposes for which the meetings are called,
shall be given by the Secretary to each shareholder entitled to vote thereat,
and to each shareholder who under the By-Laws is entitled to such notice, by
mailing the same postage paid, addressed to him at his address as it appears
upon the books of the Trust, at least ten (10) days no more than ninety (90)
days before the time fixed for the meeting, and the person given such notice
shall make an affidavit with respect thereto. If any shareholder shall have
failed to inform the Trust of his post office address, no notice need be sent to
him. No notice need be given to any shareholder if a written waiver of notice,
executed before or after the meeting by the shareholder or his attorney
thereunto authorized, is filed with the records of the meeting.
SECTION 4. QUORUM. Except as otherwise provided by law, to constitute a quorum
for the transaction of any business at any meeting of shareholders, there must
be present, in person or by proxy, holders of a majority of the total number of
shares of the then issued and outstanding shares of the Trust entitled to vote
at such meeting; provided that if a class (or series) of shares is entitled to
vote as a separate class (or series) on any matter, then in the case of that
matter a quorum shall consist of the holders of a majority of the total number
of shares of the then issued and outstanding shares of that class (or series)
entitled to vote at the meeting. Shares owned directly or indirectly by the
Trust, if any, shall not be deemed outstanding for this purpose.
If a quorum, as above defined, shall not be present for the purpose of any
vote that may properly come before any meeting of shareholders at the time and
place of any meeting, the shareholders present in person or by proxy and
entitled to vote at such meeting on such matter holding a majority of the shares
present and entitled to vote on such matter may by vote adjourn the meeting from
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time to time to be held at the same place without further notice than by
announcement to be given at the meeting until a quorum, as above defined,
entitled to vote on such matter, shall be present, whereupon any such matter may
be voted upon at the meeting as though held when originally convened.
SECTION 5. VOTING. At each meeting of the shareholders every shareholder of the
Trust shall be entitled to one (1) vote in person or by proxy for each of the
then issued and outstanding shares of the Trust then having voting power in
respect of the matter upon which the vote is to be taken, standing in his name
on the books of the Trust at the time of the closing of the transfer books for
the meeting, or, if the books be not closed for any meeting, on the record date
fixed as provided in Section 4 of Article VI of these By-Laws for determining
the shareholders entitled to vote at such meeting, or if the books be not closed
and no record date be fixed, at the time of the meeting. The record holder of a
fraction of a share shall be entitled in like manner to corresponding fraction
of a vote. Notwithstanding the foregoing, the Trustees may, in connection with
the establishment of any class (or series) of shares or in proxy materials for
any meeting of shareholders or in other solicitation materials or by vote or
other action duly taken by them, establish conditions under which the several
classes (or series) shall have separate voting rights or no voting rights.
All elections of Trustees shall be conducted in any manner approved at the
meeting of the shareholders at which said election is held, and shall be by
ballot if so requested by any shareholder entitled to vote thereon. The persons
receiving the greatest number of votes shall be deemed and declared elected.
Except as otherwise required by law or by the Declaration of Trust or by these
By-Laws, all matters shall be decided by a majority of the votes cast, as
hereinabove provided, by persons entitled to vote thereon.
SECTION 6. PROXIES. Any shareholder entitled to vote upon any matter at any
meeting of the shareholders may so vote by proxy. A proxy may be in writing
subscribed by the shareholder or by his duly authorized representatives, agent
or attorney. A written proxy shall be dated; if an undated written proxy
solicited by the management of the Trust is delivered to the Trust or its agent
or representative, such proxy shall be deemed dated by the shareholder on the
date of its receipt by the Trust or its agent or representative. A written proxy
need not be sealed, witnessed or acknowledged. A written proxy may be delivered
to the Trust or its agent by facsimile machine, graphic communication equipment
or similar electronic transmission. The shareholder may also authorize and
empower the persons named as proxies, representatives, agents or attorneys (or
their duly appointed substitutes), or any one of them on any form of proxy
solicited by the management of the Trust to vote all shares of the Trust which
he is entitled to vote upon any matter at any meeting of the shareholders by
recording his voting instructions on any recording device maintained for the
purpose by the Trust or its agent or representative; such recorded instructions
shall be deemed to constitute a written proxy subscribed by the shareholder and
delivered by him to the Trust or its agent or representative and shall be deemed
to be dated as of the date such instructions were transmitted, and the
shareholder shall be deemed to have approved and ratified all actions taken by
such persons in accordance with the voting instructions so recorded. No proxy
which is dated (or deemed dated) more than six months before the initial session
of the meeting shall be accepted and no such proxy shall be valid after the
final adjournment of the meeting. A proxy solicited by the management of the
Trust purporting to be executed or transmitted by or on behalf of a shareholder
shall be valid unless challenged at or prior to exercise of the proxy, and the
burden of proving any invalidity shall be borne by the person asserting the
challenge. A proxy solicited by the management of the Trust with respect to
shares held in the name of two or more persons shall be valid if executed or
transmitted by one of them unless at or prior to its exercise the Trust receives
a specific written notice to the contrary from any one of them.
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SECTION 7. CONSENTS. Any action which may be taken by shareholders may be taken
without a meeting if a majority of shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by law, the Declaration
or these By-Laws for approval of such matter) consent to the action in writing
and the written consents are filed with the records of the meetings of
shareholders. Such consents shall be treated for all purposes as a vote taken at
a meeting of shareholders.
SECTION 8. NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS
(A) ANNUAL MEETINGS OF SHAREHOLDERS. (1) Nominations of persons for
election of the Board of Trustees and the proposal of business to be considered
by the shareholders may be made at an annual meeting of shareholders (a)
pursuant to the notice of meeting described in Section 3 of this Article of
these By-laws; (b) by or at the direction of the Board of Trustees; or c) by any
shareholder of the Trust who was a shareholder of record at the time of giving
of notice provided for in Section 3 of this Article of these By-Laws, who is
entitled to vote at the meeting and who complied with the notice provisions set
forth in this Section 8.
(2) For nominations or other business properly to be brought before an
annual meeting by a shareholder pursuant to clause (c) of paragraph (A)(1) of
this Section 8, the shareholder must have given timely notice thereof in writing
to the Secretary of the Trust and such other business must be a proper matter
for shareholder action. To be timely, a shareholder's notice shall be delivered
to the Secretary at the principal executive offices of the Trust not later than
the close of business on the 90th day nor earlier than the close of business on
the 120th day prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is more than 30 days before or more than 60 days after such anniversary
date, notice by the shareholder to be timely must be so delivered not earlier
than the close of business on the later of the 90th day prior to such annual
meeting or the 10th day following the day on which public announcement of the
date of such meeting is first made. In no event, shall the public announcement
of an adjournment of an annual meeting commence a new time period for the giving
of a shareholder's notice as described above. Such shareholder's notice shall
set forth (a) as to each person whom the shareholder proposes to nominate for
election or reelection as a Trustee all information relating to such person that
is required to be disclosed in solicitations of proxies for election of
trustees/directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a Trustee if elected); (b) as to any other business that the
shareholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
shareholder and the beneficial owner, if any, on whose behalf the proposal is
made; and c) as to the shareholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made (i) the name and
address of such shareholder, as they appear on the Trust's books, and of such
beneficial owner and (ii) the class/series and number of shares of the Trust
which are owned beneficially and of record by such shareholder and such
beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of
this Section 8 to the contrary, in the event that the number of Trustees to be
elected to the Board of Trustees is increased and there is no public
announcement naming all of the nominees for Trustee or specifying the size of
the increased Board of Trustees made by the Trust at least 100 days prior to the
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first anniversary of the preceding year's annual meeting, a shareholder's notice
required by this Section 8 shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary at the principal executive offices of the Trust
not later than the close of business on the 10th day following the day on which
such public announcement is first made by the Trust.
(B) SPECIAL MEETINGS OF SHAREHOLDERS. Only such business shall be conducted
by a special meeting of shareholders as shall have been brought before the
meeting pursuant to the Trust's notice of meeting. Nominations of persons for
election to the Board of Trustees may be made at a special meeting of
shareholders at which Trustees are to be elected pursuant to the Trust's notice
of meeting (a) by or at the direction of the Board of Trustees or (b) by any
shareholder of the Trust who is a shareholder of record at the time of giving of
notice provided for in this Section 8, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in this Section 8.
In the event the Trust calls a special meeting of shareholders for the purpose
of electing one or more Trustees to the Board of Trustees, any such shareholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Trust's notice of meeting, if the shareholder's
notice required by paragraph (A)(2) of this Section 8 shall be delivered to the
Secretary at the principal executive offices of the Trust not earlier than the
close of business on the 120th day prior to such special meeting and not later
than the close of business on the later of the 90th day prior to such special
meeting or the 10th day following the day on which public announcement is first
made of the date of the special meeting and of the nominees proposed by the
Board of Trustees to be elected at such meeting. In no event, shall the public
announcement or adjournment of a special meeting commence a new time period for
the giving of a shareholder's notice as described above.
(C) GENERAL. (1) Only such persons who are nominated in accordance with the
procedures set forth in this Section 8 shall be eligible to serve as Trustees
and only such business shall be conducted at a meeting of shareholders as shall
have been brought before the meeting in accordance with the procedures set forth
in this Section 8. Except as otherwise provided by law, the Declaration of Trust
or these By-Laws, the Chairman (or such other officer presiding at the meeting)
shall have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made, or proposed, as the case may
be, in accordance with the procedures set forth in this Section 8 and, if any
proposed nomination or business is not in compliance with this Section 8, to
declare that such defective proposal or nomination shall be disregarded.
(2) For purposes of this Section 8, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Trust with the Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 8, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 8. Nothing in this Section 8 shall be deemed to affect any
rights of (I) shareholders to request inclusion of proposals in the Trust's
proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) the
holders of any Class of preferred shares of beneficial interest to elect
Trustees under specified circumstances.
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ARTICLE V
Trustees Meetings
SECTION 1. MEETINGS. The Trustees may in their discretion provide for regular or
stated meetings of the Trustees. Meetings of the Trustees other than regular or
stated meetings shall be held whenever called by the Chairman, President or by
any other Trustee at the time being in office. Any or all of the Trustees may
participate in a meeting by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting.
SECTION 2. NOTICES. Notice of regular or stated meetings need not be given.
Notice of the time and place of each meeting other than regular or stated
meeting shall be given by the Secretary or by the Trustee calling the meeting
and shall be mailed to each Trustee at least two (2) days before the meeting, or
shall be telegraphed, cabled, or wirelessed to each Trustee at his business
address or personally delivered to him at least one (1) day before the meeting.
Such notice may, however, be waived by all the Trustees. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any special meeting.
SECTION 3. CONSENTS. Any action required or permitted to be taken at any meeting
of the Trustees may be taken by the Trustees without a meeting if a written
consent thereto is signed by all the Trustees and filed with the records of the
Trustees' meetings. A Trustee may deliver his consent to the Trust by facsimile
machine or other graphic communication equipment. Such consent shall be treated
as a vote at a meeting for all purposes.
SECTION 4. PLACE OF MEETINGS. The Trustees may hold their meetings within or
without the Commonwealth of Massachusetts.
SECTION 5. QUORUM AND MANNER OF ACTING. A majority of the Trustees in office
shall be present in person at any regular stated or special meeting of the
Trustees in order to constitute a quorum for the transaction of business at such
meeting and (except as otherwise required by the Declaration of Trust, by these
By-Laws or by statute) the act of a majority of the Trustees present at any such
meeting, at which a quorum is present, shall be the act of the Trustees. In the
absence of quorum, a majority of the Trustees present may adjourn the meeting
from time to time until a quorum shall be present. Notice of any adjourned
meeting need not be given.
ARTICLE VI
Shares of Beneficial Interest
SECTION 1. CERTIFICATES FOR SHARES OF BENEFICIAL INTEREST. Certificates for
shares of beneficial interest of any class of shares of the Trust, if issued,
shall be in such form as shall be approved by the Trustees. They shall be signed
by, or in the name of, the Trust by the President and by the Treasurer and may,
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but need not be, sealed with seal of the Trust; provided, however, that where
such certificate is signed by a transfer agent or a transfer clerk acting on
behalf of the Trust or a registrar other than a Trustee, officer or employee of
the Trust, the signature of the President or Treasurer and the seal may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates, shall cease to be such officer or officers of the Trust whether
because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Trust, such certificate or
certificates may nevertheless be adopted by the Trust and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signatures shall have been used thereon had not
ceased to be such officer or officers of the Trust.
SECTION 2. TRANSFER OF SHARES. Transfers of shares of beneficial interest of any
shares of the Trust shall be made only on the books of the Trust by the owner
thereof or by his attorney thereunto authorized by a power of attorney duly
executed and filed with the Secretary or a transfer agent, and only upon the
surrender of any certificate or certificates for such shares. The Trust shall
not impose any restrictions upon the transfer of the shares of the Trust, but
this requirement shall not prevent the charging of customary transfer agent
fees.
SECTION 3. TRANSFER AGENT AND REGISTRAR; REGULATIONS. The Trust shall, if and
whenever the Trustees shall so determine, maintain one or more transfer offices
or agencies, each in the charge of a transfer agent designated by the Trustees,
where the shares of beneficial interest of the Trust shall be directly
transferable. The Trust shall, if and whenever the Trustees shall so determine,
maintain one or more registry offices, each in the charge of a registrar
designated by the Trustees, where such shares shall be registered, and no
certificate for shares of the Trust in respect of which a transfer agent and/or
registrar shall have been designated shall be valid unless countersigned by such
transfer agent and/or registered by such registrar. The principal transfer agent
may be located within or without the Commonwealth of Massachusetts and shall
have charge of the stock transfer books, lists and records, which shall be kept
within or without Massachusetts in an office which shall be deemed to be the
stock transfer office of the Trust. The Trustees may also make such additional
rules and regulations as it may deem expedient concerning the issue, transfer
and registration of certificates for shares of the Trust.
SECTION 4. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The Trustees may
fix in advance a time which shall be not more than seventy-five (75) days before
the date of any meeting of shareholders, or the date for the payment of any
dividend or the making or any distribution to shareholders or the last day on
which the consent or dissent of shareholders may be effectively expressed for
any purpose, as the record date for determining the shareholders having the
right to notice of and to vote at such meeting, and any adjournment thereof, or
the right to receive such dividend or distribution or the right to give such
consent or dissent, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date. The Trustees may, without fixing such record
date, close the transfer books for all or any part of such period for any of the
foregoing purposes.
SECTION 5. LOST, DESTROYED OR MUTILATED CERTIFICATES. The holder of any shares
of the Trust shall immediately notify the Trust of any loss, destruction or
mutilation of the certificate therefor, and the Trustees may, in their
discretion, cause a new certificate or certificates to be issued to him, in case
of mutilation of the certificate, upon the surrender of the mutilated
certificate, or, in case of loss or destruction of the certificate, upon
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satisfactory proof of such loss or destruction and, in any case, if the Trustees
shall so determine, upon the delivery of a bond in such form and in such sum and
with such surety or sureties as the Trustees may direct, to indemnify the Trust
against any claim that may be made against it on account of the alleged loss or
destruction of any such certificate.
SECTION 6. RECORD OWNER OF SHARES. The Trust shall be entitled to treat the
person in whose name any share of the Trust is registered on the books of the
Trust as the owner thereof, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person.
ARTICLE VII
Fiscal Year
The fiscal year of the Trust shall end on November 30 of each year,
provided, however, that the Trustees may from time to time change the fiscal
year.
ARTICLE VIII
Seal
The Trustees may adopt a seal of the Trust which shall be in such form and
shall have such inscription thereon as the Trustees may from time to time
prescribe.
ARTICLE IX
Inspection of Books
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the inspection
of the shareholders; and no shareholder shall have any right to inspect any
account or book or document of the Trust except as conferred by law or
authorized by the Trustees or by resolution of the shareholders.
ARTICLE X
Principal Custodian and Sub-custodians
The following provisions shall apply to the employment of the principal
Custodian pursuant to the Declaration of Trust:
(a) The Trust may employ the principal Custodian:
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<PAGE>
(1) To hold securities owned by the Trust and deliver the
same upon written order or oral order, if confirmed in
writing, or by such electro-mechanical or electronic
devices as are agreed to by the Trust and such
Custodian;
(2) To receive and receipt for any moneys due to the Trust
and deposit the same in its own banking department or,
as the Trustees may direct, in any bank, trust company
or banking institution approved by such Custodian,
provided that all such deposits shall be subject only
to the draft or order of such Custodian; and
(3) To disburse such funds upon orders or vouchers.
(b) The Trust may also employ such Custodian as its agent:
(1) To keep the books and accounts of the Trust and furnish
clerical and accounting services; and
(2) To compute the net asset value per share in the manner
approved by the Trust.
(c) All of the foregoing services shall be performed upon such
basis of compensation as may be agreed upon between the
Trust and the principal Custodian. If so directed by vote of
the holders of a majority of the outstanding shares of
Trust, the principal Custodian shall deliver and pay over
all property of the Trust held by it as specified in such
vote.
(d) In case of the resignation, removal or inability to serve of
any such Custodian, the Trustees shall promptly appoint
another bank or trust company meeting the requirements of
the Declaration of Trust as successor principal Custodian.
The agreement with the principal Custodian shall provide
that the retiring principal Custodian shall, upon receipt of
notice of such appointment, deliver the funds and property
of the Trust in its possession to and only to such
successor, and that pending appointment of a successor
principal Custodian, or a vote of the shareholders to
function without a principal Custodian, the principal
Custodian shall not deliver funds and property of the Trust
to the Trustees, but may deliver them to a bank or trust
company doing business in Boston, Massachusetts, of its own
selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of
not less than $2,000,000, as the property of the Trust to be
held under terms similar to those on which they were held by
the retiring principal Custodian.
The Trust may also authorize the principal Custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
Custodian and upon such terms and conditions as may be agreed upon between the
Custodian and sub-custodian.
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<PAGE>
Subject to such rules, regulations and orders as the Commission may adopt,
the Trust may authorize or direct the principal Custodian or any sub-custodian
to deposit all or any part of the securities in or with one or more depositories
or clearing agencies or systems for the central handling of securities or other
book-entry systems approved by the Trust, or in or with such other persons or
systems as may be permitted by the Commission, or otherwise in accordance with
the Act, pursuant to which all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or the principal Custodian or the sub-custodian. The
Trust may also authorize the deposit in or with one or more eligible foreign
custodians (or in or with one or more foreign depositories, clearing agencies or
systems for the central handling of securities) of all or part of the Trust's
foreign assets, securities, cash and cash equivalents in amounts reasonably
necessary to effect the Trust's foreign investment transactions, in accordance
with such rules, regulations and orders as the Commission may adopt.
ARTICLE XI
Limitation of Liability and Indemnification
SECTION 1. LIMITATION OF LIABILITY. Provided they have exercised reasonable care
and have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or liable in
any event for neglect or wrongdoing of them or any officer, agent, employee or
investment adviser of the Trust, but nothing contained in the Declaration of
Trust or herein shall protect any Trustee against any liability to which he
would otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
SECTION 2. INDEMNIFICATION OF TRUSTEES AND OFFICERS. The Trust shall indemnify
each person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
has been a Trustee, officer, employee or agent of the Trust, or is or has been
serving at the request of the Trust as a Trustee, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, provided that:
(a) such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Trust,
(b) with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful,
(c) unless ordered by a court, indemnification shall be made
only as authorized in the specific case upon a determination
that indemnification of the Trustee, officer, employee or
agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subparagraphs
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<PAGE>
(a) and (b) above and (e) below, such determination to be
made based upon a review of readily available facts (as
opposed to a full trial-type inquiry) by (i) vote of a
majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then
in office act on the matter) or (ii) by independent legal
counsel in a written opinion,
(d) in the case of an action or suit by or in the right of the
Trust to procure a judgment in its favor, no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to
the Trust unless and only to the extent that the court in
which such action or suit is brought, or a court of equity
in the county in which the Trust has its principal office,
shall determine upon application that, despite the
adjudication of liability but in view of all the
circumstances of the case, he is fairly and reasonably
entitled to indemnify for such expenses which such court
shall deem proper, and
(e) no indemnification or other protection shall be made or
given to any Trustee or officer of the Trust against any
liability to the Trust or to its security holders to which
he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his
office.
Expenses (including attorneys' fees) incurred with respect to any claim,
action, suit or proceeding of the character described in the preceding paragraph
shall be paid by the Trust in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of such person to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Trust as authorized by this Article, provided that either:
(1) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such
advances; or
(2) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested
Trustees act on the matter) or an independent legal counsel
in a written opinion shall determine, based upon a review of
readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 2, a "Disinterested Trustee" is one who is not (i)
an "Interested Person," as defined in the Act, of the Trust (including anyone
who has been exempted from being an "Interested Person" by any rule, regulation,
or order of the Securities and Exchange Commission), or (ii) involved in the
claim, action, suit or proceeding.
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<PAGE>
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Trust, or with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 3. INDEMNIFICATION OF SHAREHOLDERS. In case any shareholder or former
shareholder shall be held to be personally liable solely by reason of his being
or having been a shareholder and not because of his acts or omissions or for
some other reason, the shareholder or former shareholder (or his heirs,
executors, administrators or other legal representatives, or in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled out of the Trust estate to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust shall, upon
request by the shareholder, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. A holder of shares of a series shall be entitled to indemnification
hereunder only out of assets allocated to that series.
ARTICLE XII
Report to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE XIII
Amendments
These By-Laws may be amended at any meeting of the Trustees by a vote of a
majority of the Trustees then in office; provided, however, that any provision
of Article XI may be amended only by a two-thirds vote.
Dated: December 10, 1998
NUMBER SHARES
CUSIP __________________
SEE REVERSE FOR
WITHOUT PAR VALUE CERTAIN DEFINITIONS
THIS IS TO CERTIFY THAT
IS THE OWNER OF
COMMON SHARES OF BENEFICIAL INTEREST OF
Eaton Vance New Jersey Municipal Income Trust, a business trust established in
accordance with the laws of the Commonwealth of Massachusetts under and subject
to the provisions of a Declaration of Trust executed as of the 10th day of
December, 1998, as the same may be amended, and restated from time to time, and
filed with the Secretary of the Commonwealth of Massachusetts. The common shares
of said Trust evidenced by this certificate are issued under and subject to, and
the rights and preferences of the holders hereof are subject to, said
Declaration of Trust, and each common share of said Trust represents an equal
proportionate interest in said Trust with each other outstanding common share of
said Trust. The interest represented hereby is transferable only on the books of
said Trust by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate, properly endorsed. This certificate is not valid
until countersigned by the Transfer Agent and Registrar. WITNESS the facsimile
signatures of the President and the Secretary of said Trust.
ALAN R. DYNNER, SECRETARY THOMAS J. FETTER, PRESIDENT
COUNTERSIGNED AND REGISTERED:
FIRST DATA INVESTOR SERVICES GROUP, INC.
BY TRANSFER AGENT AND REGISTRAR
AUTHORIZED SIGNATURE
<PAGE>
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership of the face
of this certificate shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
ABBREVIATION EQUIVALENT ABBREVIATION EQUIVALENT
- ------------ ---------- ------------ ----------
JTTEN As joint tenants, TEN IN COM As tenants in common
with right of TEN BY ENT As tenants by the
survivorship and UNIF GIFT MIN ACT entireties Uniform Gift
not as tenants to Minors
in common
ABBREVIATION EQUIVALENT ABBREVIATION EQUIVALENT
- ------------ ---------- ------------ ----------
ADM Administrator(s) FDN Foundation
Administratix PL Public Law
AGMT Agreement TR (As) trustee(s), for, of
CUST Custodian for UA Under Agreement
EST Estate, Of estate of UW Under Will of, Of will of,
EX Executor(s), Executrix Under last will & testament
FBO For the benefit of
Additional abbreviations may also be used though not in the above list.
================================================================================
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY FOR VALUE RECEIVED______________ hereby sell,
OR OTHER IDENTIFYING NUMBER (I/we)
OF ASSIGNEE assign and transfer unto
.......................... ................................................
Please print or typewrite name and address
including postal zip code of assignee
................................................................................
................................................................................
..........................................................................Shares
of the Common Shares of Beneficial interest represented by this Certificate and
do hereby irrevocably constitute and appoint
.......................................................................Attorney,
to transfer said shares on the books of the Trust with full power of
substitution in the premises.
Dated:
............................................................
SIGNATURE
GUARANTEED BY Signature(s)................................................
(The signature to this assignment must correspond with the
name as written upon the face of this Certificate in every
particular, without alteration or enlargement or any change
whatsoever. If more than one owner, all must sign.)
....................................
(Signature must be guaranteed by a
commercial bank or trust company or
member firm of the New York, American,
Boston, Midwest or Pacific Stock Exchanges).
<PAGE>
IMPORTANT NOTICE:
When you sign your name to the Transfer Form without filling in the name of
your "Assignee" this stock certificate becomes fully negotiable, similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the "Assignee" space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the unsigned stock certificate and the signed
"stock power" in separate envelopes. For added protection, use registered mail
for a stock certificate.
================================================================================
REDEMPTION FORM
The undersigned hereby tenders to the Trust the within Certificate properly
endorsed with any requisite guarantee of signature and supporting papers and
requests the redemption of
..........................................................................Shares
(Indicate the number of shares to be redeemed. A new certificate will be issued
for any unredeemed balance.)
of the Common Shares of Beneficial Interest represented by the within
Certificate in accordance with the terms of the Declaration of Trust of the
Trust.
<PAGE>
================================================================================
Dated: .................
............................................................
SIGNATURE Signature(s)................................................
GUARANTEED BY (The signature to this request for redemption must
correspond with the name as written upon the face of this
Certificate in every particular, without alteration or
enlargement or any change whatsoever. If more than one
owner, all must sign.)
.................................
(Signature must be guaranteed by
a commercial bank or trust company
or member firm of the New York, American,
Boston, Midwest or Pacific Stock Exchanges).
.................................
Address
.................................
FORM OF
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
TERMS AND CONDITIONS OF DIVIDEND REINVESTMENT PLAN
Holders of common shares (the "Shares") of Eaton Vance New Jersey Municipal
Income Trust (the "Fund") participating (the "Participants") in its Dividend
Reinvestment Plan (the "Plan") are advised as follows:
1. THE PLAN AGENT. First Data Investor Services Group (the "Agent") will
act as Agent for each Participant. The Agent will open an account for each
Participant under the Plan in the same name as his or her outstanding Shares are
registered.
2. CASH OPTION. The Fund will declare its income dividends and capital
gains distributions ("Distributions") payable in Shares, or, at the option of
Shareholders, in cash. Therefore, each Participant not choosing cash
distributions will receive Shares.
3. MARKET PREMIUM ISSUANCES. If on the payment date for a Distribution, the
net asset value per Share is equal to or less than the market price per Share
plus estimated brokerage commissions, the Agent shall receive newly issued
Shares, including fractions, from the Fund for each Participant's account. The
number of additional shares to be credited shall be determined by dividing the
dollar amount of the Distribution by the greater of the net asset value per
Share on the payment date, or 95% of the then current market price per Share on
the payment date.
4. MARKET DISCOUNT PURCHASES. If the net asset value per Share exceeds the
market price plus estimated brokerage commissions on the payment date for a
Distribution, the Agent (or a broker-dealer selected by the Agent) shall
endeavor, for a purchase period of 30 days, to apply the amount of such
Distribution on each Participant's Shares (less their PRO RATA share of
brokerage commissions incurred) to purchase Shares on the open market. The
average price (including brokerage commissions) of all Shares purchased by the
Agent as Agent shall be the price per Share allocable to each Participant. If,
at the close of business on any day during the purchase period on which net
asset value per Share is calculated such net asset value equals or is less than
the market price per Share plus estimated brokerage commissions, the Agent will
cease open-market purchases, and the uninvested portion of such Distribution
shall be filled through the issuance of new Shares from the Fund at the price
set forth in paragraph 3 above. Open-market purchases may be made on any
securities exchange where Shares are traded, in the over-the-counter market or
in negotiated transactions, and may be on such terms as to price, delivery and
otherwise as the Agent shall determine.
<PAGE>
5. VALUATION. The market price of Shares on a particular date shall be the
last sales price on the New York Stock Exchange on that date, or, if there is no
sale on such Exchange on that date, then the mean between the closing bid and
asked quotations on such Exchange on such date. The net asset value per Share on
a particular date shall be the amount most recently calculated by or on behalf
of the Fund as required by law.
6. LIABILITY OF AGENT. The Agent shall at all times act in good faith and
agree to use its best efforts within reasonable limits to ensure the accuracy of
all services performed under this Agreement and to comply with applicable law,
but assumes no responsibility and shall not be liable for loss or damage due to
errors unless such error is caused by the Agent's negligence, bad faith, or
willful misconduct or that of its employees. Each Participant's uninvested funds
held by the Agent will not bear interest. The Agent shall have no liability in
connection with any inability to purchase Shares within the time provided, or
with the timing of any purchases effected. The Agent shall have no
responsibility for the value of Shares acquired. For the purpose of cash
investments, the Agent may commingle Participants' funds.
7. RECORDKEEPING. The Agent may hold each Participant's Shares acquired
pursuant to the Plan together with the Shares of other shareholders of the Fund
acquired pursuant to the Plan in noncertificated form in the Agent's name or
that of the Agent's nominee. Upon a Participant's written request, the Agent
will deliver to the Participant, without charge, a certificate or certificates
for the full shares. Each Participant will be sent a confirmation by the Agent
of each acquisition made for their account as soon as practicable but not later
than 60 days after the date thereof. Although each Participant may from time to
time have an undivided fractional interest (computed to three decimal places) in
a share of the Fund, no certificates for a fractional share will be issued.
Distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of Shares at the time of termination.
Any share dividends or split shares distributed by the Fund on Shares held
by the Agent for Participants will be credited to their accounts. In the event
that the Fund makes available to its shareholders rights to purchase additional
shares of other securities, the Shares held for each Participant under the Plan
will be added to other shares held by the Participant in calculating the number
of rights to be issued to each Participant.
8. PROXY MATERIALS. The Agent will forward to each Participant any proxy
solicitation material; and will vote any shares so held for each Participant
first in accordance with the instructions set forth on proxies returned by the
Participant to the Fund, and then with respect to any proxies not returned by
the Participant to the Fund in the same portion as the agent votes proxies
returned by the Participants to the Fund.
2
<PAGE>
9. FEES. The Agent's service fee for handling Distributions will be paid by
the Fund. Each Participant will be charged their PRO RATA share of brokerage
commissions on all open-market purchases. If a Participant elects by written
notice to the Agent to have the Agent sell part or all of his or her Shares and
remit the proceeds, the Agent is authorized to deduct a $5.00 fee plus brokerage
commissions from the proceeds.
10. TERMINATION IN THE PLAN. Each registered Participant may terminate his
or her account under the Plan by notifying the Agent in writing at P.O. Box
8030, Boston, MA 02266-8030, or by telephone at 800-331-1710. Such termination
will be effective with respect to a Distribution if the Participant's notice is
received by the Agent at least ten days prior to the Distribution record date.
The Plan may be terminated by the Agent or the Fund upon notice in writing
mailed to each Participant at least 90 days prior to any record date for the
payment of any Distribution. Upon any termination, the Agent will cause a
certificate or certificates to be issued for the full shares held for each
Participant under the Plan and cash adjustment for any fraction to be delivered
to them without charge.
11. AMENDMENT OF THE PLAN. These terms and conditions may be amended by the
Agent or the Fund at any time or times but, except when necessary or appropriate
to comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 30 days prior to the effective
date thereof. The amendment shall be deemed to be accepted by each Participant
unless, prior to the effective date thereof, the Agent receives written notice
of the termination of their account under the Plan. Any such amendment may
include an appointment by the Agent of a successor Agent.
12. APPLICABLE LAW. These terms and conditions shall be governed by the
laws of the Commonwealth of Massachusetts.
3
FORM OF
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of December, 1998, between Eaton Vance New
Jersey Municipal Income 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 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. 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 portfolio 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
<PAGE>
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 cause the Trust 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, 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.
The Adviser shall not be responsible for providing certain special
administrative services to the Trust under this Agreement. Eaton Vance
Management, in its capacity as Administrator of the Trust, shall be responsible
for providing such services to the Trust under the Trust's separate
Administration Agreement.
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 .70% annually of the
average weekly gross assets of the Trust. (Gross assets shall be calculated by
deducting accrued liabilities of the Trust except the principal amount of any
indebtedness for money borrowed, including debt securities issued by the Trust,
and the amount of any outstanding preferred shares issued by the Trust. Accrued
liabilities are expenses incurred in the normal course of operations.)
Such compensation shall be paid monthly in arrears on the last business day
of each month. The Trust's net assets 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, the
fee for that month shall be reduced proportionately on the basis of the number
of calendar days during which the Agreement is in effect and the fee shall be
computed upon the basis of the average gross assets for the business days the
Agreement is so in effect for that month.
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, spreads, 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, and
expenses of issue, sale, repurchase and redemption (if any) of interests in the
Trust, including expenses of conducting tender offers for the purpose of
repurchasing Trust interests, (viii) expenses of registering and qualifying the
Trust and its shares 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
-2-
<PAGE>
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, accounts and records,
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, (xviii) pricing and valuation
services employed by the Trust, (xix) all expenses incurred in connection with
leveraging of Trust's assets through a line of credit, or issuing and
maintaining preferred shares, and (xx) 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, officers and
shareholders 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, officers, employees, 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 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 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 interest in a Loan or of any security, investment or other
asset.
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 sub-investment
adviser and approved by the Trustees of the Trust, all as permitted by the
Investment Company Act of 1940.
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, 2000 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 2000 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.
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<PAGE>
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 Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of the Trustees, officers and shareholders of the Trust, and the
Adviser hereby agrees that it shall have recourse to the Trust for payment of
claims or obligations as between the Trust and the Adviser arising out of this
Agreement and shall not seek satisfaction from any Trustee, officer or
shareholders of the Trust.
10. USE OF THE NAME "EATON VANCE". The Adviser hereby consents to the use
by the Trust of the name "Eaton Vance" as part of the Trust's name; provided,
however, that such consent shall be conditioned upon the employment of the
Adviser or one of its affiliates as the investment adviser of the Trust. The
name "Eaton Vance" or any variation thereof may be used from time to time in
other connections and for other purposes by the Adviser and its affiliates and
other investment companies that have obtained consent to the use of the name
"Eaton Vance". The Adviser shall have the right to require the Trust to cease
using the name "Eaton Vance" as part of the Trust's name if the Trust ceases,
for any reason, to employ the Adviser or one of its affiliates as the Trust's
investment adviser. Future names adopted by the Trust for itself, insofar as
such names include identifying words requiring the consent of the Adviser, shall
be the property of the Adviser and shall be subject to the same terms and
conditions.
11. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of
shareholders, 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 shareholders of more
than 50 per centum of the shares of the Trust are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the 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.
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
By:_______________________________
President, and not Individually
EATON VANCE MANAGEMENT
By:_______________________________
Vice President, and not Individually
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Form of
TRANSFER AGENCY AND SERVICES AGREEMENT
AGREEMENT dated as of December _____, 1998, between Eaton Vance New Jersey
Municipal Income Trust (the "Fund"), a voluntary association commonly known as a
"Massachusetts business trust" having its principal place of business at 24
Federal Street, Boston, MA 02110, and FIRST DATA INVESTOR SERVICES GROUP, INC.
(the "Transfer Agent" or "FDISG"), a Massachusetts corporation with principal
offices at 4400 Computer Drive, Westboro, Massachusetts 01581.
W I T N E S S E T H:
WHEREAS, the Fund desires to retain FDISG as its transfer agent, dividend
disbursing agent and agent in connection with certain other activities, and
FDISG desires to provide such services on the terms herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and FDISG agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
(a) "Articles of Organization" shall mean the Articles of Organization,
Declaration of Trust or other charter document of the Fund, as the same may be
amended from time to time;
(b) "Authorized Person" shall be deemed to include any person duly
authorized to give Oral Instructions or Written Instructions on behalf of the
Fund as indicated in writing to FDISG from time to time;
(c) "Commission" shall mean the Securities and Exchange Commission;
(d) "Counsel" shall mean (i) outside legal counsel of the Fund in its
capacity as such and (ii) outside legal counsel of FDISG if such counsel has
been specifically authorized by an Authorized Person of the Fund to render its
opinion on the matter that has arisen;
(e) "Custodian" refers to the custodian and any sub-custodian of all
securities and other property which the Fund may from time to time deposit, or
cause to be deposited or held under the name or account of such custodian duly
engaged by the Fund;
(f) "Trustees" or "Board of Trustees" refers to the duly elected Trustees
or Directors of the Fund;
<PAGE>
(g) "Oral Instructions" shall mean instructions, other than Written
Instructions, actually received by FDISG from a person reasonably believed by
FDISG to be an Authorized Person;
(h) "Prospectus" shall mean the Fund's current prospectus and statement of
additional information, including any supplements thereto, relating to the
registration of the Fund's Shares under the Securities Act of 1933, as amended,
and the 1940 Act;
(i) "Shares" refers to the shares of beneficial interest or common stock of
the Fund (which may be divided into classes);
(j) "Shareholder" means a record owner of Shares;
(k) Written Instructions" means any written communication signed by an
Authorized Person and actually received by FDISG, and shall include manually
executed originals and authorized electronic transmissions of such originals
(including telefacsimile); and
(l) The "1940 Act" refers to the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, all as amended from time to time.
2. APPOINTMENT OF FDISG. The Fund hereby appoints FDISG as transfer agent
for its Shares and as shareholder servicing agent for the Fund, and FDISG
accepts such appointment and agrees to perform the duties hereinafter set forth.
3. DUTIES OF FDISG.
(a) FDISG shall be responsible for administering and/or performing transfer
agent functions; for acting as service agent in connection with dividend and
distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance and transfer
(including coordination with the Custodian) of Shares. Such duties are described
in the written Schedule of Duties of FDISG annexed hereto as Schedule A. FDISG
shall also act in accordance with the terms of the Prospectus of the Fund,
applicable law and the procedures established from time to time between FDISG
and the Fund.
(b) FDISG shall record the issuance of Shares and maintain pursuant to Rule
17Ad-10(e) under the Securities Act of 1934 a record of the total number of
Shares of the Fund which are authorized (with due authorization based upon data
provided by the Fund), issued and outstanding. FDISG shall provide the Fund on a
regular basis with such information but shall have no obligation, when recording
the issuance of Shares, to monitor the legality of issuance of Shares or to take
cognizance of any laws relating to the proper issue or sale of such Shares,
which functions shall be the sole responsibility of the Fund (or its
administrator).
(c) FDISG shall serve as agent for Shareholders pursuant to the Fund's
dividend reinvestment plan, as amended from time to time.
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<PAGE>
(d) FDISG acknowledges that the Funds' administrator, Eaton Vance
Management ("EVM"), currently employs personnel to provide shareholders with,
among other things, information regarding their accounts and transaction
procedures of FDISG. FDISG acknowledges that EVM is not responsible for transfer
agency services to the Fund. In the event FDISG determines that a particular
transaction requested by a shareholder cannot be processed because it is not
permitted by law or procedures established hereby but EVM or Fund personnel
desire the transaction to be so processed, then FDISG shall nonetheless process
the transaction if EVM provides a standard form indemnification to FDISG. At the
request of EVM, FDISG shall provide a written explanation for its decision.
4. RECORDKEEPING, AND OTHER INFORMATION.
(a) FDISG shall create and maintain all records required of it pursuant to
its duties hereunder and as set forth in Schedule A in accordance with all
applicable laws, rules and regulations, including records required by Section
31(a) of the 1940 Act and the rules thereunder. Where applicable, such records
shall be maintained by FDISG for the periods and the places required by Rule
31a-2 under the 1940 Act.
(b) FDISG agrees that all such records prepared or maintained by FDISG
relating to the services to be performed by FDISG hereunder are the property of
the Fund, and will be surrendered promptly to the Fund on and in accordance with
the Fund's request.
(c) In case of any requests or demands for the inspection of Shareholder
records of the Fund by third parties, FDISG will endeavor to notify the Fund of
such request and secure Written Instructions as to the handling of such request.
FDISG reserves the right, however, to exhibit the Shareholder records to any
person whenever it is required to do so by law.
5. FUND INSTRUCTIONS - LIMITATIONS OF LIABILITY.
(a) FDISG will have no liability when acting in conformance with Written or
Oral Instructions reasonably believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice of
any change of authority of any person until receipt of a Written Instruction
thereof from the Fund. FDISG will also have no liability when processing Share
certificates which it reasonably believes them to bear the proper manual or
facsimile signatures of the Officers of the Fund and the proper countersignature
of FDISG.
(b) At any time, FDISG may apply to any Authorized Person of the Fund for
Written Instructions and may, after obtaining prior oral or written approval by
an Authorized Person, seek advise from Counsel with respect to any matter
arising in connection with this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good faith in accordance with
such Written Instructions or in accordance with this opinion of Counsel. Written
Instructions requested by FDISG will be provided by the Fund within a reasonable
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<PAGE>
period of time. In addition, FDISG, its Officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Fund only if said representative is
known by FDISG, or its Officers, agents or employees, to be an Authorized
Person. FDISG shall have no duty or obligation to inquire into, nor shall FDISG
be responsible for, the legality of any act done by it upon the request or
direction of an Authorized Person.
(c) Notwithstanding any of the foregoing provisions of this Agreement,
FDISG shall be under no duty or obligation to inquire into, and shall not be
liable for: (i) the legality of the issuance or sale of any Shares or the
sufficiency of the amount to be received therefor; (ii) the propriety of the
amount per share to be paid on any redemption; (iii) the legality of the
declaration of any dividend by the Trustees, or the legality of the issuance of
any Shares in payment of any dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares.
(d) FDISG will not be liable or responsible for delays or errors by reason
of circumstances beyond its control, including acts of civil or military
authority, national emergencies, fire, mechanical breakdown beyond its control,
flood, acts of God, insurrection, war, riots, and loss of communication or power
supply, provided, however, that FDISG shall have acted in accordance with its
Disaster Recovery Plan previously provided to the Eaton Vance Group of Funds,
which may be amended from time to time by agreement of the Fund and FDISG.
6. COMPENSATION.
(a) The Fund will compensate FDISG for the performance of its obligations
hereunder in accordance with the fees set forth in the written schedule of fees
annexed hereto as Schedule B and incorporated herein.
(b) Out-of-pocket disbursements shall mean the items specified in the
written schedule of out-of-pocket charges annexed hereto as Schedule C and
incorporated herein. Reimbursement by the Fund for such out-of-pocket
disbursements incurred by FDISG in any month shall be made as soon as
practicable after the receipt of an itemized bill from FDISG. Reimbursement by
the Fund for expenses other than those specified in Schedule C shall be upon
mutual agreement of the parties as provided in Schedule C.
(c) FDISG will bill the Fund as soon as practicable after the end of each
calendar month, and said billings will be detailed in accordance with Schedule
B. The Fund will promptly pay to FDISG the amount of such billing.
(d) The parties agree to review at least annually at a Trustees' meeting of
the Fund the services provided, cost thereof, and fees and expenses charged,
including comparative information regarding the transfer agency industry. The
compensation agreed to hereunder may be adjusted from time to time by attaching
to this Agreement a revised Schedule, dated and executed by the parties hereto.
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<PAGE>
7. DOCUMENTS. In connection with the appointment of FDISG, the Fund shall
upon request, on or before the date this Agreement goes into effect, but in any
case within a reasonable period of time for FDISG to prepare to perform its
duties hereunder, furnish FDISG with the following documents:
(a) A certified copy of the Articles of Organization and By-Laws of the
Fund, as amended;
(b) A copy of the resolution of the Trustees authorizing the execution and
delivery of this Agreement;
(c) If applicable, a specimen of the certificate for Shares of the Fund in
the form approved by the Trustees, with a certificate of an Officer of the Fund
as to such approval;
(d) All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by the Fund; and
(e) With respect to any Fund previously serviced by another transfer agent,
to the extent practicable a certified list of Shareholders of the Fund with the
name, address and taxpayer identification number of each Shareholder, and the
number of shares of the Fund held by each, certificate numbers and denominations
(if any certificates have been issued), lists of any accounts against which stop
transfer orders have been placed, together with the reasons therefor, and the
number of Shares redeemed by the Fund.
8. REPRESENTATIONS AND WARRANTIES.
(a) FDISG represents and warrants to the Fund that:
(i) it is a corporation duly organized, existing and in good standing under
the laws of the Commonwealth of Massachusetts;
(ii) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(iii) all requisite corporate proceedings have been taken to authorize it
to enter into this Agreement;
(iv) FDISG will maintain its registration as a transfer agent as provided
in Section 17A(c) of the Securities Act of 1934, as amended, (the "1934 Act")
and shall comply with all applicable provisions of Section 17A of the 1934 Act
and the rules promulgated thereunder, as may be amended from time to time,
including rules relating to record retention;
(v) it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement;
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<PAGE>
(vi) to the best of its knowledge, the various procedures and systems which
FDISG has implemented or will implement with regard to safeguarding from loss or
damage attributable to fire, theft or any other cause (including provision for
24 hours-a-day restricted access) of the Fund's records and other data and
FDISG's records, data, equipment, facilities and other property used in the
performance of its obligations hereunder are adequate and that it will make such
changes therein from time to time as in its judgement are required for the
secure performance of its obligations hereunder. The parties shall review such
systems and procedures on a periodic basis; and
(vii) it maintains adequate insurance to enable it to continue its
operations as described herein, including coverage for Year 2000 system
failures. FDISG shall notify the Fund should any of its insurance coverage as
set forth in Schedule F attached hereto be changed for any reason. Such
notification shall include the date of change and reason or reasons therefor.
FDISG shall notify the Fund of any claims against it whether or not they may be
covered by insurance and shall notify the Fund from time to time as may be
appropriate, and at lest within 30 days following the end of each fiscal year of
FDISG, of the total outstanding claims made by FDISG under its insurance
coverage.
(b) The Fund represents and warrants to FDISG that:
(i) it is duly organized, existing and in good standing under the laws of
the jurisdiction in which it is organized;
(ii) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into this Agreement;
(iii) all corporate proceedings required by said Articles of Incorporation,
By-Laws and applicable laws have been taken to authorize it to enter into this
Agreement;
(iv) a registration statement under the Securities Act of 1933, as amended,
and/or the 1940 Act is currently effective and will remain effective, and all
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for sale; and
(v) all outstanding Shares are validly issued, fully paid and
non-assessable and when Shares are hereafter issued in accordance with the terms
of the Fund's Articles of Incorporation and its Prospectus, such Shares when
issued shall be validly issued, fully paid and non-assessable.
9. DUTY OF CARE AND INDEMNIFICATION.
(a) Each party shall fulfill its obligations hereunder by acting with
reasonable care and in good faith;
6
<PAGE>
(b) The Fund will indemnify FDISG against and hold it harmless from any and
all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit not
resulting from the bad faith or negligence of FDISG, and arising out of, or in
connection with, its duties on behalf of the Fund hereunder. In addition, the
Fund will indemnify FDISG against and hold it harmless from any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit as a result of : (i)
any action taken in accordance with Written or Oral Instructions, or share
certificates reasonably believed by FDISG to be genuine and to be signed,
countersigned or executed, or orally communicated by an Authorized Person; (ii)
any action taken in accordance with written or oral advice reasonably believed
by FDISG to have been given by counsel for the Fund; or (iii) any action taken
as a result of any error or omission in any record which FDISG had no reasonable
basis to believe was inaccurate (including but not limited to magnetic tapes,
computer printouts, hard copies and microfilm copies) and was delivered, or
caused to be delivered, by the Fund to FDISG in connection with this Agreement;
(c) FDISG will indemnify the Fund against and hold it harmless from any and
all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit not
resulting from the bad faith or negligence of the Fund, or arising out of, or in
connection with, FDISG's breach of this Agreement;
(d) In any case in which a party may be asked to indemnify or hold the
other party harmless, the indemnifying party shall be advised of all pertinent
facts concerning the situation in question and the party seeking indemnification
shall notify the indemnifying party promptly concerning any situation which
presents or appears likely to present a claim for indemnification. The
indemnifying party shall have the option to defend against any claim which may
be the subject of this indemnification and, in the event that the indemnifying
party so elects, such defense shall be conducted by counsel chosen by the
indemnifying party, and thereupon the indemnifying party shall take over
complete defense of the claim and the party seeking indemnification shall
sustain no further legal or other expenses in such situation for which it seeks
indemnification. The party seeking indemnification will not confess any claim or
make any compromise in any case in which the indemnifying party will be asked to
provide indemnification, except with the indemnifying party's prior written
consent; and
(e) The obligations of the parties hereto under this Section shall survive
the termination of this Agreement.
10. TERMS AND TERMINATION.
(a) Either party may terminate this Agreement without cause on or after
July 31, 2002 by giving 180 days written notice to the other party;
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<PAGE>
(b) Either party may terminate this Agreement if the other party has
materially breached the Agreement by giving the defaulting party 30 days written
notice and the defaulting party has failed to cure the breach within 60 days
thereafter; and
(c) Any written notice of termination shall specify the date of
termination. The Fund shall provide notice of the successor transfer agent
within 30 days of the termination date. Upon termination, FDISG will deliver to
such successor a certified list of shareholders of the Fund (with names,
addresses and taxpayer identification of Social Security numbers and such other
federal tax information as FDISG may be required to maintain), an historical
record of the account of each shareholder and the status thereof, and all other
relevant books, records, correspondence, and other data established or
maintained by the books, records, correspondence, and other data established or
maintained by FDISG under this Agreement in the form reasonably acceptable to
the Fund, and will cooperate in the transfer of such duties and
responsibilities, including provisions for assistance from FDISG's personnel in
the establishment of books, records and other data by such successor or
successors. FDISG shall be entitled to its out-of-pocket expenses set forth in
Schedule C incurred in the delivery of such records net of the fees owed to
FDISG for the last month of service if this Agreement is terminated pursuant to
paragraph (b) immediately above.
(d) If a majority of the non-interested trustees of any of the Funds
determines, in the exercise of their fiduciary duties and pursuant to their
reasonable business judgement after consultation with Eaton Vance Management,
that the performance of FDISG has been unsatisfactory or adverse to the
interests of shareholders of any Fund or Funds or that the terms of the
Agreement are no longer consistent with publicly available industry standards,
then the Fund or Funds shall give written notice to FDISG of such determination
and FDISG shall have 60 days (or such longer period if the non-interested
Trustees so determine) to (1) correct such performance to the satisfaction of
the non-interested trustees or (2) renegotiate terms which are satisfactory to
the non-interested trustees of the Funds. If the conditions of the preceding
sentence are not met then the Fund or Funds may terminate this Agreement on
sixty (60) days written notice provided, however, that the provisions of
Paragraph 11(c) shall remain outstanding for an additional 30 days if necessary
to transfer records to a successor transfer agent.
(e) If the Board of Trustees hereafter establishes and designates a new
Fund, FDISG agrees that it will act as transfer agent and shareholder servicing
agent for such new Fund in accordance with the terms set forth herein. The
Trustees shall cause a written notice to be sent to FDISG to the effect that it
has established a new Fund and that it appoints FDISG as transfer agent and
shareholder servicing agent for the new Fund. Such written notice must be
received by FDISG in a reasonable period of time prior to the commencement of
operations of the new Fund to allow FDISG, in the ordinary course of its
business, to prepare to perform its duties.
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<PAGE>
11. CONFIDENTIALITY OF RECORDS.
(a) FDISG agrees to treat all records and other information relative to the
Fund and its prior, present or potential Shareholders in confidence except that,
after prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld and may not be withheld where FDISG may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Fund.
(b) FDISG shall make available during regular business hours all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by the Fund, or any person retained by the Fund. Upon
reasonable notice by the Fund, FDISG shall make available during regular
business hours its facilities and premises employed in connection with its
performance of this Agreement for reasonable visitation by the Fund, or any
person retained by the Fund, to inspect its operating capabilities or for any
other reason.
(c) The Fund agrees to keep all records and information of FDISG (including
trade secrets) in confidence, unless such is required to be divulged pursuant to
law or where the Fund may be exposed to or criminal contempt proceedings for
failure to comply. FDISG acknowledges that such records and information may be
disclosed to Eaton Vance Management personnel and to Fund auditors consistent
with the responsibilities of such parties, and in such cases the Fund shall take
reasonable precautions to safeguard the confidentiality of such data to the
extent practicable.
12. AMENDMENT, ASSIGNMENT AND SUBCONTRACTING.
(a) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
(b) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that any
assignment of this Agreement (as defined in the 1940 Act) to an entity shall
require the written consent of the other party.
(c) The Fund agrees that FDISG may, in its discretion, subcontract for
certain of the services described under this Agreement or the Schedules hereto;
provided that the appointment of any such Agent shall not relieve FDISG of its
responsibilities hereunder.
13. USE OF TRADE NAMES.
(a) FDISG shall approve all reasonable uses of its name which merely refer
in accurate terms to its appointment hereunder or which are required by the
Commission or a state securities commission. Notwithstanding the foregoing, any
reference to FDISG shall include a statement to the effect that it is a wholly
owned subsidiary of First Data Corporation.
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<PAGE>
(b) FDISG shall not use the name of the Fund or material relating to the
Fund on any documents or forms for other than internal use in a manner not
approved prior thereto in writing; provided, that the Fund shall approve all
reasonable uses of its name which merely refer in accurate terms to the
appointment of FDISG or which are required by the Commission or a state
securities commission.
14. NOTICE. Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or FDISG, shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.
To the Fund:
Eaton Vance New Jersey Municipal Income Trust
24 Federal Street
Boston, MA 02110
Attention: Fund Secretary
To FDISG:
First Data Investor Services Group, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581
Attn: President
with a copy to FDISG's General Counsel
15. GOVERNING LAW/VENUE. The laws of the Commonwealth of Massachusetts,
excluding the laws on conflicts of laws, shall govern the interpretation,
validity, and enforcement of this agreement. All actions arising from or related
to this Agreement shall be brought in the state and federal courts sitting in
the City of Boston, and the parties hereby submit themselves to the exclusive
jurisdiction of those courts.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
17. CAPTIONS. The captions of this Agreement are included for convenience
or reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
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18. SEVERABILITY. The parties intend every provision of this Agreement to
be severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement failed
of its essential purpose, then all provisions of this Agreement, including the
limitations on liability and exclusion of damages, shall remain fully effective.
19. LIABILITY OF TRUSTEES, OFFICERS AND SHAREHOLDERS. The execution and
delivery of this Agreement have been authorized by the Trustees of the Fund and
signed by an authorized Officer of the Fund, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such Officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Fund, but bind only
the property of the Fund. No class of the Fund shall be liable for the
obligations of another class.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers thereunder duly authorized as of the day
and year first above written.
Eaton Vance New Jersey Municipal Income Trust
Attest:______________________ By:____________________________
First Data Investors Services Group, Inc.
Attest:______________________ By:____________________________
11
<PAGE>
SCHEDULE A
DUTIES OF FDISG
1. SHAREHOLDER INFORMATION. FDISG shall maintain a record of the number of
Shares held by each Shareholder of record which shall include name, address,
taxpayer identification and which shall indicate whether such Shares are held in
certificates or uncertificated form.
2. SHAREHOLDER SERVICES. FDISG will investigate all shareholder inquiries
relating to Shareholder accounts and will answer all communications from
Shareholders and others with respect to its duties hereunder. FDISG shall keep
records of all Shareholder correspondence and replies thereto, and of lapse of
time between the receipt of such correspondence and the mailing of such replies.
3. SHARE CERTIFICATES.
(a) At the expense of the Fund, the Fund shall supply FDISG with an
adequate supply of blank share certificates to meet FDISG requirements therefor.
Such Share certificates shall be properly signed by facsimile. The Fund agrees
that, notwithstanding the death, resignation, or removal of any officer of the
Fund whose signature appears on such certificates, FDISG or its agent may
continue to countersign certificates which bear such signatures until otherwise
directed by Written Instructions.
(b) FDISG shall issue replacement Share certificates in lieu of
certificates which have been lost, stolen or destroyed, upon receipt by FDISG of
properly executed affidavits and lost certificate bonds, in form satisfactory to
FDISG, with the Fund and FDISG as obligees under the bond.
(c) FDISG shall also maintain a record of each certificate issued, the
number of Shares represented thereby and the Shareholder of record. With respect
to Shares held in open accounts or uncertificated form (i.e., no certificate
being issued with respect thereto) FDISG shall maintain comparable records of
the Shareholders thereof, including their names, addresses and taxpayer
identification numbers. FDISG shall further maintain a stop transfer record on
lost and/or replaced certificates.
4. MAILING COMMUNICATIONS TO SHAREHOLDERS; PROXY MATERIALS. FDISG will
address and mail to Shareholders of the Fund, all reports to Shareholders,
dividend and distribution notices and proxy material for the Fund's meetings of
Shareholders, and such other communications as the Fund may authorize. In
connection with meetings of Shareholders, FDISG will prepare Shareholder lists,
mail and certify as to the mailing of proxy materials, process and tabulate
returned proxy cards, report on proxies voted prior to meetings, act as
inspector of election at meetings and certify Shares voted at meetings.
<PAGE>
5. TRANSFER OF SHARES.
(a) FDISG shall process all requests to transfer Shares in accordance with
the transfer procedures set forth in the Fund's Prospectus.
(b) FDISG will transfer Shares upon receipt of Written Instructions or
otherwise pursuant to the Prospectus and Share certificates, if any, properly
endorsed for transfer, accompanied by such documents as FDISG reasonably may
deem necessary.
(c) FDISG reserves the right to refuse to transfer Shares until it is
satisfied that the endorsement on the instructions is valid and genuine. FDISG
also reserves the right to refuse to transfer Shares until it is satisfied that
the requested transfer is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers which FDISG in its good
judgment, deems improper or unauthorized, or until it is reasonably satisfied
that there is no basis to any claims adverse to such transfer.
7. DIVIDENDS.
(a) Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of the Fund with respect to Shares of the
Fund, the Fund shall furnish or cause to be furnished to FDISG Written
Instructions setting forth the date of the declaration of such dividend or
distribution, the ex-dividend date, the date of payment thereof, the record date
as of which Shareholders entitled to payment shall be determined, the amount
payable per Share to the Shareholders of record as of that date, the total
amount payable on the payment date and whether such dividend or distribution is
to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution of the Board
of Directors, the Fund will provide FDISG with sufficient cash to make payment
to the Shareholders of record as of such payment date.
(c) If FDISG does not receive sufficient cash from the Fund to make total
dividend and/or distribution payments to all Shareholders of the Fund as of the
record date, FDISG will, upon notifying the Fund, withhold payment to all
Shareholders of record as of the record date until sufficient cash is provided
to FDISG.
8. MISCELLANEOUS
In addition to and neither in lieu nor in contravention of the services set
forth above, FDISG shall perform all the customary services of a transfer agent
registrar dividend disbursing agent and agent of the dividend reinvestment plan
as described herein consistent with those requirements in effect as at the date
of this Agreement. The detailed definition, frequency, limitations and
associated costs (if any) set out in the attached fee schedule, include but are
not limited to: maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing proxies, tabulating proxies, mailing Shareholder reports
to current Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts where applicable, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to dividends and
distributions by federal authorities for all registered Shareholders.
<PAGE>
SCHEDULE B
----------
FEE SCHEDULE
1. INITIAL PUBLIC OFFERING FEES
IPO Project Administration Fee: $10, 000.00
IPO Project Administration Fee covers:
Issuance of up to 1,000 certificates - Issuance of certificates in
excess of 1,000 to be billed at $2.00 per certificate
Administrative coordination with IPO client, underwriter and legal
representatives
Attendance at closing (out of pocket expenses associated with such
attendance will be billed as incurred)
Set-up, testing and implementation of electronic settlement and
delivery of shares through The Depository Trust Company
2. OVER-ALLOTMENT FEE: $5,000.00
Applies in the event that the underwriters elect to exercise an
over-allotment option which requires a second closing
3. STANDARD SERVICE FEES: The following fees shall apply with respect to the
initial class of shares offered by the Fund. Should the Fund issue
additional classes of shares, the fees for such shall be mutually agreed to
in writing by the parties.
Annual Service Fee $15.00 Per Account
Monthly Minimum Fee $5,000.00
After the one year anniversary of the effective date of this Agreement,
FDISG may adjust the above fees once per calendar year, upon thirty (30)
days prior written notice in an amount not to exceed the cumulative
percentage increase in the Consumer Price Index for All Urban Consumers
(CPI-U) U.S. City Average, All items (unadjusted) - (1982-84=100),
published by the U.S. Department of Labor since the last such adjustment in
the Fund's monthly fees (or the Effective Date absent a prior such
adjustment).
<PAGE>
SCHEDULE C
OUT-OF-POCKET EXPENSES
The Fund shall reimburse FDISG monthly for applicable out-of-pocket
expenses, including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes, checks and
stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct pass
through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including all lease,
maintenance and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Overtime, as approved by the Fund
- Temporary staff, as approved by the Fund
- Travel and entertainment, as approved by the Fund
- Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
- Third party audit reviews
- Ad hoc SQL time Insurance
- Such other miscellaneous expenses reasonably incurred by FDISG in
performing its duties and responsibilities under this Agreement.
The Fund agrees that postage and mailing expenses will be paid on the day
of or prior to mailing as agreed with FDISG. In addition, the Fund will promptly
reimburse FDISG for any other unscheduled expenses incurred by FDISG whenever
the Fund and FDISG mutually agree that such expenses are not otherwise properly
borne by FDISG as part of its duties and obligations under the Agreement.
Form of
EATON VANCE NEW JERSEY MUNICIPAL INCOME TRUST
ADMINISTRATION AGREEMENT
AGREEMENT made this _____ day of December, 1998, between Eaton Vance New
Jersey Municipal Income Trust, a Massachusetts business trust (the "Fund"), and
Eaton Vance Management, a Massachusetts business trust (the "Administrator").
1. Duties of the Administrator. The Fund hereby employs the Administrator
to act as administrator for and to administer the affairs of the Fund, subject
to the supervision of the Trustees of the Fund for the period and on the terms
set forth in this Agreement.
The Administrator hereby accepts such employment, and agrees to administer
the Fund's business affairs and, in connection therewith, to furnish for the use
of the Fund office space and all necessary office facilities, equipment and
personnel for administering the affairs of the Fund. The Administrator shall
also pay the salaries and compensation of all officers and Trustees of the Fund
who are members of the Administrator's organization and who render executive and
administrative services to the Fund, and the salaries and compensation of all
other personnel of the Administrator performing management and administrative
services for the Fund. The Administrator 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 Fund in
any way or otherwise be deemed an agent of the Fund.
In connection with its responsibilities as Administrator of the Fund, the
Administrator (i) will assist in preparing all annual, semi-annual and other
reports required to be sent to Fund shareholders, and arrange for the printing
and dissemination of such reports to shareholders; (ii) will prepare and
assemble all reports required to be filed by the Fund with the Securities and
Exchange Commission ("SEC") on Form N-SAR, or on such other form as the SEC may
substitute for Form N-SAR, and file such reports with the SEC; (iii) will review
the provision of services by the Fund's independent accountants, including but
not limited to the preparation by such accountants of audited financial
statements of the Fund and the Fund's federal, state and local tax returns; and
make such reports and recommendations to the Trustees of the Fund concerning the
performance of the independent accountants as the Trustees deem appropriate;
(iv) will arrange for the filing with the appropriate authorities all required
federal, state and local tax returns; (v) will arrange for the dissemination to
shareholders of the Fund's proxy materials, and will oversee the tabulation of
proxies by the Fund's transfer agent; (vi) will review and supervise the
provision of custodian services to the Fund; and make such reports and
recommendations to the Trustees concerning the provision of such services as the
Trustees deem appropriate; (vii) will value all such portfolio investments and
other assets of the Fund as may be designated by the Trustees (subject to any
guidelines, directions and instructions of the Trustees), and review and
supervise the calculation of the net asset value of the Fund's shares by the
custodian; (viii) will negotiate the terms and conditions under which transfer
agency and dividend disbursing services will be provided to the Fund, and the
fees to be paid by the Fund in connection therewith; review and supervise the
<PAGE>
2
provision of transfer agency and dividend disbursing services to the Fund; and
make such reports and recommendations to the Trustees concerning the performance
of the Fund's transfer and dividend disbursing agent as the Trustees deem
appropriate; (ix) will establish the accounting policies of the Fund; reconcile
accounting issues which may arise with respect to the Fund's operations; and
consult with the Fund's independent accountants, legal counsel, custodian,
accounting and bookkeeping agents and transfer and dividend disbursing agent as
necessary in connection therewith; (x) will determine the amount of all
distributions to be paid by the Fund to its shareholders; prepare and arrange
for the printing of notices to shareholders regarding such distributions and
provide the Fund's transfer and dividend disbursing agent and custodian with
such information as is required for such parties to effect the payment of
distributions and to implement the Fund's dividend reinvestment plan; (xi) will
review the Fund's bills and authorize payments of such bills by the Fund's
custodian; (xii) will make recommendations to the Trustees as to whether the
Fund should make repurchase or tender offers for its own shares; arrange for the
preparation and filing of all documents required to be filed by the Fund with
the SEC; arrange for the preparation and dissemination of all appropriate
repurchase or tender offer documents and papers on behalf of the Fund; and
supervise and conduct the Fund's periodic repurchase or tender offers for its
own shares; (xiii) monitor any variance between the market value and net asset
value per share, and periodically report to the Trustees available actions that
may conform such values; (xiv) monitor the activities of the Shareholder
Servicing Agent retained by the Administrator and periodically report to the
Trustees about such activities; (xv) will arrange for the preparation and filing
of all other reports, forms, registration statements and documents required to
be filed by the Fund with the SEC, the National Association of Securities
Dealers, Inc. and any securities exchange where Fund shares are listed; and
(xvi) will provide to the Fund such other internal legal, auditing and
accounting services and internal executive management and administrative
services as the Trustees deem appropriate to conduct the Fund's business
affairs.
Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares of the Fund, nor
shall the Administrator be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, custodian
or shareholder servicing agent of the Fund.
Sub-Administrators. The Administrator may employ one or more
sub-administrators from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators and approved by the
Trustees of the Fund.
2. Compensation of the Administrator. For the services, payments and
facilities to be furnished hereunder by the Administrator, the Fund shall pay to
the Administrator on the last day of each month a fee equivalent to .20%
annually of the average weekly gross assets of the Fund. (Gross assets shall be
calculated by deducting accrued liabilities of the Fund except the principal
amount of any indebtedness for money borrowed, including debt securities issued
by the Fund, and the amount of any outstanding preferred shares issued by the
Fund. Accrued liabilities are expenses incurred in the normal course of
operations.)
In case of initiation or termination of the Agreement during any month, the
fee for that month shall be reduced proportionately on the basis of the number
of calendar days during which the Agreement is in effect and the fee shall be
computed upon the basis of the average gross assets for the business days the
Agreement is so in effect for that month.
The Administrator 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 Fund will
pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Fund shall include,
without implied limitation: (i) expenses of maintaining the Fund and continuing
<PAGE>
3
its existence; (ii) registration of the Fund 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 repurchase and redemption (if any) of shares, including all
expenses incurred in conducting repurchase and tender offers for the purpose of
repurchasing Fund shares; (viii) expenses of registering and qualifying the Fund
and its shares under federal and state securities laws and of preparing
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 and
securities, keeping of books and accounts and determination of net asset value);
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, shareholder servicing agents and registrars for all services to the
Fund; (xv) expenses of listing shares with a stock exchange; (xvi) any direct
charges to shareholders approved by the Trustees of the Fund; (xvii)
compensation of and any expenses of Trustees of the Fund who are not members of
the Administrator's organization; (xviii) all payments to be made and expenses
to be assumed by the Fund in connection with the distribution of Fund shares;
(xix) any pricing and valuation services employed by the Fund; (xx) any
investment advisory fee payable to an investment adviser; (xxi) all expenses
incurred in connection with leveraging the Fund's assets through a line of
credit, or issuing and maintaining preferred shares; and (xxii) such
non-recurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and obligation of the Fund to indemnify its
Trustees, officers and with respect thereto.
4. Other Interests. It is understood that Trustees, officers and
shareholders of the Fund are or may be or become interested in the Administrator
as trustees, officers, employees, shareholders or otherwise and that trustees,
officers, employees and shareholders of the Administrator are or may be or
become similarly interested in the Fund, and that the Administrator may be or
become interested in the Fund as a shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Administrator or its subsidiaries or affiliates may enter into
advisory, management or administration agreements or other contracts or
relationship with such other companies or entities.
5. Limitation of Liability of the Administrator. The services of the
Administrator to the Fund are not to be deemed to be exclusive, the
Administrator 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 Administrator, the Administrator shall not be subject to liability to the
Fund or to any shareholder of the Fund 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. 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, 2000 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 2000 is specifically
approved at least annually (i) by the Board of Trustees of the Fund, and (ii) by
the vote of a majority of those Trustees of the Fund who are not interested
persons of the Administrator or the Fund.
<PAGE>
4
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement by action of the Trustees of the
Fund or the trustees of the Administrator, and the Fund may, at any time upon
such written notice to the Administrator, terminate the Agreement by vote of a
majority of the outstanding voting securities of the Fund. This Agreement shall
terminate automatically in the event of its assignment.
7. 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 Fund who are not interested persons of the Administrator or the
Fund, and (ii) by vote of the Board of Trustees of the Fund.
8. Limitation of Liability. Each party expressly acknowledges the provision
in the other party's Agreement and Declaration of Trust limiting the personal
liability of its shareholders officers, and Trustees, and each party hereby
agrees that it shall have recourse to the other party for payment of claims or
obligations as between the Fund and the Administrator arising out of this
Agreement and shall not seek satisfaction from the Trustees, officers or
shareholders of the other party.
9. Use of the Name "Eaton Vance." The Administrator hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Administrator or one of its affiliates as the administrator of the Fund. The
name "Eaton Vance" or any variation thereof may be used from time to time in
other connections and for other purposes by the Administrator and its affiliates
and other investment companies that have obtained consent to the use of the name
"Eaton Vance." The Administrator shall have the right to require the Fund to
cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Administrator or one of its affiliates as
the Fund's administrator. Future names adopted by the Fund for itself, insofar
as such names include identifying words requiring the consent of the
Administrator, shall be the property of the Administrator and shall be subject
to the same terms and conditions.
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" shall mean the vote of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.
EATON VANCE NEW JERSEY MUNICIPAL EATON VANCE MANAGEMENT
INCOME TRUST
By: By:
---------------------------------- ------------------------------------
President, and not Individually Vice President, and not Individually
