<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>form-n2.txt
<TEXT>

    As filed with the Securities and Exchange Commission on November 12, 2004
                                                 1933 Act File No. 333-
                                                 1940 Act File No. 811-21670

                     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 ENHANCED EQUITY INCOME FUND II
                   ------------------------------------------
               (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 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>

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
================================================================================================
                                                 PROPOSED       PROPOSED
                                                 MAXIMUM         MAXIMUM
                               AMOUNT BEING      OFFERING       AGGREGATE        AMOUNT OF
TITLE OF SECURITIES BEING       REGISTERED    PRICE PER UNIT OFFERING PRICE  REGISTRATION FEES
        REGISTERED                 (1)              (1)           (1)              (1)(2)
------------------------------------------------------------------------------------------------
<S>                               <C>            <C>             <C>               <C>
Common Shares of Beneficial       50,000         $20.00          $1,000,000        $126.70
Interest, $0.01 par value

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

(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.
</TABLE>

                               ____________________________________


     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 incomplete 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 we are not soliciting offers to buy these securities,  in
any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS       SUBJECT TO COMPLETION             November 12, 2004

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

(EATON VANCE LOGO)

      SHARES

EATON VANCE ENHANCED EQUITY INCOME FUND II

COMMON SHARES

INVESTMENT  OBJECTIVES.  Eaton Vance Enhanced Equity Income Fund II (the "Fund")
is a newly organized, diversified, closed-end management investment company. The
Fund's  primary  investment  objective  is to  provide  current  income,  with a
secondary objective of capital appreciation. The Fund will pursue its investment
objectives   by   investing   primarily   in   a   portfolio   of   large-   and
mid-capitalization  common stocks, seeking to invest primarily in companies with
above-average growth and financial strength. Under normal market conditions, the
Fund will seek to generate  current  earnings  from  option  premiums by selling
covered call options on a substantial portion of its portfolio securities. There
can be no assurance that the Fund will achieve its investment objectives.

INVESTMENT ADVISER AND SUB-ADVISER. The Fund's investment adviser is Eaton Vance
Management ("Eaton Vance" or the "Adviser"). As of October 31, 2004, Eaton Vance
and its subsidiaries managed  approximately  $[95.0] billion on behalf of funds,
institutional clients and individuals,  including  approximately $[33.0] billion
in equity fund assets.  Eaton Vance has engaged  Rampart  Investment  Management
Company  ("Rampart" or the  "Sub-Adviser") as a sub-adviser to provide advice on
and  execution  of the  Fund's  options  strategy.  Rampart,  founded  in  1983,
specializes  in options  management and trading for  institutional  and high net
worth investors.  Rampart managed  approximately  $[1.0] billion in assets as of
October 31, 2004.

PORTFOLIO  CONTENTS.  Under normal  market  conditions,  the Fund will invest at
least 80% of its total assets in common stocks.  Normally,  the Fund will invest
primarily in common  stocks of large- and  mid-capitalization  issuers that meet
the Fund's selection  criteria of above-average  growth and financial  strength.
Under  normal  market  conditions,  the Fund  expects  to  invest in at least 75
securities, seeking to reduce the Fund's exposure to individual stock risks. The
Fund  generally  will  invest in common  stocks on which  exchange  traded  call
options are currently available. The Fund will invest primarily in common stocks
of U.S.  issuers,  although the Fund may invest up to 25% of its total assets in
securities  of  foreign  issuers,  including  up to [ ]% of its total  assets in
securities of issuers located in emerging markets.

Under  normal  market  conditions,  the  Fund  intends  to  pursue  its  primary
investment  objective  principally  by employing an options  strategy of writing
(selling)  covered  call  options  on a  substantial  portion  of its  portfolio
securities.
                                               (CONTINUED ON INSIDE FRONT COVER)

BECAUSE THE FUND IS NEWLY ORGANIZED, ITS COMMON SHARES HAVE NO HISTORY OF PUBLIC
TRADING.

INVESTING IN SHARES INVOLVES CERTAIN RISKS. SEE "INVESTMENT OBJECTIVES, POLICIES
AND RISKS" BEGINNING AT PAGE [ ].

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.

                                                PRICE TO   SALES     PROCEEDS
                                                PUBLIC     LOAD(1)   TO FUND
                                                --------   -------   --------
Per share                                       $______    $______   $______
Total                                           $______    $______   $______
Total assuming full exercise of the             $______    $______   $______
over-allotment option

(1)  Eaton  Vance (not the Fund) will pay  certain  additional  compensation  to
     qualifying  underwriters.  See  "Underwriting."  Eaton Vance (not the Fund)
     will pay [ ] for  services  provided  pursuant to a  shareholder  servicing
     agreement  between  [ ] and  Eaton  Vance.  See  "Underwriting."  The total

<PAGE>

     compensation  received  by the  Underwriters  will  not  exceed [ ]% of the
     aggregate initial offering price of the Common Shares offered hereby.

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 Fund"
(above).  Eaton Vance or an affiliate  has agreed to pay the amount by which the
aggregate of all of the Fund's  offering  costs (other than sales loads) exceeds
$[ ] per share.  Eaton Vance or an affiliate  has agreed to  reimburse  all Fund
organizational costs.

The extent of option writing activity will depend upon market conditions and the
Adviser's  ongoing  assessment of the  attractiveness of writing call options on
the Fund's stock  holdings.  Writing  covered  call options  involves a tradeoff
between the option  premiums  received  and reduced  participation  in potential
future stock price appreciation. Depending on the Adviser's evaluation, the Fund
may write covered call options on varying percentages of the Fund's common stock
holdings.  The Fund seeks to  generate  current  earnings  from  option  writing
premiums and, to a lesser extent, from dividends on stocks held. The Fund's call
option-writing program will seek to achieve a high level of net option premiums,
while maintaining the potential for capital  appreciation in each stock on which
options are written up to a defined  target price for that stock  determined  by
the Adviser.  The Adviser and  Sub-Adviser  believe that by  coordinating  their
activities  they will be able to achieve the Fund's  investment  objectives.  In
particular,   the  Adviser's  active  management  style,  which  incorporates  a
research-driven   fundamental  investment  approach,  seeks  to  complement  the
Sub-Adviser's  systematic  option  methodology,  which  utilizes  a  proprietary
options analysis and management system.

The Fund may in certain  circumstances  purchase  put options on the  Standard &
Poor's 500  Composite  Stock Price  Index,  the S&P MidCap 400 Index,  any other
broad-based  securities  index  deemed  suitable  for this  purpose,  and/or  on
individual  stocks held in its portfolio or use other derivative  instruments in
order  to  help  protect  against  a  decline  in the  value  of  its  portfolio
securities.

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

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 , 2004, 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 [ ] of
this Prospectus.  This Prospectus incorporates by reference the entire Statement
of Additional Information.  The Statement of Additional Information is available
along with 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.

The underwriters named in the Prospectus may purchase up to [ ]additional shares
from the Fund under certain circumstances.

The  underwriters  expect to deliver the shares to  purchasers  on or about [ ],
2005.

You should rely only on the  information  contained or incorporated by reference
in this  Prospectus.  The Fund has not  authorized  anyone to  provide  you with
different  information.  The Fund is not making an offer of these  securities in
any state where the offer is not permitted.

Until [ ], 2005 (25 days after the date of this  Prospectus),  all dealers  that
buy, sell or trade the 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.

                                       2
<PAGE>

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..................................................................
Shareholder Servicing Agent, 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.....................................................

                                       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  Enhanced  Equity Income Fund II (the "Fund") is a newly  organized,
diversified, closed-end management investment company. The Fund seeks to achieve
current  income with the potential  for capital  appreciation.  Investments  are
based on Eaton Vance  Management's  ("Eaton  Vance" or the  "Adviser")  internal
research  and ongoing  company  analysis,  which is generally  not  available to
individual  investors.  Rampart Investment  Management Company ("Rampart" or the
"Sub-Adviser")  has been engaged as a  sub-adviser  to provide  Eaton Vance with
advice on and execution of the Fund's option writing strategy.  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 $[ ] per share.  The minimum  purchase in this
offering is 100 Shares ($ ). 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 POLICIES

The Fund's primary  investment  objective is to provide current  income,  with a
secondary objective of capital appreciation. The Fund will pursue its investment
objectives   by   investing   primarily   in   a   portfolio   of   large-   and
mid-capitalization  common stocks, seeking to invest primarily in companies with
above-average growth and financial strength. Under normal market conditions, the
Fund will seek to generate  current  earnings  from  option  premiums by selling
covered call options on a substantial portion of its portfolio securities. There
can be no assurance that the Fund will achieve its investment objectives.

Under normal market  conditions,  the Fund will invest at least 80% of its total
assets in common  stocks.  Normally,  the Fund will invest  primarily  in common
stocks of large- and  mid-capitalization  issuers that meet the Fund's selection
criteria of  above-average  growth and financial  strength.  Under normal market
conditions,  the Fund  expects to invest in at least 75  securities,  seeking to
reduce the Fund's  exposure to individual  stock risks.  The Fund generally will
invest in common  stocks on which  exchange  traded call  options are  currently
available.  The Fund will invest  primarily  in common  stocks of U.S.  issuers,
although  the Fund may  invest up to 25% 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
may invest up to [ ]% of its total assets in  securities  of issuers  located in
emerging markets.

Eaton  Vance  generally  considers  large-capitalization  companies  to be those
companies  having  market  capitalizations  equal to or greater  than the median
capitalization of the companies  included in the Standard & Poor's 500 Composite
Stock  Price  Index  ("S&P  500").   As  of  [October  31,  2004],   the  median
capitalization of companies in the S&P 500 was approximately $[ ] billion. 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").

Under  normal  market  conditions,  the  Fund  intends  to  pursue  its  primary
investment  objective  principally  by employing an options  strategy of writing
(selling)  covered  call  options  on a  substantial  portion  of its  portfolio
securities.  The extent of option  writing  activity  will  depend  upon  market
conditions and the Adviser's ongoing assessment of the attractiveness of writing
call options on the Fund's stock holdings. Writing covered call options involves
a tradeoff  between the option premiums  received and reduced  participation  in
potential   future  stock  price   appreciation.   Depending  on  the  Adviser's
evaluation,  the Fund may write covered call options on varying  percentages  of
the Fund's common stock holdings.  The Fund seeks to generate  current  earnings
from option writing  premiums and, to a lesser extent,  from dividends on stocks
held. The Fund may in certain circumstances purchase put options on the S&P 500,
the S&P MidCap 400, any other  broad-based  securities index deemed suitable for


                                       4
<PAGE>

this  purpose,  and/or on  individual  stocks held in its portfolio or use other
derivative  instruments in order to help protect  against a decline in the value
of its portfolio securities.

The Fund normally  expects that its investments  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.

INVESTMENT STRATEGY

A team of Eaton Vance  investment  professionals  with  extensive  experience in
equity research and management is responsible for the overall  management of the
Fund's  investments.  Rampart  Investment  Management  Company ("Rampart" or the
"Sub-Adviser")  has been engaged as a  sub-adviser  to provide  Eaton Vance with
advice on and  execution  of the  Fund's  option  writing  strategy.  The Fund's
investments are actively  managed,  and securities and other  investments may be
bought or sold on a daily basis.

The  Adviser  believes  that  a  strategy   combining  active  equity  portfolio
management with a systematic  program of covered call option writing can provide
potentially  attractive  long-term returns.  The Adviser further believes that a
strategy of owning  common  stocks in  conjunction  with  writing  covered  call
options on a  substantial  portion of the stocks held should  generally  provide
returns that are superior to simply owning the same stocks 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  stock-plus-covered  calls
strategy  generally  be  expected to  underperform  the stocks  held.  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  materially
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 not  materially  higher
than the long-term historical average of stock market returns.

Investment  decisions  for the  Fund  will be made  primarily  on the  basis  of
fundamental   research.   The  Eaton  Vance  portfolio   managers  will  utilize
information  provided by, and the expertise of, the Adviser's  research staff in
making investment decisions.  The Adviser believes that investments in companies
with above  average  growth and financial  strength  should  provide  attractive
opportunities  for investment  appreciation.  The Adviser seeks to identify such
stocks  by  focusing,   without  limitation,   on  issuers  with  the  following
characteristics:  (1) sustainable  competitive  advantages,  (2) predictable and
dependable cash flows,  (3) high quality  management teams and (4) solid balance
sheets. Many of these considerations are subjective.  In addition to its careful
research based analysis in selecting  investments for the Fund, the Adviser will
also place a strong emphasis on the ongoing evaluation of portfolio holdings and
the  appropriate  time and  circumstances  to sell or reduce a holding.  In this
regard,  the Adviser may sell a stock when it believes it is fully  valued,  the
fundamentals  of the  company  deteriorate,  the  stock's  price falls below its
acquisition  cost,  management  fails to execute its strategy or to pursue other
more attractive investment opportunities, among other reasons.

The Adviser and Sub-Adviser believe that by coordinating their activities,  they
will be able to achieve the Fund's  investment  objectives.  In particular,  the
Adviser's  active   management  style  seeks  to  complement  the  Sub-Adviser's
systematic option methodology.  The Fund's call option-writing program will seek
to achieve a high level of net option premiums,  while maintaining the potential
for  capital  appreciation  in each stock on which  options  are written up to a
defined target price for that stock  determined by the Adviser.  To achieve this
goal,  Rampart  utilizes  proprietary  options  management  and options  trading
analytical tools (Rampart Options Management System (ROMS)).  Additionally,  the
Adviser's long-term  investment approach and low core turnover of the underlying
portfolio allows for more efficient option overlay potential.  Transaction costs
associated  with the  Fund's  options  strategy  will vary  depending  on market
circumstances  and other  factors.  Although it is not  possible  to  accurately
predict such costs because of this variability,  the Adviser estimates that such
costs on an  annualized  basis may  range  from  between  0.20% and 0.30% of the
Fund's total  assets  assuming  the same  offering  size assumed for purposes of
presenting the information set forth under "Summary of Fund expenses." There can
be no certainty that upon changing market conditions such costs will fall within
this range.

The Fund expects  initially to write primarily  exchange-listed  call options on
individual  stocks held in the Fund's portfolio (rather than S&P 500, S&P MidCap
400, or other index options),  primarily with shorter maturities  (typically two
to six months until  expiration) and primarily at exercise prices  approximately
equal to or  slightly  above the  current  stock  price  when  written.  When an
option-writing  program is  established  for a  particular  stock,  options will
typically be written on a portion of the total stock  position,  which may allow
for upside potential . If the stock price increases, the Fund will normally look
to buy back the call  options  written  and to sell new call  options  at higher
exercise prices (up to the target price  determined by the Adviser) on a greater
number of shares.  When a stock's price moves to or above its target price,  the
Adviser will evaluate the stock and option-writing program and determine whether
to raise its target price and continue to hold the stock and write  covered call
options or,  alternatively,  whether to deliver the stock in  settlement  of the


                                       5
<PAGE>

option  position  or  otherwise  exit the  position  by buying  back the options
written  and  selling  the stock.  If the stock  price  declines,  the Fund will
normally seek to buy back the call options  written and to sell new call options
at lower exercise  prices on fewer shares.  The Fund will seek to execute option
rolls (as  described  above) such that the  premium  received  from  writing new
options  generally  exceeds  the  amounts  paid to  close  the  positions  being
replaced.   The  Fund  may  also  write  covered  call  options  with  different
characteristics and managed differently than described in this paragraph.

In addition to the intended  strategy of selling covered 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.  Among  other  derivative  strategies,  the Fund may
purchase put options on the S&P 500,  the S&P MidCap 400, any other  broad-based
securities index deemed suitable for this purpose,  and/or on individual  stocks
held in its  portfolio  or use  other  derivative  instruments  in order to help
protect against a decline in the value of its portfolio  securities.  Derivative
instruments  may be used by the Fund to enhance  returns or as a substitute  for
the purchase or sale of securities.

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.

LISTING

The Fund intends to apply for listing of its Common Shares on the New York Stock
Exchange under the symbol "[ ]."

INVESTMENT ADVISER, ADMINISTRATOR AND SUB-ADVISER

Eaton Vance,  a direct  wholly-owned  subsidiary  of Eaton Vance  Corp.,  is the
Fund's investment  adviser and  administrator.  The Adviser and its subsidiaries
managed approximately $[95.0] billion on behalf of funds,  institutional clients
and individuals as of [October 31], 2004, including  approximately $33.0 billion
in equity  fund  assets.  Twenty-eight  of the funds  managed by Eaton Vance are
closed-end  funds.  Eaton Vance has engaged  Rampart as a sub-adviser to provide
advice on and  execution of the Fund's  options  strategy.  Rampart,  founded in
1983,  specializes in option  management and trading for  institutional and high
net worth investors.  Rampart managed  approximately $[1.0] billion in assets as
of October 31, 2004. See "Management of the Fund."

DISTRIBUTIONS

Commencing with the Fund's first distribution,  the Fund intends to make regular
monthly  distributions  to Common  Shareholders  based upon the Fund's projected
annual cash  available  from option  premiums and  dividends.  For  distribution
purposes,  "cash  available from option  premiums and dividends" will consist of
the total proceeds of options sales plus dividends and interest  received,  less
amounts paid to purchase options and 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  45-60  days and paid
approximately  60-90 days after the  completion of this  offering,  depending on
market conditions.

The Fund's annual cash available from options premiums and dividends 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. Over time, all of the Fund's investment company taxable income
will be  distributed.  In  addition,  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).  To the extent  that that  Fund's net
investment  income and net capital  gain for any year  exceed the total  monthly
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.  If the Fund's total
monthly distributions in any year exceed the amount of its net investment income
and net capital gain for the year, any such excess would be  characterized  as a
return of  capital.  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.

To permit the Fund to maintain  more stable  distributions,  distribution  rates
will be based on  projected  annual cash  available  from  options  premiums and
dividends.  As a result,  the distributions  paid by the Fund for any particular
month  may be more or less  than  the  amount  of cash  available  from  options


                                       6
<PAGE>

premiums and dividends for that month. In such circumstances,  the Fund may have
to sell a portion of its investment  portfolio to make a distribution  at a time
when   independent   investment   judgment   might  not  dictate   such  action.
Undistributed  net investment income is included in the Common Shares' net asset
value,  and,  correspondingly,  distributions  from net  investment  income 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 "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 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 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.  Mutual funds are subject to
continuous   asset  in-flows  and  out-flows   that  can  complicate   portfolio
management,  whereas  closed-end funds generally can stay more fully invested in
securities  consistent  with the  closed-end  fund's  investment  objectives and
policies.  In addition,  in comparison to open-end funds,  closed-end funds have
greater flexibility in the employment of financial leverage,  and in the ability
to make certain types of  investments.  Shares of closed-end  funds listed on an
exchange  may be  purchased  and  sold  throughout  each  trading  day,  whereas
purchases  and sales of mutual funds are  generally  effected as of the close of
market  trading.  However,  shares of  closed-end  funds  frequently  trade at a
discount from their net asset value. In recognition of the possibility  that the
Common  Shares  might  trade at a discount  to net asset value 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.  Although  the  Fund  has no  current
intention to issue  preferred  shares,  investors  should note that any possible
future issuance of preferred shares to provide investment  leverage could make a
conversion  to  open-end  form more  difficult  because of the voting  rights of
preferred  shareholders,  the  costs of  redeeming  preferred  shares  and other
factors. See "Description of capital structure."

SPECIAL RISK CONSIDERATIONS

NO OPERATING HISTORY

The Fund is a 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.  In  addition,  by  writing
(selling) call options on the equity  securities  held in the Fund's  portfolio,
the capital  appreciation  potential of such  securities  will be limited to the
difference  between  the  exercise  price of the call  options  written  and the


                                       7
<PAGE>

purchase price of the equity security underlying such options. The Common Shares
at any point in time may be worth less than the original investment,  even after
taking into account any reinvestment of distributions.

ISSUER RISK

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

EQUITY RISK

At least 80% of the Fund's  total  assets will be invested in common  stocks and
therefore a principal risk of investing in the Fund is equity risk.  Equity risk
is the risk that  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 and
other equity securities 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  equity
securities  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 ASSOCIATED WITH OPTIONS ON SECURITIES

There are numerous risks associated with  transactions in options on securities.
A decision as to whether,  when and how to use options  involves the exercise of
skill and judgment, and even a well-conceived transaction may be unsuccessful to
some degree because of market behavior or unexpected  events. As the writer of a
covered call option, the Fund forgoes, during the option's life, the opportunity
to profit from  increases in the market value of the security  covering the call
option above the sum of the option  premium  received and the exercise  price of
the call, but has retained the risk of loss, minus the option premium  received,
should the price of the underlying security decline. The writer of an option has
no control over when during the exercise period of the option it may be required
to fulfill its  obligation as a writer of the option.  Once an option writer has
received an exercise notice, it cannot effect a closing purchase  transaction in
order to  terminate  its  obligation  under  the  option  and must  deliver  the
underlying  security at the exercise price. Thus, the use of options may require
the Fund to sell portfolio  securities at inopportune  times or for prices other
than current market values,  may limit the amount of  appreciation  the Fund can
realize on an investment, or may cause the Fund to hold a security that it might
otherwise sell.

The value of  options  may also be  adversely  affected  if the  market for such
options becomes less liquid or smaller.  There can be no assurance that a liquid
market will exist when the Fund seeks to close out an option position either, in
the case of a call option  written,  by buying the option,  or, in the case of a
purchased put option, by selling 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 Fund's ability to terminate  over-the-counter  options will be
more  limited  than with  exchange-traded  options and may involve the risk that
broker-dealers  participating  in  such  transactions  will  not  fulfill  their
obligations.  If the Fund were unable to close out a covered call option that it
had written on a security,  it would not be able to sell the underlying security
unless the option expired without exercise.

                                       8
<PAGE>

The hours of trading for options may not conform to the hours  during  which the
underlying  securities are traded.  To the extent that the options markets close
before the markets for the  underlying  securities,  significant  price and rate
movements can take place in the  underlying  markets that would not be reflected
concurrently in the options markets. Call options are marked to market daily and
their value will be affected  by changes in the value of and  dividend  rates of
the underlying common stocks,  changes in interest rates,  changes in the actual
or perceived volatility of the stock market and the underlying common stocks and
the remaining time to the options' expiration.  Additionally, the exercise price
of an option may be adjusted downward before the option's expiration as a result
of the occurrence of certain  corporate events  affecting the underlying  equity
security,  such as  extraordinary  dividends,  stock  splits,  merger  or  other
extraordinary  distributions  or events. A reduction in the exercise price of an
option would reduce the Fund's capital appreciation  potential on the underlying
security.

If the Fund purchases put options for hedging or risk management  purposes,  the
Fund will be subject to the following additional risks. A put option acquired by
the Fund and not sold prior to expiration will expire  worthless if the price of
the stock or index at  expiration  exceeds  the  exercise  price of the  option,
thereby  causing  the Fund to lose  its  entire  investment  in the  option.  If
restrictions  on exercise were imposed,  the Fund might be unable to exercise an
option it had purchased.  If the Fund were unable to close out an option that it
had  purchased,  it would have to  exercise  the option in order to realize  any
profit or the option may expire  worthless.  Stock  market  indices on which the
Fund may purchase options  positions will not mirror the Fund's actual portfolio
holdings.  The  effectiveness of index put options as hedges against declines in
the Fund's stock portfolio will be limited to the extent that the performance of
the underlying index does not correlate with that of the Fund's holdings.

LIMITATION ON OPTION WRITING

The number of call options the Fund can write is limited by the number of shares
of common stock the Fund holds, and further limited by the fact that listed call
options on individual  common stocks  generally trade in units  representing 100
shares of the underlying  stock.  Furthermore,  the Fund's options  transactions
will be subject to limitations  established by each of the exchanges,  boards of
trade or other  trading  facilities  on which such  options  are  traded.  These
limitations  govern the  maximum  number of  options in each class  which may be
written  or  purchased  by a single  investor  or group of  investors  acting in
concert,  regardless of whether the options are written or purchased on the same
or different exchanges,  boards of trade or other trading facilities or are held
or written in one or more  accounts or through one or more  brokers.  Thus,  the
number of  options  which  the Fund may write or  purchase  may be  affected  by
options written or purchased by other investment advisory clients of the Adviser
or Sub-Adviser.  An exchange, board of trade or other trading facility may order
the  liquidation  of positions  found to be in excess of these  limits,  and may
impose  certain  other  sanctions.  The Fund will not write "naked" or uncovered
call options.

RISKS OF MID-CAP COMPANIES

The Fund may invest  substantially in 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.

DISTRIBUTION RISK

The monthly  distributions  Common  Shareholders  receive  from the Fund will be
based primarily on the level of net option  premiums and the dividends  received
by the Fund.  Net option  premiums  and dividend  payments the Fund  receives in
respect  of its  portfolio  securities  can  vary  widely  over the  short-  and
long-term.  If stock  prices or stock price  volatility  declines,  the level of


                                       9
<PAGE>

premiums from options writing and the amounts  available for  distribution  from
options activity will likely decrease as well.  Payments to purchase put options
and to close written call options will reduce amounts available for distribution
from call  option  premiums  received  and  proceeds  of  closing  put  options.
Dividends on common  stocks are not fixed but are declared at the  discretion of
the  issuer's  board of  directors.  There is no  guarantee  that the issuers of
common stocks in which the Fund invests will declare  dividends in the future or
that if  declared  they will  remain at current  levels or  increase  over time.
Dividends  on any  preferred  stocks  in  which  the  Fund  may  invest  are not
guaranteed and certain issues of preferred  stock held by the Fund may be called
by the issuer.

FOREIGN SECURITY RISK

The Fund may have  substantial  exposure  to  foreign  securities.  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).  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 in the Fund and the accrued
income and  appreciation or  depreciation  of the  investments in U.S.  dollars.
Changes in foreign  currency  exchange  rates  relative to the U.S.  dollar will
affect the U.S.  dollar value of the Fund's assets  denominated in that currency
and the  Fund's  return  on such  assets  as  well as any  temporary  uninvested
reserves in bank  deposits in foreign  currencies.  In  addition,  the Fund will
incur costs in connection with conversions between various currencies.

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

INTEREST RATE RISK

The level of premiums  from call options  writing and the amounts  available for
distribution from the Fund's options activity may decrease in declining interest
rate environments. Any preferred stocks paying fixed dividend rates in which the
Fund invests,  will likely change in value as market interest rates change. When
interest rates rise, the market value of such securities generally will fall. To
the extent that the Fund  invests in preferred  stocks,  the net asset value and
price of the Common Shares may decline if market  interest rates rise.  Interest
rates are currently low relative to historic levels. During periods of declining
interest  rates,  an issuer of preferred stock may exercise its option to redeem
securities  prior to  maturity,  forcing the Fund to reinvest in lower  yielding
securities. This is known as call risk. During periods of rising interest rates,
the average  life of certain  types of  securities  may be  extended  because of
slower than expected payments.  This may lock in a below market yield,  increase
the security's duration, and reduce the value of the security.  This is known as
extension  risk.  The value of the Fund's common stock  investments  may also be
influenced by changes in interest rates.

                                       10
<PAGE>

SECTOR RISK

The Fund may invest a significant portion of its assets in securities of issuers
in any single industry or sector of the economy (a broad based economic  segment
that may include many  distinct  industries)  if  companies in that  industry or
sector  meet  the  Fund's  investment  criteria.  If the Fund is  focused  in an
industry  or  sector,  it  may  present  more  risks  than  if it  were  broadly
diversified over numerous  industries or sectors of the economy. A "sector" is a
broader  economic segment that may include many different  industries.  This may
make the Fund more  susceptible to adverse  economic,  political,  or regulatory
occurrences  affecting  these  sectors.  As the  percentage of the Fund's assets
invested in a particular sector increases, so does the potential for fluctuation
in the net asset value of Common Shares.  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.

DERIVATIVES RISK

In addition to writing  covered 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 purchased 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 may obtain no recovery in such circumstances.

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.

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 trading price of the Fund's Common
Shares may be less than the public offering price.  The returns earned by Common
Shareholders  who purchased  their Common Shares in this offering and sell their
Common Shares below net asset value will be reduced.

FINANCIAL LEVERAGE

Although the Fund has no current  intention to do so, the Fund is  authorized 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 income derived from securities purchased
with proceeds  received from leverage  exceeds the cost of leverage,  the Fund's
distributions will be greater than if leverage had not been used. Conversely, if
the income 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


                                       11
<PAGE>

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, Rampart and the individual portfolio managers will apply
investment  techniques and risk analyses in making investment  decisions for the
Fund, but there can be no guarantee that these will produce the desired results.
The Fund may be subject to additional management risk because the Fund's options
program  will  require  effective  coordination  between  the  Adviser  and  the
Sub-Adviser.

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
have the effect of limiting 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."

                                       12
<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.

Shareholder transaction expenses
 Sales load paid by you (as a percentage of offering price)..........  [0.90]%
 Expenses borne by the Fund..........................................[   ]%(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 $[ ]
     per Common Share ([ ]% 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.

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  [ ]
Common Shares. 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 $[ ],  estimated
offering  expenses of this offering of $[ ]), assuming (1) total annual expenses
of [ ]% of  net  assets  attributable  to  Common  Shares  and  (2) 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.

                                       13
<PAGE>

THE FUND

Eaton Vance  Enhanced  Equity Income Fund II (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
November 8, 2004 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, under 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 $[ ] per Common Share.

INVESTMENT OBJECTIVES, POLICIES AND RISKS

INVESTMENT OBJECTIVES

The Fund's primary  investment  objective is to provide current  income,  with a
secondary objective of capital appreciation. The Fund will pursue its investment
objectives by investing primarily in a portfolio of large and mid-capitalization
common  stocks,  seeking to invest  primarily  in companies  with  above-average
growth and financial  strength.  Under normal market  conditions,  the Fund will
seek to generate  current  earnings from option premiums by selling covered call
options on a substantial  portion of its portfolio  securities.  There can be no
assurance that the Fund will achieve its investment objectives.

PRIMARY INVESTMENT POLICIES

GENERAL COMPOSITION OF THE FUND

Under normal market  conditions,  the Fund will invest at least 80% of its total
assets in common  stocks.  Normally,  the Fund will invest  primarily  in common
stocks of large- and  mid-capitalization  issuers that meet the Fund's selection
criteria of  above-average  growth and financial  strength.  Under normal market
conditions,  the Fund  expects to invest in at least 75  securities,  seeking to
reduce the Fund's  exposure to individual  stock risks.  The Fund generally will
invest in common  stocks on which  exchange  traded call  options are  currently
available.  The Fund will invest  primarily  in common  stocks of U.S.  issuers,
although  the Fund may  invest up to 25% 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
may invest up to [ ]% of its total assets in  securities  of issuers  located in
emerging markets.

Eaton  Vance  generally  considers  large-capitalization  companies  to be those
companies  having  market  capitalizations  equal to or greater  than the median
capitalization of the companies  included in the Standard & Poor's 500 Composite
Stock Price Index ("S&P  500").  As of [October  31,  2004],  the median  market
capitalization of companies in the S&P 500 was approximately $[ ] billion. Eaton
Vance  generally  considers  mid-capitalization  companies to be those companies
having  market  capitalizations  within  the  range of  capitalizations  for the
Standard & Poor's MidCap 400 Index ("S&P MidCap 400").

The Fund's policy of investing, under normal market circumstances,  at least 80%
of its total assets in common stocks is not  considered to be fundamental by the
Fund and can be changed without a vote of the Fund's shareholders. However, this
policy  may only be  changed  by the  Fund's  Board of  Trustees  (the  "Board")
following  the  provision  of  60  days  prior  written  notice  to  the  Fund's
shareholders.

                                       14
<PAGE>

Under  normal  market  conditions,  the  Fund  intends  to  pursue  its  primary
investment  objective  principally  by employing an options  strategy of writing
(selling)  covered  call  options  on a  substantial  portion  of its  portfolio
securities.  The extent of option  writing  activity  will  depend  upon  market
conditions and the Adviser's ongoing assessment of the attractiveness of writing
call options on the Fund's stock holdings. Writing covered call options involves
a tradeoff  between the option premiums  received and reduced  participation  in
potential   future  stock  price   appreciation.   Depending  on  the  Adviser's
evaluation,  the Fund may write covered call options on varying  percentages  of
the Fund's common stock holdings.  The Fund seeks to generate  current  earnings
from option writing  premiums and, to a lesser extent,  from dividends on stocks
held.

The Fund may in certain  circumstances  purchase put options on the S&P 500, S&P
MidCap 400, any other  broad-based  securities  index  deemed  suitable for this
purpose,  and/or  on  individual  stocks  held  in its  portfolio  or use  other
derivative  instruments in order to help protect  against a decline in the value
of its portfolio  securities.  The premiums paid to acquire any such put options
will reduce the amounts  available for distribution to Common  Shareholders from
options activities.

The Fund normally  expects that its investments  will be invested across a broad
range of industries and market sectors. The Fund may, however,  invest up to any
amount  less than 25% of its total  assets in the  securities  of issuers in any
single industry or group of industries. See "Risk considerations--Sector risk."

INVESTMENT STRATEGY

A team of Eaton Vance  investment  professionals  with  extensive  experience in
equity research and management is responsible for the overall  management of the
Fund's  investments.  Rampart  Investment  Management  Company ("Rampart" or the
"Sub-Adviser") has been engaged as a sub-adviser to provide the Fund with advice
on and execution of its option  writing  strategy.  The Fund's  investments  are
actively managed,  and securities and other investments may be bought or sold on
a daily basis.

The  Adviser  believes  that  a  strategy   combining  active  equity  portfolio
management with a systematic  program of covered call option writing can provide
potentially  attractive  long-term returns.  The Adviser further believes that a
strategy of owning  common  stocks in  conjunction  with  writing  covered  call
options on a  substantial  portion of the stocks held should  generally  provide
returns that are superior to simply owning the same stocks 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  stock-plus-covered  calls
strategy  generally  be  expected to  underperform  the stocks  held.  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  materially
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 not  materially  higher
than the long-term historical average of stock market returns.

Investment  decisions  for the  Fund  will be made  primarily  on the  basis  of
fundamental   research.   The  Eaton  Vance  portfolio   managers  will  utilize
information  provided by, and the expertise of, the Adviser's  research staff in
making investment decisions.  The Adviser believes that investments in companies
with above  average  growth and financial  strength  should  provide  attractive
opportunities  for investment  appreciation.  The Adviser seeks to identify such
stocks  by  focusing,   without  limitation,   on  issuers  with  the  following
characteristics:  (1) sustainable  competitive  advantages,  (2) predictable and
dependable cash flows,  (3) high quality  management teams and (4) solid balance
sheets. Many of these considerations are subjective.  In addition to its careful
research based analysis in selecting  investments for the Fund, the Adviser also
places a strong emphasis on the ongoing evaluation of portfolio holdings and the
appropriate time and circumstances to sell or reduce a holding.  In this regard,
the  Adviser  may  sell a  stock  when  it  believes  it is  fully  valued,  the
fundamentals  of  a  company  deteriorate,  a  stock's  price  falls  below  its
acquisition  cost,  management  fails to execute its strategy or to pursue other
more attractive investment opportunities, among other reasons.

The Adviser and Sub-Adviser believe that by coordinating their activities,  they
will be able to achieve the Fund's  investment  objectives.  In particular,  the
Adviser's  active   management  style  seeks  to  complement  the  Sub-Adviser's
systematic option methodology.  The Fund's call option-writing program will seek
to achieve a high level of net option premiums,  while maintaining the potential
for  capital  appreciation  in each stock on which  options  are written up to a
defined target price for that stock  determined by the Adviser.  To achieve this
goal,  Rampart  utilizes  proprietary  options  management  and options  trading
analytical tools (Rampart Options Management System (ROMS)).  Additionally,  the
Adviser's long-term  investment approach and low core turnover of the underlying
portfolio allows for more efficient option overlay potential.  Transaction costs
associated  with the  Fund's  options  strategy  will vary  depending  on market
circumstances  and other  factors.  Although it is not  possible  to  accurately
predict such costs because of this variability,  the Adviser estimates that such
costs on an  annualized  basis may  range  from  between  0.20% and 0.30% of the


                                       15
<PAGE>

Fund's total  assets  assuming  the same  offering  size assumed for purposes of
presenting the information set forth under "Summary of Fund expenses." There can
be no certainty that upon changing market conditions such costs will fall within
this range.

The Fund expects  initially to write primarily  exchange-listed  call options on
individual  stocks held in the Fund's portfolio (rather than S&P 500, S&P MidCap
400 or other index options), primarily with shorter maturities (typically two to
six months until  expiration)  and  primarily at exercise  prices  approximately
equal to or  slightly  above the  current  stock  price  when  written.  When an
option-writing  program is  established  for a  particular  stock,  options will
typically be written on a portion of the total stock  position,  which may allow
for upside potential. If the stock price increases,  the Fund will normally look
to buy back the call  options  written  and to sell new call  options  at higher
exercise prices (up to the target price  determined by the Adviser) on a greater
number of shares.  When a stock's price moves to or above its target price,  the
Adviser will evaluate the stock and option-writing program and determine whether
to raise its target price and continue to hold the stock and write  covered call
options or,  alternatively,  whether to deliver the stock in  settlement  of the
option  position  or  otherwise  exit the  position  by buying  back the options
written  and  selling  the stock.  If the stock  price  declines,  the Fund will
normally seek to buy back the call options  written and to sell new call options
at lower exercise  prices on fewer shares.  The Fund will seek to execute option
rolls (as  described  above) such that the  premium  received  from  writing new
options  generally  exceeds  the  amounts  paid to  close  the  positions  being
replaced.   The  Fund  may  also  write  covered  call  options  with  different
characteristics and managed differently than described in this paragraph.

In addition to the intended  strategy of selling covered 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.  Among  other  derivative  strategies,  the Fund may
purchase put options on the S&P 500,  the S&P MidCap 400, any other  broad-based
securities index deemed suitable for this purpose,  and/or on individual  stocks
held in its portfolio in order to help protect against a decline in the value of
its  portfolio  securities.  Derivative  instruments  may be used by the Fund to
enhance returns or as a substitute for the purchase or sale of securities.

COMMON STOCKS

Under normal market  conditions,  the Fund will invest at least 80% of its total
assets in common stocks. Common stock represents an equity ownership interest in
the issuing corporation. Holders of common stock generally have voting rights in
the issuer and are entitled to receive  common stock  dividends  when, as and if
declared by the corporation's board of directors. Common stock normally occupies
the most  subordinated  position in an issuer's  capital  structure.  Returns on
common stock  investments  consist of any dividends  received plus the amount of
appreciation  or  depreciation  in the  value of the  stock.  The Fund will have
substantial exposure to common stocks.

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 25% of its  total  assets in  securities  of  issuers
located in countries other than the United States.  This includes  investment 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).

                                       16
<PAGE>

GENERAL.  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).

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

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, they may not pass-
through voting or other shareholder rights, and they may be less liquid.

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

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

                                       17
<PAGE>

OPTIONS--GENERALLY

The Fund's principal  options activity will consist of writing (selling) covered
call options on common stocks held.  Among other potential  options  strategies,
the Fund may  purchase put options on the S&P 500, the S&P MidCap 400, any other
broad-based  securities  index  deemed  suitable  for this  purpose,  and/or  on
individual stocks held in its portfolio to help protect against a decline in the
value of its  portfolio  securities.  An option on a security is a contract that
gives the holder of the option,  in return for a premium,  the right to buy from
(in the  case of a call) or sell to (in the  case of a put)  the  writer  of the
option the security  underlying  the option at a specified  exercise or "strike"
price. The writer of an option on a security has the obligation upon exercise of
the option to deliver the underlying security upon payment of the exercise price
or to pay the exercise price upon delivery of the underlying  security.  Certain
options,  known as "American  style" options may be exercised at any time during
the term of the option. Other options, known as "European style" options, may be
exercised  only on the  expiration  date of the option.  Since listed options on
individual stocks in the U.S. are generally American style options,  the Adviser
believes that substantially all of the single-stock  options written or acquired
by the Fund will be American  style  options.  Exchange-traded  options on stock
indices are generally European style options.

The Fund will write call options only if they are  "covered." A call option on a
common  stock  or other  security  is  covered  if the  Fund  owns the  security
underlying  the call or has an  absolute  and  immediate  right to acquire  that
security  without   additional  cash   consideration  (or,  if  additional  cash
consideration is required,  cash or other assets  determined to be liquid by the
Adviser (in accordance with procedures  established by the Board) in such amount
are  segregated by the Fund's  custodian)  upon  conversion or exchange of other
securities  held by the Fund.  A call option is also covered if the Fund holds a
call on the same  security 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 by the Adviser as described above.

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  purchased  by the  Fund  expires
unexercised,  the Fund realizes a capital loss equal to the premium paid.  Prior
to the earlier of  exercise  or  expiration,  an  exchange-traded  option may be
closed out by an  offsetting  purchase  or sale of an option of the same  series
(type,  underlying  security,  exercise price, and expiration).  There can be no
assurance,  however, that a closing purchase or sale transaction can be effected
when the Fund desires.  The Fund may sell put or call options it has  previously
purchased,  which could  result in a net gain or loss  depending  on whether the
amount  realized  on the  sale is  more  or less  than  the  premium  and  other
transaction  costs paid on the put or call option when purchased.  The Fund will
realize a capital gain from a closing  purchase  transaction  if the cost of the
closing option is less than the premium received from writing the option, or, if
it is more, the Fund will realize a capital loss. If the premium received from a
closing sale  transaction  is more than the premium paid to purchase the option,
the Fund will realize a capital gain or, if it is less,  the Fund will realize a
capital loss. In most cases,  net gains from the Fund's option  strategy will be
short-term capital gains which, for federal income tax purposes, will constitute
net investment  company taxable income. See  "Distributions--Federal  income tax
matters."

The principal factors affecting the market value of an option include supply and
demand,  interest rates, the current market price of the underlying  security in
relation to the exercise price of the option, the actual or perceived volatility
of the underlying  security,  and the time remaining until the expiration  date.
The premium  paid for an option  purchased  by the Fund is an asset of the Fund.
The premium  received for an option  written by the Fund is recorded as an asset
and equivalent  liability.  The Fund then adjusts over time the liability to the
market  value of the  option.  The value of an option  purchased  or  written is
marked to market  daily and is 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,  exercise  and  assignment
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,  such  as  spreads  or  straddles.
Transaction costs may be different for transactions  effected in foreign markets
than for transactions effected in U.S. markets.

Transaction  costs  associated  with  the  Fund's  options  strategy  will  vary
depending on market circumstances and other factors. Although it is not possible
to  accurately  predict  such costs  because of this  variability,  the  Adviser
estimates that such costs on an annualized basis may range from between [ ]% and


                                       18
<PAGE>

[ ]% assuming the same  offering  size assumed for  purposes of  presenting  the
information  set  forth  under  "Summary  of  Fund  expenses."  There  can be no
certainty that upon changing market  conditions such costs will fall within this
range.

CALL OPTIONS AND COVERED CALL WRITING

The Fund does not intend to  purchase  call  options as an  investment.  It will
follow a principal  options  strategy  known as "covered  call option  writing,"
which is a strategy  designed  to  generate  earnings  and offset a portion of a
market decline in the underlying  common stock.  The Fund will only write (sell)
options on common stocks held in the Fund's  portfolio.  It may not sell "naked"
call options,  I.E., options representing more shares of the stock than are held
in the portfolio.

The standard  contract size for an  exchange-listed  single-stock  option is 100
shares of the common stock. There are four items needed to identify a particular
option contract:  (1) the underlying security, (2) the expiration month, (3) the
exercise (or strike) price and (4) the type (call or put).  For example,  20 ABC
Corp.  January 40 call options provide the right to purchase 2,000 shares of ABC
Corp. common stock on or before January 22, 2005 at $40 per share. A call option
whose strike price is above the current price of the underlying  stock is called
"out-of-the-money,"  a call option  whose  strike  price is equal to the current
price of the underlying stock is called  "at-the-money"  and a call option whose
strike  price is below  the  current  price of the  underlying  stock is  called
"in-the-money."

The following is a conceptual example of the returns that may be achieved from a
stock-plus-covered-call  position, making the following assumptions:  ABC common
stock  trades  at  $36.36  per  share  and  ABC  January  40 call  options  (10%
out-of-the-money)  trade at $1.82 per underlying share (5% option premium). This
example is not meant to represent  the  performance  of any actual common stock,
option contract or the Fund itself.

The return over the period  until  option  expiration  earned by a holder of ABC
stock who writes ABC January 40 call options and  maintains  the position  until
expiration  will be as follows:  (1) if the stock price  declines 5%, the option
will  expire  worthless  and the holder  will have a net return of zero  (option
premium offsets loss in stock);  (2) if the stock price is flat, the option will
again  expire  worthless  and the  holder  will have a net  return of 5% (option
premium plus no gain or loss on stock); (3) if the stock price rises 10% (to the
$40 strike  price),  the option  will again  expire with no value and the holder
will have a net return of 15% (option premium plus 10% stock return); and (4) if
the stock rises 20%,  the  exercise of the option  would limit stock gain to 10%
and total net return to 15%. If the stock  price at exercise  exceeds the strike
price, returns from the position are capped at 15%.

As  demonstrated  in the example,  writing covered call options on common stocks
lowers the variability of potential  returns and can enhance returns in three of
four stock price performance  scenarios (down, flat or moderately up). Only when
the stock price at  expiration  exceeds the sum of the premium  received and the
option exercise price would the stock-plus-covered-call  strategy be expected to
provide  lower  returns  than the  underlying  stock.  The  amount  of  downside
protection  afforded by the  strategy in declining  stock  scenarios is limited,
however,  to the amount of option premium received.  If the stock price declines
in an amount greater than the option premium, the Fund will incur a net loss.

For conventional listed call options,  the option's expiration date can be up to
nine  months  from the date the call  options  are  first  listed  for  trading.
Longer-term  call options can have  expiration  dates up to three years from the
date of listing.  It is  anticipated  that many  options that are written by the
Fund  against  its stock  holdings  will be  repurchased  prior to the  option's
expiration date, generating a gain or loss in the options.  Options that are not
repurchased  prior to expiration are subject to exercise by the option holder if
the stock price at expiration is above the strike price.

Exchange  listed  options  contracts  are  originated  and  standardized  by  an
independent  entity  called  the  Options  Clearing   Corporation  (the  "OCC").
Currently,  listed  options are available on over 2,300 stocks with new listings
added  periodically.  The Fund will write (sell) call options that are generally
issued, guaranteed and cleared by the OCC. Listed call options are traded on the
American Stock Exchange, Chicago Board Options Exchange International Securities
Exchange, New York Stock Exchange, Pacific Stock Exchange and Philadelphia Stock
Exchange.  The Adviser and  Sub-Adviser  believe  that there  exists  sufficient
trading  volume in listed options to fulfill the Fund's option  requirements  to
implement its strategies fully.

PUT OPTIONS

Put options are  contracts  that give the holder of the option,  in return for a
premium,  the  right to sell to the  writer  of the  option  the  security/index
underlying the option at a specified  exercise price at any time during the term
of the  option.  As  discussed  above,  the  Fund may in  certain  circumstances
purchase  put  options on the S&P 500,  S&P MidCap  400,  any other  broad-based
securities index deemed suitable for this purpose,  and/or on individual  stocks


                                       19
<PAGE>

held in the  portfolio  to help  protect  against a decline  in the value of the
Fund's  portfolio  securities.  The  premiums  paid to acquire put options  will
reduce amounts available for distribution from the Fund's options activity.

ADDITIONAL INVESTMENT PRACTICES

In  addition  to its  primary  investment  policies,  the Fund may engage in the
following  investment  practices  to  a  limited  extent.  Under  normal  market
conditions,  the Fund will  invest  at least  80% of its total  assets in common
stocks,  including  stocks  of  foreign  issuers.  The  Fund may  invest  in the
aggregate up to 20% of its total assets in all investments described below.

PREFERRED STOCKS

Preferred stock, like common stock, represents an equity ownership in an issuer.
Generally, preferred stock has a priority of claim over common stock in dividend
payments and upon  liquidation  of the issuer.  Unlike common  stock,  preferred
stock does not usually have voting rights.  Preferred stock in some instances is
convertible into common stock.  Although they are equity  securities,  preferred
stocks have  certain  characteristics  of both debt and common  stock.  They are
debt-like in that their promised income is contractually  fixed. They are common
stock-like in that they do not have rights to precipitate bankruptcy proceedings
or collection activities in the event of missed payments. Furthermore, they have
many of the key characteristics of equity due to their subordinated  position in
an issuer's  capital  structure  and because their quality and value are heavily
dependent on the  profitability of the issuer rather than on any legal claims to
specific  assets or cash flows.  The Fund will only invest in  preferred  stocks
that are  rated  investment  grade at the time of  investment  or,  if  unrated,
determined by the Adviser to be of comparable quality. Standard & Poor's Ratings
Group  and  Fitch  Ratings  consider  securities  rated  BBB--  and  above to be
investment grade and Moody's Investors Service,  Inc. considers securities rated
Baa3 and above to be investment grade.

WARRANTS

The Fund may invest in equity and index  warrants of domestic and  international
issuers.  Equity warrants are securities that give the holder the right, but not
the  obligation,  to  subscribe  for equity  issues of the issuing  company or a
related  company  at a fixed  price  either  on a  certain  date or during a set
period.  Changes  in the value of a warrant  do not  necessarily  correspond  to
changes in the value of its underlying  security.  The price of a warrant may be
more volatile than the price of its underlying security, and a warrant may offer
greater potential for capital  appreciation as well as capital loss. Warrants do
not  entitle  a holder  to  dividends  or  voting  rights  with  respect  to the
underlying security and do not represent any rights in the assets of the issuing
company.  A warrant  ceases to have  value if it is not  exercised  prior to its
expiration  date.  These factors can make warrants more  speculative  than other
types of  investments.  The sale of a warrant  results in a long- or  short-term
capital gain or loss depending on the period for which a warrant is held.

CONVERTIBLE SECURITIES AND BONDS WITH WARRANTS ATTACHED

The Fund may invest in preferred  stocks and  fixed-income  obligations that are
convertible into common stocks of domestic and foreign issuers, and bonds issued
as a unit with  warrants.  Convertible  securities in which the Fund may invest,
comprised of both  convertible  debt and  convertible  preferred  stock,  may be
converted at either a stated price or at a stated rate into underlying shares of
common stock. Because of this feature,  convertible  securities generally enable
an investor to benefit  from  increases  in the market  price of the  underlying
common  stock.  Convertible  securities  often  provide  higher  yields than the
underlying   equity   securities,   but   generally   offer  lower  yields  than
non-convertible   securities  of  similar  quality.  The  value  of  convertible
securities  fluctuates in relation to changes in interest rates like bonds, and,
in addition, fluctuates in relation to the underlying common stock.

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.

                                       20
<PAGE>

The ability to use short sales against-the-box, certain equity swaps and certain
equity collar strategies 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.

TEMPORARY INVESTMENTS

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.  During unusual market circumstances,  the Fund may
temporarily  invest  a  substantial  portion  of its  assets  in  cash  or  cash
equivalents, which may be inconsistent with the Fund's investment objectives. In
moving to a substantial temporary investments position and in transitioning from
such a position  back into full  conformity  with the Fund's  normal  investment
objectives and 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 back 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  latter  purchase  common  stocks and open new
options positions in circumstances that might not otherwise be optimal.

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  securities  that are the
subject  of the  transaction  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.  Forward commitment or
when-issued  transactions will not be entered into 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 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 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  covered  call  options and
purchasing  put  options,  the Fund may invest up to 20% of its total  assets in
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  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


                                       21
<PAGE>

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 return on or increase in value of a
particular  dollar  amount  invested  at a  particular  interest  rate,  or in a
particular  security,  "basket" of securities or index. 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
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 investment  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  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 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
Internal  Revenue Code of 1986,  as amended (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.

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.  The Fund will not lend portfolio  securities  subject to a
written covered call contract.

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 there is no current  intention 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.

                                       22
<PAGE>

REVERSE REPURCHASE AGREEMENTS

The  Fund  may  enter  into  reverse  repurchase  agreements.  Under  a  reverse
repurchase  agreement,  the Fund temporarily transfers possession of a portfolio
instrument  to another  party,  such as a bank or  broker-dealer,  in return for
cash.  At the same time,  the Fund agrees to  repurchase  the  instrument  at an
agreed  upon time  (normally  within  seven days) and price,  which  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
will be 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.  While  there is a risk that large
fluctuations  in the market  value of the Fund's  assets  could affect net asset
value,  this  risk is not  significantly  increased  by  entering  into  reverse
repurchase agreements, in the opinion of the Adviser. 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 yield.

PORTFOLIO TURNOVER

The Fund  will buy and  sell  securities  to seek to  accomplish  it  investment
objectives.  Portfolio  turnover  generally  involves  some expense to the Fund,
including  brokerage  commissions  and  other  transaction  costs on the sale of
securities and reinvestment in other securities.  Higher portfolio  turnover may
decrease the after-tax return to Common Shareholders to the extent it results in
a decrease of the long-term  capital gains  portion of  distributions  to Common
Shareholders. Although the Fund cannot accurately predict its portfolio turnover
rate, under normal market conditions it expects to maintain  relatively low core
turnover of its stock  portfolio,  not considering  purchases and sales of stock
and options in connection with the Fund's options program.  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 and may result in
greater realization of taxable capital gains.

RISK CONSIDERATIONS

NO OPERATING HISTORY

The Fund is a 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.  In  addition,  by  writing
(selling) call options on the equity  securities  held in the Fund's  portfolio,
the capital  appreciation  potential of such  securities  will be limited to the
difference  between  the  exercise  price of the call  options  written  and the
purchase price of the equity security underlying such options. The Common Shares
at any point in time may be worth less than the original investment,  even after
taking into account any reinvestment of distributions.

ISSUER RISK

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

EQUITY RISK

At least 80% of the Fund's  total  assets will be invested in common  stocks and
therefore a principal risk of investing in the Fund is equity risk.  Equity risk
is the risk that  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


                                       23
<PAGE>

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 and
other equity securities 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  equity
securities  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 ASSOCIATED WITH OPTIONS ON SECURITIES

There are numerous risks associated with  transactions in options on securities.
A decision as to whether,  when and how to use options  involves the exercise of
skill and judgment, and even a well-conceived transaction may be unsuccessful to
some degree because of market behavior or unexpected  events. As the writer of a
covered call option, the Fund forgoes, during the option's life, the opportunity
to profit from  increases in the market value of the security  covering the call
option above the sum of the option  premium  received and the exercise  price of
the call, but has retained the risk of loss, minus the option premium  received,
should the price of the underlying security decline. The writer of an option has
no control over when during the exercise period of the option it may be required
to fulfill its  obligation as a writer of the option.  Once an option writer has
received an exercise notice, it cannot effect a closing purchase  transaction in
order to  terminate  its  obligation  under  the  option  and must  deliver  the
underlying  security at the exercise price. Thus, the use of options may require
the Fund to sell portfolio  securities at inopportune  times or for prices other
than current market values,  may limit the amount of  appreciation  the Fund can
realize on an investment, or may cause the Fund to hold a security that it might
otherwise sell.

The value of options may be  adversely  affected if the market for such  options
becomes less liquid or smaller.  There can be no assurance  that a liquid market
will exist when the Fund seeks to close out an option  position  either,  in the
case of a call  option  written,  by  buying  the  option,  or, in the case of a
purchased put option, by selling 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 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 Fund's ability to
terminate   over-the-counter   options   will  be   more   limited   than   with
exchange-traded   options  and  may   involve   the  risk  that   broker-dealers
participating in such  transactions will not fulfill their  obligations.  If the
Fund were  unable to close out a covered  call  option  that it had written on a
security, it would not be able to sell the underlying security unless the option
expired without exercise.

The hours of trading for options may not conform to the hours  during  which the
underlying  securities are traded.  To the extent that the options markets close
before the markets for the  underlying  securities,  significant  price and rate
movements can take place in the  underlying  markets that would not be reflected
concurrently in the options markets. Call options are marked to market daily and
their value will be affected  by changes in the value of and  dividend  rates of
the underlying common stocks,  changes in interest rates,  changes in the actual
or perceived volatility of the stock market and the underlying common stocks and
the remaining time to the options' expiration.  Additionally, the exercise price
of an option may be adjusted downward before the option's expiration as a result
of the occurrence of certain  corporate events  affecting the underlying  equity
security,  such as  extraordinary  dividends,  stock  splits,  merger  or  other
extraordinary  distributions  or events. A reduction in the exercise price of an
option would reduce the Fund's capital appreciation  potential on the underlying
security.

If the Fund purchases put options for hedging or risk management  purposes,  the
Fund will be subject to the following additional risks. A put option acquired by
the Fund and not sold prior to expiration will expire  worthless if the price of
the stock or index at  expiration  exceeds  the  exercise  price of the  option,
thereby  causing  the Fund to lose  its  entire  investment  in the  option.  If
restrictions  on exercise were imposed,  the Fund might be unable to exercise an
option it had purchased.  If the Fund were unable to close out an option that it
had  purchased,  it would have to  exercise  the option in order to realize  any
profit or the option may expire  worthless.  Stock  market  indices on which the
Fund may purchase options  positions will not mirror the Fund's actual portfolio
holdings.  The  effectiveness of index put options as hedges against declines in


                                       24
<PAGE>

the Fund's stock portfolio will be limited to the extent that the performance of
the underlying index does not correlate with that of the Fund's holdings.

LIMITATION ON OPTION WRITING

The number of call options the Fund can write is limited by the number of shares
of common stock the Fund holds, and further limited by the fact that listed call
options on individual  common stocks  generally trade in units  representing 100
shares of the underlying  stock.  Furthermore,  the Fund's options  transactions
will be subject to limitations  established by each of the exchanges,  boards of
trade or other  trading  facilities  on which such  options  are  traded.  These
limitations  govern the  maximum  number of  options in each class  which may be
written  or  purchased  by a single  investor  or group of  investors  acting in
concert,  regardless of whether the options are written or purchased on the same
or different exchanges,  boards of trade or other trading facilities or are held
or written in one or more  accounts or through one or more  brokers.  Thus,  the
number of  options  which  the Fund may write or  purchase  may be  affected  by
options written or purchased by other investment advisory clients of the Adviser
or Sub-Adviser.  An exchange, board of trade or other trading facility may order
the  liquidation  of positions  found to be in excess of these  limits,  and may
impose  certain  other  sanctions.  The Fund will not write "naked" or uncovered
call options.

RISKS OF MID-CAP COMPANIES

The Fund may invest  substantially in 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.

DISTRIBUTION RISK

The monthly  distributions  Common  Shareholders  receive  from the Fund will be
based primarily on the level of net option  premiums and the dividends  received
by the Fund.  Net option  premiums  and dividend  payments the Fund  receives in
respect  of its  portfolio  securities  can  vary  widely  over the  short-  and
long-term.  If stock  prices or stock price  volatility  declines,  the level of
premiums from options writing and the amounts  available for  distribution  from
options activity will likely decrease as well.  Payments to purchase put options
and to close written call options will reduce amounts available for distribution
from call  option  premiums  received  and  proceeds  of  closing  put  options.
Dividends on common  stocks are not fixed but are declared at the  discretion of
the  issuer's  board of  directors.  There is no  guarantee  that the issuers of
common stocks in which the Fund invests will declare  dividends in the future or
that if  declared  they will  remain at current  levels or  increase  over time.
Dividends  on any  preferred  stocks  in  which  the  Fund  may  invest  are not
guaranteed and certain issues of preferred  stock held by the Fund may be called
by the issuer.

FOREIGN SECURITY RISK

The Fund may have  substantial  exposure  to  foreign  securities.  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


                                       25
<PAGE>

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 in the Fund and the accrued
income and  appreciation or  depreciation  of the  investments in U.S.  dollars.
Changes in foreign  currency  exchange  rates  relative to the U.S.  dollar will
affect the U.S.  dollar value of the Fund's assets  denominated in that currency
and the  Fund's  return  on such  assets  as  well as any  temporary  uninvested
reserves in bank  deposits in foreign  currencies.  In  addition,  the Fund will
incur costs in connection with conversions between various currencies.

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

INTEREST RATE RISK

The level of premiums  from call options  writing and the amounts  available for
distribution from the Fund's options activity may decrease in declining interest
rate environments. Any preferred stocks paying fixed dividend rates in which the
Fund invests,  will likely change in value as market interest rates change. When
interest rates rise, the market value of such securities generally will fall. To
the extent that the Fund  invests in preferred  stocks,  the net asset value and
price of the Common Shares may decline if market  interest rates rise.  Interest
rates are currently low relative to historic levels. During periods of declining
interest  rates,  an issuer of preferred stock may exercise its option to redeem
securities  prior to  maturity,  forcing the Fund to reinvest in lower  yielding
securities. This is known as call risk. During periods of rising interest rates,
the average  life of certain  types of  securities  may be  extended  because of
slower than expected payments.  This may lock in a below market yield,  increase
the security's duration, and reduce the value of the security.  This is known as
extension  risk.  The value of the Fund's common stock  investments  may also be
influenced by changes in interest rates.

SECTOR RISK

The Fund may invest a significant portion of its assets in securities of issuers
in any single industry or sector of the economy (a broad based economic  segment
that may include many  distinct  industries)  if  companies in that  industry or
sector  meet  the  Fund's  investment  criteria.  If the Fund is  focused  in an
industry  or  sector,  it  may  present  more  risks  than  if it  were  broadly
diversified over numerous  industries or sectors of the economy. A "sector" is a
broader  economic segment that may include many different  industries.  This may
make the Fund more  susceptible to adverse  economic,  political,  or regulatory
occurrences  affecting  these  sectors.  As the  percentage of the Fund's assets
invested in a particular sector increases, so does the potential for fluctuation
in the net asset value of Common Shares.  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.

DERIVATIVES RISK

In addition to writing  covered 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 purchased by the


                                       26
<PAGE>

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 may obtain no recovery in such circumstances.

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.

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 trading price of the Fund's Common
Shares may be less than the public offering price.  The returns earned by Common
Shareholders  who purchased  their Common Shares in this offering and sell their
Common Shares below net asset value will be reduced.

FINANCIAL LEVERAGE

Although the Fund has no current  intention to do so, the Fund is  authorized 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 income derived from securities purchased
with proceeds  received from leverage  exceeds the cost of leverage,  the Fund's
distributions will be greater than if leverage had not been used. Conversely, if
the income 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, Rampart and the individual portfolio managers will apply
investment  techniques and risk analyses in making investment  decisions for the
Fund, but there can be no guarantee that these will produce the desired results.
The Fund may be subject to additional management risk because the Fund's options
program  will  require  effective  coordination  between  the  Adviser  and  the
Sub-Adviser.

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


                                       27
<PAGE>

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
have the effect of limiting 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."

MANAGEMENT OF THE FUND

BOARD OF TRUSTEES

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

THE ADVISER

Eaton Vance acts as the Fund's investment  adviser under an Investment  Advisory
Agreement (the "Advisory Agreement").  The Adviser's principal office is located
at The Eaton Vance Building,  255 State Street,  Boston, 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 $[95.0] billion as of October 31, 2004,
including  approximately $[33.0] billion in equity fund 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,  the Adviser 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.  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 [0.90]% 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,  Lewis  R.   Piantedosi   and  other  Eaton  Vance   investment
professionals   comprise  the  investment  team   responsible  for  the  overall
management  of the  Fund's  investments.  Mr.  Row  and Mr.  Piantedosi  are the
portfolio  managers  responsible  for the  day-to-day  management  of 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 another Eaton
Vance registered investment company and has been an equity analyst and member of
Eaton's Vance's equity research team since 1996.

                                       28
<PAGE>

Mr.  Piantedosi  is a Vice  President  of Eaton  Vance.  He is a member of Eaton
Vance's  Equity  Strategy  Committee  and  co-manager  of  another  Eaton  Vance
registered  investment  company.  He first joined Eaton Vance's  equity group in
1996.

THE SUB-ADVISER

Eaton  Vance has engaged  Rampart  Investment  Management  Company to serve as a
sub-adviser to the Fund to provide advice on and execution of the Fund's options
strategy.  The  Sub-Adviser's  principal office is located at One  International
Place, Boston, MA 02110. Rampart Investment Management Company, Inc. was founded
in 1983 by its  current  principals  Ronald M. Egalka and David R.  Fraley.  The
Sub-Adviser provides customized  investment  management services within its core
competency in options program management to a spectrum of institutional and high
net worth  clients.  Since  its  inception,  the  Sub-Adviser  has  continuously
expanded its computer modeling and analytical  capabilities and created tools to
identify and capitalize on opportunities in the options markets. Rampart managed
approximately $[1.0] billion in assets as of October 31, 2004.

Mr. Egalka and Mr. Fraley are 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  the   Sub-Adviser   and  a  NASD  member
broker/dealer.  Mr.  Egalka  oversees  the  development  and  implementation  of
investment  strategies  and  tactics  for  Rampart.  He has created a variety of
analytical  and  management  tools  including  the Rampart Time  Premium  Index,
published each week in BARRON'S,  the Rampart Volatility Indexes and the Rampart
Options  Management  System  (ROMS),  the  technological   platform  from  which
Rampart's  portfolio  managers deliver the company's  equity options  management
expertise.

As one of the early pioneers in personal computers and quantitative hedging, Mr.
Egalka was a founding director of the Boston Computer Society, charter member of
the  National  Options  and  Futures  Society,  a founder of the Boston  Options
Society and a guest  lecturer on  derivatives  at Boston  College.  From 1973 to
1981,  he was a  portfolio  manager  and senior  research  officer at The Boston
Company,  specializing in hedged equity  strategies.  In 1981, Mr. Egalka joined
Colonial  Management  Associates where he developed and managed a corporate cash
management mutual fund and many of the company's portfolio hedging capabilities.

A long time  proponent  of hedged  equities as an asset  class,  Mr.  Egalka has
focused on helping  create an  industry  benchmark  for  options  programs.  The
creation and subsequent  launch of the CBOE/S&P 500 BuyWrite Index (BXM) in 2002
was the realization of that  objective.  In 2003, the CBOE announced that it had
licensed the BXM to Rampart as the  strategic  basis for new options  investment
vehicles.

Mr.  Fraley is Managing  Director/Manager  of  Marketing  and Client  Service at
Rampart.  He manages  Rampart's new product  development  and  customization  of
existing  investment  strategies  for specific  client  needs.  Prior to joining
Rampart,  Mr. Fraley  served in a number of management  roles with Merrill Lynch
Capital Markets in Boston from 1975 through 1983.

Under the terms of the  Sub-Advisory  Agreement (the  "Sub-Advisory  Agreement")
between Eaton Vance and the Sub-Adviser, Eaton Vance (and not the Fund) will pay
the  Sub-Adviser  a fee at a annual rate equal to [0.20]% 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 the
Sub-Adviser  without the need for approval by shareholders of the Fund.  Rampart
Investment  Management  Company has agreed to  reimburse  Eaton Vance in certain
circumstances  for a portion of the payments that Eaton Vance makes to [ ] under
a shareholder servicing agreement. See "Underwriting."

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

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


                                       29
<PAGE>

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.

DISTRIBUTIONS

Commencing with the Fund's first distribution,  the Fund intends to make regular
monthly  distributions  to Common  Shareholders  based upon the Fund's projected
annual cash  available  from option  premiums and  dividends.  For  distribution
purposes,  "cash  available from option  premiums and dividends" will consist of
the total proceeds of options sales plus dividends and interest  received,  less
amounts paid to purchase options and 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  45-60  days and paid
approximately  60-90 days after the  completion of this  offering,  depending on
market conditions.

The Fund's annual cash available from options premiums and dividends 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. Over time, all of the Fund's investment company taxable income
will be  distributed.  In  addition,  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).

To the extent that that Fund's net investment income and net capital gain (which
is the excess of net long-term capital gain over net short-capital loss) for any
year exceed the total monthly  income  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. If the Fund's total monthly distributions in any year exceed
the amount of its net  investment  income and net capital gain for any year, any
such excess would be characterized  as a return of capital.  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.

If, for any calendar  year, as discussed  above,  the total  distributions  made
under the Fund's policy exceed the Fund's net investment  taxable income and net
capital gain, 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.  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. To the extent the Fund's  distribution  policy
results in distributions in excess of its net investment  taxable income and net
capital gain, such distributions will decrease its total assets and increase its
expense ratio to a greater extent than would have been the case if distributions
were limited to these amounts.  Distributions in any year may or may not include
a substantial return of capital component.

To permit the Fund to maintain  more stable  distributions,  distribution  rates
will be based on  projected  annual cash  available  from  options  premiums and
dividends.  As a result,  the distributions  paid by the Fund for any particular
month  may be more or less  than  the  amount  of cash  available  from  options
premiums and dividends for that month. In such circumstances,  the Fund may have
to sell a portion of its investment  portfolio to make a distribution  at a time
when   independent   investment   judgment   might  not  dictate   such  action.
Undistributed  net investment income is included in the Common Shares' net asset
value,  and,  correspondingly,  distributions  from net  investment  income 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  exemption  from Section
19(b) of the  Investment  Company 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  Investment  Company  Act.  The  Fund  will  not  pursue  this
distribution  policy  until it receives  such an  exemptive  order.  There is no
guarantee that the SEC will grant such exemptive  relief.  However,  if the Fund
fails to receive the requested relief and the Fund is unable to include realized
capital gains in regular  distributions  more frequently than would otherwise be


                                       30
<PAGE>

permitted by the  Investment  Company Act, the Adviser does not believe that the
distribution policy, as set forth above, will otherwise be adversely affected.

FEDERAL INCOME TAX MATTERS

The following discussion of federal income tax matters is based on the advice of
Kirkpatrick & Lockhart 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  and long-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.  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.

The Fund intends to make regular monthly  distributions  to Common  Shareholders
based  upon its  projected  annual  cash  available  from  option  premiums  and
dividends. Over time all of the Fund's investment company taxable income will be
distributed. The Fund intends to distribute annually any net capital gain (which
is the excess of net long-term  capital gain over net short-term  capital loss).
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
the length of time Common Shares have been held by Common Shareholders.  If, for
any calendar  year,  the total  distributions  exceed the Fund's net  investment
taxable  income and net capital  gain,  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 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 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.

The Fund's  transactions  in options 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  higher  taxed
short-term  capital gain or 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.

The taxation of equity options such as the Fund expects to write and purchase is
governed by Code  Section  1234.  Pursuant  to Code  Section  1234,  the premium
received by the Fund for selling a call option is not  included in income at the
time of receipt.  If the option expires,  the premium is short-term capital gain
to the Fund.  If the Fund  enters  into a closing  transaction,  the  difference
between the amount paid to close out its  position  and the premium  received is
short-term  capital  gain or  loss.  If a call  option  written  by the  Fund is
exercised,  thereby  requiring  the Fund to sell the  underlying  security,  the
premium will increase the amount  realized upon the sale of the security and any
resulting  gain or loss will be  long-term  or  short-term,  depending  upon the
holding  period  of the  security.  With  respect  to a put on a  stock  that is
purchased by the Fund, if the option is sold, any resulting gain or loss will be
a capital gain or loss, and will be short-term or long-term,  depending upon the
holding period for the option.  If the option  expires,  the resulting loss is a
capital loss and is short-term or long-term,  depending  upon the holding period
for the  option.  If the option is  exercised,  the amount  paid to acquire  the
position  reduces the amount realized on the underlying  security in determining
gain or loss.  Because the Fund does not have  control  over the exercise of the
call options it writes,  such exercise or other required sales of the underlying
securities may cause the Fund to realize  capital gains or losses at inopportune
times.

In the case of Fund  transactions  involving  many listed index  options and any
listed non-equity options,  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,  although
foreign  currency gains or losses arising from certain of these positions may be
treated as ordinary  income 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 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


                                       31
<PAGE>

"mark  to  market"  rules.   Section  1256  Contracts  include  certain  options
contracts,  certain  regulated  futures  contracts,  and certain other financial
contracts.

Notwithstanding any of the foregoing, 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 to  certain  transactions  closed in the  90-day
period  ending with the 30th day after the close of the taxable year, if certain
conditions are met.

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 call options
it writes on portfolio  securities  will generally be "qualified  covered calls"
that are exempt from the  straddle  rules.  To meet the  qualified  covered call
option exemption, a stock-plus-covered-call  position cannot be part of a larger
straddle and must meet a number of other  conditions,  including that the option
is written more than 30 days prior to expiration and is not  "deep-in-the-money"
as defined in the Code.  The Fund may enter into  certain  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 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 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 application of the mixed straddle account rules
is not entirely  clear.  Therefore,  there is no assurance that a mixed straddle
account election by the Fund will be accepted by the IRS.

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.

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 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
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.  Dividends  received on shares of stock that
are subject to a covered call option that is "in-the-money"  when written,  will


                                       32
<PAGE>

not constitute  qualified  dividend income.  Gains on option positions 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
after December 31, 2002 and 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 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 amount received. 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 certain 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,  which could occur,  for example,  if the Common
Shareholder is a participant  in the Plan (as defined  below) 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 2004, 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.

Finally,  the Tax Act was only recently enacted,  and its application is subject
to interpretation  by and guidance from the Treasury  Department and the IRS and
subject to change with retroactive effect.

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.

DIVIDEND REINVESTMENT PLAN

Pursuant  to the  Fund's  dividend  reinvestment  plan  (the  "Plan"),  a Common
Shareholder  may elect to have all  distributions  (including  all capital  gain
dividends)  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.

                                       33
<PAGE>

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 may 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  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 at less than
they could otherwise purchase them and will have Common Shares with a cash value
greater  than the value of any cash  distribution  they would have  received  on
their Common Shares. If the market price plus commissions is below the net asset
value, participants will receive distributions in Common Shares with a net asset
value  greater  than the per Common  Share value of any cash  distribution  they
would have received on their Common Shares.  However,  there may be insufficient
Common Shares available in the market to make  distributions in Common Shares at
prices  below the net asset  value.  Also,  since the Fund does not  redeem  its
Common Shares, the price on resale may be more or less than the 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 dividend reinvestment account.

                                       34
<PAGE>

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
November 8, 2004 and filed with the Secretary of The Commonwealth on November 9,
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, in certain limited  circumstances,  may 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  (expected to equal the
aggregate  original  purchase  price of the  outstanding  preferred  shares plus
redemption premium,  if any, together with any accrued and unpaid  distributions
thereon,  whether or not  earned or  declared  and on a  cumulative  basis).  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.

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.

                                       35
<PAGE>

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

REPURCHASE OF COMMON SHARES AND OTHER DISCOUNT MEASURES

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.  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, which 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  approximates  their net asset value.  In  recognition  of the
possibility  that the Common Shares might trade at a discount to net asset value
and that any such  discount may not be in the  interest of Common  Shareholders,
the  Board,  in  consultation  with  Eaton  Vance,  from time to time may review
possible actions to reduce any such discount.

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 liability 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 of  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 dividend  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,  shall 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 by the 1940 Act being imposed. In this regard,  holders
of the preferred  shares may be entitled to elect a majority of the Fund's Board
in other  circumstances,  for example, if one payment on the preferred shares is
in arrears.

In the event of any future issuance of preferred  shares,  the Fund likely would
seek a credit rating for such  preferred  shares from a Rating  Agency.  In such
event,  as long as preferred  shares are  outstanding,  the  composition  of its
portfolio will reflect  guidelines  established by such Rating Agency.  Based on


                                       36
<PAGE>

previous  guidelines  established by such 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, at this time, no assurance
can be given as to the nature or extent of the guidelines,  which 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,  requirements  that the Fund
maintain  a portion  of its  assets in  short-term,  high-quality,  fixed-income
securities  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 such Rating Agency would be more or less
restrictive than as 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. In the event the Fund in the future determines to engage in
investment leverage, in whole or in part, through borrowings, the Fund may enter
into definitive  agreements with respect to a credit  facility/commercial  paper
program or other borrowing program. The Fund may negotiate with commercial banks
to arrange a credit facility/commercial paper 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. 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 there are not expected to be
any sinking fund or mandatory retirement  provisions.  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  the  amounts
available  for  distribution  derived from  securities  purchased  with proceeds
received from  leverage  exceed the cost of 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 such 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.

ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST

                                       37
<PAGE>

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 Common 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.

                                       38
<PAGE>

UNDERWRITING

The underwriters named below (the "Underwriters"), acting through [ ], [ ], [ ],
[ ], [ ], and [ ], [ ], Baltimore, Maryland, as lead managers and [ ], [ ] and [
],  as  their   representatives   (together   with  the   lead   managers,   the
"Representatives"),  have severally agreed,  subject to the terms and conditions
of the  Underwriting  Agreement  with the Fund,  Eaton  Vance and  Rampart  (the
"Underwriting Agreement"), to purchase from the Fund the number of Common Shares
set forth opposite their  respective  names.  The  Underwriters are committed to
purchase and pay for all of such Common  Shares (other than those covered by the
over-allotment option described below) if any are purchased.

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








                                                                    ------------
  Total ........................................................... ============

The Fund has granted to the Underwriters an option, exercisable for 45 days from
the date of this  Prospectus,  to purchase up to an additional  Common Shares to
cover  over-allotments,  if any, at the initial offering price. The Underwriters
may  exercise  such  option  solely  for the  purpose of  covering  underwriting
over-allotments incurred in the sale of the Common Shares offered hereby. To the
extent that the Underwriters exercise this option, each of the Underwriters will
have a firm commitment, subject to certain conditions, to purchase an additional
number of Common Shares proportionate to such Underwriter's initial commitment.

The Fund has agreed to pay a commission to the  Underwriters in the amount of $[
] per Common Share ([ ]% of the public  offering  price per Common  Share).  The
Representatives  have advised the Fund that the Underwriters may pay up to $ per
Common Share from such commission to selected dealers who sell the Common Shares
and that such  dealers may reallow a  concession  of up to $ per Common Share to
certain  other dealers who sell Common  Shares.  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.
Investors must pay for any Common Shares purchased on or before , 2005.

Prior to this offering, there has been no public market for the Common Shares or
any other  securities  of the Fund.  Consequently,  the  offering  price for the
Common   Shares  was   determined  by   negotiation   among  the  Fund  and  the
Representatives.  There can be no  assurance,  however,  that the price at which
Common Shares sell 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 minimum  investment
requirement is 100 Common Shares ($[ ]).

The Fund,  Eaton Vance and Rampart  have each  agreed to  indemnify  the several
Underwriters  for  or to  contribute  to  the  losses  arising  out  of  certain
liabilities, including liabilities under the Securities Act of 1933, as amended.

The Fund has agreed  not to offer,  sell or  register  with the  Securities  and
Exchange  Commission any additional  equity  securities of the Fund,  other than
issuances of Common Shares, including pursuant to the Fund's Plan, and issuances
in  connection  with  any  preferred  shares,   each  as  contemplated  in  this
Prospectus,  for a  period  of 180  days  after  the  date  of the  Underwriting
Agreement without the prior written consent of the Representatives.

The  Representatives  have informed the Fund that the Underwriters do not intend
to  confirm  sales  to any  accounts  over  which  they  exercise  discretionary
authority.

In connection with this offering,  the Underwriters may purchase and sell Common
Shares in the open market.  These  transactions may include  over-allotment  and
stabilizing  transactions  and  purchases  to cover  syndicate  short  positions
created in connection with this offering.  Stabilizing  transactions  consist of
certain bids or purchases  for the purpose of  preventing or retarding a decline
in the market price of the Common Shares and syndicate short  positions  involve
the sale by the  Underwriters of a greater number of Common Shares than they are


                                       39
<PAGE>

required to purchase from the Fund in this offering.  The Underwriters  also may
impose a penalty bid, whereby selling  concessions  allowed to syndicate members
or other  broker-dealers  in respect of the Common  Shares sold in this offering
for their  account may be reclaimed by the  syndicate if such Common  Shares are
repurchased  by the syndicate in  stabilizing  or covering  transactions.  These
activities may stabilize,  maintain or otherwise  affect the market price of the
Common Shares,  which may be higher than the price that might otherwise  prevail
in the open market; and these activities,  if commenced,  may be discontinued at
any time  without  notice.  These  transactions  may be effected on the New York
Stock Exchange or otherwise.

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

In connection with the offering, certain of the Underwriters or selected dealers
may distribute prospectuses electronically.

Eaton Vance (and not the Fund) has agreed pursuant to an additional compensation
agreement (the "Additional Compensation Agreement") to pay to certain qualifying
Underwriters  who meet  specified  sales  targets  ("Qualifying  Underwriters"),
quarterly in arrears,  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 Eaton Vance.  These fee  payments  will
remain  in  effect  only so long as the  Advisory  Agreement  remains  in effect
between the Fund and Eaton Vance or any  successor  in interest or  affiliate of
Eaton  Vance,  as and to the  extent  that such  Advisory  Agreement  is renewed
periodically  in  accordance  with  the  1940  Act.  The  sum of the  additional
compensation payable to the Qualifying  Underwriters will not exceed [ ]% of the
aggregate  initial  offering price of the Common Shares offered hereby. [ ] will
receive  additional  compensation  which will not  exceed [ ]% of the  aggregate
initial offering price of the Common Shares offered hereby.

Pursuant  to a  shareholder  servicing  agreement  (the  "Shareholder  Servicing
Agreement") between [ ] (the "Shareholder Servicing Agent") and Eaton Vance, the
Shareholder Servicing Agent will (i) at the request of and as specified by Eaton
Vance,  undertake to make available public information pertaining to the Fund on
an ongoing basis and to communicate to investors and  prospective  investors the
Fund's  features  and  benefits   (including   arranging  periodic  seminars  or
conference  calls for Eaton Vance to  communicate  to  investors,  responding to
questions  from current or  prospective  shareholders  and  contacting  specific
shareholders,  where  appropriate),  provided  that  services  shall not include
customary  market research  information  provided by the  Shareholder  Servicing
Agent or its registered broker-dealer affiliates in the ordinary course of their
business; (ii) at the request of and as specified by Eaton Vance, make available
to investors and prospective  investors market price, net asset value, yield and
other  information  regarding the Fund (provided that services shall not include
customary  market research  information  provided by the  Shareholder  Servicing
Agent or its registered broker-dealer affiliates in the ordinary course of their
business),  if  reasonably  obtainable,  for  the  purpose  of  maintaining  the
visibility of the Fund in the investor community;  (iii) at the request of Eaton
Vance or the Fund, provide certain economic research and statistical information
and reports,  if reasonably  obtainable,  to Eaton Vance or the Fund and consult
with  representatives  of Eaton Vance and/or the Board in connection  therewith,
which  information  and reports shall  include:  (a)  statistical  and financial
market  information  with  respect to the  Fund's  market  performance;  and (b)
comparative  information  regarding  the Fund and  other  closed-end  management
investment companies with respect to (1) the net asset value of their respective
shares,  (2) the  respective  market  performance  of the Fund  and  such  other
companies,  and (3) other  relevant  performance  indicators.  Except as legally
required,  such information and reports may not be quoted or referred to, orally
or in writing,  reproduced or  disseminated by the Fund or any of its affiliates
or any of their  agents,  without the prior written  consent of the  Shareholder
Servicing Agent,  which consent will not be unreasonably  withheld;  and (iv) at
the request of Eaton Vance or the Fund, provide  information to and consult with
Eaton Vance and/or the Board with respect to applicable  strategies  designed to
address  market value  discounts,  which may include share  repurchases,  tender
offers,  modifications to dividend policies or capital structure,  repositioning
or restructuring of the Fund,  conversion of the Fund to an open-end  investment
company,  liquidation or merger;  including providing information concerning the
use and impact of the above strategic alternatives by other market participants;
provided,  however, that under the terms of the Shareholder Servicing Agreement,
the  Shareholder  Servicing  Agent is not  obligated  to  render  any  opinions,
valuations  or  recommendations  of any  kind or to  perform  any  such  similar
services.  For these services,  Eaton Vance will pay the  Shareholder  Servicing
Agent a fee computed daily and payable quarterly equal, on an annual basis, to [
]% of the Fund's average daily gross assets.  The sum of the payments payable to
the Shareholder  Servicing Agent under the Shareholder  Servicing Agreement will
not exceed [ ]% of the  aggregate  initial  offering  price of the Common Shares
offered hereby.  Under the terms of the  Shareholder  Servicing  Agreement,  the
Shareholder  Servicing  Agent is relieved from liability to Eaton Vance,  or the
Fund for any act or omission to act in the course of its  performance  under the
Shareholder Servicing Agreement in the absence of bad faith, gross negligence or
willful  misconduct  on  the  part  of  the  Shareholder  Servicing  Agent.  The
Shareholder  Servicing Agreement will continue so long as the Advisory Agreement


                                       40
<PAGE>

remains in effect  between the Fund and the Adviser or any successor in interest
or affiliate of the Adviser,  as and to the extent that such Advisory  Agreement
is renewed periodically in accordance with the 1940 Act.

The total compensation received by the Underwriters will not exceed 9.00% of the
aggregate initial offering price of the Common Shares offered hereby.

SHAREHOLDER SERVICING AGENT, CUSTODIAN AND TRANSFER AGENT

As described above under  "Underwriting," [ ] will provide shareholder  services
to the Fund pursuant to the Shareholder Servicing Agreement with Eaton Vance.

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 LLP, Boston,  Massachusetts,  and for the
Underwriters by [ ], [ ].

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

ADDITIONAL INFORMATION

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

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

                                       41
<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................................................

THE FUND'S PRIVACY POLICY

The Fund is committed to ensuring your financial  privacy.  This notice is being
sent  to  comply  with  privacy  regulations  of  the  Securities  and  Exchange
Commission.  The Fund  has in  effect  the  following  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 Fund transactions will be collected.

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).

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

For more information about the Fund's privacy policies call 1-800-262-1122.

                                       42
<PAGE>

                               (EATON VANCE LOGO)

                                                                      CE-EEIFIIP

                                       43

<PAGE>


STATEMENT OF ADDITIONAL INFORMATION    SUBJECT TO COMPLETION   November 12, 2004


STATEMENT OF ADDITIONAL INFORMATION
[             ], 2004

EATON VANCE ENHANCED EQUITY INCOME FUND II

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..............................................

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 ENHANCED EQUITY INCOME FUND II (THE
"FUND") DATED [ ], 2004 (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  may  not buy any of the  following  instruments  or use any of the
following  techniques  unless it believes 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) may be purchased
or sold to  enhance  return  (which  may be  considered  speculative),  to hedge
against  fluctuations  in  securities  prices  or  market  conditions,  or  as a
substitute  for  the  purchase  or  sale  of  securities  or  currencies.  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 also
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.

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

                                       2
<PAGE>

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  or  U.S.  government
securities  having a value,  marked to  market  daily,  of at least  100% of the
market  value  of the  loaned  securities.  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 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


                                       3
<PAGE>

     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 it
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  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
                                                                                                   Portfolios in
                                               Term of Office                                       Fund Complex          Other
Name and                  Position(s)           and Length       Principal Occupation(s)            Overseen by        Directorships
Date of Birth             with the Fund         of Service       During Past Five Years              Trustee(1)           Held
-----------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>                    <C>               <C>                                     <C>           <C>
TRUSTEES

James B. Hawkes         Trustee and            Since 11/8/04     Chairman, President and Chief           194           Director of
11/9/41                 Vice President                           Executive Officer of BMR,                             EVC
                                                                 Eaton Vance, EVC and EV;
                                                                 Director of EV; Vice President
                                                                 and Director of EVD. Trustee
                                                                 and/or officer of 194
                                                                 registered 194 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 and            Since 11/8/04     Vice President, Secretary               194           None
10/10/40                Secretary                                And Chief Legal Officer of
                                                                 BMR, Eaton Vance, EVD,
                                                                 EV and EVC. Officer of
                                                                 198 registered investment
                                                                 companies managed by
                                                                 Eaton Vance or BMR
</TABLE>

---------------------------------------------------------------------
(1) INCLUDES BOTH MASTER AND FEEDER FUNDS IN MASTER-FEEDER STRUCTURE.


                                       5
<PAGE>


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      Since 11/8/04         Senior Vice President and Chief Equity  Investment  Officer
10/26/57                Chief Executive                          of  Eaton   Vance  and  BMR.   Officer  of  43   registered
                        Officer                                  investment companies managed by Eaton Vance or BMR.


Thomas E. Faust Jr.     Vice President     Since 11/8/04         Executive Vice  President of Eaton Vance,  BMR, EVC and EV;
5/31/58                                                          Chief  Investment  Officer  of  Eaton  Vance  and  BMR  and
                                                                 Director of EVC. Chief 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 57 registered  investment  companies  managed by
                                                                 Eaton Vance or BMR.

Lewis R. Piantedosi     Vice President     Since 11/8/04         Vice  President of Eaton Vance and BMR.  Equity  Analyst at
8/10/65                                                          Eaton   Vance   since   May   1999.   Previously,  Partner,
                                                                 Portfolio  Manager  and  Equity Analyst for Freedom Capital
                                                                 Management   (1996-1999).     Officer   of   2   registered
                                                                 investment   companies  managed   by   Eaton  Vance or BMR.

Walter A. Row, III      Vice President     Since 11/8/04         Director  of Equity  Research and a Vice President of Eaton
7/20/57                                                          Vance  and  BMR.   Officer  of  22  registered   investment
                                                                 companies     managed    by     Eaton     Vance or     BMR.


James L. O'Connor       Treasurer          Since 11/804          Vice President of  BMR, Eaton   Vance   and EVD. Officer of
4/1/45                                                           115    registered  investment  companies  managed  by Eaton
                                                                 Vance or BMR.

Alan R. Dynner          Secretary          Since 11/8/04         Vice  President,  Secretary and Chief Legal Officer of BMR,
10/10/40                                                         Eaton  Vance,  EVD, EV and EVC.  Officer of 194  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

                                       6
<PAGE>

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 [ ] 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  Agreement  between the Adviser and Rampart,  the
Special Committee considered, among other things, the following:

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

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

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

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

     / /    Arrangements regarding the distribution of Fund shares;

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

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

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

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

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

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

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

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

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

In evaluating the Advisory  Agreement  between the Fund and Eaton Vance, and the
Sub-Advisory  Agreement  between the Adviser and Rampart,  the Special Committee

                                       7
<PAGE>

reviewed  material  furnished  by Eaton Vance and  Rampart at the initial  Board
meeting held on [ ], 2004,  including the above  referenced  considerations  and
information  relating  to the  education,  experience  and number of  investment
professionals  and other personnel who would provide services under the Advisory
Agreement and under the Sub-Advisory Agreement.  The Special Committee also took
into account the time and  attention to be devoted by senior  management  to the
Fund and the other funds in the complex.  The Special  Committee  evaluated  the
level  of skill  required  to  manage  the Fund  and  concluded  that the  human
resources  available at Eaton Vance were appropriate to fulfill  effectively the
duties  of the  Adviser  on  behalf  of the Fund.  The  Special  Committee  also
considered the business  reputation of the Adviser,  its financial resources and
professional  liability  insurance coverage and concluded that Eaton Vance would
be able to meet  any  reasonably  foreseeable  obligations  under  the  Advisory
Agreement.  The Special  Committee also  considered  the business  reputation of
Rampart and its options  strategy and its past experience in  implementing  this
strategy.

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

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

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

Based on its  consideration  of all factors that it deemed material and assisted
by the advice of its independent  counsel,  the Special Committee concluded that
the approval of the Advisory Agreement and the Sub-Advisory Agreement, including
the fee structure  (described  herein) is in the interests of shareholders.  The
Special   Committee  also  considered  that  the  Adviser  would  enter  into  a
Shareholder  Services 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>
INTERESTED TRUSTEE
  James B. Hawkes                               None

NON-INTERESTED TRUSTEES
</TABLE>

                                       8
<PAGE>

As of December 31, 200[ ], no  noninterested  Trustee or any of their  immediate
family members owned  beneficially  or of record any class of securities of EVC,
EVD,  Rampart or any person  controlling,  controlled by or under common control
with EVC, EVD or Rampart.

During the calendar  years ended December 31, 200[ ] and December 31, 200[ ], no
noninterested Trustee (or their immediate family members) had:

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

2.   Any direct or indirect  material  interest in any  transaction or series of
     similar transactions with (i) the Fund; (ii) another fund managed by EVC or
     Rampart, distributed by EVD or a person controlling, controlled by or under
     common control with EVC, EVD or Rampart;  (iii) EVC, EVD or Rampart; (iv) a
     person controlling,  controlled by or under common control with EVC, EVD or
     Rampart; or (v) an officer of any of the above; or

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

During the calendar  years ended December 31, 200[ ] and December 31, 200[ ], no
officer of EVC, EVD, Rampart or any person  controlling,  controlled by or under
common  control with EVC,  EVD or Rampart  served on the Board of Directors of a
company  where a  noninterested  Trustee  of the Fund or any of their  immediate
family members served as an officer.

Trustees of the Fund who are not affiliated  with the Adviser may elect to defer
receipt of all or a percentage of their annual fees in accordance with the terms
of a Trustees  Deferred  Compensation  Plan (the  "Trustees'  Plan").  Under the
Trustees' Plan, an eligible Trustee may elect to have his deferred fees invested
by the Fund in the  shares  of one or more  funds in the Eaton  Vance  Family of
Funds,  and the amount paid to the  Trustees  under the  Trustees'  Plan will be
determined based upon the performance of such investments. Deferral of Trustees'
fees in accordance with the Trustees' Plan will have a negligible  effect on the
Fund's assets, liabilities,  and net income per share, and will not obligate the
Fund to retain  the  services  of any  Trustee or  obligate  the Fund to pay any
particular  level of  compensation  to the  Trustee.  The  Fund  does not have a
retirement plan for its Trustees.

The fees and  expenses  of the  Trustees  of the Fund are paid by the  Fund.  (A
Trustee of the Fund who is a member of the Eaton Vance organization  receives no
compensation  from the Fund.) For the Fund's  fiscal  year ending  December  31,
2006,  it is  anticipated  that the Trustees of the Fund will earn the following
compensation  in their  capacities as Trustees.  For the year ended December 31,
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 [ ], 2004, 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 (the "Fund  Policy"),  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 described below.
The Trustees  will review the Fund's proxy voting  records from time to time and
will  annually  consider  approving  the Policies for the upcoming  year. In the
event that a conflict of interest arises between the Fund's shareholders and the
Adviser or any of its  affiliates or any affiliate of the Fund, the Adviser will
generally  refrain from voting the proxies related to the companies  giving rise
to such  conflict  until it  consults  with the  Board of the  Fund,  except  as
contemplated  under the Fund Policy. The Board's Special Committee will instruct
the Adviser on the appropriate course of action.

                                       9
<PAGE>

The Policies are designed to promote accountability of a company's management to
its   shareholders   and  to  align  the  interests  of  management  with  those
shareholders. The Adviser will generally support company management on proposals
relating to  environmental  and social policy issues,  on matters  regarding the
state of  organization  of the company and routine  matters related to corporate
administration  which are not expected to have a significant  economic impact on
the company or its shareholders.  On all other matters,  the Adviser will review
each matter on a  case-by-case  basis and reserves the right to deviate from the
Policies'  guidelines when it believes the situation  warrants such a deviation.
The Policies  include  voting  guidelines  for matters  relating to, among other
things, the election of directors,  approval of independent auditors,  executive
compensation,  corporate structure and anti-takeover  defenses.  The Adviser may
abstain  from  voting  from  time to time  where it  determines  that the  costs
associated with voting a proxy outweigh the benefits derived from exercising the
right to vote.

In addition,  the Adviser will monitor  situations that may result in a conflict
of  interest  between  the  Fund's  shareholders  and the  Adviser or any of its
affiliates  or any affiliate of the Fund by  maintaining  a list of  significant
existing and prospective  corporate clients. The Adviser's personnel responsible
for  reviewing  and voting  proxies on behalf of the Fund will  report any proxy
received  or expected  to be  received  from a company  included on that list to
members of senior  management of the Adviser  identified  in the Policies.  Such
members of senior  management will determine if a conflict exists. If a conflict
does exist,  the proxy will  either be voted  strictly  in  accordance  with the
Policies or the Adviser  will seek  instruction  on how to vote from the Special
Committee.  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.

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

The Advisory  Agreement with the Adviser continues in effect to [ ], 200 [ ] and
from year to year 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  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.

                                       10
<PAGE>

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

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. EVC through its subsidiaries and
affiliates  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,  Winthrop  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 have
transactions with various banks, including the custodian of the Fund, IBT. It is
Eaton Vance's  opinion that the terms and conditions of such  transactions  were
not and will not be  influenced  by existing  or  potential  custodial  or other
relationships between the Fund and such banks.

THE SUB-ADVISER.  Rampart acts as the Fund's investment sub-adviser and provides
advice and  assistance  in pursuing the Fund's  options  strategy  pursuant to a
sub-advisory  agreement  between  the Adviser  and  Rampart  (the  "Sub-Advisory
Agreement").  Rampart, a Massachusetts  corporation,  was founded in 1983 by its
current owners Ronald M. Egalka and David R. Fraley.  The  Sub-Adviser  provides
customized investment management services within a core competency in options to
a spectrum of institutional  clients.  Since its inception,  the Sub-Adviser has
continuously  expanded its computer  modeling and  analytical  capabilities  and
created tools to capitalize on opportunities  in the capital markets.  Rampart's
principal office is located at One International  Place, Boston, MA 02110. As of
[ ], 2004 Rampart had approximately $[ ] billion of assets under management.

Under the terms of the  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 0.20% of the average daily gross assets of the Fund.

The  Sub-Advisory  Agreement  continues  until [ ],  2006 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 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 provides that in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard for its obligations and duties
thereunder,  the  Rampart is not liable for any error or  judgment or mistake of
law or for any loss suffered by the Fund.

CODES OF ETHICS

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

                                       11
<PAGE>

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

INVESTMENT ADVISORY SERVICES

Under the general supervision of the Fund's Board of Trustees,  Eaton Vance will
carry out the  investment  and  reinvestment  of the  assets  of the Fund,  will
furnish  continuously  an  investment  program  with  respect to the Fund,  will
determine  which  securities  should be purchased,  sold or exchanged,  and will
implement such  determinations.  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  (such  prices  may not be used,  however,  where 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 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
                                       12
<PAGE>

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  fair  valuation  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.

                                       13
<PAGE>

PORTFOLIO TRADING

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

Transactions  on stock  exchanges  and other  agency  transactions  involve  the
payment  of  negotiated  brokerage  commissions.  Such  commissions  vary  among
different  broker-dealer  firms,  and  a  particular  broker-dealer  may  charge
different  commissions  according to such factors as the  difficulty and size of
the  transaction  and the  volume of  business  done  with  such  broker-dealer.
Transactions  in foreign  securities  often  involve  the  payment of  brokerage
commissions,  which may be higher  than  those in the  United  States.  There is
generally no stated commission in the case of securities traded in the over-the-
counter markets,  but the price paid or received usually includes an undisclosed
dealer  markup or  markdown.  In an  underwritten  offering the price paid often
includes a disclosed fixed commission or discount retained by the underwriter or
dealer.

Although spreads or commissions paid on portfolio security transactions will, in
the  judgment  of the  Adviser,  be  reasonable  in relation to the value of the
services provided,  commissions  exceeding those which another firm might charge
may be paid to  broker-dealers  who were  selected  to execute  transactions  on
behalf of the  Adviser's  clients in part for  providing  brokerage and research
services to the Adviser.

As  authorized  in Section  28(e) of the  Securities  Exchange  Act of 1934,  as
amended,  a broker or dealer who executes a portfolio  transaction  on behalf of
the Fund may receive a commission which is in excess of the amount of commission
another  broker or dealer would have charged for effecting  that  transaction if
the Adviser  determines in good faith that such  compensation  was reasonable in
relation to the value of the  brokerage  and research  services  provided.  This
determination may be made on the basis of that particular  transaction or on the
basis of overall  responsibilities which the Adviser and its affiliates have for
accounts over which they exercise investment discretion.  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."

                                       14
<PAGE>

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.

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 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 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 rule provides that no
firm which is a member of the NASD shall favor or disfavor the  distribution  of
shares of any particular  investment company or group of investment companies on
the basis of  brokerage  commissions  received or expected by such firm from any
source.

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. 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  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

                                       15
<PAGE>

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 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").  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 and long-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 RIC status and to avoid  paying any
federal  income or excise tax. To the extent it qualifies for treatment as a RIC
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 gain distributions.

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.  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.

The  taxation of equity  options  that the Fund  expects to write is governed by
Code Section 1234.  Pursuant to Code Section 1234,  the premium  received by the
Fund for selling a call option is not included in income at the time of receipt.
If the option  expires,  the premium is short-term  capital gain to the Fund. If
the Fund enters into a closing  transaction,  the difference  between the amount
paid to close out its position and the premium  received is  short-term  capital
gain or  loss.  If a call  option  written  by the  Fund is  exercised,  thereby
requiring the Fund to sell the  underlying  security,  the premium will increase
the amount realized upon the sale of the security and any resulting gain or loss
will be  long-term  or  short-term,  depending  upon the  holding  period of the
security. With respect to a put or call option that is purchased by the Fund, if
the option is sold,  any resulting  gain or loss will be a capital gain or loss,
and will be short-term or long-term,  depending  upon the holding period for the
option.  If the option  expires,  the  resulting  loss is a capital  loss and is
short-term or long-term,  depending upon the holding  period for the option.  If
the option is exercised,  the cost of the option,  in the case of a call option,
is  added to the  basis  of the  purchased  security  and,  in the case of a put
option,  reduces the amount  realized on the underlying  security in determining
gain or loss.  Because the Fund does not have  control  over the exercise of the
call options it writes,  such exercise or other required sales of the underlying
securities may cause the Fund to realize  capital gains or losses at inopportune
times.

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

                                       16
<PAGE>

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.

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.

The  Fund's  investment  in zero  coupon,  payment  in kind  and  certain  other
securities will cause it to realize income prior to the receipt of cash payments
with respect to these securities.  Such income will be accrued daily by the Fund
and,  in order to avoid a tax  payable by the Fund,  the Fund may be required to
liquidate  securities that it might otherwise have continued to hold in order to
generate  cash  so  that  the  Fund  may  make  required  distributions  to  its
shareholders.

Investments in lower rated or unrated  securities may present special tax issues
for the Fund to the extent that the issuers of these securities default on their
obligations  pertaining  thereto.  The Code is not entirely clear  regarding the
federal  income tax  consequences  of the Fund's  taking  certain  positions  in
connection with ownership of such distressed securities.

Any recognized gain or income  attributable to market discount on long-term debt
obligations  (i.e.,  obligations with a term of more than one year except to the
extent of a portion of the discount  attributable  to original  issue  discount)
purchased by the Fund is taxable as ordinary income. A long-term debt obligation
is generally  treated as acquired at a market  discount if  purchased  after its
original issue at a price less than (i) the stated  principal  amount payable at
maturity,  in the  case of an  obligation  that  does not  have  original  issue
discount  or (ii) in the case of an  obligation  that does have  original  issue
discount,  the sum of the  issue  price and any  original  issue  discount  that
accrued before the obligation was purchased, subject to a de minimis exclusion.

The Fund's  transactions  in futures  contracts  and options  will be subject to
special  provisions  of the Code  that,  among  other  things,  may  affect  the
character  of gains and losses  realized by the Fund (i.e.,  may affect  whether
gains or losses are  ordinary or  capital,  or  short-term  or  long-term),  may
accelerate  recognition  of income to the Fund and may defer Fund losses.  These
rules could, therefore, affect the character, amount and timing of distributions
to   shareholders.   These   provisions  also  (a)  will  require  the  Fund  to
mark-to-market certain types of the positions in its portfolio (i.e., treat them
as if they were  closed  out),  and (b) may cause the Fund to  recognize  income
without receiving cash with which to make  distributions in amounts necessary to
satisfy  the 90%  distribution  requirement  for  qualifying  to be  taxed  as a
regulated  investment company 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.

In  particular,  the Fund  expects to write call options with respect to certain
securities held by the Fund.  Depending on whether such options are exercised or
lapse,  or whether the  securities  or options are sold,  the existence of these
options  will  affect the amount  and  timing of the  recognition  of income and
whether the income qualifies as long-term capital gain.

Further,  the Fund's  transactions in options 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.

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.

                                       17
<PAGE>

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.

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.  If more than 50% of the value of the Fund's total assets
at the close of its taxable year consists of securities of foreign issuers,  the
Fund will be eligible to, and may,  file an election  with the Internal  Revenue
Service (the "Service") that will enable its shareholders, in effect, to receive
the benefit of the foreign tax credit with respect to any foreign  taxes paid by
it. Pursuant to the election, the Fund would treat those taxes as dividends paid
to its  shareholders  and each  shareholder  (1) would be required to include in
gross income,  and treat as paid by such shareholder,  a proportionate  share of
those taxes, (2) would be required to treat such share of those taxes and of any
dividend  paid  by  the  Fund  that  represents  income  from  foreign  or  U.S.
possessions sources as such shareholder's own income from those sources, and (3)
could either  deduct the foreign taxes deemed paid in computing  taxable  income
or, alternatively,  use the foregoing information in calculating the foreign tax
credit  against  federal  income tax.  The Fund will report to its  shareholders
shortly  after each taxable year their  respective  shares of foreign taxes paid
and the income from sources  within,  and taxes paid to,  foreign  countries and
U.S.  possessions if it makes this election.  An individual who has no more than
$300 ($600 for married  persons  filing  jointly) of  creditable  foreign  taxes
included  on Forms 1099 and all of whose  foreign  source  income is  "qualified
passive  income" may elect each year to be exempt from the  complicated  foreign
tax credit  limitation,  in which event such individual would be able to claim a
foreign tax credit without needing to file the detailed Form 1116 that otherwise
is required.

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.

                                       18
<PAGE>

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
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  the  Fund  property  or the  acts,
obligations  or affairs of the Fund. The  Declaration  of Trust in  coordination
with the  Fund's  By-laws  also  provides  for  indemnification  out of the Fund
property  of  any  shareholder  held  personally   liable  for  the  claims  and
liabilities  to which a  shareholder  may  become  subject by 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 per centum of the outstanding shares.

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

[ ], [ ], [ ] 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.

                                       19
<PAGE>

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT

[TO BE ADDED BY AMENDMENT]

                                       20
<PAGE>

EATON VANCE ENHANCED EQUITY INCOME FUND II

STATEMENT OF ASSETS AND LIABILITIES
[     ], 2004

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 [     ], 2004 (DATE OF ORGANIZATION) THROUGH [     ], 2004

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

                       See notes to financial statements.

                                       21
<PAGE>

NOTES TO FINANCIAL STATEMENTS

NOTE 1:  ORGANIZATION

The Eaton Vance  Enhanced  Equity Income Fund II (the "Fund") was organized as a
Massachusetts business trust on [ ], 2004, 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.  The Fund will pursue its
investment  objectives by investing  primarily in a portfolio of common  stocks,
seeking to substantially  replicate the price movements of the S&P 500 Composite
Stock Price Index ("S&P 500").  Under normal  market  conditions,  the Fund will
seek to generate  current  earnings  from option  premiums by selling index call
options on the S&P 500. In managing its common stock  investments and index call
option strategy, the Fund will employ various techniques seeking to optimize the
federal income tax consequences to common shareholders of investing in the Fund.
There can be no assurance that the Fund will achieve its investment objectives.

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 Rampart
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.

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.

                                       22
<PAGE>

                   EATON VANCE ENHANCED EQUITY INCOME FUND II

                       STATEMENT OF ADDITIONAL INFORMATION
                              [      ], 200[ ]

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

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

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

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

                                 TRANSFER AGENT
                                    PFPC Inc.
                                 P.O. Box 43027
                            Providence, RI 02940-3027
                                 (800) 331-1710

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                                    [      ]


                                       23
<PAGE>


                                     PART C

                                OTHER INFORMATION

ITEM 24.    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 November 8, 2004 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 ________, 2004, to be
              filed by amendment.

          (2) Form of Expense Reimbursement Arrangement dated __________,
              2004, to be filed by amendment.

          (3) Form of Sub-Advisory Agreement dated _____________, 2004 to
              be filed by amendment.

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

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

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

<PAGE>

      (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 ______________, 2004 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
              ___________, 2004 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 _______________, 2004
              to be filed by amendment.

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

      (m) Not applicable.

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

      (o) Not applicable.

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

      (q) Not applicable.


<PAGE>


      (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 June 4, 2002, filed as Exhibit (p) to Post-
              Effective Amendment No. 45 of Eaton Vance Investment Trust (File
              Nos. 33-1121, 811-4443) filed July 24, 2002 (Accession No.
              0000940394-02-000462) 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.

      (s) Power of Attorney dated ____________, 2004 to be filed by amendment.

ITEM 25.    MARKETING ARRANGEMENTS

      See Form of Underwriting Agreement to be filed by amendment.

ITEM 26.    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 27     PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

      None.

ITEM 28.    NUMBER OF HOLDERS OF SECURITIES

      Set forth below is the number of record holders as of November 10, 2004,
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

<PAGE>

ITEM 29.    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 29, 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 30.    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 31.    LOCATION OF ACCOUNTS AND RECORDS

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

ITEM 32.    MANAGEMENT SERVICES

      Not applicable.


<PAGE>


ITEM 33.    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 Enhanced
Equity Income Fund II 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 12th day of November 2004.



                              EATON VANCE ENHANCED
                                 EQUITY INCOME FUND II

                              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             November 12, 2004
------------------------       Executive Officer
Duncan W. Richardson

/s/ James L. O'Connor          Treasurer and Principal         November 12, 2004
---------------------          Financial and Accounting
James L. O'Connor

/s/ Alan R. Dynner             Trustee                         November 12, 2004
------------------
Alan R. Dynner

/s/ James B. Hawkes            Trustee                         November 12, 2004
-------------------
James B. Hawkes


<PAGE>

                                INDEX TO EXHIBITS


(a)   Agreement and Declaration of Trust dated November 8, 2004

(b)   By-Laws








</TEXT>
</DOCUMENT>
