<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 24, 1997
1933 ACT FILE NO. 2-42722
1940 ACT FILE NO. 811-02258
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 42 [X]
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 19 [X]
EATON VANCE INCOME FUND OF BOSTON
-----------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
617-482-8260
------------------------
(REGISTRANT'S TELEPHONE NUMBER)
ALAN R. DYNNER
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
---------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
<TABLE>
<CAPTION>
It is proposed that this filing will become effective pursuant to rule 485 (check appropriate box):
<S> <C>
[ ]immediately upon filing pursuant to paragraph (b) [ ]on (date) pursuant to paragraph (a)(1)
[X]on February 1, 1997 pursuant to paragraph (b) [ ]75 days after filing pursuant to paragraph (a)(2)
[ ]60 days after filing pursuant to paragraph (a)(1) [ ]on (date) pursuant to paragraph (a)(2).
If appropriate, check the following box:
<CAPTION>
[ ] this post effective amendment designates a new effective date for a previously filed post-effective amendment.
</TABLE>
The exhibit index required by Rule 483(a) under the Securities Act of 1933
is located on page in the sequential numbering system of the manually signed
copy of this Registration Statement.
The Registrant has filed a Declaration pursuant to Rule 24f-2 and on
November 25, 1996 filed its "Notice" as required by that Rule for the fiscal
year ended September 30, 1996. The Registrant continues its election to
register an indefinite number of shares of beneficial interest pursuant to
Rule 24f-2.
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<PAGE>
EATON VANCE INCOME FUND OF BOSTON
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-1A
---------------------------
<TABLE>
<CAPTION>
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
------ -------- ---------------------------------------------
<S> <C> <C>
1. ..................... Cover Page Cover Page
2. ..................... Synopsis Shareholder and Fund Expenses
3. ..................... Condensed Financial Information The Fund's Financial Highlights; Performance
Information
4. ..................... General Description of Registrant The Fund's Investment Objectives; Investment
Policies and Risks;
Organization of the Fund
5. ..................... Management of the Fund Management of the Fund
5a...................... Management's Discussion of Fund Not Applicable
Performance
6. ..................... Capital Stock and Other Securities Organization of the Fund; The Lifetime
Investing Account/Distribution Options;
Distributions and Taxes
7. ..................... Purchase of Securities Being Offered Valuing Fund Shares; How to Buy Fund Shares;
The Lifetime Investing Account/Distribution
Options; Service Plan; The Eaton Vance
Exchange Privilege; Eaton Vance Shareholder
Services
8. ..................... Redemption or Repurchase How to Redeem Fund Shares
9. ..................... Legal Proceedings Not Applicable
PART B
ITEM NO. ITEM CAPTION STATEMENT OF ADDITIONAL INFORMATION CAPTION
------- ------------ ---------------------------------------------
10. ..................... Cover Page Cover Page
11. ..................... Table of Contents Table of Contents
12. ..................... General Information and History General Information and History
13. ..................... Investment Objectives and Policies Investment Objectives and Policies;
Investment Restrictions
14. ..................... Management of the Fund Officers and Trustees of the Fund
15. ..................... Control Persons and Principal Holders of Control Persons and Principal Holders of
Securities Securities
16. ..................... Investment Advisory and Other Investment Adviser; Custodian; Service Plan;
Services Other Information
17. ..................... Brokerage Allocation and Other Portfolio Security Transactions
Practices
18. ..................... Capital Stock and Other Securities Other Information
19. ..................... Purchase, Redemption and Pricing of Determination of Net Asset Value; Principal
Securities Being Offered Underwriter; Service for Withdrawal;
Services for Accumulation; Service Plan
20. ..................... Tax Status Taxes
21. ..................... Underwriters Principal Underwriter
22. ..................... Calculations of Performance Data Investment Performance
23. ..................... Financial Statements Financial Statements
</TABLE>
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
EATON VANCE INCOME
FUND OF BOSTON
- ------------------------------------------------------------------------------
EATON VANCE INCOME FUND OF BOSTON (THE "FUND") IS A MUTUAL FUND SEEKING AS ITS
PRIMARY OBJECTIVE TO PROVIDE AS MUCH CURRENT INCOME AS POSSIBLE. IN SEEKING ITS
INVESTMENT OBJECTIVE, THE FUND MAY INVEST UP TO 100% OF ITS ASSETS IN
LOWER-RATED BONDS, COMMONLY KNOWN AS "JUNK BONDS", THAT ENTAIL GREATER RISKS,
INCLUDING DEFAULT, THAN THOSE OF HIGHER-RATED SECURITIES. INVESTORS SHOULD
CAREFULLY CONSIDER THESE RISKS AND INVEST FOR THE LONG TERM. SEE "THE FUND'S
INVESTMENT OBJECTIVES" AND "INVESTMENT POLICIES AND RISKS".
Shares of the Fund are not deposits or obligations of, or guaranteed or endorsed
by, any bank or other insured depository institution, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other government agency. Shares of the Fund involve investment risks,
including fluctuations in value and the possible loss of some or all of the
principal investment.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A
Statement of Additional Information dated February 1, 1997 for the Fund, as
supplemented from time to time, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The Statement of
Additional Information is available without charge from the Fund's principal
underwriter, Eaton Vance Distributors, Inc. (the "Principal Underwriter"), 24
Federal Street, Boston, MA 02110 (telephone (800) 225-6265). The Fund's
investment adviser is Eaton Vance Management (the "Investment Adviser") which
is located at the same address.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
PAGE PAGE
Shareholder and Fund Expenses ..... 2 How to Redeem Fund Shares ......... 11
The Fund's Financial Highlights ... 3 Reports to Shareholders ........... 12
The Fund's Investment Objectives .. 4 The Lifetime Investing Account/
Investment Policies and Risks ..... 4 Distribution Options ............. 12
Organization of the Fund .......... 7 The Eaton Vance Exchange Privilege 13
Management of the Fund ............ 8 Eaton Vance Shareholder Services .. 14
Service Plan ...................... 8 Distributions and Taxes ........... 15
Valuing Fund Shares ............... 8 Performance Information ........... 15
How to Buy Fund Shares ............ 9 Appendix A ........................ 17
Appendix B ........................ 19
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PROSPECTUS DATED FEBRUARY 1, 1997
<PAGE>
<TABLE>
<CAPTION>
SHAREHOLDER AND FUND EXPENSES
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SHAREHOLDER TRANSACTION EXPENSES
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<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) 3.75%
Sales Charges Imposed on Reinvested Distributions None
Exchange Fees None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average daily net assets)
-------------------------------------------------------------------------------------------------------
Investment Adviser Fee 0.625%
Other Expenses (including Service Plan Fees of 0.115%) 0.445%
----
Total Operating Expenses 1.070%
=====
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<S> <C> <C> <C> <C>
An investor would pay the following maximum initial sales
charge and expenses on a $1,000 investment, assuming (a) 5%
annual return and (b) redemption at the end of each period: $48 $70 $94 $163
</TABLE>
NOTES:
The table and Example summarize the aggregate expenses of the Fund and are
designed to help investors understand the costs and expenses they will bear,
directly or indirectly, by investing in the Fund. Information for the Fund is
based on its expenses for the most recent fiscal year.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES
AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal regulations
require the Example to assume a 5% annual return, but actual annual return will
vary. For further information regarding the expenses of the Fund see "The Fund's
Financial Highlights", "Management of the Fund", "Service Plan" and "How to
Redeem Fund Shares".
No sales charge is payable at the time of purchase on investments of $1 million
or more. However, a contingent deferred sales charge of 1% will be imposed on
such investments in the event of certain redemptions within 12 months of
purchase. See "How to Buy Fund Shares" and "How to Redeem Fund Shares."
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
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The following information should be read in conjunction with the audited
financial statements included in the Fund's annual report to shareholders
which is incorporated by reference into the Statement of Additional
Information in reliance upon the report of Coopers & Lybrand L.L.P.,
independent accountants, as experts in accounting and auditing. The financial
highlights for each of the five years in the period ending September 30, 1991,
presented here, were audited by other auditors whose report dated November 5,
1991, expressed an unqualified opinion on such financial highlights. Further
information regarding the performance of the Fund is contained in its annual
report to shareholders which may be obtained without charge by contacting the
Principal Underwriter.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991+ 1990+ 1989+ 1988+ 1987+
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning
of year $ 7.92 $ 7.90 $ 8.40 $ 8.33 $ 7.56 $ 6.89 $ 9.16 $ 9.39 $ 10.07 $ 10.01
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
INCOME FROM OPERATIONS:
Net investment income $ 0.80 $ 0.82 $ 0.83 $ 0.92 $ 0.97 $ 1.04 $ 1.15 $ 1.10 $ 1.08 $ 1.02
Net realized and unrealized
gain (loss) on investments 0.21 0.02 (0.47) 0.07 0.77 0.71 (2.26) (0.22) (0.25) 0.08
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total income from operations $ 1.01 $ 0.84 $ 0.36 $ 0.99 $ 1.74 $ 1.75 $ (1.11) $ 0.88 $ 0.83 $ 1.10
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $ (0.80) $ (0.82) $ (0.81) $ (0.92) $ (0.97) $ (1.04) $ (1.15) $ (1.10) $ (1.30) $ (1.04)
From paid-in capital -- -- -- -- -- -- (0.04) (0.01) (0.01) (0.21)
In excess of net investment
income(2) (0.01) -- (0.05) -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions $ (0.81) $ (0.82) $ (0.86) $ (0.92) $ (0.97) $ (1.08) $ (1.16) $ (1.11) $ (1.51) $ (1.04)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of year $ 8.12 $ 7.92 $ 7.90 $ 8.40 $ 8.33 $ 7.56 $ 6.89 $ 9.16 $ 9.39 $ 10.07
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN(1) 13.41% 11.25% 4.25% 12.59% 24.25% 28.53% (13.06%) 9.76% 9.35% 11.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(000's omitted) $143,844 $106,414 $103,482 $95,123 $85,778 $70,773 $65,588 $45,852 $44,492 $42,824
Ratio of net expenses to
average daily net assets 1.07% 1.09% 1.04% 1.03% 1.08% 1.15% 1.05% 1.39% 1.31% 1.21%
Ratio of net investment
income to average daily
net assets 9.96% 10.50% 9.75% 11.01% 12.02% 15.36% 14.26% 11.54% 11.32% 9.84%
PORTFOLIO TURNOVER 81% 84% 70% 102% 90% 80% 67% 66% 61% 86%
</TABLE>
- ----------
+ Audited by previous auditors.
(1) Total investment return is calculated assuming a purchase at the net asset
value on the first day and a sale at the net asset value on the last day of
each period reported. Dividends and distributions, if any, are assumed to
be reinvested at the net asset value on the payable date.
(2) During the year ended September 30, 1993, the Fund adopted Statement of
Position (SOP) 93-2: Determination, Disclosure and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions
by Investment Companies. The SOP requires that differences in the
recognition or classification of income between the financial statements
and tax earnings and profits that result in temporary over-distributions
for financial statement purposes, are classified as distributions in excess
of net investment income or accumulated net realized gains.
THE FUND'S INVESTMENT OBJECTIVES
- --------------------------------------------------------------------------------
THE FUND'S PRIMARY INVESTMENT OBJECTIVE IS TO PROVIDE AS MUCH CURRENT INCOME AS
POSSIBLE. In seeking this objective, the Fund currently invests a significant
portion of its assets in high yield, high risk bonds -- i.e., those rated lower
than investment grade and unrated obligations (commonly referred to as "junk
bonds"). The Fund also seeks reasonable preservation of capital to the extent
attainable from such investments, and growth of income and capital, as secondary
objectives.
The high yield, high risk bonds in which the Fund invests are considered
predominently speculative with respect to the ability of the issuer to meet
principal and interest payments. Achievement of the Fund's objectives, which
cannot be assured, is therefore much more dependent on the Investment Adviser's
own credit analysis than is the case for higher quality bonds. The Fund may not
be appropriate for investors who cannot assume the greater risk of capital
depreciation or loss inherent in seeking higher yields. Investors are urged to
carefully consider the substantial risks of investing in a portfolio of high
yield, high risk bonds before purchasing shares of the Fund.
INVESTMENT POLICIES AND RISKS
- ------------------------------------------------------------------------------
During its last fiscal year the Fund invested a significant portion of its
assets in high yield, high risk bonds which were rated lower than investment
grade (i.e., bonds rated lower than Baa by Moody's Investors Service, Inc.
("Moody's") and lower than BBB by Standard & Poor's Ratings Group ("S&P")) or
which were unrated. For a description of the Moody's and S&P's ratings, see
Appendix A to this Prospectus. These obligations are commonly referred to as
"junk bonds", carry a high degree of risk and are considered speculative by the
investment community. For more detailed information about the risks associated
with investing in such securities, see "Risk Considerations" below. At September
30, 1996, the Fund had approximately 97.8% of its assets invested in such bonds.
See Appendix B to this Prospectus for the asset composition information for the
most recent fiscal year of the Fund.
A substantial portion of the Fund's assets consists of high yield, high risk
corporate bonds issued in connection with mergers, acquisitions, leveraged
buy-outs, recapitalizations and other highly leveraged transactions. These bonds
are subject to substantially greater credit risks than some of the other
fixed-income securities in which the Fund may invest. These credit risks include
the possibility of default or the bankruptcy of the issuer. These bonds may also
be less liquid than other fixed-income securities. During periods of
deteriorating economic conditions and contraction in the credit markets, the
ability of issuers of such bonds to service their debt, meet projected goals, or
obtain additional financing may be impaired. Because the Fund seeks, in part,
preservation of capital, the Investment Adviser is more likely to avoid or limit
investment in securities with substantial credit risks than if high current
income were the Fund's only objective.
The Fund may also invest a portion of its assets in debt securities that are not
paying current income in anticipation of the receipt of possible future income
or capital appreciation. Interest and/or principal payments thereon could be in
arrears when such securities are acquired, and the issuer may be in bankruptcy
or undergoing a debt restructuring or reorganization. Such securities may be
unrated or the lowest rated obligations (rated C by Moody's or D by S&P). Bonds
rated C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Bonds rated D by S&P are in payment
default or a bankruptcy petition has been filed and debt service payments are
jeopardized. The Fund may retain defaulted obligations in its portfolio when
such retention is considered desirable by the Investment Adviser. The Fund may
also acquire other securities issued in exchange for such obligations or issued
in connection with the debt restructuring or reorganization of the issuers, or
where such acquisition, in the judgment of the Investment Adviser, may enhance
the value of such obligations or would otherwise be consistent with the Fund's
investment policies.
Although the Investment Adviser considers security ratings when making
investment decisions, it performs its own credit and investment analysis and
does not rely primarily on the ratings assigned by the rating services. In
evaluating the quality of a particular issue, whether rated or unrated, the
Investment Adviser will normally take into consideration, among other things,
the issuer's financial resources and operating history, its sensitivity to
economic conditions and trends, the ability of its management, its debt maturity
schedules and borrowing requirements, and relative values based on anticipated
cash flow, interest and asset coverages, and earnings prospects. Because of the
greater number of investment considerations involved in investing in high yield,
high risk bonds, the achievement of the Fund's objectives depends more on the
Investment Adviser's judgment and analytical abilities than would be the case if
the Fund were investing primarily in securities in the higher rating categories.
The Fund's portfolio may be invested in a broad range of securities, including
fixed-income and equity securities and short-term obligations. In addition to
lower rated bonds, the Fund may invest in higher rated securities. The Fund may
also invest in non-dividend paying common stocks and rights and warrants when
the Investment Adviser believes they present opportunities for capital
appreciation.
FIXED-INCOME OBLIGATIONS. The fixed-income securities in which the Fund may
invest include preferred and preference stocks and all types of debt obligations
of both domestic and foreign issuers, such as bonds, debentures, notes,
equipment lease certificates, equipment trust certificates, conditional sales
contracts, commercial paper, and obligations issued or guaranteed by the U.S.
Government, any state or territory of the United States, any foreign government
or any of their respective political subdivisions, agencies or
instrumentalities. Debt securities may bear fixed, fixed and contingent,
floating or variable rates of interest. Investments in foreign securities are
not expected to exceed 25% of total assets.
The Fund may also invest a portion of its assets in loan interests, which are
interests in amounts owed by a corporate, governmental or other borrower to
lenders or lending syndicates. Loan interests purchased by the Fund may have a
maturity of any number of days or years, may be secured or unsecured, and may be
of any credit quality. Loan interests, which may take the form of participation
interests in, assignments of or novations of a loan, may be acquired from U.S.
and foreign banks, insurance companies, finance companies or other financial
institutions which have made loans or are members of a lending syndicate or from
the holders of loan interests. Loan interests involve the risk of loss in case
of default or bankruptcy of the borrower and, in the case of participation
interests, involve a risk of insolvency of the agent lending bank or other
financial intermediary.
The Fund may invest up to 15% of net assets in illiquid securities. Illiquid
securities include securities legally restricted as to resale, such as
commercial paper issued pursuant to Section 4(2) of the Securities Act of 1933,
as amended, and securities eligible for resale pursuant to Rule 144A thereunder.
Section 4(2) and Rule 144A securities may, however, be treated as liquid by the
Investment Adviser pursuant to procedures adopted by the Trustees, which require
consideration of factors such as trading activity, availability of market
quotations and number of dealers willing to purchase the security.
INVESTMENT PRACTICES
DERIVATIVE INSTRUMENTS. The Fund may purchase or sell derivative instruments
(which are instruments that derive their value from another instrument,
security, index or currency) to hedge against fluctuations in interest rates,
securities prices or currency exchange rates, to change the duration of the
Fund's fixed income portfolio or as a substitute for the purchase or sale of
securities or currency. Options may be written to enhance income. The Fund's
transactions in derivative instruments may include the purchase or sale of
futures contracts on securities (such as U.S. Government securities), indices,
other financial instruments (such as certificates of deposit, Euro-dollar time
deposits, and economic indices) or currencies; options on futures contracts;
exchange-traded options on securities, indices or currencies; and forward
contracts to purchase or sell currencies. All of the Fund's transactions in
derivative instruments involve a risk of loss or depreciation due to:
unanticipated adverse changes in interest rates, securities prices or currency
exchange rates; the inability to close out a position; default by the
counterparty; imperfect correlation between a position and the desired hedge;
tax constraints on closing out positions; and portfolio management constraints
on disposing of securities subject to such transactions. The loss on derivative
instruments (other than purchased options) may substantially exceed the Fund's
initial investment in these instruments. In addition, the Fund may lose the
entire premium paid for purchased options that expire before they can be
profitably exercised by the Fund. The Fund incurs transaction costs in opening
and closing positions in derivative instruments. There can be no assurance that
the Investment Adviser's use of derivative instruments will be advantageous to
the Fund.
The Fund's success in using derivative instruments to hedge portfolio assets
depends on the degree of price correlation between the derivative instrument and
the hedged asset. Imperfect correlation may be caused by several factors,
including temporary price disparities among the trading markets for the
derivative instruments, the assets underlying the derivative instrument and the
Fund's assets. The Fund may write (sell) covered call and put options only with
respect to up to 25% of its net assets.
SHORT-TERM TRADING. Securities may be sold in anticipation of a market decline
(a rise in interest rates) and later purchased, or purchased in anticipation of
a market rise (a decline in interest rates) and later sold. In addition, a
security may be sold and another purchased at approximately the same time to
take advantage of what the Fund believes to be a temporary disparity in the
normal yield relationship between the two securities. Yield disparities may
occur for reasons not directly related to the investment quality of particular
issues or the general movement of interest rates, such as changes in the overall
demand for or supply of various types of fixed-income securities or changes in
the investment objectives of investors. Such trading may be expected to increase
the portfolio turnover rate and the expenses incurred in connection with such
trading. The Fund anticipates that its annual portfolio turnover rate will
generally not exceed 100% (excluding turnover of securities having a maturity of
one year or less).
RISK CONSIDERATIONS
Investors should carefully consider their ability to assume the risks of owning
shares of a mutual fund that invests in below investment grade debt obligations
before making an investment in the Fund. The lower ratings of certain securities
held by the Fund reflect a greater possibility that adverse changes in the
financial condition of an issuer, or in general economic conditions, or both, or
an unanticipated rise in interest rates, may impair the ability of the issuer to
make payments of interest and principal. The inability (or perceived inability)
of issuers to make timely payment of interest and principal would likely make
the values of securities held by the Fund more volatile and could limit the
Fund's ability to sell its securities at prices approximating the values the
Fund has placed on such securities. It is possible that legislation may be
adopted in the future limiting the ability of certain financial institutions to
purchase such securities; such legislation may adversely affect the liquidity of
such securities. In the absence of a liquid trading market for securities held
by it, the Fund may be unable at times to establish the fair market value of
such securities. The rating assigned to a security by a rating agency does not
reflect an assessment of the volatility of the security's market value or of the
liquidity of an investment in the securities. Credit ratings are based largely
on the issuer's historical financial condition and the rating agency's
investment analysis at the timing of rating, and the rating assigned to any
particular security is not necessarily a reflection of the issuer's current
financial condition. Credit quality in the high yield, high risk bond market can
change from time to time, and recently issued credit ratings may not fully
reflect the actual risks posed by a particular high yield security.
While the Investment Adviser will attempt to reduce the risks of investing in
lower rated or unrated securities through active portfolio management,
diversification, credit analysis and attention to current developments and
trends in the economy and the financial markets, there can be no assurance that
a broadly diversified portfolio of such securities would substantially lessen
the risks of defaults brought about by an economic downturn or recession.
The net asset value of the Fund will change in response to fluctuations in
prevailing interest rates and changes in the value of its portfolio securities.
When interest rates decline, the value of securities already held in the Fund's
portfolio can be expected to rise. Conversely, when interest rates rise, the
value of existing portfolio securities can be expected to decline. Changes in
the credit quality of issuers of debt obligations held in the Fund's portfolio
will affect the principal value (and possibly the income earned) on such
obligations. In addition, the values of such securities are affected by changes
in general economic conditions and business conditions affecting the specific
industries of their issuers. Changes by recognized rating services in their
ratings of any fixed-income security and in the ability of an issuer to make
payments of interest and principal may also affect the value of these
investments. The Fund will not dispose of a security solely because its rating
is reduced below its rating at the time of purchase, although the Investment
Adviser will monitor the investment to determine whether continued investment in
the security will assist in meeting the Fund's investment objectives.
Interest and/or principal payments on securities in default could be in arrears
when such securities are acquired, and the issuer may be in bankruptcy or
undergoing a debt restructuring or reorganization. In order to enforce its
rights in the event of a default of such securities, the Fund may be required to
take possession of and manage assets securing the issuer's obligation on such
securities, which may increase the Fund's operating expenses and adversely
affect the Fund's net asset value.
Because foreign securities involve foreign currencies, the values of the assets
of the Fund and their net investment income available for distribution may be
affected favorably or unfavorably by changes in currency exchange rates and
exchange control regulations. There may be less information publicly available
about a foreign issuer than about a U.S. issuer, and foreign issuers are not
generally subject to accounting, auditing, and financial reporting standards and
practices comparable to those in the United States. The willingness and ability
of sovereign issuers to pay principal and interest on government securities
depends on various economic factors, including among others the issuer's balance
of payments, overall debt level, and cash flow considerations related to the
availability of tax or other revenues to satisfy the issuer's obligations. The
securities of some foreign issuers are less liquid and at times more volatile
than securities of comparable U.S. issuers. Foreign brokerage commissions and
fees are also generally higher than in the United States. Foreign settlement
procedures and trade regulations may involve certain risks (such as delay in the
payment or delivery of securities or in the recovery of assets held abroad) and
expenses not present in the settlement of domestic investments. Investments may
include securities issued by companies in lesser-developed countries, which are
sometimes referred to as "emerging markets". As a result, the Fund may be
exposed to greater risk and will be more dependent on the Investment Adviser's
ability to assess such risk than if the Fund invested solely in more developed
countries. In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange controls, confiscatory
taxation, political or financial instability, armed conflict and diplomatic
developments which could affect the values of the Fund's investments in certain
foreign countries. Legal remedies available to investors in certain foreign
countries, including remedies available in bankruptcy proceedings, may be more
limited than those available with respect to investments in the United States or
in other foreign countries. The laws of some foreign countries may limit the
Fund's ability to invest in securities of certain issuers located in those
foreign countries. Special tax considerations apply to foreign securities.
Certain securities held by the Fund may permit the issuer at its option to
"call", or redeem, its securities. If an issuer were to redeem securities held
by the Fund during a time of declining interest rates, the Fund may not be able
to reinvest the proceeds in securities providing the same investment return as
the securities redeemed. The Fund may also temporarily borrow up to 5% of the
value of its total assets to satisfy redemption requests or settle securities
transactions.
Loan interests generally are not rated by any nationally recognized rating
service and are, at present, not readily marketable and may be subject to
contractual restrictions on resale. An investment in restricted securities may
involve relative greater risk and cost to the Fund because of their illiquidity.
Moreover, Rule 144A and Section 4(2) securities determined to be liquid may
increase the level of Fund illiquidity to the extent qualified institutional
buyers become uninterested in purchasing such securities.
Fixed-income securities that the Fund may invest in also include zero coupon
bonds, deferred interest bonds and bonds on which the interest is payable in
kind ("PIK bonds"). Zero coupon and deferred interest bonds are debt obligations
which are issued at a significant discount from face value. While zero coupon
bonds do not require the periodic payment of interest, deferred interest bonds
provide for a period of delay before the regular payment of interest begins. PIK
bonds are debt obligations which provide that the issuer thereof may, at its
option, pay interest on such bonds in cash or in the form of additional debt
obligations. Such investments may experience greater volatility in market value
due to changes in interest rates than debt obligations which make regular
payments of interest. The Fund will accrue income on such investments for tax
and accounting purposes, in accordance with applicable law, which income is
distributable to shareholders. Because no cash is received at the time such
income is accrued, the Fund may be required to liquidate other portfolio
securities to satisfy its distribution obligations.
The Fund has adopted certain fundamental investment restrictions which are
enumerated in detail in the Statement of Additional Information and which may
not be changed unless authorized by a shareholder vote. While the Fund's
investment objectives are not fundamental (i.e., changeable only if authorized
by shareholder vote), the Fund's management believes that any material change of
the investment objectives should be authorized by shareholder vote.
ORGANIZATION OF THE FUND
- ------------------------------------------------------------------------------
THE FUND, A BUSINESS TRUST ESTABLISHED UNDER MASSACHUSETTS LAW PURSUANT TO A
DECLARATION OF TRUST DATED MARCH 27, 1989, AS AMENDED, IS A MUTUAL FUND -- AN
OPEN-END DIVERSIFIED MANAGEMENT INVESTMENT COMPANY. Its predecessor was
organized as a Maryland corporation and commenced operation in 1971. The
Trustees of the Fund are responsible for the overall management and supervision
of its affairs. The Fund has one class of shares of beneficial interest (no par
value per share), an unlimited number of which may be issued. Each share
represents an equal proportionate beneficial interest in the Fund. When issued
and outstanding, the shares are fully paid and nonassessable by the Fund and
redeemable as described under "How to Redeem Fund Shares". There are no annual
meetings of shareholders, but special meetings may be held as required by law to
elect Trustees and consider certain other matters. Shareholders are entitled to
one vote for each full share held. Fractional shares may be voted
proportionately. Shares have no preemptive or conversion rights and are freely
transferable. In the event of the liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
MANAGEMENT OF THE FUND
- ------------------------------------------------------------------------------
THE FUND ENGAGES EATON VANCE MANAGEMENT ("EATON VANCE") AS ITS INVESTMENT
ADVISER. EATON VANCE, ITS AFFILIATES AND ITS PREDECESSOR COMPANIES HAVE BEEN
MANAGING ASSETS OF INDIVIDUALS AND INSTITUTIONS SINCE 1924 AND MANAGING
INVESTMENT COMPANIES SINCE 1931.
Acting under the general supervision of the Board of Trustees of the Fund, Eaton
Vance manages the Fund's investments and affairs. Under its investment advisory
agreement with the Fund, Eaton Vance receives a monthly advisory fee of 5/96 of
1% (equivalent to 5/8 of 1% annually) of average monthly net assets of the Fund.
The Fund paid Eaton Vance advisory fees equivalent to 0.625% of the Fund's
average daily net assets for the fiscal year ended September 30, 1996.
Eaton Vance also furnishes for the use of the Fund office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Fund. The Fund is responsible for the payment of all expenses
other than those expressly stated to be payable by Eaton Vance under the
investment advisory agreement.
EATON VANCE OR ITS AFFILIATES ACTS AS INVESTMENT ADVISER TO INVESTMENT COMPANIES
AND VARIOUS INDIVIDUAL AND INSTITUTIONAL CLIENTS WITH ASSETS UNDER MANAGEMENT OF
OVER $17 BILLION. Eaton Vance is a wholly-owned subsidiary of Eaton Vance Corp.,
a publicly-held holding company which, through its subsidiaries and affiliates,
engages in investment management, administration and marketing activities. The
Principal Underwriter is a wholly-owned subsidiary of Eaton Vance.
Hooker Talcott, Jr. and Michael Weilheimer are the co-portfolio managers of
the Fund. Mr. Talcott has been managing the Fund since 1986 and Mr. Weilheimer
has been managing the Fund since January 1, 1996. Both are Vice Presidents of
Eaton Vance.
Eaton Vance places the Fund's portfolio security transactions for execution with
many broker-dealer firms and uses its best efforts to obtain execution of such
transactions at prices which are advantageous to the Fund and at reasonably
competitive commission rates. The Fund's investment advisory agreement provides
that, subject to the foregoing, Eaton Vance may consider sales of shares of the
Fund or of other investment companies sponsored by Eaton Vance as a factor in
the selection of broker-dealer firms to execute portfolio transactions.
SERVICE PLAN
- ------------------------------------------------------------------------------
In addition to advisory fees and other expenses, the Fund pays service fees
pursuant to a Service Plan (the "Plan") designed to meet the service fee
requirements of the sales charge rule of the National Association of Securities
Dealers, Inc. THE PLAN PROVIDES THAT THE FUND MAY MAKE SERVICE FEE PAYMENTS FOR
PERSONAL SERVICES AND/OR THE MAINTENANCE OF SHAREHOLDER ACCOUNTS TO THE
PRINCIPAL UNDERWRITER, FINANCIAL SERVICE FIRMS ("AUTHORIZED FIRMS") AND OTHER
PERSONS IN AMOUNTS NOT EXCEEDING .25% OF THE FUND'S AVERAGE DAILY NET ASSETS FOR
ANY FISCAL YEAR. The Trustees of the Fund have initially implemented the Plan by
authorizing the Fund to make quarterly service fee payments to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed .25% of that
portion of the Fund's average daily net assets for any fiscal year which is
attributable to shares of the Fund sold on or after May 22, 1989 and remaining
outstanding for at least twelve months. The Plan replaced the Fund's
distribution plan which originally became effective on May 22, 1989. For the
fiscal year ended September 30, 1996, the Fund made service fee payments under
the Plan equivalent to 0.115% of the Fund's average daily net assets for such
year. The Plan is described further in the Statement of Additional Information.
VALUING FUND SHARES
- ------------------------------------------------------------------------------
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by its custodian, Investors Bank & Trust Company ("IBT"),
(as agent for the Fund) in the manner authorized by the Trustees of the Fund.
Net asset value is computed by dividing the value of the Fund's total assets,
less its liabilities, by the number of shares outstanding. Most debt securities
are valued by an independent pricing service. For further information regarding
the valuation of the Fund's assets, see "Determination of Net Asset Value" in
the Statement of Additional Information.
Authorized Firms must communicate an investor's order to the Principal
Underwriter prior to the close of the Principal Underwriter's business day to
receive that day's net asset value per share and the public offering price based
thereon. It is the Authorized Firms' responsibility to transmit orders promptly
to the Principal Underwriter.
SHAREHOLDERS MAY DETERMINE THE VALUE OF THEIR INVESTMENT BY MULTIPLYING THE
NUMBER OF FUND SHARES OWNED BY THE CURRENT NET ASSET VALUE PER SHARE.
HOW TO BUY FUND SHARES
- ------------------------------------------------------------------------------
SHARES OF THE FUND MAY BE PURCHASED FOR CASH OR MAY BE ACQUIRED IN EXCHANGE FOR
SECURITIES. Investors may purchase shares of the Fund through Authorized Firms
at the effective public offering price, which price is based on the effective
net asset value per share plus the applicable sales charge. The Fund receives
the net asset value, while the sales charge is divided between the Authorized
Firm and the Principal Underwriter. An Authorized Firm may charge its customers
a fee in connection with transactions executed by that Firm. The Fund may
suspend the offering of shares at any time and may refuse an order for the
purchase of shares.
The sales charge may vary depending on the size of the purchase and the number
of shares of Eaton Vance funds the investor may already own, any arrangement to
purchase additional shares during a 13-month period or special purchase
programs. Complete details of how investors may purchase shares at reduced sales
charges under a Statement of Intention, Right of Accumulation, or various
Employee Benefit Plans are available from Authorized Firms or the Principal
Underwriter.
The current sales charges and dealer commissions are:
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER COMMISSION
AS PERCENTAGE OF AS PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 3.75% 3.90% 4.00%
$50,000 but less than $100,000 2.75 2.83 3.00
$100,000 but less than $250,000 2.25 2.30 2.50
$250,000 but less than $500,000 1.75 1.78 2.00
$500,000 but less than $1,000,000 1.25 1.27 1.50
$1,000,000 or more 0.00* 0.00* See Below**
</TABLE>
*No sales charge is payable at the time of purchase on investments of $1
million or more. A contingent deferred sales charge ("CDSC") of 1% will be
imposed on such investments in the event of certain redemptions within 12
months of purchase. Such purchases made before January 1, 1997 will be subject
to a CDSC of 0.50% in the event of such redemptions.
**A commission on sales of $1 million or more will be paid as follows: 1.00% on
sales of $1 million or more but less than $3 million, plus 0.50% on amounts
from $3 million but less than $5 million, plus 0.25% on amounts of $5 million
or more. Purchases of $1 million or more will be aggregated over a 12-month
period for purposes of determining the commission to be paid.
The Principal Underwriter may at times allow discounts up to the full sales
charge. During periods when the discount includes the full sales charge,
Authorized Firms may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. The Principal Underwriter may, from time to time, at its
own expense, provide additional incentives to Authorized Firms which employ
registered representatives who sell the Fund's shares and/or shares of other
funds distributed by the Principal Underwriter. In some instances, such
additional incentives may be offered only to Authorized Firms whose
representatives sell or are expected to sell significant amounts of shares.
An initial investment in the Fund must be at least $1,000. Once an account has
been established the investor may send investments of $50 or more at any time
directly to the Fund's transfer agent (the "Transfer Agent") as follows: First
Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123. The
$1,000 minimum initial investment is waived for Bank Automated Investing
accounts, which may be established with an investment of $50 or more. See "Eaton
Vance Shareholder Services".
Shares of the Fund may be sold at net asset value to current and retired
Directors and Trustees of Eaton Vance funds, including the Portfolio; to clients
and current and retired officers and employees of Eaton Vance, its affiliates
and other investment advisers of Eaton Vance sponsored funds; to registered
representatives and employees of Authorized Firms; to bank employees who refer
customers to registered representatives of Authorized Firms; to officers and
employees of IBT and the Transfer Agent; and to such persons' spouses and
children under the age of 21 and their beneficial accounts. Shares may also be
issued at net asset value (1) in connection with the merger of an investment
company with the Fund, (2) to investors making an investment as part of a fixed
fee program whereby an entity unaffiliated with Eaton Vance provides multiple
investment services, such as management, brokerage and custody, and (3) to
investment advisors, financial planners or other intermediaries who place trades
for their own accounts or the accounts of their clients and who charge a
management, consulting or other fee for their services; clients of such
investment advisors, financial planners or other intermediaries who place trades
for their own accounts if the accounts are linked to the master account of such
investment advisor, financial planner or other intermediary on the books and
records of the broker or agent; and retirement and deferred compensation plans
and trusts used to fund those plans, including, but not limited to, those
defined in Section 401(a), 403(b) or 457 of the Internal Revenue Code of 1986,
as amended (the "Code") ("Eligible Plans") and "rabbi trusts." The Principal
Underwriter may pay commissions to Authorized Firms who initiate and are
responsible for purchases of shares of the Fund by Eligible Plans of up to 1.00%
of the amount invested in such shares.
No sales charge is payable at the time of purchase where the amount invested
represents redemption proceeds from a mutual fund unaffiliated with Eaton Vance
if the redemption occurred no more than 60 days prior to the purchase of Fund
shares and the redeemed shares were subject to a sales charge. A CDSC of 0.50%
will be imposed on such investments in the event of certain redemptions within
12 months of purchase and the Authorized Firm will be paid a commission on such
sales of 0.50% of the amount invested.
ACQUIRING FUND SHARES IN EXCHANGE FOR SECURITIES. IBT, as escrow agent, will
receive securities acceptable to Eaton Vance, as Investment Adviser, in exchange
for Fund shares at the applicable public offering price shown above. The minimum
value of securities (or securities and cash) accepted for deposit is $5,000.
Securities accepted will be sold on the day of their receipt or as soon
thereafter as possible. The number of Fund shares to be issued in exchange for
securities will be the aggregate proceeds from the sale of such securities,
divided by the applicable public offering price per Fund share on the day such
proceeds are received. Eaton Vance will use reasonable efforts to obtain the
then current market price for such securities but does not guarantee the best
available price. Eaton Vance will absorb any transaction costs, such as
commissions, on the sale of the securities.
Securities determined to be acceptable should be transferred via book entry or
physically delivered, in proper form for transfer, through an Authorized Firm,
together with a completed and signed Letter of Transmittal in approved form
(available from Authorized Firms), as follows:
IN THE CASE OF BOOK ENTRY:
Deliver through Depository Trust Co.
Broker #2212
Investors Bank & Trust Company
For A/C Eaton Vance Income Fund of Boston
IN THE CASE OF PHYSICAL DELIVERY:
Investors Bank & Trust Company
Attention: Eaton Vance Income Fund of Boston
Physical Securities Processing Settlement Area
89 South Street
Boston, MA 02111
Investors who are contemplating an exchange of securities for shares of the
Fund, or their representatives, must contact Eaton Vance to determine whether
the securities are acceptable before forwarding such securities to IBT. Eaton
Vance reserves the right to reject any securities. Exchanging securities for
Fund shares may create a taxable gain or loss. Each investor should consult his
or her tax adviser with respect to the particular federal, state and local tax
consequences of exchanging securities for Fund shares.
STATEMENT OF INTENTION AND ESCROW AGREEMENT. If the investor, on an application,
makes a Statement of Intention to invest a specified amount over a thirteen
month period, then out of the initial purchase (or subsequent purchases if
necessary) 5% of the dollar amount specified on the application shall be held in
escrow by the escrow agent in the form of shares (computed to the nearest full
share at the public offering price applicable to the initial purchase hereunder)
registered in the investor's name. All income dividends and capital gains
distributions on escrowed shares will be paid to the investor or to the
investor's order.
When the minimum investment so specified is completed, the escrowed shares will
be delivered to the investor. If the investor has an accumulation account the
shares will remain on deposit under the account.
If total purchases under this Statement of Intention are less than the amount
specified, the investor will promptly remit to EVD any difference between the
sales charge on the amount specified and on the amount actually purchased. If
the investor does not within 20 days after written request by EVD or the
Authorized Firm pay such difference in sales charge, the escrow agent will
redeem an appropriate number of the escrowed shares in order to realize such
difference. Full shares remaining after any such redemption together with any
excess cash proceeds of the shares so redeemed will be delivered to the investor
or to the investor's order by the escrow agent.
If total purchases made under this Statement are large enough to qualify for a
lower sales charge than that applicable to the amount specified, all
transactions will be computed at the expiration date of this Statement to give
effect to the lower charge. Any difference in sales charge will be refunded to
the investor in cash, or applied to the purchase of additional shares at the
lower charge if specified by the investor. This refund will be made by the
Authorized Firm and by EVD. If at the time of the recomputation a firm other
than the original firm is placing the orders, the adjustment will be made only
on those shares purchased through the firm then handling the investor's account.
IF YOU DON'T HAVE AN AUTHORIZED FIRM, EATON VANCE CAN RECOMMEND ONE.
HOW TO REDEEM FUND SHARES
- -------------------------------------------------------------------------------
A SHAREHOLDER MAY REDEEM FUND SHARES IN ONE OF THREE WAYS -- BY MAIL, BY
TELEPHONE OR THROUGH AN AUTHORIZED FIRM. The redemption price will be based on
the net asset value per Fund share next computed after a redemption request is
received in the proper form as described below.
REDEMPTION BY MAIL: Shares may be redeemed by delivering to the Transfer Agent,
First Data Investor Services Group, P.O. Box 5123, Westborough, Massachusetts
01581-5123, during its business hours a written request for redemption in good
order, plus any share certificates with executed stock powers. Good order means
that all relevant documents must be endorsed by the record owner(s) exactly as
the shares are registered and the signature(s) must be guaranteed by a member of
either the Securities Transfer Association's STAMP program or the New York Stock
Exchange's Medallion Signature Program, or certain banks, savings and loan
institutions, credit unions, securities dealers, securities exchanges, clearing
agencies and registered securities associations as required by a regulation of
the Securities and Exchange Commission (the "Commission") and acceptable to the
Transfer Agent. In addition, in some cases, good order may require the
furnishing of additional documents such as where shares are registered in the
name of a corporation, partnership or fiduciary.
REDEMPTION BY TELEPHONE: Shares may be redeemed by telephone provided the
investor has not disclaimed in writing the use of the privilege. Such
redemptions can be effected by calling the Transfer Agent at 800-262-1122,
Monday through Friday, 9:00 a.m. to 4:00 p.m. (Eastern Standard Time). The
proceeds of a telephone redemption may be no greater than the maximum amount
established by the Principal Underwriter (currently $50,000) and may be mailed
only to the account address of record. Shares held by corporations, trusts or
certain other entities, or subject to fiduciary arrangements, may not be
redeemed by telephone. Neither the Fund, the Principal Underwriter nor the
Transfer Agent will be responsible for the authenticity of redemption
instructions received by telephone, provided that reasonable procedures to
confirm that instructions communicated by telephone are genuine have been
followed. Telephone instructions will be tape recorded. In times of drastic
economic or market changes, a telephone redemption may be difficult to
implement.
REDEMPTION THROUGH AN AUTHORIZED FIRM: To sell shares at their net asset value
through an Authorized Firm (a repurchase), a shareholder can place a repurchase
order with the Authorized Firm, which may charge a fee. The value of such shares
is based upon the net asset value calculated after the Principal Underwriter, as
the Fund's agent, receives the order. It is the Authorized Firm's responsibility
to transmit promptly repurchase orders to the Principal Underwriter. Throughout
this Prospectus, the word "redemption" is generally meant to include a
repurchase.
Within seven days after receipt of a redemption request in good order by the
Transfer Agent, the Fund will make payment in cash for the net asset value of
the shares as of the date determined above, reduced by the amount of any federal
income tax required to be withheld. If shares were recently purchased, the
proceeds of redemption (or repurchase) will not be sent until the check
(including a certified or cashier's check) received for the shares purchased has
cleared. Payment for shares tendered for redemption may be delayed up to 15 days
from the purchase date when the purchase check has not yet cleared. Redemptions
or repurchases may result in a taxable gain or loss.
Due to the high cost of maintaining small accounts, the Fund reserves the right
to redeem Fund accounts with balances of less than $750. Prior to such a
redemption, shareholders will be given 60 days' written notice to make an
additional purchase. However, no such redemption would be required by the Fund
if the cause of the low account balance was a reduction in the net asset value
of Fund shares.
If shares have been purchased at net asset value with no initial sales charge by
virtue of the purchase having been in the amount of $1 million or more and are
redeemed within 12 months of purchase, a CDSC of 1% will be imposed on such
redemption. (Such purchases made before January 1, 1997 will be subject to a
CDSC of 0.50% in the event of certain redemptions made within 12 months of
purchase). If shares have been purchased at net asset value because the amount
invested represents redemption proceeds from a mutual fund unaffiliated with
Eaton Vance (as described under "How to Buy Fund Shares") and are redeemed
within 12 months of purchase, a CDSC of 0.50% will be imposed on such
redemption. The CDSC will be imposed on an amount equal to the lesser of the
current market value or the original purchase price of the shares redeemed.
Accordingly, no CDSC will be imposed on increases in account value above the
initial purchase price, including any dividends or distributions that have been
reinvested in additional shares. In determining whether a CDSC is applicable to
a redemption, the calculation will be made in a manner that results in the
lowest possible rate being charged. It will be assumed that redemptions are made
first from any shares in the shareholder's account that are not subject to a
CDSC. The CDSC will be retained by the Principal Underwriter.
The CDSC is waived for redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies. If a shareholder
reinvests redemption proceeds within a 60-day period and in accordance with the
conditions set forth under "Eaton Vance Shareholder Services -- Reinvestment
Privilege," the shareholder's account will be credited with the amount of any
CDSC paid on such redeemed shares.
REPORTS TO SHAREHOLDERS
- ------------------------------------------------------------------------------
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the Fund's independent accountants. Shortly after the end of each
calendar year, the Fund will furnish all shareholders with information necessary
for preparing federal and state income tax returns. Consistent with applicable
law, duplicate mailings of shareholder reports and certain other Fund
information to shareholders residing at the same address may be eliminated.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
- ------------------------------------------------------------------------------
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF FUND SHARES, THE TRANSFER AGENT
WILL SET UP A LIFETIME INVESTING ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS.
This account is a complete record of all transactions between the investor and
the Fund which at all times shows the balance of shares owned. The Fund will not
issue share certificates except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current share balance in the account. THE
LIFETIME INVESTING ACCOUNT PERMITS A SHAREHOLDER TO MAKE ADDITIONAL INVESTMENTS
IN SHARES BY SENDING A CHECK FOR $50 OR MORE to the Transfer Agent.
Any questions concerning a shareholder's account or services available may also
be directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225- 6265,
extension 2, or in writing to the Transfer Agent, First Data Investor Services
Group, P.O. Box 5123, Westborough, MA 01581-5123 (please provide the name of the
shareholder, the Fund and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME INVESTING
ACCOUNTS and may be changed as often as desired by written notice to the Fund's
dividend disbursing agent, First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123. The currently effective option will appear on each
account statement.
Share Option -- Dividends and capital gains will be reinvested in additional
shares.
Income Option -- Dividends will be paid in cash, and capital gains will be
reinvested in additional shares.
Cash Option -- Dividends and capital gains will be paid in cash.
The Share Option will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under federal income tax laws.
If the Income Option or Cash Option has been selected, dividend and/or capital
gains distribution checks which are returned by the United States Postal Service
as not deliverable or which remain uncashed for six months or more will be
reinvested in the account in shares at the then current net asset value.
Furthermore, the distribution option on the account will be automatically
changed to the Share Option until such time as the shareholder selects a
different option.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
"STREET NAME" ACCOUNTS. If shares of the Fund are held in a "street name"
account with an Authorized Firm, all recordkeeping, transaction processing and
payments of distributions relating to the beneficial owner's account will be
performed by the Authorized Firm, and not by the Fund and its Transfer Agent.
Since the Fund will have no record of the beneficial owner's transactions, a
beneficial owner should contact the Authorized Firm to purchase, redeem or
exchange shares, to make changes in or give instructions concerning the account,
or to obtain information about the account. The transfer of shares in a "street
name" account to an account with another dealer or to an account directly with
the Fund involves special procedures and will require the beneficial owner to
obtain historical purchase information about the shares in the account from the
Authorized Firm. Before establishing a "street name" account with an investment
firm, or transferring the account to another investment firm, an investor
wishing to reinvest distributions should determine whether the firm which will
hold the shares allows reinvestment of distributions in "street name" accounts.
THE EATON VANCE EXCHANGE PRIVILEGE
- ------------------------------------------------------------------------------
Shares of the Fund currently may be exchanged for shares of any of the following
funds: Eaton Vance Cash Management Fund, Eaton Vance Municipal Bond Fund L.P.,
Eaton Vance Tax Free Reserves and any fund in the Eaton Vance Traditional Group
of Funds on the basis of the net asset value per share of each fund at the time
of the exchange (plus, in the case of an exchange made within six months of the
date of purchase of shares subject to an initial sales charge, an amount equal
to the difference, if any, between the sales charge previously paid on the
shares being exchanged and the sales charge payable on the shares being
acquired). Exchange offers are available only in states where shares of the fund
being acquired may be legally sold.
Each exchange must involve shares which have a net asset value of at least
$1,000. The exchange privilege may be changed or discontinued without penalty.
Shareholders will be given sixty (60) days' notice prior to any termination or
material amendment of the exchange privilege. The Fund does not permit the
exchange privilege to be used for "Market Timing" and may terminate the exchange
privilege for any shareholder account engaged in Market Timing activity. Any
shareholder account for which more that two round-trip exchanges are made within
any twelve month period will be deemed to be engaged in Market Timing.
Furthermore, a group of unrelated accounts for which exchanges are entered
contemporaneously by a financial intermediary will be considered to be engaged
in Market Timing.
Shares of the Fund which are subject to a CDSC may be exchanged into any of the
above funds without incurring the CDSC. The shares acquired in an exchange may
be subject to a CDSC upon redemption. For purposes of computing the CDSC payable
upon redemption of shares acquired in an exchange, the holding period of the
original shares is added to the holding period of the shares acquired in the
exchange.
The Transfer Agent makes exchanges at the next determined net asset value after
receiving an exchange request in good order (see "How to Redeem Fund Shares").
Consult the Transfer Agent for additional information concerning the exchange
privilege. Applications and prospectuses of the other funds are available from
Authorized Firms or the Principal Underwriter. The prospectus for each fund
describes its investment objectives and policies, and shareholders should obtain
a prospectus and consider these objectives and policies carefully before
requesting an exchange.
Shares of certain other funds for which Eaton Vance acts as investment adviser
or administrator may be exchanged for Fund shares on the basis of the net asset
value per share of each fund at the time of the exchange (plus, in the case of
an exchange made within six months of the date of purchase, an amount equal to
the difference, if any, between the sales charge previously paid on the shares
being exchanged and the sales charge payable on the Fund shares being acquired).
Any such exchange is subject to any restrictions or qualifications set forth in
the current prospectus of any such fund.
Telephone exchanges are accepted by the Transfer Agent provided the investor has
not disclaimed in writing the use of the privilege. To effect such exchanges,
call the Transfer Agent at 800-262-1122, Monday through Friday, 9:00 a.m. to
4:00 p.m. (Eastern Standard Time). Shares acquired by telephone exchange must be
registered in the same name(s) and with the same address as the shares being
exchanged. Neither the Fund, the Principal Underwriter nor the Transfer Agent
will be responsible for the authenticity of exchange instructions received by
telephone, provided that reasonable procedures to confirm that instructions
communicated are genuine have been followed. Telephone instructions will be tape
recorded. In times of drastic economic or market changes, a telephone exchange
may be difficult to implement. An exchange may result in a taxable gain or loss.
EATON VANCE SHAREHOLDER SERVICES
- ------------------------------------------------------------------------------
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $1,000 minimum
investment has been made, checks of $50 or more payable to the order of Eaton
Vance Income Fund of Boston may be mailed directly to the Transfer Agent, First
Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123 at any
time -- whether or not dividends are reinvested. The name of the shareholder,
the Fund and the account number should accompany each investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Cash investments of
$50 or more may be made automatically each month or quarter from the
shareholder's bank account. The $1,000 minimum initial investment and small
account redemption policy are waived for these accounts.
STATEMENT OF INTENTION: Purchases of $50,000 or more made over a 13-month
period are eligible for reduced sales charges. See "How to Buy Fund Shares -
Statement of Intention and Escrow Agreement."
RIGHT OF ACCUMULATION: Purchases may qualify for reduced sales charges when the
current market value of holdings (shares at current offering price), plus new
purchases, reaches $50,000 or more. Shares of the Eaton Vance funds listed under
"The Eaton Vance Exchange Privilege" may be combined under the Statement of
Intention and Right of Accumulation.
WITHDRAWAL PLAN: A shareholder may draw on shareholdings systematically with
monthly or quarterly checks in an amount specified by the shareholder. A minimum
deposit of $5,000 in shares is required. The maintenance of a withdrawal plan
concurrently with purchases of additional shares would be disadvantageous
because of the sales charge included in such purchases.
REINVESTMENT PRIVILEGE: A shareholder who has repurchased or redeemed shares may
reinvest at net asset value any portion or all of the repurchase or redemption
proceeds (plus that amount necessary to acquire a fractional share to round off
the purchase to the nearest full share) in shares of the Fund, or, provided that
the shares redeemed have been held for at least 60 days, in shares of any of the
other funds offered by the Principal Underwriter subject to an initial sales
charge, provided that the reinvestment is effected within 60 days after such
redemption, and the privilege has not been used more than once in the prior 12
months. Shares are sold to a reinvesting shareholder at the next determined net
asset value following timely receipt of a written purchase order by the
Principal Underwriter or by the fund the shares of which are being purchased (or
by such fund's transfer agent). The privilege is also available to shareholders
of the funds listed under the "The Eaton Vance Exchange Privilege" who wish to
reinvest such redemption proceeds in shares of the Fund. If a shareholder
reinvests redemption proceeds within the 60-day period, the shareholder's
account will be credited with the amount of any CDSC paid on such redeemed
shares. To the extent that any shares of the Fund are sold at a loss and the
proceeds are reinvested in shares of the Fund (or other shares of the Fund are
acquired) within the period beginning 30 days before and ending 30 days after
the date of the redemption, some or all of the loss generally will not be
allowed as a tax deduction. Shareholders should consult their tax advisers
concerning the tax consequences of reinvestments.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase in
connection with certain tax-sheltered retirement plans. Detailed information
concerning these plans, including certain exceptions to minimum investment
requirements, and copies of the plans are available from the Principal
Underwriter. This information should be read carefully and consultation with an
attorney or tax adviser may be advisable. The infomation sets forth the service
fee charged for retirement plans and describes the federal income tax
consequences of establishing a plan. Participant accounting services (including
trust fund reconciliation services) will be offered only through third party
recordkeepers and not by the Principal Underwriter. Under all plans, dividends
and distributions will be automatically reinvested in additional shares.
DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------
DISTRIBUTIONS. Substantially all of the investment income earned by the Fund,
less its expenses, will be declared daily as a distribution to shareholders of
record at the time of declaration. Such distributions whether taken in cash or
reinvested in additional shares, will ordinarily be paid on the last day of each
month or the next business day thereafter. Capital gains, if any, realized on
sales of investments and on options and futures transactions will be offset by
any capital loss carryovers and will be distributed at least once a year,
usually in December. Daily distribution crediting will commence on the business
day after collected funds for the purchase of Fund shares are available at the
Fund's Transfer Agent.
TAXES. For federal income tax purposes, a shareholder's proportionate share of
distributions from the Fund's net investment income and net short-term capital
gains and certain foreign exchange gains are taxable as ordinary income, whether
received in cash or reinvested in additional shares. A small portion of
distributions from net investment income may be eligible for the dividends
received deduction for corporations. A shareholder's proportionate share of
distributions from the Fund's net long-term capital gain is taxable as long-term
capital gains whether received in cash or reinvested in additional shares,
regardless of the length of time Fund shares have been owned by the shareholder.
If shares are purchased shortly before the record date of a distribution, the
shareholder will pay the full price for the shares and then receive some portion
of the price back as a taxable distribution.
Sales charges paid upon a purchase of Fund shares cannot be taken into account
for purposes of determining gain or loss on a redemption or exchange of the
shares before the 91st day after their purchase to the extent a sales charge is
reduced or eliminated in a subsequent acquisition of shares of the Fund or of
another fund pursuant to the Fund's reinvestment or exchange privilege. Any
disregarded amounts will result in an adjustment to the shareholder's tax basis
in some or all of any other shares acquired.
Shareholders will receive annually one or more Forms 1099 to assist in reporting
on their federal and state income tax returns the prior calendar year's
distributions, proceeds from the redemption or exchange of Fund shares, and
federal income tax (if any) withheld by the Fund's Transfer Agent.
As a regulated investment company under the Code, the Fund does not pay federal
income or excise taxes to the extent that it distributes to shareholders its net
investment income and net realized capital gains in accordance with the timing
requirements imposed by the Code.
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
FROM TIME TO TIME, THE FUND MAY ADVERTISE ITS YIELD AND/OR AVERAGE ANNUAL TOTAL
RETURN. The Fund's current yield is calculated by dividing the net investment
income per share earned during a recent 30-day period by the maximum offering
price per share of the Fund on the last day of the period and annualizing the
resulting figure. The Fund's average annual total return is determined by
multiplying a hypothetical initial purchase order of $1,000 by the average
annual compounded rate of return (including capital appreciation/ depreciation,
and dividends and distributions paid and reinvested) for the stated period and
annualizing the result. The average annual total return calculation assumes that
the maximum sales charge is deducted from the initial $1,000 purchase order and
that all dividends and distributions are reinvested at net asset value on the
reinvestment dates during the period. The Fund may also publish annual and
cumulative total return figures from time to time.
The Fund may also furnish total return calculations based on investments at
various sales charge levels or at net asset value. Any performance data which is
based on the Fund's net asset value per share would be lower if a sales charge
were taken into account. The Fund's performance may be compared in publications
to the performance of various indices and investments for which reliable data is
available, and to averages, performance rankings, or other information prepared
by recognized mutual fund statistical services.
Investors should note that the investment results of the Fund will fluctuate
over time, and any presentation of the Fund's current yield or total return for
any prior period should not be considered a representation of what an investment
may earn or what the Fund's yield or total return may be in any future period.
The following chart reflects the annual investment returns of the Fund for one
year periods ending September 30 and does not take into account any sales charge
which investors may bear:
5 YEAR AVERAGE ANNUAL TOTAL RETURN -- 12.97%
10 YEAR AVERAGE ANNUAL TOTAL RETRN -- 10.61%
11.11% 9.35% 9.76% (13.06%) 28.53% 24.25% 12.59% 4.25% 11.25% 13.41%
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
<PAGE>
APPENDIX A
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
SECURITIES IN WHICH THE FUND MAY INVEST WILL INCLUDE THOSE IN THE FOLLOWING
CATEGORIES:
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
NOTE: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP CORPORATE BOND RATINGS:
INVESTMENT GRADE
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
SECURITIES IN WHICH THE FUND MAY INVEST WILL INCLUDE THOSE IN THE FOLLOWING
CATEGORIES:
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
SPECULATIVE GRADE
Debt rated BB, B, CCC, CC, and C is regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and C the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB: Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B: Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.
The B rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BB or BB- rating.
CCC: Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.
The CCC rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied B or B- rating.
CC: The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C: The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
C1: The Rating C1 is reserved for income bonds on which no interest is being
paid.
D: Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
PLUS (+) OR MINUS (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Bonds may lack a Standard & Poor's rating because no public rating has
been requested, because there is insufficient information on which to base a
rating, or because Standard & Poor's does not rate a particular type of
obligation as a matter of policy.
********
NOTES: Bonds which are unrated expose the investor to risks with respect to
capacity to pay interest or repay principal which are similar to the risks of
lower-rated speculative obligations. The Fund is dependent on the Investment
Adviser's judgment, analysis and experience in the evaluation of such bonds.
Investors should note that the assignment of a rating to a bond by a rating
service may not reflect the effect of recent developments on the issuer's
ability to make interest and principal payments.
<PAGE>
APPENDIX B
EATON VANCE INCOME FUND OF BOSTON
ASSET COMPOSITION INFORMATION
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1996
PERCENT OF
NET ASSETS
----------
Common Stocks & Warrants ............................. 0.1%
Short-Term Obligations ............................... 3.9%
Debt Securities -- Moody's Rating
Ba ............................................... 7.6%
B1 ............................................... 12.3%
B2 ............................................... 25.8%
B3 ............................................... 41.0%
Caa .............................................. 6.3%
Unrated .......................................... 3.0%
----
Total ............................................ 100.0%
The chart above indicates the weighted average composition of the Fund's
portfolio for the fiscal year ended September 30, 1996, with the debt securities
rated by Moody's separated into the indicated categories. The weighted average
indicated above was calculated on a dollar weighted basis and was computed as at
the end of each month during the fiscal year. The chart does not necessarily
indicate what the composition of the Fund's portfolio will be in the current and
subsequent fiscal years.
For a description of Moody's ratings of fixed-income securities, see Appendix A
to this Prospectus.
<PAGE>
EATON VANCE
INCOME FUND
OF BOSTON
PROSPECTUS
FEBRUARY 1, 1997
EATON VANCE
INCOME FUND
OF BOSTON
24 FEDERAL STREET
BOSTON, MA 02110
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Eaton Vance Management, 24 Federal Street, boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company, 89 South Street, Boston, MA 02111
TRANSFER AGENT
First Data Investor Services Group, P.O. Box 5123, Westborough, Ma 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, MA 02109
LEGAL COUNSEL
Gordon Altman Butowsky Weitzen Shalov & Wein, 114 West 47th Street,
New York, NY 10036
[logo]
EATON VANCE
- --------------------------
Mutual Funds
IBP
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF
ADDITIONAL INFORMATION
February 1, 1997
EATON VANCE INCOME FUND OF BOSTON
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
- --------------------------------------------------------------------------
TABLE OF CONTENTS Page
Additional Information about Investment Policies .................. 2
Investment Restrictions ........................................... 7
Officers and Trustees of the Fund ................................. 8
Control Persons and Principal Holders of Securities ............... 9
Investment Adviser ................................................ 10
Custodian ......................................................... 11
Services for Accumulation ......................................... 11
Service for Withdrawal ............................................ 12
Portfolio Security Transactions ................................... 12
Determination of Net Asset Value .................................. 14
Investment Performance ............................................ 14
Taxes ............................................................. 16
Principal Underwriter ............................................. 18
Service Plan ...................................................... 19
Other Information ................................................. 19
Independent Accountants ........................................... 20
Financial Statements .............................................. 20
- --------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE CURRENT PROSPECTUS OF EATON VANCE INCOME FUND OF BOSTON (THE
"FUND") DATED FEBRUARY 1, 1997, AS SUPPLEMENTED FROM TIME TO TIME, WHICH IS
INCORPORATED HEREIN BY REFERENCE. THIS STATEMENT OF ADDITIONAL INFORMATION
SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE
OBTAINED WITHOUT CHARGE BY CONTACTING EATON VANCE DISTRIBUTORS, INC. (THE
"PRINCIPAL UNDERWRITER") (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
GENERAL INFORMATION AND HISTORY
This Statement of Additional Information ("SAI") provides information about
Eaton Vance Income Fund of Boston (the "Fund"). Capitalized terms used in this
SAI and not otherwise defined herein have the meanings given them in the
Prospectus.
ADDITIONAL INFORMATION ABOUT INVESTMENT POLICIES
The Fund seeks to achieve its primary investment objective, as much current
income as possible, by investing primarily in high-yielding, high risk,
fixed-income securities. A substantial portion of the Fund's portfolio will
generally consist of fixed-income securities and dividend paying stocks.
However, the Fund may also, from time to time, invest in non-income producing
bonds and obligations and in non-dividend paying stocks and rights and warrants
when it believes there is a substantial opportunity for capital appreciation.
Any realized gains from such capital appreciation provide an opportunity for
increasing the Fund's investment in income producing securities. Bonds and
preferred stocks will tend to be acquired for current income and reasonable
stability of capital; convertible securities and common stocks will normally be
acquired for their growth potential as well as their yield. The percentages of
assets invested in fixed-income securities and the type of such securities held
by the Fund will vary and may include a broad range of quality in rated and
unrated debt securities, as described in the Prospectus. The Fund does not
invest in companies for the primary purpose of acquiring control or management
thereof.
The Fund does not seek to realize short-term gains. However, it may dispose
of fixed-income securities on a short term (less than six months) basis in order
to take advantage of differentials in bond prices and yields or of fluctuations
in interest rates consistent with its investment objective. Other securities may
also be disposed of earlier than originally anticipated because of changes in
business trends or developments, or other circumstances believed to render them
vulnerable to price decline or otherwise undesirable for continued holding.
See the information contained under the caption "Investment Policies and
Risks" in the current Prospectus for a further description of the Fund's
objective and investment policies.
OTHER FIXED-INCOME SECURITIES
Included in the fixed-income securities in which the Fund may invest are
preferred, preference and convertible stocks, equipment lease certificates,
equipment trust certificates and conditional sales contracts. Preference stocks
are stocks that have many characteristics of preferred stocks, but are typically
junior to an existing class of preferred stocks. Equipment lease certificates
are debt obligations secured by leases on equipment (such as railroad cars,
airplanes or office equipment), with the issuer of the certificate being the
owner and lessor of the equipment. Equipment trust certificates are debt
obligations secured by an interest in property (such as railroad cars or
airplanes), the title of which is held by a trustee while the property is being
used by the borrower. Conditional sales contracts are agreements under which the
seller of property continues to hold title to the property until the purchase
price is fully paid or other conditions are met by the buyer.
The Fund may purchase fixed-rate bonds which have a demand feature allowing
the holder to redeem the bonds at specified times. These bonds are more
defensive than conventional long-term bonds (protecting to some degree against a
rise in interest rates) while providing greater opportunity than comparable
intermediate term bonds, since the Fund may retain the bond if interest rates
decline. By acquiring these kinds of bonds the Fund obtains the contractual
right to require the issuer of the bonds to purchase the security at an agreed
upon price, which right is contained in the obligation itself rather than in a
separate agreement or instrument. Since this right is assignable only with the
bond, the Fund will not assign any separate value to such right. The Fund may
also purchase floating or variable rate obligations, which it would anticipate
using as short-term investments pending longer term investment of its funds.
LOAN INTERESTS
A loan in which the Fund may acquire a loan interest (a "Loan Interest") is
typically originated, negotiated and structured by a U.S. or foreign commercial
bank, insurance company, finance company or other financial institution (the
"Agent") for a lending syndicate of financial institutions. The Agent typically
administers and enforces the loan on behalf of the other lenders in the
syndicate. In addition, an institution, typically but not always the Agent (the
"Collateral Bank"), holds collateral (if any) on behalf of the lenders. These
Loan Interests may take the form of participation interests in, assignments of
or novations of a loan during its secondary distribution, or direct interests
during a primary distribution. Such Loan Interests may be acquired from U.S. or
foreign banks, insurance companies, finance companies or other financial
institutions who have made loans or are members of a lending syndicate or from
other holders of Loan Interests. The Fund may also acquire Loan Interests under
which the Fund derives its rights directly from the borrower. Such Loan
Interests are separately enforceable by the Fund against the borrower and all
payments of interest and principal are typically made directly to the Fund from
the borrower. In the event that the Fund and other lenders become entitled to
take possession of shared collateral, it is anticipated that such collateral
would be held in the custody of a Collateral Bank for their mutual benefit. The
Fund may not act as an Agent, a Collateral Bank, a guarantor or sole negotiator
or structurer with respect to a loan.
The Investment Adviser will analyze and evaluate the financial condition of
the borrower in connection with the acquisition of any Loan Interest. The
Investment Adviser also analyzes and evaluates the financial condition of the
Agent and, in the case of Loan Interests in which the Fund does not have privity
with the borrower, those institutions from or through whom the Fund derives its
rights in a loan (the "Intermediate Participants"). From time to time the
Investment Adviser and its affiliates may borrow money from various banks in
connection with their business activities. Such banks may also sell interests in
loans to or acquire such interests from the Fund or may be Intermediate
Participants with respect to loans in which the Fund owns interests. Such banks
may also act as Agents for loans in which the Fund owns interests.
In a typical loan the Agent administers the terms of the loan agreement. In
such cases, the Agent is normally responsible for the collection of principal
and interest payments from the borrower and the apportionment of these payments
to the credit of all institutions which are parties to the loan agreement. The
Fund will generally rely upon the Agent or an Intermediate Participant to
receive and forward to the Fund its portion of the principal and interest
payments on the loan. Furthermore, unless under the terms of a participation
agreement the Fund has direct recourse against the borrower, the Fund will rely
on the Agent and the other members of the lending syndicate to use appropriate
credit remedies against the borrower. The Agent is typically responsible for
monitoring compliance with covenants contained in the loan agreement based upon
reports prepared by the borrower. The seller of the Loan Interest usually does,
but is often not obligated to, notify holders of Loan Interests of any failures
of compliance. The Agent may monitor the value of the collateral and, if the
value of the collateral declines, may accelerate the loan, may give the borrower
an opportunity to provide additional collateral or may seek other protection for
the benefit of the participants in the loan. The Agent is compensated by the
borrower for providing these services under a loan agreement, and such
compensation may include special fees paid upon structuring and funding the loan
and other fees paid on a continuing basis. With respect to Loan Interests for
which the Agent does not perform such administrative and enforcement functions,
the Fund will perform such tasks on its own behalf, although a Collateral Bank
will typically hold any collateral on behalf of the Fund and the other lenders
pursuant to the applicable loan agreement.
A financial institution's appointment as Agent may usually be terminated in
the event that it fails to observe the requisite standard of care or becomes
insolvent, enters Federal Deposit Insurance Corporation ("FDIC") receivership,
or, if not FDIC insured, enters into bankruptcy proceedings. A successor Agent
would generally be appointed to replace the terminated Agent, and assets held by
the Agent under the loan agreement should remain available to holders of Loan
Interests. However, if assets held by the Agent for the benefit of the Fund were
determined to be subject to the claims of the Agent's general creditors, the
Fund might incur certain costs and delays in realizing payment on a loan
interest, or suffer a loss of principal and/or interest. In situations involving
Intermediate Participants similar risks may arise.
Purchasers of Loan Interests depend primarily upon the creditworthiness of
the borrower for payment of principal and interest. If the Fund does not receive
scheduled interest or principal payments on such indebtedness, the Fund's share
price and yield could be adversely affected. Loans that are fully secured offer
the Fund more protections than an unsecured loan in the event of non-payment of
scheduled interest or principal. However, there is no assurance that the
liquidation of collateral from a secured loan would satisfy the borrower's
obligation, or that the collateral can be liquidated. Indebtedness of borrowers
whose creditworthiness is poor involves substantially greater risks, and may be
highly speculative. Borrowers that are in bankruptcy or restructuring may never
pay off their indebtedness, or may pay only a small fraction of the amount owed.
Direct indebtedness of developing countries will also involve a risk that the
governmental entities responsible for the repayment of the debt may be unable,
or unwilling, to pay interest and repay principal when due.
The Fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry. See Investment Restrictions (1)
and (5) below. For purposes of these restrictions, the Fund generally will treat
the borrower as the "issuer" of a Loan Interest held by the Fund. In the case of
loan participations where the Agent or Intermediate Participant serves as
financial intermediary between the Fund and the borrower, the Fund, in
appropriate circumstances, will treat both the Agent or Intermediate Participant
and the borrower as "issuers" for the purposes of determining whether the Fund
has invested more than 5% of its total assets in a single issuer. Treating a
financial intermediary as an issuer of indebtedness may restrict the Fund's
ability to invest in indebtedness related to a single intermediary, or a group
of intermediaries engaged in the same industry, even if the underlying borrowers
represent many different companies and industries.
FOREIGN INVESTMENTS
Investing in foreign issuers involves certain special considerations,
including those set forth below, which are not typically associated with
investing in U.S. issuers. Since investments in foreign issuers may involve
currencies of foreign countries, and since the Fund may temporarily hold funds
in bank deposits in foreign currencies during completion of investment programs,
the Fund may be affected favorably or unfavorably by changes in currency rates
and in exchange control regulations and may incur costs in connection with
conversions between various currencies.
Since foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies, there may be less publicly
available information about a foreign company than about a domestic company.
Foreign stock markets, while growing in volume of trading activity, have
substantially less volume than the Exchange, and securities of some foreign
companies are less liquid and more volatile than securities of comparable U.S.
companies. Similarly, volume and liquidity in most foreign bond markets is less
than in the United States and, at times, volatility of price can be greater than
in the United States. Fixed commissions on foreign stock exchanges are generally
higher than negotiated commissions on U.S. exchanges, although the Fund
endeavors to achieve the most favorable net results on its portfolio
transactions. There is generally less government supervision and regulation of
stock exchanges, brokers and listed companies than in the United States. Mail
service between the United States and foreign countries may be slower or less
reliable than within the United States, thus increasing the risk of delayed
settlements of portfolio transactions or loss of certificates for portfolio
securities. In addition, with respect to certain foreign countries, there is the
possibility of expropriation or confiscatory taxation, political or social
instability, or diplomatic developments which could affect the Fund's
investments in those countries. Moreover, individual foreign economies may
differ favorably or unfavorably from the U.S. economy in such respects as growth
of gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
The Fund may enter into forward foreign currency exchange contracts. A
forward foreign currency exchange contract involves an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties, at a price set at the
time of the contract. These contracts are traded in the interbank market
conducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades.
At the maturity of a forward contract the Fund may either accept or make
delivery of the currency specified in the contract or, at or prior to maturity,
enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are usually
effected with the currency trader who is a party to the original forward
contract.
FORWARD FOREIGN CURRENCY EXCHANGE TRANSACTIONS
The Fund does not intend to enter into forward foreign currency exchange
contracts to protect the value of its portfolio securities on a regular
continuous basis, and will not do so if, as a result, the Fund will have more
than 15% of the value of its total assets committed to the consummation of such
contracts. The Fund also will not enter into such forward contracts or maintain
a net exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the securities held by the Fund or other assets denominated in that
currency. Under normal circumstances, consideration of the prospect for currency
parities will be incorporated into the long-term investment decisions made with
regard to overall diversification strategies. However, the Fund believes that it
is important to have the flexibility to enter into such forward contracts when
it determines that the best interests of the Fund will be served. The Fund
generally will not enter into a forward contract with a term of greater than one
year.
OPTIONS ON SECURITIES
An options position may be closed out only on an options exchange which
provides a secondary market for an option of the same series. Although the Fund
will generally purchase or write only those options for which there appears to
be an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option, or at any particular
time. For some options no secondary market on an exchange may exist. In such
event, it might not be possible to effect closing transactions in particular
options, with the result that the Fund would have to exercise its options in
order to realize any profit and would incur transaction costs upon the sale of
underlying securities pursuant to the exercise of put options. If the Fund as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying security until
the option expires or it delivers the underlying security upon exercise.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
the Options Clearing Corporation may not at all times be adequate to handle
current trading volume; or (vi) one or more exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.
There is no assurance that higher than anticipated trading activity or other
unforeseen events might not, at times, render certain of the facilities of the
Options Clearing Corporation inadequate, and thereby result in the institution
by an exchange of special procedures which may interfere with the timely
execution of customers' orders.
FUTURES CONTRACTS
All futures contracts entered into by the Fund are traded on exchanges or
boards of trade that are licensed and regulated by the Commodity Futures Trading
Commission ("CFTC"). The Fund may purchase and write call and put options on
futures contracts which are traded on a United States exchange or board of
trade.
The Fund will engage in futures and related options transactions for bona
fide hedging or non-hedging purposes as defined in or permitted by CFTC
regulations. The Fund will determine that the price fluctuations in the futures
contracts and options on futures used for hedging purposes are substantially
related to price fluctuations in securities held by the Fund or which it expects
to purchase. Except as stated below, the Fund's futures transactions will be
entered into for traditional hedging purposes -- i.e., futures contracts will be
sold to protect against a decline in the price of securities that the Fund owns,
or futures contracts will be purchased to protect the Fund against an increase
in the price of securities it intends to purchase. As evidence of this hedging
intent, the Fund expects that on 75% or more of the occasions on which it takes
a long futures (or option) position (involving the purchase of futures
contracts), the Fund will have purchased, or will be in the process of
purchasing, equivalent amounts of related securities in the cash market at the
time when the futures (or option) position is closed out. However, in particular
cases, when it is economically advantageous for the Fund to do so, a long
futures position may be terminated (or an option may expire) without the
corresponding purchase of securities. As an alternative to compliance with the
bona fide hedging definition, a CFTC regulation permits the Fund to elect to
comply with a different test, under which the aggregate initial margin and
premiums required to establish non-hedging positions in futures contracts and
options on futures will not exceed 5% of the Fund's net asset value after taking
into account unrealized profits and losses on such positions and excluding the
in-the-money amount of such options. The Fund will engage in transactions in
futures contracts and related options only to the extent such transactions are
consistent with the requirements of the Code for maintaining the qualification
of the Fund as a regulated investment company for federal income tax purposes
(see "Taxes")
To the extent that the Fund enters into futures contracts, options on
futures contracts and options on foreign currencies traded on an exchange
regulated by the Commodity Futures Trading Commission, in each case that are not
for bona fide hedging purposes (as defined by the CFTC), the aggregate initial
margin and premiums required to establish these positions (excluding the amount
by which options are "in-the-money") may not exceed 5% of the liquidation value
of the Fund's portfolio, after taking into account unrealized profits and
unrealized losses on any contracts the Fund has entered into. The Fund did not
engage in such transactions during the fiscal year ended September 30, 1996, and
there is no assurance that it will engage in such transactions in the future.
ASSET COVERAGE REQUIREMENTS
Transactions involving when-issued securities, the lending of Portfolio
securities, forward contracts, futures contracts and options (other than options
that the Fund has purchased) expose the Fund to an obligation to another party.
The Fund will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities or other options, futures
contracts or forward contracts, or (2) cash or liquid securities (such as
readily marketable obligations and money market instruments) with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. The Fund will comply with the Commission guidelines
regarding cover for these instruments and, if the guidelines so require, set
aside cash, or liquid securities in a segregated account with its custodian in
the prescribed amount. The securities in the segregated account will be marked
to market daily.
Assets used as cover or held in a segregated account maintained by the
Fund's custodian cannot be sold while the position requiring coverage or
segregation is outstanding unless they are replaced with other appropriate
assets. As a result, the commitment of a large portion of the Fund's assets to
segregated accounts or to cover could impede portfolio management or the Fund's
ability to meet redemption requests or other current obligations.
LENDING PORTFOLIO SECURITIES
The Fund may seek to increase its income by lending portfolio securities to
broker-dealers or other institutional borrowers. During the existence of a loan,
the Fund will continue to receive the equivalent of the interest paid by the
issuer on the securities loaned and will also receive a fee or all of a portion
of the interest on investment of the collateral, if any. However, the Fund may
pay lending fees to such borrowers. As with other extensions of credit there are
risks of delay in recovery or even loss of rights in the securities loaned if
the borrower of the securities fails financially. However, the loans would be
made only to organizations deemed by the Fund's management to be of good
standing and when, in the judgment of the Fund's management, the consideration
which can be earned from securities loans of this type, net of administrative
expenses and any finders fees, justifies the attendant risk. The financial
condition of the borrower will be monitored by the Investment Adviser on an
ongoing basis. The value of the securilties loaned will not exceed 30% of the
Fund's total assets.
Under present regulatory policies of the Commission, such loans are required
to be secured continuously by collateral in cash, cash equivalents or U.S.
Government securities held by the Fund's custodian and maintained on a current
basis at an amount at least equal to the market value of the securities loaned,
which will be marked to market daily. Cash equivalents include certificates of
deposit, commercial paper and other short-term money market instruments. The
Fund would have the right to call a loan and obtain the securities loaned at any
time on up to five business days' notice. The Fund would not have the right to
vote any securities having voting rights during the existence of a loan, but
would call the loan in anticipation of an important vote to be taken among
holders of the securities or the giving or withholding of their consent on a
material matter affecting the investment.
INVESTMENT IN WARRANTS
The Fund may invest in warrants which have no voting rights, pay no
dividends and have no rights with respect to the assets of the corporation
issuing them. Warrants basically are options to purchase equity securities at a
specific price valid for a specific period of time. They do not represent
ownership of the securities, but only the right to buy them. Warrants differ
from calls in that warrants are issued by the same issuer as the security which
may be purchased on their exercise, whereas calls may be written or issued by
anyone. The prices of warrants do not necessarily move parallel to the prices of
the underlying securities.
RESTRICTED SECURITIES
The Fund may invest in securities the disposition of which would be subject
to legal restrictions. It may be difficult to sell such securities at a price
representing their fair value until such time as such securities may be sold
publicly. Where registration is required, a considerable period may elapse
between a decision to sell the securities and the time when the Fund would be
permitted to sell. Thus, the Fund may not be able to obtain as favorable a price
as that prevailing at the time of the decision to sell. The Fund may also
acquire securities through private placements under which it may agree to
contractual restrictions on the resale of such securities. Such restrictions
might prevent their sale at a time when such sale would otherwise be desirable.
PORTFOLIO TURNOVER
The Fund cannot accurately predict its portfolio turnover rate, but it is
anticipated that the annual turnover rate will generally not exceed 100%
(excluding turnover of securities having a maturity of one year or less). A 100%
annual turnover rate would occur, for example, if all the securities in the
portfolio were replaced once in a period of one year. A high turnover rate would
occur, for example, if all the securities in the portfolio were replaced once in
a period of one year. A high turnover rate (100% or more) necessarily involves
greater expenses to the Fund. The Fund engages in portfolio trading (including
short-term trading) if it believes that a transaction including all costs will
help in achieving its investment objective either directly by increasing income
or indirectly by enhancing the Fund's net asset value.
INVESTMENT RESTRICTIONS
The following investment restrictions are designated as fundamental policies
and as such cannot be changed without the approval of the holders of a majority
of the Fund's outstanding voting securities, which as used in this SAI means the
lesser of (a) 67% of the shares of the Fund present or represented by proxy at a
meeting if the holders of more than 50% of the shares are present or represented
at the meeting or (b) more than 50% of the shares of the Fund.
As a matter of fundamental policy, the Fund may not:
(1) With respect to 75% of the total assets of the Fund, purchase any
security if such purchase, at the time thereof, would cause more than 5% of the
value of the total assets of the Fund (taken at market value) to be invested in
the securities of a single issuer, or cause more than 10% of the total
outstanding voting securities of such issuer to be held by the Fund, except
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and except securities of other investment companies;
(2) Borrow money or issue senior securities except as permitted by the
Investment Company Act of 1940. (The use of options and futures transactions
and short sales may be deemed senior securities);
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities). The deposit or payment by the Fund of initial, maintenance or
variation margin in connection with all types of options and futures contract
transactions is not considered the purchase of a security on margin;
(4) Underwrite or participate in the marketing of securities of others,
except insofar as it may technically be deemed to be an underwriter in selling a
portfolio security under circumstances which may require the registration of the
same under the Securities Act of 1933 (restricted securities);
(5) Purchase any security if such purchase, at the time thereof, would cause
more than 25% of the Fund's total assets to be invested in any single industry,
provided that the electric, gas and telephone utility industries shall be
treated as separate industries for purposes of this restriction and further
provided that there is no limitation with respect to obligations issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities;
(6) Purchase or sell real estate, although it may purchase and sell
securities which are secured by real estate and securities of companies which
invest or deal in real estate;
(7) Purchase or sell physical commodities or contracts for the purchase or
sale of physical commodities; or
(8) Make loans to any person except by (i) the acquisition of debt
securities and making portfolio investments, (ii) entering into repurchase
agreements or (iii) lending portfolio securities.
The Fund has adopted the following nonfundamental investment policies which
may be changed by the Trustees without the approval of the Fund's shareholders.
As a matter of nonfundamental policy, the Fund may not (a) invest more than 15%
of net assets in investments which are not readily marketable, including
restricted securities and repurchase agreements maturing in more 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 Trustees, or its delegate, determines to be liquid; (b) make short
sales of securities or maintain a short position, unless at all times when a
short position is open it owns an equal amount of such securities or securities
convertible into or exchangeable for, without payment of any further
consideration, securities of the same issuer as, and equal in amount to, the
securities sold short, and unless not more than 25% of its net assets (taken at
current value) is held as collateral for such sales at any one time. (The Fund
will make such sales only for the purpose of deferring realization of gain or
loss for federal income tax purposes); or (c) 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 Trustee of the Fund or is a
member, officer, director or trustee of an investment adviser of the Fund, if
after the purchase the securities of such issuer by the Fund 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) 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).
OFFICERS AND TRUSTEES OF THE FUND
The Fund's Trustees and officers are listed below. Except as indicated, each
individual has held the office shown or other offices in the same company for
the last five years. Unless otherwise noted, the business address of each
Trustee and officer is 24 Federal Street, Boston, Massachusetts 02110, which is
also the address of Eaton Vance; Eaton Vance's wholly-owned subsidiary, Boston
Management and Research ("BMR"); 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. Those Trustees who are
"interested persons" of the Fund, as defined in the 1940 Act by virtue of their
affiliation with any one or more of Eaton Vance, BMR, EVC or EV, are indicated
by an asterisk (*).
KENNETH C. KNIGHT (70), Chairman of the Board of Trustees
Consultant; prior to 1989, Division Manager, The Whale Oil Corp. of New
England (fuel oils and home heating). During the previous five years an
officer of various predecessor fuel oil and home heating companies which were
involved in takeovers.
Address: 588 Andover Street, Lowell, Massachusetts 01852
M. DOZIER GARDNER (63), President and Trustee*
Vice President of Eaton Vance, BMR, EVC and EV, and Director of EVC and EV.
Director or Trustee and officer of various investment companies managed by
Eaton Vance or BMR.
DONALD R. DWIGHT (65), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company) founded in 1988; Chairman of the Board of Newspapers of New England,
Inc., since 1983. Director or Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
ROBERT GLUCK (69), Trustee
Management Consultant
Address: 6742 Via Regina, Boca Raton, Florida 33433
SAMUEL L. HAYES III (61), Trustee
Jacob H. Schiff Professor of Investment Banking, Harvard University Graduate
School of Business Administration, Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (61), Trustee
President and Director, United Asset Management Corporation (a holding company
owning institutional investment management firms); Chairman, President and
Director, UAM Funds (mutual funds). Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (70), Trustee
Director, Fiduciary Company Incorporated; Director or Trustee of various
investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
HOOKER TALCOTT (64), Vice President
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
MICHAEL W. WEILHEIMER (36), Vice President
Vice President of Eaton Vance, BMR, and EV since February 20, 1996; employee of
Eaton Vance since November 26, 1990. Officer of various other investment
companies managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (51), Treasurer
Vice President of Eaton Vance, BMR and EV. Officer of various other investment
companies managed by Eaton Vance or BMR.
THOMAS OTIS (65), Secretary
Vice President and Secretary of Eaton Vance, BMR, EVC and EV. Officer of various
investment companies managed by Eaton Vance or BMR.
BARBARA E. CAMPBELL (39), Assistant Treasurer
Vice President of Eaton Vance and EV. Officer of various investment companies
managed by Eaton Vance or BMR.
JANET E. SANDERS (61), Assistant Treasurer and Assistant Secretary
Vice President of Eaton Vance, BMR and EV. Officer of various investment
companies managed by Eaton Vance or BMR. Ms. Sanders was elected Assistant
Treasurer and Assistant Secretary of the Fund on April 18, 1989.
A. JOHN MURPHY (34), Assistant Secretary
Assistant Vice President of Eaton Vance, BMR and EV since March 1, 1994;
employee of Eaton Vance since March 1993. State Regulations Supervisor, The
Boston Company (1991-1993). Officer of various investment companies managed by
Eaton Vance or BMR. Mr. Murphy was elected Assistant Secretary of the Fund on
April 18, 1995.
ERIC G. WOODBURY (39), Assistant Secretary
Vice President of Eaton Vance, BMR and EV since February 1993; formerly,
associate attorney at Dechert, Price & Rhoads and Gaston & Snow. Mr. Woodbury
was elected Assistant Secretary of the Fund on August 7, 1995.
Messrs. Gluck, Knight and Thorndike are members of the Special Committee of
the Board of Trustees of the Fund. The Special Committee's functions include a
continuous review of the Fund's contractual relationship with the Investment
Adviser, making recommendations to the Trustees regarding the compensation of
those Trustees who are not members of the Investment Adviser's organization, and
making recommendations to the Trustees regarding candidates to fill vacancies,
as and when they occur, in the ranks of those Trustees who are not "interested
persons" of the Fund or the Investment Adviser.
Mr. Dwight is a member of the Audit Committee of the Board of Trustees of
the Fund. The Audit Committee's functions include making recommendations to the
Trustees regarding the selection of the independent accountants, and reviewing
matters relative to trading and brokerage policies and practices, accounting and
auditing practices and procedures, accounting records, internal accounting
controls, and the functions performed by the custodian, transfer agent and
dividend disbursing agent of the Fund.
The fees and expenses of those Trustees of the Fund who are not members of
the Eaton Vance organization (the noninterested Trustees) are paid by the Fund.
(The Trustees of the Fund who are members of the Eaton Vance organization
receive no compensation from the Fund.) During the fiscal year ended September
30, 1996, the noninterested Trustees of the Fund earned the following
compensation in their capacities as Trustees from the Fund and the funds in the
Eaton Vance fund complex(1):
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM FUND AND
NAME FROM FUND FUND COMPLEX
- --- -------- -----------
Donald R. Dwight ....................... $ 1,503 $142,500(2)
Robert Gluck ........................... 10,000 10,000
Samuel L. Hayes, III ................... 1,727 153,750(3)
Kenneth C. Knight ...................... 10,000 10,000
Jerome Preston Jr. ..................... 2,100 2,100
Norton H. Reamer ....................... 1,665 142,500
John L. Thorndike ...................... 1,765 147,500
- ----------
(1) The Eaton Vance fund complex consists of 228 registered investment
companies or series thereof. Messrs. Gluck, Knight and Preston serve only
on the Board of Trustees of the Fund.
(2) Includes $42,500 of deferred compensation.
(3) Includes $37,500 of deferred compensation.
Trustees of the Eaton Vance fund complex (except Messrs. Gluck, Knight and
Preston) that are not affiliated with the Investment Adviser may elect to defer
receipt of all or a percentage of their annual fees in accordance with the terms
of a Trustees Deferred Compensation Plan (the "Trustees" Plan"). Under the
Trustees' Plan, an eligible Trustee may elect to have his deferred fees invested
by an Eaton Vance fund in the shares of one or more funds in the Eaton Vance
Family of Funds, and the amount paid to the Trustees under the Trustees' Plan
will be determined based upon the performance of such investments. Deferral of
Trustees' fees in accordance with the Trustees' Plan will have a negligible
effect on the Fund's assets, liabilities, and net income per share, and will not
obligate the Fund to retain the services of any Trustee or obligate the Fund to
pay any particular level of compensation to the Trustee. The Fund is not a
participant in the Plan. The Fund does not have a retirement plan for its
Trustees.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of December 31, 1996, the Trustees and officers of the Fund, as a group,
owned in the aggregate less than 1% of the outstanding shares of the Fund. As of
that same date, Merrill Lynch, Pierce, Fenner & Smith, Inc., Jacksonville, FL,
was the record owner of approximately 10.6% of the outstanding shares, which it
held on behalf of its customers who are the beneficial owners of such shares,
and as to which it had voting power under certain limited circumstances. To the
knowledge of the Fund, no other person owned of record or beneficially 5% or
more of the Fund's outstanding shares as of such date.
INVESTMENT ADVISER
The Fund engages Eaton Vance as its investment adviser pursuant to an
Investment Advisory Agreement (the "Agreement") originally made on May 22, 1989
and re-executed on November 1, 1990. Eaton Vance or its affiliates act as
investment adviser to investment companies and various individual and
institutional clients with combined assets under management of over $17 billion.
Eaton Vance is a wholly-owned subsidiary of EVC, a publicly-held holding
company.
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. It maintains a large staff of experienced fixed-income and
equity investment professionals to service the needs of its clients. The
fixed-income division focuses on all kinds of taxable investment-grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
Under the Investment Advisory Agreement, Eaton Vance receives a monthly
advisory fee of 5/96 of 1% (equivalent to 5/8 of 1% annually) of average monthly
net assets of the Fund. For the fiscal years ended September 30, 1996, 1995, and
1994, the Fund paid Eaton Vance an Advisory fee of $762,899, $628,411 and
$645,516, respectively.
As investment adviser to the Fund, Eaton Vance manages the Fund's
investments and administers its affairs, subject to the supervision of the Board
of Trustees of the Fund. Pursuant to the Investment Advisory Agreement, Eaton
Vance furnishes for the use of the Fund office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Fund,
and compensates all officers and Trustees of the Fund who are members of the
Eaton Vance organization and all personnel of Eaton Vance performing services
relating to research and investment activities.
The Fund has agreed to pay all expenses not expressly stated to be payable
by Eaton Vance under the Investment Advisory Agreement, which expenses payable
by the Fund include, without implied limitation, expenses of maintaining the
Fund and continuing its existence, registration of the Fund under the Investment
Company Act of 1940, commissions, fees and other expenses connected with the
purchase or sale of securities, auditing, accounting and legal expenses, taxes
and interest, governmental fees, expenses of issue, sale, repurchase and
redemptions of shares, 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, expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations therefor, expenses of reports to
governmental officers and commissions, insurance expenses, association
membership dues, fees, expenses and disbursements of custodians and
subcustodians for all services to the Fund (including without limitation
safekeeping of funds and securities, keeping of books and accounts and
determination of net asset values), fees, expenses and disbursements of transfer
agents, dividend disbursing agents and registrars for all services to the Fund,
expenses for servicing shareholder accounts, any direct charges to shareholders
approved by the Trustees of the Fund, compensation and expenses of Trustees of
the Fund who are not members of the Eaton Vance organization, and such
non-recurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and any legal obligation of the Fund to
indemnify its Trustees and officers with respect thereto to the extent not
covered by insurance.
The Fund is responsible for all expenses for servicing shareholder accounts,
and Eaton Vance performs on behalf of the Fund various functions which relate to
the administration and servicing of existing shareholder accounts without being
reimbursed by the Fund for its costs in connection therewith. It is possible
that Eaton Vance may, in the future, request that the Trustees of the Fund take
action to have the Fund reimburse Eaton Vance for its costs in performing these
services. These services include functions which are primarily administrative
and clerical in nature, and include such matters as handling communications from
shareholders with respect to their accounts and the processing of liquidation
and exchange requests received from dealers or shareholders with respect to such
accounts. If any such request for reimbursement is made, the Trustees of the
Fund intend to review the specific nature and costs of these services prior to
approving any such reimbursement.
The Investment Advisory Agreement with Eaton Vance continues in effect from
year to year so long as such continuance is approved at least annually (i) by
the vote of a majority of the Trustees who are not interested persons of the
Fund or of Eaton Vance cast in person at a meeting specifically called for the
purpose of voting on such approval and (ii) by the Board of Trustees of the Fund
or by vote of a majority of the outstanding voting securities of the Fund. The
Agreement may be terminated at any time without penalty on sixty days written
notice by the Board of Trustees of either party or by vote of the majority of
the outstanding voting securities of the Fund, and the Agreement will terminate
automatically in the event of its assignment. The Agreement provides that Eaton
Vance may render services to others. The Agreement also provides that, in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties under the agreement on the part of Eaton
Vance, Eaton Vance shall not be liable to the Fund or to any shareholder for any
act or omission in the course of or connected with rendering services or for any
losses sustained in the purpose, holding or sale of any security.
Eaton Vance and EV are both wholly-owned subsidiaries of EVC. BMR is a
wholly-owned subsidiary of Eaton Vance. Eaton Vance and BMR are both
Massachusetts business trusts, and EV is the trustee of Eaton Vance and BMR. The
Directors of EV are Landon T. Clay, M. Dozier Gardner, James B. Hawkes and
Benjamin A. Rowland, Jr. The Directors of EVC consist of the same persons and
John G. L. Cabot and Ralph Z. Sorenson. Mr. Clay is chairman, Mr. Gardner is
vice chairman and Mr. Hawkes is President of EVC, Eaton Vance, BMR and EV. All
of the issued and outstanding shares of Eaton Vance and of EV are owned by EVC.
All of the issued and outstanding shares of BMR are owned by Eaton Vance. All
shares of the outstanding Voting Common Stock of EVC are deposited in a Voting
Trust which expires December 31, 1997, the Voting Trustees of which are Messrs.
Clay, Gardner, Hawkes and Rowland and Thomas E. Faust, Jr. The Voting Trustees
have unrestricted voting rights for the election of Directors of EVC. All of the
outstanding voting trust receipts issued under said Voting Trust are owned by
certain of the officers of Eaton Vance and BMR who are also officers or officers
and Directors of EVC and EV. As of January 1, 1997, Messrs. Clay, Gardner and
Hawkes each owned 24% of such voting trust receipts and Messrs. Rowland and
Faust owned 15% and 13%, respectively, of such voting trust receipts. Messrs.
Gardner and Otis, who are officers or Trustees of the Fund are members of the
EVC, Eaton Vance, BMR and EV organizations. Messrs. Murphy, O'Connor, Talcott
and Woodbury and Ms. Campbell, and Ms. Sanders, are officers of the Fund, and
are also members of the Eaton Vance, BMR and EV organizations. Eaton Vance will
receive the fees paid under the Investment Advisory Agreement and its
wholly-owned subsidiary, Eaton Vance Distributors, Inc., as Principal
Underwriter, will receive its portion of the sales charge on shares of the Fund
sold through financial service firms ("Authorized Firms").
EVC owns all of the stock of Energex Energy Corporation, which engages in
oil and gas exploration and development. In addition, Eaton Vance owns all the
stock of Northeast Properties, Inc., which is engaged in real estate investment.
EVC owns all of the stock of Fulcrum Management, Inc. and MinVen, Inc., which
are engaged in precious metal mining venture investment and management. EVC also
owns 24% of the Class A shares of Lloyd George Management (B. V. I.) Limited, a
registered investment adviser. EVC, Eaton Vance, BMR and EV may also enter into
other businesses.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the Fund's custodian, IBT. It is
Eaton Vance's opinion that the terms and conditions of such transactions were
not and will not be influenced by existing or potential custodial or other
relationships between the Fund and such banks.
CUSTODIAN
IBT acts as custodian for the Fund. IBT has the custody of all cash and
securities of the Fund, maintains the Fund's general ledger and computes the
daily per share net asset value. In such capacity it attends to details in
connection with the sale, exchange, substitution, transfer or other dealings
with the Fund's investments, receives and disburses all funds, and performs
various other ministerial duties upon receipt of proper instructions from the
Fund. 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 Fund 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 entities in the Eaton Vance organization, owns approximately 13% of the
voting stock of Investors Financial Services Corp., the holding company parent
of IBT. Management believes that such ownership does not create an affiliated
person relationship between the Fund and IBT under the Investment Company Act of
1940.
IBT also provides services in connection with the preparation of shareholder
reports and electronic filing of such reports with the Commission, for which it
receives a separate fee.
SERVICES FOR ACCUMULATION
The following services are voluntary, involve no extra charge, other than
the sales charge included in the offering price, and may be changed or
discontinued without penalty at any time.
Intended Quantity Investment--Statement of Intention. If it is anticipated
that $50,000 or more of Fund shares and shares of the other continuously offered
open-end funds listed under "The Eaton Vance Exchange Privilege" in the current
Prospectus will be purchased within a 13-month period, a Statement of Intention
should be signed so that shares may be obtained at the same reduced sales charge
as though the total quantity were invested in one lump sum. Shares held under
Right of Accumulation (see below) as of the date of the Statement will be
included toward the completion of the Statement. The Statement authorizes the
Transfer Agent to hold in escrow sufficient shares (5% of the dollar amount
specified in the Statement) which can be redeemed to make up any difference in
sales charge on the amount intended to be invested and the amount actually
invested. Execution of a Statement does not obligate the shareholder to purchase
or the Fund to sell the full amount indicated in the Statement, and should the
amount actually purchased during the 13-month period be more or less than that
indicated on the Statement, price adjustments will be made. For sales charges
and other information on quantity purchases, see "How to Buy Fund Shares" in the
Fund's current Prospectus. Any investor considering signing a Statement of
Intention should read it carefully.
Right of Accumulation--Cumulative Quantity Discount. The applicable sales
charge level for the purchase of Fund shares is calculated by taking the dollar
amount of the current purchase and adding it to the value (calculated at the
maximum current offering price) of the shares the shareholder owns in his or her
account(s) in the Fund and in the other continuously offered open-end funds
listed under "The Eaton Vance Exchange Privilege" in the current Prospectus at
the time of purchase. The sales charge on the shares being purchased will then
be at the rate applicable to the aggregate. For example, if the shareholder
owned shares valued at $30,000 in EV Traditional California Municipals Fund, and
purchased an additional $20,000 of Fund shares, the sales charge for the $20,000
purchase would be at the rate of 2.75% of the offering price (2.83% of the net
amount invested) which is the rate applicable to single transactions of $50,000.
For sales charges on quantity purchases, see "How to Buy Fund Shares" in the
Fund's current Prospectus. Shares purchased (i) by an individual, his or her
spouse and their children under the age of twenty-one, and (ii) by a trustee,
guardian or other fiduciary of a single trust estate or a single fiduciary
account, will be combined for the purpose of determining whether a purchase will
qualify for the Right of Accumulation and if qualifying, the applicable sales
charge level.
For any such discount to be made available, at the time of purchase a
purchaser or his or her Authorized Firm must provide the Principal Underwriter
(in the case of a purchase made through an Authorized Firm) or the Transfer
Agent (in the case of an investment made by mail) with sufficient information to
permit verification that the purchase order qualifies for the accumulation
privilege. Confirmation of the order is subject to such verification. The Right
of Accumulation privilege may be amended or terminated at any time as to
purchases occurring thereafter.
SERVICE FOR WITHDRAWAL
The Transfer Agent will send to the shareholder regular monthly or quarterly
payments of any permitted amount designated by the shareholder (see "Eaton Vance
Shareholder Services -- Withdrawal Plan" in the Fund's current Prospectus) based
upon the value of the shares held. The checks will be drawn from share
redemptions and hence, are a return of principal. Income dividends and capital
gain distributions in connection with withdrawal accounts will be credited at
net asset value as of the record date for each distribution. Continued
withdrawals in excess of current income will eventually use up principal,
particularly in a period of declining market prices. A shareholder may not have
a withdrawal plan in effect at the same time he or she has authorized Bank
Automated Investing or is otherwise making regular purchases of Fund shares. The
shareholder, the Transfer Agent or the Principal Underwriter will be able to
terminate the withdrawal plan at any time without penalty.
PORTFOLIO SECURITY TRANSACTIONS
Decisions concerning the execution of Fund portfolio security transactions,
including the selection of the market and the broker-dealer firm, are made by
Eaton Vance. Eaton Vance is also responsible for the execution of transactions
for all other accounts managed by it.
Eaton Vance places the portfolio security transactions of the Fund and of
all other accounts managed by it for execution with many broker-dealer firms.
Eaton Vance uses its best efforts to obtain execution of portfolio transactions
at prices which are advantageous to the Fund and (when a disclosed commission is
being charged) at reasonably competitive commission rates. In seeking such
execution, Eaton Vance will use its best judgment in evaluating the terms of a
transaction, and will give consideration to various relevant factors including
without limitation the size and type of the transaction, the general execution
and operational capabilities of the broker-dealer, the nature and character of
the market for the security, the confidentiality, speed and certainty of
effective execution required for the transaction, the reputation, reliability,
experience and financial condition of the broker-dealer, the value and quality
of the services rendered by the broker-dealer in other transactions, and the
reasonableness of the commission, if any. Transactions on United States stock
exchanges and other agency transactions involve the payment by the Fund of
negotiated brokerage commissions. Such commissions vary among different
broker-dealer firms, and a particular broker-dealer may charge different
commissions according to such factors as the difficulty and size of the
transaction and the volume of business done with the broker-dealer. Transactions
in foreign securities usually involve the payment of fixed brokerage
commissions, which are generally higher than those in the United States. There
is generally no stated commission in the case of securities traded in the
over-the-counter markets, but the price paid or received by the Fund usually
includes an undisclosed dealer markup or markdown. In an underwritten offering,
the price paid by the Fund often includes a disclosed fixed commission or
discount retained by the underwriter or dealer. Although commissions paid on
portfolio security transactions will, in the judgment of Eaton Vance, be
reasonable in relation to the value of the services provided, commissions
exceeding those which another firm might charge may be paid to broker-dealers
who were selected to execute transactions on behalf of the Fund and Eaton
Vance's other clients for providing brokerage and research services to Eaton
Vance.
As authorized in Section 28(e) of the Securities Exchange Act of 1934, a
broker or dealer who executes a portfolio transaction on behalf of the Fund may
receive a commission which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if Eaton
Vance determines in good faith that such compensation was reasonable in relation
to the value of the brokerage and research services provided. This determination
may be made on the basis of either that particular transaction or on the basis
of overall responsibilities which Eaton Vance and its affiliates have for
accounts over which they exercise investment discretion. In making any such
determination, Eaton Vance will not attempt to place a specific dollar value on
the brokerage and research services provided or to determine what portion of the
commission should be related to such services. Brokerage and research services
may include advice as to the value of securities, the advisability of investing
in, purchasing, or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts; effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement); and
the "Research Services" referred to in the next paragraph.
It is a common practice in the investment advisory industry for the advisers
of investment companies, institutions and other investors to receive research,
statistical and quotation services, data, information and other services,
products and materials which assist such advisers in the performance of their
investment responsibilities ("Research Services") from broker-dealer firms which
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, Eaton Vance receives Research Services from many broker-dealer firms
with which Eaton Vance places the Fund's portfolio transactions and from third
parties with which these broker-dealers have arrangements. These Research
Services, include such matters as general economic and market reviews, industry
and company reviews, evaluations of securities and portfolio strategies and
transactions, recommendations as to the purchase and sale of securities and
other portfolio transactions, financial, industry and trade publications, news
and information services, pricing and quotation equipment and services, and
research oriented computer hardware, software, data bases and services. Any
particular Research Service obtained through a broker-dealer may be used by
Eaton Vance in connection with client accounts other than those accounts which
pay commissions to such broker-dealer. Any such Research Service may be broadly
useful and of value to Eaton Vance in rendering investment advisory services to
all or a significant portion of its clients, or may be relevant and useful for
the management of only one client's account or of a few clients' accounts, or
may be useful for the management of merely a segment of certain clients'
accounts, regardless of whether any such account or accounts paid commissions to
the broker-dealer through which such Research Service was obtained. The advisory
fee paid by the Fund is not reduced because Eaton Vance receives such Research
Services. Eaton Vance evaluates the nature and quality of the various Research
Services obtained through broker-dealer firms and attempts to allocate
sufficient commissions to such firms to ensure the continued receipt of Research
Services which Eaton Vance believes are useful or of value to it in rendering
investment advisory services to its clients.
Subject to the requirement that Eaton Vance shall use its best efforts to
seek to execute Fund portfolio security transactions at advantageous prices and
at reasonably competitive commission rates or spreads, Eaton Vance is authorized
to consider as a factor in the selection of any broker-dealer firm with whom
Fund portfolio orders may be placed the fact that such firm has sold or is
selling shares of the Fund or of other investment companies sponsored by Eaton
Vance. This policy is not inconsistent with a rule of the National Association
of Securities Dealers, Inc. ("NASD"), which rule provides that no firm which is
a member of the NASD shall favor or disfavor the distribution of shares of any
particular investment company or group of investment companies on the basis of
brokerage commissions received or expected by such firm from any source.
Securities considered as investments for the Fund may also be appropriate
for other investment accounts managed by Eaton Vance or its affiliates. Eaton
Vance will attempt to allocate equitably portfolio security transactions among
the Fund and the portfolios of its other investment accounts whenever decisions
are made to purchase or sell securities by the Fund and one or more of such
other accounts simultaneously. In making such allocations, the main factors to
be considered are the respective investment objectives of the Fund and such
other accounts, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment by the Fund and
such accounts, the size of investment commitments generally held by the Fund and
such accounts and the opinions of the persons responsible for recommending
investments to the Fund and such accounts. However, there may be instances when
the Fund will not participate in a securities transaction that is allocated
among other accounts. While this procedure could have a detrimental effect on
the price or amount of the securities available to the Fund from time to time,
it is the opinion of the Trustees that the benefits available from the Eaton
Vance organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions.
For the fiscal years ended September 30, 1996 and 1994, the Fund paid no
brokerage commissions. During the Fund's fiscal year ended September 30, 1995,
the Fund paid brokerage commissions of $625 on portfolio transactions.
DETERMINATION OF NET ASSET VALUE
For a description of how the Fund values its shares, see "Valuing Fund
Shares" in the Fund's current prospectus. The Fund will be closed for business
and will not price its 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.
Debt securities will normally be valued on the basis of market valuations
furnished by an independent pricing service, which uses information such as
transactions in bonds, quotations by bond dealers, market transactions in
comparable securities, relationships between securities and yield to maturity.
Debt securities for which such market valuations are unavailable or deemed not
to represent market value by the Investment Adviser will be valued at fair value
pursuant to procedures established by the Trustees. Equity securities listed on
securities exchanges or in the NASDAQ National Market are valued at closing sale
prices. Listed equity securities for which closing sale prices are not available
and unlisted securities are valued at the mean between the latest bid and asked
prices provided by dealers. Warrants will be valued at cost or market, unless
the Investment Adviser believes fair value should be used. Short-term
obligations maturing in 60 days or less are valued by amortized cost. Other
assets will be valued at fair value pursuant to procedures established by the
Trustees.
INVESTMENT PERFORMANCE
Average annual total return is determined by multiplying a hypothetical
initial purchase order of $1,000 by the average annual compound rate of return
(including capital appreciation/depreciation, and dividends and distributions
paid and reinvested) for the stated period and annualizing the result. The
calculation assumes the maximum sales charge is deducted from the initial $1,000
purchase order and that all dividends and distributions are reinvested at net
asset value on the reinvestment dates during the period. The Fund's average
annual total return for the ten year period ended September 30, 1996 was 10.19%.
Yield is computed pursuant to a standardized formula by dividing its net
investment income per share earned during a recent thirty-day period by the
maximum offering price (including the maximum sales charge) per share on the
last day of the period and annualizing the resulting figure. Net investment
income per share is equal to the Fund's dividends and interest earned during the
period, reduced by accrued expenses for the period with the resulting number
being divided by the average daily number of Fund shares outstanding and
entitled to receive dividends during the period. Yield calculations assume a
maximum sales charge equal to 3.75% of the public offering price. Actual yield
may be affected by variations in sales charges on investments. For the
thirty-day period ended September 30, 1996 the yield of the Fund was 9.16%.
The Principal Underwriter may publish to Authorized Firms the Fund's
distribution rate and/or its effective distribution rate. The Fund's
distribution rate is computed by dividing the most recent monthly distribution
per share annualized, by the current maximum offering price per share. The
Fund's effective distribution rate is computed by dividing the distribution rate
by the ratio used to annualize the distribution and reinvesting the resulting
amount for a full year on the basis of such ratio. The effective distribution
rate will be higher than the distribution rate because of the compounding effect
of the assumed reinvestment. Investors should note that the Fund's yield is
calculated using a standardized formula the income component of which is
computed from the yields to maturity of all debt obligations in the Fund's
portfolio based on the market value of such obligations and from dividends from
equity securities based on stated annual rates, exclusive of special or extra
distributions, (with all purchases and sales of securities during such period
included in the income calculation on a settlement date basis), whereas the
distribution rate is based on the Fund's last monthly distribution which tends
to be relatively stable and may be more or less than the amount of net
investment income and short-term capital gain actually earned by the Fund during
the month.
The table below indicates the cumulative and average annual total return on
a hypothetical investment of $1,000 in the Fund covering the one-, five- and
ten-year periods ended September 30, 1996.
<TABLE>
VALUE OF A $1,000 INVESTMENT
<CAPTION>
TOTAL RETURN TOTAL RETURN
VALUE OF EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT ------------------------------ ------------------------------
PERIOD DATE INVESTMENT* ON 9/30/96 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
---------- ---------- ----------- ---------- ---------- ---------- ---------- ----------
<C> <C> <C> <C> <C> <C> <C> <C>
10 Years Ended
9/30/96 09/30/86 $962.50 $2,639.02 174.18% 10.61% 163.90% 10.19%
5 Years Ended
9/30/96 9/30/91 $963.06 $1,772.09 84.01% 12.97% 77.21% 12.12%
1 Year Ended
9/30/96 9/30/95 $962.34 $1,091.42 13.41% 13.41% 9.14% 9.14%
- ----------
*Initial investment less the current maximum sales charge of 3.75%.
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate and shares, when redeemed, may be worth more or
less than their original cost.
The Fund's total return may be compared to relevant indices, such as the
Consumer Price Index, and various domestic securities indices, which may be used
in advertisements and in information furnished to present or prospective
shareholders. The performance of the Fund and/or the high yield bond market may
also be compared to the performance of comparable securities (such as Treasury
bonds) or comparable mutual funds or mutual fund averages prepared by
independent sources (such as Lipper Analytical Services, Inc., CDA/ Wiesenberger
and Morningstar, Inc.). Evaluations of the Fund's performance, comparative
performance information, charts and/or other illustrations prepared by
independent sources may also be used in advertisements and in information
furnished to present or prospective shareholders.
Information showing the effects of compounding interest (based on different
investment amounts and hypothetical rates of return) may be included in
advertisements and other material furnished to present and prospective
shareholders. Compounding is the process of earning interest on principal plus
interest that was earned earlier. Information, charts and illustrations relating
to inflation and the effects of inflation on the dollar may be included in
advertisements and other material furnished to present and prospective
shareholders.
Information, charts and illustrations showing comparative historical
information of high-yielding bonds as represented by The First Boston High Yield
Index over 10-year U.S. Treasury bonds may be used in advertisements and other
material furnished to present or prospective shareholders. The First Boston High
Yield Index is an unmanaged index of 713 high-yielding securities. The principal
and interest of U.S. Treasury bonds are guaranteed by the United States
Goverment, while high yield bonds are of lower quality than investment-grade
bonds and U.S. Government securities. Rates are given for illustrative purposes
only and are not meant to imply or predict actual results of an investment in
the Fund.
Information used in advertisements and materials furnished to present and
prospective investors may include statements or illustrations relating to the
appropriateness of certain types of securities and/or mutual funds to meet
specific financial goals. Such information may address:
- cost associated with aging parents;
- funding a college education (including its actual and estimated cost);
- health care expenses (including actual and projected expenses);
- long-term disabilities (including the availability of, and coverage
provided by, disability insurance; and
- retirement (including the availability of social security benefits, the tax
treatment of such benefits and statistics and other information relating to
maintaining a particular standard of living and outliving existing assets).
Such information may also address different methods for saving money and the
results of such methods, as well as the benefits of investing in bond funds.
Information in advertisements and materials furnished to present and
prospective investors may include profiles of different types of investors
(i.e., investors with different goals and assets) and different investment
strategies for meeting specific goals. Such information may provide hypothetical
illustrations which include: results of various investment strategies;
performance of an investment in the Fund over various time periods; and results
of diversifying assets among several investments with varying performance.
Information in advertisements and materials furnished to present and prospective
investors may also include quotations (including editorial comments) and
statistics concerning investing in securities, as well as investing in
particular types of securities and the performance of such securities.
The Fund may provide information about Eaton Vance, its affiliates and other
investment advisers to the funds in the Eaton Vance Family of Funds in sales
material or advertisements provided to investors or prospective investors. Such
material or advertisements may also provide information on the use of investment
professionals by such investors.
TAXES
The Fund has elected to be treated, has qualified, and intends to continue
to qualify each year as a regulated investment company ("RIC") under the Code.
Accordingly, the Fund 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 and net realized capital gains in accordance with the
timing requirements imposed by the Code, so as to avoid any federal income or
excise tax to the Fund. The Fund so qualified for its fiscal year ended
September 30, 1996 (see Notes to the Financial Statements incorporated by
reference in this Statement of Additional Information).
In order to avoid federal excise tax, the Code requires that the Fund
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 from the prior year (as previously
computed) that was not paid out during such year and on which the Fund paid no
federal income tax. Under current law, provided the Fund qualifies as a RIC for
federal income tax purposes, the Fund is not liable for any income, corporate
excise or franchise tax in the Commonwealth of Massachusetts.
The Fund's transactions in options, futures contracts and forward contracts
will be subject to special tax rules that may affect the amount, timing and
character of distributions to shareholders. For example, certain positions held
by the Fund on the last business day of each taxable year will be marked to
market (i.e., treated as if closed out on such day), and any resulting gain or
loss will, except for certain currency-related positions, generally be treated
as 60% long-term and 40% short-term capital gain or loss. Certain positions held
by the Fund that substantially diminish the Fund's risk of loss with respect to
other positions in its portfolio may constitute "straddles," which are subject
to tax rules that may cause deferral of Fund losses, adjustments in the holding
periods of Fund securities and conversion of short-term into long-term capital
losses. The Fund may have to limit its activities in options, futures contracts
and forward contracts in order to maintain its qualification as a RIC.
The Fund's investment in zero coupon and deferred interest securities,
payment in kind securities and any other securities with original issue discount
(or market discount, if an election is made to include earned market discount in
current income) will cause it to realize income prior to the receipt of cash
payments with respect to these securities. In order to distribute this income
and avoid a tax on the Fund, the Fund may be required to liquidate portfolio
securities that it might otherwise have continued to hold.
Investments in lower-rated or unrated securities may present special tax
issues for the Fund to the extent actual or anticipated defaults may be more
likely with respect to such securities. Tax rules are not entirely clear about
issues such as when the Fund may cease to accrue interest, original issue
discount, or market discount; when and to what extent deductions may be taken
for bad debts or worthless securities; how payments received on obligations in
default should be allocated between principal and income; and whether exchanges
of debt obligations in a workout context are taxable.
Distributions by the Fund of net investment income, the excess of net
short-term capital gains over net long-term capital losses and certain foreign
exchange gains are taxable to shareholders as ordinary income, whether received
in cash or reinvested in additional shares. Distributions of the excess of net
long-term capital gains over net short-term capital losses (including any
capital losses carried forward from prior years) are taxable to shareholders as
long-term capital gains whether received in cash or in additional shares and
regardless of the length of time their shares of the Fund have been held.
Certain distributions 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.
The portion of distributions made by the Fund which are derived from
dividends received by the Fund from domestic corporations may qualify for the
dividends-received deduction for corporations. The dividends-received deduction
for corporate shareholders is reduced to the extent the shares with respect to
which the dividends are received are treated as debt-financed under the Federal
income tax law and is eliminated if the shares are deemed to have been held for
less than a minimum period, generally 46 days. Receipt of certain distributions
qualifying for the deduction may result in reduction of the tax basis of the
corporate shareholder's shares.
Any loss realized upon the redemption or exchange of shares of the Fund with
a tax holding period of 6 months or less will be treated as a long-term capital
loss to the extent of any distribution of net long-term capital gains with
respect to such shares. All or a portion of any loss realized upon a taxable
disposition of Fund shares may be disallowed under "wash sale" rules if other
shares of the Fund are purchased (whether through the reinvestment of
distributions or otherwise) within 30 days before or after such disposition.
The Fund may be subject to foreign withholding or other foreign taxes with
respect to income (possibly including, in some cases, capital gains) on certain
foreign securities. As it is not expected that more than 50% of the value of the
total assets of the Fund at the close of any taxable year will consist of
securities issued by foreign corporations, the Fund will not be eligible to pass
through to shareholders any foreign tax credits or deductions for foreign taxes
paid by the Fund. These taxes may be reduced or eliminated under the terms of an
applicable U.S. income tax treaty. Certain foreign exchange gains and losses
realized by the Fund will be treated as ordinary income and losses. Certain uses
of foreign currency or currency derivatives and investment by the Fund in the
stock of certain "passive foreign investment companies" may be limited or a
tax-deduction may be made, if available, in order to avoid imposition of a tax
on the Fund.
Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number and
certain required certifications, as well as shareholders with respect to whom
the Fund has received notification from the Internal Revenue Service or a
broker, may be subject to "backup" withholding of federal income tax from the
Fund'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
entities generally will be subject to a U.S. withholding tax at a rate of 30% on
the Fund's distributions from ordinary income and the excess of net short-term
capital gain over net long-term capital loss unless the tax is reduced or
eliminated by an applicable tax treaty. Distributions from the excess of the
Fund's net long-term capital gain over net short-term capital loss received by
such shareholders and any gain from the sale or other disposition of shares of
the Fund generally will not be subject to U.S. federal income taxation, provided
that nonresident 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 Fund.
Special tax rules apply to Individual Retirement Accounts ("IRAs") and other
retirement plans and persons investing through such plans should consult their
tax advisers for more information. The deductibility of such contributions may
be restricted or eliminated for particular shareholders.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to the special tax rules that may apply in
their particular situations, as well as the state, local or foreign tax
consequences of investing in the Fund.
PRINCIPAL UNDERWRITER
Shares of the Fund may be continuously purchased at the public offering
price through certain Authorized Firms which have agreements with the Principal
Underwriter. The Principal Underwriter is a wholly-owned subsidiary of Eaton
Vance.
The public offering price is the net asset value next computed after receipt
of the order, plus, where applicable, a variable percentage (sales charge)
depending upon the amount of purchase as indicated by the sales charge table set
forth in the Fund's current Prospectus. Such table is applicable to purchases of
the Fund alone or in combination with purchases of the other funds offered by
the Principal Underwriter, made at a single time by (i) an individual, or an
individual, his or her spouse and their children under the age of twenty-one,
purchasing shares for his or their own account; and (ii) a trustee or other
fiduciary purchasing shares for a single trust estate or a single fiduciary
account.
The table is also presently applicable to (1) purchases of Fund shares,
alone or in combination with purchases of any of the other funds offered by the
Principal Underwriter through one dealer aggregating $50,000 or more made by any
of the persons enumerated above within a thirteen-month period starting with the
first purchase pursuant to a written Statement of Intention, in the form
provided by the Principal Underwriter, which includes provisions for a price
adjustment depending upon the amount actually purchased within such period (a
purchase not made pursuant to such Statement may be included thereunder if the
Statement is filed within 90 days of such purchase); or (2) purchases of the
Fund pursuant to the Right of Accumulation and declared as such at the time of
purchase.
Subject to the applicable provisions of the Investment Company Act of 1940,
the Fund may issue shares at net asset value in the event that an investment
company (whether a regulated or private investment company or a personal holding
company) is merged or consolidated with or acquired by the Fund. Normally no
sales charges will be paid in connection with an exchange of Fund shares for the
assets of such investment company. Shares may be sold at net asset value to any
officer, director, trustee, general partner or employee of the Fund, or any
investment company for which Eaton Vance or BMR acts as investment adviser, any
investment advisory, agency, custodial or trust account managed or administered
by Eaton Vance or by any parent, subsidiary or other affiliate of Eaton Vance,
or any officer, director or employee of any parent, subsidiary or other
affiliate of Eaton Vance. The terms "officer," "director," "trustee," "general
partner" or "employee" as used in this paragraph include any such person's
spouse and minor children, and also retired officers, directors, trustees,
general partners and employees and their spouses and minor children. Shares of
the Fund may also be sold at net asset value to registered representatives and
employees of Authorized Firms and to the spouses and children under the age of
21 and beneficial accounts of such persons.
The Fund reserves the right to suspend or limit the offering of shares of
the Fund to the public at any time.
The Principal Underwriter acts as principal in selling shares of the Fund
under the Distribution Agreement with the Fund. The expenses of printing copies
of prospectuses used to offer shares to Authorized Firms or investors and other
selling literature and of advertising are borne by the Principal Underwriter.
The fees and expenses of qualifying and registering and maintaining
qualifications and registrations of the Fund and its shares under federal and
state securities laws are borne by the Fund. The distribution agreement is
renewable annually by the Fund's Board of Trustees (including a majority of its
Trustees who are not interested persons of the Principal Underwriter or the
Fund), may be terminated on six months' notice by either party, and is
automatically terminated upon assignment. The Principal Underwriter distributes
Fund shares on a "best efforts" basis under which it is required to take and pay
for only such shares as may be sold. The Principal Underwriter allows Authorized
Firms discounts from the applicable public offering price which are alike for
all Authorized Firms. The Principal Underwriter may allow, upon notice to all
Authorized Firms with whom it has agreements, discounts up to the full sales
charge during the periods specified in the notice. See "How to Buy Fund Shares"
in the Fund's current Prospectus for the discount allowed to Authorized Firms on
the sale of Fund shares. During periods when the discount includes the full
sales charge, such Authorized Firms may be deemed to be underwriters as that
term is defined in the Securities Act of 1933. The total sales charges for sale
of shares of the Fund during the fiscal years ended September 30, 1996, 1995 and
1994 were $1,154,976, $390,210 and $456,053, respectively, of which $0.00,
$16,634 and $71,474, respectively, was received by the Principal Underwriter.
For the fiscal years ended 1996, 1995 and 1994, Authorized Firms received
$1,154,976, $373,576 and $384,579, respectively, from the total sales charges.
SERVICE PLAN
The Fund has adopted a Service Plan (the "Plan") designed to meet the
service fee requirements of the revised sales charge rule of the National
Association of Securities Dealers, Inc. (Management believes service fee
payments are not distribution expenses governed by Rule 12b-1 under the 1940
Act, but has chosen to have the Plan approved as if that Rule were applicable.)
The following supplements the discussion of the Plan contained in the Fund's
Prospectus.
The Plan remains in effect from year to year, provided such continuance is
approved by a vote of both of a majority of (i) those Trustees who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or any agreements related to it (the
"Noninterested Trustees") and (ii) all of the Trustees then in office, cast in
person at a meeting (or meetings) called for the purpose of voting on this Plan.
The Plan may be terminated any time by vote of the Noninterested Trustees or by
a vote of a majority of the outstanding voting securities of the Fund. The Plan
has been approved by the Board of Trustees of the Fund, including the
Noninterested Trustees. The Plan amends and replaces the Fund's original
distribution plan (which originally became effective on May 22, 1989 and which
was approved by the Fund's shareholders).
Under the Plan, the President or a Vice President of the Fund shall provide
to the Trustees for their review, and the Trustees shall review at least
quarterly, a written report of the amount expended under the Plan and the
purposes for which such expenditures were made. The Plan may not be amended to
increase materially the payments described herein without approval of the
shareholders of the Fund, and all material amendments of the Plan must also be
approved by the Trustees of the Fund as prescribed by the Rule. So long as the
Plan is in effect, the selection and nomination of Trustees who are not
interested persons of the Fund shall be committed to the discretion of the
Trustees who are not such interested persons. The Trustees have determined that
in their judgment there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders.
During the fiscal year ended September 30, 1996, the Fund made service fee
payments under the Plan aggregating $141,099, of which $102,614 was paid to
Authorized Firms and the balance of which was retained by the Principal
Underwriter.
OTHER INFORMATION
The Fund is a Massachusetts business trust established under a Declaration
of Trust dated March 27, 1989, as amended and restated November 20, 1995. Its
predecessor, Eaton Vance Income Fund of Boston, Inc., was organized as a
Maryland corporation and commenced operation in 1971. References herein to the
"Fund" include the Fund's predecessor, unless the context requires otherwise.
Eaton Vance, pursuant to the Investment Advisory Agreement, controls the use of
the Fund's name and may use the words "Eaton Vance" in other connections and for
other purposes. EVC may require the Fund to cease using such words in its name
if EVC or Eaton Vance or any other subsidiary or affiliate of EVC ceases to act
as investment manager of the Fund.
As permitted by Massachusetts law, there will normally be no meetings of
shareholders for the purpose of electing Trustees unless and until such time as
less than a majority of the Trustees holding office have been elected by
shareholders. In such an event the Trustees then in office will call a
shareholders' meeting for the election of Trustees. Except for the foregoing
circumstances and unless removed by action of the shareholders in accordance
with the Fund's By-laws, the Trustees shall continue to hold office and may
appoint successor Trustees.
The Fund's Declaration of Trust may be amended by the Trustees when
authorized by vote of a majority of the outstanding voting securities of the
Fund, the financial interests of which are affected by the amendment. The
Trustees may also amend the Declaration of Trust without the vote or consent of
shareholders to change the name of the Fund (or any series) or to make such
other changes as do not have a materially adverse effect on the financial
interests of shareholders or if they deem it necessary to conform it to
applicable federal or state laws or regulations. The Trustees are also
authorized to issue shares in one or more series or classes thereof. Currently,
the Trustees have only authorized issuance of shares of the Fund. Nevertheless,
the Trustees intend to submit to shareholders any proposal involving the merger
of the Fund with an operating investment company unaffiliated with Eaton Vance.
The Fund (or any series or class) may be terminated by: (1) the affirmative vote
of the holders of not less than two-thirds of the shares outstanding and
entitled to vote at any meeting of shareholders of the Fund (or the appropriate
series or class thereof) or by an instrument or instruments in writing without a
meeting, consented to by the holders of two-thirds of the shares of the Fund (or
series or class thereof), provided, however, that if such termination is
recommended by the Trustees, the vote of a majority of the outstanding voting
securities of the Fund (or series or class thereof) entitled to vote thereon
shall be sufficient authorization; or (2) by means of an instrument in writing
signed by a majority of the Trustees, be followed by a written notice to
shareholders stating that a majority of the Trustees has determined that the
continuation of the Fund (or series or class thereof) is not in the best
interests of the Fund, (or such series or class) or of its respective
shareholders.
The Declaration of Trust further provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law; but nothing in the
Declaration of Trust protects a Trustee against any liability to 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.
The right to redeem shares of the Fund can be suspended and the payment of
the redemption price deferred when the New York Stock Exchange (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
Securities and Exchange Commission (the "Commission"), or during any emergency
as determined by the Commission which makes it impracticable for the Fund 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.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, Massachusetts are
the independent accountants for the Fund, providing audit services, tax return
preparation, and assistance and consultation with respect to the preparation of
filings with the Commission.
FINANCIAL STATEMENTS
The financial statements of the Fund, which are included in the Fund's
Annual Report to Shareholders, are incorporated by reference into this SAI and
have been so incorporated in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, as experts in accounting and auditing. A copy of the
Fund's most recent Annual Report accompanies this SAI.
Registrant incorporates by reference the audited financial information for
the Fund listed below and for the Portfolio for the fiscal year ended September
30, 1996 as previously filed electronically with the Securities and Exchange
Commission:
Eaton Vance Income Fund of Boston
(Accession No. 0000950156-96-000888)
<PAGE>
[logo]
EATON VANCE
====================
Mutual Funds
EATON VANCE
INCOME FUND
OF BOSTON
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 1, 1997
EATON VANCE
INCOME FUND
OF BOSTON
24 FEDERAL STREET
BOSTON, MA 02110
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Eaton Vance Management, 24 Federal Street, Boston, MA 02110
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
CUSTODIAN
Investors Bank & Trust Company, 89 South Street, Boston, MA 02111
TRANSFER AGENT
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123
(800) 262-1122
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One Post Office Square, Boston, MA 02109
LEGAL COUNSEL
Gordon Altman Butowsky Weitzen Shalov & Wein, 114 West 47th Street,
New York, NY 10036
IBSAI
<PAGE>
PART C
OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
INCLUDED IN PART A:
Financial Highlights for the ten years ended September 30, 1996
INCLUDED IN PART B:
INCORPORATED BY REFERENCE TO THE ANNUAL REPORT FOR THE FUND
DATED SEPTEMBER 30, 1996, FILED ELECTRONICALLY ON NOVEMBER 21,
1996 PURSUANT TO SECTION 30 (B)(2) OF THE INVESTMENT COMPANY
ACT OF 1940 (ACCESSION NO. 0000950156-96-000888).
Portfolio of Investments as of September 30, 1996
Statement of Assets and Liabilities as of September 30, 1996
Statement of Operations for the year ended September 30, 1996
Statement of Changes in Net Assets for each of the two years
in the period ended September 30, 1996
Financial Highlights for each of the five years ended
September 30, 1996
Notes to Financial Statements
Report of Independent Accountants
(b) EXHIBITS:
(1) Declaration of Trust dated December 14, 1995 filed herewith.
(2)(a) By-Laws filed as Exhibit (2)(a) to Post-Effective Amendment No. 41
and incorporated herein by reference.
(b) Amendment to By-Laws dated December 13, 1993 filed as Exhibit(2)(b)
to Post-Effective Amendment No. 41 and incorporated herein by
reference.
(3) Not applicable
(4) Not applicable
(5) Investment Advisory Agreement with Eaton Vance Management dated
November 1, 1990 filed as Exhibit (5) to Post-Effective Amendment No.
41 and incorporated herein by reference.
(6)(a) Distribution Agreement between Eaton Vance Distributors, Inc. dated
November 1, 1996 filed herewith.
(b) Selling Group Agreement between Eaton Vance Distributors, Inc. and
Authorized Dealers filed as Exhibit (6)(b) to Post-Effective
Amendment No. 59 to the Registration Statement of Eaton Vance Growth
Trust (File Nos. 2-22019, and 811- 1241) and incorporated herein by
reference.
(c) Schedule of Dealer Discounts and Sales Charges filed as Exhibit
(6)(c) to Post- Effective Amendment No. 59 to the Registration
Statement of Eaton Vance Growth Trust (File Nos. 2-22019 and
811-1241) and incorporated herein by reference.
(7) Not applicable
(8)(a) Custodian Agreement with Investors Bank & Trust Company dated
December 17, 1990 filed as Exhibit (8)(a) to Post-Effective Amendment
No. 41 and incorporated herein by reference.
(8)(b) Amendment to Master Custodian Agreement with Investors Bank & Trust
Company dated November 20, 1995 filed as Exhibit (8)(b) to
Post-Effective Amendment No. 41 and incorporated herein by reference.
(9) Transfer Agency Agreement dated June 7, 1989 filed as Exhibit (9)(b)
to Post- Effective Amendment No. 65 to the Registration Statement of
Eaton Vance Growth Trust (File Nos. 2-22019, 811-1241) and
incorporated herein by reference.
(9)(a) Amendment to Transfer Agency Agreement dated February 1, 1993 filed
as Exhibit (9) (c) to Post-Effective Amendment No. 65 to the
Registration Statement of Eaton Vance Growth Trust (File Nos.
2-22019, 811-1241) and incorporated herein by reference.
(10) Not applicable
(11) Consent of Independent Accountants filed herewith.
(12) Not applicable
(13) Not applicable
(14)(a) Vance, Sanders Profit Sharing Retirement Plan for Self Employed
Persons with Adoption Agreement and instructions filed as Exhibit No.
8(b)(1) to P.E.A. No. 28 to Registration Statement on Form S-5, File
No. 2-22019 and incorporated herein by reference.
(b) Eaton & Howard, Vance Sanders Defined Contribution Prototype Plan and
Trust with Adoption Agreements (a) Basic Profit-Sharing Retirement
Plan (b) Basic Money Purchase Pension Plan (c) Thrift Plan Qualifying
as Profit Sharing Plan (d) Thrift Plan Qualifying as Money Purchase
Pension Plan (e) Integrated Profit Sharing Retirement Plan (f)
Integrated Money Purchase Pension Plan filed as Exhibit No. 14 (2) to
P.E.A. No. 29 to Registration Statement on Form N-1, File No. 2-22019
and incorporated herein by reference.
(c) Individual Retirement Account (Form 5305-A) and Initial Investment
Instruction Form filed as Exhibit No. 18 to P.E.A. No. 24 to
Registration Statement on Form S-5, File No. 2-22019 and incorporated
herein by reference.
(d) Vance, Sanders Variable Pension Prototype Plan and Trust with
Adoption Agreement filed as Exhibit No. 14(4) to P.E.A. No. 29 to
Registration Statement on Form N-1, File No. 2-22019 and incorporated
herein by reference.
(15)(a) Service Plan pursuant to Rule 12b-1 under the Investment Company Act
of 1940 dated August 9, 1993 filed as Exhibit (15) to Post-Effective
Amendment No. 41 and incorporated herein by reference.
(15)(b) Amendment to Service Plan dated November 1, 1996 filed herewith.
(16) Schedule for Computation of Performance Quotations filed herewith.
(17) Power of Attorney dated January 10, 1994 filed as Exhibit (17) to
Post-Effective Amendment No. 41 and incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable
ITEM 26. NUMBERS OF HOLDERS OF SECURITIES
NUMBER OF RECORD HOLDERS
TITLE OF CLASS AS OF DECEMBER 31, 1996
-------------- -----------------------
Shares of beneficial interest 7,480
without par value
ITEM 27. INDEMNIFICATION
Article IV of the Fund's Amended and Restated Declaration of Trust, dated
December 14, 1995, permits Trustee and officer indemnification by By-law,
contract and vote. Article XI of the By-laws contains indemnification
provisions. Registrant's Trustees and officers are insured under a standard
mutual fund errors and omissions insurance policy covering incurred by reason of
negligent errors and omissions committed in their capacities as such.
The distribution agreement of the Fund also provide for reciprocal indemnity
of the principal underwriter, on the one hand, and the Trustees and officers, on
the other.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the information set forth under the captions
"Management of the Fund" in the Prospectus and "Investment Adviser" in the
Statement of Additional Information, which information is incorporated herein by
reference.
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Registrant's principal underwriter, Eaton Vance Distributors, Inc., a
wholly-owned subsidiary of Eaton Vance Management, is the principal
underwriter for each of the investment companies named below:
<TABLE>
<CAPTION>
<S> <C>
EV Classic Florida Limited Maturity EV Marathon Kansas Municipals Fund
Municipals Fund EV Marathon Kentucky Municipals Fund
EV Classic Government Obligations Fund EV Marathon Louisiana Municipals Fund
EV Classic Greater China Growth Fund EV Marathon Maryland Municipals Fund
EV Classic Growth Fund EV Marathon Massachusetts Limited Maturity
EV Classic High Income Fund Municipals Fund
EV Classic Information Age Fund EV Marathon Massachusetts Municipals Fund
EV Classic Investors Fund EV Marathon Michigan Limited Maturity
EV Classic Massachusetts Limited Maturity Municipals Fund
Municipals Fund EV Marathon Michigan Municipals Fund
EV Classic National Limited Maturity EV Marathon Minnesota Municipals Fund
Municipals Fund EV Marathon Mississippi Municipals Fund
EV Classic National Municipals Fund EV Marathon Missouri Municipals Fund
EV Classic New York Limited Maturity EV Marathon National Limited Maturity
Municipals Fund Municipals Fund
EV Classic Pennsylvania Limited Maturity EV Marathon National Municipals Fund
Municipals Fund EV Marathon New Jersey Limited Maturity
EV Classic Senior Floating-Rate Fund Municipals Fund
EV Classic Strategic Income Fund EV Marathon New Jersey Municipals Fund
EV Classic Special Equities Fund EV Marathon New York Limited Maturity
EV Classic Stock Fund Municipals Fund
EV Classic Tax-Managed Growth Fund EV Marathon New York Municipals Fund
EV Classic Total Return Fund EV Marathon North Carolina Municipals Fund
EV Marathon Alabama Municipals Fund EV Marathon Ohio Limited Maturity
EV Marathon Arizona Municipals Fund Municipals Fund
EV Marathon Arkansas Municipals Fund EV Marathon Ohio Municipals Fund
EV Marathon Asian Small Companies Fund EV Marathon Oregon Municipals Fund
EV Marathon California Limited Maturity EV Marathon Pennsylvania Limited Maturity
Municipals Fund Municipals Fund
EV Marathon California Municipals Fund EV Marathon Pennsylvania Municipals Fund
EV Marathon Colorado Municipals Fund EV Marathon Rhode Island Municipals Fund
EV Marathon Connecticut Limited Maturity EV Marathon Strategic Income Fund
Municipals Fund EV Marathon South Carolina Municipals Fund
EV Marathon Connecticut Municipals Fund EV Marathon Special Equities Fund
EV Marathon Emerging Markets Fund EV Marathon Stock Fund
EV Marathon Florida Insured Municipals Fund EV Marathon Tax-Managed Growth Fund
EV Marathon Florida Limited Maturity EV Marathon Tennessee Municipals Fund
Municipals Fund EV Marathon Texas Municipals Fund
EV Marathon Florida Municipals Fund EV Marathon Total Return Fund
EV Marathon Georgia Municipals Fund EV Marathon Virginia Municipals Fund
EV Marathon Gold & Natural Resources Fund EV Marathon West Virginia Municipals Fund
EV Marathon Government Obligations Fund EV Marathon Worldwide Health Sciences Fund
EV Marathon Greater China Growth Fund EV Traditional Alabama Municipals Fund
EV Marathon Greater India Fund EV Traditional Arizona Municipals Fund
EV Marathon Growth Fund EV Traditional Arkansas Municipals Fund
EV Marathon Hawaii Municipals Fund EV Traditional Asian Small Companies Fund
EV Marathon High Income Fund EV Traditional California Limited Maturity
EV Marathon High Yield Municipals Fund Municipals Fund
EV Marathon Information Age Fund EV Traditional California Municipals Fund
EV Marathon Investors Fund EV Traditional Colorado Municipals Fund
<PAGE>
EV Traditional Connecticut Limited Maturity EV Traditional National Municipals Fund
Municipals Fund EV Traditional New Jersey Limited Maturity
EV Traditional Connecticut Municipals Fund Municipals Fund
EV Traditional Emerging Growth Fund EV Traditional New Jersey Municipals Fund
EV Traditional Emerging Markets Fund EV Traditional New York Limited Maturity
EV Traditional Florida Insured Municipals Fund Municipals Fund
EV Traditional Florida Limited Maturity EV Traditional New York Municipals Fund
Municipals Fund EV Traditional North Carolina Municipals Fund
EV Traditional Florida Municipals Fund EV Traditional Ohio Limited Maturity
EV Traditional Georgia Municipals Fund Municipals Fund
EV Traditional Government Obligations Fund EV Traditional Ohio Municipals Fund
EV Traditional Greater China Growth Fund EV Traditional Oregon Municipals Fund
EV Traditional Greater India Fund EV Traditional Pennsylvania Municipals Fund
EV Traditional Growth Fund EV Traditional Rhode Island Municipals Fund
EV Traditional Hawaii Municipals Fund EV Traditional South Carolina Municipals Fund
EV Traditional High Yield Municipals Fund EV Traditional Special Equities Fund
Eaton Vance Income Fund of Boston EV Traditional Stock Fund
EV Traditional Information Age Fund EV Traditional Tax-Managed Growth Fund
EV Traditional Investors Fund EV Traditional Tennessee Municipals Fund
EV Traditional Kansas Municipals Fund EV Traditional Texas Municipals Fund
EV Traditional Kentucky Municipals Fund EV Traditional Total Return Fund
EV Traditional Louisiana Municipals Fund EV Traditional Virginia Municipals Fund
EV Traditional Maryland Municipals Fund EV Traditional West Virginia Municipals Fund
EV Traditional Massachusetts Municipals Fund EV Traditional Worldwide Health
EV Traditional Michigan Limited Maturity Sciences Fund, Inc.
Municipals Fund Eaton Vance Cash Management Fund
EV Traditional Michigan Municipals Fund Eaton Vance Liquid Assets Trust
EV Traditional Minnesota Municipals Fund Eaton Vance Money Market Fund
EV Traditional Mississippi Municipals Fund Eaton Vance Prime Rate Reserves
EV Traditional Missouri Municipals Fund Eaton Vance Short-Term Treasury Fund
Eaton Vance Municipal Bond Fund L.P. Eaton Vance Tax Free Reserves
EV Traditional National Limited Maturity Massachusetts Municipal Bond Portfolio
Municipals Fund
</TABLE>
<TABLE>
<CAPTION>
(b)
(1) (2) (3)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICE
BUSINESS ADDRESS* WITH PRINCIPAL UNDERWRITER WITH REGISTRANT
----------------- -------------------------- ---------------
<S> <C> <C>
James B. Hawkes Vice President and Director President, Principal
Executive Officer and
Trustee
William M. Steul Vice President and Director None
Wharton P. Whitaker President and Director None
David B. Carle Vice President None
James S. Comforti Vice President None
Raymond Cox Vice President None
Mark P. Doman Vice President None
Alan R. Dynner Vice President None
James Foley Vice President None
Michael A. Foster Vice President None
William M. Gillen Senior Vice President None
Hugh S. Gilmartin Vice President None
Perry D. Hooker Vice President None
Thomas P. Luka Vice President None
John Macejka Vice President None
Joseph T. McMenamin Vice President None
Morgan C. Mohrman Senior Vice President None
James A. Naughton Vice President None
Mark D. Nelson Vice President None
Linda D. Newkirk Vice President None
James L. O'Connor Vice President Treasurer
Thomas Otis Secretary and Clerk Secretary
George D. Owen II Vice President None
F. Anthony Robinson Vice President None
Jay S. Rosoff Vice President None
Benjamin A. Rowland, Jr. Vice President, None
Treasurer and Director
John P. Rynne Vice President None
Kevin Schrader Vice President None
George V.F. Schwab, Jr. Vice President None
Cornelius J. Sullivan Vice President None
David M. Thill Vice President None
Chris Volf Vice President None
Sue Wilder Vice President None
</TABLE>
- ----------
*Address is 24 Federal Street, Boston, MA 02110
(c) Not applicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 89 South Street, Boston,
MA 02111 and its transfer agent, First Data Investor Services Group, 4400
Computer Drive, Westborough, MA 01581-5120, with exception of certain corporate
documents and portfolio trading documents which are in the possession and
custody of the Registrant's investment adviser, Eaton Vance Management, 24
Federal Street, Boston, MA 02110. Registrant is informed that all applicable
accounts, books and documents required to be maintained by registered investment
advisers are in the custody and possession of Registrant's investment adviser,
Eaton Vance Management.
ITEM 31. MANAGEMENT SERVICES
Not applicable
ITEM 32. UNDERTAKINGS
The Registrant undertakes to furnish to each person to whom a prospectus is
delivered a copy of the latest annual report to shareholders, upon request and
without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Boston, and
Commonwealth of Massachusetts, on the 23rd day of January, 1997.
EATON VANCE INCOME FUND OF BOSTON
By /s/M. DOZIER GARDNER
----------------------------------
M. DOZIER GARDNER, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
President, Principal
Executive Officer and
/s/M. DOZIER GARDNER Trustee January 23, 1997
- ---------------------------
M. DOZIER GARDNER
Treasurer and Principal
Financial and Accounting
/s/JAMES L. O'CONNOR Officer January 23, 1997
- ---------------------------
JAMES L. O'CONNOR
DONALD R. DWIGHT* Trustee January 23, 1997
- ---------------------------
DONALD R. DWIGHT
ROBERT GLUCK* Trustee January 23, 1997
- ---------------------------
ROBERT GLUCK
SAMUEL L. HAYES, III* Trustee January 23, 1997
- ---------------------------
SAMUEL L. HAYES, III
KENNETH C. KNIGHT* Trustee January 23, 1997
- ---------------------------
KENNETH C. KNIGHT
NORTON H. REAMER* Trustee January 23, 1997
- ---------------------------
NORTON H. REAMER
JOHN L. THORNDIKE* Trustee January 23, 1997
- ---------------------------
JOHN L. THORNDIKE
*By: /s/ M. DOZIER GARDNER
- ----------------------------
M. DOZIER GARDNER
As attorney-in-fact
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this amendment to the
Registration Statement pursuant to General Instructions E of Form N-1A.
PAGE IN
SEQUENTIAL
NUMBERING
EXHIBIT NO. DESCRIPTION SYSTEM
- ----------- ----------- ------
(1) Declaration of Trust dated December 14, 1995
(6)(a) Distribution Agreement dated November 1, 1996
(11) Consent of Independent Accountants
(15)(b) Amendment to Service Plan dated November 1, 1996
(16) Schedule for Computation of Performance Quotations
<PAGE>
Exhibit 99.1
AMENDED AND RESTATED DECLARATION OF TRUST
OF
EATON VANCE INCOME FUND OF BOSTON
DATED: DECEMBER 14, 1995
AMENDED AND RESTATED DECLARATION OF TRUST, made December 14, 1995 by
the undersigned Trustees being a majority of the Trustees in office on such
date, Donald R. Dwight, M. Dozier Gardner, Robert Gluck, Samuel L. Hayes III,
Kenneth C. Knight, Jerome Preston, Jr., Norton H. Reamer and John L. Thorndike,
hereinafter referred to collectively as the "Trustees" and individually as a
"Trustee", which terms shall include any successor Trustees or Trustee and any
present Trustees who are not signatories to this instrument.
WHEREAS, on March 27, 1989, the initial Trustees established a trust
under a Declaration of Trust as heretofore amended and restated for the
investment and reinvestment of funds contributed thereto; and
WHEREAS, a majority of the Trustees desire to amend and restate said
Declaration of Trust pursuant to the provisions thereof;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed under
this Declaration of Trust as so amended and restated for the benefit of the
holders, from time to time, of the shares of beneficial interest issued
hereunder and subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is Eaton Vance Income
Fund of Boston (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following terms
have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to a
contract described in Section 3.3 hereof.
(b) "By-Laws" means the By-Laws referred to in Section 2.5 hereof, as
from time to time amended.
(c) "Class" means any division or Class of Shares within a Series or
Fund, which Class is or has been established within such Series or Fund in
accordance with the provisions of Article V.
(d) The term "Commission" has the meaning given it in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time
to time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(g) "Fund" or "Funds," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities
belonging and allocated thereto.
(h) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(i) The term "Interested Person" has the meaning specified in the 1940
Act subject, however, to such exceptions and exemptions as my be granted by the
Commission in any rule, regulation or order.
(j) "Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(k) The "1940 Act" means the Investment Company Act of 1940 and the
Rules and Regulations thereunder, as amended from time to time.
(l) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, firms, joint ventures and other entities,
whether or not legal entities, as well as governments instrumentalities, and
agencies and political subdivisions thereof, and quasi-governmental agencies and
instrumentalities.
(m) "Principal Underwriter" means the party, other than the Trust, to a
contract described in Section 3.1 hereof.
(n) "Prospectus" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o) "Series" individually or collectively means the separately managed
component(s) or Fund(s) of the Trust (or, if the Trust shall have only one such
component or Fund, then that one) as may be established and designated from time
to time by the Trustees pursuant to Section 5.5 hereof.
(p) "Shareholder" means a record owner of Outstanding Shares. A
Shareholder of Shares of a Series shall be deemed to own a proportionate
undivided beneficial interest in such Series equal to the number of Shares of
such Series of which he is the record owner divided by the total number of
Outstanding Shares of such Series. A Shareholder of Shares of a Class within a
Series shall be deemed to own a proportionate undivided beneficial interest in
such Class equal to the number of Shares of such Class of which he is the record
owner divided by the total number of Outstanding Shares of such Class. As used
herein the term "Shareholder" shall, when applicable to one or more Series of
Funds or to one or more Classes thereof, refer to the record owners of
Outstanding Shares of such Series, Fund or Funds or of such Class or Classes of
Shares.
(q) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series or of any Class within any Series (as
the context may require) which may be established by the Trustees, and includes
fractions of Shares as well as whole Shares. "Outstanding Shares" means those
Shares shown from time to time on the books of the Trust or its Transfer Agent
as then issued and outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the time held in the
treasury of the Trust.
(r) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(s) "Trust" means Eaton Vance Income Fund of Boston. As used herein the
term Trust shall, when applicable to one or more Series or Funds, refer to such
Series or Funds.
(t) The "Trustees" means the persons who have signed this Declaration,
so long as they shall continue in office in accordance with the terms hereof,
and all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees including any and all assets of or allocated to any Series
or Class, as the context may require.
(v) Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Series or Class of Shares, the term "vote" when
used in connection with an action of Shareholders shall include a vote taken at
a meeting of Shareholders or the consent or consents of Shareholders taken
without such a meeting. Except as such term may be otherwise defined by the
Trustees in connection with any meeting or other action of Shareholders or in
conjunction with the establishment of any Series or Class of Shares, the term
"vote of a majority of the outstanding voting securities" as used in Section 8.2
and 8.4 shall have the same meaning as is assigned to that term in the 1940 Act.
ARTICLE II
TRUSTEES
Section 2.1. Management of the Trust. The business and affairs of the
Trust shall be managed by the Trustees and they shall have all powers and
authority necessary, appropriate or desirable to perform that function. The
number, term of office, manner of election, resignation, filling of vacancies
and procedures with respect to meetings and actions of the Trustees shall be as
prescribed in the By-Laws of the Trust.
Section 2.2. General Powers. The Trustees in all instances shall act as
principals for and on behalf of the Trust and the applicable Series thereof, and
their acts shall bind the Trust and the applicable Series. The Trustees shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments that they may consider necessary, appropriate
or desirable in connection with the management of the Trust. The Trustees shall
not be bound or limited in any way by present or future laws, practices or
customs in regard to trust investments or to other investments which may be made
by fiduciaries, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
promote, implement or accomplish the various objectives and interests of the
Trust and of its Series of Shares. The Trustees shall have full power and
authority to adopt such accounting and tax accounting practices as they consider
appropriate for the Trust and for any Series or Class of Shares. The Trustees
shall have exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners
of the Trust Property and business in their own right, and with such full powers
of delegation as the Trustees may exercise from time to time. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without the
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies of instrumentalities
of the United States of America and of foreign governments, and to do all such
other things as they deem necessary, appropriate or desirable in order to
promote or implement the interests of the Trust or of any Series or Class of
Shares although such things are not herein specifically mentioned. Any
determination as to what is in the interest of the Trust or of any Series or
Class of Shares made by the Trustees in good faith shall be conclusive and
binding upon all Shareholders. In construing the provisions of this Declaration,
the presumption shall be in favor of a grant of plenary power and authority to
the Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
Section 2.3. Investments. The Trustees shall have full power and
authority:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities including, but not limited to, stocks, profit-sharing
interests or participations and all other contracts for or evidences of equity
interests, bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, bills, notes and all other contracts for or
evidences of indebtedness, money market instruments including bank certificates
of deposit, finance paper, commercial paper, bankers' acceptances and other
obligations, and all other negotiable and non-negotiable securities and
instruments, however named or described, issued by corporations, trusts,
associations or any other Persons, domestic or foreign, or issued or guaranteed
by the United States of America or any agency or instrumentality thereof, by the
government of any foreign country, by any State, territory or possession of the
United States, by any political subdivision or agency or instrumentality of any
State or foreign country, or by any other government or other governmental or
quasi-governmental agency or instrumentality, domestic or foreign; to acquire
and dispose of interest in domestic or foreign loans made by banks and other
financial institutions; to deposit any assets of the Trust in any bank, trust
company or banking institution or retain any such assets in domestic or foreign
cash or currency; to purchase and sell gold and silver bullion, precious or
strategic metals, coins and currency of all countries; to engage in "when
issued" and delayed delivery transactions; to enter into repurchase agreements,
reverse repurchase agreements and firm commitment agreements; to employ all
types and kinds of hedging techniques and investment management strategies; and
to change the investments of the Trust and of each Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any Trust Property or any of
the foregoing securities, instruments or investments; to purchase and sell (or
write) options on securities, currency, precious metals and other commodities,
indices, futures contracts and other financial instruments and assets and enter
into closing and other transactions in connection therewith; to enter into all
types of commodities contracts, including without limitation the purchase and
sale of futures contracts on securities, currency, precious metals and other
commodities, indices and other financial instruments and assets; to enter into
forward foreign currency exchange contracts and other foreign exchange and
currency transactions of all types and kinds; to enter into interest rate,
currency and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in the Trust Property,
including without limitation the right to vote thereon and otherwise act with
respect thereto; and to do all acts and things for the preservation, protection,
improvement and enhancement in value of all such securities and assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or kind
of property, real or personal, including domestic or foreign currency, and any
right or interest therein.
(f) To borrow money and in this connection issue notes, commercial
paper or other evidence of indebtedness; to secure borrowings by mortgaging,
pledging or otherwise subjecting as security all or any part of the Trust
Property; to endorse, guarantee, or undertake the performance of any obligation
or engagement of any other Person; and to lend all or any part of the Trust
Property to other Persons.
(g) To aid, support or assist by further investment or other action any
Person, any obligation of or interest in which is included in the Trust Property
or in the affairs of which the Trust or any Series has any direct or indirect
interest; to do all acts and things designed to protect, preserve, improve or
enhance the value of such obligation or interest; and to guarantee or become
surety on any or all of the contracts, securities and other obligations of any
such Person.
(h) To carry on any other business in connection with or incidental to
any of the foregoing powers referred to in this Declaration, to do everything
necessary, appropriate or desirable for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power referred to in this
Declaration, either alone or in association with others, and to do every other
act or thing incidental or appurtenant to or arising out of or connected with
such business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have
full power in their discretion, without any requirement of approval by
Shareholders, to invest part or all of the Trust Property (or part or all of the
assets of any Fund), or to dispose of part or all of the Trust Property (or part
or all of the assets of any Fund) and invest the proceeds of such disposition,
in securities issued by one or more other investment companies registered under
the 1940 Act. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.
Section 2.4. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust or any Series, or in
the name of a custodian, subcustodian, agent, securities depository, clearing
agency, system for the central handling of securities or other book-entry
system, or in the name of a nominee or nominees of the Trust or a Series, or in
the name of a nominee or nominees of a custodian, subcustodian, agent,
securities depository, clearing agent, system for the central handling of
securities or other book-entry system, or in the name of any other Person as
nominee. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee. Upon
the termination of the term of office, resignation, removal or death of a
Trustee he shall automatically cease to have any right, title or interest in any
of the Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees.
Section 2.5. By-Laws. The Trustees shall have full power and authority
to adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and to amend and repeal such By-Laws. Unless the By-Laws specifically
require that Shareholders authorize or approve the amendment or repeal of a
particular provision of the By-Laws, any provision of the By-Laws may be amended
or repealed by the Trustees without Shareholder authorization or approval.
Section 2.6. Distribution and Repurchase of Shares. The Trustees shall
have full power and authority to issue, sell, repurchase, redeem, retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in Shares. Shares may be sold for cash or property or other consideration
whenever and in such amounts and manner as the Trustees deem desirable. The
Trustees shall have full power to provide for the distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both. The
Trustees shall have full power and authority to cause the Trust and any Series
and Class of Shares to finance distribution activities in the manner described
in Section 3.7, and to authorize the Trust, on behalf of one or more Series or
Classes of Shares, to adopt or enter into one or more plans or arrangements
whereby multiple Series and Classes of Shares may be issued and sold to various
types of investors.
Section 2.7. Delegation. The Trustees shall have full power and
authority to delegate from time to time to such of their number or to officers,
employees or agents of the Trust or to other Persons the doing of such things
and the execution of such agreements or other instruments either in the name of
the Trust or any Series of the Trust or the names of the Trustees or otherwise
as the Trustees may deem desirable or expedient.
Section 2.8. Collection and Payment. The Trustees shall have full power
and authority to collect all property due to the Trust; to pay all claims,
including taxes, against the Trust or Trust Property; to prosecute, defend,
compromise, settle or abandon any claims relating to the Trust or Trust
Property; to foreclose any security interest securing any obligations, by virtue
of which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.
Section 2.9. Expenses. The Trustees shall have full power and authority
to incur on behalf of the Trust or any Series or Class of Shares and pay any
costs or expenses which the Trustees deem necessary, appropriate, desirable or
incidental to carry out, implement or enhance the business or operations of the
Trust or any Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Series or Class of Shares, and to credit all or any part of the profit, income
or receipt (including without limitation any deferred sales charge or fee,
whether contingent or otherwise, paid or payable to the Trust or any Series or
Class of Shares on any redemption or repurchase of Shares) to the principal or
capital of the Trust or any Series or Class of Shares.
Section 2.10. Manner of Acting. Except as otherwise provided herein or
in the By-Laws, the Trustees and committees of the Trustees shall have full
power and authority to act in any manner which they deem necessary, appropriate
or desirable to carry out, implement or enhance the business or operations of
the Trust or any Series thereof.
Section 2.11. Miscellaneous Powers. The Trustees shall have full power
and authority to: (a) distribute to Shareholders all or any part of the earnings
or profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Series or Class of Shares, the amount
of such distributions and the manner of payment thereof to be solely at the
discretion of the Trustees; (b) employ, engage or contract with such Persons as
the Trustees may deem desirable for the transaction of the business or
operations of the Trust or any Series thereof; (c) enter into or cause the Trust
or any Series thereof to enter into joint ventures, partnerships (whether as
general partner, limited partner or otherwise) and any other combinations or
associations; (d) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such agents or
employees or other Persons as they consider appropriate, and appoint from their
own number, and terminate, any one or more committees which may exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
(e) purchase, and pay for out of Trust Property, insurance policies which may
insure such of the Shareholders, Trustees, officers, employees, agents,
investment advisers, administrators, principal underwriters, distributors or
independent contractors of the Trust as the Trustees deem appropriate against
loss or liability arising by reason of holding any such position or by reason of
any action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such loss or liability; (f) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (g)
indemnify or reimburse any Person with whom the Trust or any Series thereof has
dealings, including without limitation the Investment Adviser, Administrator,
Principal Underwriter, Transfer Agent and financial service firms, to such
extent as the Trustees shall determine; (h) guarantee the indebtedness or
contractual obligations of other Persons; (i) determine and change the fiscal
year of the Trust or any Series thereof and the methods by which its and their
books, accounts and records shall be kept; and (j) adopt a seal for the Trust,
but the absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust or any Series thereof.
Section 2.12. Litigation. The Trustees shall have full power and
authority, in the name and on behalf of the Trust, to engage in and to
prosecute, defend, compromise, settle, abandon, or adjust by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims and demands
relating to the Trust, and out of the assets of the Trust or any Series thereof
to pay or to satisfy any liabilities, losses, debts, claims or expenses
(including without limitation attorneys' fees) incurred in connection therewith,
including those of litigation, and such power shall include without limitation
the power of the Trustees or any committee thereof, in the exercise of their or
its good faith business judgment, to dismiss or terminate any action, suit,
proceeding, dispute, claim or demand, derivative or otherwise, brought by any
Person, including a Shareholder in his own name or in the name of the Trust or
any Series thereof, whether or not the Trust or any Series thereof or any of the
Trustees may be named individually therein or the subject matter arises by
reason of business for or on behalf of the Trust or any Series thereof.
ARTICLE III
CONTRACTS
Section 3.1. Principal Underwriter. The Trustees may in their
discretion from time to time authorize the Trust to enter into one or more
contracts providing for the sale of the Shares. Pursuant to any such contract
the Trust may either agree to sell the Shares to the other party to the contract
or appoint such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may in their
discretion determine; and any such contract may also provide for the repurchase
or sale of Shares by such other party as principal or as agent of the Trust.
Section 3.2. Investment Adviser. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more investment
advisory agreements, or, if the Trustees establish multiple Series, separate
investment advisory agreements, with respect to one or more Series whereby the
other party or parties to any such agreements shall undertake to furnish the
Trust or such Series investment advisory and research facilities and services
and such other facilities and services, if any, as the Trustees shall consider
desirable and all upon such terms and conditions as the Trustees may in their
discretion determine. Notwithstanding any provisions of this Declaration, the
Trustees may authorize the Investment Adviser, in its discretion and without any
prior consultation with the Trust, to buy, sell, lend and otherwise trade and
deal in any and all securities, commodity contracts and other investments and
assets of the Trust and of each Series and to engage in and employ all types of
transactions and strategies in connection therewith. Any such action taken
pursuant to such agreement shall be deemed to have been authorized by all of the
Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
Section 3.3. Administrator. The Trustees may in their discretion from
time to time authorize the Trust to enter into an administration agreement or,
if the Trustees establish multiple Series or Classes, separate administration
agreements with respect to one or more Series or Classes, whereby the other
party to such agreement shall undertake to furnish to the Trust or a Series or a
Class thereof with such administrative facilities and services and such other
facilities and services, if any, as the Trustees consider desirable and all upon
such terms and conditions as the Trustees may in their discretion determine.
Section 3.4. Other Service Providers. The Trustees may in their
discretion from time to time authorize the Trust to enter into one or more
agreements with respect to one or more Series or Classes of Shares whereby the
other party or parties to any such agreements will undertake to provide to the
Trust or Series or Class or Shareholders or beneficial owners of Shares such
services as the Trustees consider desirable and all upon such terms and
conditions as the Trustees in their discretion may determine.
Section 3.5. Transfer Agents. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Series
thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
Section 3.6. Custodian. The Trustees may appoint a bank or trust
company having an aggregate capital, surplus and undivided profits (as shown in
its last published report) of at least $2,000,000 as the principal custodian of
the Trust (the "Custodian") with authority as its agent to hold cash and
securities owned by the Trust and to release and deliver the same upon such
terms and conditions as may be agreed upon between the Trust and the Custodian.
Section 3.7. Plans of Distribution. The Trustees may in their
discretion authorize the Trust, on behalf of one or more Series or Classes of
Shares, to adopt or enter into a plan or plans of distribution and any related
agreements whereby the Trust or Series or Class may finance directly or
indirectly any activity which is primarily intended to result in sales of Shares
or any distribution activity within the meaning of Rule 12b-1 (or successor
rule) under the 1940 Act. Such plan or plans of distribution and any related
agreements may contain such terms and conditions as the Trustees may in their
discretion determine, subject to the requirements of the 1940 Act and any other
applicable rules and regulations.
Section 3.8. Affiliations. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of or has
any interest in any Person or any parent or affiliate of any such Person, with
which a contract or agreement of the character described in Sections 3.1, 3.2,
3.3, 3.4, 3.5 or 3.6 above has been or will be made or to which payments have
been or will be made pursuant to a plan or related agreement described in
Section 3.7 above, or that any such Person, or any parent or affiliate thereof,
is a Shareholder of or has an interest in the Trust, or that
(ii) any such Person also has similar contracts, agreements or plans
with other investment companies (including, without limitation, the investment
companies referred to in the last paragraph of Section 2.3) or organizations, or
has other business activities or interests, shall not affect in any way the
validity of any such contract, agreement or plan or disqualify any Shareholder,
Trustee or officer of the Trust from authorizing, voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Officers
and Employees. No Shareholder shall be subject to any personal liability
whatsoever to any Person in connection with Trust Property or the acts,
obligations or affairs of the Trust or any Series thereof. All Persons dealing
or contracting with the Trustees as such or with the Trust or any Series thereof
shall have recourse only to the Trust or such Series for the payment of their
claims or for the payment or satisfaction of claims, obligations or liabilities
arising out of such dealings or contracts. No Trustee, officer or employee of
the Trust, whether past, present or future, shall be subject to any personal
liability whatsoever to any such Person, and all such Persons shall look solely
to the Trust Property, or the assets of one or more specific Series of the Trust
if the claim arises from the act, omission or other conduct of such Trustee,
officer or employee with respect to only such Series, for satisfaction of claims
of any nature arising in connection with the affairs of the Trust or such
Series. If any Shareholder, Trustee, officer or employee, as such, of the Trust
or any Series thereof, is made a party to any suit or proceeding to enforce any
such liability of the Trust or any Series thereof, he shall not, on account
thereof, be held to any personal liability.
Section 4.2. Trustee's Good Faith Action; Advice of Others; No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, investment adviser or other adviser, administrator,
distributor or principal underwriter, custodian or transfer, dividend
disbursing, shareholder servicing or accounting agent of the Trust, nor shall
any Trustee be responsible for the act or omission of any other Trustee. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration and their duties as Trustees, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. In discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the records, books and
accounts of the Trust and upon reports made to the Trustees by any officer,
employee, agent, consultant, accountant, attorney, investment adviser or other
adviser, principal underwriter, expert, professional firm or independent
contractor. The Trustees as such shall not be required to give any bond or
surety or any other security for the performance of their duties. No provision
of this Declaration shall protect any Trustee or officer of the Trust against
any liability to the Trust or its Shareholders to which he would otherwise be
subject by reason of his own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Indemnification. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Series thereof of the Shareholders, Trustees, officers and
employees of the Trust and of such other Persons as the Trustees in the exercise
of their discretion may deem appropriate or desirable. Any such indemnification
may be mandatory or permissive, and may be insured against by policies
maintained by the Trust.
Section 4.4. No Duty of Investigation. No purchaser, lender or other
Person dealing with the Trustees or any officer, employee or agent of the Trust
or a Series thereof shall be bound to make any inquiry concerning the validity
of any transaction purporting to be made by the Trustees or by said officer,
employee or agent or be liable for the application of money or property paid,
loaned, or delivered to or on the order of the Trustees or of said officer,
employee or agent. Every obligation, contract, instrument, certificate, Share,
other security of the Trust or a Series thereof or undertaking, and every other
act or thing whatsoever executed in connection with the Trust shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust or a Series thereof. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or a Series thereof or undertaking made or issued by the Trustees may
recite that the same is executed or made by them not individually, but as
Trustees under the Declaration, and that the obligations of the Trust or a
Series thereof under any such instrument are not binding upon any of the
Trustees or Shareholders individually, but bind only the Trust Property or the
Trust Property of the applicable Series, and may contain any further recital
which they may deem appropriate, but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.
Section 4.5. Reliance on Records and Experts. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the records,
books and accounts of the Trust or a Series thereof, upon an opinion or other
advice of legal counsel, or upon reports made or advice given to the Trust or a
Series thereof by any Trustee or any of its officers employees or by the
Investment Adviser, the Administrator, the Custodian, the Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited, and the number of Shares of each Series or Class thereof
that may be issued hereunder is unlimited. The Trustees shall have the exclusive
authority without the requirement of Shareholder authorization or approval to
establish and designate one or more Series of Shares and one or more Classes
thereof as the Trustees deem necessary, appropriate or desirable. Each Share of
any series shall represent a beneficial interest only in the assets of that
Series. Subject to the provisions of Section 5.5 hereof, the Trustees may also
authorize the creation of additional Series of Shares (the proceeds of which may
be invested in separate and independent investment portfolios) and additional
Classes of Shares within any Series. All Series issued hereunder including,
without limitation, Shares issued in connection with a dividend or distribution
in Shares or a split in Shares, shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust
Property of every description and the right to conduct any business of the Trust
are vested exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by their Shares,
and they shall have no right to call for any partition or division of any
property, profits, rights or interests of the Trust or of any Fund nor can they
be called upon to share or assume any losses of the Trust or of any Fund or
suffer an assessment of any kind by virtue of their ownership of Shares. The
Shares shall be personal property giving only the rights specifically set forth
in this Declaration. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Series of Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a
Massachusetts business trust. Nothing in this Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time and without any authorization or vote of the Shareholders,
issue Shares, in addition to the then issued and outstanding Shares and Shares
held in the treasury, to such party or parties and for such amount and type of
consideration, including cash or property, a such time or times and on such
terms as the Trustees may deem appropriate or desirable, except that only Shares
previously contracted to be sold may be issued during any period when the right
of redemption is suspended pursuant to Section 6.9 hereof, and may in such
manner acquire other assets (including the acquisition of assets subject to, and
in connection with the assumption of, liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue fractional Shares and
reissue and resell full and fractional Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares of the Trust or, if the
Shares be divided into Series or Classes, of any Series or any Class thereof of
the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or fractional Shares as the Trustees may in their discretion
determine. The Trustees may authorize the issuance of certificates of beneficial
interest to evidence the ownership of Shares. Shares held in the treasury shall
not be voted nor shall such Shares be entitled to any dividends or other
distributions declared with respect thereto.
Section 5.5. Series and Class Designations. Without limiting the
exclusive authority of the Trustees set forth in Section 5.1 to establish and
designate any further Series, it is hereby confirmed that the Trust consists of
no outstanding Series and no distinct classes of Shares of any Series. The
Shares of any Series and Classes thereof that may from time to time be
established and designated by the Trustees shall be established and designated,
and the variations in the relative rights and preferences as between the
different Series and Classes shall be fixed and determined, by the Trustees
(unless the Trustees otherwise determine with respect to Series or Classes at
the time of establishing and designating the same); provided, that all Shares
shall be identical except that there may be variations so fixed and determined
between different Series or Classes thereof as to investment objective, policies
and restrictions, sales charges, purchase prices, determination of net asset
value, assets, liabilities, expenses, costs, charges and reserves belonging or
allocated thereto, the price, terms and manner of redemption or repurchase,
special and relative rights as to dividends and distributions and on
liquidation, conversion rights, exchange rights, and voting rights. All
references to Shares in this Declaration shall be deemed to be Shares of any or
all Series or Classes as the context may require. As to any division of Shares
of the Trust into Series or Classes, the following provisions shall be
applicable:
(i) The number of authorized Shares and the number of Shares of each
Series or Class thereof that may be issued shall be unlimited. The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more other Series or one or more
other Classes that may be established and designated from time to time. The
Trustees may hold as treasury shares (of the same or some other Series or
Class), reissue for such consideration and on such terms as they may determine,
or cancel any Shares of any Series or Class reacquired by the Trust at their
discretion from time to time.
(ii) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable tax laws, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series, the Trustees or their delegate shall
allocate them among any one or more of the Series established and designated
from time to time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. Each such allocation by the Trustees or
their delegate shall be conclusive and binding upon the Shareholders of all
Series for all purposes. No holder of Shares of any Series shall have any claim
on or right to any assets allocated or belonging to any other Series.
(iii) Any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees or their delegate to and
among any one or more of the Series established and designated from time to time
in such manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. The assets belonging to each particular Series shall be
charged with the liabilities, expenses, costs, charges and reserves of the Trust
so allocated to that Series and all liabilities, expenses, costs, charges and
reserves attributable to that Series which are not readily identifiable as
belonging to any particular Class thereof. Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees or their delegate shall be
conclusive and binding upon the Shareholders of all Series and Classes for all
purposes. The Trustees shall have full discretion to determine which items are
capital; and each such determination shall be conclusive and binding upon the
Shareholders. The assets of a particular Series of the Trust shall, under no
circumstances, be charged with liabilities, expenses, costs, charges and
reserves attributable to any other Series or Class thereof of the Trust. All
Persons extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that particular
series for payment of such credit, contract or claim.
(iv) Dividends and distributions of Shares of a particular Series or
Class may be paid or credited in such manner and with such frequency as the
Trustees may determine, to the holders of Shares of that Series or Class, from
such of the earnings or profits, surplus (including paid-in surplus), capital
(including paid-in capital) or assets belonging to that Series, as the Trustees
may deem appropriate or desirable, after providing for actual and accrued
liabilities, expenses, costs, charges and reserves belonging and allocated to
that Series or Class. Such dividends and distributions may be paid daily or
otherwise pursuant to the offering prospectus relating to the Shares or pursuant
to a standing vote or votes of the Trustees adopted only once or from time to
time or pursuant to other authorization or instruction of the Trustees. All
dividends and distributions on Shares of a particular Series or Class shall be
distributed pro rata to the Shareholders of that Series or Class in proportion
to the number of Shares of that Series or Class held by such Shareholders at the
time of record established for the payment or crediting of such dividends or
distributions.
(v) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
Class thereof shall be entitled to receive his pro rata share of distributions
of income and capital gains made with respect to such Series or Class net of
liabilities, expenses, costs, charges and reserves belonging and allocated to
such Series or Class. Upon redemption of his Shares or indemnification for
liabilities incurred by reason of his being or having been a Shareholder of a
Series or Class, such Shareholder shall be paid solely out of the funds and
property of such Series of the Trust. Upon liquidation or termination of a
Series or Class thereof of the Trust, a Shareholder of such Series or Class
thereof shall be entitled to receive a pro rata share of the net assets of such
Series based on the net asset value of his Shares. A Shareholder of a particular
Series of the Trust shall not be entitled to commence or participate in a
derivative or class action on behalf of any other Series or the Shareholders of
any other Series of the Trust.
(vi) On any matter submitted to a vote of Shareholders, the Shares
entitled to vote thereon and the manner in which such Shares shall be voted
shall be as set forth in the By-Laws or proxy materials for the meeting or other
solicitation materials or as otherwise determined by the Trustees, subject to
any applicable requirements of the 1940 Act. The Trustees shall have full power
and authority to call meetings of the Shareholders of a particular Class or
Classes of Shares or of one or more particular Series of Shares, or otherwise
call for the action of such Shareholders on any particular matter.
(vii) Except as otherwise provided in this Article V, the Trustees
shall have full power and authority to determine the designations, preferences,
privileges, sales charges, purchase prices, assets, liabilities, expenses,
costs, charges and reserves belonging or allocated thereto, limitations and
rights, including without limitation voting, dividend, distribution and
liquidation rights, of each Class and Series of Shares. Subject to any
applicable requirements of the 1940 Act, the Trustees shall have the authority
to provide that Shares of one Class shall be automatically converted into Shares
of another Class of the same Series or that the holders of Shares of any Series
or Class shall have the right to convert or exchange such Shares into Shares of
one or more other Series or Classes of Shares, all in accordance with such
requirements, conditions and procedures as may be established by the Trustees.
(viii) The establishment and designation of any Series or Class of
Shares shall be effective upon the execution by a majority of the then Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such Series or Class, or as otherwise
provided in such instrument. The Trustees may by an instrument subsequently
executed by a majority of their number amend, restate or rescind any prior
instrument relating to the establishment and designation of any such Series or
Class. Each instrument referred to in this paragraph shall have the status of an
amendment to this Declaration in accordance with Section 8.4 hereof, and a copy
of such instrument shall be filed in accordance with Section 10.2 hereof.
Section 5.6. Assent to Declaration of Trust and By-Laws. Every
Shareholder, by virtue of having become a Shareholder, shall be held to have
expressly assented and agreed to all the terms and provisions of this
Declaration and of the By-Laws of the Trust.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) Shares of the Trust shall be
redeemable, at such times and in such manner as may be permitted by the Trustees
from time to time. The Trustees shall have full power and authority to vary and
change the right of redemption applicable to the various Series and Classes of
Shares established by the Trustees. Redeemed or repurchased Shares may be resold
by the Trust. The Trust may require any Shareholder to pay a sales charge to the
Trust, the Principal Underwriter or any other Person designated by the Trustees
upon redemption or repurchase of Shares in such amount and upon such conditions
as shall be determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or
Class thereof at the price determined as hereinafter set forth, upon the
appropriately verified written application of the record holder thereof (or upon
such other form of request as the Trust may use for the purpose) deposited at
such office or agency as may be designated from time to time for that purpose by
the Trustees. The Trust may from time to time establish additional requirements,
terms, conditions and procedures, not inconsistent with the 1940 Act, relating
to the redemption of Shares.
Section 6.2. Price. Shares shall be redeemed at a price based on their
net asset value determined as set forth in Section 7.1 hereof as of such time as
the Trustees shall prescribe. The amount of any sales charge or redemption fee
payable upon redemption of Shares may be deducted from the proceeds of such
redemption.
Section 6.3. Payment. Payment of the redemption price of Shares thereof
shall be made in cash or in property to the Shareholder at such time and in the
manner, not inconsistent with the 1940 Act, as may be specified from time to
time in the then effective prospectus relating to such Shares, subject to the
provisions of Sections 6.4 and 6.9 hereof. Notwithstanding the foregoing, the
Trust or its agent may withhold from such redemption proceeds any amount arising
(i) from a liability of the redeeming Shareholder to the Trust or (ii) in
connection with any federal or state tax withholding requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 7.1 hereof, the Trust shall declare a suspension of the
determination of net asset value with respect to Shares of the Trust or of any
Series or Class thereof, the rights of Shareholders (including those who shall
have applied for redemption pursuant to Section 6.1 hereof but who shall not yet
have received payment) to have Shares redeemed and paid for by the Trust or a
Series shall be suspended until the termination of such suspension is declared.
Any record holder who shall have his redemption right so suspended may, during
the period of such suspension, by appropriate written notice at the office or
agency where his application or request for redemption was made, withdraw his
application or request and withdraw any Share certificates on deposit.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Principal Underwriter or another agent designated for
the purpose, by agreement with the owner thereof at a price not exceeding the
net asset value per share determined as of such time as the Trustees shall
prescribe. The Trust may from time to time establish the requirements, terms,
conditions and procedures relating to such repurchases, and the amount of any
sales charge or repurchase fee payable on any repurchase of Shares may be
deducted from the proceeds of such repurchase.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in
their sole discretion, may cause the Trust to redeem all of the Shares of one or
more Series or Class thereof held by any Shareholder if the value of such Shares
held by such Shareholder is less than the minimum amount established from time
to time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. (a) If the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
Shares or other securities of the Trust has or may become concentrated in any
Person to an extent which would disqualify the Trust or any Series of the Trust
as a regulated investment company under the Internal Revenue Code of 1986, then
the Trustees shall have the power by lot or other means deemed equitable by them
(i) to call for redemption by any such Person a number, or principal amount, of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust or any Series of the
Trust in question would result in such disqualification. The redemption shall be
effected in the manner provided in Section 6.1 and at the redemption price
referred to in Section 6.2.
(b) The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code of 1986, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series or Class thereof pursuant to the provisions of
Section 7.3.
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Fund
of securities owned by it is not reasonably practicable or it is not reasonable
practicable for the Trust or a Fund fairly to determine the value of its net
assets, or (iv) as the Commission may by order permit for the protection of
security holders of the Trust. Such suspension shall take effect at such time as
the Trust shall specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter there shall be
no right of redemption or payment on redemption until the Trust shall declare
the suspension at an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall have reopened or the
period specified in (ii) or (iii) shall have expired (as to which in the absence
of an official ruling by the Commission, the determination of the Trust shall be
conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his application or request for redemption or
receive payment based on the net asset value existing after the termination of
the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust or of each Series or Class thereof shall be determined on
such days and at or as of such time or times as the Trustees may determine. Any
reference in this Declaration to the time at which a determination of net asset
value is made shall mean the time as of which the determination is made. The
power and duty to determine net asset value may be delegated by the Trustees
from time to time to the Investment Adviser, the Administrator, the Custodian,
the Transfer Agent or such other Person or Persons as the Trustees may
determine. The value of the assets of the Trust or any Series thereof shall be
determined in a manner authorized by the Trustees. From the total value of said
assets, there shall be deducted all indebtedness, interest, taxes, payable or
accrued, including estimated taxes on unrealized book profits, expenses and
management charges accrued to the appraisal date, amounts determined and
declared as a dividend or distribution and all other items in the nature of
liabilities which shall be deemed appropriate, as incurred by or allocated to
the Trust or any Series or Class thereof. The resulting amount, which shall
represent the total net assets of the Trust or Series or Class thereof, shall be
divided by the number of Shares of the Trust or Series or Class thereof
outstanding at the time and the quotient so obtained shall be deemed to be the
net asset value of the Shares of the Trust or Series or Class thereof. The Trust
may declare a suspension of the determination of net asset value to the extent
permitted by the 1940 Act. It shall not be a violation of any provision of this
Declaration if Shares are sold, redeemed or repurchased by the Trust at a price
other than one based on net asset value if the net asset value is affected by
one or more errors inadvertently made in the pricing of portfolio securities or
other investments or in accruing or allocating income, expenses, reserves or
liabilities. No provision of this Declaration shall be construed to restrict or
affect the right or ability of the Trust to employ or authorize the use of
pricing services, appraisers or any other means, methods, procedures, or
techniques in valuing the assets or calculating the liabilities of the Trust or
any Series or Class thereof.
Section 7.2. Dividends and Distributions. (a) The Trustees may from
time to time distribute ratably among the Shareholders of the Trust or of a
Series or Class thereof such proportion of the net earnings or profits, surplus
(including paid-in surplus), capital (including paid-in capital), or assets of
the Trust or such Series held by the Trustees as they may deem appropriate or
desirable. Such distributions may be made in cash, additional Shares or property
(including without limitation any type of obligations of the Trust or Series or
Class or any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time.
The Trustees may always retain from the earnings or profits such amounts as they
may deem appropriate or desirable to pay the expenses and liabilities of the
Trust or a Series or Class thereof or to meet obligations of the Trust or a
Series or Class thereof, together with such amounts as they may deem desirable
to use in the conduct of its affairs or to retain for future requirements or
extensions of the business or operations of the Trust or such Series. The Trust
may adopt and offer to Shareholders such dividend reinvestment plans, cash
dividend payout plans or other distribution plans as the Trustees may deem
appropriate or desirable. The Trustees may in their discretion determine that an
account administration fee or other similar charge may be deducted directly from
the income and other distributions paid on Shares to a Shareholder's account in
any Series or Class.
(b) The Trustees may prescribe, in their absolute discretion, such
bases and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
(c) Inasmuch as the computation of net income and gains for federal
income tax purposes may vary from the computation thereof on the books of
account, the above provisions shall be interpreted to give the Trustees full
power and authority in their absolute discretion to distribute for any fiscal
year as dividends and as capital gains distributions, respectively, additional
amounts sufficient to enable the Trust or a Series thereof to avoid or reduce
liability for taxes.
Section 7.3. Constant Net Asset Value; Reduction of Outstanding Shares.
The Trustees may determine to maintain the net asset value per Share of any
Series or Class at a designated constant amount and in connection therewith may
adopt procedures not inconsistent with the 1940 Act for the continuing
declarations of income attributable to that Series or Class as dividends payable
in additional Shares of that Series or Class or in cash or in any combination
thereof and for the handling of any losses attributable to that Series or Class.
Such procedures may provide that, if, for any reason, the income of any such
Series or Class determined at any time is a negative amount, the Trust may with
respect to such Series or Class (i) offset each Shareholder's pro rata share of
such negative amount from the accrued dividend account of such Shareholder, or
(ii) reduce the number of Outstanding Shares of such Series or Class by reducing
the number of Shares in the account of such Shareholder by that number of full
and fractional Shares which represents the amount of such excess negative
income, or (iii) cause to be recorded on the books of the Trust an asset account
in the amount of such negative income, which account may be reduced by the
amount, provided that the same shall thereupon become the property of the Trust
with respect to such Series or Class and shall not be paid to any Shareholder,
of dividends declared thereafter upon the Outstanding Shares of such Series or
Class on the day such negative income is experienced, until such asset account
is reduced to zero, or (iv) combine the methods described in clauses (i), (ii)
and (iii) of this sentence, in order to cause the net asset value per Share of
such Series or Class to remain at a constant amount per Outstanding Share
immediately after such determination and declaration. The Trust may also fail to
declare a dividend out of income for the purpose of causing the net asset value
of any such Share to be increased. The Trustees shall have full discretion to
determine whether any cash or property received shall be treated as income or as
principal and whether any item expense shall be charged to the income or the
principal account, and their determination made in good faith shall be
conclusive upon all Shareholders. In the case of stock dividends or similar
distributions received, the Trustees shall have full discretion to determine, in
the light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
provision contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Series or Class thereof or the
income of the Series or Class thereof, or for the declaration and payment of
dividends and distributions on any Series or Class of Shares.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
SERIES OR CLASS; MERGERS; AMENDMENTS
Section 8.1. Duration. The Trust shall continue without limitation of
time but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation of authority pursuant to the terms of this
Declaration or of the By-Laws.
Section 8.2. Termination of the Trust or a Series or a Class. (a) The
Trust or any Series or Class thereof may be terminated by: (1) the affirmative
vote of the holders of not less than two-thirds of the Shares outstanding and
entitled to vote at any meeting of Shareholders of the Trust or the appropriate
Series or Class thereof, or by an instrument or instruments in writing without a
meeting, consented to by the holders of two-thirds of the Shares of the Trust or
a Series or Class thereof, provided, however, that, if such termination is
recommended by the Trustees, the vote of a majority of the outstanding voting
securities of the Trust or a Series or Class thereof entitled to vote thereon
shall be sufficient authorization; or (2) by means of an instrument in writing
signed by a majority of the Trustees, to be followed by a written notice to
Shareholders stating that a majority of the Trustees has determined that the
continuation of the Trust or a Series or a Class thereof is not in the best
interest of the Trust, such Series or Class or of their respective Shareholders.
Such determination may (but need not) be based on factors or events adversely
affecting the ability of the Trust, such Series or Class to conduct its business
and operations in an economically viable manner. Such factors and events may
include (but are not limited to) the inability of a Series or Class or the Trust
to maintain its assets at an appropriate size, changes in laws or regulations
governing the Series or Class or the Trust or affecting assets of the type in
which such Series or Class or the Trust invests, or political, social, legal or
economic developments or trends having an adverse impact on the business or
operations of such Series or Class or the Trust. Upon the termination of the
Trust or the Series or Class,
(i) The Trust, Series or Class shall carry on no business except
for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust, Series or Class and all of the powers of the Trustees
under this Declaration shall continue until the affairs of the
Trust, Series or Class shall have been wound up, including the
power to fulfill or discharge the contracts of the Trust,
Series or Class, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property or assets allocated or belonging
to such Series or Class to one or more persons at public or
private sale for consideration which may consist in whole or
in part of cash, securities or other property of any kind,
discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities
and refunding agreements as they deem necessary for their
protection, the Trustees may distribute the remaining Trust
Property or the remaining property of the terminated Series or
Class, in cash or in kind or in any combination thereof, among
the Shareholders of the Trust or the Series or Class according
to their respective rights.
(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Massachusetts
Secretary of State an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all further
liabilities and duties with respect to the Trust or the terminated Series or
Class, and the rights and interests of all Shareholders of the Trust or the
terminated Series or Class shall thereupon cease.
Section 8.3. Merger, Consolidation or Sale of Assets of a Series. A
particular Series may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of its property, including its good will, upon such terms and
conditions and for such consideration when and as authorized by the Trustees and
without any authorization, vote or consent of the Shareholders; and any such
merger, consolidation, sale, lease or exchange shall be deemed for all purposes
to have been accomplished under and pursuant to the statutes of the Commonwealth
of Massachusetts. The Trustees may also at any time sell and convert into money
all the assets of a particular Series. Upon making provision for the payment of
all outstanding obligations, taxes, and other liabilities, accrued or
contingent, of the particular Series, the Trustees shall distribute the
remaining assets of such Series among the Shareholders of such Series according
to their respective rights. Upon completion of the distribution of the remaining
proceeds or the remaining assets, the Series shall terminate and the Trustees
shall take the action provided in Section 8.2(b) hereof and they shall thereupon
be discharged from all further liabilities and duties with respect to such
Series, and the rights and interests of all Shareholders of the terminated
Series shall thereupon cease.
Section 8.4. Amendments. The execution of an instrument setting forth
the establishment and designation and the relative rights and preferences of any
Series or Class of Shares (or amending, restating or rescinding any such prior
instrument) in accordance with Section 5.5 hereof shall, without any
authorization, consent or vote of the Shareholders, effect an amendment of this
Declaration. Except as otherwise provided in this Section 8.4, if authorized by
vote of a majority of the outstanding voting securities of the Trust the
financial interests of which are affected by the amendment and which are
entitled to vote thereon (which securities shall, unless otherwise provided by
the Trustees, vote together on such amendment as a single class), the Trustees
may amend this Declaration by an instrument signed by a majority of the Trustees
then in office. No Shareholder not so affected by any such amendment shall be
entitled to vote thereon. The Trustees may (by such an instrument) also amend or
otherwise supplement this Declaration of Trust, without any authorization,
consent or vote of the Shareholders, to change the name of the Trust or any Fund
or to make such other changes as do not have a materially adverse effect on the
financial interests of Shareholders hereunder or if they deem it necessary or
desirable to conform this Declaration to the requirements of applicable federal
or state laws or regulations or the requirements of the Internal Revenue Code of
1986, but the Trustees shall not be liable for failing to do so. Any such
amendment or supplemental Declaration of Trust shall be effective as provided in
the instrument containing its terms or, if there is no provision therein with
respect to effectiveness, upon the signing of such instrument by a majority of
the Trustees then in office. Copies of any amendment or of any supplemental
Declaration of Trust shall be filed as specified in Section 9.2 hereof. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
Notwithstanding any other provision hereof, until such time as Shares
are issued and sold, this Declaration may be terminated or amended in any
respect by an instrument signed by a majority of the Trustees then in office.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Use of the Words "Eaton Vance". Eaton Vance Corp.
(hereinafter referred to as "EVC"), which owns (either directly or through
subsidiaries) all of the capital shares of the Investment Adviser of the Trust
and the Funds (or of the investment adviser of each of the investment companies
referred to in the last paragraph of Section 2.3), has consented to the use by
the Trust and the Funds of the identifying words "Eaton Vance" in the name of
the Trust and in the name of each Fund. Such consent is conditioned upon the
continued employment of EVC or a subsidiary or affiliate of EVC as Investment
Adviser of the Trust and of each such Fund or as the investment adviser of each
of the investment companies referred to in the last paragraph of Section 2.3. As
between the Trust and itself, EVC shall control the use of the name of the Trust
and the name of any Fund insofar as such name contains the identifying words
"Eaton Vance". EVC may from time to time use the identifying words "Eaton Vance"
in other connections and for other purposes, including, without limitation, in
the names of other investment companies, trusts, corporations or businesses
which it may manage, advise, sponsor or own or in which it may have a financial
interest. EVC may require the Trust to cease using the identifying words "Eaton
Vance" in the name of the Trust or any Fund if EVC or a subsidiary or affiliate
of EVC ceases to act as investment adviser of the Trust or such Fund or as the
investment adviser of each of the investment companies referred to in the last
paragraph of Section 2.3.
Section 9.2. Filing of Copies, References, Headings and Counterparts.
The original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. A copy of this instrument, of any amendment hereto, and of each
supplemental declaration of trust shall be filed with the Massachusetts
Secretary of State and with any other governmental office where such filing may
from time to time be required. Anyone dealing with the Trust may rely on a
certificate by a Trustee or an officer of the Trust as to whether or not any
such amendments or supplemental declarations of trust have been made and as to
any matters in connection with the Trust hereunder, and with the same effect as
if it were the original, may rely on a copy certified by a Trustee or an officer
of the Trust to be a copy of this instrument or of any such amendment hereto or
supplemental declaration of trust.
In this instrument or in any such amendment or supplemental declaration
of trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may hereafter be referred to in lieu of the original Declaration and
the various amendments and supplements thereto.
Section 9.3. Applicable Law. The Trust set forth in this instrument is
made in the Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 9.4. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being a majority of the current
Trustees of the Trust, have executed this instrument this 14th day of December,
1995.
/s/ Donald R. Dwight /s/ Kenneth C. Knight
- ----------------------------- -----------------------------
Donald R. Dwight Kenneth C. Knight
/s/ M. Dozier Gardner /s/ Jerome Preston, Jr.
- ----------------------------- -----------------------------
M. Dozier Gardner Jerome Preston, Jr.
/s/ Robert Gluck /s/ Jerome Preston, Jr.
- ----------------------------- -----------------------------
Robert Gluck Jerome Preston, Jr.
/s/ Samuel L. Hayes, III /s/ John L. Thorndike
- ----------------------------- -----------------------------
Samuel L. Hayes, III John L. Thorndike
The names and addresses of all the Trustees of the Trust are as follows:
Donald R. Dwight Kenneth C. Knight
16 Clover Mill Lane Jamaica House
Lyme, NH 03768 305 No. Pompano Beach Blvd.
Pompano Beach, FL 33062
M. Dozier Gardner
100 Upland Road Jerome Preston, Jr.
Brookline, MA 02146 62 Foster Street
Cambridge, MA 02138
Robert Gluck
630 W. 246 Street Norton H. Reamer
Riverdale, NY 10471 70 Circuit Road
Brookline, MA 02167
Samuel L. Hayes, III
345 Nahatan Street John L. Thorndike
Westwood, MA 02090 10 Main Street
Dover, MA 02030
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, Massachusetts
Then personally appeared the above named Donald R. Dwight, M. Dozier
Gardner, Robert Gluck, Samuel L. Hayes, III, Kenneth C. Knight, Jerome Preston,
Jr., Norton H. Reamer and John L. Thorndike being all of the Trustees then in
office, who severally acknowledge the foregoing instrument to be their free act
and deed.
Before me,
/s/ Kelley A. Glancy
--------------------------------------
My commission expires January 17, 1997
<PAGE>
Exhibit 99.6(a)
EATON VANCE INCOME FUND OF BOSTON
DISTRIBUTION AGREEMENT
AGREEMENT effective November 1, 1996 between EATON VANCE INCOME FUND OF
BOSTON, hereinafter called the "Fund," a Massachusetts business trust having its
principal place of business in Boston in the Commonwealth of Massachusetts, and
EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation having its principal
place of business in said Boston and formerly named EV Distributors, Inc.,
hereinafter sometimes called the "Principal Underwriter."
IN CONSIDERATION of the mutual promises and undertakings herein
contained, the parties hereto agree:
1. The Fund grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
the net asset value used in determining the public offering price on which such
orders were based. The Principal Underwriter shall notify Investors Bank & Trust
Company, Custodian of the Fund ("IBT"), and First Data Investor Services Group,
Transfer Agent of the Fund ("First Data"), or a successor transfer agent, at the
end of each business day, or as soon thereafter as the orders placed with it
have been compiled, of the number of shares and the prices thereof which the
Principal Underwriter is to purchase as principal for resale. The Principal
Underwriter shall take down and pay for shares ordered from the Fund on or
before the eleventh business day (excluding Saturdays) after the shares have
been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares, if any, issued by the Fund in distribution of income or realized capital
gains of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be the public
offering price as set forth in the current Prospectus relating to said shares,
but not to exceed the net asset value at which the Principal Underwriter is to
purchase the shares, plus a sales charge not to exceed 7.25% of the public
offering price (the net asset value divided by .9275). If the resulting public
offering price does not come out to an even cent, the public offering price
shall be adjusted to the nearer cent.
The Principal Underwriter may also sell shares at the net asset value
at which the Principal Underwriter is to purchase such shares, provided such
sales are not inconsistent with the provisions of Section 22(d) of the
Investment Company Act of 1940, as amended from time to time (the "1940 Act"),
and the rules thereunder, including any applicable exemptive orders or
administrative interpretations or "no-action" positions with respect thereto.
The net asset value of shares of the Fund shall be determined by the
Fund or IBT, as the agent of the Fund, as of the close of regular trading on the
New York Stock Exchange on each business day on which said Exchange is open, or
as of such other time on each such business day as may be determined by the
Trustees of the Fund, in accordance with the methodology and procedures for
calculating such net asset value authorized by the Trustees. The Fund may also
cause the net asset value to be determined in substantially the same manner or
estimated in such manner and as of such other time or times as may from time to
time be agreed upon by the Fund and Principal Underwriter. The Fund will notify
the Principal Underwriter each time the net asset value of the Fund's shares is
determined and when such value is so determined it shall be applicable to
transactions as set forth in the current Prospectus and Statement of Additional
Information (hereafter the "Prospectus") relating to the Fund's shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust, except to the Principal Underwriter, in the manner and upon the terms
above set forth to cover contracts of sale made by the Principal Underwriter
with its customers prior to any such suspension, and except as provided in the
last paragraph of paragraph 1 hereof. The Fund shall also have the right to
suspend the sale of the Fund's shares if in the judgment of the Fund conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from an investor or financial service firm, or to accept or
confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Fund covenants and agrees that it will, from time to time, but
subject to the necessary approval of the Fund's shareholders, take such steps as
may be necessary to register the Fund's shares under the federal Securities Act
of 1933, as amended from time to time (the "1933 Act"), to the end that there
will be available for sale such number of shares as the Principal Underwriter
may reasonably be expected to sell. The Fund covenants and agrees to indemnify
and hold harmless the Principal Underwriter and each person, if any, who
controls the Principal Underwriter within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any person acquiring any shares of the Fund,
which may be based upon the 1933 Act or on any other statute or at common law,
on the ground that the Registration Statement or Prospectus, as from time to
time amended and supplemented, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished in writing to the Fund in connection therewith by or on behalf of the
Principal Underwriter; provided, however, that in no case (i) is the indemnity
of the Fund in favor of the Principal Underwriter and any such controlling
person to be deemed to protect such Principal Underwriter or any such
controlling person against any liability to the Fund or its security holders to
which such Principal Underwriter or any such controlling person would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Fund to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Principal Underwriter or any such controlling person
unless the Principal Underwriter or any such controlling person, as the case may
be, shall have notified the Fund in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Principal Underwriter or such controlling
person (or after such Principal Underwriter or such controlling person shall
have received notice of such service on any designated agent), but failure to
notify the Fund of any such claim shall not relieve it from any liability which
the Fund may have to the person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The Fund
shall be entitled to participate, at its own expense, in the defense, or, if it
so elects, to assume the defense of any suit brought to enforce any such
liability, but if the Fund elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Principal Underwriter
or controlling person or persons, defendant or defendants in the suit. In the
event the Fund elects to assume the defense of any such suit and retains such
counsel, the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case the Fund does not elect to assume the
defense of any such suit, the Fund shall reimburse the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Fund agrees
promptly to notify the Principal Underwriter of the commencement of any
litigation or proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Fund and each of its Trustees
and officers and each person, if any, who controls the Fund within the meaning
of Section 15 of the 1933 Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith), arising by reason of any person acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund or any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its or his duties or by reason of its
or his reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Fund or such person, as the case may be, shall
have notified the Principal Underwriter in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Fund, or upon such person (or after
the Fund or such person shall have received notice of such service on any
designated agent), but failure to notify the Principal Underwriter of any such
claim shall not relieve it from any liability which it may have to the Fund or
any person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Principal Underwriter shall
be entitled to participate, at its own expense, in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any such liability,
but if the Principal Underwriter elects to assume the defense, such defense
shall be conducted by counsel chosen by it and satisfactory to the Fund, or to
its officers or Trustees, or to any controlling person or persons, defendant or
defendants in the suit. In the event that the Principal Underwriter elects to
assume the defense of any such suit and retains such counsel, the Fund or such
officers or Trustees or controlling person or persons, defendant or defendants
in the suit, shall bear the fees and expenses of any additional counsel retained
by them or the Fund, but, in case the Principal Underwriter does not elect to
assume the defense of any such suit, it shall reimburse the Fund, any such
officers and Trustees or controlling person or persons, defendant or defendants
in such suit, for the reasonable fees and expenses of any counsel retained by
them or the Fund. The Principal Underwriter agrees promptly to notify the Fund
of the commencement of any litigation or proceedings against it in connection
with the issue and sale of any of the Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Fund to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act (as said Registration Statement and Prospectus may be amended
or supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any financial service firm nor any other person is
authorized to act as agent for the Fund in connection with the offering or sale
of shares of the Fund to the public or otherwise. All such sales made by the
Principal Underwriter shall be made by it as principal, for its own account. The
Principal Underwriter may, however, act as agent in connection with the
repurchase of shares as provided in paragraph 6 below, or in connection with
"exchanges" between investment companies for which the Principal Underwriter (or
an affiliate thereof) acts as principal underwriter or investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
1940 Act, covering its shares and all amendments and supplements thereto, and
preparing and distributing periodic reports to shareholders (including the
expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder;
(v) the fees, costs and expenses of the registration or
qualification of shares of the Fund for sale in the various states, territories
or other jurisdictions (including without limitation the registering or
qualifying the Fund as a broker or dealer or any officer of the Fund as agent or
salesman in any state, territory or other jurisdiction); and
(vi) all payments to be made by the Fund pursuant to any written
plan approved in accordance with Rule 12b-1 under the 1940 Act or any written
service plan.
(b) The Principal Underwriter agrees that, after the Prospectus
(other than to existing shareholders of the Fund) and periodic reports have been
set up in type, it will bear the expense of printing and distributing any copies
thereof which are to be used in connection with the offering of shares of the
Fund to financial service firms or investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter or furnished by it for
use by financial service firms in connection with the offering of the shares of
the Fund for sale to the public and any expenses of advertising in connection
with such offering.
6. The Fund hereby authorizes the Principal Underwriter to
repurchase, upon the terms and conditions set forth in written instructions
given by the Fund to the Principal Underwriter from time to time, as agent of
the Fund and for its account, such shares of the Fund as may be offered for sale
to the Fund from time to time.
(a) The Principal Underwriter shall notify in writing IBT and
First Data at the end of each business day, or as soon thereafter as the
repurchases in each pricing period have been compiled, of the number of shares
repurchased for the account of the Fund since the last previous report, together
with the prices at which such repurchases were made, and upon the request of any
officer or Trustee of the Fund shall furnish similar information with respect to
all repurchases made up to the time of the request on any day.
(b) The Fund reserves the right to suspend or revoke the
foregoing authorization at any time; unless otherwise stated, any such
suspension or revocation shall be effective forthwith upon receipt of notice
thereof by an officer of the Principal Underwriter, by telegraph or by written
instrument from an officer of the Fund duly authorized by its Trustees. In the
event that the authorization of the Principal Underwriter is, by the terms of
such notice, suspended for more than twenty-four hours or until further notice,
the authorization given by this paragraph 6 shall not be revived except by
action of a majority of the Trustees of the Fund.
(c) The Principal Underwriter shall have the right to terminate
the operation of this paragraph 6 upon giving to the Fund thirty (30) days'
written notice thereof.
(d) The Fund agrees to authorize and direct First Data, to pay,
for the account of the Fund, the purchase price of any shares so repurchased
against delivery of the certificates in proper form for transfer to the Fund or
for cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in
respect of any repurchase of shares under the foregoing authorization and
appointment as agent, except contingent deferred sales charges.
(f) The Fund agrees to reimburse the Principal Underwriter, from
time to time on demand, for any reasonable expenses incurred in connection with
the repurchase of shares of the Fund pursuant to this paragraph 6.
7. If, at any time during the existence of this Agreement, the
Fund shall deem it necessary or advisable in the best interests of the Fund that
any amendment of this Agreement be made in order to comply with the
recommendations or requirements of the Commission or other governmental
authority or to obtain any advantage under Massachusetts or federal tax laws,
and shall notify the Principal Underwriter of the form of amendment which it
deems necessary or advisable and the reasons therefor, and, if the Principal
Underwriter declines to assent to such amendment, the Fund may terminate this
Agreement forthwith by written notice to the Principal Underwriter. If, at any
time during the existence of this Agreement upon request by the Principal
Underwriter, the Fund fails (after a reasonable time) to make any changes in its
Declaration of Trust, as amended, or in its methods of doing business which are
necessary in order to comply with any requirement of federal law or regulations
of the Commission or of a national securities association of which the Principal
Underwriter is or may be a member, relating to the sale of the shares of the
Fund, the Principal Underwriter may terminate this Agreement forthwith by
written notice to the Fund.
8(a). The Principal Underwriter is a corporation in the United
States organized under the laws of Massachusetts and holding membership in the
National Association of Securities Dealers, Inc., a securities association
registered under Section 15A of the Securities Exchange Act of 1934, as amended
from time to time, and during the life of this Agreement will continue to be so
resident in the United States, so organized and a member in good standing of
said Association. The Principal Underwriter covenants that it and its officers
and directors will comply with the Trust's Declaration of Trust and By-Laws, and
the 1940 Act and the rules promulgated thereunder, insofar as they are
applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United
States and preserve therein for such period or periods as the Commission shall
prescribe by rules and regulations applicable to it as Principal Underwriter of
an open-end investment company registered under the 1940 Act such accounts,
books and other documents as are necessary or appropriate to record its
transactions with the Fund. Such accounts, books and other documents shall be
subject at any time and from time to time to such reasonable periodic, special
and other examinations by the Commission or any member or representative thereof
as the Commission may prescribe. The Principal Underwriter shall furnish to the
Commission within such reasonable time as the Commission may prescribe copies of
or extracts from such records which may be prepared without effort, expense or
delay as the Commission may by order require.
9. This Agreement shall continue in force indefinitely until terminated
as in this Agreement above provided, except that:
(a) this Agreement shall remain in effect through and including April
28, 1997, and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance is specifically approved at least annually
(i) by the vote of a majority of the Trustees of the Fund who are not interested
persons of the Fund or of the Principal Underwriter cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Trustees of
the Fund or by vote of a majority of the outstanding voting securities of the
Fund; and
(b) either party shall have the right to terminate this Agreement on
six (6) months' written notice thereof given in writing to the other.
10. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
11. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Fund and that of
the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
12. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
13. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
14. The Principal Underwriter expressly acknowledges the provision in
the Fund's Declaration of Trust limiting the personal liability of the
shareholders or the Trustees of the Fund. The Principal Underwriter hereby
agrees that it shall have recourse only to the assets of the Fund for payment of
claims or obligations as between the Fund and the Principal Underwriter arising
out of this Agreement and shall not seek satisfaction from any shareholders of
the Fund or from the Trustees or any Trustee of the Fund.
15. This Agreement shall amend, replace and be substituted for the
distribution agreement dated May 22, 1989 between the Fund and the prior
principal underwriter, Eaton Vance Distributors, Inc., a separate Massachusetts
corporation that has served as principal underwriter of the Fund prior to the
effective date of this Agreement as of the opening of business on November 1,
1996, and this Agreement shall be effective as of such time.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
this 18th day of October, 1996.
EATON VANCE INCOME FUND OF BOSTON
By /s/ M. Dozier Gardner
--------------------------------
President
EATON VANCE DISTRIBUTORS, INC.
By /s/ H. Day Brigham, Jr.
--------------------------------
Vice President
<PAGE>
EXHIBIT (11)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 42 to the
Registration Statement on Form N-1A (1933 Act File Number 2-42722) of Eaton
Vance Income Fund of Boston (the "Fund") of our report dated October 25, 1996 on
our audit of the financial statements and financial highlights of the Fund which
report is included in the Annual Report to Shareholders for the year ended
September 30, 1996, which is incorporated by reference in this Registration
Statement.
We also consent to the reference to our Firm under the heading "The Fund's
Financial Highlights" in the Prospectus and, under the heading "Financial
Statements" and under the heading "Independent Accountants" in the Statement of
Additional Information of the Registration Statement.
/s/ COOPERS & LYBRAND L.L.P.
------------------------------------
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 23, 1997
<PAGE>
Exhibit 99.15(b)
AMENDMENT TO SERVICE PLAN
ON BEHALF OF
EATON VANCE INCOME FUND OF BOSTON
Whereas Eaton Vance Distributors, Inc. (the "prior principal
underwriter") has served as the Principal Underwriter of Trust shares prior to
the effective date of this Amendment, and whereas Eaton Vance Distributors, Inc.
(currently named EV Distributors, Inc.) a separate Massachusetts corporation
(the "successor principal underwriter") is succeeding to the business of the
prior principal underwriter on November 1, 1996, the Trust hereby amends its
Service Plan of the above fund, by substituting the successor principal
underwriter for the prior principal underwriter in the Plan effective November
1, 1996.
ADOPTED: August 6, 1996
EATON VANCE INCOME FUND OF BOSTON
CALCULATION OF YIELD
For the 30 days ended 9/30/96:
Interest Income Earned: $ 1,220,994
Plus
-----------
Equal Gross Income: $ 1,220,994
Minus Expenses: $116,288
-----------
Equal Net Investment Income: $ 1,104,706
Divided by Average daily number of shares
outstanding that were entitled
to receive dividends: 17,478,757
Equal Net Investment Income Earned Per Share: $ 0.0632
Maximum Offering Price Per Share 9/30/96: $ 8.4400
30 Day Yield**: 9.16%
** Yield is calculated on a bond equivalent rate as follows:
6
2[(($0.0632/$8.44)+1) -1]
<PAGE>
<TABLE>
INVESTMENT PERFORMANCE -- EATON VANCE INCOME FUND OF BOSTON
The table below indicates the total return (capital changes plus reinvestment of all distributions) on a hypothetical investment of
$1,000 in the Fund covering the 1, 5, and 10 year periods ended September 30, 1996.
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF VALUE OF TOTAL RETURN TOTAL RETURN
INVESTMENT INVESTMENT INITIAL INVESTMENT EXCLUDING SALES CHARGE INCLUDING SALES CHARGE
PERIOD DATE INVESTMENT* ON 09/30/96 CUMULATIVE ANNUALIZED CUMULATIVE ANNUALIZED
- ---------- ---------- ----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
10 YEARS ENDED
09/30/96 09/30/86 $962.50 $2,639.02 174.18% 10.61% 163.90% 10.19%
5 YEARS ENDED
09/30/96 09/30/91 $963.06 $1,772.09 84.01% 12.97% 77.21% 12.12%
1 YEAR ENDED
09/30/96 09/30/95 $962.34 $1,091.42 13.41% 13.41% 9.14% 9.14%
Average annual total return is calculated using the following formula:
n
P(1+T) = ERV
where P = an initial investment of $1,000 **
T = average annual total return
n = number of years
ERV = ending redeemable value of $1,000 initial investment at the end of the period
Cumulative total return is calculated using the following formula:
T = ( ERV / P ) - 1
where T = cumulative total return including the maximum sales charge
ERV = ending redeemable value of $1,000 initial investment at the end of the period
P = an initial investment of $1,000 ***
* Initial investment less the current maximum sales charge of 3.75%.
** The average annual total return including the sales charge is calculated based on an initial investment of $1,000 less the
maximum initial sales charge of 3.75%.
*** The cumulative total return including the sales charge is calculated based on an initial investment of $1,000 less
maximum initial sales charge of 3.75%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 137592
<INVESTMENTS-AT-VALUE> 139820
<RECEIVABLES> 6193
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 146014
<PAYABLE-FOR-SECURITIES> 1358
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 812
<TOTAL-LIABILITIES> 2170
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 158899
<SHARES-COMMON-STOCK> 17706
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 905
<ACCUMULATED-NET-GAINS> (16378)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2228
<NET-ASSETS> 143844
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 13466
<OTHER-INCOME> 0
<EXPENSES-NET> 1303
<NET-INVESTMENT-INCOME> 12163
<REALIZED-GAINS-CURRENT> (1312)
<APPREC-INCREASE-CURRENT> 4839
<NET-CHANGE-FROM-OPS> 15691
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 12163
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 181
<NUMBER-OF-SHARES-SOLD> 5726
<NUMBER-OF-SHARES-REDEEMED> 2248
<SHARES-REINVESTED> 793
<NET-CHANGE-IN-ASSETS> 37430
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 763
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1303
<AVERAGE-NET-ASSETS> 122172
<PER-SHARE-NAV-BEGIN> 7.92
<PER-SHARE-NII> 0.80
<PER-SHARE-GAIN-APPREC> 0.210
<PER-SHARE-DIVIDEND> 0.80
<PER-SHARE-DISTRIBUTIONS> 0.01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.12
<EXPENSE-RATIO> 1.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
