As filed with the Securities and Exchange Commission on February 28, 1997
1940 Act File No. 811-1339
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 20 [ X ]
CAPITAL EXCHANGE FUND, INC.
(Exact Name of Registrant as Specified in Charter)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Address of Principal Executive Offices)
(617) 482-8260
(Registrant's Telephone Number including Area Code)
Alan R. Dynner
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Name and address of agent for service)
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Throughout this Registration Statement, information concerning Tax-Managed
Growth Portfolio (the "Portfolio") (File No. 811-7409) is incorporated by
reference from Amendment No. 33 to the Registration Statement of Eaton Vance
Mutual Funds Trust (File No. 2-90946 under the Securities Act of 1933 (the "1933
Act")) (the "Amendment"), which was filed electronically with the Securities and
Exchange Commission on January 30, 1997 (Accession No. 0000950156-97-000105).
The Amendment contains the prospectus and statement of additional information
("SAI") of EV Marathon Tax-Managed Growth Fund (the "Feeder Fund"), which
invests substantially all of its assets in the Portfolio.
PART A
Responses to Items 1 through 3 and 5A have been omitted pursuant to
Paragraph 4 of Instruction F of the General Instructions to Form N-1A.
Item 4. GENERAL DESCRIPTION OF REGISTRANT
(a) (i) The Registrant is an open-end diversified management investment
company organized on October 14, 1965, as a Massachusetts Corporation.
(ii) The investment objective of the Registrant is to achieve long-term,
after-tax returns for its shareholders through investing in a diversified
portfolio of equity securities. This objective is nonfundamental but the
Directors intend to submit any proposed change which would be material to
shareholders for approval.
Prior to December 1, 1995, the Registrant invested directly in a portfolio
of securities. Information provided herein for prior periods reflects this
investment practice. Commencing on December 1, 1995, the Registrant seeks to
achieve its investment objective by investing in the Portfolio. Registrant
incorporates by reference information concerning the Portfolio's investment
objective and investment practices from "The Registrant's Investment Objective"
and "Investment Policies and Risks" in the Feeder Fund prospectus.
Item 5. MANAGEMENT OF THE REGISTRANT
(a) The Board of Directors has overall responsibility for management of the
Registrant.
(b), (c) and (g) Registrant incorporates by reference information
concerning the Portfolio's management from "Management of the Registrant and the
Portfolio" in the Feeder Fund prospectus.
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(d) Eaton Vance Management ("Eaton Vance" or the "Administrator") acts as
Administrator of the Registrant, but currently receives no compensation for
providing administrative services to the Registrant. Under its agreement with
the Registrant, Eaton Vance has been engaged to administer the Registrant's
affairs, subject to the supervision of the Board of Directors, and shall furnish
for the use of the Registrant office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Registrant.
(e) The transfer and dividend disbursing agent is First Data Investor
Services Group, P.O. Box 5123, Westborough, MA 01581-5123 (the "Transfer
Agent").
(f) The Registrant's ratio of expenses to average net assets for the period
ended October 31, 1996 was 0.76%, annualized.
(g) Not applicable
Item 6. CAPITAL STOCK AND OTHER SECURITIES
(a)(i), (ii) and (iii) The Registrant has one class of stock, consisting of
shares of common stock, par value $1.00 per share, all having equal voting
rights. All shares participate equally in earnings, dividends and assets. Shares
of the Registrant are fully paid, nonassessable and fully transferable and have
no pre-emptive or conversion rights.
Registrant incorporates by reference information concerning interests in
the Portfolio from "Organization of the Registrant and the Portfolio" in the
Feeder Fund prospectus.
(b) Not applicable
(c) Not applicable
(d) Not applicable
(e) Shareholder inquiries should be forwarded to the Registrant's office at
24 Federal Street, Boston, Massachusetts 02110.
(f) Distributions from net investment income are paid at least quarterly.
These distributions are paid in shares of the Registrant computed at net asset
value, subject to an option to each shareholder to elect to be paid in cash. Net
realized long-term capital gains are retained by the Registrant as described
below.
(g)(i) Since the Registrant intends to distribute substantially all of its
net investment income to shareholders, it is not expected that the Registrant
will be required to pay any federal income taxes on such income. However,
shareholders of the Registrant normally will have to pay federal income taxes
and any state or local taxes, on distributions from investment income.
<PAGE>
(ii) Since the Registrant retains any net realized long-term capital gain
and pays the federal tax thereon, shareholders include in their personal federal
income tax return their proportionate share of such gains (as allocated by the
Portfolio to the Registrant), take a credit for the payment of taxes thereon and
increase the tax cost basis of their shares by an amount equal to such gains
less the taxes paid. The Registrant provides each shareholder with information
regarding the shareholder's federal income tax treatment of any undistributed
realized long-term capital gain retained by the Registrant.
(iii) After the end of each calendar year, each shareholder receives
information for tax purposes regarding the distributions paid during the year
and the amount of any distributions eligible for the dividends received
deduction for corporations.
(iv) Registrant incorporates by reference information concerning the tax
consequences of certain of the Portfolio's tax consequences from "Distribution
and Taxes" in the Feeder Fund's prospectus.
(h) The Directors of the Registrant have considered the advantages and
disadvantages of investing the assets of the Registrant in the Portfolio, as
well as the advantages and disadvantages of the two-tier format. Such investment
affords the potential for economies of scale for the Registrant and may over
time result in lower expenses. In addition to selling an interest to the
Registrant, the Portfolio may sell interests to other affiliated and
non-affiliated mutual funds or institutional investors. Such investors may have
different fees than the Registrant, but will invest in the Portfolio on the same
terms and conditions and will pay a proportionate share of the Portfolio's
expenses. Information regarding other investors in the Portfolio may be obtained
by contacting Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA
02110 (617) 482-8260. Whenever the Registrant as an investor in the 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 Registrant 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 the Registrant's shareholders. The Registrant 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 Registrant to withdraw its investment in the Portfolio or take
other appropriate action.
The Registrant may withdraw (completely redeem) all its assets from the
Portfolio at any time if the Board of Directors of the Registrant determines
that it is in the best interest of the Registrant to do so. In the event the
Registrant withdraws all of its assets from the Portfolio, or the Board of
Directors of the Registrant determines that the investment objective of the
Portfolio is no longer consistent with the investment objective of the
Registrant, such Directors would consider what action might be taken, including
investing the assets of the Registrant in another pooled investment entity or
retaining an investment adviser to manage the Registrant's assets in accordance
with its investment objective. The Registrant's investment performance may be
affected by a withdrawal of all its assets from the Portfolio.
Item 7. PURCHASE OF SECURITIES BEING OFFERED
(a), (c) - (g) Registrant does not offer its shares for sale.
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(b) The Registrant 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 Registrant's net
asset value per share is determined by its custodian, Investors Bank & Trust
Company ("IBT"), (as agent for the Registrant) in the manner authorized by the
Directors of the Trust. Net asset value is computed by dividing the value of the
Registrant's total assets, less its liabilities, by the number of shares
outstanding. Because the Registrant invests its assets in an interest in the
Portfolio, the Registrant'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).
Registrant incorporates by reference information concerning the computation
of net asset value and valuation of Portfolio assets from "Valuing Registrant
Shares" in the Feeder Fund prospectus. For further information, see Item 19 of
Part B.
Item 8. REDEMPTION OR REPURCHASE OF REGISTRANT'S SHARES
A shareholder has the right to redeem fund shares by delivering to the
Transfer Agent during its business hours a written request in good order plus
any share certificates, or stock powers if no certificates have been issued.
Redemption will be made at the net asset value next computed after such
delivery. Good order means that all relevant documents must be endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) must
be guaranteed by a member of either the Securities Transfer Association's STAMP
program or the New York Stock Exchange's Medallion Signature Program, or certain
banks, savings and loan institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered securities associations
as required by a regulation of the Securities and Exchange Commission (the
"Commission") acceptable to the Transfer Agent. In addition, in some cases, good
order may require the furnishing of additional documentation if shares are
registered in the name of a corporation, partnership or fiduciary. Payment will
be made within seven days of the receipt of the aforementioned documents.
In addition to the redemption of shares in the manner described above, the
Registrant, for the convenience of its shareholders, has authorized Eaton Vance
to act as its agent in the repurchase of fund shares. Eaton Vance will normally
accept orders to repurchase shares by wire or telephone from investment dealers
for their customers at the net asset value next computed after receipt of the
order by the dealer if such order is received by Eaton Vance prior to its close
of business that day. It is the dealer's responsibility to transmit promptly the
repurchase order to Eaton Vance. These repurchase arrangements do not involve a
charge to the shareholder by either the Registrant or its agent; however,
investment dealers may make a charge to the shareholder. Payment will be made
within seven days of the receipt of an order to repurchase provided that the
certificates, or a stock power if no certificates have been issued, have been
delivered to the Transfer Agent in good order as described above.
The Registrant reserves the right to pay the redemption or repurchase price
of shares in whole or in part by a distribution of portfolio securities in lieu
of cash if, in the opinion of management, it seems advisable to do so; normally,
when the redemption or repurchase price equals or exceeds $2,500 portfolio
securities will be used by the Registrant. Any portfolio securities so
distributed will be valued at the figure at which they were appraised in
computing the net asset value of Registrant's shares. If the portfolio
securities so distributed are sold by the redeeming shareholder he will incur
brokerage commissions or other transaction costs in connection with such sale.
<PAGE>
The right to redeem shares of the Registrant can be suspended and the
payment of the redemption price deferred when the Exchange is closed (other than
for customary weekend and holiday closings), during periods when trading on the
Exchange is restricted as determined by the Commission, or during any emergency
as determined by the Commission which makes it impracticable for the Portfolio
or the Registrant to dispose of its securities or value its assets, or during
any other period permitted by order of the Commission for the protection of
investors.
Item 9. PENDING LEGAL PROCEEDING
Not applicable
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PART B
Item 10. COVER PAGE
Not applicable
Item 11. TABLE OF CONTENTS
Not applicable
Item 12. GENERAL INFORMATION AND HISTORY
Up to November 30, 1995, the Registrant invested in a portfolio of
securities. Since then, it has invested its assets in the Portfolio.
Item 13. INVESTMENT OBJECTIVES AND POLICIES
Registrant incorporates by reference additional information concerning the
investment policies of the Portfolio as well as information concerning the
investment restrictions of the Portfolio from "Additional Information about
Investment Policies" and "Investment Restrictions" in Part I of the Feeder
Registrant SAI. The Registrant is subject to the same investment restrictions as
the Portfolio. The Portfolio's portfolio turnover rate for the period from the
start of business December 31, 1995 to October 31, 1996 was 6%. The Registrant's
portfolio turnover rate for its fiscal year ended October 31, 1995 was 2%.
(d) Not applicable
Item 14. MANAGEMENT OF THE REGISTRANT
Registrant incorporates by reference additional information concerning the
management of the Portfolio from "Trustees and Officers" in the Feeder Fund SAI.
Persons serving as officers and Trustees of the Portfolio hold the same
positions with the Registrant and the Board of Trustees of Registrant has the
same committees with the same composition as the committees of the Portfolio's
Board.
(c) The fees and expenses of those Directors of the Registrant and Trustees
of the Portfolio who are not members of the Eaton Vance organization
(noninterested Directors/Trustees) are paid by the Registrant and the Portfolio,
respectively. (The Directors of the Registrant and Trustees of the Portfolio who
are members of the Eaton Vance organization receive no compensation from the
Registrant or the Portfolio.) For the twelve months ended October 31, 1996, the
noninterested Directors of the Registrant and Trustees of the Portfolio earned
the following compensation in their capacities as Directors and/or Directors
from the funds in the Eaton Vance fund complex(1):
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Total Compensation
Aggregate Aggregate from Registrant
NAME FROM REGISTRANT FROM PORTFOLIO AND FUND COMPLEX
---- --------------- -------------- ----------------
Donald R. Dwight $ 915 (2) $1,617 (2) $142,500
Samuel L. Hayes, III 877 (3) 1,740 (3) 153,750
Norton H. Reamer 871 1,672 142,500
John L. Thorndike 904 1,773 147,500
Jack L. Treynor 928 1,772 147,500
(1) The Eaton Vance fund complex consists of 212 registered investment
companies or series thereof.
(2) Includes $128 of deferred compensation.
(3) Includes $400 of deferred compensation.
Trustees of the Portfolio that are not affiliated with the investment
adviser, BMR, 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 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, 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 Registrant nor the Portfolio has a retirement plan for
Trustees.
Item 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
(a) Not applicable
(b) As of January 31, 1997, the Directors and officers of the Registrant,
as a group, owned in the aggregate less than 1% of the outstanding shares of the
Registrant. To the knowledge of the Registrant no person of record or
beneficially owns 5% or more of its shares, except the following shareholders
who owned of record the percentages of outstanding shares indicated after their
names, as of January 31, 1997: Patterson & Co., Philadelphia, PA (9.57%); and
Arthur F. Albert, Trustee Arthur F. Albert Trust U/A dated 10/3/78, Glenview, IL
(7.36%).
<PAGE>
Item 16. INVESTMENT ADVISORY AND OTHER SERVICES
(a) - (d) Registrant incorporates by reference information concerning
investment advisory and other services provided to the Portfolio from
"Investment Adviser and Administrator" in Part I of the Feeder Fund SAI.
Prior to investing in the Portfolio, the Registrant retained Eaton Vance as
investment adviser. The management fees paid by the Registrant to Eaton Vance
Management for the period from November 15 through 30, 1995 and for the fiscal
years ended October 31, 1995 and 1994 were $60,464, $634,427 and $559,424,
respectively.
(e) - (g) Not applicable
(h) and (i) Investors Bank & Trust Company ("IBT"), 89 South Street,
Boston, Massachusetts, acts as custodian for the Registrant and the Portfolio.
IBT has custody of all cash and securities representing the Registrant's
interest in the Portfolio, has custody of all the Portfolio's assets, maintains
the general ledger of the Portfolio and the Registrant and computes the daily
net asset value of interests in the Portfolio and the net asset value of shares
of the Registrant. 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 Registrant and
the Portfolio. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of the Registrant's and the Portfolio's net assets and a
portion of the fee relates to activity charges, primarily the number of
portfolio transactions. These fees are then reduced by a credit for cash
balances of the particular investment company at the custodian equal to 75% of
the 91-day, U.S. Treasury Bill auction rate applied to the particular investment
company's average daily collected balances for the week. Landon T. Clay, a
Director of EVC and an officer, Trustee or Director of other members of the
Eaton Vance organization, owns approximately 13% of the voting stock of
Investors Financial Services Corp., the holding company parent of IBT. In view
of Mr. Clay's interest in IBT, the Registrant is treated as a self-custodian
pursuant to Rule 17f-2 under the Investment Company Act of 1940, and the
Registrant's investments held by IBT as custodian's are thus subject to the
additional examinations by the Registrant's independent certified public
accountants as called for by such Rule. For the fiscal year ended October 31,
1996 the Registrant and the Portfolio paid IBT $17,988 and $125,097,
respectively.
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts are the
independent certified public accountants for the Registrant and the Portfolio.
As such they provide customary professional services in connection with the
audit function for a management investment company, including services leading
to the expression of an opinion on the financial statements in the annual report
to shareholders and preparation of federal tax returns.
Item 17. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the brokerage
practices of the Portfolio from "Portfolio Security Transactions" in Part I of
the Feeder Fund SAI.
<PAGE>
Prior to investing in the Portfolio, the Registrant invested directly in
Securities. During the Registrant's fiscal years ended October 31, 1995 and
1994, the Registrant paid brokerage commissions of $4,641 and $5,058,
respectively, on portfolio security transactions. Of the total brokerage
commission of $4,641 and $5,058, respectively, paid during the fiscal years
ended October 31, 1995 and 1994, approximately $2,220 and $3,857, respectively,
was paid in respect of portfolio security transactions aggregating approximately
$1,725,932 and $2,255,497, respectively, to firms which provided some research
services to Eaton Vance (although many of such firms may have been selected in
any particular transaction primarily because of their execution capabilities).
Item 18. CAPITAL STOCK AND OTHER SECURITIES
(a) The Registrant has one class of securities, i.e., shares of common
stock of the par value of $1.00 each, all of one class and all having equal
voting rights. Shareholders are entitled to dividends when and as declared by
the Board of Directors, and to participate equally in any liquidation or
dissolution of the Registrant. Shares when issued will be fully paid and
nonassessable and fully transferable. Shares have no pre-emptive, subscription
or conversion rights. There are no sinking fund provisions.
The rights of the holders of the Common Stock may be modified by a vote of
the holders of not less than a majority of the outstanding voting securities (as
that term is defined in the Investment Company Act of 1940).
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Directors
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 interest
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 Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Registrant or any other
investor in the Portfolio, unless either the remaining investors, by a majority
vote at a meeting of such investors, or a majority of the Directors of the
Portfolio, by written instrument consented to by a majority of its investors,
agree to continue the business of the Portfolio. This provision is consistent
with treatment of the Portfolio as a partnership for federal income tax
purposes.
(b) Not applicable
<PAGE>
Item 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
(a) The Registrant does not offer its shares for sale.
(b) Registrant incorporates by reference information concerning valuation
of the Portfolio's assets from "Determination of Net Asset Value" in Part I of
the Feeder Fund SAI.
(c) Not applicable
Item 20. TAX STATUS
The Registrant has met the requirements of subchapter M for the taxable
year ending October 31, 1996 and intends to meet such requirements for the
taxable year ending October 31, 1997. Accordingly, the Registrant intends to
satisfy certain requirements relating to sources of its income and
diversification of its assets and to distribute all of its net investment income
in accordance with the timing requirements imposed by the Code, so as to avoid
any federal income or excise tax on such income. The Registrant's treatment of
net realized long-term capital gains is discussed below. Because the Registrant
invests its assets in the Portfolio, the Portfolio normally must satisfy the
applicable source of income and diversification requirements in order for the
Registrant to satisfy them. The Portfolio will allocate at least annually among
its investors, including the Registrant, each investor's distributive share of
the Portfolio's net investment income and any other items of income, gain, loss,
deduction or credit (other than net realized long-term capital gain which is
discussed below). The Portfolio will make allocations to the Registrant in
accordance with the Code and applicable regulations and will make moneys
available for withdrawal at appropriate times and in sufficient amounts to
enable the Registrant to satisfy the tax distribution requirements that apply to
the Registrant and that must be satisfied in order to avoid federal income
and/or excise tax on the Registrant. For purposes of applying the requirements
of the Code regarding qualification as a RIC, the Registrant will be deemed (i)
to own its proportionate share of each of the assets of the Portfolio and (ii)
to be entitled to the gross income of the Portfolio attributable to such share.
Allocated net realized long-term capital gains are normally retained by the
Portfolio, and the Portfolio pays the federal tax thereon. When this is done,
the shareholder includes in his personal income tax return his proportionate
share of such gains (as allocated by the Portfolio to the Registrant), takes a
credit for the payment of taxes thereon, and increases the tax cost basis of his
shares by an amount equal to such gains less the taxes paid. Due to regulations
imposed by the Internal Revenue Service the Registrant is required to distribute
net realized long-term capital gains (computed on the basis of the one-year
period ending on October 31 of such year) and 100% of any income from the
present year that was not paid out during such year and on which the Registrant
was not taxed. The Registrant therefore reserves the right to distribute such
capital gains when required. Certain distributions, if declared in October,
November or December and paid the following January, will be taxed to
shareholders as if received on December 31 of the year in which they are
declared.
In order to avoid federal excise tax, the Code requires that the Registrant
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses, generally computed on the basis of the one-year period
ending on October 31 of such year, after reduction by any available capital loss
carryforwards, and 100% of any income and capital gains from the prior year (as
<PAGE>
previously computed) that was not paid out during such year and on which
the Registrant was not taxed. Further, under current law, provided that the
Registrant qualifies as a RIC for federal income tax purposes and the Portfolio
is treated as a partnership for Massachusetts and federal tax purposes, neither
the Registrant nor the Portfolio is liable for any income, corporate excise or
franchise tax in the Commonwealth of Massachusetts.
Foreign exchange gains and losses realized by the Portfolio and allocated
to the Registrant in connection with the Portfolio's investments in foreign
securities and certain options, futures or forward contracts or foreign currency
may be treated as ordinary income and losses under special tax rules. Certain
options, futures or forward contracts of the Portfolio may be required to be
marked to market (i.e., treated as if closed out) on the last day of each
taxable year, and any gain or loss realized with respect to these contracts may
be required to be treated as 60% long-term and 40% short-term gain or loss.
Positions of the Portfolio in securities and offsetting options, swaps, futures
or forward contracts may be treated as "straddles" and be subject to other
special rules that may, upon allocation of the Portfolio's income, gain or loss
to the Registrant, affect the amount, timing and character of the Registrant's
distributions to shareholders. Certain uses of foreign currency and foreign
currency derivatives such as options, futures, forward contracts and swaps and
investment by the Portfolio in certain "passive foreign investment companies"
may be limited or a tax election may be made, if available, in order to preserve
the Registrant's qualification as a RIC or avoid imposition of a tax on the
Registrant.
The Portfolio will allocate at least annually to the Registrant and its
other investors their respective distributive shares of any net investment
income and net capital gains (except as described above) which have been
recognized for federal income tax purposes (including unrealized gains at the
end of the Portfolio's fiscal year on certain options and futures transactions
that are required to be marked-to-market). Such amounts will be distributed by
the Registrant to its shareholders in cash or additional shares, as they elect.
Shareholders of the Registrant will be advised of the nature of the
distributions.
Certain investors in the Portfolio, including the Registrant and other
RICs, have acquired interests in the Portfolio by contributing securities. Due
to tax considerations, during the first five years following the contribution of
securities to the Portfolio by an investor, such securities will not be
distributed to any investor other than the investor who contributed those
securities. Investors who acquire an interest in the Portfolio by contributing
securities and who redeem that interest within five years thereafter will
generally receive back one or more of the securities they contributed. In
partial redemptions by such investors during this period, the Portfolio will
attempt to accommodate requests to distribute initially those contributed
securities and share lots with the highest cost basis.
The Portfolio has significant holdings of highly appreciated securities
that were contributed to the Portfolio by investors other than the Registrant.
If such securities were to be sold, the resulting capital gain would be
allocated disproportionately among the Portfolio's investors, with the result
that the Registrant would not be subject to taxation on any gain arising prior
to the contribution of the securities to the Portfolio. If any appreciated
securities to be contributed to the Portfolio by the Registrant are sold, the
resulting capital gain would be allocated to the Registrant.
<PAGE>
Any loss realized upon the redemption or exchange of shares with a tax
holding period of 6 months or less will be treated as a long-term capital loss
to the extent of any distribution of net long-term capital gains with respect to
such shares. All or a portion of a loss realized upon a taxable disposition of
Registrant shares may be disallowed under "wash sale" rules if other shares of
the Registrant are purchased (whether through reinvestment or dividends or
otherwise) within 30 days before or after the disposition. Any disallowed loss
will result in an adjustment to the shareholder's tax basis in some or all of
the other shares acquired.
The Registrant will not be subject to Massachusetts income, corporate
excise or franchise taxation as long as it qualifies as a RIC under the Code.
Amounts paid by the Registrant to individuals and certain other
shareholders who have not provided the Registrant with their correct taxpayer
identification number and certain required certifications, as well as
shareholders with respect to whom the Registrant has received notification from
the Internal Revenue Service or a broker, may be subject to "backup" withholding
of federal income tax from the Registrant's taxable dividends and distributions
and the proceeds of redemptions (including repurchases and exchanges) at a rate
of 31%. An individual's taxpayer identification number is generally his or her
social security number.
Non-resident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Registrant's distributions from its ordinary income and the excess
of its net short-term capital gain over its net long-term capital loss, unless
the tax is reduced or eliminated by an applicable tax treaty. Distributions from
the excess of the Registrant's net long-term capital gain over its net
short-term capital loss received by such shareholders and any gain from the sale
or other disposition of shares of the Registrant generally will not be subject
to U.S. Federal income taxation, provided that non-resident alien status has
been certified by the shareholder. Different U.S. tax consequences may result if
the shareholder is engaged in a trade or business in the United States, is
present in the United States for a sufficient period of time during a taxable
year to be treated as a U.S. resident, or fails to provide any required
certifications regarding status as a non-resident alien investor. Foreign
shareholders should consult their tax advisers regarding the U.S. and foreign
tax consequences of an investment in the Registrant.
Shareholders should consult their own tax advisers with respect to these or
other special tax rules that may apply in their particular situations, as well
as the state, local or foreign tax consequences of investing in the Registrant.
The foregoing discussion does not describe many of the tax rules applicable
to IRAs nor does it address the special tax rules applicable to certain other
classes of investors, such as other retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to these or other special tax rules that may
apply in their particular situations, as well as the state, local or foreign tax
consequences of investing in the Registrant.
Item 21. UNDERWRITERS
Not applicable because Registrant does not make a continuous offering of
Registrants shares.
<PAGE>
Item 22. CALCULATION OF PERFORMANCE DATA
Not applicable
Item 23. FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Registrant and the Portfolio contained in the Registrant's shareholder
report for the fiscal year ended October 31, 1996 as previously filed
electronically with the Commission on January 3, 1997 (Accession Number
0000950156-97-000028).
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) THE FOLLOWING FINANCIAL STATEMENTS ARE INCORPORATED BY
REFERENCE TO THE REPORT TO SHAREHOLDERS OF CAPITAL
EXCHANGE FUND, INC. DATED OCTOBER 31, 1996 (ACCESSION NO.
0000950156-97-000028):
Portfolio of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes In Net Assets
Financial Highlights For the last Five Years Ended
Notes to Financial Statements
Independent Auditor's Report
(b) Exhibits:
(1)(a) Articles of Organization incorporating all amendments
through December 14, 1995 and currently in effect filed
herewith.
(b) Articles of Amendment dated December 15, 1995
filed herewith.
(2) (a) By-Laws incorporating all amendments through March 28,
1984 filed as Exhibit (2)(a) to Amendment No. 19 and
incorporated herein by reference.
(b) Amendment to By-Laws dated November 30, 1995 filed
herewith.
(3) Not Applicable
(4) Not Applicable
(5) Not Applicable
<PAGE>
(6) Not Applicable
(7) The Securities and Exchange Commission has granted the
Registrant an exemptive order that permits the Registrant
to enter into deferred compensation arrangements with its
independent Directors. See in the Matter of Capital
Exchange Fund, Inc., Release No. IC-20671 (November 1,
1994).
(8) (a) Custodian Agreement dated December 17, 1990 filed as
Exhibit (8)(a) to Amendment No. 19 on October 25, 1996
and incorporated herein by reference.
(8) (b) Amendment to Custodian Agreement dated October 23,
1995 filed as Exhibit (8)(b) to Amendment No. 19 on
October 25, 1996 and incorporated herein by reference.
(9) Administrative Services Agreement with Eaton Vance
Management dated December 1, 1995 filed herewith.
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not Applicable
<PAGE>
Item 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
Number of Record
TITLE OF CLASS HOLDERS
-------------- -------
Capital Stock 374
$1.00 Par Value as of January 31, 1997
Item 27. INDEMNIFICATION
No change from the information set forth in Item 27 of Form N-1A, filed as
Post-Effective Amendment No. 8 to the Registration Statement under the 1940 Act,
File No. 811-1339, which information is incorporated herewith by reference.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Registrant incorporates herein by reference the information set forth under
the caption "Investment Adviser and Administrator" from Part I of the Feeder
Fund's SAI.
Item 29. PRINCIPAL UNDERWRITERS
Not applicable because Registrant does not make a continuous offering of
its shares.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books, and documents required to be maintained by
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the Registrant's
custodian, Investors Bank & Trust Company, 89 South Street, Boston, MA 02110,
and the Registrant's transfer agent, First Data Investor Services Group, 4400
Computer Drive, Westborough, Massachusetts 01581-5120, with the exception of
certain corporate documents and portfolio trading documents as prescribed and
listed in Rules 31a-1(b), (4), (5), (6), (7), (9), (10), and (11) which are in
the possession and custody of the Registrant's Treasurer at 24 Federal Street,
Boston, Massachusetts 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 the Portfolio's investment
adviser, BMR, 24 Federal Street, Boston, Massachusetts 02110.
Item 31. MANAGEMENT SERVICES
Not Applicable
Item 32. UNDERTAKINGS
Not Applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Boston and Commonwealth of
Massachusetts, on the 28th day of February, 1997.
CAPITAL EXCHANGE FUND, INC.
By /S/ JAMES L. O'CONNOR
----------------------------------------
James L. O'Connor, Treasurer
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement.
EXHIBIT NO. DESCRIPTION
(1)(a) Articles of Organization incorporating all amendments
through December 14, 1995
(b) Articles of Amendment dated December 15, 1995
(2)(b) Amendment to By-Laws dated November 30, 1995
(9) Administrative Services Agreement with Eaton Vance
Management dated December 1, 1995
The Commonwealth of Massachusetts
KEVIN H. WHITE
Secretary of the Commonwealth
STATE HOUSE
BOSTON, MASS.
ARTICLES OF ORGANIZATION
(Under G.L. Ch. 156B)
NAME POST OFFICE ADDRESS
We, Robert S. Swain 172 Beacon Street, Boston,
Arthur H. Haussermann 22 Allen Road, Wellesley,
Charles Jackson, Jr. Farm Street, Dover, Mass.
do hereby associate ourselves as incorporators with the intention of forming a
corporation under the provisions of General Laws, Chapter 156B.
1. The name by which the corporation shall be known is
CAPITAL EXCHANGE FUND, INC.
2. The purposes for which the corporation is formed and the nature of the
business to be transacted by it are as follows:
To engage in the business of an incorporated investment company of the
management type, investing and reinvesting, in accordance with the provisions of
Article I of these Articles of Organization (hereinafter sometimes called "these
Articles") the proceeds of the sale of the shares of its capital stock; and to
do any and all acts and things, necessary or incidental thereto, to the extent
permitted to business corporations under the provisions of Chapter 156 of the
General Laws of Massachusetts as heretofore and from time to time amended. The
Corporation may sell its shares only in accordance with the provisions of
Article VI of these Articles and may buy its own shares only in accordance with
the provisions of Article VII of these Articles. The Corporation may borrow
money and pledge securities as collateral security for such borrowings only to
such extent and subject to such restrictions and limitations as may be provided
in the By-Laws.
3. The total number of shares and the par value, if any, of each class of
stock which the corporation is authorized is as follows:
<PAGE>
WITHOUT PAR VALUE WITH PAR VALUE
PAR
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
Preferred
Common 4,000,000 $1.00
4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established:
NONE
5. The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are as follows:
NONE
6. Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or
for limiting, defining, or regulation the powers of the corporation, or of
its directors or stockholders, or of any class of stockholders:
See Continuation Sheets 2A through 2P
<PAGE>
7. The first meeting of the incorporators was duly held on the 13th day of
October, 1965 at which by-laws of the corporation were duly adopted and at
which the initial directors, president, treasurer and clerk, whose names
are set out below, were duly elected.
8. The following information shall not for any purpose be treated as a
permanent part of the Articles of Organization of the corporation.
a. The post office address of the initial principal office of the
corporation in Massachusetts is:
111 Devonshire Street, Boston, Massachusetts 02109
b. The name, residence, and post office address of each of the initial
directors and following officers of the corporation elected at the
first meeting are as follows:
NAME RESIDENCE POST OFFICE ADDRESS
President: Robert S. Swain 172 Beacon Street 111 Devonshire St.
Boston, Mass. Boston, Massachusetts
Treasurer: Arthur H. Haussermann 22 Allen Road "
Wellesley, Mass.
Clerk: Arthur H. Haussermann 22 Allen Road "
Wellesley, Mass.
Directors: Robert S. Swain 172 Beacon Street "
Boston, Mass.
Robert L. Osgood Peach Point "
Marblehead, Mass.
Edward F. Ryan 110 Bridge Street "
Manchester, Mass.
c. The date initially adopted on which the corporation's fiscal year ends
is:
October 31
d. The date initially fixed in the by-laws for the annual meeting of
stockholders of the corporation is:
4th Wednesday in February
e. The name and business address of the registered agent, if any, of the
corporation are:
NONE
<PAGE>
IN WITNESS WHEREOF, and under the penalties of perjury, we, the above-named
INCORPORATORS, hereto sign our names, this 13th day of October 1965.
/S/ ARTHUR H. HAUSSERMANN
/S/ ROBERT S. SWAIN
/S/ CHARLES JACKSON JR.
<PAGE>
The following lawful provisions are inserted in these Articles for the
conduct and regulation of the business of the Corporation, for its voluntary
dissolution and for limiting, defining or regulating the powers of the
Corporation, its directors and shareholders.
ARTICLE I
Investments
The Corporation shall have authority from time to time, subject to any
restrictions and limitations which may be contained in these Articles or the
By-Laws with respect to the character of investments and the diversification
thereof, to invest in, own, hold for investment or otherwise, and to sell or
otherwise dispose of (1) any shares of stock or voting trust certificates issued
or created in respect of shares issued by any corporation, either public,
quasi-public or private, association, trust or other organization, domestic or
foreign, (2) any bonds, notes, certificates of indebtedness, or other negotiable
securities, however named or described, issued by such organizations, (3) any
bonds, notes, certificates of indebtedness or other negotiable securities,
however named or described, issued by governments, states, counties, cities,
towns or districts, or other governmental agencies, domestic or foreign, and (4)
deposits in any bank or trust company in good standing organized under the laws
of the United States of America or under the laws of any State thereof.
ARTICLE II
Management of Securities Owned
The Board of Directors on behalf of the Corporation shall have the
authority to exercise all of the rights of the Corporation as owner of any
securities which might be exercised by any individual owning such securities in
his own right, including without limitation the right to vote by proxy for any
and all purposes (including the right to authorize any officer to execute
proxies), to consent to the reorganization, merger or consolidation of any
company, or to consent to the sale or lease of all or substantially all of the
property and assets of any company to any other company; to exchange any of the
securities of any company for the securities, including shares of stock, issued
therefor upon any such reorganization, merger, consolidation, sale or lease; to
exercise any conversion privileges, rights, options, and warrants incident to
the ownership of any security owned by it or acquired therewith; and to hold any
securities acquired in the name of the Custodian, or in the name of its nominee
or a nominee of the Corporation, or in any manner permitted herein or in the
By-Laws.
ARTICLE III
Maintenance of Assets
The Corporation shall maintain custodial and depository arrangements for
its assets in the manner referred to in the By-Laws. As used in these Articles,
the term "Custodian" shall mean the principal custodian of the Corporation
appointed by the Board of Directors.
<PAGE>
ARTICLE IV
Contracts
(a) The Board of Directors may in their discretion from time to time enter
into an exclusive or non-exclusive underwriting contract or contracts providing
for the sale of the shares of this Corporation to net the Corporation not less
than the amount provided for in Article VI hereof, whereby the Corporation 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 (such other party being herein
sometimes called the "underwriter"), and in either case on such terms and
conditions as may be prescribed in the By-Laws, if any, and such further terms
and conditions as the Board of Directors may in their discretion determine not
inconsistent with the provisions of this Article IV, of Article VI hereof or of
the By-Laws; and such contract may also provide for the repurchase of shares of
this Corporation by such other party as agent of the Corporation.
(b) The Board of Directors may in its discretion from time to time inter
into an investment advisory or management contract whereby the other party to
such contract shall undertake to furnish to the Board of Directors such
management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions, as the Board of Directors may in its discretion determine.
(c) Any contract of the character described in paragraphs (a) or (b) or any
contract with a custodian or subcustodian may be entered into with any
corporation, firm, trust or association, although one or more of the Board of
Directors or officers of this Corporation may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Corporation under or
by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article IV.
The same person (including a firm, corporation, trust or association) may be the
other party to contracts entered into pursuant to paragraphs (a) and (b) above,
and any individual may be financially interested or otherwise affiliated with
persons who are parties to any or all of the contracts mentioned in this
paragraph (c).
(d) Any contract entered into pursuant to paragraph (a) or (b) above shall
be consistent with and subject to the requirements of Section 15 of the
Investment Company Act of 1940 (including any amendment thereof or other
applicable Act of Congress hereafter enacted) with respect to its continuance in
effect, its termination and the method of authorization and approval of such
contract or renewal thereof, and no amendment to any contract entered into
pursuant to paragraph (b) shall be effective unless assented to by affirmative
vote of a majority of the outstanding shares of the Corporation.
(ARTICLE V deleted)
<PAGE>
ARTICLE VI
Sale of Shares of the Corporation
The Board of Directors may offer for sale, issue and sell or cause to be
offered, issued and sold, an initial issue of shares consisting of such number
of shares at prices to net the Corporation, before paying any taxes in
connection with the issue and sale, such amount per share as may be specified,
from time to time, by the Board of Directors or its delegate, provided that no
change in said amount shall be made after the registration statement under the
Federal Securities Act of 1933 relating to such shares shall have become
effective. In connection with such initial issue and sale, the Board of
Directors may accept securities of other issuers at market value in lieu of
cash, notwithstanding that the Federal income tax basis to the Corporation of
any securities so acquired may be less than the market value, provided that the
securities so acquired are of the character in which the Board of Directors are
permitted to invest the funds of the Corporation, and provided that the
consideration for the shares to be issued shall in every case be paid or
delivered to the Custodian, as agent of the Corporation, before the delivery of
any certificate for such shares.
The Board of Directors may from time to time issue and sell or cause to be
issued and sold shares of the Corporation for cash, which shall in every case be
paid to the Custodian as agent of the Corporation before the delivery of any
certificate for such shares. The authorized shares, including additional shares
which may hereafter be authorized by vote of the shareholders, as well as any
shares which may have been repurchased by the Corporation (herein sometimes
referred to as "treasury shares") may be sold at a price which will net the
Corporation, before paying any taxes in connection with such issue or sale, not
less than the par value thereof and not less than the net asset value thereof
(as defined in Article VIII hereof) in effect when the sale is made.
When an underwriting contract is in effect pursuant to Article IV (a) the
time of sale shall be the time when an unconditional order is placed with the
underwriter, unless the order is an unconditional order to be executed at the
public offering price to be established by a calculation of net asset value
later to become effective, in which event the time of sale shall be the time
when such net asset value becomes effective. Such contract may provide for the
sale of shares either at a price based on the net asset value in effect when the
order is placed with the underwriter or at a price based on such later
ineffective net asset value. No shares need be offered to existing shareholders
before being offered to others. No shares shall be sold by the corporation
(although shares previously contracted to be sold may be issued upon payment
therefor) during any period when the determination of net asset value is
suspended by declaration of the Board of Directors pursuant to the provisions of
Article VIII hereof. In connection with the acquisition by merger or otherwise
of all or substantially all the assets of another investment company or trust
the Board of Directors may issue or cause to be issued shares of the Corporation
and accept in payment therefor such assets at market value in lieu of cash,
notwithstanding that the Federal income tax basis to the Corporation of any
assets so acquired may be less than the market value, provided that such assets
are of the character in which the Board of Directors are permitted to invest the
funds of the Corporation.
<PAGE>
ARTICLE VII
Redemption and Repurchase of Shares
of the Corporation
(a) In case any shareholder in the Corporation at any time desires to
dispose of shares recorded in his name, he may deposit his certificate or
certificates therefor duly endorsed or accompanied by a proper instrument of
transfer at the office of the Custodian together with a request that the
Corporation purchase the shares represented thereby in accordance with this
Article VII(a). The shareholder so depositing his certificate or certificates
shall be entitled to require the Corporation to purchase, and the Corporation
shall purchase, his said shares, but only at the net asset value of such shares
(as defined in Article VIII hereof) determined by or on behalf of the Board of
Directors next after said deposit.
Payment for such shares shall be made by the Corporation to the shareholder
of record within seven (7) days after the date upon which the shares are
deposited. If the determination of the purchase price is postponed beyond the
date on which it would normally occur by reason of a declaration by the Board of
Directors suspending determination of net asset value pursuant to said Article
VIII, the right of the shareholder to have his shares purchased by the
Corporation shall be similarly suspended, and he may withdraw his certificate or
certificates from deposit if he so elects; or, if he does not so elect, the
purchase price shall be the net asset value of the shares deposited, determined
next after termination of such suspension and payment therefor shall be made
within seven (7) days thereafter.
Payment for such shares may at the option of the Board of Directors, 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 Board of Directors, 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 asset value of the Corporation's shares, provided that any
shareholder who cannot legally acquire securities so distributed in kind by
reason of the prohibitions of the Investment Company Act of 1940 shall receive
cash.
(b) The Corporation may purchase shares of the Corporation by agreement
with the owner thereof (1) at a price not exceeding the net asset value per
share determined next after the purchase or contract of purchase is made or (2)
at a price not exceeding the net asset value per share determined at some later
time, and may make payment in whole or in part in kind, as provided in paragraph
(a).
(c) Shares purchased by the Corporation either pursuant to paragraph (a) or
paragraph (b) of this Article VII shall be deemed treasury shares and may be
resold by the Corporation.
ARTICLE VIII
NET ASSET VALUE OF SHARES
The net asset value of each share of the Corporation outstanding shall be
determined by the Board of Directors or its delegate not less frequently than
once on each business day (which term shall, wherever it appears in this
instrument, be deemed to mean each day on which the net asset value of the
shares of the Corporation is required to be computed by the provisions of the
<PAGE>
Investment Company Act of 1940, including any amendment thereof or other
applicable Act of Congress hereafter enacted [the "1940 Act"]or rules or
regulations promulgated thereunder) and the net asset value as so determined
shall become effective at such time as the Board of Directors or its delegate
may determine. The Board of Directors may delegate any of its powers and duties
under this Article VIII with respect to the determination of net asset value and
appraisal of assets and liabilities. The Board of Directors or its delegate may
cause the net asset value per share last determined to be determined again, and
may determine the time when such redetermined net asset value may become
effective. Any such redetermination may be made by appraisal, or by estimate
based upon changes in the market value of representative or selected securities
or in recognized market averages or in other standard market data since the last
determination. For the purposes of Articles VII and VIII any reference 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 Board of Directors may declare a suspension of the determination of net
asset value for the whole or any part of any period with respect to which an
open-end investment company may declare such a suspension not inconsistent with
the provisions of the 1940 Act or rules or regulations promulgated thereunder.
Such suspension shall take effect at such time as the Board of Directors shall
specify but not later than the close of business on the business day next
following the declaration, and thereafter there shall be no determination of net
asset value until the Board of Directors shall declare the suspension at an end,
except that the suspension shall terminate in any event when the conditions
precedent prescribed by the 1940 Act or rules or regulations promulgated
thereunder to the declaration of such a suspension shall have terminated.
The net asset value of each share of the Corporation as of any particular
time shall be the quotient (adjusted to the nearer cent) obtained by dividing
the value, as of such time, of the net assets of the Corporation (i.e., the
value of the assets of the Corporation less its actual and accrued liabilities
exclusive of capital and surplus) by the total number of shares outstanding
(exclusive of treasury shares) at such time, all as determined by the Board of
Directors or its delegate. In appraising the liabilities of the Corporation the
Board of Directors or its delegate may include in liabilities such reserves for
taxes, estimated expenses and contingencies as the Board or its delegate deems
fair and reasonable under the circumstances. All securities for which market
quotations are readily available shall be appraised at their market value and
all other securities and assets shall be appraised at their fair value, in each
case pursuant to methods or procedures authorized or approved by the Board of
Directors or any duly authorized committee thereof. All determinations of net
asset value and appraisals of assets and liabilities made in good faith by the
Board of Directors or its delegate shall be binding and conclusive upon all
stockholders and other persons interested.
For the purposes of this Article VIII:
(i) Shares of the Corporation sold shall be deemed to become
outstanding immediately after the close of business on the day on which
the contract of sale is made, and the sale price thereof (less
commission, if any, and less any stamp or other tax payable by the
Corporation in connection with the issuance thereof) shall thereupon be
deemed an asset of the Corporation.
<PAGE>
(ii) Shares of the Corporation tendered for purchase by the
Corporation under Article VII(a) shall be deemed to be outstanding at
the close of business on the day as of which the purchase price is
determined, and thereafter they shall be deemed treasury stock and,
until paid, the price thereof shall deemed to be a liability of the
Corporation.
(iii) Shares of the Corporation purchased by the Corporation
under Article VII(b) shall be deemed to be outstanding at the close of
business on the day as of which the purchase price is determined, and
thereafter the shall be deemed treasury stock and, until paid, the
price thereof shall be deemed to be a liability of the Corporation.
(iv) Portfolio securities owned by the Corporation which the
Board of Directors or its delegate shall, pursuant to Article VII(a)
have selected for distribution in redemption or repurchase of shares of
the Corporation tendered to it pursuant to Article VII(a) or
repurchased pursuant to Article VII(b) at any time shall be included in
determining the price of such shares of the Corporation, and thereafter
neither such securities nor such shares of the Corporation shall be
included in determinations of net asset value pursuant to this Article
VIII.
ARTICLE IX
Dividends
(a) The total of distributions to shareholders paid in respect of any one
fiscal year, subject to the exceptions noted below, shall be approximately equal
to (A) the net income, exclusive of profits or losses realized upon the sale of
securities or other property, for such fiscal year, determined in accordance
with good accounting practice (which, if the Board of Directors so determine,
maybe adjusted for net amounts included as such accrued net income in the price
of shares of capital stock of the Corporation issued or repurchased), but if the
net income exceeds the amount distributed by less than one cent per share
outstanding at the record date for the final dividend, the excess shall be
treated as distributable income of the following year. Such total of
distributions may also include in the discretion of the Board of Directors an
additional amount (B) which shall not substantially exceed the excess or profits
over losses on sales of securities or other property for such fiscal year. The
decision of the Board of Directors as to what, in accordance with good
accounting practice, is income and what is principal shall be final, and except
as specifically provided herein the decision of the Board of Directors as to
what expenses and charges of the Corporation shall be charged against principal
and what against income shall be final, all subject to any applicable provisions
of the Investment Company Act of 1940 and rules and regulations of the
Securities and Exchange Commission promulgated thereunder. For the purposes of
the limitation imposed by this paragraph (a), shares issued pursuant to
paragraph (b) of this Article IX shall be valued at the amount of cash which the
shareholders would have received if they had elected to receive cash in lieu of
such shares.
<PAGE>
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give to the Board of Directors the power in
its discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Corporation to avoid or reduce liability for taxes. Any payment made
to shareholders pursuant to clause (B) shall be accompanied by a written
statement showing the source or sources of such payment, and the basis of
computation thereof.
(b) The Board of Directors shall have power, to the fullest extent
permitted by the laws of Massachusetts, but subject to the limitation as to cash
distributions imposed by paragraph (a) of this Article IX, at any time or from
time to time to declare and cause to be paid distributions payable at the
election of any of the shareholders (whether exercised before or after the
declaration of the distributions) either in cash or in shares of capital stock,
provided that the sum of (i) the cash distribution actually paid
to any shareholder and (ii) the net asset value of the shares which that
shareholder elects to receive, in effect at such time at or after the election
as the Board of Directors may specify, shall not exceed the full amount of cash
to which that shareholder would be entitled if he elected to receive only cash.
In the case of a distribution payable in cash or shares of capital stock at the
election of a shareholder, the Board of Directors may prescribe whether a
shareholder failing to express his election before a given time shall be deemed
to have elected to take shares rather than cash, or to take cash rather than
shares, or to take shares with cash adjustment of fractions.
(c) Anything in this instrument to the contrary notwithstanding, the Board
of Directors may at any time declare and distribute pro rata among the
shareholders a "stock dividend" out of either authorized but unissued or
treasury shares of the Corporation, or both.
ARTICLE X
Dealings with Directors and Officers
The Board of Directors shall not on behalf of the Corporation buy any
securities (other than shares issued by the Corporation) from or sell any
securities (other than shares issued by the Corporation) to or lend any assets
of the Corporation to any director or officer of the Corporation or any firm of
which any such director or officer is a member acting as principal; or have any
such dealings with the other party to any contract entered into pursuant to
paragraph (a) or (b) or Article IV hereof or with any person interested in such
other party as director, partner, trustee or officer; but the Corporation may
employ any such other party or any such person or any firm or company in which
any such person is so interested as broker upon customary terms.
Any director, officer or other agent of the Corporation may acquire, own
and dispose of shares of the Corporation to the same extent as if he were not a
director, officer or agent; and the Board of Directors may issue and sell, or
cause to be issued and sold for cash, shares in the Corporation to, and buy such
shares for cash from, any such person or any firm or company in which he is
interested, subject only to the general limitations herein contained as to the
sale and purchase of such shares; and all subject to any restrictions which may
be contained in the By-Laws.
<PAGE>
ARTICLE XI
Winding Up and Dissolution
In the event that the holders of a majority of the shares of the
Corporation vote to wind up and liquidate the Corporation, no further shares of
the Corporations shall be sold or redeemed or repurchased by the Corporation,
and the then Directors shall proceed to wind up its affairs, liquidate its
assets, pay its liabilities and expenses, distribute assets or the proceeds
thereof among the holders of the shares in proportion to their holdings of
shares, and do all acts necessary to secure the dissolution of the Corporation.
For the purpose of such winding up, liquidation, distribution and
dissolution, the then Directors shall continue in office until such duties have
been duly performed. During the period of liquidation and until all distribution
to the shareholders has been completed the Directors shall cause the asset value
of the shares to be determined as hereinbefore provided, and their compensation
shall be subject to the limitation contained in Article V hereof.
<PAGE>
Article XII
By-Laws
The By-Laws of the Corporation may provide that the Board of Directors may
amend or repeal the By-Laws in whole or in part without the assent or vote of
the shareholders, except with respect to any provision of the By-Laws which by
law, the Articles of Organization (including any amendments thereof) or the
By-Laws requires action by the stockholders; provided, however, that any By-Law
adopted by the Board of Directors may be amended or repealed by the
stockholders. The By-Laws may provide that meetings of the stockholders may be
held at any place in the United States. The By-Laws may also provide for the
conduct of meetings of the Board of Directors or Committees thereof by means of
a telephone conference circuit. without the assent or vote of the Shareholders.
The By-Laws may also provide for the conduct of meetings of the Board of
Directors or Committees thereof by means of a telephone conference circuit.
ARTICLE XIII
Liability of Directors
The Directors of the Corporation shall not be liable to the Corporation or
to any shareholder or creditor thereof because of any action taken by them in
good faith, and in taking any such action the Directors shall be full protect in
relying in good faith upon the books of account of the Corporation or statements
or reports prepared by any of its officials or employees or by others who they
believe in good faith are qualified to make such statements or reports.
Nothing contained in the preceding sentence or elsewhere in this Agreement
of Association shall protect any director or officer of this Corporation against
any liability to the Corporation or to 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.
ARTICLE XIV
(a) Subject to the exceptions and limitations contained in paragraph (b), below:
<PAGE>
(i) every person who is, or has been, a director or officer of the
Corporation shall be indemnified by the Corporation to the fullest
extent permitted by law against liability and against all expenses
reasonable incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a director or officer
and against amounts paid or incurred by him in the settlement thereof;
(ii) the words 'claim', 'action', 'suit', or 'proceeding' shall apply
to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened, whether or not based on any
act or omission antedating adoption of this Article XIV; and words
'liability' and 'expenses' shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a director or officer:
(i) against any liability to the Corporation or its shareholders by
reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Corporation;
(iii) in the event of a settlement unless there has been a
determination that such director or officer did not engage in wilful
misfeasance, bad faith , gross negligence or reckless disregard of the
duties involved in the conduct of his office,
(A) by the court or other body approving the settlement; or
(B) by vote of a majority of the outstanding shares of the
Corporation not including any shares owned by any affiliated
person (as defined in Section 2 (a) (3) of the Investment
Company Act of 1940) of the Corporation; or
(C) by vote of two-thirds (2/3) of those members of the Board
of Directors of the Corporation, constituting at least a
majority of such Board, who are not themselves involved in the
claim, action, suit or proceeding; or
(D) by written opinion of independent counsel, provided,
however, that any shareholder may, by appropriate legal
proceedings, challenge any such determination by the Board of
Directors, or by independent counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Corporation, shall be severable, shall not affect any
other rights to which any director or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which corporate personnel other than directors and officers may be entitled by
contract or otherwise under law.
<PAGE>
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Article XIV may be advanced by the Corporation prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient,
guaranteed by a surety bond issued by an insurance company qualified to do
business in the Commonwealth of Massachusetts, to repay such amount if it is
ultimately determined that he is not entitled to indemnification under this
Article XIV.
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
=====================================
I hereby certify that, upon an
examination of the within-written articles
of organization, duly submitted to me, it
appears that the provisions of the General
Laws relative to the organization of
corporations have been complied with, and I
hereby approve said articles; and the filing
fee in the amount of $ having been paid,
said articles are deemed to have been filed
with me this 19 day of
/s/ Kevin H. White
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTO COPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO:
Arthur H. Haussermann
c/o Vance, Sanders & Company, Inc.
111 Devonshire Street
Boston, Massachusetts 02109
FILING FEE: 1/20 of 1% of the total amount of the
authorized capital stock with par value, and one cent a
share for all authorized shares without par value, but
not less than $75. General Laws, Chapter 156B.
Copy Mailed
FEDERAL IDENTIFICATION
NO. 04-2385053
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We, Landon T. Clay , President
-------------------------------------------------
and Thomas Otis , Clerk
-------------------------------------------------
of Capital Exchange Fund, Inc.
--------------------------------------------------------------,
(Exact name of corporation)
located at 24 Federal Street, Boston, MA 02110
-------------------------------------------------------,
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment effecting articles numbered:
6
- -------------------------------------------------------------------
(Number those articles 1,2,3,4,5 and/or 6 being amended)
of the Articles of Organization was duly adopted at a meeting held December
15, 1995, by vote of:
346,437.105 Common Stock 496,736.551
- ----------- shares of ------------ of ----------- shares outstanding,
(type, class & series, if any)
- ----------- shares of ------------ of ----------- shares outstanding,
(type, class & series, if any)
and
- ----------- shares of ------------ of ----------- shares outstanding,
(type, class & series, if any)
being at least two-thirds of each type, class or series outstanding and entitled
to vote thereon.
<PAGE>
The following other lawful provisions for the conduct and regulation of
the business of the Corporation, for its voluntary dissolution, for limiting,
defining or regulating the powers of the Corporation, its directors or
shareholders are amended as indicated below:
VOTED: That Article XI of the Articles of Organization
of the Corporation be and it hereby is amended to
read as follows:
ARTICLE VI
Winding Up and Dissolution
(a) In the event that the holders of a majority of the shares of the
Corporation vote to wind up and liquidate the Corporation, no further shares of
the Corporation shall be sold or redeemed or repurchased by the Corporation, and
the then Directors shall proceed to wind up its affairs, liquidate its assets,
pay its liabilities and expenses, distribute assets or the proceeds thereof
among the holders of the shares in proportion to their holdings of shares, and
do all acts necessary to secure the dissolution of the Corporation.
(b) The holders of a majority of the shares of the Corporation
outstanding and entitled to vote thereon at a meeting called for the purpose may
vote to authorize a reorganization providing for the sale, lease or exchange of
all or substantially all of the Corporation's property and assets to another
registered investment company.
(c) for the purpose of such winding up, liquidation, reorganization,
distribution and dissolution, the then Directors shall continue in office until
such duties have been duly performed. during the period of liquidation or
reorganization and until all distribution to the shareholders has been completed
the Directors shall cause the net asset value of the shares to be determined as
hereinbefore provided, and their compensation shall be subject to the limitation
contained in Article V hereof.
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
9th January 96
SIGNED UNDER THE PENALTIES OF PERJURY, this ---- day of ------, 19---.
/s/ Landon T. Clay
- -------------------------------------------------, President
/s/ Thomas Otis
- -------------------------------------------------, Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
------------------------------------------------
------------------------------------------------
I hereby approve the within Articles of Amendment and,
the filing fee in the amount of $100.00 having been paid,
said articles are deemed to have been filed with me this
10th day of January, 1996.
Effective date:_______________________________
/s/ William Francis Galvin
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
AMENDMENT TO
BY-LAWS
OF
CAPITAL EXCHANGE FUND, INC.
November 30, 1995
Pursuant to ARTICLE XIV of the BY-LAWS of Capital Exchange Fund, Inc., (the
"Fund") upon vote of the holders of a majority of the outstanding shares of
stock of the Fund entitled to vote at a Special Meeting in lieu of the Annual
Meeting of Stockholders held on November 30, 1995, the first sentence of Section
1. of ARTICLE II of the BY-LAWS of the Fund was amended to read as follows:
SECTION 1. ANNUAL MEETING. A meeting of the shareholders for the purpose of
electing a Board of Directors, and for the transaction of such other business as
may properly be brought before the meeting, shall be held annually, on the
second Wednesday in April beginning in 1996, unless said day be a legal holiday,
in which case the annual meeting shall be held on the next day thereafter not a
legal holiday, or on such other date as the Directors shall fix consistent with
applicable law.
********************
CAPITAL EXCHANGE FUND, INC.
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made this 1st day of December, 1995, between Capital Exchange
Fund, Inc., a Massachusetts corporation (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 of the Fund and to administer its affairs, subject to
the supervision of the Directors of the Fund, for the period and on the terms
set forth in this Agreement.
The Administrator hereby accepts such employment, and undertakes to afford
to the Fund the advice and assistance of the Administrator's organization in the
administration of the Fund and 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 and to pay the salaries and fees of all officers and
Directors of the Fund who are members of the Administrator's organization and
all personnel of the Administrator performing services relating to
administrative activities. 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.
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 Tax-Managed Growth Portfolio (the
"Portfolio"), a registered open-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, currently
acts as investment adviser to the Portfolio under the Investment Advisory
Agreement dated October 23, 1995 between the Portfolio and BMR.
2. ALLOCATION OF CHARGES AND EXPENSES. The Administrator shall pay the
entire salaries and fees of all of the Fund's Directors and officers who devote
part or all of their time to the affairs of the Administrator, and the salaries
and fees of such persons shall not be deemed to be expenses incurred by the Fund
for purposes of this Section 2. Except as provided in the foregoing sentence,
the Administrator shall not pay any expenses relating to the Fund including,
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,
disposition and valuation 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 of 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, (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
<PAGE>
all services to the Fund (including without limitation safekeeping of funds,
securities and other investments, keeping of books and accounts and
determination of net asset values), (xiv) fees, expenses and disbursements of
transfer agents, dividend disbursing agents, shareholder servicing agents and
registrars for all services to the Fund, (xv) expenses for servicing shareholder
accounts, (xvi) any direct charges to shareholders approved by the Directors of
the Fund, (xvii) compensation and expenses of Directors of the Fund who are not
members of the Adviser's organization, and (xviii) such non-recurring items as
may arise, including expenses incurred in connection with litigation,
proceedings and claims and the obligation of the Fund to indemnify its Directors
and officers with respect thereto.
3. COMPENSATION OF ADMINISTRATOR. The Board of Directors of the Fund
have currently determined that, based on the current level of compensation
payable to BMR by the Portfolio under the Portfolio's present Investment
Advisory Agreement with BMR, the Administrator shall receive no compensation
from the Fund in respect of the services to be rendered and the facilities to be
provided by the Administrator under this Agreement. If the Directors determine
that the Fund, should compensate the Administrator for such services and
facilities, such compensation shall be set forth in a new agreement or in an
amendment to this Agreement to be entered into by the parties hereto.
4. OTHER INTERESTS. It is understood that Directors and officers of
the Fund 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 shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
which may include the words "Eaton Vance" or "Eaton & Howard" or "Vance Sanders"
or any combination thereof as part of their name, and that the Administrator or
its subsidiaries or affiliates may enter into advisory or management or
administration agreements or other contracts or relationships 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.
<PAGE>
6. 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
Directors of the Fund.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective upon the date of its execution, and, unless terminated as
herein provided, shall remain in full force and effect through and including
February 28, 1996 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1996 is
specifically approved at least annually (i) by the Board of Directors of the
Fund and (ii) by the vote of a majority of those Directors 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 without the payment of any
penalty, by action of Directors of the Fund or the trustee of the Administrator,
as the case may be, and the Fund may, at any time upon such written notice to
the Administrator, terminate this 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.
8. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective until approved (i) by the vote of a majority of
those Directors of the Fund who are not interested persons of the Administrator
or the Fund, and (ii) by vote of the Board of Directors of the Fund.
9. 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
CAPITAL EXCHANGE FUND, INC. EATON VANCE MANAGEMENT
By /s/ Landon T. Clay By /s/ H. Day Brigham, Jr.
--------------------- --------------------------------
PRESIDENT VICE PRESIDENT AND NOT INDIVIDUALLY
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000017147
<NAME> CAPITAL EXCHANGE FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 18,913,716
<INVESTMENTS-AT-VALUE> 135,882,935
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 135,882,935
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,593
<TOTAL-LIABILITIES> 8,593
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 484,277
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 54,896
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 28,198,341
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 116,969,219
<NET-ASSETS> 135,874,342
<DIVIDEND-INCOME> 2,042,660
<INTEREST-INCOME> 150,375
<OTHER-INCOME> (772,875)
<EXPENSES-NET> 167,261
<NET-INVESTMENT-INCOME> 1,252,899
<REALIZED-GAINS-CURRENT> 2,848,000
<APPREC-INCREASE-CURRENT> 21,470,324
<NET-CHANGE-FROM-OPS> 25,571,223
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,223,371
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 13,140
<SHARES-REINVESTED> 1,033
<NET-CHANGE-IN-ASSETS> 21,231,127
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 60,464
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 167,261
<AVERAGE-NET-ASSETS> 124,424,516
<PER-SHARE-NAV-BEGIN> 230.960
<PER-SHARE-NII> 2.562
<PER-SHARE-GAIN-APPREC> 49.548
<PER-SHARE-DIVIDEND> (2.500)
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 280.570
<EXPENSE-RATIO> 0.76
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</TABLE>
