<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 1999
1933 ACT FILE NO.
1940 ACT FILE NO.
- --------------------------------------------------------------------------------
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 INSTITUTIONAL SENIOR FLOATING-RATE FUND
----------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
--------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 482-8260
------------------------------------------------------------------
ALAN R. DYNNER
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
If any of the 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. [X]
It is proposed that this filing will become effective (check appropriate box):
[X] when declared effective pursuant to section 8(c)
<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 PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Shares of Beneficial Interest 20,000,000 $10.00 $200,000,000 $55,600.00
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</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates an 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.
Senior Debt Portfolio has also executed this Registration Statement.
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<PAGE>
EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-2
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------ ------------------
1. ........... Outside Front Cover Cover Page
2. ........... Inside Front and Outside Back Cover Pages
Cover Page
3. ........... Fee Table and Synopsis Shareholder and Fund Expenses
4. ........... Financial Highlights Not Applicable
5. ........... Plan of Distribution Purchasing Shares;
Shareholder Account Features
6. ........... Selling Shareholders Not Applicable
7. ........... Use of Proceeds Purchasing Shares; Investment
Policies and Risks
8. ........... General Description of the Organization of the Fund;
Registrant Investment Policies and Risks
9. ........... Management Management of the Fund;
Organization of the Fund
10. ........... Capital Stock, Long-Term Debt, Organization of the Fund;
and Other Securities Distributions and Taxes;
Shareholder Account Features
11. ........... Defaults and Arrears on Not Applicable
Senior 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 Management and Organization
History
17. ........... Investment Objective and Investment Policies and
Policies Risks; Investment
Restrictions; Management
and Organization
18. ........... Management Investment Advisory and
Administrative Services
19. ........... Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Shares
20. ........... Investment Advisory and Other Investment Advisory and
Services Administrative Services
21. ........... Brokerage Allocation and Portfolio Trading
Other Practices
22. ........... Tax Status Taxes
23. ........... Financial Statements Financial Statements
<PAGE>
[logo] Investing
EATON VANCE for the
- ----------- 21st
Century(R) Eaton Vance Institutional
Senior Floating-Rate Fund
THE INVESTMENT OBJECTIVE OF EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
(THE "FUND") IS TO PROVIDE AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT
WITH THE PRESERVATION OF CAPITAL, BY INVESTING IN A PORTFOLIO PRIMARILY OF
SENIOR SECURED FLOATING RATE LOANS ("SENIOR LOANS"). THE FUND IS A CONTINUOUSLY
OFFERED, CLOSED-END, NON-DIVERSIFIED INVESTMENT COMPANY. SENIOR LOANS ARE
TYPICALLY OF BELOW INVESTMENT GRADE QUALITY AND MAY HAVE BELOW INVESTMENT GRADE
RATINGS, WHICH RATINGS ARE ASSOCIATED WITH SECURITIES HAVING SPECULATIVE
CHARACTERISTICS. NEVERTHELESS, BECAUSE OF THE PROTECTIVE FEATURES OF SENIOR
LOANS (BEING SENIOR IN A BORROWER'S CAPITAL STRUCTURE AND SECURED BY SPECIFIC
COLLATERAL), THE INVESTMENT ADVISER BELIEVES, BASED ON ITS EXPERIENCE, THAT
THESE RATINGS DO NOT NECESSARILY REFLECT THE TRUE RISK OF LOSS OF PRINCIPAL OR
INTEREST.
Eaton Vance was one of the first investment advisers to manage a portfolio of
Senior Loans in a publicly offered investment company, and has done so
continuously since 1989. Senior Loan assets under management by Eaton Vance
exceed $7 billion.
NO MARKET PRESENTLY EXISTS FOR THE FUND'S SHARES AND IT IS NOT CURRENTLY
ANTICIPATED THAT A SECONDARY MARKET WILL DEVELOP FOR THEM. Fund shares are not
readily marketable. To provide investor liquidity, the Fund ordinarily will make
each JANUARY, APRIL, JULY and OCTOBER an offer to repurchase between 5% and 25%
of the Fund's outstanding shares at net asset value. See "Repurchase Offers" at
page 12.
(continued on the following page)
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INFORMATION IN THIS PROSPECTUS
Page Page
- -------------------------------------------------------------------------------
Shareholder and Fund Expenses 3 Valuing Shares 11
Performance Information 3 Purchasing Shares 11
Investment Objective 4 Repurchase Offers 12
Investment Policies and Risks 4 Shareholder Account Features 13
Organization of the Fund 9 Distributions and Taxes 13
Management of the Fund 10
- -------------------------------------------------------------------------------
Prospectus dated May 3, 1999
THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE FUND AND THE SERVICES
AVAILABLE TO SHAREHOLDERS. PLEASE SAVE IT FOR REFERENCE.
<PAGE>
(continued from cover page)
Public Offering Information: Per Share(1) Total
- --------------------------------------------------------------------------------
Public Offering Price $10.00 $200,000,000
Sales Loads None None
Proceeds to the Fund $10.00 $200,000,000
- ----------
(1) The shares are offered on a best efforts basis at a price equal to their net
asset value, which initially is $10.00 per Share.
- --------------------------------------------------------------------------------
A Statement of Additional Information dated May 3, 1999 for the Fund, as
supplemented from time to time, has been filed with the Securities and Exchange
Commission (the "SEC") and is incorporated herein by reference. The Table of
Contents of the Statement of Additional Information appears immediately below.
The Statement of Additional Information is also available without charge from
the Fund, 255 State Street, Boston, MA 02109 (telephone (800) 225-6265) (web
site: www.eatonvance.com). The Statement of Additional Information is also
available along with other Fund-related materials at the SEC's internet web set
(http://www.sec.gov).
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
Page Page
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<S> <C> <C> <C>
Investment Policies and Risks 2 Shareholder Account Information 10
Investment Restrictions 4 Portfolio Trading 11
Management and Organization 5 Taxes 12
Control Persons and Principal Holders of Shares 9 Performance 13
Investment Advisory and Administrative Services 9 Financial Statements 14
Other Service Providers 10 Appendix A: Corporate Bond Ratings a-1
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</TABLE>
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR 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. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING FLUCTUATIONS IN VALUE AND THE POSSIBLE LOSS OF SOME OR ALL OF THE
PRINCIPAL INVESTMENT.
<PAGE>
SHAREHOLDER AND FUND EXPENSES
FEES AND EXPENSES. These tables describe the fees and expenses that you may
pay if you buy and hold shares.
Shareholder Fees (fees paid directly from your investment)
- ------------------------------------------------------------------------------
Maximum Sales Charge (as a percentage of offering price) None
Dividend Reinvestment Fees None
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
- ------------------------------------------------------------------------------
Investment Advisory Fee 0.43%
Interest Payments on Borrowed Funds 0.01%
Other Expenses (including administration fees of .10%) 0.31%*
Total Annual Fund Operating Expenses 0.75%*
*Other Expenses is estimated. Eaton Vance will reimburse the Fund to the extent
Total Annual Fund Operating Expenses exceeds 0.75% of average daily net assets.
NOTES: The Fund invests exclusively in Senior Debt Portfolio (the "Portfolio").
See "Organization of the Fund and the Portfolio". The table and Example
summarize the aggregate expenses of the Fund and the Portfolio and are designed
to help investors understand the costs and expenses they will bear, directly or
indirectly, by investing in the Fund. Information for the Fund is based on its
anticipated expenses for the current fiscal year because the Fund has only
recently been organized, and is derived in part from actual operations of the
Portfolio.
EXAMPLE. This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $1,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
1 Year 3 Years
- -------------------------------------------------------------------------------
$8 $24
PERFORMANCE INFORMATION
The following bar chart provides the investment performance of another
investment company that invests in the Portfolio (which has higher expenses than
the Fund). Although past performance is no guarantee of future results, this
information demonstrates the risk that the value of your investment will change.
The following returns are for each calendar year through December 31, 1998.
Annual Total Returns
3.6% 9.6% 7.8% 6.2% 5.3% 6.1% 8.1% 6.8% 7.0% 6.9%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
The highest quarterly total return was 3.0% for the quarter ended December 31,
1989. and its lowest quarterly return was 0.6% for the quarter ended September
30, 1989. The year-to-date total return through the end of the most recent
calendar quarter (December 31, 1998 to March 31, 1999) was ___%.
INVESTMENT OBJECTIVE
Eaton Vance Institutional Senior Floating-Rate Fund's investment objective is to
provide as high a level of current income as is consistent with the preservation
of capital, by investing in a portfolio primarily of senior secured floating
rate loans ("Senior Loans"). The Fund currently seeks to achieve its objective
by investing its assets in the Senior Debt Portfolio (the "Portfolio"), a
separate closed-end, non-diversified investment company with the same investment
objective as the Fund. There is no assurance that the Fund's objective will be
achieved. An investment in shares of the Fund is not a complete investment
program.
Senior Loans are made to corporations, partnerships and other business entities
("Borrowers") which operate in various industries and geographical regions.
Senior Loans pay interest at rates which are redetermined periodically on the
basis of a floating base lending rate plus a premium. Senior Loans hold the most
senior position in the capital structure of the Borrower, are secured with
specific collateral (discussed below) and will have a claim on the assets of the
Borrower that is senior to that of subordinated debt, preferred stock and common
stock of the Borrower. Investment in floating rate instruments is expected to
minimize changes in the underlying principal value of Senior Loans, and
therefore the Fund's net asset value, resulting from changes in market interest
rates. Nevertheless, the Fund's net asset value and distribution rate will vary,
and may be affected by several factors, including changes in the credit quality
of the Borrowers underlying Senior Loans. Some Borrowers default on their Senior
Loan payments. The Portfolio attempts to manage these risks through portfolio
diversification and ongoing analysis and monitoring of Borrowers.
The Portfolio's investment adviser is Boston Management and Research (the
"Investment Adviser" or "BMR"), a wholly-owned subsidiary of Eaton Vance
Management ("Eaton Vance"), and Eaton Vance is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 255 State Street, Boston, MA 02109.
INVESTMENT POLICIES AND RISKS
GENERAL COMPOSITION OF THE PORTFOLIO
In normal market conditions, at least 80% of the Portfolio's total assets will
be invested in interests in Senior Loans (either as an original Lender or as a
purchaser of an Assignment or Participation, each as defined below) of domestic
or foreign Borrowers (so long as foreign loans are U.S. dollar-denominated and
payments of interest and repayments of principal are required to be made in U.S.
dollars). Up to 20% of the Portfolio's total assets may be held in cash,
invested in investment grade short-term debt obligations, and invested in loan
interests that are not fully secured ("Unsecured Loans"). If BMR determines that
market conditions temporarily warrant a defensive investment policy, the
Portfolio may invest up to 100% of its assets in cash and high quality,
short-term debt securities.
It is anticipated that the proceeds of the Senior Loans in which the Portfolio
will acquire interests primarily will be used to finance leveraged buyouts,
recapitalizations, mergers, acquisitions, stock repurchases, and, to a lesser
extent, to finance internal growth and for other corporate purposes of
Borrowers. Senior Loans have the most senior position in a Borrower's capital
structure, although some Senior Loans may hold an equal ranking with other
senior securities of the Borrower. The capital structure of a Borrower may
include Senior Loans, senior and junior subordinated debt, preferred stock and
common stock issued by the Borrower, typically in descending order of seniority
with respect to claims on the Borrower's assets (discussed below).
Senior Loans are secured by specific collateral.
In order to borrow money pursuant to a Senior Loan, a Borrower will frequently,
for the term of the Senior Loan, pledge collateral, including but not limited
to, (i) working capital assets, such as accounts receivable and inventory; (ii)
tangible fixed assets, such as real property, buildings and equipment; (iii)
intangible assets, such as trademarks and patent rights (but excluding
goodwill); and (iv) security interests in shares of stock of subsidiaries or
affiliates. In the case of Senior Loans made to non-public companies, the
company's shareholders or owners may provide collateral in the form of secured
guarantees and/or security interests in assets that they own. In certain
instances, a Senior Loan may be secured only by stock in the Borrower or its
subsidiaries. Collateral may consist of assets that may not be readily
liquidated, and there is no assurance that the liquidation of such assets would
satisfy fully a Borrower's obligations under a Senior Loan. The Portfolio will
not invest in a Senior Loan unless, at the time of investment, BMR determines
that the value of the collateral equals or exceeds the aggregate outstanding
principal amount of the Senior Loan.
The Portfolio is not subject to any restrictions with respect to the maturity of
Senior Loans held in its portfolio. Senior Loans typically have a stated term of
between five and nine years, and have rates of interest which typically are
redetermined either daily, monthly, quarterly or semi-annually. Senior Loans
generally pay interest at rates which are redetermined periodically by reference
to a base lending rate, plus a premium. These base lending rates generally are
the prime rate offered by one or more major United States banks (the "Prime
Rate"), the London Inter-Bank Offered Rate ("LIBOR"), the certificate of deposit
("CD") rate or other base lending rates used by commercial lenders. Longer
interest rate reset periods generally increase fluctuations in the Fund's net
asset value as a result of changes in market interest rates. The Senior Loans
held by the Portfolio will have a dollar-weighted average period until the next
interest rate adjustment of approximately 90 days or less. As a result, as
short-term interest rates increase, interest payable to the Portfolio from its
investments in Senior Loans should increase, and as short-term interest rates
decrease, interest payable to the Portfolio from its investments in Senior Loans
should decrease. The Portfolio may utilize certain investment practices to,
among other things, shorten the effective interest rate redetermination period
of Senior Loans in its portfolio. In the experience of BMR over the last decade,
because of prepayments the average life of Senior Loans has been two to three
years. As of April , 1999, the Portfolio had a dollar weighted average period to
adjustment of approximately days.
The Portfolio may purchase and retain in its portfolio a Senior Loan where the
Borrower has experienced, or may be perceived to be likely to experience, credit
problems, including involvement in or recent emergence from bankruptcy
reorganization proceedings or other forms of debt restructuring. Such
investments may provide opportunities for enhanced income as well as capital
appreciation. At times, in connection with the restructuring of a Senior Loan
either outside of bankruptcy court or in the context of bankruptcy court
proceedings, the Portfolio may determine or be required to accept equity
securities or junior debt securities in exchange for all or a portion of a
Senior Loan.
The Fund and the Portfolio have adopted certain fundamental investment
restrictions set forth in the Statement of Additional Information which may not
be changed unless authorized by a shareholder and an interestholder vote,
respectively. Except for such restrictions, the investment objective and
policies of the Fund and the Portfolio may be changed by the Trustees of the
Fund and the Portfolio without obtaining the approval of Fund shareholders.
CERTAIN CHARACTERISTICS OF SENIOR LOANS
A Senior Loan is typically originated, negotiated and structured by a U.S. or
foreign commercial bank, insurance company, finance company or other financial
institution (the "Agent") for a lending syndicate of financial institutions
("Lenders"). The Agent typically administers and enforces the Senior Loan on
behalf of the other Lenders in the syndicate. In addition, an institution,
typically but not always the Agent, holds any collateral on behalf of the
Lenders.
Senior Loans include senior secured floating rate loans and institutionally
traded senior secured floating rate debt obligations issued by an asset-backed
pool, and interests therein. Loan interests generally take the form of direct
interests acquired during a primary distribution and may also take the form of
participation interests in, assignments of, or novations of a Senior Loan
acquired in secondary markets. Such loan interests may be acquired from U.S. or
foreign commercial banks, insurance companies, finance companies or other
financial institutions who have made loans or are members of a lending syndicate
or from other holders of loan interests.
The Portfolio may purchase "Assignments" from Lenders. The purchase of an
Assignment typically succeeds to all the rights and obligations under the Loan
Agreement of the assigning Lender and becomes a Lender under the Loan Agreement
with the same rights and obligations as the assigning Lender. Assignments may,
however, be arranged through private negotiations between potential assignees
and potential assignors, and the rights and obligations acquired by the
purchaser of an Assignment may differ from, and be more limited than, those held
by the assigning Lender.
The Portfolio also may invest without limit in "Participations". Participations
by the Portfolio in a Lender's portion of a Senior Loan typically will result in
the Portfolio having a contractual relationship only with such Lender, not with
the Borrower. As a result, the Portfolio may have the right to receive payments
of principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by such Lender of such payments
from the Borrower. In connection with purchasing Participations, the Portfolio
generally will have no right to enforce compliance by the Borrower with the
terms of the loan agreement, nor any rights with respect to any funds acquired
by other Lenders through set-off against the Borrower and the Portfolio may not
directly benefit from the collateral supporting the Senior Loan in which it has
purchased the Participation. As a result, the Portfolio may assume the credit
risk of both the Borrower and the Lender selling the Participation. In the event
of the insolvency of the Lender selling a Participation, the Portfolio may be
treated as a general creditor of such Lender. The selling Lenders and other
persons interpositioned between such Lenders and the Portfolio with respect to
such Participations will likely conduct their principal business activities in
the banking, finance and financial services industries. Persons engaged in such
industries may be more susceptible to, among other things, fluctuations in
interest rates, changes in the Federal Open Market Committee's monetary policy,
governmental regulations concerning such industries and concerning capital
raising activities generally and fluctuations in the financial markets
generally.
The Portfolio will only acquire Participations if the Lender selling the
Participation, and any other persons interpositioned between the Portfolio and
the Lender, at the time of investment has outstanding debt or deposit
obligations rated investment grade (BBB or A-3 or higher by Standard & Poor's
Ratings Group ("S&P") or Baa or P-3 or higher by Moody's Investors Service, Inc.
("Moody's") or comparably rated by another nationally recognized rating agency
(each a "Rating Agency")) or determined by BMR to be of comparable quality.
Similarly, the Portfolio will purchase an Assignment or Participation or act as
a Lender with respect to a syndicated Senior Loan only where the Agent with
respect to such Senior Loan at the time of investment has outstanding debt or
deposit obligations rated investment grade or determined by BMR to be of
comparable quality. Long-term debt rated BBB by S&P is regarded by S&P as having
adequate capacity to pay interest and repay principal and debt rated Baa by
Moody's is regarded by Moody's as a medium grade obligations, i.e., it is
neither highly protected nor poorly secured. Commercial paper rated A-3 by S&P
indicates that S&P believes such obligations exhibit adequate protection
parameters but that adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation and issues of commercial paper rated P-3 by Moody's
are considered by Moody's to have an acceptable ability for repayment of
short-term debt obligations but the effect of industry characteristics and
market compositions may be more pronounced. A description of the corporate bond
ratings of Moody's and S&P is included as Appendix A to the Statement of
Additional Information.
OTHER INVESTMENTS
As stated above, up to 20% of the Portfolio's total assets may be held in cash,
invested in short-term debt obligations, and invested in interests in Unsecured
Loans. The Portfolio will invest in only those Unsecured Loans that have been
determined by BMR to have a credit quality at least equal to that of the
collateralized Senior Loans in which the Portfolio primarily invests. Should the
Borrower of an Unsecured Loan default on its obligation there will be no
specific collateral on which the Portfolio can foreclose, although the Borrower
will typically have asset value believed by BMR at the time of purchase of the
Unsecured Loans to exceed the amount of the loan. The short-term debt
obligations in which the Portfolio may invest include, but are not limited to,
interests in senior Unsecured Loans with a remaining maturity of one year or
less ("Short-Term Loans"), certificates of deposit, commercial paper, short-term
and medium-term notes, bonds with remaining maturities of less than five years,
obligations issued by the U.S. Government or any of its agencies or
instrumentalities and investments in Senior Loans. All of such other debt
instruments will be investment grade. Downgraded securities may be retained by
the Portfolio.
The Portfolio may acquire warrants and other equity securities as part of a unit
combining a Senior Loan and equity securities of a Borrower or its affiliates.
The acquisition of such equity securities will only be incidental to the
Portfolio's purchase of a Senior Loan. The Portfolio may also acquire equity
securities issued in exchange for a Senior Loan or issued in connection with the
debt restructuring or reorganization of a Borrower, or if such acquisition, in
the judgment of BMR, may enhance the value of a Senior Loan or would otherwise
be consistent with the Portfolio's investment policies.
BORROWINGS AND LEVERAGE
The Portfolio may from time to time (i) borrow money on a secured or unsecured
basis at variable or fixed rates, and (ii) issue indebtedness such as commercial
paper, bonds, debentures, notes or similar obligations or instruments. BMR
expects that the Portfolio will do so to remain fully invested after accounting
for anticipated cash infusions from the prepayment of Senior Loans and the sale
of Fund shares, and cash outflows from the fulfillment of settlement obligations
(including the funding of revolving Senior Loans) and the repurchase of Fund
shares. The Portfolio may also borrow and issue debt for the purpose of
acquiring additional income-producing investments when it believes that the
interest payments and other costs with respect to such borrowings or
indebtedness will be exceeded by the anticipated total return (a combination of
income and appreciation) on such investments. Successful use of a leveraging
strategy depends on BMR's ability to predict correctly interest rates and market
movements. Historically, the Portfolio has not used leverage for investment
purposes. There is no assurance that a leveraging strategy will be successful.
As prescribed by the 1940 Act, the Portfolio will be required to maintain
specified asset coverages of at least 300% with respect to any bank borrowing or
issuance of indebtedness immediately following any such borrowing or issuance
and on an ongoing basis as a condition of declaring dividends and repurchasing
shares. The Portfolio's inability to make distributions as a result of these
requirements could cause the Fund to fail to qualify as a regulated investment
company and/or subject the Fund to income or excise taxes. The Portfolio may be
required to dispose of portfolio investments on unfavorable terms if market
fluctuations or other factors reduce the required asset coverage to less than
the prescribed amount. The Portfolio may be required to maintain minimum average
balances in connection with borrowings or to pay a commitment or other fee to
maintain a line of credit; either of these requirements will increase the cost
of borrowing over the stated interest rate. The issuance of additional classes
of debt involves offering expenses and other costs and may limit the Portfolio's
freedom to pay dividends or to engage in other activities. Any such borrowing or
debt issuance is a speculative technique in that it will increase the
Portfolio's exposure to capital risk. The Portfolio may also borrow for
temporary, extraordinary or emergency purposes.
ADDITIONAL RISK CONSIDERATIONS
The Fund is subject to numerous investment risks. The Fund is not a money market
fund and its net asset value will fluctuate, reflecting any fluctuations in the
Portfolio's net asset value.
CREDIT RISK. Senior Loans, like other corporate debt obligations, are subject to
the risk of non-payment of scheduled interest or principal. Such non-payment
would result in a reduction of income to the Portfolio, a reduction in the value
of the Senior Loan experiencing non-payment and a potential decrease in the net
asset value of the Portfolio. Although, with respect to Senior Loans, the
Portfolio generally will invest only in Senior Loans that BMR believes are
secured by specific collateral the value of which equals or exceeds the
principal amount of the Senior Loan at the time of initial investment, there can
be no assurance that the liquidation of any such collateral would satisfy the
Borrower's obligation in the event of non-payment of scheduled interest or
principal payments, or that such collateral could be readily liquidated. In the
event of bankruptcy of a Borrower, the Portfolio could experience delays or
limitations with respect to its ability to realize the benefits of the
collateral securing a Senior Loan. To the extent that a Senior Loan is
collateralized by stock in the Borrower or its subsidiaries, such stock may lose
all or substantially all of its value in the event of bankruptcy of a Borrower.
The Agent generally is responsible for determining that the Lenders have
obtained a perfected security interest in the collateral securing the Senior
Loan. Some Senior Loans in which the Portfolio may invest are subject to the
risk that a court, pursuant to fraudulent conveyance or other similar laws,
could subordinate such Senior Loans to presently existing or future indebtedness
of the Borrower or take other action detrimental to the holders of Senior Loans,
such as the Portfolio, including, in certain circumstances, invalidating such
Senior Loans.
Senior Loans in which the Portfolio will invest often are not rated by a Rating
Agency, will not be registered with the SEC or any state securities commission
and will not be listed on any national securities exchange. Although the
Portfolio will generally have access to financial and other information made
available to the Lenders in connection with Senior Loans, the amount of public
information available with respect to Senior Loans will generally be less
extensive than that available for rated, registered or exchange listed
securities. In evaluating the creditworthiness of Borrowers, BMR will consider,
and may rely in part, on analyses performed by others. Borrowers may have
outstanding debt obligations that are rated below investment grade by a Rating
Agency. More recently, such Rating Agencies have begun rating Senior Loans and
many Senior Loans have been assigned a rating below investment grade. The
Portfolio will invest in such Senior Loans. Debt securities which are unsecured
and rated below investment grade are viewed by the Rating Agencies as having
speculative characteristics and are commonly known as "junk bonds". A
description of the ratings of corporate bonds by Moody's and S&P is included as
Appendix A to the Statement of Additional Information. Because of the protective
features of Senior Loans (being senior and secured by specific collateral), BMR
believes, based on its experience, that these ratings do not necessarily reflect
the true risk of loss of principal or interest on a Senior Loan. For example,
BMR believes that Senior Loans tend to have more favorable loss recovery rates
as compared to most other types of below investment grade debt obligations.
Accordingly, BMR generally does not take ratings into account when determining
whether to invest in a Senior Loan and, in any event, does not view ratings as a
determinative factor in its investment decisions. As a result, the Portfolio is
more dependent on BMR's credit analysis abilities than a fund that invests in
other types of debt securities.
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 ("high quality securities"), which react primarily to movements in
the general level of interest rates. Senior Loans issued in connection with
mergers, acquisitions, leveraged buy-outs, recapitalizations and other highly
leveraged transactions, pose a higher risk of default or bankruptcy of the
issuer than other higher quality debt securities, particularly during periods of
deteriorating economic conditions and contraction in the credit markets. The
investments in the Portfolio will have speculative characteristics, and
companies obligated by such debt are generally more vulnerable in an economic
downturn.
INTEREST RATE RISK. When interest rates decline, the value of a portfolio
invested in fixed-rate obligations can be expected to rise. Conversely, when
interest rates rise, the value of a portfolio invested in fixed-rate obligations
can be expected to decline. Although the Fund's net asset value will vary, the
Fund's management expects the Portfolio's policy of acquiring interests in
floating rate Senior Loans to minimize fluctuations in net asset value as a
result of changes in market interest rates. However, because floating rates on
Senior Loans only reset periodically, changes in prevailing interest rates can
be expected to cause some fluctuation in the Fund's net asset value. Similarly,
a sudden and significant increase in market interest rates may cause a decline
in the Fund's net asset value.
FOREIGN SECURITIES. Although the Portfolio will only invest in U.S.
dollar-denominated income securities, the Portfolio may invest in Senior Loans
and other debt securities of non-U.S. issuers. Investment in securities of non-
U.S. issuers involves special risks, including that non-U.S. issuers may be
subject to less rigorous accounting and reporting requirements than U.S.
issuers, less rigorous regulatory requirements, differing legal systems and laws
relating to creditors' rights, the potential inability to enforce legal
judgments and the potential for political, social and economic adversity. The
securities of some foreign issuers are less liquid and at times more volatile
than securities of comparable U.S. issuers. Foreign settlement procedures and
trade regulations may involve certain risks (such as delay in the payment or
delivery of securities and interest or in the recovery of assets held abroad)
and expenses not present in the settlement of domestic investments. There may be
a possibility of nationalization or expropriation of assets, imposition of
currency exchange controls, confiscatory taxation, political or financial
instability, armed conflict and diplomatic developments which could affect the
value of the Portfolio's investments in certain foreign countries. The Portfolio
will not invest more than 35% of its net assets in foreign Senior Loans, and has
no current intention to invest more than 10%.
LIQUIDITY RISK. Senior Loans, at present, are generally not readily marketable
and are subject to restrictions on resale. Interests in Senior Loans generally
are not listed on any national securities exchange or automated quotation system
and no active trading market may exist for many of the Senior Loans in which the
Portfolio will invest. Where a secondary market exists, such market may be
subject to irregular trading activity, wide bid/ask spreads and extended trade
settlement periods. Senior Loans are thus relatively illiquid, which illiquidity
may impair the Portfolio's ability to realize the full value of its assets in
the event of a voluntary or involuntary liquidation of such assets. The
Portfolio 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 substantial portion of the Portfolio's assets invested in Senior
Loan interests may restrict the ability of the Portfolio to dispose of its
investments in a timely fashion and at a fair price, and could result in capital
losses. The risks associated with illiquidity are particularly acute in
situations where the Fund's operations require cash, such as when the Fund
conducts repurchase offers for its shares, and may result in borrowings to meet
short-term cash requirements. The Trustees of the Fund will consider the
liquidity of the Portfolio's investments in determining the amount of quarterly
repurchase offers.
REGULATORY CHANGES. To the extent that legislation or state or federal
regulators that regulate certain financial institutions impose additional
requirements or restrictions with respect to the ability of such institutions to
make loans, particularly in connection with highly leveraged transactions, the
availability of Senior Loans for investment by the Portfolio may be adversely
affected. Further, such legislation or regulation could depress the market value
of Senior Loans held by the Portfolio.
NON-DIVERSIFICATION. The Fund and the Portfolio have each registered as a
"non-diversified" investment company under the Investment Company Act of 1940,
as amended (the "1940 Act") so that, subject to its investment restrictions and
in connection with federal income tax rules, with respect to 50% of its total
assets, the Portfolio will be able to invest more than 5% of the value of its
assets in the obligations of any single issuer, including Senior Loans of a
single Borrower or single Lender, although it has no current intention to do so.
The Portfolio will not invest more than 10% of the value of its assets in
securities (including interests in Senior Loans) of any single Borrower.
Moreover, the Portfolio may invest more than 10% (but not more than 25%) of its
total assets in Senior Loan interests for which the same intermediate
participant is interposed between the Portfolio and the Borrower. To the extent
the Portfolio invests a relatively high percentage of its assets in obligations
of a limited number of issuers, the Portfolio will be more susceptible than a
more widely diversified investment company to any single corporate, economic,
political or regulatory occurrence.
SPECIAL INVESTMENT PRACTICES
The Portfolio may engage in the following investment practices to seek to
enhance income or reduce investment risk, but has no current intention to do so.
INTEREST RATE AND OTHER HEDGING TRANSACTIONS. The Portfolio may purchase or sell
derivative instruments (which are instruments that derive their value from
another instrument, security or index) to seek to hedge against fluctuations in
securities prices or interest rates. The Portfolio's transactions in derivative
instruments may include the purchase or sale of futures contracts on securities,
securities indices or other indices, other financial instruments; options on
futures contracts; exchange-traded and over-the-counter options on securities or
indices; index-linked securities; and interest rate swaps. The Portfolio's
transactions in derivative instruments involve a risk of loss or depreciation
due to: unanticipated adverse changes in securities prices, interest rates, the
other financial instruments' prices; the inability to close out a position;
default by the counterparty; imperfect correlation between a position and the
desired hedge; tax constraints on closing out positions; and portfolio
management constraints on securities subject to such transactions. The loss on
derivative instruments (other than purchased options) may substantially exceed
the Portfolio's initial investment in these instruments. In addition, the
Portfolio may lose the entire premium paid for purchased options that expire
before they can be profitably exercised by the Portfolio. Transaction costs will
be incurred in opening and closing positions in derivative instruments. There
can be no assurance that BMR's use of derivative instruments will be
advantageous to the Portfolio.
The Portfolio may use interest rate swaps for risk management purposes and not
as a speculative investment and would typically use interest rate swaps to
shorten the average time to interest rate reset of the Portfolio. Interest rate
swaps involve the exchange by the Portfolio with another party of their
respective commitments to pay or receive interests, e.g., an exchange of fixed
rate payments for floating rate payments. The use of interest rate swaps is a
highly specialized activity which involves investment techniques and risks
different from those associated with ordinary portfolio securities transactions.
BMR has had limited experience in the use of interest rate swaps but has
utilized other types of hedging techniques. If BMR is incorrect in its forecasts
of market values, interest rates and other applicable factors, the investment
performance of the Portfolio would be less favorable than what it would have
been if this investment technique were never used.
SECURITIES LENDING. The Portfolio may seek to increase its income by lending
portfolio securities to broker-dealers of other institutional borrowers. During
the existence of a loan, the Portfolio will continue to receive the equivalent
of the interest paid by the issuer on the securities loaned and will also
receive a fee, or all or a portion of the interest on investment of the
collateral, if any. However, the Portfolio may pay lending fees to such
borrowers. As with other extensions of credit, there are risks of delay in
recovery or even loss of rights in the securities loaned if the borrower of the
securities fails financially. However, the loans will be made only to
organizations deemed by BMR to be of good standing and when, in the judgement of
the Portfolio's management, the consideration which can be earned from
securities loans of this type, net of administrative expenses and any finders or
other fees, justifies the attendant risk. The financial condition of the
borrower will be monitored by BMR on an ongoing basis. The value of the
securities loaned will not exceed 30% of the Portfolio's total assets.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements with
member banks of the Federal Reserve System or primary dealers in U.S. Government
securities. Under a repurchase agreement, the Portfolio buys securities at one
price and simultaneously promises to sell back those securities at a higher
price. The Portfolio's repurchase agreements will provide that the value of the
collateral underlying the repurchase agreement will always be at least equal to
the repurchase price, including any accrued interest earned on the repurchase
agreement, and will be marked to market daily. The repurchase date is usually
within seven days of the original purchase date. In all cases, BMR must be
satisfied with the creditworthiness of the other party to the agreement before
entering into a repurchase agreement. In the event of the bankruptcy of the
other party to a repurchase agreement, the Portfolio might experience delays in
recovering its cash. To the extent that, in the meantime, the value of the
securities the Portfolio purchased may have declined, the Portfolio could
experience a loss.
ORGANIZATION OF THE FUND
The Fund is organized as a business trust established under Massachusetts law
pursuant to a Declaration of Trust dated February 22, 1999, as amended, and is
registered under the 1940 Act. The Trustees of the Fund are responsible for
the overall management and supervision of its affairs. The Fund currently has
one class of shares of beneficial interest which may be issued in an unlimited
number by the Trustees. Each share represents an equal proportionate
beneficial interest in the Fund and, when issued and outstanding, the shares
are fully paid and nonassessable by the Fund and may be repurchased only as
described under "Repurchase Offers". There are no annual meetings of
shareholders, but special meetings may be held as required by law to elect or
remove Trustees and consider certain other matters. Because the Fund invests
in the Portfolio, it may be asked to vote on certain Portfolio matters (like
changes in certain Portfolio investment restrictions). When necessary, the
Fund will hold a meeting of its shareholders to consider the Portfolio matter
and then vote its interest in the Portfolio in proportion to the votes cast by
its shareholders. The Fund can withdraw from the Portfolio at any time.
Shareholders are entitled to one vote for each full share held. Fractional
shares may be voted proportionately. Shares have no preemptive or conversion
rights and are freely transferable. In the event of liquidation of the Fund,
shareholders are entitled to share pro rata in the net assets of the Fund
available for distribution to shareholders.
The Fund's Declaration of Trust may not be amended without the affirmative
vote of a majority of the outstanding shares of the Fund (or such greater vote
as is described below under "Anti-Takeover Provisions"), except that the
Declaration of Trust may be amended by the Trustees to change the name of the
Fund, to make such other changes as do not have a materially adverse effect on
the rights or interests of shareholders and to conform the Declaration of
Trust to applicable federal laws or regulations. The Fund may be terminated
(i) upon the merger or consolidation with or sale of the Fund's assets to
another company, if approved by the holders of two-thirds of the outstanding
shares of the Fund, except that if the Trustees recommend such transaction,
the approval by vote of the holders of a majority of the outstanding shares
will be sufficient, or (ii) upon liquidation and distribution of the assets of
the Fund, if approved by the holders of two-thirds of the Fund's outstanding
shares, except that if the Trustees recommend such transaction, the approval
by vote of the holders of a majority of the outstanding shares will be
sufficient. If not so terminated, the Fund may continue indefinitely.
ANTI-TAKEOVER PROVISIONS. The Fund presently has certain anti-takeover
provisions in its Declaration of Trust which are intended to limit, and could
have the effect of limiting, the ability of other entities or persons to
acquire control of the Fund, to cause it to engage in certain transactions or
to modify its structure. As indicated above, a two-thirds vote is required for
certain transactions. The affirmative vote or consent of the holders of two-
thirds of the shares of the Fund (a greater vote than that required by the
1940 Act and, in some cases, greater than the required vote applicable to
business corporations under state law) is required to authorize the conversion
of the Fund from a closed-end to an open-end investment company (except that
if the Trustees recommend such conversion, the approval by vote of the holders
of a majority of the outstanding shares will be sufficient) and the
affirmative vote or consent of the holders of three-quarters of the shares of
the Fund is required to authorize any of the following transactions (the
"Transactions"): (i) merger or consolidation of the Fund with or into any
corporation; (ii) issuance of any securities of the Fund to any person or
entity for cash; (iii) sale, lease or exchange of all or any substantial part
of the assets of the Fund to any entity or person (except assets having an
aggregate fair market value of less than $1,000,000 or assets sold in the
ordinary course of business); or (iv) sale, lease or exchange to the Fund, in
exchange for securities of the Fund, of any assets of any entity or person
(except assets having an aggregate fair market value of less than $1,000,000)
if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of 5% or more of the outstanding shares of
the Fund. However, such vote or consent will not be required with respect to
the Transactions if the Board of Trustees under certain conditions approves
the Transaction. Further, the provisions of the Fund's Declaration of Trust
relating to conversion of the Fund to an open-end investment company, the
Transactions, the merger or consolidation with or sale of the Fund's assets,
and the liquidation and distribution of the Fund's assets may not be amended
without the affirmative vote or consent of two-thirds of the outstanding
shares of the Fund. Reference is made to the Declaration of Trust of the Fund,
on file with the SEC, for the full text of these provisions.
The foregoing provisions will make more difficult the conversion of the Fund
to an open-end investment company and the consummation of the Transactions
without the Trustees' approval, and could have the effect of depriving
shareholders of an opportunity to sell their shares at a premium over
prevailing market prices, in the event that a secondary market for the Fund
shares does develop, by discouraging a third party from seeking to obtain
control of the Fund in a tender offer or similar transaction. However, the
Board of Trustees has considered these anti-takeover provisions and believes
that they are in the shareholders' best interests and benefit shareholders by
providing the advantage of potentially requiring persons seeking control of
the Fund to negotiate with its management regarding the price to be paid.
MASTER-FEEDER STRUCTURE. The Trustees of the Fund have considered the
advantages and disadvantages of investing the assets of the Fund in the
Portfolio, as well as the advantages and disadvantages of the two-tier format.
The Trustees believe that the structure may offer opportunities for growth in
the assets of the Portfolio, and may afford the potential for economies of
scale for the Fund. The other investors in the Portfolio will affect its
liquidity, and, therefore, could reduce the amount of the Fund's repurchase
offers.
MANAGEMENT OF THE FUND
The Portfolio engages BMR, a wholly-owned subsidiary of Eaton Vance, to manage
the investments of the Portfolio and provide related office facilities,
administrative services and personnel. In return, the Portfolio has agreed to
pay BMR a monthly fee in the amount of 19/240 of 1% (equivalent to 0.95%
annually) of the average daily gross assets of the Portfolio. Gross assets of
the Portfolio are calculated by deducting all liabilities of the Portfolio
except the principal amount of any indebtedness for money borrowed, including
debt securities issued by the Portfolio.
The Trustees of the Portfolio have voted to accept a waiver of BMR's
compensation so that the aggregate advisory fees paid by the Portfolio under
the advisory agreement during any fiscal year or portion thereof after the
Fund begins to invest its assets in the Portfolio will not exceed on an
annual basis: (a) 0.50% of average daily gross assets of the Portfolio up to
and including $1 billion; (b) 0.45% of average daily gross assets in excess of
$1 billion up to and including $2 billion; (c) 0.40% of average daily gross
assets in excess of $2 billion up to and including $7 billion; (d) 0.3875% of
average daily gross assets in excess of $7 billion up to and including $10
billion; and (e) 0.375% of average daily gross assets in excess of $10
billion. The Portfolio paid BMR advisory fees equivalent to 0.88% of the
Portfolio's average daily gross assets for the fiscal year ended December 31,
1998, when a different waiver schedule was in effect. The waiver will be
eliminated or reduced in the event that the distribution fee of certain funds
investing in the Portfolio is eliminated or reduced. If the advisory fees
increase as a result, Eaton Vance will waive its administration fee and absorb
certain other direct expenses of the Fund provided, however, the Fund
continues to qualify as a regulated investment company for federal income tax
purposes. Such actions by Eaton Vance may not be sufficient to prevent an
increase in the overall operating expenses borne by the Fund. Shareholders
will be notified of a material change in the waiver amount.
Eaton Vance, its affiliates and predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. BMR or Eaton Vance currently serves as the investment
adviser to investment companies and various individual and institutional
clients with combined assets under management of approximately $34 billion, of
which approximately $32 billion is in investment companies, including over $7
billion in the Portfolio and an investment company that invests primarily in
Senior Loans. 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. The principal underwriter is a wholly-owned subsidiary of Eaton
Vance.
Scott H. Page and Payson F. Swaffield, Vice Presidents of Eaton Vance and BMR,
have acted as co-portfolio managers of the Portfolio since August 1, 1996.
Messrs. Page and Swaffield have been employees of Eaton Vance for more than 5
years.
The Fund, the Portfolio and BMR have adopted Codes of Ethics relating to
personal securities transactions. The Codes permit Eaton Vance personnel to
invest in securities (including securities that may be purchased or held by
the Portfolio) for their own accounts, subject to certain pre-clearance,
reporting and other restrictions and procedures contained in such Codes.
Eaton Vance serves as administrator, providing the Fund with administrative
services and related office facilities. In return, the Fund is authorized to
pay Eaton Vance a monthly fee in the amount of 1/48 of 1% (equivalent to
0.25% annually) of the average daily gross assets of the Portfolio
attributable to the Fund. The Trustees of the Fund have initially implemented
the Administration Agreement by authorizing the Fund to pay Eaton Vance a
monthly fee in the amount of 1/120 of 1% (equivalent to 0.10% annually) of
the average daily gross assets of the Portfolio attributable to the Fund.
There is no intention to increase such fees in the current fiscal year.
Like most investment companies, the Fund and the Portfolio rely on computers
in conducting daily business and processing information. There is a concern
that on January 1, 2000 some computer programs will be unable to recognize the
new year and as a consequence computer malfunctions will occur. The
Administrator is taking steps that it believes are reasonably designed to
address this potential problem and to obtain satisfactory assurance from other
service providers to the Fund and Portfolio that they are also taking steps to
address the issue. There can, however, be no assurance that these steps will
be sufficient to avoid any adverse impact on the Fund, the Portfolio or
shareholders.
VALUING SHARES
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by the Fund's custodian, Investors Bank & Trust Company
("IBT") (as agent for the Fund) in the manner authorized by the Trustees of
the Fund. The Fund will be closed for business and will not price its shares
on the following business holidays: New Year's Day, Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Net asset value is computed by dividing
the value of the Fund's total assets, less its liabilities by the number of
shares outstanding. Because the Fund invests its assets in an interest in the
Portfolio, the Fund's net asset value will reflect the value of its interest
in the Portfolio (which, in turn, reflects the underlying value of the
Portfolio's assets and liabilities).
The Portfolio's net asset value is also determined as of the close of regular
trading on the Exchange by IBT (as custodian and agent for the Portfolio) in
the manner authorized by the Trustees of the Portfolio. Net asset value is
computed by determining the value of the Portfolio's total assets (the Senior
Loans and securities it holds plus any cash or other assets, including
interest accrued but not yet received), and subtracting all of the Portfolio's
liabilities (including the outstanding principal amount of any indebtedness
issued and any unpaid interest thereon).
Because Senior Loans are not actively traded in a public market, BMR,
following procedures established by the Portfolio's Trustees, will value the
Senior Loans held by the Portfolio at fair value. In valuing a Senior Loan,
BMR will consider relevant factors, data, and information, including: (i) the
characteristics of and fundamental analytical data relating to the Senior
Loan, including the cost, size, current interest rate, period until next
interest rate reset, maturity and base lending rate of the Senior Loan, the
terms and conditions of the Loan and any related agreements, and the position
of the Loan in the Borrower's debt structure; (ii) the nature, adequacy and
value of the collateral, including the Portfolio's rights, remedies and
interests with respect to the collateral; (iii) the creditworthiness of the
Borrower, based on an evaluation of its financial condition, financial
statements and information about the Borrower's business, cash flows, capital
structure and future prospects; (iv) information relating to the market for
the Senior Loan, including price quotations (if considered reliable) for and
trading in the Senior Loan and interests in similar Senior Loans and the
market environment and investor attitudes towards the Senior Loan and
interests in similar Senior Loans; (v) the reputation and financial condition
of the Agent and any intermediate participants in the Senior Loan; and (vi)
general economic and market conditions affecting the fair value of the Senior
Loan.
PURCHASING SHARES
No commissions or fees are charged on Fund purchases or repurchases. The Fund
provides shareholders ease of investment by allowing same day wire purchases.
You may purchase Fund shares through your investment dealer or by requesting
your bank to transmit immediately available funds (Federal Funds) by wire to
the address set forth below. Your initial investment must be at least
$1,000,000. To make an initial investment by wire, you must first telephone
the Fund Order Department at 800-225-6265 (extension 7604) to advise of your
action and to be assigned an account number. Failure to call will delay the
order. The Account Application form which accompanies this Prospectus must be
promptly forwarded to the transfer agent (see back cover for address).
Additional investments may be made at any time through the same wire
procedure. The Fund Order Department must be advised by telephone of each
transmission. Wire funds to:
Boston Safe Deposit & Trust Co.
ABA #011001234
Account #
Further Credit Eaton Vance Institutional Senior Floating-Rate Fund -- Fund #432
A/C # [Insert your account number -- see below]
The Fund intends at all times to be as fully invested as is feasible in order
to maximize its earnings. Accordingly, purchase orders will be executed at the
net asset value next determined after their receipt by the Fund only if the
Fund has received payment in cash or in Federal Funds. If you purchase shares
through an investment dealer, that dealer may charge you a fee for executing
the purchase for you.
From time to time the Fund may suspend the continuous offering of its shares.
During any such suspension, shareholders who reinvest their distributions in
additional shares will be permitted to continue such reinvestments, and the
Fund may permit tax sheltered retirement plans which own shares to purchase
additional shares of the Fund. The Fund may also refuse any order for the
purchase of shares.
The Portfolio intends to limit its investments to those which are eligible for
purchase by national banks for their own portfolios. The conditions and
restrictions governing the purchase of Fund shares by national banks are set
forth in the U.S. Comptroller of the Currency's Banking Circular 220. Subject
to such conditions and restrictions, national banks may acquire Fund shares
for their own investment portfolio.
REPURCHASE OFFERS
As a matter of fundamental policy which cannot be changed without shareholder
approval, the Fund is required in the months of JANUARY, APRIL, JULY and
OCTOBER to offer to repurchase at least 5% and up to 25% of its shares. Under
normal market conditions, the Trustees expect to authorize a 25% offer. (The
Fund may also make a discretionary repurchase offer once every two years but
has no current intention to do so.) The repurchase price will be the net asset
value determined not more than 14 days following the repurchase request
deadline and payment for all shares repurchased pursuant to these offers will
be made not later than 7 days after the repurchase pricing date. Under normal
circumstances, it is expected that net asset value will be determined on the
repurchase request deadline and payment for shares tendered will be made
within 3 business days after such deadline. During the period the offer to
repurchase is open shareholders may obtain the current net asset value by
calling 1-800-225-6265, option 2 (fund #432).
At least 21 days prior to the repurchase request deadline the Fund will mail
written notice to each shareholder setting forth the number of shares the Fund
will repurchase, the repurchase request deadline and other terms of the offer
to repurchase, and the procedures for shareholders to follow to request a
repurchase. THE REPURCHASE REQUEST DEADLINE WILL BE STRICTLY OBSERVED.
Shareholders and financial intermediaries failing to submit repurchase
requests in good order by such deadline will be unable to liquidate shares
until a subsequent repurchase offer.
If more shares are tendered for repurchase than the Fund has offered to
repurchase, the Board may, but is not obligated, to increase the number of
shares to be repurchased by 2% of the Fund shares outstanding; if there are
still more shares tendered than are offered for repurchase, shares will be
repurchased on a pro-rata basis. Thus, shareholders may be unable to liquidate
all or a given percentage of their shares and some shareholders may tender
more shares than they wish to have repurchased in order to ensure repurchase
of at least a specific number of shares. Shareholders may withdraw shares
tendered for repurchase at any time prior to the repurchase request deadline.
Repurchase offers and the need to fund repurchase obligations may affect the
ability of the Portfolio to be fully invested, which may reduce returns.
Moreover, diminution in the size of the Portfolio through repurchases without
offsetting new sales may result in untimely sales of portfolio securities and
a higher expense ratio, and may limit the ability of the Portfolio to
participate in new investment opportunities. Repurchases resulting in
portfolio turnover will result in additional expenses being borne by the
Portfolio. The Portfolio may borrow to meet repurchase obligations which
entails certain risks and costs. See "Borrowings and Leverage". The Portfolio
may also sell portfolio securities to meet repurchase obligations which, in
certain circumstances, may adversely affect the market for Senior Loans and
reduce the Fund's value.
The Fund may suspend or postpone a repurchase offer only: (A) if making or
effecting the repurchase offer would cause the Fund to lose its status as a
regulated investment company under the Internal Revenue Code; (B) for any
period during which the Exchange or any market in which the securities owned
by the Portfolio are principally traded is closed, other than customary
weekend and holiday closings, or during which trading in such market is
restricted; (C) for any period during which an emergency exists as a result of
which disposal by the Portfolio of securities owned by it is not reasonably
practicable, or during which it is not reasonably practicable for the
Portfolio or Fund fairly to determine the value of its net assets; or (D) for
such other periods as the SEC may by order permit for the protection of
shareholders of the Fund.
If the Fund determines that it may be treated as a personal holding company
for federal income tax purposes at any time, it may involuntarily liquidate
all accounts it determines is necessary as soon as practicable.
SHAREHOLDER ACCOUNT FEATURES
DISTRIBUTIONS. You may have your Fund distributions paid in one of the
following ways:
o FULL REINVEST OPTION Dividends and capital gains are reinvested in
additional shares. This option will be assigned if
you do not specify an option.
o PARTIAL REINVEST OPTION Dividends are paid in cash and capital gains are
reinvested in additional shares.
o OPTION CASH Dividends and capital gains are paid in cash.
INFORMATION FROM THE FUND. From time to time, you may be mailed the following:
o Quarterly repurchase offer notices.
o Annual and Semi-Annual Reports, containing performance information and
financial statements.
o Periodic account statements, showing recent activity and total share
balance.
o Form 1099 and tax information needed to prepare your income tax returns.
o Proxy materials, in the event a shareholder vote is required.
o Special notices about significant events affecting your Fund.
TAX-SHELTERED RETIREMENT PLANS: Fund shares are available for purchase in
connection with certain tax-sheltered retirement plans. Call 1-800-225-6265
for information. Distributions will be invested in additional shares for all
tax-sheltered retirement plans.
TELEPHONE TRANSACTIONS. The transfer agent and the principal underwriter have
procedures in place (such as verifying personal account information) to
authenticate telephone instructions. As long as the transfer agent and
principal underwriter follow these procedures, they will not be responsible
for unauthorized telephone transactions and you bear the risk of possible loss
resulting from such transactions. Telephone instructions are tape recorded.
ACCOUNT QUESTIONS. If you have any questions about your account or the
services available, please call Eaton Vance Shareholder Services at
1-800-225-6265, or write to the transfer agent (see back cover for address).
DISTRIBUTIONS AND TAXES
The Fund declares daily and distributes monthly substantially all of its
investment company taxable income (consisting generally of taxable net
investment income) and distributes annually net capital gain, if any (usually
in December). Daily distribution crediting will commence on the business day
after collected funds for the purchase of Fund shares are available at the
transfer agent, even if orders to purchase shares had been placed with
investment dealers. Investors who purchase shares shortly before the record
date of a capital gain distribution will pay the full price for the shares and
then receive some portion of the price back as a taxable distribution. The
Fund's distributions will not qualify for the dividends-received deduction for
corporations. The Fund expects distributions to consist primarily of
investment company taxable income which is taxable to shareholders as ordinary
income, whether paid in cash or additional shares of the Fund. Certain
distributions paid in January will be taxable to shareholders as if received
on December 31 of the prior year.
The repurchase of Fund shares may result in a taxable gain or loss to the
redeeming shareholder, depending on whether the amount received is greater or
less than such shareholder's adjusted tax basis in the shares. An exchange of
shares of the Fund for shares of another Eaton Vance fund generally will have
similar tax consequences. Different tax consequences may apply for tendering
and nontendering shareholders in connection with a repurchase offer, and these
consequences will be disclosed in the related offering documents. For example,
it is possible that repurchases not treated as an exchange for federal income
tax purposes might result in different tax characterizations of the
distributions to tendering shareholders and in deemed distributions to non-
tendering shareholders.
Taxable distributions to certain shareholders, including those who have not
provided the Fund with their correct taxpayer identification number and other
required certifications, may be subject to "backup" federal tax withholding of
31%.
The foregoing only summarizes some of the federal tax consequences to
shareholders of investing in shares of the Fund, and does not address special
tax rules applicable to certain types of investors, such as corporate and
foreign investors, individual retirement accounts and other retirement plans.
Investors should consult their tax advisers.
<PAGE>
[logo] Investing
EATON VANCE for the
- ----------- 21st
Century(R)
- -------------------------------------------------------------------------------
EATON VANCE
INSTITUTIONAL SENIOR
FLOATING-RATE
FUND
PROSPECTUS
MAY 3, 1999
- -------------------------------------------------------------------------------
INVESTMENT ADVISER OF SENIOR DEBT PORTFOLIO
Boston Management and Research, 255 State Street, Boston, MA 02109
ADMINISTRATOR OF EATON VANCE INSTITUTIONAL SENIOR DEBT FLOATING-RATE FUND
Eaton Vance Management, 255 State Street, Boston, MA 02109
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 255 State Street, Boston, MA 02109
(800) 225-6265
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
AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110
ISFRP
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
May 3, 1999
EATON VANCE INSTITUTIONAL SENIOR
FLOATING-RATE FUND
255 State Street
Boston, Massachusetts 02109
(800) 225-6265
This Statement of Additional Information ("SAI") provides general
information about the Fund and the Portfolio. Capitalized terms used in this SAI
and not otherwise defined have the meanings given to them in the prospectus.
This SAI contains additional information about:
Page
Investment Policies and Risks ........................................ 2
Investment Restrictions .............................................. 4
Management and Organization .......................................... 5
Control Persons and Principal Holders of Shares ...................... 9
Investment Advisory and Administrative Services ...................... 9
Other Service Providers .............................................. 10
Shareholder Account Information ...................................... 10
Portfolio Trading .................................................... 11
Taxes ................................................................ 12
Performance .......................................................... 13
Financial Statements ................................................. 14
Appendix A: Ratings of Corporate Bonds ............................... a-1
THIS IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY THE FUND'S PROSPECTUS DATED MAY 3,
1999, AS SUPPLEMENTED FROM TIME TO TIME, WHICH IS INCORPORATED HEREIN BY
REFERENCE. THIS SAI SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS, WHICH MAY
BE OBTAINED BY CALLING 1-800-225-6265.
<PAGE>
INVESTMENT POLICIES AND RISKS
LENDING FEES. In the process of buying, selling and holding Senior Loans the
Portfolio may receive and/or pay certain fees. These fees are in addition to
interest payments received and may include facility fees, commitment fees,
commissions and prepayment penalty fees. When the Portfolio buys a Senior Loan
it may receive a facility fee and when it sells a Senior Loan it may pay a
facility fee. On an ongoing basis, the Portfolio may receive a commitment fee
based on the undrawn portion of the underlying line of credit portion of a
Senior Loan. In certain circumstances, the Portfolio may receive a prepayment
penalty fee upon the prepayment of a Senior Loan by a Borrower. Other fees
received by the Portfolio may include covenant waiver fees and covenant
modification fees.
BORROWER COVENANTS. A Borrower must comply with various restrictive covenants
contained in a loan agreement or note purchase agreement between the Borrower
and the Lender or lending syndicate (the "Loan Agreement"). Such covenants, in
addition to requiring the scheduled payment of interest and principal, may
include restrictions on dividend payments and other distributions to
stockholders, provisions requiring the Borrower to maintain specific minimum
financial ratios, and limits on total debt. In addition, the Loan Agreement may
contain a covenant requiring the Borrower to prepay the Loan with any free cash
flow. Free cash flow is generally defined as net cash flow after scheduled debt
service payments and permitted capital expenditures, and includes the proceeds
from asset dispositions or sales of securities. A breach of a covenant which is
not waived by the Agent, or by the lenders directly, as the case may be, is
normally an event of acceleration; i.e., the Agent, or the lenders directly, as
the case may be, has the right to call the outstanding Senior Loan. The typical
practice of an Agent or a Lender in relying exclusively or primarily on reports
from the Borrower may involve a risk of fraud by the Borrower. In the case of a
Senior Loan in the form of a Participation, the agreement between the buyer and
seller may limit the rights of the holder to vote on certain changes which may
be made to the Loan Agreement, such as waiving a breach of a covenant. However,
the holder of the Participation will, in almost all cases, have the right to
vote on certain fundamental issues such as changes in principal amount, payment
dates and interest rate.
ADMINISTRATION OF LOANS. In a typical Senior Loan the Agent administers the
terms of the Loan Agreement. In such cases, the Agent is normally responsible
for the collection of principal and interest payments from the Borrower and the
apportionment of these payments to the credit of all institutions which are
parties to the Loan Agreement. The Portfolio will generally rely upon the Agent
or an intermediate participant to receive and forward to the Portfolio its
portion of the principal and interest payments on the Senior Loan. Furthermore,
unless under the terms of a Participation Agreement the Portfolio has direct
recourse against the Borrower, the Portfolio will rely on the Agent and the
other members of the lending syndicate to use appropriate credit remedies
against the Borrower. The Agent is typically responsible for monitoring
compliance with covenants contained in the Loan Agreement based upon reports
prepared by the Borrower. The seller of the Senior Loan usually does, but is
often not obligated to, notify holders of Senior Loans of any failures of
compliance. The Agent may monitor the value of the collateral and, if the value
of the collateral declines, may accelerate the Senior Loan, may give the
Borrower an opportunity to provide additional collateral or may seek other
protection for the benefit of the participants in the Senior Loan. The Agent is
compensated by the Borrower for providing these services under a Loan Agreement,
and such compensation may include special fees paid upon structuring and funding
the Senior Loan and other fees paid on a continuing basis. With respect to
Senior Loans for which the Agent does not perform such administrative and
enforcement functions, the Portfolio will perform such tasks on its own behalf,
although a collateral bank will typically hold any collateral on behalf of the
Portfolio and the other lenders pursuant to the applicable Loan Agreement.
A financial institution's appointment as Agent may usually be terminated in
the event that it fails to observe the requisite standard of care or becomes
insolvent, enters Federal Deposit Insurance Corporation ("FDIC") receivership,
or, if not FDIC insured, enters into bankruptcy proceedings. A successor Agent
would generally be appointed to replace the terminated Agent, and assets held by
the Agent under the Loan Agreement should remain available to holders of Senior
Loans. However, if assets held by the Agent for the benefit of the Portfolio
were determined to be subject to the claims of the Agent's general creditors,
the Portfolio might incur certain costs and delays in realizing payment on a
Senior Loan, or suffer a loss of principal and/or interest. In situations
involving intermediate participants similar risks may arise.
PREPAYMENTS. Senior Loans will usually require, in addition to scheduled
payments of interest and principal, the prepayment of the Senior Loan from free
cash flow, as defined above. The degree to which Borrowers prepay Senior Loans,
whether as a contractual requirement or at their election, may be affected by
general business conditions, the financial condition of the Borrower and
competitive conditions among lenders, among others. As such, prepayments cannot
be predicted with accuracy. Upon a prepayment, either in part or in full, the
actual outstanding debt on which the Portfolio derives interest income will be
reduced. However, the Portfolio may receive both a prepayment penalty fee from
the prepaying Borrower and a facility fee upon the purchase of a new Senior Loan
with the proceeds from the prepayment of the former. Prepayments generally will
not materially affect the Fund's performance because the Portfolio should be
able to reinvest prepayments in other Senior Loans that have similar or
identical yields and because receipt of such fees may mitigate any adverse
impact on the Fund's yield.
OTHER INFORMATION REGARDING SENIOR LOANS. From time to time BMR and its
affiliates may borrow money from various banks in connection with their business
activities. Such banks may also sell interests in Senior Loans to or acquire
them from the Portfolio or may be intermediate participants with respect to
Senior Loans in which the Portfolio owns interests. Such banks may also act as
Agents for Senior Loans held by the Portfolio.
The Portfolio may acquire interests in Senior Loans which are designed to
provide temporary or "bridge" financing to a Borrower pending the sale of
identified assets or the arrangement of longer-term loans or the issuance and
sale of debt obligations. The Portfolio may also invest in Senior Loans of
Borrowers who have obtained bridge loans from other parties. A Borrower's use of
bridge loans involves a risk that the Borrower may be unable to locate permanent
financing to replace the bridge loan, which may impair the Borrower's perceived
creditworthiness.
To the extent that collateral consists of the stock of the Borrower's
subsidiaries or other affiliates, the Portfolio will be subject to the risk that
this stock will decline in value. Such a decline, whether as a result of
bankruptcy proceedings or otherwise, could cause the Senior Loan to be
undercollateralized or unsecured. In most credit agreements there is no formal
requirement to pledge additional collateral. In addition, the Portfolio may
invest in Senior Loans guaranteed by, or fully secured by assets of,
shareholders or owners, even if the Senior Loans are not otherwise
collateralized by assets of the Borrower; provided, however, that such
guarantees are fully secured. There may be temporary periods when the principal
asset held by a Borrower is the stock of a related company, which may not
legally be pledged to secure a Senior Loan. On occasions when such stock cannot
be pledged, the Senior Loan will be temporarily unsecured until the stock can be
pledged or is exchanged for or replaced by other assets, which will be pledged
as security for the Senior Loan. However, the Borrower's ability to dispose of
such securities, other than in connection with such pledge or replacement, will
be strictly limited for the protection of the holders of Senior Loans and,
indirectly, Senior Loans.
If a Borrower becomes involved in bankruptcy proceedings, a court may
invalidate the Portfolio's security interest in the loan collateral or
subordinate the Portfolio's rights under the Senior Loan to the interests of the
Borrower's unsecured creditors. Such action by a court could be based, for
example, on a "fraudulent conveyance" claim to the effect that the Borrower did
not receive fair consideration for granting the security interest in the loan
collateral to the Portfolio. For Senior Loans made in connection with a highly
leveraged transaction, consideration for granting a security interest may be
deemed inadequate if the proceeds of the Loan were not received or retained by
the Borrower, but were instead paid to other persons (such as shareholders of
the Borrower) in an amount which left the Borrower insolvent or without
sufficient working capital. There are also other events, such as the failure to
perfect a security interest due to faulty documentation or faulty official
filings, which could lead to the invalidation of the Portfolio's security
interest in loan collateral. If the Portfolio's security interest in loan
collateral is invalidated or the Senior Loan is subordinated to other debt of a
Borrower in bankruptcy or other proceedings, it is unlikely that the Portfolio
would be able to recover the full amount of the principal and interest due on
the Loan.
INTEREST RATE SWAPS. The Portfolio may enter into interest rate swaps on either
an asset-based or liability-based basis, depending on whether it is hedging its
assets or its liabilities. For example, if the Portfolio holds a Senior Loan
with an interest rate that is reset only once each year, it may swap the right
to receive interest at this fixed rate for the right to receive interest at a
rate that is reset daily. Such a swap position would offset changes in the value
of the Senior Loan because of subsequent changes in interest rates. This would
protect the Portfolio from a decline in the value of the Senior Loan due to
rising interest rates, but would also limit its ability to benefit from falling
interest rates.
The Portfolio will enter into interest rate swaps only on a net basis, i.e.,
the two payment streams are netted out, with the Portfolio receiving or paying,
as the case may be, only the net amount of the two payments. Inasmuch as these
transactions are entered into for good faith hedging purposes and because a
segregated account will be used, the Portfolio will not treat them as being
subject to the Portfolio's borrowing restrictions. The net amount of the excess,
if any, of the Portfolio's obligations over its entitlements with respect to
each interest rate swap will be accrued on a daily basis and an amount of cash
or liquid securities having an aggregate net asset value at least equal to the
accrued excess will be maintained in a segregated account by the Portfolio's
custodian. The Portfolio will not enter into any interest rate swap unless the
credit quality of the unsecured senior debt or the claims-paying ability of the
other party thereto is considered to be investment grade by BMR. If there is a
default by the other party to such a transaction, the Portfolio will have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid in comparison with the markets for other similar instruments
which are traded in the interbank market.
The Portfolio may enter into interest rate swaps only with respect to
positions held in its portfolio. Interest rate swaps do not involve the delivery
of securities or other underlying assets or principal. Accordingly, the risk of
loss with respect to interest rate swaps is limited to the net amount of
interest payments that the Portfolio is contractually obligated to make or
receive. Since interest rate swaps are individually negotiated, the Portfolio
expects to achieve an acceptable degree of correlation between its rights to
receive interest on Senior Loans and its rights and obligations to receive and
pay interest pursuant to interest rate swaps.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as used
in this Statement of Additional Information means the lesser of (a) 67% of the
shares of the Fund present or represented by proxy at a meeting if the holders
of more than 50% of the outstanding shares are present or represented at the
meeting or (b) more than 50% of the outstanding shares of the Fund. As a matter
of fundamental policy the Fund may not:
(1) Borrow money, except as permitted by the Investment Company Act of
1940;
(2) Issue senior securities, as defined in the Investment Company Act of
1940, 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 Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities). The purchase of loan interests, securities or other 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 Fund 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 any security if, as a result of such purchase, more than 25% of
the Fund's total assets (taken at current value) would be invested in the
securities of Borrowers and other issuers having their principal business
activities in the same industry (the electric, gas, water and telephone utility
industries, commercial banks, thrift institutions and finance companies being
treated as separate industries for the purpose of this restriction); provided
that there is no limitation with respect to obligations issued or guaranteed by
the U.S. Government or any of its agencies or instrumentalities;
(7) 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 Fund reserves the freedom of
action to hold and to sell real estate acquired as a result of the ownership of
securities; or
(8) 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.
The Fund has no present intention of engaging in options or futures
transactions or of issuing preferred shares.
For the purpose of investment restriction (6), the Fund will consider all
relevant factors in determining who is the issuer of the loan interest,
including: the credit quality of the Borrower, the amount and quality of the
collateral, the terms of the Loan Agreement and other relevant agreements
(including inter-creditor agreements), the degree to which the credit of such
interpositioned person was deemed material to the decision to purchase the loan
interest, the interest rate environment, and general economic conditions
applicable to the Borrower and such interpositioned person. In addition, with
respect to restriction (6) above, the Fund will construe the phrase "more than
25%" to be "25% or more".
The Fund, as a matter of fundamental policy which may not be changed without
a vote of a majority of its outstanding voting securities and in accord with the
provisions of Rule 23c-3 (as amended from time to time) under the 1940 Act,
shall make repurchase offers for its common shares of beneficial interest at
periodic intervals of three months between repurchase request deadlines, such
deadlines to be dates in the months of January, April, July and October
determined by the Board of Trustees with the repurchase pricing date and time
being not later than the close of business fourteen days after the repurchase
request deadline (or the next business day if the 14th day is not a business
day).
The Portfolio, as a matter of fundamental policy which may not be changed
without a vote of a majority of its outstanding voting securities and in accord
with the provisions of Rule 23c-3 (as amended from time to time) under the 1940
Act, shall make repurchase offers for its interests at periodic intervals of
three months to each holder of its interests between repurchase request
deadlines, such deadlines to be dates determined by the Board of Trustees in the
months when each such holder conducts its periodic repurchases with the
repurchase pricing date and time being not later than the close of business
fourteen days after the repurchase request deadline (or the next business day if
the 14th day is not a business day).
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its investable assets in another management investment company
(a Portfolio) with substantially the same investment objective, policies and
restrictions as the Fund.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by the Fund; such
restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of the Portfolio.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policy which may be changed with respect to the Fund by the Trustees
of the Fund without approval by the Fund's shareholders or may be changed with
respect to the Portfolio by the Trustees of the Portfolio without the approval
of the Fund or the Portfolio's other investors. As a matter of nonfundamental
policy, neither the Fund nor the Portfolio may 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.
Whenever an investment policy or investment restriction set forth in the
prospectus or this SAI 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 Fund's or the Portfolio'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 Fund
or the Portfolio, as the case may be, to dispose of such security or other
asset. Notwithstanding the foregoing, under normal market conditions the Fund
and the Portfolio must take actions necessary to comply with the policy of
investing at least 80% of total assets in interests in Loans. Moreover, the Fund
and the Portfolio must always be in compliance with the borrowing policies set
forth above.
MANAGEMENT AND ORGANIZATION
FUND MANAGEMENT. The Trustees of the Fund are responsible for the overall
management and supervision of the Fund's affairs. The Trustees and officers of
the Fund and the Portfolio are listed below. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. Unless otherwise noted, the business address of each
Trustee and officer is 255 State Street, Boston, Massachusetts 02109. Those
Trustees who are "interested persons" of the Fund or the Portfolio as defined in
the 1940 Act, are indicated by an asterisk(*).
JESSICA M. BIBLIOWICZ (39), Trustee
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). Formerly
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.
Address: One Rockefeller Plaza, New York, New York 10020
JAMES B. HAWKES (57), President and Trustee*
Chairman, President and Chief Executive Officer of BMR, Eaton Vance and their
corporate parent and trustee (EVC and EV); and Director of EVC and EV. Trustee
and officer of various investment companies managed by Eaton Vance or BMR.
DONALD R. DWIGHT (68), Trustee
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
SAMUEL L. HAYES, III (64), Trustee
Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University
Graduate School of Business Administration. Trustee of the 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
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
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 Avenue, NW, Washington, DC 20001
JOHN L. THORNDIKE (72), Trustee of the Portfolio
Former Director of Fiduciary Company Incorporated. Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (69), Trustee
Investment Adviser and Consultant. Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
SCOTT H. PAGE (39), Vice President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
PAYSON F. SWAFFIELD (42), Vice President
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (54), Treasurer
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
ALAN R. DYNNER (58), Secretary
Vice President and Chief Legal Officer of BMR, Eaton Vance and EVC 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 (63), Assistant Treasurer and Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
A. JOHN MURPHY (36), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
ERIC G. WOODBURY (41), Assistant Secretary
Vice President of BMR and Eaton Vance. Officer of various investment companies
managed by Eaton Vance or BMR.
Messrs. Hayes (Chairman), Dwight and Reamer and Ms. Stout are members of the
Special Committee of the Board of Trustees of the Fund and of the Portfolio. 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 Fund and the Portfolio, including
investment advisory (Portfolio only), 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 Fund, the Portfolio or investors therein.
The Nominating Committee of the Board of Trustees of the Fund and the
Portfolio is comprised of all Trustees who are not "interested persons" as that
term is defined under the 1940 Act ("noninterested Trustees"). 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.
Messrs. Treynor (Chairman) and Dwight and Ms. Bibliowicz are members of the
Audit Committee of the Board of Trustees of the Fund and of the Portfolio. 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 Fund and of the Portfolio.
Trustees of the Portfolio who are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of a Trustees Deferred Compensation Plan (the
"Trustees" Plan"). Under the Trustees' Plan, an eligible Trustee may elect to
have his deferred fees invested by the Portfolio in the shares of one or more
funds in the Eaton Vance Family of Funds, and the amount paid to the Trustees
under the 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 Portfolio's assets, liabilities, and net
income per share, and will not obligate the Portfolio to retain the services of
any Trustee or obligate the Portfolio to pay any particular level of
compensation to the Trustee. Neither the Portfolio nor the Fund has a retirement
plan for its Trustees.
Each interested Trustee and officer holds comparable positions with certain
affiliates of BMR or with certain other funds of which BMR or Eaton Vance is the
investment adviser or distributor.
The fees and expenses of the noninterested Trustees of the Fund and of the
Portfolio are paid by the Fund and the Portfolio, respectively. (The Trustees of
the Fund and the Portfolio who are members of the Eaton Vance organization
receive no compensation from the Fund or the Portfolio). During the fiscal year
ended December 31, 1998, the noninterested Trustees of the Portfolio earned the
compensation set forth below in their capacities as Trustees from the Portfolio,
and the funds in the Eaton Vance fund complex(1). It is estimated that the
noninterested Trustees will receive from the Fund the amounts set forth below
for the fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
ESTIMATED AGGREGATE TOTAL COMPENSATION
COMPENSATION COMPENSATION FROM FUND AND
NAME FROM FUND FROM PORTFOLIO FUND COMPLEX
- ---- ---------------- ---------------- ----------------------
<S> <C> <C> <C>
Jessica M. Bibliowicz(8) .............. $1,600 $1,516 $ 33,334
Donald R. Dwight ...................... 1,600 6,608(2) 160,000(5)
Samuel L. Hayes, III .................. 1,600 6,787(3) 170,000(6)
Norton H. Reamer ...................... 1,600 6,439 160,000
Lynn A. Stout(8) ...................... 1,600 1,619 32,842
John L. Thorndike ..................... -- 6,568(4) 160,000(7)
Jack L. Treynor ....................... 1,600 7,224 170,000
- ------------
(1) As of January 1, 1999 the Eaton Vance fund complex consists of 97 registered investment companies
or series thereof.
(2) Includes $3,426 of deferred compensation.
(3) Includes $2,237 of deferred compensation.
(4) Includes $6,513 of deferred compensation.
(5) Includes $60,000 of deferred compensation.
(6) Includes $41,563 of deferred compensation.
(7) Includes $119,091 of deferred compensation.
(8) Ms. Bibliowicz and Ms. Stout were elected Trustees of the Portfolio on October 30, 1998.
</TABLE>
ORGANIZATION. The Fund is an organization of the type commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders of such a
trust may, under certain circumstances, be held personally liable as partners
for the obligations of the trust. The Fund's Declaration of Trust, as amended,
contains an express disclaimer of shareholder liability in connection with the
Fund property or the acts, obligations or affairs of the Fund. The Declaration
of Trust also provides for indemnification out of the Fund 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 Fund itself is
unable to meet its obligations. The Fund has been advised by its counsel that
the risk of any shareholder incurring any liability for the obligations of the
Fund is remote.
The Fund's 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 Fund 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. As permitted by Massachusetts law, there will normally be no
meetings of Fund shareholders for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees holding office have been
elected by shareholders. In such an event, the Trustees of the Fund then in
office will call a shareholders' meeting for the election of Trustees. Except
for the foregoing circumstances, the Trustees shall continue to hold office and
may appoint successor Trustees.
The Fund's by-laws provide 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 Fund's custodian or
by votes cast at a meeting called for that purpose. The by-laws further provide
that the Trustees of the Fund 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 Portfolio is organized as a trust under the laws of the state of New
York and intends to be treated as a partnership for federal tax purposes. In
accordance with the Declaration of Trust of the Portfolio, there will normally
be no meetings of the investors for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees of the Portfolio holding
office have been elected by investors. In such an event the Trustees of the
Portfolio then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by investors. In such an event, the Trustees of the
Portfolio then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interests
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The Portfolio's Declaration of Trust, as amended, provides that the Fund and
other entities permitted to invest in the Portfolio (e.g., other U.S. and
foreign investment companies, and common and commingled trust funds) will each
be liable for all obligations of the Portfolio. However, the risk of the Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Fund believe
that neither the Fund nor its shareholders will be adversely affected by reason
of the Fund investing in the Portfolio.
Whenever the Fund as an investor in a Portfolio is requested to vote on
matters pertaining to the Portfolio (other than the termination of the
Portfolio's business, which may be determined by the Trustees of the Portfolio
without investor approval), the Fund will hold a meeting of Fund shareholders
and will vote its interest in the Portfolio for or against such matters
proportionately to the instructions to vote for or against such matters received
from Fund shareholders. The Fund shall vote shares for which it receives no
voting instructions in the same proportion as the shares for which it receives
voting instructions. Other investors in the Portfolio may alone or collectively
acquire sufficient voting interests in the Portfolio to control matters relating
to the operation of the Portfolio, which may require the Fund to withdraw its
investment in the Portfolio or take other appropriate action. Any such
withdrawal could result in a distribution "in kind" of portfolio securities (as
opposed to a cash distribution from the Portfolio). If Senior Loans and noncash
assets are distributed, the Fund could incur brokerage, tax or other charges in
converting the securities to cash. In addition, the distribution in kind may
result in a less diversified portfolio of investments or adversely affect the
liquidity of the Fund. Notwithstanding the above, there are other means for
meeting shareholder redemption requests, such as borrowing.
The Fund may withdraw (completely redeem) all its assets from the Portfolio
at any time if the Board of Trustees of the Trust determines that it is in the
best interest of the Fund to do so. In the event the Fund withdraws all of its
assets from the Portfolio, or the Board of Trustees of the Trust determines that
the investment objective of the Portfolio is no longer consistent with the
investment objective of the Fund, the Trustees would consider what action might
be taken, including investing the assets of the Fund in another pooled
investment entity or retaining an investment adviser to manage the Fund's assets
in accordance with its investment objective. The Fund's investment performance
may be affected by a withdrawal of all its assets (or the assets of another
investor in the Portfolio) from the Portfolio.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of the date of this Statement of Additional Information, Eaton Vance
controlled the Fund by virtue of owning directly and indirectly 100% of the
outstanding voting shares of the Fund. Eaton Vance is a Massachusetts business
trust and a wholly-owned subsidiary of Eaton Vance Corp.
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
INVESTMENT ADVISORY SERVICES. Under the general supervision of the Portfolio's
Board of Trustees, BMR will carry out the investment and reinvestment of the
assets of the Portfolio, will furnish continuously an investment program with
respect to the Portfolio, will determine which securities should be purchased,
sold or exchanged, and will implement such determinations. BMR will furnish to
the Portfolio investment advice and office facilities, equipment and personnel
for servicing the investments of the Portfolio. BMR will compensate all Trustees
and officers of the Portfolio who are members of the BMR organization and who
render investment services to the Portfolio, and will also compensate all other
BMR personnel who provide research and investment services to the Portfolio.
For the fiscal years ended December 31, 1998, 1997 and 1996, the Portfolio
paid BMR advisory fees aggregating $44,484,347, $31,751,900 and $21,643,760,
respectively, equivalent to 0.88%, 0.89% and 0.91%, respectively, of the
Portfolio's average daily gross assets. As at December 31, 1998, the gross
assets of the Portfolio were $6,430,333,682. BMR's fee waiver described in the
prospectus is indefinite, but could be removed or changed upon agreement of BMR
and the Portfolio's Board of Trustees at any time.
ADMINISTRATIVE SERVICES. Under the Administration Agreement, Eaton Vance is
responsible for managing the business affairs of the Fund, subject to the
supervision of the Fund's Board of Trustees. Eaton Vance will furnish to the
Fund all office facilities, equipment and personnel for administering the
affairs of the Fund. Eaton Vance will compensate all Trustees and officers of
the Fund who are members of the Eaton Vance organization and who render
executive and administrative services to the Fund, and will also compensate all
other Eaton Vance personnel who perform management and administrative services
for the Fund. 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 Fund's custodian and transfer
agent, providing assistance in connection with the Trustees' and shareholders'
meetings, providing services in connection with quarterly repurchase offers and
other administrative services necessary to conduct the Fund's business.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the Advisory Agreement with the Portfolio, by Eaton Vance under the
Administration Agreement with the Fund or by the Principal Underwriter under its
Distribution Agreement with the Fund. Such costs and expenses to be borne by the
Portfolio and the Fund, as the case may be, include, without limitation: custody
and transfer agency fees and expenses, including those incurred for determining
net asset value and keeping accounting books and records; expenses of pricing
and valuation services; the cost of share certificates; membership dues in
investment company organizations; expenses of acquiring, holding and disposing
of securities and other investments; fees and expenses of registering under the
securities laws and governmental fees; expenses of reports to shareholders and
investors, proxy statements and other expenses of shareholders' or investors'
meetings; insurance premiums; printing and mailing expenses; interest, taxes and
corporate fees; legal and accounting expenses; compensation and expenses of
Trustees not affiliated with BMR or Eaton Vance; expenses of conducting
repurchase offers for the purpose of repurchasing Portfolio interests or Fund
shares; and investment advisory and administration fees. The Portfolio and the
Fund will also each bear expenses incurred in connection with any litigation in
which the Portfolio or the Fund, as the case may be, is a party and any legal
obligation to indemnify its respective officers and Trustees with respect
thereto, to the extent not covered by insurance.
The Portfolio's Advisory Agreement continues in effect 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 Portfolio cast in person at a
meeting specifically called for the purpose of voting on such approval and (ii)
by the Trustees of the Portfolio or by vote of a majority of the outstanding
interests of the Portfolio. The Fund'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 Fund's Trustees. Each agreement may be
terminated at any time without penalty on sixty (60) days' written notice by the
Trustees of the Fund or the Portfolio, as the case may be, BMR or Eaton Vance,
as applicable, or by vote of the majority of the outstanding shares of the Fund
or interests of the Portfolio, as the case may be. 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 Fund or the Portfolio under such
agreements on the part of Eaton Vance or BMR, as applicable, Eaton Vance or BMR
will not be liable to the Fund or the Portfolio, as applicable, for any loss
incurred, to the extent not covered by insurance.
INFORMATION ABOUT BMR AND EATON VANCE. 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, and Rowland, and Alan R.
Dynner, Thomas E. Faust, Jr., Thomas J. Fetter, Duncan W. 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 "Management and Organization", all
of the officers of the Fund (as well as Mr. Hawkes who is also a Trustee) hold
positions in the Eaton Vance organization.
OTHER SERVICE PROVIDERS
CUSTODIAN. Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston,
MA 02116, serves as custodian to the Fund and the Portfolio. IBT has the custody
of all cash and securities representing the Fund's interest in the Portfolio,
has custody of all the Portfolio's assets, maintains the general ledger of the
Fund and the Portfolio, and computes the daily net asset value of interests in
the Portfolio and the net asset value of shares of the Fund. In such capacity it
attends to details in connection with the sale, exchange, substitution, transfer
or other dealings with the Portfolio's investments, receives and disburses all
funds and performs various other ministerial duties upon receipt of proper
instructions from the Fund and the Portfolio. IBT also provides services in
connection with the preparation of shareholder reports and the electronic filing
of such reports with the SEC. EVC and its affiliates and their officers and
employees from time to time have transactions with various banks, including 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 Fund or the Portfolio and such banks.
INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP, 125 Summer Street, Boston,
Massachusetts, are the independent accountants of the Fund and the Portfolio,
providing audit services, tax return preparation, and assistance and
consultation with respect to the preparation of filings with the SEC.
TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR. First Data Investor Services
Group, P.O. Box 5123, Westborough, MA 01581-5120, serves with respect to the
shares as transfer and dividend paying agent and as registrar.
SHAREHOLDER ACCOUNT INFORMATION
CALCULATION OF NET ASSET VALUE. Each investor in the Portfolio, including the
Fund, may add to or reduce its investment in the Portfolio on each day the
Exchange is open for trading ("Portfolio Business Day") as of the close of
regular trading on the Exchange (the "Portfolio Valuation Time"). The value of
each investor's interest in the Portfolio will be determined by multiplying the
net asset value of the Portfolio by the percentage, determined on the prior
Portfolio Business Day, which represented that investor's share of the aggregate
interests in the Portfolio on such prior day. Any additions or withdrawals
(which would be made pursuant to Portfolio repurchase offers) for the current
Portfolio Business Day will then be recorded. Each investor's percentage of the
aggregate interest in the Portfolio will then be recomputed as a percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Portfolio as of the Portfolio Valuation Time on the prior
Portfolio Business Day plus or minus, as the case may be, the amount of any
additions to or withdrawals from the investor's investment in the Portfolio on
the current Portfolio Business Day and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of the Portfolio Valuation Time on
the prior Portfolio Business Day plus or minus, as the case may be, the amount
of the net additions to or withdrawals from the aggregate investment in the
Portfolio on the current Portfolio Business Day by all investors in the
Portfolio. The percentage so determined will then be applied to determine the
value of the investor's interest in the Portfolio for the current Portfolio
Business Day.
The Trustees monitor the market liquidity of Senior Loans and may require
use of a pricing service or mark-to-market procedures for some or all of such
holdings in the future.
Non-Loan Portfolio holdings (other than short term obligations, but
including listed issues) may be valued on the basis of prices furnished by one
or more pricing services which determine prices for normal, institutional-size
trading units of such securities using market information, transactions for
comparable securities and various relationships between securities which are
generally recognized by institutional traders. In certain circumstances,
portfolio securities will be valued at the last sale price on the exchange that
is the primary market for such securities, or the average of the last quoted bid
price and asked price for those securities for which the over-the-counter market
is the primary market or for listed securities in which there were no sales
during the day. The value of interest rate swaps will be determined in
accordance with a discounted present value formula and then confirmed by
obtaining a bank quotation.
Short-term obligations which mature in 60 days or less are valued at
amortized cost, if their original term to maturity when acquired by the
Portfolio was 60 days or less, or are valued at amortized cost using their value
on the 61st day prior to maturity, if their original term to maturity when
acquired by the Portfolio was more than 60 days, unless in each case this is
determined not to represent fair value. Repurchase agreements will be valued by
the Portfolio at cost plus accrued interest. Securities for which there exist no
price quotations or valuations and all other assets are valued at fair value as
determined in good faith by or on behalf of the Trustees of the Portfolio.
TAX-SHELTERED RETIREMENT PLANS. Shares of the Fund are available for purchase in
connection with certain tax-sheltered retirement plans. Detailed information
concerning these plans, including certain exceptions to minimum investment
requirements, and copies of the plans are available from the principal
underwriter. This information should be read carefully and consultation with an
attorney or tax adviser may be advisable. The information sets forth the service
fee charged for retirement plans and describes the federal income tax
consequences of establishing a plan. Participant accounting services (including
trust fund reconciliation services) will be offered only through third party
recordkeepers and not by the principal underwriter. Under all plans, dividends
and distributions will be automatically reinvested in additional shares.
PORTFOLIO TRADING
Specific decisions to purchase or sell securities for the Portfolio are made
by employees of BMR who are appointed and supervised by its senior officers.
Such employees may serve other clients of BMR in a similar capacity. Changes in
the Portfolio's investments are reviewed by the Board.
The Portfolio will acquire Senior Loans from major international banks,
selected domestic regional banks, insurance companies, finance companies and
other financial institutions. In selecting financial institutions from which
Senior Loans may be acquired, BMR will consider, among other factors, the
financial strength, professional ability, level of service and research
capability of the institution. While these financial institutions are generally
not required to repurchase Senior Loans which they have sold, they may act as
principal or on an agency basis in connection with their sale by the Portfolio.
Other fixed-income obligations which may be purchased and sold by the
Portfolio are generally traded in the over-the-counter market on a net basis
(i.e., without commission) through broker-dealers or banks acting for their own
account rather than as brokers, or otherwise involve transactions directly with
the issuers of such obligations. The Portfolio may also purchase fixed-income
and other securities from underwriters, the cost of which may include
undisclosed fees and concessions to the underwriters. While it is anticipated
that the Portfolio will not pay significant brokerage commissions, on occasion
it may be necessary or desirable to purchase or sell a security through a broker
on an agency basis, in which case the Portfolio will incur a brokerage
commission. Although spreads or commissions on portfolio transactions will, in
the judgment of BMR, be reasonable in relation to the value of the services
provided, spreads or commissions exceeding those which another firm might charge
may be paid to firms who were selected to execute transactions on behalf of the
Portfolio and BMR's other clients for providing brokerage and research services
to BMR. The Portfolio paid no brokerage commissions during its last three fiscal
years.
The frequency of portfolio purchases and sales, known as the "turnover
rate," will vary from year to year. The Portfolio's turnover rate for the fiscal
years ended December 31, 1997 and 1998 were 81% and 56%, respectively.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates.
Whenever decisions are made to buy or sell securities by the Portfolio and one
or more of such other accounts simultaneously, BMR 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 Portfolio 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
BMR 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
Portfolio from time to time, it is the opinion of the Trustees of the Trust and
the Portfolio that the benefits from the BMR organization outweigh any
disadvantage that may arise from exposure to simultaneous transactions.
TAXES
The Fund is treated as a separate corporation, and intends to qualify each
year as a regulated investment company ("RIC"), under the Internal Revenue Code
of 1986, as amended (the "Code") to avoid federal income tax. Accordingly, the
Fund intends to satisfy certain requirements relating to sources of its income
and diversification of its assets and to distribute a sufficient amount of its
investment company taxable income so as to effect such qualification. The Fund
may also distribute part or all of its net investment income and net realized
capital gains in accordance with the timing requirements imposed by the Code, so
as to reduce or avoid any federal income or excise tax to the Fund.
Because the Fund invests its assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements in
order for the Fund to satisfy them, and the Portfolio intends to do so. For
federal income tax purposes, the Portfolio intends to be treated as a
partnership that is not a "publicly traded partnership" and, as a result, will
not be subject to federal income tax. The Fund, as an investor in the Portfolio,
will be required to take into account in determining its federal income tax
liability its share of the Portfolio's income, gains, losses, deductions, and
credits, without regard to whether it has received any cash distributions from
the Portfolio.
The Portfolio will allocate at least annually among its investors, including
the Fund, each investor's distributive share of the Portfolio's net investment
income, net realized capital gains, and any other items of income, gain, loss,
deduction or credit. For purposes of applying the requirements of the Code
regarding qualification as a RIC, the Fund (i) will be deemed to own its
proportionate share of each of the assets of the Portfolio and (ii) will be
entitled to the gross income of the Portfolio attributable to such share.
In order to avoid federal excise tax, the Code requires the Fund to
distribute by the end of each calendar year substantially all of its ordinary
income and capital gain net income for such year, plus certain other amounts.
Under current law, provided that the Fund qualifies as a RIC and the Portfolio
is treated as a partnership for Massachusetts and federal tax purposes, neither
the Fund nor the Portfolio should be liable for any income, corporate excise or
franchise tax in the Commonwealth of Massachusetts.
The federal income tax rules governing the taxation of interest rate swaps
are not entirely clear and may require the Fund to treat payments received by
the Portfolio under such arrangements as ordinary income and to amortize such
payments under certain circumstances. The Portfolio will limit its activity in
this regard in order to enable the Fund to maintain its qualification as a RIC.
Certain investments of the Portfolio may bear original issue discount or
market discount for tax purposes. The Fund will be required to include in income
each year a portion of such original issue discount and may elect to include in
income each year a portion of such market discount. The Portfolio may have to
dispose of investments that it would otherwise have continued to hold to provide
cash to enable the Fund to satisfy its distribution requirements with respect to
such income.
Distributions of net capital gain are taxable to shareholders as long-term
capital gain, whether paid in cash or additional shares of the Fund and
regardless of the length of time Fund shares have been owned by the shareholder.
Long-term capital gain is separated into different tax rate groups depending on
the length of time the asset is held by the Fund prior to sale.
PERFORMANCE
From time to time, the Fund may quote current yield based on a specific
one-month period. Current yield is calculated by dividing the net investment
income per share earned during a recent 30-day period by the maximum offering
price per share of the Fund on the last day of the period and annualizing the
resulting figure. Yield will fluctuate from time to time and is not necessarily
representative of future results. Advertisements and communications to present
or prospective shareholders may also cite a total return for any period. Total
return will be calculated by subtracting the net asset value of a single
purchase of shares at a given date from the net asset value of those shares
(assuming reinvestment of distributions) on a subsequent date. The difference
divided by the original net asset value is the total return. The calculation of
the Fund's total return reflects the effect of compounding inasmuch as all
dividends and distributions are assumed to be reinvested in additional shares of
the Fund at net asset value. The Fund may quote total return for the period
prior to commencement of operations which would reflect the Portfolio's total
return (and that of its predecessor). If the fees or expenses of the Fund or the
Portfolio are waived or reimbursed, the Fund's performance will be higher.
Information about the performance of the Fund or other investments should not be
considered a representation of future Fund performance.
The table below indicates the cumulative and average annual total return on
a hypothetical investment of $1,000 in shares for the periods shown in the
table. Total return prior to the Fund's commencement of operations reflects the
total return of another investment company that invests in the Portfolio. This
total return has not been adjusted to reflect differences in operating expenses
between the Fund and such other investment company. If such adjustments were
made, performance would have been higher. Past performance is no guarantee of
future results. Investment return and principal value will fluctuate and shares,
when redeemed, may be worth more or less than their original cost.
VALUE OF A $1,000 INVESTMENT
VALUE OF
INVESTMENT INVESTMENT INVESTMENT TOTAL RETURN
PERIOD DATE ON 12/31/98 CUMULATIVE ANNUALIZED
- ----------------------------------------------------------------------------
Life of the Fund 8/4/89 $1,916.74 91.67% 7.16%
5 Years Ended 12/31/98 12/31/93 $1,400.82 40.08% 6.97%
1 Year Ended 12/31/98 12/31/97 $1,069.18 6.92% 6.92%
Comparative information about the Fund's current yield, net asset value and
total return, about the Prime Rate, LIBOR and other base lending rates, may also
be included in advertisements and communications of the Fund. Comparisons may be
made to CD rates; money market mutual funds and deposit accounts; and Treasury
bills.
Advertisements and communications about the Fund may include a comparison of
loan interests and other corporate debt instruments. These may describe the
credit agreements used in connection with loan interests. Moreover, the markets
for loan interests may be described. The comparison may also be made to relevant
indices and other asset classes.
The Fund's performance may be compared in publications to the performance of
various indices and investments for which reliable data is available, and to
averages, performance rankings or ratings, or other information prepared by
recognized mutual fund statistical services.
Information in advertisements and materials furnished to present and
prospective investors may include profiles of different types of investors
(i.e., investors with different goals and assets) and different investment
strategies for meeting specific financial goals. Information in advertisements
and materials furnished to present and prospective investors may also include
quotations (including editorial comments) and statistics concerning investing in
securities, as well as investing in particular types of securities and the
performance of such securities.
Information used in advertisements and in materials provided to present and
prospective shareholders may include descriptions of Eaton Vance and other Fund
and Portfolio service providers, their investment styles, other investment
products, personnel and Fund distribution channels.
BMR was one of the first investment management firms to manage a portfolio
of Senior Loans. BMR has former commercial bank lending officers and investment
bank corporate finance officers dedicated to this investment discipline. The
services of leading law and accounting firms are used as well.
The Fund (or Principal Underwriter) may provide information about Eaton
Vance, its affiliates and other investment advisers to the funds in the Eaton
Vance Family of Funds in sales material or advertisements provided to investors
or prospective investors. Such material or advertisements may also provide
information on the use of investment professionals by such investors.
FINANCIAL STATEMENTS
The audited financial statements of, and the independent auditors' report
for, the Fund and the Portfolio appear herein.
<PAGE>
EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 4, 1999
ASSETS:
Cash ......................................................... $100,000
Deferred initial offering expenses ........................... 76,100
--------
Total assets ............................................. $176,100
--------
LIABILITIES:
Initial offering expenses accrued ............................ $ 76,100
--------
Total Liabilities ........................................ $ 76,100
--------
NET ASSETS applicable to 10,000 shares of
beneficial interest issued and outstanding ..................... $100,000
========
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE..................... $10.00
======
NOTE TO FINANCIAL STATEMENT
Eaton Vance Institutional Senior Floating-Rate Fund was formed under a
Declaration of Trust dated February 22, 1999 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
10,000 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, are estimated to amount to $76,100. These
expenses will be deferred and amortized over the period shares are sold
beginning on the date of the Fund's initial public offering of its shares.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Trustees and Shareholders of
Eaton Vance Institutional Senior Floating-Rate Fund:
We have audited the accompanying statement of assets and liabilities of
Eaton Vance Institutional Senior Floating-Rate Fund as of March 4, 1999. This
financial statement is the responsibility of the Fund's management. Our
responsibility is to express an opinion on the financial statement 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Eaton Vance
Institutional Senior Floating-Rate Fund as of March 4, 1999, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 5, 1999
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
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PORTFOLIO OF INVESTMENTS
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(Expressed in United States Dollars)
Senior, Secured, Floating Rate Interests -- 93.06%(1)
PRINCIPAL
AMOUNT BORROWER VALUE
- -------------------------------------------------------------------------------
Aerospace/Defense -- 1.86%
- -------------------------------------------------------------------------------
Aerostructures Corporation
$12,017,949 Term loan, maturing December 31, 2003 $ 12,017,949
Fairchild Holdings Corporation
33,333 Revolving loan, maturing June 18, 2004 33,333
18,483,333 Term loan, maturing June 18, 2004 18,483,333
Hexcel Corporation
14,000,000 Term loan, maturing August 25, 2005 14,000,000
K&F Industries, Inc.
19,248,381 Term loan, maturing September 30, 2005 19,248,381
SWM Holdings, Inc.
4,112,956 Term loan, maturing May 27, 2005 4,112,956
4,827,859 Term loan, maturing May 27, 2006 4,827,859
Tri-Star, Inc.
14,749,495 Term loan, maturing September 30, 2003 14,749,495
United Defense Industries, Inc.
16,336,740 Term loan, maturing October 6, 2005 16,336,740
15,773,405 Term loan, maturing October 6, 2006 15,773,405
- -------------------------------------------------------------------------------
$ 119,583,451
- -------------------------------------------------------------------------------
Airlines -- 0.27%
- -------------------------------------------------------------------------------
Continental Airlines, Inc.
$17,256,924 Term loan, maturing December 31, 2006 $ 17,256,924
- -------------------------------------------------------------------------------
$ 17,256,924
- -------------------------------------------------------------------------------
Auto parts - Aftermarket -- 3.26%
- -------------------------------------------------------------------------------
AAS Holdings, LLC
$ 3,987,351 Term loan, maturing October 30, 2004 $ 3,987,351
CSK Auto, Inc.
20,880,000 Term loan, maturing October 31, 2003 20,880,000
Exide Corporation
37,758,954 Term loan, maturing March 18, 2005 37,758,954
Federal-Mogul Corporation
64,757,698 Term loan, maturing December 31, 2005 64,757,698
26,000,000 Term loan, maturing December 31, 2006 26,000,000
Keystone Automotive Operations, Inc.
12,382,813 Term loan, maturing March 31, 2006 12,382,813
Lund Industries, Incorporated
4,481,254 Term loan, maturing December 31, 2004 4,481,254
2,068,278 Term loan, maturing December 31, 2005 2,068,278
Plas-Tech (Engineered) Products, Inc.
5,806,372 Term loan, maturing April 1, 2002 5,806,372
3,941,176 Term loan, maturing April 1, 2004 3,941,176
Safelite Glass Corp.
13,750,000 Term loan, maturing December 17, 2004 13,750,000
13,750,000 Term loan, maturing December 17, 2005 13,750,000
- -------------------------------------------------------------------------------
$ 209,563,896
- -------------------------------------------------------------------------------
Automobile -- 0.85%
- -------------------------------------------------------------------------------
Accuride Corporation
$23,750,000 Term loan, maturing January 21, 2006 $ 23,750,000
Cambridge Industries, Inc.
25,740,000 Term loan, maturing June 30, 2005 25,740,000
Stanadyne Automotive Corporation
4,900,000 Term loan, maturing December 10, 2004 4,900,000
- -------------------------------------------------------------------------------
$ 54,390,000
- -------------------------------------------------------------------------------
Beverages - Soft Drink -- 0.32%
- -------------------------------------------------------------------------------
Dr. Pepper Bottling Holdings, Inc.
$15,000,000 Term loan, maturing December 31, 2005 $ 15,000,000
Mistic Brands, Inc.
2,884,047 Term loan, maturing June 1, 2004 2,884,047
2,884,047 Term loan, maturing June 1, 2005 2,884,047
- -------------------------------------------------------------------------------
$ 20,768,094
- -------------------------------------------------------------------------------
Broadcast Media -- 5.80%
- -------------------------------------------------------------------------------
Bahakel Communications
$ 9,900,000 Term loan, maturing December 31, 2005 $ 9,900,000
Benedek Broadcasting Corporation
14,666,112 Term loan, maturing May 1, 2001 14,666,112
6,947,220 Term loan, maturing November 1, 2002 6,947,220
3,475,310 Term loan, maturing December 31, 2004 3,475,310
1,866,859 Term loan, maturing December 31, 2005 1,866,859
Black Entertainment Television
13,000,000 Term loan, maturing June 30, 2006 13,000,000
Capstar Radio Broadcasting Corp
18,000,000 Term loan, maturing November 30, 2004 18,000,000
47,775,000 Term loan, maturing May 31, 2005 47,775,000
Chancellor Radio Broadcast Company
4,000,000 Term loan, maturing June 26, 2004 4,000,000
10,999,732 Revolving loan, maturing June 30, 2005 10,999,732
53,571,429 Term loan, maturing June 30, 2005 53,571,429
Comcorp Broadcasting, Inc.
5,853,659 Term loan, maturing September 30, 2005 5,853,659
Emmis Broadcasting Corporation
22,888,000 Term loan, maturing February 28, 2007 22,888,000
Intermedia Partners VI (Opco)
3,250,000 Term loan, maturing April 30, 2008 3,250,000
39,500,000 Term loan, maturing April 30, 2009 39,500,000
Jacor Communications Company
17,000,000 Term loan, maturing December 31, 2004 17,000,000
Lin Television Corp.
14,000,000 Term loan, maturing March 31, 2007 14,000,000
Retlaw Broadcasting, LLC
7,462,500 Term loan, maturing March 31, 2006 7,462,500
Sinclair Broadcast Group, Inc.
35,000,000 Term loan, maturing December 31, 2004 35,000,000
Spartan Communications, Inc.
12,500,000 Term loan, maturing June 30, 2005 12,500,000
TLMD Aquisition Co.
24,000,000 Term loan, maturing March 31, 2007 24,000,000
White Knight Broadcasting, Inc.
7,219,513 Term loan, maturing September 30, 2005 7,219,513
- -------------------------------------------------------------------------------
$ 372,875,334
- -------------------------------------------------------------------------------
Building Materials -- 1.69%
- -------------------------------------------------------------------------------
Dal-Tile Group, Inc
$ 1,458,314 Revolving loan, maturing December 31, 2002 $ 1,458,314
4,978,337 Term loan, maturing December 31, 2002 4,978,337
Dayton Superior Corporation
10,000,000 Term loan, maturing September 29, 2005 10,000,000
Falcon Building Products, Inc.
15,119,286 Term loan, maturing June 29, 2007 15,119,286
National Gypsum Company
64,923,291 Term loan, maturing September 20, 2003 64,923,291
Reliant Building Products, Inc.
12,355,769 Term loan, maturing March 31, 2004 12,355,769
- -------------------------------------------------------------------------------
$ 108,834,997
- -------------------------------------------------------------------------------
Cable Television -- 6.27%
- -------------------------------------------------------------------------------
Avalon Cable Holdings Finance, Inc.
$11,500,000 Term loan, maturing October 31, 2006 $ 11,500,000
Charter Comm. Ent. I
29,868,020 Term loan, maturing December 31, 2003 29,868,020
Charter Comm. Ent. II
18,000,000 Term loan, maturing December 31, 2007 18,000,000
Charter Comm. Properties LLC
7,500,000 Term loan, maturing September 30, 2004 7,500,000
10,500,000 Term loan, maturing June 30, 2007 10,500,000
Charter Comm. Southeast
35,000,000 Term loan, maturing December 31, 2007 35,000,000
Chelsea Communications, Inc.
19,875,000 Term loan, maturing December 31, 2004 19,875,000
Classic Cable, Inc.
15,000,000 Term loan, maturing October 31, 2007 15,000,000
Falcon Holding Group, L.P.
14,482,759 Term loan, maturing June 29, 2007 14,482,759
48,517,241 Term loan, maturing December 31, 2007 48,517,241
Frontiervision Operating Partners, L.P.
26,500,000 Term loan, maturing March 31, 2006 26,500,000
HPI Acquisition Co., LLC
10,000,000 Term loan, maturing December 31, 2006 10,000,000
Intermedia Partners Group VI (Holdco)
14,500,000 Term loan, maturing April 30, 2008 14,500,000
Intermedia Partners Group- IV
40,906,818 Term loan, maturing January 1, 2005 40,906,818
Marcus Cable Operating Company, L.P.
2,183,864 Revolving loan, maturing December 31, 2002 2,183,864
24,142,729 Term loan, maturing December 31, 2002 24,142,729
40,728,830 Term loan, maturing April 30, 2004 40,728,830
Renaissance Media LLC
1,374,886 Term loan, maturing March 31, 2006 1,374,886
13,936,364 Term loan, maturing September 30, 2006 13,936,364
TCI Pacific, Inc.
18,731,884 Term loan, maturing December 31, 2004 18,731,884
- -------------------------------------------------------------------------------
$ 403,248,395
- -------------------------------------------------------------------------------
Chemicals -- 3.16%
- -------------------------------------------------------------------------------
AOC,LLC.
$ 7,323,008 Term loan, maturing September 30, 2006 $ 7,323,008
Huntsman Corporation
1,307,993 Term loan, maturing September 30, 2003 1,307,993
14,392,804 Term loan, maturing December 31, 2004 14,392,804
5,163,656 Term loan, maturing December 31, 2005 5,163,660
Huntsman Specialty Chemicals Corporation
5,833,778 Term loan, maturing March 15, 2002 5,833,778
10,819,431 Term loan, maturing March 15, 2004 10,819,431
10,773,894 Term loan, maturing March 15, 2005 10,773,894
Lyondell Petrochemical Company
11,120,401 Term loan, maturing June 30, 1999 11,120,401
17,792,642 Term loan, maturing June 30, 2000 17,792,642
30,432,221 Term loan, maturing June 30, 2003 30,432,221
Metokote Corporation
9,500,000 Term loan, maturing November 2, 2005 9,500,000
Polymer Group, Inc.
10,936,000 Term loan, maturing December 20, 2005 10,936,000
Sterling Pulp Chemicals (Sask) Ltd.
6,633,750 Term loan, maturing June 30, 2005 6,633,750
STX Chemicals Corp. (Sterling)
20,914,654 Term loan, maturing September 30, 2004 20,914,654
Sybron Chemicals Inc.
19,256,250 Term loan, maturing July 31, 2004 19,256,250
The General Chemical Group, Inc.
13,930,000 Term loan, maturing June 14, 2004 13,930,000
6,965,000 Term loan, maturing June 15, 2004 6,965,000
- -------------------------------------------------------------------------------
$ 203,095,486
- -------------------------------------------------------------------------------
Chemicals - Specialty -- 0.32%
- -------------------------------------------------------------------------------
Huntsman Packaging Corp.
$12,500,000 Term loan, maturing June 30, 2006 $ 12,500,000
Vinings Industries, Inc.
8,139,837 Term loan, maturing March 31, 2005 8,139,837
- -------------------------------------------------------------------------------
$ 20,639,837
- -------------------------------------------------------------------------------
Coal -- 0.79%
- -------------------------------------------------------------------------------
Alliance Coal Corporation
$ 2,534,935 Term loan, maturing December 31, 2001 $ 2,534,935
6,272,389 Term loan, maturing December 31, 2002 6,272,389
P&L Coal Holdings Corporation
31,807,692 Term loan, maturing June 30, 2006 31,807,692
Quaker Coal Company
9,950,000 Term loan, maturing June 30, 2006 9,950,000
- -------------------------------------------------------------------------------
$ 50,565,016
- -------------------------------------------------------------------------------
Commercial Services -- 4.81%
- -------------------------------------------------------------------------------
Advanstar Communications Inc.
$18,962,000 Term loan, maturing April 30, 2005 $ 18,962,000
American Floral Services, Inc.
4,833,333 Term loan, maturing June 30, 2004 4,833,333
Brickman Holdings Corp
7,750,129 Term loan, maturing January 14, 2006 7,750,129
Caterair International Corporation
39,831,235 Term loan, maturing March 1, 2007 39,831,235
Dimac Corporation
5,714,286 Term loan, maturing June 30, 2006 5,714,286
4,285,714 Term loan, maturing December 31, 2006 4,285,714
Erickson Air-Crane Co.
8,842,500 Term loan, maturing December 31, 2004 8,842,500
Morris Material Handling, Inc.
6,965,000 Term loan, maturing March 31, 2003 6,965,000
Nebraska Book Company
7,442,308 Term loan, maturing March 31, 2006 7,442,308
Omni Services, Inc.
37,679,749 Term loan, maturing October 30, 2005 37,679,749
Outdoor Systems, Inc.
20,844,444 Term loan, maturing June 30, 2004 20,844,444
Outsourcing Solutions, Corp.
14,035,947 Term loan, maturing October 15, 2003 14,035,947
Philips Services Corp.
6,794,154 Term loan, maturing August 12, 2002* 4,755,907
PSI Acquisition Corporation
16,830,000 Term loan, maturing September 30, 2003 16,830,000
Saftey-Kleen Services, Inc
31,379,546 Term loan, maturing April 3, 2005 31,379,546
31,379,546 Term loan, maturing April 3, 2006 31,379,546
SC International Services, Inc.
22,405,871 Term loan, maturing March 1, 2007 22,405,871
United Rentals, Inc.
18,470,000 Term loan, maturing June 30, 2005 18,470,000
7,000,000 Term loan, maturing June 30, 2006 7,000,000
- -------------------------------------------------------------------------------
$ 309,407,515
- -------------------------------------------------------------------------------
Communications - Equip/Mfrs -- 1.98%
- -------------------------------------------------------------------------------
Amphenol Corporation
$32,786,250 Term loan, maturing May 19, 2006 $ 32,786,250
Communications & Power Industries, Inc.
1,977,527 Term loan, maturing August 11, 2000 1,977,527
8,035,807 Term loan, maturing August 12, 2002 8,035,807
Dynatech Corporation
10,539,165 Term loan, maturing March 31, 2005 10,539,165
10,539,354 Term loan, maturing March 31, 2006 10,539,354
10,539,354 Term loan, maturing March 31, 2007 10,539,354
Prodelin Holding Corporation
9,682,432 Term loan, maturing May 31, 2006 9,682,432
Superior Telecom, Inc.
26,000,000 Term loan, maturing November 27, 2005 26,000,000
Telex Communications, Inc.
4,961,538 Term loan, maturing November 6, 2004 4,961,538
Viasystems, Inc.
5,978,572 Term loan, maturing March 31, 2004 5,978,572
3,945,455 Term loan, maturing June 30, 2004 3,945,455
2,400,000 Term loan, maturing June 30, 2005 2,400,000
- -------------------------------------------------------------------------------
$ 127,385,454
- -------------------------------------------------------------------------------
Computer Software & Services -- 1.07%
- -------------------------------------------------------------------------------
Bridge Information Systems America
$ 8,250,000 Term loan, maturing May 29, 2004 $ 8,250,000
15,000,000 Term loan, maturing May 29, 2005 15,000,000
Decisionone Corporation
5,416,829 Revolving loan, maturing August 7, 2003 4,604,358
16,562,000 Term loan, maturing August 7, 2003 14,077,700
2,387,077 Term loan, maturing August 7, 2005 2,029,016
Paul G. Allen
25,000,000 Term loan, maturing June 10, 2003 25,000,000
- -------------------------------------------------------------------------------
$ 68,961,074
- -------------------------------------------------------------------------------
Computer Systems -- 0.20%
- -------------------------------------------------------------------------------
Genicom Corporation
$13,078,125 Term loan, maturing September 5, 2004 $ 13,078,125
- -------------------------------------------------------------------------------
$ 13,078,125
- -------------------------------------------------------------------------------
Conglomerates -- 2.19%
- -------------------------------------------------------------------------------
American Marketing Industries, Inc.
$ 1,095,000 Term loan, maturing August 31, 2001 $ 1,095,000
5,442,300 Term loan, maturing November 30, 2002 5,442,300
6,484,500 Term loan, maturing November 30, 2003 6,484,500
6,646,297 Term loan, maturing November 30, 2004 6,646,297
5,458,750 Term loan, maturing November 16, 2005 5,458,750
Fenway Holdings, L.L.C.
4,743,634 Term loan, maturing September 15, 2002 4,743,634
Fisher Scientific International Inc
18,576,818 Term loan, maturing January 21, 2007 18,576,818
Florida Panthers Holdings, Inc.
10,000,000 Term loan, maturing July 15, 1998 10,000,000
Seminis, Inc
9,561,201 Term loan, maturing December 31, 2003 9,561,201
14,341,802 Term loan, maturing December 31, 2004 14,341,802
SPX Corporation
53,366,250 Term loan, maturing September 30, 2006 53,366,250
5,000,000 Term loan, maturing January 21, 2007 5,000,000
- -------------------------------------------------------------------------------
$ 140,716,552
- -------------------------------------------------------------------------------
Containers - Metal & Glass -- 1.70%
- -------------------------------------------------------------------------------
Ball Corporation
$20,500,000 Term loan, maturing March 10, 2006 $ 20,500,000
Graham Packaging Company
7,579,688 Term loan, maturing January 31, 2006 7,579,688
8,316,027 Term loan, maturing January 31, 2007 8,316,027
Reid Plastics, Inc.
9,858,414 Term loan, maturing November 12, 2003 9,858,414
7,425,000 Term loan, maturing November 12, 2004 7,425,000
Russell-Stanley Holdings, Inc.
13,925,001 Term loan, maturing September 30, 2005 13,925,001
Silgan Holdings Inc.
16,461,775 Term loan, maturing June 30, 2005 16,461,775
Tekni-Plex, Inc.
17,949,288 Term loan, maturing March 31, 2006 17,949,288
Truseal Technologies, Inc.
7,274,182 Term loan, maturing July 1, 2004 7,274,182
- -------------------------------------------------------------------------------
$ 109,289,375
- -------------------------------------------------------------------------------
Containers - Paper -- 3.57%
- -------------------------------------------------------------------------------
Gaylord Container Corporation
$15,000,000 Term loan, maturing June 19, 2004 $ 15,000,000
IPC, Inc.
39,905,000 Term loan, maturing September 30, 2004 39,905,000
Jefferson Smurfit Corporation
25,000,000 Term loan, maturing March 31, 2005 25,000,000
68,000,000 Term loan, maturing March 24, 2006 68,000,000
RIC Holding, Inc.
5,631,526 Revolving loan, maturing February 28, 2003 5,631,526
15,038,657 Term loan, maturing February 28, 2003 15,038,657
10,405,607 Term loan, maturing February 28, 2004 10,405,607
4,123,123 Term loan, maturing August 28, 2004 4,123,123
Stone Container Corporation
8,851,066 Term loan, maturing April 1, 2000 8,851,066
1,224,903 Revolving loan, maturing October 1, 2003 1,224,903
4,850,000 Term loan, maturing October 1, 2003 4,850,000
19,755,690 Term loan, maturing October 1, 2004 19,755,690
Stronghaven, Inc.
9,303,448 Term loan, maturing May 15, 2004 9,303,448
2,416,467 Term loan, maturing May 15, 2005 2,416,467
- -------------------------------------------------------------------------------
$ 229,505,487
- -------------------------------------------------------------------------------
Cosmetics -- 1.44%
- -------------------------------------------------------------------------------
AM Cosmetics, Inc.
$ 948,718 Term loan, maturing June 30, 2003* $ 787,436
12,904,987 Term loan, maturing December 31, 2004* 10,711,139
Mary Kay Inc.
19,359,452 Term loan, maturing March 6, 2004 19,359,452
Revlon Consumer Products Corporation
6,243,250 Term loan, maturing May 29, 2002 6,243,250
55,446,750 Term loan, maturing May 29, 2003 55,446,750
- -------------------------------------------------------------------------------
$ 92,548,027
- -------------------------------------------------------------------------------
Drugs -- 0.22%
- -------------------------------------------------------------------------------
King Pharmaceuticals, Inc.
$ 7,000,000 Term loan, maturing December 31, 2005 $ 7,000,000
Robert's Pharmaceutical Corporation
6,965,000 Term loan, maturing June 30, 2003 6,965,000
- -------------------------------------------------------------------------------
$ 13,965,000
- -------------------------------------------------------------------------------
Electrical Power -- 0.16%
- -------------------------------------------------------------------------------
Bangor Hydro-Electric Company
$10,500,000 Term loan, maturing June 26, 2000 $ 10,500,000
- -------------------------------------------------------------------------------
$ 10,500,000
- -------------------------------------------------------------------------------
Electronics - Instrumentation -- 0.34%
- -------------------------------------------------------------------------------
Dynamic Details, Incorporated
$ 4,000,000 Term loan, maturing April 22, 2005 $ 4,000,000
Packard Bioscience Company
17,650,000 Term loan, maturing March 31, 2002 17,650,000
- -------------------------------------------------------------------------------
$ 21,650,000
- -------------------------------------------------------------------------------
Engineering & Construction -- 0.23%
- -------------------------------------------------------------------------------
International Technology Corporation
$ 4,950,658 Term loan, maturing June 11, 2006 $ 4,950,658
U.S. Aggregates, Inc.
9,750,000 Term loan, maturing March 31, 2006 9,750,000
- -------------------------------------------------------------------------------
$ 14,700,658
- -------------------------------------------------------------------------------
Entertainment -- 0.92%
- -------------------------------------------------------------------------------
Regal Cinemas Inc.
$16,642,702 Term loan, maturing May 27, 2006 $ 16,642,702
10,058,824 Term loan, maturing May 27, 2007 10,058,824
SFX Entertainment, Inc
22,500,000 Term loan, maturing March 31, 2006 22,500,000
United Artists Theatre Co.
4,000,000 Term loan, maturing April 21, 2006 4,000,000
6,000,000 Term loan, maturing April 21, 2007 6,000,000
- -------------------------------------------------------------------------------
$ 59,201,526
- -------------------------------------------------------------------------------
Equipment Leasing -- 0.04%
- -------------------------------------------------------------------------------
Rent-A-Center, Inc.
$ 1,189,640 Term loan, maturing January 31, 2006 $ 1,189,640
1,453,914 Term loan, maturing January 31, 2007 1,453,914
- -------------------------------------------------------------------------------
$ 2,643,554
- -------------------------------------------------------------------------------
Financial - Misc. -- 0.17%
- -------------------------------------------------------------------------------
Altamira Management Ltd.
$11,160,606 Term loan, maturing September 30, 2004 $ 11,160,606
- -------------------------------------------------------------------------------
$ 11,160,606
- -------------------------------------------------------------------------------
Food Wholesalers -- 0.51%
- -------------------------------------------------------------------------------
Fleming Companies Inc.
$25,877,111 Term loan, maturing July 25, 2004 $ 25,877,111
Volume Services, Inc.
7,000,000 Term loan, maturing December 31, 2002 7,000,000
- -------------------------------------------------------------------------------
$ 32,877,111
- -------------------------------------------------------------------------------
Foods -- 2.44%
- -------------------------------------------------------------------------------
Del Monte Corporation
$ 5,695,748 Term loan, maturing March 31, 2003 $ 5,695,748
36,851,270 Term loan, maturing March 31, 2005 36,851,270
Domino's Inc.
8,500,000 Term loan, maturing December 21, 2006 8,500,000
8,500,000 Term loan, maturing December 21, 2007 8,500,000
Eagle Family Foods, Inc
12,428,571 Term loan, maturing December 31, 2005 12,428,571
Favorite Brands International, Inc.
12,416,667 Term loan, maturing May 19, 2005 12,416,667
International Home Foods, Inc.
207,778 Revolving loan, maturing March 31, 2003 207,778
1,886,907 Term loan, maturing March 31, 2003 1,886,907
429,295 Revolving loan, maturing September 30, 2005 429,295
3,098,809 Term loan, maturing September 30, 2005 3,098,809
21,662,123 Term loan, maturing September 30, 2006 21,662,123
Purina Mills, Inc.
12,967,006 Term loan, maturing March 12, 2007 12,967,006
Southern Foods Group, L.P.
5,730,000 Term loan, maturing February 28, 2006 5,730,000
Specialty Foods Corporation
8,109,589 Revolving loan, maturing January 31, 2000 8,109,589
18,529,316 Term loan, maturing January 31, 2000 18,529,316
- -------------------------------------------------------------------------------
$ 157,013,079
- -------------------------------------------------------------------------------
Hardware & Tools -- 0.22%
- -------------------------------------------------------------------------------
Werner Holding Co.
$ 9,554,757 Term loan, maturing November 30, 2004 $ 9,554,757
4,912,875 Term loan, maturing November 30, 2005 4,912,875
- -------------------------------------------------------------------------------
$ 14,467,632
- -------------------------------------------------------------------------------
Health Care - Diversified -- 1.27%
- -------------------------------------------------------------------------------
Conmed Corporation
$12,765,306 Term loan, maturing December 30, 2004 $ 12,765,306
FHC Health Systems, Inc.
8,221,881 Term loan, maturing April 30, 2005 8,221,881
8,221,881 Term loan, maturing April 30, 2006 8,221,881
Integrated Health Services, Inc.
32,670,000 Term loan, maturing September 15, 2003 32,670,000
19,800,000 Term loan, maturing December 31, 2005 19,800,000
- -------------------------------------------------------------------------------
$ 81,679,068
- -------------------------------------------------------------------------------
Health Care - Misc. -- 5.95%
- -------------------------------------------------------------------------------
Alliance Imaging, Inc.
$ 1,980,000 Term loan, maturing December 18, 2003 $ 1,980,000
7,443,703 Term loan, maturing June 18, 2004 7,443,703
5,000,000 Term loan, maturing December 18, 2004 5,000,000
Community Health Systems, Inc.
14,154,565 Term loan, maturing December 31, 2003 14,154,565
14,154,565 Term loan, maturing December 31, 2004 14,154,565
10,602,261 Term loan, maturing December 31, 2005 10,602,261
Extendicare Health Services, Inc.
20,422,720 Term loan, maturing December 31, 2004 20,422,720
Genesis Health Ventures, Inc.
7,699,684 Term loan, maturing September 30, 2004 7,699,684
7,681,818 Term loan, maturing June 1, 2005 7,681,818
Imed Corporation
7,752,348 Term loan, maturing November 30, 2002 7,752,348
6,419,737 Term loan, maturing November 30, 2003 6,419,737
6,419,737 Term loan, maturing November 30, 2004 6,419,737
7,958,496 Term loan, maturing May 31, 2005 7,958,496
Kinetic Concepts, Inc.
5,197,500 Term loan, maturing December 31, 2004 5,197,500
5,197,500 Term loan, maturing December 31, 2005 5,197,500
Leiner Health Products Inc.
11,318,971 Term loan, maturing December 30, 2004 11,318,971
6,913,761 Term loan, maturing December 30, 2005 6,913,761
Magellan Health Services, Inc.
14,500,000 Term loan, maturing February 12, 2005 14,500,000
14,500,000 Term loan, maturing February 12, 2006 14,500,000
Mariner Post-Acute Network (f/k/a Paragon)
12,475,000 Term loan, maturing March 31, 2005 12,475,000
12,475,000 Term loan, maturing March 31, 2006 12,475,000
Mediq/PRN Life Support Services, Inc.
16,000,000 Term loan, maturing May 29, 2006 16,000,000
Meditrust Corporation
27,000,000 Term loan, maturing July 15, 1999 27,000,000
23,000,000 Term loan, maturing August 15, 1999 23,000,000
10,000,000 Term loan, maturing July 15, 2001 10,000,000
National Medical Care, Inc.
20,000,000 Term loan, maturing September 30, 2003 20,000,000
SMT Health Services
9,875,000 Term loan, maturing August 31, 2003 9,875,000
Sun Healthcare Group, Inc.
4,560,672 Term loan, maturing October 9, 2004 4,560,672
4,583,552 Term loan, maturing October 9, 2005 4,583,552
The Multicare Companies Inc.
7,896,566 Term loan, maturing September 30, 2004 7,896,566
2,625,525 Term loan, maturing June 1, 2005 2,625,525
Total Renal Care Holdings, Inc.
42,570,000 Term loan, maturing March 31, 2008 42,570,000
WGL Acquisition Corp.
14,017,663 Term loan, maturing July 10, 2004 14,017,663
- -------------------------------------------------------------------------------
$ 382,396,344
- -------------------------------------------------------------------------------
Heavy Duty Trucks & Parts -- 0.14%
- -------------------------------------------------------------------------------
Oshkosh Truck Corporation
$ 4,640,000 Term loan, maturing March 31, 2005 $ 4,640,000
4,640,000 Term loan, maturing March 31, 2006 4,640,000
- -------------------------------------------------------------------------------
$ 9,280,000
- -------------------------------------------------------------------------------
Hotels - Motels -- 3.07%
- -------------------------------------------------------------------------------
Allegro Resorts Corporation
$19,800,000 Term loan, maturing February 11, 2005 $ 19,800,000
Aztar Corporation
8,000,000 Term loan, maturing June 30, 2005 8,000,000
Extended Stay America
1,960,000 Revolving loan, maturing December 31, 2002 1,960,000
5,890,000 Term loan, maturing December 31, 2002 5,890,000
10,000,000 Term loan, maturing December 31, 2003 10,000,000
Felcor Suite Hotels, Inc.
22,000,000 Term loan, maturing July 1, 2001 22,000,000
Palace Station Hotel & Casino, Inc.
9,000,000 Term loan, maturing September 30, 2000 9,000,000
Patriot American Hospitality, Inc.
11,764,706 Term loan, maturing March 31, 1999 11,764,706
13,235,294 Term loan, maturing March 31, 2000 13,235,294
24,979,167 Term loan, maturing March 31, 2003 24,979,167
Starwood Hotels & Resorts
24,636,364 Term loan, maturing February 23, 1999 24,636,364
21,000,000 Term loan, maturing February 23, 2003 21,000,000
25,000,000 Term loan, maturing February 23, 2004 25,000,000
- -------------------------------------------------------------------------------
$ 197,265,531
- -------------------------------------------------------------------------------
Household Furnish & Appliances -- 2.21%
- -------------------------------------------------------------------------------
Alliance Laundry Holdings LLC.
$14,500,000 Term loan, maturing September 30, 2005 $ 14,500,000
Furniture Brands International, Inc.
40,000,000 Term loan, maturing June 27, 2007 40,000,000
Goodman Manufacturing Company, L.P.
22,500,000 Term loan, maturing July 31, 2005 22,500,000
Home Interiors & Gifts, Inc.
8,955,000 Term loan, maturing June 30, 2006 8,955,000
Sealy Mattress Company
12,061,213 Term loan, maturing December 15, 2004 12,061,213
8,687,273 Term loan, maturing December 15, 2005 8,687,273
11,101,517 Term loan, maturing December 15, 2006 11,101,517
Simmons Company
2,421,301 Term loan, maturing October 30, 2005 2,421,301
6,056,250 Term loan, maturing October 30, 2006 6,056,250
The Boyds Collection, Ltd.
5,000,000 Term loan, maturing April 21, 2005 5,000,000
10,819,445 Term loan, maturing April 21, 2006 10,819,445
- -------------------------------------------------------------------------------
$ 142,101,999
- -------------------------------------------------------------------------------
Household Products -- 1.23%
- -------------------------------------------------------------------------------
BMK, Inc.
$ 5,398,744 Term loan, maturing June 30, 2004 $ 5,398,744
Diamond Brands Operating Corp.
21,905 Revolving loan, maturing March 31, 2004 21,905
1,936,364 Term loan, maturing March 31, 2005 1,936,364
13,870,382 Term loan, maturing March 31, 2006 13,870,382
Playtex FP, Inc.
31,570,140 Term loan, maturing June 15, 2003 31,570,140
The Imperial Decor Home Group, Inc.
10,739,583 Term loan, maturing March 12, 2005 10,739,583
6,260,417 Term loan, maturing March 12, 2006 6,260,417
The Scotts Company
4,582,822 Term loan, maturing June 30, 2006 4,582,822
4,417,178 Term loan, maturing June 30, 2007 4,417,178
- -------------------------------------------------------------------------------
$ 78,797,535
- -------------------------------------------------------------------------------
Housewares -- 0.46%
- -------------------------------------------------------------------------------
Corning Consumer Products Company
$ 8,000,000 Term loan, maturing October 9, 2006 $ 8,000,000
Pillowtex Corporation
21,367,813 Term loan, maturing December 31, 2004 21,367,813
- -------------------------------------------------------------------------------
$ 29,367,813
- -------------------------------------------------------------------------------
Insurance Brokers -- 0.13%
- -------------------------------------------------------------------------------
Acordia, Inc.
$ 8,192,126 Term loan, maturing September 30, 2004 $ 8,192,126
- -------------------------------------------------------------------------------
$ 8,192,126
- -------------------------------------------------------------------------------
Leisure Time -- 3.15%
- -------------------------------------------------------------------------------
24 Hour Fitness, Inc.
$10,000,000 Term loan, maturing December 31, 2004 $ 10,000,000
Alliance Gaming Corporation
2,962,620 Term loan, maturing January 31, 2005 2,962,620
8,798,755 Term loan, maturing January 31, 2005 8,798,755
4,749,305 Term loan, maturing July 31, 2005 4,749,305
AMF Bowling Worldwide, Inc.
10,818,993 Term loan, maturing March 31, 2002 10,818,993
6,605,314 Term loan, maturing March 31, 2003 6,605,314
6,003,839 Term loan, maturing March 31, 2004 6,003,839
Amfac Resorts, Inc.
4,950,000 Term loan, maturing September 30, 2003 4,950,000
4,950,000 Term loan, maturing September 30, 2004 4,950,000
ASC East, Inc.
1,000,001 Term loan, maturing May 31, 2006 1,000,001
ASC West, Inc.
2,499,999 Term loan, maturing May 31, 2006 2,499,999
Interval International Corp.
11,847,969 Term loan, maturing December 16, 2005 11,847,969
9,318,125 Term loan, maturing December 15, 2006 9,318,125
2,529,844 Term loan, maturing December 16, 2006 2,529,844
KSL Recreation Group, Inc.
7,545,366 Revolving loan, maturing April 30, 2005 7,545,366
6,958,558 Term loan, maturing April 30, 2005 6,958,558
6,958,558 Term loan, maturing April 30, 2006 6,958,558
Metro-Goldwyn-Mayer Studios Inc.
25,000,000 Term loan, maturing March 31, 2004 25,000,000
Mikohn Gaming Corporation
10,000,000 Term loan, maturing April 1, 2004 10,000,000
Panavision International, L.P.
18,000,000 Term loan, maturing March 31, 2005 18,000,000
Premier Parks Inc.
18,392,857 Term loan, maturing March 31, 2006 18,392,857
Six Flags Theme Parks Inc.
22,761,353 Term loan, maturing November 30, 2004 22,761,353
- -------------------------------------------------------------------------------
$ 202,651,456
- -------------------------------------------------------------------------------
Machinery - Diversified -- 0.30%
- -------------------------------------------------------------------------------
Numatics, Incorporated
$ 2,081,250 Term loan, maturing March 19, 2004 $ 2,081,250
3,466,250 Term loan, maturing September 19, 2005 3,466,250
Thermadyne MFG LLC
6,965,000 Term loan, maturing May 22, 2005 6,965,000
6,965,000 Term loan, maturing May 22, 2006 6,965,000
- -------------------------------------------------------------------------------
$ 19,477,500
- -------------------------------------------------------------------------------
Manufacturing - Diversified -- 3.68%
- -------------------------------------------------------------------------------
Advanced Glassfiber Yarns LLC
$22,942,500 Term loan, maturing September 30, 2005 $ 22,942,500
AMSCAN Holdings, Inc.
8,370,000 Term loan, maturing December 31, 2004 8,370,000
Arteva B.V. (Kosa)
28,000,000 Term loan, maturing December 31, 2006 28,000,000
Desa International, Inc.
7,312,500 Term loan, maturing November 30, 2004 7,312,500
E-P Acquisition, Inc
5,700,000 Term loan, maturing August 31, 2005 5,700,000
8,538,600 Term loan, maturing August 31, 2006 8,538,600
Environmental Systems Products Hldgs., Inc.
622,223 Revolving loan, maturing September 30, 2004 622,223
3,888,889 Term loan, maturing September 30, 2004 3,888,889
18,000,000 Term loan, maturing September 30, 2005 18,000,000
Foamex L.P.
5,425,764 Revolving loan, maturing June 30, 2003 5,425,764
92,593 Term loan, maturing June 30, 2003 92,593
6,317,993 Term loan, maturing June 30, 2005 6,317,993
5,729,089 Term loan, maturing June 30, 2006 5,729,089
6,947,500 Term loan, maturing December 31, 2006 6,947,500
Handy & Harman
7,000,000 Term loan, maturing July 30, 2006 7,000,000
Impac Group, Inc.
15,000,000 Term loan, maturing June 30, 2005 15,000,000
Insilco Corporation
6,500,000 Term loan, maturing November 24, 2005 6,500,000
International Wire Group, Inc.
27,262,461 Term loan, maturing September 30, 2002 27,262,461
Matthew Warren, Inc.
7,713,768 Term loan, maturing May 31, 2005 7,713,768
2,849,422 Term loan, maturing May 31, 2006 2,849,422
Neenah Foundry Company
19,442,171 Term loan, maturing September 30, 2005 19,442,171
Panolam Industries, Inc.
724,501 Term loan, maturing November 1, 2002 724,501
4,521,474 Term loan, maturing November 1, 2004 4,521,474
2,577,180 Term loan, maturing November 1, 2005 2,577,180
1,900,008 Term loan, maturing May 1, 2006 1,900,008
Samsonite Corporation
7,000,000 Term loan, maturing June 24, 2005 7,000,000
Tokheim Corporation
6,000,000 Term loan, maturing September 30, 2004 6,000,000
- -------------------------------------------------------------------------------
$ 236,378,636
- -------------------------------------------------------------------------------
Medical Products & Supplies -- 1.42%
- -------------------------------------------------------------------------------
Arterial Vascular Engineering, Inc.
$25,935,000 Term loan, maturing September 30, 2004 $ 25,935,000
Nutramax Products, Inc.
12,368,973 Term loan, maturing September 19, 2005 12,368,973
Sterling Diagnostic Imaging, Inc.
14,985,577 Term loan, maturing December 30, 2005 14,985,577
Stryker Corporation
26,096,572 Term loan, maturing December 10, 2005 26,096,572
12,039,014 Term loan, maturing December 10, 2006 12,039,014
- -------------------------------------------------------------------------------
$ 91,425,136
- -------------------------------------------------------------------------------
Metals - Misc. -- 0.43%
- -------------------------------------------------------------------------------
C II Carbon, LLC
$10,949,987 Term loan, maturing June 30, 2008 $ 10,949,987
U.S. Silica Company
3,000,000 Revolving loan, maturing June 30, 2004 3,000,000
2,000,000 Term loan, maturing June 30, 2004 2,000,000
12,000,000 Term loan, maturing June 30, 2006 12,000,000
- -------------------------------------------------------------------------------
$ 27,949,987
- -------------------------------------------------------------------------------
Miscellaneous -- 1.59%
- -------------------------------------------------------------------------------
Coinmach Laundry Corporation
$32,615,513 Term loan, maturing June 30, 2005 $ 32,615,513
Kindercare Learning Centers, Inc.
8,386,332 Term loan, maturing February 13, 2006 8,386,332
La Petite Academy, Inc.
4,968,750 Term loan, maturing May 11, 2005 4,968,750
Prime Succession, Inc.
15,644,444 Term loan, maturing August 1, 2003 15,644,444
Rose Hills Company
9,667,565 Term loan, maturing December 1, 2003 9,667,565
Smarte Carte Corporation
451,613 Term loan, maturing December 31, 2001 451,613
2,828,571 Term loan, maturing June 30, 2003 2,828,571
4,320,000 Term loan, maturing June 30, 2004 4,320,000
Spalding Holdings Corp. (E&S)
1,956,469 Revolving loan, maturing September 30, 2003 1,760,822
456,376 Term loan, maturing September 30, 2003 410,739
3,655,538 Term loan, maturing September 30, 2004 3,289,984
3,655,538 Term loan, maturing September 30, 2005 3,289,985
2,104,604 Term loan, maturing March 30, 2006 1,894,144
Wesco International, Inc.
12,693,889 Term loan, maturing June 5, 2006 12,693,889
- -------------------------------------------------------------------------------
$ 102,222,351
- -------------------------------------------------------------------------------
Natural Gas/Distrib/Pipeline -- 0.23%
- -------------------------------------------------------------------------------
Kinder Morgan
$15,000,000 Term loan, maturing May 31, 2000 $ 15,000,000
- -------------------------------------------------------------------------------
$ 15,000,000
- -------------------------------------------------------------------------------
Office Equipment & Supplies -- 1.48%
- -------------------------------------------------------------------------------
CEX Holdings, Inc.
$14,925,000 Term loan, maturing April 25, 2005 $ 14,925,000
Cullman Ventures, Inc.
19,700,000 Term loan, maturing January 31, 2004 19,700,000
F.M.E. Corporation (Neopost)
20,776,506 Term loan, maturing June 24, 2006 20,776,506
Identity Group, Inc.
9,849,246 Term loan, maturing November 22, 2003 9,849,246
U.S. Office Products
30,000,000 Term loan, maturing June 9, 2006 30,000,000
- -------------------------------------------------------------------------------
$ 95,250,752
- -------------------------------------------------------------------------------
Paper & Forest Products -- 0.69%
- -------------------------------------------------------------------------------
Alabama River Newsprint
$21,947,818 Term loan, maturing December 31, 2002 $ 20,321,902
Bear Island Paper Company, LLC
23,735,032 Term loan, maturing December 31, 2005 23,735,032
- -------------------------------------------------------------------------------
$ 44,056,934
- -------------------------------------------------------------------------------
Property & Casualty Insurance -- 0.17%
- -------------------------------------------------------------------------------
TRG Holding Corporation
$10,875,000 Term loan, maturing January 7, 2003 $ 10,875,000
- -------------------------------------------------------------------------------
$ 10,875,000
- -------------------------------------------------------------------------------
Publishing -- 3.44%
- -------------------------------------------------------------------------------
Cygnus Publishing, Inc.
$13,331,250 Term loan, maturing June 5, 2005 $ 13,331,250
Morris Communications Corporation
19,800,000 Term loan, maturing June 30, 2005 19,800,000
Penton Media, Inc.
150,000 Revolving loan, maturing May 31, 2005 150,000
4,375,000 Term loan, maturing May 31, 2005 4,375,000
10,500,000 Term loan, maturing May 31, 2006 10,500,000
Primedia Inc.
9,610,000 Revolving loan, maturing June 30, 2004 9,610,000
31,500,000 Term loan, maturing June 30, 2004 31,500,000
R.H. Donnelley Inc.
4,629,144 Term loan, maturing December 5, 2005 4,629,144
5,320,856 Term loan, maturing December 5, 2006 5,320,856
Rand McNally & Company
997,500 Term loan, maturing April 30, 2005 997,500
4,488,750 Term loan, maturing April 30, 2006 4,488,750
Reiman Publications
5,500,000 Term loan, maturing November 30, 2005 5,500,000
The Petersen Companies, Inc.
8,188,125 Term loan, maturing March 31, 2007 8,188,125
The Sheridan Group, Inc.
6,965,000 Term loan, maturing January 30, 2005 6,965,000
Von Hoffman Press, Inc.
9,425,183 Term loan, maturing May 30, 2004 9,425,183
24,977,738 Term loan, maturing May 30, 2005 24,977,738
Yellow Book USA, L.P.
4,900,000 Term loan, maturing September 30, 2005 4,900,000
3,692,308 Term loan, maturing December 31, 2005 3,692,308
2,307,692 Term loan, maturing December 31, 2006 2,307,692
Ziff-Davis Publishing Company
5,328,947 Revolving loan, maturing March 31, 2005 5,328,947
7,105,263 Term loan, maturing March 31, 2005 7,105,263
38,000,000 Term loan, maturing March 31, 2006 38,000,000
- -------------------------------------------------------------------------------
$ 221,092,756
- -------------------------------------------------------------------------------
Publishing - Newspapers -- 1.67%
- -------------------------------------------------------------------------------
21ST Century Newspapers, Inc.
$ 9,428,750 Term loan, maturing September 15, 2005 $ 9,428,750
American Media Operations Inc.
15,000,000 Term loan, maturing March 31, 2004 15,000,000
Journal Register Company
47,000,000 Term loan, maturing September 30, 2006 47,000,000
The McClatchy Company
36,060,606 Term loan, maturing September 10, 2007 36,060,606
- -------------------------------------------------------------------------------
$ 107,489,356
- -------------------------------------------------------------------------------
Railroads -- 0.13%
- -------------------------------------------------------------------------------
I & M Rail Link, LLC
$ 804,000 Revolving loan, maturing March 31, 2004 $ 804,000
7,400,000 Term loan, maturing March 31, 2004 7,400,000
- -------------------------------------------------------------------------------
$ 8,204,000
- -------------------------------------------------------------------------------
Restaurants -- 1.07%
- -------------------------------------------------------------------------------
AFC Enterprises Inc
$ 3,990,000 Term loan, maturing June 30, 2004 $ 3,990,000
Applebee's International, Inc.
16,880,000 Term loan, maturing March 31, 2006 16,880,000
Friendly Ice Cream Corporation
1,285,714 Term loan, maturing November 15, 2004 1,285,714
6,428,571 Term loan, maturing November 15, 2005 6,428,571
Long John Silver's Restaurants Inc.
6,435,637 Term loan, maturing June 30, 2002* 5,792,074
Shoney's Inc.
4,095,940 Term loan, maturing April 30, 2002 4,095,940
8,603,438 Term loan, maturing April 30, 2003 8,603,438
Tricon Global Restaurants, Inc.
21,492,082 Term loan, maturing October 2, 2002 21,492,082
- -------------------------------------------------------------------------------
$ 68,567,819
- -------------------------------------------------------------------------------
Retail Stores - Drug Stores -- 0.18%
- -------------------------------------------------------------------------------
Duane Reade Inc.
$11,413,750 Term loan, maturing February 15, 2005 $ 11,413,750
- -------------------------------------------------------------------------------
$ 11,413,750
- -------------------------------------------------------------------------------
Retail Stores - Food Chains -- 0.72%
- -------------------------------------------------------------------------------
Pathmark Stores, Inc.
$29,210,440 Term loan, maturing December 15, 2001 $ 29,210,440
Star Markets Company, Inc.
8,292,429 Term loan, maturing December 31, 2001 8,292,429
8,967,402 Term loan, maturing December 31, 2002 8,967,402
- -------------------------------------------------------------------------------
$ 46,470,271
- -------------------------------------------------------------------------------
Retail Stores - General Mdse -- 0.18%
- -------------------------------------------------------------------------------
Tuesday Morning Corporation
$11,621,262 Term loan, maturing December 31, 2004 $ 11,621,262
- -------------------------------------------------------------------------------
$ 11,621,262
- -------------------------------------------------------------------------------
Retail Stores - Specialty -- 1.11%
- -------------------------------------------------------------------------------
Advanced Stores Company, Inc.
$30,942,500 Term loan, maturing April 15, 2006 $ 30,942,500
Griffith Consumers Company
9,360,255 Term loan, maturing December 31, 2002 9,360,255
12,971,734 Term loan, maturing December 31, 2003 12,971,734
Petro Shopping Centers, L.P.
6,429,648 Term loan, maturing December 31, 2003 6,429,648
Travelcenters of America, Inc.
11,981,073 Term loan, maturing March 27, 2005 11,981,073
- -------------------------------------------------------------------------------
$ 71,685,210
- -------------------------------------------------------------------------------
Steel -- 1.73%
- -------------------------------------------------------------------------------
Adience, Inc.
$12,474,580 Term loan, maturing April 30, 2005 $ 12,474,580
13,330,345 Term loan, maturing July 30, 2005 13,330,345
Ispat Inland, LP
11,940,000 Term loan, maturing July 15, 2005 11,940,000
11,940,000 Term loan, maturing July 16, 2006 11,940,000
Refraco Inc.
10,857,143 Term loan, maturing October 15, 2005 10,857,143
Ucar Global Enterprises, Inc.
14,933,333 Term loan, maturing December 31, 2002 14,933,333
35,500,000 Term loan, maturing December 31, 2003 35,500,000
- -------------------------------------------------------------------------------
$ 110,975,401
- -------------------------------------------------------------------------------
Telecommunications - Long Distance -- 3.65%
- -------------------------------------------------------------------------------
Access Communiations, Inc.
$ 9,711,800 Term loan, maturing December 31, 2004 $ 9,711,800
American Cellular Wireless LLC.
23,000,000 Term loan, maturing June 25, 2007 23,000,000
23,000,000 Term loan, maturing December 25, 2007 23,000,000
CCPR Services, Inc.
20,500,000 Term loan, maturing June 30, 2006 20,500,000
Cellular, Inc Financial Corporation
468,000 Revolving loan, maturing September 30, 2005 468,000
2,228,571 Term loan, maturing September 30, 2005 2,228,571
4,105,161 Term loan, maturing September 30, 2006 4,105,161
8,130,221 Term loan, maturing March 31, 2007 8,130,221
22,764,619 Term loan, maturing September 30, 2007 22,764,619
Davel Communications
4,000,000 Term loan, maturing June 23, 2005 4,000,000
Microcell Connexions
11,203,150 Term loan, maturing March 1, 2006 11,203,150
Nextel Communications, Inc.
35,000,000 Term loan, maturing September 30, 2006 35,000,000
Western PCS Holding Corporation
28,000,000 Term loan, maturing June 30, 2007 28,000,000
Western Wireless
35,000,000 Term loan, maturing March 31, 2002 35,000,000
7,500,000 Term loan, maturing March 31, 2004 7,500,000
- -------------------------------------------------------------------------------
$ 234,611,522
- -------------------------------------------------------------------------------
Telephone -- 0.44%
- -------------------------------------------------------------------------------
Mitel Corporation
$ 4,746,015 Term loan, maturing December 12, 2003 $ 4,746,015
MJD Communications
6,611,111 Term loan, maturing March 31, 2006 6,611,111
5,457,450 Term loan, maturing March 31, 2007 5,457,450
NSC Communications Corporation
11,297,059 Term loan, maturing October 1, 2003 11,297,059
- -------------------------------------------------------------------------------
$ 28,111,635
- -------------------------------------------------------------------------------
Textile - Apparel Mfg. -- 2.38%
- -------------------------------------------------------------------------------
CAF Holdings, Inc.
$ 3,911,765 Term loan, maturing June 30, 2002 $ 3,911,765
Cluett American Corp
9,950,000 Term loan, maturing May 18, 2005 9,950,000
Collins & Aikman Products Co.
18,000,000 Term loan, maturing June 30, 2005 18,000,000
Galey & Lord, Inc.
13,992,958 Term loan, maturing April 2, 2005 13,992,958
9,929,024 Term loan, maturing April 1, 2006 9,929,024
GFSI, Inc.
13,790,000 Term loan, maturing March 31, 2004 13,790,000
Globe Manufacturing Corp
12,100,000 Term loan, maturing July 31, 2006 12,100,000
Joan Fabrics Corporation
9,163,668 Term loan, maturing June 30, 2003 9,163,668
14,986,251 Term loan, maturing June 30, 2005 14,986,251
7,570,784 Term loan, maturing June 30, 2006 7,570,784
Renfro Corporation
4,800,000 Term loan, maturing November 15, 2003 4,800,000
Tartan Textile Services, Inc.
9,925,000 Term loan, maturing April 30, 2005 9,925,000
The William Carter Company
13,195,546 Term loan, maturing October 31, 2003 13,195,546
Walls Industries, Inc.
4,914,893 Term loan, maturing February 28, 2005 4,914,893
6,797,873 Term loan, maturing February 28, 2006 6,797,873
- -------------------------------------------------------------------------------
$ 153,027,762
- -------------------------------------------------------------------------------
Toys -- 0.29%
- -------------------------------------------------------------------------------
Hedstrom Corporation
$ 6,266,577 Term loan, maturing June 30, 2003 $ 6,266,577
12,084,435 Term loan, maturing June 30, 2005 12,084,435
- -------------------------------------------------------------------------------
$ 18,351,012
- -------------------------------------------------------------------------------
Transportation - Misc. -- 1.67%
- -----------------------------------------------------------------------
American Commercial Lines
$10,550,035 Term loan, maturing July 30, 2006 $ 10,550,035
20,379,121 Term loan, maturing June 30, 2007 20,379,121
Evergreen International Aviation, Inc.
20,441,661 Term loan, maturing April 30, 2002 20,441,661
1,656,341 Term loan, maturing April 30, 2003 1,656,341
Gemini Leasing, Inc.
7,500,000 Term loan, maturing December 31, 2002 7,500,000
MTL
14,476,238 Term loan, maturing August 28, 2005 14,476,238
12,399,231 Term loan, maturing February 28, 2006 12,399,231
NA Acquisition Corporation
7,425,000 Term loan, maturing March 30, 2006 7,425,000
Piedmont
6,389,831 Term loan, maturing July 23, 2006 6,389,831
6,389,831 Term loan, maturing July 23, 2007 6,389,831
- -------------------------------------------------------------------------------
$ 107,607,289
- -------------------------------------------------------------------------------
Total Senior, Secured, Floating-Rate Interests
(identified cost, $5,995,042,535) $5,983,489,418
- -------------------------------------------------------------------------------
Common Stocks and Warrants -- 0.09%
Shares/
Rights Security Value
- -------------------------------------------------------------------------------
806,708 AFC Enterprises Common Stock* $ 6,050,310
608 Classic Cable Common Stock Warrants* 0
34,364 PSI Acquisition Corporation Warrants* 0
- -------------------------------------------------------------------------------
Total Common Stocks and Warrants
(identified cost, $0) $ 6,050,310
- -------------------------------------------------------------------------------
Short-Term Investments -- 5.7%
Principal Maturity
Amount Date Borrower Rate Amount
- -------------------------------------------------------------------------------
$62,859,000 01/04/99 Associates Corporation of
North America 5.25% $ 62,831,500
75,000,000 01/07/99 Corporate Receivables 5.50% 74,931,250
86,460,000 01/08/99 Ford Motor Credit 5.53% 86,367,032
95,000,000 01/04/99 GE Capital Corporation 5.50% 94,956,458
45,000,000 01/08/99 Prudential Funding Corporation 5.80% 44,949,250
- -------------------------------------------------------------------------------
Total Short-Term Investments,
at amortized cost $ 364,035,490
- -------------------------------------------------------------------------------
Total Investments -- 98.8%
(identified cost, $6,357,118,455) $6,353,575,218
- -------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 1.2% $ 76,758,464
- -------------------------------------------------------------------------------
Total Net Assets -- 100% $6,430,333,682
- -------------------------------------------------------------------------------
* Non-income producing security.
(1) Senior secured floating rate interests often require prepayments from excess
cash flow or permit the borrower to repay at its election. The degree to
which borrowers repay, whether as a contractual requirement or at their
election, cannot be predicted with accuracy. As a result, the actual
remaining maturity may be substantially less than the stated maturities
shown. However, it is anticipated that the senior secured floating rate
interests will have an expected average life of approximately three years.
See notes to financial statements
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 31, 1998
(EXPRESSED IN UNITED STATES DOLLARS)
Assets
- -------------------------------------------------------------------------------
Investments, at value
(identified cost, $6,357,118,455) $6,353,575,218
Cash 35,301,659
Receivable for investments sold 6,389,759
Interest receivable 44,694,290
Miscellaneous receivable 101,715
Prepaid expenses 1,132,167
Deferred organization expenses 25,408
- -------------------------------------------------------------------------------
Total assets $6,441,220,216
- -------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------
Deferred facility fee income $ 10,476,834
Payable to affiliate for Trustees' fees 21,900
Other accrued expenses 387,800
- -------------------------------------------------------------------------------
Total liabilities $ 10,886,534
- -------------------------------------------------------------------------------
Net assets applicable to investors' interest in portfolio $6,430,333,682
- -------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $6,433,876,919
Net unrealized depreciation (computed on the basis
of identified cost) (3,543,237)
- -------------------------------------------------------------------------------
Total $6,430,333,682
- -------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(EXPRESSED IN UNITED STATES DOLLARS)
Investment Income
- ------------------------------------------------------------------------------
Interest $404,432,157
Facility fees earned 3,952,723
- ------------------------------------------------------------------------------
Total investment income $408,384,880
- ------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------
Investment adviser fee $ 44,484,347
Trustees fees and expenses 38,440
Custodian fee 1,148,768
Legal and accounting services 694,234
Interest 355,023
Amortization of organization expenses 6,205
Miscellaneous 817,685
- ------------------------------------------------------------------------------
Total expenses $ 47,544,702
- ------------------------------------------------------------------------------
Net investment income $360,840,178
- ------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
- ------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 936,231
- ------------------------------------------------------------------------------
Net realized gain $ 936,231
- ------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ (6,219,087)
- ------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ (6,219,087)
- ------------------------------------------------------------------------------
Net realized and unrealized loss $ (5,282,856)
- ------------------------------------------------------------------------------
Net increase in net assets from operations $355,557,322
- ------------------------------------------------------------------------------
See notes to financial statements
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
(EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
INCREASE (DECREASE) YEAR ENDED YEAR ENDED
IN NET ASSETS DECEMBER 31, 1998 DECEMBER 31, 1997
- -----------------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income $ 360,840,178 $ 254,014,218
Net realized gain (loss) 936,231 (9,000,530)
Net change in unrealized appreciation
(depreciation) (6,219,087) 8,549,067
- -----------------------------------------------------------------------------------------
Net increase in net assets from operations $ 355,557,322 $ 253,562,755
- -----------------------------------------------------------------------------------------
Capital transactions --
Contributions $ 3,159,636,461 $1,646,867,281
Withdrawals (1,119,932,026) (875,432,567)
- -----------------------------------------------------------------------------------------
Net increase in net assets from capital
transactions $ 2,039,704,435 $ 771,434,714
- -----------------------------------------------------------------------------------------
Net increase in net assets $ 2,395,261,757 $1,024,997,469
- -----------------------------------------------------------------------------------------
Net Assets
- -----------------------------------------------------------------------------------------
At beginning of year $ 4,035,071,925 $3,010,074,456
- -----------------------------------------------------------------------------------------
At end of year $ 6,430,333,682 $4,035,071,925
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
(EXPRESSED IN UNITED STATES DOLLARS)
YEAR ENDED
INCREASE (DECREASE) IN CASH DECEMBER 31, 1998
- -----------------------------------------------------------------------------
Cash flows from (used for) operating activities --
Purchases of loan interests $(2,335,082,968)
Proceeds from sales and principal repayments (5,941,701)
Interest received 385,524,441
Facility fees received 10,058,902
Interest paid (277,278)
Operating expenses paid (47,249,895)
Net increase in short-term investments (104,839,519)
- -----------------------------------------------------------------------------
Net cash used for operating activities $(2,097,808,018)
- -----------------------------------------------------------------------------
Cash flows from (used for) financing activities --
Proceeds from capital contributions $ 3,159,636,461
Payments for capital withdrawals (1,119,932,026)
- -----------------------------------------------------------------------------
Net cash provided from financing activities $ 2,039,704,435
- -----------------------------------------------------------------------------
Net decrease in cash $ (58,103,583)
- -----------------------------------------------------------------------------
Cash at beginning of year $ 93,405,242
- -----------------------------------------------------------------------------
Cash at end of year $ 35,301,659
- -----------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET ASSETS
FROM OPERATIONS TO NET CASH USED FOR
OPERATING ACTIVITIES
- ----------------------------------------------------------------------------
Net increase in net assets from operations $ 355,557,322
Increase in receivable for investments sold (5,941,701)
Increase in interest receivable (18,907,716)
Increase in prepaid expenses (152,494)
Decrease in deferred organizational expense 6,205
Increase in deferred facility fee income 6,106,179
Increase in payable to affiliate 14,437
Increase in accrued expenses 143,176
Net increase in investments (2,434,633,426)
- -----------------------------------------------------------------------------
Net cash used for operating activities $(2,097,808,018)
- -----------------------------------------------------------------------------
See notes to financial statements
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
FINANCIAL STATEMENTS CONT'D
- -------------------------------------------------------------------------------
SUPPLEMENTARY DATA (EXPRESSED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1998 1997 1996 1995(1)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating expenses 0.93% 0.94% 0.98% 1.01%(2)
Interest expense 0.01% 0.02% 0.04% 0.13%(2)
Net investment income 7.12% 7.12% 7.17% 7.95%(2)
Portfolio turnover 56% 81% 75% 39%
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (000's
omitted) $6,430,334 $4,035,072 $3,010,074 $1,621,339
- ----------------------------------------------------------------------------------------------------------------------------------
(1) For the period from the start of business, February 22, 1995, to December 31, 1995.
(2) Annualized.
</TABLE>
See notes to financial statements
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
(EXPRESSED IN UNITED STATES DOLLARS)
1 Significant Accounting Policies
- --------------------------------------------------------------------------------
Senior Debt Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a non-diversified closed-end investment company which
was organized as a trust under the laws of the State of New York on May 1,
1992. The Declaration of Trust permits the Trustees to issue interests in
the Portfolio. The following is a summary of significant accounting policies
of the Portfolio. The Policies are in conformity with accounting principles
generally accepted in the United States of America.
A Investment Valuation -- The Portfolio's investments in interests in loans
(Loan Interests) are valued at fair value by the Portfolio's investment
adviser, Boston Management and Research, under procedures established by the
Trustees as permitted by Section 2(a)(41) of the Investment Company Act of
1940. Such procedures include the consideration of relevant factors, data
and information relating to fair value, including (i) the characteristics of
and fundamental analytical data relating to the Loan Interest, including the
cost, size, current interest rate, period until next interest rate reset,
maturity and base lending rate of the Loan Interest, the terms and
conditions of the loan and any related agreements and the position of the
loan in the borrower's debt structure; (ii) the nature, adequacy and value
of the collateral, including the Portfolio's rights, remedies and interests
with respect to the collateral; (iii) the creditworthiness of the borrower,
based on evaluations of its financial condition, financial statements and
information about the borrower's business, cash flows, capital structure and
future prospects; (iv) information relating to the market for the Loan
Interest including price quotations for and trading in the Loan Interest and
interests in similar loans and the market environment and investor attitudes
towards the Loan Interest and interests in similar loans; (v) the reputation
and financial condition of the agent bank and any intermediate participant
in the loan; and (vi) general economic and market conditions affecting the
fair value of the Loan Interest. Other portfolio securities (other than
short-term obligations, but including listed issues) may be valued on the
basis of prices furnished by one or more pricing services which determine
prices for normal, institutional-size trading units of such securities using
market information, transactions for comparable securities and various
relationships between securities which are generally recognized by
institutional traders. In certain circumstances, portfolio securities will
be valued at the last sales price on the exchange that is the primary market
for such securities, or the last quoted bid price for those securities for
which the over-the-counter market is the primary market or for listed
securities in which there were no sales during the day. The value of
interest rate swaps will be determined in accordance with a discounted
present value formula and then confirmed by obtaining a bank quotation.
Short-term obligations which mature in sixty days or less are valued at
amortized cost, if their original term to maturity when acquired by the
Portfolio was 60 days or less or are valued at amortized cost using their
value on the 61st day prior to maturity, if their original term to maturity
when acquired by the Portfolio was more then 60 days, unless in each case
this is determined not to represent fair value. Repurchase agreements are
valued at cost plus accrued interest. Other portfolio securities for which
there are no quotations or valuations are valued at fair value as determined
in good faith by or on behalf of the Trustees.
B Income -- Interest income from Loan Interests is recorded on the accrual
basis at the then-current interest rate, while all other interest income is
determined on the basis of interest accrued, adjusted for amortization of
premium or discount when required for federal income tax purposes. Facility
fees received are recognized as income over the expected term of the loan.
C Income Taxes -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes
on any taxable income of the Portfolio because each investor in the
Portfolio is ultimately responsible for the payment of any taxes. Since some
of the Portfolio's investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolio, the Portfolio
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for its investors to
satisfy them. The Portfolio will allocate at least annually among its
investors each investor's distributive share of the Portfolio's net
investment income, net realized capital gains, and any other items of
income, gain, loss, deduction or credit.
D Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Other -- Investment transactions are accounted for on a trade date basis.
F Use of Estimates -- The preparation of the financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expense during
the reporting period. Actual results could differ from those estimates.
2 Investment Adviser Fee and Other Transactions with Affiliates
- --------------------------------------------------------------------------------
The investment advisory fee is paid to Boston Management and Research (BMR)
as compensation for investment advisory services rendered to the Portfolio.
The fee is computed at a monthly rate of 19/240 of 1% (0.95% annually) of
the Portfolio's average daily gross assets up to and including $1 billion
and at reduced rates as daily gross assets exceed that level. For the year
ended December 31, 1998, the effective annual rate, based on average daily
gross assets, was 0.88% and amounted to $44,484,347. Except as to Trustees
of the Portfolio who are not members of BMR's organization, officers and
Trustees receive remuneration for their services to the Portfolio out of
such investment adviser fee.
Certain of the officers and Trustees of the Portfolio are officers and
directors/trustees of BMR. Trustees of the Portfolio that are not affiliated
with the Investment Adviser may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of the Trustees
Deferred Compensation Plan. For the year ended December 31, 1998, no
significant amounts have been deferred.
3 Investments
- --------------------------------------------------------------------------------
The Portfolio invests primarily in Loan Interests. The ability of the
issuers of the Loan Interests to meet their obligations may be affected by
economic developments in a specific industry. The cost of purchases and the
proceeds from principal repayments and sales of Loan Interests for the year
ended December 31, 1998 aggregated $4,976,032,496 and $2,639,835,870,
respectively.
4 Short-Term Debt and Credit Agreements
- --------------------------------------------------------------------------------
On March 13, 1998, the Portfolio entered a $400 million unsecured line of
credit with a group of banks to permit the Portfolio to invest in accordance
with its investment practices. Interest is charged under the credit
agreement at the bank's base rate or at an amount above LIBOR. Interest
expense includes a commitment fee of approximately $257,753 which is
computed at the annual rate of 0.08% of the credit agreement. There were no
significant borrowings under this agreement during the year ended December
31, 1998. As of December 31, 1998, the Portfolio had no borrowings
outstanding.
5 Federal Income Tax Basis of Investment Securities
- --------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in the value of the
investments owned at December 31, 1998, as computed on a federal income tax
basis, were as follows:
Aggregate cost $6,357,118,455
---------------------------------------------------------------------------
Gross unrealized appreciation $ 6,050,310
Gross unrealized depreciation (9,593,547)
---------------------------------------------------------------------------
Net unrealized depreciation $ (3,543,237)
---------------------------------------------------------------------------
<PAGE>
SENIOR DEBT PORTFOLIO AS OF DECEMBER 31, 1998
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Trustees and Investors
of Senior Debt Portfolio:
- --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Senior Debt Portfolio (the
Portfolio) as of December 31, 1998, the related statements of operations and
cash flows for the year then ended, the statements of changes in net assets
for the years ended December 31, 1998 and 1997, and the supplementary data for
each of the years in the three-year period ended December 31, 1998 and for the
period from the start of business, February 22, 1995, to December 31, 1995
(all expressed in U.S. Dollars). These financial statements and supplementary
data are the responsibility of the Portfolio's management. Our responsibility
is to express an opinion on these financial statements and supplementary data
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and supplementary data are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities and Loan Interests owned at December 31, 1998 by
correspondence with the custodian and selling or agent banks; where replies
were not received from selling or agent banks, we performed other auditing
procedures. 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 audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data present
fairly, in all material respects, the financial position of Senior Debt
Portfolio as of December 31, 1998, and the results of its operations, its cash
flows, the changes in net assets and its supplemental data for the respective
stated periods in conformity with accounting principles generally accepted in
the United States of America.
As discussed in Note 1A, the financial statements include Loan Interests and
certain other securities held by the Portfolio valued at $5,989,539,728
(93.15% of net assets of the Portfolio), which values are fair values
determined by the Portfolio's investment adviser in the absence of actual
market values. Determination of fair value involves subjective judgment, as
the actual market value of a particular Loan Interest or security can be
established only by negotiations between the parties in a sale transaction. We
have reviewed the procedures established by the Trustees and used by the
Portfolio's investment adviser in determining the fair values of such Loan
Interests and securities and have inspected underlying documentation, and in
the circumstances, we believe that the procedures are reasonable and the
documentation appropriate.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 12, 1999
<PAGE>
APPENDIX A
RATINGS OF CORPORATE BONDS
DESCRIPTION OF CORPORATE BOND RATINGS OF S&P:
AAA -- Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.
BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they 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
bonds in this category than for bonds in higher rated categories.
BB -- Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face 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.
B -- Bonds rated B have a greater vulnerability to default but presently
have the capacity to meeting interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC -- Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
CC -- The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.
C -- The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D -- Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus (+) or a
minus (-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
DESCRIPTION OF BOND RATINGS OF MOODY'S:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
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, therefore, not well
safeguarded during both 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 present 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.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative standing
within the major rating categories, except in the Aaa category and in the
categories below B. The modifier 1 indicates a ranking for the security in the
higher end of a rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates a ranking in the lower end of a rating category.
<PAGE>
[logo] Investing
EATON VANCE for the
- ----------- 21st
Century(R)
- -------------------------------------------------------------------------------
EATON VANCE INSTITUTIONAL
SENIOR FLOATING-RATE FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 3, 1999
- -------------------------------------------------------------------------------
INVESTMENT ADVISER OF SENIOR DEBT PORTFOLIO
Boston Management and Research, 255 State Street, Boston, MA 02109
ADMINISTRATOR OF EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
Eaton Vance Management, 255 State Street, Boston, MA 02109
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 255 State Street, Boston, MA 02109
(800) 225-6265
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
AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110
ISFRSAI
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(1) FINANCIAL STATEMENTS:
INCLUDED IN PART A:
Not Applicable
INCLUDED IN PART B:
Financial Statements for EATON VANCE INSTITUTIONAL SENIOR
FLOATING-RATE FUND:
Statement of Assets and Liabilities as of March 4, 1999
Independent Auditors' Report
Financial Statements for SENIOR DEBT PORTFOLIO:
Portfolio of Investments as of December 31, 1998
Statement of Assets and Liabilities as of December 31, 1998
Statement of Operations for the year ended December 31, 1998
Statements of Changes in Net Assets for each of the two years
ended December 31, 1998
Statement of Cash Flows for the year ended December 31, 1998
Supplementary Data for each of the three years ended
December 31, 1998 and for the period from the start of
business, February 22, 1995, to December 31, 1995
Notes to Financial Statements
Independent Auditors' Report
(2) EXHIBITS:
(a) Agreement and Declaration of Trust dated February 22, 1999 filed
herewith.
(b) By-Laws filed herewith.
(c) Not applicable
(d) Not applicable
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h) (a) Distribution Agreement dated February 22, 1999 filed
herewith.
(b) Selling Group Agreement between Eaton Vance Distributors,
Inc. and Authorized Dealers filed as Exhibit (6)(b) to
Post-Effective Amendment No. 61 to the Registration
Statement of Eaton Vance Growth Trust (File Nos. 2-22019 and
811-1241) and incorporated herein by reference.
(c) Schedule of Dealer Discounts and Sales Charges filed as
Exhibit (6)(c) to Post- Effective Amendment No. 59 to the
Registration Statement of Eaton Vance Growth Trust (File
Nos. 2-22019 and 811-1241) and incorporated herein by
reference.
(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) (a) Custodian Agreement dated February 22, 1999 filed herewith.
(b) Amendment to Master Custodian Agreement with Investors Bank
& Trust Company dated December 21, 1998 filed as Exhibit
(g)(3) to the Registration Statement of Eaton Vance
Municipals Trust (File Nos. 33-572, 811-4409) (Accession No.
0000950156-99-000050) and incorporated herein by reference.
(k) (a) Administration Agreement dated February 22, 1999 filed
herewith.
(b) Transfer Agency Agreement as of January 1, 1998 filed as
Exhibit (k)(b) to the Registration Statement on Form N-2 of
Eaton Vance Advisers Senior Floating-Rate Fund (File Nos.
333-46853, 811-08671) (Accession No. 0000950156-98-000172)
and incorporated herein by reference.
(l) Opinion and Consent of Counsel dated March 5, 1999 filed
herewith.
(m) Not applicable
(n) (a) Consent of Independent Auditors for Eaton Vance
Institutional Senior Floating- Rate Fund filed herewith.
(b) Consent of Independent Auditors for Senior Debt Portfolio
filed herewith.
(o) Not applicable
(p) Letter Agreement with Eaton Vance Management dated March 4, 1999
filed herewith.
(q) Not applicable
(r) (a) Financial Data Schedule for Eaton Vance Institutional Senior
Floating-Rate Fund filed herewith.
(b) Financial Data Schedule for the fiscal year ended December
31, 1998 for Senior Debt Portfolio filed herewith.
(s) Power of Attorney for Eaton Vance Institutional Senior
Floating-Rate Fund dated February 22, 1999 filed herewith.
(t) Power of Attorney for Senior Debt Portfolio dated February 22,
1999 filed herewith.
ITEM 25. MARKETING ARRANGEMENTS
Not Applicable.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the approximate expenses incurred in
connection with the offerings of Registrant:
Registration fees ................................... $ 55,600
National Association of Securities Dealers, Inc. Fees $ 20,500
Printing (other than stock certificates) ............ $ 12,500
Engraving and printing stock certificates ........... $ 1,000
Fees and expenses of qualification under
state securities laws
(excluding fees of counsel) ....................... $ 19,455
Accounting fees and expenses ........................ $ 5,000
Legal fees and expenses ............................. $ 2,000
--------
Total ............................................ $116,055
========
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
Shares of beneficial interest 1
as of
March 5, 1999
ITEM 29. INDEMNIFICATION
The Registrant's By-Laws filed herewith 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.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Reference is made to: (i) the information set forth under the captions
"Management of the Fund and the Portfolio" in the Prospectus and "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 Forms ADV of Eaton Vance Management (File No.
801-15930) and Boston Management and Research (File No. 801-43127) 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 and Boston Management and Research.
ITEM 32. MANAGEMENT SERVICES
None.
ITEM 33. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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 the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the continuous offering of the shares; and.
(4) 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, any Statement of Additional Information.
<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 5th
day of March, 1999.
EATON VANCE INSTITUTIONAL SENIOR
FLOATING-RATE FUND
By /s/ JAMES B. HAWKES
--------------------------
JAMES B. HAWKES, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Trustee, President and
/s/ JAMES B. HAWKES Principal Executive Officer March 5, 1999
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JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer March 5, 1999
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JAMES L. O'CONNOR
JESSICA M. BIBLIOWIC Trustee March 5, 1999
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JESSICA M. BIBLIOWIC
DONALD R. DWIGHT* Trustee March 5, 1999
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DONALD R. DWIGHT
SAMUEL L. HAYES, III Trustee March 5, 1999
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SAMUEL L. HAYES, III
NORTON H. REAMER* Trustee March 5, 1999
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NORTON H. REAMER
LYNN A. STOUT* Trustee March 5, 1999
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LYNN A. STOUT
JACK L. TREYNOR* Trustee March 5, 1999
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JACK L. TREYNOR
*By: /s/ ALAN R. DYNNER
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ALAN R. DYNNER
Attorney-in-fact
<PAGE>
SIGNATURES
Senior Debt Portfolio has duly caused the Registration Statement on Form N-2
of Eaton Vance Institutional Senior Floating-Rate Fund to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston and
Commonwealth of Massachusetts, on the 5th day of March, 1999.
SENIOR DEBT PORTFOLIO
By /s/ JAMES B. HAWKES
--------------------------
JAMES B. HAWKES, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Trustee, President and
/s/ JAMES B. HAWKES Principal Executive Officer March 5, 1999
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JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer March 5, 1999
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JAMES L. O'CONNOR
JESSICA M. BIBLIOWIC Trustee March 5, 1999
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JESSICA M. BIBLIOWIC
DONALD R. DWIGHT* Trustee March 5, 1999
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DONALD R. DWIGHT
SAMUEL L. HAYES, III Trustee March 5, 1999
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SAMUEL L. HAYES, III
NORTON H. REAMER* Trustee March 5, 1999
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NORTON H. REAMER
LYNN A. STOUT* Trustee March 5, 1999
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LYNN A. STOUT
JACK L. TREYNOR* Trustee March 5, 1999
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JACK L. TREYNOR
*By: /s/ ALAN R. DYNNER
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ALAN R. DYNNER
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
EXHIBITS DESCRIPTION PAGE
- -------- ----------- ----
(a) Agreement and Declaration of Trust dated February 22, 1999
(b) By-Laws
(h)(a) Distribution Agreement dated February 22, 1999
(j)(a) Custodian Agreement dated February 22, 1999
(k)(a) Administration Agreement dated February 22, 1999
(l) Opinion and Consent of Counsel dated March 5, 1999
(n)(a) Consent of Independent Auditors for Eaton Vance
Institutional Senior Floating-Rate Fund
(n)(b) Consent of Independent Auditors for Senior Debt Portfolio
(p) Letter Agreement with Eaton Vance Management dated
March 4, 1999
(r)(a) Financial Data Schedule for Eaton Vance Institutional
Senior Floating-Rate Fund
(r)(b) Financial Data Schedule for the fiscal year ended
December 31, 1998 for Senior Debt Portfolio
(s) Power of Attorney for Eaton Vance Institutional Senior
Floating-Rate Fund dated February 22, 1999
(t) Power of Attorney for Senior Debt Portfolio dated
February 22, 1999
<PAGE>
EXHIBIT 99.(a)
EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
-------------------
AGREEMENT AND DECLARATION OF TRUST
Dated February 22, 1999
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
ARTICLE I - NAME AND DEFINITIONS..................................................................................4
Section 1.1. Name.....................................................................................4
Section 1.2. Definitions..............................................................................4
ARTICLE II - TRUSTEES 6
Section 2.1. Management of the Trust..................................................................6
Section 2.2. General Powers...........................................................................6
Section 2.3. Investments..............................................................................6
Section 2.4. Legal Title..............................................................................8
Section 2.5. By-Laws..................................................................................9
Section 2.6. Distribution and Repurchase of Shares....................................................9
Section 2.7. Delegation...............................................................................9
Section 2.8. Collection and Payment...................................................................9
Section 2.9. Expenses.................................................................................9
Section 2.10. Committees...............................................................................9
Section 2.11. Miscellaneous Powers....................................................................10
Section 2.12. Litigation..............................................................................10
ARTICLE III - CONTRACTS..........................................................................................11
Section 3.1. Principal Underwriter...................................................................11
Section 3.2. Investment Adviser......................................................................11
Section 3.3. Administrator...........................................................................11
Section 3.4. Other Service Providers.................................................................11
Section 3.5. Transfer Agents.........................................................................11
Section 3.6. Custodian...............................................................................12
Section 3.7. Affiliations............................................................................12
ARTICLE IV - LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS.......................................12
Section 4.1. No Personal Liability of Shareholders, Trustees, Officers and Employees.................12
Section 4.2. Trustee's Good Faith Action; Advice to Others; No Bond or Surety........................12
Section 4.3. Indemnification.........................................................................13
Section 4.4. No Duty of Investigation................................................................13
Section 4.5. Reliance on Records and Experts.........................................................13
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ARTICLE V - SHARES OF BENEFICIAL INTEREST........................................................................14
Section 5.1. Shares of Beneficial Interest...........................................................14
Section 5.2. Voting Powers...........................................................................14
Section 5.3. Rights of Shareholders..................................................................14
Section 5.4. Trust Only..............................................................................15
Section 5.5. Issuance of Shares......................................................................15
ARTICLE VI - REDEMPTIONS AND REPURCHASES.........................................................................16
Section 6.1. Redemptions and Repurchases of Shares...................................................16
Section 6.2. Manner of Payment.......................................................................16
Section 6.3. Involuntary Redemption..................................................................16
ARTICLE VII - DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS.....................................16
Section 7.1. Net Asset Value.........................................................................16
Section 7.2. Dividends and Distributions.............................................................17
Section 7.3. Power to Modify Foregoing Procedures....................................................18
ARTICLE VIII - DURATION; TERMINATION OF TRUST OR A CLASS OR SERIES; MERGERS; AMENDMENTS..........................18
Section 8.1. Duration................................................................................18
Section 8.2. Merger or Termination of the Trust or a Series or a Class...............................18
Section 8.3. Amendments..............................................................................19
Section 8.4. Certain Transactions....................................................................19
Section 8.5. Conversion..............................................................................21
ARTICLE IX - MISCELLANEOUS.......................................................................................21
Section 9.1. Use of the Words "Eaton Vance"..........................................................21
Section 9.2. Notices.................................................................................21
Section 9.3. Filing of Copies, References, Headings and Counterparts.................................22
Section 9.4. Applicable Law..........................................................................22
Section 9.5. Provisions in Conflict with Law or Regulations..........................................22
</TABLE>
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<PAGE>
AGREEMENT AND DECLARATION OF TRUST, made February 22, 1999 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
Institutional Senior Floating-Rate Fund.
SECTION 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to a
contract described in Section 3.3 hereof.
(b) "By-Laws" means the By-Laws referred to in Section 2.5 hereof, as
from time to time amended.
(c) "Class" means any 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.
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(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) "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.
(l) "Principal Underwriter" means a party, other than the Trust, to a
contract described in Section 3.1 hereof.
(m) "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.
(n) "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.
(o) "Shareholder" means a record owner of Outstanding Shares.
(p) "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. "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.
(q) "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.
(r) "Trust" means the Trust named in Section 1.1.
(s) 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.
(t) "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.
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(u) 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. The
number, term of office, manner of election, resignation, filling of vacancies
and procedures with respect to meetings and actions of the Trustees shall be as
prescribed in the By-Laws of the Trust.
SECTION 2.2. GENERAL POWERS. The Trustees in all instances shall act as
principals for and on behalf of the Trust and 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
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 2.3. INVESTMENTS. The Trustees shall have full power and
authority:
(a) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the
conduct of such operations.
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(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 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
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<PAGE>
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 in 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.
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 2.4. LEGAL TITLE. Legal title to all the Trust Property shall
be vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Class or
Series, or in the name of a custodian, subcustodian, agent, securities
depository, clearing agency, system for the central handling of securities or
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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 2.5. BY-LAWS. The Trustees shall have full power and authority
to adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and, 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 2.6. DISTRIBUTION AND REPURCHASE OF SHARES. The Trustees shall
have full power and authority to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in Shares. Shares may be sold for cash or property or other consideration
whenever and in such amounts and manner as the Trustees deem desirable. The
Trustees shall have full power to provide for the distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both.
SECTION 2.7. DELEGATION. The Trustees shall have full power and
authority to delegate from time to time to such of their number or to officers,
employees or agents of the Trust or to other Persons the doing of such things
and 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 2.8. COLLECTION AND PAYMENT. The Trustees shall have full power
and authority to collect all property due to the Trust; to pay all claims,
including taxes, against the Trust or Trust Property; to prosecute, defend,
compromise, settle or abandon any claims relating to the Trust or Trust
Property; to foreclose any security interest securing any obligations, by virtue
of which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.
SECTION 2.9. EXPENSES. The Trustees shall have full power and authority
to incur on behalf of the Trust or any Class or Series and pay any costs or
expenses which the Trustees deem necessary, appropriate, desirable or incidental
to carry out, implement or enhance the business or operations of the Trust or
any 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 2.10. 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.
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SECTION 2.11. MISCELLANEOUS POWERS. The Trustees shall have full power
and authority to: (a) distribute to Shareholders all or any part of the earnings
or profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any 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 2.12. LITIGATION. The Trustees shall have full power and
authority, in the name and on behalf of the Trust, to engage in and to
prosecute, defend, compromise, settle, abandon, or adjust by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims and demands
relating to the Trust, and out of the assets of the Trust or any 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.
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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 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
2.3) 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 everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of them or of
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any officer, agent, employee, consultant, investment adviser or other adviser,
administrator, distributor or principal underwriter, custodian or transfer,
dividend disbursing, shareholder servicing or accounting agent of the Trust, nor
shall any Trustee be responsible for the act or omission of any other Trustee.
The Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration and their duties as Trustees, and
shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. In discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the records,
books and accounts of the Trust and upon reports made to the Trustees by any
officer, employee, agent, consultant, accountant, attorney, investment adviser
or other adviser, principal underwriter, expert, professional firm or
independent contractor. The Trustees as such shall not be required to give any
bond or surety or any other security for the performance of their duties. No
provision of this Declaration shall protect any Trustee or officer of the Trust
against any liability to the Trust or its Shareholders to which he would
otherwise be subject by reason of his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
SECTION 4.3. INDEMNIFICATION. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any 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.
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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 without par value. The number of common shares authorized
hereunder is unlimited. All common 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 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 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 any Investment Adviser as required by applicable law, (ii) 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, (iii) 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 (iv) 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
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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
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.
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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
Common 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
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
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power and duty to determine net asset value may be delegated by the Trustees
from time to time to the Investment Adviser, the Administrator, the Custodian,
the Transfer Agent or such other Person or Persons as the Trustees may
determine. The value of the assets of the Trust or any 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 Shares of
the Trust or Class or Series thereof outstanding at the time and the quotient so
obtained shall be deemed to be the net asset value of the Shares of the Trust or
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 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.
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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 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.
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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
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.
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(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, affiliated, associates, or other
persons acting in concert with any Principal Shareholder.
(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.
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(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, unless otherwise provided by the Trustees, vote
together on the matter as a single 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
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
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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.
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IN WITNESS WHEREOF, the undersigned, being all of the current Trustees
of the Trust, have executed this instrument this 22nd day of February, 1999.
/s/ Jessica M. Bibliowicz /s/ Norton H. Reamer
- ------------------------------ --------------------------------
Jessica M. Bibliowicz Norton H. Reamer
/s/ Donald R. Dwight /s/ Lynn A. Stout
- ------------------------------ --------------------------------
Donald R. Dwight Lynn A. Stout
/s/ James B. Hawkes /s/ Jack L. Treynor
- ------------------------------ --------------------------------
James B. Hawkes Jack L. Treynor
/s/ Samuel L. Hayes, III
- ------------------------------
Samuel L. Hayes, III
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THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, Massachusetts
Then personally appeared the above named Jessica M. Bibliowicz, Donald R.
Dwight, James B. Hawkes, Samuel L. Hayes, III, Norton H. Reamer, Lynn A. Stout
and Jack L. Treynor, each of whom acknowledged the foregoing instrument to be
his free act and deed.
Before me,
/s/ Lynne M. Hetu
----------------------------
My commission expires: 7/15/05
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The names and addresses of all the Trustees of the Trust are as follows:
Jessica M. Bibliowicz
8 Langeloh Court
Rye, NY 10580
Donald R. Dwight
Clover Mill Lane
Lyme, NH 03768
James B. Hawkes
11 Quincy Park
Beverly, MA 01915
Samuel L. Hayes, III
345 Nahatan Street
Westwood, MA 02090
Norton H. Reamer
70 Circuit Road
Chestnut Hill, MA 02167
Lynn A. Stout
3438 N. Abingdon Street
Arlington, VA 22207
Jack L. Treynor
504 Via Almar
Palos Verdes, Estates, CA 90274
Trust Address through May 2, 1999:
24 Federal Street
Boston, MA 02110
Trust Address beginning May 3, 1999:
255 State Street
Boston, MA 02109
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EXHIBIT 99.(b)
BY-LAWS
OF
EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
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 exceed eighteen.
SECTION 2. RESIGNATION AND REMOVAL. Any Trustee may resign his trust by written
instrument 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. Any
Trustee who requests in writing to be retired or who has become incapacitated by
illness or injury may be retired by written instruments signed by a majority of
the other Trustees, specifying the date of his retirement. Any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of the Trustees prior to such removal, specifying the date when such
removal shall become effective.
No natural person shall serve as a Trustee of the Trust after the
holders of record of not less than two-thirds of the outstanding shares of
beneficial interest of the Trust (the "shares") have declared that he be removed
from that office by a declaration in writing signed by such holders and filed
with the Custodian of the assets of the Trust or by votes cast by such holders
in person or by proxy at a meeting called for the purpose. Solicitation of such
a declaration shall be deemed a solicitation of a proxy within the meaning of
Section 20(a) of the Investment Company Act of 1940, as amended. As used herein,
the term "Act" shall mean the Investment Company Act of 1940 and the rules and
regulations thereunder, as amended from time to time.
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.
Whenever ten or more shareholders of record of the Trust who have been
such for at least six months preceding the date of application, and who hold in
the aggregate either shares having a net asset value of at least $25,000 or at
least 1 per centum of the outstanding shares, whichever is less, shall apply to
the Trustees in writing, stating that they wish to communicate with other
shareholders with a view to obtaining signatures to a request for a meeting of
shareholders pursuant to this Section 3 and accompanied by a form of
communication and request which they wish to transmit, the Trustees shall within
five business days after receipt of such application either (1) afford to such
applicants access to a list of the names and addresses of all shareholders as
recorded on the books of the Trust; or (2) inform such applicants as to the
approximate number of shareholders of record, and the approximate cost of
mailing to them the proposed communication and form of request.
<PAGE>
If the Trustees elect to follow the course specified in subparagraph
(2) above of this Section 2, the Trustees, upon the written request of such
applicants, accompanied by a tender of the material to be mailed and of the
reasonable expenses of mailing, shall, with reasonable promptness, mail such
material to all shareholders of record at their addresses as recorded on the
books, unless within five business days after such tender the Trustees shall
mail to such applicants and file with the Securities and Exchange Commission
("the Commission"), together with a copy of the material to be mailed, a written
statement signed by at least a majority of the Trustees to the effect that in
their opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be violation of applicable law, and specifying the basis of
such opinion.
After the Commission has had an opportunity for hearing upon the
objections specified in the written statement so filed by the Trustees, the
Trustees or such applicants may demand that the Commission enter an order either
sustaining one or more of such objections or refusing to sustain any of such
objections. If the Commission shall enter an order refusing to sustain any of
such objections, or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all objections so sustained have been met, and shall enter an
order so declaring, the Trustees shall mail copies of such material to all
shareholders with reasonable promptness after the entry of such order and
renewal of such tender.
Until such provisions become null, void, inoperative and removed from
these By-Laws pursuant to the next sentence, the provisions of all but the first
paragraph of this Section 2 may not be amended or repealed without the vote of a
majority of the Trustees and a majority of the outstanding shares of the Trust.
These same provisions shall be deemed null, void, inoperative and removed from
these By-Laws upon the effectiveness of any amendment to the Act which
eliminates them from Section 16 of the Act or the effectiveness of any successor
Federal law governing the operation of the Trust which does not contain such
provisions.
SECTION 3. VACANCIES. 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 an increase in number, or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office whereupon the
appointment shall take effect. Within three 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 Trustees. 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 of 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. As soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder and under the Declaration of Trust. The power of
appointment is subject to the provisions of Section 16(a) of the Act.
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Whenever a vacancy among the Trustees shall occur, until such vacancy
is filled, or while any Trustee is absent from the Commonwealth of Massachusetts
or, if not a domiciliary of Massachusetts, is absent from his state of domicile,
or is physically or mentally incapacitated by reason of disease or otherwise,
the other Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy, absence or incapacity shall be conclusive.
SECTION 4. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
SECTION 5. EFFECT OF DEATH, RESIGNATION, REMOVAL, ETC. OF A TRUSTEE. The death,
declination, resignation, retirement, removal, or incapacity of the Trustees, or
any one of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of the Declaration of Trust or these
By-Laws.
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.
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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. No annual or regular meetings of shareholders shall be
required and none shall be held. 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
ten percent (10%) 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 seven (7) 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 one-third (1/3) 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 one-third (1/3) of the
total number of shares of the then issued and outstanding shares of that class
(or series) entitled to vote at the meeting. Shared 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
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present and entitled to vote on such matter may by vote adjourn the meeting from
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
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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.
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.
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.
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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,
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
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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
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 December 31 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.
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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:
(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.
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(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.
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.
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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 (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.
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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.
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.
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ARTICLE XIII
Amendments
Except as provided in Section 2 of Article I of these By-Laws for the
portions of such Section 2 referred to therein, 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: February 22, 1999
<PAGE>
EXHIBIT 99.(h)(a)
EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
DISTRIBUTION AGREEMENT
AGREEMENT dated February 22, 1999 between EATON VANCE INSTITUTIONAL
SENIOR FLOATING-RATE FUND, a Massachusetts business trust having its principal
place of business in Boston in the Commonwealth of Massachusetts, hereinafter
called the "Fund," and EATON VANCE DISTRIBUTORS, INC., a Massachusetts
corporation having its principal place of business in said Boston, hereinafter
sometimes called the "Principal Underwriter."
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree:
1. The Fund grants to the Principal Underwriter the right to purchase
common shares of the Fund upon the terms hereinbelow set forth during the term
of this Agreement. While this Agreement is in force, the Principal Underwriter
agrees to use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the net asset value used in determining the public offering price to be
paid by investors upon purchasing such shares. The Principal Underwriter shall
notify Investors Bank & Trust Company, Custodian of the Fund, ("IBT"), and First
Data Investor Services Group, Transfer Agent of the Fund ("First Data"), or a
successor transfer agent, at the end of each business day, or as soon thereafter
as the orders placed with it have been compiled, of the number of shares and the
prices thereof which the Principal Underwriter is to purchase as principal for
resale. The Principal Underwriter shall take down and pay for shares ordered
from the Fund on or before the eleventh business day (excluding Saturdays) after
the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of net investment income or
realized capital gains of the Fund payable in shares or in cash at the option of
the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be equal to the net
asset value at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the
Fund or IBT, as the agent of the Fund, as of the close of regular trading on the
New York Stock Exchange (the "Exchange") on each business day on which said
Exchange is open, or as of such other time on each such business day as may be
determined by the Trustees of the Fund, in accordance with the methodology and
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procedures for calculating such net asset value authorized by the Trustees. The
Fund may also cause the net asset value to be determined in substantially the
same manner or estimated in such manner and as of such other time or times as
may from time to time be agreed upon by the Fund and Principal Underwriter. The
Fund will notify the Principal Underwriter each time the net asset value of
shares is determined and when such value is so determined it shall be applicable
to transactions as set forth in the current Prospectus and Statement of
Additional Information (hereinafter the "Prospectus") relating to the Fund's
shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Agreement and
Declaration of Trust, except to the Principal Underwriter, in the manner and
upon the terms above set forth to cover contracts of sale made by the Principal
Underwriter with its customers prior to any such suspension, and except as
provided in the last paragraph of paragraph 1 hereof. The Fund shall also have
the right to suspend the sale of its shares if in the judgment of the Fund
conditions obtaining at any time render such action advisable. The Principal
Underwriter shall have the right to suspend sales at any time, to refuse to
accept or confirm any order from an investor or financial service firm, or to
accept or confirm any such order in part only, if in the judgment of the
Principal Underwriter such action is in the best interests of the Fund.
3. The Fund agrees that it will, from time to time, but subject to the
necessary approval of the shareholders, take such steps as may be necessary to
register its shares under the federal Securities Act of 1933, as amended from
time to time (the "1933 Act"), to the end that there will be available for sale
such number of shares as the Principal Underwriter may reasonably be expected to
sell. The Fund agrees to indemnify and hold harmless the Principal Underwriter
and each person, if any, who controls the Principal Underwriter within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable counsel
fees incurred in connection therewith), arising by reason of any person
acquiring any shares, which may be based upon the 1933 Act or on any other
statute or at common law, on the ground that the Registration Statement or
Prospectus, as from time to time amended and supplemented, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, unless such statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Fund in connection
therewith by or on behalf of the Principal Underwriter; provided, however, that
in no case (i) is the indemnity of the Fund in favor of the Principal
Underwriter and any such controlling person to be deemed to protect such
Principal Underwriter or any such controlling person against any liability to
the Fund or its security holders to which such Principal Underwriter or any such
controlling person would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Fund to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Principal Underwriter or
any such controlling person unless the Principal Underwriter or such controlling
person, as the case may be, shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Principal
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Underwriter or upon such controlling person (or after such Principal Underwriter
or such controlling person shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve it from any liability which it may have to the person against whom such
action is brought otherwise than on account of its indemnity agreement contained
in this paragraph. The Fund shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but if the Fund elects to assume the
defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Fund elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Fund does not elect to assume the defense of any such suit, it shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Fund agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
securities, and will indemnify and hold harmless the Fund and each of its
Trustees and officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith), arising by reason of any person
acquiring any shares, which may be based upon the 1933 Act or any other statute
or at common law, on account of any wrongful act of the Principal Underwriter or
any of its employees (including any failure to conform with any requirement of
any state or federal law relating to the sale of such securities) or on the
ground that the Registration Statement or Prospectus, as from time to time
amended and supplemented, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, insofar as any such
statement or omission was made in reliance upon, and in conformity with
information furnished in writing to the Fund in connection therewith by or on
behalf of the Principal Underwriter, provided, however, that in no case (i) is
the indemnity of the Principal Underwriter in favor of any person indemnified to
be deemed to protect the Fund or any such person against any liability to which
the Fund or any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its or his
duties or by reason of its or his reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Principal Underwriter to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Fund or any person indemnified unless the Fund or such
person, as the case may be, shall have notified the Principal Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Fund or upon such person (or after the Fund or such person shall have received
notice of such service on any designated agent), but failure to notify the
Principal Underwriter of any such claim shall not relieve it from any liability
which it may have to the Fund or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Principal Underwriter shall be entitled to participate, at its
own expense, in the defense, or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Principal Underwriter
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Fund, or to its officers or Trustees, or to any
controlling person or persons, defendant or defendants in the suit. In the event
that the Principal Underwriter elects to assume the defense of any such suit and
retains such counsel, the Fund or such officers or Trustees or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Principal
Underwriter does not elect to assume the defense of any such suit, it shall
reimburse the Fund, any such officers and Trustees or controlling person or
persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them. The Principal Underwriter agrees
promptly to notify the Fund of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
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Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Fund to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act, as amended (as said Registration Statement and Prospectus
may be amended or supplemented from time to time), covering the shares of the
Fund. Neither the Principal Underwriter nor any financial service firm nor any
other person is authorized to act as agent for the Fund in connection with the
offering or sale of shares of the Fund to the public or otherwise. All such
sales made by the Principal Underwriter shall be made by it as principal, for
its own account. The Principal Underwriter may, however, act as agent in
connection with "exchanges" between investment companies for which the Principal
Underwriter acts as Principal Underwriter or for which as affiliate of the
Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
Investment Company Act of 1940 (the "1940 Act") covering its shares and all
amendments and supplements thereto, and preparing and mailing periodic reports
and Prospectuses to shareholders (including the expense of setting up in type
any such Registration Statement, Prospectus or periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares purchased by it
as principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares purchased by
the Principal Underwriter hereunder;
(v) all costs and expenses of conducting the Fund's periodic
tender offers for, or other repurchases or redemptions of, shares issued by the
Fund;
(vi) all payments to be made by the Fund pursuant to any
written service plan.
(b) The Principal Underwriter agrees that, after the Prospectus (other
than to existing shareholders of the Fund) and periodic reports have been set up
in type, it will bear the expense of printing and distributing any copies
thereof which are to be used in connection with the offering of shares of the
Fund to financial service firms or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by financial service firms in connection with the offering of the shares of
the Fund for sale to the public and any expenses of advertising in connection
with such offering. The Fund agrees to pay the expenses of registration and
maintaining registration of its shares for sale under federal and state
securities laws, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a dealer or broker, in such states as shall be selected
by the Principal Underwriter and the fees payable to each such state for
continuing the qualification therein until the Principal Underwriter notifies
the Fund that it does not wish such qualification continued.
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<PAGE>
(c) The Principal Underwriter shall be entitled to receive any Early
Withdrawal Charges paid or payable on repurchases of shares by the Fund pursuant
to any repurchase or tender offer made by the Fund.
6. If, at any time during the existence of this Agreement, the Fund
shall deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Fund may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Fund
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Fund.
7(a). The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter will comply with the Fund's Agreement and
Declaration of Trust and By-Laws, and the 1940 Act, and the rules promulgated
thereunder, insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of a closed-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
8. This Agreement shall continue in force indefinitely until terminated
as in this Agreement above provided, except that:
(a) this Agreement shall continue in effect through and including April
28, 2000 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance is specifically approved at least annually
(i) by the vote of a majority of the Trustees of the Fund who are not
"interested persons" of the Fund or of the Principal Underwriter cast in person
at a meeting called for the purchase of voting on such approval, and (ii) by the
Board of Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Fund; and
(b) either party shall have the right to terminate this Agreement on
six (6) months' written notice thereof given in writing to the other party.
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<PAGE>
9. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
10. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Fund, and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
11. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other investment companies, and (b) engage
in other businesses and activities from time to time.
12. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
13. The Principal Underwriter expressly acknowledges the provision in
the Fund's Agreement and Declaration of Trust limiting the personal liability of
the shareholders of the Fund or the Trustees of the Fund. The Principal
Underwriter hereby agrees that it shall have recourse only to the assets of the
Fund for payment of claims or obligations as between the Fund, and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
any shareholders of the Fund or from the Trustees or any Trustee of the Fund.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
on the 22nd day of February, 1999.
EATON VANCE INSTITUTIONAL SENIOR
FLOATING-RATE FUND
By /s/ James B. Hawkes
----------------------------------
President
EATON VANCE DISTRIBUTORS, INC.
By /s/ William M. Steul
----------------------------------
Vice President
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<PAGE>
EXHIBIT 99.(j)(a)
February 22, 1999
Eaton Vance Institutional Senior Floating-Rate Fund hereby adopts and agrees to
become a party to the attached Master Custodian Agreement and the Amendment to
the Master Custodian Agreement dated December 21, 1998 between the Eaton Vance
Group of Funds and Investors Bank & Trust Company.
EATON VANCE INSTITUTIONAL SENIOR
FLOATING-RATE FUND
By: /s/ James B. Hawkes
-------------------------------
President
Accepted and agreed to:
Investors Bank & Trust Company
By: /s/ Kevin J. Sheehan
------------------------------
Title: Chief Executive Officer
<PAGE>
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions........................................................1-2
2. Employment of Custodian and Property to be held by it..............2-3
3. Duties of the Custodian with Respect to
Property of the Fund.................................................3
A. Safekeeping and Holding of Property..............................3
B. Delivery of Securities.........................................3-6
C. Registration of Securities.......................................6
D. Bank Accounts....................................................6
E. Payments for Shares of the Fund..................................6
F. Investment and Availability of Federal Funds.....................6
G. Collections......................................................7
H. Payment of Fund Moneys.........................................8-9
I. Liability for Payment in Advance of
Receipt of Securities Purchased..................................9
J. Payments for Repurchases of Redemptions
of Shares of the Fund.........................................9-10
K. Appointment of Agents by the Custodian..........................10
L. Deposit of Fund Portfolio Securities in Securities Systems...10-11
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper................................12-13
N. Segregated Account...........................................13-14
O. Ownership Certificates for Tax Purposes.........................14
P. Proxies.........................................................14
Q. Communications Relating to Fund Portfolio Securities............14
R. Exercise of Rights; Tender Offers...........................14-15
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S. Depository Receipts.............................................15
T. Interest Bearing Call or Time Deposits..........................15
U. Options, Futures Contracts and Foreign Currency Transactions.15-17
V. Actions Permitted Without Express Authority.....................17
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value.....................................17
5. Records and Miscellaneous Duties....................................18
6. Opinion of Fund`s Independent Public Accountants....................18
7. Compensation and Expenses of Bank...................................18
8. Responsibility of Bank...........................................18-19
9. Persons Having Access to Assets of the Fund.........................19
10. Effective Period, Termination and Amendment; Successor Custodian....20
11. Interpretive and Additional Provisions..............................20
12. Notices.............................................................21
13. Massachusetts Law to Apply..........................................21
14. Adoption of the Agreement by the Fund...............................21
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<PAGE>
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Eaton
Vance Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank 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) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository BUT
ONLY if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(f) "Federal Book-Entry System" shall mean the book-entry system referred
to in Rule 17f-4(b) under the Investment Company Act of 1940 for United States
and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
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<PAGE>
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities BUT ONLY if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a system
maintained by the Custodian or by a subcustodian employed pursuant to Section 2
hereof for the holding of commercial paper in book-entry form BUT ONLY if the
Custodian has received a certified copy of a vote of the Board approving the
participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper instructions" in
respect of any of the matters referred to in this Agreement upon receipt of
written or facsimile instructions signed by such one or more person or persons
as the Board shall have from time to time authorized to give the particular
class of instructions in question. Electronic instructions for the purchase and
sale of securities which are transmitted by Eaton Vance Management to the
Custodian through the Eaton Vance equity trading system and the Eaton Vance
fixed income trading system shall be deemed to be proper instructions; the Fund
shall cause all such instructions to be confirmed in writing. Different persons
may be authorized to give instructions for different purposes. A certified copy
of a vote of the Board may be received and accepted by the Custodian as
conclusive evidence of the authority of any such person to act and may be
considered as in full force and effect until receipt of written notice to the
contrary. Such instructions may be general or specific in terms and, where
appropriate, may be standing instructions. Unless the vote delegating authority
to any person or persons to give a particular class of instructions specifically
requires that the approval of any person, persons or committee shall first have
been obtained before the Custodian may act on instructions of that class, the
Custodian shall be under no obligation to question the right of the person or
persons giving such instructions in so doing. Oral instructions will be
considered proper instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be confirmed
in writing. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian. Upon receipt of a
certificate signed by two officers of the Fund as to the authorization by the
President and the Treasurer of the Fund accompanied by a detailed description of
the communication procedures approved by the President and the Treasurer of the
Fund, "proper instructions" may also include communications effected directly
between electromechanical or electronic devices provided that the President and
Treasurer of the Fund and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets. In performing its duties
generally, and more particularly in connection with the purchase, sale and
exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.
2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby appoints and employs the Bank as its Custodian and Agent in
accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Fund agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
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<PAGE>
consideration received by it for such new or treasury shares ("Shares") of
the Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep safely all
property of the Fund and on behalf of the Fund shall from time to time receive
delivery of Fund property for safekeeping. The Custodian shall hold, earmark and
segregate on its books and records for the account of the Fund all property of
the Fund, including all securities, participation interests and other assets of
the Fund (1) physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in Paragraph K
hereof, (3) held by or maintained in The Depository Trust Company or in
Participants Trust Company or in an Approved Clearing Agency or in the Federal
Book-Entry System or in an Approved Foreign Securities Depository, each of which
from time to time is referred to herein as a "Securities System", and (4) held
by the Custodian or by any subcustodian referred to in Section 2 hereof and
maintained in any Approved Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or deemed to be
held) by the Custodian or maintained in a Securities System account or in an
Approved Book-Entry System for Commercial Paper account only upon receipt of
proper instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities or participation interests for the account
of the Fund, BUT ONLY against receipt of payment therefor; if delivery is made
in Boston or New York City, payment therefor shall be made in accordance with
generally accepted clearing house procedures or by use of Federal Reserve Wire
System procedures; if delivery is made elsewhere payment therefor shall be in
accordance with the then current "street delivery" custom or in accordance with
such procedures agreed to in writing from time to time by the parties hereto; if
the sale is effected through a Securities System, delivery and payment therefor
shall be made in accordance with the provisions of Paragraph L hereof; if the
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<PAGE>
sale of commercial paper is to be effected through an Approved Book-Entry
System for Commercial Paper, delivery and payment therefor shall be made in
accordance with the provisions of Paragraph M hereof; if the securities are to
be sold outside the United States, delivery may be made in accordance with
procedures agreed to in writing from time to time by the parties hereto; for the
purposes of this subparagraph, the term "sale" shall include the disposition of
a portfolio security (i) upon the exercise of an option written by the Fund and
(ii) upon the failure by the Fund to make a successful bid with respect to a
portfolio security, the continued holding of which is contingent upon the making
of such a bid;
2) Upon the receipt of payment in connection with any repurchase agreement
or reverse repurchase agreement relating to such securities and entered into by
the Fund;
3) To the depository agent in connection with tender or other similar
offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or participation
interests are called, redeemed, retired or otherwise become payable; PROVIDED
that, in any such case, the cash or other consideration is to be delivered to
the Custodian or any subcustodian employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name of the
Fund or into the name of any nominee of the Custodian or into the name or
nominee name of any agent appointed pursuant to Paragraph K hereof or into the
name or nominee name of any subcustodian employed pursuant to Section 2 hereof;
or for exchange for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units; PROVIDED that,
in any such case, the new securities or participation interests are to be
delivered to the Custodian or any subcustodian employed pursuant to Section 2
hereof;
6) To the broker selling the same for examination in accordance with the
"street delivery" custom; PROVIDED that the Custodian shall adopt such
procedures as the Fund from time to time shall approve to ensure their prompt
return to the Custodian by the broker in the event the broker elects not to
accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the Issuer of such securities, or pursuant to provisions for
conversion of such securities, or pursuant to any deposit agreement; PROVIDED
that, in any such case, the new securities and cash, if any, are to be delivered
to the Custodian or any subcustodian employed pursuant to Section 2 hereof;
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<PAGE>
8) In the case of warrants, rights or similar securities, the surrender
thereof in connection with the exercise of such warrants, rights or similar
securities, or the surrender of interim receipts or temporary securities for
definitive securities; PROVIDED that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian or any subcustodian employed
pursuant to Section 2 hereof;
9) For delivery in connection with any loans of securities made by the Fund
(such loans to be made pursuant to the terms of the Fund's current registration
statement), BUT ONLY against receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities; except that in connection with any securities loans for which
collateral is to be credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of Treasury, the Custodian will not be held
liable or responsible for the delivery of securities loaned by the Fund prior to
the receipt of such collateral;
10) For delivery as security in connection with any borrowings by the Fund
requiring a pledge or hypothecation of assets by the Fund (if then permitted
under circumstances described in the current registration statement of the
Fund), provided, that the securities shall be released only upon payment to the
Custodian of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made, further securities
may be released for that purpose; upon receipt of proper instructions, the
Custodian may pay any such loan upon redelivery to it of the securities pledged
or hypothecated therefor and upon surrender of the note or notes evidencing the
loan;
11) When required for delivery in connection with any redemption or
repurchase of Shares of the Fund in accordance with the provisions of Paragraph
J hereof;
12) For delivery in accordance with the provisions of any agreement between
the Custodian (or a subcustodian employed pursuant to Section 2 hereof) and a
broker-dealer registered under the Securities Exchange Act of 1934 and, if
necessary, the Fund, relating to compliance with the rules of The Options
Clearing Corporation or of any registered national securities exchange, or of
any similar organization or organizations, regarding deposit or escrow or other
arrangements in connection with options transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement among
the Fund, the Custodian (or a subcustodian employed pursuant to Section 2
hereof), and a futures commissions merchant, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or of any contract market
or commodities exchange or similar organization, regarding futures margin
account deposits or payments in connection with futures transactions by the
Fund;
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<PAGE>
14) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to proper instructions, a certified copy of a vote of the Board
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made.
C. REGISTRATION OF SECURITIES Securities held by the Custodian (other than
bearer securities) for the account of the Fund shall be registered in the name
of the Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian, or in the name or nominee name of any agent appointed pursuant to
Paragraph K hereof, or in the name or nominee name of any subcustodian employed
pursuant to Section 2 hereof, or in the name or nominee name of The Depository
Trust Company or Participants Trust Company or Approved Clearing Agency or
Federal Book-Entry System or Approved Book-Entry System for Commercial Paper;
provided, that securities are held in an account of the Custodian or of such
agent or of such subcustodian containing only assets of the Fund or only assets
held by the Custodian or such agent or such subcustodian as a custodian or
subcustodian or in a fiduciary capacity for customers. All certificates for
securities accepted by the Custodian or any such agent or subcustodian on behalf
of the Fund shall be in "street" or other good delivery form or shall be
returned to the selling broker or dealer who shall be advised of the reason
thereof.
D. BANK ACCOUNTS The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or order by
the Custodian acting in pursuant to the terms of this Agreement, and shall hold
in such account or accounts, subject to the provisions hereof, all cash received
by it from or for the account of the Fund other than cash maintained by the Fund
in a bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for the Fund may be
deposited by it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as the Custodian may in its
discretion deem necessary or desirable; PROVIDED, however, that every such bank
or trust company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved in writing by
two officers of the Fund. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be subject to withdrawal only by the Custodian
in that capacity.
E. PAYMENT FOR SHARES OF THE FUND The Custodian shall make appropriate
arrangements with the Transfer Agent and the principal underwriter of the Fund
to enable the Custodian to make certain it promptly receives the cash or other
consideration due to the Fund for such new or treasury Shares as may be issued
or sold from time to time by the Fund, in accordance with the governing
documents and offering prospectus and statement of additional information of the
Fund. The Custodian will provide prompt notification to the Fund of any receipt
by it of payments for Shares of the Fund.
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement between the
Fund and the Custodian, the Custodian shall, upon the receipt of proper
instructions, which may be continuing instructions when deemed appropriate by
the parties,
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<PAGE>
1) invest in such securities and instruments as may be set forth in such
instructions on the same day as received all federal funds received after a time
agreed upon between the Custodian and the Fund; and
2) make federal funds available to the Fund as of specified times agreed
upon from time to time by the Fund and the Custodian in the amount of checks
received in payment for Shares of the Fund which are deposited into the Fund's
account.
G. COLLECTIONS The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which the Fund
shall be entitled either by law or pursuant to custom in the securities
business, and shall promptly collect all income and other payments with respect
to bearer securities if, on the date of payment by the issuer, such securities
are held by the Custodian or agent thereof and shall credit such income, as
collected, to the Fund's custodian account.
The Custodian shall do all things necessary and proper in connection with
such prompt collections and, without limiting the generality of the foregoing,
the Custodian shall
1) Present for payment all coupons and other income items requiring
presentations;
2) Present for payment all securities which may mature or be called,
redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Fund, checks,
drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities System or in an
Approved Book-Entry System for Commercial Paper at the time funds become
available to the Custodian; in the case of securities maintained in The
Depository Trust Company funds shall be deemed available to the Fund not later
than the opening of business on the first business day after receipt of such
funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably practicable
whenever income due on any security is not promptly collected. In any case in
which the Custodian does not receive any due and unpaid income after it has made
demand for the same, it shall immediately so notify the Fund in writing,
enclosing copies of any demand letter, any written response thereto, and
memoranda of all oral responses thereto and to telephonic demands, and await
instructions from the Fund; the Custodian shall in no case have any liability
for any nonpayment of such income provided the Custodian meets the standard of
care set forth in Section 8 hereof. The Custodian shall not be obligated to take
legal action for collection unless and until reasonably indemnified to its
satisfaction.
The Custodian shall also receive and collect all stock dividends, rights
and other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
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H. PAYMENT OF FUND MONEYS Upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out moneys of the Fund in the following cases only:
1) Upon the purchase of securities, participation interests, options,
futures contracts, forward contracts and options on futures contracts purchased
for the account of the Fund but only (a) against the receipt of
(i) such securities registered as provided in Paragraph C hereof or in
proper form for transfer or
(ii) detailed instructions signed by an officer of the Fund regarding the
participation interests to be purchased or
(iii) written confirmation of the purchase by the Fund of the options,
futures contracts, forward contracts or options on futures contracts
by the Custodian (or by a subcustodian employed pursuant to Section 2
hereof or by a clearing corporation of a national securities exchange of which
the Custodian is a member or by any bank, banking institution or trust company
doing business in the United States or abroad which is qualified under the
Investment Company Act of 1940 to act as a custodian and which has been
designated by the Custodian as its agent for this purpose or by the agent
specifically designated in such instructions as representing the purchasers of a
new issue of privately placed securities); (b) in the case of a purchase
effected through a Securities System, upon receipt of the securities by the
Securities System in accordance with the conditions set forth in Paragraph L
hereof; (c) in the case of a purchase of commercial paper effected through an
Approved Book-Entry System for Commercial Paper, upon receipt of the paper by
the Custodian or subcustodian in accordance with the conditions set forth in
Paragraph M hereof; (d) in the case of repurchase agreements entered into
between the Fund and another bank or a broker-dealer, against receipt by the
Custodian of the securities underlying the repurchase agreement either in
certificate form or through an entry crediting the Custodian's segregated,
non-proprietary account at the Federal Reserve Bank of Boston with such
securities along with written evidence of the agreement by the bank or
broker-dealer to repurchase such securities from the Fund; or (e) with respect
to securities purchased outside of the United States, in accordance with written
procedures agreed to from time to time in writing by the parties hereto;
2) When required in connection with the conversion, exchange or surrender
of securities owned by the Fund as set forth in Paragraph B hereof;
3) When required for the redemption or repurchase of Shares of the Fund in
accordance with the provisions of Paragraph J hereof;
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4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of the Fund:
advisory fees, distribution plan payments, interest, taxes, management
compensation and expenses, accounting, transfer agent and legal fees, and other
operating expenses of the Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5) For the payment of any dividends or other distributions to holders of
Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to proper instructions, a certified copy of a vote of the Board,
specifying the amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom such payment is to be made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED In
any and every case where payment for purchase of securities for the account of
the Fund is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions signed by two officers
of the Fund to so pay in advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if the securities had been
received by the Custodian; EXCEPT that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the Federal Reserve
System, the Custodian may transfer funds to the account of such bank prior to
the receipt of (i) the securities in certificate form subject to such repurchase
agreement or (ii) written evidence that the securities subject to such
repurchase agreement have been transferred by book-entry into a segregated
non-proprietary account of the Custodian maintained with the Federal Reserve
Bank of Boston or (iii) the safekeeping receipt, PROVIDED that such securities
have in fact been so transfered by book-entry and the written repurchase
agreement is received by the Custodian in due course; AND EXCEPT that if the
securities are to be purchased outside the United States, payment may be made in
accordance with procedures agreed to in writing from time to time by the parties
hereto.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND From such
funds as may be available for the purpose, but subject to any applicable votes
of the Board and the current redemption and repurchase procedures of the Fund,
the Custodian shall, upon receipt of written instructions from the Fund or from
the Fund's transfer agent or from the principal underwriter, make funds and/or
portfolio securities available for payment to holders of Shares who have caused
their Shares to be redeemed or repurchased by the Fund or for the Fund`s account
by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon which special
checks may be drawn by shareholders of the Fund holding Shares for which
certificates have not been issued. Such checking account and such special checks
shall be subject to such rules and regulations as the Custodian and the Fund may
from time to time adopt. The Custodian or the Fund may suspend or terminate use
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of such checking account or such special checks (either generally or for one
or more shareholders) at any time. The Custodian and the Fund shall notify
the other immediately of any such suspension or termination.
K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company (PROVIDED such bank or trust company is itself qualified under the
Investment Company Act of 1940 to act as a custodian or is itself an eligible
foreign custodian within the meaning of Rule 17f-5 under said Act) as the agent
of the Custodian to carry out such of the duties and functions of the Custodian
described in this Section 3 as the Custodian may from time to time direct;
PROVIDED, however, that the appointment of any such agent shall not relieve the
Custodian of any of its responsibilities or liabilities hereunder, and as
between the Fund and the Custodian the Custodian shall be fully responsible for
the acts and omissions of any such agent. For the purposes of this Agreement,
any property of the Fund held by any such agent shall be deemed to be held by
the Custodian hereunder.
L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, and at all times
subject to the following provisions:
(a) The Custodian may (either directly or through one or more subcustodians
employed pursuant to Section 2 keep securities of the Fund in a Securities
System provided that such securities are maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund, and the Custodian shall be fully and
completely responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Fund's holdings maintained in each such
Securities System.
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(c) The Custodian shall pay for securities purchased in book-entry form for
the account of the Fund only upon (i) receipt of notice or advice from the
Securities System that such securities have been transferred to the Account, and
(ii) the making of any entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian shall transfer
securities sold for the account of the Fund only upon (i) receipt of notice or
advice from the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the records of
the Custodian to reflect such transfer and payment for the account of the Fund.
Copies of all notices or advices from the Securities System of transfers of
securities for the account of the Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be promptly provided to the Fund at its
request. The Custodian shall promptly send to the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written advice or
notice of each such transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to the Securities
System's accounting system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities System; the Custodian
shall promptly send to the Fund any report or other communication relating to
the Custodian's internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the Custodian shall ensure
that any agent appointed pursuant to Paragraph K hereof or any subcustodian
employed pursuant to Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such agent's or
subcustodian's internal accounting controls and procedures for safeguarding
securities deposited in any Securities System. The Custodian's books and records
relating to the Fund's participation in each Securities System will at all times
during regular business hours be open to the inspection of the Fund's authorized
officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence of
receipt of a certificate of an officer of the Fund that the Board has approved
the use of a particular Securities System; the Custodian shall also obtain
appropriate assurance from the officers of the Fund that the Board has annually
reviewed the continued use by the Fund of each Securities System, and the Fund
shall promptly notify the Custodian if the use of a Securities System is to be
discontinued; at the request of the Fund, the Custodian will terminate the use
of any such Securities System as promptly as practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the Fund
resulting from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or subcustodians
or of any of its or their employees or from any failure of the Custodian or any
such agent or subcustodian to enforce effectively such rights as it may have
against the Securities System or any other person; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the Custodian with
respect to any claim against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or damage.
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M. DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM FOR
COMMERCIAL PAPER Upon receipt of proper instructions with respect to each issue
of direct issue commercial paper purchased by the Fund, the Custodian may
deposit and/or maintain direct issue commercial paper owned by the Fund in any
Approved Book-Entry System for Commercial Paper, in each case only in accordance
with applicable Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more subcustodians
employed pursuant to Section 2) keep commercial paper of the Fund in an Approved
Book-Entry System for Commercial Paper, provided that such paper is issued in
book entry form by the Custodian or subcustodian on behalf of an issuer with
which the Custodian or subcustodian has entered into a book-entry agreement and
provided further that such paper is maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in an Approved Book-Entry
System for Commercial Paper which shall not include any assets of the Custodian
or such subcustodian or any other person other than assets held by the Custodian
or such subcustodian as a fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of the
Fund which is maintained in an Approved Book-Entry System for Commercial Paper
shall identify by book-entry each specific issue of commercial paper purchased
by the Fund which is included in the System and shall at all times during
regular business hours be open for inspection by authorized officers, employees
or agents of the Fund. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping system capable of accurately and currently
stating the Fund's holdings of commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in book-entry
form for the account of the Fund only upon contemporaneous (i) receipt of notice
or advice from the issuer that such paper has been issued, sold and transferred
to the Account, and (ii) the making of an entry on the records of the Custodian
to reflect such purchase, payment and transfer for the account of the Fund. The
Custodian shall transfer such commercial paper which is sold or cancel such
commercial paper which is redeemed for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice that payment for such paper has
been transferred to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such transfer or redemption and payment for the
account of the Fund. Copies of all notices, advices and confirmations of
transfers of commercial paper for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian and be promptly provided to
the Fund at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the Fund in the form of
a written advice or notice of each such transaction, and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's transactions in
the System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to each System's
accounting system, system of internal accounting controls or procedures for
safeguarding commercial paper deposited in the System; the Custodian shall
promptly send to the Fund any report or other communication relating to the
Custodian's internal accounting controls and procedures for safeguarding
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<PAGE>
commercial paper deposited in any Approved Book-Entry System for Commercial
Paper; and the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to Section 2 hereof
shall promptly send to the Fund and to the Custodian any report or other
communication relating to such agent's or subcustodian's internal accounting
controls and procedures for safeguarding securities deposited in any Approved
Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence of
receipt of a certificate of an officer of the Fund that the Board has approved
the use of a particular Approved Book-Entry System for Commercial Paper; the
Custodian shall also obtain appropriate assurance from the officers of the Fund
that the Board has annually reviewed the continued use by the Fund of each
Approved Book-Entry System for Commercial Paper, and the Fund shall promptly
notify the Custodian if the use of an Approved Book-Entry System for Commercial
Paper is to be discontinued; at the request of the Fund, the Custodian will
terminate the use of any such System as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System for
Commercial Paper is maintained by the subcustodian) shall issue physical
commercial paper or promissory notes whenever requested to do so by the Fund or
in the event of an electronic system failure which impedes issuance, transfer or
custody of direct issue commercial paper by book-entry.
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the Fund
resulting from use of any Approved Book-Entry System for Commercial Paper by
reason of any negligence, misfeasance or misconduct of the Custodian or any of
its agents or subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to enforce
effectively such rights as it may have against the System, the issuer of the
commercial paper or any other person; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the System, the issuer of the commercial paper or any other person
which the Custodian may have as a consequence of any such loss or damage if and
to the extent that the Fund has not been made whole for any such loss or damage.
N. SEGREGATED ACCOUNT The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Paragraph L hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and any registered broker-dealer
(or any futures commission merchant), relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange (or of the Commodity Futures Trading Commission or of any contract
market or commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other arrangements in connection
with transactions by the Fund, (ii) for purposes of segregating cash or U.S.
Government securities in connection with options purchased, sold or written by
the Fund or futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required by
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Investment Company Act Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission relating to the maintenance
of segregated accounts by registered investment companies and (iv) for other
proper purposes, BUT ONLY, in the case of clause (iv), upon receipt of, in
addition to proper instructions, a certificate signed by two officers of the
Fund, setting forth the purpose such segregated account and declaring such
purpose to be a proper purpose.
O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES The Custodian shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
securities of the Fund held by it and in connection with transfers of
securities.
P. PROXIES The Custodian shall, with respect to the securities held by it
hereunder, cause to be promptly delivered to the Fund all forms of proxies and
all notices of meetings and any other notices or announcements or other written
information affecting or relating to the securities, and upon receipt of proper
instructions shall execute and deliver or cause its nominee to execute and
deliver such proxies or other authorizations as may be required. Neither the
Custodian nor its nominee shall vote upon any of the securities or execute any
proxy to vote thereon or give any consent or take any other action with respect
thereto (except as otherwise herein provided) unless ordered to do so by proper
instructions.
Q. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES The Custodian shall
deliver promptly to the Fund all written information (including, without
limitation, pendency of call and maturities of securities and participation
interests and expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the maturity of futures
contracts purchased or sold by the Fund) received by the Custodian from issuers
and other persons relating to the securities and participation interests being
held for the Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information received by the
Custodian from issuers and other persons relating to the securities and
participation interests whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer.
R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender offers, similar
offers to purchase or exercise rights (including, without limitation, pendency
of calls and maturities of securities and participation interests and
expirations of rights in connection therewith and notices of exercise of call
and put options and the maturity of futures contracts) affecting or relating to
securities and participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for promptly notifying the
Fund of all such offers in accordance with the standard of reasonable care set
forth in Section 8 hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Fund shall have responsibility
for providing the Custodian with all necessary instructions in timely fashion.
Upon receipt of proper instructions, the Custodian shall timely deliver to the
issuer or trustee thereof, or to the agent of either, warrants, puts, calls,
rights or similar securities for the purpose of being exercised or sold upon
proper receipt therefor and upon receipt of assurances satisfactory to the
Custodian that the new securities and cash, if any, acquired by such action are
to be delivered to the Custodian or any subcustodian employed pursuant to
Section 2 hereof. Upon receipt of proper instructions, the Custodian shall
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timely deposit securities upon invitations for tenders of securities upon
proper receipt therefor and upon receipt of assurances satisfactory to the
Custodian that the consideration to be paid or delivered or the tendered
securities are to be returned to the Custodian or subcustodian employed pursuant
to Section 2 hereof. Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action, unless otherwise
directed to the contrary by proper instructions, to comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions, or similar
rights of security ownership, and shall thereafter promptly notify the Fund in
writing of such action.
S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities to the
depository used by an issuer of American Depository Receipts or International
Depository Receipts (hereinafter collectively referred to as "ADRs") for such
securities, against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Custodian that the
depository has acknowledged receipt of instructions to issue with respect to
such securities ADRs in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section 2 hereof, for
delivery to the Custodian or such subcustodian at such place as the Custodian or
such subcustodian may from time to time designate. The Custodian shall, upon
receipt of proper instructions, surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
securities underlying such ADRs to the Custodian or to a subcustodian employed
pursuant to Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall, upon receipt
of proper instructions, place interest bearing fixed term and call deposits with
the banking department of such banking institution (other than the Custodian)
and in such amounts as the Fund may designate. Deposits may be denominated in
U.S. Dollars or other currencies. The Custodian shall include in its records
with respect to the assets of the Fund appropriate notation as to the amount and
currency of each such deposit, the accepting banking institution and other
appropriate details and shall retain such forms of advice or receipt evidencing
the deposit, if any, as may be forwarded to the Custodian by the banking
institution. Such deposits shall be deemed portfolio securities of the
applicable Fund for the purposes of this Agreement, and the Custodian shall be
responsible for the collection of income from such accounts and the transmission
of cash to and from such accounts.
U. OPTIONS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS
1. OPTIONS. The Custodians shall, upon receipt of proper instructions and
in accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Fund, relating to compliance
with the rules of the Options Clearing Corporation or of any registered national
securities exchange or similar organization or organizations, receive and retain
confirmations or other documents, if any, evidencing the purchase or writing of
an option on a security or securities index or other financial instrument or
index by the Fund; deposit and maintain in a segregated account for each Fund
separately, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and release
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and/or transfer such securities or other assets only in accordance with a
notice or other communication evidencing the expiration, termination or exercise
of such covered option furnished by the Options Clearing Corporation, the
securities or options exchange on which such covered option is traded or such
other organization as may be responsible for handling such options transactions.
The Custodian and the broker-dealer shall be responsible for the sufficiency of
assets held in each Fund's segregated account in compliance with applicable
margin maintenance requirements.
2. FUTURES CONTRACTS The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other documents, if any,
evidencing the purchase or sale of a futures contract or an option on a futures
contract by the Fund; deposit and maintain in a segregated account, for the
benefit of any futures commission merchant, assets designated by the Fund as
initial, maintenance or variation "margin" deposits (including mark-to-market
payments) intended to secure the Fund's performance of its obligations under any
futures contracts purchased or sold or any options on futures contracts written
by Fund, in accordance with the provisions of any agreement or agreements among
the Fund, the Custodian and such futures commission merchant, designed to comply
with the rules of the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar organization regarding such
margin deposits or payments; and release and/or transfer assets in such margin
accounts only in accordance with any such agreements or rules. The Custodian and
the futures commission merchant shall be responsible for the sufficiency of
assets held in the segregated account in compliance with the applicable margin
maintenance and mark-to-market payment requirements.
3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall, pursuant to proper
instructions, enter into or cause a subcustodian to enter into foreign exchange
contracts or options to purchase and sell foreign currencies for spot and future
delivery on behalf and for the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such banking or financial
institutions or other currency brokers, as set forth in proper instructions.
Foreign exchange contracts and options shall be deemed to be portfolio
securities of the Fund; and accordingly, the responsibility of the Custodian
therefor shall be the same as and no greater than the Custodian's responsibility
in respect of other portfolio securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of cash from the currency broker
or banking or financial institution with which the contract or option is made,
the maintenance of proper records with respect to the transaction and the
maintenance of any segregated account required in connection with the
transaction. The Custodian shall have no duty with respect to the selection of
the currency brokers or banking or financial institutions with which the Fund
deals or for their failure to comply with the terms of any contract or option.
Without limiting the foregoing, it is agreed that upon receipt of proper
instructions and insofar as funds are made available to the Custodian for the
purpose, the Custodian may (if determined necessary by the Custodian to
consummate a particular transaction on behalf and for the account of the Fund)
make free outgoing payments of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign exchange contract or
confirmation that the countervalue currency completing the foreign exchange
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contact has been delivered or received. The Custodian shall not be
responsible for any costs and interest charges which may be incurred by the Fund
or the Custodian as a result of the failure or delay of third parties to deliver
foreign exchange; provided that the Custodian shall nevertheless be held to the
standard of care set forth in, and shall be liable to the Fund in accordance
with, the provisions of Section 8.
V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Agreement,
PROVIDED, that all such payments shall be accounted for by the Custodian to the
Treasurer of the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Fund except as otherwise directed by the Fund.
4. DUTIES OF BANK WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATIONS OF NET
ASSET VALUE
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
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<PAGE>
5. RECORDS AND MISCELLANEOUS DUTIES
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. OPINION OF FUND'S INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. COMPENSATION AND EXPENSES OF BANK
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. RESPONSIBILITY OF BANK
So long as and to the extent that it is in the exercise of reasonable care,
the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
-18-
<PAGE>
The Bank as Custodian and Agent shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. PERSONS HAVING ACCESS TO ASSETS OF THE FUND
(i) No trustee, director, general partner, officer, employee or agent of
the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be available to
duly authorized officers, employees, representatives or agents of the Custodian
or other persons or entities for whose actions the Custodian shall be
responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
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<PAGE>
10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated by either party after August 31, 2000
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; PROVIDED, that the Fund may at any time by
action of its Board, (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian in the event the
Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Fund shall pay to
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).
This Agreement may be amended at any time by the written agreement of the
parties hereto. If a majority of the non-interested trustees of any of the Funds
determines that the performance of the Custodian 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 the Custodian of
such determination and the Custodian shall have 60 days 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.
The Board of the Fund shall, forthwith, upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian, a bank or trust
company having the qualifications required by the Investment Company Act of 1940
and the Rules thereunder. The Bank, as Custodian, Agent or otherwise, shall,
upon termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
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<PAGE>
12. NOTICES
Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such other
address as the Fund may have designated to the Bank, in writing, or to Investors
Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110, shall be
deemed to have been properly delivered or given hereunder to the respective
addressees.
13. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. ADOPTION OF THE AGREEMENT BY THE FUND
The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement, such adoption to be evidenced by a
letter agreement between the Fund and the Bank reflecting such adoption, which
letter agreement shall be dated and signed by a duly authorized officer of the
Fund and duly authorized officer of the Bank. This Agreement shall be deemed to
be duly executed and delivered by each of the parties in its name and behalf by
its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
-21-
<PAGE>
EXHIBIT 99.(k)(a)
EATON VANCE INSTITUTIONAL SENIOR FLOATING-RATE FUND
ADMINISTRATION AGREEMENT
AGREEMENT made this 22nd day of February, 1999, between Eaton Vance
Institutional Senior Floating-Rate Fund, 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 shares of beneficial interest of
the Fund are of a single series and class; however, shares may be issued in
additional classes or divided into additional series of the Fund that may be
established from time to time by action of the Trustees.
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 prepare 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
<PAGE>
-2-
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
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 distribution 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) will review and supervise the payment of any early withdrawal
charges (as described in the Fund's current offering prospectus); (xiv) will
review and supervise the continuous offering of the Fund's shares through the
principal underwriter, and arrange for the payment by the principal underwriter
of all compensation to Authorized Firms in accordance with the Fund's current
offering prospectus; (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; (xvi) will arrange for the preparation and filing of
all reports, forms, registration statements and documents required to be filed
by the Fund with state securities administrators or blue sky authorities; (xvii)
will arrange for the preparation of all advertisements and promotional material
relating to the continuous offering of the Fund's shares, and all communications
by the Fund to its shareholders; and (xviii) 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. It is intended that the assets of
the Fund will be invested in an interest in Senior Debt Portfolio (the
"Portfolio"), a registered closed-end investment company having substantially
the same investment objective, policies and restrictions as the Fund. Boston
Management and Research ("BMR"), an affiliate of the Administrator, will act as
investment adviser to the Portfolio under an Investment Advisory Agreement
between the Portfolio and BMR.
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 not to exceed 1/48 of 1%
of the average daily gross assets of the Fund throughout the month. In
calculating the gross assets of the Fund for this purpose, there shall be
deducted therefrom all liabilities of the Fund except the principal amount of
any indebtedness for money borrowed including debt securities issued by the
<PAGE>
-3-
Fund. Upon and after the investment by the Fund of substantially all of its
assets in another investment company with substantially the same investment
objective, policies and restrictions as the Fund, the Fund shall pay to the
Administrator on the last day of each month a fee not to exceed 1/48 of 1% of
that portion of the average daily gross assets of such other investment company
throughout the month which is attributable to the Fund's interest in such other
investment company. In calculating the gross assets of such other investment
company, all liabilities of the other investment company shall be deducted
except the principal amount of any indebtedness for money borrowed including
debt securities issued by the other investment company.
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
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 issue, sale, 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 and printing prospectuses for such purposes and for distributing
the same to shareholders and investors, and fees and expenses of registering and
maintaining registrations of the Fund and of the Fund's principal underwriter,
if any, as a broker-dealer or agent under state securities laws; (ix) expenses
of reports and notices to shareholders and of meetings of shareholders and proxy
solicitations therefor; (x) expenses of reports to governmental officers and
commissions; (xi) insurance expenses; (xii) association membership dues; (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Fund (including without limitation safekeeping of funds 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 for servicing shareholder accounts; (xvi) any direct charges
to shareholders approved by the Trustees of the Fund; (xvii) compensation of and
any expenses of Trustees of the Fund; (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; and (xxi) 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
<PAGE>
-3-
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.
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. The Administrator expressly acknowledges
the provision in the Agreement and Declaration of Trust of the Fund limiting the
personal liability of the shareholders of the Fund and of the officers and
Trustees of the Fund, and the Administrator hereby agrees that it shall have
recourse to the Fund 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 Fund.
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
<PAGE>
-4-
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 INSTITUTIONAL SENIOR EATON VANCE MANAGEMENT
FLOATING-RATE FUND
By /s/ James B. Hawkes By /s/ William M. Steul
-------------------------------- --------------------------------
President Vice President, and not individually
<PAGE>
EXHIBIT 99.(l)
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Telephone: (617) 482-8260
Telecopy: (617) 338-8054
March 5, 1999
Eaton Vance Institutional Senior Floating-Rate Fund
24 Federal Street
Boston, MA 02110
Gentlemen:
Eaton Vance Institutional Senior Floating-Rate Fund (the "Trust") is a
Massachusetts business trust created under a Declaration of Trust dated February
22, 1999 executed and delivered in Boston, Massachusetts (the "Declaration of
Trust").
I am of the opinion that all legal requirements have been complied with in
the creation of the Trust, and that said Declaration of Trust is legal and
valid.
The Trustees of the Trust have the powers set forth in the Declaration of
Trust, subject to the terms, provisions and conditions therein provided. As
provided in the Declaration of Trust, the Trustees may authorize one or more
classes of shares and the number of shares of each class authorized is
unlimited. Furthermore, the Trustees may from time to time issue and sell or
cause to be issued and sold shares for the Trust for cash or for property. All
such shares, when so issued, shall be fully paid and nonassessable by the Trust.
By votes duly adopted, the Trustees of the Trust have authorized the
issuance of common shares of beneficial interest, without par value, of the
Trust. The Trust is now registering on Form N-2 with the Securities and Exchange
Commission 20,000,000 common shares of beneficial interest with a maximum
aggregate offering price of $10.00 per share under the Securities Act of 1933,
as amended.
I have examined originals, or copies, certified or otherwise identified to
my satisfaction, of such certificates, records and other documents as we have
deemed necessary or appropriate for the purpose of this opinion.
Based upon the foregoing, and with respect to Massachusetts law (other than
the Massachusetts Uniform Securities Act), only to the extent that Massachusetts
law may be applicable and without reference to the laws of the other several
states or of the United States of America, I am of the opinion that under
existing law:
1. The Trust is a trust with transferable shares of beneficial interest
organized in compliance with the laws of the Commonwealth of Massachusetts, and
the Declaration of Trust is legal and valid under the laws of the Commonwealth
of Massachusetts.
<PAGE>
Eaton Vance Institutional Senior Floating-Rate Fund
March 5, 1999
Page 2
2. Common shares of beneficial interest of the Trust registered by Form N-2
may be legally and validly issued in accordance with the Declaration of Trust
upon receipt of payment in compliance with the Declaration of Trust and, when so
issued and sold, will be fully paid and nonassessable by the Trust.
I am a member of the Massachusetts bar and have acted as internal legal
counsel of the Trust in connection with the registration of shares.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Trust's Registration Statement on Form
N-2 pursuant to the Securities Act of 1933, as amended.
Very truly yours,
/s/ Eric G. Woodbury
Eric G. Woodbury, Esq.
Vice President
<PAGE>
EXHIBIT (n)(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in the Registration Statement of Eaton Vance
Institutional Senior Floating-Rate Fund of our report, dated March 5, 1999,
appearing in the Statement of Additional Information, which is part of this
Registration Statement.
We also consent to the reference to our Firm under the heading "Other Service
Providers" in the Statement of Additional Information, which is part of such
Registration Statement.
/s/Deloitte & Touche LLP
- ----------------------
Deloitte & Touche LLP
Boston, Massachusetts
March 5, 1999
<PAGE>
EXHIBIT (n)(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in the Registration Statement of Eaton Vance
Institutional Senior Floating-Rate Fund of our report relating to Senior Debt
Portfolio dated February 12, 1999, in the Statement of Additional Information,
which is part of such Registration Statement.
We also consent to the reference to our Firm under the heading "Other Service
Providers" in the Statement of Additional Information, which is part of such
Registration Statement.
/s/ Deloitte & Touche LLP
- ----------------------
Deloitte & Touche LLP
Boston, Massachusetts
March 5, 1999
<PAGE>
EXHIBIT (p)
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Telephone: (617) 482-8260
Telecopy: (617)-338-8054
March 4, 1999
Eaton Vance Institutional Senior Floating-Rate Fund
24 Federal Street
Boston, MA 02110
Ladies and Gentlemen:
With respect to our purchase from you, at the purchase price of $100,000,
of 10,000 shares of beneficial interest, net asset value of $10.00 per share for
("Initial Shares") in Eaton Vance Institutional Senior Floating-Rate Fund (the
"Fund"), we hereby advise you that we are purchasing such Initial Shares for
investment purposes without any present intention of redeeming or reselling.
Very truly yours,
EATON VANCE MANAGEMENT
By: /s/ William M. Steul
--------------------------------------
Vice President
[ARTICLE] 6
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] MAR-4-1999
[PERIOD-END] MAR-4-1999
[INVESTMENTS-AT-COST] 0
[INVESTMENTS-AT-VALUE] 0
[RECEIVABLES] 0
[ASSETS-OTHER] 100
[OTHER-ITEMS-ASSETS] 76
[TOTAL-ASSETS] 176
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 76
[TOTAL-LIABILITIES] 76
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 100
[SHARES-COMMON-STOCK] 10
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 100
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 100
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] 0
[NET-INVESTMENT-INCOME] 0
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 0
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 10
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 100
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 0
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 0
[AVERAGE-NET-ASSETS] 100
[PER-SHARE-NAV-BEGIN] 0
[PER-SHARE-NII] 10
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10
[EXPENSE-RATIO] 0
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] DEC-31-1998
[INVESTMENTS-AT-COST] 6357118
[INVESTMENTS-AT-VALUE] 6353575
[RECEIVABLES] 51186
[ASSETS-OTHER] 35302
[OTHER-ITEMS-ASSETS] 1157
[TOTAL-ASSETS] 6441220
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 10886
[TOTAL-LIABILITIES] 10886
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 6433877
[SHARES-COMMON-STOCK] 0
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (3543)
[NET-ASSETS] 6430334
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 404432
[OTHER-INCOME] 3953
[EXPENSES-NET] 47545
[NET-INVESTMENT-INCOME] 360840
[REALIZED-GAINS-CURRENT] 936
[APPREC-INCREASE-CURRENT] (6219)
[NET-CHANGE-FROM-OPS] 355557
[EQUALIZATION] 2039704
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 2395262
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 44484
[INTEREST-EXPENSE] 355
[GROSS-EXPENSE] 47545
[AVERAGE-NET-ASSETS] 5066454
[PER-SHARE-NAV-BEGIN] 0
[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 0
[EXPENSE-RATIO] 0.94
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
EXHIBIT (s)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Eaton Vance Institutional
Senior Floating-Rate Fund, a Massachusetts business trust, do hereby severally
constitute and appoint Alan R. Dynner, James B. Hawkes and Eric G. Woodbury, or
any of them, to be true, sufficient and lawful attorneys, or attorney for each
of us, to sign for each of us, in the name of each of us in the capacities
indicated below, the Registration Statement and any and all amendments
(including post-effective amendments) to the Registration Statement on Form N-2
filed by Eaton Vance Institutional Senior Floating-Rate Fund with the Securities
and Exchange Commission in respect of shares of beneficial interest and other
documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set opposite
our respective signatures.
<TABLE>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JAMES B. HAWKES President, Principal
- ------------------------------------ Executive Officer and February 22, 1999
James B. Hawkes Trustee
/S/ JAMES L. O'CONNOR Treasurer and Principal
- ------------------------------------ Financial and February 22, 1999
James L. O'Connor Accounting Officer
/S/ JESSICA M. BIBLIOWICZ Trustee February 22, 1999
- ------------------------------------
Jessica M. Bibliowicz
/S/ DONALD R. DWIGHT Trustee February 22, 1999
- ------------------------------------
Donald R. Dwight
/S/ SAMUEL L. HAYES, III Trustee February 22, 1999
- ------------------------------------
Samuel L. Hayes, III
/S/ NORTON H. REAMER Trustee February 22, 1999
- ------------------------------------
Norton H. Reamer
/S/ LYNN A. STOUT Trustee February 22, 1999
- ------------------------------------
Lynn A. Stout
/S/ JACK L. TREYNOR Trustee February 22, 1999
- ------------------------------------
Jack L. Treynor
</TABLE>
<PAGE>
EXHIBIT (t)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Senior Debt Portfolio, a New
York trust, do hereby severally constitute and appoint Alan R. Dynner, James B.
Hawkes and Eric G. Woodbury, or any of them, to be true, sufficient and lawful
attorneys, or attorney for each of us, to sign for each of us, in the name of
each of us in the capacities indicated below, any and all amendments (including
post-effective amendments) to the Registration Statement on Form N-2 filed by
Eaton Vance Institutional Senior Floating-Rate Fund with the Securities and
Exchange Commission in respect of shares of beneficial interest and other
documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set opposite
our respective signatures.
<TABLE>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ JAMES B. HAWKES President, Principal
- ------------------------------------ Executive Officer and February 22, 1999
James B. Hawkes Trustee
/S/ JAMES L. O'CONNOR Treasurer and Principal
- ------------------------------------ Financial and February 22, 1999
James L. O'Connor Accounting Officer
/S/ JESSICA M. BIBLIOWICZ Trustee February 22, 1999
- ------------------------------------
Jessica M. Bibliowicz
/S/ DONALD R. DWIGHT Trustee February 22, 1999
- ------------------------------------
Donald R. Dwight
/S/ SAMUEL L. HAYES, III Trustee February 22, 1999
- ------------------------------------
Samuel L. Hayes, III
/S/ NORTON H. REAMER Trustee February 22, 1999
- ------------------------------------
Norton H. Reamer
/S/ LYNN A. STOUT Trustee February 22, 1999
- ------------------------------------
Lynn A. Stout
/S/ JOHN L. THORNDIKE Trustee February 22, 1999
- ------------------------------------
John L. Thorndike
/S/ JACK L. TREYNOR Trustee February 22, 1999
- ------------------------------------
Jack L. Treynor
</TABLE>
