CALVERT SOCIAL INDEX SERIES, INC.
CALVERT SOCIAL INDEX FUND
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814
STATEMENT OF ADDITIONAL INFORMATION
JUNE 30, 2000
NEW ACCOUNT (800) 368-2748 SHAREHOLDER
INFORMATION: (301) 951-4820 SERVICES: (800) 368-2745
BROKER (800) 368-2746 TDD FOR THE HEARING-
SERVICES: (301) 951-4850 IMPAIRED: (800) 541-1524
THIS SAI IS NOT A PROSPECTUS. INVESTORS SHOULD READ THE SAI IN CONJUNCTION
WITH THE FUND'S PROSPECTUS DATED JUNE 30, 2000. THE PROSPECTUS MAY BE OBTAINED
FREE OF CHARGE BY WRITING THE FUND AT THE ABOVE ADDRESS OR CALLING THE FUND, OR
BY VISITING OUR WEBSITE AT WWW.CALVERT.COM.
TABLE OF CONTENTS
INVESTMENT POLICIES AND RISKS 2
INVESTMENT RESTRICTIONS 5
DIVIDENDS, DISTRIBUTIONS AND TAXES 6
NET ASSET VALUE 6
CALCULATION OF TOTAL RETURN 7
PURCHASE AND REDEMPTION OF SHARES 7
ADVERTISING 7
DIRECTORS AND OFFICERS 8
INVESTMENT ADVISOR AND SUBADVISOR 10
ADMINISTRATIVE SERVICES AGENT 11
METHOD OF DISTRIBUTION 11
TRANSFER AND SHAREHOLDER SERVICING
AGENTS 12
PORTFOLIO TRANSACTIONS 12
PERSONAL SECURITIES TRANSACTIONS 13
INDEPENDENT ACCOUNTANT AND CUSTODIANS 13
FINANCIAL STATEMENTS 13
GENERAL INFORMATION 13
APPENDIX 14
SCHEDULE A 17
<PAGE>
INVESTMENT POLICIES AND RISKS
-----------------------------
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES MAY PRESENT RISKS NOT TYPICALLY INVOLVED
IN DOMESTIC INVESTMENTS. THE FUND MAY PURCHASE FOREIGN SECURITIES ONLY TO THE
EXTENT THEY MAY BE IN THE CALVERT SOCIAL INDEX. THE INDEX WILL NOT HAVE ANY
FOREIGN STOCKS IN IT, UNLESS THEY ARE LISTED ONLY ON A U.S. EXCHANGE. THUS,
THERE WILL BE NO FOREIGN CUSTODY, OR CURRENCY INVOLVED. HOWEVER, BECAUSE THE
ISSUER IS LOCATED OUTSIDE THE U.S., SUCH SECURITIES WILL STILL BE SUBJECT TO
POLITICAL AND ECONOMIC RISKS OF THE COUNTRY WHERE THE ISSUERS ARE LOCATED.
TEMPORARY DEFENSIVE POSITIONS
FOR TEMPORARY DEFENSIVE PURPOSES, THE FUND MAY INVEST IN CASH OR CASH
EQUIVALENTS. CASH EQUIVALENTS INCLUDE INSTRUMENTS SUCH AS, BUT NOT LIMITED TO,
U.S. GOVERNMENT AND AGENCY OBLIGATIONS, CERTIFICATES OF DEPOSIT, BANKER'S
ACCEPTANCES, TIME DEPOSITS, COMMERCIAL PAPER, SHORT-TERM CORPORATE DEBT
SECURITIES, AND REPURCHASE AGREEMENTS. THE FUND MAY INVEST IN MONEY MARKET
INSTRUMENTS OF BANKS, WHETHER FOREIGN OR DOMESTIC, INCLUDING OBLIGATIONS OF US
BRANCHES OF FOREIGN BANKS ("YANKEE" INSTRUMENTS) AND OBLIGATIONS OF FOREIGN
BRANCHES OF US BANKS ("EURODOLLAR" INSTRUMENTS). ALL SUCH INSTRUMENTS MUST BE
HIGH-QUALITY, US DOLLAR-DENOMINATED OBLIGATIONS. ALTHOUGH NOT SUBJECT TO FOREIGN
CURRENCY RISK SINCE THEY ARE US DOLLAR-DENOMINATED, INVESTMENTS IN FOREIGN MONEY
MARKET INSTRUMENTS MAY INVOLVE RISKS THAT ARE DIFFERENT THAN INVESTMENTS IN
SECURITIES OF US ISSUERS. SEE "FOREIGN SECURITIES" ABOVE. THE FUND'S
INVESTMENTS IN TEMPORARY DEFENSIVE POSITIONS ARE GENERALLY NOT FDIC INSURED,
EVEN THOUGH A BANK MAY BE THE ISSUER.
TRACKING THE INDEX
THE PROCESS USED BY THE FUND TO ATTEMPT TO TRACK THE INDEX RELIES ON
ASSESSING THE DIFFERENCE BETWEEN THE FUND'S EXPOSURE TO FACTORS WHICH INFLUENCE
RETURNS AND THE INDEX'S EXPOSURE TO THOSE SAME FACTORS. THE COMBINED VARIABILITY
OF THESE FACTORS AND THE CORRELATION BETWEEN FACTORS ARE USED TO ESTIMATE THE
RISK IN THE FUND. THE EXTENT TO WHICH THE TOTAL RISK CHARACTERISTICS OF THE FUND
VARY FROM THAT OF THE INDEX IS ACTIVE RISK OR TRACKING ERROR.
THE FUND'S ABILITY TO TRACK THE INDEX WILL BE MONITORED BY ANALYZING RETURNS TO
ENSURE THAT THE RETURNS ARE REASONABLY CONSISTENT WITH INDEX RETURNS. BY
REGRESSING FUND RETURNS AGAINST INDEX RETURNS, THE ADVISOR CAN CALCULATE THE
GOODNESS OF FIT, AS MEASURED BY THE COEFFICIENT OF DETERMINATION OR R -SQUARED.
VALUES IN EXCESS OF 90% INDICATE A VERY HIGH DEGREE OF CORRELATION BETWEEN THE
FUND AND THE INDEX. THE FUND WILL ALSO BE MONITORED TO ENSURE THOSE GENERAL
CHARACTERISTICS, SUCH AS SECTOR EXPOSURES, CAPITALIZATION AND VALUATION
CRITERIA, ARE RELATIVELY CONSISTENT OVER TIME.
ANY DEVIATIONS OF REALIZED RETURNS FROM THE INDEX WHICH ARE IN EXCESS OF
THOSE EXPECTED WILL BE ANALYZED FOR SOURCES OF VARIANCE. THE FUND'S PORTFOLIO
WILL BE INVESTED IN A MANNER TO CLOSELY TRACK THE INDEX. TO THE EXTENT THAT THE
FUND HAS INVESTMENTS IN THE SPECIAL EQUITIES PORTFOLIO AND/OR THE HIGH SOCIAL
IMPACT PORTFOLIO, THE FUND MAY BE LESS ABLE TO CLOSELY TRACK THE INDEX THAN IF
IT WERE INVESTED ONLY IN THE MANNER OF THE INDEX. BOTH OF THESE PORTFOLIOS ARE
OF LIMITED SIZE (NOT MORE THAN 1% OF FUND NET ASSETS, AND NO INVESTMENT PRIOR TO
THE FUND REACHING $50,000,000 IN NET ASSETS) SO THAT THE TRACKING ERROR INDUCED
BY SUCH INVESTMENTS WOULD BE LIMITED.
SMALL CAP ISSUERS
THE SECURITIES OF SMALL CAP ISSUERS MAY BE LESS ACTIVELY TRADED THAN THE
SECURITIES OF LARGER ISSUERS, MAY TRADE IN A MORE LIMITED VOLUME, AND MAY CHANGE
IN VALUE MORE ABRUPTLY THAN SECURITIES OF LARGER COMPANIES.
INFORMATION CONCERNING THESE SECURITIES MAY NOT BE READILY AVAILABLE SO
THAT THE COMPANIES MAY BE LESS ACTIVELY FOLLOWED BY STOCK ANALYSTS. SMALL-CAP
ISSUERS DO NOT USUALLY PARTICIPATE IN MARKET RALLIES TO THE SAME EXTENT AS MORE
WIDELY-KNOWN SECURITIES, AND THEY TEND TO HAVE A RELATIVELY HIGHER PERCENTAGE OF
INSIDER OWNERSHIP.
INVESTING IN SMALLER, NEW ISSUERS GENERALLY INVOLVES GREATER RISK THAN
INVESTING IN LARGER, ESTABLISHED ISSUERS. SMALL CAP ISSUERS MAY HAVE LIMITED
PRODUCT LINES, MARKETS OR FINANCIAL RESOURCES AND MAY LACK MANAGEMENT DEPTH. THE
SECURITIES IN SUCH COMPANIES MAY ALSO HAVE LIMITED MARKETABILITY AND MAY BE
SUBJECT TO MORE ABRUPT OR ERRATIC MARKET MOVEMENTS THAN SECURITIES OF LARGER,
MORE ESTABLISHED COMPANIES OR THE MARKET AVERAGES IN GENERAL.
REPURCHASE AGREEMENTS
THE FUND MAY PURCHASE DEBT SECURITIES SUBJECT TO REPURCHASE AGREEMENTS,
WHICH ARE ARRANGEMENTS UNDER WHICH THE FUND BUYS A SECURITY, AND THE SELLER
SIMULTANEOUSLY AGREES TO REPURCHASE THE SECURITY AT A SPECIFIED TIME AND PRICE
REFLECTING A MARKET RATE OF INTEREST. THE FUND ENGAGES IN REPURCHASE AGREEMENTS
IN ORDER TO EARN A HIGHER RATE OF RETURN THAN IT COULD EARN SIMPLY BY INVESTING
IN THE OBLIGATION WHICH IS THE SUBJECT OF THE REPURCHASE AGREEMENT. REPURCHASE
AGREEMENTS ARE NOT, HOWEVER, WITHOUT RISK. IN THE EVENT OF THE BANKRUPTCY OF A
SELLER DURING THE TERM OF A REPURCHASE AGREEMENT, A LEGAL QUESTION EXISTS AS TO
WHETHER THE FUND WOULD BE DEEMED THE OWNER OF THE UNDERLYING SECURITY OR WOULD
BE DEEMED ONLY TO HAVE A SECURITY INTEREST IN AND LIEN UPON SUCH SECURITY. THE
FUND WILL ONLY ENGAGE IN REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES
DEALERS AND BANKS DETERMINED TO PRESENT MINIMAL CREDIT RISK BY THE ADVISOR. IN
ADDITION, THE FUND WILL ONLY ENGAGE IN REPURCHASE AGREEMENTS REASONABLY DESIGNED
TO SECURE FULLY DURING THE TERM OF THE AGREEMENT THE SELLER'S OBLIGATION TO
REPURCHASE THE UNDERLYING SECURITY AND WILL MONITOR THE MARKET VALUE OF THE
UNDERLYING SECURITY DURING THE TERM OF THE AGREEMENT. IF THE VALUE OF THE
UNDERLYING SECURITY DECLINES AND IS NOT AT LEAST EQUAL TO THE REPURCHASE PRICE
DUE THE FUND PURSUANT TO THE AGREEMENT, THE FUND WILL REQUIRE THE SELLER TO
PLEDGE ADDITIONAL SECURITIES OR CASH TO SECURE THE SELLER'S OBLIGATIONS PURSUANT
TO THE AGREEMENT. IF THE SELLER DEFAULTS ON ITS OBLIGATION TO REPURCHASE AND THE
VALUE OF THE UNDERLYING SECURITY DECLINES, THE FUND MAY INCUR A LOSS AND MAY
INCUR EXPENSES IN SELLING THE UNDERLYING SECURITY. THE FUND MAY HAVE A
DECREASED RETURN IN A REPURCHASE AGREEMENT IF THE REPURCHASE RATE IS LESS THAN
THE RETURN THE FUND MIGHT HAVE RECEIVED IF IT BOUGHT THE INSTRUMENT DIRECTLY,
ALTHOUGH ANY CASH POSITION INVESTED IN A REPURCHASE AGREEMENT WILL NOT BE
EXPOSED TO MARKET AND INTEREST RATE RISK THAT THE DIRECT INVESTMENT WOULD HAVE
HAD. REPURCHASE AGREEMENTS ARE ALWAYS FOR PERIODS OF LESS THAN ONE YEAR.
REPURCHASE AGREEMENTS NOT TERMINABLE WITHIN SEVEN DAYS ARE CONSIDERED ILLIQUID.
REVERSE REPURCHASE AGREEMENTS
THE FUND MAY ALSO ENGAGE IN REVERSE REPURCHASE AGREEMENTS. UNDER A REVERSE
REPURCHASE AGREEMENT, THE FUND SELLS PORTFOLIO SECURITIES TO A BANK OR
SECURITIES DEALER AND AGREES TO REPURCHASE THOSE SECURITIES FROM SUCH PARTY AT
AN AGREED UPON DATE AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE FUND
INVESTS THE PROCEEDS FROM EACH REVERSE REPURCHASE AGREEMENT IN OBLIGATIONS IN
WHICH IT IS AUTHORIZED TO INVEST. THE FUND INTENDS TO ENTER INTO A REVERSE
REPURCHASE AGREEMENT ONLY WHEN THE INTEREST INCOME PROVIDED FOR IN THE
OBLIGATION IN WHICH THE FUND INVESTS THE PROCEEDS IS EXPECTED TO EXCEED THE
AMOUNT THE FUND WILL PAY IN INTEREST TO THE OTHER PARTY TO THE AGREEMENT PLUS
ALL COSTS ASSOCIATED WITH THE TRANSACTIONS. THE FUND DOES NOT INTEND TO BORROW
FOR LEVERAGE PURPOSES. THE FUNDS WILL ONLY BE PERMITTED TO PLEDGE ASSETS TO THE
EXTENT NECESSARY TO SECURE BORROWINGS AND REVERSE REPURCHASE AGREEMENTS.
DURING THE TIME A REVERSE REPURCHASE AGREEMENT IS OUTSTANDING, THE FUND
WILL MAINTAIN IN A SEGREGATED CUSTODIAL ACCOUNT AN AMOUNT OF CASH, US GOVERNMENT
SECURITIES OR OTHER LIQUID, HIGH-QUALITY DEBT SECURITIES EQUAL IN VALUE TO THE
REPURCHASE PRICE. THE FUND WILL MARK TO MARKET THE VALUE OF ASSETS HELD IN THE
SEGREGATED ACCOUNT, AND WILL PLACE ADDITIONAL ASSETS IN THE ACCOUNT WHENEVER THE
TOTAL VALUE OF THE ACCOUNT FALLS BELOW THE AMOUNT REQUIRED UNDER APPLICABLE
REGULATIONS.
THE FUND'S USE OF REVERSE REPURCHASE AGREEMENTS INVOLVES THE RISK THAT THE
OTHER PARTY TO THE AGREEMENTS COULD BECOME SUBJECT TO BANKRUPTCY OR LIQUIDATION
PROCEEDINGS DURING THE PERIOD THE AGREEMENTS ARE OUTSTANDING. IN SUCH EVENT, THE
FUND MAY NOT BE ABLE TO REPURCHASE THE SECURITIES IT HAS SOLD TO THAT OTHER
PARTY. UNDER THOSE CIRCUMSTANCES, IF AT THE EXPIRATION OF THE AGREEMENT SUCH
SECURITIES ARE OF GREATER VALUE THAN THE PROCEEDS OBTAINED BY THE FUND UNDER THE
AGREEMENTS, THE FUND MAY HAVE BEEN BETTER OFF HAD IT NOT ENTERED INTO THE
AGREEMENT. HOWEVER, THE FUND WILL ENTER INTO REVERSE REPURCHASE AGREEMENTS ONLY
WITH BANKS AND DEALERS WHICH THE ADVISOR BELIEVES PRESENT MINIMAL CREDIT RISKS
UNDER GUIDELINES ADOPTED BY THE FUND'S BOARD OF DIRECTORS. IN ADDITION, THE FUND
BEARS THE RISK THAT THE MARKET VALUE OF THE SECURITIES IT SOLD MAY DECLINE BELOW
THE AGREED-UPON REPURCHASE PRICE, IN WHICH CASE THE DEALER MAY REQUEST THE FUND
TO POST ADDITIONAL COLLATERAL.
HIGH SOCIAL IMPACT INVESTMENTS
THE FUND WILL NOT PURCHASE DEBT SECURITIES OTHER THAN HIGH SOCIAL IMPACT
INVESTMENTS (OR MONEY MARKET INSTRUMENTS). THE HIGH SOCIAL IMPACT INVESTMENTS
PROGRAM TARGETS A PERCENTAGE OF THE FUND'S ASSETS TO DIRECTLY SUPPORT THE GROWTH
OF COMMUNITY-BASED ORGANIZATIONS FOR THE PURPOSES OF PROMOTING BUSINESS
CREATION, HOUSING DEVELOPMENT AND ECONOMIC AND SOCIAL DEVELOPMENT OF URBAN AND
RURAL COMMUNITIES. THESE SECURITIES ARE UNRATED - THEY ARE EXPECTED TO BE THE
EQUIVALENT OF NON-INVESTMENT GRADE DEBT SECURITIES - THAT IS, LOWER QUALITY
DEBT SECURITIES (GENERALLY THOSE RATED BB OR LOWER BY S&P OR BA OR LOWER BY
MOODY'S, KNOWN AS "JUNK BONDS." THESE SECURITIES HAVE MODERATE TO POOR
PROTECTION OF PRINCIPAL AND INTEREST PAYMENTS AND HAVE SPECULATIVE
CHARACTERISTICS. SEE APPENDIX FOR A DESCRIPTION OF THE RATINGS.) THE ANNUAL
RETURN ON HIGH SOCIAL IMPACT INVESTMENTS IS BETWEEN 0% AND 4%. THUS, RATHER THAN
EARNING A HIGHER RATE, AS WOULD BE EXPECTED, TO COMPENSATE FOR HIGHER THE RISK
(I.E., LOWER CREDIT QUALITY), THEY EARN A RATE OF RETURN THAT IS LOWER THAN THE
RATE CURRENTLY EARNED BY HIGH QUALITY U.S. TREASURY SECURITIES. THERE IS NO
SECONDARY MARKET FOR THESE SECURITIES.
THE FUND EXPECTS TO PURCHASE ALL OF ITS HIGH SOCIAL IMPACT INVESTMENTS IN
NOTES ISSUED BY THE CALVERT SOCIAL INVESTMENT FOUNDATION, A NON-PROFIT
ORGANIZATION, LEGALLY DISTINCT FROM CALVERT GROUP, ORGANIZED AS A CHARITABLE AND
EDUCATIONAL FOUNDATION FOR THE PURPOSE OF INCREASING PUBLIC AWARENESS AND
KNOWLEDGE OF THE CONCEPT OF SOCIALLY RESPONSIBLE INVESTING. THE FOUNDATION
PREPARES ITS OWN CAREFUL CREDIT ANALYSIS TO ATTEMPT TO IDENTIFY THOSE COMMUNITY
DEVELOPMENT ISSUERS WHOSE FINANCIAL CONDITION IS ADEQUATE TO MEET FUTURE
OBLIGATIONS OR IS EXPECTED TO BE ADEQUATE IN THE FUTURE. THROUGH PORTFOLIO
DIVERSIFICATION AND CREDIT ANALYSIS, INVESTMENT RISK CAN BE REDUCED, ALTHOUGH
THERE CAN BE NO ASSURANCE THAT LOSSES WILL NOT OCCUR. THE FOUNDATION MAINTAINS A
CERTAIN REQUIRED LEVEL OF CAPITAL UPON WHICH THE FUND COULD RELY IF A NOTE WERE
EVER TO DEFAULT.
FUTURES TRANSACTIONS
THE FUND CAN USE FINANCIAL FUTURES TO INCREASE OR DECREASE ITS EXPOSURE TO
CHANGING SECURITY PRICES. FUTURES CONTRACTS WILL BE USED ONLY FOR THE LIMITED
PURPOSE OF HEDGING THE FUND'S CASH POSITION; A FUTURES CONTRACT MAY BE PURCHASED
IF THE FUND HAS EXCESS CASH, UNTIL THE FUND CAN GET IN INVESTED IN STOCKS
REPLICATING THE INDEX. SIMILARLY, IF THE FUND SHOULD RECEIVE A LARGE REDEMPTION
REQUEST, IT COULD SELL A FUTURES CONTRACT TO LESSEN THE EXPOSURE TO THE MARKET.
THE FUND CAN USE THESE PRACTICES ONLY FOR HEDGING PURPOSES AND NOT FOR
SPECULATION OR LEVERAGE. IF THE ADVISOR AND/OR SUBADVISOR JUDGES MARKET
CONDITIONS INCORRECTLY OR EMPLOYS A STRATEGY THAT DOES NOT CORRELATE WELL WITH A
FUND'S INVESTMENTS, OR IF THE COUNTERPARTY TO THE TRANSACTION DOES NOT PERFORM
AS PROMISED, THESE TECHNIQUES COULD RESULT IN A LOSS. THESE TECHNIQUES MAY
INCREASE THE VOLATILITY OF A FUND AND MAY INVOLVE A SMALL INVESTMENT OF CASH
RELATIVE TO THE MAGNITUDE OF THE RISK ASSUMED.
A FUTURES CONTRACT IS AN AGREEMENT BETWEEN TWO PARTIES TO BUY AND SELL A
SECURITY ON A FUTURE DATE WHICH HAS THE EFFECT OF ESTABLISHING THE CURRENT PRICE
FOR THE SECURITY. ALTHOUGH FUTURES CONTRACTS BY THEIR TERMS REQUIRE ACTUAL
DELIVERY AND ACCEPTANCE OF SECURITIES, IN MOST CASES THE CONTRACTS ARE CLOSED
OUT BEFORE THE SETTLEMENT DATE WITHOUT THE MAKING OR TAKING OF DELIVERY OF
SECURITIES. UPON BUYING OR SELLING A FUTURES CONTRACT, THE FUND DEPOSITS INITIAL
MARGIN WITH ITS CUSTODIAN, AND THEREAFTER DAILY PAYMENTS OF MAINTENANCE MARGIN
ARE MADE TO AND FROM THE EXECUTING BROKER. PAYMENTS OF MAINTENANCE MARGIN
REFLECT CHANGES IN THE VALUE OF THE FUTURES CONTRACT, WITH THE FUND BEING
OBLIGATED TO MAKE SUCH PAYMENTS IF ITS FUTURES POSITION BECOMES LESS VALUABLE
AND ENTITLED TO RECEIVE SUCH PAYMENTS IF ITS POSITIONS BECOME MORE VALUABLE.
FUTURES CONTRACTS ARE DESIGNED BY BOARDS OF TRADE WHICH ARE DESIGNATED
"CONTRACTS MARKETS" BY THE COMMODITY FUTURES TRADING COMMISSION ("CFTC"). AS
SERIES OF A REGISTERED INVESTMENT COMPANY, THE FUND IS ELIGIBLE FOR EXCLUSION
FROM THE CFTC'S DEFINITION OF "COMMODITY POOL OPERATOR," MEANING THAT THE FUND
MAY INVEST IN FUTURES CONTRACTS UNDER SPECIFIED CONDITIONS WITHOUT REGISTERING
WITH THE CFTC. FUTURES CONTRACTS TRADE ON CONTRACTS MARKETS IN A MANNER THAT IS
SIMILAR TO THE WAY A STOCK TRADES ON A STOCK EXCHANGE AND THE BOARDS OF TRADE,
THROUGH THEIR CLEARING CORPORATIONS, GUARANTEE PERFORMANCE OF THE CONTRACTS.
IF THE FUND HAS SOLD FUTURES TO HEDGE AGAINST DECLINE IN THE MARKET AND
THE MARKET LATER ADVANCES, THE FUND MAY SUFFER A LOSS ON THE FUTURES CONTRACTS
WHICH IT WOULD NOT HAVE EXPERIENCED IF IT HAD NOT HEDGED. CORRELATION IS ALSO
IMPERFECT BETWEEN MOVEMENTS IN THE PRICES OF FUTURES CONTRACTS AND MOVEMENTS IN
PRICES OF THE SECURITIES WHICH ARE THE SUBJECT OF THE HEDGE. THUS THE PRICE OF
THE FUTURES CONTRACT MAY MOVE MORE THAN OR LESS THAN THE PRICE OF THE SECURITIES
BEING HEDGED.
THE FUND CAN CLOSE OUT FUTURES POSITIONS ONLY ON AN EXCHANGE OR BOARD OF
TRADE WHICH PROVIDES A SECONDARY MARKET IN SUCH FUTURES. ALTHOUGH THE FUND
INTENDS TO PURCHASE OR SELL ONLY SUCH FUTURES FOR WHICH AN ACTIVE SECONDARY
MARKET APPEARS TO EXIST, THERE CAN BE NO ASSURANCE THAT SUCH A MARKET WILL EXIST
FOR ANY PARTICULAR FUTURES CONTRACT AT ANY PARTICULAR TIME. THIS MIGHT PREVENT
THE FUND FROM CLOSING A FUTURES POSITION, WHICH COULD REQUIRE THE FUND TO MAKE
DAILY CASH PAYMENTS WITH RESPECT TO ITS POSITION IN THE EVENT OF ADVERSE PRICE
MOVEMENTS.
LENDING PORTFOLIO SECURITIES
THE FUND MAY LEND ITS SECURITIES TO MEMBER FIRMS OF THE NEW YORK STOCK
EXCHANGE AND COMMERCIAL BANKS WITH ASSETS OF ONE BILLION DOLLARS OR MORE,
PROVIDED THE VALUE OF THE SECURITIES LOANED WILL NOT EXCEED 33 1/3% OF ASSETS.
ANY SUCH LOANS MUST BE SECURED CONTINUOUSLY IN THE FORM OF CASH OR CASH
EQUIVALENTS SUCH AS US TREASURY BILLS. THE AMOUNT OF THE COLLATERAL MUST ON A
CURRENT BASIS EQUAL OR EXCEED THE MARKET VALUE OF THE LOANED SECURITIES, AND THE
FUND MUST BE ABLE TO TERMINATE SUCH LOANS UPON NOTICE AT ANY TIME. THE FUND WILL
EXERCISE ITS RIGHT TO TERMINATE A SECURITIES LOAN IN ORDER TO PRESERVE ITS RIGHT
TO VOTE UPON MATTERS OF IMPORTANCE AFFECTING HOLDERS OF THE SECURITIES,
INCLUDING SOCIAL RESPONSIBILITY MATTERS.
THE ADVANTAGE OF SUCH LOANS IS THAT THE FUND CONTINUES TO RECEIVE THE
EQUIVALENT OF THE INTEREST EARNED OR DIVIDENDS PAID BY THE ISSUERS ON THE LOANED
SECURITIES WHILE AT THE SAME TIME EARNING INTEREST ON THE CASH OR EQUIVALENT
COLLATERAL WHICH MAY BE INVESTED IN ACCORDANCE WITH THE FUND'S INVESTMENT
OBJECTIVE, POLICIES AND RESTRICTIONS.
SECURITIES LOANS ARE USUALLY MADE TO BROKER-DEALERS AND OTHER FINANCIAL
INSTITUTIONS TO FACILITATE THEIR DELIVERY OF SUCH SECURITIES. AS WITH ANY
EXTENSION OF CREDIT, THERE MAY BE RISKS OF DELAY IN RECOVERY AND POSSIBLY LOSS
OF RIGHTS IN THE LOANED SECURITIES SHOULD THE BORROWER OF THE LOANED SECURITIES
FAIL FINANCIALLY. HOWEVER, THE FUND WILL MAKE LOANS OF ITS SECURITIES ONLY TO
THOSE FIRMS THE ADVISOR OR SUBADVISOR DEEMS CREDITWORTHY AND ONLY ON TERMS THE
ADVISOR BELIEVES SHOULD COMPENSATE FOR SUCH RISK. ON TERMINATION OF THE LOAN,
THE BORROWER IS OBLIGATED TO RETURN THE SECURITIES TO THE FUND. THE FUND WILL
RECOGNIZE ANY GAIN OR LOSS IN THE MARKET VALUE OF THE SECURITIES DURING THE LOAN
PERIOD. THE FUND MAY PAY REASONABLE CUSTODIAL FEES IN CONNECTION WITH THE LOAN.
INVESTMENT RESTRICTIONS
-----------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
THE FUND HAS ADOPTED THE FOLLOWING FUNDAMENTAL INVESTMENT RESTRICTIONS.
THESE RESTRICTIONS CANNOT BE CHANGED WITHOUT THE APPROVAL OF THE HOLDERS OF A
MAJORITY OF THE OUTSTANDING SHARES OF THE FUND.
THE FUND MAY NOT:
(1) MAKE ANY INVESTMENT INCONSISTENT WITH ITS CLASSIFICATION AS A
DIVERSIFIED INVESTMENT COMPANY
UNDER THE 1940 ACT.
(2) CONCENTRATE ITS INVESTMENTS IN THE SECURITIES OF ISSUERS PRIMARILY ENGAGED
IN ANY PARTICULAR INDUSTRY (OTHER THAN SECURITIES ISSUED OR GUARANTEED BY THE US
GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES AND REPURCHASE AGREEMENTS
SECURED THEREBY.)
(3) ISSUE SENIOR SECURITIES OR BORROW MONEY, EXCEPT FROM BANKS FOR TEMPORARY OR
EMERGENCY PURPOSES AND THEN ONLY IN AN AMOUNT UP TO 33 1/3% OF THE VALUE OF THE
FUND'S TOTAL ASSETS AND EXCEPT BY ENGAGING IN REVERSE REPURCHASE AGREEMENTS.
IN ORDER TO SECURE ANY PERMITTED BORROWINGS AND REVERSE REPURCHASE AGREEMENTS
UNDER THIS SECTION, THE FUND MAY PLEDGE, MORTGAGE OR HYPOTHECATE ITS ASSETS.
(4) UNDERWRITE THE SECURITIES OF OTHER ISSUERS, EXCEPT AS ALLOWED BY LAW OR TO
THE EXTENT THAT THE PURCHASE OF OBLIGATIONS IN ACCORDANCE WITH THE FUND'S
INVESTMENT OBJECTIVE AND POLICIES, EITHER DIRECTLY FROM THE ISSUER, OR FROM AN
UNDERWRITER FOR AN ISSUER, MAY BE DEEMED AN UNDERWRITING.
(5) INVEST DIRECTLY IN COMMODITIES OR REAL ESTATE, ALTHOUGH THE FUND MAY INVEST
IN FINANCIAL FUTURES, AND IN SECURITIES WHICH ARE SECURED BY REAL ESTATE OR REAL
ESTATE MORTGAGES AND SECURITIES OF ISSUERS WHICH INVEST OR DEAL IN COMMODITIES,
COMMODITY FUTURES, REAL ESTATE OR REAL ESTATE MORTGAGES.
(6) MAKE LOANS, OTHER THAN THROUGH THE PURCHASE OF MONEY MARKET INSTRUMENTS AND
REPURCHASE AGREEMENTS OR BY THE PURCHASE OF BONDS, DEBENTURES OR OTHER DEBT
SECURITIES, OR PORTFOLIO SECURITIES LENDING. THE PURCHASE OF ALL OR A PORTION OF
AN ISSUE OF PUBLICLY OR PRIVATELY DISTRIBUTED DEBT OBLIGATIONS IN ACCORDANCE
WITH THE FUND'S INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS, SHALL NOT
CONSTITUTE THE MAKING OF A LOAN.
UNDER CURRENT LAW, A DIVERSIFIED INVESTMENT COMPANY, WITH RESPECT TO 75% OF ITS
ASSETS, CAN INVEST NO MORE THAN 5% OF ITS ASSETS IN THE SECURITIES OF ANY ONE
ISSUER, AND MAY NOT ACQUIRE MORE THAN 10% OF THE VOTING SECURITIES OF ANY
ISSUER. UNDER CURRENT LAW, "CONCENTRATE" MEANS THE FUND CANNOT INVEST 25% OR
MORE IN THE SECURITIES OF ISSUERS PRIMARILY ENGAGED IN ANY ONE INDUSTRY. UNDER
CURRENT LAW THE FUND MAY UNDERWRITE SECURITIES ONLY IN COMPLIANCE WITH THE
CONDITIONS OF SECTION 10(F) OF THE INVESTMENT COMPANY ACT AND THE RULES
THEREUNDER.
NONFUNDAMENTAL INVESTMENT RESTRICTIONS
THE FUND HAS ADOPTED THE FOLLOWING NONFUNDAMENTAL INVESTMENT RESTRICTIONS.
A NONFUNDAMENTAL INVESTMENT RESTRICTION CAN BE CHANGED BY THE BOARD AT ANY TIME
WITHOUT A SHAREHOLDER VOTE.
THE FUND MAY NOT:
(1) PURCHASE THE OBLIGATIONS OF FOREIGN ISSUERS, IF AS A RESULT, FOREIGN
SECURITIES WOULD EXCEED 5% OF THE VALUE OF THE FUND'S NET ASSETS.
(2) PURCHASE ILLIQUID SECURITIES IF MORE THAN 15% OF THE VALUE OF THE FUND'S NET
ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(3) PURCHASE DEBT SECURITIES (OTHER THAN MONEY MARKET INSTRUMENTS OR HIGH SOCIAL
IMPACT INVESTMENTS).
(4) ENTER INTO A FUTURES CONTRACT OR AN OPTION ON A FUTURES CONTRACT IF THE
AGGREGATE INITIAL MARGINS AND PREMIUMS REQUIRED TO ESTABLISH THESE POSITIONS
WOULD EXCEED 5% OF THE FUND'S NET ASSETS.
(5) PURCHASE PUT OR CALL OPTIONS.
(6) ENTER INTO REVERSE REPURCHASE AGREEMENTS IF THE AGGREGATE PROCEEDS FROM
OUTSTANDING REVERSE REPURCHASE AGREEMENTS, WHEN ADDED TO OTHER OUTSTANDING
BORROWINGS PERMITTED BY THE 1940 ACT, WOULD EXCEED 33 1/3% OF THE FUND'S TOTAL
ASSETS. THE FUND DOES NOT INTEND TO MAKE ANY PURCHASES OF SECURITIES IF
BORROWING EXCEEDS 5% OF ITS TOTAL ASSETS.
(7) PURCHASE SECURITIES THAT ARE NOT IN THE CALVERT SOCIAL INDEX IF, AS A
RESULT, SUCH SECURITIES WOULD
EXCEED 5% OF THE VALUE OF THE FUND'S NET ASSETS.
ANY INVESTMENT RESTRICTION WHICH INVOLVES A MAXIMUM PERCENTAGE OF
SECURITIES OR ASSETS SHALL NOT BE CONSIDERED TO BE VIOLATED UNLESS AN EXCESS
OVER THE APPLICABLE PERCENTAGE OCCURS IMMEDIATELY AFTER AN ACQUISITION OF
SECURITIES OR UTILIZATION OF ASSETS AND RESULTS THEREFROM.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
-----------------------------------
THE FUND INTENDS TO QUALIFY AS REGULATED INVESTMENT COMPANIES UNDER
SUBCHAPTER M OF THE INTERNAL REVENUE CODE. IF FOR ANY REASON THE FUND SHOULD
FAIL TO QUALIFY, IT WOULD BE TAXED AS A CORPORATION AT THE FUND LEVEL, RATHER
THAN PASSING THROUGH ITS INCOME AND GAINS TO SHAREHOLDERS.
DISTRIBUTIONS OF REALIZED NET CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE
A YEAR; HOWEVER, THE FUND DOES NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS UNLESS
AVAILABLE CAPITAL LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE EXPIRED.
GENERALLY, DIVIDENDS (INCLUDING SHORT-TERM CAPITAL GAINS) AND DISTRIBUTIONS
ARE TAXABLE TO THE SHAREHOLDER IN THE YEAR THEY ARE PAID. HOWEVER, ANY DIVIDENDS
AND DISTRIBUTIONS PAID IN JANUARY BUT DECLARED DURING THE PRIOR THREE MONTHS ARE
TAXABLE IN THE YEAR DECLARED.
THE FUND IS REQUIRED TO WITHHOLD 31% OF ANY REPORTABLE DIVIDENDS AND
LONG-TERM CAPITAL GAIN DISTRIBUTIONS PAID AND 31% REPORTABLE OF EACH REDEMPTION
TRANSACTION IF: (A) THE SHAREHOLDER'S SOCIAL SECURITY NUMBER OR OTHER TAXPAYER
IDENTIFICATION NUMBER ("TIN") IS NOT PROVIDED OR AN OBVIOUSLY INCORRECT TIN IS
PROVIDED; (B) THE SHAREHOLDER DOES NOT CERTIFY UNDER PENALTIES OF PERJURY THAT
THE TIN PROVIDED IS THE SHAREHOLDER'S CORRECT TIN AND THAT THE SHAREHOLDER IS
NOT SUBJECT TO BACKUP WITHHOLDING UNDER SECTION 3406(A)(1)(C) OF THE INTERNAL
REVENUE CODE BECAUSE OF UNDERREPORTING (HOWEVER, FAILURE TO PROVIDE
CERTIFICATION AS TO THE APPLICATION OF SECTION 3406(A)(1)(C) WILL RESULT ONLY IN
BACKUP WITHHOLDING ON DIVIDENDS, NOT ON REDEMPTIONS); OR (C) THE FUND IS
NOTIFIED BY THE INTERNAL REVENUE SERVICE THAT THE TIN PROVIDED BY THE
SHAREHOLDER IS INCORRECT OR THAT THERE HAS BEEN UNDERREPORTING OF INTEREST OR
DIVIDENDS BY THE SHAREHOLDER. AFFECTED SHAREHOLDERS WILL RECEIVE STATEMENTS AT
LEAST ANNUALLY SPECIFYING THE AMOUNT WITHHELD.
IN ADDITION, THE FUND IS REQUIRED TO REPORT TO THE INTERNAL REVENUE SERVICE
THE FOLLOWING INFORMATION WITH RESPECT TO EACH REDEMPTION TRANSACTION OCCURRING
IN THE FUND:(A) THE SHAREHOLDER'S NAME, ADDRESS, ACCOUNT NUMBER AND TAXPAYER
IDENTIFICATION NUMBER; (B) THE TOTAL DOLLAR VALUE OF THE REDEMPTIONS; AND (C)
THE FUND'S IDENTIFYING CUSIP NUMBER.
CERTAIN SHAREHOLDERS ARE, HOWEVER, EXEMPT FROM THE BACKUP WITHHOLDING AND
BROKER REPORTING REQUIREMENTS. EXEMPT SHAREHOLDERS INCLUDE: CORPORATIONS;
FINANCIAL INSTITUTIONS; TAX-EXEMPT ORGANIZATIONS; INDIVIDUAL RETIREMENT PLANS;
THE U.S., A STATE, THE DISTRICT OF COLUMBIA, A U.S. POSSESSION, A FOREIGN
GOVERNMENT, AN INTERNATIONAL ORGANIZATION, OR ANY POLITICAL SUBDIVISION, AGENCY
OR INSTRUMENTALITY OF ANY OF THE FOREGOING; U.S. REGISTERED COMMODITIES OR
SECURITIES DEALERS; REAL ESTATE INVESTMENT TRUSTS; REGISTERED INVESTMENT
COMPANIES; BANK COMMON TRUST FUNDS; CERTAIN CHARITABLE TRUSTS; FOREIGN CENTRAL
BANKS OF ISSUE. NON-RESIDENT ALIENS, CERTAIN FOREIGN PARTNERSHIPS AND FOREIGN
CORPORATIONS ARE GENERALLY NOT SUBJECT TO EITHER REQUIREMENT BUT MAY INSTEAD BE
SUBJECT TO WITHHOLDING UNDER SECTIONS 1441 OR 1442 OF THE INTERNAL REVENUE CODE.
SHAREHOLDERS CLAIMING EXEMPTION FROM BACKUP WITHHOLDING AND BROKER REPORTING
SHOULD CALL OR WRITE THE FUND FOR FURTHER INFORMATION.
MANY STATES DO NOT TAX THE PORTION OF THE FUND'S DIVIDENDS WHICH IS DERIVED
FROM INTEREST ON U.S. GOVERNMENT OBLIGATIONS. STATE LAW VARIES CONSIDERABLY
CONCERNING THE TAX STATUS OF DIVIDENDS DERIVED FROM U.S. GOVERNMENT OBLIGATIONS.
ACCORDINGLY, SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE TAX STATUS
OF DIVIDENDS AND DISTRIBUTIONS FROM THE FUND IN THEIR RESPECTIVE JURISDICTIONS.
DIVIDENDS PAID BY THE FUND MAY BE ELIGIBLE FOR THE DIVIDENDS RECEIVED
DEDUCTION AVAILABLE TO CORPORATE TAXPAYERS. CORPORATE TAXPAYERS REQUIRING THIS
INFORMATION MAY CONTACT CALVERT.
NET ASSET VALUE
---------------
THE PUBLIC OFFERING PRICE OF THE SHARES OF THE FUND IS THE RESPECTIVE NET
ASSET VALUE PER SHARE (PLUS, FOR CLASS A SHARES, THE APPLICABLE SALES CHARGE).
THE NET ASSET VALUE FLUCTUATES BASED ON THE RESPECTIVE VALUE OF THE FUND'S
INVESTMENTS. THE NET ASSET VALUE PER SHARE FOR EACH CLASS IS DETERMINED EVERY
BUSINESS DAY AT THE CLOSE OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE
(NORMALLY 4:00 P.M. EASTERN TIME) AND AT SUCH OTHER TIMES AS MAY BE NECESSARY OR
APPROPRIATE. THE FUND DOES NOT DETERMINE NET ASSET VALUE ON CERTAIN NATIONAL
HOLIDAYS OR OTHER DAYS ON WHICH THE NEW YORK STOCK EXCHANGE IS CLOSED: NEW
YEAR'S DAY, MARTIN LUTHER KING DAY, PRESIDENTS' DAY, GOOD FRIDAY, MEMORIAL DAY,
INDEPENDENCE DAY, LABOR DAY, THANKSGIVING DAY, AND CHRISTMAS DAY. THE FUND'S NET
ASSET VALUE PER SHARE IS DETERMINED BY DIVIDING TOTAL NET ASSETS (THE VALUE OF
ITS ASSETS NET OF LIABILITIES, INCLUDING ACCRUED EXPENSES AND FEES) BY THE
NUMBER OF SHARES OUTSTANDING FOR THAT CLASS.
THE ASSETS OF THE FUND ARE VALUED AS FOLLOWS: (A) SECURITIES FOR WHICH
MARKET QUOTATIONS ARE READILY AVAILABLE ARE VALUED AT THE MOST RECENT CLOSING
PRICE, MEAN BETWEEN BID AND ASKED PRICE, OR YIELD EQUIVALENT AS OBTAINED FROM
ONE OR MORE MARKET MAKERS FOR SUCH SECURITIES; (B) SECURITIES MATURING WITHIN 60
DAYS MAY BE VALUED AT COST, PLUS OR MINUS ANY AMORTIZED DISCOUNT OR PREMIUM,
UNLESS THE BOARD OF DIRECTORS DETERMINES SUCH METHOD NOT TO BE APPROPRIATE UNDER
THE CIRCUMSTANCES; AND (C) ALL OTHER SECURITIES AND ASSETS FOR WHICH MARKET
QUOTATIONS ARE NOT READILY AVAILABLE WILL BE FAIRLY VALUED BY THE ADVISOR IN
GOOD FAITH UNDER THE SUPERVISION OF THE BOARD OF DIRECTORS.
CALCULATION OF TOTAL RETURN
---------------------------
THE FUND MAY ADVERTISE "TOTAL RETURN." TOTAL RETURN IS CALCULATED
SEPARATELY FOR EACH CLASS. TOTAL RETURN DIFFERS FROM YIELD IN THAT YIELD FIGURES
MEASURE ONLY THE INCOME COMPONENT OF THE FUND'S INVESTMENTS, WHILE TOTAL RETURN
INCLUDES NOT ONLY THE EFFECT OF INCOME DIVIDENDS BUT ALSO ANY CHANGE IN NET
ASSET VALUE, OR PRINCIPAL AMOUNT, DURING THE STATED PERIOD. TOTAL RETURN IS
COMPUTED PER CLASS BY TAKING THE TOTAL NUMBER OF SHARES PURCHASED BY A
HYPOTHETICAL $1,000 INVESTMENT AFTER DEDUCTING ANY APPLICABLE SALES CHARGE,
ADDING ALL ADDITIONAL SHARES PURCHASED WITHIN THE PERIOD WITH REINVESTED
DIVIDENDS AND DISTRIBUTIONS, CALCULATING THE VALUE OF THOSE SHARES AT THE END OF
THE PERIOD, AND DIVIDING THE RESULT BY THE INITIAL $1,000 INVESTMENT. FOR
PERIODS OF MORE THAN ONE YEAR, THE CUMULATIVE TOTAL RETURN IS THEN ADJUSTED FOR
THE NUMBER OF YEARS, TAKING COMPOUNDING INTO ACCOUNT, TO CALCULATE AVERAGE
ANNUAL TOTAL RETURN DURING THAT PERIOD.
TOTAL RETURN IS COMPUTED ACCORDING TO THE FOLLOWING FORMULA:
P(1 + T)N = ERV
WHERE P = A HYPOTHETICAL INITIAL PAYMENT OF $1,000; T = TOTAL RETURN; N = NUMBER
OF YEARS; AND ERV = THE ENDING REDEEMABLE VALUE OF A HYPOTHETICAL $1,000 PAYMENT
MADE AT THE BEGINNING OF THE PERIOD.
TOTAL RETURN IS HISTORICAL IN NATURE AND IS NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. ALL TOTAL RETURN QUOTATIONS REFLECT THE DEDUCTION OF THE MAXIMUM
SALES CHARGE ("RETURN WITH MAXIMUM LOAD"), EXCEPT QUOTATIONS OF RETURN "WITHOUT
MAXIMUM LOAD," OR "AT NAV" (OR "WITHOUT CDSC") WHICH DO NOT DEDUCT SALES CHARGE.
THUS, IN THE FORMULA ABOVE, FOR RETURN WITHOUT MAXIMUM LOAD, P = THE ENTIRE
$1,000 HYPOTHETICAL INITIAL INVESTMENT AND DOES NOT REFLECT THE DEDUCTION OF ANY
SALES CHARGE; FOR RETURN WITH MAXIMUM LOAD, P = A HYPOTHETICAL INITIAL
INVESTMENT OF $1,000 LESS ANY SALES CHARGE ACTUALLY IMPOSED AT THE BEGINNING OF
THE PERIOD FOR WHICH THE PERFORMANCE IS BEING CALCULATED. CLASS I SHARES DO NOT
HAVE A SALES CHARGE.
PURCHASE AND REDEMPTION OF SHARES
---------------------------------
SHARE CERTIFICATES WILL NOT BE ISSUED UNLESS REQUESTED IN WRITING BY THE
INVESTOR. IF SHARE CERTIFICATES HAVE BEEN ISSUED, THEN THE CERTIFICATE MUST BE
DELIVERED TO THE FUND'S TRANSFER AGENT WITH ANY REDEMPTION REQUEST. THIS COULD
RESULT IN DELAYS. IF THE CERTIFICATES HAVE BEEN LOST, THE SHAREHOLDER WILL HAVE
TO PAY TO POST AN INDEMNITY BOND IN CASE THE ORIGINAL CERTIFICATES ARE LATER
PRESENTED BY ANOTHER PERSON. NO CERTIFICATES WILL BE ISSUED FOR FRACTIONAL
SHARES.
THE FUND HAS FILED A NOTICE OF ELECTION UNDER RULE 18F-1 WITH THE
COMMISSION. THE NOTICE STATES THAT THE FUND MAY HONOR REDEMPTIONS THAT, DURING
ANY 90-DAY PERIOD, EXCEED $250,000 OR 1% OF THE NEST ASSETS VALUE OF THE FUND,
WHICHEVER IS LESS, BY REDEMPTIONS-IN-KIND (DISTRIBUTIONS OF A PRO RATA SHARE OF
THE PORTFOLIO SECURITIES, RATHER THAN CASH.)
SEE THE PROSPECTUS FOR MORE DETAILS ON PURCHASES AND REDEMPTIONS.
ADVERTISING
-----------
THE FUND OR ITS AFFILIATES MAY PROVIDE INFORMATION SUCH AS, BUT NOT LIMITED
TO, THE ECONOMY, INVESTMENT CLIMATE, INVESTMENT PRINCIPLES, SOCIOLOGICAL
CONDITIONS AND POLITICAL AMBIANCE. DISCUSSION MAY INCLUDE HYPOTHETICAL SCENARIOS
OR LISTS OF RELEVANT FACTORS DESIGNED TO AID THE INVESTOR IN DETERMINING WHETHER
THE FUND IS COMPATIBLE WITH THE INVESTOR'S GOALS. THE FUND MAY LIST ITS HOLDINGS
OR GIVE EXAMPLES OF SECURITIES THAT MAY HAVE BEEN CONSIDERED FOR INCLUSION IN
THE FUND, WHETHER HELD OR NOT.
THE FUND OR ITS AFFILIATES MAY SUPPLY COMPARATIVE PERFORMANCE DATA AND
RANKINGS FROM INDEPENDENT SOURCES SUCH AS DONOGHUE'S MONEY FUND REPORT, BANK
RATE MONITOR, MONEY, FORBES, LIPPER ANALYTICAL SERVICES, INC., CDA INVESTMENT
TECHNOLOGIES, INC., WIESENBERGER INVESTMENT COMPANIES SERVICE, MUTUAL FUND
VALUES MORNINGSTAR RATINGS, MUTUAL FUND FORECASTER, BARRON'S, NELSON'S AND THE
WALL STREET JOURNAL. THE FUND MAY ALSO CITE TO ANY SOURCE, WHETHER IN PRINT OR
ON-LINE, SUCH AS BLOOMBERG, IN ORDER TO ACKNOWLEDGE ORIGIN OF INFORMATION, AND
MAY PROVIDE BIOGRAPHICAL INFORMATION ON, OR QUOTE, PORTFOLIO MANAGERS OR FUND
OFFICERS. THE FUND MAY COMPARE ITSELF OR ITS PORTFOLIO HOLDINGS TO OTHER
INVESTMENTS, WHETHER OR NOT ISSUED OR REGULATED BY THE SECURITIES INDUSTRY,
INCLUDING, BUT NOT LIMITED TO, CERTIFICATES OF DEPOSIT AND TREASURY NOTES.
CALVERT GROUP IS THE NATION'S LEADING FAMILY OF SOCIALLY RESPONSIBLE MUTUAL
FUNDS, BOTH IN TERMS OF SOCIALLY RESPONSIBLE MUTUAL FUND ASSETS UNDER
MANAGEMENT, AND NUMBER OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS OFFERED
(SOURCE: SOCIAL INVESTMENT FORUM, DECEMBER 31, 1999). CALVERT GROUP WAS ALSO THE
FIRST TO OFFER A FAMILY OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS.
DIRECTORS AND OFFICERS
----------------------
THE FUND'S BOARD OF DIRECTORS SUPERVISES THE FUND'S ACTIVITIES AND REVIEWS
ITS CONTRACTS WITH COMPANIES THAT PROVIDE IT WITH SERVICES. BUSINESS
INFORMATION IS PROVIDED BELOW ABOUT THE FUND'S DIRECTORS AND OFFICERS.
PRINCIPAL
OCCUPATION(S) DURING
NAME, ADDRESS & DATE OF BIRTH POSITION WITH FUND LAST 5 YEARS
REBECCA ADAMSON DIRECTOR PRESIDENT OF THE
DOB: 9/10/47 NATIONAL NON-PROFIT,
FIRST NATIONS DEVELOPMENT INSTITUTE FIRST NATIONS FINANCIAL PROJECT.
ADDRESS: 11917 MAIN STREET,
FREDERICKSBURG, VA. 22408
RICHARD L. BAIRD DIRECTOR EXECUTIVE VICE PRESIDENT
DOB: 5/9/48 OF THE FAMILY HEALTH COUNCIL, A
FAMILY HEALTH COUNCIL NON-PROFIT CORPORATION
ADDRESS: 211 OVERLOOK DRIVE THAT PROVIDES FAMILY PLANNING SERVICES,
PITTSBURGH, PA. 15216 NUTRITION, MATERNAL/CHILD HEALTH
CARE, AND VARIOUS HEALTH SCREENING
SERVICES.
JOY V. JONES, ESQ. DIRECTOR ATTORNEY AND ENTERTAINMENT
DOB: 7/2/50 MANAGER IN NEW YORK CITY.
ADDRESS: 175 WEST 12TH STREET
NEW YORK, NEW YORK 10011
* BARBARA J. KRUMSIEK DIRECTOR PRESIDENT, CHIEF EXECUTIVE OFFICER
DOB: 08/09/52 AND VICE CHAIRMAN OF CALVERT
GROUP, LTD. PRIOR TO JOINING
CALVERT GROUP, MS. KRUMSIEK
SERVED AS A MANAGING DIRECTOR OF
ALLIANCE FUND DISTRIBUTORS, INC.
TERRENCE J. MOLLNER, ED.D DIRECTOR FOUNDER, CHAIRPERSON, AND
DOB: 12/13/44 PRESIDENT OF TRUSTEESHIP
ADDRESS: 15 EDWARDS SQUARE INSTITUTE, INC., A DIVERSE
NORTHAMPTON, MASSACHUSETTS 01060. FOUNDATION KNOWN PRINCIPALLY
FOR ITS CONSULTATION TO
CORPORATIONS CONVERTING TO
COOPERATIVE EMPLOYEE-OWNERSHIP.
SYDNEY AMARA MORRIS DIRECTOR A MINISTER OF THE UNITARIAN-
DOB: 9/7/49. UNIVERSALIST FELLOWSHIP.
ADDRESS: 2915 WEST 12TH
VANCOUVER, BRITISH COLUMBIA, CANADA V6K2R2.
* CHARLES T. NASON, DIRECTOR Vice CHAIRMAN, and PRESIDENT of
Ameritas Acacia Mutual Holding
DOB: 4/22/46 Company, and chairman and CEO
ADDRESS: 7315 WISCONSIN AVENUE Acacia Life Insurance company.
BETHESDA, MARYLAND 20814
* D. WAYNE SILBY DIRECTOR PRESIDENT OF CALVERT SOCIAL
DOB: 7/20/48. INVESTMENT FUND. MR. SILBY IS ALSO
ADDRESS: 1715 18TH STREET, N.W., EXECUTIVE CHAIRMAN OF GROUP
WASHINGTON, D.C. 20009. SERVE, INC., AN INTERNET COMPANY
FOCUSED ON COMMUNITY BUILDING
COLLABORATIVE TOOLS.
RENO J. MARTINI OFFICER SENIOR VICE PRESIDENT OF CALVERT
DOB: 1/13/50 GROUP, LTD., SENIOR VICE PRESIDENT
AND CHIEF INVESTMENT OFFICER OF
CALVERT ASSET MANAGEMENT
COMPANY, INC., AND DIRECTOR AND
PRESIDENT OF CALVERT-SLOAN
ADVISERS, L.L.C.
RONALD M. WOLFSHEIMER, CPA, OFFICER SENIOR VICE PRESIDENT AND CHIEF
DOB: 7/24/52 FINANCIAL OFFICER OF
CALVERT GROUP, LTD.
WILLIAM M. TARTIKOFF, ESQ. OFFICER SENIOR VICE PRESIDENT, SECRETARY,
DOB: 8/12/47. AND GENERAL COUNSEL OF CALVERT
GROUP, LTD.
SUSAN WALKER BENDER, ESQ. OFFICER ASSOCIATE GENERAL COUNSEL OF
DOB: 1/29/59. CALVERT GROUP, LTD.
IVY WAFFORD DUKE, ESQ. OFFICER ASSOCIATE GENERAL COUNSEL OF
DOB: 09/07/68 CALVERT GROUP, LTD. MS. DUKE WAS
AN ASSOCIATE IN THE INVESTMENT
MANAGEMENT GROUP OF THE
BUSINESS AND FINANCE DEPARTMENT
AT DRINKER BIDDLE & REATH.
VICTOR FRYE, ESQ. OFFICER COUNSEL AND COMPLIANCE
DOB: 10/15/58 OFFICER OF CALVERT GROUP, LTD.
PRIOR TO WORKING AT CALVERT
GROUP, MR. FRYE WAS COUNSEL
AND MANAGER OF THE COMPLIANCE
DEPARTMENT AT THE ADVISORS GROUP.
JENNIFER STREAKS, ESQ. OFFICER ASSISTANT GENERAL COUNSEL OF
DOB: 08/02/71 CALVERT GROUP, LTD. PRIOR TO
WORKING AT CALVERT GROUP, MS.
STREAKS WAS A REGULATORY ANALYST
IN THE MARKET REGULATION
DEPARTMENT OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS.
MICHAEL V. YUHAS JR., CPA OFFFICER DIRECTOR OF FUND ADMINISTRATION
DOB: 08/04/61 OF CALVERT GROUP, LTD.
-----------------------------------------
EACH OF THE OFFICERS IS ALSO AN OFFICER OF CALVERT-SLOAN ADVISERS, L.L.C.,
EACH OF THE SUBSIDIARIES OF CALVERT GROUP, LTD., AND EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS.
THE ADDRESS OF DIRECTORS AND OFFICERS, UNLESS OTHERWISE NOTED, IS 4550
MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814. DIRECTORS MARKED WITH
AN *, ABOVE, ARE "INTERESTED PERSONS" OF THE FUND, UNDER THE INVESTMENT COMPANY
ACT OF 1940.
THE AUDIT COMMITTEE OF THE BOARD IS COMPOSED OF THOSE DIRECTORS WHO ARE
NOT INTERESTED PERSONS.
DIRECTORS OF THE FUND NOT AFFILIATED WITH THE FUND'S ADVISOR MAY ELECT TO
DEFER RECEIPT OF ALL OR A PERCENTAGE OF THEIR FEES AND INVEST THEM IN ANY FUND
IN THE CALVERT FAMILY OF FUNDS THROUGH THE DIRECTORS' DEFERRED COMPENSATION
PLAN. DEFERRAL OF THE FEES IS DESIGNED TO MAINTAIN THE PARTIES IN THE SAME
POSITION AS IF THE FEES WERE PAID ON A CURRENT BASIS. MANAGEMENT BELIEVES THIS
WILL HAVE A NEGLIGIBLE EFFECT ON THE FUND'S ASSETS, LIABILITIES, NET ASSETS, AND
NET INCOME PER SHARE.
INVESTMENT ADVISOR AND SUBADVISOR
---------------------------------
THE FUND'S INVESTMENT ADVISOR IS CALVERT ASSET MANAGEMENT COMPANY, INC.,
4550 MONTGOMERY AVENUE, 1000N, BETHESDA, MARYLAND 20814, A SUBSIDIARY OF CALVERT
GROUP LTD., WHICH IS A SUBSIDIARY OF ACACIA LIFE INSURANCE COMPANY OF
WASHINGTON, D.C. ("ACACIA"). ACACIA IS A SUBSIDIARY OF AMERITAS ACACIA MUTUAL
HOLDING COMPANY. UNDER THE ADVISORY CONTRACT, THE ADVISOR PROVIDES INVESTMENT
ADVICE TO THE FUND AND OVERSEES ITS DAY-TO-DAY OPERATIONS, SUBJECT TO DIRECTION
AND CONTROL BY THE FUND'S BOARD OF DIRECTORS. THE ADVISOR PROVIDES THE FUND WITH
INVESTMENT SUPERVISION AND MANAGEMENT, AND OFFICE SPACE; FURNISHES EXECUTIVE AND
OTHER PERSONNEL TO THE FUND; AND PAYS THE SALARIES AND FEES OF ALL DIRECTORS WHO
ARE EMPLOYEES OF THE ADVISOR OR ITS AFFILIATES. THE FUND PAYS ALL OTHER
ADMINISTRATIVE AND OPERATING EXPENSES, INCLUDING: CUSTODIAL, REGISTRAR, DIVIDEND
DISBURSING AND TRANSFER AGENCY FEES; ADMINISTRATIVE SERVICE FEES; FUND
ACCOUNTING FEES; FEDERAL AND STATE SECURITIES REGISTRATION FEES; SALARIES, FEES
AND EXPENSES OF DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES OF THE FUND WHO ARE
NOT EMPLOYEES OF THE ADVISOR OR OF ITS AFFILIATES; INSURANCE PREMIUMS; TRADE
ASSOCIATION DUES; LEGAL AND AUDIT FEES; INTEREST, TAXES AND OTHER BUSINESS FEES;
EXPENSES OF PRINTING AND MAILING REPORTS, NOTICES, PROSPECTUSES, AND PROXY
MATERIAL TO SHAREHOLDERS; ANNUAL SHAREHOLDERS' MEETING EXPENSES; AND BROKERAGE
COMMISSIONS AND OTHER COSTS ASSOCIATED WITH THE PURCHASE AND SALE OF PORTFOLIO
SECURITIES.
THE ADVISOR HAS AGREED TO LIMIT ANNUAL FUND OPERATING EXPENSES (NET OF ANY
EXPENSE OFFSET ARRANGEMENTS) THROUGH SEPTEMBER 30, 2001. THE CONTRACTUAL
EXPENSE CAP IS 0.75% FOR CLASS A, 1.75% FOR CLASS B, 1.75% FOR CLASS C AND
0.375% FOR CLASS I. FOR THE PURPOSES OF THIS EXPENSE LIMIT, OPERATING EXPENSES
DO NOT INCLUDE INTEREST EXPENSE, BROKERAGE COMMISSIONS, EXTRAORDINARY EXPENSES,
TAXES AND CAPITAL ITEMS. THE FUND HAS AN OFFSET ARRANGEMENT WITH THE CUSTODIAN
BANK WHEREBY THE CUSTODIAN AND THE TRANSFER AGENT FEES MAY BE PAID INDIRECTLY BY
CREDITS ON THE FUND'S UNINVESTED CASH BALANCES. THESE CREDITS ARE USED TO
REDUCE THE FUND'S EXPENSES.
FOR ITS SERVICES, THE ADVISOR RECEIVES AN ANNUAL FEE, PAYABLE MONTHLY, OF
0.225% OF THE FUND'S AVERAGE DAILY NET ASSETS.
SUBADVISOR
WORLD ASSET MANAGEMENT, LLC ("SUBADVISOR") IS CONTROLLED BY COMERICA BANK ,
A PUBLICLY HELD COMPANY. THE SUBADVISOR RECEIVES A SUBADVISORY FEE, PAID BY THE
ADVISOR. THE SUBADVISORY FEE, PAYABLE MONTHLY, IS 0.07% OF THE FUND'S FIRST $50
MILLION AVERAGE ANNUAL DAILY NET ASSETS MANAGED BY THE SUBADVISOR, 0.05% OF THE
NEXT $50 MILLION, AND 0.03% OF SUCH ASSETS OVER $100 MILLION.
THE FUND HAS RECEIVED AN EXEMPTIVE ORDER TO PERMIT THE FUND AND THE ADVISOR
TO ENTER INTO AND MATERIALLY AMEND THE INVESTMENT SUBADVISORY AGREEMENT WITHOUT
SHAREHOLDER APPROVAL. WITHIN 90 DAYS OF THE HIRING OF ANY SUBADVISOR OR THE
IMPLEMENTATION OF ANY PROPOSED MATERIAL CHANGED IN THE INVESTMENT SUBADVISORY
AGREEMENT, THE FUND WILL FURNISH ITS SHAREHOLDERS INFORMATION ABOUT THE NEW
SUBADVISOR OR INVESTMENT SUBADVISORY AGREEMENT THAT WOULD BE INCLUDED IN A PROXY
STATEMENT. SUCH INFORMATION WILL INCLUDE ANY CHANGE IN SUCH DISCLOSURE CAUSED BY
THE ADDITION OF A NEW SUBADVISOR OR ANY PROPOSED MATERIAL CHANGE IN THE
INVESTMENT SUBADVISORY AGREEMENT OF THE FUND. THE FUND WILL MEET THIS CONDITION
BY PROVIDING SHAREHOLDERS, WITHIN 90 DAYS OF THE HIRING OF THE SUBADVISOR OR
IMPLEMENTATION OF ANY MATERIAL CHANGE TO THE TERMS OF AN INVESTMENT SUBADVISORY
AGREEMENT, WITH AN INFORMATION STATEMENT TO THIS EFFECT.
<PAGE>
------
ADMINISTRATIVE SERVICES AGENT
-----------------------------
CALVERT ADMINISTRATIVE SERVICES COMPANY ("CASC"), AN AFFILIATE OF THE
ADVISOR, HAS BEEN RETAINED BY THE FUND TO PROVIDE CERTAIN ADMINISTRATIVE
SERVICES NECESSARY TO THE CONDUCT OF ITS AFFAIRS, INCLUDING THE PREPARATION OF
REGULATORY FILINGS AND SHAREHOLDER REPORTS. FOR PROVIDING SUCH SERVICES, CASC
RECEIVES AN ANNUAL ADMINISTRATIVE SERVICE FEE PAYABLE MONTHLY (AS A PERCENTAGE
OF NET ASSETS) AS FOLLOWS:
CLASS A, B, AND C CLASS I
0.225% 0.10%
ADMINISTRATIVE SERVICES FEE ARE ALLOCATED AMONG CLASSES AS A CLASS-LEVEL
EXPENSE BASED ON NET ASSETS.
METHOD OF DISTRIBUTION
----------------------
CALVERT DISTRIBUTORS, INC. ("CDI") IS THE PRINCIPAL UNDERWRITER AND
DISTRIBUTOR FOR THE FUND. CDI IS AN AFFILIATE OF THE FUND'S ADVISOR. UNDER THE
TERMS OF ITS UNDERWRITING AGREEMENT WITH THE FUNDS, CDI MARKETS AND DISTRIBUTES
THE FUND'S SHARES AND IS RESPONSIBLE FOR PREPARING ADVERTISING AND SALES
LITERATURE, AND PRINTING AND MAILING PROSPECTUSES TO PROSPECTIVE INVESTORS.
PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940, THE FUND
HAS ADOPTED DISTRIBUTION PLANS (THE "PLANS") WHICH PERMITS THE FUND TO PAY
CERTAIN EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF ITS SHARES. SUCH EXPENSES
MAY NOT EXCEED, ON AN ANNUAL BASIS, 0.25% OF THE FUND'S CLASS A AVERAGE DAILY
NET ASSETS. EXPENSES UNDER THE FUND'S CLASS B AND CLASS C PLANS MAY NOT EXCEED,
ON AN ANNUAL BASIS, 1.00% OF THE AVERAGE DAILY NET ASSETS OF CLASS B AND CLASS
C, RESPECTIVELY. CLASS I HAS NO DISTRIBUTION PLAN. CLASS A DISTRIBUTION PLANS
REIMBURSE CDI ONLY FOR EXPENSES IT INCURS, WHILE THE CLASS B AND C DISTRIBUTION
PLANS COMPENSATE CDI AT A SET RATE REGARDLESS OF CDI'S EXPENSES. DISTRIBUTION
PLAN EXPENSES MAY BE SPENT FOR ADVERTISING, PRINTING AND MAILING OF PROSPECTUSES
TO PERSONS WHO ARE NOT ALREADY FUND SHAREHOLDERS, COMPENSATION TO
BROKER/DEALERS, UNDERWRITERS, AND SALESPERSONS, AND, FOR CLASS B, INTEREST AND
FINANCE CHARGES.
THE FUND'S DISTRIBUTION PLANS WERE APPROVED BY THE BOARD OF DIRECTORS,
INCLUDING THE DIRECTORS WHO ARE NOT "INTERESTED PERSONS" OF THE FUND (AS THAT
TERM IS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940) AND WHO HAVE NO DIRECT OR
INDIRECT FINANCIAL INTEREST IN THE OPERATION OF THE PLANS OR IN ANY AGREEMENTS
RELATED TO THE PLANS. THE SELECTION AND NOMINATION OF THE DIRECTORS WHO ARE NOT
INTERESTED PERSONS OF THE FUND IS COMMITTED TO THE DISCRETION OF SUCH
DISINTERESTED DIRECTORS. IN ESTABLISHING THE PLANS, THE DIRECTORS CONSIDERED
VARIOUS FACTORS INCLUDING THE AMOUNT OF THE DISTRIBUTION EXPENSES. THE DIRECTORS
DETERMINED THAT THERE IS A REASONABLE LIKELIHOOD THAT THE PLANS WILL BENEFIT THE
FUND AND ITS SHAREHOLDERS, INCLUDING ECONOMIES OF SCALE AT HIGHER ASSET LEVELS,
BETTER INVESTMENT OPPORTUNITIES AND MORE FLEXIBILITY IN MANAGING A GROWING
PORTFOLIO.
THE PLANS MAY BE TERMINATED BY VOTE OF A MAJORITY OF THE NON-INTERESTED
DIRECTORS WHO HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, OR BY
VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE FUND. IF THE FUND SHOULD
EVER SWITCH TO A NEW PRINCIPAL UNDERWRITER WITHOUT TERMINATING THE CLASS B PLAN,
THE FEE WOULD BE PRORATED BETWEEN CDI AND THE NEW PRINCIPAL UNDERWRITER. ANY
CHANGE IN THE PLANS THAT WOULD MATERIALLY INCREASE THE DISTRIBUTION COST TO A
CLASS REQUIRES APPROVAL OF THE SHAREHOLDERS OF THE AFFECTED CLASS; OTHERWISE,
THE PLANS MAY BE AMENDED BY THE DIRECTORS, INCLUDING A MAJORITY OF THE
NON-INTERESTED DIRECTORS AS DESCRIBED ABOVE. THE PLANS WILL CONTINUE IN EFFECT
FOR SUCCESSIVE ONE-YEAR TERMS PROVIDED THAT SUCH CONTINUANCE IS SPECIFICALLY
APPROVED BY (I) THE VOTE OF A MAJORITY OF THE DIRECTORS WHO ARE NOT PARTIES TO
THE PLANS OR INTERESTED PERSONS OF ANY SUCH PARTY AND WHO HAVE NO DIRECT OR
INDIRECT FINANCIAL INTEREST IN THE PLANS, AND (II) THE VOTE OF A MAJORITY OF THE
ENTIRE BOARD OF DIRECTORS.
APART FROM THE PLANS, THE ADVISOR AND CDI, AT THEIR OWN EXPENSE, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF SHARES OF THE FUND.
THE ADVISOR AND/OR CDI MAY PAY CERTAIN FIRMS COMPENSATION BASED ON SALES OF FUND
SHARES OR ON ASSETS HELD IN THOSE FIRM'S ACCOUNTS FOR THEIR MARKETING AND
DISTRIBUTION OF THE FUND SHARES, ABOVE THE USUAL SALES CHARGES AND SERVICE FEES.
CDI MAKES A CONTINUOUS OFFERING OF THE FUND'S SECURITIES ON A "BEST
EFFORTS" BASIS. UNDER THE TERMS OF THE AGREEMENT, CDI IS ENTITLED TO RECEIVE,
PURSUANT TO THE DISTRIBUTION PLANS, A DISTRIBUTION FEE AND A SERVICE FEE FROM
THE FUND BASED ON THE AVERAGE DAILY NET ASSETS OF EACH CLASS. THESE FEES ARE
PAID PURSUANT TO THE FUND'S DISTRIBUTION PLAN.
<PAGE>
CLASS A SHARES ARE OFFERED AT NET ASSET VALUE PLUS A FRONT-END SALES CHARGE AS
FOLLOWS:
AS A % OF AS A % OF ALLOWED TO
AMOUNT OF OFFERING NET AMOUNT BROKERS AS A % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 4.75% 4.99% 4.00%
$50,000 BUT LESS THAN $100,000 3.75% 3.90% 3.00%
$100,000 BUT LESS THAN $250,000 2.75% 2.83% 2.25%
$250,000 BUT LESS THAN $500,000 1.75% 1.78% 1.25%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01% 0.80%
$1,000,000 AND OVER 0.00% 0.00% 0.00%
CDI RECEIVES ANY FRONT-END SALES CHARGE OR CDSC PAID. A PORTION OF THE
FRONT-END SALES CHARGE MAY BE REALLOWED TO DEALERS.
FUND DIRECTORS AND CERTAIN OTHER AFFILIATED PERSONS OF THE FUND ARE EXEMPT
FROM THE SALES CHARGE SINCE THE DISTRIBUTION COSTS ARE MINIMAL TO PERSONS
ALREADY FAMILIAR WITH THE FUND. OTHER GROUPS (E.G., GROUP RETIREMENT PLANS) ARE
EXEMPT DUE TO ECONOMIES OF SCALE IN DISTRIBUTION. SEE EXHIBIT A TO THE
PROSPECTUS.
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), A SUBSIDIARY OF STATE STREET
BANK & TRUST, HAS BEEN RETAINED BY THE FUND TO ACT AS TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT. THESE RESPONSIBILITIES INCLUDE: RESPONDING TO CERTAIN
SHAREHOLDER INQUIRIES AND INSTRUCTIONS, CREDITING AND DEBITING SHAREHOLDER
ACCOUNTS FOR PURCHASES AND REDEMPTIONS OF FUND SHARES AND CONFIRMING SUCH
TRANSACTIONS, AND DAILY UPDATING OF SHAREHOLDER ACCOUNTS TO REFLECT DECLARATION
AND PAYMENT OF DIVIDENDS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), A SUBSIDIARY OF CALVERT GROUP,
LTD. AND ACACIA, HAS BEEN RETAINED BY THE FUND TO ACT AS SHAREHOLDER SERVICING
AGENT. SHAREHOLDER SERVICING RESPONSIBILITIES INCLUDE RESPONDING TO SHAREHOLDER
INQUIRIES AND INSTRUCTIONS CONCERNING THEIR ACCOUNTS, ENTERING ANY TELEPHONED
PURCHASES OR REDEMPTIONS INTO THE NFDS SYSTEM, MAINTENANCE OF BROKER-DEALER
DATA, AND PREPARING AND DISTRIBUTING STATEMENTS TO SHAREHOLDERS REGARDING THEIR
ACCOUNTS. FOR THESE SERVICES, CSSI RECEIVES A FEE OF $6.00 PER SHAREHOLDER
ACCOUNT AND $0.65 PER TRANSACTION.
PORTFOLIO TRANSACTIONS
----------------------
PORTFOLIO TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY
FROM AN INVESTMENT STANDPOINT. THE FUND'S ADVISOR AND SUBADVISORS MAKE
INVESTMENT DECISIONS AND THE CHOICE OF BROKERS AND DEALERS UNDER THE DIRECTION
AND SUPERVISION OF THE FUND'S BOARD OF DIRECTORS.
BROKER-DEALERS WHO EXECUTE PORTFOLIO TRANSACTIONS ON BEHALF OF THE FUND ARE
SELECTED ON THE BASIS OF THEIR EXECUTION CAPABILITY AND TRADING EXPERTISE
CONSIDERING, AMONG OTHER FACTORS, THE OVERALL REASONABLENESS OF THE BROKERAGE
COMMISSIONS, CURRENT MARKET CONDITIONS, SIZE AND TIMING OF THE ORDER, DIFFICULTY
OF EXECUTION, PER SHARE PRICE, MARKET FAMILIARITY, RELIABILITY, INTEGRITY, AND
FINANCIAL CONDITION, SUBJECT TO THE ADVISOR/SUBADVISOR OBLIGATION TO SEEK BEST
EXECUTION. THE ADVISOR OR SUBADVISOR MAY ALSO CONSIDER SALES OF FUND SHARES AS A
FACTOR IN THE SELECTION OF BROKERS, AGAIN, SUBJECT TO BEST EXECUTION (I.E., THE
FUND WILL NOT "PAY UP" FOR SUCH TRANSACTIONS.)
WHILE THE FUND'S ADVISOR AND SUBADVISOR(S) SELECT BROKERS PRIMARILY ON THE
BASIS OF BEST EXECUTION, IN SOME CASES THEY MAY DIRECT TRANSACTIONS TO BROKERS
BASED ON THE QUALITY AND AMOUNT OF THE RESEARCH AND RESEARCH-RELATED SERVICES
WHICH THE BROKERS PROVIDE TO THEM. THESE RESEARCH SERVICES INCLUDE ADVICE,
EITHER DIRECTLY OR THROUGH PUBLICATIONS OR WRITINGS, AS TO THE VALUE OF
SECURITIES, THE ADVISABILITY OF INVESTING IN, PURCHASING OR SELLING SECURITIES,
AND THE AVAILABILITY OF SECURITIES OR PURCHASERS OR SELLERS OF SECURITIES;
FURNISHING OF ANALYSES AND REPORTS CONCERNING ISSUERS, SECURITIES OR INDUSTRIES;
PROVIDING INFORMATION ON ECONOMIC FACTORS AND TRENDS; ASSISTING IN DETERMINING
PORTFOLIO STRATEGY; PROVIDING COMPUTER SOFTWARE USED IN SECURITY ANALYSES;
PROVIDING PORTFOLIO PERFORMANCE EVALUATION AND TECHNICAL MARKET ANALYSES; AND
PROVIDING OTHER SERVICES RELEVANT TO THE INVESTMENT DECISION MAKING PROCESS.
OTHER SUCH SERVICES ARE DESIGNED PRIMARILY TO ASSIST THE ADVISOR IN MONITORING
THE INVESTMENT ACTIVITIES OF THE SUBADVISOR(S) OF THE FUND. SUCH SERVICES
INCLUDE PORTFOLIO ATTRIBUTION SYSTEMS, RETURN-BASED STYLE ANALYSIS, AND
TRADE-EXECUTION ANALYSIS.
IF, IN THE JUDGMENT OF THE ADVISOR OR SUBADVISOR(S), THE FUND OR OTHER ACCOUNTS
MANAGED BY THEM WILL BE BENEFITED BY SUPPLEMENTAL RESEARCH SERVICES, THEY ARE
AUTHORIZED TO PAY BROKERAGE COMMISSIONS TO A BROKER FURNISHING SUCH SERVICES
WHICH ARE IN EXCESS OF COMMISSIONS WHICH ANOTHER BROKER MAY HAVE CHARGED FOR
EFFECTING THE SAME TRANSACTION. IT IS THE POLICY OF THE ADVISOR THAT SUCH
RESEARCH SERVICES WILL BE USED FOR THE BENEFIT OF THE FUND AS WELL AS OTHER
CALVERT GROUP FUNDS AND MANAGED ACCOUNTS.
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
THE FUND, ITS ADVISORS, AND PRINCIPAL UNDERWRITER HAVE ADOPTED A CODE OF
ETHICS PURSUANT TO RULE 17J-1 OF THE INVESTMENT COMPANY ACT OF 1940. THE CODE OF
ETHICS IS DESIGNED TO PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO
MAINTAIN ETHICAL STANDARDS FOR ACCESS PERSONS AS DEFINED IN THE RULE WHEN
DEALING WITH THE PUBLIC. THE CODE OF ETHICS PERMITS THE FUND'S INVESTMENT
PERSONNEL TO INVEST IN SECURITIES THAT MAYBE PURCHASED OR HELD BY THE FUND. THE
CODE OF ETHICS CONTAINS CERTAIN CONDITIONS SUCH AS PRECLEARANCE AND RESTRICTIONS
ON USE OF MATERIAL INFORMATION.
INDEPENDENT ACCOUNTANT AND CUSTODIANS
-------------------------------------
PRICEWATERHOUSECOOPERS LLP, HAS BEEN SELECTED BY THE BOARD OF DIRECTORS TO SERVE
AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST
COMPANY, N.A., 225 FRANKLIN STREET, BOSTON, MA 02110, SERVES AS CUSTODIAN OF THE
FUND'S INVESTMENTS. ALLFIRST FINANCIAL, INC., 25 SOUTH CHARLES STREET,
BALTIMORE, MARYLAND 21203 ALSO SERVES AS CUSTODIAN OF CERTAIN OF THE FUND'S CASH
ASSETS. THE CUSTODIANS HAVE NO PART IN DECIDING THE FUND'S INVESTMENT POLICIES
OR THE CHOICE OF SECURITIES THAT ARE TO BE PURCHASED OR SOLD FOR THE FUND.
FINANCIAL STATEMENTS
--------------------
THE FUND'S AUDITED FINANCIAL STATEMENTS ARE INCLUDED AT SCHEDULE A OF THIS
STATEMENT OF ADDITIONAL INFORMATION.
GENERAL INFORMATION
-------------------
THE FUND IS A SERIES OF CALVERT SOCIAL INDEX SERIES, INC., AN OPEN-END
MANAGEMENT INVESTMENT COMPANY ORGANIZED AS A MARYLAND CORPORATION ON APRIL 7,
2000. THE FUND IS DIVERSIFIED.
EACH SHARE REPRESENTS AN EQUAL PROPORTIONATE INTEREST WITH EACH OTHER SHARE
AND IS ENTITLED TO SUCH DIVIDENDS AND DISTRIBUTIONS OUT OF THE INCOME BELONGING
TO SUCH CLASS AS DECLARED BY THE BOARD. THE FUND OFFERS FOUR SEPARATE CLASSES OF
SHARES: CLASS A, CLASS B, CLASS C, AND CLASS I. EACH CLASS REPRESENTS INTERESTS
IN THE SAME PORTFOLIO OF INVESTMENTS BUT, AS FURTHER DESCRIBED IN THE
PROSPECTUS, EACH CLASS IS SUBJECT TO DIFFERING SALES CHARGES AND EXPENSES, WHICH
DIFFERENCES WILL RESULT IN DIFFERING NET ASSET VALUES AND DISTRIBUTIONS. UPON
ANY LIQUIDATION OF THE FUND, SHAREHOLDERS OF EACH CLASS ARE ENTITLED TO SHARE
PRO RATA IN THE NET ASSETS BELONGING TO THAT SERIES AVAILABLE FOR DISTRIBUTION.
THE FUND IS NOT REQUIRED TO HOLD ANNUAL SHAREHOLDER MEETINGS, BUT SPECIAL
MEETINGS MAY BE CALLED FOR CERTAIN PURPOSES SUCH AS ELECTING DIRECTORS, CHANGING
FUNDAMENTAL POLICIES, OR APPROVING A MANAGEMENT CONTRACT. AS A SHAREHOLDER, YOU
RECEIVE ONE VOTE FOR EACH SHARE OF A FUND YOU OWN. MATTERS AFFECTING CLASSES
DIFFERENTLY, SUCH AS DISTRIBUTION PLANS, WILL BE VOTED ON SEPARATELY BY CLASS.
<PAGE>
APPENDIX
--------
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
CORPORATE BONDS:
DESCRIPTION OF MOODY'S INVESTORS SERVICE INC.'S/STANDARD & POOR'S BOND RATINGS:
AAA/AAA: BEST QUALITY. THESE BONDS CARRY THE SMALLEST DEGREE OF INVESTMENT
RISK AND ARE GENERALLY REFERRED TO AS "GILT EDGE." INTEREST PAYMENTS ARE
PROTECTED BY A LARGE OR BY AN EXCEPTIONALLY STABLE MARGIN AND PRINCIPAL IS
SECURE. THIS RATING INDICATES AN EXTREMELY STRONG CAPACITY TO PAY PRINCIPAL AND
INTEREST.
AA/AA: BONDS RATED AA ALSO QUALIFY AS HIGH-QUALITY DEBT OBLIGATIONS.
CAPACITY TO PAY PRINCIPAL AND INTEREST IS VERY STRONG, AND IN THE MAJORITY OF
INSTANCES THEY DIFFER FROM AAA ISSUES ONLY IN SMALL DEGREE. THEY ARE RATED LOWER
THAN THE BEST BONDS BECAUSE MARGINS OF PROTECTION MAY NOT BE AS LARGE AS IN AAA
SECURITIES, FLUCTUATION OF PROTECTIVE ELEMENTS MAY BE OF GREATER AMPLITUDE, OR
THERE MAY BE OTHER ELEMENTS PRESENT WHICH MAKE LONG-TERM RISKS APPEAR SOMEWHAT
LARGER THAN IN AAA SECURITIES.
A/A: UPPER-MEDIUM GRADE OBLIGATIONS. FACTORS GIVING SECURITY TO PRINCIPAL
AND INTEREST ARE CONSIDERED ADEQUATE, BUT ELEMENTS MAY BE PRESENT WHICH MAKE THE
BOND SOMEWHAT MORE SUSCEPTIBLE TO THE ADVERSE EFFECTS OF CIRCUMSTANCES AND
ECONOMIC CONDITIONS.
BAA/BBB: MEDIUM GRADE OBLIGATIONS; ADEQUATE CAPACITY TO PAY PRINCIPAL AND
INTEREST. WHEREAS THEY NORMALLY EXHIBIT ADEQUATE PROTECTION PARAMETERS, ADVERSE
ECONOMIC CONDITIONS OR CHANGING CIRCUMSTANCES ARE MORE LIKELY TO LEAD TO A
WEAKENED CAPACITY TO PAY PRINCIPAL AND INTEREST FOR BONDS IN THIS CATEGORY THAN
FOR BONDS IN HIGHER RATED CATEGORIES.
BA/BB, B/B, CAA/CCC, CA/CC: DEBT RATED IN THESE CATEGORIES IS REGARDED AS
PREDOMINANTLY SPECULATIVE WITH RESPECT TO CAPACITY TO PAY INTEREST AND REPAY
PRINCIPAL. THE HIGHER THE DEGREE OF SPECULATION, THE LOWER THE RATING. WHILE
SUCH DEBT WILL LIKELY HAVE SOME QUALITY AND PROTECTIVE CHARACTERISTICS, THESE
ARE OUTWEIGHED BY LARGE UNCERTAINTIES OR MAJOR RISK EXPOSURE TO ADVERSE
CONDITIONS.
C/C: THIS RATING IS ONLY FOR INCOME BONDS ON WHICH NO INTEREST IS BEING
PAID.
D: DEBT IN DEFAULT; PAYMENT OF INTEREST AND/OR PRINCIPAL IS IN ARREARS.
COMMERCIAL PAPER:
MOODY'S INVESTORS SERVICE, INC.:
THE PRIME RATING IS THE HIGHEST COMMERCIAL PAPER RATING ASSIGNED BY
MOODY'S. AMONG THE FACTORS CONSIDERED BY MOODY'S IN ASSIGNING RATINGS ARE THE
FOLLOWING: (1) EVALUATION OF THE MANAGEMENT OF THE ISSUER; (2) ECONOMIC
EVALUATION OF THE ISSUER'S INDUSTRY OR INDUSTRIES AND AN APPRAISAL OF
SPECULATIVE-TYPE RISKS WHICH MAY BE INHERENT IN CERTAIN AREAS; (3) EVALUATION OF
THE ISSUER'S PRODUCTS IN RELATION TO COMPETITION AND CUSTOMER ACCEPTANCE; (4)
LIQUIDITY; (5) AMOUNT AND QUALITY OF LONG-TERM DEBT; (6) TREND OF EARNINGS OVER
A PERIOD OF TEN YEARS; (7) FINANCIAL STRENGTH OF A PARENT COMPANY AND THE
RELATIONSHIPS WHICH EXIST WITH THE ISSUER; AND (8) RECOGNITION BY MANAGEMENT OF
OBLIGATIONS WHICH MAY BE PRESENT OR MAY ARISE AS A RESULT OF PUBLIC INTEREST
QUESTIONS AND PREPARATIONS TO MEET SUCH OBLIGATIONS. ISSUERS WITHIN THIS PRIME
CATEGORY MAY BE GIVEN RATINGS 1, 2, OR 3, DEPENDING ON THE RELATIVE STRENGTHS OF
THESE FACTORS.
STANDARD & POOR'S CORPORATION:
COMMERCIAL PAPER RATED A BY STANDARD & POOR'S HAS THE FOLLOWING
CHARACTERISTICS: (I) LIQUIDITY RATIOS ARE ADEQUATE TO MEET CASH REQUIREMENTS;
(II) LONG-TERM SENIOR DEBT RATING SHOULD BE A OR BETTER, ALTHOUGH IN SOME CASES
BBB CREDITS MAY BE ALLOWED IF OTHER FACTORS OUTWEIGH THE BBB; (III) THE ISSUER
SHOULD HAVE ACCESS TO AT LEAST TWO ADDITIONAL CHANNELS OF BORROWING; (IV) BASIC
EARNINGS AND CASH FLOW SHOULD HAVE AN UPWARD TREND WITH ALLOWANCES MADE FOR
UNUSUAL CIRCUMSTANCES; AND (V) TYPICALLY THE ISSUER'S INDUSTRY SHOULD BE WELL
ESTABLISHED AND THE ISSUER SHOULD HAVE A STRONG POSITION WITHIN ITS INDUSTRY AND
THE RELIABILITY AND QUALITY OF MANAGEMENT SHOULD BE UNQUESTIONED. ISSUERS RATED
A ARE FURTHER REFERRED TO BY USE OF NUMBERS 1, 2 AND 3 TO DENOTE THE RELATIVE
STRENGTH WITHIN THIS HIGHEST CLASSIFICATION.
<PAGE>
LETTER OF INTENT
DATE
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
BETHESDA, MD 20814
LADIES AND GENTLEMEN:
BY SIGNING THIS LETTER OF INTENT, OR AFFIRMATIVELY MARKING THE LETTER OF
INTENT OPTION ON MY FUND ACCOUNT APPLICATION FORM, I AGREE TO BE BOUND BY THE
TERMS AND CONDITIONS APPLICABLE TO LETTERS OF INTENT APPEARING IN THE PROSPECTUS
AND THE STATEMENT OF ADDITIONAL INFORMATION FOR THE FUND AND THE PROVISIONS
DESCRIBED BELOW AS THEY MAY BE AMENDED FROM TIME TO TIME BY THE FUND. SUCH
AMENDMENTS WILL APPLY AUTOMATICALLY TO EXISTING LETTERS OF INTENT.
I INTEND TO INVEST IN THE SHARES OF__________________ (FUND OR
PORTFOLIO NAME) DURING THE THIRTEEN (13) MONTH PERIOD FROM THE DATE OF MY FIRST
PURCHASE PURSUANT TO THIS LETTER (WHICH CANNOT BE MORE THAN NINETY (90) DAYS
PRIOR TO THE DATE OF THIS LETTER OR MY FUND ACCOUNT APPLICATION FORM, WHICHEVER
IS APPLICABLE), AN AGGREGATE AMOUNT (EXCLUDING ANY REINVESTMENTS OF
DISTRIBUTIONS) OF AT LEAST FIFTY THOUSAND DOLLARS ($50,000) WHICH, TOGETHER WITH
MY CURRENT HOLDINGS OF THE FUND (AT PUBLIC OFFERING PRICE ON DATE OF THIS LETTER
OR MY FUND ACCOUNT APPLICATION FORM, WHICHEVER IS APPLICABLE), WILL EQUAL OR
EXCEED THE AMOUNT CHECKED BELOW:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
SUBJECT TO THE CONDITIONS SPECIFIED BELOW, INCLUDING THE TERMS OF ESCROW,
TO WHICH I HEREBY AGREE, EACH PURCHASE OCCURRING AFTER THE DATE OF THIS LETTER
WILL BE MADE AT THE PUBLIC OFFERING PRICE APPLICABLE TO A SINGLE TRANSACTION OF
THE DOLLAR AMOUNT SPECIFIED ABOVE, AS DESCRIBED IN THE FUND'S PROSPECTUS. "FUND"
IN THIS LETTER OF INTENT SHALL REFER TO THE FUND OR PORTFOLIO, AS THE CASE MAY
BE. NO PORTION OF THE SALES CHARGE IMPOSED ON PURCHASES MADE PRIOR TO THE DATE
OF THIS LETTER WILL BE REFUNDED.
I AM MAKING NO COMMITMENT TO PURCHASE SHARES, BUT IF MY PURCHASES WITHIN
THIRTEEN MONTHS FROM THE DATE OF MY FIRST PURCHASE DO NOT AGGREGATE THE MINIMUM
AMOUNT SPECIFIED ABOVE, I WILL PAY THE INCREASED AMOUNT OF SALES CHARGES
PRESCRIBED IN THE TERMS OF ESCROW DESCRIBED BELOW. I UNDERSTAND THAT 4.75% OF
THE MINIMUM DOLLAR AMOUNT SPECIFIED ABOVE WILL BE HELD IN ESCROW IN THE FORM OF
SHARES (COMPUTED TO THE NEAREST FULL SHARE). THESE SHARES WILL BE HELD SUBJECT
TO THE TERMS OF ESCROW DESCRIBED BELOW.
FROM THE INITIAL PURCHASE (OR SUBSEQUENT PURCHASES IF NECESSARY), 4.75% OF
THE DOLLAR AMOUNT SPECIFIED IN THIS LETTER SHALL BE HELD IN ESCROW IN SHARES OF
THE FUND BY THE FUND'S TRANSFER AGENT. FOR EXAMPLE, IF THE MINIMUM AMOUNT
SPECIFIED UNDER THE LETTER IS $50,000, THE ESCROW SHALL BE SHARES VALUED IN THE
AMOUNT OF $2,375 (COMPUTED AT THE PUBLIC OFFERING PRICE ADJUSTED FOR A $50,000
PURCHASE). ALL DIVIDENDS AND ANY CAPITAL GAINS DISTRIBUTION ON THE ESCROWED
SHARES WILL BE CREDITED TO MY ACCOUNT.
IF THE TOTAL MINIMUM INVESTMENT SPECIFIED UNDER THE LETTER IS COMPLETED
WITHIN A THIRTEEN MONTH PERIOD, ESCROWED SHARES WILL BE PROMPTLY RELEASED TO ME.
HOWEVER, SHARES DISPOSED OF PRIOR TO COMPLETION OF THE PURCHASE REQUIREMENT
UNDER THE LETTER WILL BE DEDUCTED FROM THE AMOUNT REQUIRED TO COMPLETE THE
INVESTMENT COMMITMENT.
UPON EXPIRATION OF THIS LETTER, THE TOTAL PURCHASES PURSUANT TO THE LETTER
ARE LESS THAN THE AMOUNT SPECIFIED IN THE LETTER AS THE INTENDED AGGREGATE
PURCHASES, CALVERT DISTRIBUTORS, INC. ("CDI") WILL BILL ME FOR AN AMOUNT EQUAL
TO THE DIFFERENCE BETWEEN THE LOWER LOAD I PAID AND THE DOLLAR AMOUNT OF SALES
CHARGES WHICH I WOULD HAVE PAID IF THE TOTAL AMOUNT PURCHASED HAD BEEN MADE AT A
SINGLE TIME. IF NOT PAID BY THE INVESTOR WITHIN 20 DAYS, CDI WILL DEBIT THE
DIFFERENCE FROM MY ACCOUNT. FULL SHARES, IF ANY, REMAINING IN ESCROW AFTER THE
AFOREMENTIONED ADJUSTMENT WILL BE RELEASED AND, UPON REQUEST, REMITTED TO ME.
I IRREVOCABLY CONSTITUTE AND APPOINT CDI AS MY ATTORNEY-IN-FACT, WITH FULL
POWER OF SUBSTITUTION, TO SURRENDER FOR REDEMPTION ANY OR ALL ESCROWED SHARES ON
THE BOOKS OF THE FUND. THIS POWER OF ATTORNEY IS COUPLED WITH AN INTEREST.
THE COMMISSION ALLOWED BY CALVERT DISTRIBUTORS, INC. TO THE BROKER-DEALER
NAMED HEREIN SHALL BE AT THE RATE APPLICABLE TO THE MINIMUM AMOUNT OF MY
SPECIFIED INTENDED PURCHASES.
THE LETTER MAY BE REVISED UPWARD BY ME AT ANY TIME DURING THE
THIRTEEN-MONTH PERIOD, AND SUCH A REVISION WILL BE TREATED AS A NEW LETTER,
EXCEPT THAT THE THIRTEEN-MONTH PERIOD DURING WHICH THE PURCHASE MUST BE MADE
WILL REMAIN UNCHANGED AND THERE WILL BE NO RETROACTIVE REDUCTION OF THE SALES
CHARGES PAID ON PRIOR PURCHASES.
IN DETERMINING THE TOTAL AMOUNT OF PURCHASES MADE HEREUNDER, SHARES
DISPOSED OF PRIOR TO TERMINATION OF THIS LETTER WILL BE DEDUCTED. MY
BROKER-DEALER SHALL REFER TO THIS LETTER OF INTENT IN PLACING ANY FUTURE
PURCHASE ORDERS FOR ME WHILE THIS LETTER IS IN EFFECT.
DEALER NAME OF INVESTOR(S)
BY
AUTHORIZED SIGNER ADDRESS
DATE SIGNATURE OF INVESTOR(S)
DATE SIGNATURE OF INVESTOR(S)
<PAGE>
SCHEDULE A
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF
CALVERT SOCIAL INDEX SERIES, INC.:
IN OUR OPINION, THE ACCOMPANYING STATEMENT OF ASSETS AND LIABILITIES PRESENTS
FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF THE CALVERT SOCIAL
INDEX FUND, ONE PORTFOLIO COMPRISING THE CALVERT SOCIAL INDEX SERIES, INC. (THE
"FUND") AT JUNE 27, 2000 IN CONFORMITY WITH ACCOUNTING PRINCIPLES GENERALLY
ACCEPTED IN THE UNITED STATES. THIS FINANCIAL STATEMENT IS THE RESPONSIBILITY
OF THE FUND'S MANAGEMENT; OUR RESPONSIBILITY IS TO EXPRESS AN OPINION ON THIS
FINANCIAL STATEMENT BASED ON OUR AUDIT. WE CONDUCTED OUR AUDIT OF THIS
FINANCIAL STATEMENT IN ACCORDANCE WITH AUDITING STANDARDS GENERALLY ACCEPTED IN
THE UNITED STATES WHICH REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO OBTAIN
REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENT IS FREE OF MATERIAL
MISSTATEMENT. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS, EVIDENCE SUPPORTING
THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL STATEMENT, ASSESSING THE ACCOUNTING
PRINCIPLES USED AND SIGNIFICANT ESTIMATES MADE BY MANAGEMENT, AND EVALUATING THE
OVERALL FINANCIAL STATEMENT PRESENTATION. WE BELIEVE THAT OUR AUDIT PROVIDES A
REASONABLE BASIS FOR THE OPINION EXPRESSED ABOVE.
PRICEWATERHOUSECOOPERS LLP
JUNE 27, 2000
<PAGE>
CALVERT SOCIAL INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 27, 2000
ASSETS
------
CASH $100,000
--------
TOTAL ASSETS 100,000
-------
LIABILITIES
-----------
ACCRUED EXPENSES AND OTHER LIABILITIES 0
-
TOTAL LIABILITIES 0
-
NET ASSETS $100,000
========
NET ASSETS CONSIST OF:
-------------------------
PAID-IN CAPITAL APPLICABLE TO THE FOLLOWING SHARES OF COMMON STOCK,
WITH 250,000,000 SHARES OF $0.01 PAR VALUE SHARE AUTHORIZED FOR
CLASS A, B, C AND I COMBINED:
CLASS A: 6,466 SHARES OUTSTANDING $97,000
CLASS B: 67 SHARES OUTSTANDING 1,000
CLASS C: 67 SHARES OUTSTANDING 1,000
CLASS I: 67 SHARES OUTSTANDING 1,000
-----
NET ASSETS $100,000
========
NET ASSET VALUE PER SHARE
-----------------------------
CLASS A: (BASED ON NET ASSETS OF $97,000) $15.00
======
CLASS B: (BASED ON NET ASSETS OF $1,000) $15.00
======
CLASS C: (BASED ON NET ASSETS OF $1,000) $15.00
======
CLASS I: (BASED ON NET ASSETS OF $1,000) $15.00
======
<PAGE>
CALVERT SOCIAL INDEX FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
GENERAL: THE CALVERT SOCIAL INDEX FUND (THE "FUND"), THE SOLE SERIES OF CALVERT
SOCIAL INDEX SERIES, INC., IS REGISTERED UNDER THE INVESTMENT COMPANY ACT OF
1940 AS A DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT COMPANY. THE FUND WAS
ORGANIZED AS A MARYLAND CORPORATION ON APRIL 7, 2000. IT HAS HAD NO OPERATIONS
SINCE THAT DATE, EXCEPT FOR MATTERS RELATING TO THE FUND'S ORGANIZATION AND
REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940 AND THE SECURITIES ACT OF
1933 AND THE SALE OF 6,667 SHARES ("INITIAL SHARES") OF THE FUND TO CALVERT
ASSET MANAGEMENT COMPANY, INC. THE FUND OFFERS FOUR SEPARATE CLASSES OF SHARES:
CLASS A, CLASS B, CLASS C AND CLASS I.
THE ADVISOR IS ASSUMING ALL ORGANIZATION COSTS OF THE FUND.
NOTE B - RELATED PARTY TRANSACTIONS
THE FUND HAS ENTERED INTO AN INVESTMENT ADVISORY AGREEMENT WITH CALVERT ASSET
MANAGEMENT COMPANY, INC. CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR")
IS WHOLLY-OWNED BY CALVERT GROUP, LTD. ("CALVERT"), WHICH IS INDIRECTLY
WHOLLY-OWNED BY AMERITAS ACACIA MUTUAL HOLDING COMPANY. THE ADVISOR PROVIDES
INVESTMENT ADVISORY SERVICES AND PAYS THE SALARIES AND FEES OF OFFICERS AND
AFFILIATED DIRECTORS OF THE FUND. FOR ITS SERVICES, THE ADVISOR IS ENTITLED TO
RECEIVE AN ANNUAL FEE, PAYABLE MONTHLY, OF 0.225% OF THE FUND'S AVERAGE DAILY
NET ASSETS.
THE ADVISOR HAS AGREED TO LIMIT ANNUAL FUND OPERATING EXPENSES (NET OF EXPENSE
OFFSET ARRANGEMENTS) THROUGH SEPTEMBER 30, 2001. THE CONTRACTUAL EXPENSE CAP IS
0.75% FOR CLASS A, 1.75% FOR CLASS B, 1.75% FOR CLASS C AND 0.375% FOR CLASS I.
FOR THE PURPOSE OF THIS EXPENSE LIMIT, OPERATING EXPENSES DO NOT INCLUDE
INTEREST EXPENSE, BROKERAGE, TAXES, EXTRAORDINARY EXPENSES AND CAPITAL ITEMS.
THE FUND HAS ENTERED INTO AN ADMINISTRATIVE SERVICES AGREEMENT WITH CALVERT
ADMINISTRATIVE SERVICES COMPANY. CALVERT ADMINISTRATIVE SERVICES COMPANY
("CASC"), AN AFFILIATE OF THE ADVISOR, PROVIDES ADMINISTRATIVE SERVICES TO THE
FUND. CASC IS ENTITLED TO RECEIVE AN ANNUAL FEE, PAYABLE MONTHLY, OF 0.225% FOR
CLASSES A, B, AND C, AND 0.10% FOR CLASS I, OF THE FUND'S AVERAGE DAILY NET
ASSETS.
THE FUND HAS ENTERED INTO A DISTRIBUTION AGREEMENT AND DISTRIBUTION PLAN WITH
CALVERT DISTRIBUTORS, INC. CALVERT DISTRIBUTORS, INC. ("CDI"), AN AFFILIATE OF
THE ADVISOR, IS THE DISTRIBUTOR AND PRINCIPAL UNDERWRITER FOR THE FUND.
DISTRIBUTION PLANS, ADOPTED BY CLASS A, CLASS B, AND CLASS C SHARES ALLOW THE
FUND TO PAY THE DISTRIBUTOR FOR EXPENSES AND SERVICES ASSOCIATED WITH
DISTRIBUTION OF SHARES. SUCH EXPENSES MAY NOT EXCEED 0.25%, 1.00%, AND 1.00%
ANNUALLY OF AVERAGE DAILY NET ASSETS OF EACH CLASS A, CLASS B AND CLASS C.
THE FUND HAS ENTERED INTO A SHAREHOLDER SERVICING AGREEMENT WITH CALVERT
SHAREHOLDER SERVICES, INC. CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AN
AFFILIATE OF THE ADVISOR, IS THE SHAREHOLDER SERVICING AGENT OF THE FUND.
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), IS THE TRANSFER AND DIVIDEND
DISBURSING AGENT. FOR THESE SERVICES, CSSI IS ENTITLED TO RECEIVE A FEE OF
$6.00 PER SHAREHOLDER ACCOUNT AND $0.65 PER TRANSACTION.
<PAGE>
INVESTMENT ADVISOR
CALVERT ASSET MANAGEMENT COMPANY, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
SHAREHOLDER SERVICES TRANSFER AGENT
CALVERT SHAREHOLDER SERVICES, INC. NATIONAL FINANCIAL DATA SERVICES, INC.
4550 MONTGOMERY AVENUE 330 WEST 9TH STREET
SUITE 1000N KANSAS CITY, MISSOURI 64105
BETHESDA, MARYLAND 20814
PRINCIPAL UNDERWRITER INDEPENDENT ACCOUNTANTS
CALVERT DISTRIBUTORS, INC. PRICEWATERHOUSECOOPERS LLP
4550 MONTGOMERY AVENUE 250 WEST PRATT STREET
SUITE 1000N BALTIMORE, MARYLAND 21201
BETHESDA, MARYLAND 20814
