<SEC-DOCUMENT>0000898432-05-000288.txt : 20120827
<SEC-HEADER>0000898432-05-000288.hdr.sgml : 20120827

<ACCEPTANCE-DATETIME>20050401170536

<PRIVATE-TO-PUBLIC>

ACCESSION NUMBER:		0000898432-05-000288

CONFORMED SUBMISSION TYPE:	N-2

PUBLIC DOCUMENT COUNT:		4

REFERENCES 429:			811-21735

FILED AS OF DATE:		20050401

DATE AS OF CHANGE:		20050725


FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			Eaton Vance Tax-Managed Buy-Write Opportunities Fund

		CENTRAL INDEX KEY:			0001322436

		IRS NUMBER:				000000000



	FILING VALUES:

		FORM TYPE:		N-2

		SEC ACT:		1933 Act

		SEC FILE NUMBER:	333-123770

		FILM NUMBER:		05726378



	BUSINESS ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110

		BUSINESS PHONE:		617-482-8260



	MAIL ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110




FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			Eaton Vance Tax-Managed Buy-Write Opportunities Fund

		CENTRAL INDEX KEY:			0001322436

		IRS NUMBER:				000000000



	FILING VALUES:

		FORM TYPE:		N-2

		SEC ACT:		1940 Act

		SEC FILE NUMBER:	811-21735

		FILM NUMBER:		05726377



	BUSINESS ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110

		BUSINESS PHONE:		617-482-8260



	MAIL ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110



</SEC-HEADER>

<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>ev_formn2.txt
<TEXT>

           As filed with the Securities and Exchange Commission on April 1, 2005
                                                1933 Act File No. 333-
                                                1940 Act File No. 811-21735

                     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 BUY-WRITE OPPORTUNITIES 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
                                 75 STATE STREET
                           BOSTON, MASSACHUSETTS 02109

     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)

<PAGE>

<TABLE>
<CAPTION>

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

--------------------------------------------------------------------------------------------------------------------
                                                              PROPOSED
                                         AMOUNT BEING         MAXIMUM           PROPOSED
   TITLE OF SECURITIES BEING              REGISTERED          OFFERING           MAXIMUM            AMOUNT OF
        REGISTERED                      PRICE PER UNIT     OFFERING PRICE       AGGREGATE       REGISTRATION FEES
                                             (1)                 (1)               (1)               (1)(2)
---------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                <C>              <C>                  <C>

Common Shares of Beneficial                50,000              $20.00           $1,000,000           $117.70
Interest, $0.01 par value

---------------------------------------------------------------------------------------------------------------------
</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.  We may
not sell  these  securities  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 state where the offer or sale is not permitted.

PROSPECTUS                           SUBJECT TO COMPLETION, DATED APRIL 1, 2005

(EATON VANCE LOGO)

                                     SHARES

              EATON VANCE TAX-MANAGED BUY-WRITE OPPORTUNITIES FUND

                                  COMMON SHARES

                                $20.00 PER SHARE
                                ----------------

     INVESTMENT OBJECTIVES. Eaton Vance Tax-Managed Buy-Write Opportunities 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 (1) owning a diversified  portfolio
of  common  stocks,  a  segment  of  which  seeks to  exceed  the  total  return
performance  of the S&P 500  Composite  Stock  Price Index (the "S&P 500") (such
stocks are referred to as the "S&P 500 Segment") and a segment of which seeks to
exceed the total return  performance of the NASDAQ-100 Index (the  "NASDAQ-100")
(such stocks are referred to as the  "NASDAQ-100  Segment") and (2) selling on a
continuous basis S&P 500 call options on substantially the full value of the S&P
500 Segment and NASDAQ-100 call options on  substantially  the full value of the
NASDAQ-100 Segment. (CONTINUED ON INSIDE FRONT COVER)

     BECAUSE THE FUND IS NEWLY  ORGANIZED,  ITS 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 CONSIDERATIONS" BEGINNING AT
PAGE 20.

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

                                                   Per Share     Total (2)(3)
                                                  -----------   -------------
     Public Offering Price
     Sales Load
     Estimated Offering Expenses (1) (2)
     Proceeds to the Fund

     ------------
(1)  Eaton  Vance  (not the Fund) may pay  certain  additional  compensation  to
     qualifying  Underwriters.  See  "Underwriting."  Eaton Vance (not the Fund)
     will pay [ ] services  provided  pursuant to an  agreement  between [ ] and
     Eaton Vance. See  "Underwriting."  The total  compensation  received by the
     Underwriters  will not exceed 9.0% of the aggregate  initial offering price
     of the common shares offered hereby.
(2)  In addition to the sales load, the Fund will pay offering expenses of up to
     $[ ] 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) exceed $[ ] per share.  Eaton Vance or an affiliate has agreed
     to reimburse all Fund organizational costs.
(3)  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.
               The   Underwriters   expect  to  deliver  the  common  shares  to
     purchasers on or about , 2005.
                                ----------------
                , 2005
<PAGE>

     INVESTMENT ADVISER AND SUB-ADVISERS. The Fund's investment adviser is Eaton
Vance Management ("Eaton Vance" or the "Adviser"). As of January 31, 2005, Eaton
Vance and its subsidiaries managed approximately $98 billion on behalf of funds,
institutional clients and individuals,  including approximately $58.6 billion in
equity  assets.  Eaton  Vance has  engaged its  affiliate  Parametric  Portfolio
Associates LLC  ("Parametric" or a "Sub-Adviser")  as a sub-adviser to the Fund.
Parametric,  founded in 1987, specializes in managing broadly diversified,  risk
controlled  and  tax-efficient  portfolios  for high net  worth  and  investment
company clients.  Parametric managed  approximately $9.2 billion in assets as of
January 31, 2005.  Eaton Vance has also engaged  Rampart  Investment  Management
Company, Inc. ("Rampart" or a "Sub-Adviser") 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  $2.7
billion in assets as of February 28, 2005.  Eaton Vance will be responsible  for
managing the Fund's overall  investment  program,  providing research support to
the Sub-Advisers and supervising the performance of the Sub-Advisers. Parametric
will be  responsible  for  structuring  and  managing  the Fund's  common  stock
portfolio,  including tax-loss harvesting and other  tax-management  techniques,
relying in part on the  fundamental  research  and  analytical  judgments of the
Adviser.  Parametric has developed  specialized  programs and systems that allow
for  efficient  implementation  of  the  Fund's  strategies.   Rampart  will  be
responsible  for  providing  advice  on  and  execution  of the  Fund's  options
strategy.

     PORTFOLIO CONTENTS. Under normal market conditions, the Fund will invest at
least  80% of its total  assets in a  diversified  portfolio  of common  stocks,
designated  segments of which seek to exceed the total return performance of the
S&P 500 and the  NASDAQ-100.  Initially,  the S&P 500  Segment  is  expected  to
represent  approximately  75% of the Fund's stock  portfolio and the  NASDAQ-100
Segment  approximately 25%. Over time, these percentages may vary as a result of
relative  changes in the indices,  the  Adviser's  evaluation  of equity  market
conditions and other  factors.  Due to tax  considerations,  the Fund intends to
limit the overlap  between its stock holdings (and any subset  thereof) and each
of the S&P 500 and the NASDAQ-100 to less than 70% on an ongoing basis. The Fund
will invest primarily in common stocks of U.S. issuers.

     The Fund will seek to generate  current  earnings in part by  employing  an
options strategy of writing  (selling) index call options on the S&P 500 and the
NASDAQ-100.  Under  normal  market  conditions,  the Fund  expects  to sell on a
continuous basis S&P 500 call options on substantially the full value of the S&P
500 Segment and NASDAQ-100 call options on  substantially  the full value of the
NASDAQ-100 Segment. Under normal market conditions, at least 80% of the value of
the Fund's total assets will be subject to written index call  options.  Writing
index call options involves a tradeoff between the option premiums  received and
reduced participation in potential future stock price appreciation of the Fund's
portfolio of common  stocks.  The Fund seeks to generate  current  earnings from
option premiums and, to a lesser extent, from dividends on stocks held.

     EXCHANGE  LISTING.  The Fund's common shares have been approved for listing
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 distribution of current earnings 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,  option
premiums, market interest rates, dividend rates 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.

     This  Prospectus  sets forth  concisely  information you should know before
investing in the shares of the Fund.  Please read and retain this Prospectus for
future reference.  A Statement of Additional  Information dated , 2005, has been
filed with the  Securities and Exchange  Commission  ("SEC") 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 54 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 SEC'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 SEC's
internet site  (http://www.sec.gov);  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.  The Fund's address is The Eaton Vance Building, 255
State  Street,   Boston,   Massachusetts  02109  and  its  telephone  number  is
1-800-225-6265.

     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.

                                       2
<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 anyone 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 of these securities
in any state  where the offer is not  permitted.  You should not assume that the
information  contained in this  Prospectus is accurate as of any date other than
the  date on the  front  of this  Prospectus.  The  Fund's  business,  financial
condition, results of operations and prospects may have changed since that date.
                                ----------------

                                     TABLE OF CONTENTS

Prospectus Summary..............................................................
Summary of Fund Expenses........................................................
The Fund........................................................................
Use of Proceeds.................................................................
Investment Objectives, Policies and Risks.......................................
Management of the Fund..........................................................
Distributions...................................................................
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 , 2005 (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 is in addition to the
dealers' obligation to deliver a Prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.

                                       3
<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 FUND'S  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, POLICIES AND RISKS."

THE FUND...........................  Eaton    Vance    Tax-Managed     Buy-Write
                                     Opportunities  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"),    Parametric   Portfolio
                                     Associates   LLC's   ("Parametric"   or   a
                                     "Sub-Adviser")   and   Rampart   Investment
                                     Management Company,  Inc.'s ("Rampart" or a
                                     "Sub-Adviser")    internal   research   and
                                     proprietary    modeling    techniques   and
                                     software. An investment in the Fund may not
                                     be appropriate for all investors.  There is
                                     no assurance that the Fund will achieve its
                                     investment objectives.

THE OFFERING.......................  The  Fund  is  offering  common  shares  of
                                     beneficial  interest,  par value  $0.01 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  additional
                                     Common  Shares  solely  to cover  orders in
                                     excess of Common Shares. The initial public
                                     offering  price is $20.00  per  share.  The
                                     minimum  purchase  in this  offering is 100
                                     Shares ($2,000).  See "Underwriting." Eaton
                                     Vance or an  affiliate  has  agreed  to (i)
                                     reimburse all organizational costs and (ii)
                                     pay all  offering  costs  (other than sales
                                     loads) that exceed $[ ] 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 (1) owning a  diversified  portfolio  of
                                     common stocks,  a segment of which seeks to
                                     exceed the total return  performance of the
                                     S&P 500  Composite  Stock  Price Index (the
                                     "S&P 500") (such  stocks are referred to as
                                     the "S&P 500  Segment")  and a  segment  of
                                     which  seeks to  exceed  the  total  return
                                     performance  of the  NASDAQ-100  Index (the
                                     "NASDAQ-100")  (such stocks are referred to
                                     as  the   "NASDAQ-100   Segment")  and  (2)
                                     selling on a continuous  basis S&P 500 call
                                     options on substantially  the full value of
                                     the S&P 500  Segment  and  NASDAQ-100  call
                                     options on substantially  the full value of
                                     the NASDAQ-100 Segment.

                                     Under normal  market  conditions,  the Fund
                                     will  invest  at  least  80% of  its  total
                                     assets in a diversified portfolio of common
                                     stocks,  designated  segments of which seek
                                     to exceed the total return  performance  of
                                     the S&P 500 and the NASDAQ-100.  Initially,
                                     the  S&P  500   Segment  is   expected   to
                                     represent  approximately  75% of the Fund's
                                     stock portfolio and the NASDAQ-100  Segment
                                     approximately   25%.   Over   time,   these
                                     percentages   may  vary  as  a  result   of
                                     relative   changes  in  the  indices,   the
                                     Adviser's   evaluation   of  equity  market
                                     conditions  and other  factors.  Due to tax
                                     considerations,  the Fund  intends to limit
                                     the overlap between its stock holdings (and
                                     any subset thereof) and each of the S&P 500
                                     and the  NASDAQ-100  to less than 70% on an
                                     ongoing   basis.   The  Fund  will   invest


                                       4
<PAGE>

                                     primarily in common stocks of U.S. issuers.
                                     The Fund may  invest up to 10% of its total
                                     assets in  securities  of foreign  issuers,
                                     including  American   Depositary   Receipts
                                     ("ADRs"),    Global   Depositary   Receipts
                                     ("GDRs") and European  Depositary  Receipts
                                     ("EDRs").  The Fund  normally  expects that
                                     its assets will 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   or  group  of
                                     industries.  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 ("S&P  MidCap  400").  As of December
                                     31, 2004, the median market  capitalization
                                     of  companies  in the  S&P  MidCap  400 was
                                     approximately $2.3 billion.

                                     The  Fund  will  seek to  generate  current
                                     earnings  in part by  employing  an options
                                     strategy  of writing  (selling)  index call
                                     options on the S&P 500 and the  NASDAQ-100.
                                     Under normal  market  conditions,  the Fund
                                     expects to sell on a  continuous  basis S&P
                                     500 call options on substantially  the full
                                     value of the S&P 500 Segment and NASDAQ-100
                                     call  options  on  substantially  the  full
                                     value  of  the  NASDAQ-100  Segment.  Under
                                     normal market  conditions,  at least 80% of
                                     the value of the Fund's  total  assets will
                                     be subject to written  index call  options.
                                     Writing  index  call  options   involves  a
                                     tradeoff   between   the  option   premiums
                                     received  and  reduced   participation   in
                                     potential  future stock price  appreciation
                                     of the Fund's  portfolio of common  stocks.
                                     The Fund seeks to generate current earnings
                                     from  option  premiums  and,  to  a  lesser
                                     extent, from dividends on stocks held.

                                     The  Fund  intends  to  sell  S&P  500  and
                                     NASDAQ-100    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 S&P 500  and  NASDAQ-100
                                     call  options,  the Fund will  receive cash
                                     (the premiums) from options purchasers. The
                                     purchaser of an S&P 500 or NASDAQ-100  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 S&P 500 and NASDAQ-100 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  will,  in
                                     effect, sell the potential  appreciation in
                                     the  value  of the  S&P  500 or  NASDAQ-100
                                     above the  exercise  price in exchange  for
                                     the  option   premium   received.   If,  at
                                     expiration,  an S&P 500 or NASDAQ-100  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  policies,  under normal  market
                                     conditions,  that the Fund  will  invest at
                                     least  80%  of  its   total   assets  in  a
                                     diversified  portfolio  of  common  stocks,
                                     designated segments of which seek to exceed
                                     the total return performance of the S&P 500
                                     and the  NASDAQ-100,  and that at least 80%
                                     of the  value of the  Fund's  total  assets
                                     will  be  subject  to  written  index  call


                                       5
<PAGE>

                                     options are  non-fundamental  policies  and
                                     may be changed by the Fund's 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-Advisers
                                     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  U.S.  It is  not  possible  to  invest
                                     directly in the S&P 500. The  NASDAQ-100 is
                                     an unmanaged index maintained by the Nasdaq
                                     Stock Market, Inc. ("Nasdaq") that includes
                                     100   of   the   largest    domestic    and
                                     international    non-financial    companies
                                     listed on The  NASDAQ  Stock  Market  based
                                     upon market capitalization.  The NASDAQ-100
                                     reflects  companies  across major  industry
                                     groups,  including  computer  hardware  and
                                     software,               telecommunications,
                                     retail/wholesale  trade and  biotechnology.
                                     It is not  possible  to invest  directly in
                                     the NASDAQ-100.  The Fund is not sponsored,
                                     endorsed,  sold  or  promoted  by  Standard
                                     &Poor's or Nasdaq,  and  neither  makes any
                                     representation  regarding the  advisability
                                     of investing in the Fund.

INVESTMENT SELECTION STRATEGIES....  Eaton   Vance  will  be   responsible   for
                                     managing  the  Fund's  overall   investment
                                     program,  providing research support to the
                                     Sub-Advisers     and     supervising    the
                                     performance of the Sub-Advisers. Parametric
                                     will be  responsible  for  structuring  and
                                     managing the Fund's common stock portfolio,
                                     including  tax-loss  harvesting  and  other
                                     tax-management techniques,  relying in part
                                     on the fundamental  research and analytical
                                     judgments  of the Adviser.  Parametric  has
                                     developed  specialized programs and systems
                                     that allow for efficient  implementation of
                                     the   Fund's    strategies.    The   Fund's
                                     investments  are  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.

                                     The  Adviser  believes  that a strategy  of
                                     owning a  portfolio  of common  stocks  and
                                     selling  covered call options (a "buy-write
                                     strategy")  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  are   "section   1256
                                     contracts"   subject   to   favorable   tax
                                     treatment and because the markets for index
                                     options  are  generally   deeper  and  more
                                     liquid than options on individual stocks.

                                     Eaton  Vance   further   believes   that  a
                                     strategy  of owning a  portfolio  of common
                                     stocks in  conjunction  with writing  index
                                     call options on the S&P 500 and  NASDAQ-100
                                     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   U.S.   common   stocks   (as
                                     represented  by  the  S&P  500  and/or  the
                                     NASDAQ-100)     exceeds    the    long-term
                                     historical average of stock market returns.
                                     The  Adviser  considers  moderately  rising


                                       6
<PAGE>

                                     equity market  conditions to exist whenever
                                     current  annual  returns  on  U.S.   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 of the S&P 500 and the  NASDAQ-100
                                     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 the S&P 500 and the
                                     NASDAQ-100   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.  Parametric  will consider a
                                     variety  of  factors  in  constructing  and
                                     maintaining  the  Fund's  stock  portfolio,
                                     including,   but  not  limited  to,   stock
                                     performance  ratings as  determined  by the
                                     Adviser,  stock  dividend  yields,  overlap
                                     between the Fund's  stock  holdings and the
                                     S&P  500  and  the  NASDAQ-100,   projected
                                     tracking of the S&P 500 Segment  versus the
                                     S&P 500 and the  NASDAQ-100  Segment versus
                                     the   NASDAQ-100,   realization   of   loss
                                     harvesting   opportunities  and  other  tax
                                     management  considerations.  The  Adviser's
                                     evaluation   of  the   future   performance
                                     potential of individual  stocks will be one
                                     among several  considerations  in portfolio
                                     construction  and will not, on a standalone
                                     basis,   be   determinative   of  portfolio
                                     construction.  The Adviser's  stock ratings
                                     will  be  based  primarily  on  fundamental
                                     research.

                                     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
                                     effectively  limit the  Fund's  ability  to
                                     participate  in upward  price  movements in
                                     portfolio stocks beyond certain levels.

                                     The Fund  expects  to sell on a  continuous
                                     basis S&P 500 call options on substantially
                                     the full value of the S&P 500  Segment  and
                                     NASDAQ-100  call  options on  substantially
                                     the full value of the  NASDAQ-100  Segment.
                                     Under  normal  conditions,  at least 80% of
                                     the value of the Fund's  total  assets will
                                     be subject to written  index call  options.
                                     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  intends  to sell  S&P 500 and
                                     NASDAQ-100    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,


                                       7
<PAGE>

                                     the  Adviser  intends  to sell  S&P 500 and
                                     NASDAQ-100  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 Adviser
                                     expects   initially  to  follow  a  primary
                                     options  strategy  of  selling  S&P 500 and
                                     NASDAQ-100  call  options  with a remaining
                                     maturity  of  approximately  one  month and
                                     maintaining    its   short   call   options
                                     positions until  approximately their option
                                     valuation  date, at which time  replacement
                                     call  option  positions  with  a  remaining
                                     maturity  of  approximately  one  month are
                                     written.

                                     In  implementing   the  Fund's   investment
                                     strategy,  the Adviser and the Sub-Advisers
                                     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.   These
                                     include:  (1)  selling  index call  options
                                     that qualify for treatment as "section 1256
                                     contracts"   on  which  capital  gains  and
                                     losses   are   generally   treated  as  60%
                                     long-term and 40% short-term, regardless of
                                     holding  period;  (2)  limiting the overlap
                                     between its stock  holdings (and any subset
                                     thereof)  and  each  of the S&P 500 and the
                                     NASDAQ-100  to less than 70% on an  ongoing
                                     basis so that the Fund's stock holdings and
                                     S&P 500 and NASDAQ-100 call options are not
                                     subject  to  the   "straddle   rules;"  (3)
                                     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 (4)  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.

                                     In addition, the Fund will seek to earn and
                                     distribute   "qualified  dividend  income."
                                     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  the  Fund  to  receive  tax-advantaged
                                     treatment of its qualified dividend income,
                                     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   2008.
                                     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


                                       8
<PAGE>

                                     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 2009 unless  further  legislative
                                     action is taken.

                                     The Fund may seek to  enhance  the level of
                                     tax-advantaged  dividend income it receives
                                     by  emphasizing  higher-yielding  stocks in
                                     its  stock  portfolio  and 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.

                                     The   foregoing    policies   relating   to
                                     investment  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
                                     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.  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.   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  "Investment
                                     Objectives, Polices and Risks."

LISTING............................  The  Fund's  Common  Shares will  apply for
                                     listing  on the  New  York  Stock  Exchange
                                     under the symbol " ."

                                       9
<PAGE>

INVESTMENT ADVISER,  ADMINISTRATOR
AND SUB-ADVISERS...................  Eaton Vance,  a wholly owned  subsidiary of
                                     Eaton Vance Corp., is the Fund's investment
                                     adviser and administrator.  The Adviser and
                                     its subsidiaries managed  approximately $98
                                     billion  on behalf of funds,  institutional
                                     clients and  individuals  as of January 31,
                                     2005, including approximately $58.6 billion
                                     in equity  assets.  Thirty-one of the funds
                                     managed  by  Eaton  Vance  are   closed-end
                                     funds. Eaton Vance has engaged  Parametric,
                                     an indirect,  majority-owned  subsidiary of
                                     Eaton Vance Corp.,  as a sub-adviser to the
                                     Fund.   Parametric,    founded   in   1987,
                                     specializes     in     managing     broadly
                                     diversified,     risk     controlled    and
                                     tax-efficient portfolios for high net worth
                                     and investment company clients.  Parametric
                                     managed   approximately   $9.2  billion  in
                                     assets as of January 31, 2005.  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  $2.7 billion in assets as of
                                     February  28,  2005.  Eaton  Vance  will be
                                     responsible for managing the Fund's overall
                                     investment   program,   providing  research
                                     support to the Sub-Advisers and supervising
                                     the   performance   of  the   Sub-Advisers.
                                     Parametric    will   be   responsible   for
                                     structuring  and managing the Fund's common
                                     stock   portfolio,    including    tax-loss
                                     harvesting    and   other    tax-management
                                     techniques,   relying   in   part   on  the
                                     fundamental    research   and    analytical
                                     judgments  of the Adviser.  Parametric  has
                                     developed  specialized programs and systems
                                     that allow for efficient  implementation of
                                     the  Fund's  strategies.  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 net option  premiums,  net  realized
                                     and unrealized gains on stock  investments,
                                     and  dividends and interest  income,  after
                                     payment  of  Fund   expenses.   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  90-120  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  terminated   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


                                       10
<PAGE>

                                     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 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
                                     from   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
                                     SEC 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  SEC  will  grant  the
                                     Fund's  request for such  exemptive  order.
                                     The staff of the SEC has indicated  that it
                                     has suspended  the  processing of exemptive
                                     applications  requesting the type of relief
                                     referenced  above,  pending  review  by the
                                     staff of the  results  of an  industry-wide
                                     SEC  inspection  focusing  on the  dividend
                                     practices    of    closed-end    investment
                                     companies.  There can be no assurance as to
                                     when  that  review  might be  completed  or
                                     whether,  following that review,  the staff
                                     would  process such  applications  or grant
                                     such   relief.   As  a   result   of   this
                                     development,   the  Fund  has  no   current
                                     expectation  that it will be in a  position
                                     to include  long-term capital gains in Fund
                                     distributions   more   frequently  than  is
                                     permitted  under the 1940 Act, thus leaving
                                     the   Fund   with   the    possibility   of
                                     variability in distributions (and their tax
                                     attributes) as discussed above.

                                     Common Shareholders may elect automatically
                                     to   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,  a Common  Shareholder  may  elect to
                                     have   all   distributions    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 may elect
                                     to  participate  in the Plan by  completing


                                       11
<PAGE>

                                     the dividend  reinvestment plan application
                                     form. Common  Shareholders who do not elect
                                     to participate in the Plan will receive all
                                     distributions  in cash paid by check mailed
                                     directly to them by PFPC Inc.,  as dividend
                                     paying  agent.   Common   Shareholders  who
                                     intend to hold their Common Shares  through
                                     a broker or  nominee  should  contact  such
                                     broker or nominee to  determine  whether or
                                     how they may  participate  in the Plan. See
                                     "Dividend Reinvestment Plan."

CLOSED-END STRUCTURE...............  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.

                                     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  of  Trustees   (the   "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
                                     intends  to sell  index  call  options on a
                                     continuous basis on substantially  the full
                                     value of its  common  stock  holdings,  the
                                     Fund's  appreciation  potential from equity
                                     market  performance  will be  limited.  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.

                                       12
<PAGE>

                                     EQUITY   RISK.    Under    normal    market
                                     conditions,   the  Fund  will   invest  its
                                     managed  assets in a diversified  portfolio
                                     of 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 particular  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  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  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 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 "GROWTH" STOCK INVESTING. The Fund
                                     expects to invest  substantially  in stocks
                                     with   "growth"   characteristics.   Growth
                                     stocks  can react  differently  to  issuer,
                                     political,     market,     and     economic
                                     developments than the market as a whole and
                                     other types of stocks.  Growth  stocks tend
                                     to be  more  expensive  relative  to  their
                                     earnings or assets  compared to other types
                                     of stocks. As a result,  growth stocks tend
                                     to  be   sensitive   to  changes  in  their
                                     earnings and more volatile than other types
                                     of stocks.

                                     RISK OF  SELLING  INDEX CALL  OPTIONS.  The
                                     Fund expects to sell on a continuous  basis
                                     S&P 500 call options on  substantially  the
                                     full  value  of the  S&P  500  Segment  and
                                     NASDAQ-100  call  options on  substantially
                                     the full value of the  NASDAQ-100  Segment.
                                     The  purchaser  of an index call option has


                                       13
<PAGE>

                                     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   holding   a    diversified
                                     portfolio of stocks, the S&P 500 Segment of
                                     which  is  similar  to the  S&P 500 and the
                                     NASDAQ-100  Segment  of which is similar to
                                     the NASDAQ-100.  However, the Fund does not
                                     intend  to  acquire  and  hold a  portfolio
                                     containing  exactly  the same stocks as the
                                     S&P  500  and  the  NASDAQ-100.  Due to tax
                                     considerations,  the Fund  intends to limit
                                     the overlap between its stock holdings (and
                                     any subset thereof) and each of the S&P 500
                                     and the  NASDAQ-100  to less than 70% on an
                                     ongoing basis. Consequently, the Fund bears
                                     the  risk  that  the   performance  of  the
                                     securities   held   will   vary   from  the
                                     performance   of  the   S&P   500  and  the
                                     NASDAQ-100.  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 the S&P 500 and
                                     the   NASDAQ-100,   changes  in  actual  or
                                     perceived volatility of the S&P 500 and the
                                     NASDAQ-100  and the  remaining  time to the
                                     options'  expiration.  The trading price of
                                     S&P 500 and  NASDAQ-100  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 S&P 500
                                     and NASDAQ-100 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.

                                     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,


                                       14
<PAGE>

                                     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   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
                                     "Distributions   --   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.   Distributions
                                     paid   on   the   Common   Shares   may  be
                                     characterized  variously as net  investment
                                     income  (taxable at ordinary income rates),
                                     qualified   dividends   and  capital  gains
                                     dividends   (each   taxable  at   long-term
                                     capital  gains  rates) or return of capital
                                     (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
                                     "Distributions   --   Federal   Income  Tax
                                     Matters."

                                     DISTRIBUTION     RISK.     The    quarterly
                                     distributions   Common   Shareholders  will
                                     receive  from the Fund will be sourced from
                                     the  Fund's  net   option   premiums,   net
                                     realized  and  unrealized  gains  on  stock
                                     investments,  and  dividends  and  interest
                                     income, after payment of Fund expenses. The
                                     Fund's cash available for  distribution may
                                     vary widely over the short- and  long-term.
                                     If stock prices or stock market  volatility
                                     declines,   the  level  of  premiums   from
                                     writing  index call options and the amounts
                                     available  for  distribution  from  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


                                       15
<PAGE>

                                     stock   investments   will  be   determined
                                     primarily by the  direction and movement of
                                     the U.S.  stock market (and the  particular
                                     stocks  held).  Dividends on common  stocks
                                     are  not  fixed  but  are  declared  at the
                                     discretion   of  the   issuer's   board  of
                                     directors.  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 U.S.  exchanges or
                                     in   the   U.S.   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 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  held by 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.

                                     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.

                                     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.
                                     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. 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


                                       16
<PAGE>

                                     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  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 shares
                                     of   closed-end    management    investment
                                     companies  often  trade at a discount  from
                                     their  net  asset  value,  and  the  Fund's
                                     Common  Shares  may  likewise  trade  at  a
                                     discount  from  net  asset  value.  The net
                                     asset  value  per  Common   Share  will  be
                                     reduced immediately following this offering
                                     by  the  sales   load  and  the  amount  of
                                     offering  expenses  paid by the  Fund.  The
                                     trading  price of the Fund's  Common Shares
                                     may be less than the public offering price.
                                     The risk will be greater for  investors who
                                     sell their  Common  Shares in a  relatively
                                     short period after completion of the public
                                     offering.

                                     FINANCIAL  LEVERAGE.  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  is 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
                                     fees  will  be  higher  when   leverage  is
                                     utilized.   In  this  regard,   holders  of


                                       17
<PAGE>

                                     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, Parametric,
                                     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, Parametric, 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,  Parametric,
                                     Rampart   and  the   individual   portfolio
                                     managers  will be  successful in developing
                                     and  implementing  the  Fund's   investment
                                     strategy.   Subjective  decisions  made  by
                                     Eaton  Vance,  Parametric,  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 terrorist attacks in
                                     the United States on September 11, 2001 had
                                     a  disruptive   effect  on  the  securities
                                     markets.   These   terrorist   attacks  and
                                     related events,  including the war in Iraq,
                                     its aftermath, and continuing occupation of
                                     Iraq  by  coalition  forces,   have  raised
                                     short-term market risk and may have adverse
                                     long-term   effects   on  U.S.   and  world
                                     economies and markets. A similar disruption
                                     of  the  financial   markets  could  impact
                                     trading in common stocks and stock options,
                                     interest rates, credit risk,  inflation and
                                     other   factors   relating  to  the  Common
                                     Shares. The Fund cannot predict the effects
                                     of similar events in the future on the U.S.
                                     economy and securities markets.

                                     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.  See "Description
                                     of  Capital   Structure  --   Anti-Takeover
                                     Provisions in the Declaration of Trust."

                                       18
<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.
<TABLE>
<CAPTION>
<S>                                                                              <C>
SHAREHOLDER TRANSACTION EXPENSES
 Sales load paid by you (as a percentage of offering price).....................      %
 Expenses borne by Common Shareholders..........................................    %(1)
 Dividend reinvestment plan fees................................................     None(2)

                                                                                 PERCENTAGE OF
                                                                                  NET ASSETS
                                                                                 ATTRIBUTABLE TO
                                                                                 COMMON SHARES
                                                                                 -------------
ANNUAL EXPENSES
 Management fees...............................................................       %
 Other expenses................................................................     %(3)
 Total annual expenses.........................................................       %

------------
(1)  Eaton Vance or an affiliate has agreed to reimburse all organizational costs and pay all
      offering  costs (other than sales load) that exceed $0.04 per Common Share (0.20% of the
      offering price).

(2)   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.

(3)   Estimated expenses based on the current fiscal year.
</TABLE>

     The  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):

1 YEAR                   3 YEARS               5 YEARS               10 YEARS
------------             ------------          ------------          --------
 $                        $                     $                     $

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

------------
(1)   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.

                                       19
<PAGE>

                                    THE FUND

     Eaton Vance  Tax-Managed  Buy-Write  Opportunities  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 March [ ], 2005 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'  over-allotment  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 and (ii) pay all  offering  costs of the Fund  (other than
sales loads) that exceed $0.04 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 (1) owning a  diversified  portfolio of common  stocks a segment of
which  seeks to exceed the total  return  performance  of the S&P 500  Composite
Stock Price Index (the "S&P 500") (such  stocks are  referred to as the "S&P 500
Segment") and a segment of which seeks to exceed the total return performance of
the  NASDAQ-100  Index (the  "NASDAQ-100")  (such  stocks are referred to as the
"NASDAQ-100 Segment") and (2) selling on a continuous basis S&P 500 call options
on  substantially  the full value of the S&P 500  Segment  and  NASDAQ-100  call
options on substantially the full value of the NASDAQ-100 Segment.

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  diversified  portfolio  of
common  stocks,  designated  segments  of which seek to exceed the total  return
performance of the S&P 500 and the NASDAQ-100. Initially, the S&P 500 Segment is
expected to represent  approximately  75% of the Fund's stock  portfolio and the
NASDAQ-100 Segment approximately 25%. Over time, these percentages may vary as a
result of relative changes in the indicies,  the Adviser's  evaluation of equity
market conditions and other factors. Due to tax considerations, the Fund intends
to limit the overlap  between its stock  holdings  (and any subset  thereof) and
each of the S&P 500 and the NASDAQ-100 to less than 70% on an ongoing basis. The
Fund will invest primarily in common stocks of U.S. issuers. The Fund may invest
up to 10% of its total  assets  in  securities  of  foreign  issuers,  including
American Depositary  Receipts ("ADRs"),  Global Depositary Receipts ("GDRs") and
European Depositary Receipts ("EDRs"). The Fund normally expects that its assets
will 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 or group of industries. 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
("S&P MidCap 400"). As of December 31, 2004, the median market capitalization of
companies in the S&P MidCap 400 was approximately $2.3 billion.

     The Fund will seek to generate  current  earnings in part by  employing  an
options strategy of writing  (selling) index call options on the S&P 500 and the
NASDAQ-100.  Under  normal  market  conditions,  the Fund  expects  to sell on a
continuous basis S&P 500 call options on substantially the full value of the S&P


                                       20
<PAGE>

500 Segment and NASDAQ-100 call options on  substantially  the full value of the
NASDAQ-100 Segment. Under normal market conditions, at least 80% of the value of
the Fund's  total  assets  will be subject  to written  index call  options on a
continuous  basis.  Writing index call options  involves a tradeoff  between the
option premiums  received and reduced  participation  in potential  future stock
price appreciation of the Fund's portfolio of common stocks. Generally, the Fund
intends  to  sell  S&P  500  and  NASDAQ-100  call  options  that  are  slightly
"out-of-the-money,"  meaning  that  option  exercise  prices  generally  will be
slightly  higher than the current level of the index at the time the options are
written.  The Fund seeks to generate  current earnings from option premiums and,
to a lesser extent, from dividends on stocks held.

     The Fund  intends  to sell S&P 500 and  NASDAQ-100  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  (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.

     As the seller of S&P 500 and NASDAQ-100 call options, the Fund will receive
cash (the premium) from options purchasers. The purchaser of an index option has
the right to receive from the option seller any appreciation in the value of the
index over a fixed  price (the  exercise  price) as of a  specified  date in the
future  (the  option  valuation  date).  The  exercise-settlement  value  of the
applicable  index 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. By writing S&P 500 and NASDAQ-100  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 S&P  500 or  NASDAQ-100  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 substantially  the full value
of its  holdings of common  stocks and the Fund's  initial  expectation  to roll
forward  its  options  positions  primarily  on a monthly  basis.  For its stock
holdings,  the Fund's annual portfolio  turnover rate is expected to exceed that
of the S&P 500 and the NASDAQ-100 due to turnover in connection  with the Fund's
tax loss harvesting, gain matching, dividend capture and other strategies. On an
overall basis,  the Fund's annual turnover rate may exceed 100%. A high turnover
rate (100% or more) necessarily involves greater trading costs to the Fund.

     The Fund's  policies,  under normal market  conditions,  that the Fund will
invest at least 80% of its total  assets in a  diversified  portfolio  of common
stocks, designated segments of which seek to exceed the total return performance
of the S&P 500 and the  NASDAQ-100,  and that at least  80% of the  value of the
Fund's  total  assets  will  be  subject  to  written  index  call  options  are
non-fundamental policies and 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-Advisers 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 U.S. It is not
possible to invest directly in the S&P 500. The NASDAQ-100 is an unmanaged index
maintained by the Nasdaq Stock Market,  Inc. ("Nasdaq") that includes 100 of the
largest domestic and international  non-financial companies listed on The NASDAQ
Stock Market based upon market capitalization. The NASDAQ-100 reflects companies
across  major  industry  groups,   including  computer  hardware  and  software,
telecommunications, retail/wholesale trade and biotechnology. It is not possible
to invest directly in the NASDAQ-100. The Fund is not sponsored,  endorsed, sold
or promoted by Standard &Poor's or Nasdaq,  and neither makes any representation
regarding the advisability of investing in the Fund.

     INVESTMENT  STRATEGY.  Eaton Vance will be  responsible  for  managing  the
Fund's  overall   investment   strategy,   providing  research  support  to  the
Sub-Advisers  and supervising the  performance of the  Sub-Advisers.  Parametric
will be  responsible  for  structuring  and  managing  the Fund's  common  stock
portfolio,  including tax-loss harvesting and other  tax-management  techniques,
relying in part on the  fundamental  research  and  analytical  judgments of the
Adviser.  Parametric has developed  specialized  programs and systems that allow
for efficient  implementation of the Fund's  strategies.  The Fund's investments
are 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."

                                       21
<PAGE>

     The Adviser believes that a strategy of owning a portfolio of common stocks
and selling  covered call options (a "buy-write  strategy") can provide  current
income and gains and attractive risk-adjusted returns.  Compared to selling call
options on individual stocks,  selling index call options can achieve better tax
and  transactional  efficiency  because index options are cash-settled  "section
1256  contracts"  subject to favorable tax treatment and because the markets for
index  options are  generally  deeper and more liquid than options on individual
stocks.

     Eaton Vance  further  believes  that a strategy  of owning a  portfolio  of
common stocks in conjunction  with writing index call options on the S&P 500 and
the NASDAQ-100  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 U.S.  stocks
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 U.S.  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 of the S&P 500 and the  NASDAQ-100 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  the S&P  500  Segment  will be  sufficiently
dissimilar from the components of the S&P 500 and the NASDAQ-100 Segment will be
sufficiently   dissimilar  from  the  NASDAQ-100   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.  Parametric  will  consider  a variety  of factors in
constructing  and maintaining  the Fund's stock  portfolio,  including,  but not
limited to,  stock  performance  ratings as  determined  by the  Adviser,  stock
dividend  yields,  overlap between the Fund's stock holdings and the S&P 500 and
the NASDAQ-100, projected tracking of the S&P 500 Segment versus the S&P 500 and
the NASDAQ-100  Segment versus the  NASDAQ-100,  realization of loss  harvesting
opportunities and other tax management considerations.  The Adviser's evaluation
of the future  performance  potential  of  individual  stocks  will be one among
several  considerations in portfolio  construction and will not, on a standalone
basis, be determinative of portfolio  construction.  The Adviser's stock ratings
will be based primarily on fundamental research.

     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 effectively limit the Fund's ability to participate in upward price
movements in portfolio  stocks  beyond  certain  levels.  The Adviser  initially
expects to follow a primary  options  strategy of selling S&P 500 and NASDAQ-100
call  options  with  a  remaining   maturity  of  approximately  one  month  and
maintaining its short call options  positions until  approximately  their option
valuation date, at which time replacement call option positions with a remaining
maturity of approximately one month are written. The Adviser expects to sell S&P
500 call  options on  substantially  the full value of the S&P 500  Segment  and
NASDAQ-100  call  options  on  substantially  the full  value of the  NASDAQ-100
Segment.  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  foregoing  policies  relating to investment in common stocks and index
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 the intended  strategy of selling  index call  options,  the
Fund may invest up to 20% of its total  assets in other  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.  Derivative  instruments may be used in order to help
protect against a decline in the value of its portfolio  securities.  Derivative
instruments  may also be used by the Fund to enhance  returns or as a substitute
for the purchase or sale of securities.

                                       22
<PAGE>

     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.  Generally,  return  from  appreciation  and
depreciation in the value of Common Shares and  distributions  characterized  as
return of capital result in adjustment of a Common Shareholder's  federal income
tax basis in his or her Common Shares and  accordingly 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 net  proceeds  of such 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  and
Sub-Advisers intend to employ a variety of techniques and strategies designed to
skew  the  mix  of  Fund   returns  to  the  types  of  returns  that  are  most
advantageously  taxed,  thereby seeking to minimize and defer the federal income
taxes incurred by Common Shareholders in connection with their investment in the
Fund.  Such  techniques and strategies are expected to include:  (1) employing a
call options strategy  consisting of selling S&P 500 and NASDAQ-100 call options
that qualify for  treatment as "section  1256  contracts" on which capital gains
and losses are generally treated as 60% long-term and 40% short-term, regardless
of holding period;  (2) limiting the overlap between its stock holdings (and any
subset  thereof) and each of the S&P 500 and the  NASDAQ-100 to less than 70% on
an ongoing  basis so that the Fund's stock  holdings and S&P 500 and  NASDAQ-100
call  options  are not  subject  to the  "straddle  rules;"  (3)  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 (4) 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.

     In addition,  the Fund will seek to earn and distribute "qualified dividend
income." 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 the Fund to receive  tax-advantaged  treatment of its
qualified dividend income,  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 2008.  Thereafter,
qualified  dividend  income will be taxable as ordinary  income  unless  further
legislative action is taken.

     The Fund may seek to enhance the level of tax-advantaged dividend income it
receives by  emphasizing  higher-yielding  stocks in its stock  portfolio and 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 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.

                                       23
<PAGE>

     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 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.  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.  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  objective  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.

     COMMON  STOCKS.  Under normal  market  conditions,  the Fund will invest at
least  80% of its total  assets in a  diversified  portfolio  of common  stocks,
designated  segments of which seek to exceed the total return performance of the
S&P 500 and the NASDAQ-100. 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 issuers 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.  The Fund may invest up to 10% of its total  assets in
securities of issuers  located in countries  other than the United  States.  The
Fund will not invest in issuers located in emerging market countries.  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."

     The Fund  may  invest  in ADRs,  EDRs  and  GDRs.  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
the issuer.  Unsponsored  receipts  may involve  higher  expenses,  may not pass
through  voting  or  other  shareholder  rights,  and  may be less  liquid  than
sponsored receipts.

     INDEX  OPTIONS  GENERALLY.  The Fund will pursue its  objectives in part by
selling on a  continuous  basis S&P 500 call options on  substantially  the full
value of the S&P 500 Segment and NASDAQ-100  call options on  substantially  the
full value of the NASDAQ-100 Segment.

     The  Fund  will  sell  S&P  500  and  NASDAQ-100  index  options  that  are
exchange-listed and that are "European style," meaning that the options may only
be exercised on the  expiration  date of the option.  Index options  differ from
options on individual securities in that index options (i) typically are settled


                                       24
<PAGE>

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.

     Option  contracts are originated and  standardized by the Options  Clearing
Corporation (the "OCC"). Currently, index options are available on approximately
89 indexes, with new listings added periodically. The Fund will sell S&P 500 and
NASDAQ-100 call options that are generally issued, guaranteed and cleared by the
OCC. S&P 500 and NASDAQ-100  index options  currently  trade  exclusively on the
Chicago Board Options  Exchange.  The Adviser believes that there exists a large
trading  volume of S&P 500 and  NASDAQ-100  options,  sufficient  to fulfill the
Fund's requirements to implement its index options 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 S&P 500 and NASDAQ-100 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  S&P 500 and
NASDAQ-100 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  will,  in  effect,  sell the  potential
appreciation in the value of the S&P 500 or NASDAQ-100  above the exercise price
in exchange for the option premium  received.  If, at expiration,  an S&P 500 or
NASDAQ-100  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 S&P 500 or NASDAQ-100,  as  applicable,  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 the Fund's common stock portfolio
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
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
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 the closing  option is less
than the premium received from writing the option and a capital loss if the cost
of the closing option is more than the premium received. Because exchange-listed
S&P 500 and NASDAQ-100  options are "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 on October 31 or at the
close of each taxable year. See "Distributions -- Federal Income Tax Matters."

                                       25
<PAGE>

     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 options 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.

     The standard  contract size for  exchange-listed  S&P 500 [and  NASDAQ-100]
index  options is the index  level  multiplied  by $100.  There are three  items
needed to identify a particular S&P 500 [and NASDAQ-100]  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  consist 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.

     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.
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 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 the
S&P 500 or NASDAQ-100  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 S&P 500 and
NASDAQ-100 options will also be substantially affected by the performance of S&P
500 Segment of the Fund's  portfolio  versus the S&P 500 and the  performance of
the NASDAQ-100 Segment of the Fund's portfolio versus the NASDAQ-100.

ADDITIONAL INVESTMENT PRACTICES

                                       26
<PAGE>

     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 U.S.  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
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.

     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 acquired for non-hedging purposes. These
strategies may be executed  through the use of derivative  contracts in the U.S.
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 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.

     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) to be exchanged or "swapped" between the parties, 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 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


                                       27
<PAGE>

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  returns,  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


                                       28
<PAGE>

repurchase the  instrument at an agreed upon time  (normally  within seven days)
and price,  which  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  regarding
"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 it  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  substantially  the full value of its holdings of
common  stocks and the Fund's  initial  expectation  to roll forward its options
positions  primarily  on a monthly  basis.  For its stock  holdings,  the Fund's
annual portfolio turnover rate is expected to exceed that of the S&P 500 and the
NASDAQ-100  due to turnover in connection  with the Fund's tax loss  harvesting,
gain matching,  dividend capture and other strategies.  On an overall basis, the
Fund's annual turnover rate may 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  intends  to sell  index  call  options  on a
continuous basis on  substantially  the full value of its common stock holdings,
the  Fund's  appreciation  potential  from  equity  market  performance  will be
limited.  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 will invest its
managed  assets in a  diversified  portfolio  of  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 particular  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 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  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


                                       29
<PAGE>

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.

     RISKS OF "GROWTH" STOCK INVESTING. The Fund expects to invest substantially
in stocks with "growth" characteristics.  Growth stocks can react differently to
issuer, political,  market, and economic developments than the market as a whole
and other types of stocks.  Growth stocks tend to be more expensive  relative to
their earnings or assets compared to other types of stocks. As a result,  growth
stocks tend to be sensitive to changes in their  earnings and more volatile than
other types of stocks.


     RISK OF SELLING  INDEX CALL  OPTIONS.  The Fund expects to sell S&P 500 and
NASDAQ-100 call options on a continuous basis on substantially the full value of
its  holdings of common  stocks.  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 holding a diversified  portfolio of stocks,  the
S&P 500 Segment of which is similar to the S&P 500 and the NASDAQ-100 Segment of
which is similar to the NASDAQ-100. However, the Fund does not intend to acquire
and hold a portfolio  containing  exactly the same stocks as the S&P 500 and the
NASDAQ-100.  Due to tax  considerations,  the Fund  intends to limit the overlap
between its stock holdings (and any subset  thereof) and each of the S&P 500 and
the  NASDAQ-100  to less than 70% on an ongoing  basis.  Consequently,  the Fund
bears the risk that the  performance of the  securities  held will vary from the
performance of the S&P 500 and the NASDAQ-100. 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 the
S&P 500 and the NASDAQ-100, changes in actual or perceived volatility of the S&P
500 and the NASDAQ-100 and the remaining  time to the options'  expiration.  The
trading  price of S&P 500 and  NASDAQ-100  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 S&P 500 and NASDAQ-100 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.

     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  substantially  affected by changes in the value of and
dividend rates of the securities represented in the underlying index, changes in


                                       30
<PAGE>

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  "Distributions  --  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.  Distributions paid on the Common
Shares may be  characterized  variously  as net  investment  income  (taxable at
ordinary  income rates),  qualified  dividends and capital gains dividends (each
taxable at long-term  capital  gains rates) or return of capital (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 "Distributions -- Federal Income Tax Matters."

     DISTRIBUTION  RISK. The quarterly  distributions  Common  Shareholders will
receive from the Fund will be sourced from the Fund's net option  premiums,  net
realized and unrealized gains on stock  investments,  and dividends and interest
income,  after  payment  of  Fund  expenses.   The  Fund's  cash  available  for
distribution  may vary widely over the short- and long-term.  If stock prices or
stock market volatility declines,  the level of premiums from writing index call
options and the amounts  available for  distribution  from 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 U.S.  stock  market (and the
particular  stocks  held).  Dividends  on  common  stocks  are not fixed but are
declared at the discretion of the issuer's  board of directors.  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 U.S. exchanges
or in the U.S.  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 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 held by 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.
Foreign  securities  may not be  eligible  for  the  reduced  rate  of  taxation
applicable to qualified dividend income.

     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.

     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. Derivative transactions including options on securities and


                                       31
<PAGE>

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. 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  shares  of  closed-end  management
investment  companies often trade at a discount from their net asset value,  and
the Fund's Common Shares may likewise  trade at a discount from net asset value.
The net asset value per Common Share will be reduced immediately  following this
offering by the sales load and the amount of offering expenses paid by the Fund.
The  trading  price of the  Fund's  Common  Shares  may be less than the  public
offering  price.  The risk will be greater for  investors  who sell their Common
Shares in a relatively short period after completion of the public offering.

     FINANCIAL  LEVERAGE.  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 is 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 fees 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, Parametric,  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,
Parametric,  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, Parametric,  Rampart and the
individual  portfolio managers will be successful in developing and implementing
the  Fund's  investment  strategy.  Subjective  decisions  made by Eaton  Vance,
Parametric,  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 terrorist attacks in the United States on September
11, 2001 had a disruptive  effect on the  securities  markets.  These  terrorist
attacks  and related  events,  including  the war in Iraq,  its  aftermath,  and
continuing occupation of Iraq by coalition forces, have raised short-term market
risk and may have  adverse  long-term  effects on U.S. and world  economies  and


                                       32
<PAGE>

markets.  A similar  disruption of the financial markets could impact trading in
common stocks and stock  options,  interest  rates,  credit risk,  inflation and
other factors relating to the Common Shares. The Fund cannot predict the effects
of similar events in the future on the U.S. economy and securities markets.

     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.  See
"Description of Capital Structure -- Anti-Takeover Provisions in the Declaration
of Trust."


                                       33
<PAGE>

                             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-Advisers  under each  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, MA 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  $98 billion as of January 31, 2005,
including approximately $58.6 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 managing the Fund's overall  investment  program,  providing the
Sub-Advisers  with  research  support and  supervising  the  performance  of the
Sub-Advisers.   As  described  below  under  the  caption  "The   Sub-Advisers,"
Parametric  will be responsible  for  structuring and managing the Fund's common
stock  portfolio,   including  tax-loss  harvesting  and  other   tax-management
techniques, relying in part on the fundamental research and analytical judgments
of the Adviser;  Rampart will  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 [ ]% of the average daily gross assets of the Fund.  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 other Eaton Vance investment  professionals  comprise the
investment team responsible for managing the Fund's overall investment  program,
providing the Sub-Advisers with research support and supervising the performance
of the  Sub-Advisers.  Mr.  Row is the  portfolio  manager  responsible  for the
day-to-day  management  of Eaton  Vance's  responsibilities  with respect to the
Fund's investment portfolio.

     Mr. Row is a Vice  President  and the Director of Equity  Research at Eaton
Vance.  He is a member of Eaton Vance's Equity Strategy  Committee,  manages two
other  Eaton Vance  registered  closed-end  investment  companies  that  utilize
buy-write  strategies  and has been an equity  analyst  and  member  of  Eaton's
Vance's equity research team since 1996.

THE SUB-ADVISERS

     Eaton Vance has engaged its affiliate  Parametric  as a sub-adviser  to the
Fund.  Parametric  will be responsible  for  structuring and managing the Fund's
common stock portfolio,  including tax-loss harvesting and other  tax-management
techniques, relying in part on the fundamental research and analytical judgments
of the Adviser.  Parametric has developed  specialized programs and systems that
allow  for  efficient  implementation  of the  Fund's  strategies.  Parametric's
principal office is located at 1151 Fairview Avenue North,  Seattle,  WA 981209.
Parametric  was founded in 1987.  In  September of 2003,  Eaton Vance Corp,  the
parent  company of Eaton  Vance,  acquired an 80%  interest in the firm with the
remaining 20% owned primarily by Parametric employees. Parametric specializes in


                                       34
<PAGE>

managing broadly diversified,  risk controlled and tax-efficient  portfolios for
high net worth  investors and investment  company  clients.  Parametric  managed
approximately $9.2 billion in assets as of January 31, 2005.

     Under the terms of the Sub-Advisory Agreement (a "Sub-Advisory  Agreement")
between  Eaton  Vance and  Parametric,  Eaton  Vance (and not the Fund) will pay
Parametric  a fee at an annual  rate equal to [ ]% of the  average  daily  gross
assets  of the Fund.  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
Parametric without the need for approval by shareholders of the Fund.

     David Stein,  Ph.D., and Thomas Seto are the Parametric  portfolio managers
responsible for the day-to-day management of the Fund's common stock portfolio.

     Mr. Stein is Managing Director and Chief Investment  Officer at Parametric,
where he leads the  investment,  research and  technology  activities.  Prior to
joining  Parametric,  Mr. Stein held senior research,  development and portfolio
management positions at GTE Investment Management Corp., the Vanguard Group, and
IBM Retirement Funds.

     Mr. Seto is a Vice  President  and the Director of Portfolio  Management at
Parametric  where he is  responsible  for all  portfolio  management,  including
taxable, tax-exempt,  quantitative-active and international strategies. Prior to
joining Parametric, Mr. Seto served as the Head of U.S. Equity Index Investments
at Barclays Global Investors.

     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 and was founded in 1983. Rampart provides customized investment management
services within its core competency in options program  management to a spectrum
of institutional, high net worth and investment company clients. Rampart managed
approximately $2.7 billion in assets as of February 28, 2005.

     Mr.  Egalka  is  responsible  for the  development  and  implementation  of
Rampart's 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 investment  strategies and
tactics for Rampart.

     Under the terms of the Sub-Advisory Agreement (a "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 [ ]% of the average  daily gross  assets of the
Fund.  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-Advisers  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, but currently  receives no
compensation  for  providing  administrative  services  to 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. In addition to


                                       35
<PAGE>

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 net option  premiums,  net realized and unrealized  gains on stock
investments,  and dividends and interest income, after payment of Fund expenses.
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 90-120 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 terminated  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  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.

     Common  Shareholders  may elect  automatically  to 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 SEC  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 will not designate more than the permitted  number of capital
gain  distributions  until it receives such an exemptive order. The staff of the
SEC has indicated that it has suspended the processing of exemptive applications
requesting the type of relief referenced  above,  pending review by the staff of
the  results  of an  industry-wide  SEC  inspection  focusing  on  the  dividend
practices of closed-end  investment  companies.  There can be no assurance as to
when that review might be completed or whether, following that review, the staff
would  process  such  applications  or grant  such  relief.  As a result of this
development,  the Fund has no current  expectation that it will be in a position
to include long-term capital gains in Fund distributions more frequently than is


                                       36
<PAGE>

permitted  under the 1940 Act,  thus  leaving the Fund with the  possibility  of
variability in  distributions  (and their tax  attributes)  as discussed  above.
Failure to receive  exemptive  relief  would  increase  the  likelihood  that in
certain  taxable  years the Fund would retain all or a portion of the year's net
capital gain and pay tax on the retained  gain as described  above.  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  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  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
any  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 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 gains from the sale of investments that the Fund owned for one
year or less 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 capital  gain  (including
capital gain distributions).  A corporation that owns Fund shares generally will
not be entitled to the dividends  received deduction 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 dividends received deduction.

     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
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.

     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  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,  and (viii)  adversely  alter the  characterization  of  certain  complex
financial  transactions.  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.

     In the case of Fund  transactions  involving  S&P 500 and  NASDAQ-100  call
options  (or other  listed  options on  broad-based  securities  indices),  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%


                                       37
<PAGE>

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
such position which it holds on October 31 or at the close of each taxable year.
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  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  components  of the  NASDAQ-100  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
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 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.

     Under the "Jobs and Growth Tax Relief Reconciliation Act of 2003" (the "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


                                       38
<PAGE>

period and other  requirements  are satisfied by the Common  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.  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 the Fund to receive  tax-advantaged  dividend income,  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,  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. 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  generally  apply to taxable years  beginning  before
January 1, 2009. Thereafter,  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 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 2009
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 Common  Shareholder's  adjusted tax
basis in the Common Shares sold and the sale proceeds.  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, 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  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
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 2005, 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.  Unless  otherwise  noted,  this discussion  assumes that an
investor  is a U.S.  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
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.

                                       39
<PAGE>

                           DIVIDEND REINVESTMENT PLAN

     Pursuant to the Fund's dividend  reinvestment  plan (the "Plan"),  a Common
Shareholder  may  elect  to  have  all  distributions  (including  capital  gain
distributions)  automatically  reinvested in Common Shares.  Common Shareholders
may elect to  participate  in the Plan by completing  the dividend  reinvestment
plan application  form. Common  Shareholders  electing not to participate in the
Plan will receive all  distributions  in cash paid by check  mailed  directly to
them by PFPC Inc., as dividend paying agent.

     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 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


                                       40
<PAGE>

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.

     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  Standard
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  November  17, 2004 (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,  $0.01 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 SEC. 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 permits
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.  See "Distributions -- Federal Income
Tax Matters."  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.

                                       41
<PAGE>

     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.

     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 DISCOUNT METHODS

     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 approach or
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 holders of Common  Shares.  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  allowed 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.

                                       42
<PAGE>

     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
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.

     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.

                                       43
<PAGE>

ANTI-TAKEOVER PROVISIONS IN THE 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
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 SEC 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.

                                       44
<PAGE>

                                  UNDERWRITING

     Subject  to the terms and  conditions  stated  in the  Fund's  underwriting
agreement dated , 2005,  each  Underwriter  named below has severally  agreed to
purchase,  and the Fund has  agreed to sell to such  Underwriter,  the number of
Common Shares set forth opposite the name of such Underwriter.

                                                                    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) if they purchase any of
the Common Shares.

     The Underwriters,  for whom [ ], [ ] and [ ] are acting as representatives,
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 Common Share.  The sales load the Fund will pay of $0.90 per Common
Share is equal to 4.5% of the  initial  offering  price.  The  Underwriters  may
allow,  and such  dealers may reallow,  a concession  not to exceed $ per Common
Share on sales to certain  other  dealers.  If all of the Common  Shares are not
sold at the initial  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 , 2005.  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 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
such  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  will be  obligated,  subject to certain  conditions,  to purchase a
number  of  additional  Common  Shares   approximately   proportionate  to  such
Underwriter's initial purchase commitment.

     The Fund, the Adviser and the  Sub-Advisers  have agreed that, for a period
of 180 days from the date of this  Prospectus,  they 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.

     Prior to the  offering,  there has been no  public  market  for the  Common
Shares.  Consequently,  the initial public  offering price for the Common Shares
was   determined   by   negotiation   among  the  Fund,   the  Adviser  and  the
representatives. There can be no assurance, however, that the price at which the
Common  Shares will sell in the public  market after this  offering  will not be
lower  than  the  price at which  they are sold by the  Underwriters  or that an
active  trading market in the Common Shares will develop and continue after this
offering.  The  Common  Shares  will  apply for  listing  on the New York  Stock
Exchange, subject to notice of issuance.

     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.

                                       45
<PAGE>

                                                                PAID BY FUND
                                                         ----------------------
                                                         NO EXERCIFULL EXERCISE
Per share............................................       $         $
                                                            --        --
Total................................................       $         $
                                                            ==        ==

     The Fund,  the Adviser and the  Sub-Advisers  have each agreed to indemnify
the several  Underwriters  against certain  liabilities,  including  liabilities
under the Securities  Act of 1933, as amended,  or to contribute to payments the
Underwriters may be required to make because of any of these liabilities.

     [The Fund has agreed to pay the  Underwriters  $[ ] per  Common  Share as a
partial reimbursement of expenses incurred in connection with the offering.  The
Adviser has agreed to pay the amount by which the Fund's  offering  costs (other
than the sales load but inclusive of the  reimbursement of Underwriter  expenses
of $[ ] per share) exceed $0.04 per share.  The Adviser has agreed to pay all of
the Fund's organizational expenses.]

     The Adviser (and not the Fund) may pay to certain  qualifying  Underwriters
who meet specified sales targets ("Qualifying Underwriters") from its own assets
an  annual  fee  of  up  to [ ]%  of  the  Fund's  average  daily  gross  assets
attributable to Common Shares sold by such Qualifying  Underwriters (including a
proportionate  share  of  assets  that  may  in the  future  be  acquired  using
leverage).  Such  sales  targets  may be waived or lowered  with  respect to any
Underwriter  in the sole  discretion of the Adviser.  The sum of these fees will
not  exceed % of the total  initial  price to the  public of the  Common  Shares
offered  hereby  and will be  payable  in  arrears  at the end of each  calendar
quarter during the  continuance of the  Investment  Advisory  Agreement or other
advisory agreement between the Adviser and the Fund.  Additionally,  the Adviser
(and not the Fund)  will pay to [ ]. from its own assets a  structuring  fee for
advice relating to the structure and design of the Fund and the  organization of
the Fund as well as services  related to the sale and distribution of the Fund's
Common Shares in an amount equal to $ , which is % of the total initial price to
the public of the Common Shares offered hereby.  The sum of the noted fees to be
paid to the  Qualifying  Underwriters  and[ ]., the amounts  paid by the Fund to
reimburse  certain  Underwriter and other expenses and the sales load to be paid
by the Fund will not exceed  9.00% of the total  initial  price to the public of
the Common Shares offered hereby.

     In connection  with the  requirements  for listing the Common Shares on the
New York Stock Exchange, the Underwriters have undertaken to sell lots of 100 or
more Common Shares to a minimum of 2,000 beneficial owners in the United States.
The minimum investment requirement is 100 Common Shares.

     Certain  Underwriters  may make a market in the Common Shares after trading
in the  Common  Shares  has  commenced  on  the  New  York  Stock  Exchange.  No
Underwriter is, however,  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.

     The Underwriters have advised the Fund that, pursuant to Regulation M under
the Securities Exchange Act of 1934, as amended,  certain persons  participating
in the offering may engage in transactions, including stabilizing bids, covering
transactions  or the  imposition of penalty  bids,  which may have the effect of
stabilizing  or  maintaining  the market  price of the Common  Shares at a level
above that which might otherwise prevail in the open market. A "stabilizing bid"
is a bid for, or the purchase of, the Common Shares on behalf of an  Underwriter
for the  purpose  of fixing or  maintaining  the price of the Common  Shares.  A
"covering transaction" is a bid for, or purchase of, the Common Shares on behalf
of an  Underwriter to reduce a short position  incurred by the  Underwriters  in
connection  with the  offering.  A "penalty  bid" is a  contractual  arrangement
whereby if, during a specified  period after the issuance of the Common  Shares,
the  Underwriters  purchase  Common Shares in the open market for the account of
the  underwriting  syndicate and the Common Shares  purchased can be traced to a
particular  Underwriter  or  member  of  the  selling  group,  the  underwriting
syndicate  may require the  Underwriter  or selling  group member in question to
purchase the Common Shares in question at the cost price to the syndicate or may
recover from (or decline to pay to) the  Underwriter  or selling group member in
question any or all compensation  (including,  with respect to a representative,
the  applicable  syndicate  management  fee)  applicable to the Common Shares in
question.  As a result,  an  Underwriter  or selling  group member and, in turn,
brokers may lose the fees that they  otherwise  would have earned from a sale of
the Common Shares if their customer  resells the Common Shares while the penalty
bid is in effect.  The  Underwriters  are not required to engage in any of these
activities,  and any such activities,  if commenced,  may be discontinued at any
time.  These  transactions  may be  effected  on the New York Stock  Exchange or
otherwise.

                                       46
<PAGE>

     A  Prospectus  in  electronic  format  may  be  available  on  the  website
maintained by one or more of the Underwriters.  The representatives may agree to
allocate a number of Common Shares to the  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.

     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  have  performed  investment  banking  and  advisory
services for the Adviser,  the  Sub-Advisers  and their  affiliates from time to
time,  for  which  they  have  received  customary  fees and  expenses.  Certain
Underwriters  may,  from time to time,  engage in  transactions  with or perform
services  for the  Adviser  and  the  Sub-Advisers  in the  ordinary  course  of
business.

     Prior to the public offering of Common Shares,  an affiliate of the Adviser
will purchase 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 [ ], New York, NY [10013].

                          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 [ ], New York, New York.

                             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

     [ ], Boston,  Massachusetts is 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.

                                       47
<PAGE>

          TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION

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-


                                       48
<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.

                                       49
<PAGE>

================================================================================

                                     SHARES

              EATON VANCE TAX-MANAGED BUY-WRITE OPPORTUNITIES FUND

                                  COMMON SHARES

                               (EATON VANCE LOGO)

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

                                   PROSPECTUS
                                     , 2005
                                 ---------------

                                [                ]
                              [                    ]
                            [                        ]



================================================================================

                                       50

<PAGE>


                                             SUBJECT TO COMPLETION APRIL 1, 2005

STATEMENT OF ADDITIONAL INFORMATION
[              ], 2005

                        EATON VANCE TAX-MANAGED BUY-WRITE
                               OPPORTUNITIES 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...............................
Statement of Assets and Liabilities.........................................
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 BUY-WRITE OPPORTUNITIES
FUND (THE "FUND") DATED [ ], 2005 (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-Advisers  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.  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 acquired
for non-hedging  purposes.  These  strategies may be executed through the use of
derivative  contracts  in the U.S. or abroad.  In the course of  pursuing  these
investment  strategies,  the Fund may:  purchase  and sell  exchange-listed  and
over-the-counter  put and call options on  securities,  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.  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
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 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 therefor 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 (a)
   preferred shares which immediately after issuance will have asset coverage of

                                       3
<PAGE>

   at least 200%, (b) indebtedness  which  immediately  after issuance will have
   asset  coverage  of at  least  300%,  or  (c)  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 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,  currencies,
   interest 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 or group
   of  industries  (other  than  securities  issued  or  guaranteed  by the U.S.
   government or its agencies or instrumentalities).

   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), a large economic or market sector
shall not be construed as a group of 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 assets 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
asset. Notwithstanding the foregoing, the Fund must always be in compliance with
the borrowing policies set forth above.

                                       4
<PAGE>

                              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   Parametric   Portfolio   Associates  LLC   ("Parametric"  or  the
"Sub-Adviser")  to serve as  sub-adviser to the Fund to structure and manage the
Fund's  common  stock  portfolio,   [including  tax  harvesting  and  other  tax
management  techniques,] pursuant to an investment  sub-advisory  agreement (the
"Sub-Advisory  Agreement")  among the Fund,  the Adviser and  Parametric.  Eaton
Vance has also 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") among the Fund, the Adviser and Rampart.

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

<TABLE>
<CAPTION>

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

TRUSTEES
James B. Hawkes             Trustee              Since           Chairman,                          195              Director of EVC
11/9/41                     and                  3/30/05         President and
                            Vice                 Three           Chief Executive
                            President            Years           Officer of BMR,
                                                                 Eaton Vance, EVC
                                                                 and EV; Director
                                                                 of EV; Vice
                                                                 President and
                                                                 Director of EVD.
                                                                 Trustee and/or
                                                                 officer of 195
                                                                 registered
                                                                 investment
                                                                 companies in the
                                                                 Eaton Vance Fund
                                                                 Complex. Mr.
                                                                 Hawkes is an
                                                                 interested person
                                                                 because of his
                                                                 positions with
                                                                 BMR, Eaton Vance,
                                                                 EVC and EV, which
                                                                 are affiliates of
                                                                 the Fund.

Alan R. Dynner              Trustee              Since           Vice President,                    195                 None
10/10/40                    and                  3/30/05         Secretary and
                            Secretary                            Chief Legal
                                                                 Officer of BMR,
                                                                 Eaton Vance, EVD,
                                                                 EV and EVC.
                                                                 Officer of 195
                                                                 registered
                                                                 investment
                                                                 companies by Eaton
                                                                 Vance or BMR.
</TABLE>

------------
(1)   Includes both master and feeder funds in master-feeder structure.


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

                                                 TERM OF OFFICE
                               POSITION(S)         AND LENGTH
NAME AND DATE OF BIRTH        WITH THE FUND        OF SERVICE             PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS
-----------------------   -------------------    --------------       ---------------------------------------------------
<S>                          <C>                   <C>                <C>

Duncan W. Richardson.......  President and Chief   Since 3/30/05      Senior  Vice  President  and  Chief Equity
10/26/57                     Executive Officer                        Investment Officer of Eaton Vance and BMR.
                                                                      Officer of 46 registered investment companies
                                                                      managed by Eaton Vance or BMR.


Thomas E. Faust Jr. .......  Vice President        Since 3/30/05      Executive Vice President of Eaton Vance, BMR,
5/31/48                                                               EVC and EV; Chief Investment Officer of Eaton
                                                                      Vance and BMR and Director of EVC. Chief


                                                          5
<PAGE>

                                                                      Executive Officer of Belair Capital Fund LLC,
                                                                      Belcrest Capital Fund LLC, Belmar Capital Fund
                                                                      LLC; Belport Capital Fund LLC and Belrose
                                                                      Capital Fund LLC (private investment companies
                                                                      sponsored by Eaton Vance). Officer of 59
                                                                      registered investment companies managed by
                                                                      Eaton Vance or BMR.

James L. O'Connor..........  Treasurer and         Since 3/30/05      Vice  President of BMR, Eaton Vance and
4/1/45                       Principal Financial                      EVD. Officer of 117 registered investment
                             and Accounting                           companies managed by Eaton Vance or BMR.
                             Officer

Paul M. O'Neil.............  Chief Compliance      Since 3/30/05      Vice  President  of Eaton Vance and BMR.
7/11/53                      Officer                                  Officer of 195 registered investment 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.]

   [The  Governance  Committee of the Board of Trustees of the Fund is comprised
of the  non-interested  Trustees.  [ ] 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 non-interested  Trustees and
the compensation of non-interested Trustees.]

   [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  to  the  Governance   Committee,   contains
sufficient background  information concerning the candidate and is received in a
sufficiently timely manner.]

   [Messrs.  [ ]  (Chairman),  [ ] and [ ] 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 non-interested  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.]

   [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[ ] times,  the
Audit Committee and Special Committee have met [ ] times.]

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

                                       6
<PAGE>

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

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

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

   o  Eaton Vance's,  and Parametric's  results and financial  condition and the
      overall organization of the Adviser and the Sub-Adviser;

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

   o  Arrangements regarding the distribution of Fund shares;

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

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

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

   o  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;

   o  Parametric's compliance efforts with respect to the accounts it manages;

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

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

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

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

   o  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 Parametric,  and the Sub-Advisory
Agreement  between the  Adviser and  Rampart,  the  Special  Committee  reviewed
material  furnished by Eaton Vance and  Parametric  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 Agreements.  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 reputations of Parametric's and Rampart's
respective investment strategies and their past experience in implementing these
strategies.]

   [The  Special  Committee  received  information   concerning  the  investment
philosophy  and  investment  process to be applied by Eaton  Vance,  Rampart and
Parametric  in  managing  the  Fund.  In  this  regard,  the  Special  Committee
considered  Eaton  Vance's  in-house  research  capabilities  as well  as  other

                                       7
<PAGE>

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,  Parametric'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  Parametric  and Rampart,  the
Special  Committee  considered  and  discussed  fees  paid to  other  investment
sub-advisers in similar circumstances, as well as fees charged by Parametric and
Rampart respectively to their 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 Agreements.  Nor are the items described herein all encompassing of
the matters  considered by the Special  Committee.  In assessing the information
provided by Eaton Vance, Parametric,  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
Agreements,  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, 2004.

<TABLE>
<CAPTION>

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


INTERESTED TRUSTEE

NON-INTERESTED TRUSTEES

   [ As of  December  31,  2004,  no  non-interested  Trustee  or any  of  their
immediate family members owned beneficially or of record any class of securities
of EVC, EVD, Parametric or any person controlling, controlled by or under common
control with EVC, EVD, Rampart or Parametric.]

   [During the calendar  years ended December 31, 2003 and December 31, 2004, no
non-interested Trustee (or their immediate family members) had:

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

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

                                       8
<PAGE>

   [During the calendar  years ended  December 31, 2003 and December 31, 2004 no
officer of EVC, EVD, Parametric,  Rampart or any person controlling,  controlled
by or under common  control with EVC, EVD,  Parametric 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  [MONTH]  [DAY],
2005,  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,
2004, 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

(1)  As of [ ], 2005,  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 Policies.  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
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 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.   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,  including
corporations, hospitals, retirement plans, universities, foundations and trusts.

                                       9
<PAGE>

   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 the
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.

   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.

   The Advisory  Agreement  with the Adviser  continues in effect for an initial
period of two years until [ ], 2007, 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 and  Parametric,  as a sub-adviser to
structure and manage the Fund's common stock portfolio, including tax harvesting
and other tax management techniques.  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.

   Eaton Vance is a business trust organized under  Massachusetts law. EV serves
as  trustee  of Eaton  Vance.  Eaton  Vance and EV are  subsidiaries  of EVC,  a
Maryland corporation and publicly-held holding company. Through its subsidiaries
and affiliates EVC engages  primarily in investment  management,  administration
and marketing  activities.  The Directors of EVC are James B. Hawkes, John G. L.
Cabot,  Thomas E. Faust Jr., Leo I.  Higdon,  Jr.,  John M.  Nelson,  Vincent M.
O'Reilly,  William  H.  Smith,  Jr.,  and Ralph Z.  Sorenson.  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, Alan R.
Dynner, Thomas J. Fetter, Scott H. Page, Duncan W. Richardson, 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. 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 "Trustees and officers",  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
enter into transactions with various banks, including the custodian of the Fund,
Investors  Bank & Trust Company  ("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. Parametric acts as an investment sub-adviser to the Fund and
structures  and  manages  the  Fund's  common  stock  portfolio,  including  tax
harvesting  and other tax  management  techniques,  pursuant  to a  sub-advisory

                                       10
<PAGE>

agreement  between the Adviser and Parametric  (the  "Sub-Advisory  Agreement").
Parametric's principal office is located at 1151 Fairview Avenue North, Seattle,
WA 981209.  Parametric  was founded in 1987.  In September of 2003,  Eaton Vance
Corp,  the parent  company of Eaton Vance,  acquired an 80% interest in the firm
with the  remaining  20% owned  primarily by  Parametric  employees.  Parametric
specializes in managing broadly  diversified,  risk controlled and tax-efficient
portfolios for  institutional,  high net worth investors and investment  company
clients and their advisers.  Parametric  managed  approximately  $[ ] billion in
assets as of [ ], 2005.

   Under the terms of its Sub-Advisory Agreement,  Parametric provides structure
and manages the Fund's  common stock  portfolio,  including tax  harvesting  and
other tax management techniques, all subject to the supervision and direction of
the  Fund's  Board  of  Trustees  and the  Adviser.  For  services  rendered  by
Parametric under its Sub-Advisory Agreement,  Eaton Vance pays Parametric a fee,
payable  monthly,  in an annual  amount equal to [ ]% of the average daily gross
assets of the Fund.

   The Sub-Advisory Agreement with Parametric continues until [ ], 2007 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  Parametric  upon 3 months
notice. As discussed above, Eaton Vance may terminate the Sub-Advisory Agreement
with Parametric and directly assume  responsibility for the services provided by
Parametric upon approval by the Board of Trustees  without the need for approval
of the shareholders of the Fund.

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

   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 [ ], 2005 Rampart
had approximately $[ ] 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 average daily gross assets of the Fund.

   The  Sub-Advisory  Agreement with Rampart  continues until [ ], 2007 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.


                                       11
<PAGE>

   [PORTFOLIO MANAGERS.  The portfolio managers of the Fund are Walter A. Row of
Eaton Vance,  David Stein and Thomas Seto of Parametric  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
[February 28], 2005,  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.

<TABLE>
<CAPTION>

                                                                                    NUMBER OF     TOTAL ASSETS
                                                                                    ACCOUNTS      OF ACCOUNTS
                                                     NUMBER                         PAYING A        PAYING A
                                                       OF        TOTAL ASSETS OF   PERFORMANCE   PERFORMANCE
                                                     ACCOUNTS      ACCOUNTS*          FEE            FEE
                                                     --------  ------------------- ------------  -------------
<S>                                                  <C>       <C>                     <C>          <C>

WALTER A. ROW, III
Registered Investment Companies**..................      3     $        1,623          0            $ 0
Other Pooled Investment Vehicles...................      0     $            0          0            $ 0
Other Accounts.....................................      0     $            0          0            $ 0
DAVID STEIN
Registered Investment Companies....................      7     $          949          0            $ 0
Other Pooled Investment Vehicles...................      0     $            0          0            $ 0
Other Accounts.....................................  5,268     $        8,650          0            $ 0
THOMAS SETO
Registered Investment Companies....................      7     $          949          0            $ 0
Other Pooled Investment Vehicles...................      0     $            0          0            $ 0
Other Accounts.....................................  5,268     $        8,650          0            $ 0
RONALD M. EGALKA
Registered Investment Companies....................      2     $1,701,280,407                       $
Other Pooled Investment Vehicles...................      0     $            0                       $
Other Accounts.....................................    307     $1,040,844,649                       $
</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.]

                                       12
<PAGE>

   [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,  primary  emphasis  is
normally  placed on three-year  performance,  with  secondary  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.]

   [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.]

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

   [Parametric seeks to compensate  portfolio  managers  commensurate with their
responsibilities  and  performance,  and competitive with other firms within the
investment  management  industry.  The  performance  of  portfolio  managers  is
evaluated  primarily  based on success in  achieving  portfolio  objectives  for
managed funds and accounts.  The  compensation of portfolio  managers with other
job responsibilities (such as product development) will include consideration of
the scope of such  responsibilities  and the  managers'  performance  in meeting
them.]

   [Salaries,  bonuses and stock-based  compensation  are also influenced by the
operating  performance of Parametric and EVC, its parent  company.  Cash bonuses
are determined  based on a target  percentage of Parametric  profits.  While the
salaries of Parametric  portfolio managers are comparatively fixed, cash bonuses
and  stock-based  compensation  may fluctuate  substantially  from year to year,
based on changes in financial performance and other factors.]

   [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.]

                                       13
<PAGE>

   [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,  Parametric,  Rampart and the Fund have adopted  Codes of Ethics
governing personal  securities  transactions.  Under the Codes of Ethics,  Eaton
Vance,  Rampart  and  Parametric  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 by  sending a
written  request  and  payment of  copying  fees to the SEC's  public  reference
section,   at   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-Advisers. 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 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 U.S.  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
option is valued at the last sale price as quoted on the  principal  exchange or
board of trade on which such option or contract is traded,  or in the absence of
a sale, at the mean between the last bid and asked prices.  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

                                       14
<PAGE>

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 the mean  between  the bid and asked  prices  provided by
dealers.   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.

   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,  Parametric or Rampart as the  Sub-Advisers.  As used
below, "Adviser" refers to Eaton Vance, Parametric,  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
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 transactions will be conducted
in  conformity  with the rules under the 1940 Act. 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.

                                       15
<PAGE>

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.  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 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.

   These Research Services 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.

                                       16
<PAGE>

   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.

   Subject to the  requirement  that the Adviser  shall use its best  efforts to
seek and  execute  Fund  security  transactions  at  advantageous  prices and at
reasonably competitive spreads or commission rates, the Adviser is authorized to
consider as a factor in the selection of any  broker-dealer  firm with whom fund
orders may be placed the fact that such firm has sold or is selling  Fund shares
or  shares  of  other  investment  companies  sponsored  by the  Adviser  or its
affiliates.  This  policy is not  inconsistent  with a rule of the  NASD,  which
provides  that no firm which is a member of the NASD shall favor or disfavor the
distribution  of  shares  of any  particular  investment  company  or  group  of
investment companies on the basis of brokerage  commissions received or expected
by such firm from any source.

   The Fund and the Adviser may also receive Research Services from underwriters
and dealers in fixed-price  offerings;  such Research  Services are reviewed and
evaluated by the Adviser in connection with its investment responsibilities. The
investment  companies  sponsored by the Adviser or its  affiliates  may allocate
trades in such  offerings 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, to such companies. 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
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 Internal  Revenue Code of 1986, as amended
(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

                                       17
<PAGE>

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 U.S. federal income tax purposes and that derive less than 90%
of their gross  income for 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,  U.S.  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 U.S.  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 (as that term is defined in the Code,  but without  regard
to the  deductions  for dividends  paid)  generally  will not be subject to U.S.
federal income tax on its investment company taxable income 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 federal  income tax.
Under current law,  provided that the Fund qualifies as a RIC for 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 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 U.S.  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
treatment  applies  only  if  certain  holding  period  requirements  and  other
requirements  are  satisfied by the Common  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  after  December  31,  2002 and  beginning  before  January  1,  2009.
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) if 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.

                                       18
<PAGE>

   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 cash,
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).

   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 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.

   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 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.

   In the case of Fund  transactions  involving  S&P 500 call  options (or other
listed options on broad-based  securities indices),  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 such position which it holds on

                                       19
<PAGE>

October 31 or at the close of each taxable year. 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 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 S&P 500 under  applicable  guidance  established  by the IRS.
Under  certain   circumstances,   however,  the  Fund  may  enter  into  options
transaction  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.
Appreciated  financial positions subject to this constructive sale treatment are
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,  these
rules may also  terminate  the running 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

                                       20
<PAGE>

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)  and  (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.

   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 U.S. 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  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.

   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.

   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
2004. 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  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
federal tax law as of the date of this Statement of Additional Information,  and

                                       21
<PAGE>

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 U.S.  shareholder  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.

   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.

                                       22
<PAGE>

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   [ ], [ ], [ ] are 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.

                                       23
<PAGE>

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

              INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT

                           [TO BE ADDED BY AMENDMENT]

                                       24
<PAGE>

              EATON VANCE TAX-MANAGED BUY-WRITE OPPORTUNITIES FUND

                       STATEMENT OF ASSETS AND LIABILITIES
                                 AS OF [ ], 2005

                                     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 [ ], 2005 (DATE OF ORGANIZATION) THROUGH [ ], 2005

INVESTMENT INCOME.......................................................... $ -
                                                                            ----
EXPENSES
 Organization costs........................................................ $
 Expense reimbursement..................................................... $( )
                                                                            ----
  Net expenses............................................................. $ --
                                                                            ----
NET INVESTMENT INCOME...................................................... $ --
                                                                            ====

                       See notes to financial statements.

                                       25
<PAGE>

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1:  ORGANIZATION

   The Eaton Vance  Tax-Managed  Buy-Write  Opportunities  Fund (the "Fund") was
organized as a  Massachusetts  business trust on [ ], 2005 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,  has agreed to pay all offering
costs (other than sales loads) that exceed $0.04 per common  share.  Based on an
offering  size of $[ ] the Fund has  estimated  the cost of the  offering  to be
approximately  $[ ] all of which would be paid by the Fund. Any amount in excess
of $[ ] would be paid by Eaton Vance Management.]

   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.  Under normal
market  conditions,  the Fund's investment program will consist primarily of (1)
owning a  diversified  portfolio  of common  stocks a segment of which  seeks to
exceed the total return  performance of the S&P 500 Composite  Stock Price Index
(the "S&P 500") (such  stocks are  referred to as the "S&P 500  Segment")  and a
segment of which seeks to exceed the total return  performance of the NASDAQ-100
Index  (the  NASDAQ-100")  (such  stocks  are  referred  to as  the  "NASDAQ-100
Segment")  and (2)  selling  on a  continuous  basis  S&P 500  call  options  on
substantially  the full value of the S&P 500 Segment and NASDAQ-100 call options
on substantially the full value of the NASDAQ-100 Segment.

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 the
use of management 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 [ ]
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.

   Pursuant  to a  sub-advisory  agreement  among  the  Fund,  the  Adviser  and
Parametric   Portfolio   Associates  LLC,  the  Adviser  has  agreed  to  pay  a
sub-advisory  fee, in an annual  amount equal to [ ]% of the average daily gross
assets of the Fund.

   Pursuant to a sub-advisory  agreement among the Fund, the Adviser and Rampart
Investment   Management  Company,   Inc.,  the  Adviser  has  agreed  to  pay  a
sub-advisory  fee, in an annual  amount equal to [ ]% of the average daily gross
assets of the Fund.

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
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, the Adviser,  to the extent it is aware or reasonably should have been
aware of the conflict, will refrain from voting any proxies related to companies
giving rise to such conflict until it notifies and consults with the appropriate
Board(s) concerning the conflict.

   Once the Adviser notifies the relevant Board(s) of the conflict, the Board(s)
shall convene a meeting of the Boards' Fund Special  Committee (the "Committee")


                                       27
<PAGE>

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 Committee and make reasonably available  appropriate  personnel
to discuss the matter  with the  Committee  upon the  Committee's  request.  The
Committee will instruct the Adviser on the appropriate  course of action. If the
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
conflict to the Committee at its next meeting.

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  Policies  and
Procedures.  These proxy  policies and  procedures  reflect the  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).

  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.

   In  seeking to ensure a level of  consistency  and  rationality  in the proxy
voting  process,  the guidelines  contained in these policies and procedures are
designed to address the manner in which certain  matters that arise regularly in
proxies will generally be voted. However, each Adviser takes the view that these
guidelines  should not be used as  mechanical  instructions  for the exercise of
this  important  shareholder  right.  Except in the instance of routine  matters
related to  corporate  administrative  matters  which are not expected to have a
significant  economic  impact on the company or its  shareholders  (on which the
Advisers will  routinely  vote with  management),  the Advisers will review each
matter on a  case-by-case  basis and  reserve  the right to  deviate  from these
guidelines  when they  believe  the  situation  warrants  such a  deviation.  In
addition,  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 review and vote proxies on behalf of each Adviser's  clients)
may seek insight from the Adviser's  analysts,  portfolio  managers and/or Chief
Equity  Investment  Officer on how a particular  proxy  proposal will impact the
financial prospects of a company, and vote accordingly.  The guidelines are just

                                       28
<PAGE>

that:  guidelines  rather than hard and fast  rules,  simply  because  corporate
governance issues are so varied.

  PROXY VOTING GUIDELINES

   The  following  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.

A.  ELECTION OF BOARD OF DIRECTORS

   The  Advisers   believe  that  a  Board  of  Directors  should  primarily  be
independent,  not have significant ties to management and consist of members who
are all elected annually. In addition, the Advisers believe that important Board
committees  (E.G.,  audit,  nominating and  compensation  committees)  should be
entirely independent. In general,

   o The Advisers will support the election of directors  that result in a Board
     made up of a majority of independent directors.

   o The Advisers will support the election for  independent  directors to serve
     on the audit,  compensation,  and/or  nominating  committees  of a Board of
     Directors.

   o The Advisers  will hold all  directors  accountable  for the actions of the
     Board's  committees.  For example,  the Advisers will consider  withholding
     votes for nominees who have  recently  approved  compensation  arrangements
     that the Advisers deem excessive or propose equity-based compensation plans
     that unduly dilute the ownership interests of shareholders.

   o The Advisers will support efforts to declassify  existing Boards,  and will
     vote against proposals by companies to adopt classified Board structures.

   o The  Advisers   will  vote  against   proposals  for   cumulative   voting,
     confidential stockholder voting and the granting of pre-emptive rights.

B.  APPROVAL OF INDEPENDENT AUDITORS

   The  Advisers  believe  that the  relationship  between  the  company and its
auditors should be limited  primarily to the audit engagement and closely allied
audit-related and tax services,  although  non-audit services may be provided so
long as they are consistent with the requirements of the Sarbanes-Oxley Act and,
if required, have been approved by an independent audit committee.  The Advisers
will also consider the  reputation of the auditor and any problems that may have
arisen in the auditor's performance of services.

C.  EXECUTIVE COMPENSATION

   The Advisers believe that appropriately  designed  equity-based  compensation
plans, approved by shareholders,  can be an effective way to align the interests
of  shareholders  and the interests of  management,  employees,  and  directors.
However,   the  Advisers  are  opposed  to  plans  that   substantially   dilute
shareholders'   ownership   interests  in  the  company  or  have  objectionable
structural features.

   o The  Advisers  will  generally  vote  against  plans where total  potential
     dilution  (including all equity-based  plans) seems likely to exceed 15% of
     shares outstanding over ten years and extends longer than ten years.

   o The Advisers  will  generally  vote against  plans if annual  option grants
     exceed 2% of shares outstanding.

   These total and annual dilution thresholds are guidelines,  not ceilings, and
when  assessing  a plan's  impact  on client  shareholdings  the  Advisers  will
consider other factors such as specific  industry  practices,  company and stock
performance and management credibility. The Proxy Administrator may consult with
the relevant  analyst(s) or portfolio  manager(s) or, if appropriate,  the Chief
Equity  Investment  Officer,  to determine  when or if it may be  appropriate to
exceed these guidelines.

   o The  Advisers  will  typically  vote  against  plans  that  have any of the
     following structural features:

     o  Ability to re-price underwater options without shareholder approval.

                                       29
<PAGE>

     o  The  unrestricted  ability to issue options with an exercise price below
        the stock's current market price.

     o  Automatic share replenishment ("evergreen") feature.

   o The  Advisers are  supportive  of measures  intended to increase  long-term
     stock ownership by executives. These may include:

     o  Requiring  senior  executives  to hold a minimum  amount of stock in the
        company  (frequently  expressed as a certain multiple of the executive's
        salary).

     o  Using restricted stock grants instead of options.

     o   Utilizing  phased vesting  periods or vesting tied to company  specific
         milestones or stock performance.

   o The Advisers  will  generally  support the use of employee  stock  purchase
     plans to increase  company  stock  ownership by  employees,  provided  that
     shares  purchased under the plan are acquired for no less than 85% of their
     market value.

   In assessing a company's executive compensation plan, the Advisers will weigh
all  components  of the  plan.  For  example,  the  grant  of stock  options  to
executives of a company in a particular year may appear  excessive if that grant
goes above 2% of the shares outstanding of the company. However, such grants may
be   appropriate   if  the  senior   management  of  the  company  has  accepted
significantly  reduced  cash  compensation  for the year in lieu of  receiving a
greater number of options.

D.  CORPORATE STRUCTURE MATTERS/ANTI-TAKEOVER DEFENSES

   As a general  matter,  the Advisers oppose  anti-takeover  measures and other
proposals  designed  to limit the  ability of  shareholders  to act on  possible
transactions. In general,

   o Because a classified board structure prevents  shareholders from electing a
     full slate of directors annually,  the Advisers will typically vote against
     proposals  to create  classified  boards  and vote in favor of  shareholder
     proposals to declassify a board.

   o The Advisers  will vote for proposals to subject  shareholder  rights plans
     ("poison pills") to a shareholder vote.

   o The Advisers  will vote for  shareholder  proposals  that seek to eliminate
     supermajority voting requirements and oppose proposals seeking to implement
     supermajority voting requirements.

   o The Advisers will generally vote against  proposals to authorize  preferred
     stock whose voting, conversion, dividend and other rights are determined at
     the  discretion  of the board of directors  when the stock is issued,  when
     used as an  anti-takeover  device.  However,  such "blank check"  preferred
     stock may be issued for legitimate financing needs and the Adviser may vote
     for  proposals  to  issue  such  preferred  stock  when  it  believes  such
     circumstances exist.

   o The  Advisers  will vote for  proposals  to lower  barriers to  shareholder
     action (for  example,  limiting  rights to call special  meetings or act by
     written consent).

   o The Advisers will vote against proposals for a separate class of stock with
     disparate voting rights.

   o The  Advisers  will  consider  on a  case-by-case  basis on board  approved
     proposals  regarding changes to a company's  capitalization;  however,  the
     Advisers will generally vote in favor of proposals authorizing the issuance
     of additional  common stock (except in the case of a merger,  restructuring
     or  another  significant  corporate  event  which  will  be  handled  on  a
     case-by-case  basis),  provided  that such  issuance  does not exceed three
     times the number of currently outstanding shares.

E.  STATE OF INCORPORATION/OFFSHORE PRESENCE

   Under ordinary  circumstances,  the Advisers will not interfere with a choice
to reincorporate or reorganize a company in a different  jurisdiction,  provided
that  management's  decision has been  approved by the board of  directors.  The

                                       30
<PAGE>

Advisers  recognize that there may be benefits to  reincorporation  (such as tax
benefits   and   more   developed   business   laws  in  the   jurisdiction   of
reincorporation).  Each proposal to reincorporate in offshore tax havens will be
reviewed on a  case-by-case  basis to determine  whether such actions are in the
best  interests of the  shareholders  of the company,  including  the  Advisers'
clients.

F.  ENVIRONMENTAL/SOCIAL POLICY ISSUES

   The Advisers  believe that  "ordinary  business  matters" are  primarily  the
responsibility  of  management  and should be approved  solely by the  company's
board of directors. The Advisers recognize that certain social and environmental
issues raised in shareholder proposals are the subject of vigorous public debate
and many are the subject of legal statutes or regulation by federal and/or state
agencies. The Advisers generally support management on these types of proposals,
although they may make exceptions  where they believe a proposal has substantial
economic  implications.  The  Advisers  expect that the  companies in which they
invest their clients' assets will act as responsible corporate citizens.

G.  CIRCUMSTANCES UNDER WHICH THE ADVISERS WILL ABSTAIN FROM VOTING

   The Advisers will seek to vote all proxies for clients who have delegated the
responsibility   to  vote  such   proxies  to  the   Advisers.   Under   certain
circumstances,  the costs to their clients  associated  with voting such proxies
would far outweigh the benefit  derived from  exercising  the right to vote.  In
those  circumstances,  the Advisers will make a  case-by-case  determination  on
whether or not to vote such  proxies.  In the case of countries  which  required
so-called  "share  blocking,"  the Adviser may also  abstain  from  voting.  The
Advisers  will not seek to vote proxies on behalf of their  clients  unless they
have agreed to take on that responsibility on behalf of a client.  Finally,  the
Advisers  may be required  to abstain  from  voting on a  particular  proxy in a
situation where a conflict exists between the Adviser and its client. The policy
for resolution of such conflicts is described below in Section 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:

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

   o Proxy statements  received regarding client securities (if such proxies are
     available on the SEC's EDGAR system or a third party undertakes to promptly
     provide a copy of such documents to the Advisers,  the Advisers do not need
     to retain a separate copy of the proxy statement);

   o A record of each vote cast;

   o 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

   o 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  for two
years after they are created.

  IDENTIFICATION AND RESOLUTION OF CONFLICTS WITH CLIENTS

   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 conflicts of interest, each Adviser will
take the following steps:

   o Quarterly,  the Eaton  Vance  Legal and  Compliance  Departments  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 the Eaton Vance Funds).  Each department head
     will be asked to  provide  a list of  significant  clients  or  prospective
     clients of the Advisers or EVD. For example, a department head would report
     the fact that EVD was in discussions  with a corporate  client  considering
     management of the corporation's 401(k) plan assets.

                                       31
<PAGE>

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

   o The Proxy Administrator will compare the list of Conflicted  Companies with
     the  names of  companies  for which he or she  expects  to  receive  or has
     received proxy statements (the "Proxy Companies").  If a Conflicted Company
     is also a Proxy Company,  the Proxy  Administrator will report that fact to
     the  Eaton  Vance  Chief  Legal  Officer  and the Chief  Equity  Investment
     Officer.

   The  Chief  Legal  Officer  and Chief  Equity  Investment  Officer  will then
determine if a conflict of interest exists between the relevant  Adviser and its
client.  If they determine that a conflict exists,  they or their designees will
take the following  steps to seek to resolve such  conflict  prior to voting any
proxies relating to these Conflicted Companies.

   o For clients other than a Fund, if the Proxy  Administrator  expects to vote
     the proxy of the Conflicted  Company  strictly  according to the guidelines
     contained in these Proxy Voting Policies and Procedures  (the  "Policies"),
     she will (i) inform the Chief  Legal  Officer and Chief  Equity  Investment
     Officer (or their  designees) of that fact, (ii) vote the proxies and (iii)
     record the existence of the conflict and the resolution of the matter.

   o If (i) the  client  involved  is a Fund,  or (ii) the  Proxy  Administrator
     intends  to vote in a manner  inconsistent  with the  guidelines  contained
     herein or, if the issues raised by the proxy are not  contemplated by these
     Policies,  and the  matters  involved  in such proxy  could have a material
     economic  impact  on  the  client(s)   involved,   the  Adviser  will  seek
     instruction on how the proxy should be voted from:

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

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

     o  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  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 vote such  proxies in order to protect  its  clients'
interests.  In either case, the Proxy Administrator will record the existence of
the conflict and the resolution of the matter.

                                       32
<PAGE>


              EATON VANCE TAX-MANAGED BUY-WRITE OPPORTUNITIES FUND

                       STATEMENT OF ADDITIONAL INFORMATION
                                 [        ], 2005

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

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

                                   SUB-ADVISER
                       Parametric Portfolio Associates LLC
                           1151 Fairview Avenue North
                                Seattle, WA 98109

                                   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
                                 (800) 331-1710

                  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:
    Independent Auditor's Report*
    Statement of Assets and Liabilities*
    Notes to Financial Statement*

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

(2) EXHIBITS:

    (a) Agreement and Declaration of Trust dated March 30, 2005 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 ________, 2005, to
            be filed by amendment.

        (2) Form of Expense Reimbursement Arrangement dated
            __________, 2005, to be filed by amendment.

        (3) Form of Sub-Advisory Agreement with Rampart Investment
            Company, Inc. dated ____________, 2005, to be filed by amendment.

        (4) Form of Sub-Advisory Agreement with Parametric Portfolio
            Associates LLC dated ___________, 2005, to be filed by amendment.

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

<PAGE>

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

        (3) Form of Master Selected Dealers 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
        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 ______________, 2005 to be filed by amendment.

        (2) Extension Agreement dated August 31, 2000 to Master
            Custodian Agreement with Investors Bank & Trust Company filed as
            Exhibit (g)(4) to Post-Effective Amendment No. 85 of Eaton Vance
            Municipals Trust (File Nos. 33-572, 811-4409) filed with the
            Commission on January 23, 2001 (Accession No. 0000940394-01-500027)
            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, 2002 (Accession No. 0000940394-01-500126)
            and incorporated herein by reference.

    (k) (1) Supplement to the Transfer Agency and Services Agreement dated
            ___________, 2005 to be filed by amendment.

        (2) Transfer Agency and Services Agreement as amended and
            restated on June 16, 2003, filed as Exhibit (k)(2) to the
            Registration Statement of Eaton Vance Tax-Advantaged Dividend
            Income Fund (File Nos. 333- 107050 and 811-21400) filed July 15,
            2003 (Accession No. 0000898432- 03- 000638) and incorporated herein
            by reference.

        (3) Form of Administration Agreement dated _______________,
            2005 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.

<PAGE>

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

    (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, filed as Exhibit (r)(2) to
            Pre-Effective Amendment No. 1 of Eaton Vance Enhanced Equity Income
            Fund (File Nos. 333-118180, 811-21614) filed September 24, 2004
            (Accession No. 0000950135-04-004565) and incorporated herein by
            reference.

        (3) Code of Ethics for Parametric Portfolio Associates LLC
            effective January 1, 2005, filed as Exhibit (r)(3) to Pre-Effective
            Amendment No. 1 of Eaton Vance Tax-Managed Buy-Write Income Fund
            (File Nos. 333-120666, 811-21676) filed March 23, 2005
            (Accession No. 0000950135-05- 001628) and incorporated herein by
            reference.

    (s) Power of Attorney dated ____________, 2005 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

<PAGE>

     Set forth below is the number of record holders as of March 30, 2005, of
each class of securities of the Registrant:

Title of Class                                       Number of Record Holders
--------------                                       ------------------------
Common Shares of Beneficial                                     0
interest, par value $0.01 per share

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.

<PAGE>

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

         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
Buy-Write Opportunities 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 March 2005.



                        EATON VANCE TAX-MANAGED BUY-WRITE
                        OPPORTUNITIES 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.

Signature                    Title                              Date
-------------------------    -------------------------------    ----------------

/s/ Duncan W. Richardson
------------------------      President and Chief Executive       March 31, 2005
Duncan W. Richardson          Officer

/s/ James L. O'Connor
---------------------         Treasurer and Principal             March 31, 2005
James L. O'Connor             Financial and Accounting

/s/ Alan R. Dynner
------------------            Trustee                             March 31, 2005
Alan R. Dynner

/s/ James B. Hawkes
-------------------           Trustee                             March 31, 2005
James B. Hawkes



<PAGE>


                                INDEX TO EXHIBITS

(a)  Agreement and Declaration of Trust dated March 30, 2005

(b)  By-Laws


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2A
<SEQUENCE>2
<FILENAME>tmofdot.txt
<DESCRIPTION>DECLARATION OF TRUST
<TEXT>
              EATON VANCE TAX-MANAGED BUY-WRITE OPPORTUNITIES FUND

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


                       AGREEMENT AND DECLARATION OF TRUST


                              Dated March 30, 2005





<PAGE>

                                TABLE OF CONTENTS


ARTICLE I - NAME AND DEFINITIONS............................................  1

         Section 1.1.    Name...............................................  1
         Section 1.2.    Definitions........................................  1

ARTICLE II - TRUSTEES.......................................................  3

         Section 2.1.    Management of the Trust............................  3
         Section 2.2     Number of Trustees.................................  3
         Section 2.3     Terms of Office of Trustee.........................  3
         Section 2.4     Resignation and Appointment of Trustees............  3
         Section 2.5     Vacancies..........................................  4
         Section 2.6     Delegation of Power to Other Trustees..............  4
         Section 2.7     Removal of Trustees................................  4
         Section 2.8.    General Powers.....................................  4
         Section 2.9.    Investments........................................  5
         Section 2.10.   Legal Title........................................  6
         Section 2.11.   By-Laws............................................  7
         Section 2.12.   Distribution and Repurchase of Shares..............  7
         Section 2.13.   Delegation.........................................  7
         Section 2.14.   Collection and Payment.............................  7
         Section 2.15.   Expenses...........................................  7
         Section 2.16.   Committees.........................................  7
         Section 2.17.   Miscellaneous Powers...............................  8
         Section 2.18.   Litigation.........................................  8

ARTICLE III - CONTRACTS.....................................................  8

         Section 3.1.    Principal Underwriter..............................  8
         Section 3.2.    Investment Adviser.................................  9
         Section 3.3.    Administrator......................................  9
         Section 3.4.    Other Service Providers............................  9
         Section 3.5.    Transfer Agents....................................  9
         Section 3.6.    Custodian..........................................  9
         Section 3.7.    Affiliations........................................ 9

ARTICLE IV - LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS.. 10

         Section 4.1.    No Personal Liability of Shareholders, Trustees,
                          Officers and Employees............................ 10
         Section 4.2.    Trustee's Good Faith Action; Advice to Others;
                          No Bond or Surety................................. 10
         Section 4.3.    Indemnification.................................... 10
         Section 4.4.    No Duty of Investigation........................... 11
         Section 4.5.    Reliance on Records and Experts.................... 11

                                       i
<PAGE>

ARTICLE V - SHARES OF BENEFICIAL INTEREST................................... 11

         Section 5.1.    Shares of Beneficial Interest...................... 11
         Section 5.2.    Voting Powers...................................... 12
         Section 5.3.    Rights of Shareholders............................. 12
         Section 5.4.    Trust Only......................................... 12
         Section 5.5.    Issuance of Shares................................. 12

ARTICLE VI - REDEMPTIONS AND REPURCHASES.................................... 13

         Section 6.1.    Redemptions and Repurchases of Shares.............. 13
         Section 6.2.    Manner of Payment.................................. 13
         Section 6.3.    Involuntary Redemption............................. 13

ARTICLE VII - DETERMINATION OF NET ASSET VALUE, NET INCOME AND
              DISTRIBUTIONS................................................. 14

         Section 7.1.    Net Asset Value.................................... 14
         Section 7.2.    Dividends and Distributions........................ 14
         Section 7.3.    Power to Modify Foregoing Procedures............... 15

ARTICLE VIII - DURATION; TERMINATION OF TRUST OR A CLASS OR SERIES;
               MERGERS; AMENDMENTS.......................................... 15

         Section 8.1.    Duration........................................... 15
         Section 8.2.    Merger or Termination of the Trust or a Series
                          or a Class........................................ 15
         Section 8.3.    Amendments......................................... 16
         Section 8.4.    Certain Transactions............................... 16
         Section 8.5.    Conversion......................................... 18

ARTICLE IX - MISCELLANEOUS.................................................. 18

         Section 9.1.    Use of the Words "Eaton Vance"..................... 18
         Section 9.2.    Notices............................................ 18
         Section 9.3.    Filing of Copies, References, Headings and
                          Counterparts...................................... 18
         Section 9.4.    Applicable Law..................................... 19
         Section 9.5.    Provisions in Conflict with Law or Regulations..... 19

                                       ii
<PAGE>

     AGREEMENT  AND  DECLARATION  OF TRUST,  made March 30, 2005 by the Trustees
hereunder  and by the holders of beneficial  interest to be issued  hereunder as
hereinafter provided and

                                   WITNESSETH:

     WHEREAS,  the  Trust  has  been  formed  to  carry  on the  business  of an
investment company; and

     WHEREAS,  the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts  voluntary  association  with  transferable
shares in accordance with the provisions hereinafter set forth;

     NOW,   THEREFORE,   the  Trustees  declare  that  all  money  and  property
contributed to the trust  established  hereunder shall be held and managed under
this  Agreement and  Declaration  of Trust for the benefit of the holders,  from
time to time,  of the shares of beneficial  interest to be issued  hereunder and
subject to the provisions set forth below.


                                    ARTICLE I

                              NAME AND DEFINITIONS

     Section  1.1.  Name.  The name of the trust  created  hereby is Eaton Vance
Tax-Managed Buy-Write Opportunities Fund.

     Section 1.2.  Definitions.  Wherever  they are used herein,  the  following
terms have the following respective meanings:

     (a)  "Administrator"  means the party,  other than the Trust, to a contract
described in Section 3.3 hereof.

     (b) "By-Laws" means the By-Laws referred to in Section 2.11 hereof, as from
time to time amended.

     (c) "Class"  means any class of Shares  designated  by the Trustees as such
following  any  division  of  Shares of the Trust  into two or more  Classes  as
provided in Section 5.1 hereof.

     (d) The term "Commission" has the meaning given the term in the 1940 Act.

     (e)  "Custodian"  means any Person  other than the Trust who has custody of
any Trust  Property as required by Section  17(f) of the 1940 Act,  but does not
include a system  for the  central  handling  of  securities  described  in said
Section 17(f).

     (f)  "Declaration"  means this Declaration of Trust as amended from time to
time.

     (g) "His" shall include the feminine and neuter,  as well as the masculine,
genders.

     (h) The term "Interested  Person" has the meaning specified in the 1940 Act
subject,  however,  to such  exceptions  and exemptions as may be granted by the
Commission in any rule, regulation or order.

     (i)  "Investment  Adviser"  means the party,  other  than the Trust,  to an
agreement described in Section 3.2 hereof.

<PAGE>

     (j) The "1940 Act" means the  Investment  Company Act of 1940 and the Rules
and Regulations thereunder, as amended from time to time.

     (k) "Outstanding  Shares" means those Shares shown from time to time on the
books of the Trust or its Transfer Agent as then issued and outstanding.

     (l)  "Person"  means  and  includes  individuals,   corporations,   limited
liability companies,  partnerships,  trusts, associations, firms, joint ventures
and other  entities,  whether  or not legal  entities,  as well as  governments,
instrumentalities,   and  agencies  and  political   subdivisions  thereof,  and
quasi-governmental agencies and instrumentalities.

     (m)  "Principal  Underwriter"  means a party,  other than the  Trust,  to a
contract described in Section 3.1 hereof.

     (n)   "Prospectus"   means  the  Prospectus  and  Statement  of  Additional
Information,  if any, included in the Registration  Statement of the Trust under
the  Securities  Act of 1933 as such  Prospectus  and  Statement  of  Additional
Information,  if  any,  may be  amended  or  supplemented  and  filed  with  the
Commission from time to time.

     (o) "Registration  Statement" means the Registration Statement of the Trust
under the Securities Act of 1933 as such  Registration  Statement may be amended
and filed with the Commission from time to time.

     (p) "Series" means any series of Shares  designated by the Trustees as such
following  the  division  of  Shares  of any  Class  into two or more  Series as
provided in Section 5.1 hereof.

     (q) "Shareholder" means a record owner of Outstanding Shares.

     (r) "Shares" means the equal  proportionate  transferable units of interest
into which the  beneficial  interest in the Trust shall be divided  from time to
time,  or, if more than one Class or Series is authorized  by the Trustees,  the
equal proportionate  transferable units into which each Class or Series shall be
divided from time to time.

     (s)  "Transfer  Agent" means any Person other than the Trust who  maintains
the  Shareholder  records of the Trust,  such as the list of  Shareholders,  the
number of Shares credited to each account, and the like.

     (t) "Trust" means the Trust named in Section 1.1.

     (u) The "Trustees" means the persons who have signed this  Declaration,  so
long as they shall continue in office in accordance  with the terms hereof,  and
all  other  persons  who now  serve  or may from  time to time be duly  elected,
qualified and serving as Trustees in accordance  with the  provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee or the
Trustees  shall  refer  to such  person  or  persons  in his  capacity  or their
capacities as trustees hereunder.

     (v) "Trust Property" means any and all property, real or personal, tangible
or intangible,  which is owned or held by or for the account of the Trust or the
Trustees,  including  any and all assets of or allocated to any Class or Series,
as the context may require.

     (w)  Except  as such  term may be  otherwise  defined  by the  Trustees  in
connection  with any meeting or other action of  Shareholders  or in conjunction
with the  establishment  of any Class or Series,  the term  "vote"  when used in
connection  with an  action of  Shareholders  shall  include  a vote  taken at a
meeting of Shareholders or the consent or consents of Shareholders taken without
such a meeting.

                                       2
<PAGE>

                                   ARTICLE II

                                    TRUSTEES


     Section 2.1. Management of the Trust. The business and affairs of the Trust
shall be managed by the  Trustees  and they shall have all powers and  authority
necessary, appropriate or desirable to perform that function.

     Section  2.2.  Number of  Trustees.  The number of  Trustees  shall be such
number as shall be fixed from time to time by a written  instrument  signed by a
majority of the Trustees,  provided,  however, that the number of Trustees shall
in no event be less than two (2) nor more than fifteen (15). No reduction in the
number of  Trustees  shall have the effect of removing  any Trustee  from office
prior to the expiration of his term unless the Trustee is  specifically  removed
pursuant  to  Section  2.3 or  Section  2.7 of this  Article  II at the  time of
decrease.

     Section  2.3.  Term of Office of Trustees.  The Board of Trustees  shall be
divided into three classes. Within the limits above specified, the number of the
Trustees  in each class and the class which each  Trustee is  assigned  shall be
determined  by  resolution  of the Board of Trustees.  The term of office of the
first class shall expire on the date of the first annual meeting of Shareholders
or  special  meeting  in  lieu  thereof  following  the  effective  date  of the
Registration  Statement.  The term of office of the second class shall expire on
the date of the second annual meeting of Shareholders or special meeting in lieu
thereof following the effective date of the Registration Statement.  The term of
office of the third class shall expire on the date of the third  annual  meeting
of Shareholders or special meeting in lieu thereof  following the effective date
of the  Registration  Statement.  Upon  expiration of the term of office of each
class as set forth above, the number of Trustees in such class, as determined by
the Board of Trustees,  shall be elected for a term  expiring on the date of the
third  annual  meeting  of  Shareholders  or  special  meeting  in lieu  thereof
following such  expiration to succeed the Trustees whose terms of office expire.
The  Trustees  shall be elected  at an annual  meeting  of the  Shareholders  or
special  meeting in lieu thereof called for that purpose,  except as provided in
Section 2.3 of this Article and each Trustee elected shall hold office until his
successor shall have been elected and shall have qualified;  except (a) that any
Trustee may resign his trust  (without need for prior or subsequent  accounting)
by an instrument in writing  signed by him and delivered to the other  Trustees,
which  shall  take  effect  upon such  delivery  or upon such  later  date as is
specified  therein;  (b) that any Trustee may be removed (provided the aggregate
number of Trustees after such removal shall not be less than the number required
by Section 2.2 hereof) for cause, at any time by written  instrument,  signed by
the  remaining  Trustees,  specifying  the date when such  removal  shall become
effective; and (c) that any Trustee who requests in writing to be retired or who
has  become  incapacitated  by  illness  or injury  may be  retired  by  written
instrument signed by a majority of the other Trustees,  and he shall execute and
deliver such  documents as the remaining  Trustees shall require for the purpose
of conveying to the Fund or the remaining Trustees any Fund property held in the
name of the resigning or removed  Trustee.  Upon the  incapacity or death of any
Trustee,  his legal  representative shall execute and deliver on his behalf such
document as the  remaining  Trustees  shall require as provided in the preceding
sentence.

     Section  2.4.  Resignation  and  Appointment  of  Trustees.  In case of the
declination, death, resignation,  retirement, removal or inability of any of the
Trustees,  or in case a vacancy shall,  by reason of any increase in number,  or
for any other  reason,  exist,  the  remaining  Trustees or, prior to the public
offering of Shares of the Fund, if only one Trustee shall then remain in office,
the remaining  Trustee,  shall fill such vacancy by appointing such other person
as they, or anyone of them, in their discretion, shall see fit. Such appointment
shall be evidenced by a written instrument signed by a majority of the remaining
Trustees or by the remaining  Trustee,  as the case may be. Any such appointment
shall not  become  effective,  however,  until the person  named in the  written
instrument or appointment  shall have accepted in writing such  appointment  and
agreed in  writing  to be bound by the terms of the  Declaration.  The  Trustees
shall notify  Shareholders  of such  appointment  in an appropriate  manner.  An

                                       3
<PAGE>

appointment  of a Trustee may be made by the Trustees  then in office and notice
thereof given to Shareholders as aforesaid in anticipation of a vacancy to occur
by reason of retirement, resignation or increase in number of Trustees effective
at a later date,  provided that said appointment  shall become effective only at
or after the  effective  date of said  retirement,  resignation  or  increase in
number of Trustees.  The power of  appointment  is subject to the  provisions of
Section 16(a) of the 1940 Act.

     Section 2.5. Vacancies. The death,  declination,  resignation,  retirement,
removal or incapacity of the Trustees,  or any one of them, shall not operate to
annul the Fund or to remove any existing agency created pursuant to the terms of
this  Declaration.  Whenever a vacancy in the number of  Trustees  shall  occur,
until such vacancy is filled as provided in Section 2.3, the Trustees in office,
regardless of their number,  shall have all the duties imposed upon the Trustees
by the  Declaration  and only such Trustees shall be counted for the purposes of
establishing  the existence of a quorum or performing  such duties or exercising
such  powers  of the  Trustees  as  described  in this  Declaration.  A  written
instrument  certifying the existence of such vacancy signed by a majority of the
Trustees shall be conclusive evidence of the existence of such vacancy.

     Section  2.6.  Delegation  of  Power  to  Other  Trustees.  Subject  to the
provisions of the 1940 Act, any Trustee may, by power of attorney,  delegate his
power for a period  not  exceeding  six (6)  months at any one time to any other
Trustee or Trustees;  provided  that in no case shall less than two (2) Trustees
personally  exercise the powers  granted to the Trustees  under the  Declaration
except as herein otherwise expressly provided.

     Section 2.7. Removal of Trustees by the Shareholders. The Fund shall comply
with the provisions of Section 16(c) of the 1940 Act as though applicable to the
Fund, and with  interpretations  hereof by the Commission staff, insofar as such
provisions and interpretations provide for the removal of trustees of common-law
trusts and the  calling of  Shareholder  meetings  for such  purpose;  provided,
however,  that  the  Fund  may at any  time or from  time to time  apply  to the
Commission for one or more  exemptions from all or part of said Section 16(c) or
a staff  interpretation  thereof and, if exemptive order(s) or interpretation(s)
are  issued or  provided  by the  Commission  or its  staff,  such  order(s)  or
interpretation(s)  shall be deemed  part of  Section  16(c) for the  purpose  of
applying this Section 2.7.

     Section 2.8.  General  Powers.  The Trustees in all instances  shall act as
principals  for and on behalf of the Trust and their  acts shall bind the Trust.
The  business and affairs of the Trust shall be managed by the Trustees and they
shall  have  full  power  and  authority  to do any and all acts and to make and
execute any and all contracts and instruments that they may consider  necessary,
appropriate  or desirable in connection  with the  management of the Trust.  The
Trustees  shall not be bound or limited  in any way by  present or future  laws,
practices  or customs  in regard to trust  investments  or to other  investments
which may be made by  fiduciaries,  but shall have full  authority  and power to
make any and all investments which they, in their uncontrolled discretion, shall
deem proper to promote,  implement  or  accomplish  the various  objectives  and
interests of the Trust and of its Classes and Series.  The  Trustees  shall have
full power and authority to adopt such  accounting and tax accounting  practices
as they  consider  appropriate  for the Trust and for any Class or  Series.  The
Trustees shall have  exclusive and absolute  control over the Trust Property and
over the  business of the Trust to the same extent as if the  Trustees  were the
sole owners of the Trust Property and business in their own right, and with such
full powers of delegation  as the Trustees may exercise  from time to time.  The
Trustees  shall have power to conduct the business of the Trust and carry on its
operations  in any and all of its branches and maintain  offices both within and
without The Commonwealth of  Massachusetts,  in any and all states of the United
States  of  America,   in  the  District  of  Columbia,   and  in  any  and  all
commonwealths,  territories,  dependencies, colonies, possessions, agencies, and
instrumentalities  of the United  States of America and of foreign  governments,
and to do all such other things as they deem necessary, appropriate or desirable
in order to promote or implement  the  interests of the Trust or of any Class or
Series  although  such  things  are  not  herein  specifically  mentioned.   Any
determination  as to what is in the  interests  of the  Trust or of any Class or
Series made by the Trustees in good faith shall be  conclusive  and binding upon

                                       4
<PAGE>

all  Shareholders.  In  construing  the  provisions  of  this  Declaration,  the
presumption  shall be in favor of a grant of plenary  power and authority to the
Trustees.

     The  enumeration  of any specific  power in this  Declaration  shall not be
construed as limiting the aforesaid general and plenary powers.

     Section 2.9. Investments. The Trustees shall have full power and authority:

          (a) To operate as and carry on the business of an investment  company,
     and exercise all the powers  necessary  and  appropriate  to the conduct of
     such operations.

          (b) To acquire or buy,  and invest Trust  Property  in, own,  hold for
     investment or otherwise, and to sell or otherwise dispose of, all types and
     kinds of securities and investments of any kind including,  but not limited
     to,  stocks,  profit-sharing  interests  or  participations  and all  other
     contracts for or evidences of equity interests, bonds, debentures, warrants
     and rights to purchase securities,  and interests in loans, certificates of
     beneficial interest,  bills, notes and all other contracts for or evidences
     of indebtedness,  money market  instruments  including bank certificates of
     deposit,  finance paper,  commercial paper,  bankers' acceptances and other
     obligations,  and all other  negotiable and  non-negotiable  securities and
     instruments,  however named or described,  issued by corporations,  trusts,
     associations  or any  other  Persons,  domestic  or  foreign,  or issued or
     guaranteed by the United States of America or any agency or instrumentality
     thereof, by the government of any foreign country, by any State,  territory
     or possession of the United States, by any political  subdivision or agency
     or  instrumentality  of any  state  or  foreign  country,  or by any  other
     government  or  other   governmental   or   quasi-governmental   agency  or
     instrumentality,  domestic or foreign;  to acquire and dispose of interests
     in   domestic  or  foreign   loans  made  by  banks  and  other   financial
     institutions; to deposit any assets of the Trust in any bank, trust company
     or banking  institution  or retain any such  assets in  domestic or foreign
     cash or currency; to purchase and sell gold and silver bullion, precious or
     strategic  metals,  and coins and currency of all  countries;  to engage in
     "when issued" and delayed delivery  transactions;  to enter into repurchase
     agreements,  reverse repurchase agreements and firm commitment  agreements;
     to  employ  all  types  and  kinds of  hedging  techniques  and  investment
     management  strategies;  and to change the  investments of the Trust and of
     each Class or Series.

          (c) To acquire (by purchase,  subscription or otherwise),  to hold, to
     trade in and deal in, to acquire any rights or options to purchase or sell,
     to sell or otherwise  dispose of, to lend and to pledge any Trust  Property
     or any of the foregoing securities, instruments or investments; to purchase
     and sell  options  on  securities,  currency,  precious  metals  and  other
     commodities, indices, futures contracts and other financial instruments and
     assets  and  enter  into  closing  and  other  transactions  in  connection
     therewith;  to enter into all types of  commodities  contracts,  including,
     without  limitation,   the  purchase  and  sale  of  futures  contracts  on
     securities,  currency,  precious metals and other commodities,  indices and
     other  financial  instruments  and assets;  to enter into  forward  foreign
     currency  exchange  contracts  and  other  foreign  exchange  and  currency
     transactions of all types and kinds; to enter into interest rate,  currency
     and  other  swap  transactions;  and to  engage  in all  types and kinds of
     hedging and risk management transactions.

          (d) To exercise  all rights,  powers and  privileges  of  ownership or
     interest in all securities and other assets included in the Trust Property,
     including,  without limitation, the right to vote thereon and otherwise act
     with respect thereto;  and to do all acts and things for the  preservation,
     protection, improvement and enhancement in value of all such securities and
     assets.

                                       5
<PAGE>
          (e) To acquire (by  purchase,  lease or otherwise)  and to hold,  use,
     maintain,  lease, develop and dispose of (by sale or otherwise) any type or
     kind of property, real or personal, including domestic or foreign currency,
     and any right or interest therein.

          (f) To borrow money and in this  connection  issue  notes,  commercial
     paper  or  other  evidence  of  indebtedness;   to  secure   borrowings  by
     mortgaging, pledging or otherwise subjecting as security all or any part of
     the Trust Property; to endorse,  guarantee, or undertake the performance of
     any  obligation or engagement of any other Person;  to lend all or any part
     of the Trust Property to other Persons;  and to issue general  unsecured or
     other  obligations  of the Trust,  and enter into  indentures or agreements
     relating thereto.

          (g) To aid,  support or assist by further  investment  or other action
     any Person,  any  obligation of or interest  which is included in the Trust
     Property  or in the  affairs  of which the Trust or any Class or Series has
     any direct or  indirect  interest;  to do all acts and things  designed  to
     protect,  preserve,  improve or  enhance  the value of such  obligation  or
     interest; and to guarantee or become surety on any or all of the contracts,
     securities and other obligations of any such Person.

          (h) To join  other  security  holders in acting  through a  committee,
     depositary,  voting trustee or otherwise, and in that connection to deposit
     any  security  with,  or  transfer  any  security  to, any such  committee,
     depositary  or trustee,  and to  delegate to them such power and  authority
     with relation to any security  (whether or not so deposited or transferred)
     as the Trustees  shall deem proper,  and to agree to pay, and to pay,  such
     portion of the expenses and  compensation of such committee,  depositary or
     trustee as the Trustees shall deem proper.

          (i) To carry on any other business in connection with or incidental to
     any  of  the  foregoing  powers  referred  to in  this  Declaration,  to do
     everything  necessary,  appropriate or desirable for the  accomplishment of
     any purpose or the attainment of any object or the furtherance of any power
     referred  to in this  Declaration,  either  alone  or in  association  with
     others,  and to do every other act or thing incidental or appurtenant to or
     arising out of or  connected  with such  business or  purposes,  objects or
     powers.

          (j) To the  extent  necessary  or  appropriate  to give  effect to the
     preferences,  special or  relative  rights and  privileges  of any Class or
     Series, to allocate assets,  liabilities,  income and expenses of the Trust
     to particular  Classes or Series or to apportion the same among two or more
     Classes or Series.

     The foregoing  clauses shall be construed  both as objects and powers,  and
shall not be held to limit or  restrict  in any manner the  general  and plenary
powers of the Trustees.

     Notwithstanding  any other provision  herein,  the Trustees shall have full
power in their discretion,  without any requirement of approval by Shareholders,
to invest part or all of the Trust Property (or part or all of the assets of any
Class or Series), or to dispose of part or all of the Trust Property (or part or
all of the  assets of any Class or  Series)  and  invest  the  proceeds  of such
disposition,  in  securities  issued by one or more other  investment  companies
registered under the 1940 Act. Any such other  investment  company may (but need
not) be a trust  (formed under the laws of the State of New York or of any other
state) which is classified as a partnership for federal income tax purposes.

     Section 2.10.  Legal Title.  Legal title to all the Trust Property shall be
vested in the  Trustees  who from time to time shall be in office.  The Trustees
may hold any  security or other  Trust  Property  in a form not  indicating  any
trust,  whether in bearer,  unregistered or other negotiable form, and may cause
legal title to any security or other Trust Property to be held by or in the name
of one or more of the  Trustees,  or in the name of the  Trust  or any  Class or
Series,  or  in  the  name  of  a  custodian,  subcustodian,  agent,  securities
depository,  clearing  agency,  system for the central handling of securities or

                                       6
<PAGE>

other book-entry system, or in the name of a nominee or nominees of the Trust or
a Class or  Series,  or in the name of a nominee  or  nominees  of a  custodian,
subcustodian,  agent,  securities  depository,  clearing  agent,  system for the
central handling of securities or other book-entry system, or in the name of any
other  Person as nominee.  The right,  title and interest of the Trustees in the
Trust Property shall vest  automatically in each Person who may hereafter become
a Trustee. Upon the termination of the term of office,  resignation,  removal or
death of a Trustee  he shall  automatically  cease to have any  right,  title or
interest in any of the Trust Property, and the right, title and interest of such
Trustee  in the  Trust  Property  shall  vest  automatically  in  the  remaining
Trustees.

     Section 2.11. By- Laws. The Trustees shall have full power and authority to
adopt  By-Laws  providing  for the  conduct  of the  business  of the  Trust and
containing  such  other  provisions  as  they  deem  necessary,  appropriate  or
desirable,  and,  subject to the voting powers of one or more Classes or Series,
to amend and repeal such By-Laws.  Unless the By-Laws  specifically require that
Shareholders  authorize  or  approve  the  amendment  or repeal of a  particular
provision  of the  By-Laws,  any  provision  of the  By-Laws  may be  amended or
repealed by the Trustees without Shareholder authorization or approval.

     Section 2.12.  Distribution  and  Repurchase of Shares.  The Trustees shall
have full  power and  authority  to issue,  sell,  repurchase,  redeem,  retire,
cancel, acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal
in  Shares.  Shares  may be sold for  cash or  property  or other  consideration
whenever  and in such  amounts and manner as the Trustees  deem  desirable.  The
Trustees shall have full power to provide for the  distribution of Shares either
through one or more principal underwriters or by the Trust itself, or both.

     Section 2.13. Delegation.  The Trustees shall have full power and authority
to delegate from time to time to such of their number or to officers,  employees
or  agents  of the  Trust or to other  Persons  the  doing  of such  things  and
execution  of such  agreements  or other  instruments  either in the name of the
Trust or any  Class or  Series  of the  Trust or the  names of the  Trustees  or
otherwise as the Trustees may deem desirable or expedient.

     Section 2.14.  Collection  and Payment.  The Trustees shall have full power
and  authority  to collect  all  property  due to the Trust;  to pay all claims,
including  taxes,  against the Trust or Trust  Property;  to prosecute,  defend,
compromise,  settle  or  abandon  any  claims  relating  to the  Trust  or Trust
Property; to foreclose any security interest securing any obligations, by virtue
of  which  any  property  is owed to the  Trust;  and to  enter  into  releases,
agreements and other instruments.

     Section 2.15. Expenses. The Trustees shall have full power and authority to
incur on  behalf  of the  Trust  or any  Class or  Series  and pay any  costs or
expenses which the Trustees deem necessary, appropriate, desirable or incidental
to carry out,  implement or enhance the business or  operations  of the Trust or
any Class or Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees.  The Trustees shall determine the compensation of all
officers,  employees  and Trustees of the Trust.  The  Trustees  shall have full
power and  authority  to cause the Trust to charge  all or any part of any cost,
expense or expenditure  (including  without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Class or Series, and to credit all or any part of the profit,  income or receipt
to the principal or capital of the Trust or any Class or Series.

     Section 2.16.  Committees.  The Trustees may appoint from their own number,
and terminate,  any one or more  committees  consisting of two or more Trustees,
including  an  executive  committee  which  may,  when the  Trustees  are not in
session,  exercise some or all of the power and authority of the Trustees as the
Trustees may determine.

                                       7
<PAGE>

     Section 2.17.  Miscellaneous Powers. The Trustees shall have full power and
authority to: (a) distribute to Shareholders  all or any part of the earnings or
profits,  surplus  (including  paid-in  surplus),   capital  (including  paid-in
capital)  or assets of the Trust or of any Class or  Series,  the amount of such
distributions  and the manner of payment  thereof to be solely at the discretion
of the  Trustees;  (b)  employ,  engage or  contract  with such  Persons  as the
Trustees may deem desirable for the transaction of the business or operations of
the Trust or any Class or Series  thereof;  (c) enter into or cause the Trust or
any Class or Series thereof to enter into joint ventures,  partnerships (whether
as general partner,  limited partner or otherwise) and any other combinations or
associations;  (d)  purchase and pay for  entirely  out of Trust  property  such
insurance  as they may deem  necessary  or  appropriate  for the  conduct of the
business, including, without limitation,  insurance policies insuring the assets
of the Trust  and  payment  of  distributions  and  principal  on its  portfolio
investments,  and  insurance  policies  insuring  the  Shareholders,   Trustees,
officers,   employees,   agents,  investment  advisers  or  managers,  principal
underwriters,  or independent  contractors of the Trust individually against all
claims and  liabilities of every nature  arising by reason of holding,  being or
having held any such office or position,  or by reason of any action  alleged to
have been taken or omitted by any such person as Shareholder,  Trustee, officer,
employee,  agent,  investment  adviser or  manager,  principal  underwriter,  or
independent  contractor,  including  any  action  taken or  omitted  that may be
determined  to  constitute  negligence,  whether or not the Trust would have the
power to indemnify such person against such  liability;  (e) establish  pension,
profit-sharing,  share  purchase,  and other  retirement,  incentive and benefit
plans  for any  Trustees,  officers,  employees  and  agents of the  Trust;  (f)
indemnify  or  reimburse  any Person  with whom the Trust or any Class or Series
thereof has dealings,  including  without  limitation  the  Investment  Adviser,
Administrator,  Principal  Underwriter,  Transfer Agent, financial service firms
and other agents, to such extent as the Trustees shall determine;  (g) guarantee
the indebtedness or contractual  obligations of other Persons; (h) determine and
change the fiscal year of the Trust and the methods by which its books, accounts
and records shall be kept;  and (i) adopt a seal for the Trust,  but the absence
of such seal shall not impair the validity of any instrument  executed on behalf
of the Trust.

     Section 2.18. Litigation. The Trustees shall have full power and authority,
in the name and on behalf of the Trust,  to engage in and to prosecute,  defend,
compromise, settle, abandon, or adjust by arbitration or otherwise, any actions,
suits, proceedings,  disputes, claims and demands relating to the Trust, and out
of the  assets of the Trust or any Class or Series  thereof to pay or to satisfy
any liabilities, losses, debts, claims or expenses (including without limitation
attorneys'   fees)  incurred  in  connection   therewith,   including  those  of
litigation,  and such power shall include  without  limitation  the power of the
Trustees or any  committee  thereof,  in the exercise of their or its good faith
business  judgment,  to dismiss  or  terminate  any  action,  suit,  proceeding,
dispute,  claim or demand,  derivative  or  otherwise,  brought  by any  Person,
including a Shareholder in his own name or in the name of the Trust or any Class
or Series  thereof,  whether or not the Trust or any Class or Series  thereof or
any of the  Trustees  may be named  individually  therein or the subject  matter
arises  by  reason  of  business  for or on  behalf of the Trust or any Class or
Series thereof.

                                   ARTICLE III

                                    CONTRACTS

     Section 3.1.  Principal  Underwriter.  The Trustees may in their discretion
from  time to time  authorize  the  Trust  to enter  into one or more  contracts
providing  for the sale of the Shares.  Pursuant to any such  contract the Trust
may  either  agree to sell the  Shares to the  other  party to the  contract  or
appoint  such other party its sales agent for such Shares.  In either case,  any
such contract shall be on such terms and conditions as the Trustees may in their
discretion  determine;  and any such  contract  may also provide for the sale of
Shares by such other party as principal or as agent of the Trust.

                                       8
<PAGE>

     Section 3.2. Investment Adviser. The Trustees may, subject to any approvals
by  Shareholders  required by applicable  law, in their  discretion from time to
time  authorize  the  Trust  to  enter  into  one or  more  investment  advisory
agreements  whereby  the other  party or  parties to any such  agreements  shall
undertake to furnish the Trust investment  advisory and research  facilities and
services and such other  facilities and services,  if any, as the Trustees shall
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine.  Notwithstanding any provisions of this Declaration,
the Trustees may authorize the Investment Adviser, in its discretion and without
any prior  consultation  with the Trust,  to buy, sell, lend and otherwise trade
and deal in any and all securities,  commodity  contracts and other  investments
and assets of the Trust and to engage in and  employ  all types of  transactions
and strategies in connection  therewith.  Any such action taken pursuant to such
agreement shall be deemed to have been authorized by all of the Trustees.

     The  Trustees may also  authorize  the Trust to employ,  or  authorize  the
Investment Adviser to employ, one or more  sub-investment  advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the  Investment  Adviser
and such sub-investment adviser and approved by the Trustees.

     Section 3.3. Administrator.  The Trustees may in their discretion from time
to time authorize the Trust to enter into one or more administration agreements,
whereby  the other party to such  agreement  shall  undertake  to furnish to the
Trust or a Series or a Class thereof such administrative facilities and services
and such  other  facilities  and  services,  if any,  as the  Trustees  consider
desirable  and all upon such terms and  conditions  as the Trustees may in their
discretion determine.

     The  Trustees  may also  authorize  the Trust to employ  or  authorize  the
Administrator  to  employ  one or more  sub-administrators  from time to time to
perform such of the acts and services of the  Administrator  and upon such terms
and  conditions  as may be  agreed  upon  between  the  Administrator  and  such
sub-administrator and approved by the Trustees.

     Section 3.4. Other Service Providers.  The Trustees may in their discretion
from  time to time  authorize  the  Trust to enter  into one or more  agreements
whereby  the other party or parties to any such  agreements  will  undertake  to
provide to the Trust or any Class or Series or Shareholders or beneficial owners
of Shares such  services as the Trustees  consider  desirable  and all upon such
terms and conditions as the Trustees in their discretion may determine.

     Section 3.5.  Transfer  Agents.  The Trustees may in their  discretion from
time to time appoint one or more  transfer  agents for the Trust or any Class or
Series  thereof.  Any contract with a transfer  agent shall be on such terms and
conditions as the Trustees may in their discretion determine.

     Section 3.6.  Custodian.  The Trustees may appoint a bank or trust  company
having an aggregate capital, surplus and undivided profits (as shown in its last
published  report) of at least  $2,000,000  as a  custodian  of the Trust or any
Class or Series with authority as its agent to hold cash and securities owned by
the  Trust or the  Class or  Series  and to  release  and  deliver  the same and
otherwise to perform  such duties as the  Trustees  may  specify,  all upon such
terms and conditions as may be agreed upon between the Trust and the Custodian.

     Section 3.7. Affiliations. The fact that:

          (i) any of the  Shareholders,  Trustees  or officers of the Trust is a
     shareholder,  creditor,  director, officer, partner, trustee or employee of
     or has any  interest in any Person or any parent or  affiliate  of any such
     Person,  with which a contract or agreement of the  character  described in
     this Article III has been or will be made, or that any such Person,  or any
     parent or affiliate thereof,  is a Shareholder of or has an interest in the
     Trust, or that

                                       9
<PAGE>

          (ii) any such Person also has similar  contracts,  agreements or plans
     with  other  investment  companies  (including,   without  limitation,  the
     investment  companies  referred to in the last paragraph of Section 2.9) or
     Persons, or has other business activities or interests, shall not affect in
     any way the validity of any such contract,  agreement or plan or disqualify
     any Shareholder,  Trustee or officer of the Trust from authorizing,  voting
     upon or executing the same or create any liability or accountability to the
     Trust or its Shareholders.


                                   ARTICLE IV

          LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS

     Section 4.1. No Personal Liability of Shareholders,  Trustees, Officers and
Employees.  No Shareholder shall be subject to any personal liability whatsoever
to any Person in  connection  with Trust  Property or the acts,  obligations  or
affairs  of the Trust or any Class or Series  thereof.  All  Persons  dealing or
contracting  with the  Trustees as such or with the Trust or any Class or Series
thereof or having  any claim  against  the Trust or any Class or Series  thereof
shall have recourse only to the Trust or such Class or Series for the payment of
their  claims or for the  payment  or  satisfaction  of claims,  obligations  or
liabilities  arising out of such dealings or contracts.  No Trustee,  officer or
employee of the Trust,  whether past, present or future, shall be subject to any
personal  liability  whatsoever  to any such Person,  and all such Persons shall
look  solely to the Trust  Property,  or to the  assets of one or more  specific
Class or Series of the Trust if the claim arises from the act, omission or other
conduct of such Trustee,  officer or employee with respect to only such Class or
Series,  for satisfaction of claims of any nature arising in connection with the
affairs  of the Trust or such  Class or  Series.  If any  Shareholder,  Trustee,
officer  or  employee,  as  such,  of the  Trust  is made a party to any suit or
proceeding  to enforce  any such  liability  of the Trust or any Class or Series
thereof, he shall not, on account thereof, be held to any personal liability.

     Section 4.2.  Trustee's  Good Faith  Action;  Advice to Others;  No Bond or
Surety.  The exercise by the Trustees of their powers and discretions  hereunder
shall be binding upon all Interested  Parties. A Trustee shall not be liable for
errors  of  judgment  or  mistakes  of fact or law.  The  Trustees  shall not be
responsible  or liable in any event for any neglect or  wrongdoing of them or of
any officer, agent, employee,  consultant,  investment adviser or other adviser,
administrator,  distributor  or  principal  underwriter,  custodian or transfer,
dividend disbursing, shareholder servicing or accounting agent of the Trust, nor
shall any Trustee be  responsible  for the act or omission of any other Trustee.
The  Trustees  may take advice of counsel or other  experts  with respect to the
meaning and  operation of this  Declaration  and their  duties as Trustees,  and
shall be under no  liability  for any act or  omission in  accordance  with such
advice or for failing to follow such advice.  In discharging  their duties,  the
Trustees, when acting in good faith, shall be entitled to rely upon the records,
books and  accounts of the Trust and upon  reports  made to the  Trustees by any
officer, employee, agent, consultant,  accountant,  attorney, investment adviser
or  other  adviser,   principal  underwriter,   expert,   professional  firm  or
independent  contractor.  The Trustees as such shall not be required to give any
bond or surety or any other  security for the  performance  of their duties.  No
provision of this Declaration  shall protect any Trustee or officer of the Trust
against  any  liability  to the  Trust  or its  Shareholders  to  which he would
otherwise be subject by reason of his own willful misfeasance,  bad faith, gross
negligence  or reckless  disregard of the duties  involved in the conduct of his
office.

     Section 4.3.  Indemnification.  The  Trustees  may provide,  whether in the
By-Laws or by contract,  vote or other action,  for the  indemnification  by the
Trust or by any Class or Series thereof of the Shareholders,  Trustees, officers
and  employees  of the Trust and of such other  Persons as the  Trustees  in the
exercise  of  their  discretion  may deem  appropriate  or  desirable.  Any such

                                       10
<PAGE>

indemnification  may be mandatory or permissive,  and may be insured  against by
policies maintained by the Trust.

     Section 4.4. No Duty of Investigation. No purchaser, lender or other Person
dealing with the  Trustees or any  officer,  employee or agent of the Trust or a
Class or  Series  thereof  shall be bound  to make any  inquiry  concerning  the
validity of any  transaction  purporting  to be made by the  Trustees or by said
officer, employee or agent or be liable for the application of money or property
paid,  loaned,  or  delivered  to or on the  order  of the  Trustees  or of said
officer, employee or agent. Every obligation, contract, instrument, certificate,
Share,  other  security or  undertaking  of the Trust or a Class or Series,  and
every other act or thing whatsoever  executed in connection with the Trust shall
be conclusively  presumed to have been executed or done by the executors thereof
only in their capacity as Trustees  under this  Declaration or in their capacity
as  officers,  employees  or  agents of the  Trust.  Every  written  obligation,
contract, instrument,  certificate,  Share, other security or undertaking of the
Trust or a Class or Series  made or issued by the  Trustees  may recite that the
same is executed  or made by them not  individually,  but as Trustees  under the
Declaration,  and that the obligations of the Trust or a Class or Series thereof
under  any  such  instrument  are  not  binding  upon  any  of the  Trustees  or
Shareholders  individually,  but  bind  only the  Trust  Property  or the  Trust
Property of the applicable Class or Series,  and may contain any further recital
which they may deem appropriate,  but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.

     Section 4.5.  Reliance on Records and  Experts.  Each  Trustee,  officer or
employee of the Trust  shall,  in the  performance  of his duties,  be fully and
completely  justified and protected with regard to any act or any failure to act
resulting  from  reliance in good faith upon the records,  books and accounts of
the Trust or a Class or Series thereof, upon an opinion or other advice of legal
counsel,  or upon reports made or advice given to the Trust or a Class or Series
thereof by any Trustee or any of the Trust's  officers  or  employees  or by the
Investment Adviser, the Administrator,  the Custodian,  a Principal Underwriter,
Transfer Agent, accountants,  appraisers or other experts, advisers, consultants
or  professionals  selected with  reasonable care by the Trustees or officers of
the Trust,  regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.

                                    ARTICLE V

                          SHARES OF BENEFICIAL INTEREST

     Section  5.1.   Shares  of  Beneficial   Interest.   The  interest  of  the
beneficiaries  of the Trust  initially  shall be divided  into common  shares of
beneficial  interest of $.01 par value.  The number of common shares  authorized
hereunder is unlimited. All shares issued, including,  without limitation, those
issued in connection with a dividend or distribution or a share split,  shall be
fully paid and nonassessable.  The Trustees may, without  Shareholder  approval,
authorize one or more Classes of Shares (which  Classes may without  Shareholder
approval be divided by the  Trustees  into two or more  Series),  Shares of each
such Class or Series  having  such  preferences,  voting  powers and  special or
relative  rights or  privileges  (including  conversion  rights,  if any) as the
Trustees  may  determine  and as shall be set forth in a  resolution  adopted in
accordance  with the  By-Laws.  The  number of  Shares  of each  Class or Series
authorized shall be unlimited except as the By-Laws may otherwise  provide.  The
Trustees  may from time to time  divide or  combine  the  Shares of any Class or
Series  into  a  greater  or  lesser  number   without   thereby   changing  the
proportionate beneficial interest in the Class or Series.

     The  ownership  of Shares  shall be recorded on the books of the Trust or a
transfer or similar agent.  No  certificates  certifying the ownership of Shares
shall be issued  except as the Trustees  may  otherwise  determine  from time to
time.  The Trustees  may make such rules as they  consider  appropriate  for the
issuance of Share certificates,  the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to who are the  Shareholders  of each

                                       11
<PAGE>

Class or Series and as to the number of Shares of each Class or Series held from
time to time by each  Shareholder.  The Trustees may at any time discontinue the
issuance of Share  certificates and may, by written notice to each  Shareholder,
require the surrender of Share certificates to the Trust for cancellation.  Such
surrender  and  cancellation  shall not  affect the  ownership  of Shares in the
Trust.

     Section 5.2.  Voting  Powers.  Subject to the voting  powers of one or more
Classes  or  Series,  the  Shareholders  shall  have power to vote only (i) with
respect  to the  election  of  Trustees,  (ii) for the  removal of  Trustees  as
provided for herein, (iii) with respect to any Investment Adviser as required by
applicable law, (iv) with respect to any termination or amendment of this Trust,
or with  respect to certain  transactions,  to the  extent  and as  provided  in
Article  VIII,  (v) to the same extent as the  stockholders  of a  Massachusetts
business  corporation  as to whether or not a court action,  proceeding or claim
should or should not be brought or maintained  derivatively or as a class action
on behalf  of the  Trust or the  Shareholders,  and (vi)  with  respect  to such
additional  matters  relating  to the  Trust  as may be  required  by law,  this
Declaration,  the By-Laws or any  registration  of the Trust with the Securities
and  Exchange  Commission  (or any  successor  agency) or any  state,  or as the
Trustees may consider necessary or desirable. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote.  Notwithstanding any
other  provision  of this  Declaration,  on any  matter  submitted  to a vote of
Shareholders,  all Shares of the Trust then  entitled to vote  shall,  except as
otherwise provided in the By-Laws or required by applicable law, be voted in the
aggregate as a single Class without regard to Classes or Series.  There shall be
no cumulative voting in the election of Trustees.

     Section 5.3. Rights of Shareholders. The ownership of the Trust Property of
every  description and the right to conduct any business of the Trust are vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the  beneficial  interest  conferred by their Shares,  and they shall
have no right to call for any  partition or division of any  property,  profits,
rights or  interests  of the  Trust or of any  Class or  Series  nor can they be
called upon to share or assume any losses of the Trust or of any Class or Series
or suffer an assessment of any kind by virtue of their ownership of Shares.  The
Shares shall be personal property giving only the rights  specifically set forth
in this  Declaration.  The Shares  shall not entitle  the holder to  preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Class or Series.

     Every Shareholder by virtue of having become a Shareholder shall be held to
have  expressly  assented  and agreed to the terms of this  Declaration  and the
Bylaws and to have become a party hereto and thereto. The death of a Shareholder
during the  continuance of the Trust shall not operate to terminate the same nor
entitle the  representative  of any deceased  Shareholder to an accounting or to
take any action in court or  elsewhere  against the Trust or the  Trustees,  but
only to the rights of said decedent under this Trust.

     Section 5.4. Trust Only. It is the intention of the Trustees to create only
the  relationship  of Trustee  and  beneficiary  between the  Trustees  and each
Shareholder from time to time. It is not the intention of the Trustees to create
a  general   partnership,   limited   partnership,   joint  stock   association,
corporation,   limited  liability  company,   bailment  or  any  form  of  legal
relationship  other  than  a  Massachusetts  business  trust.  Nothing  in  this
Declaration shall be construed to make the Shareholders, either by themselves or
with the Trustees, partners or members of a joint stock association.

     Section 5.5. Issuance of Shares. The Trustees in their discretion may, from
time to time and without any  authorization or vote of the  Shareholders,  issue
Shares of any Class or Series,  in addition  to the then issued and  Outstanding
Shares,  to such party or parties and for such amount and type of consideration,
including  cash or  property,  at such  time or times  and on such  terms as the
Trustees may deem appropriate or desirable, and may in such manner acquire other

                                       12
<PAGE>

assets  (including the  acquisition of assets subject to, and in connection with
the assumption of, liabilities) and businesses.  In connection with any issuance
of Shares,  the Trustees may issue fractional Shares and reissue and resell full
and  fractional  Shares held in the  treasury.  The Trustees may  authorize  the
issuance of  certificates  of  beneficial  interest to evidence the ownership of
Shares.  Shares held in the treasury shall not be voted nor shall such Shares be
entitled to any dividends or other distributions  declared with respect thereto.
The  Trustees in their  discretion  may also,  from time to time and without any
authorization or vote of the  Shareholders,  issue to the extent consistent with
applicable law securities of the Trust  convertible into Shares of the Trust and
warrants  to purchase  securities  of the Trust,  in each case  pursuant to such
terms and under such conditions as the Trustees may specify in their discretion.
Shares of any Class or Series,  in addition  to the then issued and  outstanding
Shares, and such warrants or convertible securities, may be issued to such party
or parties  and for such  amount and type of  consideration,  including  cash or
property,  at such  time or times  and on such  terms as the  Trustees  may deem
appropriate or desirable, and may in such manner acquire other assets (including
the  acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses.  The officers of the Trust are severally authorized
to take all such  actions as may be  necessary  or  desirable  to carry out this
Section 5.5.

                                   ARTICLE VI

                           REDEMPTIONS AND REPURCHASES

     Section 6.1.  Redemptions and Repurchases of Shares.  From time to time the
Trust may redeem or repurchase its Shares, all upon such terms and conditions as
may be  determined by the Trustees and subject to any  applicable  provisions of
the 1940 Act. The Trust may require  Shareholders to pay a withdrawal  charge, a
sales charge, or any other form of charge to the Trust, to the underwriter or to
any other person  designated  by the Trustees  upon  redemption or repurchase of
Trust  Shares  in such  amount as shall be  determined  from time to time by the
Trustees.  The Trust may also  charge a  redemption  or  repurchase  fee in such
amount as may be determined from time to time by the Trustees.

     Section 6.2.  Manner of Payment.  Payment of Shares redeemed or repurchased
may at the option of the  Trustees or such  officer or officers as they may duly
authorize for the purpose, in their complete discretion,  be made in cash, or in
kind, or partially in cash and partially in kind. In case of payment in kind the
Trustees, or their delegate,  shall have absolute discretion as to what security
or securities  shall be  distributed in kind and the amount of the same, and the
securities  shall be valued for purposes of  distribution at the figure at which
they were  appraised  in computing  the net asset value of the Shares,  provided
that any  Shareholder  who cannot legally  acquire  securities so distributed in
kind by reason of the prohibitions of the 1940 Act shall receive cash.

     Section 6.3. Involuntary Redemption. If the Trustees shall, at any time and
in good faith, be of the opinion that direct or indirect  ownership of Shares of
any  Class  or  Series  or  other  securities  of the  Trust  has or may  become
concentrated  in any person to an extent which would  disqualify  the Trust as a
regulated  investment company under the Internal Revenue Code, then the Trustees
shall have the power by lot or other means deemed  equitable by them (i) to call
for redemption by any such person a number,  or principal  amount,  of Shares or
other  securities  of the Trust  sufficient  to  maintain or bring the direct or
indirect  ownership of Shares or other  securities of the Trust into  conformity
with the requirements for such  qualification  and (ii) to refuse to transfer or
issue Shares or other securities of the Trust to any person whose acquisition of
the Shares or other  securities  of the Trust in question  would  result in such
disqualification.   The  redemption  shall  be  effected  upon  such  terms  and
conditions as shall be determined by the Trustees.

     The  holders of Shares or other  securities  of the Trust shall upon demand
disclose to the Trustees in writing such  information with respect to direct and
indirect  ownership of Shares or other  securities  of the Trust as the Trustees

                                       13
<PAGE>

deem necessary to comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.


                                   ARTICLE VII

                        DETERMINATION OF NET ASSET VALUE,
                          NET INCOME AND DISTRIBUTIONS

     Section 7.1. Net Asset Value. The net asset value of each outstanding Share
of the Trust or of any Class or Series  thereof shall be determined on such days
and at or as of such time or times as the Trustees may determine.  Any reference
in this  Declaration to the time at which a determination  of net asset value is
made shall mean the time as of which the  determination  is made.  The power and
duty to  determine  and  method  of  determination  of net  asset  value  may be
delegated  by the  Trustees  from time to time to the  Investment  Adviser,  the
Administrator, the Custodian, the Transfer Agent or such other Person or Persons
as the Trustees may determine. The value of the assets of the Trust or any Class
or Series  thereof shall be  determined in a manner  authorized by the Trustees.
From the total value of said assets,  there shall be deducted all  indebtedness,
interest,  taxes,  payable or accrued,  including  estimated taxes on unrealized
book profits, expenses and management charges accrued to the appraisal date, and
all other items in the nature of liabilities  which shall be deemed  appropriate
by the Trustees, as incurred by or allocated to the Trust or any Class or Series
thereof. The resulting amount, which shall represent the total net assets of the
Trust or Class or Series thereof,  shall be divided by the number of Outstanding
Shares of the Trust or Class or Series  thereof at that time and the quotient so
obtained shall be deemed to be the net asset value of the Shares of the Trust or
Class or Series thereof. The Trust may declare a suspension of the determination
of net asset  value to the extent  permitted  by the 1940 Act. It shall not be a
violation of any provision of this  Declaration if Shares are sold,  redeemed or
repurchased  by the Trust at a price  other than one based on net asset value if
the net asset value is affected by one or more errors  inadvertently made in the
pricing  of  portfolio  securities  or  other  investments  or  in  accruing  or
allocating  income,  expenses,  reserves or  liabilities.  No  provision of this
Declaration shall be construed to restrict or affect the right or ability of the
Trust to employ or  authorize  the use of pricing  services,  appraisers  or any
other  means,  methods,  procedures,  or  techniques  in  valuing  the assets or
calculating the liabilities of the Trust or any Class or Series thereof.

     Section 7.2. Dividends and Distributions. (a) The Trustees may from time to
time  distribute  ratably among the  Shareholders  of the Trust or of a Class or
Series thereof such portion of the net earnings or profits,  surplus  (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such  Class or  Series  held by the  Trustees  as they may deem  appropriate  or
desirable. Such distributions may be made in cash, additional Shares or property
(including  without  limitation any type of obligations of the Trust or Class or
Series or any assets thereof), and the Trustees may distribute ratably among the
Shareholders  of the Trust or Class or Series thereof  additional  Shares of the
Trust or Class or Series  thereof  issuable  hereunder in such  manner,  at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions  may be among  the  Shareholders  of the  Trust or Class or Series
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Class or Series thereof at such other date or time or dates or times as
the Trustees shall  determine.  The Trustees may always retain from the earnings
or profits  such  amounts as they may deem  appropriate  or desirable to pay the
expenses and  liabilities  of the Trust or a Class or Series  thereof or to meet
obligations  of the  Trust or a Class or  Series  thereof,  together  with  such
amounts as they may deem  desirable  to use in the  conduct of its affairs or to
retain for future  requirements  or  extensions of the business or operations of
the Trust or such Class or Series. The Trust may adopt and offer to Shareholders
such  dividend   reinvestment   plans,  cash  dividend  payout  plans  or  other
distribution  plans as the  Trustees  may deem  appropriate  or  desirable.  The
Trustees may in their discretion determine that an account administration fee or
other  similar  charge  may be  deducted  directly  from the  income  and  other
distributions paid on Shares to a Shareholder's account in any Class or Series.

     (b) The Trustees may prescribe,  in their absolute  discretion,  such bases
and times for  determining  the  amounts  for the  declaration  and  payment  of
dividends  and  distributions  as  they  may  deem  necessary,   appropriate  or
desirable.

                                       15
<PAGE>

     (c) Inasmuch as the  computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of account,  the
above  provisions  shall be  interpreted  to give the  Trustees  full  power and
authority in their  absolute  discretion  to  distribute  for any fiscal year as
dividends and as capital gains distributions,  respectively,  additional amounts
sufficient  to enable the Trust or a Class or Series  thereof to avoid or reduce
liability for taxes.

     Section 7.3.  Power to Modify  Foregoing  Procedures.  Notwithstanding  any
provision  contained in this Declaration,  the Trustees may prescribe,  in their
absolute  discretion,  such other means,  methods,  procedures or techniques for
determining  the per Share net asset  value of a Class or Series  thereof or the
income of the Class or Series  thereof,  or for the  declaration  and payment of
dividends and distributions on any Class or Series.

                                  ARTICLE VIII

                       DURATION; TERMINATION OF TRUST OR A
                      CLASS OR SERIES; MERGERS; AMENDMENTS

     Section 8.1. Duration.  The Trust shall continue without limitation of time
but subject to the  provisions  of this Article  VIII.  The death,  declination,
resignation,  retirement,  removal or incapacity of the Trustees,  or any one of
them,  shall not  operate  to  terminate  or annul  the  Trust or to revoke  any
existing  agency  or  delegation  or  authority  pursuant  to the  terms of this
Declaration or of the By-Laws.

     Section 8.2. Merger or Termination of the Trust or a Series or a Class. The
Trust may merge or consolidate with any other corporation, association, trust or
other  organization or may sell, lease or exchange all or  substantially  all of
the Trust property,  including its good will, upon such terms and conditions and
for such  consideration  when and as  authorized  at a meeting  of  Shareholders
called for the purpose by the  affirmative  vote of the holders of two-thirds of
each Class and Series of Shares outstanding and entitled to vote (with each such
class and series separately voting thereon as a separate Class or Series), or by
an instrument or instruments in writing  without a meeting,  consented to by the
holders of  two-thirds  of each Class and Series of Shares (with each such Class
and  Series  separately  consenting  thereto  as a  separate  Class or  Series);
provided, however, that if such merger,  consolidation,  sale, lease or exchange
is recommended by the Trustees,  the vote or written consent of the holders of a
majority of the Shares  outstanding  and  entitled  to vote shall be  sufficient
authorization; and any such merger, consolidation, sale, lease or exchange shall
be deemed for all purposes to have been  accomplished  under and pursuant to the
statutes of The  Commonwealth of  Massachusetts.  Upon making  provision for the
payment of all outstanding  obligations,  taxes and other liabilities,  (whether
accrued or contingent) of the Trust, the Trustees shall distribute the remaining
assets of the Trust ratably among the holders of the outstanding Shares,  except
as may be otherwise provided by the Trustees with respect to any Class or Series
of Shares thereof.

     Subject to  authorization  by the  Shareholders  as indicated below in this
paragraph,  the  Trust may at any time sell and  convert  into  money all of the
assets  of the  Trust,  and,  upon  making  provision  for  the  payment  of all
outstanding  obligations,  taxes  and  other  liabilities  (whether  accrued  or
contingent) of the Trust,  the Trustees shall distribute the remaining assets of
the Trust ratably among the holders of the outstanding Shares,  except as may be
otherwise  provided  by the  Trustees  with  respect  to any  Class or Series of
Shares.   Such  action  shall  first  have  been  authorized  at  a  meeting  of
Shareholders  called for the purpose by the  affirmative  vote of the holders of
two-thirds of each Class and Series of Shares  outstanding  and entitled to vote
(with each such Class and Series  separately  voting thereon as a separate Class
or Series),  or by an instrument or  instruments  in writing  without a meeting,
consented  to by the  holders of  two-thirds  of each Class and Series of Shares
(with  each such Class and Series  separately  consenting  thereto as a separate

                                       16
<PAGE>

Class or Series);  provided,  however, that if such action is recommended by the
Trustees, the vote or written consent of the holders of a majority of the Shares
outstanding and entitled to vote shall be sufficient authorization.

     Upon  completion  of the  distribution  of the  remaining  proceeds  or the
remaining assets as provided in this section,  the Trust shall terminate and the
Trustees  shall be  discharged  of any and all  further  liabilities  and duties
hereunder  and the right,  title and interest of all parties  shall be cancelled
and discharged.

     Section 8.3.  Amendments.  The execution of an instrument setting forth the
establishment  and designation and the relative rights of any Class or Series of
Shares in accordance with Section 5.1 hereof shall,  without any  authorization,
consent or vote of the  Shareholders,  effect an amendment of this  Declaration.
Except as otherwise provided in this Section, if authorized by a majority of the
Trustees and by vote of a majority of the outstanding  voting  securities of the
Trust affected by the amendment (which voting securities shall, unless otherwise
provided by the Trustees, vote together on such amendment as a single class), or
by any larger vote which may be required by applicable  law or this  Declaration
of Trust in any particular case, the Trustees may amend or otherwise  supplement
this Declaration.  The Trustees may also amend this Declaration without the vote
or consent of Shareholders to change the name of the Trust or to make such other
changes as do not have a materially adverse effect on the rights or interests of
Shareholders  hereunder or if they deem it necessary to conform this Declaration
to  the   requirements  of  applicable   Federal  laws  or  regulations  or  the
requirements  of the  regulated  investment  company  provisions of the Internal
Revenue Code, but the Trustees shall not be liable for failing so to do.

     No  amendment  may be made under this  Section  which shall  amend,  alter,
change or repeal any of the  provisions  of Article  VIII  unless the  amendment
effecting  such  amendment,  alteration,  change or  repeal  shall  receive  the
affirmative  vote or consent  of the  holders  of  two-thirds  of each Class and
Series of Shares  outstanding  and  entitled  to vote  (with each such Class and
Series  separately  voting thereon on consenting  thereto as a separate Class or
Series).  Such  affirmative  vote or consent shall be in addition to the vote or
consent of the holders of Shares  otherwise  required by law or by any agreement
between the Trust and any national securities exchange.

     Nothing  contained in this  Declaration  shall permit the amendment of this
Declaration to impair the exemption from personal liability of the Shareholders,
Trustees,  officers,  employees and agents of the Trust or to permit assessments
upon Shareholders.

     Notwithstanding   any  other  provision  hereof,   until  such  time  as  a
Registration  Statement  under the Securities Act of 1933, as amended,  covering
the  first  public  offering  of  securities  of the  Trust  shall  have  become
effective,  this  Declaration may be terminated or amended in any respect by the
affirmative  vote of a majority of the Trustees or by an instrument  signed by a
majority of the Trustees.

     Section 8.4. Certain Transactions.  (a) Notwithstanding any other provision
of this Declaration and subject to the exceptions provided in sub-section (d) of
this Section 8.4, the types of transactions described in sub-section (c) of this
Section  8.4 shall  require  the  affirmative  vote or consent of the holders of
seventy-five  percent (75%) of each Class of Shares  outstanding (with each such
Class voting separately  thereon),  when a Principal  Shareholder (as defined in
sub-section (b) of this Section 8.4) is determined by the Trustees to be a party
to the transaction. Such affirmative vote or consent shall be in addition to the
vote or consent of the  holders of Shares  otherwise  required  by law or by the
terms of any Class or Series,  whether now or  hereafter  authorized,  or by any
agreement between the Trust and any national securities exchange.

     (b) The term  "Principal  Shareholder"  shall mean any Person  which is the
beneficial owner, directly or indirectly,  of more than five percent (5%) of the
Outstanding  Shares  of  the  Trust  or of  any  Class  and  shall  include  any

                                       17
<PAGE>

"affiliate"  or  "associate",  as such  terms are  defined  in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934. For the
purpose  of  this  Section  8.4,  in  addition  to the  Shares  which  a  Person
beneficially  owns  directly,  (a) a Person shall be deemed to be the beneficial
owner of any Shares (i) which the Trustees determine it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warrants,  or
otherwise (but excluding  Share options  granted by the Trust) or (ii) which the
Trustees  determine are beneficially  owned,  directly or indirectly  (including
Shares  deemed  owned  through  application  of clause (i) above),  by any other
Person with which it or its  "affiliate" or  "associate"  (as defined above) has
any  agreement,  arrangement  or  understanding  for the  purpose of  acquiring,
holding,  voting or disposing of Shares, or which is its affiliate or associate,
and (b) the  outstanding  Shares  shall  include  Shares  deemed  owned  through
application of clauses (i) and (ii) above but shall not include any other Shares
which are not at the time issued and outstanding but may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.

     (c) This Section 8.4 shall apply to the following transactions:

          (i) The merger or  consolidation of the Trust or any subsidiary of the
     Trust with or into any Principal Shareholder.

          (ii) The  issuance  of any  securities  of the Trust to any  Principal
     Shareholder for cash.

          (iii) The sale,  lease or exchange of all or any  substantial  part of
     the  assets  of the  Trust  to any  Principal  Shareholder  (except  assets
     determined  by the Trustees to have 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 assets sold in the ordinary course of business).

          (iv)  The  sale,  lease  or  exchange  to or  with  the  Trust  or any
     subsidiary  thereof, in exchange for securities of the Trust, of any assets
     of any Principal  Shareholder  (except assets determined by the Trustees to
     have 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).

     For purposes of this sub-section  8.4(c), the term "Principal  Shareholder"
shall include all subsidiaries,  affiliates, associates, or other persons acting
in concert with any Principal Shareholder.

     (d) The  provisions  of this Section 8.4 shall not be applicable to (i) any
of the  transactions  described  in  sub-section  (c) of this Section 8.4 if the
Trustees shall by resolution  have approved a memorandum of  understanding  with
such Principal  Shareholder  with respect to and  substantially  consistent with
such  transaction,  or (ii) any such  transaction  with  any  Person  of which a
majority of the outstanding  shares of all classes of stock normally entitled to
vote in the  election of  directors  is owned of record or  beneficially  by the
Trust and its subsidiaries.

     (e) The Trustees shall have the power to determine for the purposes of this
Section 8.4 on the basis of information known to the Trust, whether (i) a Person
beneficially  owns more than five percent (5%) of the  outstanding  Shares or is
otherwise  a  Principal  Shareholder,   (ii)  a  Person  is  an  "affiliate"  or
"associate"  (as defined  above) of another,  (iii) the assets being acquired or
leased to or by the Trust or any  subsidiary  thereof  constitute a  substantial
part or the assets of the Trust and have an aggregate  fair market value of less
than $1,000,000, (iv) the memorandum of understanding referred to in sub-section
(d) hereof is substantially consistent with the transaction covered thereby, and
(v)  the  provisions  of the  Section  8.5  otherwise  apply  to any  Person  or
transaction.  Any such  determination  shall be  conclusive  and binding for all
purposes of this Section 8.4.

                                       18
<PAGE>

     Section  8.5.  Conversion.  Notwithstanding  any other  provisions  of this
Declaration,  the  conversion  of the Trust from a  "closed-end  company"  to an
"open-end  company," as those terms are defined in Section  5(a)(2) and 5(a)(1),
respectively,  of the 1940 Act shall require the affirmative  vote or consent of
the holders of two-thirds of each Class  outstanding (with each Class separately
voting thereon or consenting thereto as a separate Class). Such affirmative vote
or consent  shall be in  addition  to the vote or consent of the  holders of the
Shares otherwise required by law or by the terms of any Class or Series, whether
now or  hereafter  authorized,  or by any  agreement  between  the Trust and any
national securities  exchange.  However, if such conversion is recommended by at
least 75% of the  Trustees  then in office,  the vote or written  consent of the
holders of a majority of the outstanding  voting  securities of the Trust (which
voting  securities  shall  vote  separately  on the  matter by  class)  shall be
sufficient to authorize such conversion.


                                   ARTICLE IX

                                  MISCELLANEOUS

     Section 9.1. Use of the Words "Eaton Vance". Eaton Vance Corp. (hereinafter
referred to as "EVC"), which owns (either directly or through  subsidiaries) all
of the  capital  shares  of the  Investment  Adviser  of  the  Trust  (or of the
investment  adviser of each of the investment  companies referred to in the last
paragraph  of  Section  2.9),  has  consented  to the  use by the  Trust  of the
identifying  words  "Eaton  Vance" in the name of the  Trust.  Such  consent  is
conditioned upon the continued employment of EVC or a subsidiary or affiliate of
EVC as Investment  Adviser of the Trust or as the investment  adviser of each of
the  investment  companies  referred to in the last paragraph of Section 2.9. As
between the Trust and itself, EVC shall control the use of the name of the Trust
insofar as such name contains the identifying words "Eaton Vance".  EVC may from
time to time use the  identifying  words "Eaton Vance" in other  connections and
for other purposes, including, without limitation, the names of other investment
companies,  trusts,  corporations  or  businesses  which it may manage,  advise,
sponsor or own or in which it may have a financial interest. EVC may require the
Trust to cease  using the  identifying  words  "Eaton  Vance" in the name of the
Trust if EVC or a subsidiary  or  affiliate  of EVC ceases to act as  investment
adviser  of the Trust or as the  investment  adviser  of each of the  investment
companies referred to in the last paragraph of Section 2.9.

     Section  9.2.  Notices.   Notwithstanding   any  other  provision  of  this
Declaration,  any and all notices to which any  Shareholder  may be entitled and
any and all  communications  shall be deemed  duly  served  or given if  mailed,
postage  prepaid,  addressed  to any  Shareholder  of record  at his last  known
address  as  recorded  on the  register  of  the  Trust.  If  and to the  extent
consistent with applicable law, a notice of a meeting, an annual report, and any
other  communication to Shareholders need not be sent to a Shareholder (i) if an
annual report and a proxy  statement for two  consecutive  shareholder  meetings
have been  mailed  to such  Shareholder's  address  and have  been  returned  as
undeliverable,  (ii) if all,  and at least two,  checks (if sent by first  class
mail) in payment of  distributions  on Shares during a twelve-month  period have
been  mailed  to  such   Shareholder's   address  and  have  been   returned  as
undeliverable or (iii) in any other case in which a proxy statement concerning a
meeting  of  security  holders  is not  required  to be  given  pursuant  to the
Commission's  proxy  rules as from time to time in effect  under the  Securities
Exchange Act of 1934, as amended.  However,  delivery of such proxy  statements,
annual  reports  and  other   communications  shall  resume  if  and  when  such
Shareholder  delivers  or causes to be  delivered  to the Trust  written  notice
setting forth such Shareholder's then current address.

     Section 9.3. Filing of Copies, References,  Headings and Counterparts.  The
original  or a copy of this  instrument,  of any  amendment  hereto  and of each
declaration  of trust  supplemental  hereto,  shall be kept at the office of the
Trust.  Anyone  dealing with the Trust may rely on a certificate by a Trustee or

                                       19
<PAGE>

an officer of the Trust as to whether or not any such amendments or supplemental
declarations  of trust have been made and as to any matters in  connection  with
the Trust hereunder,  and, with the same effect as if it were the original,  may
rely on a copy certified by a Trustee or an officer of the Trust to be a copy of
this instrument or of any such amendment  hereto or supplemental  declaration of
trust.

     In this instrument or in any such amendment or supplemental  declaration of
trust,  references to this  instrument,  and all  expressions  such as "herein",
"hereof",  and  "hereunder",  shall be  deemed  to refer to this  instrument  as
amended or affected by any such supplemental  declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text  of  this  instrument,  rather  than  the  headings,  shall  control.  This
instrument may be executed in any number of counterparts  each of which shall be
deemed an original,  but such  counterparts  shall constitute one instrument.  A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative,  may be executed from
time to time by a  majority  of the  Trustees  then in office and filed with the
Massachusetts  Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may  thereafter  be referred to in lieu of the original  Declaration
and the various amendments and supplements thereto.

     Section 9.4. Applicable Law. The Trust set forth in this instrument is made
in The  Commonwealth  of  Massachusetts,  and it is  created  under and is to be
governed  by and  construed  and  administered  according  to the  laws  of said
Commonwealth.  The Trust shall be of the type  commonly  called a  Massachusetts
business  trust,  and without  limiting  the  provisions  hereof,  the Trust may
exercise all powers which are ordinarily exercised by such a trust.

     Section  9.5.  Provisions  in  Conflict  with Law or  Regulations.  (a) The
provisions  of  this  Declaration  are  severable,  and  if the  Trustees  shall
determine,  with the advice of legal counsel,  that any of such provisions is in
conflict  with the 1940 Act,  the  Internal  Revenue  Code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be construed in
such a manner consistent with such law as may most closely reflect the intention
of the offending provision; provided, however, that such determination shall not
affect any of the remaining  provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.

     (b) If  any  provision  of  this  Declaration  shall  be  held  invalid  or
unenforceable in any  jurisdiction,  such invalidity or  unenforceability  shall
attach only to such provision in such  jurisdiction  and shall not in any manner
affect such provision in any other  jurisdiction  or any other provision of this
Declaration in any jurisdiction.

                                       20
<PAGE>


     IN WITNESS WHEREOF,  the undersigned,  being all of the current Trustees of
the Trust, have executed this instrument this 30th day of March, 2005.


/s/ Alan R. Dynner                                /s/ James B. Hawkes
------------------------------------              ------------------------------
Alan R. Dynner, as Trustee                        James B. Hawkes, as Trustee
     and not Individually                              and not Individually



                        THE COMMONWEALTH OF MASSACHUSETTS


Suffolk, ss.                                               Boston, Massachusetts


     On this 30th day of March,  2005, before me, the undersigned notary public,
personally  appeared the above named Alan R. Dynner and James B. Hawkes,  proved
to me through  satisfactory  evidence  of  identification,  which  consisted  of
personal  knowledge,  to be the persons  whose names are signed on the preceding
document in my presence and who swore or affirmed to me that the contents of the
document are truthful and accurate to the best of their knowledge and belief.


                                                 Before me,


                                                /s/ Jaime Viola
                                                -----------------------------
                                                My commission expires:
                                                July 31, 2009

                                       21
<PAGE>


The names and addresses of all the Trustees of the Trust are as follows:


Alan R. Dynner
227 Beacon Street
Boston, MA  02116

James B. Hawkes
11 Quincy Park
Beverly, MA  01915

Trust Address:
The Eaton Vance Building
255 State Street
Boston, MA  02109
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2B
<SEQUENCE>3
<FILENAME>tmofbylaw.txt
<DESCRIPTION>BY-LAWS
<TEXT>
                                     BY-LAWS

                                       OF

              EATON VANCE TAX-MANAGED BUY-WRITE OPPORTUNITIES FUND

                                    ARTICLE I

                                  The Trustees

SECTION 1.  Number of  Trustees.  The number of  Trustees  shall be fixed by the
Trustees,  provided, however, that such number shall at no time be less than two
or exceed fifteen.


                                   ARTICLE II

                           Officers and Their Election

SECTION  1.  Officers.  The  officers  of the  Trust  shall  be a  President,  a
Treasurer,  a Secretary,  and such other  officers or agents as the Trustees may
from time to time  elect.  It shall not be  necessary  for any  Trustee or other
officer to be a holder of shares in the Trust.

SECTION 2. Election of Officers.  The  Treasurer  and Secretary  shall be chosen
annually by the Trustees. The President shall be chosen annually by and from the
Trustees.  Except for the offices of the  President and  Secretary,  two or more
offices may be held by a single  person.  The  officers  shall hold office until
their successors are chosen and qualified.

SECTION 3.  Resignations  and  Removals.  Any officer of the Trust may resign by
filing a written resignation with the President or with the Trustees or with the
Secretary,  which  shall  take  effect  on being so filed or at such time as may
otherwise  be  specified  therein.  The  Trustees  may at any meeting  remove an
officer.


                                   ARTICLE III

                   Powers and Duties of Trustees and Officers

SECTION 1.  Trustees.  The business and affairs of the Trust shall be managed by
the  Trustees,  and they shall have all powers  necessary and desirable to carry
out that  responsibility,  so far as such powers are not  inconsistent  with the
laws of the  Commonwealth of  Massachusetts,  the Declaration of Trust, or these
By-Laws.

SECTION 2. Executive and other Committees. The Trustees may elect from their own
number an  executive  committee  to consist of not less than three nor more than
five  members,  which  shall have the power and duty to conduct  the current and
ordinary  business of the Trust while the Trustees are not in session,  and such
other powers and duties as the  Trustees may from time to time  delegate to such
committee.  The Trustees  may also elect from their own number other  committees
from time to time, the number composing such committees and the powers conferred
upon the same to be determined by the Trustees.  Without limiting the generality
of the foregoing,  the Trustees may appoint a committee  consisting of less than
the whole number of Trustees then in office, which committee may be empowered to
act for and bind the  Trustees and the Trust,  as if the acts of such  committee

<PAGE>

were  the  acts  of all  the  Trustees  then  in  office,  with  respect  to the
institution,  prosecution, dismissal, settlement, review, investigation or other
disposition of any dispute,  claim,  action,  suit or proceeding  which shall be
pending or threatened to be brought before any court,  administrative  agency or
other adjudicatory body.

SECTION 3. Chairman of the Trustees. The Trustees shall appoint from among their
number a Chairman.  The Chairman  shall  preside at the meetings of the Trustees
and may call meetings of the Trustees and of any committee  thereof  whenever he
deems it necessary  or  desirable  to do so. The Chairman may in his  discretion
preside at any meeting of the  shareholders,  and may delegate such authority to
another Trustee or officer of the Trust. The Chairman shall exercise and perform
such additional powers and duties as from time to time may be assigned to him by
the  Trustees,  and  shall  have the  resources  and  authority  appropriate  to
discharge the responsibilities of the office.

SECTION 4.  President.  Subject to such  supervisory  powers,  if any, as may be
given by the Trustees to the Chairman of the Trustees,  the  President  shall be
the chief  executive  officer  of the Trust and  subject  to the  control of the
Trustees,  he shall  have  general  supervision,  direction  and  control of the
business  of the Trust and of its  employees  and shall  exercise  such  general
powers of  management  as are  usually  vested in the office of  President  of a
corporation.  In the event that the  Chairman  does not  preside at a meeting of
shareholders  or delegate such power and authority to another Trustee or officer
of the Fund,  the President or his designee  shall  preside at such meeting.  He
shall have the power to employ attorneys and counsel for the Trust and to employ
such subordinate officers, agents, clerks and employees as he may find necessary
to transact  the  business of the Trust.  He shall also have the power to grant,
issue,  execute or sign such powers of attorney,  proxies or other  documents as
may be deemed  advisable  or necessary in  furtherance  of the  interests of the
Trust.  The  President  shall have such other powers and duties as, from time to
time, may be conferred upon or assigned to him by the Trustees.

SECTION  5.  Treasurer.  The  Treasurer  shall be the  principal  financial  and
accounting  officer of the Trust.  He shall deliver all funds and  securities of
the Trust  which may come  into his hands to such bank or trust  company  as the
Trustees  shall  employ as  custodian  in  accordance  with  Article  III of the
Declaration  of Trust.  He shall make annual  reports in writing of the business
conditions of the Trust, which reports shall be preserved upon its records,  and
he shall furnish such other reports  regarding the business and condition as the
Trustees may from time to time require.  The Treasurer shall perform such duties
additional to foregoing as the Trustees may from time to time designate.

SECTION 6.  Secretary.  The Secretary shall record in books kept for the purpose
all  votes  and  proceedings  of the  Trustees  and the  shareholders  at  their
respective meetings. He shall have custody of the seal, if any, of the Trust and
shall  perform such duties  additional to the foregoing as the Trustees may from
time to time designate.

SECTION 7. Other Officers.  Other officers elected by the Trustees shall perform
such duties as the Trustees may from time to time designate.

SECTION 8. Compensation. The Trustees and officers of the Trust may receive such
reasonable  compensation  from the Trust for the  performance of their duties as
the Trustees may from time to time determine.

                                       -2-
<PAGE>

                                   ARTICLE IV

                            Meetings of Shareholders

SECTION 1. Meetings.  Meetings of shareholders,  at which the shareholders shall
elect  Trustees and transact such other business as may properly come before the
meeting,  shall be held  annually  so long as  required  by the  American  Stock
Exchange,  New York Stock  Exchange or such other  exchange or trading system on
which shares are principally traded.  Meetings of the shareholders (or any class
or series)  may be called at any time by the  President,  and shall be called by
the President or the Secretary at the request, in writing or by resolution, of a
majority of the Trustees,  or at the written request of the holder or holders of
twenty-five  percent  (25%) or more of the total  number of the then  issued and
outstanding  shares  of the Trust  entitled  to vote at such  meeting.  Any such
request shall state the purposes of the proposed meeting.

SECTION 2. Place of Meetings.  Meetings of the shareholders shall be held at the
principal  place of  business  of the Trust in Boston,  Massachusetts,  unless a
different  place  within the United  States is  designated  by the  Trustees and
stated as specified in the respective  notices or waivers of notice with respect
thereto.

SECTION 3.  Notice of  Meetings.  Notice of all  meetings  of the  shareholders,
stating the time,  place and the  purposes  for which the  meetings  are called,
shall be given by the  Secretary to each  shareholder  entitled to vote thereat,
and to each  shareholder  who under the By-Laws is entitled to such  notice,  by
delivering (by electronic,  telephonic,  computerized or other alternative means
as may be approved by resolutions  adopted by the trustees,  which authorization
is received not more than six months before delivery of such notice) or mailing,
postage  paid,  addressed  to such  address as it appears  upon the books of the
Trust,  at least ten days no more than ninety days before the time fixed for the
meeting,  and the person given such notice shall make an affidavit  with respect
thereto.  If any  shareholder  shall  have  failed  to  inform  the Trust of his
address,  no  notice  need be  sent  to him.  No  notice  need be  given  to any
shareholder if a written waiver of notice,  executed before or after the meeting
by the  shareholder  or his  attorney  thereunto  authorized,  is filed with the
records of the meeting.

SECTION 4. Quorum.  Except as otherwise  provided by law, to constitute a quorum
for the transaction of any business at any meeting of  shareholders,  there must
be present, in person or by proxy,  holders of a majority of the total number of
shares of the then issued and  outstanding  shares of the Trust entitled to vote
at such  meeting;  provided that if a class (or series) of shares is entitled to
vote as a separate  class (or  series) on any  matter,  then in the case of that
matter a quorum  shall  consist of the holders of a majority of the total number
of shares of the then  issued and  outstanding  shares of that class (or series)
entitled to vote at the meeting.  Shares  owned  directly or  indirectly  by the
Trust, if any, shall not be deemed outstanding for this purpose.

     If a quorum, as above defined,  shall not be present for the purpose of any
vote that may properly come before any meeting of  shareholders  at the time and
place of any  meeting,  the  shareholders  present  in  person  or by proxy  and
entitled to vote at such meeting on such matter holding a majority of the shares
present and entitled to vote on such matter may by vote adjourn the meeting from
time to  time  to be held at the  same  place  without  further  notice  than by
announcement  to be given  at the  meeting  until a  quorum,  as above  defined,
entitled to vote on such matter, shall be present, whereupon any such matter may
be voted upon at the meeting as though held when originally convened.

                                      -3-
<PAGE>

SECTION 5. Voting. At each meeting of the shareholders  every shareholder of the
Trust  shall be  entitled to one vote in person or by proxy for each of the then
issued and  outstanding  shares of the Trust then having voting power in respect
of the matter  upon which the vote is to be taken,  standing  in his name on the
books of the  Trust at the time of the  closing  of the  transfer  books for the
meeting,  or, if the books be not closed  for any  meeting,  on the record  date
fixed as  provided in Section 4 of Article VI of these  By-Laws for  determining
the shareholders entitled to vote at such meeting, or if the books be not closed
and no record date be fixed, at the time of the meeting.  The record holder of a
fraction of a share shall be entitled in like manner to  corresponding  fraction
of a vote.  Notwithstanding the foregoing,  the Trustees may, in connection with
the  establishment  of any class (or series) of shares or in proxy materials for
any meeting of  shareholders  or in other  solicitation  materials or by vote or
other action duly taken by them,  establish  conditions  under which the several
classes (or series) shall have separate voting rights or no voting rights.

     All elections of Trustees shall be conducted in any manner  approved at the
meeting of the  shareholders  at which said  election  is held,  and shall be by
ballot if so requested by any shareholder  entitled to vote thereon. The persons
receiving  the greatest  number of votes shall be deemed and  declared  elected.
Except as otherwise  required by law or by the  Declaration of Trust or by these
By-Laws,  all  matters  shall be  decided by a majority  of the votes  cast,  as
hereinabove provided, by persons entitled to vote thereon.

SECTION 6.  Proxies.  Any  shareholder  entitled  to vote upon any matter at any
meeting of the  shareholders  may so vote by proxy,  provided that such proxy to
act is  authorized to act by (i) a written  instrument,  dated not more than six
months before the meeting and executed  either by the  shareholder  or by his or
her duly  authorized  attorney in fact (who may be so authorized by a writing or
by  any  non-written  means  permitted  by  the  laws  of  The  Commonwealth  of
Massachusetts)  or (ii)  such  electronic,  telephonic,  computerized  or  other
alternative  means as may be approved by a resolution  adopted by the  Trustees,
which  authorization  is  received  not more than six months  before the initial
session of the meeting. Proxies shall be delivered to the Secretary of the Trust
or other person  responsible for recording the proceedings before being voted. A
proxy with  respect to shares held in the name of two or more  persons  shall be
valid if  executed  by one of them  unless at or prior to exercise of such proxy
the Trust  receives a specific  written  notice to the contrary  from any one of
them.  Unless  otherwise  specifically  limited by their  terms,  proxies  shall
entitle  the holder  thereof to vote at any  adjournment  of a meeting.  A proxy
purporting  to be  exercised  by or on behalf of a  shareholder  shall be deemed
valid  unless  challenged  at or prior to its exercise and the burden of proving
invalidity  shall rest on the challenger.  At all meetings of the  shareholders,
unless the voting is  conducted by  inspectors,  all  questions  relating to the
qualifications  of voters,  the  validity  of  proxies,  and the  acceptance  or
rejection of votes shall be decided by the chairman of the meeting.

SECTION 7. Consents.  Any action which may be taken by shareholders may be taken
without a meeting if a majority of  shareholders  entitled to vote on the matter
(or such larger proportion  thereof as shall be required by law, the Declaration
or these  By-Laws for approval of such matter)  consent to the action in writing
and the  written  consents  are  filed  with  the  records  of the  meetings  of
shareholders. Such consents shall be treated for all purposes as a vote taken at
a meeting of shareholders.

                                      -4-
<PAGE>

SECTION 8. Notice of Shareholder Business and Nominations

     (A) Annual  Meetings  of  Shareholders.  (1)  Nominations  of  persons  for
election of the Board of Trustees and the proposal of business to be  considered
by the  shareholders  may be made  at an  annual  meeting  of  shareholders  (a)
pursuant  to the notice of  meeting  described  in Section 3 of this  Article of
these  By-Laws;  (b) by or at the direction of the Board of Trustees;  or (c) by
any  shareholder  of the  Trust who was a  shareholder  of record at the time of
giving of notice provided for in Section 3 of this Article of these By-Laws, who
is entitled to vote at the meeting and who complied  with the notice  provisions
set forth in this Section 8.

         (2) For  nominations or other business properly to be brought before an
annual  meeting by a shareholder  pursuant to clause (c) of paragraph  (A)(1) of
this Section 8, the shareholder must have given timely notice thereof in writing
to the  Secretary of the Trust and such other  business  must be a proper matter
for shareholder action. To be timely, a shareholder's  notice shall be delivered
to the Secretary at the principal  executive offices of the Trust not later than
the  close of  business  on the  ninetieth  day nor  earlier  than the  close of
business on the one  hundred-twentieth day prior to the first anniversary of the
preceding year's annual meeting;  provided,  however, that in the event that the
date of the annual  meeting is more than  thirty  days before or more than sixty
days after such anniversary date, notice by the shareholder to be timely must be
so  delivered  not  earlier  than the  close  of  business  on the  later of the
ninetieth day prior to such annual meeting or the tenth day following the day on
which  public  announcement  of the date of such  meeting is first  made.  In no
event,  shall the public  announcement  of an  adjournment  of an annual meeting
commence a new time period for the giving of a shareholder's notice as described
above. Such shareholder's  notice shall set forth (a) as to each person whom the
shareholder  proposes to nominate  for election or  reelection  as a Trustee all
information  relating  to  such  person  that is  required  to be  disclosed  in
solicitations  of proxies  for  election  of  trustees/directors  in an election
contest, or is otherwise required, in each case pursuant to Regulation 14A under
the Securities  Exchange Act of 1934, as amended (the  "Exchange  Act") and Rule
14a-11 thereunder (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a Trustee if elected);  (b) as to
any other business that the shareholder  proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting,  the
reasons for conducting such business at the meeting and any material interest in
such business of such  shareholder  and the beneficial  owner,  if any, on whose
behalf the proposal is made; and (c) as to the shareholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and  address of such  shareholder,  as they  appear on the  Trust's
books,  and of such  beneficial  owner and (ii) the  class/series  and number of
shares  of the  Trust  which  are  owned  beneficially  and of  record  by  such
shareholder and such beneficial owner.

          (3) Notwithstanding  anything in the second  sentence of paragraph (A)
(2) of this Section 8 to the  contrary, in the event that the number of Trustees
to be elected to  the  Board of Trustees is increased  and  there is  no  public
announcement  naming all of the nominees for Trustee or  specifying  the size of
the  increased  Board of Trustees  made by the Trust at least one  hundred  days
prior to the  first  anniversary  of the  preceding  year's  annual  meeting,  a
shareholder's notice required by this Section 8 shall also be considered timely,
but  only  with  respect  to  nominees  for any new  positions  created  by such
increase,  if it shall be delivered to the Secretary at the principal  executive
offices  of the  Trust not later  than the  close of  business  on the tenth day
following the day on which such public announcement is first made by the Trust.

                                      -5-
<PAGE>

     (B) Special Meetings of Shareholders. Only such business shall be conducted
by a special  meeting  of  shareholders  as shall have been  brought  before the
meeting  pursuant to the Trust's  notice of meeting.  Nominations of persons for
election  to the  Board  of  Trustees  may  be  made  at a  special  meeting  of
shareholders at which Trustees are to be elected  pursuant to the Trust's notice
of meeting  (1) by or at the  direction  of the Board of  Trustees or (2) by any
shareholder of the Trust who is a shareholder of record at the time of giving of
notice  provided  for in this  Section 8, who shall be  entitled  to vote at the
meeting and who complies with the notice procedures set forth in this Section 8.
In the event the Trust calls a special meeting of  shareholders  for the purpose
of electing one or more Trustees to the Board of Trustees,  any such shareholder
may  nominate a person or persons  (as the case may be),  for  election  to such
position(s) as specified in the Trust's notice of meeting,  if the shareholder's
notice required by paragraph  (A)(2) of this Section 8 shall be delivered to the
Secretary at the principal  executive  offices of the Trust not earlier than the
close of business on the one hundred-twentieth day prior to such special meeting
and not later than the close of business on the later of the ninetieth day prior
to such  special  meeting  or the tenth day  following  the day on which  public
announcement  is  first  made of the  date  of the  special  meeting  and of the
nominees proposed by the Board of Trustees to be elected at such meeting.  In no
event,  shall the  public  announcement  or  adjournment  of a  special  meeting
commence a new time period for the giving of a shareholder's notice as described
above.

     (C) General. (1) Only such persons who are nominated in accordance with the
procedures  set forth in this  Section 8 shall be  eligible to serve as Trustees
and only such business shall be conducted at a meeting of  shareholders as shall
have been brought before the meeting in accordance with the procedures set forth
in this Section 8. Except as otherwise provided by law, the Declaration of Trust
or these By-Laws,  the Chairman (or such other officer presiding at the meeting)
shall have the power and duty to determine  whether a nomination or any business
proposed to be brought before the meeting was made, or proposed, as the case may
be, in accordance  with the  procedures  set forth in this Section 8 and, if any
proposed  nomination  or business is not in  compliance  with this Section 8, to
declare that such defective proposal or nomination shall be disregarded.

          (2) For purposes  of this Section 8, "public  announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Trust with the Securities and Exchange Commission (the "Commission") pursuant to
Section 13, 14 or 15(d) of the Exchange Act.

          (3)  Notwithstanding the foregoing provisions  of this  Section  8,  a
shareholder  shall also comply with all applicable  requirements of the Exchange
Act and the rules and  regulations  thereunder  with  respect to the matters set
forth in this Section 8. Nothing in this Section 8 shall be deemed to affect any
rights of (a)  shareholders  to request  inclusion  of  proposals in the Trust's
proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) the holders
of any class of preferred shares of beneficial  interest to elect Trustees under
specified circumstances.

                                      -6-
<PAGE>

                                    ARTICLE V

                                Trustees Meetings

SECTION 1. Meetings. The Trustees may in their discretion provide for regular or
stated meetings of the Trustees.  Meetings of the Trustees other than regular or
stated meetings shall be held whenever  called by the Chairman,  President or by
any other  Trustee at the time being in office.  Any or all of the  Trustees may
participate  in  a  meeting  by  means  of a  conference  telephone  or  similar
communications  equipment  by means of which all  persons  participating  in the
meeting can hear each other at the same time,  and  participation  by such means
shall constitute presence in person at a meeting.

SECTION 2.  Notices.  Notice of regular  or stated  meetings  need not be given.
Notice  of the time and  place of each  meeting  other  than  regular  or stated
meeting  shall be given by the  Secretary or by the Trustee  calling the meeting
and shall be mailed to each  Trustee at least two days  before the  meeting,  or
shall be  telegraphed,  cabled,  or  wirelessed  to each Trustee at his business
address or personally delivered to him at least one day before the meeting. Such
notice may, however, be waived by all the Trustees. Notice of a meeting need not
be given to any Trustee if a written waiver of notice, executed by him before or
after the meeting,  is filed with the records of the meeting,  or to any Trustee
who attends the meeting without  protesting prior thereto or at its commencement
the lack of notice to him.  A notice or waiver of notice  need not  specify  the
purpose of any special meeting.

SECTION 3. Consents. Any action required or permitted to be taken at any meeting
of the  Trustees  may be taken by the  Trustees  without a meeting  if a written
consent  thereto is signed by all the Trustees and filed with the records of the
Trustees' meetings.  A Trustee may deliver his consent to the Trust by facsimile
machine or other graphic communication equipment.  Such consent shall be treated
as a vote at a meeting for all purposes.

SECTION 4. Place of Meetings.  The Trustees  may hold their  meetings  within or
without The Commonwealth of Massachusetts.

SECTION 5.  Quorum and Manner of Acting.  A majority  of the  Trustees in office
shall be  present  in person at any  regular  stated or  special  meeting of the
Trustees in order to constitute a quorum for the transaction of business at such
meeting and (except as otherwise  required by the Declaration of Trust, by these
By-Laws or by statute) the act of a majority of the Trustees present at any such
meeting, at which a quorum is present,  shall be the act of the Trustees. In the
event  that  action  is to be taken  with  respect  to the  death,  declination,
resignation, retirement, removal or incapacity of one or more Trustees, a quorum
for the  transaction of such business and any other  business  conducted at such
meeting and (except as otherwise  required by the Declaration of Trust, by these
By-Laws or by statute)  shall be a majority of the  remaining  Trustees  then in
office. In the absence of quorum, a majority of the Trustees present may adjourn
the meeting  from time to time until a quorum  shall be  present.  Notice of any
adjourned meeting need not be given.

                                      -7-
<PAGE>

                                   ARTICLE VI

                          Shares of Beneficial Interest

SECTION 1.  Certificates  for Shares of Beneficial  Interest.  Certificates  for
shares of  beneficial  interest of any class of shares of the Trust,  if issued,
shall be in such form as shall be approved by the Trustees. They shall be signed
by, or in the name of, the Trust by the  President and by the Treasurer and may,
but need not be, sealed with seal of the Trust;  provided,  however,  that where
such  certificate  is signed by a transfer  agent or a transfer  clerk acting on
behalf of the Trust or a registrar other than a Trustee,  officer or employee of
the Trust,  the  signature of the  President  or  Treasurer  and the seal may be
facsimile.  In case any  officer or  officers  who shall have  signed,  or whose
facsimile  signature or signatures  shall have been used on any such certificate
or certificates, shall cease to be such officer or officers of the Trust whether
because  of  death,  resignation  or  otherwise,   before  such  certificate  or
certificates  shall  have been  delivered  by the  Trust,  such  certificate  or
certificates  may  nevertheless  be  adopted  by the  Trust  and be  issued  and
delivered  as though the  person or  persons  who  signed  such  certificate  or
certificates or whose facsimile  signatures shall have been used thereon had not
ceased to be such officer or officers of the Trust.

SECTION 2. Transfer of Shares. Transfers of shares of beneficial interest of any
shares  of the  Trust  shall be made only on the books of the Trust by the owner
thereof or by his  attorney  thereunto  authorized  by a power of attorney  duly
executed  and filed with the  Secretary or a transfer  agent,  and only upon the
surrender of any  certificate or certificates  for such shares.  The Trust shall
not impose any  restrictions  upon the transfer of the shares of the Trust,  but
this  requirement  shall not prevent the  charging of customary  transfer  agent
fees.

SECTION 3. Transfer Agent and Registrar;  Regulations.  The Trust shall,  if and
whenever the Trustees shall so determine,  maintain one or more transfer offices
or agencies,  each in the charge of a transfer agent designated by the Trustees,
where  the  shares  of  beneficial  interest  of the  Trust  shall  be  directly
transferable.  The Trust shall, if and whenever the Trustees shall so determine,
maintain  one or more  registry  offices,  each  in the  charge  of a  registrar
designated  by the  Trustees,  where such  shares  shall be  registered,  and no
certificate  for shares of the Trust in respect of which a transfer agent and/or
registrar shall have been designated shall be valid unless countersigned by such
transfer agent and/or registered by such registrar. The principal transfer agent
may be located within or without the  Commonwealth  of  Massachusetts  and shall
have charge of the stock transfer books, lists and records,  which shall be kept
within or without  Massachusetts  in an office  which  shall be deemed to be the
stock transfer  office of the Trust.  The Trustees may also make such additional
rules and  regulations as it may deem expedient  concerning the issue,  transfer
and registration of certificates for shares of the Trust.

SECTION 4. Closing of Transfer  Books and Fixing  Record Date.  The Trustees may
fix in advance a time which shall be not more than  seventy-five days before the
date of any meeting of shareholders, or the date for the payment of any dividend
or the making or any  distribution  to shareholders or the last day on which the
consent or dissent of shareholders may be effectively expressed for any purpose,
as the record date for determining the  shareholders  having the right to notice
of and to vote at such meeting,  and any  adjournment  thereof,  or the right to
receive  such  dividend  or  distribution  or the right to give such  consent or
dissent,  and in such case only shareholders of record on such record date shall
have such  right,  notwithstanding  any  transfer  of shares on the books of the
Trust after the record date. The Trustees may,  without fixing such record date,
close  the  transfer  books  for all or any part of such  period  for any of the
foregoing purposes.

                                      -8-
<PAGE>

SECTION 5. Lost, Destroyed or Mutilated  Certificates.  The holder of any shares
of the Trust  shall  immediately  notify the Trust of any loss,  destruction  or
mutilation  of  the  certificate  therefor,  and  the  Trustees  may,  in  their
discretion, cause a new certificate or certificates to be issued to him, in case
of  mutilation  of  the  certificate,   upon  the  surrender  of  the  mutilated
certificate,  or,  in  case  of loss or  destruction  of the  certificate,  upon
satisfactory proof of such loss or destruction and, in any case, if the Trustees
shall so determine, upon the delivery of a bond in such form and in such sum and
with such surety or sureties as the Trustees may direct,  to indemnify the Trust
against any claim that may be made  against it on account of the alleged loss or
destruction of any such certificate.

SECTION 6.  Record  Owner of Shares.  The Trust  shall be  entitled to treat the
person in whose  name any share of the Trust is  registered  on the books of the
Trust as the owner thereof, and shall not be bound to recognize any equitable or
other  claim to or  interest  in such  share or  shares on the part of any other
person.


                                   ARTICLE VII

                                   Fiscal Year

SECTION 1. Fiscal  Year.  The fiscal year of the Trust shall end on such date as
the Trustees may, from time to time, determine.


                                  ARTICLE VIII

                                      Seal

SECTION 1. Seal.  The  Trustees  may adopt a seal of the Trust which shall be in
such form and shall have such inscription  thereon as the Trustees may from time
to time prescribe.


                                   ARTICLE IX

                               Inspection of Books

SECTION 1.  Inspection of Books.  The Trustees shall from time to time determine
whether  and to what  extent,  and at what  times and  places,  and  under  what
conditions  and  regulations  the accounts and books of the Trust or any of them
shall be open to the inspection of the  shareholders;  and no shareholder  shall
have any right to inspect any account or book or document of the Trust except as
conferred  by  law  or  authorized  by  the  Trustees  or by  resolution  of the
shareholders.

                                      -9-
<PAGE>


                                    ARTICLE X

                     Principal Custodian and Sub-custodians

SECTION 1.  Principal  Custodian.  The following  provisions  shall apply to the
employment of the principal Custodian pursuant to the Declaration of Trust:

     (A) The Trust may employ the principal Custodian:

          (1)  To hold  securities  owned by the Trust and deliver the same upon
               written order or oral order, if confirmed in writing,  or by such
               electro-mechanical  or electronic devices as are agreed to by the
               Trust and such Custodian;

          (2)  To  receive  and  receipt  for any  moneys  due to the  Trust and
               deposit  the  same  in its  own  banking  department  or,  as the
               Trustees  may  direct,  in any bank,  trust  company  or  banking
               institution  approved by such  Custodian,  provided that all such
               deposits  shall  be  subject  only to the  draft or order of such
               Custodian; and

          (3)  To disburse such funds upon orders or vouchers.

     (B) The Trust may also employ such Custodian as its agent:

          (1)  To keep the books and accounts of the Trust and furnish  clerical
               and accounting services; and

          (2)  To compute the net asset  value per share in the manner  approved
               by the Trust.

     (C)  All of the foregoing  services  shall be performed  upon such basis of
          compensation as may be agreed upon between the Trust and the principal
          Custodian.  If so directed by vote of the holders of a majority of the
          outstanding shares of Trust, the principal Custodian shall deliver and
          pay over all  property  of the Trust held by it as  specified  in such
          vote.

     (D)  In case of the resignation,  removal or inability to serve of any such
          Custodian,  the Trustees shall promptly  appoint another bank or trust
          company  meeting  the  requirements  of the  Declaration  of  Trust as
          successor  principal  Custodian.  The  agreement  with  the  principal
          Custodian shall provide that the retiring  principal  Custodian shall,
          upon  receipt  of notice of such  appointment,  deliver  the funds and
          property of the Trust in its possession to and only to such successor,
          and that pending appointment of a successor principal Custodian,  or a
          vote of the  shareholders to function  without a principal  Custodian,
          the  principal  Custodian  shall not deliver funds and property of the
          Trust to the Trustees, but may deliver them to a bank or trust company
          doing business in Boston, Massachusetts,  of its own selection, having
          an aggregate capital,  surplus and undivided profits,  as shown by its
          last published report, of not less than $2,000,000, as the property of

                                      -10-
                                     <PAGE>

          the Trust to be held under  terms  similar to those on which they were
          held by the retiring principal Custodian.

SECTION 2.  Sub-Custodian.  The Trust may also authorize the principal Custodian
to employ one or more  sub-custodians  from time to time to perform  such of the
acts and services of the Custodian and upon such terms and  conditions as may be
agreed upon between the Custodian and sub-custodian.

SECTION 3. Securities Depositories,  etc. Subject to such rules, regulations and
orders as the  Commission  may  adopt,  the Trust may  authorize  or direct  the
principal  Custodian  or any  sub-custodian  to  deposit  all or any part of the
securities in or with one or more  depositories or clearing  agencies or systems
for the central handling of securities or other  book-entry  systems approved by
the Trust,  or in or with such other  persons or systems as may be  permitted by
the Commission,  or otherwise in accordance with the Act,  pursuant to which all
securities of any particular  class or series of any issuer deposited within the
system are treated as fungible and may be  transferred or pledged by bookkeeping
entry  without  physical  delivery of such  securities,  provided  that all such
deposits shall be subject to withdrawal  only upon the order of the Trust or the
principal  Custodian  or the  sub-custodian.  The Trust may also  authorize  the
deposit in or with one or more eligible foreign custodians (or in or with one or
more foreign depositories, clearing agencies or systems for the central handling
of securities) of all or part of the Trust's  foreign assets,  securities,  cash
and cash  equivalents  in amounts  reasonably  necessary  to effect the  Trust's
foreign investment transactions,  in accordance with such rules, regulations and
orders as the Commission may adopt.


                                   ARTICLE XI

                   Limitation of Liability and Indemnification

SECTION 1. Limitation of Liability. Provided they have exercised reasonable care
and have acted under the  reasonable  belief that their  actions are in the best
interest of the Trust,  the Trustees shall not be  responsible  for or liable in
any event for neglect or wrongdoing of them or any officer,  agent,  employee or
investment  adviser of the Trust,  but nothing  contained in the  Declaration of
Trust or herein  shall  protect any Trustee  against any  liability  to which he
would  otherwise be subject by reason of wilful  misfeasance,  bad faith,  gross
negligence  or reckless  disregard of the duties  involved in the conduct of his
office.

SECTION 2.  Indemnification of Trustees and Officers.  The Trust shall indemnify
each  person  who was or is a party or is  threatened  to be made a party to any
threatened,  pending or completed  action,  suit or  proceeding,  whether civil,
criminal,  administrative or investigative,  by reason of the fact that he is or
has been a Trustee,  officer,  employee or agent of the Trust, or is or has been
serving at the request of the Trust as a Trustee, director, officer, employee or
agent  of  another  corporation,  partnership,  joint  venture,  trust  or other
enterprise,  against expenses (including attorneys' fees), judgments,  fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, provided that:

          (a)  such  person  acted in good  faith and in a manner he  reasonably
               believed  to be in or not  opposed to the best  interests  of the
               Trust,

          (b)  with  respect to any  criminal  action or  proceeding,  he had no
               reasonable cause to believe his conduct was unlawful,

                                      -11-
<PAGE>

          (c)  unless ordered by a court,  indemnification shall be made only as
               authorized  in  the  specific  case  upon  a  determination  that
               indemnification  of the  Trustee,  officer,  employee or agent is
               proper in the  circumstances  because  he has met the  applicable
               standard of conduct set forth in subparagraphs  (a) and (b) above
               and (e) below, such  determination to be made based upon a review
               of  readily  available  facts (as  opposed  to a full  trial-type
               inquiry) by (i) vote of a majority of the Disinterested  Trustees
               acting  on  the  matter   (provided   that  a  majority   of  the
               Disinterested  Trustees then in office act on the matter) or (ii)
               by independent legal counsel in a written opinion,

          (d)  in the case of an  action or suit by or in the right of the Trust
               to procure a judgment in its favor, no  indemnification  shall be
               made in respect  of any  claim,  issue or matter as to which such
               person shall have been  adjudged to be liable for  negligence  or
               misconduct in the performance of his duty to the Trust unless and
               only to the extent that the court in which such action or suit is
               brought,  or a court of equity  in the  county in which the Trust
               has its principal office,  shall determine upon application that,
               despite  the  adjudication  of  liability  but in view of all the
               circumstances  of the case, he is fairly and reasonably  entitled
               to  indemnify  for such  expenses  which  such  court  shall deem
               proper, and

          (e)  no  indemnification or other protection shall be made or given to
               any Trustee or officer of the Trust  against any liability to the
               Trust or to its security  holders to which he would  otherwise be
               subject  by reason  of  willful  misfeasance,  bad  faith,  gross
               negligence  or reckless  disregard of the duties  involved in the
               conduct of his office.

     Expenses  (including  attorneys'  fees) incurred with respect to any claim,
action, suit or proceeding of the character described in the preceding paragraph
shall be paid by the Trust in  advance  of the final  disposition  thereof  upon
receipt of an  undertaking  by or on behalf of such  person to repay such amount
unless it shall  ultimately be determined  that he is entitled to be indemnified
by the Trust as authorized by this Article, provided that either:

          (1)  such  undertaking  is  secured  by a  surety  bond or some  other
               appropriate  security  provided  by the  recipient,  or the Trust
               shall be insured against losses arising out of any such advances;
               or

          (2)  a majority  of the  Disinterested  Trustees  acting on the matter
               (provided  that a majority of the  Disinterested  Trustees act on
               the matter) or an independent  legal counsel in a written opinion
               shall determine,  based upon a review of readily  available facts
               (as opposed to a full trial-type  inquiry),  that there is reason
               to believe that the recipient  ultimately  will be found entitled
               to indemnification.

     As used in this Section 2, a "Disinterested  Trustee" is one who is not (i)
an "Interested  Person," as defined in the Act, of the Trust  (including  anyone
who has been exempted from being an "Interested Person" by any rule, regulation,
or order of the  Commission),  or (ii)  involved in the claim,  action,  suit or
proceeding.

                                      -12-
<PAGE>

     The  termination  of any action,  suit or  proceeding  by judgment,  order,
settlement,  conviction,  or upon a plea of nolo  contendere or its  equivalent,
shall not, of itself,  create a presumption  that the person did not act in good
faith and in a manner  which he  reasonably  believed to be in or not opposed to
the best  interests  of the Trust,  or with  respect to any  criminal  action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

SECTION 3.  Indemnification  of Shareholders.  In case any shareholder or former
shareholder  shall be held to be personally liable solely by reason of his being
or having been a  shareholder  and not because of his acts or  omissions  or for
some  other  reason,  the  shareholder  or  former  shareholder  (or his  heirs,
executors,  administrators or other legal  representatives,  or in the case of a
corporation or other entity,  its corporate or other general successor) shall be
entitled  out of the  Trust  estate  to be held  harmless  from and  indemnified
against all loss and expense arising from such liability.  The Trust shall, upon
request by the  shareholder,  assume the  defense of any claim made  against any
shareholder  for any act or  obligation  of the Trust and satisfy  any  judgment
thereon.  A holder of shares of a series  shall be entitled  to  indemnification
hereunder only out of assets allocated to that series.


                                   ARTICLE XII

                             Report to Shareholders

SECTION 1. Reports to  Shareholders.  The Trustees shall at least  semi-annually
transmit by written, electronic,  computerized or other alternative means to the
shareholders  a  written  financial  report  of the  transactions  of the  Trust
including  financial  statements  which shall at least  annually be certified by
independent public accountants.


                                  ARTICLE XIII

                                   Amendments

SECTION 1.  Amendments.  These  By-Laws  may be  amended  at any  meeting of the
Trustees  by a vote of a majority  of the  Trustees  then in  office;  provided,
however,  that any  provision  of Article XI may be amended only by a two-thirds
vote.



Dated:  March 30, 2005

                                      -13-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>COVER
<SEQUENCE>4
<FILENAME>filename4.txt
<TEXT>
M


Kirkpatrick & Lockhart Nicholson Graham LLP
75 State Street
Boston, MA  02109
Tel.:  (617) 261-3246
Fax.:  (617) 261-3175


April 1, 2005

VIA EDGAR
---------

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

     Re:   Eaton Vance Tax-Managed Buy-Write Opportunities Fund
           Registration Statement on Form N-2 (333-___; 811-21735)
           ------------------------------------------------------------

Ladies and Gentlemen:

     Transmitted electronically with this letter for filing pursuant to the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, on behalf of Eaton Vance Tax-Managed Buy-Write Opportunities Fund (the
"Fund") is a registration statement on Form N-2 relating to Registrant's initial
issuance of common shares of beneficial interest, par value $.01 per share (the
"Registration Statement"). The Fund has filed electronically a Notification of
Registration on Form N-8A in conjunction with this filing.

     The Fund is a newly-organized, closed-end management investment company and
the Registration Statement is being filed for the purpose of registering common
shares of beneficial interest of the Fund. The registration fee for purposes of
the initial filing of $117.70 has been wired through the FEDWIRE system to the
Securities and Exchange Commission's ("SEC") account at Mellon Bank. The
Registration Statement transmitted with this letter contains conformed signature
pages, the manually executed originals of which are maintained at the offices of
the Fund.

     The SEC staff follows selective review procedures for registration
statements, set forth in Securities Act Release No. 6510 (Feb. 15, 1984), which
are applicable to all management investment company registration statements. The
staff may determine not to review a registration statement (or portions of a
registration statement) based on similarity to prior filings that have been
reviewed by the staff. Based on these procedures, a registrant may identify
portions of prior filings similar or identical to, and intended to serve as
precedent for, a current filing.

     The Fund is substantially similar to a fund currently in registration and
in this regard, the disclosure in the Registration Statement regarding the Fund
is substantially similar to that contained in the Form N-2 registration
statement filed on behalf of Eaton Vance Tax-Managed Buy-Write Income Fund

<PAGE>

(333-120666; 811-21676), pre-effective amendment No. 1 filed March 23, 2005. The
Fund's investment objectives are identical to Eaton Vance Tax-Managed Buy-Write
Income Fund, however the Fund's investment strategy differs in that its
investment program will consist of (1) owning a diversified portfolio of common
stocks, a segment of which seeks to exceed the total return performance of the
S&P 500 and a segment of which seeks to exceed the total return performance of
the NASDAQ-100, and (2) selling S&P 500 call options and NASDAQ-100 call options
on substantially the full value invested in each of those segments. The Eaton
Vance Tax-Managed Buy-Write Income Fund does not include the NASDAQ-100
component. Additional disclosure has been added to this Registration Statement
to reflect the risks associated with such exposure.

     Except as stated above, the Registration Statement is substantially
identical to the above registration statement. Thus, the staff may conclude that
the entire Registration Statement needs only cursory (if any) review.

     The Fund desires to commence the public offering of its common shares as
soon as possible and expects to begin circulating a "red herring" prospectus
during the month of May. The appropriate legends are included on the cover pages
of the prospectus and SAI. The Fund requests selective review as discussed above
and seeks comments, if any, on the Registration Statement as soon as possible.
It is expected that the Fund will file a pre-effective amendment responding to
any comments and registering additional shares promptly after the resolution of
any comments, along with a request for acceleration of effectiveness of the
Registration Statement.

     Questions should be directed to the undersigned at (617) 261-3246.



                                           Sincerely,



                                           /s/ Clair E. Pagnano
                                           --------------------
                                           Clair E. Pagnano
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
