As filed with the Securities and Exchange Commission on October 25, 1996
1940 Act File No. 811-1207
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 ]
THE EXCHANGE FUND OF BOSTON, 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)
THOMAS OTIS, Clerk
24 Federal Street, Boston, Massachusetts 02110
(Name and address of agent for service)
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
Responses to Items 1, 2, 3 and 5(a) 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 March 20, 1963, as a Massachusetts corporation.
Shares of the Registrant are not currently offered for sale.
(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.
The Registrant seeks to achieve its investment objective by
investing in Tax-Managed Growth Portfolio (the "Portfolio") (File No. 811-7409).
The investment objective of the Portfolio is identical to that of the Registrant
but is fundamental and cannot be changed without approval of the holders of
interests in the Portfolio. The Registrant and the Portfolio have the same
fundamental investment policies and restrictions, and, therefore, the Registrant
incorporates by reference the items identified herein of the Portfolio's
Registration Statement under the Investment Company Act of 1940 (the "1940 Act")
on Form N-1A as previously filed electronically with the Securities and Exchange
Commission (the "Commission") on November 2, 1995 (Accession No.
0000898432-95-000362).
(b) and (c) The Registrant incorporates herein by reference
the information pertaining to investment policies and risks set forth under Item
4 of the Registration Statement of the Portfolio.
Item 5. Management of the Fund
(a) The Board of Directors has overall responsibility for
management of the Registrant.
(b) and (c) The Registrant has had no investment adviser since
June 30, 1996, and incorporates herein by reference the information set forth
under Item 5 of the Registration Statement of the Portfolio regarding the
Portfolio's investment adviser.
(d) Eaton Vance Management ("Eaton Vance" or "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 Trustees, 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").
-2-
<PAGE>
(f) The Registrant's ratio of expenses to average net assets
for the fiscal year ended June 30, 1996 was 0.78%.
(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. In addition, 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 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
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.
(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) Dividends from net investment income are paid at least
quarterly. These dividends 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.
(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 the dividends from
investment income.
(ii) Since the Registrant retains any net realized long-term capital
gain and pays the federal tax thereon on behalf of shareholders, the shareholder
includes in his personal federal income tax return his proportionate share of
such gains, 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. Registrant provides each shareholder with information regarding the
shareholder's federal income tax treatment of any undistributed realized
long-term capital gain retained by Registrant.
-3-
<PAGE>
(iii) After the end of each calendar year, each shareholder receives
information for tax purposes regarding the dividends paid during the year and
the amount of dividends eligible for the dividends received exclusion for
corporations.
(h) 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 will invest in the Portfolio on the
same terms and conditions and will pay a proportionate share of the Portfolio's
expenses. However, the other investors investing in the Portfolio may be subject
to different expenses than those of the Registrant. These differences may result
in differences in returns experienced by investors in the various funds that
invest in the Portfolio. Such differences in returns are also present in other
mutual fund structures, including funds that have multiple classes of shares.
Information regarding other pooled investment entities or funds which invest in
the Portfolio may be obtained by contacting Eaton Vance Distributors, Inc., 24
Federal Street, Boston, MA 02110, (617) 482-8260. 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
Inapplicable. Registrant has not offered its shares for sale
subsequent to its initial public offering in 1963.
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 and
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 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
-4-
<PAGE>
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 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.
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.
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
Trustees 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 Registrant
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).
The Portfolio's net asset value is also determined as of the
close of regular trading on the Exchange by IBT (as custodian and agent for the
Portfolio) based on market or fair value in the manner authorized by the
Trustees of the Portfolio. Net asset value is computed by subtracting the
liabilities of the Portfolio from the value of its total assets. Securities
listed on securities exchanges or in the NASDAQ National Market are valued at
closing sales prices.
Item 9. Pending Legal Proceedings
Not applicable
-5-
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page
Inapplicable
Item 11. Table of Contents
Inapplicable
Item 12. General Information and History
Up to June 30, 1996, the Registrant invested in a portfolio of
securities. Since then, it has invested its assets in the Portfolio. 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 Trustees 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.
Item 13. Investment Objectives and Policies
(a) - (b) The Registrant incorporates herein by reference the
information set forth under Item 13 of the Registration Statement of the
Portfolio.
(c) The Registrant and the Portfolio have adopted the
following investment policies which may be changed without investor approval.
Neither the Registrant nor the Portfolio may invest more than 15% of its net
assets in investments which are not readily marketable, including restricted
securities and repurchase agreements with a maturity longer than seven days.
Restricted securities for the purposes of this limitation do not include
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933 and commercial paper issued pursuant to Section 4(2) of said Act that the
Board of Directors of the Registrant or the Board of Trustees of the Portfolio,
or its delegate, determines to be liquid. Neither the Registrant nor the
Portfolio will sell or contract to sell any security which it does not own
unless by virtue of its ownership of other securities it has at the time of sale
a right to obtain securities equivalent in kind and amount to the securities
sold and provided that if such right is conditional the sale is made upon the
same conditions. Neither the Registrant nor the Portfolio will invest for the
purpose of exercising control or management of other companies. Neither the
Registrant nor the Portfolio will purchase or retain in its portfolio any
securities issued by an issuer any of whose officers, directors, trustees or
security holders is an officer or Director or Trustee of the Registrant or the
Portfolio or is a member, officer, director or trustee of the Investment Adviser
of the Portfolio, if after the purchase of the securities of such issuer by the
Registrant or the Portfolio one or more of such persons owns beneficially more
than 1/2 of 1% of the shares or securities or both (all taken at market value)
-6-
<PAGE>
of such issuer and such persons owning more than 1/2 of 1% of such shares
or securities together own beneficially more than 5% of such shares or
securities or both (all taken at market value). Neither the Registrant nor the
Portfolio will purchase an option on any security if, after such transaction,
more than 5% of its net assets, as measured by the aggregate of all premiums
paid for all such options held by the Registrant or the Portfolio, would be so
invested.
(d) Inapplicable.
Item 14. Management of the Fund
The Directors and officers of the Registrant and the Trustees
and officers of the Portfolio are listed below. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. Unless otherwise noted, the business address of each
Director/Trustee and officer is 24 Federal Street, Boston, Massachusetts, 02110,
which is also the address of the Portfolio's investment advisor, Boston
Management and Research ("BMR"), a wholly-owned subsidiary of Eaton Vance
Management ("Eaton Vance"); Eaton Vance's parent, Eaton Vance Corp. ("EVC"); and
of Eaton Vance's and BMR's Trustee, Eaton Vance, Inc. ("EV"). Eaton Vance and EV
are both wholly-owned subsidiaries of EVC. The Director/Trustee who is an
"interested person" of the Registrant, Eaton Vance, BMR, EVC, or EV as defined
in the 1940 Act, by virtue of his affiliation with or stockholdings of any one
or more of, the registrant, Eaton Vance, BMR, EVC or EV is indicated by an
asterisk(*). All of the officers, Directors/Trustees listed below are also
officers, Directors or Trustees of various investment companies managed by Eaton
Vance or BMR.
(1) (2) (3)
Position Held
with Registrant/ Principal Occupations
Name (Age) and Address Portfolio during Past 5 Years
- - ---------------------- --------- -------------------
Landon T. Clay(70)* President & Chairman of the Board and
Director/Trustee Director of EVC and EV;
Chairman, Eaton Vance
and BMR.
Donald R. Dwight(65) Director/Trustee President Dwight Partners,
Clover Mill Lane Inc. (since 1988) (a
Lyme, New Hampshire 03468
corporate relations and
communications company;)
Chairman of the Board of
Newspapers of New England,
Inc. (since 1983).
Samuel L. Hayes, III(61) Director/Trustee Jacob H. Schiff Professor
Harvard Graduate School of of Investment Banking,
Business Administration Harvard University Graduate
Soldiers Field Road School of Business
Boston, Massachusetts 02163 Administration.
-7-
<PAGE>
Norton H. Reamer (61) Director/Trustee President and Director,
One International Place United Asset Management
Boston, Massachusetts 02110 Corporation, (a holding,
company owning institutional
investment management firms;
Chairman, President and
Director, UAM Funds
(mutual funds).
John L. Thorndike (69) Director/Trustee Director, Fiduciary Company
175 Federal Street Incorporated.
Boston, Massachusetts 02110
Jack L. Treynor (66) Director/Trustee Investment Adviser and
504 Via Almar Consultant.
Palos Verdes Estates,
California 90274
James B. Hawkes(54) Vice President Executive Vice President
and Director, EVC and EV;
Executive Vice President of
Eaton Vance and BMR.
Duncan W. Richardson(38) Vice President of Vice President, Eaton Vance,
the Portfolio EV and BMR.
Thomas Otis(65) Clerk Vice President and Secretary,
EVC, Eaton Vance, EV and BMR.
James L. O'Connor(51) Treasurer Vice President, Eaton
Vance, EV and BMR.
Janet E. Sanders(60) Assistant Treasurer Vice President, Eaton Vance,
& Assistant Clerk/ EV and BMR.
Assistant Secretary
M. Katherine Kreider(35) Assistant Treasurer Assistant Vice President,
(since 2/21/96) Eaton Vance, BMR and EV
(since 2/5/96); Senior Audit
Manager and Audit Manager
Financial Services Industry
Practice with Deloitte &
Touche LLP (1987 to 1996).
-8-
<PAGE>
A. John Murphy (33) Assistant Clerk/ Assistant Vice President,
Assistant Secretary Eaton Vance, BMR and EV
(since 3/27/95) (since 3/1/94); employee of
Eaton Vance (since March
1993); State Regulations
Supervisor, The Boston
Company (1991-1993);
Registration Specialist,
Fidelity Management &
Research Co. (1986-1991).
Eric G. Woodbury (39) Assistant Clerk/ Vice President of Eaton
Assistant Secretary Vance, BMR and EV and
(since 6/19/95) employee of Eaton Vance
(since February,1993);
formerly, associate attorney
at Dechert, Price & Rhoads
and Gaston & Snow.
Messrs. Hayes (Chairman), Reamer and Thorndike are members of
the Special Committee of the Board of Directors of the Registrant and Trustees
of the Portfolio. The purpose of the Special Committee is to consider, evaluate
and make recommendations to the full Board concerning (i) all contractual
arrangements with service providers to the Registrant, including administrative
services, transfer agency, custodial and fund accounting and distribution
services, and (ii) all other matters in which Eaton Vance or its affiliates has
any actual or potential conflict of interest with the Registrant or its
shareholders.
The Nominating Committee is comprised of four Board members
who are not "interested persons" as that term is defined under the Investment
Company Act of 1940 ("noninterested Directors/Trustees"). The Committee has
four-year staggered terms, with one member rotating off the Committee to be
replaced by another noninterested Director of the Registrant. The purpose of the
Committee is to recommend to the Board nominees for the position of
noninterested Director/Trustee and to assure that at least a majority of the
Board is independent of Eaton Vance and its affiliates.
Messrs. Treynor (Chairman) and Dwight are members of the Audit
Committee of the Board of Directors of the Registrant and the Trustees of the
Portfolio. The Audit Committee's functions include making recommendations to the
Board regarding the selection of the independent public accountants, and
reviewing with such accountants and the Treasurer of the Registrant and the
Portfolio matters relative to trading and brokerage policies and practices,
accounting and auditing practices and procedures, accounting records, internal
accounting controls, and the functions performed by the custodian, transfer
agent and dividend disbursing agent of the Registrant and the Portfolio.
(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.)
-9-
<PAGE>
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 "Plan"). Under the 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 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 its
Directors/Trustees.
During the Registrant's fiscal year ended June 30, 1996, the
noninterested Directors of the Registrant earned the following compensation in
their capacities as Directors from the Registrant, and during the twelve month
period ended June 30, 1996 as Directors and/or Trustees from all funds in the
Eaton Vance fund complex(1)
Total Compensation
Aggregate from Registrant and
Name from Registrant Fund Complex
Donald R. Dwight $ 1,130(2) $140,000(4)
Samuel L. Hayes, III 1,300(3) 157,500(5)
Norton H. Reamer 1,268 140,000
John L. Thorndike 1,347 145,000
Jack L. Treynor 1,274 145,000
(1) The Eaton Vance fund complex consists of 218 registered investment
companies or series thereof.
(2) Includes $423 of deferred compensation.
(3) Includes $445 of deferred compensation.
(4) Includes $35,000 of deferred compensation.
(5) Includes $33,750 of deferred compensation.
Item 15. Control Persons and Principal Holders of Securities
(a) Not applicable
(b) To the knowledge of the Registrant no person of record or
beneficially owns more than 5% of its stock.
(c) The Directors and offiers of the Registrant own none of
its stock.
-10-
<PAGE>
Item 16. Investment Advisory and Other Services
(a) - (c) The Registrant incorporates the information set
forth under Item 16 of the Registration Statement of the Portfolio herein by
reference.
The management fees paid by the Registrant for the fiscal
years ended June 30, 1996, 1995 and 1994 were $482,131, $402,696 and $410,280,
respectively.
(d) - (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 June 30, 1996,
the Registrant paid IBT $42,436.
IBT also provides services in connection with the preparaton
of shareholder reports and the electronic filing of such reports with the
Securities and Exchange Commission, for which it receives a separate fee.
Deloitte & Touche LLP, 125 Summer Street, Boston,
Massachusetts are the independent certified public accountants for the
Registrant. 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 the Registrant's federal and
state tax returns.
Item 17. Brokerage Allocation and Other Practices
(a) - (e) The Registrant incorporates the information set
forth under Item 17 of the Registration Statement of the Portfolio herein by
reference.
-11-
<PAGE>
During the Registrant's fiscal years ended June 30, 1996, 1995
and 1994, the Registrant paid brokerage commissions of $5,700, $6,150 and
$14,645, respectively, on portfolio security transactions. Of the total
brokerage commission of $5,700, $6,150 and $14,645, respectively, paid during
the fiscal years ended June 30, 1996, 1995 and 1994, approximately $5,700,
$2,400 and $12,345, respectively, was paid in respect of portfolio security
transactions aggregating approximately $3,811,802, $1,642,049 and $5,743,275,
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
Trustees unless and until such time as less than a majority of the Trustees
holding office have been elected by investors. In such an event the Trustees of
the Portfolio then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no
person shall serve as a Trustee if investors holding two-thirds of the
outstanding 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.
(b) Not applicable
Item 19. Purchase, Redemption and Pricing of Securities Being Offered
(a) Subsequent to its initial public offering in 1963, the
Registrant has not offered its shares for sale.
(b) The net asset value of the Portfolio and of shares of the
Registrant is determined by IBT (as agent and custodian for the Registrant and
the Portfolio) in the manner described in Item 8 above. The Registrant and
Portfolio will be closed for business and will not price their shares on the
following business holidays: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
-12-
<PAGE>
With respect to valuation of the Portfolio's holdings, the
Registrant incorporates herein by reference the information set forth under Item
19 of the Registration Statement of the Portfolio.
Each investor in the Portfolio, including the Registrant, may
add to or reduce its investment in the Portfolio on each day the New York Stock
Exchange (the "Exchange") is open for trading ("Portfolio Business Day") as of
the close of regular trading on the Exchange (the "Portfolio Valuation Time").
The value of each investor's interest in the Portfolio will be determined by
multiplying the net asset value of the Portfolio by the percentage, determined
on the prior Portfolio Business Day, which represents that investor's share of
the aggregate interests in the Portfolio on such prior day. Any additions or
withdrawals for the current Portfolio Business Day will then be recorded. Each
investor's percentage of the aggregate interest in the Portfolio will then be
recomputed as a percentage equal to a fraction (i) the numerator of which is the
value of such investor's investment in the Portfolio as of the Portfolio
Valuation Time on the prior Portfolio Business Day plus or minus, as the case
may be, that amount of any additions to or withdrawals from the investor's
investment in the Portfolio on the current Portfolio Business Day and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of the
Portfolio Valuation Time on the prior Portfolio Business Day plus or minus, as
the case may be, the amount of the net additions to or withdrawals from the
aggregate investment in the Portfolio on the current Portfolio Business Day by
all investors in the Portfolio. The percentage so determined will then be
applied to determine the value of the investor's interest in the Portfolio for
the current Portfolio Business Day.
(c) Not applicable
Item 20. Tax Status
Under the provisions of Subchapter M of the Internal Revenue
Code, an investment company, such as the Registrant, which distributes to its
shareholders for any year substantially all of its net investment income pays no
federal income or excise taxes on such income as to that year. The Registrant
met the requirements of Subchapter M for the taxable year ended June 30, 1996
and intends to meet such requirement for the taxable year ending October 31,
1996.
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.
-13-
<PAGE>
Allocated net realized long-term capital gains are normally
retained by the Registrant, and the Registrant pays the federal tax thereon.
When this is done, the shareholder includes in his personal income tax return
his proportionate share of such gains, 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 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.
-14-
<PAGE>
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 by other investors to the Portfolio. If
any appreciated securities contributed to the Portfolio by the Registrant are
sold, the resulting capital gain attributable to the period prior to the
Registrant's investment in the Portfolio would be allocated to the Registrant.
Such precontribution gain equalled $66,257,994 on net assets of $82,497,107.
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 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 and certain foreign
corporations and 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.
Item 21. Underwriters
Not applicable, inasmuch as Registrant does not make a
continuous offering of its shares.
-15-
<PAGE>
Item 22. Calculation of Performance Data
Not applicable
Item 23. Financial Statements
Registrant incorporates by reference the audited financial
information for the Registrant contained in the Registrant's shareholder report
for the year ended June 30, 1996 as previously filed electronically with the
Securities and Exchange Commission on August 14, 1996 (Accession Number:
0000950156-96-000644).
-16-
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) INCLUDED IN ITEM 23 OF THE REGISTRANT'S STATEMENT OF ADDITIONAL
INFORMATION (Form N-1A, Part B): INCORPORATED BY REFERENCE TO ANNUAL
REPORT FOR THE EXCHANGE FUND OF BOSTON, INC., DATED JUNE 30, 1996,
FILED ELECTRONICALLY ON AUGUST 14, 1996 WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO SECTION 30(b)(2) OF THE INVESTMENT
COMPANY ACT OF 1940 (Accession No. 0000950156-96-000644) Which contains
the following:
Portfolio of Investments, June 30, 1996
Statement of Assets and Liabilities, June 30, 1996
Statement of Operations For The Year Ended June 30, 1996
Statement of Changes In Net Assets For Each of The Two Years In The
Year Ended June 30, 1996
Financial Highlights For Each of The Five Years In the Year Ended
June 30, 1996
Notes to Financial Statements
Independent Auditors' Report dated July 31, 1996
INCORPORATED BY REFERENCE TO ANNUAL REPORT, DATED JUNE 30, 1991, FILED
PURSUANT TO SECTION 30(b)(2) OF THE INVESTMENT COMPANY ACT OF 1940:
(a) Supplementary Information For Each of The Five Years Ended June
30, 1991.
(b) Exhibits:
(1)(a) Articles of Organization Filed herewith.
incorporating all amendments
to date and currently in effect
(b) Articles of Amendment dated Filed herewith.
June 4, 1996
(2)(a) By-Laws incorporating all Filed as Exhibit (2(a) to
amendments through Post-Effective Amendment No.
September 27, 1983 and 19 to the Registration
currently in effect Statement and incorporated
herein by reference.
(b) Amendment to By-Laws dated Filed herewith.
September 21, 1995
-17-
<PAGE>
(c) Amendment to By-Laws dated Filed herewith.
June 4, 1996
(3) Not Applicable
(4) Not applicable
(5) Not applicable
(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 Filed herewith.
December 17, 1990
(b) Amendment to Custodian Filed herewith.
Agreement dated October 23,
1995
(9) Administrative Services Filed herewith.
Agreement Eaton Vance Management
dated July 1, 1996
(10) Legal Opinion of Gaston, Filed as Exhibit No. 9C to
Snow, Motley & Holt, dated Amendment No. 4 to
August 2, 1963 Registration Statement on
Form S-5, File No. 2-21222
and incorporated herein
by reference.
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
-18-
<PAGE>
Item 25. Persons Controlled by or under Common Control with Registrant
Not Applicable
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders
Capital Stock 260
$1.00 par value as of September 30, 1996
Item 27. Indemnification
Registrant's Articles of Organization contain the following
provision with respect to indemnification of Directors and officers:
"(a) Subject to the exceptions and limitations contained in paragraph (b),
below:
(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
reasonably 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
-19-
<PAGE>
(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.
(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."
The Massachusetts Business Corporation Laws Section 67 "Indemnification
of officers and directors", of Chapter 156B of the General Laws of
Massachusetts) provides as follows:
"Indemnification of directors and officers, employees and other agents
of a corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by it
to whatever extent shall be specified in or authorized by (i) the articles of
organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote on
the election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence who are not directors of the corporation may be provided by it to the
extent authorized by the directors. Such indemnification may include payment by
the corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may be
provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization no
longer serves with respect to any such employee benefit plan.
No indemnification shall be provided for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or to the extent that such matter relates to service
with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
The absence of any express provision for indemnification shall not
limit any right of indemnification existing independently of this section.
-20-
<PAGE>
A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or other agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liability."
So long as the position of the Division of Investment Management of the
Securities and Exchange Commission with respect to indemnification of officers
and directors as set forth in Release No. IC-11330 dated September 2, 1980
remains in effect, the Registrant undertakes that it will not indemnify any such
officer or director pursuant to clause (B) or (C) of Paragraph (b) (iii) of
Article XIV of the Registrant's Articles of Organization in the absence of
written determination by independent legal counsel that the person being
indemnified was not liable to the Registrant or its shareholders by reason of
disabling conduct, unless in the opinion of its counsel the matter has been
settled by controlling precedent.
Registrant's Directors and officers are insured under a standard mutual
fund errors and omissions insurance policy covering loss incurred by reason of
negligent errors and omissions committed in their capacities as such.
Item 28. Business and Other Connections of Investment Adviser
Registrant incorporates herein by reference the information
set forth under the caption "Investment Advisory and Other Services" in Item 16
of the Portfolio's registration statement.
Item 29. Principal Underwriters
Not applicable
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, 24 Federal Street,
Boston, Massachusetts 02110 and 89 South Street, Boston, MA 02lll, and the
Registrant's transfer agent, First Data Investor Services Group, 4400 Computer
Drive, Westborough, Massachusetts 01581 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
-21-
<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 October, 1996.
THE EXCHANGE FUND OF BOSTON, INC.
By/s/ James L. O'Connor
-----------------------------------
James L. O'Connor, Treasurer
-22-
<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
September 27, 1983.
1(b) Articles of Amendment dated June 4, 1996
2(b) Amendment to By-Laws dated September 21, 1995.
2(c) Amendment to By-Laws dated June 4, 1996
8(a) Custodian Agreement dated December 17, 1990
8(b) Amendment to Custodian Agreement dated October 23, 1995
9 Administrative Services Agreement with Eaton Vance Management
dated July 1, 1996
-23-
EXHIBIT 99.1(a)
The Commonwealth of Massachusetts
KEVIN H. WHITE
Secretary of the Commonwealth
STATE HOUSE
BOSTON, MASS.
ARTICLES OF ORGANIZATION
We, Robert S. Swain, Arthur H. Haussermann and Charles Jackson, Jr.
being a majority of the directors of THE EXCHANGE FUND OF BOSTON, INC.
elected at its first meeting, in compliance with the requirements of General
Laws, Chapter 156, Section 10, hereby certify that the following is a true copy
of the agreement of association to form said corporation, with the names of the
subscribers thereto:
We, whose names are hereto subscribed, do, by this agreement, associate
ourselves with the intention of forming a corporation under the provisions of
General Laws, Chapter 156.
The name by which the corporation shall be known is
THE EXCHANGE FUND OF BOSTON, INC.
The location of the principal office of the corporation in Massachusetts
is to be in the city of Boston
[The business address of the corporation is to be
Second Floor, 111 Devonshire Street, Boston 9, Massachusetts
- - --------------------------------------------------------------------------------
Street and number (if office building, give room number), city or town.
If such business address is not yet determined, give the name and
business address of the treasurer or other officer to receive mail.
- - -------------------------------------------------------------------------------]
Name and title of officer to receive mail and his complete business address.
The purposes for which the corporation is formed and the nature of the
business to be transacted by it are as follows:
<PAGE>
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 this Agreement of Association and 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 hereto fore
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.
The total capital stock to be authorized is as follows:
WITH PAR VALUE
CLASS OF STOCK NUMBER OF SHARES PAR VALUE AMOUNT
Common 3,500,000 $1 3,500,000
The corporation may issue and sell fractions of shares having pro rata
all the rights of full shares, including, without limitation, the right to vote
and to receive dividends, and wherever the words "share" or "shares" are used in
these Articles they shall be deemed to include fractions of shares, where the
context does not clearly indicate that only full shares are intended.
The following lawful provisions are inserted in the Articles of
Organization 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 and shareholders.
<PAGE>
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.
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
<PAGE>
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 int he 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 October 10, 1975)
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
<PAGE>
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 valued 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 effective
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 Corporations 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.
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
<PAGE>
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 with 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
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
<PAGE>
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 he
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.
(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 b 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.
<PAGE>
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, may be 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.
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 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 case 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.
<PAGE>
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.
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.
Article XII
By-Laws
The By-Laws of the Corporation may provide for their amendment,
alteration, enlargement or repeal in whole or in part by the Board of Directors
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.
<PAGE>
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:
(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
<PAGE>
(C) by vote of two-thirds (2/3) of those members of the
Board of Directors of the 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.
(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>
[If notice is waived, fill in the following paragraph]
We hereby waive all requirements of the General Laws of Massachusetts
for notice of the first meeting of the incorporators for the purpose of
organization, and appoint the 19th day of March, 1963, at 3:00 o 'clock P.M., at
Second Floor, 111 Devonshire Street, Boston 9, Massachusetts as the time and
place for holding such first meeting.
The names and residences of the incorporators and the amount of stock
subscribed for by each are as follows:
NAME DOMICIL AMOUNT OF STOCK
FIRST NAME MUST BE ACTUAL PLACE OF RESIDENCE SUBSCRIBED FOR
WRITTEN IN FULL MUST BE GIVEN PREFERRED COMMON
Robert S. Swain 90 Commonwealth Avenue none
Boston, Massachusetts
Arthur H. Haussermann 22 Allen Road none
Wellesley, Massachusetts
Charles Jackson, Jr. Farm Street none
Dover, Massachusetts
IN WITNESS WHEREOF we hereto sign our names, this 19th day of March,1963.
(Type of plainly print the name of each incorporator as signed to the Agreement
of Association.)
/s/ Robert S. Swain
- - --------------------------
Robert S. Swain
/s/ Arthur H. Haussermann
- - --------------------------
Arthur H. Haussermann
/s/ Charles Jackson Jr.
- - -------------------------
Charles Jackson, Jr.
<PAGE>
And we further certify that:
The first meeting of the subscribers to said agreement was held on the 19th day
of March, 1963
The amount of capital stock now to be issued is as follows:
NUMBER OF SHARES
CLASS OF STOCK WITHOUT PAR VALUE WITH PAR VALUE
Preferred
Common 1
Preferred Common
TO BE PAID FOR:
IN CASH:
In Full 1
In installments
Amount of instalment to be paid before commencing business
IN PROPERTY
REAL ESTATE
Location
Area
PERSONAL PROPERTY:
Accounts receivable
Notes receivable
Merchandise
Supplies
Securities
Machinery
Motor vehicles and trailers
Equipment and tools
Furniture and fixtures
Patent rights
Trade-marks
Copyrights
Goodwill
(1)IN SERVICES
(2)IN EXPENSES
(1) No stock shall be at any time issued unless the cash, so far as due, or the
property, services or expenses for which it was authorized to be issued, has
been actually received or incurred by, or conveyed or rendered to, the
corporation, or is in its possession as surplus; nor shall any note or evidence
of indebtedness, secured or unsecured, of any person to whom stock is issued, be
deemed to be payment therefor; and the president, treasurer and directors shall
be jointly and severally liable to any stockholder of the corporation for actual
damages caused to him by such issue.
2) SERVICES and EXPENSES: Services must have been rendered and expenses
incurred before stock is issued therefor. State clearly the nature of such
services or expenses and the amount of stock to be issued therefor.
<PAGE>
The name, residence, and post office address of each of the officers of
the corporation is as follows:
NAME DOMICIL POST OFFICE ADDRESS
President Robert S. Swain, 90 Commonwealth Ave.
Boston, Massachusetts
Treasurer Arthur H. Haussermann, 22 Allen Road
Wellesley, Massachusetts
Clerk Arthur H. Haussermann,
Directors Charles Jackson, Jr., Farm Street,
Dover, Mass.
Robert S. Swain, 90 Commonwealth Ave.
Boston, Massachusetts
Arthur H. Haussermann, 22 Allen Road
Wellesley, Massachusetts
e. We, being a majority of the directors of THE EXCHANGE FUND OF BOSTON, INC.
(Name of Corporation)
do hereby certify that the provisions of sections eight and nine of Chapter 156
relative to the calling and holding of the first meeting of the corporation, and
the election of a temporary clerk, the adoption of by-laws and the election of
officers have been complied with.
f. The final day of the corporation's fiscal year is June
---------------------
(Month)
30th and the date provided in the by-laws for the annual
- - ---------------------------
(Date)
meeting is 4th Tuesday September
-------------------------------------------------------------------
(Day) (Month)
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we hereto sign
our names, this 19th day of March,1963.
/s/ Robert S. Swain
- - -----------------------------
President and Director
/s/ Arthur H. Haussermann
- - -----------------------------
Treasurer, Clerk & Director
/s/ Charles Jackson Jr.
- - -----------------------------
Director
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
WRITE NOTHING BELOW
The Exchange Fund of Boston, Inc.
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156, SECTION 10
March 20, 1963
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 cause them
to be recorded and filed this 20th day
March, 1963
/s/ Kevin H. White
Secretary of the Commonwealth
TO BE FILLED IN BY THE CORPORATION:
CHARTER TO BE SENT TO
Gaston, Snow, Motley & Holt
82 Devonshire St. Boston
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 156, Section 53.
EXHIBIT 99.1(b)
FEDERAL IDENTIFICATION
NO. 04-6059332
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 Janet E. Sanders , /Assistant Clerk
-------------------------------------------------
of The Exchange Fund of Boston, 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 June 4,
1996, by vote of:
219,273,966 Common Stock 286,045.538
- - ----------- 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 and of each type, class or series of stock whose rights are
adversely affected thereby:
<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 VI 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.
19th July 96
SIGNED UNDER THE PENALTIES OF PERJURY, this ---- day of -----, 19---.
/s/ Landon T. Clay
- - -------------------------------------------------, President/
/s/ Janet E. Sander
- - -------------------------------------------------, /Assistant 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 24th day of July, 1996.
Effective date:_______________________________
/s/ William Francis Galvin
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
EXHIBIT 99.2(b)
AMENDMENT TO
BY-LAWS
OF
THE EXCHANGE FUND OF BOSTON, INC.
September 21, 1995
Pursuant to ARTICLE XV of the BY-LAWS of The Exchange Fund of Boston, 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 September 21, 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, the Treasurer and the Clerk, and for the
transaction of such other business as may properly be brought before the
meeting, shall be held annually, on the third thursday in September 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.
********************
EXHIBIT 99.2(c)
AMENDMENT TO
BY-LAWS
OF
THE EXCHANGE FUND OF BOSTON, INC.
June 4, 1996
Pursuant to ARTICLE XV of the BY-LAWS of The Exchange Fund of Boston, 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 of Stockholders held on
June 4, 1996 ARTICLE VII of the BY-LAWS of the Fund was amended to read as
follows:
ARTICLE VII
Fiscal Year
Effective July 1, 1996, the fiscal year of the Corporation shall end on October
31st in each year.
********************
EXHIBIT 99.8(a)
December 17, 1990
The Exchange Fund of Boston, Inc. hereby adopts and agrees to become a party
to the attached Master Custodian Agreement between the Eaton Vance Group of
Funds and Investors Bank & Trust Company.
THE EXCHANGE FUND OF BOSTON, INC.
By /S/ LANDON T. CLAY
-------------------------------
President
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By: /S/ HENRY M. JOYCE
- - ---------------------------------
Title: Vice President
<PAGE>
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions.............................................................1-2
2. Employment of Custodian and Property to be held by it...................2-3
3. Duties of the Custodian with Respect to
Property of the Fund......................................................3
A. Safekeeping and Holding of Property...................................3
B. Delivery of Securities..............................................3-6
C. Registration of Securities............................................6
D. Bank Accounts.........................................................6
E. Payments for Shares of the Fund.......................................6
F. Investment and Availability of Federal Funds..........................6
G. Collections...........................................................7
H. Payment of Fund Moneys..............................................8-9
I. Liability for Payment in Advance of
Receipt of Securities Purchased.......................................9
J. Payments for Repurchases of Redemptions
of Shares of the Fund..............................................9-10
K. Appointment of Agents by the Custodian...............................10
L. Deposit of Fund Portfolio Securities in Securities Systems........10-11
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper.......................................12-13
N. Segregated Account................................................13-14
O. Ownership Certificates for Tax Purposes..............................14
P. Proxies..............................................................14
Q. Communications Relating to Fund Portfolio Securities.................14
R. Exercise of Rights; Tender Offers................................14-15
-i-
<PAGE>
S. Depository Receipts..................................................15
T. Interest Bearing Call or Time Deposits...............................15
U. Options, Futures Contracts and Foreign Currency Transactions......15-17
V. Actions Permitted Without Express Authority..........................17
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value..........................................17
5. Records and Miscellaneous Duties.........................................18
6. Opinion of Fund`s Independent Public Accountants.........................18
7. Compensation and Expenses of Bank........................................18
8. Responsibility of Bank................................................18-19
9. Persons Having Access to Assets of the Fund..............................19
10. Effective Period, Termination and Amendment; Successor Custodian.........20
11. Interpretive and Additional Provisions...................................20
12. Notices..................................................................21
13. Massachusetts Law to Apply...............................................21
14. Adoption of the Agreement by the Fund....................................21
-ii-
<PAGE>
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Eaton
Vance Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian of
its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository BUT
ONLY if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for United
States and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
-1-
<PAGE>
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities BUT ONLY if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form BUT ONLY
if the Custodian has received a certified copy of a vote of the Board approving
the participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by Eaton Vance
Management to the Custodian through the Eaton Vance equity trading system and
the Eaton Vance fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for different
purposes. A certified copy of a vote of the Board may be received and accepted
by the Custodian as conclusive evidence of the authority of any such person to
act and may be considered as in full force and effect until receipt of written
notice to the contrary. Such instructions may be general or specific in terms
and, where appropriate, may be standing instructions. Unless the vote delegating
authority to any person or persons to give a particular class of instructions
specifically requires that the approval of any person, persons or committee
shall first have been obtained before the Custodian may act on instructions of
that class, the Custodian shall be under no obligation to question the right of
the person or persons giving such instructions in so doing. Oral instructions
will be considered proper instructions if the Custodian reasonably believes them
to have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. The Fund authorizes the Custodian to tape record any and
all telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Fund as to the authorization by
the President and the Treasurer of the Fund accompanied by a detailed
description of the communication procedures approved by the President and the
Treasurer of the Fund, "proper instructions" may also include communications
effected directly between electromechanical or electronic devices provided that
the President and Treasurer of the Fund and the Custodian are satisfied that
such procedures afford adequate safeguards for the Fund's assets. In performing
its duties generally, and more particularly in connection with the purchase,
sale and exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.
2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
-2-
<PAGE>
cash consideration received by it for such new or treasury shares
("Shares") of the Fund as may be issued or sold from time to time. The Custodian
shall not be responsible for any property of the Fund held by the Fund and not
delivered by the Fund to the Custodian. The Fund will also deliver to the Bank
from time to time copies of its currently effective charter (or declaration of
trust or partnership agreement, as the case may be), by-laws, prospectus,
statement of additional information and distribution agreement with its
principal underwriter, together with such resolutions, votes and other
proceedings of the Fund as may be necessary for or convenient to the Bank in the
performance of its duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep safely
all property of the Fund and on behalf of the Fund shall from time
to time receive delivery of Fund property for safekeeping. The
Custodian shall hold, earmark and segregate on its books and records
for the account of the Fund all property of the Fund, including all
securities, participation interests and other assets of the Fund (1)
physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in
Paragraph K hereof,(3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved Clearing
Agency or in the Federal Book-Entry System or in an Approved Foreign
Securities Depository, each of which from time to time is referred
to herein as a "Securities System", and (4) held by the Custodian
or by any subcustodian referred to in Section 2 hereof and
maintained in any Approved Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties,
and only in the following cases:
1) Upon sale of such securities or participation interests for
the account of the Fund, BUT ONLY against receipt of payment
therefor; if delivery is made in Boston or New York City,
payment therefor shall be made in accordance with generally
accepted clearing house procedures or by use of Federal
Reserve Wire System procedures; if delivery is made
elsewhere payment therefor shall be in accordance with the
then current "street delivery" custom or in accordance with
such procedures agreed to in writing from time to time by
the parties hereto; if the sale is effected through a
Securities System, delivery and payment therefor shall be
-3-
<PAGE>
made in accordance with the provisions of Paragraph L
hereof; if the sale of commercial paper is to be effected
through an Approved Book-Entry System for Commercial Paper,
delivery and payment therefor shall be made in accordance
with the provisions of Paragraph M hereof; if the securities
are to be sold outside the United States, delivery may be
made in accordance with procedures agreed to in writing from
time to time by the parties hereto; for the purposes of this
subparagraph, the term "sale" shall include the disposition
of a portfolio security (i) upon the exercise of an option
written by the Fund and (ii) upon the failure by the Fund to
make a successful bid with respect to a portfolio security,
the continued holding of which is contingent upon the making
of such a bid;
2) Upon the receipt of payment in connection with any
repurchase agreement or reverse repurchase agreement
relating to such securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; PROVIDED that, in any such case,
the cash or other consideration is to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2
hereof;
5) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or into the name or
nominee name of any subcustodian employed pursuant to
Section 2 hereof; or for exchange for a different number of
bonds, certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in
any such case, the new securities or participation interests
are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance
with the "street delivery" custom; PROVIDED that the
Custodian shall adopt such procedures as the Fund from time
to time shall approve to ensure their prompt return to the
Custodian by the broker in the event the broker elects not
to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the Issuer of such
securities, or pursuant to provisions for conversion of such
securities, or pursuant to any deposit agreement; PROVIDED
that, in any such case, the new securities and cash, if any,
are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
-4-
<PAGE>
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender of
interim receipts or temporary securities for definitive
securities; PROVIDED that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2
hereof;
9) For delivery in connection with any loans of securities made
by the Fund (such loans to be made pursuant to the terms of
the Fund's current registration statement), BUT ONLY against
receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Fund, which may be in the form
of cash or obligations issued by the United States
government, its agencies or instrumentalities; except that
in connection with any securities loans for which collateral
is to be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department of
Treasury, the Custodian will not be held liable or
responsible for the delivery of securities loaned by the
Fund prior to the receipt of such collateral;
10) For delivery as security in connection with any borrowings
by the Fund requiring a pledge or hypothecation of assets by
the Fund (if then permitted under circumstances described in
the current registration statement of the Fund), provided,
that the securities shall be released only upon payment to
the Custodian of the monies borrowed, except that in cases
where additional collateral is required to secure a
borrowing already made, further securities may be released
for that purpose; upon receipt of proper instructions, the
Custodian may pay any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing the loan;
11) When required for delivery in connection with any redemption
or repurchase of Shares of the Fund in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any
agreement between the Custodian (or a subcustodian employed
pursuant to Section 2 hereof) and a broker-dealer registered
under the Securities Exchange Act of 1934 and, if necessary,
the Fund, relating to compliance with the rules of The
Options Clearing Corporation or of any registered national
securities exchange, or of any similar organization or
organizations, regarding deposit or escrow or other
arrangements in connection with options transactions by the
Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian (or a subcustodian
employed pursuant to Section 2 hereof), and a futures
commissions merchant, relating to compliance with the rules
of the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization, regarding futures margin account deposits or
payments in connection with futures transactions by the
Fund;
-5-
<PAGE>
14) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to proper instructions, a certified
copy of a vote of the Board specifying the securities to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be proper corporate
purpose, and naming the person or persons to whom delivery
of such securities shall be made.
C. REGISTRATION OF SECURITIES Securities held by the
Custodian (other than bearer securities) for the account of
the Fund shall be registered in the name of the Fund or in
the name of any nominee of the Fund or of any nominee of the
Custodian, or in the name or nominee name of any agent
appointed pursuant to Paragraph K hereof, or in the name or
nominee name of any subcustodian employed pursuant to
Section 2 hereof, or in the name or nominee name of The
Depository Trust Company or Participants Trust Company or
Approved Clearing Agency or Federal Book-Entry System or
Approved Book-Entry System for Commercial Paper; provided,
that securities are held in an account of the Custodian or
of such agent or of such subcustodian containing only assets
of the Fund or only assets held by the Custodian or such
agent or such subcustodian as a custodian or subcustodian or
in a fiduciary capacity for customers. All certificates for
securities accepted by the Custodian or any such agent or
subcustodian on behalf of the Fund shall be in "street" or
other good delivery form or shall be returned to the selling
broker or dealer who shall be advised of the reason thereof.
D. BANK ACCOUNTS The Custodian shall open and maintain a
separate bank account or accounts in the name of the
Fund, subject only to draft or order by the Custodian
acting in pursuant to the terms of this Agreement, and
shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for
the account of the Fund other than cash maintained by
the Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company
Act of 1940. Funds held by the Custodian for the Fund
may be deposited by it to its credit as Custodian in
the Banking Department of the Custodian or in such
other banks or trust companies as the Custodian may in
its discretion deem necessary or desirable; PROVIDED,
however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such
bank or trust company shall be approved in writing by
two officers of the Fund. Such funds shall be deposited
by the Custodian in its capacity as Custodian and shall
be subject to withdrawal only by the Custodian in that
capacity.
E. PAYMENT FOR SHARES OF THE FUND The Custodian shall make
appropriate arrangements with the Transfer Agent and the
principal underwriter of the Fund to enable the Custodian to
make certain it promptly receives the cash or other
consideration due to the Fund for such new or treasury Shares
as may be issued or sold from time to time by the Fund, in
accordance with the governing documents and offering
prospectus and statement of additional information of the
Fund. The Custodian will provide prompt notification to the
Fund of any receipt by it of payments for Shares of the Fund.
-6-
<PAGE>
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement
between the Fund and the Custodian, the Custodian shall, upon
the receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties,
1) invest in such securities and instruments as
may be set forth in such instructions on the
same day as received all federal funds
received after a time agreed upon between
the Custodian and the Fund; and
2) make federal funds available to the Fund as
of specified times agreed upon from time to
time by the Fund and the Custodian in the
amount of checks received in payment for
Shares of the Fund which are deposited into
the Fund's account.
G. COLLECTIONS The Custodian shall promptly collect all income
and other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall
promptly collect all income and other payments with respect to
bearer securities if, on the date of payment by the issuer,
such securities are held by the Custodian or agent thereof and
shall credit such income, as collected, to the Fund's
custodian account.
The Custodian shall do all things necessary and proper in
connection with such prompt collections and, without limiting
the generality of the foregoing, the Custodian shall
1) Present for payment all coupons and other income items
requiring presentations;
2) Present for payment all securities which may mature or
be called, redeemed, retired or otherwise become
payable;
3) Endorse and deposit for collection, in the name of the
Fund, checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a
Securities System or in an Approved Book-Entry System
for Commercial Paper at the time funds become available
to the Custodian; in the case of securities maintained
in The Depository Trust Company funds shall be deemed
available to the Fund not later than the opening of
business on the first business day after receipt of
such funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably
practicable whenever income due on any security is not
promptly collected. In any case in which the Custodian does
not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in
writing, enclosing copies of any demand letter, any written
response thereto, and memoranda of all oral responses thereto
and to telephonic demands, and await instructions from the
Fund; the Custodian shall in no case have any liability for
any nonpayment of such income provided the Custodian meets the
standard of care set forth in Section 8 hereof. The Custodian
shall not be obligated to take legal action for collection
unless and until reasonably indemnified to its satisfaction.
-7-
<PAGE>
The Custodian shall also receive and collect all stock
dividends, rights and other items of like nature, and deal
with the same pursuant to proper instructions relative
thereto.
H. PAYMENT OF FUND MONEYS Upon receipt of proper instructions,
which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out moneys of the Fund
in the following cases only:
1) Upon the purchase of securities, participation
interests, options, futures contracts, forward
contracts and options on futures contracts purchased
for the account of the Fund but only (a) against the
receipt of
(i) such securities registered as provided in
Paragraph C hereof or in proper form for
transfer or
(ii) detailed instructions signed by an officer
officer of the Fund regarding the participation
interests to be purchased or
(iii) written confirmation of the purchase by
the Fund of the options, futures contracts,
forward contracts or options on futures
contracts
by the Custodian (or by a subcustodian employed pursuant to
Section 2 hereof or by a clearing corporation of a national
securities exchange of which the Custodian is a member or by any
bank, banking institution or trust company doing business in the
United States or abroad which is qualified under the Investment
Company Act of 1940 to act as a custodian and which has been
designated by the Custodian as its agent for this purpose or by
the agent specifically designated in such instructions as
representing the purchasers of a new issue of privately placed
securities); (b) in the case of a purchase effected through a
Securities System, upon receipt of the securities by the
Securities System in accordance with the conditions set forth in
Paragraph L hereof; (c) in the case of a purchase of commercial
paper effected through an Approved Book-Entry System for
Commercial Paper, upon receipt of the paper by the Custodian or
subcustodian in accordance with the conditions set forth in
Paragraph M hereof; (d) in the case of repurchase agreements
entered into between the Fund and another bank or a
broker-dealer, against receipt by the Custodian of the securities
underlying the repurchase agreement either in certificate form or
through an entry crediting the Custodian's segregated,
non-proprietary account at the Federal Reserve Bank of Boston
with such securities along with written evidence of the agreement
by the bank or broker-dealer to repurchase such securities from
the Fund; or (e) with respect to securities purchased outside of
the United States, in accordance with written procedures agreed
to from time to time in writing by the parties hereto;
2) When required in connection with the conversion,
exchange or surrender of securities owned by the Fund
as set forth in Paragraph B hereof;
-8-
<PAGE>
3) When required for the redemption or repurchase of
Shares of the Fund in accordance with the provisions of
Paragraph J hereof;
4) For the payment of any expense or liability incurred by
the Fund, including but not limited to the following
payments for the account of the Fund: advisory fees,
distribution plan payments, interest, taxes, management
compensation and expenses, accounting, transfer agent
and legal fees, and other operating expenses of the
Fund whether or not such expenses are to be in whole or
part capitalized or treated as deferred expenses;
5) For the payment of any dividends or other distributions
to holders of Shares declared or authorized by the
Board; and
6) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board, specifying the
amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such
purpose to be a proper corporate purpose, and naming
the person or persons to whom such payment is to be
made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED In any and every case where payment for purchase
of securities for the account of the Fund is made by the
Custodian in advance of receipt of the securities purchased
in the absence of specific written instructions signed by
two officers of the Fund to so pay in advance, the Custodian
shall be absolutely liable to the Fund for such securities
to the same extent as if the securities had been received by
the Custodian; EXCEPT that in the case of a repurchase
agreement entered into by the Fund with a bank which is a
member of the Federal Reserve System, the Custodian may
transfer funds to the account of such bank prior to the
receipt of (i) the securities in certificate form subject to
such repurchase agreement or (ii) written evidence that the
securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary
account of the Custodian maintained with the Federal Reserve
Bank of Boston or (iii) the safekeeping receipt, PROVIDED
that such securities have in fact been so transfered by
book-entry and the written repurchase agreement is received
by the Custodian in due course; AND EXCEPT that if the
securities are to be purchased outside the United States,
payment may be made in accordance with procedures agreed to
in writing from time to time by the parties hereto.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND
From such funds as may be available for the purpose, but
subject to any applicable votes of the Board and the current
redemption and repurchase procedures of the Fund, the
Custodian shall, upon receipt of written instructions from
the Fund or from the Fund's transfer agent or from the
principal underwriter, make funds and/or portfolio
securities available for payment to holders of Shares who
have caused their Shares to be redeemed or repurchased by
the Fund or for the Fund`s account by its transfer agent or
principal underwriter.
-9-
<PAGE>
The Custodian may maintain a special checking account upon
which special checks may be drawn by shareholders of the
Fund holding Shares for which certificates have not been
issued. Such checking account and such special checks shall
be subject to such rules and regulations as the Custodian
and the Fund may from time to time adopt. The Custodian or
or the Fund may suspend or terminate use of such checking
account or such special checks (either generally or for one or
more shareholders) at any time. The Custodian and the Fund
shall notify the other immediately of any such suspension or
termination.
K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at
any time or times in its discretion appoint (and may at any
time remove) any other bank or trust company (PROVIDED such
bank or trust company is itself qualified under the
Investment Company Act of 1940 to act as a custodian or is
itself an eligible foreign custodian within the meaning of
Rule 17f-5 under said Act) as the agent of the Custodian to
carry out such of the duties and functions of the Custodian
described in this Section 3 as the Custodian may from time
to time direct; PROVIDED, however, that the appointment of
any such agent shall not relieve the Custodian of any of its
responsibilities or liabilities hereunder, and as between
the Fund and the Custodian the Custodian shall be fully
responsible for the acts and omissions of any such agent.
For the purposes of this Agreement, any property of the Fund
held by any such agent shall be deemed to be held by the
Custodian hereunder.
L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS
The Custodian may deposit and/or maintain securities owned
by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2 keep
securities of the Fund in a Securities System provided that
such securities are maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in the
Securities System which shall not include any assets of the
Custodian or such subcustodian or any other person other than
assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
-10-
<PAGE>
(b) The records of the Custodian with respect to
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging
to the Fund, and the Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Fund's holdings
maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased
in book-entry form for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
such securities have been transferred to the Account, and (ii)
the making of any entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account
of the Fund only upon (i) receipt of notice or advice from the
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all notices or
advices from the Securities System of transfers of securities
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be promptly
provided to the Fund at its request. The Custodian shall
promptly send to the Fund confirmation of each transfer to or
from the account of the Fund in the form of a written advice
or notice of each such transaction, and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the
Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to the Securities System's accounting
system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities
System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's
internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Securities System. The Custodian's books and records relating
to the Fund's participation in each Securities System will at
all times during regular business hours be open to the
inspection of the Fund's authorized officers, employees or
agents.
(e) The Custodian shall not act under this Paragraph
L in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Securities System; the Custodian shall also obtain appropriate
assurance from the officers of the Fund that the Board has
annually reviewed the continued use by the Fund of each
Securities System, and the Fund shall promptly notify the
Custodian if the use of a Securities System is to be
discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
-11-
<PAGE>
(f) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of the
Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or
subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the
Securities System or any other person; at the election of the
Fund, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent
that the Fund has not been made whole for any such loss or
damage.
M. DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY
SYSTEM FOR COMMERCIAL PAPER Upon receipt of proper
instructions with respect to each issue of direct issue
commercial paper purchased by the Fund, the Custodian may
deposit and/or maintain direct issue commercial paper owned by
the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable
Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the
following provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry System
for Commercial Paper, provided that such paper is issued in
book entry form by the Custodian or subcustodian on behalf of
an issuer with which the Custodian or subcustodian has entered
into a book-entry agreement and provided further that such
paper is maintained in a non-proprietary account ("Account")
of the Custodian or such subcustodian in an Approved
Book-Entry System for Commercial Paper which shall not include
any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such
subcustodian as a fiduciary, custodian, or otherwise for its
customers.
(b) The records of the Custodian with respect to
commercial paper of the Fund which is maintained in an
Approved Book-Entry System for Commercial Paper shall identify
by book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open for
inspection by authorized officers, employees or agents of the
Fund. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping system capable of accurately
and currently stating the Fund's holdings of commercial paper
maintained in each such System.
(c) The Custodian shall pay for commercial paper
purchased in book-entry form for the account of the Fund only
upon contemporaneous (i) receipt of notice or advice from the
issuer that such paper has been issued, sold and transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such purchase, payment and
transfer for the account of the Fund. The Custodian shall
transfer such commercial paper which is sold or cancel such
commercial paper which is redeemed for the account of the Fund
only upon contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
-12-
<PAGE>
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer or redemption and payment
for the account of the Fund. Copies of all notices, advices
and confirmations of transfers of commercial paper for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be promptly provided to the Fund
at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to each System's accounting system, system
of internal accounting controls or procedures for safeguarding
commercial paper deposited in the System; the Custodian shall
promptly send to the Fund any report or other communication
relating to the Custodian's internal accounting controls and
procedures for safeguarding commercial paper deposited in
any Approved Book-Entry System for Commercial Paper; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to
such agent's or subcustodian's internal accounting controls
and procedures for safeguarding securities deposited in any
Approved Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph
M in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the Custodian
shall also obtain appropriate assurance from the officers of
the Fund that the Board has annually reviewed the continued
use by the Fund of each Approved Book-Entry System for
Commercial Paper, and the Fund shall promptly notify the
Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the
Fund, the Custodian will terminate the use of any such System
as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved
Book-Entry System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund or in
the event of an electronic system failure which impedes
issuance, transfer or custody of direct issue commercial paper
by book-entry.
(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of any
Approved Book-Entry System for Commercial Paper by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their
employees or from any failure of the Custodian or any such
agent or subcustodian to enforce effectively such rights as it
may have against the System, the issuer of the commercial
paper or any other person; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the System, the
issuer of the commercial paper or any other person which the
Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for
any such loss or damage.
-13-
<PAGE>
N. SEGREGATED ACCOUNT The Custodian shall upon receipt of
proper instructions establish and maintain a segregated
account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by
the Custodian pursuant to Paragraph L hereof, (i) in
accordance with the provisions of any agreement among the
Fund, the Custodian and any registered broker-dealer (or any
futures commission merchant), relating to compliance with
the rules of the Options Clearing Corporation and of any
registered national securities exchange (or of the Commodity
Futures Trading Commission or of any contract market or
commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other
arrangements in connection with transactions by the Fund,
(ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or
written by the Fund or futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of
compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated
accounts by registered investment companies and (iv)
for other proper purposes, BUT ONLY, in the case of
clause (iv), upon receipt of, in addition to proper
instructions, a certificate signed by two officers of
the Fund, setting forth the purpose such segregated
account and declaring such purpose to be a proper
purpose.
O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES The Custodian shall
execute ownership and other certificates and affidavits for
all federal and state tax purposes in connection with receipt
of income or other payments with respect to securities of the
Fund held by it and in connection with transfers of
securities.
P. PROXIES The Custodian shall, with respect to the securities
held by it hereunder, cause to be promptly delivered to the
Fund all forms of proxies and all notices of meetings and
any other notices or announcements or other written
information affecting or relating to the securities, and
upon receipt of proper instructions shall execute and
deliver or cause its nominee to execute and deliver such
proxies or other authorizations as may be required. Neither
the Custodian nor its nominee shall vote upon any of the
securities or execute any proxy to vote thereon or give any
consent or take any other action with respect thereto
(except as otherwise herein provided) unless ordered to do
so by proper instructions.
Q. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call
and maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers and other persons
relating to the securities and participation interests being
held for the Fund. With respect to tender or exchange
-14-
<PAGE>
offers, the Custodian shall deliver promptly to the Fund all
written information received by the Custodian from issuers
and other persons relating to the securities and
participation interests whose tender or exchange is sought
and from the party (or his agents) making the tender or
exchange offer.
R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender
offers, similar offers to purchase or exercise rights
(including, without limitation, pendency of calls and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options and the maturity of futures
contracts) affecting or relating to securities and
participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for
promptly notifying the Fund of all such offers in accordance
with the standard of reasonable care set forth in Section 8
hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Fund shall
have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of
proper instructions, the Custodian shall timely deliver to
the issuer or trustee thereof, or to the agent of either,
warrants, puts, calls, rights or similar securities for the
purpose of being exercised or sold upon proper receipt
therefor and upon receipt of assurances satisfactory to the
Custodian that the new securities and cash, if any, acquired
by such action are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof. Upon
receipt of proper instructions, the Custodian shall timely
deposit securities upon invitations for tenders of
securities upon proper receipt therefor and upon receipt of
assurances satisfactory to the Custodian that the
consideration to be paid or delivered or the tendered
securities are to be returned to the Custodian or
subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action,
unless otherwise directed to the contrary by proper
instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or
similar rights of security ownership, and shall thereafter
promptly notify the Fund in writing of such action.
S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of
proper instructions, surrender or cause to be surrendered
foreign securities to the depository used by an issuer of
American Depository Receipts or International Depository
Receipts (hereinafter collectively referred to as "ADRs")
for such securities, against a written receipt therefor
adequately describing such securities and written evidence
satisfactory to the Custodian that the depository has
acknowledged receipt of instructions to issue with respect
to such securities ADRs in the name of a nominee of the
Custodian or in the name or nominee name of any subcustodian
employed pursuant to Section 2 hereof, for delivery to the
Custodian or such subcustodian at such place as the
-15-
<PAGE>
Custodian or such subcustodian may from time to time
designate. The Custodian shall, upon receipt of proper
instructions, surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the
Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver
the securities underlying such ADRs to the Custodian or to a
subcustodian employed pursuant to Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall,
upon receipt of proper instructions, place interest bearing
fixed term and call deposits with the banking department of
such banking institution (other than the Custodian) and in
such amounts as the Fund may designate. Deposits may be
denominated in U.S. Dollars or other currencies. The
Custodian shall include in its records with respect to the
assets of the Fund appropriate notation as to the amount and
currency of each such deposit, the accepting banking
institution and other appropriate details and shall retain
such forms of advice or receipt evidencing the deposit, if
any, as may be forwarded to the Custodian by the banking
institution. Such deposits shall be deemed portfolio
securities of the applicable Fund for the purposes of this
Agreement, and the Custodian shall be responsible for the
collection of income from such accounts and the transmission
of cash to and from such accounts.
U. OPTIONS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS
1. OPTIONS. The Custodians shall, upon receipt of
proper instructions and in accordance with the
provisions of any agreement between the Custodian,
any registered broker-dealer and, if necessary, the
Fund, relating to compliance with the rules of the
Options Clearing Corporation or of any registered
national securities exchange or similar organization
or organizations, receive and retain confirmations or
other documents, if any, evidencing the purchase or
writing of an option on a security or securities
index or other financial instrument or index by the
Fund; deposit and maintain in a segregated account
for each Fund separately, either physically or by
book-entry in a Securities System, securities subject
to a covered call option written by the Fund; and
release and/or transfer such securities or other
assets only in accordance with a notice or other
communication evidencing the expiration, termination
or exercise of such covered option furnished by the
Options Clearing Corporation, the securities or
options exchange on which such covered option is
traded or such other organization as may be
responsible for handling such options transactions.
The Custodian and the broker-dealer shall be
responsible for the sufficiency of assets held in
each Fund's segregated account in compliance with
applicable margin maintenance requirements.
-16-
<PAGE>
2. FUTURES CONTRACTS The Custodian shall, upon
receipt of proper instructions, receive and retain
confirmations and other documents, if any, evidencing
the purchase or sale of a futures contract or an
option on a futures contract by the Fund; deposit and
maintain in a segregated account, for the benefit of
any futures commission merchant, assets designated by
the Fund as initial, maintenance or variation
"margin" deposits (including mark-to-market payments)
intended to secure the Fund's performance of its
obligations under any futures contracts purchased or
sold or any options on futures contracts written by
Fund, in accordance with the provisions of any
agreement or agreements among the Fund, the Custodian
and such futures commission merchant, designed to
comply with the rules of the Commodity Futures
Trading Commission and/or of any contract market or
commodities exchange or similar organization
regarding such margin deposits or payments; and
release and/or transfer assets in such margin
accounts only in accordance with any such agreements
or rules. The Custodian and the futures commission
merchant shall be responsible for the sufficiency of
assets held in the segregated account in compliance
with the applicable margin maintenance and
mark-to-market payment requirements.
3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall,
pursuant to proper instructions, enter into or cause
a subcustodian to enter into foreign exchange
contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such
banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts and options shall be deemed to be
portfolio securities of the Fund; and accordingly,
the responsibility of the Custodian therefor shall be
the same as and no greater than the Custodian's
responsibility in respect of other portfolio
securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of
cash from the currency broker or banking or financial
institution with which the contract or option is
made, the maintenance of proper records with respect
to the transaction and the maintenance of any
segregated account required in connection with the
transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or
banking or financial institutions with which the Fund
deals or for their failure to comply with the terms
of any contract or option. Without limiting the
foregoing, it is agreed that upon receipt of proper
instructions and insofar as funds are made available
to the Custodian for the purpose, the Custodian may
(if determined necessary by the Custodian to
consummate a particular transaction on behalf and for
the account of the Fund) make free outgoing payments
of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign
exchange contract or confirmation that the
countervalue currency completing the foreign exchange
-17-
<PAGE>
contact has been delivered or received. The
Custodian shall not be responsible for any costs and
interest charges which may be incurred by the Fund
or the Custodian as a result of the failure or
delay of third parties to deliver foreign exchange;
provided that the Custodian shall nevertheless
be held to the standard of care set forth in, and
shall be liable to the Fund in accordance with,
the provisions of Section 8.
V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY The Custodian
may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to
its duties under this Agreement, PROVIDED, that all
such payments shall be accounted for by the Custodian
to the Treasurer of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the
securities and property of the Fund except as otherwise
directed by the Fund.
4. DUTIES OF BANK WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATIONS
OF NET ASSET VALUE
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
-18-
<PAGE>
5. RECORDS AND MISCELLANEOUS DUTIES
The Bank shall create, maintain and preserve all records relating to
its activities and obligations under this Agreement in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. OPINION OF FUND'S INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. COMPENSATION AND EXPENSES OF BANK
The Bank shall be entitled to reasonable compensation for its services
as Custodian and Agent, as agreed upon from time to time between the Fund and
the Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. RESPONSIBILITY OF BANK
So long as and to the extent that it is in the exercise of reasonable
care, the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
-19-
<PAGE>
The Bank as Custodian and Agent shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement but shall be
liable only for its own negligent or bad faith acts or failures to act.
Notwithstanding the foregoing, nothing contained in this paragraph is intended
to nor shall it be construed to modify the standards of care and responsibility
set forth in Section 2 hereof with respect to subcustodians and in subparagraph
f of Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. PERSONS HAVING ACCESS TO ASSETS OF THE FUND
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees, representatives or agents of
the Custodian or other persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
-20-
<PAGE>
10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; PROVIDED, that
the Fund may at any time by action of its Board, (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of The Commonwealth
of Massachusetts or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding Shares of the Fund
vote to have the securities, funds and other properties held hereunder delivered
and paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits, as
shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
-21-
<PAGE>
12. NOTICES
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such
other address as the Fund may have designated to the Bank, in writing, or to
Investors Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110,
shall be deemed to have been properly delivered or given hereunder to the
respective addressees.
13. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. ADOPTION OF THE AGREEMENT BY THE FUND
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Fund and the Bank reflecting such adoption,
which letter agreement shall be dated and signed by a duly authorized officer of
the Fund and duly authorized officer of the Bank. This Agreement shall be deemed
to be duly executed and delivered by each of the parties in its name and behalf
by its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
-22-
EXHIBIT 99.8(b)
AMENDMENT TO
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
This Amendment, dated as of October 23, 1995, is made to the MASTER
CUSTODIAN AGREEMENT (the "Agreement") between each investment company for which
Eaton Vance Management acts as investment adviser or administrator which has
adopted the Agreement (the "Funds") and Investors Bank & Trust Company (the
"Custodian") pursuant to Section 10 of the Agreement.
The Funds and the Custodian agree that Section 10 of the Agreement
shall, as of October 23, 1995, be amended to read as follows:
Unless otherwise defined herein, terms which are defined in the
Agreement and used herein are so used as so defined.
10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
----------------------------------------------------------------
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated by either party after August
31, 2000 by an instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; PROVIDED, that the Fund may at any
time by action of its Board, (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian in the event
the Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Fund shall pay to
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).
This Agreement may be amended at any time by the written agreement of
the parties hereto. If a majority of the non-interested trustees of any of the
Funds determines that the performance of the Custodian has been unsatisfactory
or adverse to the interests of shareholders of any Fund or Funds or that the
terms of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to
-1-
<PAGE>
the non-interested trustees of the Funds. If the conditions of the preceding
sentence are not met then the Fund or Funds may terminate this Agreement on
sixty (60) days written notice.
The Board of the Fund shall, forthwith, upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian, a bank or
trust company having the qualifications required by the Investment Company Act
of 1940 and the Rules thereunder. The Bank, as Custodian, Agent or otherwise,
shall, upon termination of the Agreement, deliver to such successor custodian,
all securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
Except as expressly provided herein, the Agreement shall remain
unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
CAPITAL EXCHANGE FUND, INC. EATON VANCE MUNICIPALS TRUST II
DEPOSITORS FUND OF BOSTON, INC. EATON VANCE MUTUAL FUNDS TRUST
DIVERSIFICATION FUND, INC. EATON VANCE PRIME RATE RESERVES
EATON VANCE EQUITY-INCOME TRUST EATON VANCE SPECIAL INVESTMENT TRUST
EATON VANCE GROWTH TRUST EV CLASSIC SENIOR FLOATING-RATE FUND
EATON VANCE INVESTMENT FUND, INC. FIDUCIARY EXCHANGE FUND, INC.
EATON VANCE INVESTMENT TRUST SECOND FIDUCIARY EXCHANGE FUND, INC.
EATON VANCE MUNICIPAL BOND FUND L.P. THE EXCHANGE FUND OF BOSTON, INC.
EATON VANCE MUNICIPALS TRUST VANCE, SANDERS EXCHANGE FUND
By: /S/ JAMES L. O'CONNOR
---------------------------------
Treasurer
INVESTORS BANK & TRUST COMPANY
By: /S/ MICHAEL F. ROGERS
--------------------------------
-2-
EXHIBIT 99.9
THE EXCHANGE FUND OF BOSTON, INC.
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made this 1st day of July, 1996, between The Exchange Fund of
Boston, 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
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
-1-
<PAGE>
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.
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, 1997 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after February 28, 1997 is
specifically approved at least annually (i) by the Board of 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.
-2-
<PAGE>
8. Amendments of the Agreement. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective until approved (i) by the vote of a majority of
those 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
THE EXCHANGE FUND OF BOSTON, INC. EATON VANCE MANAGEMENT
/s/ Landon T. Clay /s/ H. Day Brigham, Jr.
By--------------------------------- By--------------------------------
President Vice President and not individually
-3-
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000033951
<NAME> THE EXCHANGE FUND OF BOSTON
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 16,455
<INVESTMENTS-AT-VALUE> 82,712
<RECEIVABLES> 143
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 221
<TOTAL-ASSETS> 83,076
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 579
<TOTAL-LIABILITIES> 579
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18,265
<SHARES-COMMON-STOCK> 286
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 182
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,208)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 66,258
<NET-ASSETS> 82,497
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 1,429
<EXPENSES-NET> 606
<NET-INVESTMENT-INCOME> 823
<REALIZED-GAINS-CURRENT> 3,337
<APPREC-INCREASE-CURRENT> 11,874
<NET-CHANGE-FROM-OPS> 16,034
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 822
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 10
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 8
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 12,658
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 482
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 605
<AVERAGE-NET-ASSETS> 77,139
<PER-SHARE-NAV-BEGIN> 238.23
<PER-SHARE-NII> 2.871
<PER-SHARE-GAIN-APPREC> 52.483
<PER-SHARE-DIVIDEND> 2.85
<PER-SHARE-DISTRIBUTIONS> 0.04
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 288.73
<EXPENSE-RATIO> 0.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
