<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>ev_formn2.txt
<TEXT>
    As filed  with the  Securities and Exchange  Commission on August  12,  2004
                                                     1933 Act File No. 333-
                                                     1940 Act File No. 811-21614

                     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
                     ---------------------------------------
               (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):
        |X|  when declared effective pursuant to Section 8(c)


<PAGE>


CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

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

Common Shares of             50,000       $20.00     $1,000,000     $126.70
Beneficial 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.

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


    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>

PRELIMINARY PROSPECTUS           SUBJECT TO COMPLETION           August 12, 2004

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

[EATON VANCE LOGO]          [        ] SHARES

                     EATON VANCE ENHANCED EQUITY INCOME FUND

                     COMMON SHARES

INVESTMENT OBJECTIVES. Eaton Vance Enhanced Equity Income Fund (the "Fund") is a
newly organized,  diversified,  closed-end  management  investment company.  The
Fund's  primary  investment  objective  is to  provide  current  income,  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 intends
to  sell  covered  call  options  on a  substantial  portion  of  its  portfolio
securities to seek to earn current income from option premiums.  There can be no
assurance that the Fund will achieve its investment objectives.

INVESTMENT  ADVISER.  The Fund's  investment  adviser is Eaton Vance  Management
("Eaton  Vance" or the  "Adviser").  As of July 31,  2004,  Eaton  Vance and its
subsidiaries   managed   approximately   $[  ]  billion   on  behalf  of  funds,
institutional clients and individuals,  including  approximately $[ ] billion in
equity  fund  assets.  Eaton  Vance has engaged  Rampart  Investment  Management
Company  as a  sub-adviser  to  provide  advice on and  execution  of the Fund's
options strategy.

PORTFOLIO  CONTENTS.  Under normal  market  conditions,  the Fund will invest at
least  80% of its  total  managed  assets in  common  stocks  and  other  equity
securities.  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  to help  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 10% of its total managed assets in securities of foreign issuers.

Under normal market conditions, the Fund intends to pursue its primary objective
in part 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 depends 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 premium
income  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 may at times  write call  options on all of its stock  holdings  and may at
other  times  in  certain  market  circumstances  have  no  outstanding  options
positions.  The Fund seeks to  produce  current  income  generated  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 Standard & Poor's
500 Index (or another  broad-based  securities  index  deemed  suitable for this
purpose)  in order to help  protect  against a  decline  in the value of the its
portfolio securities.

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.

<TABLE>
<CAPTION>
                                                                                PROCEEDS TO
                                            PRICE TO PUBLIC     SALES LOAD (1)     FUND
                                            ---------------     --------------     ----
----------------------------------------------------------------------------------------------
<S>   <C>                                 <C>                 <C>                <C>
      Per share                           $                   $                  $
----------------------------------------------------------------------------------------------
      Total                               $                   $                  $
----------------------------------------------------------------------------------------------
      Total assuming full exercise
      of the over-allotment option        $                   $                  $
----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

      (notes on following page)

In  addition  to the sales load,  the Fund will pay  offering  expenses of up to
$0.04 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 $0.04 per share. Eaton Vance or an affiliate has agreed to reimburse all
Fund organizational costs.

                                            .

[NAMES OF UNDERWRITERS]


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

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 [ ],
2004.

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 [ ], 2004 (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.

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

(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

                                       2
<PAGE>

[ ] and Eaton Vance.  See "Shareholder  Servicing Agent,  custodian and transfer
agent." The total amount of the  foregoing  payments will not exceed 4.5% of the
aggregate initial offering price of the Common Shares offered hereby.


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 auditors
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 (the  "Fund") is a newly  organized,
diversified, closed-end management investment company. The Fund offers investors
the  opportunity  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.  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 $0.04 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 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 intends to sell
covered call options on a  substantial  portion of its  portfolio  securities to
seek to earn current income from option premiums. 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
managed assets in common stocks and other equity securities.  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 to help 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 10% of its total  managed
assets in securities of foreign issuers.

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 Index
("S&P 500"). Eaton Vance generally considers  mid-capitalization companies to be
those   companies   having   market   capitalizations   within   the   range  of
capitalizations for the S&P 600 Mid Cap Index.

Under normal market conditions, the Fund intends to pursue its primary objective
in part 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 depends 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 premium
income  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 may at times  write call  options on all of its stock  holdings  and may at
other  times  in  certain  market  circumstances  have  no  outstanding  options
positions.  The Fund seeks to  produce  current  income  generated  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 (or
another broad-based  securities index deemed suitable for this purpose) in order
to help protect against a decline in the value of the 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, however,  invest up to any
amount less than 25% of its total managed assets in the securities of issuers in
any single industry or group of industries.

                                       4
<PAGE>

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 program  combining equity portfolio  management with
opportunistic 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 markets; and 3) moderately rising equity markets.
Only in  strongly  rising  equity  markets  would the  stock-plus-covered  calls
strategy generally be expected to underperform the stocks held.

Investment  decisions  for the  Fund  will be made  primarily  on the  basis  of
fundamental  research.  The portfolio managers utilize information  provided by,
and the  expertise  of,  the  Adviser's  research  staff  in  making  investment
decisions.  The Adviser believes that investment in companies with above average
growth  and  financial  strength  will  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.

Derivative  instruments  may also be used by the Fund to enhance returns or as a
substitute for the purchase or sale of  securities.  In addition to the intended
strategy of selling  covered call options,  the Fund may invest up to 20% of its
total  managed  assets in  derivative  instruments  acquired for  hedging,  risk
management and investment  purposes (to gain exposure to securities,  securities
markets,  markets  indices  and/or  currencies  consistent  with its  investment
objectives  and  policies),  provided  that no more than 10% of the Fund's total
managed  assets may be  invested in such  derivative  instruments  acquired  for
speculative purposes.

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,  the Fund may  invest to a limited  extent in  preferred  stocks and
engage in certain other investment practices.

LISTING

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

INVESTMENT ADVISER AND ADMINISTRATOR

Eaton Vance,  a direct  wholly-owned  subsidiary  of Eaton Vance  Corp.,  is the
Fund's investment  adviser and  administrator.  The Adviser and its subsidiaries
manage approximately $[ ] billion on behalf of funds,  institutional clients and
individuals as of July 31, 2004, including  approximately $[ ] billion in equity
fund assets.  [Twenty-eight] of the funds managed by Eaton Vance are closed-end.
Eaton Vance has engaged Rampart  Investment  Management Company as a sub-adviser
to  provide  advice  on  and  execution  of the  Fund's  options  strategy.  See
"Management of the Fund."

DISTRIBUTIONS

Commencing  with the Fund's  first  dividend,  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 amount of options premiums and dividends  received,  less cash paid to
close  written  options  positions  and  Fund  expenses.   The  Fund's  dividend
distribution  rate may be adjusted from  time-to-time.  The Fund's  Trustees may
modify this dividend policy at any time without obtaining the approval of Common
Shareholders.  The initial distribution is expected to be declared approximately
[60 to 90] days and paid  approximately [90 to 120] days after the completion of
this offering, depending on market conditions.

                                       5
<PAGE>

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 received on the sale of portfolio  investments held for less
than the long-term capital gains holding period) 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.
If the Fund's  dividend  distributions  in any year exceed the amount of its net
investment  income and net capital gain, any such excess would be  characterized
as a return of capital.

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."

To permit the Fund to maintain more stable distributions, the Fund may initially
distribute  less than the entire  amount of the cash  available  in a particular
period.  The  undistributed   amount  may  be  available  to  supplement  future
distributions.  As a  result,  the  distributions  paid  by  the  Fund  for  any
particular  month may be more or less than the amount of net  investment  income
actually  earned by the Fund  during the month,  and 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.

DIVIDEND REINVESTMENT PLAN

The Fund has established a dividend  reinvestment  plan (the "Plan").  Under the
Plan,  a Common  Shareholder  may elect to have all  dividend  and capital  gain
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.  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 do so,  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

                                       6
<PAGE>

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.  The Common Shares at any point
in time may be worth less than the original  investment,  even after taking into
account any reinvestment of dividends and distributions.

ISSUER RISK
The value of common and  preferred  stocks 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
Substantially  all of the Fund's  assets will be  invested in common  stocks and
other equity  securities 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 and
particularly  during periods of high or rising concern about  inflation,  common
stocks also have  experienced  significantly  more volatility in returns and may
not maintain their real values during  inflationary  periods.  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.  In addition,  while broad market  measures of common stocks have
historically  generated  higher  average  returns than fixed income  securities,
common  stocks have also  experienced  significantly  more  volatility  in those
returns. 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 several risks  associated with  transactions in options on securities.
For  example,  there are  significant  differences  between the  securities  and
options  markets  that could result in an imperfect  correlation  between  these
markets, causing a given transaction not to achieve its objective. 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 premium and the strike  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
the time when 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.

There can be no assurance that a liquid market will exist when the Fund seeks to
close out an option  position.  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 at some future date to discontinue  the trading
of  options  (or a  particular  class or series of  options).  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 is 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.

                                       7
<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 cannot be reflected 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, an increase 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 index put options for hedging  purposes,  the Fund will be
subject to the following additional risks. If a put option purchased by the Fund
is not sold when it has  remaining  value,  and if the  underlying  index  value
remains  equal to or greater  than the  exercise  price,  the Fund will lose its
entire  investment  in the  option.  Also,  because the Fund  purchases  puts on
indices that do not mirror the Fund's actual  portfolio  holdings,  the price of
the put may move  more or less  than  the  prices  of the  Fund's  holdings.  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.

LIMITATION ON OPTION WRITING RISK
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 call
options  represent 100 share lots of the underlying  common stock. The Fund will
not write "naked" or uncovered  call options.  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
Investment Manager or Sub-Advisor.  An exchange, board of trade or other trading
facility may order the  liquidation of positions  found to be in excess of these
limits, and it may impose certain other sanctions.

RISKS OF MID-CAP COMPANIES
The Fund may invest substantially in companies that meet the Fund's criteria for
above average growth and financial  strength but 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.

INCOME RISK
The income Common  Shareholders  receive from the Fund is based primarily on the
level of premiums  earned from options writing and the dividends and interest it
earns from its investments,  which can vary widely over the short and long-term.
Premiums  from writing call options and dividend and interest  payments the Fund
receives in respect of its portfolio  securities  can vary widely over the short
and long-term.  If prevailing  market  interest rates drop and/or there is a low
level of stock market  volatility,  the level of premiums available from options
writing and the income to Common  Shareholders  generated by such  activity will
likely  decrease  as well.  Dividends  on  common  stocks  are not fixed but are
declared at the  discretion of the an 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.  In  addition,  in a  declining  interest  rate
environment,  distribution rates of any preferred stock holdings of the Fund and
Common Shareholders' income from the Fund could drop as well.

FOREIGN SECURITY RISK
The value of foreign  securities  is  affected  by changes  in  currency  rates,
foreign tax laws  (including  withholding  tax),  government  policies  (in this
country or abroad), relations between nations and trading, settlement, custodial
and other  operational  risks.  In addition,  the costs of investing  abroad 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

                                       8
<PAGE>

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.

INTEREST RATE RISK
As discussed  above under "Income  Risk," the level of premiums  available  from
options  writing and hence the income  generated  from such  activity for Common
Shareholders  tends to decrease in  declining  interest  rate  environments.  In
addition,  there is a risk that any preferred stocks paying fixed dividend rates
in which the Fund  invests,  will decline in value  because of changes in market
interest  rates.  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 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.  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.

DERIVATIVES RISK
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 imperfect  correlation  or  unexpected  price or
interest  rate  movements.  The Fund also will be  subject  to credit  risk with
respect to the  counterparties  to the  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.  As a
general matter,  dividends  received on hedged stock positions are characterized
as ordinary  income and are not eligible for favorable tax treatment.  Dividends
received  on  securities  with  respect to which the Fund is  obligated  to make
related payments (pursuant to short sales or otherwise) will be treated as fully
taxable  ordinary  income.  In  addition,  use of  derivatives  may give rise to
short-term  capital  gains and other income that may not qualify for payments by
the Fund of tax-advantaged dividends.

LIQUIDITY RISK
The Fund may  invest up to 15% of its total  managed  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


                                       9
<PAGE>

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 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 dividend 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 as dividends and other  distributions 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 will be borne by Common Shareholders and consequently
will 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  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.

MARKET DISRUPTION
The  terrorist  attacks  in the  United  States  on  September  11,  2001  had a
disruptive effect on the securities markets. The Fund cannot predict the effects
of similar  events in the future on the U.S.  economy  and  securities  markets.
These  terrorist  attacks and related  events,  including  the war in Iraq,  its
aftermath,  and continuing  occupation of Iraq by coalition forces,  have led to
increased  short-term  market  volatility and may have long-term effects on U.S.
and world economies and markets.  A similar  disruption of the financial markets
could impact interest rates, auctions,  secondary trading, ratings, credit risk,
inflation and other factors relating to the Common Shares.

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."

                                       10
<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)             [ ]%
 Expenses borne by the Fund                                             [ ](1)
 Dividend reinvestment plan fees                                        None(2)


                                                PERCENTAGE OF NET ASSETS
                                                      ATTRIBUTABLE
                                                    TO COMMON SHARES
--------------------------------------------------------------------------------
Annual expenses
      Investment advisory fee                                           [ ]
      Other expenses                                                    [ ]%(3)
      Total annual expenses                                             [ ]%

----------

      (1) Eaton Vance or an affiliate has agreed to reimburse all organizational
      costs and pay all offering costs (other than sales load) that exceed $0.04
      per Common Share ([ ]% 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
      net annual expenses of [ ]% of net assets attributable to Common Shares in
      years 1 through 5 increasing to [ ]% in years 9 and 10 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,  that fees and expenses  increase as
      described in note 2 below and that all  dividends  and  distributions  are
      reinvested at net asset value. Actual expenses may be greater or less than

                                       11
<PAGE>

      those assumed.  Moreover,  the Fund's actual rate of return may be greater
      or less than the hypothetical 5% return shown in the example.

                                       12
<PAGE>

The Fund

Eaton  Vance  Enhanced  Equity  Income Fund (the  "Fund") is a newly  organized,
diversified,  closed-end management investment company registered under the 1940
Act. The Fund was organized as a Massachusetts business trust on August 11, 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 $0.04 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 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 intends to sell
covered call options on a  substantial  portion of its  portfolio  securities to
seek to earn current income from option premiums. There can be no assurance that
the Fund will achieve its investment objectives.

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 Index
("S&P 500"). Eaton Vance generally considers  mid-capitalization companies to be
those   companies   having   market   capitalizations   within   the   range  of
capitalizations for the S&P 600 Mid Cap Index.

PRIMARY INVESTMENT POLICIES

GENERAL  COMPOSITION OF THE FUND Under normal market  conditions,  the Fund will
invest at least  80% of its total  managed  assets  in common  stocks  and other
equity securities.  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  to help  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 10% of its total managed assets in securities of foreign issuers.

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 Index
("S&P 500"). Eaton Vance generally considers  mid-capitalization companies to be
those   companies   having   market   capitalizations   within   the   range  of
capitalizations for the S&P 600 Mid Cap Index.

The Fund's policy of investing, in normal market circumstances,  at least 80% of
its total  managed  assets in common  stocks and other equity  securities 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 following the provision of 60 days prior written notice to the
Fund's shareholders.

                                       13
<PAGE>

Under normal market conditions, the Fund intends to pursue its primary objective
in part 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 depends 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 premium
income  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 may at times  write call  options on all of its stock  holdings  and may at
other  times  in  certain  market  circumstances  have  no  outstanding  options
positions.  The Fund seeks to  produce  current  income  generated  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 (or
another broad-based  securities index deemed suitable for this purpose) in order
to help protect against a decline in the value of its portfolio securities.  The
premiums  paid to acquire  any such  index put  options  will  reduce the income
earned from writing covered call options on portfolio securities.

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 managed assets in the securities of issuers in
any single industry or group of industries. See "Investment objectives, policies
and risks--Additional 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  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 program  combining equity portfolio  management with
opportunistic 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 markets; and 3) moderately rising equity markets.
Only in  strongly  rising  equity  markets  would the  stock-plus-covered  calls
strategy generally be expected be expected to underperform the stocks held.

Investment  decisions  for the  Fund  will be made  primarily  on the  basis  of
fundamental  research.  The portfolio managers utilize information  provided by,
and the  expertise  of,  the  Adviser's  research  staff  in  making  investment
decisions.  The Adviser believes that investment in companies with above average
growth  and  financial  strength  will  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.

COMMON STOCKS
Common stock represents an equity ownership interest in an issuer. Common stocks
generally have voting rights. 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.

OPTIONS--IN GENERAL
The Fund will pursue its strategy of writing  (selling)  covered call options on
common stocks.  The Fund seeks to produce  current income  generated from option
writing  premiums  and,  to a lesser  extent,  from  dividends.  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

                                       14
<PAGE>

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 virtually all options on individual  stocks trade American style,
the Adviser believes that  substantially  all of the options written by the Fund
will be American 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 of Trustees) 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 "Taxation."

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 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.

CALL OPTIONS AND COVERED CALL WRITING
The Fund will not  purchase  call  options as an  investment.  It will  follow a
strategy known as "covered call option writing," which is a strategy designed to
produce income and offset a portion of a market decline in the underlying common
stock. This strategy will be the Fund's primary  investment  strategy.  The Fund
will  only  "sell"  or  "write"  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 a single  option is 100  shares of the  common
stock.  There are four items needed to identify any option:  (1) the  underlying
security,  (2) the expiration month, (3) the strike price and (4) the type (call
or put). For example,  ten XYZ Co. October 40 call options  provide the right to
purchase 1,000 shares of XYZ Co. on or before October 16, 2004 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." Most of the options that will be sold by the
Fund are expected to be out-of-the-money, allowing for potential appreciation in
addition to the  proceeds  from the sale of the option.  An option  whose strike
price  is  below  the  current   price  of  the   underlying   stock  is  called
"in-the-money"  and will be sold by the Fund as a  defensive  measure to protect
against a possible decline in the underlying stock.

The following is a conceptual example of a covered call transaction,  making the
following assumptions: (1) a common stock currently trading at $37.15 per share;
(2) a 6-month  call  option is  written  with a strike  price of $40 (I.E.  7.7%
higher  than the current  market  price) and (3) the writer  receives  $2.45 (or
6.6%) of the common stock's value as premium income.

This  example is not meant to represent  the  performance  of any actual  common
stock, option contract or the Fund itself.

Under  this  scenario,  before  giving  effect to any change in the price of the
stock, the covered-call  writer receives the premium,  representing  6.6% of the

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<PAGE>

common stock's  value,  regardless of the stock's  performance  over the 6-month
period until option expiration.  If the stock remains unchanged, the option will
expire and there  would be a 6.6% return for the  6-month  period.  If the stock
were to decline in price by 6.6%, the strategy would  "break-even" thus offering
no gain or loss.  If the  stock  were to climb to a price of $40 or  above,  the
option  would be  exercised  and the stock would  return 7.7%  coupled  with the
option premium of 6.6% for a total return of 14.3%.

Under this scenario, the investor would not benefit from any appreciation of the
stock above $40, and thus be limited to a 14.3% total return. The premium income
from writing the call option serves to offset some of the unrealized loss on the
stock in the event that the price of the stock  declines,  but if the stock were
to  decline  more  than  6.6%  under  this  scenario,  the  investor's  downside
protection is eliminated and the stock could eventually become worthless.

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 most options that are written  against
Fund stock holdings will be repurchased  prior to the option's  expiration date,
generating  a gain  or  loss  in the  options.  If the  options  were  not to be
repurchased,  the option  holder would  exercise  their rights and buy the stock
from the Fund at the strike price if the stock traded at a higher price than the
strike price.

Option contracts are originated and standardized by an independent entity called
the OCC. Currently, 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,  NYSE, Pacific Stock Exchange,  Philadelphia Stock Exchange
or various other U.S. options exchanges.  The Fund's Investment Manager believes
that there  exists a large  trading  volume of  options,  easily  sufficient  to
fulfill the Fund's option requirements to fully implement its strategies.

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 Standard & Poor's 500 Index (or another  broad-based
securities  index deemed  suitable for this  purpose) to help protect  against a
decline in the value of the Fund's  portfolio  securities.  The premiums paid to
acquire  index put options will reduce the income  earned from  writing  covered
call options on  portfolio  securities.  However,  because the premiums on index
options  generally  are  significantly  lower  than the  premiums  on options on
individual  securities,  the Fund's option writing strategy is still expected to
produce net positive income.

ADDITIONAL INVESTMENT PRACTICES

In  addition  to its  primary  investment  policies,  the Fund may engage in the
following  investment  practices to a limited extent.  Although certain of these
investments,  such as common stocks of foreign issuers and preferred stocks, are
equity securities for purposes of the Fund's policy of investing at least 80% of
its total  assets in common  stocks and other  equity  securities,  their use is
expected to be limited.  The Fund may only invest in the  aggregate up to 20% of
its total managed assets in all investments  described below that are not equity
securities.

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.

FOREIGN SECURITIES
The Fund may  invest up to 10% of its total  managed  assets  in  securities  of
issuers  located of issuers  located in countries  other than the United States.
The Fund will not invest in issuers  located in emerging market  countries.  The
value of foreign  securities is affected by changes in currency  rates,  foreign
tax laws (including  withholding tax),  government  policies (in this country or
abroad), relations between nations and trading, settlement,  custodial and other
operational  risks.  In addition,  the costs of investing  abroad are  generally

                                       16
<PAGE>

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).

The  Fund  may  invest  in  American  Depositary  Receipts  ("ADRs"),   European
Depositary Receipts ("EDRs") and Global Depositary Receipts ("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.

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.  Income
payments on  convertible  fixed-income  obligations  will be taxable as ordinary
income;  dividend payments on convertible preferred stocks may be tax-advantaged
dividends depending on the nature of the preferred 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.

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 within  thirty days of the end of the Fund's
taxable year 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.  Dividends  received on securities with respect to which
the Fund is  obligated  to make  related  payments  (pursuant  to short sales or
otherwise) will be treated as fully taxable ordinary income.

TEMPORARY INVESTMENTS
Interest  generated by investments in cash or cash  equivalents  will be taxable
for federal income tax purposes at rates applicable to ordinary  income.  During
unusual market  circumstances,  the Fund may invest  temporarily in cash or cash
equivalents,  which may be inconsistent with the Fund's  investment  objectives.
Cash  equivalents  are highly liquid,  short-term  securities such as commercial

                                       17
<PAGE>

paper, time deposits,  certificates of deposit,  short-term notes and short-term
U.S. government obligations. During such market circumstances,  the Fund may not
pay tax-advantaged dividends.

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 be expected to 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  are not entered into for the purpose of
investment leverage.

ILLIQUID SECURITIES
The Fund may  invest up to 15% of its total  managed  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 such securities at a price  representing  their fair
value  until  such  time  as  such  securities  may  be  sold  publicly.   Where
registration is required, a considerable period may elapse between a decision to
sell the securities  and the time when 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.

SWAPS
Swap  contracts  may be  purchased  or sold to  hedge  against  fluctuations  in
securities prices,  interest rates or market conditions,  to change the duration
of the overall  portfolio,  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  "basket"  of  securities  representing  a
particular 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.  These  instruments 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.

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).  Income payments
on interest rate swaps are taxable as ordinary income.

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). Amounts realized on
total return swaps may be taxable as ordinary  income  (i.e.,  income other than
tax-advantaged  dividends),  capital gain or a combination  thereof depending on
the nature of the swap contract.

                                       18
<PAGE>

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 unanticipated  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 foreign currency contract held by the Fund is a "Section 1256 contract" under
the Code,  the contract will be  marked-to-market  annually and any gain or loss
will be treated as 60% long-term and 40%  short-term,  regardless of the holding
period for such contract.

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.  In the
judgment  of the  Adviser,  the loans will be made only to  organizations  whose
credit quality or claims paying ability is considered 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.  Income  realized from  securities  lending and
payments in lieu of dividends on loaned stock will generally be fully taxable as
ordinary income.

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.

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 fully 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 does not expect that it will exceed 100%
(excluding turnover of securities having a maturity of one year or less). A high
turnover rate (100% or more)  necessarily  involves greater trading costs to the
Fund and may result in greater realization of net short-term capital gains.

ADDITIONAL RISK CONSIDERATIONS

                                       19
<PAGE>

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.  The Common Shares at any point
in time may be worth less than the original  investment,  even after taking into
account any reinvestment of dividends and distributions.

ISSUER RISK
The value of common and  preferred  stocks 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
Substantially  all of the Fund's  assets will be  invested in common  stocks and
other equity securities, 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 and
particularly  during periods of high or rising concern about  inflation,  common
stocks also have  experienced  significantly  more volatility in returns and may
not maintain their real values during  inflationary  periods.  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.  In addition,  while broad market  measures of common stocks have
historically  generated  higher  average  returns than fixed income  securities,
common  stocks have also  experienced  significantly  more  volatility  in those
returns. 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 several risks  associated with  transactions in options on securities.
For  example,  there are  significant  differences  between the  securities  and
options  markets  that could result in an imperfect  correlation  between  these
markets, causing a given transaction not to achieve its objective. 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 premium and the strike  price of the call,  but has
retained the risk of loss should the price of the underlying  security  decline.
The writer of an option has no control  over the time when 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.

There can be no assurance that a liquid market will exist when the Fund seeks to
close out an option  position.  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 at some future date to discontinue  the trading
of  options  (or a  particular  class or series of  options).  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 is 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.

                                       20
<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 cannot be reflected 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, an increase 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 index put options for hedging  purposes,  the Fund will be
subject to the following additional risks. If a put option purchased by the Fund
is not sold when it has  remaining  value,  and if the  underlying  index  value
remains  equal to or greater  than the  exercise  price,  the Fund will lose its
entire investment in the option. Also, because the Fund purchase puts on indices
that do not mirror the Fund's actual  portfolio  holdings,  the price of the put
may move more or less than the prices of the Fund's holdings. 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.

LIMITATION ON OPTION WRITING RISK
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 call
options  represent 100 share lots of the underlying  common stock. The Fund will
not write "naked" or uncovered  call options.  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
Investment  Manager.  An exchange,  board of trade or other trading facility may
order the liquidation of positions found to be in excess of these limits, and it
may impose certain other sanctions.

RISKS OF MID-CAP COMPANIES
The Fund may invest substantially in companies that meet the Fund's criteria for
above average growth and financial  strength but 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.

INCOME RISK
The income Common  Shareholders  receive from the Fund is based primarily on the
level of premiums  earned from options writing and the dividends and interest it
earns from its investments,  which can vary widely over the short and long-term.
Premiums  from writing call options and dividend and interest  payments the Fund
receives in respect of its portfolio  securities  can vary widely over the short
and long-term.  If prevailing  market  interest rates drop and/or there is a low
level of stock market  volatility,  the level of premiums available from options
writing and the income to Common  Shareholders  generated by such  activity will
likely  decrease  as well.  Dividends  on  common  stocks  are not fixed but are
declared at the  discretion of the an 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.  In  addition,  in a  declining  interest  rate
environment,  distribution rates of any preferred stock holdings of the Fund and
Common Shareholders' income from the Fund could drop as well.

Pursuant to its  distribution  policy,  the Fund intends to make regular monthly
distributions  on its Common Shares.  In order to make such  distributions,  the
Fund may have to sell a  portion  of its  investment  portfolio  at a time  when
independent  investment  judgment may not dictate such action. If, for any year,
the total  distributions  made  under the  Fund's  policy  exceed the Fund's net
investment  income and net realized capital gains, the excess will be treated as
a tax-free return of capital to each Common Shareholder (up to the amount of the

                                       21
<PAGE>

Common Shareholder's basis in his or her Shares) and thereafter as gain from the
sale of Shares.  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 of his or her Common Shares.  To the extent the Fund's dividend
policy results in distributions  in excess of its net investment  income and net
realized capital gains,  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  are most likely to
contain a return of capital  component in circumstances  involving rising equity
markets with low volatility.  In such circumstances,  income from option writing
available for distribution is likely to decrease.

FOREIGN SECURITY RISK
The Fund may have  significant  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.

INTEREST RATE RISK
As discussed  above under "Income  Risk," the level of premiums  available  from
options  writing and hence the income  generated  from such  activity for Common
Shareholders  tends to decrease in  declining  interest  rate  environments.  In
addition,  there is a risk that any preferred stocks paying fixed dividend rates
in which the Fund  invests,  will decline in value  because of changes in market
interest  rates.  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 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.  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.

DERIVATIVES RISK
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 imperfect  correlation  or  unexpected  price or
interest  rate  movements.  The Fund also will be  subject  to credit  risk with
respect to the  counterparties  to the  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.  As a
general matter,  dividends  received on hedged stock positions are characterized
as ordinary  income and are not eligible for favorable tax treatment.  Dividends
received  on  securities  with  respect to which the Fund is  obligated  to make
related payments (pursuant to short sales or otherwise) will be treated as fully

                                       22
<PAGE>

taxable  ordinary  income.  In  addition,  use of  derivatives  may give rise to
short-term capital gains and other income that would not qualify for payments by
the Fund of tax-advantaged dividends.

LIQUIDITY RISK
The Fund may  invest up to 15% of its total  managed  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 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 dividend 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 as dividends and other  distributions 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 will be borne by Common Shareholders and consequently
will 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  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.

MARKET DISRUPTION
The  terrorist  attacks  in the  United  States  on  September  11,  2001  had a
disruptive effect on the securities markets. The Fund cannot predict the effects
of similar  events in the future on the U.S.  economy  and  securities  markets.
These  terrorist  attacks and related  events,  including  the war in Iraq,  its
aftermath,  and continuing  occupation of Iraq by coalition forces,  have led to
increased  short-term  market  volatility and may have long-term effects on U.S.
and world economies and markets.  A similar  disruption of the financial markets
could impact interest rates, auctions,  secondary trading, ratings, credit risk,
inflation and other factors relating to the Common Shares.

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."

                                       23
<PAGE>

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), 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  $[ ] billion as of July 31,  2004,
including  approximately  $[ ] 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 [ ]% of the  average  daily
gross assets of the Fund. Eaton Vance may voluntarily  reimburse additional fees
and  expenses  but  is  under  no  obligation  to  do  so.  Any  such  voluntary
reimbursements  may be  terminated  at any time.  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.

Duncan W. Richardson,  Walter Row and other Eaton Vance investment professionals
comprise the  investment  team  responsible  for the overall  management  of the
Fund's  investments.  Mr.  Richardson  and Mr.  Row are the  portfolio  managers
responsible for the day-to-day management of the Fund's investment portfolio.

Mr.  Richardson  is a Senior  Vice  President  and the Chief  Equity  Investment
Officer of Eaton Vance.  He has been an Eaton Vance  portfolio  manager for more
than 5 years and also manages other Eaton Vance equity portfolios.

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.

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 was founded in
1983 by its current owners Ronald M. Egalka and David R. Fraley. The Sub-Adviser
provides customized investment management services within its core competency in
options 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 capitalize on opportunities in the
capital markets.

Mr. Egalka and Mr. Fraley are responsible for the development and implementation
of Rampart's options strategy utilized in managing the Fund.

                                       24
<PAGE>

Mr.  Egalka is  President  and CEO of Rampart.  He is also  President of Rampart
Securities,  Inc.,  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 is  Manager  of  Marketing  and  Client  Service  and also  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. He worked with the Corporate  Financial  Services
Division as the  Northeast  Regional  Manager.  After that, he was the Northeast
Manager for the Institutional Options Department and also directed and performed
underwriting  for Merrill  Lynch's - Colonial  Corporate  Cash  Trust,  a hedged
equity registered investment company managed by Mr. Egalka.

Under the terms of the  Sub-Advisory  Agreement (the  "Sub-Advisory  Agreement")
among the Fund, Eaton Vance and the Sub-Adviser,  Eaton Vance,  Eaton Vance (and
not the Fund) will pay the  Sub-Adviser  a fee at a annual rate equal to [ ]% of
the Fund's  average  daily gross  assets.  Pursuant to the terms of the Advisory
Agreement,  Eaton Vance,  upon approval by the Board of Trustees,  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.

The Fund and the  Adviser  have  adopted a Code of Ethics  relating  to personal
securities transactions. The Sub-Adviser has also adopted such a Code of Ethics.
The Codes of Ethics  permits  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 Code of Ethics.

Eaton Vance  serves as  administrator  of the Fund,  but  currently  receives no
compensation  for  providing  administrative  services  to the  Fund.  Under  an
Administration Agreement with the Fund (the "Administration  Agreement"),  Eaton
Vance is responsible for managing the business  affairs of the Fund,  subject to
the  supervision  of the Fund's Board.  Eaton Vance will furnish to the Fund all
office facilities,  equipment and personnel for administering the affairs of the
Fund. Eaton Vance's administrative  services include recordkeeping,  preparation
and filing of  documents  required to comply with  federal and state  securities
laws,  supervising  the activities of the Fund's  custodian and transfer  agent,
providing   assistance  in  connection  with  the  Trustees'  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  dividend,  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 amount of options premiums and dividends  received,  less cash paid to
close  written  options  positions  and  Fund  expenses.   The  Fund's  dividend
distribution  rate may be adjusted from  time-to-time.  The Fund's  Trustees may
modify this dividend policy at any time without obtaining the approval of Common
Shareholders.  The initial distribution is expected to be declared approximately
[60 to 90] days and paid  approximately [90 to 120] 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 received on the sale of portfolio  investments held for less

                                       25
<PAGE>

than the long-term capital gains holding period) 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.
If the Fund's  dividend  distributions  in any year exceed the amount of its net
investment  income and net capital gain, any such excess would be  characterized
as a return of capital.

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."

To permit the Fund to maintain more stable distributions, the Fund may initially
distribute  less than the entire  amount of the cash  available  in a particular
period.  The  undistributed   amount  may  be  available  to  supplement  future
distributions.  As a  result,  the  distributions  paid  by  the  Fund  for  any
particular  month may be more or less than the amount of net  investment  income
actually  earned by the Fund  during the month,  and 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.

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 Shares) and  thereafter as gain from the sale of Shares.  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 of his or her Common
Shares.  To the extent the Fund's  dividend 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  are most  likely to  contain a return of capital
component in circumstances  involving rising equity markets with low volatility.
In such circumstances,  income from option writing available for distribution is
likely to decrease.

The Fund has applied for an order from the SEC granting  exemption  from Section
19(b) of the  Investment  Company Act of 1940, as amended  ("Investment  Company
Act" or "1940  Act"),  and Rule 19b-1  thereunder  to permit the Fund to include
realized  long-term  capital  gains as a part of its  regular  distributions  to
Common  Shareholders  more  frequently  than would otherwise be permitted by the
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  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
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 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 at
a fixed rate per Common  Share based upon its  projected  annual cash  available
from option  premiums and dividends 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  dividends"),  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

                                       26
<PAGE>

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 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 of his or her Common  Shares..  See below for a summary of the  maximum tax
rates  applicable  to  capital  gain  (including  capital  gain  dividends).   A
corporation  that  owns  Fund  shares  generally  will  not be  entitled  to the
dividends  received deduction with respect to all the dividends it receives from
the Fund. Fund dividend  payments that are attributable to qualifying  dividends
received by the Fund from certain domestic corporations may be designated by the
Fund as being eligible for the dividends received deduction.

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
and other requirements are satisfied by the Common Shareholder and the dividends
are attributable to qualified  dividend income received by the Fund itself.  For
this purpose,  "qualified  dividend income" means dividends received by the Fund
from United States corporations and "qualified foreign  corporations,"  provided
that the Fund satisfies certain holding period and other requirements in respect
of  the  stock  of  such  corporations.   In  the  case  of  securities  lending
transactions, payments in lieu of dividends do not constitute qualified dividend
income.  Dividends received by the Fund from REITs are qualified dividend income
eligible for this lower tax rate only in limited  circumstances.  These  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  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 that a portion
of the Fund's income distributions will not be fully taxable as ordinary income.

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

The Tax Act, in amending  certain Code provisions to provide that dividends paid
by a  regulated  investment  company,  such as the  Fund,  would be  treated  as
"qualified  dividend income" to the extent that such dividends were derived from
qualified dividend income received by the regulated  investment company,  failed
to make certain  conforming  amendments  to other  provisions  of the Code. As a
result,  the  Code  contains  certain  contradictory  provisions  creating  some
ambiguity  as to whether the Code  authorizes  the Fund to  designate in certain
circumstances as qualified dividend income that portion of its dividends that is
derived from dividends it has received from qualified foreign corporations.  The
Fund believes,  however,  that the intention of the Tax Act was to authorize the
Fund's  designation of such  dividends as qualified  dividend  income.  Further,
bills  proposing to make technical  corrections  to the Tax Act (the  "Technical

                                       27
<PAGE>

Corrections  Bills")  have  been  filed  in both  the  Senate  and the  House of
Representatives,  and these Technical  Corrections Bills would amend the Code to
make it clear that  dividends  paid by a  regulated  investment  company  can be
designated  qualified  dividend  income to the extent that they are derived from
dividends received from qualified foreign corporations.  The Fund cannot predict
whether or in what forms the Technical  Corrections Bills will be enacted or, if
enacted, when that will occur. Nevertheless, the Treasury Department and the IRS
have announced that they will apply the provisions of the Technical  Corrections
Bills relating to qualified  dividend income in advance of the enactment of such
legislation.

A dividend  paid by the Fund to a Common  Shareholder  (whether  paid in cash or
reinvested in additional  Fund shares) may not be treated as qualified  dividend
income of the Common Shareholder if (1) the dividend is received with respect to
any share held for fewer than 61 days during the 120-day period beginning on the
date which is 60 days  before the date on which such share  becomes  ex-dividend
with respect to such dividend (the 120-day period would be expanded to a 121-day
period  under the  Technical  Corrections  Bills),  (2) to the  extent  that the
shareholder  is  under  an  obligation  (whether  pursuant  to a  short  sale or
otherwise) to make related  payments with respect to positions in  substantially
similar  or  related  property,  or (3) if the  shareholder  elects  to have the
dividend  treated  as  investment  income  for  purposes  of the  limitation  on
deductibility of investment interest.

The Fund's  transactions  in options are subject to special and complex  federal
income tax  provisions  that may, among other things,  (i) treat  dividends that
would otherwise constitute  qualified dividend income as non-qualified  dividend
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 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 dividends) (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  dividends  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  dividend  (including a capital gain  dividend),
the  purchase  price  likely  will  reflect  the value of the  dividend  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.

                                       28
<PAGE>

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.  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  of dividends  (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. If Common  Shareholders do not participate,
such Common  Shareholders  will receive all  distributions in cash paid by check
mailed directly to them by PFPC Inc., as dividend paying agent.

PFPC Inc.  (the "Plan  Agent")  serves as agent for the Common  Shareholders  in
administering the Plan. Common  Shareholders who elect not to participate in the
Plan will  receive all  distributions  of dividends 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 dividend 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 dividend,  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  dividend  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
dividend 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
dividend  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 dividend amount
in  Common  Shares  acquired  on  behalf  of  the  participants  in  open-market
purchases.

In the event of a market  discount on the dividend  payment date, the Plan Agent
will have up to 30 days after the  dividend  payment date to invest the dividend
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  dividend  had been paid in newly  issued  Common  Shares on the dividend
payment date.  Therefore,  the Plan provides that if the Plan Agent is unable to
invest the full dividend  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 dividend 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 dividends 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 dividends.

                                       29
<PAGE>

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.  Common  Shareholders  will be charged a $5.00  service
charge and pay  brokerage  charges if such Common  Shareholder  directs the Plan
Agent to sell Common Shares held in a dividend reinvestment account.

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

Description of capital structure

The Fund is an  unincorporated  business trust established under the laws of The
Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated and
filed  with  the  Secretary  of  The   Commonwealth  on  August  11,  2004  (the
"Declaration of Trust").  The Declaration of Trust provides that the Trustees of
the Fund may authorize  separate classes of shares of beneficial  interest.  The
Trustees have 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 dividends  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 dividends 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 Trustees 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 Fund as though  they were
general  partners,  the  provisions  of the  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 dividend or other
distribution on its Common Shares,  unless at the time of such declaration,  (i)
all accrued dividends 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  dividend  or  other  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 dividends 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 the  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

                                       30
<PAGE>

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
dividends to the holders of the  preferred  shares in certain  circumstances  in
connection  with  any  such  impairment  of the  Fund's  status  as a  regulated
investment  company.  See  "Investment  objectives,   policies  and  risks"  and
"Distributions."  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.

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 Fund's Common Shares trading at
a price, which is 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 the 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 dividends  thereon (on a
cumulative basis), whether or not earned or declared. The terms of any preferred
shares, including their dividend 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 the 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 the preferred shares may
also enable the Fund to lengthen such intervals.  At times, the dividend 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.

                                       31
<PAGE>

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.  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 Fund's  Trustees  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
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,
which 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 not 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 dividends 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  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 dividend

                                       32
<PAGE>

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 as dividends and other distributions 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 will be borne by Common Shareholders
and  consequently  will 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.

ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST

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

                                       33
<PAGE>

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.

                                       34
<PAGE>

Underwriting

The underwriters named below (the "Underwriters"), acting through [ ], [ ] and [
] 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.

UNDERWRITERS                           NUMBER
                                       OF
                                       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 [ ],
2004.

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
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

                                       35
<PAGE>

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.  As
described  below under  "Shareholder  Servicing  Agent,  custodian  and transfer
agent,"  [ ] will  provide  shareholder  services  to  the  Fund  pursuant  to a
shareholder servicing agreement with Eaton Vance.

Compensation  received  pursuant to the  Additional  Compensation  Agreement and
compensation received by [ ] pursuant to the Shareholder Servicing Agreement (as
defined below) together will not exceed 4.5% of the aggregate  initial  offering
price of the Common Shares offered hereby, and the total  compensation  received
by the Underwriters will not exceed 9.0% of the aggregate initial offering price
of the Common Shares offered hereby.

Shareholder Servicing Agent, custodian and transfer agent

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  Trustees of the Fund 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 of Trustees of the Fund 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

                                       36
<PAGE>

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 0.10% of the Fund's  average daily gross assets.
Rampart  Investment  Management  Company has agreed to reimburse  Eaton Vance in
certain  circumstances  for a portion of the payments  that Eaton Vance makes to
the Shareholder Servicing Agent under the Shareholder  Servicing Agreement.  The
sum of the  payments  payable  to the  Shareholder  Servicing  Agent  under  the
Shareholder  Servicing Agreement will not exceed 3.029% 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  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.

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 auditors

[ ], Boston,  Massachusetts  are the independent  auditors 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.

                                       37
<PAGE>

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.

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 auditors
Statement Of Assets And Liabilities
Notes to financial statements
APPENDIX A:   Ratings                     A-

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:

-    Only such  information  received  from you,  through  application  forms or
     otherwise, and information about your Fund transactions will be collected.

-    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).

-    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.

                                       38
<PAGE>

                               (EATON VANCE LOGO)

                                                                      CE-TAGDOFP

                                       39

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION    SUBJECT TO COMPLETION     August 12, 2004


STATEMENT OF ADDITIONAL INFORMATION
[          ], 2004

EATON VANCE ENHANCED EQUITY INCOME FUND

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

TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----

Additional investment information and restrictions
Trustees and officers.......................
Investment advisory and other services......
Determination of net asset value............
Portfolio trading...........................
Taxes.......................................
Other information...........................
Independent auditors........................
Statement Of Assets And Liabilities.........
Notes to financial statements...............
APPENDIX A: Ratings.........................                                 A-

THIS  STATEMENT OF  ADDITIONAL  INFORMATION  ("SAI") IS NOT A PROSPECTUS  AND IS
AUTHORIZED  FOR  DISTRIBUTION  TO  PROSPECTIVE  INVESTORS  ONLY IF  PRECEDED  OR
ACCOMPANIED BY THE  PROSPECTUS OF EATON VANCE  ENHANCED  EQUITY INCOME FUND (THE
"FUND")  DATED  [  ],  2004,  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 objective.

EQUITY INVESTMENTS.  As described in the Prospectus,  the Fund invests primarily
in common stocks and other equity securities.

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.   Such
transactions  may be in the U.S. or abroad and may include the  purchase or sale
of futures contracts on indices and options on stock index futures, the purchase
of put options and the sale of call options on  securities  held,  equity swaps.
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  than 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.

A put option on a security may be written only if the Adviser intends to acquire
the security. Call options written on securities will be covered by ownership of
the securities subject to the call option or an offsetting option.

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).  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.

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 within  thirty days of the end of the Fund's
taxable year and the underlying appreciated securities position is held unhedged
for at least the next  sixty  days  after the  hedging  transaction  is  closed.
Failure to meet these  requirements would trigger the recognition of gain on the
underlying appreciated securities position under the federal tax laws applicable
to constructive sales.

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  objective 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


                                       3
<PAGE>

    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
    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  objective  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.

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  ("Rampart")  to serve as
sub-adviser to the Fund to provide advice and assistance  with the  development,
implementation  and  execution  of the Fund's  options  strategy,  pursuant to a
sub-advisory agreement (the "Sub-Advisory Agreement) among the Fund, the Adviser
and Rampart.


[INDEPENDENT  TRUSTEE  INFORMATION  IN  REQUIRED  TABULAR  FORMAT TO BE ADDED BY
AMENDMENT UPON ELECTION OF FULL BOARD OF TRUSTEES.]
<TABLE>
<CAPTION>
                                                                                      NUMBER OF
                                        TERM OF OFFICE                             PORTFOLIOS IN
                                          AND LENGTH                                FUND COMPLEX          OTHER
NAME AND                 POSITION(S)      OF SERVICE     PRINCIPAL OCCUPATION(S)     OVERSEEN BY      DIRECTORSHIPS
DATE OF BIRTH           WITH THE FUND                    DURING PAST FIVE YEARS      TRUSTEE(1)           HELD
--------------------------------------------------------------------------------------------------------------------

TRUSTEES

<S>                     <C>             <C>             <C>                             <C>         <C>
James B. Hawkes         Trustee and     Since 8/__/04   Chairman, President and         [193]       Director of
11/9/41                 Vice President                  Chief Executive Officer                     EVC
                                                        of BMR, Eaton Vance, EVC
                                                        and EV; Director of EV;
                                                        Vice President and
                                                        Director of EVD. Trustee
                                                        and/or officer of 193
                                                        registered investment
                                                        companies in the Eaton
                                                        Vance Fund Complex. Mr.
                                                        Hawkes is an interested
                                                        person because of his
                                                        positions with BMR,
                                                        Eaton Vance, EVC and EV,
                                                        which are affiliates of
                                                        the Fund.


Alan R. Dynner          Trustee and     Since 8/__/04   Vice President,                             None
10/10/40                Secretary                       Secretary And Chief
                                                        Legal Officer of BMR,
                                                        Eaton Vance, EVD, EV and
                                                        EVC. Officer of [193]
                                                        registered investment
                                                        companies managed by
                                                        Eaton Vance or BMR


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

</TABLE>



                                       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 _/__/04   Senior Vice President and Chief Equity
10/26/57                     Chief                           Investment Officer of Eaton Vance and BMR.
                                                             Executive Officer of 44 registered investment
                                                             companies Officer managed by Eaton Vance or
                                                             BMR.


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



Walter Row                   Vice President  Since _/__/04
4/8/62                                                       .

James L. O'Connor            Treasurer       Since _/__/04   Vice President of BMR, Eaton Vance and EVD.
4/1/45                                                       Officer of 118 registered investment companies
                                                             managed by Eaton Vance or BMR.

Alan R. Dynner               Secretary       Since _/__/04   Vice President, Secretary and Chief Legal
10/10/40                                                     Officer of BMR, Eaton Vance, EVD, EV and EVC.
                                                             Officer of 196 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  noninterested  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  noninterested  Trustees and
the compensation of noninterested 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 [ ] are members of the Audit Committee of
the Board of Trustees of the Fund. The Board of Trustees has designated  Messrs.
[ ], [ ] and [ ], each a noninterested  Trustee,  as audit  committee  financial
experts.  The Audit  Committee's  functions  include (i)  overseeing  the Fund's
accounting and financial  reporting  policies and practices,  its internal audit
controls and procedures,  the internal controls of certain service providers, as
appropriate,  and the quality and integrity of the Fund's  financial  statements
and  independent  audit thereof;  (ii) approving the selection,  evaluation and,
when  appropriate,  replacement of the Fund's  independent  auditors;  and (iii)
evaluating  the  qualification,  independence,  and  performance  of the  Fund's
independent auditors.]

[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


                                        6
<PAGE>

therein;  and (iii) any other matter appropriate for review by the noninterested
Trustees,  unless  the  matter  is  within  the  responsibilities  of the  Audit
Committee  or the  Governance  Committee of the Fund.  In addition,  the Special
Committee has established a Contract Review Subcommittee whose duties and powers
include  evaluating  proposed new or amended or existing  contracts for services
provided to the Fund and making  recommendations  to the Board of Trustees  with
respect to all matters  involving  an actual or  potential  conflict of interest
between the interests of Eaton Vance or any of its affiliated companies,  on the
one hand,  and the Fund on the other hand.  The members of the  Contract  Review
Subcommittee are Messrs. [ ] (Chairman), [ ], [ ] and [ ].]

[As of the date of this SAI, the  Governance  Committee  has met [ ] times,  the
Audit  Committee  and  Special  Committee  have each  held [ ]  meeting  and the
Contract Review Subcommittee has held [ ] meetings.]

[When  considering  approval of the Advisory  Agreement between the Fund and the
Adviser, and the Sub-Advisory Agreement among the Fund, the Adviser and Rampart,
the Contract Review  Sub-Committee of 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;

+    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, 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;

+    Investment management staffing;

+    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  among the Fund,  the Adviser and Rampart,  the Contract
Review  Subcommittee of the Special  Committee  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 Contract Review Subcommittee 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 Contract Review Subcommittee 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  Contract  Review  Subcommittee  also


                                       7
<PAGE>

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  Contract  Review  Subcommittee  also  considered  the  business
reputation  of Rampart  and its  options  strategy  and its past  experience  in
implementing this strategy.]

[The Contract Review Subcommittee of 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  Contract
Review Subcommittee  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
Contract  Review  Subcommittee   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 Contract Review Subcommittee of
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
Contract Review Subcommittee  considered the profits realized by Eaton Vance and
its affiliates in connection with the operation of the Fund. The Contract Review
Subcommittee  also  considered  profit margins of Eaton Vance in comparison with
available  industry  data.  In  evaluating  the  fees to be paid by the  Fund to
Rampart,  the Contract Review  Subcommittee of 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 Contract Review  Subcommittee of 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  Contract  Review
Subcommittee.  In  assessing  the  information  provided  by Eaton Vance and its
affiliates  and  Rampart,  the  Contract  Review  Subcommittee  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 Contract Review  Subcommittee of
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.]

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, 2003.

<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>                             <C>
INTERESTED TRUSTEE

NONINTERESTED TRUSTEES
</TABLE>






[As of December 31, 2003,  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, 2002 and December 31, 2003,  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

                                       8
<PAGE>


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,
   EVDor  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, 2002 and December 31, 2003,  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 March 31, 2005,
it is  anticipated  that the  Trustees  of the  Fund  will  earn  the  following
compensation  in their  capacities as Trustees.  For the year ended December 31,
2003, 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 [197]
registered investment companies or series thereof.

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.

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


                                       9
<PAGE>

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.  Effective August 31, 2004, information on how the Fund voted proxies
relating to portfolio  securities during the 12 month period ended June 30, 2004
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 [     ], 2006 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.

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 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. James B. Hawkes,  Jeffrey P. Beale, Alan R. Dynner, Thomas E. Faust Jr.,
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


                                       10
<PAGE>

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   Investment   Management   Company   ("Rampart"  or
"Sub-Adviser") 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   among  the  Fund,   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 $[ ] 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 [ ] 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 party thereto,
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. 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.]

CODE OF ETHICS

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

The Code 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.


                                       11
<PAGE>

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.

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

Debt securities for which the over-the-counter  market is the primary market are
normally valued on the basis of prices furnished by one or more pricing services
at the mean between the latest  available bid and asked prices.  OTC options are
valued  at 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.

                                       12
<PAGE>

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.

PORTFOLIO TRADING

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

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

Fixed  income  obligations  which  may be  purchased  and  sold by the  Fund are
generally traded in the  over-the-counter  market on a net basis (i.e.,  without
commission) through  broker-dealers or banks acting for their own account rather
than as brokers, or otherwise involve transactions  directly with the issuers of
such  obligations.  The Fund may also purchase fixed income and other securities
from  underwriters,   the  cost  of  which  may  include  undisclosed  fees  and
concessions to the underwriters.

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

As  authorized  in Section  28(e) of the  Securities  Exchange  Act of 1934,  as
amended,  a broker or dealer who executes a portfolio  transaction  on behalf of
the Fund may receive a commission which is in excess of the amount of commission
another  broker or dealer would have charged for effecting  that  transaction if
the Adviser  determines in good faith that such  compensation  was reasonable in
relation to the value of the  brokerage  and research  services  provided.  This
determination may be made on the basis of that particular  transaction or on the
basis of overall  responsibilities which the Adviser and its affiliates have for
accounts  over which they  exercise  investment  discretion.  In making any such
determination,  the Adviser will not attempt to place a specific dollar value on
the brokerage and research services provided or to determine what portion of the
commission  should be related to such services.  Brokerage and research services
may include advice as to the value of securities,  the advisability of investing
in,  purchasing,  or selling  securities,  and the availability of securities or
purchasers or sellers of securities;  furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and  the  performance  of  accounts;   effecting  securities   transactions  and
performing functions incidental thereto (such as clearance and settlement);  and
the "Research Services" referred to in the next paragraph.

It is a common practice of the investment  advisory industry and of the advisers
of investment  companies,  institutions and other investors to receive research,


                                       13
<PAGE>

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 third parties with which such broker-dealers have arrangements.  Consistent
with  this  practice,   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.  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.

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.

Subject to the  requirement  that the Adviser shall use its best efforts to seek
and  execute  portfolio  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
portfolio  orders  may be placed  the fact that such firm has sold or is selling
shares of the Fund or of other  investment  companies  sponsored by the Adviser.
This  policy is not  inconsistent  with a rule of the  National  Association  of
Securities Dealers,  Inc. ("NASD"),  which rule provides that no firm which is a
member of the NASD shall favor or  disfavor  the  distribution  of shares of any
particular  investment company or group of investment  companies on the basis of
brokerage commissions received or expected by such firm from any source.

Securities  considered as investments  for the Fund may also be appropriate  for
other  investment  accounts  managed by the Adviser or its affiliates.  Whenever
decisions are made to buy or sell securities by the Fund and one or more of such
other   accounts   simultaneously,   the  Adviser  will  allocate  the  security
transactions  (including  "hot"  issues)  in a manner  which it  believes  to be
equitable under the circumstances. As a result of such allocations, there may be
instances where the Fund will not participate in a transaction that is allocated
among  other  accounts.  If an  aggregated  order  cannot be filled  completely,
allocations  will  generally  be made on a pro rata  basis.  An order may not be
allocated on a pro rata basis where, for example:  (i) consideration is given to
portfolio  managers who have been  instrumental  in developing or  negotiating a
particular   investment;   (ii)  consideration  is  given  to  an  account  with
specialized investment policies that coincide with the particulars of a specific
investment;  (iii) pro rata  allocation  would  result in  odd-lot or de minimis
amounts  being  allocated  to a  portfolio  or other  client;  or (iv) where the
Adviser  reasonably  determines  that  departure  from a pro rata  allocation is
advisable.  While  these  aggregation  and  allocation  policies  could  have  a
detrimental  effect on the price or amount of the  securities  available  to the
Fund from time to time,  it is the opinion of the  Trustees of the Fund that the
benefits  from the Adviser's  organization  outweigh any  disadvantage  that may
arise from exposure to simultaneous transactions.

TAXES

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


                                       14
<PAGE>

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 and (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,  plus 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
by  the  Fund  from  United   States   corporations   and   "qualified   foreign
corporations," provided that the Fund satisfies certain holding period and other
requirements  in  respect  of the  stock  of such  corporations.  In the case of
securities lending transactions, payments in lieu of dividends do not constitute
qualified  dividend  income.  Dividends  received  by the Fund  from  REITs  are
qualified  dividend  income  eligible  for this  lower tax rate only in  limited
circumstances.  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
that a portion of the Fund's income  distributions  will not be fully taxable as
ordinary income.

Subject to certain exceptions,  a "qualified foreign corporation" is any foreign
corporation that is either (i) incorporated in a possession of the United States
(the  "possessions  test"),  or (ii)  eligible for  benefits of a  comprehensive
income tax treaty with the United  States,  which the  Secretary of the Treasury
determines is satisfactory  for these purposes and which includes an exchange of
information  program  (the  "treaty  test").  The  Secretary of the Treasury has
currently  identified  tax  treaties  between  the  United  States  and 52 other
countries that satisfy the treaty test.

Subject to the same  exceptions,  a foreign  corporation  that does not  satisfy
either the  possessions  test or the  treaty  test will  still be  considered  a
"qualified  foreign  corporation"  with  respect  to any  dividend  paid by such
corporation  if the stock with respect to which such dividend is paid is readily
tradable on an established  securities market in the United States. The Treasury
Department  has issued a notice  stating  that common or ordinary  stock,  or an
American  Depositary  Receipt in respect of such stock,  is  considered  readily
tradable  on an  established  securities  market in the  Unites  States if it is
listed on a national  securities  exchange that is registered under section 6 of
the Securities Exchange Act of 1934, as amended, or on the Nasdaq Stock Market.

                                       15
<PAGE>

A qualified foreign  corporation does not include any foreign  corporation which
for the taxable year of the  corporation  in which the dividend is paid,  or the
preceding  taxable  year,  is a  foreign  personal  holding  company,  a foreign
investment company or a passive foreign investment company.

The Tax Act, in amending  certain Code provisions to provide that dividends paid
by a RIC would be treated as "qualified dividend income" to the extent that such
dividends  were  derived from  qualified  dividend  income  received by the RIC,
failed to make certain conforming amendments to other provisions of the Code. As
a result,  the Code  contains  certain  contradictory  provisions  creating some
ambiguity  as to whether the Code  authorizes  the Fund to  designate in certain
circumstances as qualified dividend income that portion of its dividends that is
derived from dividends it has received from qualified foreign corporations.  The
Fund believes,  however,  that the intention of the Tax Act was to authorize the
Fund's  designation of such  dividends as qualified  dividend  income.  Further,
bills  proposing to make technical  corrections  to the Tax Act (the  "Technical
Corrections  Bills")  have  been  filed  in both  the  Senate  and the  House of
Representatives,  and these Technical  Corrections Bills would amend the Code to
make it clear that a RIC's dividends can be designated qualified dividend income
to the extent that they are  derived  from  dividends  received  from  qualified
foreign  corporations.  The Fund  cannot  predict  whether  or in what  form the
Technical  Corrections  Bills will be  enacted  or, if  enacted,  when that will
occur.  Nevertheless,  the Treasury  Department  and the IRS have announced that
they will apply the  provision of the  Technical  Corrections  Bill  relating to
qualified dividend income in advance of the enactment of such legislation.

A dividend  (whether paid in cash or reinvested in additional  Fund shares) will
not be treated as qualified  dividend  income  (whether  received by the Fund or
paid by the Fund to a shareholder)  if (1) the dividend is received with respect
to any share held for fewer than 61 days during the 120-day period  beginning on
the date  which is 60 days  before  the date on which  such  share  becomes  ex-
dividend with respect to such dividend (the 120-day  period would be expanded to
a 121-day period under the Technical  Corrections Bills), (2) to the extent that
the  shareholder  is under an  obligation  (whether  pursuant to a short sale or
otherwise) to make related  payments with respect to positions in  substantially
similar  or  related  property,  or (3) if the  shareholder  elects  to have the
dividend  treated  as  investment  income  for  purposes  of the  limitation  on
deductibility of investment interest.

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


                                       16
<PAGE>

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) treat dividends
that would otherwise  constitute qualified dividend income as dividends 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,  and (iii)  disallow,  suspend or otherwise limit
the allowance of certain losses or deductions.

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 the period beginning 30 days
before the redemption of the loss shares and ending 30 days after such date. Any
disallowed loss will result in an adjustment to the  shareholder's  tax basis in
some or all of the other shares acquired.

Sales  charges  paid upon a purchase of shares  cannot be taken into account for
purposes of determining gain or loss on a sale of the shares before the 91st day
after their  purchase to the extent a sales charge is reduced or eliminated in a
subsequent  acquisition  of shares of the Fund (or of another fund)  pursuant to
the reinvestment or exchange  privilege.  Any disregarded amounts will result in
an adjustment to the  shareholder's tax basis in some or all of any other shares
acquired.

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

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 "IRS") 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


                                       17
<PAGE>

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.

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 IRS as well as  shareholders  with
respect  to whom the Fund has  received  certain  information  from the IRS 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 IRS.

The foregoing  discussion  does not address the special tax rules  applicable to
certain classes of investors,  such as tax-exempt  entities,  foreign investors,
insurance  companies and financial  institutions.  Shareholders  should  consult
their own tax advisers with respect to special tax rules that may apply in their
particular  situations,  as well as the state,  local,  and,  where  applicable,
foreign tax consequences of investing in the Fund.

STATE AND LOCAL TAXES

Shareholders  should  consult  their own tax  advisers as the state or local tax
consequences of investing in the Fund.

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


                                       18
<PAGE>

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 AUDITORS

[     ],  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>



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

[TO BE ADDED BY AMENDMENT]



                                       20
<PAGE>


EATON VANCE ENHANCED EQUITY INCOME FUND

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 5,000 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 (the  "Fund") was  organized as a
Massachusetts  business  trust on August [ ], 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  long-term  capital
appreciation with a secondary objective of current income and current gains. The
Fund will pursue its investment objectives by investing primarily in a portfolio
consisting of large and mid-  capitalization  common stocks,  seeking  companies
with  above-average   growth  and  financial  strength.   The  Fund  will,  when
appropriate  opportunities  arise,  sell covered  call options on its  portfolio
securities  to  seek  to earn  income  from  option  premiums.  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
Investment  Management,  the Adviser has agreed to pay a sub-advisory fee, in an
annual amount equal to [ ]% of he average daily gross 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>



                                                             APPENDIX A: RATINGS


DESCRIPTION OF SECURITIES RATINGS+
MOODY'S INVESTORS SERVICE, INC.

PREFERRED STOCK RATINGS

AAA: Bonds and preferred  stock which are rated Aaa are judged to be of the best
quality.  They carry the smallest  degree of  investment  risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally   stable  margin  and  principal  is  secure.  While  the  various
protective  elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

AA:  Bonds and  preferred  stock  which  are  rated Aa are  judged to be of high
quality by all  standards.  Together  with the Aaa group they  comprise what are
generally  known as high grade  bonds.  They are rated lower than the best bonds
because  margins  of  protection  may not be as  large as in Aaa  securities  or
fluctuation of protective  elements may be of greater  amplitude or there may be
other elements present which make the long term risk appear somewhat larger than
the Aaa securities.

A: Bonds and preferred stock which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade  obligations.  Factors
giving security to principal and interest are considered adequate,  but elements
may be present which  suggest a  susceptibility  to  impairment  sometime in the
future.

BAA:  Bonds  and  preferred   stock  which  are  rated  Baa  are  considered  as
medium-grade  obligations  (i.e.,  they are neither highly  protected nor poorly
secured).  Interest  payments and  principal  security  appear  adequate for the
present   but   certain   protective   elements   may  be   lacking  or  may  be
characteristically  unreliable  over any great  length of time.  Such  bonds and
preferred stock lack  outstanding  investment  characteristics  and in fact have
speculative characteristics as well.

BA: Bonds and preferred stock which are rated Ba are judged to have  speculative
elements;  their  future  cannot  be  considered  as  well-assured.   Often  the
protection of interest and  principal  payments may be very moderate and thereby
not  well  safeguarded  during  other  good  and  bad  times  over  the  future.
Uncertainty of position characterizes bonds in this class.

B: Bonds and preferred stock which are rated B generally lack characteristics of
the desirable  investment.  Assurance of interest and  principal  payments or of
maintenance  of other terms of the contract  over any long period of time may be
small.

CAA: Bonds and preferred  stock which are rated Caa are of poor  standing.  Such
issues may be in default or there may be present elements of danger with respect
to principal or interest.

CA: Bonds and preferred stock which are rated Ca represent obligations which are
speculative  in a high  degree.  Such  issues are often in default or have other
marked shortcomings.

C: Bonds and  preferred  stock  which are rated C are the lowest  rated class of
bonds, and issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

----------

+  The ratings  indicated  herein are  believed  to be the most  recent  ratings
   available  at the date of this SAI for the  securities  listed.  Ratings  are
   generally  given to  securities  at the time of  issuance.  While the  rating
   agencies  may from  time to time  revise  such  ratings,  they  undertake  no
   obligation to do so, and the ratings  indicated do not necessarily  represent
   ratings  which would be given to these  securities  on the date of the Fund's
   fiscal year end.

Absence of Rating:  Where no rating has been assigned or where a rating has been
suspended or  withdrawn,  it may be for reasons  unrelated to the quality of the
issue.

Should no rating be assigned, the reason may be one of the following:

                                       23
<PAGE>

1. An application for rating was not received or accepted.

2. The issue or issuer  belongs to a group of securities  or companies  that are
not rated as a matter of policy.

3. There is a lack of essential data pertaining to the issue or issuer.

4. The issue was privately  placed, in which case the rating is not published in
Moody's publications.

Suspension or withdrawal may occur if new and material  circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable  up-to-date  data to permit a  judgment  to be  formed;  if a bond is
called for redemption; or for other reasons.

Note:  Moody's applies  numerical  modifiers,  1, 2 and 3 in each generic rating
classification  from Aa  through B in its bond  rating  system.  The  modifier 1
indicates  that the  security  ranks in the  higher  end of its  generic  rating
category;  the  modifier 2  indicates a mid-range  ranking;  and the  modifier 3
indicates that the issue ranks in the lower end of its generic rating category.

SHORT-TERM DEBT SECURITIES RATINGS
Moody's  short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations.  These obligations have an original maturity
not exceeding one year, unless explicitly noted.

Moody's  employs the following three  designations,  all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:

PRIME-1:  Issuers rated  Prime-1 (or  supporting  institutions)  have a superior
ability for repayment of senior short-term debt  obligations.  Prime-1 repayment
ability  will  often  be  evidenced  by many of the  following  characteristics:
leading market positions in well-established industries; high rates of return on
funds employed;  conservative capitalization structure with moderate reliance on
debt and ample asset  protection;  broad  margins in earnings  coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.

PRIME-2:  Issuers  rated  Prime-2  (or  supporting  institutions)  have a strong
ability for repayment of senior short-term debt obligations.  This will normally
be evidenced by many of the characteristics  cited above but to a lesser degree.
Earnings  trends  and  coverage  ratios,  while  sound,  may be more  subject to
variation. Capitalization characteristics,  while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

PRIME-3:  Issuers rated Prime-3 (or supporting  institutions) have an acceptable
ability for repayment of senior short-term  obligations.  The effect of industry
characteristics and market  compositions may be more pronounced.  Variability in
earnings and profitability may result in changes in the level of debt protection
measurements  and may  require  relatively  high  financial  leverage.  Adequate
alternate liquidity is maintained.

NOT PRIME:  Issuers  rated Not Prime do not fall within any of the Prime  rating
categories.

STANDARD & POOR'S RATINGS GROUP

INVESTMENT GRADE

AAA:    Debt and preferred  stock rated AAA have the highest rating  assigned by
S&P. Capacity to pay interest and repay principal is extremely strong.

AA:     Debt rated AA have a very  strong  capacity  to pay  interest  and repay
principal and differs from the highest rated issues only in small degree.

A:      Debt and preferred  stock rated A have a strong capacity to pay interest
and repay  principal  although it is somewhat  more  susceptible  to the adverse
effects of changes in circumstances and economic  conditions than debt in higher
rated categories.

BBB:    Debt and  preferred  stock rated BBB are  regarded as having an adequate
capacity to pay  interest  and repay  principal.  Whereas it  normally  exhibits


                                       24
<PAGE>

adequate  protection   parameters,   adverse  economic  conditions  or  changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories.

SPECULATIVE GRADE
Debt and  preferred  stock  rated BB, B, CCC,  CC and C are  regarded  as having
predominantly  speculative  characteristics  with  respect  to  capacity  to pay
interest and repay principal. BB indicates the least degree of speculation and C
the  highest.  While such debt will  likely  have some  quality  and  protective
characteristics,  these are outweighed by large uncertainties or major exposures
to adverse conditions.

BB:     Debt and preferred stock rated BB have less near-term  vulnerability  to
default  than  other  speculative  issues.   However,  it  faces  major  ongoing
uncertainties or exposure to adverse business, financial, or economic conditions
which could lead to  inadequate  capacity to meet timely  interest and principal
payments.  The BB rating  category is also used for debt  subordinated to senior
debt that is assigned an actual or implied BBB- rating.

B:      Debt and preferred stock rated B have a greater vulnerability to default
but  currently  has  the  capacity  to  meet  interest  payments  and  principal
repayments.  Adverse  business,  financial,  or economic  conditions will likely
impair capacity or willingness to pay interest and repay principal. The B rating
category is also used for debt  subordinated  to senior debt that is assigned an
actual or implied BB or BB- rating.

CCC:    Debt  and  preferred  stock  rated  CCC  have a  currently  identifiable
vulnerability to default,  and is dependent upon favorable business,  financial,
and economic  conditions  to meet timely  payment of interest  and  repayment of
principal. In the event of adverse business,  financial, or economic conditions,
it is not likely to have the capacity to pay interest and repay  principal.  The
CCC rating  category is also used for debt  subordinated  to senior debt that is
assigned an actual or implied B or B- rating.

CC:     The rating CC is typically  applied to debt  subordinated to senior debt
and preferred stock which is assigned an actual or implied CCC debt rating.

C:      The rating C is typically  applied to debt  subordinated  to senior debt
and preferred stock which is assigned an actual or implied CCC- debt rating. The
C rating may be used to cover a situation  where a bankruptcy  petition has been
filed, but debt service payments are continued.

C1:     The Rating C1 is reserved for income bonds on which no interest is being
paid.

D:      Debt and  preferred  stock rated D is in payment  default.  The D rating
category is used when  interest  payments or principal  payments are not made on
the date due even if the  applicable  grace period has not  expired,  unless S&P
believes that such payments will be made during such grace period.

The D rating also will be used upon the filing of a bankruptcy  petition if debt
service payments are jeopardized.

PLUS  (+) OR  MINUS  (-):  The  ratings  from AA to CCC may be  modified  by the
addition  of a plus or minus  sign to show  relative  standing  within the major
rating categories.

P:      The letter "p" indicates that the rating is  provisional.  A provisional
rating  assumes the  successful  completion of the project being financed by the
debt being rated and  indicates  that  payment of debt service  requirements  is
largely or entirely  dependent upon the successful and timely  completion of the
project.  This rating,  however,  while addressing credit quality  subsequent to
completion of the project, makes no comment on the likelihood of, or the risk of
default upon failure of such  completion.  The investor  should exercise his own
judgment with respect to such likelihood and risk.

L:      The  letter "L"  indicates  that the rating  pertains  to the  principal
amount of those bonds to the extent that the  underlying  deposit  collateral is
insured by the Federal  Deposit  Insurance  Corp.  and  interest  is  adequately
collateralized. In the case of certificates of deposit, the letter "L" indicates
that the deposit,  combined with other deposits being held in the same right and
capacity,  will be honored for principal and accrued pre-default  interest up to
the  federal  insurance  limits  within 30 days  after  closing  of the  insured
institution or, in the event that the deposit is assumed by a successor  insured
institution, upon maturity.

NR:     NR indicates no rating has been  requested,  that there is  insufficient
information  on which to base a rating,  or that S&P does not rate a  particular
type of obligation as a matter of policy.

                                       25
<PAGE>

COMMERCIAL PAPER

COMMERCIAL PAPER RATING DEFINITIONS
A S&P's  commercial  paper rating is a current  assessment of the  likelihood of
timely  payment of debt  having an  original  maturity of no more than 365 days.
Ratings  are graded  into  several  categories,  ranging  from A for the highest
quality obligations to D for the lowest. These categories are as follows:

A-1: A short-term  obligation rated A-1 is rated in the highest category by S&P.
The  obligor's  capacity to meet its financial  commitment on the  obligation is
strong.  Within this category,  certain  obligations  are designated with a plus
sign (+).  This  indicates  that the  obligor's  capacity to meet its  financial
commitment on these obligations is extremely strong.

A-2: A  short-term  obligation  rated A-2 is somewhat  more  susceptible  to the
adverse  effects  of changes  in  circumstances  and  economic  conditions  than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated A-3 exhibits adequate protection  parameters.
However,  adverse economic conditions or changing  circumstances are more likely
to lead to a weakened  capacity of the obligor to meet its financial  commitment
on the obligation.

B:   A  short-term   obligation  rated  B  is  regarded  as  having  significant
speculative characteristics.  The obligor currently has the capacity to meet its
financial  commitment  on  the  obligation;  however,  it  faces  major  ongoing
uncertainties which could lead to the obligor's  inadequate capacity to meet its
financial commitment on the obligation.

C:   A short-term  obligation rated C is currently  vulnerable to nonpayment and
is dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D:   A  short-term  obligation  rated  D is in  payment  default.  The D  rating
category  is used when  payments on an  obligation  are not made on the date due
even if the  applicable  grace period has not expired,  unless S&P believes that
such payments  will be made during such grace period.  The D rating also will be
used upon the filing of a bankruptcy  petition or the taking of a similar action
if payments on an obligation are jeopardized.

A commercial  paper rating is not a recommendation  to purchase,  sell or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor.  The ratings are based on current information  furnished to
S&P by the issuer or obtained from other sources it considers reliable. S&P does
not perform an audit in connection with any rating and may, on occasion, rely on
unaudited  financial  information.  The ratings may be  changed,  suspended,  or
withdrawn as a result of changes in or unavailability of such information.

FITCH RATINGS

INVESTMENT GRADE RATINGS
AAA: Bonds and preferred stocks are considered to be investment grade and of the
highest credit quality.  The obligor has an exceptionally  strong ability to pay
interest  and repay  principal,  which is unlikely to be affected by  reasonably
foreseeable events.

AA: Bonds and preferred stocks are considered to be investment grade and of very
high credit quality.  The obligor's  ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated "AAA". Because bonds
rated in the "AAA"  and "AA"  categories  are not  significantly  vulnerable  to
foreseeable future  developments,  short-term debt of these issuers is generally
rated "F-1+".

A: Bonds and preferred  stocks are considered to be investment grade and of high
credit  quality.  The obligor's  ability to pay interest and repay  principal is
considered  to be  strong,  but may be more  vulnerable  to  adverse  changes in
economic conditions and circumstances than bonds with higher ratings.

BBB:  Bonds and preferred  stocks are  considered to be investment  grade and of
satisfactory  credit  quality.  The obligor's  ability to pay interest and repay
principal is considered to be adequate.  Adverse changes in economic  conditions
and  circumstances,  however,  are more likely to have  adverse  impact on these


                                       26
<PAGE>

bonds, and therefore,  impair timely payment. The likelihood that the ratings of
these  bonds  will fall  below  investment  grade is higher  than for bonds with
higher ratings.

BELOW INVESTMENT GRADE RATINGS
BB: Bonds and preferred stocks are considered speculative. The obligor's ability
to pay  interest  and repay  principal  may be  affected  over  time by  adverse
economic changes. However, business and financial alternatives can be identified
that could assist the obligor in satisfying its debt service requirements.

B: Bonds and preferred stocks are considered highly speculative.  While bonds in
this class are currently meeting debt service  requirements,  the probability of
continued  timely  payment of  principal  and interest  reflects  the  obligor's
limited  margin of safety  and the need for  reasonable  business  and  economic
activity throughout the life of the issue.

CCC: Bonds and preferred stocks have certain identifiable characteristics which,
if not remedied,  may lead to default.  The ability to meet obligations requires
an advantageous business and economic environment.

CC: Bonds and preferred  stocks are minimally  protected.  Default in payment of
interest and/or principal seems probable over time.

C:  Bonds and preferred stocks are in imminent default in payment of interest or
principal.

DDD, DD AND D: Bonds and  preferred  stocks are in default  on  interest  and/or
principal payments. Such bonds are extremely speculative and should be valued on
the basis of their ultimate  recovery value in liquidation or  reorganization of
the obligor. "DDD" represents the highest potential for recovery on these bonds,
and "D" represents the lowest potential for recovery.

PLUS (+) OR MINUS (-):  The ratings from AA to C may be modified by the addition
of a plus or minus sign to indicate the relative position of a credit within the
rating category.

NR:  Indicates that Fitch does not rate the specific issue.

CONDITIONAL:  A conditional rating is premised on the successful completion of a
project or the occurrence of a specific event.

INVESTMENT GRADE SHORT-TERM RATINGS
Fitch's  short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit,  medium-term notes, and municipal and investment
notes.

F-1+:   Exceptionally  Strong Credit  Quality.  Issues  assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1:    Very Strong  Credit  Quality.  Issues  assigned  this rating  reflect an
assurance  of timely  payment  only  slightly  less in degree than issues  rated
"F-1+".

F-2:    Good Credit  Quality.  Issues  carrying this rating have a  satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as the "F-1+" and "F-1" categories.

F-3:    Fair Credit Quality.  Issues  carrying this rating have  characteristics
suggesting that the degree of assurance for timely payment is adequate, however,
near-term  adverse  change  could  cause  these  securities  to be  rated  below
investment grade.

                                 * * * * * * * *

Notes:  Bonds and preferred stock which are unrated expose the investor to risks
with respect to capacity to pay interest or repay principal which are similar to
the  risks  of  lower-rated  speculative  bonds.  The Fund is  dependent  on the
Adviser's judgment, analysis and experience in the evaluation of such bonds.

Investors  should  note  that the  assignment  of a rating to a bond by a rating
service  may not  reflect  the  effect of recent  developments  on the  issuer's
ability to make interest and principal payments.


                                       27
<PAGE>



                     EATON VANCE ENHANCED EQUITY INCOME FUND

                       STATEMENT OF ADDITIONAL INFORMATION
                                  [    ], 2004

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

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

                                   SUB-ADVISER
                      Rampart Investment Management Company
                             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 REGISITERED PUBLIC ACCOUTING FIRM
                                    [       ]




                                       28

<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  August  10,  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. to
              be filed by amendment.

      (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 August 12, 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 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 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 August 2004.


<PAGE>


                              EATON VANCE ENHANCED
                              EQUITY INCOME FUND

                              By:   /S/ DUNCAN W. RICHARDSON
                                    ------------------------
                                    Duncan W. Richardson
                                    President and Chief Executive Officer

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

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

/S/ DUNCAN W. RICHARDSON       President and Chief Executive    August 12, 2004
------------------------       Officer
Duncan W. Richardson



/S/ JAMES L. O'CONNOR          Treasurer and Principal          August 12, 2004
---------------------          Financial and Accounting
James L. O'Connor



/S/ ALAN R. DYNNER             Trustee                          August 12, 2004
------------------
Alan R. Dynner


/S/ JAMES B. HAWKES            Trustee                          August 12, 2004
-------------------
James B. Hawkes




<PAGE>


                                INDEX TO EXHIBITS

(a) Agreement and Declaration of Trust dated August 10, 2004

(b) By-Laws



</TEXT>
</DOCUMENT>
