As filed with the Securities and Exchange Commission on March 21, 2000
File No. 811-09835
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 1 [X]
CAPITAL GROWTH PORTFOLIO
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(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building
255 State Street, Boston, Massachusetts 02109
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(Address of Principal Executive Offices)
(617) 482-8260
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(Registrant's Telephone Number, including Area Code)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
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(Name and Address of Agent for Service)
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Throughout this Registration Statement, information concerning Capital
Growth Portfolio (the "Portfolio") is incorporated by reference from Amendment
No. 56 to the Registration Statement of Eaton Vance Special Investment Trust
(File No. 2-27962 under the Securities Act of 1933 (the "1933 Act")) (the
"Amendment"), which was filed electronically with the Securities and Exchange
Commission on February 28, 2000 (Accession No. 0000950156-00-000132). The
Amendment contains the prospectus and statement of additional information
("SAI") of Eaton Vance Balanced Fund (the "Feeder Fund"), which invests a
significant portion of its assets in the Portfolio. Certain investment practices
and policies of the Feeder Fund are substantially the same as those of the
Portfolio.
PART A
Responses to Items 1, 2, 3, 5 and 9 have been omitted pursuant to Paragraph
B 2.(b) of the General Instructions to Form N-1A.
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED
RISKS
The Portfolio is a diversified, open-end management investment company.
Interests in the Portfolio are issued solely in private placement transactions
that do not involve any "public offering" within the meaning of Section 4(2) of
the 1933 Act. Investments in the Portfolio may be made only by U.S. and foreign
investment companies, common or commingled trust funds, or similar organizations
or entities that are "accredited investors" within the meaning of Regulation D
under the 1933 Act. This Registration Statement, as amended, does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
The Portfolio is not intended to be a complete investment program, and a
prospective investor should take into account its objectives and other
investments when considering the purchase of an interest in the Portfolio. The
Portfolio cannot assure achievement of its investment objective.
Registrant incorporates by reference information concerning the Portfolio's
investment objective and investment practices from "Fund Summaries" and
"Investment Objectives & Principal Policies and Risks" in the Feeder Fund
prospectus.
ITEM 6. MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE
(a) Management
Registrant incorporates by reference information concerning the Portfolio's
management from "Management and Organization" in the Feeder Fund prospectus.
(b) Capital Stock
Registrant incorporates by reference information concerning interests in
the Portfolio from "Management and Organization" in the Feeder Fund SAI.
ITEM 7. SHAREHOLDER INFORMATION
(a) Pricing
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The net asset value of the Portfolio is determined once each day only when
the New York Stock Exchange (the "Exchange") is open for trading ("Portfolio
Business Day"). This determination is made each Portfolio Business Day as of the
close of regular trading on the Exchange (currently 4:00 p.m., eastern time)
(the "Portfolio Valuation Time"). Registrant incorporates by reference
information concerning the computation of net asset value and valuation of
Portfolio assets from "Valuing Shares" in the Feeder Fund prospectus.
(b) and (c) Purchases and Redemptions
As described above, interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. There is no minimum initial or
subsequent investment in the Portfolio. The Portfolio reserves the right to
cease accepting investments at any time or to reject any investment order. The
placement agent for the Portfolio is Eaton Vance Distributors, Inc. ("EVD"), a
wholly-owned subsidiary of Eaton Vance Management. The principal business
address of EVD is The Eaton Vance Building, 255 State Street, Boston,
Massachusetts 02109. EVD receives no compensation for serving as the placement
agent for the Portfolio.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Portfolio Business Day as of the Portfolio Valuation Time. The
value of each investor's interest in the Portfolio will be determined by
multiplying the net asset value of the Portfolio by the percentage, determined
on the prior Portfolio Business Day, which represents that investor's share of
the aggregate interests in the portfolio on such prior day. Any additions or
withdrawals for the current Portfolio Business Day will then be recorded. Each
investor's percentage of the aggregate interest in the Portfolio will then be
recomputed as a percentage equal to a fraction (i) the numerator of which is the
value of such investor's investment in the Portfolio as of the Portfolio
Valuation Time on the prior Portfolio Business Day plus or minus, as the case
may be, the amount of any additions to or withdrawals from the investor's
investment in the Portfolio on the current Portfolio Business Day and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of the
Portfolio Valuation Time on the prior Portfolio Business Day plus or minus, as
the case may be, the amount of the net additions to or withdrawals from the
aggregate investment in the Portfolio on the current Portfolio Business Day by
all investors in the Portfolio. The percentage so determined will then be
applied to determine the value of the investor's interest in the Portfolio for
the current Portfolio Business Day.
An investor in the Portfolio may withdraw all of (redeem) or any portion of
(decrease) its interest in the Portfolio if a withdrawal request in proper form
is furnished by the investor to the Portfolio. All withdrawals will be effected
as of the next Portfolio Valuation Time. The proceeds of a withdrawal will be
paid by the Portfolio normally on the Portfolio Business Day the withdrawal is
effected, but in any event within seven days. The Portfolio reserves the right
to pay the proceeds of a withdrawal (whether a redemption or decrease) by a
distribution in kind of portfolio securities (instead of cash). The securities
so distributed would be valued at the same amount as that assigned to them in
calculating the net asset value for the interest (whether complete or partial)
being withdrawn. If an investor received a distribution in kind upon such
withdrawal, the investor could incur brokerage and other charges in converting
the securities to cash.
The right of any investor to receive payment with respect to any withdrawal
may be suspended or the payment of the withdrawal proceeds postponed during any
period in which the Exchange is closed (other than weekends or holidays) or
trading on the Exchange is restricted as determined by the Securities and
Exchange Commission (the "SEC") or, to the extent otherwise permitted by the
Investment Company Act of 1940, as amended (the "1940 Act"), if an emergency
exists as determined by the SEC, or during any other period permitted by order
of the SEC for the protection of investors.
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(d) Dividends and Distributions
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net investment income, net
realized capital gains, and any other items of income, gain, loss, deduction or
credit.
(e) Tax Consequences
Under the anticipated method of operation of the Portfolio, the Portfolio
will not be subject to any federal income tax. However, each investor in the
Portfolio will take into account its allocable share of the Portfolio's ordinary
income and capital gain in determining its federal income tax liability. The
determination of each such share will be made in accordance with the governing
instruments of the Portfolio, which are intended to comply with the requirements
of the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations promulgated thereunder.
The Portfolio expects to manage its assets in such a way that an investment
company investing in the Portfolio will be able to satisfy the requirements of
Subchapter M of the Code, assuming that it invests all of its assets in the
Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS
Not applicable.
A-3
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PART B
ITEM 10. COVER PAGE AND TABLE OF CONTENTS
Page
Portfolio History.......................................................B-1
Description of the Portfolio and Its Investments and Risks..............B-1
Management of the Portfolio.............................................B-1
Control Persons and Principal Holder of Securities......................B-1
Investment Advisory and Other Services..................................B-2
Brokerage Allocation and Other Practices................................B-2
Capital Stock and Other Securities......................................B-2
Purchase, Redemption and Pricing........................................B-3
Taxation of the Portfolio...............................................B-3
Underwriters............................................................B-6
Calculation of Performance Data.........................................B-6
Financial Statements....................................................B-6
ITEM 11. PORTFOLIO HISTORY
The Portfolio is organized as a trust under the laws of the state of New
York under a Declaration of Trust dated February 28, 2000.
ITEM 12. DESCRIPTION OF THE PORTFOLIO AND ITS INVESTMENTS AND RISKS
Part A contains information about the investment objective and policies of
the Portfolio. This Part B should be read in conjunction with Part A.
Capitalized terms used in this Part B and not otherwise defined have the
meanings given them in Part A.
Registrant incorporates by reference additional information concerning the
investment policies of the Portfolio as well as information concerning the
investment restrictions of the Portfolio from "Strategies and Risks" and
"Investment Restrictions" in the Feeder Fund SAI.
ITEM 13. MANAGEMENT OF THE PORTFOLIO
(a) - (d) Board of Trustees, Management Information and Compensation
Registrant incorporates by reference additional information concerning the
management of the Portfolio from "Management and Organization" in the Feeder
Fund SAI.
(e) Sales Loads
Not applicable.
(f) Code of Ethics
Registrant incorporates by reference information concerning relevant codes
of ethics from "Management and Organization" in the Feeder Fund prospectus.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDER OF SECURITIES
(a) - (b) Control Persons and Principal Holders
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As of February 28, 2000, Eaton Vance Management controlled the Portfolio by
virtue of owning approximately 99.9% of the value of the outstanding interests
in the Portfolio.
(c) Management Ownership
The Trustees and officers of the Portfolio as a group own less than 1% of
the Portfolio.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES
Registrant incorporates by reference information concerning investment
advisory and other services provided to the Portfolio from "Investment Advisory
and Administrative Services" and "Other Service Providers" in the Feeder Fund
SAI.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the brokerage
practices of the Portfolio from "Portfolio Security Transactions" in the Feeder
Fund SAI.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES
Under the Portfolio's Declaration of Trust, the Trustees are authorized to
issue interests in the Portfolio. Investors are entitled to participate pro rata
in distributions of taxable income, loss, gain and credit of the Portfolio. Upon
dissolution of the Portfolio, the Trustees shall liquidate the assets of the
Portfolio and apply and distribute the proceeds thereof as follows: (a) first,
to the payment of all debts and obligations of the Portfolio to third parties
including, without limitation, the retirement of outstanding debt, including any
debt owed to holders of record of interests in the Portfolio ("Holders") or
their affiliates, and the expenses of liquidation, and to the setting up of any
reserves for contingencies which may be necessary; and (b) second, in accordance
with the Holders' positive Book Capital Account balances after adjusting Book
Capital Accounts for certain allocations provided in the Declaration of Trust
and in accordance with the requirements described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(b)(2). Notwithstanding the foregoing, if the Trustees
shall determine that an immediate sale of part or all of the assets of the
Portfolio would cause undue loss to the Holders, the Trustees, in order to avoid
such loss, may, after having given notification to all the Holders, to the
extent not then prohibited by the law of any jurisdiction in which the Portfolio
is then formed or qualified and applicable in the circumstances, either defer
liquidation of and withhold from distribution for a reasonable time any assets
of the Portfolio except those necessary to satisfy the Portfolio's debts and
obligations or distribute the Portfolio's assets to the Holders in liquidation.
Certificates representing an investor's interest in the Portfolio are issued
only upon the written request of a Holder.
Each Holder is entitled to vote in proportion to the amount of its interest
in the Portfolio. Holders do not have cumulative voting rights. The Portfolio is
not required and has no current intention to hold annual meetings of Holders,
but the Portfolio will hold meetings of Holders when in the judgment of the
Portfolio's Trustees it is necessary or desirable to submit matters to a vote of
Holders at a meeting. Any action which may be taken by Holders may be taken
without a meeting if Holders holding more than 50% of all interests entitled to
vote (or such larger proportion thereof as shall be required by any express
provision of the Declaration of Trust of the Portfolio) consent to the action in
writing and the consents are filed with the records of meetings of Holders.
The Portfolio's Declaration of Trust may be amended by vote of Holders of
more than 50% of all interests in the Portfolio at any meeting of Holders or by
an instrument in writing without a meeting, executed by a majority of the
Trustees and consented to by the Holders of more than 50% of all interests.
B-2
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The Trustees may also amend the Declaration of Trust (without the vote or
consent of Holders) to change the Portfolio's name or the state or other
jurisdiction whose law shall be the governing law, to supply any omission or
cure, correct or supplement any ambiguous, defective or inconsistent provision,
to conform the Declaration of Trust to applicable federal law or regulations or
to the requirements of the Code, or to change, modify or rescind any provision,
provided that such change, modification or rescission is determined by the
Trustees to be necessary or appropriate and not to have a materially adverse
effect on the financial interests of the Holders. No amendment of the
Declaration of Trust which would change any rights with respect to any Holder's
interest in the Portfolio by reducing the amount payable thereon upon
liquidation of the Portfolio may be made, except with the vote or consent of the
Holders of two-thirds of all interests. References in the Declaration of Trust
and in Part A or this Part B to a specified percentage of, or fraction of,
interests in the Portfolio, means Holders whose combined Book Capital Account
balances represent such specified percentage or fraction of the combined Book
Capital Account balance of all, or a specified group of, Holders.
The Portfolio may merge or consolidate with any other corporation,
association, trust or other organization or may sell or exchange all or
substantially all of its assets upon such terms and conditions and for such
consideration when and as authorized by the Holders of (a) 67% or more of the
interests in the Portfolio present or represented at the meeting of Holders, if
Holders of more than 50% of all interests are present or represented by proxy,
or (b) more than 50% of all interests, whichever is less. The Portfolio may be
terminated (i) by the affirmative vote of Holders of not less than two-thirds of
all interests at any meeting of Holders or by an instrument in writing without a
meeting, executed by a majority of the Trustees and consented to by Holders of
not less than two-thirds of all interests, or (ii) by the Trustees by written
notice to the Holders.
The Declaration of Trust provides that obligations of the Portfolio are not
binding upon the Trustees individually but only upon the property of the
Portfolio and that the Trustees will not be liable for any action or failure to
act, 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.
ITEM 18. PURCHASE, REDEMPTION, AND PRICING
See Item 7 herein. Registrant incorporates by reference information
concerning valuation of the Portfolio's assets from "Purchasing and Redeeming
Shares - Calculation of Net Asset Value" in the Feeder Fund SAI.
ITEM 19. TAXATION OF THE PORTFOLIO
The Portfolio has been advised by tax counsel that, provided the Portfolio
is operated at all times during its existence in accordance with certain
organizational and operational documents, the Portfolio should be classified as
a partnership under the Code, and it should not be a "publicly traded
partnership"
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within the meaning of Section 7704 of the Code. Consequently, the Portfolio does
not expect that it will be required to pay any federal income tax, and a Holder
will be required to take into account in determining its federal income tax
liability its share of the Portfolio's income, gains, losses, deductions and
credits.
Under Subchapter K of the Code, a partnership is considered to be either an
aggregate of its members or a separate entity depending upon the factual and
legal context in which the question arises. Under the aggregate approach, each
partner is treated as an owner of an undivided interest in partnership assets
and operations. Under the entity approach, the partnership is treated as a
separate entity in which partners have no direct interest in partnership assets
and operations. The Portfolio has been advised by tax counsel that, in the case
of a Holder that seeks to qualify as a registered investment company ("RIC"),
the aggregate approach should apply, and each such Holder should accordingly be
deemed to own a proportionate share of each of the assets of the Portfolio and
to be entitled to the gross income of the Portfolio attributable to that share
for purposes of all requirements of Subchapter M of the Code. Further, the
Portfolio has been advised by tax counsel that each Holder that seeks to qualify
as a RIC should be deemed to hold its proportionate share of the Portfolio's
assets for the period the Portfolio has held the assets or for the period the
Holder has been an investor in the Portfolio, whichever is shorter. Investors
should consult their tax advisers regarding whether the entity or the aggregate
approach applies to their investment in the Portfolio in light of their
particular tax status and any special tax rules applicable to them.
In order to enable a Holder (that is otherwise eligible) to qualify as a
RIC, the Portfolio intends to satisfy the requirements of Subchapter M of the
Code relating to sources of income and diversification of assets as if they were
applicable to the Portfolio and to permit withdrawals in a manner that will
enable a Holder which is a RIC to comply with the distribution requirements
applicable to RICs (including those under Sections 852 and 4982 of the Code).
The Portfolio will allocate at least annually to each Holder such Holder's
distributive share of the Portfolio's net investment income, net realized
capital gains, and any other items of income, gain, loss, deduction or credit in
a manner intended to comply with the Code and applicable Treasury regulations.
Tax counsel has advised the Portfolio that the Portfolio's allocations of
taxable income and loss should have "economic effect" under applicable Treasury
regulations.
To the extent the cash proceeds of any withdrawal (or, under certain
circumstances, such proceeds plus the value of any marketable securities
distributed to an investor) ("liquid proceeds") exceed a Holder's adjusted basis
of his interest in the Portfolio, the Holder will generally realize a gain for
federal income tax purposes. If, upon a complete withdrawal (redemption of the
entire interest), a Holder receives only liquid proceeds (and/or unrealized
receivables) and the Holder's adjusted basis of his interest exceeds the liquid
proceeds of such withdrawal, the Holder will generally realize a loss for
federal income tax purposes. In addition, on a distribution to a Holder from the
Portfolio (whether pursuant to a partial or complete withdrawal or otherwise),
(1) income or gain will be recognized if the distribution is in liquidation of
the Holder's entire interest in the Portfolio and includes a disproportionate
share of any unrealized receivables held by the Portfolio and (2) gain or loss
may be recognized on a distribution to a Holder that contributed property to the
Portfolio. The tax consequences of a withdrawal of property (instead of or in
addition to liquid proceeds) will be different and will depend on the specific
factual circumstances. A Holder's adjusted basis of an interest in the Portfolio
will generally be the aggregate prices paid therefor (including the adjusted
basis of contributed property and any gain recognized on the contribution
thereof), increased by the amounts of the Holder's distributive share of items
of income (including interest income exempt from federal income tax) and
realized net gain of the Portfolio, and reduced, but not below zero, by (i) the
amounts of the Holder's distributive share of items of Portfolio loss, and (ii)
the amount of any cash distributions (including distributions of interest income
exempt from
B-4
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federal income tax and cash distributions on withdrawals from the Portfolio) and
the basis to the Holder of any property received by such Holder other than in
liquidation, and (iii) the Holder's distributive share of the Portfolio's
nondeductible expenditures not properly chargeable to capital account. Increases
or decreases in a Holder's share of the Portfolio's liabilities may also result
in corresponding increases or decreases in such adjusted basis.
The Portfolio's transactions in options, futures contracts, forward
contracts and certain other transactions involving foreign exchange gain or loss
will be subject to special tax rules, the effect of which may be to accelerate
income to the Portfolio, defer Portfolio losses, cause adjustments in the
holding periods of Portfolio securities, convert capital gain into ordinary
income and convert short-term capital losses into long-term capital losses. For
example, the tax treatment of many types of options, futures contracts and
forward contacts entered into by the Portfolio will be governed by Section 1256
of the Code. Absent a tax election for "mixed straddles" (see below), each such
position held by the Portfolio on the last business day of each taxable year
will be marked to market (i.e., treated as if it were closed out on such day),
and any resulting gain or loss, except for certain currency-related positions,
will generally be treated as 60% long-term and 40% short-term capital gain or
loss, with subsequent adjustments made to any gain or loss realized upon an
actual disposition of such positions. When the Portfolio holds an option or
contract governed by Section 1256 which substantially diminishes the Holder's
risk of loss with respect to another position of the Portfolio not governed by
Section 1256 (as might occur in some hedging transactions), this combination of
positions could be a "mixed straddle" which is generally subject to special tax
rules requiring deferral of losses and other adjustments in addition to being
subject in part to Section 1256. The Portfolio may make certain tax elections
for its "mixed straddles" which could alter certain effects of these rules.
Income from transactions in options derived by the Portfolio with respect
to its business of investing in securities will qualify as permissible income
for its Holders that are RICs under the requirement that at least 90% of a RIC's
gross income each taxable year consist of specified types of income.
The Portfolio 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. These taxes may be reduced or eliminated under the
terms of an applicable U.S. income tax treaty. The anticipated extent of the
Portfolio's investment in foreign securities is such that it is not expected
that an investor that is a RIC will be eligible to pass through to its
shareholders foreign taxes paid by the Portfolio and allocated to the investor,
so that shareholders of such a RIC will not be entitled to foreign tax credits
or deductions for foreign taxes paid by the Portfolio. Certain foreign exchange
gains and losses realized by the Portfolio and allocated to the RIC will be
treated as ordinary income and losses. Certain uses of foreign currency and
investment by the Portfolio in the stock of certain "passive foreign investment
companies" may be limited or a tax election may be made, if available, in order
to enable an investor that is a RIC to preserve its qualification as a RIC or to
avoid imposition of a tax on such an investor.
The Portfolio's investments, if any, in securities issued with original
issue discount (possibly including certain asset-related securities) or
securities acquired at a market discount (if an election is made to include
accrued 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
enable a Holder to distribute its proportionate share of this income, the
Portfolio may be required to liquidate portfolio securities that is might
otherwise have continued to hold in order to generate cash that the Holder may
withdraw from the Portfolio for subsequent distribution to such Holder's
shareholders.
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An entity that is treated as a partnership under the Code, such as the
Portfolio, is generally treated as a partnership under state and local tax laws,
but certain states may have different entity classification criteria and may
therefore reach a different conclusion. Entities that are classified as
partnerships are not treated as taxable entities under most state and local tax
laws, and the income of a partnership is considered to be income of partners
both in timing and in character. Each Holder of an interest in the Portfolio is
advised to consult his own tax adviser.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, insurance
companies and financial institutions. Investors should consult their own tax
advisers with respect to special tax rules that may apply in their particular
situations, as well as the state, local or foreign tax consequences of investing
in the Portfolio.
ITEM 20. UNDERWRITERS
The placement agent for the Portfolio is EVD. Investment companies, common
and commingled trust funds and similar organizations and entities may
continuously invest in the Portfolio.
ITEM 21. CALCULATION OF PERFORMANCE DATA
Not applicable.
ITEM 22. FINANCIAL STATEMENTS
The following financial statements included herein have been included in
reliance upon the report of PricewaterhouseCoopers LLP, independent accountants,
as experts in accounting and auditing.
Statement of Assets and Liabilities as of February 28, 2000
Independent Accountants' Report
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FINANCIAL STATEMENTS
CAPITAL GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2000
ASSETS:
Cash..........................................................$100,010
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Total assets.............................................$100,010
LIABILITIES:
Net assets.....................................................$100,010
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Note 1: Organization
Capital Growth Portfolio (the "Portfolio") was organized as a New York Trust on
February 28, 2000 and has been inactive since that date, except for matters
relating to its organization and registration as an investment company under the
Investment Company Act of 1940 and the sale of interests therein at the purchase
price of $100,000 to Eaton Vance Management (EVM) and the sale of an interest
therein at the purchase price of $10 to Boston Management & Research (BMR), a
wholly-owned subsidiary of EVM (the "Initial Interests"). Organizational costs
are being borne by EVM and are approximately $3,650.
At 4:00 PM, New York City time, on each business day of the Portfolio, the value
of an investor's interest in the Portfolio is equal to the product of (1) the
aggregate net asset value of the Portfolio multiplied by (ii) the percentage
representing that investor's share of the aggregate interest in the Portfolio
effective for that day.
Note 2: Transactions with Affiliates
The Portfolio has entered into an investment advisory agreement with BMR under
which the fee is computed at the monthly rate of 5/96 of 1% (0.625% annually) of
the Portfolio's average daily net assets up to $170 million and 1/24 of 1%
(0.50% annually) of average daily net assets of $170 million and more.
B-7
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Investors of
Capital Growth Portfolio:
In our opinion, the accompanying statement of assets and liabilities
presents fairly, in all material respects, the financial position of the Capital
Growth Portfolio (the "Portfolio") at February 28, 2000, in conformity with
accounting principles generally accepted in the United States. This financial
statement is the responsibility of the Portfolio's management; our
responsibility is to express an opinion on this financial statement based on our
audit. We conducted our audit of this financial statement in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 28, 2000
B-8
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PART C
ITEM 23. EXHIBITS
(a) Declaration of Trust dated February 28, 2000 filed as Exhibit No.
(a) to the Registrant's Original Registration Statement and
incorporated herein by reference.
(b) By-Laws of the Registrant adopted February 28, 2000 filed as
Exhibit No. (b) to the Registrant's Original Registration
Statement and incorporated herein by reference.
(c) Reference is made to Item 23(a) and 23(b) above.
(d) Investment Advisory Agreement between the Registrant and Boston
Management and Research dated February 28, 2000 filed herewith.
(e) Placement Agent Agreement with Eaton Vance Distributors, Inc.
dated February 28, 2000 filed as Exhibit No. (e) to the
Registrant's Original Registration Statement and incorporated
herein by reference.
(f) The Securities and Exchange Commission has granted the Registrant
an exemptive order that permits the Registrant to enter into
deferred compensation arrangements with its independent Trustees.
See IN THE MATTER OF CAPITAL EXCHANGE FUND, INC., Release No.
IC-20671 (November 1, 1994).
(g) Master Custodian Agreement with Investors Bank & Trust Company
dated February 28, 2000 filed as Exhibit No. (g) to the
Registrant's Original Registration Statement and incorporated
herein by reference.
(j) Consent of Independent Accountants filed herewith.
(l) Investment representation letter of Eaton Vance Management dated
February 28, 2000 filed as Exhibit No. (l) to the Registrant's
Original Registration Statement and incorporated herein by
reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 25. INDEMNIFICATION
Article V of the Registrant's Declaration of Trust contains indemnification
provisions for Trustees and officers. The Trustees and officers of the
Registrant and the personnel of the Registrant's investment adviser are insured
under an errors and omissions liability insurance policy.
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The Placement Agent Agreement also provides for reciprocal indemnity of
the placement agent, on the one hand, and the Trustees and officers, on the
other.
C-2
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ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Reference is made to: (i) the information set forth under the caption
"Management and Organization" in the Statement of Additional Information; (ii)
the Eaton Vance Corp. 10-K filed under the Securities Exchange Act of 1934 (File
No. 1-8100); and (iii) the Forms ADV of Eaton Vance Management (File No.
801-15930) and Boston Management and Research (File No. 801-43127) filed with
the Commission, all of which are incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITERS
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the 1940 Act and the Rules promulgated
thereunder are in the possession and custody of the Registrant's custodian,
Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 02116, with the
exception of certain corporate documents and portfolio trading documents which
are in the possession and custody of the Registrant's investment adviser at The
Eaton Vance Building, 255 State Street, Boston, MA 02109. The Registrant is
informed that all applicable accounts, books and documents required to be
maintained by registered investment advisers are in the custody and possession
of the Registrant's investment adviser.
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form N-1A to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Boston and Commonwealth of Massachusetts on the 20th
day of March, 2000.
CAPITAL GROWTH PORTFOLIO
By:/s/ James B. Hawkes
-------------------
James B. Hawkes
President
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ----------- ----------------------
(d) Investment Advisory Agreement between the Registrant and
Boston Management & Research dated February 28, 2000
(j) Consent of Independent Accountants
Exhibit (d)
CAPITAL GROWTH PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 2000, between Capital Growth
Portfolio, a New York trust (the "Trust"), and Boston Management and Research, a
Massachusetts business trust (the "Adviser").
1. DUTIES OF THE ADVISER. The Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and to administer its affairs, subject to the supervision of
the Trustees of the Trust, for the period and on the terms set forth in this
Agreement.
The Adviser hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of securities for the Trust and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Trust
and for administering its affairs and to pay the salaries and fees of all
officers and Trustees of the Trust who are members of the Adviser's organization
and all personnel of the Adviser performing services relating to research and
investment activities. The Adviser shall for all purposes herein be deemed to be
an independent contractor and shall, except as otherwise expressly provided or
authorized, have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Trust's investments. As investment adviser to the Trust, the
Adviser shall furnish continuously an investment program and shall determine
from time to time what securities and other investments shall be acquired,
disposed of or exchanged and what portion of the Trust's assets shall be held
uninvested, subject always to the applicable restrictions of the Declaration of
Trust, By-Laws and registration statement of the Trust under the Investment
Company Act of 1940, all as from time to time amended. Should the Trustees of
the Trust at any time, however, make any specific determination as to investment
policy for the Trust and notify the Adviser thereof in writing, the Adviser
shall be bound by such determination for the period, if any, specified in such
notice or until similarly notified that such determination has been revoked. The
Adviser shall take, on behalf of the Trust, all actions which it deems necessary
or desirable to implement the investment policies of the Trust.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of the Trust either directly with the issuer or with
brokers or dealers selected by the Adviser, and to that end the Adviser is
authorized as the agent of the Trust to give instructions to the custodian of
the Trust as to deliveries of securities and payments of cash for the account of
the Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall use its best efforts to seek to
execute security transactions at prices which are advantageous to the Trust and
(when a disclosed commission is being charged) at reasonably competitive
commission rates. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to pay any broker or dealer who provides such brokerage and research
services a commission for executing a security transaction which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in
<PAGE>
terms of either that particular transaction or the overall responsibilities
which the Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. Subject to the requirement set forth in the
second sentence of this paragraph, the Adviser is authorized to consider, as a
factor in the selection of any broker or dealer with whom purchase or sale
orders may be placed, the fact that such broker or dealer has sold or is selling
shares of any one or more investment companies sponsored by the Adviser or its
affiliates or shares of any other investment company or series thereof that
invests substantially all of its assets in the Trust.
2. COMPENSATION OF THE ADVISER. For the services, payments and facilities
to be furnished hereunder by the Adviser, the Adviser shall be entitled to
receive from the Trust compensation in an amount equal to 5/96 of 1% of the
average daily net assets of the Trust throughout each month; provided that for
any month during which such average daily net assets exceeds $170,000,000, such
compensation payable for that month based on the portion of such average daily
net assets in excess of $170,000,000 shall be 1/24 of 1% of such portion.
Such compensation shall be paid monthly in arrears on the last business day
of each month. The Trust's daily net assets shall be computed in accordance with
the Declaration of Trust of the Trust and any applicable votes and
determinations of the Trustees of the Trust. In case of initiation or
termination of the Agreement during any month with respect to the Trust, the fee
for that month shall be based on the number of calendar days during which it is
in effect.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Trust will
pay all expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Trust shall include, without implied
limitation, (i) expenses of maintaining the Trust and continuing its existence,
(ii) registration of the Trust under the Investment Company Act of 1940, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale, and redemption of Interests in the Trust, (viii) expenses of
registering and qualifying the Trust and Interests in the Trust under federal
and state securities laws and of preparing and printing registration statements
or other offering statements or memoranda for such purposes and for distributing
the same to Holders and investors, and fees and expenses of registering and
maintaining registrations of the Trust and of the Trust's placement agent as
broker-dealer or agent under state securities laws, (ix) expenses of reports and
notices to Holders and of meetings of Holders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Trust
(including without limitation safekeeping of funds, securities and other
investments, keeping of books, accounts and records, and determination of net
asset values, book capital account balances and tax capital account balances),
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, Holder servicing agents and registrars for all services to the Trust,
(xv) expenses for servicing the account of Holders, (xvi) any direct charges to
Holders approved by the Trustees of the Trust, (xvii) compensation and expenses
of Trustees of the Trust who are not members of the Adviser's organization, and
(xviii) such non-recurring items as may arise, including expenses incurred in
connection with litigation, proceedings and claims and the obligation of the
Trust to indemnify its Trustees, officers and Holders with respect thereto.
2
<PAGE>
4. OTHER INTERESTS. It is understood that Trustees and officers of the
Trust and Holders of Interests in the Trust are or may be or become interested
in the Adviser as trustees, officers, employees, shareholders or otherwise and
that trustees, officers, employees and shareholders of the Adviser are or may be
or become similarly interested in the Trust, and that the Adviser may be or
become interested in the Trust as a Holder or otherwise. It is also understood
that trustees, officers, employees and shareholders of the Adviser may be or
become interested (as directors, trustees, officers, employees, shareholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which the Adviser may organize, sponsor or acquire, or
with which it may merge or consolidate, and which may include the words "Eaton
Vance" or "Boston Management and Research" or any combination thereof as part of
their name, and that the Adviser or its subsidiaries or affiliates may enter
into advisory or management agreements or other contracts or relationships with
such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADVISER. The services of the Adviser to
the Trust are not to be deemed to be exclusive, the Adviser being free to render
services to others and engage in other business activities. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the Adviser shall
not be subject to liability to the Trust or to any Holder of Interests in the
Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the acquisition,
holding or disposition of any security or other investment.
6. SUB-INVESTMENT ADVISERS. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such investment adviser
and approved by the Trustees of the Trust, all as permitted by the Investment
Company Act of 1940.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including February
28, 2002 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 2002 is specifically
approved at least annually (i) by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Trust and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested persons
of the Adviser or the Trust cast in person at a meeting called for the purpose
of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written notice to
the other, terminate this Agreement without the payment of any penalty, by
action of Trustees of the Trust or the trustees of the Adviser, as the case may
be, and the Trust may, at any time upon such written notice to the Adviser,
terminate this Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate automatically in the
event of its assignment.
8. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or the Trust
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding voting securities of the
Trust.
3
<PAGE>
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust (Section 5.2 and 5.6)
limiting the personal liability of the Trustees and officers of the Trust, and
the Adviser hereby agrees that it shall have recourse to the Trust for payment
of claims or obligations as between the Trust and the Adviser arising out of
this Agreement and shall not seek satisfaction from any Trustee or officer of
the Trust.
10. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of Holders, of
the lesser of (a) 67 per centum or more of the Interests in the Trust present or
represented by proxy at the meeting if the Holders of more than 50 per centum of
the outstanding Interests in the Trust are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the outstanding Interests in the
Trust. The terms "Holders" and "Interests" when used herein shall have the
respective meanings specified in the Declaration of Trust of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
CAPITAL GROWTH PORTFOLIO
By: /s/ James B. Hawkes
-------------------
President
BOSTON MANAGEMENT AND RESEARCH
By: /s/ Alan R. Dynner
------------------
Vice President
and not individually
4
Exhibit (j)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Amendment No. 1 to the Registration
Statement on Form N-1A of our report dated February 28, 2000, relating to the
financial statement of the Capital Growth Portfolio, which appears in such
Registration Statement. We also consent to the reference to us under the heading
"Financial Statements" in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 20, 2000
