<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>facingpage.txt
<TEXT>

        As filed with the Securities and Exchange Commission on October 31, 2006
                                                     1933 Act File No. 333-
                                                     1940 Act File No. 811-21973

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM N-2

                             REGISTRATION STATEMENT
                      UNDER THE SECURITIES ACT OF 1933           [x]
                          PRE-EFFECTIVE AMENDMENT NO.            [ ]
                          POST-EFFECTIVE AMENDMENT NO.           [ ]


                                     AND/OR



                        REGISTRATION STATEMENT UNDER THE
                         INVESTMENT COMPANY ACT OF 1940          [x]
                                 AMENDMENT NO.                   [ ]
                        (CHECK APPROPRIATE BOX OR BOXES)

         EATON VANCE TAX-MANAGED GLOBAL DIVERSIFIED EQUITY INCOME FUND
         -------------------------------------------------------------
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

    THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
    -----------------------------------------------------------------------
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (617) 482-8260
       -----------------------------------------------------------------

                                 ALAN R. DYNNER
    THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
    -----------------------------------------------------------------------
                    NAME AND ADDRESS (OF AGENT FOR SERVICE)

                          COPIES OF COMMUNICATIONS TO:


                              MARK P. GOSHKO, ESQ.
                  KIRKPATRICK & LOCKHART NICHOLSON GRAHAM LLP
                         STATE STREET FINANCIAL CENTER
                               ONE LINCOLN STREET
                          BOSTON, MASSACHUSETTS 02111


   APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:  As soon as practicable after
the effective date of this Registration Statement.

   If any of the securities being registered on this form are to be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. []

   It is proposed that this filing will become effective (check appropriate
box):
      [] when declared effective pursuant to Section 8(c)CALCULATION OF

<PAGE>

<TABLE>
<CAPTION>

                                   REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

------------------------------------------------------------------------------------------------------------------------------------
                                                                       PROPOSED         PROPOSED
                                                     AMOUNT BEING      MAXIMUM          MAXIMUM            AMOUNT OF
                                                      REGISTERED       OFFERING         AGGREGATE       REGISTRATION FEES
                                                          (1)        PRICE PER UNIT   OFFERING PRICE         (1)(2)
                                                                          (1)               (1)
       TITLE OF SECURITIES BEING
               REGISTERED
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>             <C>           <C>                  <C>
Common Shares of Beneficial
Interest, $0.01 par value                                50,000          $20.00        $1,000,000           $107.00

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  Estimated solely for purposes of calculating the registration fee, pursuant
     to Rule 457(o) under the Securities Act of 1933.

(2)  Includes Shares that may be offered to the Underwriters pursuant to an
     option to cover over-allotments.

                      ____________________________________


   THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.


                                   SUBJECT TO COMPLETION, DATED OCTOBER 31, 2006
PRELIMINARY PROSPECTUS
(EATON VANCE LOGO)

                                        SHARES
             EATON VANCE TAX-MANAGED GLOBAL DIVERSIFIED EQUITY INCOME FUND
                                     COMMON SHARES
                                   $20.00 PER SHARE
                                     -------------

   INVESTMENT OBJECTIVES. Eaton Vance Tax-Managed Global Diversified Equity
Income Fund (the "Fund") is a newly organized, diversified, closed-end
management investment company. The Fund's primary investment objective is to
provide current income and gains, with a secondary objective of capital
appreciation. In pursuing its investment objectives, the Fund will evaluate
returns on an after-tax basis, seeking to minimize and defer shareholder federal
income taxes.

   PORTFOLIO MANAGEMENT STRATEGIES. Under normal market conditions, the Fund's
investment program will consist primarily of owning a diversified portfolio of
domestic and foreign common stocks. The Fund will seek to earn high levels of
tax-advantaged income and gains by (1) emphasizing investments in stocks that
pay dividends that qualify for favorable federal income tax treatment and (2)
writing (selling) stock index call options with respect to a portion of its
common stock portfolio value. Call options on broad-based stock indices
generally qualify for treatment as "section 1256 contracts," as defined in the
Internal Revenue Code of 1986, as amended, on which capital gains and losses are
generally treated as 60% long-term and 40% short-term, regardless of holding
period.

   INVESTMENT ADVISER AND SUB-ADVISER. The Fund's investment adviser is Eaton
Vance Management ("Eaton Vance" or the "Adviser"). As of September 30, 2006,
Eaton Vance and its subsidiaries managed approximately $124.1 billion on behalf
of funds, institutional clients and individuals, including approximately $74.9
billion in equity assets. Eaton Vance has engaged Rampart Investment Management
Company, Inc. ("Rampart" or the "Sub-Adviser") as a sub-adviser of the Fund.
Rampart, founded in 1983, specializes in options management and trading for
institutional, high net worth and investment company clients. Rampart managed
approximately $6.6 billion in assets as of September 30, 2006. Eaton Vance will
be responsible for the Fund's overall investment program, structuring and
managing the Fund's common stock portfolio, including dividend capture trading,
tax-loss harvesting and other tax-management techniques, providing consultation
to the Sub-Adviser and supervising the performance of the Sub-Adviser. Rampart
will be responsible for providing advice on and execution of the Fund's options
strategy. (continued on inside front cover)

   This Prospectus sets forth concisely information you should know before
investing in the shares of the Fund.

   BECAUSE THE FUND IS NEWLY ORGANIZED, ITS COMMON SHARES ("COMMON SHARES") HAVE
NO HISTORY OF PUBLIC TRADING. THE SHARES OF CLOSED-END INVESTMENT COMPANIES
OFTEN TRADE AT A DISCOUNT FROM THEIR NET ASSET VALUE, WHICH MAY INCREASE
INVESTORS' RISK OF LOSS.

   ------------- INVESTING IN THE FUND'S COMMON SHARES INVOLVES CERTAIN RISKS.
SEE "INVESTMENT OBJECTIVES, POLICIES AND RISKS-RISK CONSIDERATION" BEGINNING ON
PAGE [ ].

   Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
                                 -------------

                                                    PER SHARE           TOTAL(1)
 Public Offering Price                                 $20.00                  $
 Sales Load(2)                                          $0.90                  $
 Estimated Offering Expenses (3)                        $0.04                  $
 Proceeds to the Fund                                  $19.06                  $
                                  -------------

(1)  The underwriters may also purchase up to an additional Common Shares at the
     public offering price, less the sales load, within 45 days from the date of
     this Prospectus to cover over-allotments, if any. If such option is
     exercised in full, the total public offering price, sales load, estimated
     offering expenses and proceeds to the Fund will be $ , $ , $ , and $ ,
     respectively

(2)  Eaton Vance has agreed to pay from its own assets a structuring fee to each
     of [ ], [ ] and [ ] [and additional compensation to ]. [Eaton Vance (not
     the Fund) may pay certain qualifying underwriters a marketing and
     structuring fee, additional compensation, or a sales incentive fee in
     connection with the offering.] See "Underwriting." The total compensation
     received by the underwriters will not exceed 9.0% of the total public
     offering price of the Common Shares offered hereby.

(3)  In addition to the sales load, the Fund will pay offering costs of up to
     $0.04 per share, estimated to total $ , which will reduce the "Proceeds to
     the Fund" (above). Eaton Vance or an affiliate has agreed to pay the amount
     by which the aggregate of all of the Fund's offering costs (other than
     sales loads) exceeds $0.04 per share. Eaton Vance or an affiliate has
     agreed to reimburse all organizational costs.

    The underwriters expect to deliver the Common Shares to purchasers on or
                          about ________________, 2007

                                     -------------

                    THE DATE OF THIS PROSPECTUS IS [  ] [  ], 2006
<PAGE>

   (CONTINUED FROM PREVIOUS PAGE)

PORTFOLIO CONTENTS. Under normal market conditions, the Fund will invest at
least 80% of its total assets in a combination of (1) dividend-paying domestic
and foreign common stocks and (2) common stocks the value of which is subject to
covered written index call options. Typically, the Fund will invest at least 40%
of its total assets in securities of non-U.S. companies (unless the Adviser
deems market conditions and/or company valuations less favorable to non-U.S.
companies, in which case the Fund will invest at least 30% of its total assets
in securities of non-U.S. companies). The Fund may not invest 25% or more of its
total assets in the securities of issuers in any single industry. The Fund will
emphasize investments in stocks that pay dividends that qualify for federal
income taxation at rates applicable to long-term capital gains, and will seek to
enhance the level of tax-advantaged dividend income it receives by engaging in
dividend capture trading. In a dividend capture trade, the Fund sells a stock on
or shortly after the stock's ex-dividend date and uses the sale proceeds to
purchase one or more other stocks that are expected to pay dividends before the
next dividend payment on the stock being sold. Through this practice, the Fund
may receive more dividend payments over a given time period than if it held a
single stock. By complying with applicable holding period and other requirements
while engaging in dividend capture trading, the Fund may enhance the level of
tax-advantaged dividend income it receives. The use of dividend capture trading
strategies will expose the Fund to increased trading costs and potentially
higher short-term gain or loss.

   The Fund intends to write call options on broad-based domestic, foreign
country and/or regional stock indices that the Adviser believes collectively
approximate the characteristics of its common stock portfolio (or that portion
of its portfolio against which options are written) and that present attractive
opportunities to earn options premiums. [The Fund intends initially to write
call options on the S&P 500 Composite Stock Price Index{reg-trade-mark} and at
least one broad-based foreign stock index, and may also initially write call
options on other domestic and foreign stock indices.] Over time, the indices on
which the Fund writes call options may vary as a result of changes in the
availability and liquidity of various listed index options, changes in stock
portfolio holdings, the Adviser's evaluation of equity market conditions and
other factors. Writing index call options involves a tradeoff between the option
premiums received and reduced participation in potential future stock price
appreciation. Due to tax considerations, the Fund intends to limit the overlap
between its stock holdings (and any subset thereof) and each index on which it
has outstanding options positions to less than 70% on an ongoing basis. The
Fund's stock holdings will normally include stocks not included in the indices
on which it writes call options.

  THE FUND SEEKS TO GENERATE CURRENT EARNINGS FROM DIVIDENDS ON STOCKS HELD AND
FROM OPTION PREMIUMS. The Fund intends to employ a variety of tax-management
techniques and strategies as described herein, seeking in part to minimize the
Fund's ordinary income (other than qualified dividend income) and net realized
short-term capital gains in excess of net realized long-term capital losses and
Fund expenses. To the extent that the Fund's ordinary income (other than
qualified dividend income) and net realized short-term gains over net realized
long-term losses exceed Fund expenses, dividends with respect to such amounts
when paid to Common Shareholders (as defined below) will be taxable as ordinary
income.

   EXCHANGE LISTING. The Fund has applied for listing of its common shares on
the New York Stock Exchange under the symbol "[ ]." Because the Fund is newly
organized, its Common Shares have no history of public trading. The shares of
closed-end management investment companies frequently trade at a discount from
their net asset value. The returns earned by holders of the Fund's Common Shares
("Common Shareholders") who purchase their shares in this offering and sell
their shares below net asset value will be reduced.

   Eaton Vance believes that the Fund may be appropriate for investors seeking
an investment vehicle that combines regular distributions and the potential for
capital appreciation. The Fund may be particularly well suited for taxpaying
investors who can benefit from the minimization and deferral of federal income
taxes that the Fund seeks to provide.

   The Fund's net asset value and distribution rate will vary and may be
affected by numerous factors, including changes in stock prices, dividend rates,
dividend capture trading activity, option premiums and other factors. An
investment in the Fund may not be appropriate for all investors. There is no
assurance that the Fund will achieve its investment objectives.

  Please read and retain this Prospectus for future reference. A Statement of
Additional Information dated 2006 has been filed with the Securities and
Exchange Commission and can be obtained without charge by calling 1-800-225-6265
or by writing to the Fund. A table of contents to the Statement of Additional
Information is located at page [ ] of this Prospectus. This Prospectus
incorporates by reference the entire Statement of Additional Information. The
Statement of Additional Information is available along with shareholder reports
and other Fund-related materials at the Securities and Exchange Commission's
public reference room in Washington, DC (call 1-202-942-8090 for information on
the operation of the reference room), from the EDGAR database on the Securities
and Exchange Commission's internet site (http://www.sec.gov), upon payment of
copying fees by writing to the Securities and Exchange Commission's public
reference section, Washington, DC 20549-0102; or by electronic mail at
publicinfo@sec.gov. The Fund's address is The Eaton Vance Building, 255 State
Street, Boston, Massachusetts 02109 and its telephone number is 1-800-225-6265.

                                       2
<PAGE>

  The Fund's shares do not represent a deposit or obligation of, and are not
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.

   The Fund is not sponsored, endorsed, sold or promoted by any index sponsor.
No index sponsor has passed on the legality or suitability of, or the accuracy
or adequacy of, descriptions and disclosures relating to the Fund. No index
sponsor has made any representation or warranty, express or implied, to the
Common Shareholders of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly,
or the ability of any index to track general stock market performance. The
indices are determined, composed and calculated by the respective index sponsors
without regard to the Fund or its use of the indices for option writing. The
index sponsors have no obligation to take the needs of the Fund or its Common
Shareholders into consideration in determining, composing or calculating the
indices. No index sponsor is responsible for or has participated in the
determination of the timing of, price of, or number of Common Shares of the Fund
to be issued. No index sponsor has any liability in connection with the
management, administration, marketing or trading of the Fund.

   THE INDEX SPONSORS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE INDICES OR ANY DATA INCLUDED THEREIN. THE INDEX SPONSORS MAKE
NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, THE
COMMON SHAREHOLDERS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDICES IN
THE FUND'S OPTIONS WRITING PROGRAM. IN PUBLISHING THE INDICES, THE INDEX
SPONSORS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE INDICES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL AN INDEX SPONSOR HAVE ANY LIABILITY FOR ANY LOST
PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES,
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

                                       3
<PAGE>

   You should rely only on the information contained or incorporated by
reference in this Prospectus. The Fund has not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. The Fund is not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information provided by this Prospectus is accurate
as of any date other than the date on the front of this Prospectus. The Fund's
business, financial condition and results of operations may have changed since
the date of this Prospectus. -----------------

                                TABLE OF CONTENTS

                                                                            PAGE
 Prospectus Summary........................................................
 Summary of Fund Expenses..................................................
 The Fund..................................................................
 Use of Proceeds...........................................................
 Investment Objectives and Policies........................................
 Risk Factors..............................................................
 Management of the Fund....................................................
 Distributions.............................................................
 Federal Income Tax Matters................................................
 Dividend Reinvestment Plan................................................
 Description of Capital Structure..........................................
 Underwriting..............................................................
 Custodian and Transfer Agent..............................................
 Legal Opinions............................................................
 Reports to Shareholders...................................................
 Independent Registered Public Accounting Firm.............................
 Additional Information....................................................
 Table of Contents for the Statement of Additional Information.............
 The Fund's Privacy Policy.................................................

   Until , 2006 (25 days after the date of this Prospectus), all dealers that
buy, sell or trade the Common Shares, whether or not participating in this
offering, may be required to deliver a Prospectus. This requirement is in
addition to the dealers' obligation to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.

                                       4
<PAGE>

                               PROSPECTUS SUMMARY
   This is only a summary. This summary may not contain all of the information
that you should consider before investing in the Eaton Vance Tax-Managed Global
Diversified Equity Income Fund's common shares ("Common Shares"). You should
review the more detailed information contained in this Prospectus and in the
Statement of Additional Information, especially the information set forth under
the heading "Investment Objectives and Policies" and "Risk Factors."

<TABLE>
<CAPTION>
<S>                                       <C>
THE FUND................................. Eaton Vance Tax-Managed Global Diversified Equity Income Fund (the
                                          "Fund") is a newly organized, diversified, closed-end management
                                          investment company. The Fund seeks to provide current income and
                                          gains, with a secondary objective of capital appreciation.
                                          Investments are based on Eaton Vance Management's ("Eaton Vance"
                                          or the "Adviser") and Rampart Investment Management Company,
                                          Inc.'s ("Rampart" or the "Sub-Adviser") internal research and
                                          management. An investment in the Fund may not be appropriate for
                                          all investors.

THE OFFERING............................. The Fund is offering  Common Shares of beneficial interest, par
                                          value $.01 per share, through a group of underwriters (the
                                          "Underwriters") led by  [  ] ,  and  . The Common Shares of
                                          beneficial interest are called "Common Shares." The Underwriters
                                          have been granted an option by the Fund to purchase up to an
                                          additional  Common Shares solely to cover orders in excess of
                                          Common Shares. The initial public offering price is $20.00 per
                                          Common Share. The minimum purchase in this offering is 100 Common
                                          Shares ($2,000). See "Underwriting." Eaton Vance or an affiliate
                                          has agreed to (i) reimburse all organizational costs of the Fund
                                          and (ii) pay all offering costs (other than sales load) that
                                          exceed $.04 per Common Share.

INVESTMENT OBJECTIVES AND STRATEGIES..... The Fund's primary investment objective is to provide current
                                          income and gains, with a secondary objective of capital
                                          appreciation. In pursuing its investment objectives, the Fund will
                                          evaluate returns on an after-tax basis, seeking to minimize and
                                          defer shareholder federal income taxes. There can be no assurance
                                          that the Fund will achieve its investment objectives.

                                          Under normal market conditions, the Fund's investment program will
                                          consist primarily of owning a diversified portfolio of domestic and
                                          foreign common stocks. The Fund will seek to earn high levels of
                                          tax-advantaged income and gains by (1) emphasizing investments in stocks
                                          that pay dividends that qualify for favorable federal income tax
                                          treatment and (2) writing (selling) stock index call options with
                                          respect to a portion of its common stock portfolio value. Call options
                                          on broad-based stock indices generally will qualify for treatment as
                                          "section 1256 contracts" as defined in the Internal Revenue Code of
                                          1986, as amended (the "Code"), on which capital gains and losses are
                                          generally treated as 60% long-term and 40% short-term, regardless of
                                          holding period.

                                          Under normal market conditions, the Fund will invest at least 80% of its
                                          total assets in a combination of (1) dividend-paying domestic and
                                          foreign common stocks and (2) common stocks the value of which is
                                          subject to covered written index call options. The Fund will emphasize
                                          investments in stocks that pay dividends that qualify for federal income
                                          taxation at rates applicable to long-term capital gains, and will seek
                                          to enhance the level of tax-advantaged dividend income it receives by
                                          engaging in dividend capture trading. In a dividend capture trade, the
                                          Fund sells a stock on or shortly after the stock's ex-dividend date and
                                          uses the sale proceeds to purchase one or more other stocks that are
                                          expected to pay dividends before the next dividend payment on the stock
                                          being sold. Through this practice, the Fund may receive more dividend
                                          payments over a given time period than if it held a single stock. By
                                          complying with applicable holding period and other requirements while
                                          engaging in dividend capture trading, the


                                                      5
<PAGE>

                                          Fund may enhance the level of tax-advantaged dividend income it
                                          receives. The use of dividend capture trading strategies will expose the
                                          Fund to increased trading costs and potentially higher short-term gain
                                          or loss.

                                          Typically, the Fund will invest at least 40% of its total assets in
                                          securities of non-U.S. companies (unless the Adviser deems market
                                          conditions and/or company valuations less favorable to non-U.S.
                                          companies, in which case the Fund will invest at least 30% of its total
                                          assets in securities of non-U.S. companies). The Fund's investments in
                                          non-U.S. companies may include securities evidenced by American
                                          Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs") and
                                          European Depositary Receipts ("EDRs"). The Fund may invest up to [5%] of
                                          its total assets in securities of emerging market issuers. The Fund
                                          expects that its assets will normally be invested across a broad range
                                          of industries and market sectors. The Fund may not invest 25% or more of
                                          its total assets in the securities of issuers in any single industry.
                                          The Fund may invest a portion of its assets in stocks of
                                          mid-capitalization companies. Eaton Vance generally considers
                                          mid-capitalization companies to be those companies having market
                                          capitalizations within the range of capitalizations for the S&P MidCap
                                          400 Index (the "S&P MidCap 400"). As of September 30, 2006, the median
                                          market capitalization of companies in the S&P MidCap 400 was
                                          approximately $2.55 billion.

                                          The Fund intends to write call options on broad-based domestic, foreign
                                          country and/or regional stock indices that the Adviser believes
                                          collectively approximate the characteristics of its common stock
                                          portfolio (or that portion of its portfolio against which options are
                                          written) and that present attractive opportunities to earn options
                                          premiums. [The Fund intends initially to write call options on the S&P
                                          500 Composite Stock Price Index(R) (the "S&P 500") and at least one
                                          broad-based foreign stock index, and may also initially write call
                                          options on other domestic and foreign stock indices.] Over time, the
                                          indices on which the Fund writes call options may vary as a result of
                                          changes in the availability and liquidity of various listed index
                                          options, changes in stock portfolio holdings, the Adviser's evaluation
                                          of equity market conditions and other factors. Writing index call
                                          options involves a tradeoff between the option premiums received and
                                          reduced participation in potential future stock price appreciation. Due
                                          to tax considerations, the Fund intends to limit the overlap between its
                                          stock holdings (and any subset thereof) and each index on which it has
                                          outstanding options positions to less than 70% on an ongoing basis. The
                                          Fund's stock holdings will normally include stocks not included in the
                                          indices on which it writes call options.

                                          The Fund generally intends to sell index call options that are
                                          exchange-listed and "European style," meaning that the options may be
                                          exercised only on the expiration date of the option. Index options
                                          differ from options on individual securities in that index options (i)
                                          typically are settled in cash rather than by delivery of securities and
                                          (ii) reflect price fluctuations in a group of securities or segments of
                                          the securities market rather than price fluctuations in a single
                                          security.

                                          As the seller of index call options, the Fund will receive cash (the
                                          premiums) from option purchasers. The purchaser of an index call option
                                          has the right to any appreciation in the value of the applicable index
                                          over a fixed price (the exercise price) as of a specified date in the
                                          future (the option valuation date). Generally, the Fund intends to sell
                                          call options that are slightly "out-of-the-money" (i.e., the exercise
                                          price generally will be slightly above the current level of the
                                          applicable index when the option is sold). The Fund may also sell index
                                          options that are more substantially "out-of-the-money." Such options
                                          that are more substantially "out-of-the-money" provide greater potential
                                          for the Fund to realize capital appreciation, but generally would pay a
                                          lower premium than options that are slightly "out-of-the-money."


                                                      6
<PAGE>

                                          In writing index options, the Fund will, in effect, sell the potential
                                          appreciation in the value of the applicable index above the exercise
                                          price in exchange for the option premium received. If, at expiration, an
                                          index call option sold by the Fund is exercised, the Fund will pay the
                                          purchaser the difference between the cash value of the applicable index
                                          and the exercise price of the option. The premium, the exercise price
                                          and the market value of the applicable index will determine the gain or
                                          loss realized by the Fund as the seller of the index call option.

                                          The Fund's policy that, under normal market conditions, the Fund will
                                          invest at least 80% of its total assets in a combination of (1)
                                          dividend-paying domestic and foreign common stocks and (2) common stocks
                                          the value of which is subject to covered written index call options is a
                                          non-fundamental policy that may be changed by the Fund's Board of
                                          Trustees (the "Board") without Common Shareholder approval following the
                                          provision of 60 days' prior written notice to Common Shareholders.

                                          In implementing the Fund's investment strategy, the Adviser and
                                          Sub-Adviser intend to employ a variety of techniques and strategies
                                          designed to minimize and defer the federal income taxes incurred by
                                          Common Shareholders in connection with their investment in the Fund as
                                          described below.

                                          [The S&P 500 is an unmanaged index of 500 stocks maintained and
                                          published by Standard & Poor's that is market-capitalization weighted
                                          and generally representative of the performance of larger stocks traded
                                          in the United States.]

                                          The Fund is not sponsored, endorsed, sold or promoted by any index
                                          sponsor. No index sponsor has passed on the legality or suitability of,
                                          or the accuracy or adequacy of descriptions and disclosures relating to
                                          the Fund. No index sponsor has made any representation or warranty,
                                          express or implied, to the Common Shareholders of the Fund or any member
                                          of the public regarding the advisability of investing in securities
                                          generally or in the Fund particularly, or the ability of any index to
                                          track general stock market performance. The indices are determined,
                                          composed and calculated by the respective index sponsors without regard
                                          to the Fund or its use of the indices for option writing. The index
                                          sponsors have no obligation to take the needs of the Fund or its Common
                                          Shareholders into consideration in determining, composing or calculating
                                          the indices. No index sponsor is responsible for or has participated in
                                          the determination of the timing of, price of, or number of Common Shares
                                          of the Fund to be issued. No index sponsor has any liability in
                                          connection with the management, administration, marketing or trading of
                                          the Fund.

                                          THE INDEX SPONSORS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
                                          CALCULATION OF THE INDICES OR ANY DATA INCLUDED THEREIN. THE INDEX
                                          SPONSORS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
                                          OBTAINED BY THE FUND, THE COMMON SHAREHOLDERS OR ANY OTHER PERSON OR
                                          ENTITY FROM THE USE OF THE INDICES IN THE FUND'S OPTIONS WRITING
                                          PROGRAM. IN PUBLISHING THE INDICES, THE INDEX SPONSORS MAKE NO EXPRESS
                                          OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF
                                          MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
                                          TO THE INDICES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
                                          FOREGOING, IN NO EVENT SHALL AN INDEX SPONSOR HAVE ANY LIABILITY FOR ANY
                                          LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
                                          DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

INVESTMENT SELECTION STRATEGIES.......... Eaton Vance will be responsible for the Fund's overall investment
                                          program, structuring and managing the Fund's domestic and foreign


                                                      7
<PAGE>

                                          common stock portfolio, including dividend capture trading, tax-loss
                                          harvesting and other tax-management techniques, providing consultation
                                          to the Sub-Adviser and supervising the performance of the Sub-Adviser.
                                          The Fund's investments will be actively managed, and securities may be
                                          bought or sold on a daily basis. Rampart will be responsible for
                                          providing advice on and execution of the Fund's options strategy.

                                          A team of Eaton Vance investment professionals is responsible for the
                                          overall management of the Fund's investments, including decisions about
                                          asset allocation and securities selection. The portfolio managers
                                          utilize information provided by, and the expertise of, the Adviser's
                                          research staff in making investment decisions. Investment decisions are
                                          made primarily on the basis of fundamental research, which involves
                                          consideration of the various company-specific and general business,
                                          economic and market factors that may influence the future performance of
                                          individual companies and equity investments therein. The Adviser will
                                          also consider a variety of other factors in constructing and maintaining
                                          the Fund's stock portfolio, including, but not limited to, stock
                                          dividend yields and payment schedules, overlap between the Fund's stock
                                          holdings and the indices on which it has outstanding options positions,
                                          realization of tax loss harvesting opportunities and other tax
                                          management considerations.

                                          The Adviser believes that a strategy of owning a portfolio of common
                                          stocks and selling covered call options (a "buy-write strategy") with
                                          respect to a portion thereof can provide current income and gains and
                                          attractive risk-adjusted returns. The Fund will sell only "covered" call
                                          options. An index call option is considered covered if the Fund
                                          maintains with its custodian assets determined to be liquid (in
                                          accordance with procedures established by the Board) in an amount at
                                          least equal to the contract value of the index. An index call option
                                          also is covered if the Fund holds a call on the same index as the call
                                          written where the exercise price of the call held is (i) equal to or
                                          less than the exercise price of the call written, or (ii) greater than
                                          the exercise price of the call written, provided the difference is
                                          maintained by the Fund in segregated assets determined to be liquid (in
                                          accordance with procedures established by the Board). Compared to
                                          selling call options on individual stocks, the Adviser believes that
                                          selling index call options can achieve better tax and transactional
                                          efficiency because listed options on broad-based securities indices
                                          generally qualify as "section 1256 contracts" under the Code subject to
                                          specialized tax treatment and because the markets for index options are
                                          generally deeper and more liquid than options on individual stocks.
                                          Although the Fund generally and initially expects to write stock index
                                          call options with respect to only a portion of its common stock
                                          portfolio value, the Fund may in market circumstances deemed appropriate
                                          by the Adviser write covered index call options on up to 100% of the
                                          value of its assets.

                                          Eaton Vance further believes that a strategy of owning a portfolio of
                                          domestic and foreign common stocks in conjunction with writing index
                                          call options with respect to a portion thereof should generally provide
                                          returns that are superior to owning the same stocks without an
                                          associated call option writing program under three different stock
                                          market scenarios: (1) down-trending equity markets; (2) flat market
                                          conditions; and (3) moderately rising equity markets. In the Adviser's
                                          opinion, only in more strongly rising equity markets would the buy-write
                                          strategy generally be expected to underperform the stock-only portfolio.
                                          For these purposes, the Adviser considers more strongly rising equity
                                          market conditions to exist whenever the current annual rate of return
                                          for


                                                      8
<PAGE>

                                          United States common stocks (as represented by the S&P 500) exceeds the
                                          long-term historical average of stock market returns. The Adviser
                                          considers moderately rising equity market conditions to exist whenever
                                          current annual returns on United States common stocks are positive, but
                                          do not exceed the long-term historical average of stock market returns.

                                          To avoid being subject to the "straddle rules" under federal income tax
                                          law, the Fund intends to limit the overlap between its stock holdings
                                          (and any subset thereof) and each index on which it has outstanding
                                          options positions to less than 70% on an ongoing basis. Under the
                                          "straddle rules," "offsetting positions with respect to personal
                                          property" generally are considered to be straddles. In general,
                                          investment positions will be offsetting if there is a substantial
                                          diminution in the risk of loss from holding one position by reason of
                                          holding one or more other positions. The Fund expects that the index
                                          call options it writes will not be considered straddles because its
                                          stock holdings will be sufficiently dissimilar from the components of
                                          each index on which it has open call options positions under applicable
                                          guidance established by the Internal Revenue Service (the "IRS"). Under
                                          certain circumstances, however, the Fund may enter into options
                                          transactions or certain other investments that may constitute positions
                                          in a straddle.

                                          The Fund's index option strategy is designed to produce current cash
                                          flow from options premiums and to moderate the volatility of the Fund's
                                          returns. This index option strategy is of a hedging nature, and is not
                                          designed to speculate on equity market performance. The Adviser believes
                                          that the Fund's index option strategy will moderate the volatility of
                                          the Fund's returns because the option premiums received will help to
                                          mitigate the impact of downward price movements in the stocks held by
                                          the Fund, while the Fund's obligations under index calls written will
                                          constrain the Fund's ability to participate in upward price movements in
                                          portfolio stocks.

                                          The Fund expects normally to sell index call options on a portion of its
                                          common stock portfolio value. The Adviser does not intend to sell index
                                          call options representing amounts greater than the value of the Fund's
                                          common stock portfolio (i.e., take a "naked" position). The Adviser
                                          generally intends to sell index call options that are exchange-listed
                                          and "European style," meaning that the options may only be exercised on
                                          the expiration date of the option. Exchange-traded index options are
                                          typically settled in cash and provide that the holder of the option has
                                          the right to receive an amount of cash determined by the excess of the
                                          exercise-settlement value of the index over the exercise price of the
                                          option. The exercise-settlement value is calculated based on opening
                                          sales prices of the component index stocks on the option valuation date,
                                          which is the last business day before the expiration date. Generally,
                                          the Adviser intends to sell index call options that are slightly
                                          "out-of-the-money," meaning that option exercise prices generally will
                                          be slightly above the current level of the index at the time the options
                                          are written. The Fund may also sell index options that are more
                                          substantially "out-of-the-money." Such options that are more
                                          substantially "out-of-the-money" provide greater potential for the Fund
                                          to realize capital appreciation on its portfolio stocks but generally
                                          would pay a lower premium than options that are slightly
                                          "out-of-the-money." The Adviser expects initially to follow a primary
                                          options strategy of selling index call options with a remaining maturity
                                          of between approximately one and three months and maintaining its short
                                          call options positions until approximately their option valuation date,
                                          at which time replacement call option positions with a remaining
                                          maturity within this range are written.

                                          In implementing the Fund's investment strategy, the Adviser intends to
                                          employ a variety of techniques and strategies designed to minimize and
                                          defer the federal income taxes incurred by Common Shareholders in
                                          connection with their investment in the Fund. These include: (1)
                                          investing in stocks that pay dividends that qualify for federal income
                                          taxation at rates applicable to


                                                      9
<PAGE>

                                          long-term capital gains and complying with the holding period and other
                                          requirements for favorable tax treatment; (2) selling index call options
                                          that qualify for treatment as "section 1256 contracts" under the Code on
                                          which capital gains and losses are generally treated as 60% long-term
                                          and 40% short-term, regardless of holding period; (3) limiting the
                                          overlap between the Fund's stock holdings (and any subset thereof) and
                                          each index on which it has outstanding options positions to less than
                                          70% on an ongoing basis so that the Fund's stock holdings and index call
                                          options are not subject to the "straddle rules;" (4) engaging in a
                                          systematic program of tax-loss harvesting in the Fund's stock portfolio,
                                          periodically selling stock positions that have depreciated in value to
                                          realize capital losses that can be used to offset capital gains realized
                                          by the Fund; and (5) managing the sale of appreciated stock positions so
                                          as to minimize the Fund's net realized short-term capital gains in
                                          excess of net realized long-term capital losses. When an appreciated
                                          security is sold, the Fund intends to select for sale the share lots
                                          resulting in the most favorable tax treatment, generally those with
                                          holding periods sufficient to qualify for long-term capital gains
                                          treatment that have the highest cost basis.

                                          As described above, the Fund intends to emphasize investments in stocks
                                          that pay dividends that qualify for federal income taxation at rates
                                          applicable to long-term capital gains. Under federal income tax law
                                          enacted in 2003, the qualified dividend income of individuals and other
                                          noncorporate taxpayers is taxed at long-term capital gain tax rates if
                                          certain holding period and other requirements are met. Qualified
                                          dividends are dividends from domestic corporations and dividends from
                                          foreign corporations that meet certain specified criteria. The Fund
                                          generally can pass the tax treatment of qualified dividend income it
                                          receives through to Common Shareholders. For dividends the Fund receives
                                          to qualify for tax-advantaged treatment, the Fund must hold stock paying
                                          qualified dividends for more than 60 days during the 121-day period
                                          beginning 60 days before the ex-dividend date (or more than 90 days
                                          during the associated 181-day period, in the case of certain preferred
                                          stocks). In addition, the Fund cannot be obligated to make related
                                          payments (pursuant to a short sale or otherwise) with respect to
                                          positions in any security that is substantially similar or related
                                          property with respect to such stock. Similar provisions apply to each
                                          Common Shareholder's investment in the Fund. In order for qualified
                                          dividend income paid by the Fund to a Common Shareholder to be taxable
                                          at long-term capital gains rates, the Common Shareholder must hold his
                                          or her Fund shares for more than 60 days during the 121-day period
                                          surrounding the ex-dividend date. The provisions of the Code applicable
                                          to qualified dividend income are effective through 2010. Thereafter,
                                          qualified dividend income will be subject to tax at ordinary income
                                          rates unless further legislative action is taken. The Fund's investment
                                          program and the tax treatment of Fund distributions may be affected by
                                          IRS interpretations of the Code and future changes in tax laws and
                                          regulations, including changes resulting from the "sunset" provisions
                                          described above that would have the effect of repealing the favorable
                                          treatment of qualified dividend income and reimposing the higher tax
                                          rates applicable to ordinary income in 2011 unless further legislative
                                          action is taken.

                                          The Fund may seek to enhance the level of tax-advantaged dividend income
                                          it receives by engaging in dividend capture trading. In a dividend
                                          capture trade, the Fund sells a stock on or shortly after the stock's
                                          ex-dividend date and uses the sale proceeds to purchase one or more
                                          other stocks that are expected to pay dividends before the next dividend
                                          payment on the stock being sold. Through this practice, the Fund may
                                          receive more dividend payments over a given time period than if it held
                                          a single stock. In order for dividends received by the Fund to qualify
                                          for favorable tax treatment, the Fund must comply with the holding


                                                     10
<PAGE>

                                          period and other requirements set forth in the preceding paragraph. By
                                          complying with applicable holding period and other requirements while
                                          engaging in dividend capture trading, the Fund may be able to enhance
                                          the level of tax-advantaged dividend income it receives because it will
                                          receive more dividend payments qualifying for favorable treatment during
                                          the same time period than if it simply held its portfolio stocks. The
                                          use of dividend capture trading strategies will expose the Fund to
                                          increased trading costs and potentially higher short-term gain or loss.

                                          Options on broad-based equity indices that trade on a national
                                          securities exchange registered with the Securities and Exchange
                                          Commission (the "SEC") or a domestic board of trade designated as a
                                          contract market by the Commodity Futures Trading Commission generally
                                          qualify for treatment as "section 1256 contracts" under the Code.
                                          Options on broad-based equity indices that trade on other exchanges,
                                          boards of trade or markets designated by the United States Secretary of
                                          Treasury also qualify for treatment as "section 1256 contracts" under
                                          the Code. Because only a small number of exchanges, boards and markets
                                          outside the United States have to date received the necessary
                                          designation, most foreign-traded stock index options do not currently
                                          qualify for treatment as "section 1256 contracts" under the Code. To the
                                          extent that the Fund writes options on indices based upon foreign
                                          stocks, the Fund generally intends to sell options on broad-based
                                          foreign country and/or regional stock indices that are listed for
                                          trading in the United States or which otherwise qualify as "section 1256
                                          contracts" under the Code. Options on foreign indices that are listed
                                          for trading in the United States or which otherwise qualify as "section
                                          1256 contracts" under the Code may trade in substantially lower volumes
                                          and with substantially wider bid-ask spreads than other options
                                          contracts on the same or similar indices that trade on other markets
                                          outside the United States. To implement its options program most
                                          effectively, the Fund may sell index options that do not qualify as
                                          "section 1256 contracts" under the Code. Gain or loss on index options
                                          not qualifying as "section 1256 contracts" under the Code would be
                                          realized upon disposition, lapse or settlement of the positions, and
                                          would be treated as short-term gain or loss.

                                          The foregoing policies relating to investments in common stocks and
                                          options writing are the Fund's primary investment policies. In addition
                                          to its primary investment policies, the Fund may invest to a limited
                                          extent in other types of securities and engage in certain other
                                          investment practices. In addition to writing index call options, the
                                          Fund may write call options on up to 20% of the value of its total
                                          assets on futures contracts based upon broad-based securities indices.
                                          The Fund's use of such options on index futures would be substantially
                                          similar to its use of options directly on indices. The Fund may also
                                          invest up to 20% of its total assets in derivative instruments acquired
                                          for hedging, risk management and investment purposes (to gain exposure
                                          to securities, securities markets, market indices and/or currencies
                                          consistent with its investment objectives and policies), provided that
                                          no more than 10% of the Fund's total assets may be invested in such
                                          derivative instruments acquired for non-hedging purposes. The loss on
                                          derivative instruments (other than purchased options) may substantially
                                          exceed an investment in these instruments. To seek to protect against
                                          price declines in securities holdings with large accumulated gains, the
                                          Fund may use various hedging techniques (such as the purchase and sale
                                          of futures contracts on stocks and stock indices and options thereon,
                                          equity swaps, covered short sales, forward sales of stocks and the
                                          purchase and sale of forward currency exchange contracts and currency
                                          futures). By using these techniques rather than selling appreciated
                                          securities, the Fund can, within certain limitations, reduce its
                                          exposure to price declines in the securities without currently realizing
                                          substantial capital gains under current federal tax law.


                                                     11
<PAGE>

                                          Derivative instruments may also be used by the Fund to enhance returns
                                          or as a substitute for the purchase or sale of securities. As a general
                                          matter, dividends received on hedged stock positions are characterized
                                          as ordinary income and are not eligible for favorable tax treatment.
                                          Dividends received on securities with respect to which the Fund is
                                          obligated to make related payments (pursuant to short sales or
                                          otherwise) will be treated as fully taxable ordinary income (i.e.,
                                          income other than tax-advantaged dividends). In addition, use of
                                          derivatives may give rise to short-term capital gains and other income
                                          that would not qualify for favorable tax treatment. See "Federal Income
                                          Tax Matters" and "Investment objectives and polices."

LISTING.................................. The Fund has applied for listing of its Common Shares on the New York
                                          Stock Exchange under the symbol "[ ]."

INVESTMENT ADVISER, ADMINISTRATOR AND     Eaton Vance, a wholly owned subsidiary of Eaton Vance Corp., is
SUB-ADVISER.............................. the Fund's investment adviser and administrator. The Adviser and
                                          its subsidiaries managed approximately $124.1 billion on behalf of
                                          funds, institutional clients and individuals as of September 30, 2006,
                                          including approximately $74.9 billion in equity assets. Eaton Vance has
                                          also engaged Rampart as a sub-adviser. Rampart, founded in 1983,
                                          specializes in options management and trading for institutional, high
                                          net worth and investment company clients. Rampart managed approximately
                                          $6.6 billion in assets as of September 30, 2006. Eaton Vance will be
                                          responsible for the Fund's overall investment program, structuring and
                                          managing the Fund's common stock portfolio, including dividend capture
                                          trading, tax-loss harvesting and other tax-management techniques,
                                          providing consultation to the Sub-Adviser and supervising the
                                          performance of the Sub-Adviser. Rampart will be responsible for
                                          providing advice on and execution of the Fund's options strategy. See
                                          "Management of the Fund."

DISTRIBUTIONS............................ Commencing with the Fund's first distribution, the Fund intends to
                                          make regular quarterly distributions to Common Shareholders
                                          sourced from the Fund's cash available for distribution. "Cash
                                          available for distribution" will consist of the Fund's dividends
                                          and interest income after payment of Fund expenses, net option
                                          premiums, and net realized and unrealized gains on stock
                                          investments. The Fund's distribution rate may be adjusted from
                                          time to time. The Board may modify this distribution policy at any
                                          time without obtaining the approval of Common Shareholders. The
                                          initial distribution is expected to be declared approximately 75
                                          days and paid approximately 90 to 120 days after the completion of
                                          this offering, depending on market conditions.

                                          The Fund's annual distributions will likely differ from annual net
                                          investment income. The investment income of the Fund will consist of all
                                          dividend and interest income accrued on portfolio investments,
                                          short-term capital gain (including short-term gains on option positions
                                          and gains on the sale of portfolio investments held for one year or
                                          less) in excess of long-term capital loss and income from certain
                                          hedging transactions, less all expenses of the Fund. Expenses of the
                                          Fund will be accrued each day. To the extent that the Fund's net
                                          investment income for any year exceeds the total quarterly distributions
                                          paid during the year, the Fund will make a special distribution at or
                                          near year-end of such excess amount as may be required. Over time, all
                                          of the Fund's investment company taxable income will be distributed.

                                          At least annually, the Fund intends to distribute any net capital gain
                                          (which is the excess of net long-term capital gain over net short-term
                                          capital loss) or, alternatively, to retain all or a portion of the
                                          year's net capital gain and pay federal income tax on the retained gain.
                                          As provided under federal tax law, Common Shareholders of record as of
                                          the end of the Fund's taxable year will include their attributable share
                                          of the retained gain in


                                                     12
<PAGE>

                                          their income for the year as a long-term capital gain, and will be
                                          entitled to a tax credit or refund for the tax deemed paid on their
                                          behalf by the Fund. The Fund may treat the cash value of tax credit and
                                          refund amounts in connection with retained capital gains as a substitute
                                          for equivalent cash distributions.

                                          If the Fund's total quarterly distributions in any year exceed the
                                          amount of its net investment income for the year, any such excess would
                                          be characterized as a return of capital for federal income tax purposes
                                          to the extent not designated as a capital gain dividend. Distributions
                                          in any year may include a substantial return of capital component. Under
                                          the Investment Company Act of 1940, as amended (the "1940 Act"), for any
                                          distribution that includes amounts from sources other than net income,
                                          the Fund is required to provide Common Shareholders a written statement
                                          regarding the components of such distribution. Such a statement will be
                                          provided at the time of any distribution believed to include any such
                                          amounts.

                                          To permit the Fund to maintain more stable distributions, distribution
                                          rates will be based on projected annual cash available for distribution.
                                          As a result, the distributions paid by the Fund for any particular
                                          quarter may be more or less than the amount of cash available for
                                          distribution from that quarterly period. In certain circumstances, the
                                          Fund may be required to sell a portion of its investment portfolio to
                                          fund distributions. Distributions will reduce the Common Shares' net
                                          asset value.

                                          The Fund has applied for an order from the Securities and Exchange
                                          Commission granting it an exemption from Section 19(b) of the 1940 Act
                                          and Rule 19b-1 thereunder to permit the Fund to include realized
                                          long-term capital gains as a part of its regular distributions to Common
                                          Shareholders more frequently than would otherwise be permitted by the
                                          1940 Act (generally once per taxable year). In the event that such an
                                          exemptive order is obtained, the Fund will consider increasing the
                                          frequency of its regular distributions from quarterly to monthly. There
                                          is no assurance that the Securities and Exchange Commission will grant
                                          the Fund's request for such exemptive order. However, if the Fund fails
                                          to receive the requested relief and the Fund is unable to include
                                          realized capital gains in regular distributions more frequently than
                                          would otherwise be permitted by the 1940 Act, the Adviser does not
                                          believe that the distribution policy, as set forth above, will otherwise
                                          be adversely affected

                                          Common Shareholders may automatically reinvest some or all of
                                          their distributions in additional Common Shares under the Fund's
                                          dividend reinvestment plan. See "Distributions" and "Dividend
                                          Reinvestment Plan."

DIVIDEND REINVESTMENT PLAN............... The Fund has established a dividend reinvestment plan (the
                                          "Plan"). Under the Plan, unless a Common Shareholder elects to
                                          receive distributions in cash, all distributions will be
                                          automatically reinvested in additional Common Shares, either
                                          purchased in the open market or newly issued by the Fund if the
                                          Common Shares are trading at or above their net asset value.
                                          Common Shareholders who intend to hold their Common Shares through
                                          a broker or nominee should contact such broker or nominee
                                          regarding the Plan. See "Dividend Reinvestment Plan."

CLOSED-END STRUCTUR...................... Closed-end funds differ from traditional, open-end management
                                          investment companies (commonly referred to as "mutual funds") in
                                          that closed-end funds generally list their shares for trading on a
                                          securities exchange and do not redeem their shares at the option
                                          of the shareholder. By comparison, mutual funds issue securities
                                          that are redeemable at net asset value at the option of the
                                          shareholder and typically engage in a continuous offering of their
                                          shares.

                                                     13
<PAGE>

                                          Shares of closed-end funds frequently trade at a discount from their net
                                          asset value. In recognition of this possibility and that any such
                                          discount may not be in the interest of Common Shareholders, the Fund's
                                          Board, in consultation with Eaton Vance, from time to time may review
                                          possible actions to reduce any such discount. The Board might consider
                                          open market repurchases or tender offers for Common Shares at net asset
                                          value. There can be no assurance that the Board will decide to undertake
                                          any of these actions or that, if undertaken, such actions would result
                                          in the Common Shares trading at a price equal to or close to net asset
                                          value per Common Share. The Board might also consider the conversion of
                                          the Fund to an open-end mutual fund. The Board believes, however, that
                                          the closed-end structure is desirable, given the Fund's investment
                                          objectives and policies. Investors should assume, therefore, that it is
                                          highly unlikely that the Board would vote to convert the Fund to an
                                          open-end investment company.

SPECIAL RISK CONSIDERATIONS.............. The following describes various principal risks of investing in
                                          the Fund. A more detailed description of these and other risks of
                                          investing in the Fund are described under "Investment Objectives,
                                          Policies and Risks--Risk Considerations" in this Prospectus and
                                          under "Additional Investment Information and Restrictions" in the
                                          Fund's Statement of Additional Information.

                                          NO OPERATING HISTORY. The Fund is a newly organized, diversified
                                          closed-end investment company with no history of operations and is
                                          designed for long-term investors and not as a trading vehicle.

                                          INVESTMENT AND MARKET RISK. An investment in Common Shares is subject to
                                          investment risk, including the possible loss of the entire principal
                                          amount invested. An investment in Common Shares represents an indirect
                                          investment in the securities owned by the Fund, which are generally
                                          traded on a securities exchange or in the over-the-counter markets. The
                                          value of these securities, like other market investments, may move up or
                                          down, sometimes rapidly and unpredictably. Because the Fund normally
                                          intends to sell stock index call options on a portion of its common
                                          stock portfolio value, the Fund's appreciation potential from equity
                                          market performance will be more limited than if the Fund did not engage
                                          in selling stock index call options. The Common Shares at any point in
                                          time may be worth less than the original investment, even after taking
                                          into account any reinvestment of distributions.

                                          ISSUER RISK. The value of securities held by the Fund may decline for a
                                          number of reasons that directly relate to the issuer, such as management
                                          performance, financial leverage and reduced demand for the issuer's
                                          goods and services.

                                          EQUITY RISK. Under normal market conditions, the Fund's investment
                                          program will consist primarily of owning a diversified portfolio of
                                          domestic and foreign common stocks. Therefore, a principal risk of
                                          investing in the Fund is equity risk. Equity risk is the risk that the
                                          value of securities held by the Fund will fluctuate or fall due to
                                          general market or economic conditions, perceptions regarding the
                                          industries in which the issuers of securities held by the Fund
                                          participate, and the particular circumstances and performance of
                                          companies whose securities the Fund holds. Although common stocks have
                                          historically generated higher average returns than fixed-income
                                          securities over the long term, common stocks also have experienced
                                          significantly more volatility in returns. An adverse event, such as an
                                          unfavorable earnings report, may depress the value of equity securities
                                          of an issuer held by the Fund; the price of common stock of an issuer
                                          may be particularly sensitive to general movements in the stock market;
                                          or a drop in the stock market may depress the price of most or all of
                                          the common stocks held by the Fund. In addition, common stock of an
                                          issuer in the


                                                     14
<PAGE>

                                          Fund's portfolio may decline in price if the issuer fails to make
                                          anticipated dividend payments because, among other possible reasons, the
                                          issuer of the security experiences a decline in its financial condition.
                                          Common stocks in which the Fund will invest are structurally
                                          subordinated to preferred stocks, bonds and other debt instruments in a
                                          company's capital structure, in terms of priority to corporate income,
                                          and therefore will be subject to greater dividend risk than preferred
                                          stocks or debt instruments of such issuers. Finally, common stock prices
                                          may be sensitive to rising interest rates, as the costs of capital rise
                                          and borrowing costs increase.

                                          RISKS OF INVESTING IN MID-CAP COMPANIES. The Fund may make investments
                                          in stocks of companies whose market capitalization is considered middle
                                          sized or "mid-cap." Mid-cap companies often are newer or less
                                          established companies than larger capitalization companies. Investments
                                          in mid-cap companies carry additional risks because earnings of these
                                          companies tend to be less predictable; they often have limited product
                                          lines, markets, distribution channels or financial resources; and the
                                          management of such companies may be dependent upon one or a few key
                                          people. The market movements of equity securities of mid-cap companies
                                          may be more abrupt or erratic than the market movements of equity
                                          securities of larger, more established companies or the stock market in
                                          general. Historically, mid-cap companies have sometimes gone through
                                          extended periods when they did not perform as well as larger companies.
                                          In addition, equity securities of mid-cap companies generally are less
                                          liquid than those of larger companies. This means that the Fund could
                                          have greater difficulty selling such securities at the time and price
                                          that the Fund would like.

                                          RISK OF SELLING INDEX CALL OPTIONS. Under normal market conditions, a
                                          portion of the Fund's common stock portfolio value will be subject to
                                          written index call options. The purchaser of an index call option has
                                          the right to any appreciation in the value of the index over the
                                          exercise price of the call option as of the valuation date of the
                                          option. Because their exercise is settled in cash, sellers of index call
                                          options such as the Fund cannot provide in advance for their potential
                                          settlement obligations by acquiring and holding the underlying
                                          securities. The Fund intends to mitigate the risks of its options
                                          activities by writing options on broad-based domestic, foreign country
                                          and/or regional stock indices that the Adviser believes collectively
                                          approximate the characteristics of the Fund's common stock portfolio (or
                                          that portion of its portfolio against which options are written). The
                                          Fund will not, however, hold stocks that fully replicate the indices on
                                          which it writes call options. Due to tax considerations, the Fund
                                          intends to limit the overlap between its stock holdings (and any subset
                                          thereof) and each index on which it has outstanding options positions to
                                          less than 70% on an ongoing basis. The Fund's stock holdings will
                                          normally include stocks not included in the indices on which it writes
                                          call options. Consequently, the Fund bears the risk that the performance
                                          of its stock portfolio will vary from the performance of the indices on
                                          which it writes call options. For example, with respect to the portion
                                          of its stock portfolio against which S&P 500 index call options have
                                          been written, the Fund will suffer a loss if the S&P 500 appreciates
                                          above the exercise price of the options written while the associated
                                          securities held by the Fund fail to appreciate as much or decline in
                                          value over the life of the written option. Index options written by the
                                          Fund will be priced on a daily basis. Their value will be affected
                                          primarily by changes in the prices and dividend rates of the underlying
                                          common stocks in such index, changes in actual or perceived volatility
                                          of such index and the remaining time to the options' expiration. The
                                          trading price of index call options will also be affected by liquidity
                                          considerations and the balance of purchase and sale orders.

                                                     15
<PAGE>

                                          A decision as to whether, when and how to use options involves the
                                          exercise of skill and judgment, and even a well-conceived and
                                          well-executed options program may be adversely affected by market
                                          behavior or unexpected events. As the writer of index call options, the
                                          Fund will forgo, during the option's life, the opportunity to profit
                                          from increases in the value of the applicable index above the sum of the
                                          option premium received and the exercise price of the call option, but
                                          retains the risk of loss, minus the option premium received, should the
                                          value of the applicable index decline. When a call option is exercised,
                                          the Fund will be required to deliver an amount of cash determined by the
                                          excess of the value of the applicable index at contract termination over
                                          the exercise price of the option. Thus, the exercise of index call
                                          options sold by the Fund may require the Fund to sell portfolio
                                          securities to generate cash at inopportune times or for unattractive
                                          prices.

                                          To the extent that the Fund writes options on indices based upon foreign
                                          stocks, the Fund generally intends to sell options on broad-based
                                          foreign country and/or regional stock indices that are listed for
                                          trading in the United States or which otherwise qualify as "section 1256
                                          contracts" under the Code. Options on foreign indices that are listed
                                          for trading in the United States or which otherwise qualify as "section
                                          1256 contracts" under the Code may trade in substantially lower volumes
                                          and with substantially wider bid-ask spreads than other options
                                          contracts on the same or similar indices that trade on other markets
                                          outside the United States. To implement its options program most
                                          effectively, the Fund may sell index options that do not qualify as
                                          "section 1256 contracts" under the Code. Gain or loss on index options
                                          not qualifying as "section 1256 contracts" under the Code would be
                                          realized upon disposition, lapse or settlement of the positions and
                                          would be treated as short-term gain or loss.

                                          The trading price of options may be adversely affected if the market for
                                          such options becomes less liquid or smaller. The Fund may close out a
                                          call option by buying the option instead of letting it expire or be
                                          exercised. There can be no assurance that a liquid market will exist
                                          when the Fund seeks to close out a call option position by buying the
                                          option. 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; (iv) unusual or
                                          unforeseen circumstances may interrupt normal operations on an exchange;
                                          (v) the facilities of an exchange or the Options Clearing Corporation
                                          (the "OCC") 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 to discontinue the trading of options
                                          (or a particular class or series of options) at some future date. If
                                          trading were discontinued, the secondary market on that exchange (or in
                                          that class or series of options) would cease to exist. However,
                                          outstanding options on that exchange that had been issued by the OCC as
                                          a result of trades on that exchange would continue to be exercisable in
                                          accordance with their terms.

                                          The hours of trading for options may not conform to the hours during
                                          which common stocks held by the Fund are traded. To the extent that the
                                          options markets close before the markets for securities, significant
                                          price and rate movements can take place in the securities markets that
                                          would not be reflected concurrently in the options markets. Index call
                                          options are marked to market daily and their value is affected by
                                          changes in the value and dividend rates of the securities represented in
                                          the underlying index, changes in interest rates, changes in the actual
                                          or perceived


                                                     16
<PAGE>

                                          volatility of the associated index and the remaining time to the
                                          options' expiration, as well as trading conditions in the options
                                          market.

                                          TAX RISK. Reference is made to "Federal Income Tax Matters" for an
                                          explanation of the federal income tax consequences and attendant risks
                                          of investing in the Fund. Although the Fund seeks to minimize and defer
                                          the federal income taxes incurred by Common Shareholders in connection
                                          with their investment in the Fund, there can be no assurance that it
                                          will be successful in this regard. The tax treatment and
                                          characterization of the Fund's distributions may change over time due to
                                          changes in the Fund's mix of investment returns and changes in the
                                          federal tax laws, regulations and administrative and judicial
                                          interpretations. The provisions of the Code applicable to qualified
                                          dividend income are set to expire at the close of 2010. Thereafter, the
                                          Fund's distributions to Common Shareholders of qualified dividend income
                                          will be subject to tax at the higher rates that apply to ordinary income
                                          unless further legislative action is taken. There can be no assurances
                                          that after 2010 such qualified dividends will be available to the Fund
                                          and its Common Shareholders. The Fund's investment program and the tax
                                          treatment of Fund distributions may be affected by IRS interpretations
                                          of the Code and future changes in tax laws and regulations, including
                                          changes resulting from the "sunset" provisions described above that
                                          would have the effect of repealing the favorable treatment of qualified
                                          dividend income and reimposing the higher tax rates applicable to
                                          ordinary income beginning in 2011 unless further legislative action is
                                          taken. Distributions paid on the Common Shares may be characterized
                                          variously as non-qualified dividends (taxable at ordinary income rates),
                                          qualified dividends (generally taxable at long-term capital gains
                                          rates), capital gains dividends (taxable at long-term capital gains
                                          rates) or return of capital (generally not currently taxable). The
                                          ultimate tax characterization of the Fund's distributions made in a
                                          calendar year may not finally be determined until after the end of that
                                          calendar year. Distributions to a Common Shareholder that are return of
                                          capital will be tax free to the amount of the Common Shareholder's
                                          current tax basis in his or her Common Shares, with any distribution
                                          amounts exceeding such basis treated as capital gain on a deemed sale of
                                          Common Shares. Common Shareholders are required to reduce their tax
                                          basis in Common Shares by the amount of tax-free return of capital
                                          distributions received, thereby increasing the amount of capital gain
                                          (or decreasing the amount of capital loss) to be recognized upon a later
                                          disposition of the Common Shares. In order for Fund distributions of
                                          qualified dividend income to be taxable at favorable long-term capital
                                          gains rates, a Common Shareholder must meet certain prescribed holding
                                          period and other requirements with respect to his or her Common Shares.
                                          If positions held by the Fund were treated as "straddles" for federal
                                          income tax purposes, dividends on such positions would not constitute
                                          qualified dividend income subject to favorable income tax treatment.
                                          Gain or loss on positions in a straddle are subject to special (and
                                          generally disadvantageous) rules as described under "Federal Income Tax
                                          Matters."

                                          DISTRIBUTION RISK. The quarterly distributions Common Shareholders will
                                          receive from the Fund will be sourced from the Fund's dividends and
                                          interest income after payment of Fund expenses, net option premiums, and
                                          net realized and unrealized gains on stock investments. The Fund's cash
                                          available for distribution may vary widely over the short- and
                                          long-term. Dividends on common stocks are not fixed but are declared at
                                          the discretion of the issuer's board of directors. The Fund's dividend
                                          income will be substantially influenced by the activity level and
                                          success of its dividend capture trading program. If stock market
                                          volatility and/or stock prices decline, the level of premiums from
                                          writing index call options and the amounts available for distribution
                                          from the Fund's options activity will likely decrease as well. Payments
                                          to close written call options will reduce amounts available for
                                          distribution from call option premiums received. Net realized and


                                                     17
<PAGE>

                                          unrealized gains on the Fund's stock investments will be determined
                                          primarily by the direction and movement of the United States stock
                                          market and the particular stocks held. There can be no assurance that
                                          quarterly distributions paid by the Fund to the Common Shareholders will
                                          be maintained at initial levels or increase over time.

                                          FOREIGN SECURITY RISk. The value of foreign securities is affected by
                                          changes in currency rates, foreign tax laws (including withholding tax),
                                          government policies (in this country or abroad), relations between
                                          nations and trading, settlement, custodial and other operational risks.
                                          In addition, the costs of investing abroad (such as foreign brokerage
                                          costs, custodial expenses and other fees) are generally higher than in
                                          the United States, and foreign securities markets may be less liquid,
                                          more volatile and less subject to governmental supervision than markets
                                          in the United States. Foreign investments also could be affected by
                                          other factors not present in the United States, including expropriation
                                          of assets, armed conflict, confiscatory taxation, lack of uniform
                                          accounting and auditing standards, less publicly available financial and
                                          other information and potential difficulties in enforcing contractual
                                          obligations or repatriating capital invested in foreign countries. As an
                                          alternative to holding foreign-traded securities, the Fund may invest in
                                          dollar-denominated securities of foreign companies that trade on United
                                          States exchanges or in the United States over-the-counter market
                                          (including depositary receipts, which evidence ownership in underlying
                                          foreign securities). Since the Fund may invest in securities denominated
                                          or quoted in currencies other than the United States dollar, the Fund
                                          may be affected by changes in foreign currency exchange rates (and
                                          exchange control regulations) which affect the value of investments held
                                          by the Fund and the accrued income and appreciation or depreciation of
                                          the investments in United States dollars. Changes in foreign currency
                                          exchange rates relative to the United States dollar will affect the
                                          United States dollar value of the Fund's assets denominated in that
                                          currency and the Fund's return on such assets as well as any temporary
                                          uninvested reserves in bank deposits in foreign currencies. In addition,
                                          the Fund will incur costs in connection with conversions between various
                                          currencies.

                                          Because foreign companies may not be subject to accounting, auditing and
                                          financial reporting standards, practices and requirements comparable to
                                          those applicable to United States companies, there may be less or less
                                          reliable publicly available information about a foreign company than
                                          about a domestic company. There is generally less government supervision
                                          and regulation of securities exchanges, broker-dealers 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 for, or loss of certificates of, portfolio
                                          securities. Payment for securities before delivery may be required. In
                                          addition, with respect to certain foreign countries, there is the
                                          possibility of expropriation or confiscatory taxation, political or
                                          social instability, or diplomatic developments that could adversely
                                          affect investments in those countries. Moreover, individual foreign
                                          economies may differ favorably or unfavorably from the United States
                                          economy in such respects as growth of gross national product, rate of
                                          inflation, capital reinvestment, resource self-sufficiency and balance
                                          of payments position. Foreign securities markets, while growing in
                                          volume and sophistication, are generally not as developed as those in
                                          the United States, and securities of some foreign issuers (particularly
                                          those located in developing countries) may be less liquid and more
                                          volatile than securities of comparable United States companies. The
                                          risks of foreign investments described above apply to an even greater
                                          extent to investments in emerging markets.

                                                     18
<PAGE>

                                          EMERGING MARKET SECURITY RISK. The Fund may invest up to [5%] of its
                                          total assets in securities of issuers located in emerging markets. The
                                          risks of foreign investments described above apply to an even greater
                                          extent to investments in emerging markets. The securities markets of
                                          emerging countries are generally smaller, less developed, less liquid,
                                          and more volatile than the securities markets of the United States and
                                          developed foreign markets. Disclosure and regulatory standards in many
                                          respects are less stringent than in the United States and developed
                                          foreign markets. There also may be a lower level of monitoring and
                                          regulation of securities markets in emerging market countries and the
                                          activities of investors in such markets and enforcement of existing
                                          regulations may be limited. Many emerging countries have experienced
                                          substantial, and in some periods extremely high, rates of inflation for
                                          many years. Inflation and rapid fluctuations in inflation rates have had
                                          and may continue to have very negative effects on the economies and
                                          securities markets of certain emerging countries. Economies in emerging
                                          markets generally are heavily dependent upon international trade and,
                                          accordingly, have been and may continue to be affected adversely by
                                          trade barriers, exchange controls, managed adjustments in relative
                                          currency values, and other protectionist measures imposed or negotiated
                                          by the countries with which they trade. The economies of these countries
                                          also have been and may continue to be adversely affected by economic
                                          conditions in the countries in which they trade. The economies of
                                          countries with emerging markets may also be predominantly based on only
                                          a few industries or dependent on revenues from particular commodities.
                                          In addition, custodial services and other costs relating to investment
                                          in foreign markets may be more expensive in emerging markets than in
                                          many developed foreign markets, which could reduce the Fund's income
                                          from such securities.

                                          In many cases, governments of emerging countries continue to exercise
                                          significant control over their economies, and government actions
                                          relative to the economy, as well as economic developments generally, may
                                          affect the Fund's investments in those countries. In addition, there is
                                          a heightened possibility of expropriation or confiscatory taxation,
                                          imposition of withholding taxes on dividend and interest payments, or
                                          other similar developments that could affect investments in those
                                          countries. There can be no assurance that adverse political changes will
                                          not cause the Fund to suffer a loss of any or all of its investments.

                                          INTEREST RATE RISK. The premiums from writing index call options and
                                          amounts available for distribution from the Fund's options activity may
                                          decrease in declining interest rate environments. The value of the
                                          Fund's common stock investments may also be influenced by changes in
                                          interest rates. Higher yielding stocks and stocks of issuers whose
                                          businesses are substantially affected by changes in interest rates may
                                          be particularly sensitive to interest rate risk.

                                          CURRENCY RISK. Since the Fund will invest in securities denominated or
                                          quoted in currencies other than the U.S. dollar, the Fund will be
                                          affected by changes in foreign currency exchange rates (and exchange
                                          control regulations) which affect the value of investments in the Fund
                                          and the accrued income and appreciation or depreciation of the
                                          investments in U.S. dollars. Changes in foreign currency exchange rates
                                          relative to the U.S. dollar will affect the U.S. dollar value of the
                                          Fund's assets denominated in that currency and the Fund's return on such
                                          assets as well as any temporary uninvested reserves in bank deposits in
                                          foreign currencies. In addition, the Fund will incur costs in connection
                                          with conversions between various currencies.

                                          The Fund may attempt to protect against adverse changes in the value of
                                          the U.S. dollar in relation to a foreign currency by entering into a
                                          forward contract for the purchase or sale of the amount of foreign
                                          currency invested or to be invested, or by


                                                     19
<PAGE>

                                          buying or selling a foreign currency option or futures contract for such
                                          amount. Such strategies may be employed before the Fund purchases a
                                          foreign security traded in the currency which the Fund anticipates
                                          acquiring or between the date the foreign security is purchased or sold
                                          and the date on which payment therefor is made or received. Seeking to
                                          protect against a change in the value of a foreign currency in the
                                          foregoing manner does not eliminate fluctuations in the prices of
                                          portfolio securities or prevent losses if the prices of such securities
                                          decline. Furthermore, such transactions reduce or preclude the
                                          opportunity for gain if the value of the currency should move in the
                                          direction opposite to the position taken. Unanticipated changes in
                                          currency prices may result in poorer overall performance for the Fund
                                          than if it had not entered into such contracts.

                                          DERIVATIVES RISK. In addition to writing index call options, the risks
                                          of which are described above, the Fund may invest up to 20% of its total
                                          assets in other derivative investments acquired for hedging, risk
                                          management and investment purposes, provided that no more than 10% of
                                          the Fund's total assets may be invested in such derivative instruments
                                          acquired for non-hedging purposes. Derivative transactions including
                                          options on securities and securities indices and other transactions in
                                          which the Fund may engage (such as futures contracts and options
                                          thereon, swaps and short sales) may subject the Fund to increased risk
                                          of principal loss due to unexpected movements in stock prices, changes
                                          in stock volatility levels and interest rates, and imperfect
                                          correlations between the Fund's securities holdings and indices upon
                                          which derivative transactions are based. Derivatives can be illiquid,
                                          may disproportionately increase losses, and may have a potentially large
                                          impact on the Fund's performance. The loss on derivative instruments
                                          (other than purchased options) may substantially exceed an investment in
                                          these instruments. The Fund also will be subject to credit risk with
                                          respect to the counterparties to any over-the-counter derivatives
                                          contracts entered into by the Fund. If a counterparty becomes bankrupt
                                          or otherwise fails to perform its obligations under a derivative
                                          contract due to financial difficulties, the Fund may experience
                                          significant delays in obtaining any recovery under the derivative
                                          contract in a bankruptcy or other reorganization proceeding. The Fund
                                          may obtain only a limited recovery or no recovery in such circumstances.
                                          Derivatives may disproportionately increase losses and have a
                                          potentially large negative impact on the Fund's performance.

                                          LIQUIDITY RISK. The Fund may invest up to 15% of its total assets in
                                          securities for which there is no readily available trading market or
                                          which are otherwise illiquid. The Fund may not be able readily to
                                          dispose of such securities at prices that approximate those at which the
                                          Fund could sell such securities if they were more widely traded and, as
                                          a result of such illiquidity, the Fund may have to sell other
                                          investments or engage in borrowing transactions if necessary to raise
                                          cash to meet its obligations. In addition, the limited liquidity could
                                          affect the market price of the securities, thereby adversely affecting
                                          the Fund's net asset value, and at times may make the disposition of
                                          securities impracticable.

                                          INFLATION RISK. Inflation risk is the risk that the purchasing power of
                                          assets or income from investments will be worth less in the future as
                                          inflation decreases the value of money. As inflation increases, the real
                                          value of the Common Shares and distributions thereon can decline.

                                          MARKET PRICE OF COMMON SHARES. The Fund's share price will fluctuate
                                          and, at the time of sale, shares may be worth more or less than the
                                          original investment or the Fund's then current net asset value. The Fund
                                          cannot predict whether its shares will trade at a price at, above or
                                          below its net asset value. Shares of closed-end funds frequently trade
                                          at a discount to net asset value.



                                                     20
<PAGE>

                                          FINANCIAL LEVERAGE RISK. Although the Fund has no current intention to
                                          do so, the Fund is authorized and reserves the flexibility to utilize
                                          leverage through the issuance of preferred shares and/or borrowings,
                                          including the issuance of debt securities. In the event that the Fund
                                          determines in the future to utilize investment leverage, there can be no
                                          assurance that such a leveraging strategy will be successful during any
                                          period in which it is employed. Leverage creates risks for Common
                                          Shareholders, including the likelihood of greater volatility of net
                                          asset value and market price of the Common Shares and the risk that
                                          fluctuations in distribution rates on any preferred shares or
                                          fluctuations in borrowing costs may affect the return to Common
                                          Shareholders. To the extent the returns derived from securities
                                          purchased with proceeds received from leverage exceeds the cost of
                                          leverage, the Fund's distributions may be greater than if leverage had
                                          not been used. Conversely, if the returns from the securities purchased
                                          with such proceeds are not sufficient to cover the cost of leverage, the
                                          amount available for distribution to Common Shareholders will be less
                                          than if leverage had not been used. In the latter case, Eaton Vance, in
                                          its best judgment, may nevertheless determine to maintain the Fund's
                                          leveraged position if it deems such action to be appropriate. The costs
                                          of an offering of preferred shares and/or a borrowing program would be
                                          borne by Common Shareholders and consequently would result in a
                                          reduction of the net asset value of Common Shares. In addition, the fee
                                          paid to Eaton Vance will be calculated on the basis of the Fund's
                                          average daily gross assets, including proceeds from the issuance of
                                          preferred shares and/or borrowings, so the fee will be higher when
                                          leverage is utilized. In this regard, holders of preferred shares do not
                                          bear the investment advisory fee. Rather, Common Shareholders bear the
                                          portion of the investment advisory fee attributable to the assets
                                          purchased with the proceeds of the preferred shares offering.

                                          MANAGEMENT RISK. The Fund is subject to management risk because it is an
                                          actively managed portfolio. Eaton Vance, Rampart and the individual
                                          portfolio managers invest the assets of the Fund as they deem
                                          appropriate in implementing the Fund's investment strategy. Accordingly,
                                          the success of the Fund depends upon the investment skills and
                                          analytical abilities of Eaton Vance, Rampart and the individual
                                          portfolio managers to develop and actively implement investment
                                          strategies that achieve the Fund's investment objectives. There is no
                                          assurance that Eaton Vance, Rampart and the individual portfolio
                                          managers will be successful in developing and implementing the Fund's
                                          investment strategy. Subjective decisions made by Eaton Vance, Rampart
                                          and the individual portfolio managers may cause the Fund to incur losses
                                          or to miss profit opportunities on which it could otherwise have
                                          capitalized.

                                          MARKET DISRUPTION. The aftermath of the war in Iraq and the continuing
                                          occupation of Iraq, instability in the Middle East and terrorist attacks
                                          in the U.S. and around the world have resulted in market volatility and
                                          may have long-term effects on the U.S. and worldwide financial markets
                                          and may cause further economic uncertainties in the U.S. and worldwide.
                                          The Fund does not know how long the securities markets will continue to
                                          be affected by these events and cannot predict the effects of the
                                          occupation or similar events in the future on the U.S. economy and
                                          securities markets. Given the risks described above, an investment in
                                          the Common Shares may not be appropriate for all investors. You should
                                          carefully consider your ability to assume these risks before making an
                                          investment in the Fund.

                                          ANTI-TAKEOVER PROVISIONS. The Fund's Agreement and Declaration of Trust
                                          includes provisions that could limit the ability of other persons or
                                          entities to acquire control of the Fund or to change the composition of
                                          its Board. These provisions may deprive Common Shareholders of
                                          opportunities to sell their Common Shares at a


                                                     21
<PAGE>

                                          premium over the then current market price of the Common Shares.
                                          See "Risk Factors" and "Description of Capital Structure --
                                          Anti-Takeover Provisions in the Agreement and Declaration of
                                          Trust."

</TABLE>

                                                           22
<PAGE>

                            SUMMARY OF FUND EXPENSES

   The purpose of the table below is to help you understand all fees and
expenses that you, as a Common Shareholder, would bear directly or indirectly.
See "Management of the Fund."

SHAREHOLDER TRANSACTION EXPENSES

  Sales load paid by you (as a percentage of offering price)...  [4.50]%
  Expenses borne by Common Shareholders........................  [0.20]%(1)(2)
  Dividend reinvestment plan fees..............................  None(3)



                                                                PERCENTAGE OF
                                                                NET ASSETS
                                                                ATTRIBUTABLE TO
                                                                COMMON SHARES
                                                                -------------
 ANNUAL EXPENSES
  Management fees..............................................  [1.00]%
  Other expenses...............................................  [0.20]%(4)
  Total annual expenses........................................  [1.20]%

------------

   The Other expenses, and correspondingly the Total annual expenses, shown in
the table are based on estimated amounts for the Fund's first year of operations
and assume that the Fund issues approximately 12,500,000 Common Shares. If the
Fund issues fewer Common Shares, these expenses generally would increase. See
"Management of the Fund" and "Dividend Reinvestment Plan."

   EXAMPLE

   The following example illustrates the expenses that you would pay on a $1,000
investment in Common Shares (including the sales load of $45 and estimated
offering expenses of this offering of $2), assuming (i) total annual expenses of
[1.20%] of net assets attributable to Common Shares and (ii) a 5% annual
return*:

1 YEAR             3 YEARS           5 YEARS             10 YEARS
------             -------           -------             --------
 $[59]              $[83]            $[110]              $[186]

   THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE HIGHER OR LOWER.

   *   The example assumes that the estimated Other expenses set forth in the
       Annual Expenses table are accurate, and that all dividends and
       distributions are reinvested at net asset value. Actual expenses may be
       greater or less than those assumed. Moreover, the Fund's actual rate of
       return may be greater or less than the hypothetical 5% return shown in
       the example.

   (1) EATON VANCE OR AN AFFILIATE HAS AGREED TO REIMBURSE ALL ORGANIZATIONAL
       COSTS AND PAY ALL OFFERING COSTS (OTHER THAN SALES LOADS) THAT EXCEED
       $0.04 PER COMMON SHARE (0.20% OF THE OFFERING PRICE).

   (2) EATON VANCE HAS AGREED TO PAY FROM ITS OWN ASSETS A [STRUCTURING FEE] TO
       EACH OF [ ] AND [ ] [AND ADDITIONAL COMPENSATION TO ]. [EATON VANCE MAY
       PAY CERTAIN QUALIFYING UNDERWRITERS A MARKETING AND STRUCTURING FEE,
       ADDITIONAL COMPENSATION, OR A SALES INCENTIVE FEE IN CONNECTION WITH THE
       OFFERING.] SEE "UNDERWRITING."

   (3) YOU WILL BE CHARGED A $5.00 SERVICE CHARGE AND PAY BROKERAGE CHARGES IF
       YOU DIRECT THE PLAN AGENT TO SELL YOUR COMMON SHARES HELD IN A DIVIDEND
       REINVESTMENT ACCOUNT.

   (4) ESTIMATED EXPENSES BASED ON THE CURRENT FISCAL
       YEAR.


                                       23
<PAGE>

                                    THE FUND

   Eaton Vance Tax-Managed Global Diversified Equity Income Fund (the "Fund") is
a newly organized, diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940 Act"
or the "Investment Company Act"). The Fund was organized as a Massachusetts
business trust on October 31, 2006 pursuant to a Declaration of Trust governed
by the laws of The Commonwealth of Massachusetts and has no operating history.
The Fund's principal office is located at The Eaton Vance Building, 255 State
Street, Boston, Massachusetts 02109, and its telephone number is 1-800-225-6265.

   This Prospectus relates to the initial public offering of the Fund's Common
Shares of beneficial interest, $0.01 par value (the "Common Shares"). See
"Underwriting."

                                 USE OF PROCEEDS

   The net proceeds of this offering of Common Shares will be approximately $
(or $ assuming exercise of the Underwriters' overallotment option in full),
which, after payment of the estimated offering expenses, will be invested in
accordance with the Fund's investment objectives and policies as soon as
practicable, but, in no event, assuming normal market conditions, later than
three months after the receipt thereof. Pending such investment, the proceeds
may be invested in high-quality, short-term debt securities, cash and/or cash
equivalents. Eaton Vance or an affiliate has agreed to (i) reimburse all
organizational costs of the Fund and (ii) pay all offering costs of the Fund
(other than sales load) that exceed $.04 per Common Share.

                   INVESTMENT OBJECTIVES, POLICIES AND RISKS

INVESTMENT OBJECTIVES

   The Fund's primary investment objective is to provide current income and
gains, with a secondary objective of capital appreciation. In pursuing its
investment objectives, the Fund will evaluate returns on an after-tax basis,
seeking to minimize and defer shareholder federal income taxes. There can be no
assurance that the Fund will achieve its investment objectives.

   Under normal market conditions, the Fund's investment program will consist
primarily of owning a diversified portfolio of domestic and foreign common
stocks. The Fund will seek to earn high levels of tax-advantaged income and
gains by (1) emphasizing investments in stocks that pay dividends that qualify
for favorable federal income tax treatment and (2) writing (selling) stock index
call options with respect to a portion of its common stock portfolio value. Call
options on broad-based stock indices generally qualify for treatment as "section
1256 contracts" as defined in the Internal Revenue Code of 1986, as amended (the
"Code"), on which capital gains and losses are generally treated as 60%
long-term and 40% short-term, regardless of holding period.

PRIMARY INVESTMENT POLICIES

   GENERAL COMPOSITION OF THE FUND. Under normal market conditions, the Fund
will invest at least 80% of its total assets in a combination of (1)
dividend-paying domestic and foreign common stocks and (2) common stocks the
value of which is subject to covered written index call options. The Fund will
emphasize investments in stocks that pay dividends that qualify for federal
income taxation at rates applicable to long-term capital gains, and will seek to
enhance the level of tax-advantaged dividend income it receives by engaging in
dividend capture trading. In a dividend capture trade, the Fund sells a stock on
or shortly after the stock's ex-dividend date and uses the sale proceeds to
purchase one or more other stocks that are expected to pay dividends before the
next dividend payment on the stock being sold. Through this practice, the Fund
may receive more dividend payments over a given time period than if it held a
single stock. By complying with applicable holding period and other requirements
while engaging in dividend capture trading, the Fund may enhance the level of
tax-advantaged dividend income it receives. The use of dividend capture trading
strategies will expose the Fund to increased trading costs and potentially
higher short-term gain or loss.

   Typically, the Fund will invest at least 40% of its total assets in
securities of non-U.S. companies (unless the Adviser deems market conditions
and/or company valuations less favorable to non-U.S. companies, in which case
the Fund will invest at least 30% of its total assets in securities of non-U.S.
companies). The Fund's investments in non-U.S companies may include securities
evidenced by American Depositary Receipts ("ADRs"), Global Depositary Receipts
("GDRs") and European Depositary Receipts ("EDRs"). The Fund may invest up to
[5%] of its total assets in securities of emerging market issuers. The Fund
expects that its assets will normally be invested across a broad range of
industries and market sectors. The Fund may not invest 25% or more of its total
assets in the securities of issuers in any single industry. The Fund may invest
a portion of its assets in stocks of mid-capitalization companies. Eaton Vance
generally considers mid-capitalization companies to be those companies having
market capitalizations within the range of capitalizations for the S&P MidCap


                                       24
<PAGE>

400 Index (the "S&P MidCap 400"). As of September 30, 2006, the median market
capitalization of companies in the S&P MidCap 400 was approximately $2.55
billion.

   The Fund intends to write call options on broad-based domestic, foreign
country and/or regional stock indices that the Adviser believes collectively
approximate the characteristics of its common stock portfolio (or that portion
of its portfolio against which options are written) and that present attractive
opportunities to earn options premiums. [The Fund intends initially to write
call options on the S&P 500 Composite Stock Price Index{reg-trade-mark} (the
"S&P 500") and at least one broad-based foreign stock index, and may also
initially write call options on other domestic and foreign stock indices.] Over
time, the indices on which the Fund writes call options may vary as a result of
changes in the availability and liquidity of various listed index options,
changes in stock portfolio holdings, the Adviser's evaluation of equity market
conditions and other factors. Writing index call options involves a tradeoff
between the option premiums received and reduced participation in potential
future stock price appreciation. Due to tax considerations, the Fund intends to
limit the overlap between its stock holdings (and any subset thereof) and each
index on which it has outstanding options positions to less than 70% on an
ongoing basis. The Fund's stock holdings will normally include stocks not
included in the indices on which it writes call options.

   The Fund generally intends to sell stock index call options that are
exchange- listed and "European style," meaning that the options may be exercised
only on the expiration date of the option. Index options differ from options on
individual securities in that index options (i) typically are settled in cash
rather than by delivery of securities and (ii) reflect price fluctuations in a
group of securities or segments of the securities market rather than price
fluctuations in a single security.

   As the seller of index call options, the Fund will receive cash (the
premiums) from option purchasers. The purchaser of an index call option has the
right to any appreciation in the value of the applicable index over a fixed
price (the exercise price) as of a specified date in the future (the option
valuation date). Generally, the Fund intends to sell call options that are
slightly "out- of-the-money" (i.e., the exercise price generally will be
slightly above the current level of the applicable index when the option is
sold). The Fund may also sell index options that are more substantially
"out-of-the-money." Such options that are more substantially "out-of-the-money"
provide greater potential for the Fund to realize capital appreciation, but
generally would pay a lower premium than options that are slightly
"out-of-the-money." In writing index options, the Fund will, in effect, sell the
potential appreciation in the value of the applicable index above the exercise
price in exchange for the option premium received. If, at expiration, an index
call option sold by the Fund is exercised, the Fund will pay the purchaser the
difference between the cash value of the applicable index and the exercise price
of the option. The premium, the exercise price and the market value of the
applicable index will determine the gain or loss realized by the Fund as the
seller of the index call option.

   The Fund expects to maintain high turnover in index call options, based on
the Adviser's intent to sell index call options on a portion of its stock
portfolio value and the Fund's initial expectation to roll forward its options
positions approximately every one to three months. For its stock holdings, the
Fund's annual portfolio turnover rate is expected to exceed that of the indices
on which the Fund writes call options due to turnover in connection with the
Fund's active stock selection, tax loss harvesting, dividend capture and other
strategies. On an overall basis, the Fund expects that its annual turnover rate
will exceed 100%. A high turnover rate (100% or more) necessarily involves
greater trading costs to the Fund.

   The Fund's policy that, under normal market conditions, the Fund will invest
at least 80% of its total assets in a combination of (1) dividend-paying
domestic and foreign common stocks and (2) common stocks the value of which is
subject to covered written index call options is a non-fundamental policy that
may be changed by the Fund's Board of Trustees (the "Board") without Common
Shareholder approval following the provision of 60 days' prior written notice to
Common Shareholders.

  In implementing the Fund's investment strategy, the Adviser and Sub-Adviser
intend to employ a variety of techniques and strategies designed to minimize and
defer the federal income taxes incurred by shareholders in connection with their
investment in the Fund as described below.

   [The S&P 500 is an unmanaged index of 500 stocks maintained and published by
Standard & Poor's that is market-capitalization weighted and generally
representative of the performance of larger stocks traded in the United States.]

   The Fund is not sponsored, endorsed, sold or promoted by any index sponsor.
No index sponsor has passed on the legality or suitability of, or the accuracy
or adequacy of descriptions and disclosures relating to the Fund. No index
sponsor has made any representation or warranty, express or implied, to the
Common Shareholders of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly,
or the ability of any index to track general stock market performance. The
indices are determined, composed and calculated by the respective index sponsors
without regard to the Fund or its use of the indices for option writing. The
index sponsors have no obligation to take the needs of the Fund or its Common
Shareholders into consideration in determining, composing or calculating the
indices. No index sponsor is responsible for or has participated in the


                                       25
<PAGE>

determination of the timing of, price of, or number of Common Shares of the Fund
to be issued. No index sponsor has any liability in connection with the
management, administration, marketing or trading of the Fund.

   THE INDEX SPONSORS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE INDICES OR ANY DATA INCLUDED THEREIN. THE INDEX SPONSORS MAKE
NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, THE
COMMON SHAREHOLDERS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDICES IN
THE FUND'S OPTIONS WRITING PROGRAM. IN PUBLISHING THE INDICES, THE INDEX
SPONSORS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE INDICES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL AN INDEX SPONSOR HAVE ANY LIABILITY FOR ANY LOST
PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES,
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

   INVESTMENT STRATEGY. Eaton Vance will be responsible for the Fund's overall
investment program, structuring and managing the Fund's common stock portfolio,
including dividend capture trading, tax-loss harvesting and other tax-management
techniques, providing consultation to the Sub-Adviser and supervising the
performance of the Sub-Adviser. The Fund's investments will be actively managed,
and securities may be bought or sold on a daily basis. Rampart will be
responsible for providing advice on and execution of the Fund's options
strategy. See "Management of the Fund."

   A team of Eaton Vance investment professionals is responsible for the overall
management of the Fund's investments, including decisions about asset allocation
and securities selection. The portfolio managers utilize information provided
by, and the expertise of, the Adviser's research staff in making investment
decisions. Investment decisions are made primarily on the basis of fundamental
research, which involves consideration of the various company-specific and
general business, economic and market factors that may influence the future
performance of individual companies and equity investments therein. The Adviser
will also consider a variety of other factors in constructing and maintaining
the Fund's stock portfolio, including, but not limited to, stock dividend yields
and payment schedules, overlap between the Fund's stock holdings and the indices
on which it has outstanding options positions, realization of tax loss
harvesting opportunities and other tax management considerations.

   The Adviser believes that a strategy of owning a portfolio of common stocks
and selling covered call options (a "buy-write strategy") with respect to a
portion thereof can provide current income and gains and attractive risk-
adjusted returns. Compared to selling call options on individual stocks, the
Adviser believes that selling index call options can achieve better tax and
transactional efficiency because listed options on broad-based securities
indices generally qualify as "section 1256 contracts" under the Code, subject to
specialized tax treatment, and because the markets for index options are
generally deeper and more liquid than options on individual stocks. Although the
Fund generally and initially expects to write stock index call options with
respect to only a portion of its common stock portfolio value, the Fund may in
market circumstances deemed appropriate by the Adviser write covered index call
options on up to 100% of the value of its assets.

   Eaton Vance further believes that a strategy of owning a portfolio of
domestic and foreign common stocks in conjunction with writing index call
options with respect to a portion thereof should generally provide returns that
are superior to owning the same stocks without an associated call option writing
program under three different stock market scenarios: (1) down-trending equity
markets; (2) flat market conditions; and (3) moderately rising equity markets.
In the Adviser's opinion, only in more strongly rising equity markets would the
buy- write strategy generally be expected to underperform the stock-only
portfolio. For these purposes, the Adviser considers more strongly rising equity
market conditions to exist whenever the current annual rate of return for United
States common stocks (as represented by the S&P 500) exceeds the long-term
historical average of stock market returns. The Adviser considers moderately
rising equity market conditions to exist whenever current annual returns on
United States common stocks are positive, but do not exceed the long-term
historical average of stock market returns.

   To avoid being subject to the "straddle rules" under federal income tax law,
the Fund intends to limit the overlap between its stock holdings (and any subset
thereof) and each index on which it has outstanding options positions to less
than 70% on an ongoing basis. Under the "straddle rules," "offsetting positions
with respect to personal property" generally are considered to be straddles. In
general, investment positions will be offsetting if there is a substantial
diminution in the risk of loss from holding one position by reason of holding
one or more other positions. The Fund expects that the index call options it
writes will not be considered straddles because its stock holdings will be
sufficiently dissimilar from the components of each index on which it has open
call options positions under applicable guidance established by the IRS. Under
certain circumstances, however, the Fund may enter into options transactions or
certain other investments that may constitute positions in a straddle.

   The Fund's index option strategy is designed to produce current cash flow
from option premiums and to moderate the volatility of the Fund's returns. This
index option strategy is of a hedging nature, and is not designed to speculate
on equity market performance. The Adviser believes that the Fund's index option
strategy will moderate the volatility of the Fund's returns because the option
premiums received will help to mitigate the impact of downward price movements
in the stocks held by the Fund, while the Fund's obligations under index calls

                                       26
<PAGE>

written will constrain the Fund's ability to participate in upward price
movements in portfolio stocks. The Adviser initially expects to follow a primary
options strategy of selling index call options with a remaining maturity of
between approximately one and three months and maintaining its short call
options positions until approximately their expiration date, at which time
replacement call option positions with a remaining maturity within this range
are written.

   The Fund expects normally to sell index call options on a portion of its
common stock portfolio value. The Adviser does not intend to sell index call
options representing amounts greater than the value of the Fund's common stock
portfolio (i.e., take a "naked" position). The Adviser generally intends to sell
index call options that are exchange-listed and "European style," meaning that
the options may only be exercised on the expiration date of the option.
Exchange-traded index options are typically settled in cash and provide that the
holder of the option has the right to receive an amount of cash determined by
the excess of the exercise-settlement value of the index over the exercise price
of the option. The exercise-settlement value is calculated based on opening
sales prices of the component index stocks on the option valuation date, which
is the last business day before the expiration date. Generally, the Adviser
intends to sell index call options that are slightly "out-of-the-money," meaning
that option exercise prices generally will be slightly above the current level
of the index at the time the options are written. The Fund may also sell index
options that are more substantially "out-of-the-money." Such options that are
more substantially "out-of-the-money" provide greater potential for the Fund to
realize capital appreciation on its portfolio stocks but generally would pay a
lower premium than options that are slightly "out-of-the-money." The Adviser
expects initially to follow a primary options strategy of selling index call
options with a remaining maturity of between approximately one and three months
and maintaining its short call options positions until approximately their
option valuation date, at which time replacement call option positions with a
remaining maturity within this range are written.

   The foregoing policies relating to investments in common stocks and options
writing are the Fund's primary investment policies. In addition to its primary
investment policies, the Fund may invest to a limited extent in other types of
securities and engage in certain other investment practices. In addition to
writing index call options, the Fund may write call options on up to 20% of the
value of its total assets on futures contracts based upon broad-based securities
indices. The Fund's use of such options on index futures would be substantially
similar to its use of options directly on indices. The Fund may also invest up
to 20% of its total assets in derivative instruments acquired for hedging, risk
management and investment purposes (to gain exposure to securities, securities
markets, markets indices and/or currencies consistent with its investment
objectives and policies), provided that no more than 10% of the Fund's total
assets may be invested in such derivative instruments acquired for non-hedging
purposes. The loss on derivative instruments (other than purchased options) may
substantially exceed an investment in these instruments. To seek to protect
against price declines in securities holdings with large accumulated gains, the
Fund may use various hedging techniques (such as the purchase and sale of
futures contracts on stocks and stock indices and options thereon, equity swaps,
covered short sales, forward sales of stocks and the purchase and sale of
forward currency exchange contracts and currency futures). By using these
techniques rather than selling appreciated securities, the Fund can, within
certain limitations, reduce its exposure to price declines in the securities
without realizing substantial capital gains under current tax law. Derivative
instruments may also be used by the Fund to enhance returns or as a substitute
for the purchase or sale of securities.

   TAX-MANAGED INVESTING. Taxes are a major influence on the net after-tax
returns that investors receive on their taxable investments. There are five
potential sources of returns for a Common Shareholder: (1) appreciation or
depreciation in the value of the Common Shares; (2) distributions of qualified
dividend income; (3) distributions of other investment income and net short-term
capital gains; (4) distributions of long-term capital gains (and long-term
capital gains retained by the Fund); and (5) distributions of return of capital.
These different sources of investment returns are subject to widely varying
federal income tax treatment. Distributions of other investment income (i.e.,
non-qualified dividend income) and net realized short-term gains are taxed
currently as ordinary income, at rates as high as 35%. Distributions of
qualified dividend income and net realized long-term gains (whether distributed
or retained by the Fund) are taxed currently at rates up to 15% for individuals
and other noncorporate taxpayers (provided in the case of qualified dividend
income that certain holding period and other requirements are met). Generally,
return from unrealized appreciation and depreciation in the value of Common
Shares and distributions characterized as return of capital are not taxable
until the Common Shareholder sells his or her Common Shares. Upon sale, a
capital gain or loss equal to the difference between the amount realized on the
sale and the Common Shareholder's adjusted tax basis is realized. Capital gain
is considered long-term and is taxed at rates up to 15% for individuals and
other noncorporate taxpayers if the Common Shareholder has held his or her
shares more than one year. Otherwise, capital gain is considered short-term and
is taxed at rates up to 35%. The after-tax returns achieved by a Common
Shareholder will be substantially influenced by the mix of different types of
returns subject to varying federal income tax treatment.

   In implementing the Fund's investment strategy, the Adviser intends to employ
a variety of techniques and strategies designed to minimize and defer the
federal income taxes incurred by Common Shareholders in connection with their
investment in the Fund. These include: (1) investing in stocks that pay
dividends that qualify for federal income taxation at rates applicable to long-
term capital gains and complying with the holding period and other requirements
for favorable tax treatment; (2) selling index call options that qualify for
treatment as "section 1256 contracts" under the Code, on which capital gains and
losses are generally treated as 60% long-term and 40% short-term, regardless of
holding period; (3) limiting the overlap between the Fund's stock holdings (and


                                       27
<PAGE>

any subset thereof) and each index on which it has outstanding options positions
to less than 70% on an ongoing basis so that the Fund's stock holdings and index
call options are not subject to the "straddle rules;" (4) engaging in a
systematic program of tax-loss harvesting in the Fund's stock portfolio,
periodically selling stock positions that have depreciated in value to realize
capital losses that can be used to offset capital gains realized by the Fund;
and (5) managing the sale of appreciated stock positions so as to minimize the
Fund's net realized short-term capital gains in excess of net realized long-term
capital losses. When an appreciated security is sold, the Fund intends to select
for sale the share lots resulting in the most favorable tax treatment, generally
those with holding periods sufficient to qualify for long-term capital gains
treatment that have the highest cost basis.

   The Fund intends to emphasize investments in stocks that pay dividends that
qualify for federal income taxation at rates applicable to long-term capital
gains. Under federal income tax law enacted in 2003, the qualified dividend
income of individuals and other noncorporate taxpayers is taxed at long-term
capital gain tax rates if certain holding period and other requirements are met.
Qualified dividends are dividends from domestic corporations and dividends from
foreign corporations that meet certain specified criteria. The Fund generally
can pass the tax treatment of qualified dividend income it receives through to
Common Shareholders. For dividends the Fund receives to qualify for tax-
advantaged treatment, the Fund must hold stock paying qualified dividends for
more than 60 days during the 121-day period beginning 60 days before the ex-
dividend date (or more than 90 days during the associated 181-day period, in the
case of certain preferred stocks). In addition, the Fund cannot be obligated to
make related payments (pursuant to a short sale or otherwise) with respect to
positions in any security that is substantially similar or related property with
respect to such stock. Similar provisions apply to each Common Shareholder's
investment in the Fund. In order for qualified dividend income paid by the Fund
to a Common Shareholder to be taxable at long-term capital gains rates, the
Common Shareholder must hold his or her Fund shares for more than 60 days during
the 121-day period surrounding the ex-dividend date. The provisions of the Code
applicable to qualified dividend income are effective through 2010. Thereafter,
qualified dividend income will be subject to tax at ordinary income rates unless
further legislative action is taken. The Fund's investment program and the tax
treatment of Fund distributions may be affected by IRS interpretations of the
Code and future changes in tax laws and regulations, including changes resulting
from the "sunset" provisions described above that would have the effect of
repealing the favorable treatment of qualified dividend income and reimposing
the higher tax rates applicable to ordinary income in 2011 unless further
legislative action is taken.

   The Fund will seek to enhance the level of tax-advantaged dividend income it
receives by engaging in dividend capture trading. In a dividend capture trade,
the Fund sells a stock on or shortly after the stock's ex-dividend date and uses
the sale proceeds to purchase one or more other stocks that are expected to pay
dividends before the next dividend payment on the stock being sold. Through this
practice, the Fund may receive more dividend payments over a given time period
than if it held a single stock. In order for dividends received by the Fund to
qualify for favorable tax treatment, the Fund must comply with the holding
period and other requirements set forth in the preceding paragraph. By complying
with applicable holding period and other requirements while engaging in dividend
capture trading, the Fund may be able to enhance the level of tax-advantaged
dividend income it receives because it will receive more dividend payments
qualifying for favorable treatment during the same time period than if it simply
held its portfolio stocks. The use of dividend capture trading strategies will
expose the Fund to increased trading costs and potentially higher short-term
gain or loss.

   Options on broad-based equity indices that trade on a national securities
exchange registered with the Securities and Exchange Commission (the "SEC") or a
domestic board of trade designated as a contract market by the Commodity Futures
Trading Commission generally will qualify for treatment as "section 1256
contracts." Options on broad-based equity indices that trade on other exchanges,
boards of trade or markets designated by the United States Secretary of Treasury
also qualify for treatment as "section 1256 contracts." Because only a small
number of exchanges, boards and markets outside the United States have to date
received the necessary designation, most foreign-traded stock index options do
not currently qualify for treatment as "section 1256 contracts." To the extent
that the Fund writes options on indices based upon foreign stocks, the Fund
generally intends to sell options on broad-based foreign country and/or regional
stock indices that are listed for trading in the United States or which
otherwise qualify as "section 1256 contracts." Options on foreign indices that
are listed for trading in the United States or which otherwise qualify as
"section 1256 contracts" under the Code may trade in substantially lower volumes
and with substantially wider bid-ask spreads than other options contracts on the
same or similar indices that trade on other markets outside the United States.
To implement its options program most effectively, the Fund may sell index
options that do not qualify as "section 1256 contracts." Gain or loss on index
options not qualifying as "section 1256 contracts" under the Code would be
realized upon disposition, lapse or settlement of the positions, and would be
treated as short-term gain or loss.

   To seek to protect against price declines in securities holdings with large
accumulated gains, the Fund may use various hedging techniques (such as the sale
of futures contracts on stocks and stock indices and options thereon, equity
swaps, covered short sales, and forward sales of stocks). By using these
techniques rather than selling appreciated securities, the Fund can, within
certain limitations, reduce its exposure to price declines in the securities
without currently realizing substantial capital gains under current federal tax
law. Derivative instruments may also be used by the Fund to enhance returns or
as a substitute for the purchase or sale of securities. As a general matter,
dividends received on hedged stock positions are characterized as ordinary
income and are not eligible for favorable tax treatment. Dividends received on
securities with respect to which the Fund is obligated to make related payments

                                       28
<PAGE>

(pursuant to short sales or otherwise) will be treated as fully taxable ordinary
income (i.e., income other than tax-advantaged qualified dividend income). In
addition, use of derivatives may give rise to short-term capital gains and other
income that would not qualify for favorable tax treatment. As indicated above,
in addition to writing index call options, the Fund may invest up to 20% of its
total assets in derivative instruments acquired for hedging, risk management and
investment purposes (to gain exposure to securities, securities markets, markets
indices and/or currencies consistent with its investment objectives and
policies), provided that no more than 10% of the Fund's total assets may be
invested in such derivative instruments acquired for non-hedging purposes. The
loss on derivative instruments (other than purchased options) may substantially
exceed an investment in these instruments.

   COMMON STOCKS. Under normal market conditions, the Fund's investment program
will consist primarily of owning a diversified portfolio of common stocks.
Common stock represents an equity ownership interest in the issuing corporation.
Holders of common stock generally have voting rights in the issuer and are
entitled to receive common stock dividends when, as and if declared by the
corporation's board of directors. Common stock normally occupies the most
subordinated position in an issuer's capital structure. Returns on common stock
investments consist of any dividends received plus the amount of appreciation or
depreciation in the value of the stock.

   Although common stocks have historically generated higher average returns
than fixed-income securities over the long term and particularly during periods
of high or rising concerns about inflation, common stocks also have experienced
significantly more volatility in returns and may not maintain their real value
during inflationary periods. An adverse event, such as an unfavorable earnings
report, may depress the value of a particular common stock held by the Fund.
Also, the prices of common stocks are sensitive to general movements in the
stock market and a drop in the stock market may depress the price of common
stocks to which the Fund has exposure. Common stock prices fluctuate for many
reasons, including changes in investors' perceptions of the financial condition
of an issuer or the general condition of the relevant stock market, or when
political or economic events affecting the issuer occur. In addition, common
stock prices may be sensitive to rising interest rates as the costs of capital
rise and borrowing costs increase.

FOREIGN SECURITIES. Typically, the Fund will invest at least 40% of its total
assets in securities of non-U.S. companies (unless the Adviser deems market
conditions and/or company valuations less favorable to non-U.S. companies, in
which case the Fund will invest at least 30% of its total assets in securities
of non-U.S. companies). The value of foreign securities is affected by changes
in currency rates, foreign tax laws (including withholding tax), government
policies (in this country or abroad), relations between nations and trading,
settlement, custodial and other operational risks. In addition, the costs of
investing abroad are generally higher than in the United States, and foreign
securities markets may be less liquid, more volatile and less subject to
governmental supervision than markets in the United States. Foreign investments
also could be affected by other factors not present in the United States,
including expropriation, armed conflict, confiscatory taxation, lack of uniform
accounting and auditing standards, less publicly available financial and other
information and potential difficulties in enforcing contractual obligations. As
an alternative to holding foreign-traded securities, the Fund may invest in
dollar-denominated securities of foreign companies that trade on U.S. exchanges
or in the U.S. over-the-counter market (including depositary receipts, which
evidence ownership in underlying foreign securities). Dividends received with
respect to stock of a foreign corporation may qualify for the reduced rates of
federal income taxation applicable to qualified dividend income only if such
corporation satisfies the requirements to be a "qualified foreign corporation."

Because foreign companies are not 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. Volume and liquidity in
most foreign debt markets are less than in the United States and securities of
some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. There is generally less government supervision and
regulation of securities exchanges, broker-dealers 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. Payment for securities before delivery
may be required. 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 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. Foreign securities markets, while
growing in volume and sophistication, are generally not as developed as those in
the United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. companies.

American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") and
Global Depositary Receipts ("GDRs") may be purchased. ADRs, EDRs and GDRs are
certificates evidencing ownership of shares of foreign issuers and are
alternatives to purchasing directly the underlying foreign securities in their
national markets and currencies. However, they continue to be subject to many of
the risks associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks of the
underlying issuer's country. ADRs, EDRs and GDRs may be sponsored or
unsponsored. Unsponsored receipts are established without the participation of


                                       29
<PAGE>

the issuer. Unsponsored receipts may involve higher expenses, they may not
passthrough voting or other shareholder rights, and they may be less liquid.

   EMERGING MARKETS. The Fund may invest up to [5]% of its total assets in
securities of issuers located in emerging markets. The risks of foreign
investments described above apply to an even greater extent to investments in
emerging markets. The securities markets of emerging market countries are
generally smaller, less developed, less liquid and more volatile than the
securities markets of the United States and developed foreign markets.
Disclosure and regulatory standards in many respects are less stringent than in
the United States and developed foreign markets. There also may be a lower level
of monitoring and regulation of securities markets in emerging market countries,
and enforcement of existing regulations may be extremely limited. Many emerging
market countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have very negative effects on the
economies and securities markets of certain emerging market countries. Economies
in emerging markets generally are heavily dependent upon international trade
and, accordingly, have been and may continue to be affected adversely by trade
barriers, exchange controls, managed adjustments in relative currency values,
and other protectionist measures imposed or negotiated by the countries with
which they trade. The economies of these countries also have been and may
continue to be adversely affected by economic conditions in the countries in
which they trade. The economies of countries with emerging markets may also be
predominantly based on only a few industries or dependent on revenues from
particular commodities. In addition, custodial services and other costs relating
to investment in foreign markets may be more expensive in emerging markets than
in many developed foreign markets, which could reduce the Fund's income from
such securities.

   INDEX OPTIONS GENERALLY. The Fund will pursue its objectives in part by
writing (selling) stock index call options with respect to a portion of its
common stock portfolio value. The Fund generally intends to sell index options
that are exchange-listed and "European style," meaning that the options may be
exercised only on the expiration date of the option. Index options differ from
options on individual securities in that index options (i) typically are settled
in cash rather than by delivery of securities (meaning the exercise of an index
option does not involve the actual purchase or sale of securities) and (ii)
reflect price fluctuations in a group of securities or segments of the
securities market rather than price fluctuations in a single security.

   United States listed options contracts are originated and standardized by the
Options Clearing Corporation (the "OCC"). Currently, United States listed index
options are available on approximately 144 indexes, with new listings added
periodically. In the United States, the Fund generally intends to sell index
call options that are issued, guaranteed and cleared by the OCC. The Fund may
also sell index call options in the United States and outside the United States
that are not issued, guaranteed or cleared by the OCC. The Adviser believes that
there exists sufficient liquidity in the index options markets to fulfill the
Fund's requirements to implement its strategy.

   SELLING INDEX CALL OPTIONS. The Fund's index option strategy is designed to
produce current cash flow from options premiums and to moderate the volatility
of the Fund's returns. This index option strategy is of a hedging nature, and is
not designed to speculate on equity market performance.

   As the seller of index call options, the Fund will receive cash (the premium)
from the purchasers thereof. The purchaser of an index option has the right to
any appreciation in the value of the applicable index over a fixed price (the
exercise price) as of a specified date in the future (the option valuation
date). Generally, the Fund intends to sell index call options that are slightly
"out-of-the-money" (i.e., the exercise price generally will be slightly above
the current level of the applicable index when the option is sold). The Fund may
also sell index options that are more substantially "out-of-the-money." Such
options that are more substantially "out-of-the-money" provide greater potential
for the Fund to realize capital appreciation on its portfolio stocks but
generally would pay a lower premium than options that are slightly "out-of-the-
money." When it writes index call options, the Fund will, in effect, sell the
potential appreciation in the value of the applicable index above the exercise
price in exchange for the option premium received. If, at expiration, an index
call option sold by the Fund is exercised, the Fund will pay the purchaser the
difference between the cash value of the applicable index and the exercise price
of the option. The premium, the exercise price and the market value of the
applicable index will determine the gain or loss realized by the Fund as the
seller of the index call option.

   Prior to expiration, the Fund may close an option position by making an
offsetting market purchase of identical option contracts (same type, underlying
index, exercise price and expiration). The cost of closing transactions and
payments in settlement of exercised options will reduce the net option premiums
available for distribution to Common Shareholders by the Fund. The reduction in
net option premiums due to a rise in stock prices should generally be offset, at
least in part, by appreciation in the value of common stocks held and by the
opportunity to realize higher premium income from selling new index options at
higher exercise prices.

   In certain extraordinary market circumstances, to limit the risk of loss on
the Fund's index option strategy, the Fund may enter into "spread" transactions
by purchasing index call options with higher exercise prices than those of index
call options written. The Fund will only engage in such transactions when Eaton
Vance and Rampart believe that certain extraordinary events temporarily have


                                       30
<PAGE>

depressed equity prices and substantial short-term appreciation of such prices
is expected. By engaging in spread transactions in such circumstances the Fund
will reduce the limitation imposed on its ability to participate in such
recovering equity markets that exist if the Fund only writes index call options.
The premiums paid to purchase such call options are expected to be lower than
the premiums earned from the call options written at lower exercise prices.
However, the payment of these premiums will reduce amounts available for
distribution from the Fund's option activity.

   The Fund will sell only "covered" call options. An index call option is
considered covered if the Fund maintains with its custodian assets determined to
be liquid (in accordance with procedures established by the Board) in an amount
at least equal to the contract value of the index. An index call option also is
covered if the Fund holds a call on the same index as the call written where the
exercise price of the call held is (i) equal to or less than the exercise price
of the call written, or (ii) greater than the exercise price of the call
written, provided the difference is maintained by the Fund in segregated assets
determined to be liquid (in accordance with procedures established by the
Board).

   If an option written by the Fund expires unexercised, the Fund realizes on
the expiration date a capital gain equal to the premium received by the Fund at
the time the option was written. If an option written by the Fund is exercised,
the Fund realizes on the expiration date a capital gain if the cash payment made
by the Fund upon exercise is less than the premium received from writing the
option and a capital loss if the cash payment made is more than the premium
received. If a written option is repurchased, the Fund realizes upon the closing
purchase transaction a capital gain if the cost of repurchasing the option is
less than the premium received from writing the option and a capital loss if the
cost of repurchasing the option is more than the premium received.

   For written index options that qualify as "section 1256 contracts," the
Fund's gains and losses thereon generally will be treated as 60% long-term and
40% short-term capital gain or loss, regardless of holding period. In addition,
the Fund generally will be required to "mark to market" (i.e., treat as sold for
fair market value) each outstanding index option position at the close of each
taxable year (and on October 31 of each year for excise tax purposes) and to
adjust the amount of gain or loss subsequently realized to reflect the marking
to market. Gain or loss on index options not qualifying as "section 1256
contracts" under the Code would be realized upon disposition, lapse or exercise
of the positions and would be treated as short-term gain or loss.

   The principal factors affecting the market value of an option contract
include supply and demand in the options market, interest rates, the current
market price of the underlying index in relation to the exercise price of the
option, the actual or perceived volatility associated with the underlying index,
and the time remaining until the expiration date. The premium received for an
option written by the Fund is recorded as an asset of the Fund and its
obligation under the option contract as an equivalent liability. The Fund then
adjusts over time the liability as the market value of the option changes. The
value of each written option will be marked to market daily and valued at the
closing price on the exchange on which it is traded or, if not traded on an
exchange or no closing price is available, at the mean between the last bid and
asked prices or otherwise at fair value as determined by the Board of the Fund.

  The transaction costs of buying and selling options consist primarily of
commissions (which are imposed in opening, closing and exercise transactions),
but may also include margin and interest costs in particular transactions. The
impact of transaction costs on the profitability of a transaction may often be
greater for options transactions than for transactions in the underlying
securities because these costs are often greater in relation to option premiums
than in relation to the prices of underlying securities. Transaction costs may
be especially significant in option strategies calling for multiple purchases
and sales of options over short periods of time or concurrently. Transaction
costs associated with the Fund's options strategy will vary depending on market
circumstances and other factors.

   There are three items needed to identify a particular index option contract:
(1) the expiration month, (2) the exercise (or strike) price and (3) the type
(i.e., call or put). For example, a January 2005 1200 strike S&P 500 call option
provides the option holder the right to receive $100 multiplied by the positive
difference between the January option exercise-settlement value of the S&P 500
(determine on January 20, 2005 based on opening sales prices of the component
index stocks on that date) and 1200. A call option whose exercise price is above
the current price of the underlying index is called "out-of-the-money" and a
call option whose exercise price is below the current price of the underlying
index is called "in-the-money."

   The following is a conceptual example of the returns that may be achieved
from a buy-write investment strategy that consists of holding a portfolio of
stocks whose performance matches the S&P 500 and selling S&P 500 call options on
the full value of the stock position. This example is not meant to represent the
performance of actual option contracts or the Fund. In particular, it should be
noted that the example is based upon writing call options on a single index
while holding a portfolio of securities precisely matching the index. In
implementing its options strategy, the Fund may write options on a number of
different representative indices, will not hold stocks precisely matching these
indices, and generally intends to write options on only a portion of the value
of its portfolio of common stocks. In addition, the example does not account for
the cost of options transactions, which would lower returns.

                                       31
<PAGE>

  A holder of a portfolio of common stocks writes (sells) January 2005 1200
strike S&P 500 call options on December 17, 2004 when the S&P 500 is at 1198.63.
When written, the options are 1.37 points (0.11%) "out of the money." The
options writer receives $14.41 (1.20%) per option written. Assume that the
portfolio of stocks held by the options writer matches the performance of the
S&P 500 over the period until the January exercise-settlement value of the S&P
500 is determined on January 20, 2005.

   In the example, the return over the period until option expiration earned by
the holder of a portfolio of stocks whose performance matches the S&P 500 and
who writes S&P 500 index call options on the full value of the portfolio
position and maintains the options position until expiration will be as follows:
(1) if the S&P 500 declines 1.20%, the option will expire worthless and the
holder will have a net return of zero (option premium offsets loss in stock
portfolio); (2) if the S&P 500 is flat, the option will again expire worthless
and the holder will have a net return of 1.20% (option premium plus no gain or
loss on portfolio); (3) if the S&P 500 rises 0.11%, the option will again expire
with no value and the holder will have a net return of 1.31% (option premium
plus 0.11% portfolio return); and (4) if the index rises more than 0.11%, the
exercise of the option would limit portfolio gain to 0.11% and total net return
to 1.31%. If the index value at exercise exceeds the exercise price, returns
over the period from the position are capped at 1.31%. On an annualized basis in
this example option premiums increase returns by approximately 12.9% in down,
flat and moderately up markets; annualized returns in this example for the buy-
write strategy, before accounting for the costs of the options transactions, are
capped at approximately 14.1% in a strong up market.

   As demonstrated in the example, writing index call options can lower the
variability of potential return outcomes and can enhance returns in three of
four market performance scenarios (down, flat or moderately up). Only when the
level of the index at option expiration exceeds the sum of the premium received
and the option exercise price would the buy-write strategy be expected to
provide lower returns than the stock portfolio-only alternative. The amount of
downside protection afforded by the buy-write strategy in declining market
scenarios is limited, however, to the amount of option premium received. If an
index declines by an amount greater than the option premium, a buy-write
strategy consisting of owning all of the stocks in the index and writing index
options on the value thereof would generate an investment loss. The Fund's
returns from implementing a buy-write strategy using index options will also be
substantially affected by the performance of the Fund's stock portfolio versus
the indices on which it writes call options and by the percentage of portfolio
value on which options are written. The returns on the Fund's portfolio are
unlikely to be the same as the returns on the indices on which it writes
options.

ADDITIONAL INVESTMENT PRACTICES

   In addition to its primary investment strategies as described above, the Fund
may engage in the following investment practices.

   TEMPORARY INVESTMENTS. During unusual market circumstances, the Fund may
temporarily invest a substantial portion of its assets in cash or cash
equivalents. Cash equivalents are highly liquid, short-term securities such as
commercial paper, time deposits, certificates of deposit, short-term notes and
short-term United States government obligations. In moving to a substantial
temporary investments position and in transitioning from such a position back
into conformity with the Fund's normal investment policies, the Fund may incur
transaction costs that would not be incurred if the Fund had remained fully
invested in accordance with such normal policies. The transition to and from a
substantial temporary investments position may also result in the Fund having to
sell common stocks and/or close out options positions and then later purchase
common stocks and open new options positions in circumstances that might not
otherwise be optimal. The Fund's investment in such temporary investments under
unusual market circumstances may not be in furtherance of the Fund's investment
objectives.

   WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS. Securities may be purchased
on a "forward commitment" or "when-issued" basis (meaning securities are
purchased or sold with payment and delivery taking place in the future) in order
to secure what is considered to be an advantageous price and yield at the time
of entering into the transaction. However, the return on a comparable security
when the transaction is consummated may vary from the return on the security at
the time that the forward commitment or when-issued transaction was made. From
the time of entering into the transaction until delivery and payment is made at
a later date, the transacted securities are subject to market fluctuations. In
forward commitment or when-issued transactions, if the seller or buyer, as the
case may be, fails to consummate the transaction, the counterparty may miss the
opportunity of obtaining a price or yield considered to be advantageous. Forward
commitment or when-issued transactions may occur a month or more before delivery
is due. However, no payment or delivery is made until payment is received or
delivery is made from the other party to the transaction. The Fund does not
intend to enter into forward commitment or when-issued transactions for the
purpose of investment leverage.

   ILLIQUID SECURITIES. The Fund may invest up to 15% of its total assets in
securities for which there is no readily available trading market or that are
otherwise illiquid. 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 Adviser pursuant to procedures adopted by the Board,
which require consideration of factors such as trading activity, availability of
market quotations and number of dealers willing to purchase the security. If the


                                       32
<PAGE>

Fund invests in Rule 144A securities, the level of portfolio illiquidity may be
increased to the extent that eligible buyers become uninterested in purchasing
such securities.

  It may be difficult to sell illiquid 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 by
the Fund to sell the securities and the time when it 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.

FOREIGN CURRENCY TRANSACTION. The value of foreign assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in foreign currency
rates and exchange control regulations. Currency exchange rates can also be
affected unpredictably by intervention by U.S. or foreign governments or central
banks, or the failure to intervene, or by currency controls or political
developments in the United States or abroad. The Fund may engage in transactions
to hedge against changes in foreign currencies, and will use such hedging
techniques when the Adviser deems appropriate. Foreign currency exchange
transactions may be conducted on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering into
derivative currency transactions. Currency futures contracts are exchange-traded
and change in value to reflect movements of a currency or a basket of
currencies. Settlement must be made in a designated currency.

Forward foreign currency exchange contracts are individually negotiated and
privately traded so they are dependent upon the creditworthiness of the
counterparty. Such contracts may be used when a security denominated in a
foreign currency is purchased or sold, or when the receipt in a foreign currency
of dividend or interest payments on such a security is anticipated. A forward
contract can then "lock in" the U.S. dollar price of the security or the U.S.
dollar equivalent of such dividend or interest payment, as the case may be.
Additionally, when the Adviser believes that the currency of a particular
foreign country may suffer a substantial decline against the U.S. dollar, it may
enter into a forward contract to sell, for a fixed amount of dollars, the amount
of foreign currency approximating the value of some or all of the securities
held that are denominated in such foreign currency. The precise matching of the
forward contract amounts and the value of the securities involved will not
generally be possible. In addition, it may not be possible to hedge against
long-term currency changes. Cross-hedging may be performed by using forward
contracts in one currency (or basket of currencies) to hedge against
fluctuations in the value of securities denominated in a different currency if
the Adviser determines that there is an established historical pattern of
correlation between the two currencies (or the basket of currencies and the
underlying currency). Use of a different foreign currency magnifies exposure to
foreign currency exchange rate fluctuations. Forward contracts may also be used
to shift exposure to foreign currency exchange rate changes from one currency to
another. Short-term hedging provides a means of fixing the dollar value of only
a portion of portfolio assets. Income or gains earned on any of the Fund's
foreign currency transactions generally will be treated as fully taxable income
(i.e. income other than tax-advantaged dividends).

Currency transactions are subject to the risk of a number of complex political
and economic factors applicable to the countries issuing the underlying
currencies. Furthermore, unlike trading in most other types of instruments,
there is no systematic reporting of last sale information with respect to the
foreign currencies underlying the derivative currency transactions. As a result,
available information may not be complete. In an over-the-counter trading
environment, there are no daily price fluctuation limits. There may be no liquid
secondary market to close out options purchased or written, or forward contracts
entered into, until their exercise, expiration or maturity. There is also the
risk of default by, or the bankruptcy of, the financial institution serving as
counterparty.

   OTHER DERIVATIVE INSTRUMENTS. In addition to the intended strategy of selling
index call options, the Fund may invest up to 20% of its total assets in other
derivative instruments (which are instruments that derive their value from
another instrument, security or index) acquired for hedging, risk management and
investment purposes (to gain exposure to securities, securities markets, markets
indices and/or currencies consistent with its investment objectives and
policies), provided that no more than 10% of the Fund's total assets may be
invested in such derivative instruments for non-hedging purposes. These
strategies may be executed through the use of derivative contracts in the United
States or abroad. In the course of pursuing these investment strategies, the
Fund may purchase and sell derivative contracts based on equity and fixed-income
indices and other instruments, purchase and sell futures contracts and options
thereon, and enter into various transactions such as swaps, caps, floors or
collars. In addition, derivatives may also include new techniques, instruments
or strategies that are not currently available. Derivative instruments may be
used by the Fund to enhance returns or as a substitute for the purchase or sale
of securities. The loss on derivative instruments (other than purchased options)
may substantially exceed an investment in these instruments.

   SWAPS. Swap contracts may be purchased or sold to hedge against fluctuations
in securities prices, interest rates or market conditions, to mitigate non-
payment or default risk or to gain exposure to particular securities, baskets of
securities, indices or currencies. In a standard "swap" transaction, two parties
agree to exchange the returns (or differentials in rates of return) on different
currencies, securities, baskets of currencies or securities, indices or other
instruments, which returns are calculated with respect to a "notional amount,"
i.e., the designated referenced amount of exposure to the underlying
instruments. The Fund will enter into swaps only on a net basis, i.e., the two


                                       33
<PAGE>

payment streams are netted out, with the Fund receiving or paying, as the case
may be, only the net amount of the two payments. If the other party to a swap
defaults, the Fund's risk of loss consists of the net amount of payments that
the Fund is contractually entitled to receive. The net amount of the excess, if
any, of the Fund's obligations over its entitlements will be maintained in a
segregated account by the Fund's custodian. The Fund will not enter into any
swap unless the claims-paying ability of the other party thereto is considered
to be investment grade by the Adviser. If there is a default by the other party
to such a transaction, the Fund will have contractual remedies pursuant to the
agreements related to the transaction. Swaps are traded in the over-the-counter
market. The use of swaps is a highly specialized activity, which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Adviser is incorrect in its forecasts
of market values, interest rates and other applicable factors, the total return
performance of the Fund would be unfavorably affected.

   TOTAL RETURN SWAPS. Total return swaps are contracts in which one party
agrees to make payments of the total return from the designated underlying
asset(s), which may include securities, baskets of securities, or securities
indices during the specified period, in return for payments equal to a fixed or
floating rate of interest or the total return from other designated underlying
asset(s).

   INTEREST RATE SWAPS. Interest rate swaps involve the exchange by the Fund
with another party of their respective commitments to pay or receive interest
(e.g., an exchange of fixed rate payments for floating rate payments).

   FUTURES AND OPTIONS ON FUTURES. The Fund may purchase and sell various kinds
of financial futures contracts and options thereon to seek to hedge against
changes in stock prices or interest rates, for other risk management purposes or
to gain exposure to certain securities, indices and currencies. Futures
contracts may be based on various securities indices and securities. Such
transactions involve a risk of loss or depreciation due to adverse changes in
securities prices, which may exceed the Fund's initial investment in these
contracts. The Fund will only purchase or sell futures contracts or related
options in compliance with the rules of the Commodity Futures Trading
Commission. These transactions involve transaction costs. Sales of futures
contracts and related options generally result in realization of short-term or
long-term capital gain depending on the period for which the investment is held.
To the extent that any futures contract or options on futures contract held by
the Fund is a "section 1256 contract" under the Code, the contract will be
marked-to-market annually and any gain or loss will be treated as 60% long-term
and 40% short-term, regardless of the holding period for such contract.

   SHORT SALES. The Fund may sell a security short if it owns at least an equal
amount of the security sold short or another security convertible or
exchangeable for an equal amount of the security sold short without payment of
further compensation (a short sale against-the-box). In a short sale against-
the-box, the short seller is exposed to the risk of being forced to deliver
stock that it holds to close the position if the borrowed stock is called in by
the lender, which would cause gain or loss to be recognized on the delivered
stock. The Fund expects normally to close its short sales against-the-box by
delivering newly acquired stock.

   Short sales against-the-box can be a tax-efficient alternative to the sale of
an appreciated securities position. The ability to use short sales against-the-
box as a tax-efficient management technique with respect to holdings of
appreciated securities is limited to circumstances in which the hedging
transaction is closed out not later than thirty days after the end of the Fund's
taxable year in which the transaction was initiated, and the underlying
appreciated securities position is held unhedged for at least the next sixty
days after the hedging transaction is closed. Not meeting these requirements
would trigger the recognition of gain on the underlying appreciated securities
position under the federal tax laws applicable to constructive sales.

   SECURITIES LENDING. The Fund may seek to earn income by lending portfolio
securities to broker-dealers or other institutional 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. Loans will be made only to organizations whose credit quality or
claims paying ability is considered by the Adviser to be at least investment
grade and when the expected return, net of administrative expenses and any
finders' fees, justifies the attendant risk. Securities loans currently are
required to be secured continuously by collateral in cash, cash equivalents
(such as money market instruments) or other liquid securities held by the
custodian and maintained in an amount at least equal to the market value of the
securities loaned. The financial condition of the borrower will be monitored by
the Adviser on an ongoing basis.

   BORROWINGS. The Fund may borrow money to the extent permitted under the 1940
Act as interpreted, modified or otherwise permitted by the regulatory authority
having jurisdiction. Although it does not currently intend to do so, the Fund
may in the future from time to time borrow money to add leverage to the
portfolio. The Fund may also borrow money for temporary administrative purposes
or to meet temporary cash needs.

   REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements. Under a reverse repurchase agreement, the Fund temporarily transfers
possession of a portfolio instrument to another party, such as a bank or broker-
dealer, in return for cash. At the same time, the Fund agrees to repurchase the
instrument at an agreed upon time (normally within seven days) and price, which


                                       34
<PAGE>

reflects an interest payment. The Fund may enter into such agreements when it is
able to invest the cash acquired at a rate higher than the cost of the
agreement, which would increase earned income. Income realized on reverse
repurchase agreements is taxable as ordinary income.

   When the Fund enters into a reverse repurchase agreement, any fluctuations in
the market value of either the securities transferred to another party or the
securities in which the proceeds may be invested would affect the market value
of the Fund's assets. As a result, such transactions may increase fluctuations
in the market value of the Fund's assets. There is a risk that large
fluctuations in the market value of the Fund's assets could affect net asset
value and the market price of Common Shares. Because reverse repurchase
agreements may be considered to be the practical equivalent of borrowing funds,
they constitute a form of leverage and may be subject to leverage risks. Such
agreements will be treated as subject to investment restrictions as mentioned
above under "Borrowings." If the Fund reinvests the proceeds of a reverse
repurchase agreement at a rate lower than the cost of the agreement, entering
into the agreement will lower the Fund's cash available for distribution.

   PORTFOLIO TURNOVER. The Fund will buy and sell securities to seek to
accomplish its investment objectives. Portfolio turnover generally involves
expense to the Fund, including brokerage commissions and other transaction costs
on the sale of securities and reinvestment in other securities. The Fund expects
to maintain high turnover in index call options, based on the Adviser's intent
to sell index call options on a portion of its stock portfolio value and the
Fund's initial expectation to roll forward its options positions approximately
every one to three months. For its stock holdings, the Fund's annual portfolio
turnover rate is expected to exceed that of the indices on which the Fund writes
call options due to turnover in connection with the Fund's active stock
selection, tax loss harvesting, dividend capture and other strategies. On an
overall basis, the Fund expects that its annual turnover rate will exceed 100%.
A high turnover rate (100% or more) necessarily involves greater trading costs
to the Fund.

RISK CONSIDERATIONS

   NO OPERATING HISTORY. The Fund is a newly organized, diversified closed-end
investment company with no history of operations and is designed for long-term
investors and not as a trading vehicle.

   INVESTMENT AND MARKET RISK. An investment in Common Shares is subject to
investment risk, including the possible loss of the entire principal amount
invested. An investment in Common Shares represents an indirect investment in
the securities owned by the Fund, which are generally traded on a securities
exchange or in the over-the-counter markets. The value of these securities, like
other market investments, may move up or down, sometimes rapidly and
unpredictably. Because the Fund normally intends to sell stock index call
options on a portion of its common stock portfolio value, the Fund's
appreciation potential from equity market performance will be more limited than
if the Fund did not engage in selling stock index call options. The Common
Shares at any point in time may be worth less than the original investment, even
after taking into account any reinvestment of distributions.

  ISSUER RISK. The value of securities held by the Fund may decline for a number
of reasons that directly relate to the issuer, such as management performance,
financial leverage and reduced demand for the issuer's goods and services.

   EQUITY RISK. Under normal market conditions, the Fund's investment program
will consist primarily of owning a diversified portfolio of domestic and foreign
common stocks. Therefore, a principal risk of investing in the Fund is equity
risk. Equity risk is the risk that the value of securities held by the Fund will
fall due to general market or economic conditions, perceptions regarding the
industries in which the issuers of securities held by the Fund participate, and
the particular circumstances and performance of companies whose securities the
Fund holds. Although common stocks have historically generated higher average
returns than fixed-income securities over the long term, common stocks also have
experienced significantly more volatility in returns. An adverse event, such as
an unfavorable earnings report, may depress the value of equity securities of an
issuer held by the Fund; the price of common stock of an issuer may be
particularly sensitive to general movements in the stock market; or a drop in
the stock market may depress the price of most or all of the common stocks held
by the Fund. In addition, common stock of an issuer in the Fund's portfolio may
decline in price if the issuer fails to make anticipated dividend payments
because, among other possible reasons, the issuer of the security experiences a
decline in its financial condition. Common stocks in which the Fund will invest
are structurally subordinated to preferred stocks, bonds and other debt
instruments in a company's capital structure, in terms of priority to corporate
income, and therefore will be subject to greater dividend risk than preferred
stocks or debt instruments of such issuers. Finally, common stock prices may be
sensitive to rising interest rates, as the costs of capital rise and borrowing
costs increase.

   RISKS OF INVESTING IN MID-CAP COMPANIES. The Fund may make investments in
stocks of companies whose market capitalization is considered middle sized or
"mid-cap." Mid-cap companies often are newer or less established companies than
larger companies. Investments in mid-cap companies carry additional risks
because earnings of these companies tend to be less predictable; they often have
limited product lines, markets, distribution channels or financial resources;
and the management of such companies may be dependent upon one or a few key
people. The market movements of equity securities of mid-cap companies may be


                                       35
<PAGE>

more abrupt or erratic than the market movements of equity securities of larger,
more established companies or the stock market in general. Historically, mid-cap
companies have sometimes gone through extended periods when they did not perform
as well as larger companies. In addition, equity securities of mid-cap companies
generally are less liquid than those of larger companies. This means that the
Fund could have greater difficulty selling such securities at the time and price
that the Fund would like.

  RISKS OF SELLING INDEX CALL OPTIONS. Under normal market conditions, a portion
of the Fund's common stock portfolio value will be subject to written index call
options. The purchaser of an index call option has the right to any appreciation
in the value of the index over the exercise price of the call option as of the
valuation date of the option. Because their exercise is settled in cash, sellers
of index call options such as the Fund cannot provide in advance for their
potential settlement obligations by acquiring and holding the underlying
securities. The Fund intends to mitigate the risks of its written index call
positions by writing options on broad-based domestic, foreign country and/ore
regional stock indices that the Adviser believes collectively approximate the
characteristics of its common stock portfolio (or that portion of its portfolio
against which options are written). However, the Fund does not intend to acquire
and hold a portfolio of exactly the same stocks as the indices on which it
writes call options. Due to tax considerations, the Fund intends to limit the
overlap between its stock holdings (and any subset thereof) and each index on
which it has outstanding options positions to less than 70% on an ongoing basis.
The Fund's stock holdings will normally include stocks not included in the
indices on which it writes call options. Consequently, the Fund bears the risk
that the performance of the Fund's stock portfolio will vary from the
performance of the indices on which it writes call options. For example, with
respect to the portion of its stock portfolio against which S&P 500 index call
options have been written, the Fund will suffer a loss if the S&P 500
appreciates above the exercise price of the options written while the associated
securities held by the Fund fail to appreciate as much or decline in value over
the life of the written option. Index options written by the Fund will be priced
on a daily basis. Their value will be affected primarily by changes in the price
and dividend rates of the underlying common stocks in such index, changes in
actual or perceived volatility of such index and the remaining time to the
options' expiration. The trading price of index call options will also be
affected by liquidity considerations and the balance of purchase and sale
orders.

   A decision as to whether, when and how to use options involves the exercise
of skill and judgment, and even a well-conceived and well-executed options
program may be adversely affected by market behavior or unexpected events. As
the writer of index call options, the Fund will forgo, during the option's life,
the opportunity to profit from increases in the value of the applicable index
above the sum of the option premium received and the exercise price of the call
option, but retains the risk of loss, minus the option premium received, should
the value of the applicable index decline. When a call option is exercised, the
Fund will be required to deliver an amount of cash determined by the excess of
the value of the applicable index at contract termination over the exercise
price of the option. Thus, the exercise of index call options sold by the Fund
may require the Fund to sell portfolio securities to generate cash at
inopportune times or for unattractive prices.

   To the extent that the Fund writes options on indices based upon foreign
stocks, the Fund generally intends to sell options on broad-based foreign
country and/or regional stock indices that are listed for trading in the United
States or which otherwise qualify as "section 1256 contracts." Options on
foreign indices that are listed for trading in the United States or which
otherwise qualify as "section 1256 contracts" under the Code may trade in
substantially lower volumes and with substantially wider bid-ask spreads than
other options contracts on the same or similar indices that trade on other
markets outside the United States. To implement its options program most
effectively, the Fund may sell index options that do not qualify as "section
1256 contracts." Gain or loss on index options not qualifying as "section 1256
contracts" under the Code would be realized upon disposition, lapse or
settlement of the positions and would be treated as short-term gain or loss.

   The trading price of options may be adversely affected if the market for such
options becomes less liquid or smaller. The Fund may close out a call option by
buying the option instead of letting it expire or be exercised. There can be no
assurance that a liquid market will exist when the Fund seeks to close out a
call option position by buying the option. 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; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an exchange or the Options Clearing Corporation (the "OCC") 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 to
discontinue the trading of options (or a particular class or series of options)
at some future date. If trading were discontinued, the secondary market on that
exchange (or in that class or series of options) would cease to exist. However,
outstanding options on that exchange that had been issued by the OCC as a result
of trades on that exchange would continue to be exercisable in accordance with
their terms.

   The hours of trading for options may not conform to the hours during which
common stocks held by the Fund are traded. To the extent that the options
markets close before the markets for securities, significant price and rate
movements can take place in the securities markets that would not be reflected
concurrently in the options markets. Index call options are marked to market

                                       36
<PAGE>

daily and their value is affected by changes in the value and dividend rates of
the securities represented in the underlying index, changes in interest rates,
changes in the actual or perceived volatility of the associated index and the
remaining time to the options' expiration, as well as trading conditions in the
options market.

  TAX RISK. Reference is made to "Federal Income Tax Matters" for an explanation
of the federal income tax consequences and attendant risks of investing in the
Fund. Although the Fund seeks to minimize and defer the federal income taxes
incurred by Common Shareholders in connection with their investment in the Fund,
there can be no assurance that it will be successful in this regard. The tax
treatment and characterization of the Fund's distributions may change over time
due to changes in the Fund's mix of investment returns and changes in the
federal tax laws, regulations and administrative and judicial interpretations.
The provisions of the Code applicable to qualified dividend income are set to
expire at the close of 2010. Thereafter, the Fund's distributions to Common
Shareholders of qualified dividend income will be subject to tax at the higher
rates that apply to ordinary income unless further legislative action is taken.
There can be no assurances that after 2010 such qualified dividends will be
available to the Fund and its Common Shareholders. The Fund's investment program
and the tax treatment of Fund distributions may be affected by IRS
interpretations of the Code and future changes in tax laws and regulations,
including changes resulting from the "sunset" provisions described above that
would have the effect of repealing the favorable treatment of qualified dividend
income and reimposing the higher tax rates applicable to ordinary income
beginning in 2011 unless further legislative action is taken. Distributions paid
on the Common Shares may be characterized variously as non-qualified dividends
(taxable at ordinary income rates), qualified dividends (generally taxable at
long-term capital gains rates), capital gains dividends (taxable at long-term
capital gains rates) or return of capital (generally not currently taxable). The
ultimate tax characterization of the Fund's distributions made in a calendar
year may not finally be determined until after the end of that calendar year.
Distributions to a Common Shareholder that are return of capital will be tax
free to the amount of the Common Shareholder's current tax basis in his or her
Common Shares, with any distribution amounts exceeding such basis treated as
capital gain on a deemed sale of Common Shares. Common Shareholders are required
to reduce their tax basis in Common Shares by the amount of tax-free return of
capital distributions received, thereby increasing the amount of capital gain
(or decreasing the amount of capital loss) to be recognized upon a later
disposition of the Common Shares. In order for Fund distributions of qualified
dividend income to be taxable at favorable long-term capital gains rates, a
Common Shareholder must meet certain prescribed holding period and other
requirements with respect to his or her Common Shares. If positions held by the
Fund were treated as "straddles" for federal income tax purposes, dividends on
such positions would not constitute qualified dividend income subject to
favorable income tax treatment. Gain or loss on positions in a straddle are
subject to special (and generally disadvantageous) rules as described under
"Federal Income Tax Matters."

   DISTRIBUTION RISK. The quarterly distributions Common Shareholders will
receive from the Fund will be sourced from the Fund's dividends and interest
income after payment of Fund expenses, net option premiums, and net realized and
unrealized gains on stock investments. The Fund's cash available for
distribution may vary widely over the short- and long-term. Dividends on common
stocks are not fixed but are declared at the discretion of the issuer's board of
directors. The Fund's dividend income will be substantially influenced by the
activity level and success of its dividend capture trading program. If stock
market volatility and/or stock prices decline, the level of premiums from
writing index call options and the amounts available for distribution from the
Fund's options activity will likely decrease as well. Payments to close written
call options will reduce amounts available for distribution from call option
premiums received. Net realized and unrealized gains on the Fund's stock
investments will be determined primarily by the direction and movement of the
United States stock market and the particular stocks held. There can be no
assurance that quarterly distributions paid by the Fund to the Common
Shareholders will be maintained at initial levels or increase over time.

   FOREIGN SECURITY RISK. The value of foreign securities is affected by changes
in currency rates, foreign tax laws (including withholding tax), government
policies (in this country or abroad), relations between nations and trading,
settlement, custodial and other operational risks. In addition, the costs of
investing abroad (such as foreign brokerage costs, custodial expenses and other
fees) are generally higher than in the United States, and foreign securities
markets may be less liquid, more volatile and less subject to governmental
supervision than markets in the United States. Foreign investments also could be
affected by other factors not present in the United States, including
expropriation of assets, armed conflict, confiscatory taxation, lack of uniform
accounting and auditing standards, less publicly available financial and other
information and potential difficulties in enforcing contractual obligations or
repatriating capital invested in foreign countries. As an alternative to holding
foreign-traded securities, the Fund may invest in dollar-denominated securities
of foreign companies that trade on United States exchanges or in the United
States over-the-counter market (including depositary receipts, which evidence
ownership in underlying foreign securities). Since the Fund may invest in
securities denominated or quoted in currencies other than the United States
dollar, the Fund will be affected by changes in foreign currency exchange rates
(and exchange control regulations) which affect the value of investments held by
the Fund and the accrued income and appreciation or depreciation of the
investments in United States dollars. Changes in foreign currency exchange rates
relative to the United States dollar will affect the United States dollar value
of the Fund's assets denominated in that currency and the Fund's return on such
assets as well as any temporary uninvested reserves in bank deposits in foreign
currencies. In addition, the Fund will incur costs in connection with
conversions between various currencies. Foreign securities may not be eligible
for the reduced rate of taxation applicable to qualified dividend income.

                                       37
<PAGE>

   Because foreign companies may not be subject to accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to United States companies, there may be less publicly available
information about a foreign company than about a domestic company. There is
generally less government supervision and regulation of securities exchanges,
broker-dealers 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 for, or loss of certificates of, portfolio securities.
Payment for securities before delivery may be required. In addition, with
respect to certain foreign countries, there is the possibility of expropriation
or confiscatory taxation, political or social instability, or diplomatic
developments that could adversely affect investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the United States economy in such respects as growth of gross national product,
rate of inflation, capital reinvestment, resource self-sufficiency and balance
of payments position. Foreign securities markets, while growing in volume and
sophistication, are generally not as developed as those in the United States,
and securities of some foreign issuers (particularly those located in developing
countries) may be less liquid and more volatile than securities of comparable
United States companies.

   EMERGING MARKET SECURITY RISK. The Fund may invest up to 5% of its total
assets in securities of issuers located in emerging markets. The risks of
foreign investments described above apply to an even greater extent to
investments in emerging markets. The securities markets of emerging countries
are generally smaller, less developed, less liquid, and more volatile than the
securities markets of the United States and developed foreign markets.
Disclosure and regulatory standards in many respects are less stringent than in
the United States and developed foreign markets. There also may be a lower level
of monitoring and regulation of securities markets in emerging market countries
and the activities of investors in such markets and enforcement of existing
regulations may be limited. Many emerging countries have experienced
substantial, and in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates have had and may
continue to have very negative effects on the economies and securities markets
of certain emerging countries. Economies in emerging markets generally are
heavily dependent upon international trade and, accordingly, have been and may
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values, and other protectionist measures
imposed or negotiated by the countries with which they trade. The economies of
these countries also have been and may continue to be adversely affected by
economic conditions in the countries in which they trade. The economies of
countries with emerging markets may also be predominantly based on only a few
industries or dependent on revenues from particular commodities. In addition,
custodial services and other costs relating to investment in foreign markets may
be more expensive in emerging markets than in many developed foreign markets,
which could reduce the Fund's income from such securities.

   In many cases, governments of emerging countries continue to exercise
significant control over their economies, and government actions relative to the
economy, as well as economic developments generally, may affect the Fund's
investments in those countries. In addition, there is a heightened possibility
of expropriation or confiscatory taxation, imposition of withholding taxes on
dividend and interest payments, or other similar developments that could affect
investments in those countries. There can be no assurance that adverse political
changes will not cause the Fund to suffer a loss of any or all of its
investments.

   CURRENCY RISK. Since the Fund will invest in securities denominated or quoted
in currencies other than the U.S. dollar, the Fund will be affected by changes
in foreign currency exchange rates (and exchange control regulations) which
affect the value of investments in the Fund and the accrued income and
appreciation or depreciation of the investments in U.S. dollars. Changes in
foreign currency exchange rates relative to the U.S. dollar will affect the U.S.
dollar value of the Fund's assets denominated in that currency and the Fund's
return on such assets as well as any temporary uninvested reserves in bank
deposits in foreign currencies. In addition, the Fund will incur costs in
connection with conversions between various currencies.

   The Fund may attempt to protect against adverse changes in the value of the
U.S. dollar in relation to a foreign currency by entering into a forward
contract for the purchase or sale of the amount of foreign currency invested or
to be invested, or by buying or selling a foreign currency option or futures
contract for such amount. Such strategies may be employed before the Fund
purchases a foreign security traded in the currency which the Fund anticipates
acquiring or between the date the foreign security is purchased or sold and the
date on which payment therefor is made or received. Seeking to protect against a
change in the value of a foreign currency in the foregoing manner does not
eliminate fluctuations in the prices of portfolio securities or prevent losses
if the prices of such securities decline. Furthermore, such transactions reduce
or preclude the opportunity for gain if the value of the currency should move in
the direction opposite to the position taken. Unanticipated changes in currency
prices may result in poorer overall performance for the Fund than if it had not
entered into such contracts.

   INTEREST RATE RISK. The premiums from writing index call options and amounts
available for distribution from the Fund's options activity may decrease in
declining interest rate environments. The value of the Fund's common stock
investments may also be influenced by changes in interest rates. Higher yielding
stocks and stocks of issuers whose businesses are substantially affected by
changes in interest rates may be particularly sensitive to interest rate risk.

                                       38
<PAGE>

   DERIVATIVES RISK. In addition to writing index call options, the risks of
which are described above, the Fund may invest up to 20% of its total assets in
other derivative investments acquired for hedging, risk management and
investment purposes, provided that no more than 10% of the Fund's total assets
may be invested in such derivative instruments acquired for non-hedging
purposes. The loss on derivative instruments (other than purchased options) may
substantially exceed an investment in these instruments. Derivative transactions
including options on securities and securities indices and other transactions in
which the Fund may engage (such as futures contracts and options thereon, swaps
and short sales) may subject the Fund to increased risk of principal loss due to
unexpected movements in stock prices, changes in stock volatility levels and
interest rates, and imperfect correlations between the Fund's securities
holdings and indices upon which derivative transactions are based. Derivatives
can be illiquid, may disproportionately increase losses, and may have a
potentially large impact on the Fund's performance. The Fund also will be
subject to credit risk with respect to the counterparties to any over-the-
counter derivatives contracts entered into by the Fund. If a counterparty
becomes bankrupt or otherwise fails to perform its obligations under a
derivative contract due to financial difficulties, the Fund may experience
significant delays in obtaining any recovery under the derivative contract in a
bankruptcy or other reorganization proceeding. The Fund may obtain only a
limited recovery or no recovery in such circumstances. Derivatives may
disproportionately increase losses and have a potentially large negative impact
on the Funds' performance.

   LIQUIDITY RISK. The Fund may invest up to 15% of its total assets in
securities for which there is no readily available trading market or which are
otherwise illiquid. The Fund may not be able readily to dispose of such
securities at prices that approximate those at which the Fund could sell such
securities if they were more widely traded and, as a result of such illiquidity,
the Fund may have to sell other investments or engage in borrowing transactions
if necessary to raise cash to meet its obligations. In addition, the limited
liquidity could affect the market price of the securities, thereby adversely
affecting the Fund's net asset value, and at times may make the disposition of
securities infeasible.

   INFLATION RISK. Inflation risk is the risk that the purchasing power of
assets or income from investment will be worth less in the future as inflation
decreases the value of money. As inflation increases, the real value of the
Common Shares and distributions thereon can decline.

   MARKET PRICE OF COMMON SHARES. The Fund's share price will fluctuate and, at
the time of sale, shares may be worth more or less than the original investment
or the Fund's then current net asset value. The Fund cannot predict whether its
shares will trade at a price at, above or below its net asset value. Shares of
closed-end funds frequently trade at a discount to net asset value.

   FINANCIAL LEVERAGE RISK. Although the Fund has no current intention to do so,
the Fund is authorized and reserves the flexibility to utilize leverage through
the issuance of preferred shares and/or borrowings, including the issuance of
debt securities. In the event that the Fund determines in the future to utilize
investment leverage, there can be no assurance that such a leveraging strategy
will be successful during any period in which it is employed. Leverage creates
risks for Common Shareholders, including the likelihood of greater volatility of
net asset value and market price of the Common Shares and the risk that
fluctuations in distribution rates on any preferred shares or fluctuations in
borrowing costs may affect the return to Common Shareholders. To the extent the
returns derived from securities purchased with proceeds received from leverage
exceeds the cost of leverage, the Fund's distributions may be greater than if
leverage had not been used. Conversely, if the returns from the securities
purchased with such proceeds are not sufficient to cover the cost of leverage,
the amount available for distribution to Common Shareholders will be less than
if leverage had not been used. In the latter case, Eaton Vance, in its best
judgment, may nevertheless determine to maintain the Fund's leveraged position
if it deems such action to be appropriate. The costs of an offering of preferred
shares and/or a borrowing program would be borne by Common Shareholders and
consequently would result in a reduction of the net asset value of Common
Shares. In addition, the fee paid to Eaton Vance will be calculated on the basis
of the Fund's average daily gross assets, including proceeds from the issuance
of preferred shares and/or borrowings, so the fee will be higher when leverage
is utilized. In this regard, holders of preferred shares do not bear the
investment advisory fee. Rather, Common Shareholders bear the portion of the
investment advisory fee attributable to the assets purchased with the proceeds
of the preferred shares offering.

   MANAGEMENT RISK. The Fund is subject to management risk because it is an
actively managed portfolio. Eaton Vance, Rampart and the individual portfolio
managers invest the assets of the Fund as they deem appropriate in implementing
the Fund's investment strategy. Accordingly, the success of the Fund depends
upon the investment skills and analytical abilities of Eaton Vance, Rampart and
the individual portfolio managers to develop and actively implement investment
strategies that achieve the Fund's investment objectives. There is no assurance
that Eaton Vance, Rampart and the individual portfolio managers will be
successful in developing and implementing the Fund's investment strategy.
Subjective decisions made by Eaton Vance, Rampart and the individual portfolio
managers may cause the Fund to incur losses or to miss profit opportunities on
which it could otherwise have capitalized.

   MARKET DISRUPTION. The aftermath of the war in Iraq and the continuing
occupation of Iraq, instability in the Middle East and terrorist attacks in the
U.S. and around the world have resulted in market volatility and may have long-
term effects on the U.S. and worldwide financial markets and may cause further
economic uncertainties in the U.S. and worldwide. The Fund does not know how


                                       39
<PAGE>

long the securities markets will continue to be affected by these events and
cannot predict the effects of the occupation or similar events in the future on
the U.S. economy and securities markets. Given the risks described above, an
investment in the Common Shares may not be appropriate for all investors. You
should carefully consider your ability to assume these risks before making an
investment in the Fund.

   ANTI-TAKEOVER PROVISIONS. The Fund's Agreement and Declaration of Trust
includes provisions that could limit the ability of other persons or entities to
acquire control of the Fund or to change the composition of its Board. These
provisions may deprive Common Shareholders of opportunities to sell their Common
Shares at a premium over the then current market price of the Common Shares. See
"Description of Capital Structure - Anti-Takeover Provisions in the Agreement
and Declaration of Trust."

                             MANAGEMENT OF THE FUND

BOARD OF TRUSTEES

   The management of the Fund, including general supervision of the duties
performed by the Adviser under the Advisory Agreement (as defined below) and the
Sub-Adviser under the Sub-Advisory Agreement (as defined below), is the
responsibility of the Fund's Board under the laws of The Commonwealth of
Massachusetts and the 1940 Act.

THE ADVISER

   Eaton Vance acts as the Fund's investment adviser under an Investment
Advisory Agreement (the "Advisory Agreement"). The Adviser's principal office is
located at The Eaton Vance Building, 255 State Street, Boston, Massachusetts
02109. Eaton Vance, its affiliates and predecessor companies have been managing
assets of individuals and institutions since 1924 and of investment funds since
1931. Eaton Vance (or its affiliates) currently serves as the investment adviser
to investment funds and various individual and institutional clients with
combined assets under management of approximately $124.1 billion as of September
30, 2006, including approximately $74.9 billion in equity assets. Eaton Vance is
a direct, wholly-owned subsidiary of Eaton Vance Corp., a publicly-held holding
company, which through its subsidiaries and affiliates engages primarily in
investment management, administration and marketing activities.

   Under the general supervision of the Fund's Board, Eaton Vance will be
responsible for the Fund's overall investment program, structuring and managing
the Fund's common stock portfolio, including dividend capture trading, tax-loss
harvesting and other tax-management techniques, providing consultation to the
Sub-Adviser and supervising the performance of the Sub-Adviser. As described
below under the caption "The Sub-Adviser," Rampart will be responsible for
providing advice on and execution of the Fund's options strategy. The Adviser
will furnish to the Fund investment advice and office facilities, equipment and
personnel for servicing the investments of the Fund. The Adviser will compensate
all Trustees and officers of the Fund who are members of the Adviser's
organization and who render investment services to the Fund, and will also
compensate all other Adviser personnel who provide research and investment
services to the Fund. In return for these services, facilities and payments, the
Fund has agreed to pay the Adviser as compensation under the Advisory Agreement
an annual fee in the amount of 1.00% of the average daily gross assets of the
Fund. For purposes of the Advisory Agreement and the Sub-Advisory Agreement,
gross assets of the Fund means total assets of the Fund, including any form of
investment leverage that the Fund may in the future determine to utilize, minus
all accrued expenses incurred in the normal course of operations, but not
excluding any liabilities or obligations attributable to any future investment
leverage obtained through (i) indebtedness of any type (including, without
limitation, borrowing through a credit facility/commercial paper program or the
issuance debt securities), (ii) the issuance of preferred shares or other
similar preference securities, (iii) the reinvestment of collateral received for
securities loaned in accordance with the Fund's investment objectives and
policies and/or (iv) any other means. During any future periods in which the
Fund is using leverage, the fees paid to Eaton Vance for investment advisory
services will be higher than if the Fund did not use leverage because the fees
paid will be calculated on the basis of the Fund's gross assets, including
proceeds from any borrowings and from the issuance of preferred shares.

   Walter A. Row and Michael A. Allison are the Fund's portfolio managers and
together are responsible for managing the Fund's overall investment program,
structuring and managing the Fund's common stock portfolio, providing
consultation to the Sub-Adviser and supervising the performance of the Sub-
Adviser. Mr. Row and Mr. Allison are the portfolio managers responsible for the
day-to-day management of Eaton Vance's responsibilities with respect to the
Fund's investment portfolio.

   Mr. Row is Vice President and Director of Equity Research at Eaton Vance. He
is a member of Eaton Vance's Equity Strategy Committee and manages five other
Eaton Vance registered closed-end investment companies. He has been a member of
Eaton's Vance's equity investment team since 1996, and has over 25 years of
professional experience.

                                       40
<PAGE>

   Mr. Allison is a Vice President of Eaton Vance and co-portfolio manager of a
privately offered equity fund sponsored by Eaton Vance. He has been a member of
Eaton Vance's equity investment team since 2000, and has over 17 years of
professional experience.

THE SUB-ADVISER

   Eaton Vance has engaged Rampart to serve as a sub-adviser to the Fund to
provide advice on and execution of the Fund's options strategy. Rampart's
principal office is located at One International Place, Boston, Massachusetts
02110. Founded in 1983, Rampart provides customized options program management
utilizing listed equity and index options to a spectrum of institutional, high
net worth and investment company clients. Rampart managed approximately $6.6
billion in assets as of September 30, 2006.

   Ronald M. Egalka is the portfolio manager at Rampart responsible for the
development and implementation of the options strategy utilized in managing the
Fund.

   Mr. Egalka is President and CEO of Rampart. He is also President of Rampart
Securities, Inc., an affiliate of Rampart and a NASD member broker/dealer. Mr.
Egalka oversees the development and implementation of options investment
strategies employed by Rampart clients, including five other Eaton Vance
registered closed-end investment companies.

   Under the terms of the Sub-Advisory Agreement (the "Sub-Advisory Agreement")
between Eaton Vance and Rampart, Eaton Vance (and not the Fund) will pay Rampart
a fee at an annual rate equal to 0.05% of the value of the Fund's average daily
gross assets that is subject to written call options. Pursuant to the terms of
the Advisory Agreement, Eaton Vance, upon approval by the Board, may terminate
the Sub-Advisory Agreement and Eaton Vance may assume full responsibility for
the services provided by Rampart without the need for approval by shareholders
of the Fund.

   The Fund, the Adviser and the Sub-Adviser have adopted codes of ethics
relating to personal securities transactions (the "Codes of Ethics"). The Codes
of Ethics permit Adviser and Sub-Adviser personnel to invest in securities
(including securities that may be purchased or held by the Fund) for their own
accounts, subject to certain pre-clearance, reporting and other restrictions and
procedures contained in such Codes of Ethics.

ADDITIONAL INFORMATION REGARDING PORTFOLIO MANAGERS

  The Statement of Additional Information provides additional information about
the portfolio managers' compensation, other accounts managed by the portfolio
managers, and the portfolio managers' ownership of securities in the Fund.

THE ADMINISTRATOR

   Eaton Vance serves as administrator of the Fund. Under an Administration
Agreement with the Fund (the "Administration Agreement"), Eaton Vance is
responsible for managing the business affairs of the Fund, subject to the
supervision of the Fund's Board. Eaton Vance will furnish to the Fund all office
facilities, equipment and personnel for administering the affairs of the Fund.
Eaton Vance's administrative services include recordkeeping, preparation and
filing of documents required to comply with federal and state securities laws,
supervising the activities of the Fund's custodian and transfer agent, providing
assistance in connection with the Board and shareholders' meetings, providing
service in connection with any repurchase offers and other administrative
services necessary to conduct the Fund's business. Eaton Vance currently
receives no compensation for providing administrative services to the Fund. In
addition to the management fee, the Fund pays all costs and expenses of its
operation, including compensation of its Trustees (other than those affiliated
with the Adviser), custodial expenses, dividend disbursing expenses, legal fees,
expenses of independent auditors, expenses of preparing Fund documents and
reports to governmental agencies, and taxes and filing or other fees, if any.

                                  DISTRIBUTIONS

   Commencing with the Fund's first distribution, the Fund intends to make
regular quarterly distributions to Common Shareholders sourced from the Fund's
cash available for distribution. "Cash available for distribution" will consist
of the Fund's dividends and interest income after payment of Fund expenses, net
option premiums and net realized and unrealized gains on stock investments. The
Fund's distribution rate may be adjusted from time to time. The Board may modify
this distribution policy at any time without obtaining the approval of Common
Shareholders. The initial distribution is expected to be declared approximately
75 days and paid approximately 90 to 120 days after the completion of this
offering, depending on market conditions.

                                       41
<PAGE>

   The Fund's annual distributions will likely differ from annual net investment
income. The investment income of the Fund will consist of all dividend and
interest income accrued on portfolio investments, short-term capital gain
(including short-term gains on option positions and gains on the sale of
portfolio investments held for one year or less) in excess of long-term capital
loss and income from certain hedging transactions, less all expenses of the
Fund. Expenses of the Fund will be accrued each day. To the extent that that
Fund's net investment income for any year exceeds the total quarterly
distributions paid during the year, the Fund will make a special distribution at
or near year-end of such excess amount as may be required. Over time, all of the
Fund's investment company taxable income will be distributed.

   At least annually, the Fund intends to distribute any net capital gain (which
is the excess of net long-term capital gain over net short-term capital loss)
or, alternatively, to retain all or a portion of the year's net capital gain and
pay federal income tax on the retained gain. As provided under federal tax law,
Common Shareholders of record as of the end of the Fund's taxable year will
include their attributable share of the retained gain in their income for the
year as a long-term capital gain, and will be entitled to a tax credit or refund
for the tax paid on their behalf by the Fund. The Fund may treat the cash value
of tax credit and refund amounts in connection with retained capital gains as a
substitute for equivalent cash distributions.

   If, for any calendar year, as discussed above, the total distributions made
exceed the Fund's net investment taxable income and net capital gains, the
excess generally will be treated as a tax-free return of capital to each Common
Shareholder (up to the amount of the Common Shareholder's basis in his or her
Common Shares) and thereafter as gain from the sale of Common Shares. The amount
treated as a tax-free return of capital will reduce the Common Shareholder's
adjusted basis in his or her Common Shares, thereby increasing his or her
potential gain or reducing his or her potential loss on the subsequent sale of
his or her Common Shares. Distributions in any year may include a substantial
return of capital component. Under the 1940 Act, for any distribution that
includes amounts from sources other than net income, the Fund is required to
provide Common Shareholders a written statement regarding the components of such
distribution. Such a statement will be provided at the time of any distribution
believed to include any such amounts.

   To permit the Fund to maintain more stable distributions, distribution rates
will be based on projected annual cash available for distribution. As a result,
the distributions paid by the Fund for any particular quarter may be more or
less than the amount of cash available for distribution for that quarterly
period. In certain circumstances, the Fund may be required to sell a portion of
its investment portfolio to fund distributions. Distributions will reduce the
Common Shares' net asset value.

   Common Shareholders may automatically reinvest some or all of their
distributions in additional Common Shares under the Fund's dividend reinvestment
plan. See "Dividend Reinvestment Plan."

   The Fund has applied for an order from the Securities and Exchange Commission
granting it an exemption from Section 19(b) of the 1940 Act and Rule 19b-1
thereunder to permit the Fund to include realized long-term capital gains as a
part of its regular distributions to Common Shareholders more frequently than
would otherwise be permitted by the 1940 Act (generally once per taxable year).
In the event that such an exemptive order is obtained, the Fund will consider
increasing the frequency of its regular distributions to Common Shareholders
from quarterly to monthly. The Fund does not intend to designate more than the
permitted number of capital gain distributions until it receives such an
exemptive order. However, if the Fund fails to receive the requested relief and
the Fund is unable to include realized capital gains in regular distributions
more frequently than would otherwise be permitted by the 1940 Act, the Adviser
does not believe that the distribution policy, as set forth above, will
otherwise be adversely affected. The Adviser does not believe that retaining
capital gains and paying tax thereon would have a material adverse affect on the
Fund or the Common Shareholders.

FEDERAL INCOME TAX MATTERS

   The following discussion of federal income tax matters is based on the advice
of Kirkpatrick & Lockhart Nicholson Graham LLP, counsel to the Fund. The Fund
intends to elect to be treated and to qualify each year as a regulated
investment company (a "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 substantially all of its net
income and net short-term capital gains (after reduction by net long term
capital losses and any available capital loss carryforwards) in accordance with
the timing requirements imposed by the Code, so as to maintain its regulated
investment company status and to avoid paying federal income or excise tax
thereon. To the extent it qualifies for treatment as a regulated investment
company and satisfies the above-mentioned distribution requirements, the Fund
will not be subject to federal income tax on income paid to its shareholders in
the form of dividends or capital gains distributions.

   At least annually, the Fund intends to distribute any net capital gain (which
is the excess of net long-term capital gain over net short-term capital loss)
or, alternatively, to retain all or a portion of the year's net capital gain and
pay federal income tax on the retained gain. As provided under federal tax law,
Common Shareholders of record as of the end of the Fund's taxable year will


                                       42
<PAGE>

include their attributable share of the retained gain in their income for the
year as long-term capital gain (regardless of holding period in the Common
Shares), and will be entitled to a tax credit or refund for the tax paid on
their behalf by the Fund. Common Shareholders of record for the retained capital
gain will also be entitled to increase their tax basis in their Common Shares by
65 percent of the allocated gain. Distributions of the Fund's net capital gain
("capital gain distributions"), if any, are taxable to Common Shareholders as
long-term capital gain, regardless of their holding period in the Common Shares.
Distributions of the Fund's net realized short-term gains will be taxable as
ordinary income.

   If, for any calendar year, the Fund's total distributions exceed the Fund's
current and accumulated earnings and profits, the excess will be treated as a
tax-free return of capital to each Common Shareholder (up to the amount of the
Common Shareholder's basis in his or her Common Shares) and thereafter as gain
from the sale of Common Shares (assuming the Common Shares are held as a capital
asset). The amount treated as a tax-free return of capital will reduce the
Common Shareholder's adjusted basis in his or her Common Shares, thereby
increasing his or her potential gain or reducing his or her potential loss on
the subsequent sale or other disposition of his or her Common Shares. See below
for a summary of the maximum tax rates applicable to long-term capital gain
(including capital gain distributions). A corporation that owns Fund shares
generally will not be entitled to the dividends received deduction ("DRD") with
respect to all (or any prescribed percentage) of the distributions it receives
from the Fund. Fund distributions that are attributable to qualified dividend
income received by the Fund from certain domestic corporations may be designated
by the Fund as being eligible for the DRD.

   If the Fund does not qualify as a RIC for any taxable year, the Fund's
taxable income will be subject to corporate income taxes, and all distributions
from earnings and profits, including distributions of net capital gain (if any),
will be taxable to the shareholder as ordinary income. Such distributions
generally would be eligible (i) to be treated as qualified dividend income in
the case of individual and other noncorporate shareholders and (ii) for the DRD
in the case of corporate shareholders. In addition, in order to requalify for
taxation as a RIC, the Fund may be required to recognize unrealized gains, pay
substantial taxes and interest, and make certain distributions.

   Certain of the Fund's investment practices are subject to special and complex
federal income tax provisions that may, among other things, (i) convert
dividends that would otherwise constitute qualified dividend income into
ordinary income, (ii) treat dividends that would otherwise be eligible for the
corporate DRD as ineligible for such treatment, (iii) disallow, suspend or
otherwise limit the allowance of certain losses or deductions, (iv) convert
long-term capital gain into short-term capital gain or ordinary income, (v)
convert an ordinary loss or deduction into a capital loss (the deductibility of
which is more limited), (vi) cause the Fund to recognize income or gain without
a corresponding receipt of cash, (vii) adversely affect the time as to when a
purchase or sale of stock or securities is deemed to occur, (viii) adversely
alter the characterization of certain complex financial transactions, and (ix)
produce income that will not qualify as good income for purposes of the income
requirement that applies to RICs. While it may not always be successful in doing
so, the Fund will seek to avoid or minimize the adverse tax consequences of its
investment practices.

   For the Fund's index call options that qualify as "section 1256 contracts,"
Code Section 1256 generally will require any gain or loss arising from the
lapse, closing out or exercise of such positions to be treated as 60% long-term
and 40% short-term capital gain or loss. In addition, the Fund generally will be
required to "mark to market" (i.e., treat as sold for fair market value) each
outstanding index option position at the close of each taxable year (and on
October 31 of each year for excise tax purposes). If a "section 1256 contract"
held by the Fund at the end of a taxable year is sold in the following year, the
amount of any gain or loss realized on such sale will be adjusted to reflect the
gain or loss previously taken into account under the "mark to market" rules. In
addition to most index call options, "section 1256 contracts" under the Code
include certain other options contracts, certain regulated futures contracts,
and certain other financial contracts.

   The Fund's index call options that do not qualify as "section 1256 contracts"
under the Code generally will be treated as equity options governed by Code
Section 1234. Pursuant to Code Section 1234, if a written option expires
unexercised, the premium received is short-term capital gain to the Fund. If the
Fund enters into a closing transaction, the difference between the premium
received for writing the option, and the amount paid to close out its position
is short-term capital gain or loss. If a call option written by the Fund that is
not a "section 1256 contract" is cash settled, any resulting gain or loss will
be short-term.

   The Code contains special rules that apply to "straddles," defined generally
as the holding of "offsetting positions with respect to personal property." For
example, the straddle rules normally apply when a taxpayer holds stock and an
offsetting option with respect to such stock or substantially identical stock or
securities. In general, investment positions will be offsetting if there is a
substantial diminution in the risk of loss from holding one position by reason
of holding one or more other positions. The Fund expects that the index call
options it writes will not be considered straddles for this purpose because the
Fund's portfolio of common stocks will be sufficiently dissimilar from the
components of each index on which it has outstanding options positions under
applicable guidance established by the IRS. Under certain circumstances,
however, the Fund may enter into options transactions or certain other
investments that may constitute positions in a straddle. If two or more


                                       43
<PAGE>

positions constitute a straddle, recognition of a realized loss from one
position must generally be deferred to the extent of unrecognized gain in an
offsetting position. In addition, long-term capital gain may be recharacterized
as short-term capital gain, or short-term capital loss as long-term capital
loss. Interest and other carrying charges allocable to personal property that is
part of a straddle are not currently deductible but must instead be capitalized.
Similarly, "wash sale" rules apply to prevent the recognition of loss by the
Fund from the disposition of stock or securities at a loss in a case in which
identical or substantially identical stock or securities (or an option to
acquire such property) is or has been acquired within a prescribed period.

   The Code allows a taxpayer to elect to offset gains and losses from positions
that are part of a "mixed straddle." A "mixed straddle" is any straddle in which
one or more but not all positions are "section 1256 contracts." The Fund may be
eligible to elect to establish one or more mixed straddle accounts for certain
of its mixed straddle trading positions. The mixed straddle account rules
require a daily "marking to market" of all open positions in the account and a
daily netting of gains and losses from all positions in the account. At the end
of a taxable year, the annual net gains or losses from the mixed straddle
account are recognized for tax purposes. The net capital gain or loss is treated
as 60% long-term and 40% short-term capital gain or loss if attributable to the
"section 1256 contract" positions, or all short-term capital gain or loss if
attributable to the non-section 1256 contract positions.

   The Fund may recognize gain (but not loss) from a constructive sale of
certain "appreciated financial positions" if the Fund enters into a short sale,
offsetting notional principal contract, or forward contract transaction with
respect to the appreciated position or substantially identical property.
Appreciated financial positions subject to this constructive sale treatment
include interests (including options and forward contracts and short sales) in
stock and certain other instruments. Constructive sale treatment does not apply
if the transaction is closed out not later than thirty days after the end of the
taxable year in which the transaction was initiated, and the underlying
appreciated securities position is held unhedged for at least the next sixty
days after the hedging transaction is closed.

   Gain or loss from a short sale of property is generally considered as capital
gain or loss to the extent the property used to close the short sale constitutes
a capital asset in the Fund's hands. Except with respect to certain situations
where the property used to close a short sale has a long-term holding period on
the date the short sale is entered into, gains on short sales generally are
short-term capital gains. A loss on a short sale will be treated as a long-term
capital loss if, on the date of the short sale, "substantially identical
property" has been held by the Fund for more than one year. In addition,
entering into a short sale may result in suspension of the holding period of
"substantially identical property" held by the Fund.

   Gain or loss on a short sale will generally not be realized until such time
as the short sale is closed. However, as described above in the discussion of
constructive sales, if the Fund holds a short sale position with respect to
securities that has appreciated in value, and it then acquires property that is
the same as or substantially identical to the property sold short, the Fund
generally will recognize gain on the date it acquires such property as if the
short sale were closed on such date with such property. Similarly, if the Fund
holds an appreciated financial position with respect to securities and then
enters into a short sale with respect to the same or substantially identical
property, the Fund generally will recognize gain as if the appreciated financial
position were sold at its fair market value on the date it enters into the short
sale. The subsequent holding period for any appreciated financial position that
is subject to these constructive sale rules will be determined as if such
position were acquired on the date of the constructive sale.

   Under the "Jobs and Growth Tax Relief Reconciliation Act of 2003" (the "2003
Tax Act"), certain dividend distributions paid by the Fund (whether paid in cash
or reinvested in additional Common Shares) to individual taxpayers are taxed at
rates applicable to net long-term capital gains (15%, or 5% for individuals in
the 10% or 15% tax brackets). This tax treatment applies only if certain holding
period and other requirements are satisfied by the Common Shareholder, as
discussed below, and the dividends are attributable to qualified dividend income
received by the Fund itself. For this purpose, "qualified dividend income" means
dividends received by the Fund from United States corporations and "qualified
foreign corporations," provided that the Fund satisfies certain holding period
and other requirements in respect of the stock of such corporations.

   Subject to certain exceptions, a "qualified foreign corporation" is any
foreign corporation that is either (i) incorporated in a possession of the
United States (the "possessions test"), or (ii) eligible for benefits of a
comprehensive income tax treaty with the United States that the Secretary of the
Treasury determines is satisfactory for these purposes and which includes an
exchange of information program (the "treaty test"). The Secretary of the
Treasury has currently identified tax treaties between the United States and 52
other countries that satisfy the treaty test. Subject to the same exceptions, a
foreign corporation that does not satisfy either the possessions test or the
treaty test will still be considered a "qualified foreign corporation" with
respect to any dividend paid by such corporation if the stock with respect to
which such dividend is paid is readily tradable on an established securities
market in the United States. The Treasury Department has issued a notice stating
that common or ordinary stock, or an ADR in respect of such stock, is considered
"readily tradable" if it is listed on a national securities exchange that is
registered under section 6 of the Securities Exchange Act of 1934, as amended,
or on the National Association of Securities Dealers Automated Quotations
system. Foreign corporations that are passive foreign investment companies will
not be "qualified foreign corporations."

                                       44
<PAGE>

   In order for qualified dividends paid by the Fund to a Common Shareholder to
be taxable at long-term capital gains rates, the Common Shareholder must hold
his or her Common Shares for more than 60 days during the 121-day period
surrounding the ex-dividend date. For dividends the Fund receives to qualify for
tax-advantaged treatment, the Fund must hold stock paying qualified dividend
income for more than 60 days during the 121-day period beginning 60 days before
the ex-dividend date (or more than 90 days during the associated 181-day period,
in the case of certain preferred stocks). In addition, neither a Common
Shareholder nor the Fund can be obligated to make related payments (pursuant to
a short sale or otherwise) with respect to positions in any security that is
substantially similar or related property with respect to his or her Common
Shares or such stock, respectively. Gains on option positions treated as short-
term and other short-term gains, interest income and non-qualified dividends are
not eligible for the lower tax rate. The special rules relating to the taxation
of ordinary income dividends paid by the Fund that are attributable to the
Fund's qualified income only apply to taxable years beginning before January 1,
2011. Thereafter, all of the Fund's distributions that are characterized as
dividends, other than capital gain distributions, will be fully taxable at
ordinary income tax rates unless further Congressional action is taken. There
can be no assurance as to what portion of the Fund's dividend distributions will
qualify for favorable treatment under the 2003 Tax Act. The Fund's investment
program and the tax treatment of Fund distributions may be affected by IRS
interpretations of the Code and future changes in tax laws and regulations,
including changes resulting from the "sunset" provisions described above that
would have the effect of repealing the favorable treatment of qualified dividend
income and reimposing the higher tax rates applicable to ordinary income in 2011
unless further legislative action is taken.

   The Fund will inform Common Shareholders of the source and tax status of all
distributions promptly after the close of each calendar year.

   Selling Common Shareholders will generally recognize gain or loss in an
amount equal to the difference between the amount realized on the sale and the
Common Shareholder's adjusted tax basis in the Common Shares sold. If the Common
Shares are held as a capital asset, the gain or loss will be a capital gain or
loss. The maximum tax rate applicable to net capital gains recognized by
individuals and other non-corporate taxpayers is (i) the same as the maximum
ordinary income tax rate for gains recognized on the sale of capital assets held
for one year or less (in 2006, 35%), or (ii) 15% for gains recognized on the
sale of capital assets held for more than one year (as well as any capital gain
distributions) (5% for individuals in the 10% or 15% tax brackets). Any loss on
a disposition of Common Shares held for six months or less will be treated as a
long-term capital loss to the extent of any capital gain distributions received
with respect to those Common Shares. For purposes of determining whether Common
Shares have been held for six months or less, the holding period is suspended
for any periods during which the Common Shareholder's risk of loss is diminished
as a result of holding one or more other positions in substantially similar or
related property, or through certain options or short sales. Any loss realized
on a sale or exchange of Common Shares will be disallowed to the extent those
Common Shares are replaced by other Common Shares within a period of 61 days
beginning 30 days before and ending 30 days after the date of disposition of the
Common Shares (whether through the reinvestment of distributions or otherwise).
In that event, the basis of the replacement Common Shares will be adjusted to
reflect the disallowed loss.

   An investor should be aware that, if Common Shares are purchased shortly
before the record date for any taxable distribution (including a capital gain
distribution), the purchase price likely will reflect the value of the
distribution and the investor then would receive a taxable distribution that is
likely to reduce the trading value of such Common Shares, in effect resulting in
a taxable return of some of the purchase price. Taxable distributions to certain
individuals and certain other non-corporate Common Shareholders, including those
who have not provided their correct taxpayer identification number and other
required certifications, may be subject to "backup" federal income tax
withholding at the fourth lowest rate of tax applicable to a single individual
(in 2006, 28%).

   An investor should also be aware that the benefits of the reduced tax rate
applicable to long-term capital gains and qualified dividend income may be
impacted by the application of the alternative minimum tax to individual
shareholders.

   The foregoing briefly summarizes some of the important federal income tax
consequences to Common Shareholders of investing in Common Shares, reflects the
federal tax law as of the date of this Prospectus, and does not address special
tax rules applicable to certain types of investors, such as corporate and
foreign investors. A more complete discussion of the tax rules applicable to the
Fund and the Common Shareholders can be found in the Statement of Additional
Information that is incorporated by reference into this Prospectus. Unless
otherwise noted, this discussion assumes that an investor is a United States
person and holds Common Shares as a capital asset. This discussion is based upon
current provisions of the Code, the regulations promulgated thereunder, and
judicial and administrative ruling authorities, all of which are subject to
change or differing interpretations by the courts or the IRS retroactively or
prospectively. Investors should consult their tax advisors regarding other
federal, state or local tax considerations that may be applicable in their
particular circumstances, as well as any proposed tax law changes.

                                       45
<PAGE>

                           DIVIDEND REINVESTMENT PLAN

   Pursuant to the Fund's dividend reinvestment plan (the "Plan"), unless a
Common Shareholder elects to receive distributions in cash, all distributions
(including capital gain dividends) will be automatically reinvested in Common
Shares.

   PFPC Inc. (the "Plan Agent") serves as agent for the Common Shareholders in
administering the Plan. Common Shareholders who elect not to participate in the
Plan will receive all Fund distributions in cash paid by check mailed directly
to the Common Shareholder of record (or, if the Common Shares are held in street
or other nominee name, then to the nominee) by PFPC Inc., as disbursing agent.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by written notice if received by the Plan
Agent prior to any distribution record date.

  Common Shares will be acquired by the Plan Agent or an independent broker-
dealer for the participants' accounts, depending upon the circumstances
described below, either (i) through receipt of additional previously authorized
but unissued Common Shares from the Fund ("newly issued Common Shares") or (ii)
by purchase of outstanding Common Shares on the open market ("open-market
purchases") on the New York Stock Exchange or elsewhere. If, on the payment date
for the distribution, the net asset value per Common Share is equal to or less
than the market price per Common Share plus estimated brokerage commissions
(such condition being referred to herein as "market premium"), the Plan Agent
will invest the distribution amount in newly issued Common Shares on behalf of
the participants. The number of newly issued Common Shares to be credited to
each participant's account will be determined by dividing the dollar amount of
the distribution by the net asset value per Common Share on the date the Common
Shares are issued, provided that the maximum discount from the then current
market price per Common Share on the date of issuance may not exceed 5%. If on
the distribution payment date the net asset value per Common Share is greater
than the market value plus estimated brokerage commissions (such condition being
referred to herein as "market discount"), the Plan Agent will invest the
distribution amount in Common Shares acquired on behalf of the participants in
open-market purchases.

   In the event of a market discount on the distribution payment date, the Plan
Agent will have up to 30 days after the distribution payment date to invest the
distribution amount in Common Shares acquired in open-market purchases. If,
before the Plan Agent has completed its open-market purchases, the market price
of a Common Share exceeds the net asset value per Common Share, the average per
Common Share purchase price paid by the Plan Agent could exceed the net asset
value of the Fund's Common Shares, resulting in the acquisition of fewer Common
Shares than if the distribution had been paid in newly issued Common Shares on
the distribution payment date. Therefore, the Plan provides that if the Plan
Agent is unable to invest the full distribution amount in open-market purchases
during the purchase period or if the market discount shifts to a market premium
during the purchase period, the Plan Agent will cease making open-market
purchases and will invest the uninvested portion of the distribution amount in
newly issued Common Shares.

   The Plan Agent maintains all Common Shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by Common Shareholders for tax records. Common Shares in the
account of each Plan participant will be held by the Plan Agent on behalf of the
Plan participant, and each Common Shareholder's proxy will include those Common
Shares purchased or received pursuant to the Plan. The Plan Agent will forward
all proxy solicitation materials to participants and vote proxies for Common
Shares held pursuant to the Plan in accordance with the instructions of the
participants. In the case of Common Shareholders such as banks, brokers or
nominees that hold Common Shares for others who are the beneficial owners, the
Plan Agent will administer the Plan on the basis of the number of Common Shares
certified from time to time by the record Common Shareholder's name and held for
the account of beneficial owners who participate in the Plan.

   There will be no brokerage charges with respect to Common Shares issued
directly by the Fund as a result of distributions payable either in Common
Shares or in cash. However, each Plan participant will pay a pro rata share of
brokerage commissions incurred with respect to the Plan Agent's open-market
purchases in connection with the reinvestment of distributions.

   Common Shareholders participating in the Plan may receive benefits not
available to Common Shareholders not participating in the Plan. If the market
price (plus commissions) of the Fund's Common Shares is above their net asset
value, participants in the Plan will receive Common Shares of the Fund purchased
at a discount to market price and having a current value that exceeds the cash
distributions they would have otherwise received on their Common Shares. If the
market price (plus commissions) of the Fund's Common Shares is below their net
asset value, Plan participants will receive Common Shares with a net asset value
that exceeds the cash distributions they would have otherwise received on their
Common Shares. There may, however, be insufficient Common Shares available in
the market at prices below net asset value to satisfy the Plan's requirements,
in which case the Plan Agent will acquire newly issued Common Shares. Also,
since the Fund does not redeem its Common Shares, the price on resale of Common
Shares may be more or less than their net asset value.

                                       46
<PAGE>

   Experience under the Plan may indicate that changes are desirable.
Accordingly, upon 30 days' notice to Plan participants, the Fund reserves the
right to amend or terminate the Plan. A Plan participant will be charged a $5.00
service charge and pay brokerage charges whenever he or she directs the Plan
Agent to sell Common Shares held in a distribution reinvestment account.

   All correspondence concerning the Plan should be directed to the Plan Agent
at PFPC Inc., P.O. Box 43027, Providence, Rhode Island 02940-3027. Please call
1- 800-331-1710 between the hours of 9:00 a.m. and 5:00 p.m. Eastern Time if you
have questions regarding the Plan.

                        DESCRIPTION OF CAPITAL STRUCTURE

   The Fund is an unincorporated business trust established under the laws of
The Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated
and filed with the Secretary of The Commonwealth on October 5, 2005 (the
"Declaration of Trust"). The Declaration of Trust provides that the Board may
authorize separate classes of shares of beneficial interest. The Board has
authorized an unlimited number of Common Shares. The Fund intends to hold annual
meetings of Common Shareholders in compliance with the requirements of the New
York Stock Exchange.

COMMON SHARES

   The Declaration of Trust permits the Fund to issue an unlimited number of
full and fractional common shares of beneficial interest, $.01 par value per
share. Each Common Share represents an equal proportionate interest in the
assets of the Fund with each other Common Share in the Fund. Holders of Common
Shares will be entitled to the payment of distributions when, as and if declared
by the Board. The 1940 Act or the terms of any future borrowings or issuance of
preferred shares may limit the payment of distributions to the holders of Common
Shares. Each whole Common Share shall be entitled to one vote as to matters on
which it is entitled to vote pursuant to the terms of the Declaration of Trust
on file with the Securities and Exchange Commission. Upon liquidation of the
Fund, after paying or adequately providing for the payment of all liabilities of
the Fund and the liquidation preference with respect to any outstanding
preferred shares, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Board may distribute
the remaining assets of the Fund among the holders of the Common Shares. The
Declaration of Trust provides that Common Shareholders are not liable for any
liabilities of the Fund, and requires inclusion of a clause to that effect in
agreements entered into by the Fund and, in coordination with the Fund's By-
laws, indemnifies shareholders against any such liability. Although shareholders
of an unincorporated business trust established under Massachusetts law may, in
certain limited circumstances, be held personally liable for the obligations of
the business trust as though they were general partners, the provisions of the
Fund's Declaration of Trust and By-laws described in the foregoing sentence make
the likelihood of such personal liability remote.

   The Fund has no current intention to issue preferred shares or to borrow
money. However, if at some future time there are any borrowings or preferred
shares outstanding, the Fund may not be permitted to declare any cash
distribution on its Common Shares, unless at the time of such declaration, (i)
all accrued distributions on preferred shares or accrued interest on borrowings
have been paid and (ii) the value of the Fund's total assets (determined after
deducting the amount of such distribution), less all liabilities and
indebtedness of the Fund not represented by senior securities, is at least 300%
of the aggregate amount of such securities representing indebtedness and at
least 200% of the aggregate amount of securities representing indebtedness plus
the aggregate liquidation value of the outstanding preferred shares. In addition
to the requirements of the 1940 Act, the Fund may be required to comply with
other asset coverage requirements as a condition of the Fund obtaining a rating
of preferred shares from a nationally recognized statistical rating agency (a
"Rating Agency"). These requirements may include an asset coverage test more
stringent than under the 1940 Act. This limitation on the Fund's ability to make
distributions on its Common Shares could in certain circumstances impair the
ability of the Fund to maintain its qualification for taxation as a regulated
investment company for federal income tax purposes. If the Fund were in the
future to issue preferred shares or borrow money, it would intend, however, to
the extent possible to purchase or redeem preferred shares or reduce borrowings
from time to time to maintain compliance with such asset coverage requirements
and may pay special distributions to the holders of the preferred shares in
certain circumstances in connection with any potential impairment of the Fund's
status as a regulated investment company. Depending on the timing of any such
redemption or repayment, the Fund may be required to pay a premium in addition
to the liquidation preference of the preferred shares to the holders thereof.

   The Fund has no present intention of offering additional Common Shares,
except as described herein. Other offerings of its Common Shares, if made, will
require approval of the Board. Any additional offering will not be sold at a
price per Common Share below the then current net asset value (exclusive of
underwriting discounts and commissions) except in connection with an offering to
existing Common Shareholders or with the consent of a majority of the Fund's
outstanding Common Shares. The Common Shares have no preemptive rights.

                                       47
<PAGE>

   The Fund generally will not issue Common Share certificates. However, upon
written request to the Fund's transfer agent, a share certificate will be issued
for any or all of the full Common Shares credited to an investor's account.
Common Share certificates that have been issued to an investor may be returned
at any time.

REPURCHASE OF COMMON SHARES AND OTHER METHODS TO ADDRESS POTENTIAL DISCOUNT

   Because shares of closed-end management investment companies frequently trade
at a discount to their net asset values, the Board has determined that from time
to time it may be in the interest of Common Shareholders for the Fund to take
corrective actions to reduce trading discounts in the Common Shares. The Board,
in consultation with Eaton Vance, will review at least annually the possibility
of open market repurchases and/or tender offers for the Common Shares and will
consider such factors as the market price of the Common Shares, the net asset
value of the Common Shares, the liquidity of the assets of the Fund, the effect
on the Fund's expenses, whether such transactions would impair the Fund's status
as a regulated investment company or result in a failure to comply with
applicable asset coverage requirements, general economic conditions and such
other events or conditions that may have a material effect on the Fund's ability
to consummate such transactions. There are no assurances that the Board will, in
fact, decide to undertake either of these actions or, if undertaken, that such
actions will result in the Common Shares trading at a price equal to or
approximating their net asset value. The Board, in consultation with Eaton
Vance, may from time to time review other possible actions to reduce trading
discounts in the Common Shares.

PREFERRED SHARES

   The Fund has no current intention of issuing any shares other than the Common
Shares. However, the Declaration of Trust authorizes the issuance of an
unlimited number of shares of beneficial interest with preference rights (the
"preferred shares") in one or more series, with rights as determined by the
Board, by action of the Board without the approval of the Common Shareholders.

   Under the requirements of the 1940 Act, the Fund must, immediately after the
issuance of any preferred shares, have an "asset coverage" of at least 200%.
Asset coverage means the ratio which the value of the total assets of the Fund,
less all liabilities and indebtedness not represented by senior securities (as
defined in the 1940 Act), bears to the aggregate amount of senior securities
representing indebtedness of the Fund, if any, plus the aggregate liquidation
preference of the preferred shares. If the Fund seeks a rating for preferred
shares, asset coverage requirements in addition to those set forth in the 1940
Act may be imposed. The liquidation value of any preferred shares would be
expected to equal their aggregate original purchase price plus redemption
premium, if any, together with any accrued and unpaid distributions thereon (on
a cumulative basis), whether or not earned or declared. The terms of any
preferred shares, including their distribution rate, voting rights, liquidation
preference and redemption provisions, will be determined by the Board (subject
to applicable law and the Fund's Declaration of Trust) if and when it authorizes
preferred shares. The Fund may issue preferred shares that provide for the
periodic redetermination of the distribution rate at relatively short intervals
through an auction or remarketing procedure, although the terms of such
preferred shares may also enable the Fund to lengthen such intervals. At times,
the distribution rate as redetermined on any preferred shares could exceed the
Fund's return after expenses on the investment of proceeds from the preferred
shares and the Fund's leveraged capital structure would result in a lower rate
of return to Common Shareholders than if the Fund were not so structured.

   In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Fund, the terms of any preferred shares may entitle the
holders of preferred shares to receive a preferential liquidating distribution
(expected to equal the original purchase price per share plus redemption
premium, if any, together with accrued and unpaid dividends, whether or not
earned or declared and on a cumulative basis) before any distribution of assets
is made to Common Shareholders. After payment of the full amount of the
liquidating distribution to which they are entitled, the preferred shareholders
would not be entitled to any further participation in any distribution of assets
by the Fund. Holders of preferred shares, voting as a class, would be entitled
to elect two of the Fund's Trustees, if any preferred shares are issued. Under
the 1940 Act, if at any time dividends on the preferred shares are unpaid in an
amount equal to two full years' dividends thereon, the holders of all
outstanding preferred shares, voting as a class, will be entitled to elect a
majority of the Board until all dividends in default have been paid or declared
and set apart for payment. In addition, if required by a Rating Agency rating
the preferred shares or if the Board determines it to be in the best interests
of the Common Shareholders, issuance of the preferred shares may result in more
restrictive provisions than required under the 1940 Act. In this regard, holders
of preferred shares may, for example, be entitled to elect a majority of the
Fund's Board if only one dividend on the preferred shares is in arrears.

   In the event of any future issuance of preferred shares, the Fund likely
would seek a credit rating for such preferred shares from a Rating Agency. In
such event, as long as preferred shares are outstanding, the composition of its
portfolio will reflect guidelines established by such Rating Agency. Based on
previous guidelines established by Rating Agencies for the securities of other
issuers, the Fund anticipates that the guidelines with respect to any preferred
shares would establish a set of tests for portfolio composition and asset
coverage that supplement (and in some cases are more restrictive than) the
applicable requirements under the 1940 Act. Although no assurance can be given


                                       48
<PAGE>

as to the nature or extent of the guidelines that may be imposed in connection
with obtaining a rating of any preferred shares, the Fund anticipates that such
guidelines would include asset coverage requirements that are more restrictive
than those under the 1940 Act, restrictions on certain portfolio investments and
investment practices and certain mandatory redemption requirements relating to
any preferred shares. No assurance can be given that the guidelines actually
imposed with respect to any preferred shares by a Rating Agency would be more or
less restrictive than those described in this Prospectus.

CREDIT FACILITY/COMMERCIAL PAPER PROGRAM

   The Fund has no current intention to borrow money for the purpose of
obtaining investment leverage. If, in the future, the Fund determines to engage
in investment leverage using borrowings, the Fund may enter into definitive
agreements with respect to a credit facility/commercial paper program or other
borrowing program, pursuant to which the Fund would expect to be entitled to
borrow up to a specified amount. Any such borrowings would constitute financial
leverage. Borrowings under such a facility/commercial paper program would not be
expected to be convertible into any other securities of the Fund. Outstanding
amounts would be expected to be prepayable by the Fund prior to final maturity
without significant penalty, and no sinking fund or mandatory retirement
provisions would be expected to apply. Outstanding amounts would be payable at
maturity or such earlier times as required by the agreement. The Fund may be
required to prepay outstanding amounts under the facility/program or incur a
penalty rate of interest in the event of the occurrence of certain events of
default. The Fund would be expected to indemnify the lenders under the
facility/program against liabilities they may incur in connection with the
facility/program.

   In addition, the Fund expects that any such credit facility/program would
contain covenants that, among other things, likely would limit the Fund's
ability to pay distributions in certain circumstances, incur additional debt,
change its fundamental investment policies and engage in certain transactions,
including mergers and consolidations, and may require asset coverage ratios in
addition to those required by the 1940 Act. The Fund may be required to pledge
its assets and to maintain a portion of its assets in cash or high-grade
securities as a reserve against interest or principal payments and expenses. The
Fund expects that any credit facility/program would have customary covenant,
negative covenant and default provisions. There can be no assurance that the
Fund will enter into an agreement for a credit facility/program on terms and
conditions representative of the foregoing, or that additional material terms
will not apply. In addition, if entered into, any such credit facility/program
may in the future be replaced or refinanced by one or more credit facilities
having substantially different terms or by the issuance of preferred shares or
debt securities.

EFFECTS OF POSSIBLE FUTURE LEVERAGE

   As discussed above, the Fund has no current intention to issue preferred
shares or to borrow money for the purpose of obtaining investment leverage. In
the event that the Fund determines in the future to utilize investment leverage,
there can be no assurance that such a leveraging strategy would be successful
during any period in which it is employed. Leverage creates risks for Common
Shareholders, including the likelihood of greater volatility of net asset value
and market price of the Common Shares and the risk that fluctuations in
distribution rates on any preferred shares or fluctuations in borrowing costs
may affect the return to Common Shareholders. To the extent that amounts
available for distribution derived from securities purchased with the proceeds
of leverage exceed the cost of such leverage, the Fund's distributions would be
greater than if leverage had not been used. Conversely, if the amounts available
for distribution derived from securities purchased with leverage proceeds are
not sufficient to cover the cost of leverage, distributions to Common
Shareholders would be less than if leverage had not been used. In the latter
case, Eaton Vance, in its best judgment, may nevertheless determine to maintain
the Fund's leveraged position if it deems such action to be appropriate. The
costs of an offering of preferred shares and/or a borrowing program would be
borne by Common Shareholders and consequently would result in a reduction of the
net asset value of Common Shares. See "Risk Factors - Financial Leverage Risk."

  In addition, the fee paid to Eaton Vance will be calculated on the basis of
the Fund's average daily gross assets, including proceeds from the issuance of
preferred shares and/or borrowings, so the fees would be higher if leverage is
utilized. In this regard, holders of preferred shares would not bear the
investment advisory fee. Rather, Common Shareholders would bear the portion of
the investment advisory fee attributable to the assets purchased with the
proceeds of the preferred shares offering. See "Risk Factors - Financial
Leverage Risk."

ANTI-TAKEOVER PROVISIONS IN THE AGREEMENT AND DECLARATION OF TRUST

   The Declaration of Trust includes provisions that could have the effect of
limiting the ability of other entities or persons to acquire control of the Fund
or to change the composition of its Board and could have the effect of depriving
Common Shareholders of an opportunity to sell their Common Shares at a premium
over prevailing market prices by discouraging a third party from seeking to
obtain control of the Fund. These provisions may have the effect of discouraging
attempts to acquire control of the Fund, which attempts could have the effect of
increasing the expenses of the Fund and interfering with the normal operation of
the Fund. The Board is divided into three classes, with the term of one class
expiring at each annual meeting of shareholders. At each annual meeting, one


                                       49
<PAGE>

class of Trustees is elected to a three-year term. This provision could delay
for up to two years the replacement of a majority of the Board. A Trustee may be
removed from office only for cause by a written instrument signed by the
remaining Trustees or by a vote of the holders of at least two-thirds of the
class of shares of the Fund that elected such Trustee and are entitled to vote
on the matter.

   In addition, the Declaration of Trust requires the favorable vote of the
holders of at least 75% of the outstanding shares of each class of the Fund,
voting as a class, then entitled to vote to approve, adopt or authorize certain
transactions with 5%-or-greater holders of a class of shares and their
associates, unless the Board shall by resolution have approved a memorandum of
understanding with such holders, in which case normal voting requirements would
be in effect. For purposes of these provisions, a 5%-or-greater holder of a
class of shares (a "Principal Shareholder") refers to any person who, whether
directly or indirectly and whether alone or together with its affiliates and
associates, beneficially owns 5% or more of the outstanding shares of any class
of beneficial interest of the Fund. The transactions subject to these special
approval requirements are: (i) the merger or consolidation of the Fund or any
subsidiary of the Fund with or into any Principal Shareholder; (ii) the issuance
of any securities of the Fund to any Principal Shareholder for cash; (iii) the
sale, lease or exchange of all or any substantial part of the assets of the Fund
to any Principal Shareholder (except assets having an aggregate fair market
value of less than $1,000,000, aggregating for the purpose of such computation
all assets sold, leased or exchanged in any series of similar transactions
within a twelve-month period); or (iv) the sale, lease or exchange to the Fund
or any subsidiary thereof, in exchange for securities of the Fund, of any assets
of any Principal Shareholder (except assets having an aggregate fair market
value of less than $1,000,000, aggregating for the purposes of such computation
all assets sold, leased or exchanged in any series of similar transactions
within a twelve-month period).

   The Board has determined that provisions with respect to the Board and the
75% voting requirements described above, which voting requirements are greater
than the minimum requirements under Massachusetts law or the 1940 Act, are in
the best interest of Common Shareholders generally. Reference should be made to
the Declaration of Trust on file with the Securities and Exchange Commission for
the full text of these provisions.

CONVERSION TO OPEN-END FUND

   The Fund may be converted to an open-end management investment company at any
time if approved by the lesser of (i) two-thirds or more of the Fund's then
outstanding Common Shares and preferred shares (if any), each voting separately
as a class, or (ii) more than 50% of the then outstanding Common Shares and
preferred shares (if any), voting separately as a class if such conversion is
recommended by at least 75% of the Trustees then in office. If approved in the
foregoing manner, conversion of the Fund could not occur until 90 days after the
shareholders' meeting at which such conversion was approved and would also
require at least 30 days' prior notice to all shareholders. Conversion of the
Fund to an open-end management investment company also would require the
redemption of any outstanding preferred shares and could require the repayment
of borrowings, which would eliminate any future leveraged capital structure of
the Fund with respect to the Common Shares. In the event of conversion, the
Common Shares would cease to be listed on the New York Stock Exchange or other
national securities exchange or market system. The Board believes that the
closed-end structure is desirable, given the Fund's investment objectives and
policies. Investors should assume, therefore, that it is unlikely that the Board
would vote to convert the Fund to an open-end management investment company.
Shareholders of an open-end management investment company may require the
company to redeem their shares at any time (except in certain circumstances as
authorized by or under the 1940 Act) at their net asset value, less such
redemption charge, if any, as might be in effect at the time of a redemption. If
the Fund were to convert to an open-end investment company, the Fund expects it
would pay all such redemption requests in cash, but would likely reserve the
right to pay redemption requests in a combination of cash or securities. If such
partial payment in securities were made, investors may incur brokerage costs in
converting such securities to cash. If the Fund were converted to an open-end
fund, it is likely that new Common Shares would be sold at net asset value plus
a sales load.

                                       50
<PAGE>

                                  UNDERWRITING

   [ ], [ ], [ ], and [ ] are acting as the representatives of the underwriters
("Underwriter") named below. Subject to the terms and conditions stated in the
underwriting agreement, dated the date of this prospectus, each Underwriter
named below has agreed to purchase, and the Fund has agreed to sell to that
Underwriter, the number of Common Shares set forth opposite the Underwriter's
name.

                                                                 NUMBER OF
UNDERWRITERS                                                   COMMON SHARES
-------------------------------------------------------------------------------

[         ]...................................................




                                                               ________________
  Total..................................................
......================

   The underwriting agreement provides that the obligations of the Underwriters
to purchase the Common Shares included in this offering are subject to approval
of legal matters by counsel and to other conditions. The Underwriters are
obligated to purchase all the Common Shares (other than those covered by the
over-allotment option described below) shown in the table above if any of the
Common Shares are purchased.

   The Underwriters propose to offer some of the Common Shares directly to the
public at the public offering price set forth on the cover page of this
prospectus and some of the Common Shares to dealers at the public offering price
less a concession not to exceed $ per share. The sales load the Fund will pay of
$0.90 per share is equal to 4.5% of the initial public offering price. The
Underwriters may allow, and dealers may reallow, a concession not to exceed $
per share on sales to other dealers. If all of the Common Shares are not sold at
the initial public offering price, the representatives may change the public
offering price and other selling terms. Investors must pay for any Common Shares
purchased on or before , 2006. The representatives have advised the Fund that
the Underwriters do not intend to confirm any sales to any accounts over which
they exercise discretionary authority.

   [The Adviser (and not the Fund) has agreed to pay to [ ], from its own
assets, a structuring fee for advice relating to the structure, design and
organization of the Fund as well as services related to the sale and
distribution of the Fund's Common Shares in the amount of $ . The structuring
fee paid to [ ] will not exceed [ ]% of the total public offering price of the
Common Shares sold in this offering.

  [The Adviser (and not the Fund) may also pay certain qualifying Underwriters a
marketing and structuring fee, a sales incentive fee, or additional compensation
in connection with the offering.]

   The total amount of the underwriter compensation payments described above
will not exceed 4.5% of the total public offering price of the shares offered
hereby. The sum total of all compensation to the Underwriters in connection with
this public offering of Common Shares, including sales load and all forms of
additional compensation or structuring or sales incentive fee payments to the
Underwriters and other expenses, will be limited to not more than 9.0% of the
total public offering price of the Common Shares sold in this offering.

   The Fund has granted to the Underwriters an option, exercisable for 45 days
from the date of this prospectus, to purchase up to additional Common Shares at
the public offering price less the sales load. The Underwriters may exercise the
option solely for the purpose of covering over-allotments, if any, in connection
with this offering. To the extent such option is exercised, each Underwriter
must purchase a number of additional Common Shares approximately proportionate
to that Underwriter's initial purchase commitment.

   The Fund has agreed that, for a period of 180 days from the date of this
Prospectus, it will not, without the prior written consent of [ ], on behalf of
the Underwriters, dispose of or hedge any Common Shares or any securities
convertible into or exchangeable for Common Shares. [ ], in its sole discretion,
may release any of the securities subject to these agreements at any time
without notice.

   The Underwriters have undertaken to sell Common Shares to a minimum of 2,000
beneficial owners in lots of 100 or more shares to meet the New York Stock
Exchange distribution requirements for trading.

                                       51
<PAGE>

   The Fund's has applied for listing of its Common Shares on the New York Stock
Exchange under the symbol "[ ].".

   The following table shows the sales load that the Fund will pay to the
Underwriters in connection with this offering. These amounts are shown assuming
both no exercise and full exercise of the Underwriters' option to purchase
additional Common Shares.


                                          PAID BY FUND
                                  No Exercise      Full Exercise
                                  -----------      -------------
 Per Share                       $                $
 Total                           $                $

   The Fund, the Adviser and the Subadviser have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the Underwriters may be
required to make because of any of those liabilities. Certain Underwriters may
make a market in the Common Shares after trading in the Common Shares has
commenced on the NYSE. No Underwriter, however, is obligated to conduct market-
making activities and any such activities may be discontinued at any time
without notice, at the sole discretion of the Underwriter. No assurance can be
given as to the liquidity of, or the trading market for, the Common Shares as a
result of any market-making activities undertaken by any Underwriter. This
prospectus is to be used by any Underwriter in connection with the offering and,
during the period in which a prospectus must be delivered, with offers and sales
of the Common Shares in market-making transactions in the over-the-counter
market at negotiated prices related to prevailing market prices at the time of
the sale.

   In connection with the offering, [ ], on behalf of itself and the other
Underwriters, may purchase and sell Common Shares in the open market. These
transactions may include short sales, syndicate covering transactions and
stabilizing transactions. Short sales involve syndicate sales of Common Shares
in excess of the number of Common Shares to be purchased by the Underwriters in
the offering, which creates a syndicate short position. "Covered" short sales
are sales of Common Shares made in an amount up to the number of Common Shares
represented by the Underwriters' over-allotment option. In determining the
source of Common Shares to close out the covered syndicate short position, the
Underwriters will consider, among other things, the price of Common Shares
available for purchase in the open market as compared to the price at which they
may purchase Common Shares through the over-allotment option.

   Transactions to close out the covered syndicate short position involve either
purchases of Common Shares in the open market after the distribution has been
completed or the exercise of the over-allotment option. The Underwriters may
also make "naked" short sales of Common Shares in excess of the over-allotment
option. The Underwriters must close out any naked short position by purchasing
Common Shares in the open market. A naked short position is more likely to be
created if the Underwriters are concerned that there may be downward pressure on
the price of Common Shares in the open market after pricing that could adversely
affect investors who purchase in the offering. Stabilizing transactions consist
of bids for or purchases of Common Shares in the open market while the offering
is in progress.

   The Underwriters may impose a penalty bid. Penalty bids allow the
underwriting syndicate to reclaim selling concessions allowed to an underwriter
or a dealer for distributing Common Shares in this offering if the syndicate
repurchases Common Shares to cover syndicate short positions or to stabilize the
purchase price of the Common Shares.

   Any of these activities may have the effect of preventing or retarding a
decline in the market price of Common Shares. They may also cause the price of
Common Shares to be higher than the price that would otherwise exist in the open
market in the absence of these transactions.

   The Underwriters may conduct these transactions on the New York Stock
Exchange or in the over-the-counter market, or otherwise. If the Underwriters
commence any of these transactions, they may discontinue them at any time.

   A prospectus in electronic format may be made available on the websites
maintained by one or more of the Underwriters. Other than the prospectus in
electronic format, the information on any such Underwriter's website is not part
of this prospectus. The representatives may agree to allocate a number of Common
Shares to Underwriters for sale to their online brokerage account holders. The
representatives will allocate Common Shares to Underwriters that may make
Internet distributions on the same basis as other allocations. In addition,
Common Shares may be sold by the Underwriters to securities dealers who resell
Common Shares to online brokerage account holders.

                                       52
<PAGE>

   The Fund anticipates that, from time to time, certain Underwriters may act as
brokers or dealers in connection with the execution of the Fund's portfolio
transactions after they have ceased to be Underwriters and, subject to certain
restrictions, may act as brokers while they are Underwriters.

   Certain Underwriters may, from time to time, engage in transactions with or
perform services for the Adviser, the Subadviser and their affiliates in the
ordinary course of business.

   Prior to the initial public offering of Common Shares, the Adviser purchased
Common Shares from the Fund in an amount satisfying the net worth requirements
of Section 14(a) of the 1940 Act.

   The principal business address of [ ], is [ ]..

                          CUSTODIAN AND TRANSFER AGENT

   Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston,
Massachusetts 02116 is the custodian of the Fund and will maintain custody of
the securities and cash of the Fund. IBT maintains the Fund's general ledger and
computes net asset value per share daily. IBT also attends to details in
connection with the sale, exchange, substitution, transfer and other dealings
with the Fund's investments and receives and disburses all funds. IBT also
assists in preparation of shareholder reports and the electronic filing of such
reports with the SEC.

   PFPC Inc., P.O. Box 43027, Providence, Rhode Island 02940-3027 is the
transfer agent and dividend disbursing agent of the Fund.

                                 LEGAL OPINIONS

   Certain legal matters in connection with the Common Shares will be passed
upon for the Fund by Kirkpatrick & Lockhart Nicholson Graham LLP, Boston,
Massachusetts, and for the Underwriters by [ ]. [ ] may rely as to certain
matters of Massachusetts law on the opinion of Kirkpatrick & Lockhart Nicholson
Graham LLP, Boston, Massachusetts.

                             REPORTS TO SHAREHOLDERS

   The Fund will send to Common Shareholders unaudited semi-annual and audited
annual reports, including a list of investments held.

                 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   [ ] are the independent registered public accounting firm for the Fund and
will audit the Fund's financial statements.

                             ADDITIONAL INFORMATION

   The Prospectus and the Statement of Additional Information do not contain all
of the information set forth in the Registration Statement that the Fund has
filed with the SEC. The complete Registration Statement may be obtained from the
SEC upon payment of the fee prescribed by its rules and regulations. The
Statement of Additional Information can be obtained without charge by calling 1-
800- 225-6265.

   Statements contained in this Prospectus as to the contents of any contract or
other documents referred to are not necessarily complete, and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement of which this Prospectus forms a part,
each such statement being qualified in all respects by such reference.


                                       53
<PAGE>

         TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION

                                                                           PAGE
Additional Investment Information and Restrictions.......................
Trustees and Officers....................................................
Investment Advisory and Other Services...................................
Determination of Net Asset Value.........................................
Portfolio Trading........................................................
Taxes....................................................................
Other Information........................................................
Independent Registered Public Accounting Firm............................
Statement of Assets and Liabilities......................................
Notes to Financial Statements............................................
Appendix A: Proxy Voting Policies and Procedures.........................   A-

                                       54
<PAGE>

                            THE FUND'S PRIVACY POLICY

   The Eaton Vance organization is committed to ensuring your financial privacy.
Each of the financial institutions identified below has in effect the following
policy ("Privacy Policy") with respect to nonpublic personal information about
its customers:

   o  Only such information received from you, through application forms or
      otherwise, and information about your Eaton Vance fund transactions will
      be collected. This may include information such as name, address, social
      security number, tax status, account balances and transactions.

   o  None of such information about you (or former customers) will be disclosed
      to anyone, except as permitted by law (which includes disclosure to
      employees necessary to service your account). In the normal course of
      servicing a customer's account, Eaton Vance may share information with
      unaffiliated third parties that perform various required services such as
      transfer agents, custodians and broker/dealers.

   o  Policies and procedures (including physical, electronic and procedural
      safeguards) are in place that are designed to protect the confidentiality
      of such information.

   o  We reserve the right to change our Privacy Policy at any time upon proper
      notification to you. Customers may want to review our Privacy Policy
      periodically for changes by accessing the link on our homepage:
      www.eatonvance.com.

   Our pledge of privacy applies to the following entities within the Eaton
Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management,
Eaton Vance Investment Counsel, Boston Management and Research, and Eaton Vance
Distributors, Inc.

   In addition, our Privacy Policy only applies to those Eaton Vance customers
who are individuals and who have a direct relationship with us. If a customer's
account (i.e., fund shares) is held in the name of a third-party financial
adviser/broker-dealer, it is likely that only such adviser's privacy policies
apply to the customer. This notice supersedes all previously issued privacy
disclosures.

   For more information about Eaton Vance's Privacy Policy, please call 1-800-
262-1122.

                                       55
<PAGE>


                               (EATON VANCE LOGO)


                             Eaton Vance Tax-Managed
                         Diversified Equity Income Fund


                      -----------------------------------

                                   PRELIMINARY
                                   PROSPECTUS

                                 November , 2006
                      -----------------------------------

                                      [  ]



                                       56

<PAGE>

                                          SUBJECT TO COMPLETION October 31, 2006

STATEMENT OF ADDITIONAL INFORMATION
[          ], 2006

EATON VANCE TAX-MANAGED GLOBAL DIVERSIFIED EQUITY INCOME FUND

THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MASSACHUSETTS 02109
(800) 225-6265

TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
Additional investment information and restrictions..........................
Trustees and officers.......................................................
Investment advisory and other services......................................
Determination of net asset value............................................
Portfolio trading...........................................................
Taxes.......................................................................
Other information...........................................................
Independent registered public accounting firm...............................
Financial statements........................................................
Notes to financial statements...............................................
Appendix A: Proxy voting policies and procedures............................ A-

THIS  STATEMENT OF  ADDITIONAL  INFORMATION  ("SAI") IS NOT A PROSPECTUS  AND IS
AUTHORIZED  FOR  DISTRIBUTION  TO  PROSPECTIVE  INVESTORS  ONLY IF  PRECEDED  OR
ACCOMPANIED  BY THE  PROSPECTUS OF EATON VANCE  TAX-MANAGED  GLOBAL  DIVERSIFIED
EQUITY  INCOME  FUND  (THE  "FUND")  DATED  [ ],  2006  (THE  "PROSPECTUS"),  AS
SUPPLEMENTED FROM TIME TO TIME, WHICH IS INCORPORATED HEREIN BY REFERENCE.  THIS
SAI SHOULD BE READ IN CONJUNCTION WITH SUCH  PROSPECTUS,  A COPY OF WHICH MAY BE
OBTAINED WITHOUT CHARGE BY CONTACTING YOUR FINANCIAL INTERMEDIARY OR CALLING THE
FUND AT 1-800-225-6265.

THE INFORMATION IN THIS STATEMENT OF ADDITIONAL  INFORMATION IS NOT COMPLETE AND
MAY BE  CHANGED.  THESE  SECURITIES  MAY  NOT BE  SOLD  UNTIL  THE  REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE  COMMISSION IS EFFECTIVE.  THIS
STATEMENT OF ADDITIONAL INFORMATION,  WHICH IS NOT A PROSPECTUS, IS NOT AN OFFER
TO SELL THESE  SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>

Capitalized  terms used in this SAI and not otherwise  defined have the meanings
given them in the Fund's Prospectus.

ADDITIONAL INVESTMENT INFORMATION AND RESTRICTIONS

Primary investment strategies are described in the Prospectus.  The following is
a description of the various investment policies that may be engaged in, whether
as a primary or secondary  strategy,  and a summary of certain  attendant risks.
Eaton Vance and the Sub-Adviser may not buy any of the following  instruments or
use any of the following  techniques unless they believe that doing so will help
to achieve the Fund's investment objectives.

EQUITY INVESTMENTS. As described in the Prospectus, the Fund invests primarily
in common stocks.

PREFERRED  STOCKS.  The Fund may invest in preferred stocks of both domestic and
foreign issuers. Under normal market conditions,  the Fund expects, with respect
to that portion of its total assets invested in preferred stocks, to invest only
in preferred  stocks of investment  grade quality as determined by S&P, Fitch or
Moody's or, if unrated,  determined to be of comparable  quality by Eaton Vance.
The  foregoing  credit  quality  policies  apply only at the time a security  is
purchased, and the Fund is not required to dispose of a security in the event of
a downgrade of an  assessment of credit  quality or the  withdrawal of a rating.
Preferred  stocks involve credit risk,  which is the risk that a preferred stock
will  decline in price,  or fail to pay  dividends  when  expected,  because the
issuer  experiences  a decline in its  financial  status.  In addition to credit
risk,  investment in preferred stocks involves certain other risks as more fully
described in the Prospectus.

DERIVATIVE  INSTRUMENTS.  In addition to the intended  strategy of selling index
call  options,  the Fund  may  invest  up to 20% of its  total  assets  in other
derivative  instruments  (which are  instruments  that  derive  their value from
another instrument, security or index) acquired for hedging, risk management and
investment purposes (to gain exposure to securities, securities markets, markets
indices and/or currencies  consistent with the Fund's investment  objectives and
policies), provided that no more than 10% of the Fund's total assets (other than
writing call options on futures contracts on securities  indices as described in
the  prospectus)  may be invested in such  derivative  instruments  acquired for
non-hedging  purposes.  These  strategies  may be  executed  through  the use of
derivative  contracts in the United States or abroad.  In the course of pursuing
these investment strategies, the Fund may purchase and sell derivative contracts
based  on  exchange-listed  and  equity  and  fixed-income   indices  and  other
instruments;  purchase and sell futures contracts and options thereon; and enter
into various  transactions such as swaps, caps, floors or collars.  In addition,
derivatives  may include new  techniques,  instruments  or  strategies  that are
permitted as regulatory changes occur. Derivative instruments may be used by the
Fund  to  enhance  returns  or as a  substitute  for  the  purchase  or  sale of
securities.  Transactions  in derivative  instruments  involve a risk of loss or
depreciation due to unanticipated adverse changes in securities prices, interest
rates,  indices or the other  financial  instruments'  prices;  the inability to
close out a position; default by the counterparty; imperfect correlation between
a position and the desired hedge; tax constraints on closing out positions;  and
portfolio management constraints on securities subject to such transactions. The
loss on derivative  instruments (other than purchased options) may substantially
exceed an investment in these instruments.  In addition, the entire premium paid
for  purchased  options  may be lost before  they can be  profitably  exercised.
Transaction  costs are  incurred in opening and  closing  positions.  Derivative
instruments may sometimes  increase or leverage  exposure to a particular market
risk, thereby increasing price volatility.  Over-the-counter  ("OTC") derivative
instruments,  equity swaps and forward sales of stocks  involve an enhanced risk
that  the  issuer  or   counterparty   will  fail  to  perform  its  contractual
obligations.  Some  derivative  instruments  are not readily  marketable  or may
become illiquid under adverse market conditions.  In addition, during periods of
market  volatility,  a commodity  exchange  may  suspend or limit  trading in an
exchange-traded  derivative instrument,  which may make the contract temporarily
illiquid and difficult to price.  Commodity  exchanges may also establish  daily
limits on the amount that the price of a futures  contract or futures option can
vary from the previous day's settlement  price. Once the daily limit is reached,
no trades may be made that day at a price beyond the limit. This may prevent the
closing  out of  positions  to limit  losses.  The  staff of the SEC  takes  the
position  that  certain  purchased  OTC  options,  and assets  used as cover for
certain  written  OTC  options,  are  illiquid.  The  ability to  terminate  OTC
derivative  instruments may depend on the cooperation of the  counterparties  to
such contracts.  For thinly traded  derivative  instruments,  the only source of
price quotations may be the selling dealer or counterparty. In addition, certain
provisions  of the Internal  Revenue Code of 1986, as amended (the "Code") limit
the use of derivative  instruments.  The Fund has claimed an exclusion  from the
definition of a Commodity Pool Operator ("CPO") under the Commodity Exchange Act
and therefore is not subject to  registration  or regulation as a CPO. There can
be no assurance that the use of derivative instruments will be advantageous.

Foreign  exchange traded futures  contracts and options thereon may be used only
if the Adviser  determines that trading on such foreign exchange does not entail
risks,  including credit and liquidity risks,  that are materially  greater than
the risks associated with trading on CFTC-regulated exchanges.

                                       2
<PAGE>

SHORT SALES

The Fund may sell a  security  short if it owns at least an equal  amount of the
security sold short or another security convertible or exchangeable for an equal
amount of the security sold short  without  payment of further  compensation  (a
short sale against-the-box).

Purchasing securities to close out the short position can itself cause the price
of the securities to rise further,  thereby exacerbating the loss. Short-selling
exposes the Fund to unlimited risk with respect to that security due to the lack
of an upper limit on the price to which an  instrument  can rise.  Although  the
Fund  reserves  the  right to  utilize  short  sales,  the  Adviser  is under no
obligation to utilize short sales at all.

SECURITIES LENDING

As described  in the  Prospectus,  the Fund may lend a portion of its  portfolio
securities to broker-dealers  or other  institutional  borrowers.  Loans will be
made only to  organizations  whose credit  quality or claims  paying  ability is
considered by the Adviser to be at least investment  grade. All securities loans
will be  collateralized on a continuous basis by cash, cash equivalents (such as
money market  instruments) or other liquid  securities held by the custodian and
maintained  in an amount at least  equal to the market  value of the  securities
loaned.  The Fund may  receive  loan  fees in  connection  with  loans  that are
collateralized  by  securities  or on loans of  securities  for  which  there is
special  demand.  The Fund may also seek to earn income on  securities  loans by
reinvesting  cash  collateral  in  securities  consistent  with  its  investment
objectives  and  policies,  seeking to invest at rates that are higher  than the
"rebate"  rate that it normally  will pay to the  borrower  with respect to such
cash  collateral.  Any  such  reinvestment  will be  subject  to the  investment
policies,  restrictions and risk considerations  described in the Prospectus and
in this SAI.

Securities  loans  may  result  in delays  in  recovering,  or a failure  of the
borrower to return, the loaned securities.  The defaulting  borrower  ordinarily
would be  liable  to the Fund for any  losses  resulting  from  such  delays  or
failures, and the collateral provided in connection with the loan normally would
also be available for that purpose.  Securities loans normally may be terminated
by either the Fund or the borrower at any time. Upon  termination and the return
of the loaned securities,  the Fund would be required to return the related cash
or  securities  collateral  to the  borrower and it may be required to liquidate
longer  term  portfolio  securities  in order to do so. To the extent  that such
securities have decreased in value, this may result in the Fund realizing a loss
at a time when it would not  otherwise  do so. The Fund also may incur losses if
it is unable to reinvest cash collateral at rates higher than applicable  rebate
rates paid to  borrowers  and  related  administrative  costs.  These  risks are
substantially the same as those incurred through investment leverage and will be
subject  to  the  investment  policies,  restrictions  and  risk  considerations
described in the Prospectus and in this SAI.

The Fund will receive amounts equivalent to any interest or other  distributions
paid on securities  while they are on loan, and the Fund will not be entitled to
exercise voting or other beneficial rights on loaned  securities.  The Fund will
exercise its right to terminate  loans and thereby regain these rights  whenever
the Adviser  considers  it to be in the Fund's  interest  to do so,  taking into
account the related loss of reinvestment income and other factors.

TEMPORARY INVESTMENTS

The Fund may invest  temporarily in cash or cash  equivalents.  Cash equivalents
are  highly  liquid,  short-term  securities  such  as  commercial  paper,  time
deposits,   certificates  of  deposit,  short-term  notes  and  short-term  U.S.
government obligations.

INVESTMENT RESTRICTIONS

The following investment  restrictions of the Fund are designated as fundamental
policies and as such cannot be changed  without the approval of the holders of a
majority of the Fund's outstanding voting securities,  which as used in this 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 outstanding shares are
present or represented at the meeting or (b) more than 50% of outstanding shares
of the Fund. As a matter of fundamental policy, the Fund may not:

(1) Borrow money,  except as permitted by the Investment Company Act of 1940, as
    amended  (the  "1940  Act").  The  1940  Act  currently  requires  that  any
    indebtedness  incurred  by a  closed-end  investment  company  have an asset
    coverage of at least 300%;

(2) Issue  senior  securities,  as  defined  in the  1940  Act,  other  than (i)
    preferred shares which  immediately  after issuance will have asset coverage

                                       3
<PAGE>

    of at least 200%, (ii)  indebtedness  which  immediately after issuance will
    have asset coverage of at least 300%, or (iii) the  borrowings  permitted by
    investment  restriction  (1) above.  The 1940 Act currently  defines "senior
    security" as any bond,  debenture,  note or similar obligation or instrument
    constituting a security and evidencing indebtedness and any stock of a class
    having priority over any other class as to distribution of assets or payment
    of dividends.  Debt and equity securities issued by a closed-end  investment
    company  meeting the foregoing  asset coverage  provisions are excluded from
    the general 1940 Act prohibition on the issuance of 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  purchase  of  investment  assets  with the  proceeds of a
    permitted  borrowing  or  securities  offering  will not be deemed to be the
    purchase of securities on margin;

(4) Underwrite  securities  issued by other  persons,  except  insofar as it may
    technically be deemed to be an underwriter under the Securities Act of 1933,
    as amended, in selling or disposing of a portfolio investment;

(5) Make loans to other persons,  except by (a) the  acquisition of loans,  loan
    interests,  debt  securities  and  other  obligations  in which  the Fund is
    authorized  to invest  in  accordance  with its  investment  objectives  and
    policies,  (b)  entering  into  repurchase  agreements  and (c)  lending its
    portfolio securities;

(6) Purchase or sell real estate,  although it may purchase and sell  securities
    which are  secured by  interests  in real estate and  securities  of issuers
    which invest or deal in real estate. The Fund reserves the freedom of action
    to hold and to sell real  estate  acquired as a result of the  ownership  of
    securities;

(7) Purchase or sell physical  commodities or contracts for the purchase or sale
    of  physical  commodities.  Physical  commodities  do  not  include  futures
    contracts with respect to securities,  securities indices, currency or other
    financial instruments;

(8) With  respect to 75% of its total  assets,  invest more than 5% of its total
    assets in the securities of a single issuer or purchase more than 10% of the
    outstanding voting securities of a single issuer,  except obligations issued
    or guaranteed by the U.S. government,  its agencies or instrumentalities and
    except securities of other investment companies; and

(9) Invest 25% or more of its total  assets in any single  industry  (other than
    securities  issued or guaranteed  by the U.S.  government or its agencies or
    instrumentalities).

In regard to 5(c), the value of the securities loaned by the Fund may not exceed
33 1/3% of its total assets.

The Fund may borrow money as a temporary  measure for extraordinary or emergency
purposes,  including the payment of dividends  and the  settlement of securities
transactions  which  otherwise  might  require  untimely  dispositions  of  Fund
securities.  The 1940 Act  currently  requires  that the Fund  have  300%  asset
coverage with respect to all borrowings other than temporary borrowings.

For purposes of construing  restriction (9), securities of the U.S.  Government,
its agencies,  or instrumentalities  are not considered to represent industries.
Municipal obligations backed by the credit of a governmental entity are also not
considered to represent industries.

The Fund has adopted the following nonfundamental investment policy which may be
changed by the Board without approval of the Fund's shareholders. As a matter of
nonfundamental  policy,  the Fund  may not make  short  sales of  securities  or
maintain a short position, unless at all times when a short position is open the
Fund  either  owns an  equal  amount  of  such  securities  or  owns  securities
convertible into or exchangeable,  without payment of any further consideration,
for securities of the same issue as, and equal in amount to, the securities sold
short.

Upon the Board's approval, the Fund may invest more than 10% of its total assets
in one  or  more  other  management  investment  companies  (or  may  invest  in
affiliated  investment  companies)  to the extent  permitted by the 1940 Act and
rules thereunder.

Whenever  an  investment  policy  or  investment  restriction  set  forth in the
Prospectus  or this SAI  states  a  maximum  percentage  of  assets  that may be
invested in any security or other asset or describes a policy regarding  quality
standards,   such   percentage   limitation  or  standard  shall  be  determined
immediately after and as a result of the Fund's  acquisition of such security or
asset.  Accordingly,  any later increase or decrease  resulting from a change in
values,  assets or other circumstances or any subsequent rating change made by a
rating  service (or as determined by the Adviser if the security is not rated by
a rating  agency) will not compel the Fund to dispose of such  security or other

                                       4
<PAGE>

asset. Notwithstanding the foregoing, the Fund must always be in compliance with
the borrowing policies set forth above.

Trustees and officers

The  Trustees  of the  Fund  are  responsible  for the  overall  management  and
supervision  of the affairs of the Fund.  The  Trustees and officers of the Fund
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. The "noninterested
Trustees"  consist of those  Trustees  who are not  "interested  persons" of the
Fund, as that term is defined  under the 1940 Act. The business  address of each
Trustee and  officer is The Eaton  Vance  Building,  255 State  Street,  Boston,
Massachusetts  02109.  As used in this SAI,  "EVC"  refers to Eaton Vance Corp.,
"EV"  refers  to Eaton  Vance,  Inc.,  "BMR"  refers to  Boston  Management  and
Research,  and "EVD" refers to Eaton Vance  Distributors Inc. EVC and EV are the
corporate parent and trustee,  respectively, of Eaton Vance and BMR. Eaton Vance
has engaged  Rampart  Investment  Management  Company,  Inc.  ("Rampart"  or the
"Sub-Adviser")  to serve as  sub-adviser  to the Fund to  provide  advice on and
execution  of the  construction  of the  Fund's  equity  portfolio  and  options
strategy,  pursuant to an investment  sub-advisory  agreement (the "Sub-Advisory
Agreement")  between the Adviser and  Rampart.  Each  officer of Eaton Vance may
hold a position with other Eaton Vance  affiliates  that is comparable to his or
her position with Eaton Vance listed below.

[INDEPENDENT  TRUSTEE  INFORMATION  IN  REQUIRED  TABULAR  FORMAT TO BE ADDED BY
AMENDMENT UPON ELECTION OF FULL BOARD OF TRUSTEES]

<TABLE>
<CAPTION>
                                                                                     NUMBER OF
                                                                                    PORTFOLIOS
                                                                                        IN
                                          TERM OF OFFICE                               FUND              OTHER
    NAME AND               POSITION(S)    AND LENGTH      PRINCIPAL OCCUPATION(S)     COMPLEX        DIRECTORSHIPS
  DATE OF BIRTH           WITH THE FUND    OF SERVICE     DURING PAST FIVE YEARS    OVERSEEN BY          HELD
                                                                                     TRUSTEE(1)
---------------------------------------------------------------------------------------------------------------
<S>                       <C>                <C>          <C>                           <C>              <C>
TRUSTEES

Thomas  E.  Faust Jr.     Trustee            Since        President of Eaton            166              None
5/31/58                   and Vice           10/30/06     Vance, BMR, EVC and
                          President                       EV, and Director of
                                                          EVC; Chief Investment
                                                          Officer of Eaton
                                                          Vance, BMR and EVC.
                                                          Officer of 68
                                                          registered investment
                                                          companies and 5
                                                          private investment
                                                          companies managed by
                                                          Eaton Vance or BMR.

Alan R. Dynner            Trustee            Since        Vice President,               166              None
11/9/41                   and                10/30/06     Secretary and Chief
                          Secretary                       Legal Counsel of BMR,
                                                          Eaton Vance, EVD, EV
                                                          and EVC. Officer of
                                                          166 registered
                                                          investment companies
                                                          managed by Eaton
                                                          Vance or BMR.
</TABLE>

----------
(1)   INCLUDES BOTH MASTER AND FEEDER FUNDS IN MASTER-FEEDER STRUCTURE.
(2)   CLASS I TRUSTEES WHOSE TERM EXPIRES IN [2007].
(3)   CLASS II TRUSTEES WHOSE TERM EXPIRES IN [2008].
(4)   CLASS III TRUSTEES WHOSE TERM EXPIRES IN [2009].

                                       5
<PAGE>

PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES
<TABLE>
<CAPTION>



                                             TERM OF OFFICE
    NAME AND               POSITION(S)       AND LENGTH
  DATE OF BIRTH           WITH THE FUND       OF SERVICE                PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>              <C>                 <C>
Duncan W. Richardson        President and    Since 10/30/06      Executive Vice President and Chief
10/26/57                    Chief Executive                      Equity Investment Officer of EVC, Eaton
                            Officer                              Vance and BMR. Officer of 54 registered
                                                                 investment companies managed by Eaton
                                                                 Vance or BMR.

James B. Hawkes             Vice President   Since 10/30/06      Chairman, and Chief Executive Officer of
11/9/41                                                          BMR, Eaton Vance, EVC and EV; Director
                                                                 of EV; Vice President and Director of
                                                                 EVD. Trustee and/or officer of 166
                                                                 registered investment companies in the
                                                                 Eaton Vance Fund Complex.

Michael A. Allison          Vice President   Since 10/30/06      Vice President of Eaton Vance and BMF.
10/26/64                                                         Officer of 1 registered investment
                                                                 company managed by Eaton Vance or BMR.

Walter A. Row               Vice President   Since 10/30/06      Director of Equity Research and a Vice
7/20/57                                                          President of Eaton Vance and BMR.
                                                                 Officer of 31 registered investment
                                                                 companies managed by Eaton Vance or BMR.

Barbara E. Campbell         Treasurer and    Since 10/30/06      Vice President of BMR and Eaton Vance.
6/19/57                     Principal                            Officer of 166 registered investment
                            Financial and                        companies managed by Eaton Vance or BMR.
                            Accounting
                            Officer

Paul M. O'Neil              Chief            Since 10/30/06      Vice President of Eaton Vance and BMR.
7/11/53                     Compliance                           Officer of 166 registered investment
                            Officer                              companies managed by Eaton Vance or BMR.
</TABLE>

[The Board of Trustees of the Fund has several  standing  Committees,  including
the Governance Committee, the Audit Committee,  and the Special Committee.  Each
such Committee is comprised of only noninterested Trustees.]

[Messrs.  [ ], [ ], [ ], [ ] and [ ] are members of the Governance  Committee of
the Board of Trustees of the Fund. [ ] currently  serves as  chairperson  of the
Governance  Committee.  The purpose of the Governance  Committee is to consider,
evaluate and make  recommendations  to the Board of Trustees with respect to the
structure,  membership and operation of the Board of Trustees and the Committees
thereof,  including the nomination and selection of noninterested Trustees and a
Chairperson of the Board of Trustees and compensation of such persons.]

[The  Governance  Committee  will,  when a  vacancy  exists  or is  anticipated,
consider any nominee for noninterested  Trustee  recommended by a shareholder if
such  recommendation  is  submitted  in  writing  to the  Governance  Committee,
contains sufficient  background  information  concerning the candidate including
evidence  the  candidate  is  willing  to serve as a  noninterested  Trustee  if
selected for the position and is received in a sufficiently timely manner.]

[Messrs.  [ ]  (Chairman),  [ ],  [ ],  [ ] and [ ] are  members  of  the  Audit
Committee  of the Board of  Trustees  of the Fund.  The  Board of  Trustees  has
designated  Messrs.  [ ], [ ] and [ ], each a  noninterested  Trustee,  as audit
committee financial experts.  The Audit Committee's  purposes are to (i) oversee
the Fund's accounting and financial  reporting  processes,  its internal control
over  financial  reporting,  and, as  appropriate,  the  internal  control  over
financial   reporting  of  certain  service  providers;   (ii)  oversee  or,  as
appropriate,  assist Board  oversight of the quality and integrity of the Fund's
financial  statements and the independent audit thereof;  (iii) oversee,  or, as
appropriate,  assist Board  oversight of, the Fund's  compliance  with legal and
regulatory  requirements  that  relate to the Fund's  accounting  and  financial
reporting,  internal  control over financial  reporting and independent  audits;
(iv)  approve  prior  to  appointment  the  engagement  and,  when  appropriate,
replacement  of the  independent  registered  public  accounting  firm,  and, if
applicable,  nominate the independent  registered  public  accounting firm to be
proposed for  shareholder  ratification  in any proxy statement of the Fund; (v)
evaluate the  qualifications,  independence  and  performance of the independent
registered public accounting firm and the audit partner in charge of leading the
audit; and (vi) prepare,  as necessary,  audit committee reports consistent with
the  requirements  of Rule 306 of  Regulation  S-K for  inclusion  in the  proxy
statement of the Fund.]

                                       6
<PAGE>

[Messrs. [ ] (Chairman), [ ], [ ], [ ], [ ] and [ ] are currently members of the
Special  Committee  of the Board of  Trustees of the Fund.  The  purposes of the
Special  Committee  are to consider,  evaluate and make  recommendations  to the
Board of Trustees concerning the following matters: (i) contractual arrangements
with each  service  provider  to the  Fund,  including  advisory,  sub-advisory,
transfer  agency,  custodial  and fund  accounting,  distribution  services  and
administrative services; (ii) any and all other matters in which any of the Fund
service  providers  (including Eaton Vance or any affiliated entity thereof) has
an actual or potential  conflict of interest  with the interests of the Fund, or
investors  therein;  and (iii) any other  matter  appropriate  for review by the
non-interested Trustees, unless the matter is within the responsibilities of the
Audit Committee or the Governance Committee of the Fund.]

[As of the date of this SAI,  the  Governance  Committee  has met [ ], the Audit
Committee has met [ ] and the Special Committee has met [ ].]

[When  considering  approval of the Advisory  Agreement between the Fund and the
Adviser,  and the Sub-Advisory  Agreement  between the Adviser and Rampart,  the
Special Committee considered, among other things, the following:

>>   A  report  comparing  the  fees  and  expenses  of  the  Fund  and  certain
     profitability analyses prepared by Eaton Vance and Rampart;

>>    Information on the relevant peer group(s) of funds;

>>    The economic  outlook and the general  investment  outlook in the relevant
      investment markets;

>>    Eaton  Vance's and  Rampart's  results  and  financial  condition  and the
      overall organization of the Adviser and the Sub-Adviser;

>>    Arrangements regarding the distribution of Fund shares;

>>    The procedures used to determine the fair value of the Fund's assets;

>>    The  allocation of brokerage and the benefits  received by the Adviser and
      the  Sub-Adviser  as  the  result  of  brokerage   allocation,   including
      allocations  to soft dollar  brokerage and  allocations to firms that sell
      Eaton Vance fund shares;

>>    Eaton  Vance's   management  of  the  relationship   with  the  custodian,
      subcustodians and fund accountants;

>>    The resources devoted to Eaton Vance's  compliance  efforts  undertaken on
      behalf of the funds it  manages  and the  record  of  compliance  with the
      investment  policies  and  restrictions  and  with  policies  on  personal
      securities transactions;

>>    Rampart's compliance efforts with respect to the accounts it manages;

>>    The quality,  nature,  cost and character of the  administrative and other
      non-investment  management  services  provided  by  Eaton  Vance  and  its
      affiliates and by Rampart;

>>    The terms of the Advisory  Agreement and the Sub-Advisory  Agreement,  and
      the reasonableness  and  appropriateness of the particular fee paid by the
      Fund for the services described therein;

>>    Operating  expenses  (including  transfer  agency  expenses) to be paid to
      third parties; and

>>    Information   to  be  provided   to   investors,   including   the  Fund's
      shareholders.]

[In  evaluating  the Advisory  Agreement  between the Fund and Eaton Vance,  the
Sub-Advisory  Agreement  between the Adviser and Rampart,  the Special Committee
reviewed  material  furnished  by Eaton Vance and  Rampart at the initial  Board
meeting held on [ ], 2005,  including the above  referenced  considerations  and
information  relating  to the  education,  experience  and number of  investment
professionals  and other personnel who would provide services under the Advisory
Agreement and under the Sub-Advisory Agreement.  The Special Committee also took
into account the time and  attention to be devoted by senior  management  to the
Fund and the other funds in the complex.  The Special  Committee  evaluated  the
level  of skill  required  to  manage  the Fund  and  concluded  that the  human
resources  available at Eaton Vance were appropriate to fulfill  effectively the
duties  of the  Adviser  on  behalf  of the Fund.  The  Special  Committee  also
considered the business  reputation of the Adviser,  its financial resources and
professional  liability  insurance coverage and concluded that Eaton Vance would
be able to meet  any  reasonably  foreseeable  obligations  under  the  Advisory
Agreement.  The Special  Committee also  considered  the business  reputation of
Rampart,  Rampart's respective  investment strategies and its past experience in
implementing these strategies.]

                                       7
<PAGE>

[The Special Committee received information concerning the investment philosophy
and investment  process to be applied by Eaton Vance and Rampart in managing the
Fund. In this regard,  the Special  Committee  considered Eaton Vance's in-house
research  capabilities  as well as other  resources  available  to  Eaton  Vance
personnel, including research services that may be available to Eaton Vance as a
result of  securities  transactions  effected for the Fund and other  investment
advisory  clients.  The  Special  Committee  concluded  that Eaton  Vance's  and
Rampart's  investment  process,  research  capabilities and philosophy were well
suited to the Fund, given the Fund's investment objective and policies.]

[In addition to the factors mentioned above, the Special Committee also reviewed
the level of the  Adviser's  profits in respect of the  management  of the Eaton
Vance funds,  including the Fund.  The Special  Committee  considered  the other
profits  realized  by Eaton  Vance and its  affiliates  in  connection  with the
operation of the Fund. The Special  Committee also considered  profit margins of
Eaton Vance in comparison with available industry data. In addition, the Special
Committee  considered  the  fiduciary  duty assumed by the Adviser in connection
with  the  service  rendered  to the  Fund and the  business  reputation  of the
Adviser,  its  financial  resources  and its  professional  liability  insurance
coverage.  In evaluating the fees to be paid to Rampart,  the Special  Committee
considered and discussed fees paid to other  investment  sub-advisers in similar
circumstances, as well as fees charged by Rampart to its other clients.]

[The Special  Committee  did not consider any single  factor as  controlling  in
determining   whether  or  not  to  approve  the  Advisory   Agreement  and  the
Sub-Advisory  Agreement.  Nor are the items described herein all encompassing of
the matters  considered by the Special  Committee.  In assessing the information
provided by Eaton Vance,  Rampart and their  affiliates,  the Special  Committee
also took into consideration the benefits to shareholders of investing in a fund
that is part of a large  family  of funds  which  provides  a large  variety  of
shareholder services.]

[Based on its  consideration of all factors that it deemed material and assisted
by the advice of its independent  counsel,  the Special Committee concluded that
the approval of the Advisory Agreement and the Sub-Advisory Agreement, including
the fee structure  (described  herein) is in the interests of shareholders.  The
Special   Committee  also  considered  that  the  Adviser  would  enter  into  a
Structuring  Fee/Shareholder  Servicing  Agreement with [ ], whereby the Adviser
(and not the Fund) would pay [ ] to provide upon request certain market data and
reports to support shareholder services pursuant to the agreement.]

SHARE OWNERSHIP

The  following  table shows the dollar range of equity  securities  beneficially
owned by each  Trustee in the Fund and all Eaton  Vance  Funds  overseen  by the
Trustee as of December  31,  2005.  None of the  Trustees own shares of the Fund
since the Fund has not commenced operations.

<TABLE>
<CAPTION>

                                                                AGGREGATE DOLLAR RANGE OF
                                        DOLLAR RANGE OF                   EQUITY
                                       EQUITY SECURITIES         SECURITIES OWNED IN ALL
NAME OF TRUSTEE                        OWNED IN THE FUND                REGISTERED
                                                               FUNDS OVERSEEN BY TRUSTEE IN
                                                                           THE
                                                                 EATON VANCE FUND COMPLEX
---------------------------------------------------------------------------------------------
<S>     <C>
INTERESTED TRUSTEE

 NON-INTERESTED TRUSTEES
</TABLE>

----------

[As of December 31, 2005, no  non-interested  Trustee or any of their  immediate
family members owned  beneficially  or of record any class of securities of EVC,
EVD,  Rampart or any person  controlling,  controlled by or under common control
with EVC, EVD or Rampart.]

[During the calendar  years ended  December  31, 2004 and December 31, 2005,  no
non-interested Trustee (or their immediate family members) had:

1. Any direct or indirect  interest in Eaton  Vance,  EVC,  EVD,  Rampart or any
   person  controlling,  controlled by or under common  control with EVC, EVD or
   Rampart;

2. Any direct or  indirect  material  interest in any  transaction  or series of
   similar  transactions  with (i) the Fund; (ii) another fund managed by EVC or

                                       8
<PAGE>

   Rampart,  distributed by EVD or a person controlling,  controlled by or under
   common  control with EVC, EVD or Rampart;  (iii) EVC, EVD or Rampart;  (iv) a
   person  controlling,  controlled by or under common  control with EVC, EVD or
   Rampart; or (v) an officer of any of the above; or

3. Any direct or indirect  relationship  with (i) the Fund;  (ii)  another  fund
   managed  by EVC or  Rampart,  distributed  by  EVD or a  person  controlling,
   controlled  by or under common  control with EVC, EVD or Rampart;  (iii) EVC,
   EVD or Rampart;  (iv) a person  controlling,  controlled  by or under  common
   control with EVC, EVD or Rampart; or (v) an officer of any of the above.]

[During the  calendar  years ended  December  31, 2004 and  December 31, 2005 no
officer of EVC, EVD, Rampart or any person  controlling,  controlled by or under
common  control with EVC,  EVD or Rampart  served on the Board of Directors of a
company  where a  noninterested  Trustee  of the Fund or any of their  immediate
family members served as an officer.]

Trustees of the Fund who are not affiliated  with the Adviser may elect to defer
receipt of all or a percentage of their annual fees in accordance with the terms
of a Trustees  Deferred  Compensation  Plan (the  "Trustees'  Plan").  Under the
Trustees' Plan, an eligible Trustee may elect to have his deferred fees invested
by the 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  does not have a
retirement plan for its Trustees.

The fees and  expenses  of the  Trustees  of the Fund are paid by the  Fund.  (A
Trustee of the Fund who is a member of the Eaton Vance organization  receives no
compensation  from the Fund.) For the Fund's  fiscal  year ending  December  31,
2006,  it is  anticipated  that the Trustees of the Fund will earn the following
compensation  in their  capacities as Trustees.  For the year ended December 31,
2005, the Trustees earned the  compensation  set forth below in their capacities
as Trustees from the funds in the Eaton Vance Fund Complex(1).

SOURCE OF
COMPENSATION
-------------------------------------
-------------------------------------
Fund*..............................................
Fund Complex**    .................................

----------
 *  ESTIMATED
**  [      ]  and  [      ]  were  elected  on  [      ],  2005 and they did not
    receive fees for the period.

(1) AS OF  [       ],  2006,  THE EATON  VANCE  FUND  COMPLEX  CONSISTED  OF [ ]
    REGISTERED INVESTMENT COMPANIES OR SERIES THEREOF.

(2) INCLUDES $[      ] OF DEFERRED COMPENSATION.

(3) INCLUDES $[      ] OF DEFERRED COMPENSATION.

PROXY VOTING  POLICY.  The Fund is subject to the Eaton Vance Funds Proxy Voting
Policy and  Procedures,  pursuant to which the  Trustees  have  delegated  proxy
voting  responsibility  to the Adviser and adopted the  Adviser's  proxy  voting
policies and  procedures  (the  "Policies")  which are attached as Appendix A to
this SAI. The Trustees will review the Fund's proxy voting  records from time to
time and will annually consider approving the Policies for the upcoming year. In
the event that a conflict of interest arises between the Fund's shareholders and
the Adviser or any of its  affiliates or any affiliate of the Fund,  the Adviser
will generally  refrain from voting the proxies related to the companies  giving
rise to such conflict  until it consults  with the Board of the Fund,  except as
contemplated  under the Fund Policy. The Board's Special Committee will instruct
the Adviser on the  appropriate  course of action.  The Fund's and the Adviser's
Proxy Voting Policies and Procedures are attached as Appendix A to this SAI.

Information  on how the Fund voted  proxies  relating  to  portfolio  securities
during the 12 month  period  ended June 30, 2005 will be  available  (1) without
charge, upon request, by calling  1-800-262-1122,  and (2) on the Securities and
Exchange Commission's website at http://www.sec.gov.

INVESTMENT ADVISORY AND OTHER SERVICES

THE  INVESTMENT  ADVISER.  Eaton  Vance,  its  affiliates  and  its  predecessor
companies have been managing assets of individuals and  institutions  since 1924

                                       9
<PAGE>

and of  investment  companies  since  1931.  They  maintain  a  large  staff  of
experienced  fixed-income,  senior loan and equity  investment  professionals to
service the needs of their clients.  The fixed-income group 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
senior loan group  focuses on senior  floating rate loans,  unsecured  loans and
other  floating  rate  debt  securities  such as notes,  bonds and asset  backed
securities.  The equity group covers  stocks  ranging from blue chip to emerging
growth  companies.  Eaton Vance and its affiliates act as adviser to a family of
mutual funds,  and  individual  and various  institutional  accounts,  including
corporations, hospitals, retirement plans, universities, foundations and trusts.

The Fund will be  responsible  for all of its costs and expenses  not  expressly
stated  to  be  payable  by  Eaton  Vance  under  the   Advisory   Agreement  or
Administration  Agreement.  Such  costs  and  expenses  to be  borne by the Fund
include,  without  limitation:  custody and transfer  agency fees and  expenses,
including those incurred for determining net asset value and keeping  accounting
books and records; expenses of pricing and valuation services; the cost of share
certificates;  membership dues in investment company organizations;  expenses of
acquiring,  holding and disposing of securities and other investments;  fees and
expenses of registering  under the securities  laws; stock exchange listing fees
and  governmental  fees;  rating  agency fees and  preferred  share  remarketing
expenses;  expenses  of  reports to  shareholders,  proxy  statements  and other
expenses of shareholders'  meetings;  insurance  premiums;  printing and mailing
expenses;  interest,  taxes and corporate fees;  legal and accounting  expenses;
compensation and expenses of Trustees not affiliated with Eaton Vance;  expenses
of conducting repurchase offers for the purpose of repurchasing Fund shares; and
investment  advisory and  administration  fees. The Fund will also bear expenses
incurred in connection  with any litigation in which the Fund is a party and any
legal obligation to indemnify its officers and Trustees with respect thereto, to
the extent not covered by insurance.

The  Advisory  Agreement  with the  Adviser  continues  in effect for an initial
period of two years  until , 200 , and from year to year  thereafter  so long as
such  continuance is approved at least annually (i) by the vote of a majority of
the noninterested  Trustees of the Fund or of the Adviser,  such vote being 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  shares of the Fund.  The  Fund's  Administration  Agreement
continues in effect from year to year so long as such continuance is approved at
least annually by the vote of a majority of the Fund's Trustees.  Each agreement
may be terminated at any time without penalty on sixty (60) days' written notice
by the Trustees of the Fund or Eaton  Vance,  as  applicable,  or by vote of the
majority of the  outstanding  shares of the Fund.  Each agreement will terminate
automatically in the event of its assignment.  Each agreement  provides that, in
the absence of willful  misfeasance,  bad faith,  gross  negligence  or reckless
disregard of its  obligations or duties to the Fund under such agreements on the
part of Eaton  Vance,  Eaton  Vance shall not be liable to the Fund for any loss
incurred, to the extent not covered by insurance.

The  Advisory  Agreement  provides  that  Eaton  Vance  may  engage  one or more
investment  sub-advisers to assist with some or all aspects of the management of
the Fund's investments  subject to such approvals as are required under the 1940
Act.  Pursuant  to these  provisions,  Eaton  Vance has  engaged  Rampart,  as a
sub-adviser  to provide  assistance  with the  development,  implementation  and
execution of the Fund's options strategy.  The Advisory  Agreement provides that
Eaton Vance may terminate any sub-advisory  agreement  entered into and directly
assume any functions performed by the sub-adviser, upon approval of the Board of
Trustees, without the need for approval of the shareholders of the Fund.

Pursuant to an investment  advisory  agreement between the Adviser and the Fund,
the Fund has  agreed to pay an  investment  advisory  fee,  payable on a monthly
basis,  at an annual rate of % of the average  daily gross mean total  assets of
the Fund,  including  any form of  investment  leverage that the Fund may in the
future determine to utilize, minus all expenses incurred in the normal course of
operations, but not excluding any liabilities or obligations attributable to any
future  investment  leverage  obtained  through  (i)  indebtedness  of any  type
(including without  limitation,  borrowing through a credit  facility/commercial
paper  program  or the  issuance  of debt  securities),  (ii)  the  issuance  of
preferred shares or other similar preference securities,  (iii) the reinvestment
of  collateral  received for  securities  loaned in  accordance  with the Fund's
investment objectives and policies and/or (iv) any other means.

Eaton Vance is a business trust organized under  Massachusetts law. EV serves as
trustee of Eaton Vance. Eaton Vance and EV are wholly-owned subsidiaries of EVC,
a Maryland  corporation  and  publicly-held  holding  company.  EVC  through its
subsidiaries  and  affiliates   engages  primarily  in  investment   management,
administration  and  marketing  activities.  The  Directors  of EVC are James B.
Hawkes, Thomas E. Faust Jr., Ann E. Berman, John G.L. Cabot, Leo I. Higdon, Jr.,
Vincent M.  O'Reilly,  Dorothy E. Puhy and Winthrop H. Smith,  Jr. All shares of
the outstanding  Voting Common Stock of EVC are deposited in a Voting Trust, the
Voting Trustees of which are Messrs. Hawkes, Faust, Jeffrey P. Beale, Cynthia J.
Clemson,  Alan R.  Dynner,  Michael  R.  Mach,  Robert B.  Macintosh,  Thomas M.
Metzold,  Scott H. Page, Duncan W. Richardson,  G. West  Saltonstall,  Judith A.
Saryan,  William M.  Steul,  Payson F.  Swaffield,  Michael W.  Weilheimer,  and
Wharton  P.  Whitaker  (all of whom are  officers  of Eaton  Vance).  The Voting
Trustees have  unrestricted  voting rights for the election of Directors of EVC.

                                       10
<PAGE>

All of the outstanding  voting trust receipts issued under said Voting Trust are
owned by certain of the  officers of BMR and Eaton Vance who are also  officers,
or officers  and  Directors of EVC and EV. As indicated  under  "Management  and
Organization,"  all of the  officers  of the Fund (as well as Mr.  Hawkes who is
also a Trustee) hold positions in the Eaton Vance organization.

EVC and its  affiliates  and their officers and employees from time to time have
transactions with various banks, including the custodian of the Fund, 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.

THE SUB-ADVISER.  Rampart acts as the Fund's investment sub-adviser and provides
advice and  assistance  in pursuing the Fund's  options  strategy  pursuant to a
sub-advisory  agreement  between  the Adviser  and  Rampart  (the  "Sub-Advisory
Agreement").  Rampart, a Massachusetts  corporation,  was founded in 1983 by its
current owners Ronald M. Egalka and David R. Fraley.  The  Sub-Adviser  provides
customized investment management services within a core competency in options to
a spectrum of institutional  clients.  Since its inception,  the Sub-Adviser has
continuously  expanded its computer  modeling and  analytical  capabilities  and
created tools to capitalize on opportunities  in the capital markets.  Rampart's
principal office is located at One International  Place, Boston, MA 02110. As of
September  30,  2006  Rampart had  approximately  $6.6  billion of assets  under
management.

Under the terms of its  Sub-Advisory  Agreement,  Rampart  provides  advice  and
assistance  with the  development,  implementation  and  execution of the Fund's
options  strategy,  all subject to the  supervision  and direction of the Fund's
Board of Trustees and the Adviser.  For services  rendered by Rampart  under the
Sub-Advisory  Agreement,  Eaton Vance pays Rampart a fee, payable monthly, in an
annual  amount  equal to [ ]% of the value of the  Fund's  average  daily  gross
assets that is subject to written call options.

The  Sub-Advisory  Agreement with Rampart  continues  until [ ], 200[ ] and from
year to year thereafter if approved annually (i) by the Fund's Board of Trustees
or by the holders of a majority of its outstanding voting securities and (ii) by
a majority of the Trustees who are not  "interested  persons" (as defined in the
1940 Act) of any party to the Sub-Advisory  Agreement, by vote cast in person at
a meeting  called for the purpose of voting on such approval.  The  Sub-Advisory
Agreement  terminates  automatically  on its  assignment  and may be  terminated
without  penalty on 60 days written  notice at the option of either the Adviser,
by the Fund's  Board of Trustees  or by a vote of a majority  (as defined in the
1940 Act) of the Fund's  outstanding  shares or by Rampart upon 3 months notice.
As discussed above,  Eaton Vance may terminate the  Sub-Advisory  Agreement with
Rampart and directly assume  responsibility for the services provided by Rampart
upon  approval  by the Board of Trustees  without  the need for  approval of the
shareholders of the Fund.

The Sub-Advisory  Agreement with Rampart provides that in the absence of willful
misfeasance,   bad  faith,  gross  negligence  or  reckless  disregard  for  its
obligations  and  duties  thereunder,  Rampart  is not  liable  for any error or
judgment or mistake of law or for any loss suffered by the Fund.

[PORTFOLIO  MANAGERS.  The portfolio  managers of the Fund are Walter A. Row and
Michael  A.  Allison  of Eaton  Vance and  Ronald M.  Egalka  of  Rampart.  Each
portfolio manager manages other investment  companies and/or investment accounts
in addition to the Fund. The following  tables show, as of [ ], 2006, the number
of accounts each portfolio  manager managed in each of the listed categories and
the total assets in the accounts  managed within each  category.  The table also
shows the number of accounts  with respect to which the advisory fee is based on
the performance of the account,  if any, and the total assets in those accounts.
[TO BE COMPLETED UPON AMENDMENT]

                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                                        NUMBER OF        TOTAL ASSETS
                                                                                        ACCOUNTS         OF ACCOUNTS
                                                         NUMBER                         PAYING A            PAYING A
                                                             OF       TOTAL ASSETS OF   PERFORMANCE      PERFORMANCE
                                                         ACCOUNT          ACCOUNTS*             FEE              FEE
--------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                                 <C>
WALTER A. ROW, III
Registered Investment Companies**.....................                  $                                   $
Other Pooled Investment Vehicles......................                  $                                   $
Other Accounts........................................                  $                                   $
MICHAEL A. ALLISON
Registered Investment Companies**.....................                  $                                   $
Other Pooled Investment Vehicles......................                  $                                   $
Other Accounts........................................                  $                                   $
RONALD M. EGALKA
Registered Investment Companies**.....................                  $                                   $
Other Pooled Investment Vehicles......................                  $                                   $
Other Accounts........................................                  $                                   $
</TABLE>

----------
*  IN MILLIONS OF DOLLARS.

** FOR  REGISTERED  INVESTMENT  COMPANIES,  ASSETS  REPRESENT  NET ASSETS OF ALL
   OPEN-END INVESTMENT  COMPANIES AND GROSS ASSETS OF ALL CLOSED-END  INVESTMENT
   COMPANIES.

[None of the portfolio managers  beneficially owned shares of the Fund as of the
date of this SAI.]

[It is possible  that  conflicts  of interest may arise in  connection  with the
portfolio managers' management of the Fund's investments on the one hand and the
investments of other  accounts for which the Fund manager is responsible  for on
the other.  For example,  a portfolio  manager may have conflicts of interest in
allocating  management time,  resources and investment  opportunities  among the
Fund and other  accounts  he  advises.  In addition  due to  differences  in the
investment strategies or restrictions between the Fund and the other accounts, a
portfolio  manager may take action with respect to another  account that differs
from the action taken with respect to the Fund. In some cases,  another  account
managed by a portfolio  manager may compensate  the investment  adviser based on
the performance of the securities held by that account.  The existence of such a
performance  based fee may  create  additional  conflicts  of  interest  for the
portfolio manager in the allocation of management time, resources and investment
opportunities.  Whenever conflicts of interest arise, the portfolio manager will
endeavor to exercise his discretion in a manner that he believes is equitable to
all interested persons.]

[EATON  VANCE'S  COMPENSATION  STRUCTURE  AND METHOD TO DETERMINE  COMPENSATION.
Compensation  of  the  Adviser's   portfolio   managers  and  other   investment
professionals  has three primary  components:  (1) a base salary,  (2) an annual
cash  bonus and (3) annual  stock-based  compensation  consisting  of options to
purchase  shares of EVC's  nonvoting  common stock and/or  restricted  shares of
EVC's  nonvoting  common stock.  The  Adviser's  investment  professionals  also
receive  certain  retirement,  insurance  and other  benefits  that are  broadly
available  to  all  the  Adviser's  employees.  Compensation  of  the  Adviser's
investment professionals is reviewed primarily on an annual basis. Cash bonuses,
stock-based  compensation  awards,  and adjustments in base salary are typically
paid or put into effect at or shortly after the October 31st fiscal  year-end of
EVC.]

[The Adviser compensates its portfolio managers based primarily on the scale and
complexity of their portfolio  responsibilities and the total return performance
of managed  funds and accounts  versus  appropriate  peer groups or  benchmarks.
Performance  is normally based on periods ending on the September 30th preceding
fiscal year-end.  Fund performance is evaluated  primarily versus peer groups of
funds as determined by Lipper Inc.  and/or  Morningstar,  Inc. In evaluating the
performance of a fund and its manager, emphasis is normally placed on three-year
performance,  with consideration of performance over longer and shorter periods.
For funds that are  tax-managed  or  otherwise  have an  objective  of after-tax
returns,  performance is measured net of taxes. For other funds,  performance is
evaluated  on a pre-tax  basis.  In addition  to rankings  within peer groups of
funds on the basis of absolute  performance,  consideration may also be given to
risk-adjusted  performance.  For funds with an investment  objective  other than
total return (such as current income),  consideration  will also be given to the
fund's success in achieving its objective. For managers responsible for multiple
funds and accounts,  investment  performance is evaluated on an aggregate basis,
based on averages or weighted  averages among managed funds and accounts.  Funds
and  accounts  that  have  performance-based  advisory  fees  are  not  accorded
disproportionate   weightings   in   measuring   aggregate   portfolio   manager
performance.]

                                       12
<PAGE>

[The compensation of portfolio managers with other job responsibilities (such as
heading an investment group or providing analytical support to other portfolios)
will  include  consideration  of the  scope  of  such  responsibilities  and the
managers' performance in meeting them.]

[The Adviser  seeks to compensate  portfolio  managers  commensurate  with their
responsibilities  and performance  and  competitive  with other firms within the
investment management industry.  The Adviser participates in investment-industry
compensation surveys and utilizes survey data as a factor in determining salary,
bonus and  stock-based  compensation  levels for  portfolio  managers  and other
investment  professionals.  Salaries,  bonuses and stock-based  compensation are
also  influenced  by the  operating  performance  of the  Adviser and its parent
company.  The overall annual cash bonus pool is based on a  substantially  fixed
percentage of pre-bonus  operating  income.  While the salaries of the Adviser's
portfolio  managers  are  comparatively  fixed,  cash  bonuses  and  stock-based
compensation may fluctuate  significantly from year to year, based on changes in
manager performance and other factors as described herein. For a high performing
portfolio  manager,  cash bonuses and stock-based  compensation  may represent a
substantial portion of total compensation.]

[RAMPART'S  COMPENSATION  STRUCTURE  AND METHOD TO DETERMINE  COMPENSATION.  The
identified Rampart portfolio manager is a founding shareholder. The compensation
of the  identified  portfolio  manager  has two primary  components:  (1) a base
salary,  and (2) an  annual  cash  bonus.  There  are also  certain  retirement,
insurance  and  other  benefits  that  are  broadly  available  to  all  Rampart
employees.   Compensation  of  Rampart  investment   professionals  is  reviewed
primarily on an annual basis.  Cash bonuses and  adjustments  in base salary are
typically  paid or put into  effect  at or  shortly  after  the  June 30  fiscal
year-end of Rampart.]

[METHOD  TO   DETERMINE   COMPENSATION.   Rampart   compensates   its   founding
shareholders/identified  portfolio  managers  based  primarily  on the scale and
complexity of their  responsibilities.  The performance of portfolio managers is
evaluated  primarily  based on success in  achieving  portfolio  objectives  for
managed funds and accounts.  Rampart seeks to compensate all portfolio  managers
commensurate with their  responsibilities and performance,  and competitive with
other firms within the investment management industry.  This is reflected in the
founding shareholders/identified portfolio managers' salaries.]

[Salaries  and  profit  participations  are  also  influenced  by the  operating
performance   of   Rampart.   While   the   salaries   of   Rampart's   founding
shareholders/identified  portfolio  managers  are  comparatively  fixed,  profit
participations  may fluctuate  substantially from year to year, based on changes
in financial performance.]

CODES OF ETHICS

The  Adviser,  Rampart  and the Fund  have  adopted  Codes of  Ethics  governing
personal  securities  transactions.  Under the Codes of Ethics,  Eaton Vance and
Rampart employees may purchase and sell securities (including securities held or
eligible  for  purchase  by the  Fund)  subject  to  certain  pre-clearance  and
reporting requirements and other procedures.

The Codes of Ethics can be reviewed  and copied at the  Securities  and Exchange
Commission's  public reference room in Washington,  DC (call  1-202-942-8090 for
information  on the  operation  of the  public  reference  room);  on the  EDGAR
Database on the SEC's  Internet site  (http://www.sec.gov);  or, upon payment of
copying fees, by writing, to the SEC's public reference section,  Washington, DC
20549-0102, or by electronic mail at publicinfo@sec.gov.

INVESTMENT ADVISORY SERVICES

Under the general supervision of the Fund's Board of Trustees,  Eaton Vance will
carry out the  investment  and  reinvestment  of the  assets  of the Fund,  will
furnish  continuously  an  investment  program  with  respect to the Fund,  will
determine  which  securities  should be purchased,  sold or exchanged,  and will
implement such  determinations  and will supervise the overall activities of the
Sub-Adviser.  Eaton Vance will furnish to the Fund investment advice and provide
related  office  facilities  and personnel for servicing the  investments of the
Fund.  Eaton Vance will compensate all Trustees and officers of the Fund who are
members of the Eaton Vance  organization and who render  investment  services to
the Fund, and will also  compensate all other Eaton Vance  personnel who provide
research and investment services to the Fund.

ADMINISTRATIVE SERVICES

Under the Administration Agreement,  Eaton Vance is responsible for managing the
business affairs of the Fund,  subject to the supervision of the Fund's Board of
Trustees. Eaton Vance will furnish to the Fund all office facilities,  equipment

                                       13
<PAGE>

and  personnel  for  administering  the  affairs of the Fund.  Eaton  Vance will
compensate  all  Trustees  and officers of the Fund who are members of the Eaton
Vance organization and who render executive and  administrative  services to the
Fund,  and will also  compensate  all other  Eaton Vance  personnel  who perform
management   and   administrative   services   for  the  Fund.   Eaton   Vance's
administrative  services  include  recordkeeping,   preparation  and  filing  of
documents required to comply with federal and state securities laws, supervising
the activities of the Fund's custodian and transfer agent,  providing assistance
in connection with the Trustees' and shareholders' meetings,  providing services
in connection with repurchase offers, if any, and other administrative  services
necessary to conduct the Fund's business.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of the Fund is determined no less  frequently than
daily, on each day that 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 IBT, 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.

The Trustees of the Fund have  established  the  following  procedures  for fair
valuation  of the Fund's  assets  under  normal  market  conditions.  Marketable
securities listed on foreign or United States securities exchanges generally are
valued at closing  sale prices or, if there were no sales,  at the mean  between
the closing bid and asked prices  therefor on the exchange where such securities
are principally traded (unless an active  over-the-counter market in an exchange
listed  security better reflects  current market value).  Marketable  securities
listed in the NASDAQ  National  Market System are valued at the NASDAQ  official
closing price.  Unlisted or listed  securities for which closing sale prices are
not available are valued at the mean between the latest bid and asked prices. An
exchange-traded  option is valued on the valuation  day as the "Primary  Market"
quote reported by the Option Pricing  Authority  ("OPRA").  OPRA gathers options
quotations  from the six major United States  Options  exchanges and reports the
last sale price  from any  exchange  on which the  option is listed.  If no such
sales are  reported,  such portion will be valued at the mean of the closing bid
and asked prices on the  valuation  day on the exchange on which the options are
primarily  traded.  When the Fund writes a call option it records the premium as
an asset and equivalent  liability and  thereafter  adjusts the liability to the
market value of the option determined in accordance with the preceding sentence.

The Adviser and the valuation committee may implement new pricing  methodologies
or expand  mark-to-market  valuation of debt securities  whose market prices are
not readily available in the future,  which may result in a change in the Fund's
net asset  value per share.  The  Fund's net asset  value per share will also be
affected by fair value  pricing  decisions and by changes in the market for such
debt securities.  In determining the fair value of a debt security,  the Adviser
will consider  relevant  factors,  data,  and  information,  including:  (i) the
characteristics  of  and  fundamental  analytical  data  relating  to  the  debt
security,  including the cost, size,  current  interest rate,  period until next
interest rate reset,  maturity and base lending rate of the debt  security,  the
terms and  conditions of the debt security and any related  agreements,  and the
position of the debt security in the borrower's debt structure; (ii) the nature,
adequacy and value of the collateral,  including the Fund's rights, remedies and
interests  with respect to the  collateral;  (iii) the  creditworthiness  of the
borrower,  based  on  an  evaluation  of  its  financial  condition,   financial
statements and information about the borrower's  business,  cash flows,  capital
structure and future prospects;  (iv) information relating to the market for the
debt security,  including price  quotations for and trading in the debt security
and interests in similar debt securities and the market environment and investor
attitudes  towards the debt security and  interests in similar debt  securities;
(v) the experience,  reputation,  stability and financial condition of the agent
and any  intermediate  participants  in the  debt  security;  and  (vi)  general
economic and market  conditions  affecting the fair value of the debt  security.
The fair value of each debt  security is reviewed and approved by the  Adviser's
valuation committee and the Fund's Trustees.

Debt securities for which the over-the-counter  market is the primary market are
normally valued on the basis of prices furnished by one or more pricing services
at the mean between the latest  available bid and asked prices.  OTC options are
valued at prices  obtained  from a broker  (typically  the  counterparty  to the
options) on the valuation day.  Financial  futures contracts listed on commodity
exchanges and  exchange-traded  options are valued at closing settlement prices.
Short-term  obligations  having  remaining  maturities  of less than 60 days are
valued  at  amortized  cost,  which  approximates  value,  unless  the  Trustees
determine  that under  particular  circumstances  such method does not result in
fair  value.  As  authorized  by  the  Trustees,  debt  securities  (other  than
short-term  obligations) may be valued on the basis of valuations furnished by a
pricing service which determines  valuations based upon market  transactions for
normal,  institutional-size  trading units of such  securities.  Securities  for
which there is no such quotation or valuation and all other assets are valued at
fair  value as  determined  in good faith by or at the  direction  of the Fund's
Trustees  considering  relevant  factors,  data and  information,  including the
market value of freely  tradable  securities  of the same class in the principal
market on which such securities are normally traded.

                                       14
<PAGE>

All other  securities are valued at fair value as determined in good faith by or
at the direction of the Trustees.

The daily  valuation of foreign equity  securities held by the Fund generally is
determined  as of the close of trading on the  principal  exchange on which such
securities  trade.  Events  occurring  after the  close of  trading  on  foreign
exchanges may result in  adjustments  to the valuation of foreign  securities to
more  accurately  reflect their fair value as of the close of regular trading on
the Exchange.  The Fund may rely on an independent pricing service in making any
such  adjustment.  Foreign  securities  held by the Fund  will be valued in U.S.
dollars; such values will be computed by the custodian based on foreign currency
exchange rate quotations supplied by an independent quotation service.

PORTFOLIO TRADING

Decisions concerning the execution of portfolio security transactions, including
the selection of the market and the executing firm, are made by Eaton Vance, the
Fund's Adviser or Rampart as the Sub-Adviser. As used below, "Adviser" refers to
Eaton Vance and Rampart, as applicable.  The Adviser is also responsible for the
execution  of  transactions  for all other  accounts  managed by it. The Adviser
places the portfolio security transactions of the Fund and of all other accounts
managed by it for execution  with many firms.  The Adviser uses its best efforts
to obtain  execution  of  portfolio  security  transactions  at prices which are
advantageous  to the  Fund  and at  reasonably  competitive  spreads  or (when a
disclosed  commission  is being  charged) at reasonably  competitive  commission
rates.  In seeking such  execution,  the Adviser  will use its best  judgment in
evaluating the terms of a transaction,  and will give  consideration  to various
relevant factors, including without limitation the full range and quality of the
executing  firm's  services,  the value of the brokerage  and research  services
provided,  the  responsiveness of the firm to the Adviser,  the size and type of
the  transaction,  the nature and character of the market for the security,  the
confidentiality,  speed and  certainty of effective  execution  required for the
transaction, the general execution and operational capabilities of the executing
firm, the  reputation,  reliability,  experience and financial  condition of the
firm,  the value and  quality of the  services  rendered by the firm in this and
other transactions, and the reasonableness of the spread or commission, if any.

Transactions  on stock  exchanges  and other  agency  transactions  involve  the
payment  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  such  broker-dealer.
Transactions  in foreign  securities  often  involve  the  payment of  brokerage
commissions,  which may be 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  usually  includes an
undisclosed  dealer markup or markdown.  In an  underwritten  offering the price
paid often  includes a disclosed  fixed  commission or discount  retained by the
underwriter or dealer.

Although spreads or commissions paid on portfolio security transactions will, in
the  judgment  of the  Adviser,  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  Adviser's  clients in part for  providing  brokerage and research
services to the Adviser.

As  authorized  in Section  28(e) of the  Securities  Exchange  Act of 1934,  as
amended,  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
the Adviser  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 that particular  transaction or on the
basis of overall  responsibilities which the Adviser and its affiliates have for
accounts  over which they  exercise  investment  discretion.  In making any such
determination,  the Adviser 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 of the investment  advisory industry and of the advisers
of investment  companies,  institutions and other investors to receive research,
analytical,  statistical  and quotation  services,  data,  information and other
services,  products and materials  which assist such advisers in the performance

                                       15
<PAGE>

of their investment  responsibilities  ("Research  Services") from broker-dealer
firms which execute portfolio  transactions for the clients of such advisers and
from  affiliates of executing  broker-dealers.  Advisers  also commonly  receive
Research  Services  from  research  providers  that are not  affiliated  with an
executing  broker-dealer,  but which  have  entered  into  payment  arrangements
involving an executing broker-dealer ("Third Party Research Services").  Under a
typical Third Party Research Services payment arrangement, the research provider
agrees to provide  services to an Adviser in exchange for specified  payments to
the research provider by a broker-dealer  that executes  portfolio  transactions
for clients of the Adviser.  The Adviser and the executing  broker-dealer  enter
into a related agreement specifying the amount of brokerage business the Adviser
will  direct  to the  executing  broker-dealer  to offset  payments  made by the
executing  broker-dealer  for Third  Party  Research  Services  received  by the
Adviser.  For  example,  the  Adviser  may  agree to direct  brokerage  business
generating  $45,000 in commissions on portfolio  transactions to a broker-dealer
firm as consideration for the executing broker-dealer making payments of $30,000
to a provider of Third Party Research Services.  The ratio of the commissions to
be paid to an executing  broker-dealer as consideration for Third Party Research
Services over the cost borne by the executing  broker-dealer  in connection with
providing such services to the Adviser is referred to herein as the "Third Party
Research Services Payment Ratio."

Consistent with the foregoing practices,  the Adviser receives Research Services
from  many  broker-dealer  firms  with  which  the  Adviser  places  the  Fund's
transactions  and from  third  parties  with  which  these  broker-dealers  have
arrangements.  The Fund and the Adviser may also receive Research  Services from
underwriters and dealers in fixed-price  offerings,  which Research Services are
reviewed  and  evaluated  by the  Adviser  in  connection  with  its  investment
responsibilities.

Research  Services  received by the Advisers may include such matters as general
economic,  political,  business  and market  information,  industry  and company
reviews,  evaluations of securities and portfolio  strategies and  transactions,
proxy voting data and analysis  services,  technical analysis of various aspects
of the  securities  market,  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,  databases and
services.  Any particular  Research Service obtained through a broker-dealer may
be used by the  Adviser 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 the  Adviser  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 the Adviser
receives such Research Services. The Adviser evaluates the nature and quality of
the various Research Services obtained through  broker-dealer firms and attempts
to allocate sufficient  portfolio security  transactions to such firms to ensure
the continued receipt of Research Services which the Adviser believes are useful
or of value to it in rendering investment advisory services to its clients.

In the event that the  Adviser  executes  Fund  securities  transactions  with a
broker-dealer  and the associated  commission is  consideration  for Third Party
Research  Services (as  described  above),  the Adviser has agreed to reduce the
advisory  fee payable by the Fund by an amount equal to the  commission  payment
associated with the transaction  divided by the applicable  Third Party Research
Services Payment Ratio.

Some  executing  broker-dealers  develop  and make  available  directly to their
brokerage  customers  proprietary  Research  Services   ("Proprietary   Research
Services").  As a general matter,  broker-dealers bundle the cost of Proprietary
Research Services with trade execution services rather than charging  separately
for each.  In such  circumstances,  the  independent  cost or other value of the
Proprietary Research Services cannot be determined. The advisory fee paid by the
Fund will not be reduced in connection with the receipt of Proprietary  Research
Services by the Adviser.

The investment companies sponsored by the Adviser or its affiliates may allocate
brokerage  commissions to acquire information relating to the performance,  fees
and expenses of such companies and other mutual funds, which information is used
by the Directors or Trustees of such  companies to fulfill their  responsibility
to oversee the quality of the services provided by various  entities,  including
the Adviser. Such companies may also pay cash for such information.

Securities  considered as investments  for the Fund may also be appropriate  for
other  investment  accounts  managed by the Adviser or its affiliates.  Whenever
decisions are made to buy or sell securities by the Fund and one or more of such
other   accounts   simultaneously,   the  Adviser  will  allocate  the  security
transactions  (including  "hot"  issues)  in a manner  which it  believes  to be
equitable under the circumstances. As a result of such allocations, there may be
instances where the Fund will not participate in a transaction that is allocated
among  other  accounts.  If an  aggregated  order  cannot be filled  completely,
allocations  will  generally  be made on a pro rata  basis.  An order may not be
allocated on a pro rata basis where, for example:  (i) consideration is given to
portfolio  managers who have been  instrumental  in developing or  negotiating a
particular   investment;   (ii)  consideration  is  given  to  an  account  with
specialized investment policies that coincide with the particulars of a specific
investment;  (iii) pro rata  allocation  would  result in  odd-lot or de minimis

                                       16
<PAGE>

amounts  being  allocated  to a  portfolio  or other  client;  or (iv) where the
Adviser  reasonably  determines  that  departure  from a pro rata  allocation is
advisable.  While  these  aggregation  and  allocation  policies  could  have  a
detrimental  effect on the price or amount of the  securities  available  to the
Fund from time to time,  it is the opinion of the  Trustees of the Fund that the
benefits  from the Adviser's  organization  outweigh any  disadvantage  that may
arise from exposure to simultaneous transactions.

TAXES

The following discussion of federal income tax matters is based on the advice of
Kirkpatrick  & Lockhart  Nicholson  Graham  LLP,  counsel to the Fund.  The Fund
intends  to  elect  to be  treated  and to  qualify  each  year  as a  regulated
investment company ("RIC") under the Code.

Qualification as a RIC requires,  among other things,  that the Fund: (i) derive
in each  taxable  year at least 90% of its gross  income  from:  (a)  dividends,
interest,  payments with respect to certain securities loans, and gains from the
sale or other disposition of stock,  securities or foreign currencies,  or other
income  (including  but not  limited to gain from  options,  futures and forward
contracts)  derived  with  respect to its  business of  investing in such stock,
securities or foreign  currencies;  and (b) net income derived from interests in
certain publicly traded partnerships that are treated as partnerships for United
States  federal income tax purposes and that derive less than 90% of their gross
income from the items described in (a) above (each a "Qualified  Publicly Traded
Partnership");  and (ii)  diversify  its  holdings  so that,  at the end of each
quarter of each taxable year:  (a) at least 50% of the value of the Fund's total
assets is  represented  by (I) cash and cash  items,  United  States  government
securities,  the  securities of other  regulated  investment  companies and (II)
other  securities,  with such other  securities  limited,  in respect to any one
issuer, to an amount not greater than 5% of the value of the Fund's total assets
and not more than 10% of the  outstanding  voting  securities of such issuer and
(b) not more than 25% of the value of the Fund's total assets is invested in the
securities (other than United States government securities and the securities of
other  regulated  investment  companies) of (I) any one issuer,  (II) any two or
more issuers that the Fund controls and that are determined to be engaged in the
same or similar  trades or businesses  or related  trades or businesses or (III)
any one or more Qualified Publicly Traded Partnerships.

As a RIC, the Fund generally will not be subject to United States federal income
tax on its  investment  company  taxable  income (as that term is defined in the
Code,  but without  regard to the  deductions for dividend paid) and net capital
gain (the  excess of net  long-term  capital  gain over net  short-term  capital
loss),  if any, that it  distributes  in each taxable year to its  shareholders,
provided that it  distributes  at least 90% of its  investment  company  taxable
income  for  such  taxable   year.   The  Fund  intends  to  distribute  to  its
shareholders,  at least annually,  substantially  all of its investment  company
taxable income and net capital gain. In order to avoid incurring a nondeductible
4% federal excise tax obligation, the Code requires that the Fund distribute (or
be deemed to have distributed) by December 31 of each calendar year an amount at
least equal to the sum of (i) 98% of its ordinary income for such year, (ii) 98%
of its  capital  gain net  income  (which  is the  excess  of its  realized  net
long-term capital gain over its realized net short-term capital loss), 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 (iii) 100% of
any  ordinary  income  and  capital  gain net  income  from the  prior  year (as
previously  computed)  that were not paid out during  such year and on which the
Fund paid no United States federal income tax. Under current law,  provided that
the Fund qualifies as a RIC for United States  federal income tax purposes,  the
Fund should not be liable for any income,  corporate  excise or franchise tax in
The Commonwealth of Massachusetts.

If the Fund does not qualify as a RIC or fails to satisfy  the 90%  distribution
requirement  for any taxable year,  the Fund's taxable income will be subject to
corporate  income  taxes,  and all  distributions  from  earnings  and  profits,
including  distributions  of net capital  gain (if any),  will be taxable to the
shareholder as ordinary income.  Such distributions  generally would be eligible
(i) to be treated as qualified  dividend  income in the case of  individual  and
other  noncorporate  shareholders and (ii) for the dividends  received deduction
("DRD")  in the  case of  corporate  shareholders.  In  addition,  in  order  to
requalify  for  taxation  as a RIC,  the  Fund  may  be  required  to  recognize
unrealized  gains,  pay  substantial  taxes  and  interest,   and  make  certain
distributions.

For United States  federal  income tax purposes,  distributions  paid out of the
Fund's current or accumulated  earnings and profits will,  except in the case of
distributions of qualified dividend income and capital gain dividends  described
below, be taxable as ordinary  dividend  income.  Under the "Jobs and Growth Tax
Relief Reconciliation Act of 2003" (the "Tax Act"), certain income distributions
paid by the Fund (whether paid in cash or reinvested in additional  Fund shares)
to individual  taxpayers are taxed at rates applicable to net long-term  capital
gains (15%,  or 5% for  individuals  in the 10% or 15% tax  brackets).  This tax

                                       17
<PAGE>

treatment  applies  only  if  certain  holding  period  requirements  and  other
requirements are satisfied by the shareholder and the dividends are attributable
to qualified  dividend  income  received by the Fund itself.  For this  purpose,
"qualified  dividend  income" means  dividends  received by the Fund from United
States corporations and "qualified foreign corporations," provided that the Fund
satisfies certain holding period and other  requirements in respect of the stock
of such  corporations.  These special rules relating to the taxation of ordinary
income  dividends paid by RICs generally apply to taxable years beginning before
January 1, 2011.  Thereafter,  the Fund's  dividends,  other than  capital  gain
dividends,  will be fully  taxable at ordinary  income tax rates unless  further
Congressional  action is taken.  There can be no assurance as to what portion of
the Fund's dividend distributions will qualify for favorable treatment under the
Tax Act.

Shareholders  receiving any distribution from the Fund in the form of additional
shares pursuant to the dividend reinvestment plan will be treated as receiving a
taxable  distribution  in an amount equal to the fair market value of the shares
received, determined as of the reinvestment date.

Dividends  of  investment  company  taxable  income  designated  by the Fund and
received by corporate  shareholders  of the Fund will qualify for the DRD to the
extent of the amount of qualifying  dividends received by the Fund from domestic
corporations  for the taxable year. A dividend  received by the Fund will not be
treated  as a  qualifying  dividend  (i) to the  extent  the  stock on which the
dividend is paid is considered to be "debt-financed"  (generally,  acquired with
borrowed  funds),  (ii)  if the  Fund  fails  to  meet  certain  holding  period
requirements  for the stock on which the dividend is paid or (iii) to the extent
that the Fund is under an obligation  (pursuant to a short sale or otherwise) to
make related  payments  with respect to  positions in  substantially  similar or
related  property.  Moreover,  the  DRD  may be  disallowed  or  reduced  if the
corporate  shareholder fails to satisfy the foregoing  requirements with respect
to its shares of the Fund or by application of the Code.

Distributions of net capital gain, if any, designated as capital gains dividends
are taxable to a shareholder as long-term capital gains,  regardless of how long
the shareholder  has held Fund shares.  A distribution of an amount in excess of
the Fund's  current and  accumulated  earnings  and profits will be treated by a
shareholder  as a return of capital  which is applied  against  and  reduces the
shareholder's  basis in his or her shares.  To the extent that the amount of any
such  distribution  exceeds the  shareholder's  basis in his or her shares,  the
excess will be treated by the shareholder as gain from a sale or exchange of the
shares.  Distributions of gains from the sale of investments that the Fund owned
for one year or less will be taxable as ordinary income.

The Fund may elect to retain  its net  capital  gain or a  portion  thereof  for
investment and be taxed at corporate rates on the amount retained. In such case,
it may designate the retained amount as undistributed  capital gains in a notice
to its  shareholders  who will be treated as if each received a distribution  of
his pro rata share of such gain, with the result that each  shareholder will (i)
be  required  to report  his pro rata  share of such  gain on his tax  return as
long-term  capital gain,  (ii) receive a refundable  tax credit for his pro rata
share of tax paid by the Fund on the gain and (iii)  increase  the tax basis for
his shares by an amount equal to the deemed distribution less the tax credit.

Selling shareholders will generally recognize gain or loss in an amount equal to
the difference  between the shareholder's  adjusted tax basis in the shares sold
and the sale proceeds.  If the shares are held as a capital  asset,  the gain or
loss will be a capital  gain or loss.  The  maximum tax rate  applicable  to net
capital gains recognized by individuals and other non-corporate taxpayers is (i)
the same as the maximum  ordinary  income tax rate for gains  recognized  on the
sale of  capital  assets  held  for one  year or  less,  or (ii)  15% for  gains
recognized on the sale of capital assets held for more than one year (as well as
certain  capital gain  distributions)  (5% for individuals in the 10% or 15% tax
brackets) but only for taxable years  beginning on or before  December 31, 2010.
Thereafter,  the maximum  rate will  increase  to 20%,  unless  Congress  enacts
legislation providing otherwise.

Any loss realized upon the sale or exchange of Fund shares with a holding period
of six months or less will be treated as a long-term  capital loss to the extent
of  any  capital  gain   distributions   received  (or  amounts   designated  as
undistributed capital gains) with respect to such shares. In addition,  all or a
portion of a loss realized on a sale or other  disposition of Fund shares may be
disallowed under "wash sale" rules to the extent the shareholder  acquires other
shares of the same Fund (whether  through the  reinvestment of  distributions or
otherwise)  within a period of 61 days  beginning  30 days  before and ending 30
days after the date of  disposition of the common  shares.  Any disallowed  loss
will result in an  adjustment to the  shareholder's  tax basis in some or all of
the other shares acquired.

Sales  charges  paid upon a purchase of shares  cannot be taken into account for
purposes of determining gain or loss on a sale 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 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.

                                       18
<PAGE>

Dividends  and  distributions  on the  Fund's  shares are  generally  subject to
federal  income tax as  described  herein to the  extent  they do not exceed the
Fund's realized income and gains,  even though such dividends and  distributions
may economically  represent a return of a particular  shareholder's  investment.
Such  distributions are likely to occur in respect of shares purchased at a time
when the Fund's net asset value  reflects gains that are either  unrealized,  or
realized  but  not  distributed.  Such  realized  gains  may be  required  to be
distributed  even when the  Fund's  net asset  value  also  reflects  unrealized
losses.  Certain  distributions  declared  in  October,  November or December to
Shareholders  of record of such month and paid in the following  January will be
taxed to  shareholders  as if  received on December 31 of the year in which they
were declared. In addition,  certain other distributions made after the close of
a taxable year of the Fund may be "spilled back" and treated as paid by the Fund
(except for purposes of the  non-deductible  4% federal  excise tax) during such
taxable year. In such case, shareholders will be treated as having received such
dividends in the taxable year in which the distributions were actually made.

The  Fund  will  inform  shareholders  of  the  source  and  tax  status  of all
distributions promptly after the close of each calendar year.

The benefits of the reduced tax rates applicable to long-term  capital gains and
qualified  dividend income may be impacted by the application of the alternative
minimum tax to individual shareholders.

For the Fund's index call options that qualify as section 1256  contracts,  Code
Section  1256  generally  will  require any gain or loss arising from the lapse,
closing out or exercise of such positions to be treated as 60% long-term and 40%
short-term  capital  gain or  loss.  In  addition,  the Fund  generally  will be
required to "mark to market"  (I.E.,  treat as sold for fair market  value) each
outstanding  index option  position  which it holds at the close of each taxable
year (and on October 31 of each year for excise tax purposes). If a section 1256
contract  held by the Fund at the end of a taxable year is sold in the following
year,  the amount of any gain or loss  realized on such sale will be adjusted to
reflect  the gain or loss  previously  taken  into  account  under  the "mark to
market"  rules.  In addition to most index call options,  section 1256 contracts
include certain other options  contracts,  certain regulated futures  contracts,
and certain other financial contracts.

The Fund's index call options  that do not qualify as "section  1256  contracts"
generally  will be treated as equity  options  governed  by Code  Section  1234.
Pursuant to Code Section  1234, if a written  option  expires  unexercised,  the
premium received is short-term capital gain to the Fund. If the Fund enters into
a closing  transaction,  the difference between the amount paid to close out its
position and the premium  received for writing the option is short-term  capital
gain or loss.  If a call option  written by the Fund that is not a "section 1256
contract" is cash settled, any resulting gain or loss will be short-term capital
gain or loss.

The Code contains special rules that apply to "straddles,"  defined generally as
the holding of  "offsetting  positions  with respect to personal  property." For
example,  the straddle  rules  normally apply when a taxpayer holds stock and an
offsetting option with respect to such stock or substantially identical stock or
securities.  In general,  investment  positions will be offsetting if there is a
substantial  diminution  in the risk of loss from holding one position by reason
of holding one or more other  positions.  The Fund  expects  that the index call
options it writes will not be considered  straddles for this purpose because the
Fund's  portfolio  of common  stocks will be  sufficiently  dissimilar  from the
components of the indices on which it has  outstanding  options  positions under
applicable guidance established by the Internal Revenue Service (the "Service").
Under  certain   circumstances,   however,  the  Fund  may  enter  into  options
transactions  or certain other  investments  that may constitute  positions in a
straddle.  If two or more  positions  constitute  a straddle,  recognition  of a
realized  loss from one  position  must  generally  be deferred to the extent of
unrecognized gain in an offsetting position. In addition, long-term capital gain
may be recharacterized as short-term capital gain, or short-term capital loss as
long-term  capital  loss.  Interest  and other  carrying  charges  allocable  to
personal  property that is part of a straddle are not currently  deductible  but
must instead be capitalized.  Similarly,  "wash sale" rules apply to prevent the
recognition of loss by the Fund from the disposition of stock or securities at a
loss in a case in which identical or substantially identical stock or securities
(or an  option  to  acquire  such  property)  is or has been  acquired  within a
prescribed period.

The Code  allows a taxpayer to elect to offset  gains and losses from  positions
that are part of a "mixed straddle." A "mixed straddle" is any straddle in which
one or more but not all  positions are section 1256  contracts.  The Fund may be
eligible to elect to establish one or more mixed  straddle  accounts for certain
of its mixed  straddle  trading  positions.  The mixed  straddle  account  rules
require a daily  "marking to market" of all open  positions in the account and a
daily netting of gains and losses from all positions in the account.  At the end
of a taxable  year,  the  annual  net gains or  losses  from the mixed  straddle
account are recognized for tax purposes. The net capital gain or loss is treated
as 60% long-term and 40% short-term  capital gain or loss if attributable to the
section  1256  contract  positions,  or all  short-term  capital gain or loss if
attributable to the non-section 1256 contract positions.

The Fund may recognize gain (but not loss) from a  constructive  sale of certain
"appreciated  financial  positions"  if  the  Fund  enters  into a  short  sale,
offsetting  notional principal  contract,  or forward contract  transaction with
respect  to  the  appreciated  position  or  substantially  identical  property.

                                       19
<PAGE>

Appreciated  financial  positions  subject to this  constructive  sale treatment
include interests  (including  options and forward contracts and short sales) in
stock and certain other instruments.  Constructive sale treatment does not apply
if the transaction is closed out not later than thirty days after the end of the
taxable  year in  which  the  transaction  was  initiated,  and  the  underlying
appreciated  securities  position is held  unhedged  for at least the next sixty
days after the hedging transaction is closed.

Gain or loss from a short sale of property is  generally  considered  as capital
gain or loss to the extent the property used to close the short sale constitutes
a capital asset in the Fund's hands.  Except with respect to certain  situations
where the property used to close a short sale has a long-term  holding period on
the date the short sale is entered  into,  gains on short  sales  generally  are
short-term  capital gains. A loss on a short sale will be treated as a long-term
capital  loss  if,  on the  date of the  short  sale,  "substantially  identical
property"  has  been  held by the Fund for more  than  one  year.  In  addition,
entering  into a short sale may result in  suspension  of the holding  period of
"substantially identical property" held by the Fund.

Gain or loss on a short sale will  generally not be realized  until such time as
the short sale is closed.  However,  as  described  above in the  discussion  of
constructive  sales,  if the Fund holds a short sale  position  with  respect to
securities that have appreciated in value, and it then acquires property that is
the same as or  substantially  identical  to the property  sold short,  the Fund
generally  will  recognize  gain on the date it acquires such property as if the
short sale were closed on such date with such property.  Similarly,  if the Fund
holds an  appreciated  financial  position with respect to  securities  and then
enters  into a short sale with  respect to the same or  substantially  identical
property, the Fund generally will recognize gain as if the appreciated financial
position were sold at its fair market value on the date it enters into the short
sale. The subsequent holding period for any appreciated  financial position that
is  subject to these  constructive  sale  rules  will be  determined  as if such
position were acquired on the date of the constructive sale.

The Fund's  transactions  in futures  contracts  and options  will be subject to
special  provisions  of the Code  that,  among  other  things,  may  affect  the
character  of gains and losses  realized by the Fund (I.E.,  may affect  whether
gains or losses are  ordinary or  capital,  or  short-term  or  long-term),  may
accelerate  recognition  of income to the Fund and may defer Fund losses.  These
rules could, therefore, affect the character, amount and timing of distributions
to   shareholders.   These   provisions  also  (a)  will  require  the  Fund  to
mark-to-market certain types of the positions in its portfolio (I.E., treat them
as if they were  closed  out),  and (b) may cause the Fund to  recognize  income
without receiving cash with which to make  distributions in amounts necessary to
satisfy the 90% distribution requirement for qualifying to be taxed as a RIC and
the 98%  distribution  requirement  for  avoiding  excise  taxes.  The Fund will
monitor its transactions,  will make the appropriate tax elections and will make
the  appropriate  entries in its books and records  when it acquires any futures
contract,  option or hedged  investment in order to mitigate the effect of these
rules and prevent  disqualification  of the Fund from being taxed as a regulated
investment company.

Further,  certain of the Fund's investment  practices are subject to special and
complex federal income tax provisions that may, among other things,  (i) convert
dividends  that  would  otherwise  constitute  qualified  dividend  income  into
short-term  capital gain or ordinary  income taxed at the higher rate applicable
to ordinary  income,  (ii) treat  dividends that would otherwise be eligible for
the corporate  dividends  received  deduction as ineligible for such  treatment,
(iii)  disallow,  suspend or otherwise  limit the allowance of certain losses or
deductions,  (iv) convert long-term capital gain into short-term capital gain or
ordinary  income,  (v) convert an ordinary loss or deduction into a capital loss
(the  deductibility of which is more limited),  (vi) cause the Fund to recognize
income or gain without a corresponding  receipt of cash,  (vii) adversely affect
the time as to when a  purchase  or sale of stock or  securities  is  deemed  to
occur, (viii) adversely alter the  characterization of certain complex financial
transactions,  and (ix) produce  income that will not qualify as good income for
purposes of the 90% annual gross income  requirement  described above.  While it
may not  always  be  successful  in doing  so,  the Fund  will  seek to avoid or
minimize any adverse tax consequences of its investment practices.

Dividends  and interest  received,  and gains  realized,  by the Fund on foreign
securities  may be subject  to income,  withholding  or other  taxes  imposed by
foreign countries and United States possessions  (collectively  "foreign taxes")
that would reduce the return on its securities.  Tax conventions between certain
countries and the United States, however, may reduce or eliminate foreign taxes,
and many foreign  countries  do not impose taxes on capital  gains in respect of
investments by foreign investors. Shareholders will generally not be entitled to
claim a credit or deduction with respect to foreign taxes paid by the Fund.

The Fund may  invest  in the stock of  "passive  foreign  investment  companies"
("PFICs").  A PFIC is any foreign corporation (with certain exceptions) that, in
general,  meets  either of the  following  tests:  (1) at least 75% of its gross
income is passive or (2) an  average of at least 50% of its assets  produce,  or
are held for the production of, passive income. Under certain circumstances, the
Fund will be subject  to United  States  federal  income tax on a portion of any
"excess  distribution"  received  on the  stock  of a PFIC or of any  gain  from
disposition of that stock (collectively  "PFIC income"),  plus interest thereon,
even if the Fund  distributes  the PFIC  income  as a  taxable  dividend  to its
shareholders.  The  balance of the PFIC  income  will be  included in the Fund's
investment company taxable income and, accordingly, will not be taxable to it to
the extent it distributes that income to its shareholders.

                                       20
<PAGE>

If the Fund  invests  in a PFIC and  elects  to treat  the PFIC as a  "qualified
electing  fund"  ("QEF"),  then  in  lieu  of the  foregoing  tax  and  interest
obligation,  the Fund will be  required  to include in income  each year its pro
rata share of the QEF's annual ordinary earnings and net capital  gain--which it
may have to  distribute  to  satisfy  the  distribution  requirement  and  avoid
imposition of the excise tax--even if the QEF does not distribute those earnings
and  gain to the  Fund.  In most  instances  it will be very  difficult,  if not
impossible, to make this election because of certain of its requirements.

The  Fund   may   elect  to  "mark   to   market"   its   stock  in  any   PFIC.
"Marking-to-market,"  in this context,  means  including in ordinary income each
taxable year the excess, if any, of the fair market value of a PFIC's stock over
the Fund's  adjusted  basis therein as of the end of that year.  Pursuant to the
election, the Fund also would be allowed to deduct (as an ordinary, not capital,
loss) the  excess,  if any,  of its  adjusted  basis in PFIC stock over the fair
market value thereof as of the taxable  year-end,  but only to the extent of any
net mark-to-market  gains (reduced by any prior deductions) with respect to that
stock  included  by the Fund for prior  taxable  years under the  election.  The
Fund's  adjusted  basis in each PFIC's  stock with  respect to which it has made
this  election  will be adjusted to reflect the amounts of income  included  and
deductions taken thereunder.

Under Section 988 of the Code,  gains or losses  attributable to fluctuations in
exchange  rates  between  the time the Fund  accrues  income or  receivables  or
expenses or other liabilities denominated in a foreign currency and the time the
Fund actually  collects such income or receivables or pays such  liabilities are
generally  treated as  ordinary  income or loss.  Similarly,  gains or losses on
foreign  currency  forward  contracts  and the  disposition  of debt  securities
denominated in a foreign currency, to the extent attributable to fluctuations in
exchange rate between the acquisition and disposition dates, are also treated as
ordinary income or loss.

Amounts paid by the Fund to individuals and certain other  shareholders who have
not provided the Fund with their correct taxpayer  identification number ("TIN")
and certain certifications  required by the Service as well as shareholders with
respect to whom the Fund has received certain  information from the Service or a
broker may be subject to "backup" withholding of federal income tax arising from
the  Fund's  taxable  dividends  and  other  distributions  as well as the gross
proceeds of sales of shares,  at a rate of 28% for amounts paid during 2006.  An
individual's  TIN is  generally  his  or  her  social  security  number.  Backup
withholding  is not an  additional  tax. Any amounts  withheld  under the backup
withholding  rules  from  payments  made to a  shareholder  may be  refunded  or
credited against such shareholder's  United States federal income tax liability,
if any, provided that the required information is furnished to the Service.

The  foregoing  briefly  summarizes  some of the  important  federal  income tax
consequences to common shareholders of investing in common shares,  reflects the
United  States  federal tax law as of the date of this  Statement of  Additional
Information,  and does not address special tax rules applicable to certain types
of investors,  such as corporate and foreign investors.  Unless otherwise noted,
this  discussion  assumes that an investor is a United  States  person and holds
Common  Shares  as a  capital  asset.  This  discussion  is based  upon  present
provisions of the Code, the regulations promulgated thereunder, and judicial and
administrative  ruling  authorities,  all of which  are  subject  to  change  or
differing  interpretations  by  the  courts  or  the  Service  retroactively  or
prospectively.  Investors  should  consult  their tax advisors  regarding  other
federal,  state or local  tax  considerations  that may be  applicable  to their
particular circumstances, as well as any proposed tax law changes.

OTHER INFORMATION

The Fund is an  organization  of the  type  commonly  known as a  "Massachusetts
business trust." Under  Massachusetts law,  shareholders of such a trust may, in
certain circumstances, be held personally liable as partners for the obligations
of the  trust.  The  Declaration  of Trust  contains  an express  disclaimer  of
shareholder liability in connection with Fund property or the acts,  obligations
or affairs  of the Fund.  The  Declaration  of Trust,  together  with the Fund's
By-laws,  also  provides  for  indemnification  out  of  Fund  property  of  any
shareholder  held  personally  liable for the claims and  liabilities to which a
shareholder  may  become  subject  by sole  reason  of  being or  having  been a
shareholder. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which the Fund itself is
unable to meet its  obligations.  The Fund has been  advised by its counsel that
the risk of any  shareholder  incurring any liability for the obligations of the
Fund is remote.

The  Declaration  of Trust  provides  that the  Trustees  will not be liable for
errors of judgment or mistakes of fact or law; but nothing in the Declaration of
Trust protects a Trustee  against any liability to the Fund or its  shareholders
to which he or she 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 or her office. Voting rights are not cumulative, which means that
the holders of more than 50% of the shares  voting for the  election of Trustees
can elect 100% of the Trustees and, in such event,  the holders of the remaining
less than 50% of the shares  voting on the matter  will not be able to elect any
Trustees.

                                       21
<PAGE>

The  Declaration  of Trust  provides  that no person shall serve as a Trustee if
shareholders  holding two-thirds of the outstanding shares have removed him from
that office either by a written  declaration  filed with the Fund's custodian or
by votes cast at a meeting  called for that purpose.  The  Declaration  of Trust
further  provides that the Trustees of the Fund shall promptly call a meeting of
the  shareholders  for the  purpose of voting  upon a question of removal of any
such  Trustee  or  Trustees  when  requested  in  writing to do so by the record
holders of not less than 10% of the outstanding shares.

The Fund's  Prospectus  and this SAI do not contain all of the  information  set
forth in the  Registration  Statement  that the Fund has filed with the SEC. The
complete Registration Statement may be obtained from the SEC upon payment of the
fee prescribed by its Rules and Regulations.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

[                            ]  is the independent  registered public accounting
firm for the  Fund,  providing  audit  services,  tax  return  preparation,  and
assistance and consultation  with respect to the preparation of filings with the
SEC.

                                       22
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                          [TO BE PROVIDED BY AMENDMENT]

                                       23
<PAGE>

<TABLE>
<CAPTION>
EATON VANCE TAX-MANAGED GLOBAL DIVERSIFIED EQUITY INCOME FUND

STATEMENT OF ASSETS AND LIABILITIES
AS OF [      ], 2006
<S>                                                                             <C>
ASSETS
 Cash.........................................................................  $
 Offering costs...............................................................
 Receivable from Adviser......................................................  _______
 Total assets.................................................................  $
                                                                                =======
LIABILITIES
 Accrued offering costs.......................................................  $
 Accrued organizational costs.................................................  _______
 Total liabilities............................................................  $
                                                                                =======
Net assets applicable to [   ] common shares of beneficial interest issued
 and outstanding..............................................................  $
                                                                                =======
NET ASSET VALUE AND OFFERING PRICE PER SHARE..................................  $______

STATEMENT OF OPERATIONS
PERIOD FROM OCTOBER 30, 2006 (DATE OF ORGANIZATION) THROUGH [    ], 2006

INVESTMENT INCOME............................................................   $______
EXPENSES
 Organization costs..........................................................   $
 Expense reimbursement.......................................................   $______
   Net expenses..............................................................   $______
NET INVESTMENT INCOME........................................................   $
                                                                                =======
</TABLE>

                       See notes to financial statements.

                                       24
<PAGE>


NOTES TO FINANCIAL STATEMENTS

NOTE 1:  ORGANIZATION

The Eaton Vance Tax-Managed  Global  Diversified Equity Income Fund (the "Fund")
was organized as a Massachusetts business trust on October 30, 2006 and has been
inactive  since that date except for matters  relating to its  organization  and
registration as a diversified,  closed-end  management  investment company under
the Investment Company Act of 1940, as amended,  and the Securities Act of 1933,
as amended,  and the sale of [ ] common  shares to Eaton Vance  Management,  the
Fund's Investment Adviser.

Eaton  Vance  Management,   or  an  affiliate,   has  agreed  to  reimburse  all
organizational  costs,  estimated at approximately $[ ]. Eaton Vance Management,
or an affiliate,  directly provided certain organizational  services to the Fund
at no expense. The costs of such services are not material.

Eaton Vance  Management,  or an affiliate,  has agreed to pay all offering costs
(other than sales loads) that exceed $[ ] per common share.  The total estimated
fund  offering  costs are $[ ], of which the Fund would pay $[ ] and Eaton Vance
Management would pay $[ ] based on such estimate.

The Fund's primary investment  objective is to provide current income and gains,
with a  secondary  objective  of  capital  appreciation.  The Fund  will seek to
generate  current  earnings in part by employing  an option  strategy of writing
(selling)  index call  options  on a portion  of the value of the  Fund's  total
assets  under  normal  market  conditions.  Writing  index  call  options  is  a
specialized  investment  practice  that involves  certain  related risks and tax
consequences.  Upon the writing of a call option, an amount equal to the premium
received by the Fund is included in the Statement of Assets and Liabilities as a
liability.  The amount of the  liability  is  subsequently  marked-to-market  to
reflect the current value of the option  written in  accordance  with the Fund's
policies on investment  valuation.  Premiums received from writing options which
expire are treated as realized  gains.  Premiums  received from writing  options
which are exercised or are closed are added to or offset against the proceeds or
amount paid on the  transaction  to determine the realized gain or loss.  When a
call option is exercised, the Fund will be required to deliver an amount of cash
determined  by the  excess  of the  value of the  applicable  index at  contract
termination  over the exercise price of the option.  Thus, the exercise of index
call options sold by the Fund may require the Fund to sell portfolio  securities
to generate cash at inopportune times or for unattractive prices.

[Although,  the Fund has no current  intention to do so, the Fund is  authorized
and reserves the  flexibility to use leverage  through the issuance of preferred
shares and/or borrowings,  including the issuance of debt securities.  The costs
of issuing  preferred shares and/or a borrowing program would be borne by Common
Shareholders and consequently  would result in a reduction of net asset value of
Common  Shares.  In addition,  the fee paid to Eaton Vance will be calculated on
the basis of the Fund's average daily gross assets,  including proceeds from the
issuance of preferred shares and/or borrowings,  so the fees will be higher when
leverage is utilized.]

NOTE 2:  ACCOUNTING POLICIES

The Fund's  financial  statements  are prepared in  accordance  with  accounting
principles  generally  accepted in the United  States of America  which  require
management to make estimates. Actual results may differ from those estimates.

The Fund's share of offering costs will be recorded  within paid in capital as a
reduction of the proceeds from the sale of common  shares upon the  commencement
of Fund  operations.  The  offering  costs  reflected  above  assume the sale of
[12,500,000] common shares.

NOTE 3:  INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an investment  advisory  agreement between the Adviser and the Fund,
the Fund has  agreed to pay an  investment  advisory  fee,  payable on a monthly
basis, at an annual rate of [ ] % of the average daily gross assets of the Fund.
Gross assets of the Fund shall be calculated by deducting accrued liabilities of
the Fund not  including the amount of any preferred  shares  outstanding  or the
principal amount of any indebtedness for money borrowed.

                                       25
<PAGE>

Pursuant to a sub-advisory  agreement between the Adviser and Rampart Investment
Management  Company,  Inc.  ("Rampart"),   the  Adviser  has  agreed  to  pay  a
sub-advisory  fee to Rampart,  in an annual amount equal to [ ]% of the value of
the Fund's average daily gross assets that is subject to written call options.

NOTE 4:  FEDERAL INCOME TAXES

The Fund intends to comply with the  requirements  of the Internal  Revenue Code
applicable  to  regulated  investment  companies  and to  distribute  all of its
taxable income, including any net realized gain on investments.

                                       26
<PAGE>

APPENDIX A

Eaton Vance Funds
Proxy voting policy and procedures

I.  OVERVIEW

The Boards of Trustees  (the  "Boards")  of the Eaton Vance Funds (the  "Funds")
recognize  that it is their  fiduciary  responsibility  to actively  monitor the
Funds' operations.  The Boards have always placed paramount  importance on their
oversight of the  implementation  of the Funds'  investment  strategies  and the
overall  management  of  the  Funds'  investments.  A  critical  aspect  of  the
investment  management of the Funds continues to be the effective assessment and
voting of proxies relating to the Funds' portfolio securities.  While the Boards
will  continue  to  delegate  the  day-to-day  responsibilities  relating to the
management of the  proxy-voting  process to the relevant  investment  adviser or
sub-adviser, if applicable, of the Fund (or its underlying portfolio in the case
of a  master-feeder  arrangement),  the Boards have determined that it is in the
interests of the Funds'  shareholders to adopt these written proxy voting policy
and procedures (the "Policy"). For purposes of this Policy the term "Fund" shall
include a Fund's underlying portfolio in the case of a master-feeder arrangement
and the term "Adviser"  shall mean the adviser to a Fund or its sub-adviser if a
sub-advisory relationship exists.

II.  DELEGATION OF PROXY VOTING RESPONSIBILITIES

Pursuant to investment  advisory  agreements  between each Fund and its Adviser,
the Adviser has long been responsible for reviewing proxy statements relating to
Fund  investments  and, if the Adviser  deems it  appropriate  to do so, to vote
proxies  on behalf of the  Funds.  The  Boards  hereby  formally  delegate  this
responsibility to the Adviser,  except as otherwise described in this Policy. In
so doing,  the  Boards  hereby  adopt on  behalf  of each Fund the proxy  voting
policies  and  procedures  of the  Adviser(s)  to each Fund as the proxy  voting
policies and procedures of the Fund. The Boards  recognize that the Advisers may
from time to time amend their policies and procedures.  The Advisers will report
material  changes to the Boards in the manner set forth in Section IV below.  In
addition, the Boards will annually review and approve the Advisers' proxy voting
policies and procedures.

III.  DELEGATION OF PROXY VOTING DISCLOSURE RESPONSIBILITIES

The Securities  and Exchange  Commission  (the  "Commission")  recently  enacted
certain new reporting  requirements  for registered  investment  companies.  The
Commission's  new regulations  require that funds (other than those which invest
exclusively in non-voting  securities) make certain disclosures  regarding their
proxy voting  activities.  The most significant  disclosure  requirement for the
Funds is the duty  pursuant  to Rule  30b1-4  promulgated  under the  Investment
Company Act of 1940,  as amended  (the "1940  Act"),  to file Form N-PX no later
than August 31st of each year beginning in 2004. Under Form N-PX, each Fund will
be required to disclose,  among other  things,  information  concerning  proxies
relating to the Fund's  portfolio  investments,  whether or not the Fund (or its
Adviser)  voted the proxies  relating to securities  held by the Fund and how it
voted in the matter and whether it voted for or against management.

The Boards hereby  delegate to each Adviser the  responsibility  for  recording,
compiling and  transmitting  in a timely manner all data required to be filed on
Form N-PX to Eaton Vance Management,  which acts as administrator to each of the
Funds (the "Administrator"), for each Fund that such Adviser manages. The Boards
hereby delegate the  responsibility  to file Form N-PX on behalf of each Fund to
the Administrator.

IV.  CONFLICTS OF INTEREST

The Boards expect each Adviser, as a fiduciary to the Fund(s) it manages, to put
the interests of each Fund and its shareholders  above those of the Adviser.  In
the event that in connection with its proxy voting  responsibilities  a material
conflict of interest arises between a Fund's shareholders and the Fund's Adviser
or the  Administrator  (or any of their  affiliates) or any affiliated person of
the Fund  and the  Proxy  Administrator  intends  to vote the  proxy in a manner
inconsistent  with the  guidelines  approved by the Board,  the Adviser,  to the
extent  it is  aware or  reasonably  should  have  been  aware  of the  material
conflict,  will refrain from voting any proxies related to companies giving rise
to such material  conflict  until it notifies and consults with the  appropriate
Board(s), or a committee or sub-committee of such Board, concerning the material
conflict.

                                       27
<PAGE>

Once the Adviser notifies the relevant  Board(s),  committee or sub-committee of
the Board, of the material conflict,  the Board(s),  committee or sub-committee,
shall convene a meeting to review and consider all relevant materials related to
the proxies  involved.  In  considering  such  proxies,  the Adviser  shall make
available all materials  requested by the Board,  committee or sub-committee and
make  reasonably  available  appropriate  personnel  to discuss  the matter upon
request. The Board,  committee or sub-committee will instruct the Adviser on the
appropriate course of action. If the Board, committee or sub-committee is unable
to meet and the failure to vote a proxy would have a material  adverse impact on
the  Fund(s)  involved,  each  Adviser  will have the right to vote such  proxy,
provided that it discloses the existence of the material  conflict to the Board,
committee or sub-committee at its next meeting. Any determination  regarding the
voting of proxies of each Fund that is made by the  committee  or  sub-committee
shall be deemed to be a good faith determination regarding the voting of proxies
by the full Board.

V.  REPORTS

The  Administrator  shall  make  copies of each Form N-PX filed on behalf of the
Funds  available  for  the  Boards'  review  upon  the  Boards'   request.   The
Administrator  (with input from the Adviser for the relevant Fund(s)) shall also
provide any  reports  reasonably  requested  by the Boards  regarding  the proxy
voting records of the Funds.

Each Adviser shall annually report any material  changes to such Adviser's proxy
voting  policies  and  procedures  to the  relevant  Board(s)  and the  relevant
Board(s) will annually  review and approve the Adviser's  proxy voting  policies
and  procedures.  Each Adviser shall report any changes to such Adviser's  proxy
voting policies and procedures to the  Administrator  prior to implementing such
changes in order to enable  the  Administrator  to  effectively  coordinate  the
Funds' disclosure relating to such policies and procedures.

EATON VANCE MANAGEMENT
BOSTON MANAGEMENT AND RESEARCH
PROXY VOTING POLICIES AND PROCEDURES

I.  INTRODUCTION

Eaton  Vance  Management,   Boston  Management  and  Research  and  Eaton  Vance
Investment Counsel (each an "Adviser" and collectively the "Advisers") have each
adopted and implemented  policies and procedures that each Adviser  believes are
reasonably  designed  to ensure that  proxies are voted in the best  interest of
clients,  in accordance  with its fiduciary  duties and Rule 206(4)-6  under the
Investment Advisers Act of 1940, as amended. The Advisers' authority to vote the
proxies of their clients is established  by their advisory  contracts or similar
documentation, such as the Eaton Vance Funds Proxy Voting Policy and Procedures.
These proxy  policies and  procedures  reflect the U.S.  Securities and Exchange
Commission  ("SEC")  requirements   governing  advisers  and  the  long-standing
fiduciary  standards  and  responsibilities  for ERISA  accounts  set out in the
Department of Labor Bulletin 94-2 C.F.R. 2509.94-2 (July 29, 1994).

II.  OVERVIEW

Each Adviser  manages its clients' assets with the overriding goal of seeking to
provide the greatest  possible return to such clients  consistent with governing
laws and the  investment  policies of each client.  In pursuing that goal,  each
Adviser  seeks to  exercise  its  clients'  rights  as  shareholders  of  voting
securities to support sound corporate  governance of the companies issuing those
securities  with the principle aim of  maintaining  or enhancing the  companies'
economic value.

The exercise of  shareholder  rights is generally done by casting votes by proxy
at shareholder  meetings on matters  submitted to shareholders for approval (for
example,  the election of directors or the approval of a company's  stock option
plans for directors, officers or employees). Each Adviser is adopting the formal
written Guidelines described in detail below and will utilize such Guidelines in
voting  proxies on behalf of its  clients.  These  Guidelines  are  designed  to
promote  accountability of a company's  management and board of directors to its
shareholders   and  to  align  the  interests  of   management   with  those  of
shareholders.

Each  Adviser  will vote any proxies  received by a client for which it has sole
investment  discretion  through a third-party  proxy voting service ("Agent") in
accordance  with customized  policies,  as approved by the Boards of Trustees of
the Eaton Vance Funds and, with respect to proxies  referred back to the Adviser
by the Agent pursuant to the Guidelines, in a manner that is reasonably designed
to eliminate any potential conflicts of interest, as described more fully below.
The Agent is currently  Institutional  Shareholder Services Inc. Proxies will be
voted in accordance  with  client-specific  guidelines and an Eaton Vance Fund's
sub-adviser's proxy voting policies and procedures, if applicable.

                                       28
<PAGE>

No set of Guidelines can anticipate  all situations  that may arise.  In special
cases,  the  Proxy  Administrator  (the  person  specifically  charged  with the
responsibility  to  oversee  the  Agent and  coordinate  the  voting of  proxies
referred back to the Adviser by the Agent) may seek insight from the Proxy Group
established  by the  Advisers.  The Proxy Group will assist in the review of the
Agent's  recommendation when a proxy voting issue is referred to the Proxy Group
through  the Proxy  Administrator.  The  members of the Proxy  Group,  which may
include  employees  of the  Advisers'  affiliates,  may change at the  Advisers'
discretion.

III.  ROLES AND RESPONSIBILITIES

A.  PROXY ADMINISTRATOR

The Proxy  Administrator  will assist in the  coordination of the voting of each
client's  proxy in  accordance  with the  Guidelines  below and the Funds' Proxy
Voting Policy and Procedures.  The Proxy  Administrator  is authorized to direct
the Agent to vote a proxy in accordance  with the  Guidelines.  Responsibilities
assigned herein to the Proxy  Administrator,  or activities in support  thereof,
may be  performed  by such  members  of the  Proxy  Group  or  employees  of the
Advisers' affiliates as are deemed appropriate by the Proxy Group.

B.  AGENT

An independent  proxy voting service (the "Agent"),  as approved by the Board of
each Fund,  shall be engaged  to assist in the voting of  proxies.  The Agent is
currently  Institutional  Shareholder Services Inc. The Agent is responsible for
coordinating  with the clients'  custodians  and the Advisers to ensure that all
proxy materials received by the custodians relating to the portfolio  securities
are  processed in a timely  fashion.  The Agent is required to vote and/or refer
all proxies in accordance  with the Guidelines  below.  The Agent shall retain a
record of all proxy votes handled by the Agent.  Such record must reflect all of
the information  required to be disclosed in a Fund's Form N-PX pursuant to Rule
30b1-4 under the Investment  Company Act of 1940, as amended.  In addition,  the
Agent is responsible for maintaining copies of all proxy statements  received by
issuers and to promptly provide such materials to an Adviser upon request.

Subject to the oversight of the Advisers, the Agent shall establish and maintain
adequate  internal  controls and policies in  connection  with the  provision of
proxy voting services to the Advisers,  including  methods to reasonably  ensure
that its  analysis  and  recommendations  are not  influenced  by a conflict  of
interest, and shall disclose such controls and policies to the Advisers when and
as  provided  for  herein.  Unless  otherwise  specified,  references  herein to
recommendations  of the  Agent  shall  refer to those  in which no  conflict  of
interest has been identified.

C.  PROXY GROUP

The Adviser  shall  establish a Proxy Group which shall  assist in the review of
the Agent's  recommendations  when a proxy voting issue has been referred to the
Proxy  Administrator  by the Agent.  The members of the Proxy  Group,  which may
include employees of the Advisers' affiliates,  may be amended from time to time
at the Advisers' discretion.

For each proposal  referred to the Proxy Group,  the Proxy Group will review the
(i) Guidelines, (ii) recommendations of the Agent, and (iii) any other resources
that any member of the Proxy Group deems  appropriate to aid in a  determination
of the recommendation.

If the Proxy Group  recommends a vote in accordance with the Guidelines,  or the
recommendation  of the Agent,  where  applicable,  it shall  instruct  the Proxy
Administrator to so advise the Agent.

If the  Proxy  Group  recommends  a vote  contrary  to  the  Guidelines,  or the
recommendation of the Agent, where applicable, or if the proxy statement relates
to a conflicted  company of the Agent,  as determined by the Advisers,  it shall
follow the procedures for such voting outlined below.

The Proxy  Administrator  shall use best efforts to convene the Proxy Group with
respect to all matters requiring its consideration. In the event the Proxy Group
cannot meet in a timely manner in connection with a voting  deadline,  the Proxy
Administrator shall follow the procedures for such voting outlined below.

                                       29
<PAGE>

IV.  PROXY VOTING GUIDELINES ("GUIDELINES")

A.  GENERAL POLICIES

It shall  generally  be the policy of the  Advisers to take no action on a proxy
for which no client holds a position or otherwise maintains an economic interest
in the relevant security at the time the vote is to be cast.

In all cases except those highlighted below, it shall generally be the policy of
the  Advisers  to vote in  accordance  with  the  recommendation  by the  Agent,
Institutional Shareholder Services Inc.

When a fund  client  participates  in the  lending  of its  securities  and  the
securities are on loan at the record date,  proxies  related to such  securities
generally will not be forwarded to the relevant  Adviser by the fund's custodian
and therefore will not be voted.  In the event that the Adviser  determines that
the  matters  involved  would have a material  effect on the  applicable  fund's
investment in the loaned securities,  the fund will exercise its best efforts to
terminate  the  loan in time to be able  to  cast  such  vote or  exercise  such
consent.

Interpretation  and application of these Guidelines is not intended to supersede
any law,  regulation,  binding  agreement or other legal requirement to which an
issuer may be or become subject. The Guidelines relate to the types of proposals
that are most frequently  presented in proxy statements to shareholders.  Absent
unusual  circumstances,  each Adviser will utilize these  Guidelines when voting
proxies on behalf of its  clients.  The  Guidelines  may be revised at any time,
provided  such  revisions  are  reported  to the Boards of Trustees of the Eaton
Vance Funds.

B.  PROPOSALS REGARDING MERGERS AND CORPORATE RESTRUCTURINGS

The Agent shall be directed to refer proxy proposals  accompanied by its written
analysis and voting  recommendation to the Proxy Administrator for all proposals
relating to Mergers and Corporate Restructurings.

C.    PROPOSALS     REGARDING     MUTUAL    FUND     PROXIES--DISPOSITION     OF
      ASSETS/TERMINATION/LIQUIDATION AND MERGERS

The Agent shall be directed to refer proxy proposals  accompanied by its written
analysis and voting  recommendation to the Proxy Administrator for all proposals
relating  to the  Disposition  of Assets/  Termination/Liquidation  and  Mergers
contained in mutual fund proxies.

D.  CORPORATE STRUCTURE MATTERS/ANTI-TAKEOVER DEFENSES

As a general  matter,  the Advisers  will  normally  vote against  anti-takeover
measures and other  proposals  designed to limit the ability of  shareholders to
act on  possible  transactions  (except  in the  case of  closed-end  management
investment companies).

E.  SOCIAL AND ENVIRONMENTAL ISSUES

The Advisers generally support management on social and environmental proposals.

F.  VOTING PROCEDURES

Upon  receipt of a referral  from the Agent or upon  advice  from an Eaton Vance
investment professional, the Proxy Administrator may solicit additional research
from the Agent, as well as from any other source or service.

1.  WITHIN-GUIDELINES  VOTES:  Votes in Accordance  with the Guidelines  and/or,
where applicable, Agent Recommendation

In the event the Proxy  Administrator  recommends  a vote within the  Guidelines
and/or,  where applicable,  in accordance with the Agent's  recommendation,  the
Proxy Administrator will instruct the Agent to vote in this manner.

2.    NON-VOTES: Votes in Which No Action is Taken

The Proxy  Administrator  may recommend  that a client refrain from voting under
the  following  circumstances:  (i)  if the  economic  effect  on  shareholders'
interests  or  the  value  of  the  portfolio   holding  is   indeterminable  or

                                       30
<PAGE>

insignificant, e.g., proxies in connection with securities no longer held in the
portfolio of a client or proxies being  considered on behalf of a client that is
no longer in  existence;  or (ii) if the cost of  voting a proxy  outweighs  the
benefits,  e.g., certain international  proxies,  particularly in cases in which
share  blocking  practices  may  impose  trading  restrictions  on the  relevant
portfolio security. In such instances,  the Proxy Administrator may instruct the
Agent not to vote such proxy.

Reasonable  efforts  shall be made to secure and vote all other  proxies for the
clients, but, particularly in markets in which shareholders' rights are limited,
Non-Votes  may also occur in  connection  with a client's  related  inability to
timely  access  ballots  or  other  proxy  information  in  connection  with its
portfolio securities.

Non-Votes may also result in certain  cases in which the Agent's  recommendation
has been deemed to be conflicted, as provided for herein.

3.  OUT-OF-GUIDELINES  VOTES:  Votes  Contrary  to  the  Guidelines,   or  Agent
Recommendation,  where applicable, Where No Recommendation is Provided by Agent,
or Where Agent's Recommendation is Conflicted

If the  Proxy  Administrator  recommends  that a  client  vote  contrary  to the
Guidelines,  or the recommendation of the Agent, where applicable,  if the Agent
has made no recommendation on a matter requiring case-by-case  consideration and
the Guidelines are silent,  or the Agent's  recommendation on a matter requiring
case-by-case  consideration is deemed to be conflicted,  the Proxy Administrator
will forward the Agent's analysis and  recommendation  and any research obtained
from the Agent or any  other  source to the  Proxy  Group.  The Proxy  Group may
consult  with the  Agent as it deems  necessary.  The Proxy  Administrator  will
instruct  the Agent to vote the proxy as  recommended  by the Proxy  Group.  The
Adviser will provide a report to the Boards of Trustees of the Eaton Vance Funds
reflecting any votes cast contrary to the Guidelines or Agent Recommendation, as
applicable, and shall do so no less than annually.

The Proxy  Administrator will maintain a record of all proxy questions that have
been  referred  by the  Agent,  all  applicable  recommendations,  analysis  and
research received and any resolution of the matter.

V.  RECORDKEEPING

The Advisers will maintain  records  relating to the proxies they vote on behalf
of their clients in accordance with Section 204-2 of the Investment Advisers Act
of 1940, as amended. Those records will include:

>>   A copy of the Advisers' proxy voting policies and procedures;

>>   Proxy  statements   received  regarding  client   securities.   Such  proxy
     statements  received from issuers are either in the SEC's EDGAR database or
     are kept by the Agent and are available upon request;

>>   A record of each vote cast;

>>   A copy of any document  created by the Advisers that was material to making
     a  decision  on how to vote a proxy for a client or that  memorializes  the
     basis for such a decision; and

>>   Each  written  client  request for proxy voting  records and the  Advisers'
     written  response to any client request  (whether written or oral) for such
     records.

All records described above will be maintained in an easily accessible place for
five years and will be  maintained in the offices of the Advisers or their Agent
for two years after they are created.

VI.  ASSESSMENT OF AGENT AND  IDENTIFICATION  AND  RESOLUTION OF CONFLICTS  WITH
     CLIENTS

A.   ASSESSMENT OF AGENT

The  Advisers  shall  establish  that  the  Agent  (i) is  independent  from the
Advisers,  (ii) has resources that indicate it can competently  provide analysis
of proxy issues,  and (iii) can make  recommendations in an impartial manner and
in the best interests of the clients and,  where  applicable,  their  beneficial
owners.  The Advisers  shall  utilize,  and the Agent shall  comply  with,  such
methods for  establishing  the  foregoing as the  Advisers  may deem  reasonably
appropriate  and shall do so not less than annually as well as prior to engaging
the  services of any new proxy voting  service.  The Agent shall also notify the
Advisers in writing within fifteen (15) calendar days of any material  change to
information  previously  provided to an Adviser in connection with  establishing
the Agent's independence, competence or impartiality.

                                       31
<PAGE>

B.  CONFLICTS OF INTEREST

As fiduciaries to their clients,  each Adviser puts the interests of its clients
ahead of its own. In order to ensure that relevant personnel of the Advisers are
able to identify  potential  material  conflicts of interest,  each Adviser will
take the following steps:

>>   Quarterly,  the Eaton  Vance  Legal  and  Compliance  Department  will seek
     information  from the department  heads of each  department of the Advisers
     and of Eaton Vance Distributors, Inc. ("EVD") (an affiliate of the Advisers
     and principal  underwriter of certain Eaton Vance Funds).  Each  department
     head will be asked to provide a list of significant  clients or prospective
     clients of the Advisers or EVD.

>>   A representative of the Legal and Compliance Department will compile a list
     of the companies  identified (the "Conflicted  Companies") and provide that
     list to the Proxy Administrator.

>>   The Proxy Administrator will compare the list of Conflicted  Companies with
     the  names of  companies  for  which he or she has  been  referred  a proxy
     statement (the "Proxy Companies").  If a Conflicted Company is also a Proxy
     Company, the Proxy Administrator will report that fact to the Proxy Group.

>>   If the Proxy Administrator  expects to instruct the Agent to vote the proxy
     of the Conflicted Company strictly according to the Guidelines contained in
     these  Proxy  Voting  Policies  and  Procedures  (the  "Policies")  or  the
     recommendation  of the Agent, as applicable,  he or she will (i) inform the
     Proxy Group of that fact,  (ii)  instruct the Agent to vote the proxies and
     (iii) record the existence of the material  conflict and the  resolution of
     the matter.

>>   If the  Proxy  Administrator  intends  to  instruct  the Agent to vote in a
     manner   inconsistent   with  the  Guidelines   contained  herein  or,  the
     recommendation   of  the  Agent,   as  applicable,   the  Proxy  Group,  in
     consultation with Eaton Vance senior  management,  will then determine if a
     material  conflict of interest exists between the relevant  Adviser and its
     clients.  If the Proxy  Group,  in  consultation  with Eaton  Vance  senior
     management,   determines  that  a  material   conflict  exists,   prior  to
     instructing  the Agent to vote any  proxies  relating  to these  Conflicted
     Companies  the Adviser  will seek  instruction  on how the proxy  should be
     voted from:

>>   The client, in the case of an individual or corporate client;

>>   In the  case  of a Fund  its  board  of  directors,  or  any  committee  or
     sub-committee identified by the board; or

>>   The adviser,  in situations where the Adviser acts as a sub-adviser to such
     adviser.

The Adviser will provide all reasonable  assistance to each party to enable such
party to make an informed decision.

If the client,  Fund board or adviser, as the case may be, fails to instruct the
Adviser on how to vote the proxy, the Adviser will generally instruct the Agent,
through the Proxy  Administrator,  to abstain  from voting in order to avoid the
appearance of  impropriety.  If however,  the failure of the Adviser to vote its
clients'  proxies would have a material adverse economic impact on the Advisers'
clients' securities holdings in the Conflicted Company, the Adviser may instruct
the Agent,  through the Proxy  Administrator,  to vote such  proxies in order to
protect its clients'  interests.  In either case, the Proxy  Administrator  will
record the existence of the material conflict and the resolution of the matter.

The Advisers shall also identify and address  conflicts that may arise from time
to time  concerning the Agent.  Upon the Advisers'  request,  which shall be not
less than annually, and within fifteen (15) calendar days of any material change
to such information  previously provided to an Adviser,  the Agent shall provide
the  Advisers  with  such  information  as  the  Advisers  deem  reasonable  and
appropriate for use in determining material  relationships of the Agent that may
pose a conflict  of  interest  with  respect to the  Agent's  proxy  analysis or
recommendations.  Such  information  shall  include,  but is not  limited  to, a
monthly  report  from the  Agent  detailing  the  Agent's  Corporate  Securities
Division  clients and related  revenue  data.  The  Advisers  shall  review such
information on a monthly basis. The Proxy Administrator shall instruct the Agent
to refer any proxies for which a material  conflict of the Agent is deemed to be
present to the Proxy  Administrator.  Any such proxy referred by the Agent shall
be  referred  to the Proxy Group for  consideration  accompanied  by the Agent's
written  analysis  and  voting  recommendation.  The  Proxy  Administrator  will
instruct the Agent to vote the proxy as recommended by the Proxy Group.

                                       32
<PAGE>



          EATON VANCE TAX-MANAGED GLOBAL DIVERSIFIED EQUITY INCOME FUND

                       STATEMENT OF ADDITIONAL INFORMATION
                                    [ ], 2006

                                ----------------


                      INVESTMENT ADVISER AND ADMINISTRATOR
                             Eaton Vance Management
                                255 State Street
                                Boston, MA 02109

                                   SUB-ADVISER
                   Rampart Investment Management Company, Inc.
                             One International Place
                                Boston, MA 02110

                                    CUSTODIAN
                         Investors Bank & Trust Company
                              200 Clarendon Street
                                Boston, MA 02116

                                 TRANSFER AGENT
                                    PFPC Inc.
                                 P.O. Box 43027
                            Providence, RI 02940-3027

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                                       [ ]

                                       33

<PAGE>
                                     PART C

                                OTHER INFORMATION

ITEM 25.    FINANCIAL STATEMENTS AND EXHIBITS

(1) FINANCIAL STATEMENTS:

      Included in Part A:
      Not applicable.

      Included in Part B:
      Report of Independent Registered Public Accounting Firm*
      Statement of Assets and Liabilities*
      Notes to Financial Statement*

----------------------------
*To be added by amendment.

(2)   EXHIBITS:

      (a) Agreement and Declaration of Trust dated October 30, 2006 filed
          herewith.

      (b) By-Laws filed herewith.

      (c) Not applicable.

      (d) Form of Specimen Certificate for Common Shares of Beneficial Interest
          to be filed by amendment.

      (e) Form of Dividend Reinvestment Plan to be filed by amendment.

      (f) Not applicable.

      (g) (1) Form of Investment Advisory Agreement dated ________, 2006, to be
              filed by amendment.

          (2) Form of Sub-Advisory Agreement with Rampart Investment Company,
              Inc. dated ____________, 2006, to be filed by amendment.

      (h) (1) Form of Underwriting Agreement to be filed by amendment.

          (2) Form of Master Agreement Among Underwriters to be filed by
              amendment.

          (3) Form of Master Selected Dealer Agreement to be filed by
              amendment.

      (i) The Securities and Exchange Commission has granted the Registrant an
          exemptive order that permits the Registrant to enter into deferred

<PAGE>

          compensation arrangements with its independent Trustees. See in the
          matter of Capital Exchange Fund, Inc., Release No. IC- 20671
          (November 1, 1994).

      (j) (1) Master Custodian Agreement with Investors Bank & Trust Company
              dated ______________, 2006 to be filed by amendment.

          (2) Extension Agreement dated August 31, 2005 to Master Custodian
              Agreement with Investors Bank & Trust Company filed as Exhibit
              (j)(2) to the Pre-Effective Amendment No. 2 of Eaton Vance
              Tax-Managed Global Buy-Write Opportunities Fund (File Nos.
              333-123961, 811-21745) filed with the Commission on September 26,
              2005 (Accession No. 0000950135-05- 005528) and incorporated herein
              by reference.

          (3) Delegation Agreement dated December 11, 2000, with Investors Bank
              & Trust Company filed as Exhibit (j)(e) to the Eaton Vance Prime
              Rate Reserves N-2, Amendment No. 5 (File Nos. 333-32267,
              811-05808) filed April 3, 2001 (Accession No.
              0000940394-01-500126) and incorporated herein by reference.

      (k) (1) Transfer Agency and Services Agreement as amended and restated on
              June 16, 2005, filed as Exhibit (k)(2) to the Pre-Effective
              Amendment No. 1 of Eaton Vance Tax-Managed Global Buy-Write
              Opportunities Fund (File Nos. 333-123961 and 811-21745) filed
              August 24, 2005 (Accession No. 0000950135-05-004937) and
              incorporated herein by reference.

          (2)  Supplement to the Transfer Agency and Services Agreement dated
               ___________, 2006 to be filed by amendment.

          (3)  Form of Administration Agreement dated _______________, 2006 to
               be filed by amendment.

          (4)  Organizational and Expense Reimbursement Agreement to be filed by
               amendment.

          (5)  Form of Structuring Fee Agreement to be filed by amendment.

      (l) Opinion and Consent of Kirkpatrick & Lockhart Nicholson Graham LLP
          as to Registrant's Common Shares to be filed by amendment.

      (m) Not applicable.

      (n) Consent of Independent Registered Public Accounting Firm to be filed
          by amendment.

      (o) Not applicable.

      (p) Letter Agreement with Eaton Vance Management to be filed by
          amendment.
<PAGE>

      (q) Not applicable.



      (r) (1) Code of Ethics adopted by Eaton Vance Corp., Eaton Vance
              Management Boston Management and Research, Eaton Vance
              Distributors, Inc. and the Eaton Vance Funds effective September
              1, 2000, as revised February 1, 2005 filed as Exhibit (r)(1) to
              the Registration Statement on Form N-2 of Eaton Vance Global
              Enhanced Equity Income Fund (File Nos. 33-122540, 811- 21711)
              filed February 4, 2005 (Accession No. 0000898432-05- 000098) and
              incorporated herein by reference.

          (2) Code of Ethics for Rampart Investment Management Company, Inc.
              effective September 1, 2004, as modified February 1, 2005, filed
              as Exhibit (r)(2) to Pre-Effective Amendment No. 2 of Eaton Vance
              Tax- Managed Global Buy-Write Opportunities Fund (File Nos.
              333-123961, 811- 21745) filed September 26, 2005 (Accession No.
              0000950135-05- 005528) and incorporated herein by reference.

      (s) Power of Attorney dated ____________, 2006 to be filed by amendment.

ITEM 26.  MARKETING ARRANGEMENTS

      See Form of Underwriting Agreement to be filed by amendment.

ITEM 27.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

      The approximate expenses in connection with the offering are as follows:

Registration and Filing Fees                                  $_________________
National Association of Securities Dealers, Inc. Fees
New York Stock Exchange Fees
Costs of Printing and Engraving
Accounting Fees and Expenses
Legal Fees and Expenses
                                                              ===============
Total                                                         $_________________

ITEM 28.  PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

      None.

ITEM 29.  NUMBER OF HOLDERS OF SECURITIES

      Set forth below is the number of record holders as of October 31, 2006, of
each class of securities of the Registrant:

<TABLE>
<CAPTION>
Title of Class                                          Number of Record Holders
--------------                                          ------------------------
<PAGE>
<S>                                                             <C> <C>
Common Shares of Beneficial                                     0
interest, par value $0.01 per share
</TABLE>

ITEM 30.  INDEMNIFICATION

      The Registrant's By-Laws filed herewith contain, and the form of
Underwriting Agreement to be filed by amendment is expected to contain,
provisions limiting the liability, and providing for indemnification, of the
Trustees and officers under certain circumstances.

      Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their official capacities as
such. Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the provisions
described in this Item 30, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

ITEM 31.  BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

      Reference is made to: (i) the information set forth under the caption
Investment advisory and other services" in the Statement of Additional
Information; (ii) the Eaton Vance Corp. 10-K filed under the Securities Exchange
Act of 1934 (File No. 001-8100); and (iii) the Form ADV of Eaton Vance
Management (File No. 801-15930) filed with the Commission, all of which are
incorporated herein by reference.

ITEM 32.  LOCATION OF ACCOUNTS AND RECORDS

      All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 200 Clarendon Street,
16th Floor, Boston, MA 02116, and its transfer agent, PFPC Inc., 4400 Computer
Drive, Westborough, MA 01581-5120, with the exception of certain corporate
documents and portfolio trading documents which are in the possession and
custody of Eaton Vance Management, The Eaton Vance Building, 255 State Street,
Boston, MA 02109. Registrant is informed that all applicable accounts, books and
documents required to be maintained by registered investment advisers are in the
custody and possession of Eaton Vance Management.

ITEM 33.  MANAGEMENT SERVICES

<PAGE>

      Not applicable.

ITEM 34.  UNDERTAKINGS

      1. The Registrant undertakes to suspend offering of Common Shares until
the prospectus is amended if (1) subsequent to the effective date of this
Registration Statement, the net asset value declines more than 10 percent from
its net asset value as of the effective date of this Registration Statement or
(2) the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.

      2. Not applicable.

      3. Not applicable.

      4. Not applicable.

      5. The Registrant undertakes that:

            a. for the purpose of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to 497(h) under the Securities Act
shall be deemed to be part of the Registration Statement as of the time it was
declared effective; and

            b. for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

      6. The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days of receipt
of an oral or written request, its Statement of Additional Information.

<PAGE>

                                     NOTICE

      A copy of the Agreement and Declaration of Trust of Eaton Vance Tax-
Managed Global Diversified Equity Income Fund is on file with the Secretary of
State of the Commonwealth of Massachusetts and notice is hereby given that this
instrument is executed on behalf of the Registrant by an officer of the
Registrant as an officer and not individually and that the obligations of or
arising out of this instrument are not binding upon any of the Trustees,
officers or shareholders individually, but are binding only upon the assets and
property of the Registrant.


<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, as amended and
the Investment Company Act of 1940, as amended the Registrant has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Boston and the Commonwealth of
Massachusetts, on the 31st day of October 2006.



                                    EATON VANCE TAX-MANAGED GLOBAL
                                       DIVERSIFIED EQUITY INCOME FUND


                                    By:   /s/ Duncan W. Richardson
                                          ---------------------------------
                                          Duncan W. Richardson
                                          President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, as amended
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                      Title                                Date
-----------------------------  ---------------------------------    ----------------------
<S>                            <C>                                  <C>


/s/ Duncan W. Richardson       President and Chief Executive        October 31, 2006
-----------------------------  Officer
Duncan W. Richardson

/s/ Barbara E. Campbell        Treasurer (and Principal             October 31, 2006
-----------------------------  Financial and Accounting
Barbara E. Campbell            Officer)


/s/ Thomas E. Faust Jr.        Trustee                              October 31, 2006
-----------------------------
Thomas E. Faust Jr.

/s/ Alan R. Dynner             Trustee                              October 31, 2006
-----------------------------
Alan R. Dynner
</TABLE>

<PAGE>

                                INDEX TO EXHIBITS

(a) Agreement and Declaration of Trust dated October 30, 2006

(b) By-Laws

<PAGE>

</TEXT>
</DOCUMENT>
