Exhibit 10.1


 


As
effective November 1, 2005


 


EATON VANCE CORP.


 


1998 STOCK OPTION
PLAN


 


RESTATEMENT NO. 6


 


1.                                       Definitions. As used
in this Eaton Vance Corp. 1998 Stock Option Plan the following terms shall have
the following meaning:


 


Board means the
Company’s Board of Directors.


 


Code means the
Internal Revenue Code of 1986, as amended from time to time. References to any
provision of the Code shall be deemed to include successor provisions and
regulations and other guidance issued thereunder.


 


Committee means the
Compensation Committee of the Board, or such other Board committee as may be
appointed by the Board to administer the Plan pursuant to Section 5.


 


Company means
Eaton Vance Corp., a Maryland corporation, or any successor corporation.


 


Director Option
means a nonqualified stock option granted to a director pursuant to the formula
plan set forth in Section 8.


 


Exchange Act
means the Securities Exchange Act of 1934, as amended from time to time. References
to any provision of the Exchange Act shall be deemed to include successor
provisions thereto and regulations and other guidance issued thereunder.


 


Grant Date means the
date on which an Option is granted.


 


Incentive Option
means an Option that satisfies the requirements of Section 422 of the
Code.


 


Market Value
means the closing price on the New York Stock Exchange for the Shares for any
date.


 


Nonqualified Option
means an Option other than an Incentive Option granted to an employee.


 


Option means an
option to purchase Shares granted under the Plan.


 


Option Agreement
means an agreement between the Company and an Optionee, setting forth the terms
and conditions of an Option.


 


Option Price means
the price to be paid by an Optionee upon exercise of an Option.


 


Optionee means a
person eligible to receive an Option to whom an Option shall have been granted
under the Plan.


 


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Plan means this
1998 Stock Option Plan, as amended or restated from time to time.


 


Qualified Member
means a member of the Committee who is a “non-employee director” within the
meaning of Rule 16b-3(b)(3) and an “outside director” within the
meaning of Treasury Regulation 1.162-27(e)(3) under Code Section 162(m).


 


Rule 16b-3
means Rule 16b-3, as from time to time in effect and applicable to the
Plan and any Optionee, promulgated by the Securities and Exchange Commission
under Section 16 of the Exchange Act.


 


Shares means
shares of Non-Voting Common Stock of the Company or such other securities as may be
substituted or resubstituted therefor pursuant to Section 4.


 


Subsidiary means a
subsidiary of the Company, as defined in Section 424(f) of the Code.


 


2.                                       Purpose. The
purpose of the Plan is to advance the interests of the Company by strengthening
the ability of the Company and its Subsidiaries to attract, retain and motivate
directors and employees by providing them with an opportunity to purchase
Shares and thus participate in the ownership of the Company, including the
opportunity to share in any appreciation in the value of such Shares. It is
intended that the Plan will strengthen the mutuality of interest between such
persons and the stockholders of the Company. Both Incentive Options and
Nonqualified Options may be granted under the Plan. This Plan is the
successor to the Company’s 1995 Stock Option Plan – Restatement No. 2.


 


3.                                       Effective Date. The Plan
became effective on July 7, 1998, the date it was adopted by the Board and
approved by the voting stockholders of the Company. This Restatement No. 6
became effective on November 1, 2005, the date it was adopted by the Board
and approved by the voting stockholders of the Company.


 


4.                                       Stock Subject to the Plan; Adjustments.


 


(a)                                  Shares Reserved. Subject
to adjustment as hereinafter provided, the total number of Shares reserved for
issuance in connection with Options under the Plan shall be 35,000,000. No
Option may be granted if the number of shares to which such Option
relates, when added to the number of Shares previously issued under the Plan,
exceeds the number of shares reserved under this Section 4(a). Shares
issued under the Plan shall be counted against this limit in the manner
specified in Section 4(b).


 


(b)                                 Manner of Counting Shares.
If any Shares subject to an Option are forfeited, canceled, exchanged, or
surrendered or such Option is settled in cash or otherwise terminates without a
distribution of Shares to the Participant, including (i) the number of
Shares withheld in payment of any Option Price or tax obligation relating to
the exercise of such Option and (ii) the number of Shares equal to the
number surrendered in payment of any Option Price or tax obligation relating to
the exercise of such Option, such number of Shares will again be available for
Options under the Plan. The Committee may make determinations and adopt
regulations for the counting of Shares relating to any Option to ensure
appropriate counting, avoid double counting (in the case of substitute
Options), and provide for adjustments in any case in which the number of Shares
actually distributed differs from the number of Shares previously counted in
connection with such Option.


 


(c)                                  Type of Shares Distributable.
Any Shares delivered upon exercise of an Option may consist, in whole or
in part, of authorized and unissued Shares or Shares reacquired by the Company
through purchase in the open market or in private transactions.


 


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(d)                                 Adjustments. In the
event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Shares, or other property)
which is unusual and non-recurring, or any recapitalization, stock split,
reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase or share exchange, or other similar corporate transaction or event
affects the Shares such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Optionees under the Plan, then the
Committee shall make such equitable changes or adjustments as it deems
appropriate and, in such manner as it may deem equitable, adjust any or
all of (i) the number and kind of Shares which may thereafter be
issued in connection with Options, (ii) the number and kind of Shares
issued or issuable in respect of outstanding Options or, if deemed appropriate,
make provisions for payment of cash or other property with respect to any
outstanding Option, (iii) the Option Price relating to any Option, and (iv) the
number and kind of Shares set forth in Section 7(d) as the per-person
limitation for any three calendar years; provided, however, in each case that,
with respect to Incentive Options, such adjustment shall be made in accordance
with Section 424 of the Code, unless the Committee determines otherwise. In
addition, the Committee is authorized to make adjustments in the terms and
conditions of, and any criteria and performance objectives or goals included
in, Options in recognition of unusual or non-recurring events (including events
described in the preceding sentence, as well as acquisitions and dispositions
of assets or all or part of businesses) affecting the Company or any
Subsidiary or any business unit, or the financial statements thereof, or in
response to changes in applicable laws, regulations, accounting principles, tax
rates and regulations, or business conditions or in view of the Committee’s
assessment of the business strategy of the Company, a Subsidiary, or business
unit thereof, performance of comparable organizations, economic and business
conditions, personal performance of an Optionee, and any other circumstances
deemed relevant; provided that, unless otherwise determined by the Committee,
no such adjustment shall be made if and to the extent that such adjustment
would cause Options granted to employees who are “covered employees” within the
meaning of Code Section 162(m) to fail to qualify as “performance-based
compensation” under Code Section 162(m) and regulations thereunder.


 


5.                                       Administration.


 


(a)                                  Authority of the Committee.
The Plan shall be administered by the Committee. The Committee shall have full and
final authority and discretion to take the following actions, in each case
subject to and consistent with the provisions of the Plan:


 


(i)                                     to select employees to whom Options may be granted;


 


(ii)                                  to determine the type and number of Options to be granted to
employees, the number of Shares to which such an Option may relate, the
terms and conditions of any Option granted to an employee under the Plan
(including the Option Price, any restriction or condition, any schedule for
lapse of restrictions or conditions relating to transferability or forfeiture,
exercisability, or settlement of such an Option, and waivers or accelerations
thereof, and waivers of performance conditions relating to such an option,
based in each case on such considerations as the Committee shall determine),
and all other matters to be determined in connection with any Option granted to
an employee;


 


(iii)                               to determine whether, to what extent, and under what
circumstances an Option may be settled, or the Option Price may be
paid, in cash, Shares or other property, or an Option may be canceled,
forfeited, exchanged, or surrendered;


 


(iv)                              to determine whether, to what extent, and under what
circumstances cash, Shares or other property payable with respect to an Option
will be deferred either automatically, at the election of the Committee, or at
the election of the Optionee, and whether to create trusts and deposit Shares
or other property therein;


 


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(v)                                 to prescribe the form of each Option Agreement, which
need not be identical for each Optionee;


 


(vi)                              to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;


 


(vii)                           to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Option, rules and regulations, Option Agreement, or other agreement or
instrument hereunder; and


 


(viii)                        to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.


 


In its administration of the Plan, the Committee shall not
take any action which would result in a transaction involving a Director Option
failing to be exempt under Rule 16b-3(d). Other provisions of the Plan
notwithstanding, the Board may perform any function of the Committee
under the Plan, including for the purpose of ensuring that transactions under
the Plan by Optionees who are then subject to Section 16 of the Exchange
Act in respect of the Company are exempt under Rule 16b-3. In any case in
which the Board is performing a function of the Committee under the Plan, each
reference to the Committee herein shall be deemed to refer to the Board, except
where the context otherwise requires.


 


(b)                                 Manner of Exercise of Committee Authority. At any time that a member of the Committee is not a
Qualified Member, any action of the Committee relating to an Option to be
granted to an employee who is then subject to Section 16 of the Exchange
Act in respect of the Company, or relating to an Option intended to constitute “qualified
performance-based compensation” within the meaning of Code


 


Section 162(m) and regulations thereunder, may be
taken either (i) by a subcommittee composed solely of two or more
Qualified Members, or (ii) by the Committee but with each such member who
is a not Qualified Member abstaining or recusing himself or herself from such
action, provided that, upon such abstention or recusal, the Committee remains
composed solely of two or more Qualified Members. Such action, authorized by
such a subcommittee or by the Committee upon the abstention or recusal of such
non-Qualified Member(s), shall be the action of the Committee for purposes of
the Plan. Any action of the Committee with respect to the Plan shall be final,
conclusive, and binding on all persons, including the Company, Subsidiaries,
Optionees, any person claiming any rights under the Plan from or through any
Optionee, and stockholders of the Company. The express grant of any specific
power to the Committee, and the taking of any action by the Committee, shall
not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or any
Subsidiary the authority, subject to such terms as the Committee shall
determine, to perform administrative functions and such other functions as
the Committee may determine, to the extent permitted under applicable law
and, with respect to any Optionee who is then subject to Section 16 of the
Exchange Act in respect of the Company, to the extent performance of such
function will not result in a subsequent transaction failing to be exempt under
Rule 16b-3(d).


 


(c)           Limitation of Liability. Each
member of the Committee shall be entitled in good faith to rely or act upon any
report or other information furnished to him or her by any officer or other
employee of the Company or any Subsidiary, the Company’s independent certified
public accountants, or other professional retained by the Company to assist in
the administration of the Plan.No member of the Committee, nor any
officer or employee of the Company acting on behalf of the Committee, shall be 


 


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personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Committee and any
officer or employee of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company with
respect to any such action, determination, or interpretation.


 


6.                                       Duration of the Plan.
This Plan shall terminate ten years from the original effective date hereof,
unless terminated earlier pursuant to Section 12, and no Options may be
granted thereafter.


 


7.                                       Options for Employees.


 


(a)                                  Eligible Employees. Options may be
granted to those employees of the Company or of any of its Subsidiaries as are
selected by the Committee.


 


(b)                                 Restrictions on Incentive Options. Incentive Options shall be subject to the following
restrictions:


 


(i)                                     Limitation on Number of Shares.
To the extent that the aggregate Market Value on the Grant Date of the Shares
with respect to which an Option that would otherwise constitute an Incentive
Option (when aggregated, if appropriate, with incentive stock options granted
before the Option under this Plan or any other plan maintained by the Company
or any Subsidiary of the Company) is exercisable for the first time by the
Optionee during any calendar year exceeds $100,000, the Option shall be treated
as a Nonqualified Option.


 


(ii)                                  10% Stockholder. If any
Optionee to whom an Incentive Option is granted is on the Grant Date the owner
of stock (as determined under Section 424(d) of the Code) possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or any of its Subsidiaries, then the following special provisions shall
be applicable to that Incentive Option:


 


(A)                              The Option Price per Share shall not be less than 110% of the
Market Value on the Grant Date; and


 


(B)                                The Incentive Option shall expire not more than five years
after the Grant Date.


 


(c)                                  Price. Subject
to the conditions on certain Incentive Options in Section 7(b), the Option
Price per Share payable upon the exercise of each Incentive Option shall be not
less than 100% of the Market Value on the Grant Date. The Option Price per
Share of stock payable upon exercise of each Nonqualified Option shall be
determined by the Committee, provided that the Option Price shall not be less
than 100% of the Market Value on the Grant Date.


 


(d)                                 Limitation on Number of Shares to be Granted to Each Optionee. Each Option Agreement shall specify the number of Shares to
which it pertains. No Optionee may receive, during any three calendar year
period, Options to purchase more than 7,200,000 Shares. If any Option granted
to an employee is canceled, the canceled Option continues to be counted against
the maximum number of Shares for which Options may be granted to that
employee under the Plan. If, after grant of an Option to an employee, the
Option Price is reduced, the transaction will be treated as a cancellation of
the Option and the grant of a new Option, 


 


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and in such case both the Option that is deemed to be
canceled and the Option that is deemed to be granted reduce the maximum number
of Shares for which Options may be granted to that employee under the Plan.
The preceding two sentences apply only to calculating the maximum number of
Shares available to an Optionee during any three calendar year periods, and
shall not apply to or affect the manner of counting Shares pursuant to Section 4(b).


 


(e)                                  Exercise of Options.
Subject to the terms and conditions set forth in the Option Agreement, each
Option shall be exercisable for the full amount or for any part thereof
and at such intervals or in such installments as the Committee may determine
at the time it grants the Option; provided, however, that no Option shall be
exercisable with respect to any Shares later than ten years after the Grant
Date.


 


8.                                       Formula Plan; Options for Directors. Upon first election to the Board of Directors of the
Company of a person who was not, within twelve months preceding election,
either an officer of employee of the Company or any Subsidiary, such person
shall be granted a Director Option to purchase such number of Shares that, on
the Grant Date, has a value under the Black-Scholes method of $80,000 (using
the methodology used by the Corporation in determining the value of Options
granted to employees). On the third Friday of December in each year, each
director who is not an employee of the Company and its Subsidiaries shall
receive a Director Option to purchase such number of Shares that, on the Grant
Date, has a value under the Black-Scholes method of $80,000 (using the
methodology used by the Corporation in determining the value of Options granted
to employees). In the event that on any Grant Date there is not a sufficient
number of Shares available to implement fully the preceding sentences, then
each such director shall receive a pro rata portion of the Director Option
contemplated by the preceding sentences. The Option Price for each Director
Option shall be the Market Value on the Grant Date or, in the event there is no
Market Value available on the Grant Date, on the date next following the Grant
Date for which a Market Value is available. Each Director Option shall become
exercisable in four equal installments upon each of the first four
anniversaries of the Grant Date. No Director Option shall be exercisable later
than ten years after the Grant Date. It is intended that each Director Option
automatically granted pursuant to this Section 8 shall be made pursuant to
a formula plan as defined in Release No. 34-37260 of the Securities and
Exchange Commission (adopting restated Rule 16b-3).


 


9.                                       Terms and Conditions Applicable to All Options.


 


(a)                                  Non-Transferability.
Except as otherwise expressly provided in an Option Agreement, no Option shall
be transferable by the Optionee, other than by will or the laws of descent and
distribution, and each Option shall be exercisable, during the Optionee’s
lifetime, only by him or her (i.e. if the Option is exercised during the
Optionee’s lifetime, it shall only be exercisable by the Optionee).


 


(b)                                 Notice of Exercise and Payment.
An Option shall be exercisable only by delivery of a written notice to the
Company’s Treasurer or any other officer of the Company designated by the
Committee to accept such notices on its behalf, specifying the number of Shares
for which it is exercised. If the Shares are not at that time effectively
registered under the Securities Act of 1933, as amended, the Optionee shall
include with such notice a letter, in form and substance satisfactory to
the Company, confirming that the Shares are being purchased for the Optionee’s
own account for investment and not with a view to distribution. Payment shall
be made in full at the time the Option is exercised. Payment shall be made by (i) cash
or check, (ii) delivery and assignment to the Company of Shares having
been owned by the Optionee for such period as the Company’s Treasurer may determine
and having a Market Value as of the date of exercise equal to the exercise
price, (iii) if approved by the Committee, delivery of the Optionee’s
promissory note for the exercise price, or (iv) any combination of (i), (ii) or
(iii) above.


 


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(c)                                  No Rights to Options; No Stockholder Rights. No employee shall have any claim to be granted an Option
under the Plan, and there is no obligation for uniformity of treatment of
employees. No Option shall confer upon the Optionee any rights as a stockholder
or any claim to dividends paid with respect to any Shares to which the Option
relates unless and until such Shares are duly issued to him or her in
accordance with the terms of the Option.


 


(d)                                 Cancellation and Rescission of Options. The Committee may provide in any Option Agreement
that, in the event an Optionee violates a term of the Option Agreement or other
agreement with or policy of the Company or a Subsidiary, takes or omits to take
actions that are deemed to be in competition with the Company or its
Subsidiaries, an unauthorized solicitation of customers, suppliers, or
employees of the Company or its Subsidiaries, or an unauthorized disclosure or
misuse of proprietary or confidential information of the Company or its
Subsidiaries, or takes or omits to take any other action as may be
specified in the Option Agreement, the Optionee shall be subject to forfeiture
of such Option or portion, if any, of the Option as may then remain
outstanding and also to forfeiture of any amounts of cash, Shares or other property
received by the Optionee upon exercise or settlement of such Option or in
connection with such Option during such period (as the Committee may provide
in the Option Agreement) prior to the occurrence which gives rise to the
forfeiture.


 


(e)                                  Options to Optionees Outside the United States. The Committee may modify the terms of any Option under
the Plan granted to an Optionee who is, at the time of grant or during the term
of the Option, resident or primarily employed outside of the United States in any
manner deemed by the Committee to be necessary or appropriate in order that
such Option shall conform to laws, regulations, and customs of the country
in which the Optionee is then resident or primarily employed, or so that the
value and other benefits of the Option to the Optionee, as affected by foreign
tax laws and other restrictions applicable as a result of the Optionee’s
residence or employment abroad, shall be comparable to the value of such an
Option to an Optionee who is resident or primarily employed in the United
States. An Option may be modified under this Section 9(f) in a
manner that is inconsistent with the express terms of the Plan, so long as such
modifications will not contravene any applicable law or regulation.


 


10.                                 Termination of Options.
Each Option shall terminate and may no longer be exercised if the Optionee
ceases to perform services for the Company or a Subsidiary, in accordance
with the following provisions:


 


(i)                                     if the Optionee’s services shall have been terminated by
resignation or other voluntary action, or if such services shall have been
terminated involuntarily for cause, all of the Optionee’s Options shall
terminate and may no longer be exercised;


 


(ii)                                  if the Optionee’s services shall have been terminated for any
reason other than cause, resignation or other voluntary action before his or
her eligibility to retire, and before his or her disability or death, he or she
may at any time within a period of fifteen (15) months after such
termination of service exercise his or her Options to the extent that the
Options were exercisable on the date of termination of service;


 


(iii)                               if the Optionee’s service shall have been terminated because
of disability within the meaning of 

Section 22(e)(3) of the Code, he or she may at any time within a
period of fifteen (15) months after such termination of service exercise his or
her Options to the extent that such Options were exercisable on the date of
termination of service; and


 


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(iv)                              if the Optionee dies at a time when he or she might have
exercised an Option, then his or her estate, personal representative or
beneficiary to whom it has been transferred pursuant to Section 9(a) hereof
may at any time within a period of fifteen (15) months after the Optionee’s
death exercise the Option to the extent the Optionee might have exercised it at
the time of death;


 


provided, however, that the Committee may, at its sole
discretion, provide specifically in an Option Agreement for such other period
of time (shorter or longer than as set forth above) during which an Optionee may exercise
an Option after termination of the Optionee’s services as the Committee may approve,
subject to the overriding limitation that no Option may be exercised to
any extent by anyone after the date of expiration of the Option.


 


11.                                 Withholding
Taxes; Delivery of Shares. The Company’s obligation to deliver Shares upon
exercise of an Option shall be subject to the Optionee’s satisfaction of all
applicable federal, state and local income and employment tax withholding
obligations. The Optionee may satisfy the obligations by electing (a) to make a cash payment to the
Company, or (b) to have the Company withhold Shares with a value equal to
the amount required to be withheld, or (c) to deliver to the Company
Shares having been owned by the Optionee for such period as the Company’s
Treasurer may determine and having a value equal to the amount required to
be withheld. The value of Shares to be withheld or delivered shall be based on the
Market Value on the date the amount of tax to be withheld is to be determined. The
Optionee’s election to have Shares withheld for this purpose will be subject to
the following restrictions: (1) the election must be made prior to the
date the amount of tax is to be determined, (2) the election must be
irrevocable, and (3) the election will be subject to the disapproval of
the Committee.


 


12.                                 Termination or Amendment of Plan. The Board may at any time terminate the Plan or make
such changes in or additions to the Plan as it deems advisable without further
action on the part of the shareholders of the Company, provided:


 


(a)                                  that no such termination or amendment shall adversely affect
or impair any then outstanding Option without the consent of the Optionee
holding that Option; and


 


(b)                                 that any such amendment which: (i) increases the maximum
number of Shares subject to this Plan, or (ii) changes the class of
persons eligible to participate in this Plan, or (iii) materially
increases the benefits accruing to participants under this Plan, shall be
subject to approval by the voting stockholders of the Company within one year
from the effective date of such amendment and shall be null and void if such
approval is not obtained.


 


13.                                 Change of Control - Automatic Vesting of Options. Notwithstanding anything to the contrary herein, the Board
or the Committee shall include in the Option Agreement for each unvested Option
granted under this Plan the following provision, and such inclusion may be
effected by incorporating this provision by reference to this Section 13:


 


This Option shall be immediately exercisable and the
Optionee shall become eligible to purchase any and all shares covered by each
Option at any time or from time to time after the occurrence of a Change of
Control of the Company. A “Change of Control” shall mean:


 


(a)                                  The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section

13 (d) (3) or 14(d) (2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
25% or more of either (i) the then outstanding non-voting common stock of
the Company (the “Non-Voting Stock”) or (ii) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Company Voting Securities”); provided,
that any 


 


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acquisition by (x) the Company or any of its subsidiaries, or
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries or (y) any Person that is eligible, pursuant
to Rule 13d-1(b) under the Exchange Act, to file a statement on Schedule 13G
with respect to its beneficial ownership of Company Voting Securities, whether
or not such Person shall have filed a statement on Schedule 13G, unless
such Person shall have filed a statement on Schedule 13D with respect to
beneficial ownership of 25% or more of the Company Voting Securities, shall not
constitute a Change of Control; and provided, further, that the
provisions of this subsection (a) shall apply whether or not the
Company Voting Securities or the Non-Voting Stock is registered or required to
be registered under the Exchange Act; or


 


(b)                                 Individuals who, as of the date hereof, constitute the
Company’s Board of Directors (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, that any
individual becoming a director of the Company (“Director”) subsequent to the
date of the Option whose election or nomination for election by the Company’s
shareholders was approved by at least a majority of the Directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of the Directors of the
Company (as such terms are used in Rule 14a-11 of the Regulation 14A
promulgated under the Exchange Act); or


 


(c)                                  Approval by the shareholders of the Company of a
reorganization, merger or consolidation (a “Business Combination”), in each
case with respect to which all or substantially all of the individuals and
entities who were the respective beneficial owners of the Non-Voting Stock and
of the Company Voting Securities immediately prior to such Business Combination
will not, following such Business Combination, beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding non-voting
stock and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the corporation or
other entity resulting from the Business Combination in substantially the same
proportion as their ownership immediately prior to such Business Combination of
the Non-Voting Stock and Company Voting Securities, as the case may be; or


 


(d)                                 Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company, or (ii) a sale or
other disposition of all or substantially all of the assets of the Company, or (iii) a
sale or disposition of Eaton Vance Management (or any successor thereto) or of
all or substantially all of the assets of Eaton Vance Management (or any
successor thereto), or (iv) an assignment by any direct or indirect
investment adviser subsidiary of the Company of investment advisory agreements
pertaining to more than 50% of the aggregate assets under management of all
such subsidiaries of the Company, in the case of (ii), (iii) or (iv) other
than to a corporation or other entity with respect to which, following such
sale or disposition or assignment, more than 60% of, respectively, the
outstanding non-voting stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors is then owned beneficially, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners of the Non-Voting Stock and Company Voting Securities immediately prior
to such sale, disposition or assignment in substantially the same proportion as
their ownership of the Non-Voting Stock and Company Voting Securities, as the
case may be, immediately prior to such sale, disposition or assignment.


 


Notwithstanding the foregoing, the following events
shall not cause, or be deemed to cause, and shall not constitute, or be deemed
to constitute, a Change of Control:


 


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(1)                                  The acquisition, holding or disposition of Company Voting
Securities deposited under the Voting Trust Agreement dated as of October 30,
1997, as amended, or of the voting trust receipts issued therefor, or any
change in the persons who are voting trustees thereunder, or the acquisition,
holding or disposition of Company Voting Securities deposited under any
subsequent replacement voting trust agreement or of the voting trust receipts
issued therefor, or any change in the persons who are voting trustees under any
such subsequent replacement voting trust agreement; provided, that any such
acquisition, disposition or change shall have resulted solely by reason of the
death, incapacity, retirement, resignation, election or replacement of one or
more voting trustees.


 


(2)                                  Any termination or expiration of a voting trust agreement
under which Company Voting Securities have been deposited or the withdrawal
therefrom of any Company Voting Securities deposited thereunder, if all Company
Voting Securities and/or the voting trust receipts issued therefor continue to
be held thereafter by the same persons in the same amounts, or if contemporaneously
there shall be a Business Combination or change in the capitalization of the
Company as described in clause (3) below.


 


(3)                                  A Business Combination or change in the capitalization of the
Company pursuant to which the holders of the Non-Voting Stock of the Company
become holders of voting securities of the Company or of the corporation or
other entity resulting from such Business Combination, in substantially the
same proportion as their ownership of Non-Voting Stock immediately prior to
such Business Combination or change in capitalization.


 


14.                                 General Provisions.


 


(a)                                  Compliance with Legal and Exchange Requirements. The Plan, the granting and exercising of Options
thereunder, and the other obligations of the Company under the Plan and any
Option Agreement, shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency as may be
required. The Company, in its discretion, may postpone the issuance or
delivery of Shares under any Option until completion of such stock exchange
listing or registration or qualification of such Shares or other required
action under any state, federal or foreign law, rule or regulation as the
Company may consider appropriate, and may require any Optionee to
make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Shares in compliance
with applicable laws, rules and regulations.


 


(b)                                 Compliance with Section 162(m) and Rule 16b-3. If any provision of the Plan or any Option Agreement
relating to a “covered employee” or a person subject to Section 16 of the
Exchange Act does not comply or is inconsistent with the requirements of Code Section 162(m)
or regulations thereunder or Rule 16b-3, such provision shall be construed
or deemed amended to the extent necessary to conform to such requirements.


 


(c)                                  No Right to Continued Employment. Neither the Plan nor any action taken thereunder shall be
construed as giving any employee the right to be retained in the employ of the
Company or any of its Subsidiaries, nor shall it interfere in any way with the
right of the Company or any of its Subsidiaries to terminate any employee’s
employment at any time.


 


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(d)                                 Taxes. The
Company or any Subsidiary is authorized to withhold from any payment relating
to an Option under the Plan, or any distribution of Shares, or any payroll or
other payment to an Optionee, amounts of withholding and other taxes due in
connection with any transaction involving an Option, and to take such other
action as the Committee may deem advisable to enable the Company and
Optionees to satisfy obligations for the payment of withholding taxes and other
tax obligations relating to any Option or exercise thereof. This authority
shall include authority to withhold or receive Shares or other property and to
make cash payments in respect thereof in satisfaction of an Optionee’s tax
obligations.


 


(e)                                  Nonexclusivity of the Plan.
Neither the adoption of the Plan by the Board nor its submission to the voting
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including the granting of stock
options and other awards otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.


 


(f)                                    Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan, and any Option
Agreement shall be determined in accordance with the laws of the Commonwealth
of Massachusetts, without giving effect to principles of conflicts of laws, and
applicable federal law.


 


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