SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
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14a-6(e)(2))
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[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
First Variable Rate Fund for Government Income
(Name of Registrant as Specified in Its Charter)
William M. Tartikoff, Esq.
Secretary
(Name of Person Filing Proxy Statement if other than the Registrant)
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{Tentative Shareholder Letter from President}
[DATE - Approximately December 31, 1998]
Dear Shareholder:
I am writing to inform you of the upcoming special meeting for shareholders of
the First Variable Rate Fund for Government Income.
A summary of the proposals and the formal Notice of Meeting appears on the
next few pages, followed by the detailed proxy statement. Please take a few
minutes to read the enclosed material and vote on these important issues. The
Board of Trustees/Directors, including myself, believes these changes are in
your best interest and that of your Fund.
Regardless of the number of shares you own, it is important that you take the
time to read the enclosed proxy materials, and vote on the issues as soon as
you can. You may vote by mail, by telephone, through the internet, by
facsimile machine, or in person. If you do not cast your vote, you may be
contacted by our proxy solicitation service, Shareholder Communications, Inc.,
or by a Calvert employee. First Variable will have to incur the expense of
additional solicitations. All shareholders benefit from the speedy return of
proxy votes.
I appreciate the time you will take to review this important matter. If we may
be of any assistance or if you have any questions about the proxy issues,
please call us at (800) 368-2745. Our hearing-impaired shareholders may call
(800) 541-1524 for a TDD connection.
Sincerely,
/s/
Barbara J. Krumsiek
President and Chief Executive Officer
Calvert Group, Ltd.
<PAGE>
First Variable Rate Fund for Government Income
Calvert First Government Money Market Fund
Overview
The table below lists the proposals and gives a brief reason the proposal
should be changed or approved. Please be sure to read this entire proxy
statement and cast your votes as soon as possible.
{This table will be formatted by the typesetter in tabular format}
Proposal Number 1
Proposal
To approve a new investment advisory agreement with the investment advisor,
Calvert Asset Management Company, Inc. ("CAMCO").
Reason
CAMCO is a subsidiary of Calvert Group, Ltd. which is owned by Acacia Mutual
Life Insurance Company ("Acacia"). Acacia plans to merge with another
insurance company, Ameritas Insurance Holding Company. Because of the merger
of the ultimate parent company, the investment advisory contract should be
approved by shareholders.
In addition, CAMCO recommends the deletion of references to administrative
services from the investment advisory contract since they are provided by a
different subsidiary. CAMCO also recommends the deletion of the expense cap
guarantee from the contract, as it has agreed to voluntarily maintain the cap.
Proposal Number 2
Proposal
To elect the Board of Trustees.
Reason
It has been several years since the Board members have been voted on by
shareholders. Recently, some new members have been added; thus, it is
appropriate for the shareholders to vote on the complete slate.
Proposal Number 3
Proposal
To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws; (b) change some of the fundamental policies and restrictions to
non-fundamental operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
Reason
Current investment restrictions (and policies, for some of the Funds) are more
restrictive than Federal law. A shareholder vote is required to change the
restrictions and policies because they are considered fundamental. CAMCO has
recommended to the Board that the investment restrictions of the Portfolios be
changed to conform to, but not be more restrictive than, federal law, and
changing the policies so that they can be altered by the Board without a
shareholder vote (nonfundamental policies or restrictions). This would give
each of the Portfolios more flexibility and may help each Portfolio to more
easily adapt to different investment environments.
Proposal Number 4
Proposal
To ratify the Board's selection of auditors, PricewaterhouseCoopers, L.L.P.
Reason
Periodically, shareholders will be asked to approve independent auditors for
Calvert Funds. The auditors review reports, documents filed with federal and
state governments, and help to ensure that the Funds are complying with
generally accepted accounting principles.
First Variable Rate Fund for Government Income
Calvert First Government Money Market Fund
Class O
Class B
Class C
Class I
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on February 24, 1999
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of the First
Variable Rate Fund for Government Income ("FVRF" or the "Fund") will be held
in the Tenth Floor Conference Room of Calvert Group, Ltd., Air Rights North
Tower, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland at 9:00 a.m. on
Wednesday, February 24, 1999 for the following purposes:
I. To approve a new investment advisory agreement with the investment
advisor, Calvert Asset Management Company, Inc. ("CAMCO"), identical
to the current investment advisory agreements in all material
respects, except that it reflects a reduced advisory fee and does not
provide for administrative services or an expense cap.
II. To elect the Board of Trustees.
III. To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to
changes in state laws; (b) change some of the fundamental policies
and restrictions to non-fundamental operating policies; and (c) to
revise the language of those restrictions that are still required to
be fundamental.
IV. To ratify the Board's selection of auditors, PricewaterhouseCoopers,
L.L.P.
V. To transact any other business that may properly come before the
Special Meeting or any adjournment or adjournments thereof.
By Order of the Trustees/Directors,
/s/
William M. Tartikoff, Esq.
Vice President
The approximate date on which this proxy statement and form of proxy are first
being mailed to shareholders is December 31, 1998.
<PAGE>
First Variable Rate Fund for Government Income
Calvert First Government Money Market Fund
Class O
Class B
Class C
Class I
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
PROXY STATEMENT
December 31, 1998
We are sending this proxy statement to you to ask you to approve several
important changes. You may vote by mail, by telephone, by facsimile, through a
secure internet website, or in person. Your vote is important. Please call
800-368-2745 if you have questions about this proxy.
This statement is furnished in connection with the solicitation of proxies by
the Board of Trustees of the First Variable Rate Fund for Government Income.
(the "Board") to be used at the Special Meeting of Shareholders. The Special
Meeting will be held in the Tenth Floor Conference Room of Calvert Group,
Ltd., Air Rights North Tower, 4550 Montgomery Avenue, Suite 1000N, Bethesda,
Maryland at 9:00 a.m. on Wednesday, February 24, 1999, or at such later time
or date made necessary by adjournment for the purpose set forth in the Notice
of Meeting.
Calvert First Government Money Market Fund is the only series of the First
Variable Rate Fund for Government Income, an open-end management investment
company that was first incorporated in Maryland in 1976 and then organized as
a Massachusetts business trust in April, 1984.
PROPOSALS
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Proposal 1
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To approve a new investment advisory agreement with the investment advisor,
CAMCO.
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Discussion
The following circumstances affect the terms of the current investment
advisory agreement (the "Current Advisory Agreement"); therefore, Management
proposes that a new advisory agreement be executed:
CAMCO is an indirectly wholly-owned subsidiary of Acacia Mutual Life
Insurance Company ("Acacia"), which subject to certain conditions, plans
to merge with Ameritas Insurance Holding Company ("Ameritas") (such
planned transaction is hereafter referred to as the "Merger"). The
surviving company will be named Ameritas Acacia Mutual Holding Company.
Although the Merger could be considered a change in control of CAMCO,
terminating the Current Advisory Agreement, the Board has received
assurances that it does not cause such a change. Nonetheless, in order to
remove any possible doubt as to the status of the Current Advisory
Agreement, the Board has approved, and recommends that shareholders
approve, a standard investment advisory agreement between FVRF and CAMCO
(the "New Advisory Agreement").
Management has determined that the administrative services, and the
provision of compensation for such services, are best provided for in a
separate administrative services agreement. Accordingly, it is proposed
to remove the provision of these services from the advisory agreement.
Management proposes to eliminate the expense limitation with respect to
fund expenses. However, Management agrees to maintain the expense
limitation until such time in the future that Management and the Board
agree otherwise.
Despite the importance of the proposed changes, CAMCO anticipates there will
be no effect the actual investment management operations with respect to FVRF.
The Current Advisory Agreement
Under the Current Advisory Agreement, CAMCO provides a continuous investment
program for FVRF, subject to the control of the Board. The Current Advisory
Agreement was last submitted to shareholders in 1983 due to the sale of
Calvert Group, Ltd., CAMCO's parent company, to Acacia. The shareholders of
the Fund approved the Contract at a meeting on December 20, 1983, and it was
signed January 3, 1984. Since then, the Contract has been approved by the
Fund's Trustees on an annual basis, in accordance with the requirements of the
Investment Company Act of 1940.
The terms of the January 1984 contract between CAMCO and the Fund
included:
1. The services to be provided to the Fund (manage Fund assets,
place orders for securities trades and perform other
administrative services);
2. General obligations of CAMCO (manage the Fund in accordance
with Fund guidelines and restrictions, under the direction of
the Board);
3. Expenses of the Fund (advisory, legal, audit, registration,
transfer agent, and custodial fees, taxes, printing and postage,
mailing prospectuses);
4. Expense limitation (CAMCO agreed to reimburse the Fund for any
total expenses over 1% of average daily net assets);
5. Liability issues (CAMCO was not liable for actions unless it
was grossly negligent, acted in bad faith, or in reckless
disregard of its duties); and
6. The fees to be paid to CAMCO (0.50% for the first $500,000,000
of the Fund's average daily net assets, 0.45% for the next
$400,000,000, 0.40% for the next $400,000,000, 0.35% for the
next $400,000,000, and 0.30% of all assets in excess of
$2,000,000,000.)
The Current Advisory Agreement provides for automatic termination unless its
continuance is approved by January 1, 2000, and at least annually thereafter
by (i) a majority of the Board, including those who are not parties to the
Agreement or interested persons, within the meaning of the Investment Company
Act of 1940 (the "1940 Act"), of any such party ("Independent Directors"), and
(ii) the holders of a majority of the outstanding shares of FVRF. The Current
Advisory Agreement terminates automatically upon its assignment and is
terminable at any time, without penalty, by the Board, CAMCO, or the holders
of a majority of the outstanding shares of FVRF, upon 60 days' prior written
notice.
The New Advisory Agreement
The terms and conditions of the New Advisory Agreement are identical to the
terms and conditions of the Current Advisory Agreement, except as to effective
and termination dates, deletion of the provision of administrative services as
discussed under B., below, elimination of the expense limitation as discussed
under C. In addition, since the Fund is now a Massachusetts business trust,
the Fund will be referred to in the Contract as a "Trust" and the Board of
Directors will be changed to the Board of Trustees.
If approved by shareholders, the New Advisory Agreements will continue until
January 1, 2001 unless terminated earlier by either party, and provided that
at least annually thereafter its continuance is approved in the same manner as
prescribed in the Current Advisory Agreement.
The description of the New Advisory Agreements is qualified in its entirety by
reference to the New Advisory Agreement, attached hereto as Appendix 1.
Calvert Asset Management Company, Inc.
CAMCO has investment advisory contracts with eight investment companies: First
Variable Rate Fund for Government Income, Calvert Tax-Free Reserves, Calvert
Cash Reserves, Calvert Social Investment Fund, The Calvert Fund, Calvert
Municipal Fund, Inc., Calvert World Values Fund, Inc., and Calvert Variable
Series, Inc. Each has a substantially similar investment advisory contract
with CAMCO, though the actual fees and breakpoints may vary.
Reno J. Martini, Senior Vice President and Chief Investment Officer for CAMCO,
has primary responsibility for rendering advisory services to FVRF. Mr.
Martini oversees the management of all Calvert Funds. It is anticipated that
each of the directors and officers of CAMCO will hold the same position with
CAMCO after the Merger. The address of the directors and officers is 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814, unless otherwise
noted. The directors and executive officers of CAMCO are listed below:
Charles T. Nason, Director. Chairman, President and Chief Executive
Officer of The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Barbara J. Krumsiek, Director. President of CAMCO and President, Chief
Executive Officer and Vice Chairman of Calvert Group, Ltd.
*David R. Rochat, Director and Senior Vice President.
Robert-John H. Sands, Director. Senior Vice President and General
Counsel, The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Reno J. Martini, Senior Vice President and Chief Investment Officer.
*Ronald M. Wolfsheimer, Senior Vice President and Chief Financial
Officer.
*William M. Tartikoff, Senior Vice President, Secretary, and General
Counsel.
Matthew D. Gelfand, Senior Vice President.
*Daniel K. Hayes, Vice President.
John Nichols, Vice President.
Persons marked with a *, above, are also Trustees/Directors and/or officers of
FVRF.
A. The Merger of CAMCO's parent company
CAMCO is an indirect, wholly-owned subsidiary of Acacia. On September 14,
1998, seeking a strategic affiliation to create a stronger, more diversified
insurance and financial services enterprise, Acacia and Ameritas entered into
an agreement of merger which provides for the merger of their respective
mutual holding companies.
Acacia and its related subsidiaries offer traditional life insurance and
annuity products, as well as variable products, special banking products and
services, and a variety of mutual funds, and operate a full service financial
planning broker dealer, while Ameritas and its subsidiaries specialize in
variable life, fixed and variable annuities, group dental, low-load insurance
products and 401(k) and other investment products. This strategic affiliation
is expected to create a stronger, more diversified insurance and financial
services enterprise, with almost $11 billion in assets under management,
insurance assets of $6 billion, $21 billion life insurance in-force, over $750
million in revenues and approximately $750 million in equity/capital.
The Merger is subject to the approval of the members of both Acacia and
Ameritas and is further conditioned upon approval by the appropriate federal
and state regulatory authorities.
CAMCO will not be directly affected by the Merger and will remain a
wholly-owned subsidiary of Calvert Group, Ltd. As a result of the Merger,
however, CAMCO will become an indirect, wholly-owned subsidiary of Ameritas
Acacia Mutual Holding Company.
Acacia's current address is 7315 Wisconsin Avenue, Bethesda, Maryland 20814.
After consummation of the Merger, Ameritas Acacia Mutual Holding Company's
principal place of business will be 5900 "O" Street, Lincoln, Nebraska
68501-1889.
B. Administrative Services
Management has taken the opportunity to re-examine the specific provisions for
services under the Current Advisory Agreement. In doing so, management has
determined that it is better to delete the provision of administrative duties
and leave intact the investment advisory services to be provided by CAMCO.
Administrative services are not currently provided by CAMCO, but are provided
by FVRF's Administrator, Calvert Administrative Services Company, Inc.
("CASC"). Thus, this change will more accurately reflect the services which
CAMCO provides. As a result of administrative services being provided to FVRF
under a separate agreement, the investment advisory fees will be reduced so
that the proposed advisory fee plus the new administrative fee will equal the
current advisory fees. During the 1997 fiscal year ended December 31, 1997,
the Fund paid advisory fees of $1,206,618 to CAMCO. Under the new contract,
the total expenses would have been the same as 1997.
The fees to be paid to CAMCO will be reduced to 0.25% for the first
$500,000,000 of the Fund's average daily net assets, 0.225% for the next
$400,000,000, 0.20% for the next $400,000,000, 0.175% for the next
$400,000,000, and 0.15% of all assets in excess of $2,000,000,000. Under the
new contract, total management fees (advisory fee plus administrative services
fee) are expected to remain 0.50% of the Fund's average daily net assets, the
same as in previous fiscal years. No other fees will be changing.
C. Expense Limitation
Upon initially entering into the Current Advisory Agreement, CAMCO agreed to
limit the fund expenses to 1.00% of average daily net assets. At that time,
certain states also imposed limits on fund expenses so that if expenses
exceeded a certain amount, the investment advisor would have to reimburse a
fund for the excess. The recent passage of reformed federal securities laws
now preempts the states from imposing substantive requirements on investment
companies. Therefore, the state-imposed expense limitation is no longer
applicable to FVRF.
Accordingly, Management recommends that this provision not be included in the
New Advisory Agreement. The removal of the contractual expense limitation will
not affect the management of FVRF or its accrual of expenses. Management has
agreed to maintain the expense limitation until such time in the future that
Management and the Board agree otherwise.
Recommendation
Based on evaluation of the materials presented, the Board has determined that
the changes reflected in the proposed New Advisory Agreement are in the best
interests of the shareholders of FVRF. The Board based this determination
primarily upon the following:
(a) After a review of all materials related to the Merger, the Board
determined that they were satisfied that CAMCO's services to FVRF would
not be affected by the Merger and that such Merger would not impose an
unfair burden on FVRF;
(b) In evaluating the materials presented concerning administrative
services, the Board carefully considered the corporate structure and
advisory expenses, and reviewed the proposed form of New Investment
Advisory Agreement and form of Administrative Services Agreement;
(c) In evaluating the deletion of the expense limitation, the
Trustees/Directors considered the applicable securities laws and the
current fund expenses, and Management's agreement to continue the
limitation.
Thus, the Board, including a majority of the Independent Trustees/Directors,
approved the New Advisory Agreement (subject to approval by shareholders) and
authorized submission of the New Advisory Agreement to shareholders for
approval. Accordingly, the Board recommends that shareholders vote FOR the
proposed New Advisory Agreement.
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Proposal 2
To elect the Board of Trustees.
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Discussion
The purpose of this proposal is to elect the currently serving members of the
Board of Trustees. All of the nominees listed below have served as Trustees
continuously since originally elected or appointed. Each of the nominees
elected will serve as a Trustee until the next meeting called for the purpose
of electing a Board of Trustees and until a successor is elected and
qualified, or until death, retirement, resignation or removal.
{This will be formatted in tabular format by the typesetter}
Name
Date of Birth, Principal Occupation
& Year Elected During Last Five Years
or Appointed and Other Directorships
Richard L. Baird, Jr.
DOB: 05/09/48
1986
Mr. Baird is Executive Vice President for the Family Health Council, Inc. in
Pittsburgh, Pennsylvania, a non-profit corporation which provides family
planning services, nutrition, maternal/child health care, and various health
screening services. Mr. Baird is a trustee/director of each of the investment
companies in the Calvert Group of Funds, except for Calvert Variable Series,
Inc., Calvert New World Fund, Inc. and Calvert World Values Fund, Inc.
Frank H. Blatz, Jr., Esq.
DOB: 10/29/35
1982
Mr. Blatz is a partner in the law firm of Snevily, Ely, Williams & Blatz. He
was formerly a partner with Abrams, Blatz, Gran, Hendricks & Reina, P.A. He is
also a director of Calvert Variable Series, Inc.
Frederick T. Borts, M.D.
DOB: 7/23/49
1976
Dr. Borts is a radiologist with Kaiser Permanente. Prior to that, he was a
radiologist at Bethlehem Medical Imaging in Allentown, Pennsylvania.
Charles E. Diehl
DOB: 10/13/22
1983
Mr. Diehl is a self-employed consultant and is Vice President and Treasurer
Emeritus of the George Washington University. He has retired from University
Support Services, Inc. of Herndon, Virginia. Formerly, he was a Director of
Acacia Mutual Life Insurance Company, and is currently a Director of Servus
Financial Corporation.
Douglas E. Feldman, M.D.
DOB: 5/23/48
1982
Dr. Feldman practices head and neck reconstructive surgery in the Washington,
D.C., metropolitan area.
Peter W. Gavian, CFA
DOB: 12/8/32
1980
Mr. Gavian is President of Corporate Finance of Washington, Inc. Formerly, he
was a principal of Gavian De Vaux Associates, an investment banking firm. He
is also a CFA and an accredited senior business appraiser.
John G. Guffey, Jr.
DOB: 5/15/48
1976
Mr. Guffey is chairman of the Calvert Social Investment Foundation, organizing
director of the Community Capital Bank in Brooklyn, New York, and a financial
consultant to various organizations. In addition, he is a director of the
Community Bankers Mutual Fund of Denver, Colorado, a director of Ariel Funds,
and the Treasurer and Director of Silby, Guffey, and Co., Inc., a venture
capital firm. Mr. Guffey is a trustee/director of each of the other investment
companies in the Calvert Group of Funds, except for Calvert Variable Series,
Inc. and Calvert New World Fund, Inc.
*Barbara J. Krumsiek
DOB: 8/9/52
1997
Ms. Krumsiek serves as President, Chief Executive Officer and Vice Chairman of
Calvert Group, Ltd. and as an officer and director of each of its affiliated
companies. She is a director of Calvert-Sloan Advisers, L.L.C., and a
trustee/director of each of the investment companies in the Calvert Group of
Funds. Ms. Krumsiek is the President of each of the investment companies,
except for Calvert Social Investment Fund, of which she is the Senior Vice
President. Prior to joining Calvert Group, Ms. Krumsiek served as a Managing
Director of Alliance Fund Distributors, Inc.
M. Charito Kruvant
DOB: 12/8/45
1996
Ms. Kruvant is President and CEO of Creative Associates International, Inc., a
firm that specializes in human resources development, information management,
public affairs and private enterprise development. She is also a director of
Acacia Federal Savings Bank.
Arthur J. Pugh
DOB: 9/24/37
1983
Mr. Pugh is a Director of Calvert Variable Series, Inc., and serves as a
director of Acacia Federal Savings Bank.
*David R. Rochat
DOB: 10/7/37
1982
Mr. Rochat is Executive Vice President of Calvert Asset Management Company,
Inc., Director and Secretary of Grady, Berwald and Co., Inc., and Director and
President of Chelsea Securities, Inc. He is the Senior Vice President of First
Variable Rate Fund, Calvert Tax-Free Reserves, Calvert Municipal Fund, Inc.,
Calvert Cash Reserves, and The Calvert Fund.
*D. Wayne Silby, Esq.
DOB: 7/20/48
1976
Mr. Silby is a trustee/director of each of the investment companies in the
Calvert Group of Funds, except for Calvert Variable Series, Inc. and Calvert
New World Fund. Mr. Silby is Executive Chairman of Group Serve, Inc., an
internet company focused on community building collaborative tools, and an
officer, director and shareholder of Silby, Guffey & Company, Inc., which
serves as general partner of Calvert Social Venture Partners ("CSVP"). CSVP is
a venture capital firm investing in socially responsible small companies. He
is also a Director of Acacia Mutual Life Insurance Company.
Executive officers of the Fund not mentioned above include William Tartikoff,
Esq., age 51, Vice President and Secretary, Ronald Wolfsheimer, age 51,
Treasurer, Reno J. Martini, age 48, Senior Vice President, and Daniel Hayes,
age 48, Vice President. Each has been an executive officer for more than five
years.
Trustees marked with an *, above, are "interested persons" of the Funds, under
the Investment Company Act of 1940, because of their affiliation with the
Funds, the investment advisor, or the parent company. As a group, the Trustees
and officers own less than 1% of each Fund's outstanding shares.
The Audit Committee of the Board is composed of Messrs. Baird, Blatz, Feldman,
Guffey and Pugh. The Board's Investment Policy Committee is composed of
Messrs. Borts, Diehl, Gavian, Rochat and Silby and Ms. Krumsiek. The
committees meet four (4) times per year. All Trustees attended at least 75% of
the meetings held. Trustees of the Fund not affiliated with the Advisor
presently receive an annual fee of $20,500 for service as a member of the
Board of Trustees of the Calvert Group of Funds, and a fee of $750 to $1,500
for each regular Board or Committee meeting attended.
Trustees of the Fund who are 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 Trustees Deferred Compensation
Plan (shown as "Pension or Retirement Benefits Accrued as part of Fund
Expenses," below). Deferral of the fees is designed to maintain the parties in
the same position as if the fees were paid on a current basis.
Trustee Compensation Table
Fiscal Year 1997 Aggregate Pension or Total Compensation
Compensation Retirement from Benefits
(unaudited numbers) from Registrant Accrued as Registrant and Fund
for Service part of Complex paid to
as Trustee of Registrant Trustee**
Expenses*
Name of Trustee
Richard L. Baird, Jr. $2,418 $0 $34,450
Frank H. Blatz, Jr. $3,076 $3,076 $46,000
Frederick T. Borts $2,323 $0 $32,500
Charles E. Diehl $2,968 $2,968 $44,500
Douglas E. Feldman $2,318 $0 $32,500
Peter W. Gavian $1,488 $1,259 $38,500
John G. Guffey, Jr. $3,019 $0 $61,615
M. Charito Kruvant $2,588 $0 $36,250
Arthur J. Pugh $3,129 $104 $48,250
D. Wayne Silby $2,480 $0 $62,830
*Messrs. Blatz, Diehl, Gavian and Pugh have chosen to defer a portion of their
compensation. As of December 31, 1997, total deferred compensation, including
dividends and capital appreciation, was $555,901.79, $545,259.10, $137,436.70
and $187,735.55, for each trustee, respectively.
**As of December 31, 1997. The Fund Complex consists of nine (9) registered
investment companies.
Recommendation
The Board recommends that you vote FOR each of the Trustees listed above.
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Proposal 3
To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws; (b) change some of the fundamental policies and restrictions to
non-fundamental operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
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Discussion
FVRF came into existence over 20 years ago. The federal and state laws
governing mutual funds have been changed several times since then. The Fund's
Prospectus and Statement of Additional Information ("SAI") contain investment
policies and restrictions that are more restrictive than the current law. For
example, federal Rule 2a-7 under the 1940 Act (the "Rule") states what types
of money market securities can be purchased for a money market fund. All money
market funds must comply with the Rule. However, the investment policies for
the Fund are currently even more stringent than the Rule. This severely
restricts Fund investments and could potentially reduce its yield. The
fundamental policies concern the Government-guaranteed loan market,
investments maturing in more than one year, and repurchase agreements by the
Fund to sell a money market security and buy it back (repurchase) at a
particular time and price. The Fund does not intend to change its investment
style but plans to operate under Rule 2a-7, as may be periodically amended.
Also in the past few years, many state securities laws have changed or have
been superseded by federal securities laws. The Fund, however, must still
comply with the old fundamental restrictions, unless you vote to change these
restrictions to be in line with the changed regulatory landscape.
As explained above, federal law in many cases controls what a mutual fund can
purchase. Federal law also specifies certain investment restrictions that must
be fundamental and cannot be changed without a shareholder vote. The
policies/restrictions that are required by law to be fundamental are those
concerning diversification, borrowing money, the issuance of senior
securities, underwriting of securities issued by other persons, the purchase
and sale of real estate and commodities, the policy about making loans to
other persons, and the concentration of investments in a particular industry
or group of industries.
CAMCO has recommended to the Board that the investment restrictions be changed
to conform to, but not be more restrictive than, the federal law. That way, if
the federal law changes, the restrictions can change accordingly. This gives
the Fund more flexibility and may help it to more easily adapt to different
investment environments. This is expected to increase investment management
opportunities. Further, it is not anticipated that these proposed changes will
substantially affect the way the Fund is currently managed.
The current investment restrictions, excerpted from their SAI, are shown
below. After careful consideration, and with the advice of outside counsel, the
Board has approved several changes, subject to shareholder approval. Please
note that the Board recommends the deletion of any language in [brackets] and
italicized. Any new language has been underlined and made bold. Restrictions
that the Board believes should be nonfundamental operating policies are marked
with ***NF***.
Investment Restrictions:
The Fund has adopted the following investment restrictions which, [together
with the foregoing investment objectives and fundamental policies] cannot be
changed without the approval of the holders of a majority of the outstanding
shares. As defined in the Investment Company Act of 1940, this means the
lesser of the vote of (a) 67% of the shares of the Fund at a meeting where
more than 50% of the outstanding shares are present in person or by proxy or
(b) more than 50% of the outstanding shares. Shares have equal rights as to
voting.
The Fund may not:
[(1) Purchase common stocks, preferred stocks, warrants,
other equity securities, corporate bonds or debentures,
state bonds, municipal bonds, or industrial revenue bonds;]
(2) Issue senior securities or Borrow money, except from
banks as a temporary measure for emergency (not leveraging)
purposes in an amount not greater than [25%] 33 1/3% of the
value of the Fund's total assets (including the amount
borrowed) at the time the borrowing is made. [Investment
securities will not be purchased while borrowings are
outstanding. Borrowings will only be undertaken to
facilitate the meeting of redemption requests;]
(3) Pledge its assets, except to secure borrowing for
temporary or emergency purposes and then only in an amount
up to [25%] 33 1/3% of its total assets. [Although the Fund
has the right to pledge in excess of 10% of the value of its
assets, it will not do so as a matter of operating policy in
order to comply with certain state investment restrictions;]
***NF*** (4) Sell securities short; ***NF***
[(5) Write or purchase put or call options;]
(6) Underwrite the securities of other issuers except as
permitted by the Board of Trustees within applicable law,
and except to the extent that in connection with the
disposition of its portfolio securities, a Portfolio may be
deemed to be an underwriter.
[(7) Purchase a security which is subject to legal or
contractual restrictions on resale, i.e., restricted
securities;]
(8) Purchase or sell real estate investment trust
securities, or commodities. [, or oil and gas interests;]
(9) Make loans of more than one-third of the total assets of
the Fund, or as permitted by law, other than through the
purchase of money market instruments and repurchase
agreements or by the purchase of bonds, debentures or other
debt securities. 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.
[to others, except for repurchase transactions (the purchase
of a portion of publicly distributed debt securities is not
considered the making of a loan);]
[(10) Invest in companies for the purpose of exercising
control; or invest in the securities of other investment
companies, except as they may be acquired as part of a
merger, consolidation or acquisition of assets, or in
connection with a trustee's deferred compensation plan.]
11. Concentrate 25% or more of the value of its assets in
any one industry, or as permitted by law; provided, however,
that there is no limitation with respect to investments in
obligations issued or guaranteed by the United States
Government or its agencies and instrumentalities, and
repurchase agreements secured thereby, and there is no
limitation with respect to investments in money market
instruments of banks.
Thus, the revised fundamental investment restriction section of the SAI would
appear as shown below:
PROPOSED MODEL INVESTMENT RESTRICTIONS:
The Fund has adopted the following investment restrictions which cannot be
changed without the approval of the holders of a majority of the outstanding
shares. As defined in the Investment Company Act of 1940, this means the
lesser of the vote of (a) 67% of the shares of the Fund at a meeting where
more than 50% of the outstanding shares are present in person or by proxy or
(b) more than 50% of the outstanding shares. Shares have equal rights as to
voting.
The Fund may not:
1. Concentrate 25% or more of the value of its assets
in any one industry, or as permitted by law; provided,
however, that there is no limitation with respect to
investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities, and repurchase agreements secured
thereby, and there is no limitation with respect to
investments in money market instruments of banks.
2. Make loans of more than one-third of the total
assets of the Fund, or as permitted by law, other than
through the purchase of money market instruments and
repurchase agreements or by the purchase of bonds,
debentures or other debt securities. The purchase by the
Fund of all or a portion of an issue of publicly or
privately distributed debt obligations in accordance with
its investment objective, policies and restrictions, shall
not constitute the making of a loan.
3. Underwrite the securities of other issuers, except
as permitted by the Board of Trustees within applicable law,
and except to the extent that in connection with the
disposition of its portfolio securities, the Fund may be
deemed to be an underwriter.
4. 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 or as permitted by law and except by engaging in
reverse repurchase agreements, where allowed. In order to
secure any permitted borrowings and reverse repurchase
agreements under this section, the Fund may pledge, mortgage
or hypothecate its assets.
5. Invest directly in commodities, commodities futures
contracts, or real estate, although it may invest 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.
Recommendation
The Board has voted to change or delete each of these fundamental investment
restrictions as shown above and recommends that you vote FOR the changes or
deletions of each of these revised fundamental investment restrictions for the
Fund.
- --------------------------------------------------------------------------------
Proposal 4
- --------------------------------------------------------------------------------
To ratify the Board's selection of accountants, PricewaterhouseCoopers, L.L.P.
Discussion
Shareholders are requested to ratify the action of the Board in selecting the
firm of PricewaterhouseCoopers, L.L.P. as the independent accountants for FVRF
during the current fiscal year. The Board believe that the firm is well
qualified, and has accordingly selected PricewaterhouseCoopers to act as
independent accountants, subject to ratification by shareholders.
Coopers & Lybrand, L.L.P. has experience in accounting and auditing and has
served as independent accountants for FVRF since 1994. On July 1, 1998,
Coopers & Lybrand merged with Price Waterhouse, L.L.P. to form
PricewaterhouseCoopers, L.L.P.
Neither PricewaterhouseCoopers nor any of its partners has any direct or
indirect connection (other than as independent accountants) with FVRF or any
of their affiliates. No representative of PricewaterhouseCoopers will be
present at the Special Meeting, but a representative will be available via
telephone to respond to appropriate questions from shareholders.
Recommendation
The Board recommends a vote FOR ratification of the selection of
PricewaterhouseCoopers, L.L.P. as independent accountants for FVRF.
- --------------------------------------------------------------------------------
OTHER BUSINESS
- --------------------------------------------------------------------------------
The Board does not intend to present any other business at the meeting. If,
however, any other matters are properly brought before the meeting, William M.
Tartikoff, Esq., and Barbara J. Krumsiek will vote on the matters in
accordance with their judgment.
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The audited Annual Report to Shareholders of FVRF is incorporated by reference
into this proxy statement. Copies of the most recent Annual Report may be
obtained without charge if you:
write to FVRF at 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814; or
call (800) 368-2745; or
visit Calvert's website at www.calvertgroup.com.
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- --------------------------------------------------------------------------------
FVRF is not required to hold annual shareholder meetings. Shareholders who
would like to submit proposals for consideration at future shareholder
meetings should send written proposals to the Calvert Group Legal Department,
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814.
- --------------------------------------------------------------------------------
VOTING INFORMATION
- --------------------------------------------------------------------------------
Proxies are solicited initially by mail. Additional solicitations may be made
by telephone, computer communications, facsimile or other such means, or by
personal contact by officers or employees of Calvert Group and its affiliates
or by ADP/Shareholder communications, Inc., a proxy soliciting firm retained
for this purpose. FVRF will bear solicitation costs. By voting as soon as
possible, you can save the Fund the expense of follow-up mailings and calls.
A proxy may be revoked at any time before the meeting or during the meeting by
oral or written notice to William M. Tartikoff, Esq., 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814. Unless revoked, all valid proxies will
be voted in accordance with the specification thereon or, in the absence of
specification, for approval of the proposals.
Each proposal must be approved by a majority of the outstanding shares, which
is defined as the lesser of: (1) the vote of 67% or more of the shares of the
Fund at the Special Meeting if the holders of more than 50% of the outstanding
shares of the Fund o are present in person or by proxy, or (2) the vote of
more than 50% of the outstanding shares of the Fund. All classes of the Fund
vote together.
Any abstentions and broker non-votes will be counted as shares present for
purposes of determining whether a quorum is present but will not be voted for
or against any adjournment or proposal. A broker non-vote is when a broker
holds the shares and the actual owner does not vote and the broker holding the
shares does not have the authority to vote the shares. This means that
abstentions and broker non-votes effectively will be a vote against
adjournment or against any proposal where the required vote is a percentage of
the shares present.
Shareholders of the Fund of record at the close of business on December 7,
1998 ("record date") are entitled to notice of and to vote at the Special
Meeting or any adjournment thereof. Shareholders are entitled to one vote for
each share held on that date. As of December 1, 1998, as shown on the books of
the Fund, there were issued and outstanding [#] shares.
As of the record date, the officers and Trustees/Directors of FVRF as a group
beneficially owned less than 1% of the outstanding shares of any Portfolio.
The following shareholders, as of record date, owned more than 5% of the
Portfolio shown, as of December 1, 1998:
[insert info]
Name and Address % of Ownership
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
- --------------------------------------------------------------------------------
ADJOURNMENT
- --------------------------------------------------------------------------------
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled
for the meeting, William M. Tartikoff, Esq., or Barbara J. Krumsiek may move
one or more adjournments of the meeting to permit further solicitation of
proxies with respect to any such proposals. Any such adjournment will require
the affirmative vote of a majority of the shares present at the meeting. Mr.
Tartikoff and Ms. Krumsiek will vote in favor of such adjournment those shares
that they are entitled to vote which have voted in favor of such proposals.
They will vote against any such adjournment on behalf of those proxies that
have voted against any such proposals.
- --------------------------------------------------------------------------------
APPENDIX 1
PROPOSED INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, made this ___ day of ___________,
1998, by and between CALVERT ASSET MANAGEMENT COMPANY, INC., a Delaware
corporation having its principal place of business in Bethesda, Maryland (the
"Advisor"), and FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME, a
Massachusetts business trust created pursuant to a Declaration of Trust filed
with the Secretary of State of the Commonwealth of Massachusetts (the
"Trust"), both having their principal place of business at 4550 Montgomery
Avenue, Bethesda, Maryland.
WHEREAS, the Trust has been organized to operate as an investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
for the purpose of investing and reinvesting its assets in securities, as set
forth in its Declaration of Trust, its By-laws and its registration statements
under the 1940 Act and the Securities Act of 1933 (the "1933 Act"), as
amended; and the Trust desires to avail itself of the services, information,
advice, assistance and facilities of an investment advisor and to have an
investment advisor perform for it various investment advisory, research
services and other management services; and
WHEREAS, the Advisor has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940, as amended, and
is engaged in the business of rendering management, and investment advisory
services to investment companies and desires to provide such services to the
Trust;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Trust hereby employs the Advisor to
manage the investment and reinvestment of the Trust assets, subject
to the control and direction of the Trust's Board of Trustees, for
the period and on the terms hereinafter set forth. The Advisor hereby
accepts such employment and agrees during such period to render the
services and to assume the obligations herein set forth for the
compensation herein provided. The Advisor shall for all purposes
herein be deemed to be an independent contractor and shall, except as
expressly provided or authorized (whether herein or otherwise), have
no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
2. Obligations of and Services to be Provided by the Advisor. The
Advisor undertakes to provide the following services and to assume
the following obligations:
a. The Advisor shall manage the investment and reinvestment of
the Trust's assets, subject to and in accordance with the investment
objectives and policies of the Trust and any directions which the Trust's
Board of Trustees may issue from time to time. In pursuance of the foregoing,
the Advisor shall make all determinations with respect to the investment of
the Trust's assets and the purchase and sale of portfolio securities and shall
take such steps as may be necessary to implement the same. Such determination
and services shall also include determining the manner in which voting rights,
rights to consent to corporate action, any other rights pertaining to the
Trust's portfolio securities shall be exercised. The Advisor shall render
regular reports to the Trust's Board of Trustees concerning the Trust's
investment activities.
b. The Advisor shall, in the name of the Trust on behalf of the
Trust, place orders for the execution of the Trust's
portfolio transactions in accordance with the policies with
respect thereto set forth in the Trust's registration
statements under the 1940 Act and the 1933 Act, as such
registration statements may be amended from time to time. In
connection with the placement of orders for the execution of
the Trust's portfolio transactions the Advisor shall create
and maintain all necessary brokerage records of the Trust in
accordance with all applicable laws, rules and regulations,
including but not limited to records required by Section
31(a) of the 1940 Act. All records shall be the property of
the Trust and shall be available for inspection and use by
the SEC, the Trust or any person retained by the Trust.
Where applicable, such records shall be maintained by the
Advisor for the periods and the places required by Rule
31a-2 under the 1940 Act.
c. The Advisor shall bear its expenses of providing services to
the Trust pursuant to this Agreement except such expenses as are undertaken by
the Trust. In addition, the Advisor shall pay the salaries and fees of all
Trustees and executive officers who are employees of the Advisor or its
affiliates ("Advisor Employees").
3. Expenses of The Trust. The Trust shall pay all expenses other than
those expressly assumed by the Advisor herein, which expenses payable
by the Trust shall include, but are not limited to:
a. Fees to the Advisor as provided herein;
b. Legal and audit expenses;
c. Fees and expenses related to the registration and
qualification of the Trust and its shares for distribution
under federal and state securities laws;
d. Expenses of the transfer agent, registrar, custodian,
dividend disbursing agent and shareholder servicing agent;
e. Any telephone charges associated with shareholder servicing
or the maintenance of the Funds or Corporation;
f. Salaries, fees and expenses of Trustees and executive
officers of the Trust, other than Advisor Employees;
g. Taxes and corporate fees levied against the Trust;
h. Brokerage commissions and other expenses associated with
the purchase and sale of portfolio securities for the Trust;
i. Expenses, including interest, of borrowing money;
j. Expenses incidental to meetings of the Trust's shareholders
and the maintenance of the Trust's organizational existence;
k. Expenses of printing stock certificates representing shares
of the Trust and expenses of preparing, printing and mailing
notices, proxy material, reports to regulatory bodies and
reports to shareholders of the Trust;
l. Expenses of preparing and typesetting of prospectuses of
the Trust;
m. Expenses of printing and distributing prospectuses to
shareholders of the Trust;
m. Association membership dues;
n. Insurance premiums for fidelity and other coverage; and
o. Such other legitimate Trust expenses as the Board of
Trustees may from time to time determine are properly
chargeable to the Trust.
4. Compensation of Advisor.
a. As compensation for the services rendered and obligations
assumed hereunder by the Advisor, the Trust shall pay to the
Advisor within ten (10) days after the last day of each
calendar month a fee equal on an annualized basis to 0.25%
of the value of the first $500,000,000 of the Trust's net
assets determined for each calendar day, 0.225% of the next
$400,000,000 of such assets, 0.20% of the next $400,000,000
of such assets, 0.175% of the next $700,000,000 of such
assets, and 0.15% of all such assets in excess of
$2,000,000,000.
Such fee shall be computed and accrued daily. Upon termination of
this Agreement before the end of any calendar month, the fee for such
period shall be prorated. For purposes of calculating the Advisor's
fee, the daily value of the Trust's net assets shall be computed by
the same method as the Trust uses to compute the value of its net
assets in connection with the determination of the net asset value of
Trust shares.
b. The Advisor reserves the right (i) to waive all or part of
its fee and (ii) to make payments to brokers and dealers in
consideration of their promotional or administrative
services.
5. Activities of the Advisor. The services of the Advisor to the Trust
hereunder are not to be deemed exclusive, and the Advisor shall be
free to render similar services to others. It is understood that
Trustees and officers of the Trust are or may become interested in
the Advisor as stockholders, officers, or otherwise, and that
stockholders and officers of the Advisor are or may become similarly
interested in the Trust, and that the Advisor may become interested
in the Trust as a shareholder or otherwise.
6. Use of Names. The Trust shall not use the name of the Advisor in any
prospectus, sales literature or other material relating to the Trust
in any manner not approved prior thereto by the Advisor; provided,
however, that the Advisor shall approve all uses of its name which
merely refer in accurate terms to its appointment hereunder or which
are required by the SEC; and, provided, further, that in no event
shall such approval be unreasonably withheld. The Advisor shall not
use the name of the Trust or any Trust in any material relating to
the Advisor in any manner not approved prior thereto by the Trust;
provided, however, that the Trust shall approve all uses of its name
which merely refer in accurate terms to the appointment of the
Advisor hereunder or which are required by the SEC; and, provide,
further, that in no event shall such approval be unreasonably
withheld.
7. Liability of the Advisor. Absent willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Advisor, the Advisor shall not be
subject to liability to the Trust or to any shareholder of the Trust
for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained
in the purchase, holding or sale of any security.
8. Force Majeure. The Advisor shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including
but not limited to acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot, or failure of communication or power supply.
In the event of equipment breakdowns beyond its control, the Advisor
shall take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto.
9. Renewal, Termination and Amendment. This Agreement shall continue in
effect with respect to the Trust, unless sooner terminated as
hereinafter provided, through December 31, 1998, and indefinitely
thereafter if its continuance shall be specifically approved at least
annually by vote of the holders of a majority of the outstanding
voting securities of the Trust or by vote of a majority of the
Trust's Board of Trustees; and further provided that such continuance
is also approved annually by the vote of a majority of the Trustees
who are not parties to this Agreement or interested persons of the
Advisor, cast in person at a meeting called for the purpose of voting
on such approval, or as allowed by law. This Agreement may be
terminated at any time, without payment of any penalty, by the
Trust's Board of Trustees or by a vote of the majority of the
outstanding voting securities of the Trust upon 60 days' prior
written notice to the Advisor and by the Advisor upon 60 days' prior
written notice to the Trust. This Agreement may be amended at any
time by the parties, subject to approval by the Trust's Board of
Trustees and, if required by applicable SEC rules and regulations, a
vote of a majority of the Trust's outstanding voting securities. This
Agreement shall terminate automatically in the event of its
assignment. The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meaning set forth for
such terms in the 1940 Act.
10. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. Miscellaneous. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the
purposes hereof. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Maryland.
The captions in this Agreement are included for convenience only and
in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
FIRST VARIABLE RATE FUND
FOR GOVERNMENT INCOME
CALVERT ASSET MANAGEMENT COMPANY, INC.
<PAGE>
PROXY CARD
The undersigned, revoking previous proxies, hereby appoint(s) William M.
Tartikoff, Esq. and Barbara J. Krumsiek, attorneys, with full power of
substitution, to vote all shares that the undersigned is entitled to vote at
the Special Meeting of Shareholders to be held in the Tenth Floor Conference
Room of Calvert Group, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814 on Wednesday, February 24, 1999 at 9:00 a.m. and at any adjournment
thereof. All powers may be exercised by a majority of the proxy holders or
substitutes voting or acting or, if only one votes and acts, then by that one.
This Proxy shall be voted on the proposals described in the Proxy Statement.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
You may cast your vote using one of the following methods:
1. By internet (through a secure internet site): www.calvertgroup.com
2. By telephone (through a secure telephone system): call 1-800-368-2745
3. By facsimile: fax to ______________
4. By mail: postage-paid envelope enclosed
5. In person: Wednesday, February 24, 1999
NOTE: If you plan to vote by mail or by facsimile, please sign the proxy card
exactly as your name appears on the card. If you have a joint account, either
person may sign the proxy card. When signing in a fiduciary capacity, such as
executor, administrator, trustee, guardian, etc., please sign your name and
indicate your title. Corporate and partnership proxies should be signed by an
authorized person indicating the person's title.
Date: ________________________, 1999
__________________________________
__________________________________
Signature(s) (and Title(s), if applicable)
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, the attorneys shall vote in accordance with their best
judgment.
THE BOARD OF TRUSTEES/DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
1. To approve a new investment advisory agreement with the investment
advisor, Calvert Asset Management Company, Inc. ("CAMCO").
For [ ] Against [ ] Abstain [ ]
2. To approve the Board of Trustees for FVRF:
1. Richard L. Baird, Jr.
2. Frank H. Blatz, Jr., Esq.
3. Frederick T. Borts, M.D.
4. Charles E. Diehl
5. Douglas E. Feldman, M.D.
6. Peter W. Gavian, CFA
7. John G. Guffey, Jr.
8. Barbara J. Krumsiek
9. M. Charito Kruvant
10. Arthur J. Pugh
11. David R. Rochat
12. D. Wayne Silby, Esq.
For all [ ] Against all [ ] Abstain [ ]
[ ] To vote against one or more of the proposed Trustees listed above,
but to approve the others, place an "x" in the box at left and indicate the
number(s) of the person you are voting against on this line:__________________
3. To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws; (b) change some of the fundamental policies and restrictions to
non-fundamental operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
For [ ] Against [ ] Abstain [ ]
[ ] To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve the others, place
an "x" in the box at left and indicate the number(s) (as set forth in
the proxy statement) of the investment restriction(s) you do not want
to change on this line:
4. For each Portfolio: to ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
For [ ] Against [ ] Abstain [ ]
<PAGE>
Inside Back Cover:
Investment Advisor
Calvert Asset Management
Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Administrator
Calvert Administrative Services Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
