SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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Eaton Vance Mutual Funds Trust
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement no.:
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(4) Date Filed:
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EATON VANCE TAX-MANAGED INTERNATIONAL GROWTH FUND
The Eaton Vance Building
255 State Street
Boston, Massachusetts 02109
February 25, 2004
Dear Shareholder:
We cordially invite you to attend a Special Meeting of Shareholders of
Eaton Vance Tax-Managed International Growth Fund (the "Fund"), a series of
Eaton Vance Mutual Funds Trust (the "Trust"), on Friday, April 16, 2004 to
consider three Proposals. We ask you to read the enclosed information carefully
and to submit your vote promptly.
In the proxy statement that follows this letter, the Trustees are asking
shareholders to approve an Investment Sub-Advisory Agreement for Tax-Managed
International Growth Portfolio (the "Portfolio"), the underlying registered
investment company in which all of the assets of the Fund are invested. On
February 9, 2004, the Board of Trustees of the Portfolio approved an Investment
Sub-Advisory Agreement between Boston Management and Research, the Portfolio's
investment adviser, and Eagle Global Advisors, L.L.C. The Trustees are also
asking Fund shareholders to approve an amendment to the Portfolio's Investment
Advisory Agreement and to authorize Trustees to select new sub-advisers without
shareholder approval to the extent permitted by applicable law.
We realize that most shareholders will not be able to attend the meeting
and vote their shares in person. However, the Fund does need your vote. You can
vote by mail, telephone, or over the Internet, as explained in the enclosed
material. If you later decide to attend the meeting, you may revoke your proxy
and vote your shares in person. By voting promptly, you can help the Fund avoid
the expense of additional mailings.
If you would like additional information concerning either proposal, please
call one of our service representatives at 1-866-387-2378. Your participation in
this vote is extremely important.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes
President and Chief Executive Officer
Eaton Vance Management
YOUR VOTE IS IMPORTANT - PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE URGED TO SIGN AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED
POSTAGE PREPAID ENVELOPE OR VOTE BY TELEPHONE OR OVER THE INTERNET BY FOLLOWING
THE ENCLOSED INSTRUCTIONS. YOUR VOTE IS IMPORTANT WHETHER YOU OWN A FEW SHARES
OR MANY SHARES.
EATON VANCE TAX-MANAGED INTERNATIONAL GROWTH FUND
The Eaton Vance Building
255 State Street
Boston, Massachusetts 02109
Notice of Special Meeting of Shareholders
To Be Held April 16, 2004
A Special Meeting of Shareholders of Eaton Vance Tax-Managed International
Growth Fund will be held at the principal office of the Fund, The Eaton Vance
Building, 255 State Street, Boston, Massachusetts 02109, on Friday, April 16,
2004 at 1:30 P.M. (Eastern Standard Time), for the following purposes:
1. To consider and act upon a proposal to approve an Investment
Sub-Advisory Agreement between Boston Management and Research and
Eagle Global Advisors, L.L.C. for Tax-Managed International Growth
Portfolio.
2. To consider and act upon a proposal to amend the Investment Advisory
Agreement for Tax-Managed International Growth Portfolio.
3. To authorize the Board of Trustees to select investment sub-advisers
and enter into investment sub-advisory agreements without obtaining
shareholder approval to the extent permitted by applicable law.
4. To consider and act upon any other matters which may properly come
before the meeting and any adjourned session thereof.
These proposals are discussed in greater detail in the following pages.
The meeting is called pursuant to the By-Laws of the Fund. The Board of
Trustees of the Fund has fixed the close of business on February 20, 2004 as the
record date for the determination of the shareholders of the Fund entitled to
notice of and to vote at the meeting and any adjournments thereof.
By Order of the Board of Trustees
/s/ Alan R. Dynner
Alan R. Dynner
Secretary
February 25, 2004
Boston, Massachusetts
IMPORTANT
Shareholders can help the Board of Trustees avoid the necessity and additional
expense to the Fund of further solicitations to obtain a quorum by promptly
returning the enclosed proxy or voting by telephone or over the Internet. The
enclosed addressed envelope requires no postage if mailed in the United States
and is intended for your convenience.
EATON VANCE TAX-MANAGED INTERNATIONAL GROWTH FUND
The Eaton Vance Building
255 State Street
Boston, Massachusetts 02109
PROXY STATEMENT
A proxy is enclosed with the foregoing Notice of a Special Meeting of the
Fund to be held April 16, 2004 at The Eaton Vance Building, 255 State Street,
Boston, MA 02109, for the benefit of shareholders who wish to vote, but do not
expect to be present at the meeting. Shareholders may also vote by telephone or
over the Internet. The proxy is solicited on behalf of the Board of Trustees. A
written proxy is revocable by the person giving it prior to exercise by a signed
writing filed with the Fund's proxy tabulator, Management Information Services,
an ADP Company, P.O. Box 9123, Hingham, MA 02043-9123, or by executing and
delivering a later dated proxy, or by attending the meeting and voting the
shares in person. Proxies voted by telephone or over the Internet may be revoked
at any time in the same manner that proxies voted by mail may be revoked. Each
proxy will be voted in accordance with its instructions; if no instruction is
given, an executed proxy will authorize the persons named as attorneys, or any
of them, to vote in favor of each matter. This proxy material is initially being
mailed to shareholders on or about February 25, 2004. Supplementary
solicitations may be made by mail, telephone, telegraph, facsimile or electronic
means.
The Trustees have fixed the close of business on February 20, 2004 as the
record date for the determination of the shareholders entitled to notice of and
to vote at the meeting and any adjournments thereof. Shareholders at the close
of business on the record date will be entitled to one vote for each share held.
As of February 20, 2004, there were _______________ shares of beneficial
interest of the Fund consisting of Class A, B, C and D shares.
The persons who held of record more than 5% of the outstanding shares of
each class of the Fund as of February 2, 2004 are set forth in Exhibit A. To the
knowledge of the Fund no other person owns (of record or beneficially) 5% or
more of the outstanding shares of a class of the Fund. The Trustees and
executive officers of the Trust as a group own beneficially less than 1% of the
outstanding shares of the Fund, except as indicated on Exhibit A. Shareholders
of all classes of shares of the Fund will vote jointly on each proposal.
The Trustees know of no business other than the business mentioned in
Proposals 1, 2 and 3 of the Notice of Meeting that will be presented for
consideration. If any other matters are properly presented, it is the intention
of the persons named as attorneys in the enclosed proxy to vote the proxies in
accordance with their judgment on such matters.
The Fund will furnish without charge a copy of the Fund's most recent
Annual Report to any shareholder upon request. Shareholders desiring to obtain a
copy of such report should write to the Fund c/o Eaton Vance Management, The
Eaton Vance Building, 255 State Street, Boston, MA 02109, Attn: Proxy
Coordinator, or call 1-866-387-2378.
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Background
The Fund's investment objective is to seek long-term, after-tax returns by
investing in a diversified portfolio of foreign equity securities. The Fund
seeks its objective by investing in the Portfolio, which has the same investment
objective as the Fund. Boston Management and Research ("BMR") manages the assets
of the Portfolio pursuant to an Investment Advisory Agreement dated as of
February 13, 2001 (the "Advisory Agreement"). A description of the Advisory
Agreement appears in Proposal 2 below. See "Advisory Agreement."
At a meeting of the Boards of Trustees of the Trust and Portfolio held on
February 9, 2004, BMR suggested several changes to the Fund and Portfolio. BMR
recommended that the Fund and Portfolio abandon their "growth focus" and adopt a
more conservative risk profile in line with the Fund's benchmark, the Morgan
Stanley International Europe, Australasia, and Far East Index.1 BMR further
suggested that a sub-adviser specializing in large capitalization international
securities be appointed to take over the day-to-day management of the Portfolio
under BMR's supervision. BMR indicated to the Board that it believed these
changes are in the best interest of Fund shareholders and Portfolio interest
holders.
In response to these recommendations, the Board of the Portfolio approved
an Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement") between BMR
and Eagle Global Advisors, L.L.C. ("Eagle"), subject to approval by a "majority
of the outstanding voting securities" of the Portfolio as required by the
Investment Company Act of 1940. In addition, the Boards of Trustees of the Trust
and the Portfolio approved changing the names of the Fund and Portfolio to Eaton
Vance Tax-Managed International Equity Fund and Tax-Managed International Equity
Portfolio, respectively, and the adoption by each of the Fund and Portfolio of a
policy to invest at least 80% of net assets in equity securities. The name
changes and 80% policies will become effective upon approval of the Sub-Advisory
Agreement by the Portfolio's interest holders. The 80% policy is consistent with
the manner in which the Portfolio has operated historically and will not result
in a management change.
The Portfolio will seek the approval of the holders of interest in the
Portfolio, including the Fund, for the Sub-Advisory Agreement and the other
proposals described in this Proxy Statement. In turn, Fund shareholders are
being asked to vote on the Sub-Advisory Agreement and the other proposals
described in this proxy statement because the Trust's Board of Trustees has
decided to seek instructions from Fund shareholders as to how to vote on these
matters.
PROPOSAL 1. APPROVAL OF INVESTMENT
SUB-ADVISORY AGREEMENT
As noted above, BMR manages the assets of the Portfolio pursuant to the
Advisory Agreement. The Advisory Agreement was most recently approved by the
Board of Trustees of the Portfolio, including a majority of the Trustees who are
not "interested persons" as that term is defined in the Investment Company Act
of 1940 of any party to such agreement (referred to as the "Noninterested
Trustees"), on March 17, 2003. The Advisory Agreement was most recently
submitted to a vote of interest holders on February 13, 2001 in connection with
its initial approval.
Under the Advisory Agreement, BMR is authorized to employ one or more
sub-advisers for the Portfolio subject to approval by the Board of Trustees of
__________________
1 It is not possible to invest directly in an Index.
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the Portfolio and a "majority of the outstanding voting securities" (as
described below) of the Portfolio. On February 9, 2004, the Portfolio's Board of
Trustees approved the Sub-Advisory Agreement with Eagle.
A description of Eagle, the Sub-Advisory Agreement, the fees BMR will pay
Eagle for its sub-advisory services and the Board of Trustee's evaluation of the
sub-advisory arrangement follows.
About Eagle
Eagle, a Texas limited liability company located at 5847 San Felipe, Suite
930, Houston, TX 77057, has been an investment adviser registered with the
Securities and Exchange Commission since it was founded in 1996. Eagle provides
advisory services to institutional clients and high net worth individuals.
Eagle's investment philosophy on its international portfolios is to seek capital
appreciation through investments in large capitalization international growth
companies. As of December 31, 2003, Eagle had $545 million of assets under
management.
The day to day management of the Portfolio will be the responsibility of
Edward R. Allen, III and Thomas N. Hunt, III. Messrs. Allen and Hunt are each
partners of Eagle and have been with the firm since its inception in 1996. Mr.
Allen earned a bachelor's degree in engineering from Princeton University and a
Ph.D. in economics from the University of Chicago. Mr. Hunt received a
bachelor's degree in accounting from the University of Texas and a MBA from
Harvard Business School.
Eagle is 100% owned by its partners and employees. Eagle does not act as
investment adviser or sub-adviser for any registered investment companies with
investment objectives similar to the Portfolio.
The Sub-Advisory Agreement
The Sub-Advisory Agreement between BMR and Eagle, a copy of the form of
which is attached as Exhibit B, requires Eagle to provide a continuous
investment program for the Portfolio, including making determinations with
respect to its purchase, retention or sale of securities, cash or other
investments in accordance with the Portfolio's investment objective, policies
and restrictions contained in its Registration Statement, the provisions of the
Investment Company Act and the diversification requirements of the Internal
Revenue Code.
Under the Sub-Advisory Agreement, Eagle may select the broker-dealers
through which Portfolio transactions are executed and negotiate commissions;
however the Sub-Advisory Agreement provides that Eagle's primary consideration
in effecting such transactions will be obtaining best execution. The
Sub-Advisory Agreement provides that Eagle may, subject to the policies of the
Portfolio's Board of Trustees and consistent with applicable law, pay a broker a
higher commission than another broker might have charged for effecting a
securities transaction if Eagle determines, in good faith, that the higher
commission was reasonable in relation to the value of the brokerage and research
services provided by the broker. The Sub-Advisory Agreement further provides
that Eagle may allocate orders it places on behalf of the Portfolio to an
affiliated broker or to brokers who provide research materials or other services
to the Portfolio, Eagle or an affiliate of Eagle.
The Sub-Advisory Agreement provides that BMR is responsible for supervising
Eagle, including its compliance responsibilities. Eagle will be liable for any
act or omission arising out of any services it provides under the Sub-Advisory
Agreement due to its willful misfeasance, bad faith, or negligence in its
performance, and for any breach of its obligations or duties under the
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Agreement. However, the Sub-Advisory Agreement also provides that BMR will
indemnify and hold Eagle harmless for any loss or litigation Eagle becomes
liable for based on (a) BMR's gross negligence, willful misfeasance, or bad
faith in the performance of its duties or by reason of reckless disregard of its
obligations and duties under the Sub-Advisory Agreement or (b) any untrue
statement of material fact or failure to state a material fact in the
Portfolio's Registration Statement.
Under the Sub-Advisory Agreement, Eagle is responsible for voting all
proxies the Portfolio is entitled to vote, subject to the review of the
Portfolio's Board of Trustees and BMR. Eagle will vote all proxies in accordance
with policies approved by the Portfolio's Board of Trustees.
If approved by the vote of the holders of a "majority of the outstanding
voting securities" (as such term is defined below) of the Portfolio, the
Sub-Advisory Agreement will become effective immediately and will continue in
effect through April 2005. The Sub-Advisory Agreement will continue, subject to
approval annually in accordance with the Investment Company Act. The
Sub-Advisory Agreement may be terminated at any time without the payment of any
penalty by the Board of Trustees of the Portfolio, by the vote of a "majority of
the outstanding voting securities" of the Portfolio or by BMR on 60 days prior
notice to Eagle. The Sub-Advisory Agreement also may be terminated by Eagle on 3
months notice unless the Portfolio or Adviser requests Eagle continue to serve
the Portfolio for up to 3 additional months while a replacement sub-adviser is
found. Under certain circumstances, such as Eagle becoming legally incapable of
providing investment management services to the Portfolio, Eagle may terminate
the Sub-Advisory Agreement at any time without the payment of any penalty. The
Sub-Advisory Agreement will terminate automatically in the event of its
"assignment" (as defined in the Investment Company Act).
Sub-Advisory Fees
Under the Sub-Advisory Agreement, BMR (not the Portfolio) pays Eagle for
its services on the basis of the following annual fee schedule:
Eagle's
Average Daily Net Assets Annual Fee
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Up to $500 million 0.50000%
$500 million but less than $1 billion 0.46875%
$1 billion but less than $2.5 billion 0.43750%
$2.5 billion but less than $5 billion 0.40625%
$5 billion and over 0.37500%
Fees are paid monthly in arrears on the last business day of each month.
Approval of the Sub-Advisory Agreement would have no effect upon the amount
of advisory fees paid by the Portfolio to BMR.
The Fee that would have been payable to Eagle for services provided
pursuant to the Sub-Advisory Agreement for the period from November 1, 2002 to
October 31, 2003 had the Agreement been in effect for such period is $ . The
advisory fee payable by the Portfolio to BMR under the Advisory Agreement for
the same period is set forth in Proposal 2. See "Advisory Fee."
4
Refer to Exhibit B attached hereto for the complete terms of the
Sub-Advisory Agreement. The description of the Sub-Advisory Agreement set forth
herein is qualified in its entirety by the provisions of the form of the
Sub-Advisory Agreement in Exhibit B.
For the Portfolio's fiscal year ended October 31, 2003, no commissions were
paid to any broker that is an affiliate of the Portfolio, BMR, or Eagle.
Management and Governance. Listed below are the names, positions and
principal occupations of the partners and the principal executive officers of
Eagle. The principal address of each individual as it relates to his or her
duties at Eagle is the same as that of Eagle.
Name Principal Occupation
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Edward R. Allen III Partner
Thomas N. Hunt III Partner
Steven S. Russo Partner
John F. Gualy Vice President
Malcom S. Day Vice President
Messrs. Allen, Hunt and Russo each own 25% or more of Eagle. No officer or
Trustee of the Portfolio currently is a director, officer or employee of Eagle,
provided that, if the Sub-Advisory Agreement is approved, the Board of Trustees
of the Portfolio intends to appoint Messrs Allen and Hunt as Vice Presidents of
the Portfolio. Messrs Allen and Hunt would receive no compensation for serving
as officers of the Portfolio. No officer or Trustee of the Portfolio owns the
securities of or has any other material direct or indirect interest in Eagle or
any other person controlling, controlled by or under common control with Eagle.
Since January 1, 2003, none of the Trustees of the Portfolio has had any
material interest, direct or indirect, in any material transactions, or in any
material proposed transactions, to which Eagle was or is to be a party.
Evaluation of the Board of Trustees
At a meeting held on February 9, 2004, the Board of Trustees of the Trust
and the Portfolio authorized BMR to approve the Eagle Sub-Advisory Agreement
following presentations by BMR and representatives of Eagle and consideration of
the factors discussed below.
The Trustees noted that BMR had, with the assistance of an independent
consulting firm, identified and considered several potential sub-advisers. The
Trustees considered information with respect to Eagle and whether the
Sub-Advisory Agreement was in the best interests of the Portfolio and its
interest holders. As part of their deliberations, the Trustees took into account
the nature and quality of the anticipated services to be provided by Eagle and
reviewed and discussed information regarding the Sub-Adviser's fees and
performance. In evaluating Eagle's ability to provide services to the Portfolio,
the Trustees also reviewed information relating to the education, experience and
number of investment professionals and other personnel of the sub-adviser who
would provide services under the Sub-Advisory agreement. The Trustees took into
account the resources available to Eagle in fulfilling its duties under the
Sub-Advisory Agreement and noted the Sub-Adviser's experience in managing
international equity portfolios.
Based upon its review and the representations made to it, the Board of
Trustees, including all of the Noninterested Trustees, concluded that (a) the
terms of the Sub-Advisory Agreement are reasonable, fair and in the best
interests of the Portfolio and its holders of beneficial interests, and (b) the
fees provided in the Sub-Advisory Agreement are fair and reasonable in light of
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the usual and customary charges made for services of the same nature and
quality. Accordingly, after consideration of the above factors, and such other
factors and information as it deemed relevant, the Board of Trustees, including
all of the Noninterested Trustees, approved the Sub-Advisory Agreement with
Eagle.
Vote Required to Approve Proposal 1
Approval of a Sub-Adviser requires the affirmative vote of a "majority of
the outstanding voting securities" of the Fund which term as used in the Proxy
Statement means the vote of the lesser of (a) more than 50% of the outstanding
voting securities of the Fund, or (b) 67% or more of the voting securities of
the Fund present at the Meeting or represented by proxy if holders of more than
50% of the outstanding voting securities of the Fund are present or represented
by proxy at the Meeting.
If the Sub-Adviser is not approved by the requisite shareholders of the
Fund, the Portfolio will continue to be managed by BMR.
The Board of Trustees unanimously recommends that shareholders vote FOR the
approval of the Sub-Advisory Agreement between BMR and Eagle Global Advisors,
L.L.C.
PROPOSAL 2. APPROVAL OF AN AMENDED
INVESTMENT ADVISORY AGREEMENT
As noted above, BMR manages the assets of the Portfolio pursuant to an
Advisory Agreement. At the meeting of the Board of Trustees of the Portfolio on
February 9, 2004, the Trustees approved an amendment (the "Amendment") to the
Advisory Agreement, subject to approval by a "majority of the outstanding voting
securities" of the Portfolio. The Amendment affects two provisions of the
Advisory Agreement: the provision allowing BMR to hire sub-advisers and the
provision governing amendments to the Agreement.
Subadvisers. The Amendment would allow BMR to enter into an investment
sub-advisory agreement with a new sub-investment adviser or replace an existing
sub-adviser with the approval of the Board of Trustees but without shareholder
approval to the extent permitted by the Investment Company Act and the rules
thereunder.
This change is being proposed in connection with a recently proposed new
rule under the Investment Company Act that, if adopted by the Securities and
Exchange Commission, would allow mutual fund advisers to hire sub-advisers or
replace existing sub-advisers without obtaining approval of interest holders.
Under the proposed rule, any sub-advisory agreement entered into with a
sub-adviser would still require the approval of the Board of Trustees. In
addition, the proposed rule would require that BMR's investment advisory
agreement obligate BMR to supervise the sub-adviser in order for BMR to rely on
the rule. To comply with this condition, the Amendment provides for BMR to
supervise any sub-adviser employed by BMR. The terms of the proposed rule are
discussed in more detail in Proposal 3 below.
Amendments to the Advisory Agreement. The Amendment would also allow the
Board of Trustees to amend the Advisory Agreement without obtaining interest
holder approval when permitted by applicable law. In interpretations of the
Investment Company Act and the rules thereunder, the staff of the Securities and
Exchange Commission has stated that under certain limited circumstances
amendments to an investment advisory agreement are allowed to be made without
obtaining shareholder approval. The Amendment would allow the Board of Trustees
6
of the Portfolio to amend the Advisory Agreement without shareholder approval in
such circumstances.
Refer to Exhibit C attached hereto for the complete terms of the form of
Amendment to the Advisory Agreement for the Portfolio. The description of the
Amendment set forth herein is qualified in its entirety by the provisions of the
Amendment as set forth in Exhibit C.
Advisory Agreement
Under the Advisory Agreement, BMR is responsible for managing the
investments and affairs the Portfolio and providing related office facilities
and personnel subject to the supervision of the Portfolio's Board of Trustees.
BMR furnishes investment research, advice and supervision, furnishes an
investment program and determines what securities will be purchased, held or
sold by the Portfolio and what portion, if any, of the Portfolio's assets will
be held uninvested. The Advisory Agreement requires BMR to pay the salaries and
fees of all officers and Trustees of the Portfolio who are members of BMR's
organization and all personnel of the investment adviser performing services
relating to research and investment activities.
The Advisory Agreement continues in effect 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 Portfolio 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 Portfolio or by vote of a majority of the outstanding
voting securities of the Portfolio. The Advisory Agreement may be terminated at
any time without penalty on sixty (60) days' written notice by the Board of
Trustees of the Portfolio or by BMR, or by vote of the majority of the
outstanding voting securities of the Portfolio. The Advisory Agreement will
terminate automatically in the event of its assignment.
The Advisory Agreement provides that BMR may render services to others. The
Advisory Agreement also provides that BMR shall not be liable for any loss
incurred in connection with the performance of its duties, or action taken or
omitted under the Agreement, in the absence of willful misfeasance, bad faith,
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties thereunder, or for any losses sustained
in the acquisition, holding or disposition of any security or other investment.
Under the Advisory Agreement, BMR selects the brokers with which portfolio
securities transactions are executed. BMR is obligated to use its best efforts
to obtain execution at advantageous prices and reasonably competitive commission
rates. Furthermore, the Advisory Agreement provides that BMR may pay a broker a
higher commission than another broker might have charged for effecting a
securities transaction if BMR determines, in good faith, that the higher
commission was reasonable in relation to the value any brokerage and research
services provided by the broker.
Refer to Exhibit D attached hereto for the complete terms of the Advisory
Agreement for the Portfolio. The description of the Advisory Agreement set forth
herein is qualified in its entirety by the provisions of the Advisory Agreement
as set forth in Exhibit D.
Advisory Fees
Under the Advisory Agreement, the Portfolio pays BMR an advisory fee in an
amount equal to the following of the average daily net assets of the Portfolio
throughout each month:
Average Daily Net Assets for the Month Annual Fee Rate
- -----------------------------------------------------------------------
Up to $500 million 1.0000%
7
$500 million but less than $1 billion 0.9375%
$1 billion but less than $2.5 billion 0.8750%
$2.5 billion but less than $5 billion 0.8125%
$5 billion and over 0.7500%
Fees are paid monthly in arrears on the last business day of each month.
The fees payable to BMR for services provided pursuant to the Advisory
Agreement for the period from November 1, 2002 to October 31, 2003 were
$970,995.
As of October 31, 2003, the Portfolio had net assets of $108,454,023. No
commissions were paid by the Portfolio during its last fiscal year to any
affiliated brokers.
Evaluation by the Board
At the meeting held on February 9, 2004, the Board of Trustees of the
Portfolio authorized the Amendment to the Advisory Agreement. When considering
the Amendment, the Trustees considered the substantial costs entailed in holding
the shareholder meetings required to approve amendments to the Advisory
Agreement and to adopt investment sub-advisory agreements. These costs must be
weighed against the benefits of shareholder scrutiny of such matters. In the
case of amendments to the Advisory Agreement, the Trustees noted that the
ability to amend the Agreement without shareholder approval would only be
available in limited circumstances. Furthermore, in the case of entering into
new or replacement investment sub-advisory contracts without shareholder
approval, BMR will be constrained by the requirements and conditions set forth
in the new rule, when adopted by the Securities Exchange Commission. In
addition, even in the absence of shareholder approval, any proposal to amend the
Advisory Agreement or to enter into an investment sub-advisory agreement with a
new or replacement sub-adviser would be subject to the careful review by the
Board of Trustees of the Portfolio.
The Trustees believe that the proposed authority for the Board of Trustees
to enter into investment sub-advisory agreements with new or replacement
sub-advisers without shareholder approval when permitted by the Investment
Company Act and to amend the Advisory Agreement without obtaining approval of
the shareholders, unless required by the Investment Company Act, is in the best
interests of shareholders of the Fund.
Vote Required to Approve Proposal 2
Approval of the Amendment requires the affirmative vote of a "majority of
the outstanding voting securities" of the Fund which term as used in this Proxy
Statement means the vote of the lesser of (a) more than 50% of the outstanding
voting securities of the Fund, or (b) 67% of the voting securities of the Fund
present at the Meeting or represented by proxy if holders of more than 50% of
the outstanding voting securities of the Fund are present or represented by
proxy at the Meeting.
The Trustees have considered various factors and believe that this Proposal
is in the best interests of the Fund's shareholders. If the Proposal is not
approved, the Portfolio's present Advisory Agreement will remain in effect and a
shareholder vote would be required before BMR could appoint a new sub-adviser.
The Board of Trustees recommends that the shareholders of the Fund vote FOR
the amendment of the Portfolio's Investment Advisory Agreement as described in
this Proposal 2.
8
PROPOSAL 3. TO AUTHORIZE THE BOARD OF TRUSTEES TO SELECT
INVESTMENT SUB-ADVISERS AND ENTER INVESTMENT SUB-ADVISORY
AGREEMENTS WITHOUT OBTAINING SHAREHOLDER APPROVAL
TO THE EXTENT PERMITTED BY APPLICABLE LAW.
The Investment Company Act requires that all contracts pursuant to which
persons serve as investment advisers to investment companies be approved by
investors. This requirement currently applies to the appointment of any new
sub-adviser to the Portfolio. However, the Securities and Exchange Commission
has recently proposed a new rule that, if adopted, would allow BMR to hire a
sub-adviser or replace an existing sub-adviser for the Portfolio without
obtaining investor approval, subject to certain conditions. To rely on the rule,
BMR would be required to supervise and oversee the Portfolio's sub-adviser(s)
and the hiring of a new or different sub-adviser could not increase the fees
charged to the Portfolio. In addition, BMR would be required to obtain a vote of
the Portfolio's interest holders, including the Fund, authorizing BMR to enter
into investment sub-advisory agreements with new or replacement sub-advisers
without interest holder approval. Any sub-advisory agreement entered into with a
sub-adviser pursuant to the rule would still require Trustee approval.
The Fund is seeking shareholder approval of the Portfolio's operation under
the new rule if it is adopted by the Securities and Exchange Commission.
This Proposal 3 is intended to facilitate the efficient supervision and
management of the sub-adviser by BMR and the Board of Trustees of the Portfolio.
BMR will monitor the performance of the sub-adviser and may from time to time
recommend that the Board of Trustees replace the sub-adviser or appoint
additional sub-advisers, depending on BMR's assessment of which sub-adviser or
combination of sub-advisers it believes will optimize the Portfolio's chances of
achieving its investment objective. If Fund shareholders approve this proposal
and the new rule is adopted, the Fund would no longer be required to call a
shareholder meeting each time a new or replacement sub-adviser is appointed by
the Portfolio, and shareholders of the Fund would not be asked to vote on the
new sub-adviser.
Shareholder meetings entail substantial costs which could diminish the
benefits of any sub-advisory arrangements. These costs must be weighed against
the benefits of shareholder scrutiny of proposed contracts with additional or
replacement sub-advisers. However, even in the absence of shareholder approval,
any proposal to add or replace sub-advisers would receive careful review. First,
BMR would assess the Portfolio's needs and, if it believed additional or
replacement sub-advisers could benefit the Portfolio, would search for available
investment sub-advisers. Second, any recommendations made by BMR would have to
be approved by a majority of the Portfolio's Trustees, including a majority of
the Noninterested Trustees. In selecting any new or replacement sub-advisers,
the Trustees are required to determine that an investment sub-advisory agreement
with the sub-adviser is reasonable, fair and in the best interests of the
Portfolio and its shareholders, and that the fees provided in the agreement are
fair and reasonable in light of the usual and customary charges made by others
for services of the same nature and quality.
The Trustees believe that the proposed authority for the Board of Trustees
to select and change investment sub-advisers and enter into investment
sub-advisory agreements without obtaining the approval of shareholders, subject
to the Commission's adoption of the new rule is in the best interests of the
shareholders of the Fund.
9
Required Vote
Approval to authorize the Trustees to select investment sub-advisers and
enter into investment sub-advisory agreements without obtaining shareholder
approval requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund which term as used in this Proxy Statement means the
vote of the lesser of (a) more than 50% of the outstanding voting securities of
the Fund, or (b) 67% or more of the voting securities of the Fund present at the
Meeting or represented by proxy if holders of more than 50% of the outstanding
voting securities of the Fund are present or represented by proxy at the
Meeting.
The Board of Trustees unanimously recommends that shareholders of the Fund vote
FOR authorizing the Trustees to select investment sub-advisers and enter into
investment sub-advisory agreements without obtaining shareholder approval.
NOTICE TO BANKS AND BROKER/DEALERS
The Fund has previously solicited all Nominee and Broker/Dealer accounts as
to the number of additional proxy statements required to supply owners of
shares. Should additional proxy material be required for beneficial owners,
please forward such requests to Eaton Vance Management, The Eaton Vance
Building, 255 State Street, Boston, MA 02109, Attn: Proxy Coordinator.
ADDITIONAL INFORMATION
Investment Adviser, Administrator and Underwriter
BMR serves as investment adviser to the Portfolio, as well as many of the
other funds in the Eaton Vance Group of Funds. BMR is a subsidiary of Eaton
Vance Management ("Eaton Vance"). BMR and Eaton Vance are indirect, wholly owned
subsidiaries of Eaton Vance Corporation ("EVC"), a Maryland Corporation and
publicly held holding company. Eaton Vance serves as administrator to the Fund,
but receives no compensation. EVD acts as the principal underwriter for the Fund
and as placement agent for the Portfolio. The Fund paid EVD $____________ for
its distribution services for the year ended October 31, 2003. EVD receives no
compensation for acting as placement agent for the Portfolio. The business
address of Eaton Vance, BMR and EVD is The Eaton Vance Building, 255 State
Street, Boston, MA 02109.
Officers of the Trust and Portfolio
The officers of the Trust and Portfolio and their length of service are set
forth below. Because of their positions with Eaton Vance and their ownership of
EVC stock, the officers of the Trust and the Portfolio benefit from the advisory
fees paid by the Portfolio to BMR. Unless otherwise indicated, the positions
listed under "Position(s) Held with the Trust and/or Portfolio" are held with
both the Trust and the Portfolio.
10
Position(s)
Held with the
Trust and/or Term of Office and Principal Occupations
Name, Address and Age(1) Portfolio Length of Time Served During Past Five Years(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas E. Faust Jr. President of Since 2002 Executive Vice President of EVM, BMR, EVC and EV; Chief
DOB: 5/31/58 the Trust Investment Officer of EVM 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 EVM). Officer
of 53 registered investment companies managed by EVM or
BMR.
William H. Ahern, Jr. Vice President Since 1995 Vice President of EVM and BMR. Officer of 35 registered
DOB: 7/28/59 of the Trust investment companies managed by EVM or BMR.
Kiersten Christensen Vice President Since 2002 Vice President of EVM and BMR since August 2000.
DOB: 10/21/65 of the Portfolio Previously, a portfolio manager and equity analyst at
Lloyd George Investment Management (Bermuda) Limited.
Officer of 1 registered investment company managed by EVM
or BMR.
Thomas J. Fetter Vice President Since 1997 Vice President of EVM and BMR. Trustee and President of
DOB: 8/20/43 of the Trust The Massachusetts Health & Education Tax-Exempt Trust.
Officer of 127 registered investment companies managed by
EVM or BMR.
Robert B. MacIntosh Vice President Since 1998 Vice President of EVM and BMR. Officer of 127 registered
DOB: 1/22/57 of the Trust investment companies managed by EVM or BMR.
11
Position(s)
Held with the
Trust and/or Term of Office and Principal Occupations
Name, Address and Age(1) Portfolio Length of Time Served During Past Five Years(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Michael R. Mach Vice President Since 1999 Vice President of EVM and BMR. Previously, Managing
DOB: 7/15/47 of the Trust Director and Senior Analyst for Robertson Stephens
(1998-1999). Officer of 26 registered investment
companies managed by EVM or BMR.
Duncan W. Richardson Vice President Vice President of the Senior Vice President and Chief Equity Investment Officer
DOB: 10/26/57 of the Trust; Trust since 2001; of EVM and BMR. Officer of 42 registered investment
President of President of the companies managed by EVM or BMR.
the Portfolio Portfolio since 2002
Walter A. Row, III Vice President Since 2001 Director of Equity Research and a Vice President of EVM
DOB: 7/20/57 of the Trust and BMR. Officer of 22 registered investment companies
managed by EVM or BMR.
Judith A. Saryan Vice President Since 2003 Vice President of EVM and BMR. Previously, Portfolio
DOB: 8/21/54 of the Trust Manager and Equity Analyst for State Street Global
Advisers (1980-1999). Officer of 25 registered
investment companies managed by EVM or BMR.
Susan Schiff Vice President Since 2002 Vice President of EVM and BMR. Officer of 26 registered
DOB: 3/13/61 of the Trust investment companies managed by EVM or BMR.
James L. O'Connor Treasurer of Since 1989 Vice President of BMR, EVM, and EVD. Officer of 116
DOB: 4/1/45 the Trust registered investment companies managed by EVM or BMR.
Kristin S. Anagnost Treasurer of Since 2002(2) Vice President of EVM and BMR. Officer of 109 registered
DOB: 6/12/65 the Portfolio investment companies managed by EVM or BMR.
12
Position(s)
Held with the
Trust and/or Term of Office and Principal Occupations
Name, Address and Age(1) Portfolio Length of Time Served During Past Five Years(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Alan R. Dynner Secretary Secretary of the Vice President, Secretary and Chief Legal Officer of BMR,
DOB: 10/10/40 Trust since 1997; of EVM, EVD, Eaton Vance, Inc. and EVC. Officer of 195
the Portfolio since registered investment companies managed by EVM or BMR.
1998
(1) The business address of each officer is The Eaton Vance Building, 255 State
Street, Boston, MA 02109.
(2) Includes both master and feeder funds in master-feeder structure.
(3) Prior to 2002, Ms. Anagnost served as Assistant Treasurer since 1998.
Proxy Solicitation and Tabulation
The expense of preparing, printing and mailing this Proxy Statement and
enclosures and the costs of soliciting proxies on behalf of the Trust's Board of
Trustees will be borne by the Fund and BMR. Proxies will be solicited by mail
and may be solicited in person or by telephone, telegraph, facsimile or other
electronic means by officers of the Trust, by personnel of Eaton Vance, by the
Fund's transfer agent, PFPC Inc., by broker-dealer firms or by a professional
solicitation organization. The Fund has retained D.F. King & Co., Inc. of New
York, NY ("DF King") to assist in the solicitation of proxies, for which the
Fund will pay an estimated fee of approximately $____________ plus out-of-pocket
expenses. The expenses connected with the solicitation of these proxies and with
any further proxies which may be solicited by the Fund's officers, by Eaton
Vance personnel, by the transfer agent, PFPC Inc., by broker-dealer firms or by
DF King, in person, or by telephone, by telegraph, by facsimile or other
electronic means will be borne by the Fund and BMR. A written proxy may be
delivered to the Fund or its transfer agent prior to the meeting by facsimile
machine, graphic communication equipment or other electronic transmission. The
Fund will reimburse banks, broker-dealer firms, and other persons holding shares
registered in their names or in the names of their nominees, for their expenses
incurred in sending proxy material to and obtaining proxies from the beneficial
owners of such shares. Total estimated costs are $___________.
Shareholders may also choose to give their proxy votes by telephone using
an automated telephonic voting system or through the Internet rather than return
their proxy cards. Please see the proxy card for details. The Fund may arrange
for Eaton Vance, its affiliates or agents to contact shareholders who have not
returned their proxy cards and offer to have votes recorded by telephone. If the
Fund records votes by telephone or over the Internet, it will use procedures
designed to authenticate shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with their instructions, and
to confirm that their instructions have been properly recorded. If the enclosed
proxy card is executed and returned, or an Internet or telephonic vote is
delivered, that vote may nevertheless be revoked at any time prior to its use by
written notification received by the Fund, by the execution of a later-dated
13
proxy card, by the Fund's receipt of a subsequent valid Internet or telephonic
vote, or by attending the meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and telephone and Internet votes that are properly delivered and
received by the Secretary prior to the meeting, and which are not revoked, will
be voted at the meeting. Shares represented by such proxies will be voted in
accordance with the instructions thereon. If no specification is made on the
proxy card with respect to a Proposal, it will be voted FOR the matters
specified on the proxy card. For purposes of determining the presence or absence
of a quorum and for determining whether sufficient votes have been received for
approval of any matter to be acted upon at the meeting, abstentions and broker
non-votes (i.e., proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owner or other person
entitled to vote shares on a particular matter with respect to which the brokers
or nominees do not have discretionary power) will be treated as shares that are
present at the meeting, but which have not been voted. Accordingly, abstentions
and broker non-votes will assist the Fund in obtaining a quorum, but will have
no effect on the outcome of the Proposals.
If a quorum is not present at the meeting or if the quorum is present at
the meeting, but sufficient votes by the shareholders of the Fund in favor of
any Proposal set forth in the Notice of this meeting are not received by the
meeting date, the persons named as attorneys in the enclosed proxy may propose
one or more adjournments of the meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of the holders
of a majority of the shares of the Fund present in person or by proxy at the
session of the meeting to be adjourned. The persons named as attorneys in the
enclosed proxy will vote in favor of such adjournment those proxies that they
are entitled to vote in favor of the Proposal for which further solicitation of
proxies is to be made. They will vote against any such adjournment those proxies
required to be voted against such Proposal. The costs of any such additional
solicitation and of any adjourned session will be borne by the Fund as described
above.
Shareholder Proposals
Shareholders wishing to submit proposals for consideration at a subsequent
shareholders' meeting should send their written proposals to: Secretary, Eaton
Vance Group of Funds, The Eaton Vance Building, 255 State Street, Boston, MA
02109. Proposals must be received in advance of a proxy solicitation to be
considered and the mere submission of a proposal does not guarantee inclusion in
the proxy statement or consideration at the meeting. The Fund does not conduct
annual meetings.
February 25, 2004
14
Exhibit A
As of February 2, 2004, the following record owner(s) of each class of the
Fund held the share percentages indicated below, which were owned either (i)
beneficially by such person(s) or (ii) of record by such person(s) on behalf of
customers who are the beneficial owners of such shares and as to which such
record owner(s) may exercise voting rights under certain limited circumstances.
Amount of
Shares and %
Address Owned
------- -----
Class A Shares
Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 5.4%
Class B Shares
Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 10.2%
Class C Shares
Merrill Lynch, Pierce, Fenner & Smith, Inc. Jacksonville, FL 19.1%
Class D Shares
US Clearing Corp. New York, NY 19.3%
FBO 463-12035-20
US Clearing Corp. New York, NY 11.1%
FBO 463-12038-27
A-1
Exhibit B
TAX-MANAGED INTERNATIONAL EQUITY PORTFOLIO
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT effective this ____ day of ________, 2004 between Boston
Management and Research, a Massachusetts business trust (the "Adviser"), and
Eagle Global Advisors, L.L.C., a Texas limited liability company (the
"Sub-Adviser").
WHEREAS, Tax-Managed International Equity Portfolio (the "Trust") is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, management investment company; and
WHEREAS, the Trust is a master fund in a master feeder structure whereby,
among other potential investors, one or more investment companies registered
with the Securities and Exchange Commission ("SEC") may invest its assets in the
Trust (each a "Fund"); and
WHEREAS, pursuant to an Investment Advisory Agreement, dated February 13,
2001 (the "Advisory Agreement"), a copy of which has been provided to the
Sub-Adviser, the Trust has retained BMR to render advisory and management
services to the Trust; and
WHEREAS, pursuant to authority granted to BMR in the Advisory Agreement,
BMR wishes to retain the Sub-Adviser to furnish investment advisory services to
the Trust, and the Sub-Adviser is willing to furnish such services to the Trust
and BMR.
NOW, THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between BMR and the Sub-Adviser
as follows:
1. Appointment. BMR hereby appoints the Sub-Adviser to act as the
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and to administer its affairs, subject to the supervision of
BMR, for the period and on the terms set forth in this Agreement. The
Sub-Adviser accepts such appointment and agrees to furnish the services herein
set forth herein for the compensation herein provided.
2. Sub-Adviser Duties. Subject to the supervision of the Trust's Board of
Trustees (the "Board") and BMR, the Sub-Adviser will provide a continuous
investment program for the Trust's portfolio and determine in its discretion the
composition of the assets of the Trust's portfolio, including determination of
the purchase, retention, or sale of the securities, cash, and other investments
contained in the portfolio. The Sub-Adviser will provide investment research and
conduct a continuous program of evaluation, investment, sales, and reinvestment
of the Trust's assets by determining the securities and other investments that
shall be purchased, entered into, sold, closed, or exchanged for the Trust, when
these transactions should be executed, and what portion of the assets of the
Trust should be held in the various securities and other investments in which it
may invest. To the extent permitted by the investment policies of the Trust, the
Sub-Adviser shall make decisions for the Trust as to foreign currency matters
and make determinations as to and execute and perform foreign currency exchange
contracts on behalf of the Trust. The Sub-Adviser will provide the services
B-1
under this Agreement in accordance with the Trust's investment objective or
objectives, policies, and restrictions as stated in the Trust's Registration
Statement filed with the SEC, as amended (the "Registration Statement"), copies
of which shall be sent to the Sub-Adviser by BMR prior to the commencement of
this Agreement and promptly following any such amendment. The Sub-Adviser
further agrees as follows:
a. The Sub-Adviser will conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Trust's Board of
which the Sub-Adviser has been sent a copy, and the provisions of the
Registration Statement, of which the Sub-Adviser has received a copy and with
the Sub-Adviser's portfolio manager operating policies and procedures as are
approved by BMR. The Sub-Adviser shall exercise reasonable care in the
performance of its duties under the Agreement.
b. The Sub-Adviser will manage the Trust so that it meets the income and
asset diversification requirements of Section 851 of the Internal Revenue Code.
c. The Sub-Adviser shall exercise voting authority with respect to proxies
that the Trust is entitled to vote with regard to securities in the Trust's
portfolio, provided that such authority may be revoked in whole or in part by
BMR at any time upon notice to the Sub-Adviser and provided further that the
exercise of such authority shall be subject to review by BMR and the Board. The
Sub-Adviser shall exercise its proxy voting authority hereunder in accordance
with such proxy voting policies and procedures of the Sub-Adviser as are
approved by BMR. The Sub-Adviser shall provide such information relating to its
exercise of proxy voting authority hereunder (including the manner in which it
has voted proxies and its resolution of conflicts of interest) as reasonably
requested by BMR from time to time.
d. In connection with the purchase and sale of securities for the Trust,
the Sub-Adviser will arrange for the transmission to the custodian for the Trust
(the "Custodian") on a daily basis such confirmation, trade tickets, and other
documents and information, including, but not limited to, Cusip, Cedel, or other
numbers that identify securities to be purchased or sold on behalf of the Trust,
as may be reasonably necessary to enable the Custodian to perform its
administrative and recordkeeping responsibilities with respect to the Trust.
With respect to portfolio securities to be settled through the Trust's transfer
agent, the Sub-Adviser will arrange for the prompt transmission of the
confirmation of such trades to the Trust's Custodian.
e. The Sub-Adviser will assist the Custodian in determining or confirming,
consistent with the procedures and policies stated in the Registration Statement
or adopted by the Board, the value of any portfolio securities or other assets
of the Trust for which the Custodian seeks assistance from or identifies for
review by the Sub-Adviser; provided that the Sub-Adviser shall be responsible
for determining in good faith, consistent with the procedures and policies
stated in the Registration Statement or adopted by the Board, the fair value of
the Trust's portfolio of securities and shall obtain the services, at its own
expense, of any pricing service required by the Board or BMR. The parties
acknowledge that the Sub-Adviser is not a custodian of the Trust's assets and
will not take possession or custody of such assets.
B-2
f. Following the end of the Trust's semi-annual period and fiscal year, the
Sub-Adviser will assist BMR in preparing a letter to shareholders containing a
discussion of those factors referred to in Item 5(a) of 1940 Act Form N-1A in
respect of both the prior quarter and the fiscal year to date.
g. The Sub-Adviser will complete and deliver to BMR for each quarter by the
5th business day of the following quarter a written compliance checklist in a
form provided by BMR.
h. The Sub-Adviser will make available to the Trust and BMR, promptly upon
request, any of the Trust's investment records and ledgers maintained by the
Sub-Adviser (which shall not include the records and ledgers maintained by the
Custodian or portfolio accounting agent for the Trust) as are necessary to
assist the Trust and BMR to comply with requirements of the 1940 Act and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the rules
under each, as well as other applicable laws. The Sub-Adviser will furnish to
regulatory authorities having the requisite authority any information or reports
in connection with such services in respect to the Trust which may be requested
in order to ascertain whether the operations of the Trust are being conducted in
a manner consistent with applicable laws and regulations.
i. The Sub-Adviser will provide reports to the Board for consideration at
meetings of the Board on the investment program for the Trust and the issuers
and securities represented in the Trust's portfolio, and will furnish the Board
with such periodic and special reports as the Board and BMR may reasonably
request.
3. Broker-Dealer Selection. The Sub-Adviser is authorized to make decisions
to buy and sell securities and other investments for the Trust's portfolio, and
to select broker-dealers and to negotiate brokerage commission rates in
effecting a security transaction. The Sub-Adviser's primary consideration in
effecting a security transaction will be to obtain the best execution for the
Trust, taking into account the factors specified in the prospectus and/or
statement of additional information for the Trust, and determined in
consultation with BMR, which include price (including the applicable brokerage
commission or dollar spread), the size of the order, the nature of the market
for the security, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer involved, the quality of the service,
the difficulty of execution, and the execution capabilities and operational
facilities of the firm involved, and the firm's risk in positioning a block of
securities. Accordingly, the price to the Trust in any transaction may be less
favorable than that available from another broker-dealer if the difference is
reasonably justified, in the judgment of the Sub-Adviser in the exercise of its
fiduciary obligations to the Trust, by other aspects of the portfolio execution
services offered. Subject to such policies as the Trust's Board or Adviser may
determine and consistent with Section 28(e) of the Securities Exchange Act of
1934, the Sub-Adviser shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of its
having caused the Trust to pay a broker-dealer for effecting a portfolio
investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the
Sub-Adviser determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's or BMR's overall responsibilities with respect
to the Trust and to their respective other clients as to which they exercise
B-3
investment discretion. The Sub-Adviser will consult with BMR to ensure that
portfolio transactions on behalf of the Trust are directed to broker-dealers on
the basis of criteria reasonably considered appropriate by BMR. To the extent
consistent with these standards, the Sub-Adviser is further authorized to
allocate the orders placed by it on behalf of the Trust to an affiliated
broker-dealer, or to such brokers and dealers who also provide research or
statistical material, or other services to the Trust, the Sub-Adviser, or an
affiliate of the Sub-Adviser. Such allocation shall be in such amounts and
proportions as the Sub-Adviser shall determine consistent with the above
standards, and the Sub-Adviser will report on said allocation regularly to the
Trust's Board indicating the broker-dealers to which such allocations have been
made and the basis therefor.
4. Disclosure about Sub-Adviser. The Sub-Adviser has reviewed the most
recent Amendment to the Registration Statement for the Trust and the
registration statement of any Fund filed with the SEC (the Registration
Statement and the Funds' registration statements referred to herein as the
"Registration Statements") that contain disclosure about the Sub-Adviser, and
represents and warrants that, with respect to the disclosure about the
Sub-Adviser or information relating directly or indirectly to the Sub-Adviser,
such Registration Statements contain, as of the date hereof, no untrue statement
of any material fact and do not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under BMRs Act and will maintain such registration
so long as this Agreement remains in effect. BMR hereby acknowledges that it has
received a copy of the Sub-Adviser's Form ADV, Part II at least 48 hours prior
to entering into this Agreement.
5. Expenses. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it and its staff and for their activities in connection
with its duties under this Agreement. BMR or the Trust shall be responsible for
all the expenses of the Trust's operations.
6. Compensation. For the services provided to the Trust, BMR will pay the
Sub-Adviser an annual fee equal to the amount specified in Schedule A hereto,
payable monthly in arrears on the last business day of each month. The fee will
be appropriately prorated to reflect any portion of a calendar month that this
Agreement is not in effect among the parties. BMR is solely responsible for the
payment of fees to the Sub-Adviser, and the Sub-Adviser agrees to seek payment
of its fees solely from BMR. The Trust shall have no liability for Sub-Adviser's
fee hereunder.
7. Materials. During the term of this Agreement, BMR agrees to furnish the
Sub-Adviser at its principal office all prospectuses, proxy statements, and
reports to shareholders prepared for distribution to shareholders of the Trust
or any Fund that refer to the Sub-Adviser in any way, prior to the use thereof,
and BMR shall not use any such materials if the Sub-Adviser reasonably objects
in writing within 2 business days (or such other period as may be mutually
agreed) after receipt thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials that expressly relate to
the Sub-Adviser, its services and its clients, and such objection may only be on
the grounds of the accuracy or completeness of the references to the aforesaid.
BMR agrees to use its reasonable best efforts to ensure that materials prepared
by its employees or agents or its affiliates that refer to the Sub-Adviser or
its clients in any way are consistent with those materials previously approved
by the Sub-Adviser as referenced in the first sentence of this paragraph.
B-4
8. Compliance.
a. The Sub-Adviser agrees to use reasonable compliance techniques as BMR or
the Board may adopt or approve, including written compliance procedures. In
addition, the Sub-Adviser shall retain, at its own expense, the services of the
Custodian or any other party as requested by the Board to monitor the compliance
of the Trust's portfolio of holdings with the investment objective, policies and
restrictions set forth in the Registration Statement.
b. The Sub-Adviser agrees that it shall promptly notify, if legally
permitted, BMR and the Trust (1) in the event that the SEC has censured the
Sub-Adviser; placed limitations upon its activities, functions or operations;
suspended or revoked its registration as an investment adviser; commenced
proceedings or an investigation (formally or informally) that may result in any
of these actions; or corresponded with the Sub-Adviser, including sending a
deficiency letter or raising issues about the business, operations, or practices
of the Sub-Adviser, (2) in the event of any notice of investigation,
examination, inquiry, audit or subpoena of the Sub-Adviser or any of its
officers or employees by any federal, state, municipal or other governmental
department, commission, bureau, board, agency or instrumentality, or (3) upon
having a reasonable basis for believing that the Trust has ceased to qualify or
might not qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code. If legally permitted, the Sub-Adviser will furnish BMR,
upon request, copies of any and all documents relating to the foregoing. The
Sub-Adviser further agrees to notify BMR and the Trust promptly of any material
fact known to the Sub-Adviser respecting or relating to the Sub-Adviser that is
not contained in the Registration Statement or prospectus for the Trust or any
Fund, or any amendment or supplement thereto, or if any statement contained
therein that becomes untrue in any material respect.
c. BMR agrees that it shall promptly notify, if legally permitted, the
Sub-Adviser (1) in the event that the SEC has censured BMR or the Trust; placed
limitations upon either of their activities, functions, or operations; suspended
or revoked BMR's registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these actions, or (2)
upon having a reasonable basis for believing that the Trust has ceased to
qualify or might not qualify as a regulated investment company under Subchapter
M of the Internal Revenue Code.
d. The Sub-Adviser will provide BMR with such reports, presentations,
certifications and other information as BMR may request from time to time
concerning the business and operations of the Sub-Adviser in performing services
hereunder or generally concerning the Sub-Adviser's investment advisory
services, the Sub-Adviser's compliance with applicable federal, state and local
law and regulations, and changes in the Sub-Adviser's key personnel, investment
strategies, policies and procedures, and other matters that are likely to have a
material impact on the Sub-Advisers duties hereunder.
9. Books and Records. The Sub-Adviser hereby agrees that all records which
it maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's or BMR's
request in compliance with the requirements of Rule 31a-3 under the 1940 Act,
although the Sub-Adviser may, at its own expense, make and retain a copy of such
records. The Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-l under the 1940 Act.
B-5
10. Cooperation; Confidentiality. Each party to this Agreement agrees to
cooperate with the other party and with all appropriate governmental authorities
having the requisite jurisdiction (including, but not limited to, the SEC) in
connection with any investigation or inquiry relating to this Agreement or the
Trust. Subject to the foregoing, the Sub-Adviser shall treat as confidential all
information pertaining to the Trust and actions of the Trust, BMR and the
Sub-Adviser, and BMR shall treat as confidential and use only in connection with
the Trust all information furnished to the Trust or BMR by the Sub-Adviser, in
connection with its duties under this Agreement except that the aforesaid
information need not be treated as confidential if required to be disclosed
under applicable law, if generally available to the public through means other
than by disclosure by the Sub-Adviser or BMR, or if available from a source
other than BMR, Sub-Adviser or the Trust.
11. Control. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Trust shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and has reserved the right to reasonably direct any action hereunder
taken on its behalf by the Sub-Adviser.
12. Liability.
a. Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, BMR agrees that the Sub-Adviser, any
affiliated person of the Sub-Adviser, and each person, if any, who, within the
meaning of Section 15 of the Securities Act of 1933, as amended ("the 1933 Act")
controls the Sub-Adviser shall not be liable for, or subject to any damages,
expenses, or losses in connection with, any act or omission connected with or
arising out of any services rendered under this Agreement, except by reason of
willful misfeasance, bad faith, or negligence in the performance of the
Sub-Adviser's duties, or any breach by the Sub-Adviser of its obligations or
duties under this Agreement.
b. The Sub-Adviser agrees that neither the Trust nor any Fund shall bear
any responsibility or shall be subject to any liability for any damages,
expenses, or losses of Sub-Adviser connected with or arising out of its services
under this Agreement.
13. Indemnification.
a. BMR agrees to indemnify and hold harmless the Sub-Adviser, any
affiliated person of the Sub-Adviser, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls ("controlling person") the
Sub-Adviser (all of such persons being referred to as "Sub-Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, BMRs
Act, under any other statute, at common law or otherwise, arising out of BMR's
responsibilities to the Sub-Adviser which (1) may be based upon BMR's gross
negligence, willful misfeasance, or bad faith in the performance of its duties,
or by reason of BMR's reckless disregard of its obligations and duties under
this Agreement, or (2) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statements or
prospectuses covering shares of the Trust or any Fund, or any amendment thereof
or any supplement thereto, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
B-6
reliance upon information furnished to BMR or the Trust or to any affiliated
person of BMR by a Sub-Adviser Indemnified Person; provided however, that in no
case shall the indemnity in favor of the Sub-Adviser Indemnified Person be
deemed to protect such person against any liability to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, or negligence
in the performance of its duties, or by reason of its breach or reckless
disregard of its obligations or duties under this Agreement.
b. Notwithstanding Section 12 of this Agreement, the Sub-Adviser agrees to
indemnify and hold harmless BMR, any affiliated person of BMR, and any
controlling person of BMR (all of such persons being referred to as "Adviser
Indemnified Persons") against any and all losses, claims, damages, liabilities,
or litigation (including legal and other expenses) to which an Adviser
Indemnified Person may become subject under the 1933 Act, 1940 Act, BMRs Act,
under any other statute, at common law or otherwise, arising out of the
Sub-Adviser's responsibilities as Sub-Adviser of the Trust which (1) may be
based upon the Sub-Adviser's negligence, willful misfeasance, or bad faith in
the performance of its duties, or by reason of any breach by the Sub-Adviser of
its obligations or duties under this Agreement, or (2) may be based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statements or prospectuses covering the shares of the Trust or any
Fund, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact known or which should have been known
to the Sub-Adviser and was required to be stated therein or necessary to make
the statements therein not misleading, if such a statement or omission was made
in reliance upon information furnished to BMR, the Trust, or any affiliated
person of BMR or Trust by the Sub-Adviser or any affiliated person of the
Sub-Adviser; provided, however, that in no case shall the indemnity in favor of
an Adviser Indemnified Person be deemed to protect such person against any
liability to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or by
reason of its breach or reckless disregard of its obligations and duties under
this Agreement.
c. BMR shall not be liable under Paragraph (a) of this Section 13 with
respect to any claim made against a Sub-Adviser Indemnified Person unless such
Sub-Adviser Indemnified Person shall have notified BMR in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Sub-Adviser Indemnified Person (or after such Sub-Adviser Indemnified Person
shall have received notice of such service on any designated agent), but failure
to notify BMR of any such claim shall not relieve BMR from any liability which
it may have to the Sub-Adviser Indemnified Person against whom such action is
brought except to the extent BMR is prejudiced by the failure or delay in giving
such notice. In case any such action is brought against the Sub-Adviser
Indemnified Person, BMR will be entitled to participate, at its own expense, in
the defense thereof or, after notice to the Sub-Adviser Indemnified Person, to
assume the defense thereof, with counsel satisfactory to the Sub-Adviser
Indemnified Person. If BMR assumes the defense of any such action and the
selection of counsel by BMR to represent BMR and the Sub-Adviser Indemnified
Person would result in a conflict of interests and therefore, would not, in the
reasonable judgment of the Sub-Adviser Indemnified Person, adequately represent
the interests of the Sub-Adviser Indemnified Person, BMR will, at its own
expense, assume the defense with counsel to BMR and, also at its own expense,
with separate counsel to the Sub-Adviser Indemnified Person, which counsel shall
be satisfactory to BMR and to the Sub-Adviser Indemnified Person. The
Sub-Adviser Indemnified Person shall bear the fees and expenses of any
B-7
additional counsel retained by it, and BMR shall not be liable to the
Sub-Adviser Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Sub-Adviser Indemnified Person
independently in connection with the defense thereof other than reasonable costs
of investigation. BMR shall not have the right to compromise on or settle the
litigation without the prior written consent of the Sub-Adviser Indemnified
Person if the compromise or settlement results, or may result in a finding of
wrongdoing on the part of the Sub-Adviser Indemnified Person.
d. The Sub-Adviser shall not be liable under Paragraph (b) of this Section
13 with respect to any claim made against an Adviser Indemnified Person unless
such Adviser Indemnified Person shall have notified the Sub-Adviser in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such Adviser
Indemnified Person (or after such Adviser Indemnified Person shall have received
notice of such service on any designated agent), but failure to notify the
Sub-Adviser of any such claim shall not relieve the Sub-Adviser from any
liability which it may have to BMR Indemnified Person against whom such action
is brought except to the extent the Sub-Adviser is prejudiced by the failure or
delay in giving such notice. In case any such action is brought against BMR
Indemnified Person, the Sub-Adviser will be entitled to participate, at its own
expense, in the defense thereof or, after notice to BMR Indemnified Person, to
assume the defense thereof, with counsel satisfactory to BMR Indemnified Person.
If the Sub-Adviser assumes the defense of any such action and the selection of
counsel by the Sub-Adviser to represent both the Sub-Adviser and BMR Indemnified
Person would result in a conflict of interests and therefore, would not, in the
reasonable judgment of BMR Indemnified Person, adequately represent the
interests of BMR Indemnified Person, the Sub-Adviser will, at its own expense,
assume the defense with counsel to the Sub-Adviser and, also at its own expense,
with separate counsel to BMR Indemnified Person, which counsel shall be
satisfactory to the Sub-Adviser and to BMR Indemnified Person. BMR Indemnified
Person shall bear the fees and expenses of any additional counsel retained by
it, and the Sub-Adviser shall not be liable to BMR Indemnified Person under this
Agreement for any legal or other expenses subsequently incurred by BMR
Indemnified Person independently in connection with the defense thereof other
than reasonable costs of investigation. The Sub-Adviser shall not have the right
to compromise on or settle the litigation without the prior written consent of
BMR Indemnified Person if the compromise or settlement results, or may result in
a finding of wrongdoing on the part of BMR Indemnified Person.
14. Duration and Termination.
a. This Agreement shall become effective on the date first indicated above,
subject to the condition that the Trust's Board, including a majority of those
Trustees who are not interested persons (as such term is defined in the 1940
Act) of BMR or the Sub-Adviser, and the Holders of Interests in the Trust, shall
have approved this Agreement in the manner required by the 1940 Act. Unless
terminated as provided herein, this Agreement shall remain in full force and
effect through and including ___________, 2005 and shall continue in full force
and affect indefinitely thereafter, but only so long as such continuance is
specifically approved at least annually by (a) the Board, or by the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
the Trust, and (b) the vote of a majority of those Trustees who are not
interested persons (as such term is defined in the 1940 Act) of any such party
to this Agreement cast in person at a meeting called for the purpose of voting
on such approval.
B-8
b. Notwithstanding the foregoing, this Agreement may be terminated: (a) by
BMR at any time without payment of any penalty, upon 60 days' prior written
notice to the Sub-Adviser and the Trust; (b) at any time without payment of any
penalty by the Trust, by the Trust's Board or a majority of the outstanding
voting securities of the Trust, upon 60 days' prior written notice to BMR and
the Sub-Adviser, or (c) by the Sub-Adviser upon 3 months' prior written notice
unless the Trust or BMR requests additional time to find a replacement for the
Sub-Adviser, in which case the Sub-Adviser shall allow the additional time
requested by the Trust or Adviser not to exceed 3 additional months beyond the
initial three-month notice period; provided, however, that the Sub-Adviser may
terminate this Agreement at any time without penalty, effective upon written
notice to BMR and the Trust, in the event either the Sub-Adviser (acting in good
faith) or BMR ceases to be registered as an investment adviser under BMRs Act or
otherwise becomes legally incapable of providing investment management services
pursuant to its respective contract with the Trust.
c. In the event of termination for any reason, all records of the Trust
shall promptly be returned to BMR or the Trust, free from any claim or retention
of rights in such record by the Sub-Adviser, although the Sub-Adviser may, at
its own expense, make and retain a copy of such records. This Agreement shall
automatically terminate in the event of its assignment (as such term is
described in the 1940 Act). In the event this Agreement is terminated or is not
approved in the manner described above, the Sections or Paragraphs numbered 9,
10, 11, 12, and 13 of this Agreement shall remain in effect, as well as any
applicable provision of this Section 14 and, to the extent that only amounts are
owed to the Sub-Adviser as compensation for services rendered while the
agreement was in effect, Section 6.
15. Notices. Any notice must be in writing and shall be sufficiently given
(1) when delivered in person, (2) when dispatched by electronic mail or
electronic facsimile transfer (confirmed in writing by postage prepaid first
class air mail simultaneously dispatched), (3) when sent by internationally
recognized overnight courier service (with receipt confirmed by such overnight
courier service), or (4) when sent by registered or certified mail, to the other
party at the address of such party set forth below or at such other address as
such party may from time to time specify in writing to the other party.
If to the Trust:
Tax-Managed International Equity Portfolio
The Eaton Vance Building
255 State Street
Boston, MA 02109
Attn: Chief Legal Officer
If to BMR:
Boston Management and Research
The Eaton Vance Building
255 State Street
Boston, MA 02109
Attn: Chief Legal Officer
B-9
If to the Sub-Adviser:
Eagle Global Advisors, L.L.C
5847 San Felipe, Suite 930
Houston, Texas 77057
Attn:_____________________
16. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved as required by applicable law.
17. Miscellaneous.
a. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, BMRs Act or rules or orders of the SEC
thereunder, and without regard for the conflicts of laws principle thereof. The
term "affiliate" or "affiliated person" as used in this Agreement shall mean
"affiliated person" as defined in Section 2(a)(3) of the 1940 Act.
b. BMR and the Sub-Adviser acknowledge that the Trust enjoys the rights of
a third-party beneficiary under this Agreement, and BMR acknowledges that the
Sub-Adviser enjoys the rights of a third party beneficiary under the Advisory
Agreement.
c. The Sub-Adviser expressly acknowledges the provision in the Declaration
of Trust of BMR limiting the personal liability of the Trustee and officers of
BMR, and the Sub-Adviser hereby agrees that it shall have recourse to BMR for
payment of claims or obligations as between BMR and the Sub-Adviser arising out
of this Agreement and shall not seek satisfaction from the Trustee or any
officer of BMR.
d. The captions of this Agreement are included for convenience only and in
no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
e. To the extent permitted under Section 14 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent of
the other party.
f. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
g. Nothing herein shall be construed as constituting the Sub-Adviser as an
agent or co-partner of BMR, or constituting BMR as an agent or co-partner of the
Sub-Adviser.
h. This Agreement may be executed in counterparts.
[Signature page follows.]
B-10
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
Boston Management and Research
By:_________________________________
Name:_______________________________
Title:______________________________
Eagle Global Advisors, L.L.C.
By:_________________________________
Name:_______________________________
Title:______________________________
B-11
SCHEDULE A
Annual Investment Sub-advisory Fee
Average Daily Net Assets for the Month Annual Fee Rate
Up to $500 million 0.50000%
$500 million but less than $1 billion 0.46875%
$1 billion but less than $2.5 billion 0.43750%
$2.5 billion but less than $5 billion 0.40625%
$5 billion and over 0.37500%
The Trust's daily net assets shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and determinations of
the Board of the Trust.
B-12
Exhibit C
TAX-MANAGED INTERNATIONAL EQUITY PORTFOLIO
FORM OF AMENDMENT TO INVESTMENT ADVISORY AGREEMENT
This AMENDMENT dated , 2004 (the "Amendment"), is by and between
Tax-Managed International Equity Portfolio, a New York trust (formerly
Tax-Managed International Growth Portfolio) (the "Trust"), and Boston Management
and Research, a Massachusetts business trust (the "Adviser").
WHEREAS, the Trust and BMR are parties to that certain Investment
Advisory Agreement dated February 13, 2001 (the "Advisory
Agreement"); and
WHEREAS, the Trust and BMR wish to amend the Advisory Agreement;
NOW THEREFORE, in consideration of the premises and the promises
contained herein and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
it is agreed between the Trust and BMR as follows:
1. Section 6 of the Advisory Agreement is hereby amended by deleting such
Section in its entirety and substituting therefore:
6. Sub-Investment Advisers. BMR may employ one or more sub-investment
advisers from time to time to perform such of the acts and services of
BMR, including the selection of brokers or dealers to execute the
Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon under an agreement between BMR and
such investment adviser that is approved by the Trustees of the Trust,
all as permitted by the Investment Company Act of 1940. Each such
sub-investment adviser's performance of its obligation under any such
agreement shall be supervised by BMR. Further, BMR may, with the
approval of the Trustees of the Trust and without the vote of any
Interests in the Trust, terminate any agreement with any
sub-investment adviser and/or enter into an agreement with one or more
other sub-investment advisers, all as permitted by the Investment
Company Act of 1940 and the rules hereunder.
2. Section 8 of the Advisory Agreement is hereby amended by hereby amended
by deleting such Section in its entirety and substituting therefore:
8. Amendments of the Agreement. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to
this Agreement shall be effective until approved (i) by the vote of a
majority of those Trustees of the Trust who are not interested persons
of BMR or the Trust cast in person at a meeting called for the purpose
of voting on such approval, and (ii) if required by the Investment
C-1
Company Act of 1940 or the rules hereunder, by vote of a majority of
the outstanding voting securities of the Trust.
3. Except as specifically amended by this Amendment, the terms of the
Advisory Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on the day and year first above written.
TAX-MANAGED INTERNATIONAL
EQUITY PORTFOLIO
By: ____________________________
President
BOSTON MANAGEMENT AND RESEARCH
By: ____________________________
Vice President
C-2
Exhibit D
TAX-MANAGED INTERNATIONAL GROWTH PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 13th day of February, 2001, between Tax-Managed
International Growth Portfolio, a New York trust (the "Trust"), and Boston
Management and Research, a Massachusetts business trust (the "Adviser").
1. Duties of BMR. The Trust hereby employs BMR to act as investment adviser
for and to manage the investment and reinvestment of the assets of the Trust and
to administer its affairs, subject to the supervision of the Trustees of the
Trust, for the period and on the terms set forth in this Agreement.
BMR hereby accepts such employment, and undertakes to afford to the Trust
the advice and assistance of BMR's organization in the choice of investments and
in the purchase and sale of securities for the Trust and to furnish for the use
of the Trust office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Trust and for administering its
affairs and to pay the salaries and fees of all officers and Trustees of the
Trust who are members of BMR's organization and all personnel of BMR performing
services relating to research and investment activities. BMR shall for all
purposes herein be deemed to be an independent contractor and shall, except as
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent of the Trust.
BMR shall provide the Trust with such investment management and supervision
as the Trust may from time to time consider necessary for the proper supervision
of the Trust's investments. As investment adviser to the Trust, BMR shall
furnish continuously an investment program and shall determine from time to time
what securities and other investments shall be acquired, disposed of or
exchanged and what portion of the Trust's assets shall be held uninvested,
subject always to the applicable restrictions of the Declaration of Trust,
By-Laws and registration statement of the Trust under the Investment Company Act
of 1940, all as from time to time amended. Should the Trustees of the Trust at
any time, however, make any specific determination as to investment policy for
the Trust and notify BMR thereof in writing, BMR shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. BMR shall take, on
behalf of the Trust, all actions which it deems necessary or desirable to
implement the investment policies of the Trust.
BMR shall place all orders for the purchase or sale of portfolio securities
for the account of the Trust either directly with the issuer or with brokers or
dealers selected by BMR, and to that end BMR is authorized as the agent of the
Trust to give instructions to the custodian of the Trust as to deliveries of
securities and payments of cash for the account of the Trust. In connection with
the selection of such brokers or dealers and the placing of such orders, BMR
shall use its best efforts to seek to execute security transactions at prices
which are advantageous to the Trust and (when a disclosed commission is being
D-1
charged) at reasonably competitive commission rates. In selecting brokers or
dealers qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) to BMR and BMR
is expressly authorized to pay any broker or dealer who provides such brokerage
and research services a commission for executing a security transaction which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if BMR determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities which BMR and its
affiliates have with respect to accounts over which they exercise investment
discretion. Subject to the requirement set forth in the second sentence of this
paragraph, BMR is authorized to consider, as a factor in the selection of any
broker or dealer with whom purchase or sale orders may be placed, the fact that
such broker or dealer has sold or is selling shares of any one or more
investment companies sponsored by BMR or its affiliates or shares of any other
investment company or series thereof that invests substantially all of its
assets in the Trust.
2. Compensation of BMR. For the services, payments and facilities to be
furnished hereunder by BMR, BMR shall be entitled to receive from the Trust
compensation in an amount equal to the following of the average daily net assets
of the Trust throughout each month:
Average Daily Net Assets for the Month Annual Fee Rate
- -------------------------------------- ---------------
Up to $500 million 1.00%
$500 million but less than $1 billion 0.9375%
$1 billion but less than $2.5 billion 0.875%
$2.5 billion but less than $5 billion 0.8125%
$5 billion and over 0.75%
Such compensation shall be paid monthly in arrears on the last business day of
each month. The Trust's daily net assets shall be computed in accordance with
the Declaration of Trust of the Trust and any applicable votes and
determinations of the Trustees of the Trust. In case of initiation or
termination of the Agreement during any month with respect to the Trust, the fee
for that month shall be based on the number of calendar days during which it is
in effect.
BMR may, from time to time, waive all or a part of the above compensation.
3. Allocation of Charges and Expenses. It is understood that the Trust will
pay all expenses other than those expressly stated to be payable by BMR
hereunder, which expenses payable by the Trust shall include, without implied
limitation, (i) expenses of maintaining the Trust and continuing its existence,
(ii) registration of the Trust under the Investment Company Act of 1940, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale, and redemption of Interests in the Trust, (viii) expenses of
registering and qualifying the Trust and Interests in the Trust under federal
D-2
and state securities laws and of preparing and printing registration statements
or other offering statements or memoranda for such purposes and for distributing
the same to Holders and investors, and fees and expenses of registering and
maintaining registrations of the Trust and of the Trust's placement agent as
broker-dealer or agent under state securities laws, (ix) expenses of reports and
notices to Holders and of meetings of Holders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Trust
(including without limitation safekeeping of funds, securities and other
investments, keeping of books, accounts and records, and determination of net
asset values, book capital account balances and tax capital account balances),
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, Holder servicing agents and registrars for all services to the Trust,
(xv) expenses for servicing the account of Holders, (xvi) any direct charges to
Holders approved by the Trustees of the Trust, (xvii) compensation and expenses
of Trustees of the Trust who are not members of BMR's organization, and (xviii)
such non-recurring items as may arise, including expenses incurred in connection
with litigation, proceedings and claims and the obligation of the Trust to
indemnify its Trustees, officers and Holders with respect thereto.
4. Other Interests. It is understood that Trustees and officers of the
Trust and Holders of Interests in the Trust are or may be or become interested
in BMR as trustees, officers, employees, shareholders or otherwise and that
trustees, officers, employees and shareholders of BMR are or may be or become
similarly interested in the Trust, and that BMR may be or become interested in
the Trust as a Holder or otherwise. It is also understood that trustees,
officers, employees and shareholders of BMR may be or become interested (as
directors, trustees, officers, employees, shareholders or otherwise) in other
companies or entities (including, without limitation, other investment
companies) which BMR may organize, sponsor or acquire, or with which it may
merge or consolidate, and which may include the words "Eaton Vance" or "Boston
Management and Research" or any combination thereof as part of their name, and
that BMR or its subsidiaries or affiliates may enter into advisory or management
agreements or other contracts or relationships with such other companies or
entities.
5. Limitation of Liability of BMR. The services of BMR to the Trust are not
to be deemed to be exclusive, BMR being free to render services to others and
engage in other business activities. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of BMR, BMR shall not be subject to liability to the Trust or to any
Holder of Interests in the Trust for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses which may be
sustained in the acquisition, holding or disposition of any security or other
investment.
6. Sub-Investment Advisers. BMR may employ one or more sub-investment
advisers from time to time to perform such of the acts and services of BMR,
including the selection of brokers or dealers to execute the Trust's portfolio
security transactions, and upon such terms and conditions as may be agreed upon
between BMR and such investment adviser and approved by the Trustees of the
Trust, all as permitted by the Investment Company Act of 1940.
7. Duration and Termination of this Agreement. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
D-3
provided, shall remain in full force and effect through and including March 31,
2002 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after March 31, 2002 is specifically approved
at least annually (i) by the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Trust and (ii) by the vote
of a majority of those Trustees of the Trust who are not interested persons of
BMR or the Trust cast in person at a meeting called for the purpose of voting on
such approval.
Either party hereto may, at any time on sixty (60) days' prior written notice to
the other, terminate this Agreement without the payment of any penalty, by
action of Trustees of the Trust or the trustees of BMR, as the case may be, and
the Trust may, at any time upon such written notice to BMR, terminate this
Agreement by vote of a majority of the outstanding voting securities of the
Trust. This Agreement shall terminate automatically in the event of its
assignment.
8. Amendments of the Agreement. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of BMR or the Trust cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the outstanding voting securities of the Trust.
9. Limitation of Liability. BMR expressly acknowledges the provision in the
Declaration of Trust of the Trust (Section 5.2 and 5.6) limiting the personal
liability of the Trustees and officers of the Trust, and BMR hereby agrees that
it shall have recourse to the Trust for payment of claims or obligations as
between the Trust and BMR arising out of this Agreement and shall not seek
satisfaction from any Trustee or officer of the Trust.
10. Certain Definitions. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of Holders, of
the lesser of (a) 67 per centum or more of the Interests in the Trust present or
represented by proxy at the meeting if the Holders of more than 50 per centum of
the outstanding Interests in the Trust are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the outstanding Interests in the
Trust. The terms "Holders" and "Interests" when used herein shall have the
respective meanings specified in the Declaration of Trust of the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
TAX-MANAGED INTERNATIONAL
GROWTH PORTFOLIO
By: /s/ James B. Hawkes
------------------------------
President
BOSTON MANAGEMENT AND RESEARCH
By: /s/ Alan R. Dynner
------------------------------
Vice President
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PROXY TABULATOR
P.O. BOX 9132
HINGHAM, MA 02043-9132
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
*** 3 EASY WAYS TO VOTE YOUR PROXIES ***
VOTE BY TELEPHONE VOTE ON THE INTERNET VOTE BY MAIL
1) Read the Proxy Statement and have this 1) Read the Proxy Statement and have this 1) Read the Proxy Statement
card at hand card at hand 2) If you want to vote use the Proxy
2) Call 1-800-690-6903 2) Go to www.proxyweb.com/proxy Card on reverse
3) Enter control number shown at left and 3) Enter control number shown at left and 3) Return the card in the postage-paid
follow the simple instructions follow the simple instructions envelope provided
4) Keep this card for your records 4) Keep this card for your records
*** Control Number: 999 999 999 999 99 ***
Eaton Vance Tax-Managed International Growth Fund
SPECIAL MEETING OF SHAREHOLDERS
April 16, 2004
PROXY SOLICITED ON BEHALF OF BOARD OF TRUSTEES
The undersigned holder of shares of beneficial interest of the above-referenced
Fund (the "Fund"), hereby appoints JAMES B. HAWKES, ALAN R. DYNNER and THOMAS E.
FAUST JR., and each of them, with full power of substitution and revocation, as
proxies to represent the undersigned at the Special Meeting of Shareholders of
the Fund to be held at the principal office of the Fund, The Eaton Vance
Building, 255 State Street, Boston, Massachusetts 02109, on Friday, April 16,
2004 at 1:30 P.M., Eastern Standard Time, and at any and all adjournments
thereof, and to vote all shares of beneficial interest of the Fund which the
undersigned would be entitled to vote, with all powers the undersigned would
possess if personally present, in accordance with the instructions on this
proxy.
Dated:__________________
PLEASE VOTE, DATE, SIGN AND PROMPTLY RETURN
IN THE ACCOMPANYING ENVELOPE.
NO POSTAGE REQUIRED IF MAILED IN THE U.S.
____________________________________________________________
Signature(s): (Sign in the Box)
Note: Please sign this proxy as your name appears on the
books of the Fund. Joint owners should each sign personally.
Trustees and other fiduciaries should indicate the capacity
in which they sign, and where more than one name appears, a
majority must sign. If a corporation, this signature should
be that of an authorized officer who should state his or her
title.
EATON VANCE PROXY/NMF
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES REPRESENTED HEREBY WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
THE PROPOSALS SET FORTH BELOW AND IN THE DISCRETION OF THE PROXIES WITH RESPECT
TO ALL OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE SPECIAL MEETING AND ANY
ADJOURNMENTS THEREOF. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE ACCOMPANYING
NOTICE OF SPECIAL MEETING AND PROXY STATEMENT.
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. [X]
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
FOR AGAINST ABSTAIN
1. To approve an Investment Sub-Advisory Agreement between Boston Management [ ] [ ] [ ]
and Research and Eagle Global Advisors L.L.C. for Tax-Managed International
Growth Portfolio
2. To amend the Investment Advisory Agreement for Tax-Managed International [ ] [ ] [ ]
Growth Portfolio
3. To authorize the Board of Trustees to select investment sub-advisers and [ ] [ ] [ ]
enter into investment sub-advisory agreement without obtaining shareholder
approval
NOTE ADDRESS CHANGE: _______________________________
_______________________________
_______________________________
PLEASE SIGN ON REVERSE SIDE
EVD