SEC REGISTRATION NOS.
2-56809 AND 811-2633
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 40 XX
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 40 XX
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER: (301) 951-4881
WILLIAM M. TARTIKOFF, ESQ.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
(NAME AND ADDRESS OF AGENT FOR SERVICE)
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
__ IMMEDIATELY UPON FILING XX ON APRIL 30, 2000
PURSUANT TO PARAGRAPH (B) PURSUANT TO PARAGRAPH (B)
__ 60 DAYS AFTER FILING __ ON (DATE)
PURSUANT TO PARAGRAPH (A) PURSUANT TO PARAGRAPH (A)
OF RULE 485.
CALVERT
FIRST GOVERNMENT
MONEY MARKET FUND
PROSPECTUS
APRIL 30, 2000
<PAGE>
PROSPECTUS
APRIL 30, 2000
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
ABOUT THE FUND
2 INVESTMENT OBJECTIVE
2 PRINCIPAL RISKS
3 PAST PERFORMANCE
4 FEES AND EXPENSES
ABOUT YOUR INVESTMENT
5 ADVISORY FEES
6 HOW TO BUY SHARES
6 GETTING STARTED
6 CHOOSING A SHARE CLASS
7 CALCULATION OF CDSC/WAIVER
8 DISTRIBUTION AND SERVICE FEES
9 ACCOUNT APPLICATION
9 IMPORTANT - HOW SHARES ARE PRICED
10 WHEN YOUR ACCOUNT WILL BE CREDITED
10 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
13 DIVIDENDS AND TAXES
14 HOW TO SELL SHARES
16 FINANCIAL HIGHLIGHTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVE
CALVERT FIRST GOVERNMENT MONEY MARKET FUND (THE "FUND") IS A U.S.
GOVERNMENT-ONLY MONEY MARKET FUND THAT SEEKS TO EARN THE HIGHEST POSSIBLE YIELD
CONSISTENT WITH SAFETY, LIQUIDITY, AND PRESERVATION OF CAPITAL. IN PURSUING ITS
OBJECTIVE, THE FUND INVESTS ONLY IN U.S. GOVERNMENT OBLIGATIONS, INCLUDING SUCH
OBLIGATIONS SUBJECT TO REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS
AND BANKS. THE FUND SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE.
PRINCIPAL INVESTMENT STRATEGIES
FUND ASSETS ARE INVESTED IN SHORT-TERM MONEY MARKET INSTRUMENTS, SUCH AS:
OBLIGATIONS ISSUED BY THE U.S. TREASURY, SUCH AS U.S. TREASURY BILLS, NOTES AND
BONDS, SECURITIES ISSUED BY U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES;
REPURCHASE AGREEMENTS; AND VARIABLE-RATE DEMAND NOTES. ALL INVESTMENTS MUST
COMPLY WITH THE SEC MONEY MARKET FUND REQUIREMENTS
PRINCIPAL RISKS
- - INVESTMENTS IN OBLIGATIONS NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF
THE U.S. GOVERNMENT ARE SUBJECT TO THE ABILITY OF THE ISSUER TO MAKE
PAYMENT AT MATURITY.
- - THE YIELD OF THE FUND WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER
SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF
A HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT
INVESTED IN ANY ONE ISSUER TO TRY TO LESSEN EXPOSURE.
- - AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN
THE FUND.
<PAGE>
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE BY CALENDAR YEAR FOR CLASS O OF THE FUND. THE CHARTS SHOW HOW THE
PERFORMANCE HAS VARIED FROM YEAR TO YEAR. THE TABLES COMPARE CLASS O RETURNS
OVER TIME TO THE LIPPER U.S. GOVERNMENT MONEY MARKET INDEX. THE INDEX IS A
COMPOSITE INDEX OF THE ANNUAL RETURN OF MUTUAL FUNDS THAT HAVE SIMILAR
INVESTMENT GOALS. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW
IT WILL PERFORM IN THE FUTURE.
THE RETURN FOR THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS PROSPECTUS
WILL DIFFER FROM THE CLASS O RETURNS SHOWN IN THE BAR CHART, DEPENDING UPON THE
EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU
MAY BE REQUIRED TO PAY UPON REDEMPTION OF THE FUND'S SHARES, SUCH AS FOR CLASS B
OR C. ANY SALES CHARGE WILL REDUCE YOUR RETURN.
CLASS O
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '90 1.90%
WORST QUARTER (OF PERIODS SHOWN) Q2 '93 0.66%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
1 YEAR 5 YEAR 10 YEAR
CALVERT FIRST GOVERNMENT CLASS O 4.38% 4.86% 4.72%
CALVERT FIRST GOVERNMENT CLASS B 3.11% N/A N/A
CALVERT FIRST GOVERNMENT CLASS C 3.12% N/A N/A
LIPPER U.S. GOVERNMENT MONEY
MARKET INDEX 4.58% 4.98% 4.79%
FOR CURRENT YIELD INFORMATION, CALL 800-368-2745.
<PAGE>
FEES AND EXPENSES
THE TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF A CLASS. SHAREHOLDER FEES ARE PAID DIRECTLY FROM YOUR ACCOUNT; ANNUAL
FUND OPERATING EXPENSES ARE DEDUCTED FROM FUND ASSETS.
SHAREHOLDER FEES CLASS O CLASS B CLASS C
MAXIMUM SALES CHARGE (LOAD) NONE NONE NONE
IMPOSED ON PURCHASES
(AS A PERCENTAGE OF OFFERING
PRICE)
MAXIMUM DEFERRED SALES
CHARGE (LOAD) NONE 5%2 1%4
(AS A PERCENTAGE OF PURCHASE
OR REDEMPTION PROCEEDS,
WHICHEVER IS LOWER)
MAXIMUM ACCOUNT FEE 1 N/A N/A
ANNUAL FUND OPERATING EXPENSES5
MANAGEMENT FEES .50% .50% .50%
DISTRIBUTION AND SERVICE
(12B-1) FEES NONE 1.00% 1.00%
OTHER EXPENSES .32% 6.59% 3.25%
TOTAL ANNUAL FUND OPERATING
EXPENSES .82% 8.09% 4.75%
FEE WAIVER AND/OR EXPENSE
REIMBURSEMENT N/A 6.07%3 2.73%3
NET ANNUAL FUND OPERATING
EXPENSES N/A 2.02% 2.02%
1 FOR EACH ACCOUNT WITH A BALANCE OF LESS THAN $1,000, THE FUND CHARGES A
MONTHLY ACCOUNT MAINTENANCE FEE OF $3.
2 A CONTINGENT DEFERRED SALES CHARGE IS IMPOSED ON THE PROCEEDS OF CLASS B
SHARES ACCORDING TO THE CDSC SCHEDULE OF THE FUND IN WHICH THE CLASS B
SHARES WERE ORIGINALLY PURCHASED. THAT CHARGE IS IMPOSED AS A PERCENTAGE OF
NET ASSET VALUE AT THE TIME OF PURCHASE OR REDEMPTION, WHICHEVER IS LESS.
SEE "CALCULATION OF CONTINGENT DEFERRED SALES CHARGES."
3 CAMCO HAS AGREED TO WAIVE FEES AND OR REIMBURSE OPERATING EXPENSES (NET OF
ANY EXPENSE OFFSET ARRANGEMENTS) FOR THE FUND'S CLASS B AND C SHARES
THROUGH YEAR 8. THE CONTRACTUAL EXPENSE CAP IS SHOWN AS "NET ANNUAL FUND
OPERATING EXPENSES"; THIS IS THE MAXIMUM AMOUNT OF OPERATING EXPENSES THAT MAY
BE CHARGED TO THE FUND FOR THIS PERIOD. FOR THE PURPOSE OF THIS CAP, OPERATING
EXPENSES DO NOT INCLUDE DISTRIBUTION PLAN EXPENSES, INTEREST EXPENSES,
EXTRAORDINARY EXPENSES, TAXES AND CAPITAL ITEMS.
<PAGE>
4 A CONTINGENT DEFERRED SALES CHARGE IS IMPOSED ON THE PROCEEDS OF CLASS C
SHARES REDEEMED WITHIN ONE YEAR OF THE PURCHASE OF THE CLASS C SHARES IN THE
ORIGINAL FUND. THAT CHARGE IS IMPOSED AS A PERCENTAGE OF NET ASSET VALUE AT
THE TIME OF PURCHASE OR REDEMPTION, WHICHEVER IS LESS. SEE "CALCULATION
OF CONTINGENT DEFERRED SALES CHARGES."
5 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR. MANAGEMENT
FEES INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT
ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, CAMCO.
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
YOU INVEST $10,000 IN THE FUND FOR THE TIME PERIODS INDICATED;
YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND THE FUND'S OPERATING
EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
CLASS NUMBER OF YEARS INVESTMENT IS HELD
1 YEAR 3 YEARS 5 YEARS 10 YEARS
O $84 $262 $455 $1,014
B W/REDEMPTION $705 $1,635 $2,465 $3,985
B W/O REDEMPTION $205 $1,235 $2,265 $3,985
C W/ REDEMPTION $305 $1,235 $2,265 $4,839
C W/O REDEMPTION $205 $1,235 $2,265 $4,839
ABOUT CALVERT GROUP
CALVERT ASSET MANAGEMENT COMPANY, INC. ("CAMCO"), 4550 MONTGOMERY AVENUE, SUITE
1000N, BETHESDA, MD 20814, IS THE FUND'S INVESTMENT ADVISOR AND PROVIDES
DAY-TO-DAY INVESTMENT MANAGEMENT SERVICES TO THE FUND. IT HAS BEEN MANAGING
MUTUAL FUNDS SINCE 1976. CAMCO IS THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND
PORTFOLIOS, INCLUDING THE FIRST AND LARGEST FAMILY OF SOCIALLY SCREENED FUNDS.
AS OF DECEMBER 31, 1999, CAMCO HAD OVER $6.5 BILLION IN ASSETS UNDER MANAGEMENT.
ADVISORY FEES
THE AGGREGATE ANNUAL ADVISORY FEE PAID TO CAMCO BY THE FUND FOR THE MOST RECENT
FISCAL YEAR AS A PERCENTAGE OF THE FUND'S AVERAGE DAILY NET ASSETS WAS .25%.
<PAGE>
HOW TO BUY SHARES
GETTING STARTED - BEFORE YOU OPEN AN ACCOUNT
YOU HAVE A FEW DECISIONS TO MAKE BEFORE YOU OPEN AN ACCOUNT IN A MUTUAL FUND.
FIRST, DECIDE WHICH FUND OR FUNDS BEST SUITS YOUR NEEDS AND YOUR GOALS.
SECOND, DECIDE WHAT KIND OF ACCOUNT YOU WANT TO OPEN. CALVERT OFFERS INDIVIDUAL,
JOINT, TRUST, UNIFORM GIFT/TRANSFER TO MINOR ACCOUNTS, AND SEVERAL OTHER TYPES
OF ACCOUNTS. MINIMUM INVESTMENTS ARE LOWER FOR THE RETIREMENT PLANS.
THEN DECIDE WHICH CLASS OF SHARES IS BEST FOR YOU.
YOU SHOULD MAKE THIS DECISION CAREFULLY, BASED ON:
- - THE AMOUNT YOU WISH TO INVEST;
- - THE LENGTH OF TIME YOU PLAN TO KEEP THE INVESTMENT; AND
- - THE CLASS EXPENSES.
CHOOSING A SHARE CLASS
THE FUND OFFERS FIVE CLASSES OF SHARES, THOUGH ONLY CLASS O, B, AND C ARE
OFFERED BY THIS PROSPECTUS. INVESTORS MAY PURCHASE CLASS O DIRECTLY. CLASS B AND
C MAY BE PURCHASED ONLY BY EXCHANGE FROM THE SAME CLASS OF ANOTHER CALVERT FUND.
CLASS O
CLASS O SHARES ARE SOLD WITH NO FRONT-END SALES CHARGE AT THE TIME OF PURCHASE
AND NO BACK-END LOAD WHEN THEY ARE REDEEMED. CDI DOES NOT RECEIVE ANY
COMPENSATION FROM THE FUND WITH RESPECT TO CLASS O SHARES, ALTHOUGH FROM ITS OWN
RESOURCES, CDI MAY PAY DEALERS SERVICE FEES OF UP TO 0.20% OF THE CLASS O
AVERAGE DAILY NET ASSETS MAINTAINED BY SUCH DEALERS.
CLASS B
CLASS B SHARES MAY BE PURCHASED ONLY BY EXCHANGE FROM CLASS B SHARES OF ANOTHER
CALVERT GROUP FUND. CLASS B SHARES ARE SOLD WITHOUT A SALES CHARGE AT THE TIME
OF PURCHASE, BUT ARE SUBJECT TO A DEFERRED SALES CHARGE UPON REDEMPTION,
ACCORDING TO THE SCHEDULE OF THE ORIGINAL FUND. IF IMPOSED, THE DEFERRED SALES
CHARGE IS DEDUCTED FROM THE REDEMPTION PROCEEDS OTHERWISE PAYABLE TO YOU. THE
DEFERRED SALES CHARGE IS RETAINED BY CDI. SEE "CALCULATION OF CONTINGENT
DEFERRED SALES CHARGES AND WAIVER OF SALES CHARGES" BELOW.
CLASS B SHARES WILL AUTOMATICALLY CONVERT TO CLASS O SHARES, ACCORDING TO THE
CONVERSION SCHEDULE OF THE CLASS B SHARES OF THE ORIGINAL FUND. CLASS O SHARES
ARE SUBJECT TO A LOWER DISTRIBUTION PLAN CHARGE. THE CLASS B SHARES SO CONVERTED
WILL NO LONGER BE SUBJECT TO THE HIGHER EXPENSES BORNE BY CLASS B SHARES. UNDER
CURRENT LAW, IT IS THE ADVISOR'S OPINION THAT SUCH A CONVERSION WILL NOT
CONSTITUTE
<PAGE>
A TAXABLE EVENT UNDER FEDERAL INCOME TAX LAW. IN THE EVENT THAT THIS CEASES TO
BE THE CASE, THE BOARD OF TRUSTEES WILL CONSIDER WHAT ACTION, IF ANY, IS
APPROPRIATE AND IN THE BEST INTERESTS OF THE CLASS B SHAREHOLDERS.
CLASS C
CLASS C SHARES ARE OFFERED AT NET ASSET VALUE, WITHOUT A FRONT-END SALES CHARGE.
WITH CERTAIN EXCEPTIONS, THE FUND IMPOSES A DEFERRED SALES CHARGE OF 1.00% ON
SHARES REDEEMED DURING THE FIRST YEAR AFTER PURCHASE OF THE CLASS C SHARES IN
THE ORIGINAL FUND. IF IMPOSED, THE DEFERRED SALES CHARGE IS DEDUCTED FROM THE
REDEMPTION PROCEEDS OTHERWISE PAYABLE TO YOU. THE DEFERRED SALES CHARGE IS
RETAINED BY CDI. SEE "CALCULATION OF CONTINGENT DEFERRED SALES CHARGES AND
WAIVER OF SALES CHARGES" BELOW.
CALCULATION OF CONTINGENT DEFERRED SALES CHARGE AND WAIVER OF SALES CHARGES
THE CDSC WILL NOT BE CHARGED ON SHARES YOU RECEIVED AS DIVIDENDS OR FROM CAPITAL
GAINS DISTRIBUTIONS OR ON ANY CAPITAL APPRECIATION (GAIN IN THE VALUE) OF SHARES
THAT ARE SOLD.
SHARES THAT ARE NOT SUBJECT TO THE CDSC WILL BE REDEEMED FIRST, FOLLOWED BY
SHARES YOU HAVE HELD THE LONGEST. THE CDSC IS CALCULATED BY DETERMINING THE
SHARE VALUE AT BOTH THE TIME OF PURCHASE AND REDEMPTION AND THEN MULTIPLYING
WHICHEVER VALUE IS LESS BY THE PERCENTAGE THAT APPLIES AS SHOWN ABOVE. IF YOU
CHOOSE TO SELL ONLY PART OF YOUR SHARES, THE CAPITAL APPRECIATION FOR THOSE
SHARES ONLY IS INCLUDED IN THE CALCULATION, RATHER THAN THE CAPITAL APPRECIATION
FOR THE ENTIRE ACCOUNT.
THE CDSC ON CLASS B SHARES WILL BE WAIVED IN THE FOLLOWING CIRCUMSTANCES:
- - REDEMPTION UPON THE DEATH OR DISABILITY OF THE SHAREHOLDER, PLAN
PARTICIPANT, OR BENEFICIARY.1
- - MINIMUM REQUIRED DISTRIBUTIONS FROM RETIREMENT PLAN ACCOUNTS FOR
SHAREHOLDERS 70 1/2 AND OLDER.2
- - THE RETURN OF AN EXCESS CONTRIBUTION OR DEFERRAL AMOUNTS, PURSUANT TO
SECTIONS 408(D)(4) OR (5), 401(K)(8), 402(G)(2), OR 401(M)(6) OF
THE INTERNAL REVENUE CODE.
- - INVOLUNTARY REDEMPTIONS OF ACCOUNTS UNDER PROCEDURES SET FORTH BY
THE FUND'S BOARD OF TRUSTEES/DIRECTORS.
- - A SINGLE ANNUAL WITHDRAWAL UNDER A SYSTEMATIC WITHDRAWAL PLAN OF UP
TO 10% OF THE SHAREHOLDER'S ACCOUNT BALANCE.3
<PAGE>
1 "DISABILITY" MEANS A TOTAL DISABILITY AS EVIDENCED BY A DETERMINATION BY THE
FEDERAL SOCIAL SECURITY ADMINISTRATION.
2 THE MAXIMUM AMOUNT SUBJECT TO THIS WAIVER IS BASED ONLY UPON THE SHAREHOLDER'S
CALVERT GROUP RETIREMENT ACCOUNTS.
3 THIS SYSTEMATIC WITHDRAWAL PLAN REQUIRES A MINIMUM ACCOUNT BALANCE OF $50,000
TO BE ESTABLISHED.
DISTRIBUTION AND SERVICE FEES
CLASS B AND C HAVE ADOPTED A PLAN UNDER RULE 12B-1 OF THE INVESTMENT COMPANY ACT
OF 1940 THAT ALLOWS THE FUND TO PAY ANNUAL DISTRIBUTION FEES OF 0.75% FOR THE
SALE AND DISTRIBUTION OF ITS SHARES. THE DISTRIBUTION PLAN ALSO PAYS SERVICE
FEES OF 0.25% TO PERSONS (SUCH AS YOUR FINANCIAL PROFESSIONAL) FOR SERVICES
PROVIDED TO SHAREHOLDERS. BECAUSE THESE DISTRIBUTION AND SERVICE FEES ARE PAID
OUT OF CLASS ASSETS ON AN ONGOING BASIS, OVER TIME, THESE FEES WILL INCREASE THE
COST OF YOUR INVESTMENT AND MAY COST YOU MORE THAN PAYING OTHER TYPES OF SALES
CHARGES. THESE DISTRIBUTION AND SERVICE FEES (TOTAL 1.00%) ARE SHOWN IN THE FEE
TABLES.
<PAGE>
NEXT STEP - ACCOUNT APPLICATION
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. WHEN MULTIPLE CLASSES OF
SHARES ARE OFFERED, PLEASE SPECIFY WHICH CLASS YOU WISH TO PURCHASE. FOR MORE
INFORMATION, CONTACT YOUR FINANCIAL PROFESSIONAL OR OUR SHAREHOLDER SERVICES
DEPARTMENT AT 800-368-2748.
MINIMUM TO OPEN AN ACCOUNT MINIMUM ADDITIONAL
$2,000 INVESTMENTS -$250
PLEASE MAKE YOUR CHECK PAYABLE
TO THE FUND AND MAIL IT TO:
NEW ACCOUNTS SUBSEQUENT INVESTMENTS
(INCLUDE APPLICATION) (INCLUDE INVESTMENT SLIP)
CALVERT GROUP CALVERT GROUP
P.O. BOX 219544 P.O. BOX 219739
KANSAS, CITY MO KANSAS CITY, MO
64121-9544 64121-9739
CERTIFIED, OR C/O NFDS,
OVERNIGHT MAIL 330 WEST 9TH ST.,
KANSAS CITY, MO 64105-1807
AT THE CALVERT OFFICE VISIT THE CALVERT OFFICE TO MAKE
INVESTMENTS BY CHECK.
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
DETERMINED ACCORDING TO THE "AMORTIZED COST" METHOD. IT IS COMPUTED PER CLASS BY
ADDING THE VALUE OF A FUND'S HOLDINGS PLUS OTHER ASSETS, SUBTRACTING
LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES OUTSTANDING.
THE NAV IS CALCULATED AS OF THE CLOSE OF EACH BUSINESS DAY, WHICH COINCIDES WITH
THE CLOSING OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE ("NYSE")
(NORMALLY 4 P.M. ET). EACH FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS OPEN.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, SUCH AS COLUMBUS DAY AND
VETERANS DAY, WHEN THE NYSE IS OPEN AND EACH FUND IS OPEN, BUT NO PURCHASES MAY
BE RECEIVED BECAUSE THE POST OFFICES AND BANKS ARE CLOSED.
<PAGE>
WHEN YOUR ACCOUNT WILL BE CREDITED
BEFORE YOU BUY SHARES, PLEASE READ THE FOLLOWING INFORMATION TO MAKE SURE YOUR
INVESTMENT IS CREDITED PROPERLY AND IN A TIMELY MANNER.
- - YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR
ORDER IS RECEIVED.
- - ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS.
- - NO CASH WILL BE ACCEPTED.
- - NO CREDIT CARD OR CREDIT LOAN CHECKS WILL BE ACCEPTED.
- - THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD
OF TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER.
- - AS A CONVENIENCE, CHECK PURCHASES RECEIVED AT CALVERT'S OFFICE IN
BETHESDA, MARYLAND WILL BE SENT BY OVERNIGHT DELIVERY TO THE TRANSFER
AGENT AND WILL BE CREDITED THE NEXT BUSINESS DAY UPON RECEIPT.
- - ANY CHECK PURCHASE RECEIVED WITHOUT AN INVESTMENT SLIP MAY CAUSE DELAYED
CREDITING.
- - IF YOUR CHECK DOES NOT CLEAR YOUR BANK, YOUR PURCHASE WILL BE CANCELED AND
YOU WILL BE CHARGED A $25 FEE PLUS ANY COSTS INCURRED.
- - ALL PURCHASES WILL BE CONFIRMED AND CREDITED TO YOUR ACCOUNT IN FULL AND
FRACTIONAL SHARES (ROUNDED TO THE NEAREST 1/1000TH OF A SHARE).
EARNING DIVIDENDS
IF THE TRANSFER AGENT RECEIVES YOUR WIRE PURCHASE BY 5 P.M. ET, YOUR ACCOUNT
WILL BEGIN EARNING DIVIDENDS ON THE NEXT BUSINESS DAY. EXCHANGES BEGIN EARNING
DIVIDENDS THE NEXT BUSINESS DAY AFTER THE EXCHANGE REQUEST IS RECEIVED BY MAIL
OR TELEPHONE. PURCHASES RECEIVED BY CHECK WILL BEGIN EARNING DIVIDENDS THE NEXT
BUSINESS DAY AFTER THEY ARE CREDITED TO THE ACCOUNT.
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION CALL 800-368-2745 OR VISIT
WWW.CALVERT.COM
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE PHONE
CALL, 24 HOURS A DAY.
<PAGE>
ACCOUNT SERVICES
BY SIGNING UP FOR SERVICES WHEN YOU OPEN YOUR ACCOUNT, YOU AVOID HAVING TO
OBTAIN A SIGNATURE GUARANTEE. IF YOU WISH TO ADD SERVICES AT A LATER DATE, A
SIGNATURE GUARANTEE TO VERIFY YOUR SIGNATURE MAY BE OBTAINED FROM ANY BANK,
TRUST COMPANY AND SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, BROKER-DEALER FIRM
OR MEMBER OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC CANNOT PROVIDE A
SIGNATURE GUARANTEE.
CALVERT MONEY CONTROLLER
CALVERT MONEY CONTROLLER ALLOWS YOU TO PURCHASE OR SELL SHARES BY ELECTRONIC
FUNDS TRANSFER WITHOUT THE TIME DELAY OF MAILING A CHECK OR THE ADDED EXPENSE OF
A WIRE. USE THIS SERVICE TO TRANSFER UP TO $300,000 ELECTRONICALLY. ALLOW ONE OR
TWO BUSINESS DAYS AFTER YOU PLACE YOUR REQUEST FOR THE TRANSFER TO TAKE PLACE.
MONEY TRANSFERRED TO PURCHASE NEW SHARES WILL BE SUBJECT TO A HOLD OF UP TO 10
BUSINESS DAYS BEFORE REDEMPTION REQUESTS WILL BE HONORED. TRANSACTION REQUESTS
MUST BE RECEIVED BY 4 P.M. ET. YOU MAY REQUEST THIS SERVICE ON YOUR INITIAL
ACCOUNT APPLICATION. CALVERT MONEY CONTROLLER TRANSACTIONS RETURNED FOR
INSUFFICIENT FUNDS WILL INCUR A $25 CHARGE.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES, WIRE FUNDS AND USE CALVERT MONEY
CONTROLLER BY TELEPHONE IF YOU HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS. YOU
RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT UNLESS YOU
ELECT OTHERWISE. FOR OUR MUTUAL PROTECTION, THE FUND, THE SHAREHOLDER SERVICING
AGENT AND THEIR AFFILIATES USE PRECAUTIONS SUCH AS VERIFYING SHAREHOLDER
IDENTITY AND RECORDING TELEPHONE CALLS TO CONFIRM INSTRUCTIONS GIVEN BY PHONE. A
CONFIRMATION STATEMENT IS SENT FOR MOST TRANSACTIONS; PLEASE REVIEW THIS
STATEMENT AND VERIFY THE ACCURACY OF YOUR TRANSACTION IMMEDIATELY.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS (CALL
YOUR BROKER OR CALVERT REPRESENTATIVE FOR MORE INFORMATION). WE MAKE IT EASY FOR
YOU TO PURCHASE SHARES IN OTHER CALVERT FUNDS IF YOUR INVESTMENT GOALS CHANGE.
THE EXCHANGE PRIVILEGE OFFERS FLEXIBILITY BY ALLOWING YOU TO EXCHANGE SHARES ON
WHICH YOU HAVE ALREADY PAID A SALES CHARGE FROM ONE MUTUAL FUND TO ANOTHER AT NO
ADDITIONAL CHARGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR EXISTING
CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY TELEPHONE IF
TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT IN CERTIFICATE
FORM.
<PAGE>
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING:
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. THEREFORE, YOU COULD REALIZE A TAXABLE GAIN OR LOSS.
YOU MAY EXCHANGE SHARES ACQUIRED BY REINVESTMENT OF DIVIDENDS OR DISTRIBUTIONS
INTO ANOTHER CALVERT FUND AT NO ADDITIONAL CHARGE.
SHARES MAY ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT
FUND.
NO CDSC IS IMPOSED ON EXCHANGES OF SHARES SUBJECT TO A CDSC AT THE TIME OF THE
EXCHANGE. THE APPLICABLE CDSC IS IMPOSED AT THE TIME THE SHARES ACQUIRED BY THE
EXCHANGE ARE REDEEMED.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY); THESE
EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S CUSTODIAN BANK IS
OPEN.
EACH FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS OF
PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE OFFERING MADE
BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, EACH FUND AND THE
DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING ACTIVITY.
THE FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
MULTIPLE ACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBER WILL RECEIVE ONE MAILING
PER HOUSEHOLD OF INFORMATION SUCH AS PROSPECTUSES AND SEMI-ANNUAL AND ANNUAL
REPORTS. YOU MAY REQUEST FURTHER GROUPING OF ACCOUNTS TO RECEIVE FEWER MAILINGS.
SEPARATE STATEMENTS WILL BE GENERATED FOR EACH SEPARATE ACCOUNT AND WILL BE
MAILED IN ONE ENVELOPE FOR EACH COMBINATION ABOVE.
SPECIAL SERVICES AND CHARGES
THE FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL TRANSCRIPT OF
AN ACCOUNT OR A STOP PAYMENT ON A DRAFT. YOU MAY BE REQUIRED TO PAY A FEE FOR
THESE SPECIAL SERVICES; FOR EXAMPLE, THE FEE FOR STOP PAYMENTS IS $25.
<PAGE>
IF YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY A
BROKER/DEALER OR FINANCIAL INSTITUTION, YOU SHOULD READ THE PROGRAM MATERIALS
TOGETHER WITH THIS PROSPECTUS. CERTAIN FEATURES MAY BE MODIFIED IN THESE
PROGRAMS. INVESTORS MAY BE CHARGED A FEE IF THEY EFFECT TRANSACTIONS IN FUND
SHARES THROUGH A BROKER OR AGENT.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN EACH OF YOUR ACCOUNTS OF AT LEAST $1,000 PER CLASS.
IF THE BALANCE IN YOUR ACCOUNT FALLS BELOW THE MINIMUM DURING A MONTH, A $3
MONTHLY FEE MAY BE CHARGED TO YOUR ACCOUNT.
DIVIDENDS AND TAXES
THE FUND ACCRUES DIVIDENDS DAILY AND PAYS THEM MONTHLY FROM ITS NET INVESTMENT
INCOME. NET INVESTMENT INCOME CONSISTS OF INTEREST INCOME, NET SHORT-TERM
CAPITAL GAINS, IF ANY, AND DIVIDENDS DECLARED AND PAID ON INVESTMENTS, LESS
EXPENSES. DISTRIBUTIONS OF NET SHORT-TERM CAPITAL GAINS (TREATED AS DIVIDENDS
FOR TAX PURPOSES) AND NET LONG-TERM CAPITAL GAINS, IF ANY, ARE NORMALLY PAID
ONCE A YEAR; HOWEVER, THE FUND DOES NOT ANTICIPATE MAKING ANY SUCH DISTRIBUTIONS
UNLESS AVAILABLE CAPITAL LOSS CARRYOVERS HAVE BEEN USED OR HAVE EXPIRED.
DIVIDEND AND DISTRIBUTION PAYMENTS WILL VARY BETWEEN CLASSES.
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV (WITHOUT SALES CHARGE), UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID
IN CASH (BY CHECK OR BY CALVERT MONEY CONTROLLER). DIVIDENDS AND DISTRIBUTIONS
FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN AN IDENTICALLY
REGISTERED ACCOUNT IN ANY OTHER CALVERT GROUP FUND AT NAV. IF REINVESTED IN THE
SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON THE REINVESTMENT DATE,
WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT DATE. YOU MUST NOTIFY THE
FUNDS IN WRITING TO CHANGE YOUR PAYMENT OPTIONS. IF YOU ELECT TO HAVE DIVIDENDS
AND/OR DISTRIBUTIONS PAID IN CASH, AND THE US POSTAL SERVICE RETURNS THE CHECK
AS UNDELIVERABLE, IT, AS WELL AS FUTURE DIVIDENDS AND DISTRIBUTIONS, WILL BE
REINVESTED IN ADDITIONAL SHARES. NO DIVIDENDS WILL ACCRUE ON AMOUNTS REPRESENTED
BY UNCASHED DISTRIBUTION OR REDEMPTION CHECKS.
FEDERAL TAXES
IN JANUARY, THE FUND WILL MAIL YOU FORM 1099-DIV INDICATING THE FEDERAL TAX
STATUS OF DIVIDENDS AND ANY CAPITAL GAIN DISTRIBUTIONS PAID TO YOU BY THE FUND
DURING THE PAST YEAR. DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE TO YOU REGARDLESS
OF WHETHER THEY ARE TAKEN IN CASH OR REINVESTED. DIVIDENDS, INCLUDING SHORT-TERM
CAPITAL GAINS, ARE TAXABLE AS ORDINARY INCOME. DISTRIBUTIONS FROM LONG-TERM
CAPITAL GAINS ARE TAXABLE AS LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU
HAVE OWNED FUND SHARES.
<PAGE>
OTHER TAX INFORMATION
IN ADDITION TO FEDERAL TAXES, YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR
INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL BE NOTIFIED TO THE
EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM U.S. GOVERNMENT
SECURITIES. SUCH DIVIDENDS MAY BE EXEMPT FROM CERTAIN STATE INCOME TAXES.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER ACCOUNT BY EXCHANGE.
IF THIS TIN INFORMATION IS NOT RECEIVED WITHIN 60 DAYS AFTER YOUR ACCOUNT IS
ESTABLISHED, YOUR ACCOUNT MAY BE CLOSED. CALVERT GROUP RESERVES THE RIGHT TO
REJECT ANY NEW ACCOUNT OR ANY PURCHASE ORDER FOR FAILURE TO SUPPLY A CERTIFIED
TIN.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY THE FUND IS OPEN FOR
BUSINESS, PROVIDED THE AMOUNT REQUESTED IS NOT ON HOLD. WHEN YOU PURCHASE BY
CHECK OR WITH CALVERT MONEY CONTROLLER (ELECTRONIC FUNDS TRANSFER), THE PURCHASE
WILL BE ON HOLD FOR UP TO 10 BUSINESS DAYS FROM THE DATE OF RECEIPT. DURING THE
HOLD PERIOD, REDEMPTION PROCEEDS WILL NOT BE SENT UNTIL THE TRANSFER AGENT IS
REASONABLY SATISFIED THAT THE PURCHASE PAYMENT HAS BEEN COLLECTED. DRAFTS
WRITTEN DURING THE HOLD PERIOD WILL BE RETURNED FOR UNCOLLECTED FUNDS.
YOUR SHARES WILL BE REDEEMED AT THE NAV NEXT CALCULATED AFTER YOUR REDEMPTION
REQUEST IS RECEIVED (LESS ANY APPLICABLE CDSC). THE PROCEEDS WILL NORMALLY BE
SENT TO YOU ON THE NEXT BUSINESS DAY, BUT IF MAKING IMMEDIATE PAYMENT COULD
ADVERSELY AFFECT THE FUND, IT MAY TAKE UP TO SEVEN (7) DAYS TO MAKE PAYMENT.
CALVERT MONEY CONTROLLER REDEMPTIONS GENERALLY WILL BE CREDITED TO YOUR BANK
ACCOUNT BY THE SECOND BUSINESS DAY AFTER YOUR PHONE CALL. WHEN THE NYSE IS
CLOSED (OR WHEN TRADING IS RESTRICTED) FOR ANY REASON OTHER THAN ITS CUSTOMARY
WEEKEND OR HOLIDAY CLOSINGS, OR UNDER ANY EMERGENCY CIRCUMSTANCES AS DETERMINED
BY THE SECURITIES AND EXCHANGE COMMISSION, REDEMPTIONS MAY BE SUSPENDED OR
PAYMENT DATES POSTPONED. PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS,
HOWEVER, SUCH AS COLUMBUS DAY AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE
FUND IS OPEN BUT REDEMPTIONS CANNOT BE MAILED OR WIRED BECAUSE THE POST OFFICES
AND BANKS ARE CLOSED.
THE FUND HAS THE RIGHT TO REDEEM SHARES IN ASSETS OTHER THAN CASH FOR REDEMPTION
AMOUNTS EXCEEDING, IN ANY 90-DAY PERIOD, $250,000 OR 1% OF THE NET ASSET VALUE
OF THE FUND, WHICHEVER IS LESS.
<PAGE>
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY MAILED
TO YOUR ADDRESS OF RECORD OR ELECTRONICALLY TRANSFERRED OR WIRED TO A BANK YOU
HAVE PREVIOUSLY AUTHORIZED. A CHARGE OF $5 MAY BE IMPOSED ON WIRE TRANSFERS OF
LESS THAN $1,000.
WRITTEN REQUESTS
CALVERT GROUP, P.O. BOX 219544, KANSAS CITY, MO 64121-9544
YOUR LETTER SHOULD INCLUDE YOUR ACCOUNT NUMBER AND FUND AND THE NUMBER OF SHARES
OR THE DOLLAR AMOUNT YOU ARE REDEEMING. PLEASE PROVIDE A DAYTIME TELEPHONE
NUMBER, IF POSSIBLE, FOR US TO CALL IF WE HAVE QUESTIONS. IF THE MONEY IS BEING
SENT TO A NEW BANK, PERSON, OR ADDRESS OTHER THAN THE ADDRESS OF RECORD, YOUR
LETTER MUST BE SIGNATURE GUARANTEED.
DRAFTWRITING
YOU MAY REDEEM SHARES IN YOUR ACCOUNT BY WRITING A DRAFT FOR AT LEAST $250. IF
YOU COMPLETE AND RETURN THE SIGNATURE CARD FOR DRAFTWRITING, THE FUND WILL MAIL
BANK DRAFTS TO YOU, PRINTED WITH YOUR NAME AND ADDRESS. DRAFTS MAY NOT BE
ORDERED UNTIL YOUR INITIAL PURCHASE HAS CLEARED. CALVERT WILL PROVIDE PRINTED
DRAFTS (CHECKS). YOU MAY NOT PRINT YOUR OWN. ANY CUSTOMER-PRINTED CHECKS WILL
NOT BE HONORED AND WILL BE RETURNED WITHOUT NOTICE. THE FUND WILL CHARGE A
SERVICE FEE OF $25 FOR DRAFTS RETURNED FOR INSUFFICIENT FUNDS AND FOR ANY STOP
PAYMENTS ON DRAFTS. AS A SERVICE TO SHAREHOLDERS, SHARES MAY BE AUTOMATICALLY
TRANSFERRED BETWEEN YOUR CALVERT MONEY MARKET ACCOUNTS TO COVER DRAFTS YOU HAVE
WRITTEN. THE SIGNATURE OF ONLY ONE AUTHORIZED SIGNER IS REQUIRED TO HONOR A
DRAFT.
SYSTEMATIC CHECK REDEMPTIONS
IF YOU MAINTAIN AN ACCOUNT WITH A BALANCE OF $10,000 OR MORE, YOU MAY HAVE UP TO
TWO (2) REDEMPTION CHECKS FOR A FIXED AMOUNT SENT TO YOU ON THE 15TH OF THE
MONTH, SIMPLY BY SENDING A LETTER WITH ALL INFORMATION, INCLUDING YOUR ACCOUNT
NUMBER, AND THE DOLLAR AMOUNT ($100 MINIMUM). IF YOU WOULD LIKE A REGULAR CHECK
MAILED TO ANOTHER PERSON OR PLACE, YOUR LETTER MUST BE SIGNATURE GUARANTEED.
UNLESS THEY OTHERWISE QUALIFY FOR A WAIVER, CLASS B OR CLASS C SHARES REDEEMED
BY SYSTEMATIC CHECK REDEMPTION WILL BE SUBJECT TO THE CONTINGENT DEFERRED SALES
CHARGE.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
<PAGE>
TRUSTS
YOUR LETTER OF INSTRUCTION SHOULD BE SIGNED BY THE TRUSTEE(S) (AS TRUSTEE(S)),
WITH A SIGNATURE GUARANTEE. (IF THE TRUSTEE'S NAME IS NOT REGISTERED ON YOUR
ACCOUNT, PLEASE PROVIDE A COPY OF THE TRUST DOCUMENT, CERTIFIED WITHIN THE LAST
60 DAYS.)
THROUGH YOUR DEALER
YOUR DEALER MUST RECEIVE YOUR REQUEST BEFORE THE CLOSE OF REGULAR TRADING ON THE
NYSE TO RECEIVE THAT DAY'S NAV. YOUR DEALER WILL BE RESPONSIBLE FOR FURNISHING
ALL NECESSARY DOCUMENTATION TO CALVERT GROUP AND MAY CHARGE YOU FOR SERVICES
PROVIDED.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST FIVE (5) FISCAL YEARS (OR, IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS
FOR A SINGLE SHARE BY CLASS. THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE
THAT AN INVESTOR WOULD HAVE EARNED (OR LOST) ON AN INVESTMENT IN THE FUND
(ASSUMING REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS), AND DOES NOT REFLECT
ANY APPLICABLE FRONT- OR BACK-END SALES CHARGE. THIS INFORMATION HAS BEEN
AUDITED BY PRICEWATERHOUSECOOPERS LLP, WHOSE REPORT, ALONG WITH THE FUND'S
FINANCIAL STATEMENTS, ARE INCLUDED IN THE FUND'S ANNUAL REPORT, AVAILABLE UPON
REQUEST.
<PAGE>
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31,
CLASS O SHARES 1999 1998
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .043 .048
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.043) (.048)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 4.38% 4.93%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.28% 4.82%
TOTAL EXPENSES .82% .81%
EXPENSES BEFORE OFFSETS .82% .81%
NET EXPENSES .81% .79%
NET ASSETS, ENDING (IN THOUSANDS) $229,754 $246,019
DECEMBER 31,
CLASS O SHARES 1997
NET ASSET VALUE, BEGINNING $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .049
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.049)
NET ASSET VALUE, ENDING $1.00
TOTAL RETURN 5.00%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.88%
TOTAL EXPENSES .82%
EXPENSES BEFORE OFFSETS .82%
NET EXPENSES .80%
NET ASSETS, ENDING (IN THOUSANDS) $232,025
YEARS ENDED
DECEMBER 31, DECEMBER 31,
CLASS O SHARES 1996 1995
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .047 .051
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.047) (.051)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 4.79% 5.22%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.69% 5.04%
TOTAL EXPENSES .86% .89%
EXPENSES BEFORE OFFSETS .86% .89%
NET EXPENSES .85% .88%
NET ASSETS, ENDING (IN THOUSANDS) $239,420 $241,150
<PAGE>
FINANCIAL HIGHLIGHTS
PERIODS ENDED
DECEMBER 31, DECEMBER 31,
CLASS B SHARES 1999 1998^
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .031 .027
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.031) (.027)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 3.11% 2.72%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.18% 3.28%(A)
TOTAL EXPENSES 8.09% 36.93%(A)
EXPENSES BEFORE OFFSETS 2.02% 2.02%(A)
NET EXPENSES 2.00% 2.00%(A)
NET ASSETS, ENDING (IN THOUSANDS) $420 $74
PERIODS ENDED
DECEMBER 31, DECEMBER 31,
CLASS C SHARES 1999 1998^^
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .031 .020
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.031) (.020)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 3.12% 2.06%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.22% 3.35%(A)
TOTAL EXPENSES 4.75% 8.46%(A)
EXPENSES BEFORE OFFSETS 2.02% 2.02%(A)
NET EXPENSES 2.00% 2.00%(A)
NET ASSETS, ENDING (IN THOUSANDS) $1,056 $339
(A) ANNUALIZED
^ FROM APRIL 1,1998 INCEPTION.
^^ FROM JUNE 1, 1998 INCEPTION.
<PAGE>
TO OPEN AN ACCOUNT:
800-368-2748
PERFORMANCE AND PRICES:
WWW.CALVERT.COM
CALVERT INFORMATION NETWORK
24 HOURS, 7 DAYS A WEEK
800-368-2745
SERVICE FOR EXISTING ACCOUNTS:
SHAREHOLDERS 800-368-2745
BROKERS 800-368-2746
TDD FOR HEARING-IMPAIRED:
800-541-1524
BRANCH OFFICE:
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUND, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
EACH FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR THE FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUND BY CONTACTING YOUR FINANCIAL PROFESSIONAL,
OR THE FUND AT:
CALVERT GROUP, LTD.
4550 MONTGOMERY AVE.
SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
YOU CAN REVIEW THE FUND'S REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT ONLY COPIES:
- - FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102, TELEPHONE: 202-942-8090.
- - FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-2633 (FIRST VARIABLE RATE FUND)
PROSPECTUS
APRIL 30, 2000
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
INSTITUTIONAL CLASS
ABOUT THE FUND
2 INVESTMENT OBJECTIVE
2 INVESTMENT STRATEGIES AND RISKS
2 PERFORMANCE
3 FEES AND EXPENSES
ABOUT THE ADVISOR
3 MANAGEMENT AND ADVISORY FEES
SHAREHOLDER GUIDE
4 HOW TO BUY SHARES
5 DIVIDENDS AND TAXES
5 HOW TO SELL SHARES
6 FINANCIAL HIGHLIGHTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVE
CALVERT FIRST GOVERNMENT MONEY MARKET FUND (THE "FUND") IS A U.S.
GOVERNMENT-ONLY MONEY MARKET FUND THAT SEEKS TO EARN THE HIGHEST POSSIBLE YIELD
CONSISTENT WITH SAFETY, LIQUIDITY, AND PRESERVATION OF CAPITAL. IN PURSUING ITS
OBJECTIVE, THE FUND INVESTS ONLY IN U.S. GOVERNMENT OBLIGATIONS, INCLUDING SUCH
OBLIGATIONS SUBJECT TO REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS
AND BANKS. THE FUND SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER
SHARE.
THE FUND IS OFFERED IN THIS PROSPECTUS TO INSTITUTIONAL INVESTORS.
PRINCIPAL INVESTMENT STRATEGIES
FUND ASSETS ARE INVESTED IN SHORT-TERM MONEY MARKET INSTRUMENTS, SUCH AS:
OBLIGATIONS ISSUED BY THE U.S. TREASURY, SUCH AS U.S. TREASURY BILLS, NOTES AND
BONDS; SECURITIES ISSUED BY U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES;
REPURCHASE AGREEMENTS; AND VARIABLE-RATE DEMAND NOTES. ALL INVESTMENTS MUST
COMPLY WITH THE SEC MONEY MARKET FUND REQUIREMENTS.
PRINCIPAL RISKS
- - INVESTMENTS IN OBLIGATIONS NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF
THE U.S. GOVERNMENT ARE SUBJECT TO THE ABILITY OF THE ISSUER TO MAKE PAYMENT AT
MATURITY.
- - THE YIELD OF THE FUND WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER
SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF
A HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT INVESTED
IN ANY ONE ISSUER TO TRY TO LESSEN EXPOSURE.
- - AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT
$1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE INSTITUTIONAL CLASS' ANNUAL RETURNS AND
ITS LONG-TERM PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE
RISKS OF INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE HAS VARIED
FROM YEAR TO YEAR. THE TABLES COMPARE RETURNS OVER TIME TO THE LIPPER
INSTITUTIONAL U.S. GOVERNMENT MONEY MARKET INDEX. THE INDEX IS A COMPOSITE INDEX
OF THE ANNUAL RETURN OF MUTUAL FUNDS THAT HAVE SIMILAR INVESTMENT GOALS.
INSTITUTIONAL CLASS SHARES HAVE AN ACTUAL INCEPTION DATE OF 9/15/98. HOWEVER,
CLASS O SHARES (NOT OFFERED IN THIS PROSPECTUS) HAVE AN INCEPTION DATE OF
12/7/76. IN THE CHART AND TABLE BELOW, PERFORMANCE RESULTS BEFORE 9/30/98 ARE
FOR CLASS O. BECAUSE CLASS O HAD HIGHER EXPENSES, ITS PERFORMANCE WAS LOWER THAN
THE INSTITUTIONAL CLASS WOULD HAVE REALIZED IN THE SAME PERIOD. THE FUND'S PAST
PERFORMANCE DOES NOT NECESSARILY INDICATE HOW IT WILL PERFORM IN THE FUTURE.
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '90 1.90%
WORST QUARTER (OF PERIODS SHOWN) Q2 '93 0.66%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
1 YEAR 5 YEAR 10 YEAR
FIRST GOVERNMENT
INSTITUTIONAL CLASS 4.84% 4.98% 4.78%
LIPPER INSTITUTIONAL U.S.
GOVERNMENT MONEY
MARKET INDEX 4.80% 5.23% 5.05%
FOR CURRENT YIELD INFORMATION ON THE INSTITUTIONAL CLASS, CALL 800-317-2274, OR
VISIT CALVERT GROUP'S WEBSITE AT WWW.CALVERT.COM.
<PAGE>
FEES AND EXPENSES OF THE CLASS
THESE TABLES DESCRIBE THE FEES AND EXPENSES YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE CLASS.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
INSTITUTIONAL
CLASS
MAXIMUM SALES LOAD ON PURCHASES NONE
MAXIMUM DEFERRED SALES LOAD NONE
MAXIMUM SALES LOAD ON REINVESTED DIVIDENDS NONE
REDEMPTION FEES NONE
EXCHANGE FEE NONE
ANNUAL FUND OPERATING EXPENSES1
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
INSTITUTIONAL
CLASS
MANAGEMENT FEES .30%
DISTRIBUTION AND SERVICE (12B-1) FEES NONE
OTHER EXPENSES .20%
TOTAL ANNUAL FUND OPERATING EXPENSES .50%
1THE INSTITUTIONAL CLASS EXPENSES ARE BASED ON THE MOST RECENT FISCAL YEAR.
MANAGEMENT FEES INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT
ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR.
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CLASS
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
- - YOU INVEST $1,000,000 IN THE CLASS FOR THE TIME PERIODS
INDICATED;
- - YOU REDEEM ALL SHARES AT THE END OF THE PERIODS;
- - YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- - THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
CALVERT FIRST
GOVERNMENT
INSTITUTIONAL CLASS $5,113 $16,038 $27,969 $62,823
ABOUT CALVERT GROUP
CALVERT ASSET MANAGEMENT COMPANY, INC. ("CAMCO"), 4550 MONTGOMERY AVENUE, SUITE
1000N, BETHESDA, MD 20814, IS THE FUND'S INVESTMENT ADVISOR AND PROVIDES
DAY-TO-DAY INVESTMENT MANAGEMENT SERVICES TO THE FUND. IT HAS BEEN MANAGING
MUTUAL FUNDS SINCE 1976. CAMCO IS THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND
PORTFOLIOS, INCLUDING THE FIRST AND LARGEST FAMILY OF SOCIALLY SCREENED FUNDS.
AS OF DECEMBER 31, 1999, CAMCO HAD OVER $6.5 BILLION IN ASSETS UNDER MANAGEMENT.
ADVISORY FEES
THE AGGREGATE ANNUAL ADVISORY FEE PAID TO CAMCO BY THE FUND FOR THE MOST RECENT
FISCAL YEAR AS A PERCENTAGE OF THE FUND'S AVERAGE DAILY NET ASSETS WAS .25%.
<PAGE>
SHAREHOLDER GUIDE
HOW TO BUY SHARES
OPENING AN ACCOUNT
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. FOR MORE INFORMATION,
PLEASE CONTACT THE CALVERT INSTITUTIONAL MARKETING GROUP AT 800-317-2274.
THE MINIMUM INITIAL INVESTMENT AND MINIMUM BALANCE REQUIRED IS $1,000,000. THE
MINIMUM FOR SUBSEQUENT INVESTMENTS IS $25,000. INVESTMENTS MAY BE MADE BY WIRE
OR BY EXCHANGE FROM ANOTHER CALVERT GROUP ACCOUNT:
WIRE INVESTMENTS TO: STATE STREET BANK AND TRUST COMPANY
BOSTON MA
ABA# 011000028
FBO: CFGMMF INSTITUTIONAL FUND 701
WIRE ACCOUNT #9903-765-7
YOUR NAME AND ACCOUNT NUMBER
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
DETERMINED ACCORDING TO THE "AMORTIZED COST" METHOD. IT IS COMPUTED PER CLASS BY
ADDING THE VALUE OF A FUND'S HOLDINGS PLUS OTHER ASSETS, SUBTRACTING
LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES OUTSTANDING.
THE NAV IS CALCULATED AS OF THE CLOSE OF EACH BUSINESS DAY, WHICH COINCIDES WITH
THE CLOSING OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE ("NYSE")
(NORMALLY 4:00 P.M. ET). EACH FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS
OPEN. PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, SUCH AS COLUMBUS DAY AND
VETERANS DAY, WHEN THE NYSE IS OPEN AND EACH FUND IS OPEN, BUT NO PURCHASES MAY
BE RECEIVED BECAUSE THE BANKS ARE CLOSED.
WHEN YOUR ACCOUNT WILL BE CREDITED
BEFORE YOU BUY SHARES, PLEASE READ THE FOLLOWING INFORMATION TO MAKE SURE YOUR
INVESTMENT IS CREDITED PROPERLY AND IN A TIMELY MANNER.
YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED. A TELEPHONE ORDER PLACED TO CALVERT INSTITUTIONAL MARKETING GROUP BY
1:00 P.M. EASTERN TIME WILL RECEIVE THE DIVIDEND ON CLASS SHARES DECLARED THAT
DAY IF FEDERAL FUNDS ARE RECEIVED BY THE CUSTODIAN BY 5:00 P.M. EASTERN TIME.
TELEPHONE ORDERS PLACED AFTER 1:00 P.M. WILL BEGIN EARNING DIVIDENDS ON CLASS
SHARES THE NEXT BUSINESS DAY. IF NO TELEPHONE ORDER IS PLACED, INVESTMENTS BEGIN
EARNING DIVIDENDS THE NEXT BUSINESS DAY. EXCHANGES BEGIN EARNING DIVIDENDS THE
NEXT BUSINESS DAY AFTER THE EXCHANGE REQUEST IS RECEIVED BY MAIL OR TELEPHONE.
ALL OF YOUR PURCHASES MUST BE MADE BY WIRE. NO CASH OR CHECKS WILL BE ACCEPTED.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF
TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER.
EXCHANGES
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. IF YOUR INVESTMENT GOALS CHANGE, THE CALVERT GROUP FAMILY OF
FUNDS HAS A VARIETY OF INVESTMENT ALTERNATIVES THAT INCLUDES COMMON STOCK FUNDS,
TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS. THE EXCHANGE
PRIVILEGE IS A CONVENIENT WAY TO BUY SHARES IN OTHER CALVERT GROUP FUNDS IN
ORDER TO RESPOND TO CHANGES IN YOUR GOALS OR IN MARKET CONDITIONS. BEFORE YOU
MAKE AN EXCHANGE FROM A FUND, PLEASE NOTE THE FOLLOWING:
CALL THE CALVERT INSTITUTIONAL MARKETING GROUP FOR INFORMATION AND A PROSPECTUS
FOR ANY OF CALVERT'S OTHER FUNDS REGISTERED IN YOUR STATE. READ THE PROSPECTUS
OF THE FUND INTO WHICH YOU WANT TO EXCHANGE FOR RELEVANT INFORMATION. SHARES MAY
ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT FUND.
COMPLETE AND SIGN AN APPLICATION FOR AN ACCOUNT IN THAT FUND, TAKING CARE TO
REGISTER YOUR NEW ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS
YOUR EXISTING CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY
TELEPHONE IF TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT
IN CERTIFICATE FORM.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY); THESE
EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S CUSTODIAN BANK IS
OPEN.
EACH FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS OF
PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE OFFERING MADE
BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, EACH FUND AND THE
DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING ACTIVITY.
THE FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION CALL
800-368-2745 OR VISIT WWW.CALVERT.COM
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE
TELEPHONE CALL, 24 HOURS A DAY.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, EXCHANGE SHARES, OR WIRE FUNDS BY TELEPHONE IF YOU
HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS. YOU RECEIVE TELEPHONE PRIVILEGES
AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT UNLESS YOU ELECT OTHERWISE. FOR OUR
MUTUAL PROTECTION, THE FUND, THE SHAREHOLDER SERVICING AGENT AND THEIR
AFFILIATES USE PRECAUTIONS SUCH AS VERIFYING SHAREHOLDER IDENTITY AND RECORDING
TELEPHONE CALLS TO CONFIRM INSTRUCTIONS GIVEN BY PHONE. A CONFIR-
<PAGE>
MATION STATEMENT IS SENT FOR MOST TRANSACTIONS; PLEASE REVIEW THIS STATEMENT AND
VERIFY THE ACCURACY OF YOUR TRANSACTION IMMEDIATELY.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
JOIN US IN OUR EFFORTS TO CONSERVE PAPER AND SAVE ON POSTAGE. IF YOU HAVE
MULTIPLE ACCOUNTS WITH CALVERT, YOU MAY RECEIVE COMBINED MAILINGS OF SHAREHOLDER
INFORMATION, SUCH AS ACCOUNT STATEMENTS, CONFIRMATIONS OF TRANSACTIONS,
PROSPECTUSES AND SEMI-ANNUAL AND ANNUAL REPORTS.
SPECIAL SERVICES AND CHARGES
THE FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL TRANSCRIPT OF
AN ACCOUNT, OR A STOP PAYMENT ON A DRAFT. YOU MAY BE REQUIRED TO PAY A FEE FOR
THESE SPECIAL SERVICES.
DIVIDENDS AND TAXES
EACH YEAR, THE FUND DISTRIBUTES SUBSTANTIALLY ALL OF ITS NET INVESTMENT INCOME
TO SHAREHOLDERS. DIVIDENDS FROM THE FUND'S NET INVESTMENT INCOME ARE DECLARED
DAILY AND PAID MONTHLY. NET INVESTMENT INCOME CONSISTS OF INTEREST INCOME, NET
SHORT-TERM CAPITAL GAINS, IF ANY, AND DIVIDENDS DECLARED AND PAID ON
INVESTMENTS, LESS EXPENSES.
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV (WITHOUT SALES CHARGE), UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID
IN CASH BY WIRE TO A PREDESIGNATED BANK ACCOUNT. DIVIDENDS AND DISTRIBUTIONS
FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN AN IDENTICALLY
REGISTERED ACCOUNT IN ANY OTHER CALVERT GROUP FUND AT NAV. IF REINVESTED IN THE
SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON THE REINVESTMENT DATE,
WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT DATE. YOU MUST NOTIFY THE
FUND IN WRITING TO CHANGE YOUR PAYMENT OPTIONS.
FEDERAL TAXES
IN JANUARY, THE FUND WILL MAIL YOU FORM 1099-DIV INDICATING THE FEDERAL TAX
STATUS OF DIVIDENDS AND ANY CAPITAL GAIN DISTRIBUTIONS PAID TO YOU BY THE FUND
DURING THE PAST YEAR. DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE TO YOU REGARDLESS
OF WHETHER THEY ARE TAKEN IN CASH OR REINVESTED. DIVIDENDS, INCLUDING SHORT-TERM
CAPITAL GAINS, ARE TAXABLE AS ORDINARY INCOME. DISTRIBUTIONS FROM LONG-TERM
CAPITAL GAINS ARE TAXABLE AS LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU
HAVE OWNED FUND SHARES. A PORTION OF THE FUND'S DIVIDENDS MAY QUALIFY FOR THE
DIVIDENDS RECEIVED DEDUCTION FOR CORPORATIONS.
OTHER TAX INFORMATION
IN ADDITION TO FEDERAL TAXES, YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR
INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL BE NOTIFIED TO THE
EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM U.S. GOVERNMENT
SECURITIES. SUCH DIVIDENDS MAY BE EXEMPT FROM CERTAIN STATE INCOME TAXES.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW MAY REQUIRE
THE FUND TO WITHHOLD 31% OF YOUR DIVIDENDS. IN ADDITION, YOU MAY BE SUBJECT TO A
FINE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER ACCOUNT BY EXCHANGE. IF
THIS TIN INFORMATION IS NOT RECEIVED WITHIN 60 DAYS AFTER YOUR ACCOUNT IS
ESTABLISHED, YOUR ACCOUNT MAY BE REDEEMED AT THE CURRENT NAV ON THE DATE OF
REDEMPTION. THE FUND RESERVES THE RIGHT TO REJECT ANY NEW ACCOUNT OR ANY
PURCHASE ORDER FOR FAILURE TO SUPPLY A CERTIFIED TIN.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY THE FUND IS OPEN FOR
BUSINESS. YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR
REDEMPTION REQUEST IS RECEIVED. YOU WILL RECEIVE DIVIDENDS THROUGH THE DATE THE
REQUEST IS RECEIVED AND PROCESSED.
A TELEPHONE ORDER FOR A REDEMPTION MUST BE RECEIVED BY THE CALVERT INSTITUTIONAL
MARKETING GROUP BY NOON EASTERN TIME IN ORDER FOR THE PROCEEDS TO BE SENT TO YOU
ON THE SAME BUSINESS DAY. WHEN THE NYSE IS CLOSED (OR WHEN TRADING IS
RESTRICTED) FOR ANY REASON OTHER THAN ITS CUSTOMARY WEEKEND OR HOLIDAY CLOSINGS,
OR UNDER ANY EMERGENCY CIRCUMSTANCES AS DETERMINED BY THE SECURITIES AND
EXCHANGE COMMISSION, REDEMPTIONS MAY BE SUSPENDED OR PAYMENT DATES POSTPONED.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT REDEMPTIONS
CANNOT BE MAILED OR WIRED BECAUSE THE POST OFFICES AND BANKS ARE CLOSED.
IF MAKING IMMEDIATE PAYMENT COULD ADVERSELY AFFECT THE FUND, IT MAY TAKE UP TO
SEVEN (7) DAYS TO MAKE PAYMENT. THE FUND HAS THE RIGHT TO REDEEM SHARES IN
ASSETS OTHER THAN CASH FOR REDEMPTION AMOUNTS EXCEEDING, IN ANY 90-DAY PERIOD,
$250,000 OR 1% OF THE NET ASSET VALUE OF THE FUND, WHICHEVER IS LESS.
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
INSTITUTIONAL MARKETING GROUP 800.317.2274
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY
ELECTRONICALLY TRANSFERRED OR WIRED TO A BANK YOU HAVE PREVIOUSLY AUTHORIZED. TO
BETTER ENABLE CAMCO TO KEEP THE FUND FULLY INVESTED, CALVERT REQUESTS THAT YOU
NOTIFY THE INSTITUTIONAL MARKETING GROUP AT LEAST 24 HOURS IN ADVANCE FOR ANY
REDEMPTION OVER $10 MILLION PER DAY. A CHARGE OF $5 MAY BE IMPOSED ON WIRE
TRANSFERS OF LESS THAN $50,000.
<PAGE>
WRITTEN REQUESTS
CALVERT GROUP, P.O. BOX 219544, KANSAS CITY, MO 64121-9544
YOUR LETTER SHOULD INCLUDE YOUR ACCOUNT NUMBER AND FUND AND THE NUMBER OF SHARES
OR THE DOLLAR AMOUNT YOU ARE REDEEMING. PLEASE PROVIDE A DAYTIME TELEPHONE
NUMBER, IF POSSIBLE, FOR US TO CALL IF WE HAVE QUESTIONS. IF THE MONEY IS BEING
SENT TO A NEW BANK, PERSON, OR ADDRESS OTHER THAN THE ADDRESS OF RECORD, YOUR
LETTER MUST BE SIGNATURE GUARANTEED.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST FIVE (5) FISCAL YEARS (OR IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). THE FUND'S FISCAL YEAR END IS DECEMBER 31.
CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE SHARE. THE TOTAL
RETURNS IN THE TABLE REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE EARNED (OR
LOST) ON AN INVESTMENT IN THE FUND, ASSUMING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. THIS INFORMATION HAS BEEN AUDITED BY PRICEWATERHOUSECOOPERS LLP,
WHOSE REPORT AND THE FUND'S FINANCIAL STATEMENTS ARE INCLUDED IN THE FUND'S
ANNUAL REPORT, AVAILABLE UPON REQUEST.
PERIODS ENDED
DECEMBER 31, DECEMBER 31,
INSTITUTIONAL CLASS SHARES 1999 1998^
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .047 .015
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.047) (.015)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 4.84% 1.49%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.72% 4.95%(A)
TOTAL EXPENSES .50% .43%(A)
EXPENSES BEFORE OFFSETS .38% .34%(A)
NET EXPENSES .37% .32%(A)
NET ASSETS, ENDING (IN THOUSANDS) $19,679 $20,128
(A) ANNUALIZED
^ FROM SEPTEMBER 16, 1998 INCEPTION.
<PAGE>
SERVICE FOR EXISTING ACCOUNT:
800-368-2746
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
BRANCH OFFICE AND
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUND, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
THE FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR THE FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUND BY CONTACTING YOUR BROKER, OR THE FUND AT:
CALVERT GROUP, LTD.
4550 MONTGOMERY AVE, SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
YOU CAN REVIEW THE FUND'S REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT ONLY COPIES:
- - FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE ROOM
OF THE COMMISSION, WASHINGTON, D.C. 20549-6009,
TELEPHONE: 1-800-SEC-0330.
- - FREE FROM THE COMMISSION'S INTERNET WEBSITE AT
HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-2633 (FIRST VARIABLE RATE FUND)
PROSPECTUS
THE ADVISORS GROUP
- -RESERVE FUND
- -TAX-FREE RESERVES
APRIL 30, 2000
PROSPECTUS
APRIL 30, 2000
THE ADVISORS GROUP RESERVE FUND
A CLASS OF CALVERT FIRST GOVERNMENT MONEY MARKET FUND
AND
THE ADVISORS GROUP TAX-FREE RESERVES
A CLASS OF CALVERT TAX-FREE RESERVES MONEY MARKET PORTFOLIO
ABOUT THE FUNDS
1 INVESTMENT OBJECTIVES
1 PRINCIPAL INVESTMENT STRATEGIES AND RISKS
3 PERFORMANCE
6 FEES AND EXPENSES
ABOUT THE ADVISOR
7 MANAGEMENT AND ADVISORY FEES
7 DISTRIBUTION PLAN EXPENSES AND SERVICE FEES
SHAREHOLDER GUIDE
8 HOW TO BUY SHARES
9 DIVIDENDS, CAPITAL GAINS AND TAXES
10 HOW TO SELL SHARES
10 FINANCIAL HIGHLIGHTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVES
THE ADVISORS GROUP RESERVE FUND
THE ADVISORS GROUP RESERVE FUND (THE "RESERVE FUND") IS A U.S. GOVERNMENT-ONLY
MONEY MARKET FUND THAT SEEKS TO EARN THE HIGHEST POSSIBLE YIELD CONSISTENT WITH
SAFETY, LIQUIDITY, AND PRESERVATION OF CAPITAL. IN PURSUING ITS OBJECTIVE, THE
RESERVE FUND INVESTS ONLY IN U.S. GOVERNMENT OBLIGATIONS, INCLUDING SUCH
OBLIGATIONS SUBJECT TO REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS
AND BANKS. THE RESERVE FUND SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF
$1.00 PER SHARE.
THE RESERVE FUND IS OFFERED IN THIS PROSPECTUS TO INVESTORS WITH BROKERAGE
ACCOUNTS AT THE ADVISORS GROUP, INC.
THE ADVISORS GROUP TAX-FREE RESERVES
THE ADVISORS GROUP TAX-FREE RESERVES ("TAX-FREE RESERVES") SEEKS TO EARN THE
HIGHEST LEVEL OF INTEREST INCOME EXEMPT FROM FEDERAL INCOME TAXES AS IS
CONSISTENT WITH PRUDENT INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE
QUALITY AND MATURITY CHARACTERISTICS OF TAX-FREE RESERVES. TAX-FREE RESERVES
SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER SHARE.
TAX-FREE RESERVES IS OFFERED IN THIS PROSPECTUS TO INVESTORS WITH BROKERAGE
ACCOUNTS AT THE ADVISORS GROUP, INC.
PRINCIPAL INVESTMENT STRATEGIES - RESERVE FUND
FUND ASSETS ARE INVESTED IN SHORT-TERM MONEY MARKET INSTRUMENTS, SUCH AS:
OBLIGATIONS ISSUED BY THE U.S. TREASURY, SUCH AS U.S. TREASURY BILLS, NOTES AND
BONDS, SECURITIES ISSUED BY U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES;
REPURCHASE AGREEMENTS; AND VARIABLE-RATE DEMAND NOTES. ALL INVESTMENTS MUST
COMPLY WITH THE SEC MONEY MARKET FUND REQUIREMENTS
PRINCIPAL RISKS
- - INVESTMENTS IN OBLIGATIONS NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF
THE U.S. GOVERNMENT ARE SUBJECT TO THE ABILITY OF THE ISSUER TO MAKE
PAYMENT AT MATURITY.
- - THE YIELD OF THE FUND WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER
SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF
A HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT
INVESTED IN ANY ONE ISSUER TO TRY TO LESSEN EXPOSURE.
<PAGE>
- - AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT
$1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS - TAX-FREE RESERVES
TAX-FREE RESERVES INVESTS IN FIXED AND FLOATING RATE MUNICIPAL BONDS AND NOTES,
VARIABLE RATE DEMAND NOTES, TAX-EXEMPT COMMERCIAL PAPER, AND OTHER HIGH QUALITY,
SHORT-TERM MUNICIPAL OBLIGATIONS. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG
CREDIT QUALITY THAT ARE ATTRACTIVELY PRICED. THIS MAY INCLUDE INVESTMENTS WITH
UNUSUAL FEATURES OR PRIVATELY PLACED ISSUES THAT ARE NOT WIDELY FOLLOWED IN THE
FIXED INCOME MARKETPLACE. ALL INVESTMENTS MUST COMPLY WITH THE SEC MONEY MARKET
FUND REQUIREMENTS.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED BY A CREDIT FACILITY (TO
IMPROVE THE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE MATURITY)
PROVIDED BY BANKS; THUS, THE FUND HAS AN EXPOSURE TO THE BANKING INDUSTRY.
THE FUND MAY PURCHASE SECURITIES THAT HAVE NOT BEEN RATED BY A RATING AGENCY, SO
LONG AS THE ADVISOR DETERMINES THEY ARE OF COMPARABLE CREDIT QUALITY TO RATED
SECURITIES PERMISSIBLE FOR THE FUND.
UNRATED AND PRIVATELY PLACED SECURITIES MAY BE LESS LIQUID THAN THOSE THAT ARE
RATED OR HAVE AN ACTIVE TRADING MARKET.
TAX-FREE RESERVE'S YIELD WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER
SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF A
HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT IT INVESTS
IN ANY ONE ISSUER TO TRY TO LESSEN ITS EXPOSURE.
IN ADDITION TO INTEREST RATE RISK AND CREDIT RISK, DIFFERENT TYPES OF MUNICIPAL
BONDS MAY BE AFFECTED DIFFERENTLY, BASED ON MANY FACTORS, INCLUDING ECONOMIC AND
REGULATORY DEVELOPMENTS, CHANGES OR PROPOSED CHANGES IN THE FEDERAL AND STATE
TAX STRUCTURE, DEREGULATION, AND COURT RULINGS, AMONG OTHER FACTORS.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
<PAGE>
PERFORMANCE
THE BAR CHARTS AND TABLES BELOW SHOW THE ANNUAL RETURNS AND LONG-TERM
PERFORMANCE BY CALENDAR YEAR FOR CLASS O OF EACH OF THE FUNDS, SHOWN AS CALVERT
FIRST GOVERNMENT FOR THE RESERVE FUND AND CTFR MONEY MARKET FOR THE TAX-FREE
RESERVES FUND. THE CHARTS SHOWS HOW THE PERFORMANCE HAS VARIED FROM YEAR TO
YEAR. THE TABLES COMPARE CLASS O RETURNS OVER TIME TO THE LIPPER U.S. GOVERNMENT
MONEY MARKET INDEX FOR THE RESERVE FUND, AND THE LIPPER TAX-EXEMPT MONEY MARKET
INDEX FOR TAX-FREE RESERVES. EACH INDEX IS A COMPOSITE INDEX OF THE ANNUAL
RETURN OF MUTUAL FUNDS THAT HAVE SIMILAR INVESTMENT GOALS. EACH FUND'S PAST
PERFORMANCE DOES NOT NECESSARILY INDICATE HOW IT WILL PERFORM IN THE FUTURE.
PLEASE NOTE THAT PERFORMANCE FOR THE RESERVE FUND AND TAX-FREE RESERVES IS NOT
SHOWN SINCE IT DID NOT HAVE A FULL CALENDAR YEAR OF PERFORMANCE DURING THE TIME
PERIODS SHOWN.
<PAGE>
CALVERT FIRST GOVERNMENT CLASS O
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '90 1.90%
WORST QUARTER (OF PERIODS SHOWN) Q2 '93 0.66%
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 1999)
1 YEAR 5 YEAR 10 YEAR
CALVERT FIRST GOVERNMENT CLASS O 4.38% 4.86% 4.72%
LIPPER U.S. GOVERNMENT MONEY
MARKET INDEX 4.58% 4.98% 4.79%
<PAGE>
CTFR MONEY MARKET CLASS O
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '90 1.53%
WORST QUARTER (OF PERIODS SHOWN) Q1 '93 0.56%
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 1999)
1 YEAR 5 YEAR 10 YEAR
CTFR MONEY MARKET CLASS O 3.04% 3.40% 3.63%
LIPPER TAX-EXEMPT MONEY
MARKET INDEX 2.81% 3.13% 3.27%
FOR CURRENT YIELD INFORMATION ON THE RESERVE FUND AND TAX-FREE RESERVES,
CALL 1-800-777-1500.
<PAGE>
FEES AND EXPENSES
THESE TABLES DESCRIBE THE FEES AND EXPENSES YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF EACH FUND.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
RESERVE TAX-FREE
FUND RESERVES
MAXIMUM SALES LOAD ON PURCHASES NONE NONE
MAXIMUM DEFERRED SALES LOAD NONE NONE
MAXIMUM SALES LOAD ON REINVESTED
DIVIDENDS NONE NONE
REDEMPTION FEES NONE NONE
EXCHANGE FEE NONE NONE
ANNUAL FUND OPERATING EXPENSES1
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
RESERVE TAX-FREE
FUND RESERVES
MANAGEMENT FEES . 50% .46%
DISTRIBUTION AND SERVICE (12B-1) FEES .25% .25%
OTHER EXPENSES .20% .14%
TOTAL ANNUAL FUND OPERATING EXPENSES .95% .85%
1 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR. MANAGEMENT FEES
INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT ADMINISTRATIVE
SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR.
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
- - YOU INVEST $10,000 IN A FUND FOR THE TIME PERIODS INDICATED;
- - YOU REDEEM ALL SHARES AT THE END OF THE PERIODS;
- - YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- - THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
RESERVE FUND $97 $303 $525 $1,166
TAX-FREE RESERVES $87 $271 $471 $1,049
<PAGE>
MANAGEMENT AND ADVISORY FEES
CALVERT ASSET MANAGEMENT COMPANY, INC. (4550 MONTGOMERY AVENUE, SUITE 1000N,
BETHESDA, MD 20814) ("CAMCO") IS THE FUND'S INVESTMENT ADVISOR. CAMCO HAS BEEN
MANAGING MUTUAL FUNDS SINCE 1976, AND IS A SUBSIDIARY OF CALVERT GROUP, LTD.
CAMCO CURRENTLY ADVISES OVER 25 MUTUAL FUND PORTFOLIOS, INCLUDING THE FIRST AND
LARGEST FAMILY OF SOCIALLY SCREENED FUNDS. AS OF DECEMBER 31, 1999, IT HAD OVER
$6.5 BILLION IN ASSETS UNDER MANAGEMENT.
CAMCO PROVIDES THE FUNDS WITH INVESTMENT SUPERVISION AND MANAGEMENT;
ADMINISTRATIVE SERVICES AND OFFICE SPACE; AND FURNISHES EXECUTIVE AND OTHER
PERSONNEL TO THE FUNDS. CAMCO ALSO PAYS THE SALARIES AND FEES OF ALL TRUSTEES
WHO ARE AFFILIATED PERSONS OF THE ADVISOR. CAMCO MAY PAY CERTAIN ADVERTISING AND
PROMOTIONAL EXPENSES OF THE FUNDS. PURSUANT TO THE INVESTMENT ADVISORY
AGREEMENT, CAMCO IS ENTITLED TO AN ANNUAL ADVISORY FEE OF 0.25% OF THE AVERAGE
DAILY NET ASSETS OF THE RESERVE FUND. THE TAX-FREE RESERVES INVESTMENT ADVISORY
AGREEMENT ENTITLES CAMCO TO RECEIVE AN ANNUAL ADVISORY FEE OF 0.25% OF THE FIRST
$500 MILLION OF AVERAGE DAILY NET ASSETS, 0.20% OF THE NEXT $500 MILLION, AND
0.15% ON ASSETS OF $1 BILLION OR MORE. CAMCO MAY VOLUNTARILY WAIVE A PORTION OF
ITS ADVISORY FEE.
DISTRIBUTION AND SERVICE FEES
THE FUNDS HAVE EACH ADOPTED A PLAN UNDER RULE 12B-1 OF THE INVESTMENT COMPANY
ACT OF 1940 THAT ALLOWS THE FUND TO PAY DISTRIBUTION FEES FOR THE SALE AND
DISTRIBUTION OF ITS SHARES. THE DISTRIBUTION PLAN ALSO PAYS SERVICE FEES TO
PERSONS (SUCH AS YOUR FINANCIAL PROFESSIONAL) FOR SERVICES PROVIDED TO
SHAREHOLDERS. BECAUSE THESE FEES ARE PAID OUT OF A FUND'S ASSETS ON AN ONGOING
BASIS, OVER TIME, THESE FEES WILL INCREASE THE COST OF YOUR INVESTMENT AND MAY
COST YOU MORE THAN PAYING OTHER TYPES OF SALES CHARGES.
THE TABLE BELOW SHOWS THE MAXIMUM ANNUAL PERCENTAGE PAYABLE UNDER THE
DISTRIBUTION PLAN, AND THE AMOUNT ACTUALLY PAID BY EACH FUND FOR THE MOST RECENT
FISCAL YEAR. THE FEES ARE BASED ON AVERAGE DAILY NET ASSETS.
MAXIMUM PAYABLE UNDER PLAN/AMOUNT ACTUALLY PAID
RESERVE FUND 0.25%/0.25%
TAX-FREE RESERVES 0.25%/0.25%
CALVERT DISTRIBUTORS, INC. ("CDI"), THE FUND'S PRINCIPAL UNDERWRITER, PAYS
DEALERS AN ONGOING SERVICE FEE OF UP TO 0.25% WHILE YOU OWN SHARES OF A FUND
(EXPRESSED AS AN ANNUAL PERCENTAGE RATE OF AVERAGE DAILY NET ASSETS HELD IN
CALVERT ACCOUNTS BY THAT DEALER).
<PAGE>
SHAREHOLDER GUIDE
HOW TO BUY SHARES
PLEASE CONTACT YOUR LOCAL OFFICE OF THE ADVISORS GROUP, INC. TO OPEN YOUR MONEY
MARKET ACCOUNT. ALL TRANSACTIONS WILL BE PROCESSED ELECTRONICALLY THROUGH THE
NATIONAL FINANCIAL PROPRIETARY MONEY MARKET SWEEP PROGRAM ON BEHALF OF THE
ADVISORS GROUP, INC.
THERE IS NO MINIMUM FOR INITIAL INVESTMENTS AND NO MINIMUM FOR SUBSEQUENT
INVESTMENTS, PROVIDED YOU HAVE A BROKERAGE ACCOUNT WITH THE ADVISORS GROUP, INC.
BECAUSE YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY THE
ADVISORS GROUP, INC., A REGISTERED BROKER/DEALER AND INVESTMENT ADVISOR, YOU
SHOULD READ PROGRAM MATERIALS TOGETHER WITH THIS PROSPECTUS. CERTAIN ACCOUNT
FEATURES HAVE BEEN MODIFIED FOR THIS PROGRAM, AND THE ADVISORS GROUP, INC. MAY
IMPOSE CHARGES FOR THEIR SERVICES. THE ADVISORS GROUP, INC. IS AN AFFILIATE OF
THE FUNDS' INVESTMENT ADVISOR, CAMCO, AND THE FUNDS' PRINCIPAL UNDERWRITER, CDI.
CAMCO, CDI OR THEIR AFFILIATES MAY PAY, FROM THEIR OWN RESOURCES, THE ADVISORS
GROUP, INC. FOR THE SALE AND DISTRIBUTION OF THE FUNDS' SHARES OR FOR SERVICES
TO THE FUND. THESE AMOUNTS MAY BE SIGNIFICANT. PAYMENTS MAY INCLUDE COMPENSATION
BEYOND THE REGULARLY SCHEDULED RATES.
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
DETERMINED ACCORDING TO THE "AMORTIZED COST" METHOD. IT IS COMPUTED PER CLASS BY
ADDING THE VALUE OF A FUND'S HOLDINGS PLUS OTHER ASSETS, SUBTRACTING
LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES OUTSTANDING.
THE NAV IS CALCULATED AS OF THE CLOSE OF EACH BUSINESS DAY, WHICH COINCIDES WITH
THE CLOSING OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE ("NYSE")
(NORMALLY 4:00 P.M. ET). EACH FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS
OPEN. PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, SUCH AS COLUMBUS DAY AND
VETERANS DAY, WHEN THE NYSE IS OPEN AND EACH FUND IS OPEN, BUT PURCHASES CANNOT
BE RECEIVED BECAUSE THE BANKS ARE CLOSED.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED. ELECTRONIC SWEEPS INTO AN ACCOUNT BEGIN EARNING DIVIDENDS THE NEXT
BUSINESS DAY.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF
TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER.
<PAGE>
DIVIDENDS, CAPITAL GAINS AND TAXES
EACH FUND ACCRUES DIVIDENDS DAILY FROM ITS NET INVESTMENT INCOME, AND PAYS THE
DIVIDENDS MONTHLY. NET INVESTMENT INCOME CONSISTS OF INTEREST INCOME, NET
SHORT-TERM CAPITAL GAINS, IF ANY, AND DIVIDENDS DECLARED AND PAID ON
INVESTMENTS, LESS EXPENSES. DISTRIBUTIONS OF NET SHORT-TERM CAPITAL GAINS
(TREATED AS DIVIDENDS FOR TAX PURPOSES) AND NET LONG-TERM CAPITAL GAINS, IF ANY,
ARE NORMALLY PAID ONCE A YEAR; HOWEVER, THE FUNDS DO NOT ANTICIPATE MAKING ANY
SUCH DISTRIBUTIONS UNLESS AVAILABLE CAPITAL LOSS CARRYOVERS HAVE BEEN USED OR
HAVE EXPIRED.
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV, UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID IN CASH (BY CHECK).
FEDERAL TAXES
IN JANUARY, THE ADVISORS GROUP, INC. WILL MAIL FORM 1099-DIV, INDICATING TAXABLE
DIVIDENDS AND ANY CAPITAL GAIN DISTRIBUTIONS PAID TO YOU DURING THE PAST YEAR.
GENERALLY, DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE 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. DIVIDENDS AND DISTRIBUTIONS
ARE TAXABLE TO YOU REGARDLESS OF WHETHER THEY ARE TAKEN IN CASH OR REINVESTED.
DIVIDENDS, INCLUDING SHORT-TERM CAPITAL GAINS, ARE TAXABLE AS ORDINARY INCOME.
DISTRIBUTIONS FROM LONG-TERM CAPITAL GAINS ARE TAXABLE AS LONG-TERM CAPITAL
GAINS, REGARDLESS OF HOW LONG YOU HAVE OWNED SHARES. TAX-FREE RESERVES MAY
DERIVE UP TO 20% OF ITS INCOME FROM TAXABLE INVESTMENTS, FOR LIQUIDITY PURPOSES
OR PENDING INVESTMENT.
OTHER TAX INFORMATION
IN ADDITION TO FEDERAL TAXES FOR THE RESERVE FUND, YOU MAY BE SUBJECT TO STATE
OR LOCAL TAXES ON YOUR INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL
BE NOTIFIED TO THE EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM
US GOVERNMENT SECURITIES. SUCH DIVIDENDS MAY BE EXEMPT FROM CERTAIN STATE INCOME
TAXES.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE.
<PAGE>
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY THE FUNDS ARE OPEN FOR
BUSINESS, PROVIDED THE AMOUNT REQUESTED IS NOT ON HOLD. YOUR SHARES WILL BE
REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR REDEMPTION REQUEST IS RECEIVED.
YOU WILL RECEIVE DIVIDENDS THROUGH THE DATE THE REQUEST IS RECEIVED AND
PROCESSED. THE PROCEEDS WILL NORMALLY BE SENT TO YOU ON THE NEXT BUSINESS DAY,
BUT IF MAKING IMMEDIATE PAYMENT COULD ADVERSELY AFFECT THE FUND, IT MAY TAKE UP
TO SEVEN (7) DAYS TO MAKE PAYMENT. THE FUNDS HAVE THE RIGHT TO REDEEM SHARES IN
ASSETS OTHER THAN CASH FOR REDEMPTION AMOUNTS EXCEEDING, IN ANY 90-DAY PERIOD,
$250,000 OR 1% OF THE NET ASSET VALUE OF THE FUND, WHICHEVER IS LESS. WHEN THE
NYSE IS CLOSED (OR WHEN TRADING IS RESTRICTED) FOR ANY REASON OTHER THAN ITS
CUSTOMARY WEEKEND OR HOLIDAY CLOSINGS, OR UNDER ANY EMERGENCY CIRCUMSTANCES AS
DETERMINED BY THE SECURITIES AND EXCHANGE COMMISSION, REDEMPTIONS MAY BE
SUSPENDED OR PAYMENT DATES POSTPONED. PLEASE NOTE THAT THERE ARE SOME FEDERAL
HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY AND VETERANS DAY, WHEN THE NYSE IS OPEN
AND THE FUND IS OPEN, BUT REDEMPTIONS CANNOT BE MAILED OR WIRED BECAUSE THE POST
OFFICES AND BANKS ARE CLOSED.
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY SENT BY
CHECK, ELECTRONICALLY TRANSFERRED, OR WIRED TO A BANK YOU HAVE PREVIOUSLY
AUTHORIZED BY CONTACTING YOUR LOCAL OFFICE OF THE ADVISORS GROUP, INC.
CHECKWRITING
CHECKWRITING IS OFFERED THROUGH THE ADVISORS GROUP, INC. THE CHECKWRITING
FEATURES VARY, DEPENDING ON WHAT YOU CHOOSE WHEN YOU OPEN THE MONEY MARKET SWEEP
ACCOUNT WITH THE ADVISORS GROUP, INC. PLEASE SEE THE ADVISORS GROUP, INC.
PROGRAM MATERIALS FOR INFORMATION.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST FIVE (5) FISCAL YEARS (OR, IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS
FOR A SINGLE SHARE BY CLASS. THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE
THAT AN INVESTOR WOULD HAVE EARNED (OR LOST) ON AN INVESTMENT IN THE FUND
(ASSUMING REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS), AND DOES NOT REFLECT
ANY APPLICABLE FRONT- OR BACK-END SALES CHARGE. THIS INFORMATION HAS BEEN
AUDITED BY PRICEWATERHOUSECOOPERS LLP, WHOSE REPORT, ALONG WITH THE FUND'S
FINANCIAL STATEMENTS, ARE INCLUDED IN THE FUND'S ANNUAL REPORT, AVAILABLE UPON
REQUEST.
<PAGE>
FINANCIAL HIGHLIGHTS
PERIOD ENDED
DECEMBER 31,
RESERVE FUND 1999^
NET ASSET VALUE, BEGINNING $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME . 035
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.035)
NET ASSET VALUE, ENDING $1.00
TOTAL RETURN 3.59%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.29%(A)
TOTAL EXPENSES .95%(A)
EXPENSES BEFORE OFFSETS .95%(A)
NET EXPENSES .94%(A)
NET ASSETS, ENDING (IN THOUSANDS) $100,778
PERIOD ENDED
DECEMBER 31,
TAX-FREE RESERVES 1999^
NET ASSET VALUE, BEGINNING $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME . 025
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.025)
NET ASSET VALUE, ENDING $1.00
TOTAL RETURN* 2.50%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.90%(A)
TOTAL EXPENSES .85%(A)
EXPENSES BEFORE OFFSETS .85%(A)
NET EXPENSES .84%(A)
NET ASSETS, ENDING (IN THOUSANDS) $37,053
(A) ANNUALIZED
* TOTAL RETURN IS NOT ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
^ FROM MARCH 1, 1999 INCEPTION.
<PAGE>
TO OPEN AN ACCOUNT:
800-777-1500
PERFORMANCE AND PRICES:
800-777-1500
SERVICE FOR EXISTING ACCOUNTS:
800-777-1500
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
THE ADVISORS GROUP, INC.
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT EACH FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
EACH FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR EACH FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUNDS AT:
CALVERT GROUP, LTD.
4550 MONTGOMERY AVE.
SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
YOU CAN REVIEW THE FUNDS' REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT ONLY COPIES:
- - FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102, TELEPHONE: 202-942-8090.
- - FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-2633 (FIRST VARIABLE RATE FUND)
NO. 811-3101 (CALVERT TAX-FREE RESERVES)
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814
STATEMENT OF ADDITIONAL INFORMATION
APRIL 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 STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. INVESTORS
SHOULD READ THE STATEMENT OF ADDITIONAL INFORMATION IN CONJUNCTION WITH THE
APPROPRIATE FIRST VARIABLE RATE FUND CALVERT FIRST GOVERNMENT MONEY MARKET FUND
(THE "FUND") PROSPECTUS, DATED APRIL 30, 2000 (ONE PROSPECTUS IS ISSUED FOR
CLASSES O, B, AND C, ONE PROSPECTUS FOR CLASS T, AND ONE PROSPECTUS FOR THE
INSTITUTIONAL CLASS). THE FUND'S AUDITED FINANCIAL STATEMENT INCLUDED IN ITS
MOST RECENT ANNUAL REPORT TO SHAREHOLDERS, ARE EXPRESSLY INCORPORATED BY
REFERENCE, AND MADE A PART OF THIS SAI. THE PROSPECTUS AND THE MOST RECENT
SHAREHOLDER REPORT 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 2
DIVIDENDS AND DISTRIBUTIONS 3
TAX MATTERS 3
NET ASSET VALUE 4
CALCULATION OF YIELD 5
ADVERTISING 5
PURCHASES AND REDEMPTION OF SHARES 6
TRUSTEES AND OFFICERS 6
INVESTMENT ADVISOR 10
REIMBURSEMENTS 10
ADMINISTRATIVE SERVICES AGENT 10
TRANSFER AND SHAREHOLDER SERVICING AGENTS 11
PORTFOLIO TRANSACTIONS 11
INDEPENDENT ACCOUNTANTS AND CUSTODIANS 11
METHOD OF DISTRIBUTION 11
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 12
GENERAL INFORMATION 13
- ------------------------
<PAGE>
INVESTMENT POLICIES AND RISKS
-----------------------------
IN PURSUING ITS OBJECTIVE OF EARNING THE HIGHEST POSSIBLE YIELD CONSISTENT
WITH SAFETY, LIQUIDITY, AND PRESERVATION OF CAPITAL, THE FUND INVESTS SOLELY IN
DEBT OBLIGATIONS ISSUED OR GUARANTEED BY THE UNITED STATES, ITS AGENCIES OR
INSTRUMENTALITIES, ASSIGNMENTS OF INTEREST IN SUCH OBLIGATIONS, AND COMMITMENTS
TO PURCHASE SUCH OBLIGATIONS ("U.S. GOVERNMENT-BACKED OBLIGATIONS"). THE FUND
MAY INVEST IN U.S. GOVERNMENT-BACKED OBLIGATIONS SUBJECT TO REPURCHASE
AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS AND BANKS.
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. IF THE SELLER WERE TO BECOME BANKRUPT, THE FUND MIGHT REALIZE A
LOSS IF THE VALUE OF THE UNDERLYING SECURITY DID NOT EQUAL OR EXCEED THE
REPURCHASE PRICE. IN ORDER TO MINIMIZE THE RISK OF INVESTING IN REPURCHASE
AGREEMENTS, THE FUND ENGAGES IN SUCH TRANSACTIONS ONLY WITH RECOGNIZED
SECURITIES DEALERS AND BANKS AND IN ALL INSTANCES HOLDS UNDERLYING SECURITIES
WITH A VALUE EQUAL TO THE TOTAL REPURCHASE PRICE SUCH DEALER OR BANK HAS AGREED
TO PAY. REPURCHASE AGREEMENTS ARE ALWAYS FOR PERIODS OF LESS THAN ONE YEAR AND
NO MORE THAN 10% OF THE FUND'S ASSETS MAY BE INVESTED IN REPURCHASE AGREEMENTS
NOT TERMINABLE WITHIN SEVEN DAYS.
ALTHOUGH ALL THE SECURITIES PURCHASED BY THE FUND ARE GOVERNMENT-BACKED AS
TO PRINCIPAL OR SECURED BY SUCH SECURITIES, SOME OF THE TYPES OF GOVERNMENT
SECURITIES THE FUND BUYS MAY BE SOLD AT A PREMIUM WHICH IS NOT BACKED BY A
GOVERNMENT GUARANTEE. THE PREMIUMS ARE AMORTIZED OVER THE LIFE OF THE SECURITY;
HOWEVER, IF A SECURITY SHOULD DEFAULT OR BE PREPAID, THE FUND COULD REALIZE AS A
LOSS THE UNAMORTIZED PORTION OF SUCH PREMIUM.
IN THE GOVERNMENT-GUARANTEED LOAN MARKET, MOST PURCHASES OF NEW ISSUES ARE
MADE UNDER FIRM (FORWARD) COMMITMENT AGREEMENTS. PURCHASES OF LONG-TERM FIXED
RATE DEBT SECURITIES UNDER SUCH AGREEMENTS CAN INVOLVE RISK OF LOSS DUE TO
CHANGES IN THE MARKET RATE OF INTEREST BETWEEN THE COMMITMENT DATE AND THE
SETTLEMENT DATE. FORWARD COMMITMENT AGREEMENTS FOR VARIABLE RATE SECURITIES,
UNLIKE SUCH AGREEMENTS FOR FIXED RATE SECURITIES, ARE STABLE IN VALUE; THE
FUND'S ADVISOR BELIEVES THE RISK OF LOSS UNDER FORWARD COMMITMENT AGREEMENTS
INVOLVING VARIABLE RATE OBLIGATIONS TO BE INSIGNIFICANT.
ALL THE FUND'S INVESTMENTS MATURING IN MORE THAN ONE YEAR WILL HAVE A
VARIABLE RATE FEATURE UNDER WHICH THE YIELD IS ADJUSTED PERIODICALLY BASED UPON
CHANGES IN MONEY MARKET RATES SUCH AS PRIME. SUCH ADJUSTMENTS WILL BE MADE AT
LEAST SEMI-ANNUALLY. VARIABLE RATE SECURITIES MINIMIZE THE WIDE FLUCTUATIONS IN
CAPITAL VALUE THAT REPRESENT THE TRADITIONAL DRAWBACK TO SUCH LONG-TERM
INVESTMENTS; BUT THIS ALSO MEANS THAT SHOULD INTEREST RATES DECLINE, THE AMOUNT
OF RETURN PAID BY THE FUND WILL DECLINE AND THE FUND WILL FOREGO THE OPPORTUNITY
OF CAPITAL APPRECIATION ON ITS PORTFOLIO SECURITIES.
THE FOREGOING INVESTMENT OBJECTIVE MAY NOT BE ALTERED WITHOUT THE PRIOR
APPROVAL OF THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF THE FUND.
THERE IS, OF COURSE, NO ASSURANCE THAT THE FUND WILL BE SUCCESSFUL IN MEETING
THE ABOVE INVESTMENT OBJECTIVE.
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.
(1) THE FUND MAY NOT MAKE ANY INVESTMENT INCONSISTENT WITH ITS CLASSIFICATION AS
A DIVERSIFIED INVESTMENT COMPANY UNDER THE 1940 ACT.
(2) THE FUND MAY NOT CONCENTRATE ITS INVESTMENTS IN THE SECURITIES OF ISSUERS
PRIMARILY ENGAGED IN ANY PARTICULAR INDUSTRY (OTHER THAN SECURITIES ISSUED OR
GUARANTEED BY THE U.S. GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES AND
REPURCHASE AGREEMENTS SECURED THEREBY), OR DOMESTIC BANK MONEY MARKET
INSTRUMENTS.
(3) THE FUND MAY NOT 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 ITS 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.
(4) THE FUND MAY NOT 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) THE FUND MAY NOT INVEST DIRECTLY IN COMMODITIES 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.
(6) THE FUND MAY NOT 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 AS PERMITTED BY LAW. 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.
NONFUNDAMENTAL INVESTMENT RESTRICTIONS
THE BOARD OF TRUSTEES HAS ADOPTED THE FOLLOWING NONFUNDAMENTAL INVESTMENT
RESTRICTIONS. A NONFUNDAMENTAL INVESTMENT RESTRICTION CAN BE CHANGED BY THE
BOARD AT ANY TIME WITHOUT A SHAREHOLDER VOTE.
(1) THE FUND MAY NOT PURCHASE COMMON STOCKS, PREFERRED STOCKS, WARRANTS, OR
OTHER EQUITY SECURITIES.
(2) THE FUND DOES NOT INTEND TO MAKE ANY PURCHASES OF SECURITIES IF BORROWING
EXCEEDS 5% OF TOTAL ASSETS.
(3) THE FUND MAY NOT SELL SECURITIES SHORT.
(4) THE FUND MAY NOT WRITE OR PURCHASE PUT OR CALL OPTIONS.
DIVIDENDS AND DISTRIBUTIONS
---------------------------
DIVIDENDS FROM THE FUND'S NET INVESTMENT INCOME ARE DECLARED DAILY AND PAID
MONTHLY. NET INVESTMENT INCOME CONSISTS OF THE INTEREST INCOME EARNED ON
INVESTMENTS (ADJUSTED FOR AMORTIZATION OF ORIGINAL ISSUE OR MARKET DISCOUNT OR
PREMIUM), LESS EXPENSES. REALIZED AND UNREALIZED GAINS AND LOSSES ARE NOT
INCLUDED IN NET INVESTMENT INCOME. DISTRIBUTIONS OF NET CAPITAL GAINS, IF ANY,
ARE NORMALLY DECLARED AND PAID BY THE FUND ONCE A YEAR; HOWEVER, THE FUND DOES
NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS FROM SECURITIES PROFITS UNLESS
AVAILABLE LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE EXPIRED. DIVIDENDS AND
DISTRIBUTIONS MAY DIFFER AMONG THE CLASSES.
PURCHASERS OF FUND SHARES BEGIN RECEIVING DIVIDENDS FROM THE DATE FEDERAL
FUNDS ARE RECEIVED BY THE FUND. NON-INSTITUTIONAL PURCHASES BY BANK WIRE
RECEIVED BY THE FUND'S CUSTODIAN PRIOR TO 12:30 P.M., EASTERN TIME, REPRESENT
IMMEDIATELY AVAILABLE FEDERAL FUNDS. SHAREHOLDERS REDEEMING SHARES BY TELEPHONE,
ELECTRONIC FUNDS TRANSFER OR WRITTEN REQUEST WILL RECEIVE DIVIDENDS THROUGH THE
DATE THAT THE REDEMPTION REQUEST IS RECEIVED; SHAREHOLDERS REDEEMING SHARES BY
DRAFT WILL RECEIVE DIVIDENDS THROUGH THE DATE SUCH DRAFT IS PRESENTED TO THE
FUND FOR PAYMENT.
TAX MATTERS
-----------
THE FUND INTENDS TO CONTINUE TO QUALIFY AS REGULATED INVESTMENT COMPANIES
UNDER SUBCHAPTER M OF THE INTERNAL REVENUE CODE. IF FOR ANY REASON IT SHOULD
FAIL TO QUALIFY, IT WOULD BE TAXED AS A CORPORATION, RATHER THAN PASSING THROUGH
ITS INCOME AND GAINS TO SHAREHOLDERS.
DIVIDENDS OF NET INVESTMENT INCOME AND DISTRIBUTIONS OF NET SHORT-TERM
CAPITAL GAINS, WHETHER TAKEN IN CASH OR REINVESTED IN ADDITIONAL SHARES, ARE
TAXABLE TO SHAREHOLDERS AS ORDINARY INCOME AND DO NOT QUALIFY FOR THE DIVIDENDS
RECEIVED DEDUCTION FOR CORPORATIONS. NET LONG-TERM CAPITAL GAIN DISTRIBUTIONS,
IF ANY, WILL GENERALLY BE INCLUDABLE AS LONG-TERM CAPITAL GAIN IN THE GROSS
INCOME OF SHAREHOLDERS WHO ARE CITIZENS OR RESIDENTS OF THE UNITED STATES.
WHETHER SUCH REALIZED SECURITIES GAINS AND LOSSES ARE LONG-OR SHORT-TERM DEPENDS
ON THE PERIOD THE SECURITIES ARE HELD BY THE FUND, NOT THE PERIOD FOR WHICH THE
SHAREHOLDER HOLDS SHARES OF THE FUND.
THE FUND IS REQUIRED TO WITHHOLD 31% OF ANY DIVIDENDS (INCLUDING LONG-TERM
CAPITAL GAIN DIVIDENDS, IF ANY) 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; 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 OF DIVIDENDS WITHHELD.
SHAREHOLDERS EXEMPT FROM BACKUP WITHHOLDING 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; AND FOREIGN
CENTRAL BANKS OF ISSUE. NON-RESIDENT ALIENS ALSO ARE GENERALLY NOT SUBJECT TO
BACKUP WITHHOLDING BUT, ALONG WITH CERTAIN FOREIGN PARTNERSHIPS AND FOREIGN
CORPORATIONS, MAY INSTEAD BE SUBJECT TO WITHHOLDING UNDER SECTION 1441 OF THE
INTERNAL REVENUE CODE. SHAREHOLDERS CLAIMING EXEMPTION FROM BACKUP WITHHOLDING
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. THE LAW OF THE STATES VARIES
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.
NET ASSET VALUE
---------------
THE NET ASSET VALUE PER SHARE OF THE FUND, THE PRICE AT WHICH SHARES ARE
REDEEMED (AND, FOR CLASS B OR C, LESS ANY APPLICABLE CONTINGENT DEFERRED SALES
CHARGE, "CDSC"), IS COMPUTED BY DIVIDING THE VALUE OF THE FUND'S TOTAL ASSETS,
LESS ITS LIABILITIES, BY THE TOTAL NUMBER OF SHARES OUTSTANDING. NET ASSET VALUE
IS CALCULATED SEPARATELY FOR EACH CLASS. IT IS DETERMINED EVERY BUSINESS DAY AT
THE CLOSE OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE (GENERALLY, 4:00
P.M. EASTERN TIME). 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 ASSETS, INCLUDING SECURITIES SUBJECT TO REPURCHASE AGREEMENTS,
ARE NORMALLY VALUED AT THEIR AMORTIZED COST WHICH DOES NOT TAKE INTO ACCOUNT
UNREALIZED CAPITAL GAINS OR LOSSES. THIS INVOLVES VALUING AN INSTRUMENT AT ITS
COST AND THEREAFTER ASSUMING A CONSTANT AMORTIZATION TO MATURITY OF ANY DISCOUNT
OR PREMIUM, REGARDLESS OF THE IMPACT OF FLUCTUATING INTEREST RATES ON THE MARKET
VALUE OF THE INSTRUMENT. WHILE THIS METHOD PROVIDES CERTAINTY IN VALUATION, IT
MAY RESULT IN PERIODS DURING WHICH VALUE, AS DETERMINED BY AMORTIZED COST, IS
HIGHER OR LOWER THAN THE PRICE THAT WOULD BE RECEIVED UPON SALE OF THE
INSTRUMENT. DURING PERIODS OF DECLINING INTEREST RATES, THE DAILY YIELD ON
SHARES OF THE FUND MAY TEND TO BE HIGHER THAN A LIKE COMPUTATION MADE BY A FUND
WITH IDENTICAL INVESTMENTS UTILIZING A METHOD OF VALUATION BASED UPON MARKET
PRICES AND ESTIMATES OF MARKET PRICES FOR ALL OF ITS PORTFOLIO INSTRUMENTS.
THUS, IF THE USE OF AMORTIZED COST BY THE FUND RESULTED IN A LOWER AGGREGATE
PORTFOLIO VALUE ON A PARTICULAR DAY, A PROSPECTIVE INVESTOR IN THE FUND WOULD BE
ABLE TO OBTAIN A SOMEWHAT HIGHER YIELD THAN WOULD RESULT FROM INVESTMENT IN A
FUND UTILIZING SOLELY MARKET VALUES, AND EXISTING INVESTORS IN THE FUND WOULD
RECEIVE LESS INVESTMENT INCOME. THE CONVERSE WOULD APPLY IN A PERIOD OF RISING
INTEREST RATES.
RULE 2A-7 UNDER THE INVESTMENT COMPANY ACT OF 1940 PERMITS THE FUND TO
VALUE ITS ASSETS AT AMORTIZED COST IF THE FUND MAINTAINS A DOLLAR-WEIGHTED
AVERAGE MATURITY OF 90 DAYS OR LESS AND ONLY PURCHASES OBLIGATIONS HAVING
REMAINING MATURITIES OF 13 MONTHS OR LESS. RULE 2A-7 FURTHER REQUIRES, AS A
CONDITION OF ITS USE, THAT THE FUND INVEST ONLY IN OBLIGATIONS DETERMINED BY THE
TRUSTEES TO BE OF HIGH QUALITY WITH MINIMAL CREDIT RISKS AND REQUIRES THE
TRUSTEES TO ESTABLISH PROCEDURES DESIGNED TO STABILIZE, TO THE EXTENT REASONABLY
POSSIBLE, THE FUND'S PRICE PER SHARE AS COMPUTED FOR THE PURPOSE OF SALES AND
REDEMPTIONS AT $1.00. SUCH PROCEDURES INCLUDE REVIEW OF THE FUND'S INVESTMENT
HOLDINGS BY THE TRUSTEES, AT SUCH INTERVALS AS THEY MAY DEEM APPROPRIATE, TO
DETERMINE WHETHER THE FUND'S NET ASSET VALUE CALCULATED BY USING AVAILABLE
MARKET QUOTATIONS OR EQUIVALENTS DEVIATES FROM $1.00 PER SHARE. IF SUCH
DEVIATION EXCEEDS L/2 OF 1%, THE TRUSTEES WILL PROMPTLY CONSIDER WHAT ACTION, IF
ANY, WILL BE INITIATED. IN THE EVENT THE TRUSTEES DETERMINE THAT A DEVIATION
EXISTS WHICH MAY RESULT IN MATERIAL DILUTION OR OTHER UNFAIR RESULTS TO
INVESTORS OR EXISTING SHAREHOLDERS, THE TRUSTEES WILL TAKE SUCH CORRECTIVE
ACTION AS THEY REGARD AS NECESSARY AND APPROPRIATE, INCLUDING: THE SALE OF
PORTFOLIO INSTRUMENTS PRIOR TO MATURITY TO REALIZE CAPITAL GAINS OR LOSSES OR TO
SHORTEN AVERAGE PORTFOLIO MATURITY; THE WITHHOLDING OF DIVIDENDS OR PAYMENT OF
DISTRIBUTIONS FROM CAPITAL OR CAPITAL GAINS; REDEMPTIONS OF SHARES IN KIND; OR
THE ESTABLISHMENT OF A NET ASSET VALUE PER SHARE BASED UPON AVAILABLE MARKET
QUOTATIONS.
NET ASSET VALUE AND OFFERING PRICE PER SHARE, DECEMBER 31, 1999
CLASS O ($229,753,994/230,100,288 SHARES) $1.00
CLASS B ($419,767/419,695 SHARES) $1.00
CLASS C ($1,055,575/1,055,314 SHARES) $1.00
CLASS I ($19,678,758/19,664,141 SHARES) $1.00
CLASS T ($100, 777, 827/100,768,290 SHARES) $1.00
CALCULATION OF YIELD
--------------------
YIELD IS CALCULATED SEPARATELY BY CLASS BY DIVIDING THE NET CHANGE
EXCLUSIVE OF CAPITAL CHANGES IN THE VALUE OF A SHARE DURING A PARTICULAR BASE
PERIOD BY THE NET ASSET VALUE PER SHARE AT THE BEGINNING OF SUCH PERIOD AND
ANNUALIZING THE RESULT. CAPITAL CHANGES EXCLUDED FROM THE CALCULATION OF YIELD
ARE: (1) REALIZED GAINS AND LOSSES FROM THE SALE OF SECURITIES, AND (2)
UNREALIZED APPRECIATION AND DEPRECIATION. THE FUND'S EFFECTIVE YIELD FOR A
SEVEN-DAY PERIOD IS ITS ANNUALIZED COMPOUNDED AVERAGE YIELD DURING THE PERIOD,
CALCULATED ACCORDING TO THE FOLLOWING FORMULA:
FOR THE SEVEN DAY PERIOD ENDED DECEMBER 31, 1999, THE FUND'S YIELD AND EFFECTIVE
YIELD WERE AS FOLLOWS:
YIELD EFFECTIVE YIELD
CLASS O 4.89% 5.01%
CLASS B 3.47% 3.53%
CLASS C 3.65% 3.72%
CLASS I 5.27% 5.42%
CLASS T 4.52% 4.62%
THE FUND'S YIELD FLUCTUATES IN RESPONSE TO CHANGES IN INTEREST RATES AND
GENERAL ECONOMIC CONDITIONS, PORTFOLIO QUALITY, PORTFOLIO MATURITY, AND
OPERATING EXPENSES. YIELD IS NOT FIXED OR INSURED AND THEREFORE IS NOT
COMPARABLE TO A SAVINGS OR OTHER SIMILAR TYPE ACCOUNT. YIELD DURING ANY
PARTICULAR TIME PERIOD SHOULD NOT BE CONSIDERED AN INDICATION OF FUTURE YIELD.
IT IS, HOWEVER, USEFUL IN EVALUATING THE FUND'S PERFORMANCE IN MEETING ITS
INVESTMENT OBJECTIVE.
THIS STANDARDIZED TOTAL RETURN FOR INSTITUTIONAL CLASS SHARES IS "LINKED"
TO CLASS O TOTAL RETURN. THAT IS, INSTITUTIONAL CLASS SHARES HAVE AN ACTUAL
INCEPTION DATE OF SEPTEMBER 15, 1998. HOWEVER, CLASS O SHARES HAVE AN INCEPTION
DATE OF SEVERAL YEARS EARLIER. IN THE TABLE BELOW, PERFORMANCE RESULTS BEFORE
SEPTEMBER 30, 1998 ARE FOR CLASS O. BECAUSE CLASS O HAD HIGHER EXPENSES, ITS
PERFORMANCE WAS LOWER THAN THE INSTITUTIONAL CLASS WOULD HAVE REALIZED IN THE
SAME PERIOD. NONSTANDARDIZED TOTAL RETURN FOR INSTITUTIONAL CLASS SHARES MAY
ALSO BE SHOWN FROM THE ACTUAL INSTITUTIONAL CLASS INCEPTION DATE; THIS FIGURE IS
NOT LINKED TO CLASS O TOTAL RETURN.
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 PORTFOLIO
HOLDINGS OR GIVE EXAMPLES OR 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, RUSSELL
2000/SMALL STOCK INDEX, MUTUAL FUND VALUES MORNINGSTAR RATINGS, MUTUAL FUND
FORECASTER, BARRON'S, THE WALL STREET JOURNAL, AND SCHABACKER INVESTMENT
MANAGEMENT, INC. SUCH AVERAGES GENERALLY DO NOT REFLECT ANY FRONT- OR BACK-END
SALES CHARGES THAT MAY BE CHARGED BY FUNDS IN THAT GROUPING. THE FUND MAY ALSO
CITE TO ANY SOURCE, WHETHER IN PRINT OR ON-LINE, SUCH AS BLOOMBERG, IN ORDER TO
ACKNOWLEDGE ORIGIN OF INFORMATION. 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. THE FUND, ITS ADVISOR, AND ITS AFFILIATES RESERVE THE RIGHT TO
UPDATE PERFORMANCE RANKINGS AS NEW RANKINGS BECOME AVAILABLE.
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.
PURCHASES AND REDEMPTION OF SHARES
----------------------------------
SHARE CERTIFICATES WILL NOT BE ISSUED UNLESS REQUESTED IN WRITING BY THE
INVESTOR. NO CERTIFICATES WILL BE ISSUED FOR FRACTIONAL SHARES (SEE PROSPECTUS,
"HOW TO SELL YOUR SHARES"). CERTAIN CLASS B AND C SHARES MAY BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE WHICH IS SUBTRACTED FROM THE REDEMPTION
PROCEEDS (SEE PROSPECTUS, "CALCULATION OF CONTINGENT DEFERRED SALES CHARGE").
CLASS O SHAREHOLDERS WISHING TO USE THE DRAFT WRITING SERVICE SHOULD
COMPLETE THE SIGNATURE CARD ENCLOSED WITH THE INVESTMENT APPLICATION. THE DRAFT
WRITING SERVICE IS NOT AVAILABLE FOR CLASS B, C, I, OR T SHARES. THE DRAFT
WRITING SERVICE WILL BE SUBJECT TO THE CUSTOMARY RULES AND REGULATIONS GOVERNING
CHECKING ACCOUNTS, AND THE FUND RESERVES THE RIGHT TO CHANGE OR SUSPEND THE
SERVICE. GENERALLY, THERE IS NO CHARGE TO YOU FOR THE MAINTENANCE OF THIS
SERVICE OR THE CLEARANCE OF DRAFTS, BUT THE FUND RESERVES THE RIGHT TO CHARGE A
SERVICE FEE FOR DRAFTS RETURNED FOR UNCOLLECTED OR INSUFFICIENT FUNDS, AND WILL
CHARGE $25 FOR STOP PAYMENTS. AS A SERVICE TO SHAREHOLDERS, THE FUND MAY
AUTOMATICALLY TRANSFER THE DOLLAR AMOUNT NECESSARY TO COVER DRAFTS YOU HAVE
WRITTEN ON THE FUND TO YOUR FUND ACCOUNT FROM ANY OTHER OF YOUR IDENTICALLY
REGISTERED ACCOUNTS IN CALVERT MONEY MARKET FUNDS OR CALVERT INSURED PLUS. THE
FUND MAY CHARGE A FEE FOR THIS SERVICE.
WHEN A PAYABLE THROUGH DRAFT IS PRESENTED TO THE CUSTODIAN FOR PAYMENT, A
SUFFICIENT NUMBER OF FULL AND FRACTIONAL SHARES FROM THE SHAREHOLDER'S ACCOUNT
TO COVER THE AMOUNT OF THE DRAFT WILL BE REDEEMED AT THE NET ASSET VALUE NEXT
DETERMINED. IF THERE ARE INSUFFICIENT SHARES IN THE SHAREHOLDER'S ACCOUNT, THE
DRAFT MAY BE RETURNED. DRAFTS PRESENTED FOR PAYMENT WHICH WOULD REQUIRE THE
REDEMPTION OF SHARES PURCHASED BY CHECK OR ELECTRONIC FUNDS TRANSFER WITHIN THE
PREVIOUS 10 BUSINESS DAYS MAY NOT BE HONORED.
EXISTING SHAREHOLDERS, OTHER THAN CLASS T, WHO AT ANY TIME DESIRE TO
ARRANGE FOR THE TELEPHONE REDEMPTION PROCEDURE, OR TO CHANGE INSTRUCTIONS
ALREADY GIVEN, MUST SEND A WRITTEN NOTICE TO CALVERT GROUP, P.O. BOX 219544,
KANSAS CITY, MO 64121-9544, WITH A VOIDED COPY OF A CHECK FOR THE BANK WIRING
INSTRUCTIONS TO BE ADDED. IF A VOIDED CHECK DOES NOT ACCOMPANY THE REQUEST, THEN
THE REQUEST MUST BE SIGNATURE GUARANTEED BY A COMMERCIAL BANK, SAVINGS AND LOAN
ASSOCIATION, TRUST COMPANY, MEMBER FIRM OF ANY NATIONAL SECURITIES EXCHANGE, OR
CREDIT UNION. FURTHER DOCUMENTATION MAY BE REQUIRED FROM CORPORATIONS,
FIDUCIARIES, AND INSTITUTIONAL INVESTORS. CLASS T SHAREHOLDERS SHOULD CONTACT
THEIR BROKER, THE ADVISORS GROUP, LTD.
THE RIGHT OF REDEMPTION MAY BE SUSPENDED OR THE DATE OF PAYMENT POSTPONED
FOR ANY PERIOD DURING WHICH THE NEW YORK STOCK EXCHANGE IS CLOSED (OTHER THAN
CUSTOMARY WEEKEND AND HOLIDAY CLOSINGS), WHEN TRADING ON THE NEW YORK STOCK
EXCHANGE IS RESTRICTED, OR AN EMERGENCY EXISTS, AS DETERMINED BY THE SEC, OR IF
THE COMMISSION HAS ORDERED SUCH A SUSPENSION FOR THE PROTECTION OF SHAREHOLDERS.
REDEMPTION PROCEEDS ARE NORMALLY MAILED OR WIRED NO LATER THAN THE NEXT BUSINESS
DAY AFTER A PROPER REDEMPTION REQUEST HAS BEEN RECEIVED, UNLESS REDEMPTIONS HAVE
BEEN SUSPENDED OR POSTPONED AS DESCRIBED ABOVE.
TRUSTEES AND OFFICERS
---------------------
THE FUND'S BOARD OF TRUSTEES/DIRECTORS SUPERVISES THE FUND'S ACTIVITIES AND
REVIEWS ITS CONTRACTS WITH COMPANIES THAT PROVIDE IT WITH SERVICES.
RICHARD L. BAIRD, JR., TRUSTEE. 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. DOB: 05/09/48. ADDRESS: 211 OVERLOOK DRIVE,
PITTSBURGH, PENNSYLVANIA 15216.
FRANK H. BLATZ, JR., ESQ., TRUSTEE. 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. DOB: 10/29/35. ADDRESS: 282 SOUTH AVENUE, SUITE 201, P.O. 207, FANWOOD, NEW
JERSEY 07023.
FREDERICK T. BORTS, M.D., TRUSTEE. DR. BORTS IS A RADIOLOGIST WITH KAISER
PERMANENTE. PRIOR TO THAT, HE WAS A RADIOLOGIST AT BETHLEHEM MEDICAL IMAGING IN
ALLENTOWN, PENNSYLVANIA. DOB: 07/23/49. ADDRESS: 2610 NONOHE STREET, WAHIAWA,
HAWAII 96786.
CHARLES E. DIEHL, TRUSTEE. 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 SERVICES FINANCIAL CORPORATION. DOB: 10/13/22. ADDRESS:
1658 QUAIL HOLLOW COURT, MCLEAN, VIRGINIA 22101.
DOUGLAS E. FELDMAN, M.D., TRUSTEE. DR. FELDMAN IS MANAGING PARTNER OF
FELDMAN OTOLARYNGOLOGY, HEAD AND NECK SURGERY IN WASHINGTON, D.C. A GRADUATE OF
HARVARD MEDICAL SCHOOL, HE IS ASSOCIATE PROFESSOR OF OTOLARYNGOLOGY, HEAD AND
NECK SURGERY AT GEORGETOWN UNIVERSITY AND GEORGE WASHINGTON UNIVERSITY MEDICAL
SCHOOL, AND PAST CHAIRMAN OF THE DEPARTMENT OF OTOLARYNGOLOGY, HEAD AND NECK
SURGERY AT THE WASHINGTON HOSPITAL CENTER. HE IS INCLUDED IN THE BEST DOCTORS IN
AMERICA. DOB: 05/23/48. ADDRESS: 7536 PEPPERELL DRIVE, BETHESDA, MARYLAND 20817.
PETER W. GAVIAN, CFA, TRUSTEE. 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 CHARTERED FINANCIAL ANALYST AND AN
ACCREDITED SENIOR BUSINESS APPRAISER. DOB: 12/08/32. ADDRESS: 3005 FRANKLIN ROAD
NORTH, ARLINGTON, VIRGINIA 22201.
JOHN G. GUFFEY, JR., TRUSTEE. 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. DOB: 5/15/48.
ADDRESS: 388 CALLI CALINA, SANTA FE NM 87511.
MR. GUFFEY HAS BEEN ADVISED THAT THE SECURITIES AND EXCHANGE COMMISSION ("SEC")
HAS ENTERED AN ORDER AGAINST HIM RELATING TO HIS FORMER SERVICE AS A DIRECTOR OF
COMMUNITY BANKERS MUTUAL FUND, INC. THIS FUND IS NOT CONNECTED WITH ANY CALVERT
FUND OR THE CALVERT GROUP AND CEASED OPERATIONS IN SEPTEMBER, 1994. MR. GUFFEY
CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE FINDINGS IN
THE ORDER. THE ORDER CONTAINS FINDINGS THAT (1) THE COMMUNITY BANKERS MUTUAL
FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION WERE MATERIALLY FALSE
AND MISLEADING BECAUSE THEY MISSTATED OR FAILED TO STATE MATERIAL FACTS
CONCERNING THE PRICING OF FUND SHARES AND THE PERCENTAGE OF ILLIQUID SECURITIES
IN THE FUND'S PORTFOLIO AND THAT MR. GUFFEY, AS A MEMBER OF THE FUND'S BOARD,
SHOULD HAVE KNOWN OF THESE MISSTATEMENTS AND THEREFORE VIOLATED THE SECURITIES
ACT OF 1933; (2) THE PRICE OF THE FUND'S SHARES SOLD TO THE PUBLIC WAS NOT BASED
ON THE CURRENT NET ASSET VALUE OF THE SHARES, IN VIOLATION OF THE INVESTMENT
COMPANY ACT OF 1940 (THE "INVESTMENT COMPANY ACT"); AND (3) THE BOARD OF THE
FUND, INCLUDING MR. GUFFEY, VIOLATED THE INVESTMENT COMPANY ACT BY DIRECTING THE
FILING OF A MATERIALLY FALSE REGISTRATION STATEMENT. THE ORDER DIRECTED MR.
GUFFEY TO CEASE AND DESIST FROM COMMITTING OR CAUSING FUTURE VIOLATIONS AND TO
PAY A CIVIL PENALTY OF $5,000. THE SEC PLACED NO RESTRICTIONS ON MR. GUFFEY'S
CONTINUING TO SERVE AS A TRUSTEE OR DIRECTOR OF MUTUAL FUNDS.
*BARBARA J. KRUMSIEK, PRESIDENT AND TRUSTEE. 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. DOB: 08/09/52.
M. CHARITO KRUVANT, TRUSTEE. 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 CALVERT VARIABLE SERIES, INC. AND ACACIA
FEDERAL SAVINGS BANK. DOB: 12/08/45. ADDRESS: 5301 WISCONSIN AVENUE, N.W.,
WASHINGTON, D.C. 20015.
ARTHUR J. PUGH, TRUSTEE. MR. PUGH IS A DIRECTOR OF CALVERT VARIABLE SERIES,
INC., AND SERVES AS A DIRECTOR OF ACACIA FEDERAL SAVINGS BANK. DOB: 09/24/37.
ADDRESS: 4823 PRESTWICK DRIVE, FAIRFAX, VIRGINIA 22030.
*DAVID R. ROCHAT, SENIOR VICE PRESIDENT AND TRUSTEE. 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. DOB: 10/07/37. ADDRESS: BOX 93, CHELSEA, VERMONT 05038.
*D. WAYNE SILBY, ESQ., TRUSTEE. 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. DOB: 07/20/48. ADDRESS: 1715 18TH STREET, N.W., WASHINGTON,
D.C. 20009.
RENO J. MARTINI, SENIOR VICE PRESIDENT. MR. MARTINI IS A DIRECTOR AND
SENIOR VICE PRESIDENT OF CALVERT GROUP, LTD., AND SENIOR VICE PRESIDENT AND
CHIEF INVESTMENT OFFICER OF CALVERT ASSET MANAGEMENT COMPANY, INC. MR. MARTINI
IS ALSO A DIRECTOR AND PRESIDENT OF CALVERT-SLOAN ADVISERS, L.L.C., AND A
DIRECTOR AND OFFICER OF CALVERT NEW WORLD FUND. DOB: 1/13/50.
RONALD M. WOLFSHEIMER, CPA, TREASURER. MR. WOLFSHEIMER IS SENIOR VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER OF CALVERT GROUP, LTD. AND ITS
SUBSIDIARIES AND AN OFFICER OF EACH OF THE OTHER INVESTMENT COMPANIES IN THE
CALVERT GROUP OF FUNDS. MR. WOLFSHEIMER IS VICE PRESIDENT AND TREASURER OF
CALVERT-SLOAN ADVISERS, L.L.C., AND A DIRECTOR OF CALVERT DISTRIBUTORS, INC.
DOB: 07/24/47.
WILLIAM M. TARTIKOFF, ESQ., VICE PRESIDENT AND SECRETARY. MR. TARTIKOFF IS
AN OFFICER OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS,
AND IS SENIOR VICE PRESIDENT, SECRETARY, AND GENERAL COUNSEL OF CALVERT GROUP,
LTD., AND EACH OF ITS SUBSIDIARIES. MR. TARTIKOFF IS ALSO VICE PRESIDENT AND
SECRETARY OF CALVERT-SLOAN ADVISERS, L.L.C., A DIRECTOR OF CALVERT DISTRIBUTORS,
INC., AND IS AN OFFICER OF ACACIA NATIONAL LIFE INSURANCE COMPANY. DOB:
08/12/47.
DANIEL K. HAYES, VICE PRESIDENT. MR. HAYES IS VICE PRESIDENT OF CALVERT
ASSET MANAGEMENT COMPANY, INC., AND IS AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS, EXCEPT FOR CALVERT NEW WORLD
FUND, INC. DOB: 09/09/50.
SUSAN WALKER BENDER, ESQ., ASSISTANT SECRETARY. MS. BENDER IS ASSOCIATE
GENERAL COUNSEL OF CALVERT GROUP, LTD. AND AN OFFICER OF EACH OF ITS
SUBSIDIARIES AND CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH
OF THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 01/29/59.
IVY WAFFORD DUKE, ESQ., ASSISTANT SECRETARY. MS. DUKE IS ASSOCIATE GENERAL
COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. SHE ALSO SERVES AS SECRETARY
AND PROVIDES COUNSEL TO THE CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO
WORKING AT CALVERT GROUP, MS. DUKE WAS AN ASSOCIATE IN THE INVESTMENT MANAGEMENT
GROUP OF THE BUSINESS AND FINANCE DEPARTMENT AT DRINKER BIDDLE & REATH. DOB:
09/07/68.
VICTOR FRYE, ESQ., ASSISTANT SECRETARY AND COMPLIANCE OFFICER. MR. FRYE IS
COUNSEL AND COMPLIANCE OFFICER OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS
SUBSIDIARIES AND CALVERT-SLOAN ADVISERS, L.L.C. HE IS ALSO AN OFFICER OF EACH OF
THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. SHE ALSO SERVES
AS PRIOR TO WORKING AT CALVERT GROUP, MR. FRYE WAS COUNSEL AND MANAGER OF THE
COMPLIANCE DEPARTMENT AT THE ADVISORS GROUP. DOB: 10/15/58.
JENNIFER STREAKS, ESQ., ASSISTANT SECRETARY. MS STREAKS IS ASSISTANT
GENERAL COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. PRIOR TO WORKING AT CALVERT
GROUP, MS. STREAKS WAS A REGULATORY ANALYST IN THE MARKET REGULATION DEPARTMENT
OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS. DOB: 8/02/71.
MICHAEL V. YUHAS JR., CPA, CONTROLLER OF FUNDS. MR. YUHAS IS THE DIRECTOR
OF FUND ADMINISTRATION OF CALVERT GROUP, LTD., AND AN OFFICER OF EACH OF THE
OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 08/04/61.
THE ADDRESS OF TRUSTEES AND OFFICERS, UNLESS OTHERWISE NOTED, IS 4550
MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814. TRUSTEES AND OFFICERS
AS A GROUP OWN LESS THAN 1% OF THE PORTFOLIO'S OUTSTANDING SHARES. TRUSTEES
MARKED WITH AN *, ABOVE, ARE "INTERESTED PERSONS" OF THE FUND, UNDER THE
INVESTMENT COMPANY ACT OF 1940.
EACH OF THE ABOVE NAMED TRUSTEES AND OFFICERS IS A TRUSTEE OR OFFICER OF
EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS WITH THE
EXCEPTION OF CALVERT SOCIAL INVESTMENT FUND, OF WHICH ONLY MESSRS. BAIRD, GUFFEY
AND SILBY AND MS. KRUMSIEK ARE AMONG THE TRUSTEES, CALVERT VARIABLE SERIES,
INC., OF WHICH ONLY MESSRS. BLATZ, DIEHL AND PUGH AND MMES. KRUMSIEK AND KRUVANT
ARE AMONG THE DIRECTORS, CALVERT WORLD VALUES FUND, INC., OF WHICH ONLY MESSRS.
GUFFEY AND SILBY AND MS. KRUMSIEK ARE AMONG THE DIRECTORS, AND CALVERT NEW WORLD
FUND, INC., OF WHICH ONLY MS. KRUMSIEK AND MR. MARTINI ARE AMONG THE DIRECTORS.
THE BOARD'S AUDIT COMMITTEE IS COMPOSED OF MESSRS. BAIRD, BLATZ, FELDMAN,
GUFFEY AND PUGH AND MS. KRUVANT. THE INVESTMENT POLICY COMMITTEE IS COMPOSED OF
MESSRS. BORTS, DIEHL, GAVIAN, ROCHAT, SILBY AND MS. KRUMSIEK.
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; SUCH FEES ARE ALLOCATED AMONG THE RESPECTIVE FUNDS
ON THE BASIS OF NET ASSETS.
TRUSTEES 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 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/DIRECTORS COMPENSATION TABLE
FISCAL YEAR 1999
(UNAUDITED NUMBERS)
AGGREGATE PENSION OR TOTAL COMPENSATION
COMPENSATION RETIREMENT BENEFITS FROM
FROM REGISTRANT ACCRUED AS REGISTRANT AND FUND
FOR SERVICE PART OF COMPLEX PAID TO
AS TRUSTEE REGISTRANT TRUSTEE/DIRECTORS**
EXPENSES*
NAME OF TRUSTEE/DIRECTORS
RICHARD L. BAIRD, JR. $2842 $0 $39,250
FRANK H. BLATZ, JR. $2960 $2960 $48,250
FREDERICK T. BORTS $2779 $0 $35,500
CHARLES E. DIEHL $2960 $0 $48,250
DOUGLAS E. FELDMAN $2906 $0 $37,000
PETER W. GAVIAN $2906 $0 $37,000
JOHN G. GUFFEY, JR. $2842 $564 $56,365
M. CHARITO KRUVANT $2779 $1667 $45,250
ARTHUR J. PUGH $2960 $0 $48,250
D. WAYNE SILBY $2524 $0 $60,831
* CERTAIN TRUSTEES HAVE CHOSEN TO DEFER THEIR COMPENSATION. AS OF DECEMBER 31,
1999, TOTAL DEFERRED COMPENSATION FROM THE FUND COMPLEX, INCLUDING DIVIDENDS AND
CAPITAL APPRECIATION FOR THE TRUSTEES SHOWN WAS: BLATZ, $784,000; DIEHL,
$760,650; GAVIAN, $194,300; GUFFEY, $11,100; KRUVANT, $58,700; AND PUGH,
$134,450.
** THE FUND COMPLEX CONSISTS OF NINE (9) REGISTERED INVESTMENT COMPANIES.
INVESTMENT ADVISOR
------------------
THE FUND'S INVESTMENT ADVISOR IS CALVERT ASSET MANAGEMENT COMPANY, INC.,
4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814, A SUBSIDIARY OF
CALVERT GROUP, LTD., WHICH IS A CONTROLLED SUBSIDIARY OF AMERITAS ACACIA MUTUAL
HOLDING COMPANY OF LINCOLN, NEBRASKA.
UNDER THE ADVISOR AGREEMENTS, 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 TRUSTEES. FOR ITS SERVICES, EFFECTIVE WITH THE COMMENCEMENT
OF THE INSTITUTIONAL CLASS THE ADVISOR RECEIVES A FEE OF 0.25% OF THE FIRST $500
MILLION OF THE AVERAGE DAILY NET ASSETS OF THE FUND, 0.225% OF THE NEXT $400
MILLION OF SUCH ASSETS, 0.20% OF THE NEXT $400 MILLION OF SUCH ASSETS, 0.175% OF
THE NEXT $700 MILLION OF SUCH ASSETS, AND 0.15% ON ALL ASSETS IN EXCESS OF $2
BILLION. SUCH FEE IS PAYABLE MONTHLY.
THE ADVISOR PROVIDES THE FUND WITH INVESTMENT ADVICE AND RESEARCH, PAYS THE
SALARIES AND FEES OF ALL TRUSTEES AND EXECUTIVE OFFICERS OF THE FUND WHO ARE
EMPLOYEES OF THE ADVISOR, OR ITS AFFILIATES AND PAYS CERTAIN FUND ADVERTISING
AND PROMOTIONAL EXPENSES. THE FUND PAYS ALL OTHER ADMINISTRATIVE AND OPERATING
EXPENSES, INCLUDING: CUSTODIAL FEES; SHAREHOLDER SERVICING, DIVIDEND DISBURSING
AND TRANSFER AGENCY FEES; ADMINISTRATIVE SERVICE FEES; FEDERAL AND STATE
SECURITIES REGISTRATION FEES; INSURANCE PREMIUMS; TRADE ASSOCIATION DUES;
INTEREST, TAXES AND OTHER BUSINESS FEES; LEGAL AND AUDIT FEES; AND BROKERAGE
COMMISSIONS AND OTHER COSTS ASSOCIATED WITH THE PURCHASE AND SALE OF PORTFOLIO
SECURITIES. THE FUND OFFERS MULTIPLE CLASSES OF SHARES, THEREFORE INVESTMENT
ADVISORY FEES ARE ALLOCATED AS A FUND LEVEL EXPENSE BASED ON NET ASSETS. FOR THE
FUND'S FISCAL YEARS ENDED DECEMBER 31, 1997, 1998, AND 1999, THE FUND PAID THE
ADVISOR INVESTMENT ADVISORY FEES OF $1,206,618, $1,037,947, AND $784,621,
RESPECTIVELY. THE ADVISOR HAS AGREED TO REIMBURSE THE FUND FOR ALL EXPENSES
(EXCLUDING BROKERAGE, TAXES, INTEREST, DISTRIBUTION PLAN EXPENSES, AND
EXTRAORDINARY ITEMS) EXCEEDING, ON A PRO RATA BASIS, 1% OF THE FUND'S AVERAGE
DAILY NET ASSETS.
REIMBURSEMENTS
--------------
CLASS 1997 1998 1999
CLASS O $0 $0 $0
CLASS B N/A $9,526 $12,108
CLASS C N/A $7,401 $13,355
CLASS I N/A $7,448 $24,131
CLASS T N/A N/A $0
ADMINISTRATIVE SERVICE 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 THE FUND'S AFFAIRS. SUCH SERVICES INCLUDE THE
PREPARATION OF CORPORATE AND REGULATORY REPORTS AND FILINGS, PORTFOLIO
ACCOUNTING, AND THE DAILY DETERMINATION OF NET INVESTMENT INCOME AND NET ASSET
VALUE PER SHARE. EFFECTIVE WITH THE COMMENCEMENT OF THE INSTITUTIONAL CLASS
(SEPTEMBER 1998), CLASSES O, B, AND C PAY AN ANNUAL RATE OF 0.25%, WHILE THE
INSTITUTIONAL CLASS PAYS AN ANNUAL RATE OF 0.05%, BASED ON AVERAGE DAILY NET
ASSETS. CLASS T PAYS AN ANNUAL RATE OF 0.25%. THERE WERE NO ADMINISTRATIVE
SERVICES FEES PAID BY THE FUND IN THE 1997 FISCAL YEAR. DURING FISCAL YEAR 1998,
THE FUND PAID $208,596 IN ADMINISTRATIVE FEES.
CLASS 1997 1998 1999
CLASS O $0 $204,370 $594,037
CLASS B $0 $54 $499
CLASS C $0 $229 $1,221
CLASS I $0 $3,943 $10,580
CLASS T $0 N/A $135,968
ADMINISTRATIVE SERVICE FEES ARE ALLOCATED AS A CLASS-LEVEL EXPENSE, AGAIN
BASED ON NET ASSETS.
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), 330 W. 9TH STREET, KANSAS
CITY, MISSOURI 64105, 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"), 4550 MONTGOMERY AVENUE,
BETHESDA, MARYLAND 20814, A SUBSIDIARY OF CALVERT GROUP, LTD., 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, NFDS AND CALVERT SHAREHOLDER SERVICES, INC. RECEIVE A
FEE BASED ON THE NUMBER OF SHAREHOLDER ACCOUNTS AND SHAREHOLDER TRANSACTIONS.
PORTFOLIO TRANSACTIONS
----------------------
PORTFOLIO TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY
FROM AN INVESTMENT STANDPOINT. INVESTMENT DECISIONS AND CHOICE OF BROKERS AND
DEALERS ARE MADE BY THE FUND'S ADVISOR UNDER THE DIRECTION AND SUPERVISION OF
THE FUND'S BOARD OF TRUSTEES.
BROKER-DEALERS WHO EXECUTE PORTFOLIO TRANSACTIONS ON BEHALF OF THE FUND ARE
SELECTED ON THE BASIS OF THEIR PROFESSIONAL CAPABILITY AND THE VALUE AND QUALITY
OF THEIR SERVICES. THE ADVISOR RESERVES THE RIGHT TO PLACE ORDERS FOR THE
PURCHASE OF SALE OF PORTFOLIO SECURITIES WITH DEALERS WHO PROVIDE IT WITH
STATISTICAL, RESEARCH, OR OTHER INFORMATION AND SERVICES. ALTHOUGH ANY
STATISTICAL, RESEARCH, OR OTHER INFORMATION AND SERVICES PROVIDED BY DEALERS MAY
BE USEFUL TO THE ADVISOR, THE DOLLAR VALUE OF SUCH INFORMATION IS GENERALLY
INDETERMINABLE, AND ITS AVAILABILITY OR RECEIPT DOES NOT SERVE TO MATERIALLY
REDUCE THE ADVISOR'S NORMAL RESEARCH ACTIVITIES OR EXPENSES. NO BROKERAGE
COMMISSIONS HAVE BEEN PAID TO ANY BROKER-DEALER THAT PROVIDED THE FUND'S ADVISOR
WITH RESEARCH OR OTHER SERVICES.
THE ADVISOR MAY ALSO EXECUTE PORTFOLIO TRANSACTIONS WITH OR THROUGH
BROKER-DEALERS WHO HAVE SOLD SHARES OF THE FUND. HOWEVER, SUCH SALES WILL NOT BE
A QUALIFYING OR DISQUALIFYING FACTOR IN A BROKER-DEALER'S SELECTION NOR WILL THE
SELECTION OF ANY BROKER-DEALER BE BASED ON THE VOLUME OF FUND SHARES SOLD. THE
ADVISOR MAY COMPENSATE, AT ITS EXPENSE, SUCH BROKER-DEALERS IN CONSIDERATION OF
THEIR PROMOTIONAL AND ADMINISTRATIVE SERVICES.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
--------------------------------------
PRICEWATERHOUSECOOPERS LLP, 250 WEST PRATT STREET, BALTIMORE, MARYLAND
21201, HAS BEEN SELECTED BY THE BOARD OF TRUSTEES TO SERVE AS INDEPENDENT
ACCOUNTANTS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST COMPANY, N.A., 225
FRANKLIN STREET, BOSTON, MASSACHUSETTS 02110, CURRENTLY SERVES AS CUSTODIAN OF
THE FUND'S INVESTMENTS. ALL FIRST FINANCIAL INC., 25 SOUTH CHARLES STREET,
BALTIMORE, MARYLAND 21203 ALSO SERVES AS CUSTODIAN OF CERTAIN OF THE FUND'S CASH
ASSETS. NEITHER CUSTODIAN HAS ANY PART IN DECIDING THE FUND'S INVESTMENT
POLICIES OR THE CHOICE OF SECURITIES THAT ARE TO BE PURCHASED OR SOLD FOR THE
FUND.
METHOD OF DISTRIBUTION
----------------------
THE FUND HAS ENTERED INTO AN AGREEMENT WITH CALVERT DISTRIBUTORS, INC.
("CDI"), 4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814, WHEREBY CDI, ACTING
AS PRINCIPAL UNDERWRITER FOR THE FUND, MAKES A CONTINUOUS OFFERING OF THE FUND'S
SECURITIES ON A "BEST EFFORTS" BASIS. CDI IS AN AFFILIATE OF THE FUND'S ADVISOR.
UNDER THE TERMS OF THE AGREEMENT, CDI IS ENTITLED TO RECEIVE A DISTRIBUTION FEE
FROM THE FUND PAID THROUGH THE DISTRIBUTION PLANS OF CLASS B, C, AND T. CLASS O
AND THE INSTITUTIONAL CLASS HAVE NO DISTRIBUTION PLANS. FOR CLASS B AND CLASS C
SHARES, CDI RECEIVES ANY CDSC PAID.
PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT, CLASS B, C, AND T HAVE ADOPTED
DISTRIBUTION PLANS (THE "PLANS") WHICH PERMIT THEM TO PAY CERTAIN EXPENSES
ASSOCIATED WITH THE DISTRIBUTION AND SERVICING OF ITS SHARES. SUCH EXPENSES MAY
NOT EXCEED, ON AN ANNUAL BASIS, 1.00% OF THE AVERAGE DAILY NET ASSETS OF CLASS B
AND C, RESPECTIVELY, AND 0.25% OF CLASS T.
THE DISTRIBUTION PLANS WERE APPROVED BY THE BOARD OF TRUSTEES, INCLUDING
THE TRUSTEES WHO ARE NOT "INTERESTED PERSONS" OF THE FUND (AS THAT TERM IS
DEFINED IN THE 1940 ACT) 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 TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE
FUND IS COMMITTED TO THE DISCRETION OF SUCH DISINTERESTED TRUSTEES. IN
ESTABLISHING THE PLANS, THE TRUSTEES CONSIDERED VARIOUS FACTORS INCLUDING THE
AMOUNT OF THE DISTRIBUTION EXPENSES. THE TRUSTEES DETERMINED THAT THERE IS A
REASONABLE LIKELIHOOD THAT THE PLANS WILL BENEFIT THE AFFECTED CLASS 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
TRUSTEES WHO HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, OR BY
VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE AFFECTED CLASS. ANY CHANGE
IN THE PLANS THAT WOULD MATERIALLY INCREASE THE COST TO THE AFFECTED CLASS
REQUIRES APPROVAL OF THE SHAREHOLDERS OF THAT CLASS; OTHERWISE, THE PLANS MAY BE
AMENDED BY THE TRUSTEES, INCLUDING A MAJORITY OF THE NON-INTERESTED TRUSTEES 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 TRUSTEES 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 TRUSTEES.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THE DISTRIBUTION PLAN EXPENSES
WERE SPENT FOR THE FOLLOWING PURPOSES:
CLASS B CLASS C CLASS T
COMPENSATION TO BROKER-DEALERS 1,996 4,884 135,967
COMPENSATION TO SALES PERSONNEL
ADVERTISING
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS
COMPENSATION TO UNDERWRITERS
INTEREST, FINANCIAL CHARGES
OTHER
TOTAL PAID TO CDI 1,996 4,884 135,967
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.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THEY PAID TO BROKER/DEALERS
FROM THEIR OWN RESOURCES A TOTAL OF $1,026,100 FOR DISTRIBUTION EXPENSES FOR ALL
FUNDS IN THE CALVERT GROUP.
CERTAIN BROKER-DEALERS, AND/OR OTHER PERSONS MAY RECEIVE COMPENSATION FROM
THE INVESTMENT ADVISOR, UNDERWRITER, OR THEIR AFFILIATES FOR THE SALE AND
DISTRIBUTION OF THE SECURITIES OR FOR SERVICES TO THE PORTFOLIO. SUCH
COMPENSATION MAY INCLUDE ADDITIONAL COMPENSATION BASED ON ASSETS HELD THROUGH
THAT FIRM BEYOND THE REGULARLY SCHEDULED RATES, AND FINDER'S FEES PAYMENTS TO
FIRMS WHOSE REPRESENTATIVES ARE RESPONSIBLE FOR SOLICITING A NEW ACCOUNT WHERE
THE ACCOUNTHOLDER DOES NOT CHOOSE TO PURCHASE THROUGH THAT FIRM.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
---------------------------------------------------
AS OF APRIL 20, 2000, THERE WERE NO SHAREHOLDERS THAT OWNED OF RECORD 5% OR
MORE OF THE CLASS OF CALVERT FIRST GOVERNMENT MONEY MARKET FUND.
GENERAL INFORMATION
-------------------
THE FUND IS ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST, AND HAS ONE SERIES, THE
CALVERT FIRST GOVERNMENT MONEY MARKET FUND. THE FUND'S DECLARATION OF TRUST
CONTAINS AN EXPRESS DISCLAIMER OF SHAREHOLDER LIABILITY FOR ACTS OR OBLIGATIONS
OF THE FUND. THE SHAREHOLDERS OF MASSACHUSETTS BUSINESS TRUST MIGHT, HOWEVER,
UNDER CERTAIN CIRCUMSTANCES, BE HELD PERSONALLY LIABLE AS PARTNERS FOR ITS
OBLIGATIONS. THE DECLARATION OF TRUST PROVIDES FOR INDEMNIFICATION AND
REIMBURSEMENT OF EXPENSES OUT OF FUND ASSETS FOR ANY SHAREHOLDER HELD PERSONALLY
LIABLE FOR OBLIGATIONS OF THE FUND. THE DECLARATION OF TRUST PROVIDES THAT THE
FUND SHALL, UPON REQUEST, ASSUME THE DEFENSE OF ANY CLAIM MADE AGAINST ANY
SHAREHOLDER FOR ANY ACT OR OBLIGATION OF THE FUND AND SATISFY ANY JUDGMENT
THEREON. THE DECLARATION OF TRUST FURTHER PROVIDES THAT THE FUND MAY MAINTAIN
APPROPRIATE INSURANCE (FOR EXAMPLE, FIDELITY BONDING AND ERRORS AND OMISSIONS
INSURANCE) FOR THE PROTECTION OF THE FUND, ITS SHAREHOLDERS, TRUSTEES, OFFICERS,
EMPLOYEES AND AGENTS TO COVER POSSIBLE TORT AND OTHER LIABILITIES. THUS, THE
RISK OF A SHAREHOLDER INCURRING FINANCIAL LOSS ON ACCOUNT OF SHAREHOLDER
LIABILITY IS LIMITED TO CIRCUMSTANCES IN WHICH BOTH INADEQUATE INSURANCE EXISTS
AND THE FUND ITSELF IS UNABLE TO MEET ITS OBLIGATIONS.
THE FUND OFFERS FIVE SEPARATE CLASSES OF SHARES: CLASS O, CLASS B, CLASS C,
OFFERED IN ONE PROSPECTUS; THE INSTITUTIONAL CLASS, OFFERED IN A SEPARATE
PROSPECTUS, AND CLASS T, ALSO OFFERED BY A SEPARATE PROSPECTUS. CLASS T IS ALSO
KNOWN AS THE ADVISORS GROUP RESERVES FUND. THE CLASSES REPRESENT INTERESTS IN
THE SAME PORTFOLIO OF INVESTMENTS BUT, AS FURTHER DESCRIBED IN THE PROSPECTUSES,
EACH CLASS MAY BE SUBJECT TO DIFFERING SALES CHARGES AND EXPENSES, WHICH WILL
RESULT IN DIFFERENT DIVIDENDS AND DISTRIBUTIONS. UPON ANY LIQUIDATION OF THE
FUND, SHAREHOLDERS OF EACH CLASS ARE ENTITLED TO SHARE PRO RATA IN THE NET
ASSETS AVAILABLE FOR DISTRIBUTION.
THE FUND WILL SEND ITS SHAREHOLDERS PERIODIC TRANSACTION STATEMENTS AND
UNAUDITED SEMI-ANNUAL AND AUDITED ANNUAL FINANCIAL STATEMENTS OF THE FUND'S
INVESTMENT SECURITIES, ASSETS AND LIABILITIES, INCOME AND EXPENSES, AND CHANGES
IN NET ASSETS.
THE PROSPECTUSES AND THIS STATEMENT OF ADDITIONAL INFORMATION DO NOT
CONTAIN ALL THE INFORMATION IN THE FUND'S REGISTRATION STATEMENT. THE
REGISTRATION STATEMENT IS ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION
AND IS AVAILABLE TO THE PUBLIC.
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS:
99B.1 DECLARATION OF TRUST INCORPORATED BY REFERENCE TO REGISTRANT'S
POST-EFFECTIVE AMENDMENT NO. 11, MAY 1, 1984 FILED HEREWITH.99B.2
BY-LAWS OF THE TRUST INCORPORATED BY REFERENCE TO REGISTRANT'S
POST-EFFECTIVE AMENDMENT NO. 11, MAY 1, 1984 FILED HEREWITH.
99.B5. INVESTMENT ADVISORY AGREEMENT, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 39, APRIL 30, 1999,
ACCESSION NUMBER 0000205355-99-000010
99.B6 UNDERWRITING AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 35, DATED MARCH 31,
1998, FILED HEREWITH.
99.B7 . TRUSTEES' DEFERRED COMPENSATION AGREEMENT, INCORPORATED BY
REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 19,
APRIL 30, 1992 FILED HEREWITH.
99.B8. CUSTODIAL CONTRACT, INCORPORATED BY REFERENCE TO REGISTRANT'S
POST-EFFECTIVE AMENDMENT NO. 35, MARCH 31, 1998 FILED
HEREWITH.
99.B9 TRANSFER AGENCY AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 35, MARCH 31, 1998
FILED HEREWITH.
99.B9.A. SERVICING AGREEMENT, FILED HEREWITH.
99.B9.B. ADMINISTRATIVE SERVICES AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 15, JANUARY 30,
1989, AMENDED IN 1999 FILED HEREWITH.
99.B10 OPINION AND CONSENT OF COUNSEL FILED HEREWITH.
99.B11. CONSENT OF INDEPENDENT ACCOUNTANTS TO USE OF REPORT, FILED
HEREWITH.
99.B15 PLAN OF DISTRIBUTION, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 35, MARCH 31, 1998,
FILED HEREWITH.
99.B15A PLAN OF DISTRIBUTION FOR CLASS T, FILED HEREWITH.
99.B17.A MULTIPLE-CLASS PLAN UNDER THE INVESTMENT COMPANY ACT OF 1940
RULE 18F-3, (INCORPORATED BY REFERENCE TO REGISTRANT'S POST-
EFFECTIVE AMENDMENT NO. 35, MARCH 31, 1998, FILED HEREWITH.
99.B17.B POWER OF ATTORNEY FORMS SIGNED BY EACH DIRECTOR, INCORPORATED
BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 39,
DATED APRIL 30, 1999, ACCESSION NUMBER 0000205355-99-000010
99.B18 CODE OF ETHICS FILED HEREWITH.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
NOT APPLICABLE.
ITEM 25. INDEMNIFICATION
REGISTRANT'S DECLARATION OF TRUST, WHICH DECLARATION IS
EXHIBIT 1 OF THIS REGISTRATION STATEMENT, PROVIDES, IN SUMMARY, THAT
OFFICERS, TRUSTEES, EMPLOYEES, AND AGENTS SHALL BE INDEMNIFIED BY
REGISTRANT AGAINST LIABILITIES AND EXPENSES INCURRED BY SUCH PERSONS IN
CONNECTION WITH ACTIONS, SUITS, OR PROCEEDINGS ARISING OUT OF THEIR
OFFICES OR DUTIES OF EMPLOYMENT, EXCEPT THAT NO INDEMNIFICATION CAN BE
MADE TO SUCH A PERSON IF HE HAS BEEN ADJUDGED LIABLE OF WILLFUL
MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE, OR RECKLESS DISREGARD OF
HIS DUTIES. IN THE ABSENCE OF SUCH AN ADJUDICATION, THE DETERMINATION
OF ELIGIBILITY FOR INDEMNIFICATION SHALL BE MADE BY INDEPENDENT COUNSEL
IN A WRITTEN OPINION OR BY THE VOTE OF A MAJORITY OF A QUORUM OF
TRUSTEES WHO ARE NEITHER "INTERESTED PERSONS" OF REGISTRANT, AS THAT
TERM IS DEFINED IN SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF
1940, NOR PARTIES TO THE PROCEEDING.
REGISTRANT'S DECLARATION OF TRUST ALSO PROVIDES THAT
REGISTRANT MAY PURCHASE AND MAINTAIN LIABILITY INSURANCE ON BEHALF OF
ANY OFFICER, TRUSTEE, EMPLOYEE OR AGENT AGAINST ANY LIABILITIES ARISING
FROM SUCH STATUS. IN THIS REGARD, REGISTRANT MAINTAINS A DIRECTORS &
OFFICERS (PARTNERS) LIABILITY INSURANCE POLICY WITH CHUBB GROUP OF
INSURANCE COMPANIES, 15 MOUNTAIN VIEW ROAD, WARREN, NEW JERSEY 07061,
PROVIDING REGISTRANT WITH $5 MILLION IN DIRECTORS AND OFFICERS
LIABILITY COVERAGE, PLUS $5 MILLION IN EXCESS DIRECTORS
AND OFFICERS LIABILITY COVERAGE FOR THE INDEPENDENT TRUSTEES/DIRECTORS
ONLY. REGISTRANT ALSO MAINTAINS AN $9 MILLION INVESTMENT COMPANY
BLANKET BOND ISSUED BY ICI MUTUAL INSURANCE COMPANY, P.O. BOX 730,
BURLINGTON, VERMONT, 05402.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
NAME OF COMPANY, PRINCIPAL
NAME BUSINESS AND ADDRESS CAPACITY
BARBARA J. KRUMSIEK CALVERT VARIABLE SERIES, INC. OFFICER
CALVERT MUNICIPAL FUND, INC. AND
CALVERT WORLD VALUES FUND, INC. DIRECTOR
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT SOCIAL INVESTMENT FUND
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
ALLIANCE CAPITAL MGMT. L.P. SR. VICE PRESIDENT
MUTUAL FUND DIVISION DIRECTOR
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
--------------
RONALD M. WOLFSHEIMER FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
DAVID R. ROCHAT FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT MUNICIPAL FUND, INC. OFFICER
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CHELSEA SECURITIES, INC. OFFICER
SECURITIES FIRM AND
POST OFFICE BOX 93 DIRECTOR
CHELSEA, VERMONT 05038
---------------
GRADY, BERWALD & CO. OFFICER
HOLDING COMPANY AND
43A SOUTH FINLEY AVENUE DIRECTOR
BASKING RIDGE, NJ 07920
---------------
RENO J. MARTINI CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CHARLES T. NASON AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA LIFE INSURANCE AND DIRECTOR
INSURANCE COMPANIES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA FINANCIAL CORPORATION OFFICER
HOLDING COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
ACACIA FEDERAL SAVINGS BANK DIRECTOR
SAVINGS BANK
7600-B LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22043
---------------
ENTERPRISE RESOURCES, INC. DIRECTOR
BUSINESS SUPPORT SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA REALTY SQUARE, L.L.C. DIRECTOR
REALTY INVESTMENTS
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
GARDNER MONTGOMERY COMPANY DIRECTOR
TAX RETURN PREPARATION SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. DIRECTOR
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. DIRECTOR
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. DIRECTOR
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SOCIAL INVESTMENT FUND TRUSTEE
INVESTMENT COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
-----------------
THE ADVISORS GROUP, LTD. DIRECTOR
BROKER-DEALER AND
INVESTMENT ADVISOR
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ROBERT-JOHN H. AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA LIFE INSURANCE
ACACIA NATIONAL LIFE INSURANCE OFFICER
INSURANCE COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
ACACIA LIFE INSURANCE OFFICER
INSURANCE COMPANY
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
----------------
ACACIA FINANCIAL CORPORATION OFFICER
HOLDING COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
ACACIA FEDERAL SAVINGS BANK OFFICER
SAVINGS BANK
7600-B LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22043
---------------
ENTERPRISE RESOURCES, INC. DIRECTOR
BUSINESS SUPPORT SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA REALTY SQUARE, L.L.C. DIRECTOR
REALTY INVESTMENTS
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
THE ADVISORS GROUP, LTD. DIRECTOR
BROKER-DEALER AND
INVESTMENT ADVISOR
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
GARDNER MONTGOMERY COMPANY DIRECTOR
TAX RETURN PREPARATION SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. DIRECTOR
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. DIRECTOR
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT, CO., INC. DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. DIRECTOR
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
WILLIAM M. TARTIKOFF ACACIA NATIONAL LIFE INSURANCE OFFICER
INSURANCE COMPANY
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE OFFICER
SERVICES COMPANY
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO. INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. DIRECTOR
BROKER-DEALER AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
SUSAN WALKER BENDER CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
IVY WAFFORD DUKE CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
JENNIFER STREAKS CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
VICTOR FRYE CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
THE ADVISORS GROUP, LTD. COUNSEL
BROKER-DEALER AND AND
INVESTMENT ADVISOR COMPLIANCE
7315 WISCONSIN AVENUE MANAGER
BETHESDA, MARYLAND 20814
---------------
DANIEL K. HAYES CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
JOHN NICHOLS CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
DAVID LEACH CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
MATTHEW D. GELFAND CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
STRATEGIC INVESTMENT MANAGEMENT OFFICER
INVESTMENT ADVISOR
1001 19TH STREET NORTH
ARLINGTON, VIRGINIA 20009
------------------
ITEM 27. PRINCIPAL UNDERWRITERS
(A) REGISTRANT'S PRINCIPAL UNDERWRITER UNDERWRITES SHARES OF FIRST
VARIABLE RATE FUND FOR GOVERNMENT INCOME, CALVERT TAX-FREE RESERVES, CALVERT
SOCIAL INVESTMENT FUND, CALVERT CASH RESERVES, THE CALVERT FUND, CALVERT
MUNICIPAL FUND, INC., CALVERT WORLD VALUES FUND, INC., CALVERT NEW WORLD FUND,
INC., AND CALVERT VARIABLE SERIES, INC. (FORMERLY NAMED ACACIA CAPITAL
CORPORATION).
(B) POSITIONS OF UNDERWRITER'S OFFICERS AND DIRECTORS
NAME AND PRINCIPAL POSITION(S) WITH POSITION(S) WITH
BUSINESS ADDRESS UNDERWRITER REGISTRANT
BARBARA J. KRUMSIEK DIRECTOR AND PRESIDENT PRESIDENT AND TRUSTEE
RONALD M. WOLFSHEIMER DIRECTOR, SENIOR VICE TREASURER
PRESIDENT AND CHIEF FINANCIAL OFFICER
WILLIAM M. TARTIKOFF DIRECTOR, SENIOR VICE VICE PRESIDENT AND
PRESIDENT AND SECRETARY SECRETARY
CRAIG CLOYED SENIOR VICE PRESIDENT NONE
KAREN BECKER VICE PRESIDENT, OPERATIONS NONE
MATTHEW GELFAND VICE PRESIDENT NONE
GEOFFREY ASHTON REGIONAL VICE PRESIDENT NONE
MARTIN BROWN REGIONAL VICE PRESIDENT NONE
BILL HAIRGROVE REGIONAL VICE PRESIDENT NONE
ANTHONY EAMES REGIONAL VICE PRESIDENT NONE
STEVE HIMBER REGIONAL VICE PRESIDENT NONE
TANYA WILLIAMS REGIONAL VICE PRESIDENT NONE
BEN OGBOGU REGIONAL VICE PRESIDENT NONE
TOM STANTON REGIONAL VICE PRESIDENT NONE
CHRISTINE TESKE REGIONAL VICE PRESIDENT NONE
JENNIFER STREAKS ASSISTANT SECRETARY NONE
SUSAN WALKER BENDER ASSISTANT SECRETARY ASSISTANT SECRETARY
IVY WAFFORD DUKE ASSISTANT SECRETARY ASSISTANT SECRETARY
VICTOR FRYE ASSISTANT SECRETARY NONE
AND COMPLIANCE OFFICER
(C) INAPPLICABLE.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
RONALD M. WOLFSHEIMER, TREASURER
AND
WILLIAM M. TARTIKOFF, ASSISTANT SECRETARY
4550 MONTGOMERY AVENUE, SUITE 1000N
BETHESDA, MARYLAND 20814
ITEM 29. MANAGEMENT SERVICES
NOT APPLICABLE
ITEM 30. UNDERTAKINGS
NOT APPLICABLE
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE
INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT CERTIFIES THAT IT MEETS
ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS REGISTRATION
STATEMENT UNDER RULE 485(B) UNDER THE SECURITIES ACT AND HAS DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, DULY AUTHORIZED, IN THE CITY OF BETHESDA, AND STATE OF
MARYLAND, ON THE 26TH DAY OF APRIL, 2000.
FIRST VARIABLE RATE FUND
BY:
________________**________________
BARBARA J. KRUMSIEK
PRESIDENT AND TRUSTEE
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
__________**____________ PRESIDENT AND 4/26/00
BARBARA J. KRUMSIEK TRUSTEE (PRINCIPAL EXECUTIVE OFFICER)
__________**____________ PRINCIPAL ACCOUNTING 4/26/00
RONALD M. WOLFSHEIMER OFFICER
__________**____________ TRUSTEE 4/26/00
RICHARD L. BAIRD, JR.
__________**____________ TRUSTEE 4/26/00
FRANK H. BLATZ, JR., ESQ.
__________**____________ TRUSTEE 4/26/00
FREDERICK T. BORTS, M.D.
__________**____________ TRUSTEE 4/26/00
CHARLES E. DIEHL
__________**____________ TRUSTEE 4/26/00
DOUGLAS E. FELDMAN
__________**____________ TRUSTEE 4/26/00
PETER W. GAVIAN
__________**____________ TRUSTEE 4/26/00
JOHN G. GUFFEY, JR.
__________**____________ TRUSTEE 4/26/00
M. CHARITO KRUVANT
__________**____________ TRUSTEE 4/26/00
ARTHUR J. PUGH
__________**____________ TRUSTEE 4/26/00
DAVID R. ROCHAT
__________**____________ TRUSTEE 4/26/00
D. WAYNE SILBY
**BY SUSAN WALKER BENDER AS ATTORNEY-IN-FACT, PURSUANT TO POWER OF ATTORNEY
FORMS ON FILE.
EXHIBIT 1
DECLARATION OF TRUST
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
DECLARATION OF TRUST
ARTICLE I NAME AND DEFINITIONS 1
1. NAME 1
2. DEFINITIONS
(A) AFFILIATED PERSON, ASSIGNMENT,
COMMISSION, INTERESTED PERSON,
MAJORITY SHAREHOLDER NOTE, PRINCIPAL
UNDERWRITER 1
(B) TRUST 1
(C) ACCUMULATED NET INCOME 1
(D) SHAREHOLDER 1
(E) TRUSTEES 1
(F) SHARES 2
(G) 1940 ACT 2
(H) COMMISSION 2
(I) BUSINESS DAY 2
ARTICLE II PURPOSE OF TRUST 2
ARTICLE III BENEFICIAL INTEREST 2
1. SHARES OF BENEFICIAL INTEREST 2
2. OWNERSHIP OF SHARES 3
3. INVESTMENT IN THE TRUST 3
4. NO PRE-EMPTIVE RIGHTS 4
5. PROVISIONS RELATING TO SERIES OF SHARES 4
ARTICLE IV THE TRUSTEES 5
1. MANAGEMENT OF THE TRUST 5
2. ELECTION OF TRUSTEES 5
3. TERM OF OFFICE OF TRUSTEES 5
4. TERMINATION OF SERVICE AND
APPOINTMENT OF TRUSTEES 6
5. TEMPORARY ABSENCE OF TRUSTEE 6
6. NUMBER OF TRUSTEES 6
7. EFFECT OF DEATH, RESIGNATION, ETC.
OF A TRUSTEE 7
8. OWNERSHIP OF THE TRUST 7
ARTICLE V POWERS OF THE TRUSTEES 7
1. POWERS 7
2. TRUSTEES AND OFFICERS AS SHAREHOLDERS 10
3. PARTIES TO CONTRACT 10
ARTICLE VI TRUSTEES' EXPENSES AND COMPENSATION 11
1. TRUSTEE REIMBURSEMENT 11
2. TRUSTEE COMPENSATION 12
ARTICLE VII INVESTMENT ADVISER, ADMINISTRATIVE
SERVICES, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT 12
1. INVESTMENT ADVISER 12
2. ADMINISTRATIVE SERVICES 13
3. PRINCIPAL UNDERWRITER 13
4. TRANSFER AGENT 13
ARTICLE VIII SHAREHOLDERS' VOTING POWERS AND MEETINGS 14
1. VOTING POWERS 14
2. MEETINGS 14
3. QUORUM AND REQUIRED VOTE 14
4. PROXIES 15
5. ADDITIONAL PROVISIONS 15
ARTICLE IX CUSTODIANS 15
1. APPOINTMENT OF CUSTODIAN AND DUTIES 15
2 CENTRAL CERTIFICATE SYSTEM 16
3. SPECIAL CUSTODIANS 16
4. SPECIAL DEPOSITORIES 17
ARTICLE X DISTRIBUTIONS AND REDEMPTIONS 17
1. DISTRIBUTIONS 17
2. REDEMPTIONS AND REPURCHASES 18
3. DETERMINATION OF ACCUMULATED NET
INCOME 19
4. NET ASSET VALUE OF SHARES 19
5. SUSPENSION OF THE RIGHT OF REDEMPTION 20
6. TRUST'S RIGHT TO REDEEM SHARES 20
ARTICLE XI LIMITATION OF LIABILITY AND INDEMNIFICATION 21
1. LIMITATION OF PERSONAL LIABILITY AND
INDEMNIFICATION OF SHAREHOLDERS 21
2. LIMITATION OF PERSONAL LIABILITY OF
TRUSTEES, OFFICERS, EMPLOYEES OR
AGENTS OF THE TRUST 22
3. EXPRESS EXCULPATORY CLAUSES AND
INSTRUMENTS 22
4. MANDATORY INDEMNIFICATION 23
ARTICLE XII MISCELLANEOUS 24
1. TRUST IS NOT A PARTNERSHIP 24
2. TRUSTEE'S GOOD FAITH ACTION, EXPERT
ADVICE, NO BOND OR SURETY 24
3. ESTABLISHMENT OF RECORD DATES 24
4. TERMINATION OF TRUST 25
5. OFFICES OF THE TRUST, FILING OF COPIES
REFERENCES, HEADINGS 25
6. APPLICABLE LAW 26
7. AMENDMENTS 26
8. CONFLICTS WITH LAW OR REGULATIONS 27
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
DECLARATION OF TRUST
DECLARATION OF TRUST MADE THIS 20TH DAY OF APRIL, 1984, BY JOHN G. GUFFEY, JR.,
AND D. WAYNE SILBY. WHEREAS, THE TRUSTEES DESIRE TO ESTABLISH A TRUST FUND
FOR THE INVESTMENT AND REINVESTMENT OF FUNDS CONTRIBUTED THERETO; NOW,
THEREFORE, THE TRUSTEES DECLARE THAT ALL MONEY AND PROPERTY CONTRIBUTED TO THE
TRUST FUND HEREUNDER SHALL BE HELD AND MANAGED UNDER THIS DECLARATION OF TRUST
IN TRUST AS HEREIN SET FORTH BELOW.
ARTICLE I
NAMES AND DEFINITIONS
SECTION 1. NAME. THIS TRUST SHALL BE KNOWN AS "FIRST VARIABLE RATE FUND FOR
GOVERNMENT INCOME. "SHOULD THE TRUSTEES DETERMINE THAT THE USE OF SUCH NAME IS
NOT ADVISABLE OR OTHERWISE CEASE USING SUCH NAME, THEN THEY MAY HOLD THE
PROPERTY OF THE TRUST AND CONDUCT ITS BUSINESS UNDER ANOTHER NAME OF THEIR
CHOOSING, AND SHALL UNDERTAKE TO CHANGE THE NAME OF THE TRUST ACCORDINGLY.
SECTION 2. DEFINITIONS. WHEREVER USED HEREIN, UNLESS OTHERWISE REQUIRED BY
THE CONTEXT OR SPECIFICALLY PROVIDED:
(A) THE TERMS "AFFILIATED PERSON", "ASSIGNMENT", "INTERESTED
PERSON", "MAJORITY SHAREHOLDER VOTE" (THE 67% OR 50% REQUIREMENT OF THE THIRD
SENTENCE OF SECTION 2(A) (42) OF THE 1940 ACT, WHICHEVER MAY BE APPLICABLE), AND
"PRINCIPAL UNDERWRITER" SHALL HAVE THE MEANINGS GIVEN THEM IN THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED FROM TIME TO TIME;
(B) THE "TRUST" REFERS TO FIRST VARIABLE RATE FUND FOR GOVERNMENT
INCOME;
(C) "ACCUMULATED NET INCOME" MEANS THE ACCUMULATED NET INCOME OF THE
TRUST DETERMINED IN THE MANNER PROVIDED OR AUTHORIZED IN ARTICLE X, SECTION 3;
(D) "SHAREHOLDER" MEANS A RECORD OWNER OF SHARES OF THE TRUST;
(E) THE "TRUSTEES" REFERS TO THE INDIVIDUAL TRUSTEES IN THEIR
CAPACITY AS TRUSTEES HEREUNDER OF THE TRUST AND THEIR SUCCESSOR OR SUCCESSORS
FOR THE TIME BEING IN OFFICE AS SUCH TRUSTEES;
(F) "SHARES" MEANS THE EQUAL PROPORTIONATE UNITS OF INTEREST INTO
WHICH THE BENEFICIAL INTEREST IN THE TRUST SHALL BE DIVIDED FROM TIME TO TIME
AND INCLUDES FRACTIONS OF SHARES AS WELL AS WHOLE SHARES;
(G) THE "1940 ACT" REFERS TO THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED FROM TIME TO TIME;
(H) THE "COMMISSION" REFERS TO THE COMMISSION DESCRIBED IN THE 1940
ACT AND TO ANY SUCCEEDING GOVERNMENTAL AUTHORITY; AND
(I) A "BUSINESS DAY" MEANS A DAY WHEN THE NEW YORK STOCK EXCHANGE IS
OPEN FOR TRADING AND THE TRUSTEES HAVE NOT DETERMINED THAT THE TRUST SHALL BE
CLOSED FOR BUSINESS IN OBSERVANCE OF A HOLIDAY OBSERVED GENERALLY BY BANKS IN
NEW YORK CITY, WASHINGTON, D.C., OR BY THE OFFICES OF THE FEDERAL GOVERNMENT IN
WASHINGTON, D.C.
ARTICLE II
PURPOSE OF TRUST
THIS TRUST IS ORGANIZED TO OPERATE AS AN INVESTMENT COMPANY REGISTERED UNDER
THE 1940 ACT FOR THE PURPOSE OF INVESTING AND REINVESTING ITS ASSETS IN
SECURITIES.
ARTICLE III
BENEFICIAL INTEREST
SECTION 1. SHARES OF BENEFICIAL INTEREST. THE BENEFICIAL INTEREST IN THE
TRUST SHALL AT ALL TIMES BE DIVIDED INTO TRANSFERABLE SHARES, WITHOUT PAR VALUE,
EACH OF WHICH SHALL REPRESENT AN EQUAL PROPORTIONATE INTEREST IN THE TRUST WITH
EACH OTHER SHARE OUTSTANDING, NONE HAVING PRIORITY OR PREFERENCE OVER ANOTHER,
EXCEPT TO THE EXTENT MODIFIED BY THE TRUSTEES UNDER THE PROVISIONS OF THIS
SECTION. THE NUMBER OF SHARES WHICH MAY BE ISSUED IS UNLIMITED. THE TRUSTEES MAY
FROM TIME TO TIME DIVIDE OR COMBINE THE OUTSTANDING SHARES INTO A GREATER OR
LESSER NUMBER WITHOUT THEREBY CHANGING THE PROPORTIONATE BENEFICIAL INTEREST IN
THE TRUST. CONTRIBUTIONS TO THE TRUST MAY BE ACCEPTED FOR, AND SHARES SHALL BE
REDEEMED AS, WHOLE SHARES AND/OR FRACTIONS. SHARES MAY BE REPRESENTED BY
CERTIFICATES OR BY SUITABLE ENTRIES IN THE BOOKS OF THE TRUST.
FROM TIME TO TIME AS THEY DEEM APPROPRIATE, THE TRUSTEES MAY CREATE SERIES
AND/OR CLASSES OF SHARES. REFERENCES IN THIS DECLARATION OF TRUST TO SHARES OF
THE TRUST SHALL APPLY TO EACH SUCH SERIES OF SHARES AND (TO THE EXTENT NOT
INCONSISTENT WITH THE RIGHTS AND RESTRICTIONS OF A CLASS) TO EACH SUCH CLASS OF
SHARES, EXCEPT TO THE EXTENT MODIFIED BY THE TRUSTEES UNDER THE PROVISIONS OF
THIS SECTION.
ANY SERIES OF SHARES CREATED HEREUNDER SHALL REPRESENT THE BENEFICIAL
INTEREST IN THE ASSETS (AND RELATED LIABILITIES) ALLOCATED BY THE TRUSTEES TO
SUCH SERIES OF SHARES AND ACQUIRED BY THE TRUST ONLY AFTER CREATION OF THE
RESPECTIVE SERIES OF SHARES AND ONLY ON THE ACCOUNT OF SUCH SERIES. UPON
CREATION OF ANY SERIES OF SHARES, THE TRUSTEES SHALL DESIGNATE IT APPROPRIATELY
AND DETERMINE THE INVESTMENT POLICIES WITH RESPECT TO THE ASSETS ALLOCATED TO
SUCH SERIES OF SHARES, PREFERENCES, REDEMPTION RIGHTS, DIVIDEND RIGHTS,
CONVERSION RIGHTS, LIQUIDATION RIGHTS, VOTING RIGHTS, AND SUCH OTHER RIGHTS AND
RESTRICTIONS AS THE TRUSTEES DEEM APPROPRIATE, TO THE EXTENT NOT INCONSISTENT
WITH THE PROVISIONS OF THIS DECLARATION OF TRUST.
THE TRUSTEES MAY DIVIDE THE SHARES OR ANY SERIES OF SHARES INTO MORE THAN
ONE CLASS. UPON CREATION OF ANY ADDITIONAL CLASS OF SHARES, THE TRUSTEES SHALL
DESIGNATE IT APPROPRIATELY AND DETERMINE ITS PREFERENCES, REDEMPTION RIGHTS,
DIVIDEND RIGHTS, CONVERSION RIGHTS, LIQUIDATION RIGHTS, VOTING RIGHTS, AND SUCH
OTHER RIGHTS AND RESTRICTIONS AS THE TRUSTEES DEEM APPROPRIATE.
SECTION 2. OWNERSHIP OF SHARES. THE OWNERSHIP OF SHARES SHALL BE RECORDED IN
THE BOOKS OF THE TRUST OR OF A TRANSFER AGENT. THE TRUSTEES MAY MAKE SUCH RULES
AS THEY CONSIDER APPROPRIATE FOR THE TRANSFER OF SHARES AND SIMILAR MATTERS. THE
RECORD BOOKS OF THE TRUST OR ANY TRANSFER AGENT, AS THE CASE MAY BE, SHALL BE
CONCLUSIVE AS TO WHO ARE THE HOLDERS OF SHARES AND AS TO THE NUMBER OF SHARES
HELD FROM TIME TO TIME BY EACH.
SECTION 3. INVESTMENT IN THE TRUST. THE TRUSTEES MAY ACCEPT INVESTMENTS IN
THE TRUST FROM SUCH PERSONS AND ON SUCH TERMS AS THEY MAY FROM TIME TO TIME
AUTHORIZE AND MAY CEASE OFFERING SHARES TO THE PUBLIC AT ANY TIME. AFTER THE
DATE OF THE INITIAL CONTRIBUTION OF CAPITAL TO THE TRUST, THE NUMBER OF SHARES
DETERMINED BY THE TRUSTEES TO REPRESENT THE INITIAL CONTRIBUTION SHALL BE
CONSIDERED AS OUTSTANDING, AND THE AMOUNT RECEIVED BY THE TRUSTEES ON ACCOUNT OF
THE CONTRIBUTION SHALL BE TREATED AS AN ASSET OF THE TRUST. SUBSEQUENT TO SUCH
INITIAL CONTRIBUTION OF CAPITAL, SHARES (INCLUDING SHARES WHICH MAY HAVE BEEN
REDEEMED OR REPURCHASED BY THE TRUST) MAY BE ISSUED OR SOLD AT A PRICE WHICH
WILL NET THE TRUST, BEFORE PAYING ANY TAXES IN CONNECTION WITH SUCH ISSUE OR
SALE, NOT LESS THAN THE NET ASSET VALUE (AS DEFINED IN ARTICLE X, SECTION 4)
HEREOF; PROVIDED, HOWEVER, THAT THE TRUSTEES MAY IN THEIR DISCRETION IMPOSE A
SALES CHARGE UPON INVESTMENTS IN THE TRUST.
SECTION 4. NO PRE-EMPTIVE RIGHTS. SHAREHOLDERS SHALL HAVE NO PRE-EMPTIVE OR
OTHER RIGHT TO SUBSCRIBE TO ANY ADDITIONAL SHARES OR OTHER SECURITIES ISSUED BY
THE TRUST OR THE TRUSTEES.
SECTION 5. PROVISIONS RELATING TO SERIES OF SHARES. WHENEVER NO SHARES OF A
SERIES ARE OUTSTANDING, THEN THE TRUSTEES MAY ABOLISH SUCH SERIES (OR ANY CLASS
OF SHARES OF A SERIES FOR WHICH THERE ARE NO OUTSTANDING SHARES). WHENEVER MORE
THAN ONE SERIES OF SHARES IS OUTSTANDING, THEN THE FOLLOWING PROVISIONS SHALL
APPLY:
(A) ASSETS BELONGING TO EACH SERIES. ALL CONSIDERATION RECEIVED BY
THE TRUST FOR THE ISSUE OR SALE OF SHARES OF A PARTICULAR SERIES, TOGETHER WITH
ALL ASSETS IN WHICH SUCH CONSIDERATION IS INVESTED OR REINVESTED, ALL INCOME,
EARNINGS AND PROCEEDS THEREOF, AND ANY FUNDS DERIVED FROM ANY REINVESTMENT OF
SUCH PROCEEDS, SHALL IRREVOCABLY BELONG TO THAT SERIES FOR ALL PURPOSES, SUBJECT
ONLY TO THE RIGHTS OF CREDITORS, AND SHALL BE SO RECORDED UPON THE BOOKS OF THE
TRUST. IN THE EVENT THERE ARE ASSETS, INCOME, EARNINGS, AND PROCEEDS THEREOF
WHICH ARE NOT READILY IDENTIFIABLE AS BELONGING TO A PARTICULAR SERIES, THEN THE
TRUSTEES SHALL ALLOCATE SUCH ITEMS TO THE VARIOUS SERIES THEN EXISTING, IN SUCH
MANNER AND ON SUCH BASIS AS THEY, IN THEIR SOLE DISCRETION, DEEM FAIR AND
EQUITABLE. THE AMOUNT OF EACH SUCH ITEM ALLOCATED TO A PARTICULAR SERIES BY THE
TRUSTEES SHALL THEN BELONG TO THAT SERIES, AND EACH SUCH ALLOCATION SHALL BE
CONCLUSIVE AND BINDING UPON THE SHAREHOLDERS OF ALL SERIES FOR ALL PURPOSES.
(B) LIABILITIES BELONGING TO EACH SERIES. THE ASSETS BELONGING TO
EACH PARTICULAR SERIES SHALL BE CHARGED WITH THE LIABILITIES, EXPENSES, COSTS
AND RESERVES OF THE TRUST ATTRIBUTABLE TO THAT SERIES; ANY GENERAL LIABILITIES,
EXPENSES, COSTS AND RESERVES OF THE TRUST WHICH ARE NOT READILY IDENTIFIABLE AS
ATTRIBUTABLE TO A PARTICULAR SERIES SHALL BE ALLOCATED BY THE TRUSTEES TO THE
VARIOUS SERIES THEN EXISTING, IN SUCH MANNER AND ON SUCH BASIS AS THEY, IN THEIR
SOLE DISCRETION, DEEM FAIR AND EQUITABLE. EACH SUCH ALLOCATION SHALL BE
CONCLUSIVE AND BINDING UPON THE SHAREHOLDERS OF ALL SERIES FOR ALL PURPOSES.
(C) SERIES SHARES, DIVIDENDS AND LIQUIDATION. EACH SHARE OF EACH
RESPECTIVE CLASS OF A SERIES SHALL HAVE THE SAME RIGHTS AND PRO RATA BENEFICIAL
INTEREST IN THE ASSETS AND LIABILITIES OF THE SERIES AS ANY OTHER SUCH SHARE.
ANY DIVIDENDS PAID ON THE SHARES OF ANY SERIES SHALL ONLY BE PAYABLE FROM AND TO
THE EXTENT OF THE ASSETS (NET OF LIABILITIES) BELONGING TO THAT SERIES. IN THE
EVENT OF LIQUIDATION OF A SERIES, ONLY THE ASSETS (LESS PROVISION FOR
LIABILITIES) OF THAT SERIES SHALL BE DISTRIBUTED TO THE HOLDERS OF THE SHARES OF
THAT SERIES.
(D) VOTING BY SERIES. EXCEPT AS PROVIDED IN THIS SECTION OR AS
LIMITED BY THE RIGHTS AND RESTRICTIONS OF ANY CLASS, EACH SHARE OF THE TRUST
SHALL VOTE WITH AND IN THE SAME MANNER AS ANY OTHER SHARE ON MATTERS SUBMITTED
TO A VOTE OF THE SHAREHOLDERS, WITHOUT DIFFERENTIATION AMONG VOTES FROM THE
SEPARATE SERIES; PROVIDED, HOWEVER, THAT (I) AS TO ANY MATTER WITH RESPECT TO
WHICH A SEPARATE VOTE OF ANY SERIES IS REQUIRED BY THE 1940 ACT OR WOULD BE
REQUIRED UNDER THE MASSACHUSETTS BUSINESS CORPORATION LAW IF THE TRUST WERE A
MASSACHUSETTS BUSINESS CORPORATION, SUCH REQUIREMENTS AS TO A SEPARATE VOTE BY
THE SERIES SHALL APPLY IN LIEU OF THE VOTING DESCRIBED ABOVE HEREIN; (II) IN THE
EVENT THAT THE SEPARATE VOTE REQUIREMENTS REFERRED TO IN (I) ABOVE APPLY WITH
RESPECT TO ONE OR MORE SERIES, THEN, SUBJECT TO (III) BELOW, THE SHARES OF ALL
OTHER SERIES SHALL VOTE WITHOUT DIFFERENTIATION AMONG THEIR VOTES; AND (III) AS
TO ANY MATTER WHICH DOES NOT AFFECT THE INTEREST OF A PARTICULAR SERIES, ONLY
THE HOLDERS OF SHARES OF THE ONE OR MORE AFFECTED SERIES SHALL BE ENTITLED TO
VOTE.
ARTICLE IV
THE TRUSTEES
SECTION 1. MANAGEMENT OF THE TRUST. THE BUSINESS AND AFFAIRS OF THE TRUST
SHALL BE MANAGED BY THE TRUSTEES, AND THEY SHALL HAVE ALL POWERS NECESSARY AND
DESIRABLE TO CARRY OUT THAT RESPONSIBILITY.
SECTION 2. ELECTION OF TRUSTEES. THE INDIVIDUALS EXECUTING AS TRUSTEES THIS
DECLARATION OF TRUST SHALL SERVE UNTIL THEIR SUCCESSORS ARE ELECTED AT THE FIRST
MEETING OF THE SOLE SHAREHOLDER OF THE TRUST AND SUCH SUCCESSORS ACCEPT THEIR
APPOINTMENTS. THEREAFTER, THE TRUSTEES SHALL SERVE FOR SUCH REGULAR TERMS AS MAY
BE PROVIDED IN THE BY-LAWS OF THE TRUST.
SECTION 3. TERM OF OFFICE OF TRUSTEES. THE TRUSTEES SHALL HOLD OFFICE DURING
THE LIFETIME OF THIS TRUST AND UNTIL THE EXPIRATION OF THE TERM OF OFFICE FOR
WHICH EACH WAS ELECTED, EXCEPT THAT (A) ANY TRUSTEE MAY RESIGN HIS TRUST BY
WRITTEN INSTRUMENT SIGNED BY HIM AND DELIVERED TO THE OTHER TRUSTEES, WHICH
SHALL TAKE EFFECT UPON SUCH DELIVERY OR UPON SUCH LATER DATE AS IS SPECIFIED
THEREIN; (B) ANY TRUSTEE MAY BE REMOVED AT ANY TIME BY WRITTEN INSTRUMENT SIGNED
BY AT LEAST TWO-THIRDS OF THE NUMBER OF TRUSTEES PRIOR TO SUCH REMOVAL,
SPECIFYING THE DATE WHEN SUCH REMOVAL SHALL BECOME EFFECTIVE; (C) ANY TRUSTEE
WHO REQUESTS IN WRITING TO BE RETIRED OR WHO HAS BECOME MENTALLY OR PHYSICALLY
INCAPACITATED MAY BE RETIRED BY WRITTEN INSTRUMENT SIGNED BY A MAJORITY OF THE
OTHER TRUSTEES, SPECIFYING THE DATE OF HIS RETIREMENT; (D) A TRUSTEE MAY BE
REMOVED AT ANY SPECIAL MEETING OF SHAREHOLDERS OF THE TRUST BY A VOTE OF
TWO-THIRDS OF THE OUTSTANDING SHARES; AND (E) A TRUSTEE MAY BE REMOVED UPON THE
FILING WITH THE CUSTODIAN APPOINTED PURSUANT TO ARTICLE IX HEREOF A WRITTEN
DECLARATION SIGNED BY SHAREHOLDERS HOLDING IN THE AGGREGATE TWO THIRDS OF THE
OUTSTANDING STOCKS.
SECTION 4. TERMINATION OF SERVICE AND APPOINTMENT OF TRUSTEES. IN CASE THE
DEATH, RESIGNATION, RETIREMENT, REMOVAL OR MENTAL OR PHYSICAL INCAPACITY OF ANY
OF THE TRUSTEES, OR IN CASE A VACANCY SHALL, BY REASON OF AN INCREASE IN NUMBER,
OR FOR ANY OTHER REASON, EXIST, THE REMAINING TRUSTEES SHALL FILL SUCH VACANCY
BY APPOINTING FOR THE REMAINING TERM OF THE PREDECESSOR TRUSTEE SUCH OTHER
PERSON AS THEY IN THEIR DISCRETION SHALL SEE FIT. SUCH APPOINTMENT SHALL BE
EFFECTED BY THE SIGNING OF A WRITTEN INSTRUMENT BY A MAJORITY OF THE TRUSTEES IN
OFFICE. WITHIN THREE MONTHS OF SUCH APPOINTMENT, THE TRUSTEES SHALL CAUSE NOTICE
OF SUCH APPOINTMENT TO BE MAILED TO EACH SHAREHOLDER AT HIS ADDRESS AS RECORDED
ON THE BOOKS OF THE TRUST. AN APPOINTMENT OF A TRUSTEE MAY BE MADE BY THE
TRUSTEES THEN IN OFFICE AND NOTICE THEREOF MAILED TO SHAREHOLDERS AS AFORESAID
IN ANTICIPATION OF A VACANCY TO OCCUR BY REASON OF RETIREMENT, RESIGNATION OR
INCREASE IN NUMBER OF TRUSTEES EFFECTIVE AT A LATER DATE, PROVIDED THAT SAID
APPOINTMENT SHALL BECOME EFFECTIVE ONLY AT OR AFTER THE EFFECTIVE DATE OF SAID
RETIREMENT, RESIGNATION OR INCREASE IN NUMBER OF TRUSTEES. AS SOON AS ANY
TRUSTEE SO APPOINTED SHALL HAVE ACCEPTED THIS TRUST, THE TRUST ESTATE SHALL VEST
IN THE NEW TRUSTEE OR TRUSTEES, TOGETHER WITH THE CONTINUING TRUSTEES, WITHOUT
ANY FURTHER ACT OR CONVEYANCE, AND HE SHALL BE DEEMED A TRUSTEE HEREUNDER. ANY
APPOINTMENT AUTHORIZED BY THIS SECTION 4 IS SUBJECT TO THE PROVISIONS OF
SECTIONS 16(A) AND (B) OF THE 1940 ACT, AS APPLICABLE.
SECTION 5. TEMPORARY ABSENCE OF TRUSTEE. ANY TRUSTEE MAY, BY POWER OF
ATTORNEY, DELEGATE HIS POWER FOR A PERIOD NOT EXCEEDING SIX MONTHS AT ANY ONE
TIME TO ANY OTHER TRUSTEE OR TRUSTEES, PROVIDED THAT IN NO CASE SHALL LESS THAN
TWO OF THE TRUSTEES PERSONALLY EXERCISE THEIR POWER HEREUNDER, EXCEPT AS HEREIN
OTHERWISE EXPRESSLY PROVIDED.
SECTION 6. NUMBER OF TRUSTEES. THE NUMBER OF TRUSTEES SERVING HEREUNDER AT
ANY TIME SHALL BE DETERMINED BY THE TRUSTEES THEMSELVES, BUT ONCE SHARES HAVE
BEEN ISSUED SHALL NOT BE LESS THAN THREE (3) NOR MORE THAN FIFTEEN (15).
WHENEVER A VACANCY IN THE BOARD OF TRUSTEES SHALL OCCUR, UNTIL SUCH VACANCY
IS FILLED OR WHILE ANY TRUSTEE IS PHYSICALLY OR MENTALLY INCAPACITATED, THE
OTHER TRUSTEES SHALL HAVE ALL THE POWERS HEREUNDER AND THE CERTIFICATE SIGNED BY
A MAJORITY OF THE OTHER TRUSTEES OF SUCH VACANCY, ABSENCE OR INCAPACITY, SHALL
BE CONCLUSIVE, PROVIDED, HOWEVER, THAT NO VACANCY WHICH REDUCES THE NUMBER OF
TRUSTEES BELOW THREE (3) SHALL REMAIN UNFILLED FOR A PERIOD LONGER THAN SIX
CALENDAR MONTHS.
SECTION 7. EFFECT OF DEATH, RESIGNATION, ETC., OF A TRUSTEE. THE DEATH,
RESIGNATION, RETIREMENT, REMOVAL, OR MENTAL OR PHYSICAL INCAPACITY OF THE
TRUSTEES, OR ANY ONE OF THEM, SHALL NOT OPERATE TO ANNUL THE TRUST OR TO REVOKE
ANY EXISTING AGENCY CREATED PURSUANT TO THE TERMS OF THIS DECLARATION OF TRUST.
SECTION 8. OWNERSHIP OF THE TRUST. THE ASSETS OF THE TRUST SHALL BE HELD
SEPARATE AND APART FROM ANY ASSETS NOW OR HEREAFTER HELD IN ANY CAPACITY OTHER
THAN AS TRUSTEE HEREUNDER BY THE TRUSTEES OR BY ANY SUCCESSOR TRUSTEES. ALL OF
THE ASSETS OF THE TRUST SHALL AT ALL TIMES BE CONSIDERED AS VESTED IN THE
TRUSTEES. NO SHAREHOLDER SHALL BE DEEMED TO HAVE SEVERABLE OWNERSHIP IN ANY
INDIVIDUAL ASSET OF THE TRUST OR ANY RIGHT OF PARTITION OR POSSESSION THEREOF,
BUT EACH SHAREHOLDER SHALL HAVE A PROPORTIONATE UNDIVIDED BENEFICIAL INTEREST IN
THE TRUST.
ARTICLE V
POWERS OF THE TRUSTEES
SECTION 1. POWERS. THE TRUSTEES IN ALL INSTANCES SHALL ACT AS PRINCIPALS AND
ARE AND SHALL BE FREE FROM THE CONTROL OF THE SHAREHOLDERS. THE TRUSTEES SHALL
HAVE FULL POWER AND AUTHORITY TO DO ANY AND ALL ACTS AND TO MAKE AND EXECUTE ANY
AND ALL CONTRACT AND INSTRUMENTS THAT THEY MAY CONSIDER NECESSARY OR APPROPRIATE
IN CONNECTION WITH THE MANAGEMENT OF THE TRUST. THE TRUSTEES SHALL NOT BE BOUND
OR LIMITED BY PRESENT OR FUTURE LAWS OR CUSTOMS IN REGARD TO INVESTMENT BY
TRUSTEES OR FIDUCIARIES, BUT SHALL HAVE FULL AUTHORITY AND POWER TO MAKE ANY AND
ALL INVESTMENTS WHICH THEY, IN THEIR UNCONTROLLED DISCRETION, SHALL DEEM PROPER
TO ACCOMPLISH THE PURPOSE OF THIS TRUST. WITHOUT LIMITING THE FOREGOING, THE
TRUSTEES SHALL HAVE THE FOLLOWING SPECIFIC POWERS AND AUTHORITY, SUBJECT TO ANY
APPLICABLE LIMITATION IN THIS DECLARATION OF TRUST OR IN THE BY-LAWS OF THE
TRUST.
(A) TO BUY, AND INVEST FUNDS OF THE TRUST, IN SECURITIES INCLUDING,
BUT NOT LIMITED TO, COMMON STOCKS, PREFERRED STOCKS, BONDS, DEBENTURES, WARRANTS
AND RIGHTS TO PURCHASE SECURITIES, OPTIONS, CERTIFICATES OF BENEFICIAL INTEREST,
MONEY MARKET INSTRUMENTS, NOTES OR OTHER EVIDENCES OF INDEBTEDNESS ISSUED BY
CORPORATIONS, TRUSTS, ASSOCIATIONS, OR BANKING INSTITUTIONS, DOMESTIC OR
FOREIGN, OR ISSUED OR GUARANTEED BY THE UNITED STATES OF AMERICA OR ANY AGENCY
OR INSTRUMENTALITY THEREOF, BY THE GOVERNMENT OF ANY FOREIGN COUNTRY, BY ANY
STATE OF THE UNITED STATES (INCLUDING THE DISTRICT OF COLUMBIA, PUERTO RICO AND
GUAM) OR BY ANY POLITICAL SUBDIVISION OR AGENCY OR INSTRUMENTALITY OF ANY STATE
OR FOREIGN COUNTRY, OR IN "WHEN-ISSUED" OR "DELAYED-DELIVERY" CONTRACTS FOR ANY
SUCH SECURITIES, OR IN ANY REPURCHASE AGREEMENT (AGREEMENTS UNDER WHICH THE
SELLER AGREES AT THE TIME OF SALE TO REPURCHASE THE SECURITY AT AN AGREED TIME
AND PRICE); OR RETAIN TRUST ASSETS IN CASH, AND FROM TIME TO TIME CHANGE THE
INVESTMENTS CONSTITUTING THE ASSETS OF THE TRUST;
(B) TO ADOPT BY-LAWS NOT INCONSISTENT WITH THE DECLARATION OF TRUST
PROVIDING FOR THE CONDUCT OF THE BUSINESS OF THE TRUST AND TO AMEND AND REPEAL
THEM TO THE EXTENT THAT THEY DO NOT RESERVE THAT RIGHT TO THE SHAREHOLDERS;
(C) TO ELECT AND REMOVE SUCH OFFICERS AND APPOINT AND TERMINATE SUCH
AGENTS AS THEY CONSIDER APPROPRIATE;
(D) TO APPOINT OR OTHERWISE ENGAGE ONE OR MORE BANKS OR TRUST
COMPANIES OR MEMBER FIRMS OF ANY NATIONAL SECURITIES EXCHANGE REGISTERED UNDER
THE SECURITIES EXCHANGE ACT OF 1934 AS CUSTODIAN OF ANY ASSETS OF THE TRUST,
SUBJECT TO ANY CONDITIONS SET FORTH IN THIS DECLARATION OF TRUST OR IN THE
BY-LAWS.
(E) TO APPOINT OR OTHERWISE ENGAGE CUSTODIAL AGENTS, TRANSFER
AGENTS, DIVIDEND DISBURSING AGENTS, SHAREHOLDER SERVICING AGENTS, INVESTMENT
ADVISERS, SUB-INVESTMENT ADVISERS, PRINCIPAL UNDERWRITERS, ADMINISTRATIVE
SERVICE AGENTS, AND SUCH OTHER AGENTS AS THE TRUSTEES MAY FROM TIME TO TIME
APPOINT OR OTHERWISE ENGAGE;
(F) TO PROVIDE FOR THE DISTRIBUTION OF INTERESTS OF THE TRUST EITHER
THROUGH A PRINCIPAL UNDERWRITER IN THE MANNER HEREINAFTER PROVIDED FOR OR BY THE
TRUST ITSELF, OR BOTH;
(G) TO SET RECORD DATES IN THE MANNER HEREINAFTER PROVIDED FOR;
(H) TO DELEGATE SUCH AUTHORITY AS THEY CONSIDER DESIRABLE TO A
COMMITTEE OR COMMITTEES COMPOSED OF TRUSTEES, INCLUDING WITHOUT LIMITATION, AN
EXECUTIVE COMMITTEE, OR TO ANY OFFICERS OF THE TRUST AND TO ANY AGENT, CUSTODIAN
OR UNDERWRITER;
(I) TO SELL OR EXCHANGE ANY OR ALL OF THE ASSETS OF THE TRUST,
SUBJECT TO THE PROVISIONS OF ARTICLE XII, SECTION 4(B) HEREOF;
(J) TO VOTE OR GIVE ASSENT, OR EXERCISE ANY RIGHTS OF OWNERSHIP,
WITH RESPECT TO STOCK OR OTHER SECURITIES OR PROPERTY; AND TO EXECUTE AND
DELIVER POWERS OF ATTORNEY TO SUCH PERSON OR PERSONS AS THE TRUSTEES SHALL DEEM
PROPER, GRANTING TO SUCH PERSON OR PERSONS SUCH POWER AND DISCRETION WITH
RELATION TO SECURITIES OR PROPERTY AS THE TRUSTEES SHALL DEEM PROPER;
(K) TO EXERCISE POWERS AND RIGHTS OF SUBSCRIPTION OR OTHERWISE WHICH
IN ANY MANNER ARISE OUT OF OWNERSHIP OF SECURITIES;
(1) TO HOLD ANY SECURITY OR PROPERTY IN A FORM NOT INDICATING ANY
TRUST, WHETHER IN BEARER, UNREGISTERED OR OTHER NEGOTIABLE FORM; OR EITHER IN
ITS OWN NAME OR IN THE NAME OF A CUSTODIAN OR A NOMINEE OR NOMINEES, SUBJECT IN
EITHER CASE TO PROPER SAFEGUARDS ACCORDING TO THE USUAL PRACTICE OF
MASSACHUSETTS TRUST COMPANIES OR INVESTMENT COMPANIES;
(M) TO CONSENT TO OR PARTICIPATE IN ANY PLAN FOR THE REORGANIZATION,
CONSOLIDATION OR MERGER OF ANY CORPORATION OR CONCERN, ANY SECURITY OF WHICH IS
HELD IN THE TRUST; TO CONSENT TO ANY CONTRACT, LEASE, MORTGAGE, PURCHASE, OR
SALE OF PROPERTY BY SUCH CORPORATION OR CONCERN, AND TO PAY CALLS OR
SUBSCRIPTIONS WITH RESPECT TO ANY SECURITY HELD IN THE TRUST.
(N) TO ENGAGE IN AND TO PROSECUTE, COMPOUND, COMPROMISE, ABANDON, OR
ADJUST, BY ARBITRATION, OR OTHERWISE, ANY ACTIONS, SUITS, PROCEEDINGS, DISPUTES,
CLAIMS, DEMANDS, AND THINGS RELATING TO THE TRUST, AND OUT OF THE ASSETS OF THE
TRUST TO PAY, OR TO SATISFY, ANY DEBTS, CLAIMS OR EXPENSES INCURRED IN
CONNECTION THEREWITH, INCLUDING THOSE OF LITIGATION, UPON ANY EVIDENCE THAT THE
TRUSTEES MAY DEEM SUFFICIENT (SUCH POWERS SHALL INCLUDE WITHOUT LIMITATION ANY
ACTIONS, SUITS, PROCEEDINGS, DISPUTES, CLAIMS DEMANDS AND THINGS RELATING TO THE
TRUST WHEREIN ANY OF THE TRUSTEES MAY BE NAMED INDIVIDUALLY AND THE SUBJECT
MATTER OF WHICH ARISES BY REASON OF BUSINESS FOR OR ON BEHALF OF THE TRUST);
(O) TO MAKE DISTRIBUTIONS OF INCOME AND OF CAPITAL GAINS TO
SHAREHOLDERS IN THE MANNER HEREINAFTER PROVIDED FOR;
(P) TO BORROW MONEY AND ENTER INTO REVERSE REPURCHASE AGREEMENTS
(AGREEMENTS IN WHICH THE TRUST SELLS ASSETS WHILE CONCURRENTLY AGREEING TO
REPURCHASE SUCH ASSETS AT A LATER DATE AT A SPECIFIC PRICE) IF SUCH BORROWINGS
ARE MADE TEMPORARILY FOR EXTRAORDINARY OR EMERGENCY PURPOSES OR TO PERMIT
REDEMPTIONS OF SHARES WITHOUT SELLING PORTFOLIO SECURITIES. ANY BORROWINGS
HEREUNDER MAY BE MADE WITH OR WITHOUT COLLATERAL SECURITY, AND THE TRUSTEES MAY,
IN THEIR DISCRETION, PLEDGE, MORTGAGE, CHARGE, HYPOTHECATE OR OTHERWISE ENCUMBER
THE GROSS ASSETS OF THE TRUST AS SECURITY FOR ANY LOANS OR REVERSE REPURCHASE
AGREEMENTS, SUBJECT TO THE LIMITATIONS PROVIDED HEREIN.
(Q) TO LEND PORTFOLIO SECURITIES OF THE TRUST PURSUANT TO POLICIES
ESTABLISHED BY THE TRUSTEES.
(R) TO INVEST IN SECURITIES HAVING LEGAL OR CONTRACTUAL RESTRICTIONS
ON THEIR RESALE OR FOR WHICH NO READILY AVAILABLE MARKET EXISTS.
(S) FROM TIME TO TIME TO ISSUE AND SELL THE SHARES OF THE TRUST
EITHER FOR CASH OR FOR PROPERTY WHENEVER AND IN SUCH AMOUNTS AS THE TRUSTEES MAY
DEEM DESIRABLE, BUT SUBJECT TO THE LIMITATIONS SET FORTH IN SECTION 3 OF ARTICLE
III.
(T) TO PURCHASE INSURANCE OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, INSURANCE ON BEHALF OF ANY PERSON WHO IS OR WAS A TRUSTEE, OFFICER,
EMPLOYEE OR AGENT OF THE TRUST, OR IS OR WAS SERVING AT THE REQUEST OF THE TRUST
AS A TRUSTEE, DIRECTOR, OFFICER, AGENT OR EMPLOYEE OF ANOTHER CORPORATION,
PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE AGAINST ANY LIABILITY
ASSERTED AGAINST SUCH PERSON AND INCURRED BY SUCH PERSON IN ANY SUCH CAPACITY OR
ARISING OUT OF SUCH PERSON'S STATUS AS SUCH.
(U) TO REDEEM AND REPURCHASE SHARES IN ACCORDANCE WITH THE
PROVISIONS OF ARTICLE X HEREOF.
NO ONE DEALING WITH THE TRUSTEES SHALL BE UNDER OBLIGATION TO MAKE
ANY INQUIRY CONCERNING THE AUTHORITY OF THE TRUSTEES.
SECTION 2. TRUSTEES AND OFFICERS AS SHAREHOLDERS. ANY TRUSTEE, OFFICER OR
OTHER AGENT OF THE TRUST MAY ACQUIRE, OWN AND DISPOSE OF SHARES OF THE TRUST TO
THE SAME EXTENT AS IF HE WERE NOT A TRUSTEE, OFFICER OR AGENT; AND THE TRUSTEES
MAY ISSUE AND SELL OR CAUSE TO BE ISSUED OR SOLD SHARES OF THE TRUST TO AN
INTERESTED PERSON SUBJECT ONLY TO THE GENERAL LIMITATIONS HEREIN CONTAINED AS TO
THE SALE AND PURCHASE OF SUCH SHARES; AND ALL SUBJECT TO ANY RESTRICTIONS WHICH
MAY BE CONTAINED IN THE BY-LAWS.
SECTION 3. PARTIES TO CONTRACT. THE TRUSTEES MAY ENTER INTO ANY CONTRACT OF
THE CHARACTER DESCRIBED IN SECTION 1, 2, 3, OR 4 OF ARTICLE VII, OR IN ARTICLE
IX HEREOF, OR OF ANY OTHER CHARACTER NOT PROHIBITED BY THE 1940 ACT WITH ANY
CORPORATION, FIRM, TRUST OR ASSOCIATION, ALTHOUGH ONE OR MORE OF THE
SHAREHOLDERS, TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS OF THE TRUST OR THEIR
AFFILIATES MAY BE AN OFFICER; DIRECTOR, TRUSTEE, SHAREHOLDER OR INTERESTED
PERSON OF SUCH OTHER PARTY TO THE CONTRACT, AND NO SUCH CONTRACT SHALL BE
INVALIDATED OR RENDERED VOIDABLE BY REASON OF THE EXISTENCE OF ANY SUCH
RELATIONSHIP, NOR SHALL ANY PERSON HOLDING SUCH RELATIONSHIP BE LIABLE MERELY BY
REASON OF SUCH RELATIONSHIP FOR ANY LOSS OR EXPENSE TO THE TRUST UNDER OR BY
REASON OF SAID CONTRACT OR ACCOUNTABLE FOR ANY PROFIT REALIZED DIRECTLY OR
INDIRECTLY THEREFROM, IN THE ABSENCE OF ACTUAL FRAUD. THE SAME PERSON (INCLUDING
A FIRM, CORPORATION, TRUST OR ASSOCIATION) MAY BE THE OTHER PARTY TO CONTRACTS
ENTERED INTO PURSUANT TO SECTIONS 1, 2, 3, AND 4 OF ARTICLE VII OR ARTICLE IX OR
ANY OTHER CAPACITY DEEMED LEGAL UNDER THE 1940 ACT, AND ANY INDIVIDUAL MAY BE
FINANCIALLY INTERESTED OR OTHERWISE AN INTERESTED PERSON OF PARTIES TO ANY OR
ALL OF THE CONTRACTS MENTIONED IN THIS SECTION 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
SECTION 1. TRUSTEE REIMBURSEMENT. THE TRUSTEES SHALL BE REIMBURSED FROM THE
TRUST ESTATE FOR ALL OF THEIR EXPENSES AND DISBURSEMENTS NOT OTHERWISE
REIMBURSED, INCLUDING, WITHOUT LIMITATION, EXPENSES OF ORGANIZING THE TRUST AND
CONTINUING ITS EXISTENCE; FEES AND EXPENSES OF TRUSTEES AND OFFICERS OF THE
TRUST; FEES FOR INVESTMENT ADVISORY SERVICES, ADMINISTRATIVE SERVICES AND
PRINCIPAL UNDERWRITING SERVICES PROVIDED FOR IN ARTICLE VII, SECTIONS 1, 2, AND
3; FEES AND EXPENSES OF PREPARING AND PRINTING ITS REGISTRATION STATEMENTS UNDER
THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940 AND ANY
AMENDMENTS THERETO; EXPENSES OF REGISTERING AND QUALIFYING THE TRUST AND ITS
SHARES UNDER FEDERAL AND STATE LAWS AND REGULATIONS; EXPENSES OF PREPARING,
PRINTING AND DISTRIBUTING PROSPECTUSES AND ANY AMENDMENTS THEREOF SENT TO
SHAREHOLDERS, UNDERWRITERS, BROKER-DEALERS AND TO INVESTORS WHO MAY BE
CONSIDERING THE PURCHASE OF SHARES; EXPENSES OF REGISTERING, LICENSING OR OTHER
AUTHORIZATION OF THE TRUST AS A BROKER-DEALER AND OF ITS OFFICERS AS AGENTS AND
SALESMEN UNDER FEDERAL AND STATE LAWS AND REGULATIONS; INTEREST EXPENSE, TAXES,
FEES AND COMMISSIONS OF EVERY KIND; EXPENSES OF ISSUE (INCLUDING COST OF SHARE
CERTIFICATES), REPURCHASE AND REDEMPTION OF SHARES, INCLUDING EXPENSES
ATTRIBUTABLE TO A PROGRAM OF PERIODIC ISSUE; CHARGES AND EXPENSES OF CUSTODIANS,
TRANSFER AGENTS, DIVIDEND DISBURSING AGENTS, SHAREHOLDER SERVICING AGENTS AND
REGISTRARS; PRINTING AND MAILING COSTS; AUDITING, ACCOUNTING AND LEGAL EXPENSES;
REPORTS TO SHAREHOLDERS AND GOVERNMENTAL OFFICERS AND COMMISSIONS; EXPENSES OF
MEETINGS OF SHAREHOLDERS AND PROXY SOLICITATIONS THEREFOR; INSURANCE EXPENSES;
ASSOCIATION MEMBERSHIP DUES AND NONRECURRING ITEMS AS MAY ARISE, INCLUDING ALL
LOSSES AND LIABILITIES BY THEM INCURRED IN ADMINISTERING THE TRUST, INCLUDING
EXPENSES INCURRED IN CONNECTION WITH LITIGATION, PROCEEDINGS AND CLAIMS AND THE
OBLIGATIONS OF THE TRUST UNDER ARTICLE XI HEREOF TO INDEMNIFY ITS TRUSTEES,
OFFICERS, EMPLOYEES, SHAREHOLDERS AND AGENTS, AND FOR THE PAYMENT OF SUCH
EXPENSES, DISBURSEMENTS, LOSSES AND LIABILITIES, THE TRUSTEES SHALL HAVE A LIEN
ON THE TRUST ESTATE PRIOR TO ANY RIGHTS OR INTERESTS OF THE SHAREHOLDERS
THERETO. THIS SECTION SHALL NOT PRECLUDE THE TRUST FROM DIRECTLY PAYING ANY OF
THE AFOREMENTIONED FEES AND EXPENSES.
SECTION 2. TRUSTEE COMPENSATION. THE TRUSTEES SHALL BE ENTITLED TO
COMPENSATION FROM THE TRUST FOR THEIR RESPECTIVE SERVICES AS TRUSTEES, TO BE
DETERMINED FROM TIME TO TIME BY VOTE OF THE TRUSTEES, AND THE TRUSTEES SHALL
ALSO DETERMINE THE COMPENSATION OF ALL OFFICERS, CONSULTANTS AND AGENTS WHO THEY
MAY ELECT OR APPOINT. THE TRUST MAY PAY ANY TRUSTEE OR ANY CORPORATION, FIRM,
TRUST OR ASSOCIATION OF WHICH A TRUSTEE IS AN INTERESTED PERSON FOR SERVICES
RENDERED TO THE TRUST IN ANY CAPACITY NOT PROHIBITED BY THE 1940 ACT, AND SUCH
PAYMENTS SHALL NOT BE DEEMED COMPENSATION FOR SERVICES AS A TRUSTEE UNDER THE
FIRST SENTENCE OF THIS SECTION 2 OF ARTICLE VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
SECTION 1. INVESTMENT ADVISER. SUBJECT TO A MAJORITY SHAREHOLDER VOTE, THE
TRUSTEES MAY IN THEIR DISCRETION FROM TIME TO TIME ENTER INTO AN INVESTMENT
ADVISORY CONTRACT WHEREBY THE OTHER PARTY TO SUCH CONTRACT SHALL UNDERTAKE TO
FURNISH THE TRUSTEES INVESTMENT ADVISORY SERVICES UPON SUCH TERMS AND CONDITIONS
AND FOR SUCH COMPENSATION AS THE TRUSTEES MAY IN THEIR DISCRETION DETERMINE.
SUBJECT TO A MAJORITY SHAREHOLDER VOTE, THE INVESTMENT ADVISER MAY ENTER INTO A
SUB-INVESTMENT ADVISORY CONTRACT TO RECEIVE INVESTMENT ADVICE, STATISTICAL AND
FACTUAL INFORMATION FROM THE SUB-INVESTMENT ADVISER UPON SUCH TERMS AND
CONDITIONS AND FOR SUCH COMPENSATION AS THE TRUSTEES MAY IN THEIR DISCRETION
AGREE TO. NOTWITHSTANDING ANY PROVISIONS OF THIS DECLARATION OF TRUST, THE
TRUSTEES MAY AUTHORIZE THE INVESTMENT ADVISER OR SUB-INVESTMENT ADVISER OR ANY
PERSON FURNISHING ADMINISTRATIVE PERSONNEL AND SERVICES AS SET FORTH IN ARTICLE
VII, SECTION 2 (SUBJECT TO SUCH GENERAL OR SPECIFIC INSTRUCTIONS AS THE TRUSTEES
MAY FROM TIME TO TIME ADOPT) TO EFFECT PURCHASES, SALES OR EXCHANGES OF
PORTFOLIO SECURITIES OF THE TRUST ON BEHALF OF THE TRUSTEES OR MAY AUTHORIZE ANY
OFFICER OR TRUSTEE TO EFFECT SUCH PURCHASES, SALES OR EXCHANGES PURSUANT TO
RECOMMENDATIONS OF THE INVESTMENT ADVISER (AND ALL WITHOUT FURTHER ACTION BY THE
TRUSTEES). ANY SUCH PURCHASES, SALES AND EXCHANGES SHALL BE DEEMED TO HAVE BEEN
AUTHORIZED BY THE TRUSTEES. THE TRUSTEES MAY ALSO AUTHORIZE THE INVESTMENT
ADVISER TO DETERMINE WHAT FIRMS SHALL BE EMPLOYED TO EFFECT TRANSACTIONS IN
SECURITIES FOR THE ACCOUNT OF THE TRUST AND TO DETERMINE WHAT FIRMS SHALL
PARTICIPATE IN ANY SUCH TRANSACTIONS OR SHALL SHARE IN COMMISSIONS OR FEES
CHARGED IN CONNECTION WITH SUCH TRANSACTIONS.
SECTION 2. ADMINISTRATIVE SERVICES. THE TRUSTEES MAY IN THEIR DISCRETION
FROM TIME TO TIME CONTRACT FOR ADMINISTRATIVE PERSONNEL AND SERVICES WHEREBY THE
OTHER PARTY SHALL AGREE TO PROVIDE THE TRUSTEES ADMINISTRATIVE PERSONNEL AND
SERVICES TO OPERATE THE TRUST ON A DAILY BASIS, ON SUCH TERMS AND CONDITIONS AS
THE TRUSTEES MAY IN THEIR DISCRETION DETERMINE. SUCH SERVICES MAY BE PROVIDED BY
ONE OR MORE ENTITIES.
SECTION 3. PRINCIPAL UNDERWRITER. THE TRUSTEES MAY IN THEIR DISCRETION FROM
TIME TO TIME ENTER INTO AN EXCLUSIVE OR NON-EXCLUSIVE CONTRACT OR CONTRACTS
PROVIDING FOR THE SALE OF THE SHARES OF THE TRUST TO NET THE TRUST NOT LESS THAN
THE AMOUNT PROVIDED IN ARTICLE III, SECTION 3 HEREOF, WHEREBY THE TRUST MAY
EITHER AGREE TO SELL THE SHARES TO THE OTHER PARTY TO THE CONTRACT OR APPOINT
SUCH OTHER PARTY ITS SALES AGENT FOR SUCH SHARES. IN EITHER CASE, THE CONTRACT
SHALL BE ON SUCH TERMS AND CONDITIONS AS THE TRUSTEES MAY IN THEIR DISCRETION
DETERMINE NOT INCONSISTENT WITH THE PROVISIONS OF THIS ARTICLE VII; AND SUCH
CONTRACTS MAY ALSO PROVIDE FOR THE REPURCHASE OR SALES OF SHARES OF THE TRUST BY
SUCH OTHER PARTY AS PRINCIPAL OR AS AGENT OF THE TRUST AND MAY PROVIDE THAT THE
OTHER PARTY MAY MAINTAIN A MARKET FOR SHARES OF THE TRUST.
SECTION 4. TRANSFER AGENT. THE TRUSTEES MAY IN THEIR DISCRETION FROM TIME TO
TIME ENTER INTO TRANSFER AGENCY AND SHAREHOLDER SERVICES CONTRACTS WHEREBY THE
OTHER PARTY SHALL UNDERTAKE TO FURNISH TO THE TRUSTEES TRANSFER AGENCY AND
SHAREHOLDER SERVICES. THE CONTRACTS SHALL BE ON SUCH TERMS AND CONDITIONS AS THE
TRUSTEES MAY IN THEIR DISCRETION DETERMINE NOT INCONSISTENT WITH THE PROVISIONS
OF THIS DECLARATION OF TRUST. SUCH SERVICES MAY BE PROVIDED BY ONE OR MORE
ENTITIES.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 1. VOTING POWERS. THE SHAREHOLDERS SHALL HAVE POWER TO VOTE (I) FOR
THE ELECTION OF TRUSTEES AS PROVIDED IN ARTICLE IV, SECTION 2; (II) FOR THE
REMOVAL OF TRUSTEES AS PROVIDED IN ARTICLE IV, SECTION 3(D); (III) WITH RESPECT
TO ANY INVESTMENT ADVISER OR SUB-INVESTMENT ADVISER AS PROVIDED IN ARTICLE VII,
SECTION 1; (IV) WITH RESPECT TO THE AMENDMENT OF THIS DECLARATION OF TRUST AS
PROVIDED IN ARTICLE XII, SECTION 7; (V) TO THE SAME EXTENT AS THE SHAREHOLDERS
OF A MASSACHUSETTS BUSINESS CORPORATION AS TO WHETHER OR NOT A COURT ACTION,
PROCEEDING OR CLAIM SHOULD BE BROUGHT OR MAINTAINED DERIVATIVELY OR AS A CLASS
ACTION ON BEHALF OF THE TRUST OR THE SHAREHOLDERS; AND (VI) WITH RESPECT TO SUCH
ADDITIONAL MATTERS RELATING TO THE TRUST AS MAY BE REQUIRED BY LAW, BY THIS
DECLARATION OF TRUST, OR BY BY-LAWS OF THE TRUST OR ANY REGULATION OF THE TRUST
BY THE COMMISSION OR ANY STATE, OR AS THE TRUSTEES MAY CONSIDER DESIRABLE. EACH
WHOLE SHARE SHALL BE ENTITLED TO ONE VOTE AS TO ANY MATTER ON WHICH IT IS
ENTITLED TO VOTE, AND EACH FRACTIONAL SHARE SHALL BE ENTITLED TO A PROPORTIONATE
FRACTIONAL VOTE. THERE SHALL BE NO CUMULATIVE VOTING IN THE ELECTION OF
TRUSTEES. UNTIL SHARES ARE ISSUED, THE TRUSTEES MAY EXERCISE ALL RIGHTS OF
SHAREHOLDERS AND MAY TAKE ANY ACTION REQUIRED OR PERMITTED BY LAW, THIS
DECLARATION OF TRUST OR ANY BY-LAWS OF THE TRUST TO BE TAKEN BY SHAREHOLDERS.
SECTION 2. MEETINGS. SHAREHOLDER MEETINGS SHALL BE HELD AS SPECIFIED IN
SECTION 2 OF ARTICLE IV AND IN THE BY-LAWS AT THE PRINCIPAL OFFICE OF THE TRUST
OR AT SUCH OTHER PLACE AS THE TRUSTEES MAY DESIGNATE. SPECIAL MEETINGS OF THE
SHAREHOLDERS MAY BE CALLED BY THE TRUSTEES OR BY OFFICERS OF THE TRUST GIVEN
SUCH AUTHORITY IN THE BY-LAWS AND SHALL BE CALLED BY THE TRUSTEES AT A PLACE
DESIGNATED BY THEM UPON THE WRITTEN REQUEST OF SHAREHOLDERS OWNING AT LEAST
ONE-TENTH OF THE OUTSTANDING SHARES ENTITLED TO VOTE. SHAREHOLDERS SHALL BE
ENTITLED TO AT LEAST TEN DAYS' NOTICE OF ANY MEETING.
SECTION 3. QUORUM AND REQUIRED VOTE. EXCEPT AS OTHERWISE PROVIDED BY LAW, TO
CONSTITUTE A QUORUM FOR THE TRANSACTION OF ANY BUSINESS AT ANY MEETING OF
SHAREHOLDERS THERE MUST BE PRESENT, IN PERSON OR BY PROXY, HOLDERS OF ONE-FOURTH
OF THE TOTAL NUMBER OF SHARES OF THE TRUST THEN OUTSTANDING AND ENTITLED TO VOTE
AT SUCH MEETING. IF A QUORUM, AS ABOVE DEFINED, SHALL NOT BE PRESENT FOR THE
PURPOSE OF ANY VOTE THAT MAY PROPERLY COME BEFORE THE MEETING, THE SHAREHOLDERS
PRESENT IN PERSON OR BY PROXY AND ENTITLED TO VOTE AT SUCH MEETING ON SUCH
MATTER HOLDING A MAJORITY OF THE SHARES PRESENT ENTITLED TO VOTE ON SUCH MATTER
MAY BY VOTE ADJOURN THE MEETING FROM TIME TO TIME TO BE HELD AT THE SAME PLACE
WITHOUT FURTHER NOTICE THAN BY ANNOUNCEMENT TO BE GIVEN AT THE MEETING UNTIL A
QUORUM, AS ABOVE DEFINED, ENTITLED TO VOTE ON SUCH MATTER SHALL BE PRESENT,
WHEREUPON ANY SUCH MATTER MAY BE VOTED UPON AT THE MEETING AS THOUGH HELD WHEN
ORIGINALLY CONVENED. SUBJECT TO ANY APPLICABLE REQUIREMENT OF LAW OR OF THIS
DECLARATION OF TRUST OR BY THE BY-LAWS, A PLURALITY OF THE VOTES CAST SHALL
ELECT A TRUSTEE AND ALL OTHER MATTERS SHALL BE DECIDED BY A MAJORITY OF THE
VOTES CAST ENTITLED TO VOTE THEREON.
SECTION 4. PROXIES. ANY VOTE BY A SHAREHOLDER OF THE TRUST MAY BE MADE IN
PERSON OR BY PROXY, PROVIDED THAT NO PROXY SHALL BE VOTED AT ANY MEETING UNLESS
IT SHALL HAVE BEEN PLACED ON FILE WITH THE TRUSTEES OR THEIR DESIGNATE PRIOR TO
THE TIME THE VOTE IS TAKEN. PURSUANT TO A RESOLUTION OF A MAJORITY OF THE
TRUSTEES, PROXIES MAY BE SOLICITED IN THE NAME OF ONE OR MORE TRUSTEES OR ONE OR
MORE OFFICERS OF THE TRUST. ONLY SHAREHOLDERS OF RECORD SHALL BE ENTITLED TO
VOTE. A PROXY PURPORTING TO BE EXECUTED BY OR ON BEHALF OF A SHAREHOLDER SHALL
BE DEEMED VALID UNLESS CHALLENGED AT OR PRIOR TO ITS EXERCISE, AND THE BURDEN OF
PROVING INVALIDITY SHALL REST ON THE CHALLENGER.
SECTION 5. ADDITIONAL PROVISIONS. THE BY-LAWS MAY INCLUDE FURTHER PROVISIONS
FOR SHAREHOLDERS' VOTES AND MEETINGS AND RELATED MATTERS.
ARTICLE IX
CUSTODIANS
SECTION 1. APPOINTMENT OF CUSTODIAN AND DUTIES. THE TRUSTEES SHALL APPOINT
OR OTHERWISE ENGAGE A BANK OR TRUST COMPANY HAVING AN AGGREGATE CAPITAL, SURPLUS
AND UNDIVIDED PROFITS (AS SHOWN IN ITS LAST PUBLISHED REPORT) OF AT LEAST TWO
MILLION DOLLARS ($2,000,000) AS ITS CUSTODIAN WITH AUTHORITY AS ITS AGENT, BUT
SUBJECT TO SUCH RESTRICTIONS, LIMITATIONS AND OTHER REQUIREMENTS, IF ANY, AS MAY
BE CONTAINED IN THE BY-LAWS OF THE TRUST:
(1) TO RECEIVE AND HOLD SECURITIES OWNED BY THE TRUST AND DELIVER THE SAME
UPON WRITTEN ORDER;
(2) TO RECEIVE AND RECEIPT FOR ANY MONEYS DUE TO THE TRUST AND DEPOSIT THE
SAME IN ITS OWN BANKING DEPARTMENT OR ELSEWHERE AS THE TRUSTEES MAY DIRECT;
(3) TO DISBURSE SUCH FUNDS UPON ORDERS OR VOUCHERS;
(4) TO KEEP, IF AUTHORIZED TO DO SO BY THE TRUSTEES, THE BOOKS AND ACCOUNTS
OF THE TRUST AND FURNISH CLERICAL AND ACCOUNTING SERVICES; AND
(5) TO COMPUTE, IF AUTHORIZED TO DO SO BY THE TRUSTEES, THE ACCUMULATED NET
INCOME OF THE TRUST AND THE NET ASSET VALUE OF THE SHARES IN ACCORDANCE WITH THE
PROVISIONS HEREOF; ALL UPON SUCH BASIS OF COMPENSATION AS MAY BE AGREED UPON
BETWEEN THE TRUSTEES AND THE CUSTODIAN. IF SO DIRECTED BY A MAJORITY SHAREHOLDER
VOTE, THE CUSTODIAN SHALL DELIVER AND PAY OVER ALL PROPERTY OF THE TRUST HELD BY
IT AS SPECIFIED IN SUCH VOTE.
THE TRUSTEES MAY ALSO AUTHORIZE THE CUSTODIAN TO EMPLOY ONE OR MORE
SUB-CUSTODIANS FROM TIME TO TIME TO PERFORM SUCH OF THE ACTS AND SERVICES OF THE
CUSTODIAN AND UPON SUCH TERMS AND CONDITIONS, AS MAY BE AGREED UPON BETWEEN THE
CUSTODIAN AND SUCH SUB-CUSTODIAN AND APPROVED BY THE TRUSTEES, PROVIDED THAT IN
EVERY CASE SUCH SUB-CUSTODIAN SHALL BE A BANK OR TRUST COMPANY ORGANIZED UNDER
THE LAWS OF THE UNITED STATES OR ONE OF THE STATES THEREOF AND HAVING AN
AGGREGATE CAPITAL, SURPLUS AND UNDIVIDED PROFITS (AS SHOWN IN ITS LAST PUBLISHED
REPORT) OF AT LEAST TWO MILLION DOLLARS ($2,000,000) OR A MEMBER FIRM OF A
NATIONAL SECURITIES EXCHANGE REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF
1934.
SECTION 2. CENTRAL CERTIFICATE SYSTEM. SUBJECT TO SUCH RULES, REGULATIONS
AND ORDERS AS THE COMMISSION MAY ADOPT, THE TRUSTEES MAY DIRECT THE CUSTODIAN TO
DEPOSIT ALL OR ANY PART OF THE SECURITIES OWNED BY THE TRUST IN A SYSTEM FOR THE
CENTRAL HANDLING OF SECURITIES ESTABLISHED BY A NATIONAL SECURITIES EXCHANGE OR
A NATIONAL SECURITIES ASSOCIATION REGISTERED WITH THE COMMISSION UNDER THE
SECURITIES EXCHANGE ACT OF 1934, OR SUCH OTHER PERSON AS MAY BE PERMITTED BY THE
COMMISSION OR OTHERWISE IN ACCORDANCE WITH THE 1940 ACT, PURSUANT TO WHICH
SYSTEM ALL SECURITIES OF ANY PARTICULAR CLASS OR SERIES OF ANY ISSUER DEPOSITED
WITHIN THE SYSTEM ARE TREATED AS FUNGIBLE AND MAY BE TRANSFERRED OR PLEDGED BY
BOOKKEEPING ENTRY WITHOUT PHYSICAL DELIVERY OF SUCH SECURITIES, PROVIDED THAT
ALL SUCH DEPOSITS SHALL BE SUBJECT TO WITHDRAWAL ONLY UPON THE ORDER OF THE
CUSTODIAN AT THE DIRECTION OF THE TRUSTEES.
SECTION 3. SPECIAL CUSTODIANS. THE TRUSTEES MAY APPOINT OR OTHERWISE ENGAGE
ANY INSTITUTION WHICH WOULD BE PERMITTED TO ACT AS A SUB-CUSTODIAN HEREUNDER TO
ACT AS A SPECIAL CUSTODIAN OF THE TRUST. ANY SPECIAL CUSTODIAN WHICH IS A MEMBER
FIRM OF A NATIONAL SECURITIES EXCHANGE SHALL HAVE CUSTODY ONLY OF SECURITIES
OWNED BY THE TRUST AND SHALL NOT HOLD ANY OF ITS CASH. SPECIAL CUSTODIANS SHALL
BE APPOINTED PURSUANT TO A WRITTEN AGREEMENT APPROVED AND THEREAFTER AT LEAST
ANNUALLY RATIFIED BY THE TRUSTEES, AND ANY SUCH WRITTEN AGREEMENT SHALL MEET
SUCH REQUIREMENTS AS MAY BE SPECIFIED BY LAW OR BY THE REGULATIONS OF THE
COMMISSION. ANY SUCH WRITTEN AGREEMENT WITH A MEMBER FIRM OF A NATIONAL
SECURITIES EXCHANGE SHALL ALSO REQUIRE THAT THE SPECIAL CUSTODIAN SHALL DELIVER
TO THE CUSTODIAN ITS RECEIPT, EVIDENCING THAT IT HOLDS THE SPECIFIC SECURITIES
IN QUESTION ON BEHALF OF THE TRUST IN ITS SAFEKEEPING, BEFORE ANY PAYMENT CAN BE
MADE FOR SUCH SECURITIES BY THE TRUST. SPECIAL CUSTODIANS SHALL BE USED BY THE
TRUST ONLY FOR PURPOSES OF SAFEKEEPING DESIGNATED TYPES OF SECURITIES FOR
PERIODS OF LIMITED DURATION IN CASES WHERE, IN THE OPINION OF THE TRUSTEES,
OFFICERS OF THE TRUST, ITS INVESTMENT ADVISER OR OTHER AUTHORIZED AGENT, SUCH
SAFEKEEPING SERVICES WOULD BE MORE APPROPRIATE OR CONVENIENT TO THE TRUST THAN
THE SAFEKEEPING OF SUCH SECURITIES WITH THE CUSTODIAN.
SECTION 4. SPECIAL DEPOSITORIES. THE TRUSTEES MAY BY RESOLUTION APPOINT AS
SPECIAL DEPOSITORIES ANY COMMERCIAL BANKS INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION HAVING AGGREGATE CAPITAL, SURPLUS AND UNDIVIDED PROFITS
(AS SHOWN IN THEIR RESPECTIVE LAST PUBLISHED REPORTS) OF AT LEAST TWO MILLION
DOLLARS ($2,000,000). THE TRUST MAY MAINTAIN WITH A SPECIAL DEPOSITORY ONLY
DEMAND DEPOSIT ACCOUNTS AND SHALL NOT PERMIT THE AGGREGATE BALANCES IN SUCH
ACCOUNTS TO EXCEED THE AMOUNT OF ANY FIDELITY BOND COVERING ANY OFFICER OF THE
TRUST AUTHORIZED BY THE TRUSTEES TO HAVE SIGNATURE AUTHORITY OVER SUCH DEMAND
DEPOSIT ACCOUNTS.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
SECTION 1. DISTRIBUTIONS.
(A) THE TRUSTEES MAY FROM TIME TO TIME DECLARE AND PAY DIVIDENDS,
AND THE AMOUNT OF SUCH DIVIDENDS AND THE PAYMENT OF THEM SHALL BE WHOLLY IN THE
DISCRETION OF THE TRUSTEES.
(B) THE TRUSTEES MAY DECLARE ACCUMULATED. NET INCOME OF THE TRUST
(AS DEFINED IN SECTION 3 OF THIS ARTICLE X) AS A DIVIDEND TO SHAREHOLDERS OF
RECORD AT SUCH TIME AS THE TRUSTEES SHALL DESIGNATE, PAYABLE IN ADDITIONAL FULL
AND FRACTIONAL SHARES OR IN CASH. THE TRUSTEES MAY, IF THEY DEEM IT ADVISABLE,
DECLARE A NEGATIVE DIVIDEND (OR REVERSE SPLIT) AND DEDUCT SUCH AMOUNT FROM THE
PREVIOUSLY ACCUMULATED DIVIDENDS OF EACH SHAREHOLDER OR FROM SUCH SHAREHOLDER'S
INTEREST IN THE TRUST.
(C) THE TRUSTEES MAY DISTRIBUTE IN RESPECT OF ANY FISCAL YEAR AS
ORDINARY DIVIDENDS AND AS CAPITAL GAINS DISTRIBUTIONS, RESPECTIVELY, AMOUNTS
SUFFICIENT TO ENABLE THE TRUST AS A REGULATED INVESTMENT COMPANY TO AVOID ANY
LIABILITY FOR FEDERAL INCOME TAXES IN RESPECT OF THAT YEAR.
(D) THE DECISION OF THE TRUSTEES AS TO WHAT, IN ACCORDANCE WITH GOOD
ACCOUNTING PRACTICE, IS INCOME AND WHAT IS PRINCIPAL SHALL BE FINAL, AND EXCEPT
AS SPECIFICALLY PROVIDED HEREIN, THE DECISION OF THE TRUSTEES AS TO WHAT
EXPENSES AND CHARGES OF THE TRUST SHALL BE CHARGED AGAINST PRINCIPAL AND WHAT
AGAINST INCOME SHALL BE FINAL. ANY INCOME NOT DISTRIBUTED IN ANY YEAR MAY BE
PERMITTED TO ACCUMULATE AND AS LONG AS NOT DISTRIBUTED MAY BE INVESTED FROM TIME
TO TIME IN THE SAME MANNER AS THE PRINCIPAL FUNDS OF THE TRUST.
(E) THE TRUSTEES SHALL HAVE POWER, TO THE FULLEST EXTENT PERMITTED
BY LAW, AT ANY TIME, OR FROM TIME TO TIME, TO DECLARE AND CAUSE TO BE PAID
DIVIDENDS, WHICH, AT THE ELECTION OF THE TRUSTEES, MAY BE ACCRUED, AUTOMATICALLY
REINVESTED IN ADDITIONAL SHARES (OR FRACTIONS THEREOF) OF THE TRUST OR PAID IN
CASH OR ADDITIONAL SHARES, ALL UPON SUCH TERMS AND CONDITIONS AS THE TRUSTEES
MAY PRESCRIBE.
(F) ANYTHING IN THIS INSTRUMENT TO THE CONTRARY NOTWITHSTANDING, THE
TRUSTEES MAY AT ANY TIME DECLARE AND DISTRIBUTE A DIVIDEND CONSISTING OF SHARES
OF THE TRUST.
SECTION 2. REDEMPTIONS AND REPURCHASES.
(A) IF ANY SHAREHOLDER OF RECORD OF THE TRUST AT ANY TIME DESIRES OR
AUTHORIZES THE DISPOSITION OF SHARES RECORDED IN HIS NAME, HE OR HIS AUTHORIZED
AGENT MAY DEPOSIT A WRITTEN REQUEST (OR SUCH OTHER FORM OF REQUEST AS THE
TRUSTEES MAY FROM TIME TO TIME AUTHORIZE) REQUESTING THAT THE TRUST PURCHASE HIS
SHARES, TOGETHER WITH SUCH OTHER INSTRUMENTS OR AUTHORIZATION TO EFFECT THE
TRANSFER AS THE TRUSTEES MAY FROM TIME TO TIME REQUIRE, AT THE OFFICE OF THE
TRUST, AND THE TRUST SHALL PURCHASE HIS SAID SHARES, BUT ONLY AT THE NET ASSET
VALUE OF SUCH SHARES (AS DEFINED IN SECTION 4 OF THIS ARTICLE X) NEXT DETERMINED
BY OR ON BEHALF OF THE TRUSTEES AFTER SAID REQUEST.
PAYMENT FOR SUCH SHARES SHALL BE MADE BY THE TRUST TO THE
SHAREHOLDER OF RECORD AT A TIME DETERMINED BY THE TRUSTEES WITHIN SEVEN (7) DAYS
AFTER THE DATE UPON WHICH THE REQUEST (AND, IF REQUIRED, SUCH OTHER INSTRUMENTS
OR AUTHORIZATIONS OF TRANSFER) IS DEPOSITED, SUBJECT TO THE RIGHT OF THE
TRUSTEES TO POSTPONE THE DATE OF PAYMENT PURSUANT TO SECTION 5 OF THIS ARTICLE
X. IF THE REDEMPTION IS POSTPONED BEYOND THE DATE ON WHICH IT WOULD NORMALLY
OCCUR BY REASON OF A DECLARATION BY THE TRUSTEES SUSPENDING THE RIGHT OF
REDEMPTION PURSUANT TO SECTION 5 OF THIS ARTICLE X, THE RIGHT OF THE SHAREHOLDER
TO HAVE HIS SHARES PURCHASED BY THE TRUST SHALL BE SIMILARLY SUSPENDED, AND HE
MAY WITHDRAW HIS REQUEST (OR SUCH OTHER INSTRUMENTS OR AUTHORIZATIONS OF
TRANSFER) FROM DEPOSIT IF HE SO ELECTS; OR, IF HE DOES NOT SO ELECT, THE
PURCHASE PRICE SHALL BE THE NET ASSET VALUE OF HIS SHARES, DETERMINED NEXT AFTER
TERMINATION OF SUCH SUSPENSION AND PAYMENT THEREFOR SHALL BE MADE WITHIN SEVEN
(7) DAYS THEREAFTER.
(B) THE TRUST MAY PURCHASE SHARES OF THE TRUST BY AGREEMENT WITH THE
OWNER THEREOF (1) AT A PRICE NOT EXCEEDING THE NET ASSET VALUE PER SHARE
DETERMINED NEXT AFTER THE PURCHASE OR CONTRACT OF PURCHASE IS MADE OR (2) AT A
PRICE NOT EXCEEDING THE NET ASSET VALUE PER SHARE DETERMINED AT SOME LATER TIME.
(C) SHARES PURCHASED BY THE TRUST EITHER PURSUANT TO PARAGRAPH (A)
OR PARAGRAPH (B) OF THIS SECTION 2 SHALL BE DEEMED TREASURY SHARES AND MAY BE
RESOLD BY THE TRUST.
(D) IF THE TRUSTEES DETERMINE THAT ECONOMIC CONDITIONS WOULD MAKE IT
SERIOUSLY DETRIMENTAL TO THE BEST INTERESTS OF THE REMAINING SHAREHOLDERS OF THE
TRUST TO MAKE PAYMENT WHOLLY OR PARTLY IN CASH, THE TRUST MAY PAY THE REDEMPTION
PRICE IN WHOLE OR IN PART BY A DISTRIBUTION IN KIND OF SECURITIES FROM THE
PORTFOLIO OF THE TRUST, IN LIEU OF CASH, IN CONFORMITY WITH APPLICABLE RULES OF
THE COMMISSION, TAKING SUCH SECURITIES AT THE SAME VALUE EMPLOYED IN DETERMINING
NET ASSET VALUE AND SELECTING THE SECURITIES IN SUCH MANNER AS THE TRUSTEES MAY
DEEM FAIR AND EQUITABLE.
SECTION 3. DETERMINATION OF ACCUMULATED NET INCOME. THE ACCUMULATED NET
INCOME OF THE TRUST SHALL BE DETERMINED BY OR ON BEHALF OF THE TRUSTEES DAILY OR
MORE FREQUENTLY AT THE DISCRETION OF THE TRUSTEES, ON EACH BUSINESS DAY AT SUCH
TIME OR TIMES AS THE TRUSTEES SHALL IN THEIR DISCRETION DETERMINE. SUCH
DETERMINATION SHALL BE MADE IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AND PRACTICES AND THE ACCOUNTING POLICIES ESTABLISHED BY THE TRUSTEES
AND MAY INCLUDE REALIZED AND/OR UNREALIZED GAINS FROM THE SALE OR DISPOSITION OF
SECURITIES OR OTHER PROPERTY OF THE TRUST. THE POWER AND DUTY TO DETERMINE
ACCUMULATED NET INCOME MAY BE DELEGATED BY THE TRUSTEES FROM TIME TO TIME TO ONE
OR MORE OF THE TRUSTEES OR OFFICERS OF THE TRUST, TO THE OTHER PARTY TO ANY
CONTRACT ENTERED INTO PURSUANT TO SECTION 1 OR 2 OF ARTICLE VII, OR TO THE
CUSTODIAN OR TO A TRANSFER AGENT.
SECTION 4. NET ASSET VALUE OF SHARES. THE NET ASSET VALUE OF EACH SHARE OF
THE TRUST OUTSTANDING SHALL BE DETERMINED AT LEAST ONCE ON EACH BUSINESS DAY BY
OR ON BEHALF OF THE TRUSTEES. THE POWER AND DUTY TO DETERMINE NET ASSET VALUE
MAY BE DELEGATED BY THE TRUSTEES FROM TIME TO TIME TO ONE OR MORE OF THE
TRUSTEES OR OFFICERS OF THE TRUST, TO THE OTHER PARTY TO ANY CONTRACT ENTERED
INTO PURSUANT TO SECTION 1 OR 2 OF ARTICLE VII, OR TO THE CUSTODIAN OR TO A
TRANSFER AGENT.
THE NET ASSET VALUE OF EACH SHARE OF THE TRUST AS OF ANY PARTICULAR TIME
SHALL BE THE QUOTIENT (ADJUSTED TO THE NUMBER OF SIGNIFICANT DIGITS DETERMINED
BY THE TRUSTEES) OBTAINED BY DIVIDING THE VALUE, AS OF SUCH TIME, OF THE NET
ASSETS OF THE TRUST (I.E., THE VALUE OF THE ASSETS OF THE TRUST LESS ITS
LIABILITIES EXCLUSIVE OF CAPITAL AND SURPLUS) BY THE TOTAL NUMBER OF SHARES
OUTSTANDING (EXCLUSIVE OF TREASURY SHARES) AT SUCH TIME IN ACCORDANCE WITH THE
REQUIREMENTS OF THE 1940 ACT AND ANY APPLICABLE RULES, REGULATIONS AND ORDERS
THEREUNDER, AND APPLICABLE PROVISIONS OF THE BY-LAWS OF THE TRUST IN CONFORMITY
WITH GENERALLY ACCEPTED ACCOUNTING PRACTICES AND PRINCIPLES.
SECTION 5. SUSPENSION OF THE RIGHT OF REDEMPTION. THE TRUSTEES MAY DECLARE A
SUSPENSION OF THE DETERMINATION OF NET ASSET VALUE AND/OR THE RIGHT OF
REDEMPTION OR POSTPONE THE DATE OF PAYMENT FOR THE WHOLE OR ANY PART OF ANY
PERIOD (I) DURING WHICH THE NEW YORK STOCK EXCHANGE IS CLOSED OTHER THAN
CUSTOMARY WEEKEND AND HOLIDAY CLOSINGS, (II) DURING WHICH TRADING ON THE NEW
YORK STOCK EXCHANGE IS RESTRICTED, (III) DURING WHICH AN EMERGENCY EXISTS AS A
RESULT OF WHICH DISPOSAL BY THE TRUST OF SECURITIES OWNED BY IT IS NOT
REASONABLY PRACTICABLE OR IT IS NOT REASONABLY PRACTICABLE FOR THE TRUST FAIRLY
TO DETERMINE THE VALUE OF ITS NET ASSETS, OR (IV) DURING ANY OTHER PERIOD WHEN
THE COMMISSION MAY PERMIT SUSPENSION OF THE RIGHT OF REDEMPTION OR POSTPONEMENT
OF THE DATE OF PAYMENT ON REDEMPTION BY ORDER, RULE OR INTERPRETATION FOR THE
PROTECTION OF SECURITY HOLDERS OF THE TRUST; PROVIDED THAT APPLICABLE RULES,
INTERPRETATIONS AND REGULATIONS OF THE COMMISSION SHALL GOVERN AS TO WHETHER THE
CONDITIONS PRESCRIBED IN (II) OR (III) EXIST. SUCH SUSPENSION SHALL TAKE EFFECT
AT SUCH TIME AS THE TRUSTEES SHALL SPECIFY BUT NOT LATER THAN THE CLOSE OF
BUSINESS ON THE BUSINESS DAY NEXT FOLLOWING THE DECLARATION OF SUSPENSION, AND
THEREAFTER THERE SHALL BE NO RIGHT OF REDEMPTION OR PAYMENT UNTIL THE TRUSTEES
SHALL DECLARE THE SUSPENSION AT AN END, EXCEPT THAT THE SUSPENSION SHALL
TERMINATE IN ANY EVENT ON THE FIRST DAY ON WHICH SAID STOCK EXCHANGE SHALL HAVE
REOPENED OR THE PERIOD SPECIFIED IN (II) OR (III) SHALL HAVE EXPIRED (AS TO
WHICH IN THE ABSENCE OF AN OFFICIAL RULING BY THE COMMISSION, THE DETERMINATION
OF THE TRUSTEES SHALL BE CONCLUSIVE).
SECTION 6. TRUST'S RIGHT TO REDEEM SHARES. THE TRUST SHALL HAVE THE RIGHT TO
CAUSE THE REDEMPTION OF SHARES IN ANY SHAREHOLDER'S ACCOUNT FOR THEIR THEN
CURRENT NET ASSET VALUE (WHICH WILL BE PROMPTLY PAID TO THE SHAREHOLDER IN CASH)
IF AT ANY TIME THE TOTAL INVESTMENT IN THE ACCOUNT DOES NOT HAVE A MINIMUM
DOLLAR VALUE DETERMINED FROM TIME TO TIME BY THE TRUSTEES IN THEIR SOLE
DISCRETION. SHARES OF THE TRUST ARE REDEEMABLE AT THE OPTION OF THE TRUST IF, IN
THE OPINION OF THE TRUSTEES, OWNERSHIP OF TRUST SHARES HAS OR MAY BECOME
CONCENTRATED TO AN EXTENT WHICH WOULD CAUSE THE TRUST TO BE A PERSONAL HOLDING
COMPANY WITHIN THE MEANING OF THE INTERNAL REVENUE CODE OF 1954, AS AMENDED, AND
ANY SUCCESSOR STATUTE (AND THEREBY DISQUALIFIED UNDER SUB-CHAPTER M OF SAID
CODE); IN SUCH CIRCUMSTANCES THE TRUST MAY COMPEL THE REDEMPTION OF SHARES,
REJECT ANY ORDER FOR THE PURCHASE OF SHARES OR REFUSE TO GIVE EFFECT TO THE
TRANSFER OF SHARES.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 1. LIMITATION OF PERSONAL LIABILITY AND INDEMNIFICATION OF
SHAREHOLDERS. THE TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS OF THE TRUST SHALL
HAVE NO POWER TO BIND ANY SHAREHOLDER PERSONALLY OR CALL UPON ANY SHAREHOLDER
FOR THE PAYMENT OF ANY SUM OF MONEY OR ASSESSMENT WHATSOEVER, OTHER THAN SUCH AS
THE SHAREHOLDER MAY AT ANY TIME AGREE TO PAY BY WAY OF SUBSCRIPTION TO ANY
SHARES OR OTHERWISE.
NO SHAREHOLDER OR FORMER SHAREHOLDER OF THE TRUST SHALL BE LIABLE SOLELY BY
REASON OF HIS BEING OR HAVING BEEN A SHAREHOLDER FOR ANY DEBT, CLAIM, ACTION,
DEMAND, SUIT, PROCEEDING, JUDGMENT, DECREE, LIABILITY OR OBLIGATION OF ANY KIND,
AGAINST, OR WITH RESPECT TO THE TRUST ARISING OUT OF ANY ACTION TAKEN OR OMITTED
FOR OR ON BEHALF OF THE TRUST, AND THE TRUST SHALL BE SOLELY LIABLE THEREFOR AND
RESORT SHALL BE HAD SOLELY TO THE TRUST PROPERTY FOR THE PAYMENT OR PERFORMANCE
THEREOF.
EACH SHAREHOLDER OR FORMER SHAREHOLDER OF THE TRUST (OR THEIR HEIRS,
EXECUTORS, ADMINISTRATORS OR OTHER LEGAL REPRESENTATIVES OR, IN CASE OF A
CORPORATE ENTITY, ITS CORPORATE OR GENERAL SUCCESSOR) SHALL BE ENTITLED TO
INDEMNITY AND REIMBURSEMENT OUT OF THE TRUST PROPERTY TO THE FULL EXTENT OF SUCH
LIABILITY AND THE COSTS OF ANY LITIGATION OR OTHER PROCEEDINGS IN WHICH SUCH
LIABILITY SHALL HAVE BEEN DETERMINED, INCLUDING, WITHOUT LIMITATION, THE FEES
AND DISBURSEMENTS OF COUNSEL IF, CONTRARY TO THE PROVISIONS HEREOF, SUCH
SHAREHOLDER OR FORMER SHAREHOLDER OF THE TRUST SHALL BE HELD TO PERSONAL
LIABILITY.
THE TRUST SHALL, UPON REQUEST BY THE SHAREHOLDER OR FORMER SHAREHOLDER,
ASSUME THE DEFENSE OF ANY CLAIM MADE AGAINST ANY SHAREHOLDER FOR ANY ACT OR
OBLIGATION OF THE TRUST AND SATISFY ANY JUDGMENT THEREON.
SECTION 2. LIMITATION OF PERSONAL LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES
OR AGENTS OF THE TRUST. NO TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF THE TRUST
SHALL HAVE THE POWER TO BIND ANY OTHER TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF
THE TRUST PERSONALLY. THE TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS OF THE TRUST
INCURRING ANY DEBTS, LIABILITIES OR OBLIGATIONS, OR IN TAKING OR OMITTING ANY
OTHER ACTIONS FOR OR IN CONNECTION WITH THE TRUST ARE, AND EACH SHALL BE DEEMED
TO BE, ACTING AS TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF THE TRUST AND NOT IN HIS
OWN INDIVIDUAL CAPACITY.
PROVIDED THEY HAVE ACTED UNDER THE BELIEF THAT THEIR ACTIONS ARE IN THE BEST
INTEREST OF THE TRUST, THE TRUSTEES AND OFFICERS SHALL NOT BE RESPONSIBLE FOR OR
LIABLE IN ANY EVENT FOR NEGLECT OR WRONGDOING BY THEM OR ANY OFFICER, AGENT,
EMPLOYEE, INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, TRANSFER AGENT OR CUSTODIAN
OF THE TRUST OR OF ANY ENTITY PROVIDING ADMINISTRATIVE SERVICES FOR THE TRUST,
BUT NOTHING HEREIN CONTAINED SHALL PROTECT ANY TRUSTEE OR OFFICER AGAINST ANY
LIABILITY TO WHICH HE WOULD OTHERWISE BE SUBJECT BY REASON OF WILLFUL
MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE OR RECKLESS DISREGARD OF THE DUTIES
INVOLVED IN THE CONDUCT OF HIS OFFICE.
SECTION 3. EXPRESS EXCULPATORY CLAUSES AND INSTRUMENTS. THE TRUSTEES SHALL
USE APPROPRIATE MEANS TO ASSURE THAT ALL PERSONS HAVING DEALINGS WITH THE TRUST
SHALL BE INFORMED THAT THE PROPERTY OF THE SHAREHOLDERS AND THE TRUSTEES,
OFFICERS, EMPLOYEES AND AGENTS OF THE TRUST SHALL NOT BE SUBJECT TO CLAIMS
AGAINST OR OBLIGATIONS OF THE TRUST TO ANY EXTENT WHATSOEVER. THE TRUSTEES MAY
CAUSE TO BE INSERTED IN ANY WRITTEN AGREEMENT, UNDERTAKING OR OBLIGATION MADE OR
ISSUED ON BEHALF OF THE TRUST (INCLUDING CERTIFICATES FOR SHARES OF THE TRUST)
AN APPROPRIATE REFERENCE TO THIS DECLARATION, PROVIDING THAT NEITHER THE
SHAREHOLDERS, THE TRUSTEES, THE OFFICERS, THE EMPLOYEES NOR ANY AGENT OF THE
TRUST SHALL BE LIABLE THEREUNDER, AND THAT THE OTHER PARTIES TO SUCH INSTRUMENT
SHALL LOOK SOLELY TO THE TRUST PROPERTY FOR THE PAYMENT OF ANY CLAIM THEREUNDER
OR FOR THE PERFORMANCE THEREOF; BUT THE OMISSION OF SUCH PROVISIONS FROM ANY
SUCH INSTRUMENT SHALL NOT RENDER ANY SHAREHOLDER, TRUSTEE, OFFICER, EMPLOYEE OR
AGENT LIABLE, NOR SHALL THE TRUSTEE, OR ANY OFFICER, AGENT OR EMPLOYEE OF THE
TRUST BE LIABLE TO ANYONE FOR SUCH OMISSION. IF, NOTWITHSTANDING THIS PROVISION,
ANY SHAREHOLDER, TRUSTEE, OFFICER, EMPLOYEE OR AGENT SHALL BE HELD LIABLE TO ANY
OTHER PERSON BY REASON OF THE OMISSION OF SUCH PROVISION FROM ANY SUCH
AGREEMENT, UNDERTAKING OR OBLIGATION, THE SHAREHOLDER, TRUSTEE, OFFICER,
EMPLOYEE OR AGENT SHALL BE ENTITLED TO INDEMNITY AND REIMBURSEMENT OUT OF THE
TRUST PROPERTY, AS PROVIDED IN THIS ARTICLE XI.
SECTION 4. MANDATORY INDEMNIFICATION.
(A) SUBJECT ONLY TO THE PROVISIONS HEREOF AND ANY APPLICABLE
PROVISIONS OF THE BY-LAWS OF THE TRUST, EVERY PERSON WHO IS OR HAS BEEN A
TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF THE TRUST AND EVERY PERSON WHO SERVES AT
THE TRUST'S REQUEST AS DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF ANOTHER
CORPORATION, PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE SHALL BE
INDEMNIFIED BY THE TRUST TO THE FULLEST EXTENT PERMITTED BY LAW AGAINST ALL
LIABILITIES AND AGAINST ALL EXPENSES REASONABLY INCURRED OR PAID BY HIM IN
CONNECTION WITH ANY DEBT, CLAIM, ACTION, DEMAND, SUIT, PROCEEDING, JUDGMENT,
DECREE, LIABILITY OR OBLIGATION OF ANY KIND IN WHICH HE BECOMES INVOLVED AS A
PARTY OR OTHERWISE OR IS THREATENED BY VIRTUE OF HIS BEING OR HAVING BEEN A
TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF THE TRUST OR OF ANOTHER CORPORATION,
PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE AT THE REQUEST OF THE
TRUST AGAINST AMOUNTS PAID OR INCURRED BY HIM IN THE COMPROMISE OR SETTLEMENT
THEREOF.
(B) THE WORDS "CLAIM," "ACTION," "SUIT," OR "PROCEEDING" SHALL APPLY
TO ALL CLAIMS, ACTIONS, SUITS OR PROCEEDINGS (CIVIL, CRIMINAL, ADMINISTRATIVE,
LEGISLATIVE, INVESTIGATIVE OR OTHER, INCLUDING APPEALS), ACTUAL OR THREATENED,
AND THE WORDS "LIABILITIES" AND "EXPENSES" SHALL INCLUDE, WITHOUT LIMITATION,
ATTORNEYS' FEES, COSTS, JUDGMENTS, AMOUNTS PAID IN SETTLEMENT, FINES, PENALTIES
AND OTHER LIABILITIES.
(C) NO INDEMNIFICATION SHALL BE PROVIDED TO ANY PERSON HEREUNDER
AGAINST ANY LIABILITIES TO THE TRUST OR ITS SHAREHOLDERS ADJUDICATED TO HAVE
BEEN INCURRED BY REASON OF WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE, OR
RECKLESS DISREGARD OF THE DUTIES INVOLVED IN THE CONDUCT OF SUCH PERSON'S
OFFICE.
(D) THE RIGHTS OF INDEMNIFICATION HEREIN PROVIDED MAY BE INSURED
AGAINST BY POLICIES MAINTAINED BY THE TRUST, SHALL BE SEVERABLE, SHALL NOT
AFFECT ANY OTHER RIGHTS TO WHICH ANY TRUSTEE, OFFICER, EMPLOYEE OR AGENT MAY NOW
OR HEREAFTER BE ENTITLED, SHALL CONTINUE AS TO A PERSON WHO HAS CEASED TO BE
SUCH TRUSTEE, OFFICER, EMPLOYEE, OR AGENT AND SHALL INURE TO THE BENEFIT OF THE
HEIRS, EXECUTORS AND ADMINISTRATORS OF SUCH A PERSON; PROVIDED, HOWEVER, THAT NO
PERSON MAY SATISFY ANY RIGHT OF INDEMNITY OR REIMBURSEMENT GRANTED HEREIN EXCEPT
OUT OF THE PROPERTY OF THE TRUST, AND NO OTHER PERSON SHALL BE PERSONALLY LIABLE
TO PROVIDE INDEMNITY OR REIMBURSEMENT HEREUNDER (EXCEPT AN INSURER OR SURETY OF
PERSON OTHERWISE BOUND BY CONTRACT).
(E) EXPENSES IN CONNECTION WITH THE PREPARATION AND PRESENTATION OF
A DEFENSE TO ANY CLAIM, ACTION, SUIT OR PROCEEDING OF THE CHARACTER DESCRIBED IN
PARAGRAPH (A) OF THIS SECTION 4 MAY BE PAID BY THE TRUST PRIOR TO FINAL
DISPOSITION THEREOF UPON RECEIPT OF A WRITTEN UNDERTAKING BY OR ON BEHALF OF THE
TRUSTEE, OFFICER, EMPLOYEE OR AGENT TO REIMBURSE TO THE TRUST IF IT IS
ULTIMATELY DETERMINED UNDER THIS SECTION 4 THAT HE IS NOT ENTITLED TO
INDEMNIFICATION.
ARTICLE XII
MISCELLANEOUS
SECTION 1. TRUST IS NOT A PARTNERSHIP. IT IS HEREBY EXPRESSLY DECLARED THAT
A TRUST AND NOT A PARTNERSHIP IS CREATED HEREBY.
SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY. THE
EXERCISE BY THE TRUSTEES OF THEIR POWERS AND DISCRETIONS HEREUNDER IN GOOD FAITH
AND WITH REASONABLE CARE UNDER THE CIRCUMSTANCES THEN PREVAILING, SHALL BE
BINDING UPON EVERYONE INTERESTED. SUBJECT TO THE PROVISIONS OF ARTICLE XI, THE
TRUSTEES SHALL NOT BE LIABLE FOR ERRORS OF JUDGMENT OR MISTAKES OF FACT OR LAW.
THE TRUSTEES MAY TAKE ADVICE OF COUNSEL OR OTHER EXPERTS WITH RESPECT TO THE
MEANING AND OPERATION OF THIS DECLARATION OF TRUST, AND, SUBJECT TO THE
PROVISIONS OF ARTICLE XI, SHALL BE UNDER NO LIABILITY FOR ANY ACT OR OMISSION IN
ACCORDANCE WITH SUCH ADVICE OR FOR FAILING TO FOLLOW SUCH ADVICE. THE TRUSTEES
SHALL NOT BE REQUIRED TO GIVE ANY BOND AS SUCH, NOR ANY SURETY IF A BOND IS
REQUIRED.
SECTION 3. ESTABLISHMENT OF RECORD DATES. THE TRUSTEES MAY CLOSE THE SHARE
TRANSFER BOOKS OF THE TRUST FOR A PERIOD NOT EXCEEDING NINETY (90) DAYS
PRECEDING THE DATE OF ANY MEETING OF SHAREHOLDERS, OR THE DATE FOR THE PAYMENT
OF ANY DIVIDEND OR THE MAKING OF ANY DISTRIBUTION TO SHAREHOLDERS, OR THE DATE
FOR THE ALLOTMENT OF RIGHTS, OR THE DATE WHEN ANY CHANGE OR CONVERSION OR
EXCHANGE OF SHARES SHALL GO INTO EFFECT; OR IN LIEU OF CLOSING THE SHARE
TRANSFER BOOKS AS AFORESAID, THE TRUSTEES MAY FIX IN ADVANCE A DATE, NOT
EXCEEDING NINETY (90) DAYS PRECEDING THE DATE OF ANY MEETING OF SHAREHOLDERS, OR
THE DATE FOR THE PAYMENT OF ANY DIVIDEND OR THE MAKING OF ANY DISTRIBUTION TO
SHAREHOLDERS, OR THE DATE FOR THE ALLOTMENT OF RIGHTS, OR THE DATE WHEN ANY
CHANGE OR CONVERSION OR EXCHANGE OF SHARES SHALL GO INTO EFFECT, OR THE LAST DAY
ON WHICH THE CONSENT OR DISSENT OF SHAREHOLDERS MAY BE EFFECTIVELY EXPRESSED FOR
ANY PURPOSE, AS A RECORD DATE FOR THE DETERMINATION OF THE SHAREHOLDERS ENTITLED
TO NOTICE OF, AND TO VOTE AT, ANY SUCH MEETING AND ANY ADJOURNMENT THEREOF, OR
ENTITLED TO RECEIVE PAYMENT OF ANY SUCH DIVIDEND OR DISTRIBUTION, OR TO ANY SUCH
ALLOTMENT OF RIGHTS, OR TO EXERCISE THE RIGHTS IN RESPECT OF ANY SUCH CHANGE,
CONVERSION OR EXCHANGE OF SHARES, OR TO EXERCISE THE RIGHT TO GIVE SUCH CONSENT
OR DISSENT, AND IN SUCH CASE, SUCH SHAREHOLDERS AND ONLY SUCH SHAREHOLDERS AS
SHALL BE SHAREHOLDERS OF RECORD ON THE DATE SO FIXED SHALL BE ENTITLED TO SUCH
NOTICE OF, AND TO VOTE AT, SUCH MEETING, OR TO RECEIVE PAYMENT OF SUCH DIVIDEND
OR DISTRIBUTION, OR TO RECEIVE SUCH ALLOTMENT OR RIGHTS, OR TO EXERCISE SUCH
RIGHTS, AS THE CASE MAY BE, NOTWITHSTANDING ANY TRANSFER OF ANY SHARES ON THE
BOOKS OF THE TRUST AFTER ANY SUCH DATE FIXED AS AFORESAID.
SECTION 4. TERMINATION OF TRUST.
(A) THIS TRUST SHALL CONTINUE WITHOUT LIMITATION OF TIME BUT SUBJECT
TO THE PROVISIONS OF PARAGRAPHS (B), (C) AND (D) OF THIS SECTION 4.
(B) THE TRUSTEES, WITH THE APPROVAL OF THE HOLDERS OF A MAJORITY OF
THE OUTSTANDING SHARES, MAY MERGE, CONSOLIDATE, OR SELL AND CONVEY THE ASSETS OF
THE TRUST INCLUDING ITS GOODWILL TO ANOTHER TRUST OR CORPORATION ORGANIZED UNDER
THE LAWS OF ANY STATE OF THE UNITED STATES FOR AN ADEQUATE CONSIDERATION WHICH
MAY INCLUDE THE ASSUMPTION OF ALL OUTSTANDING OBLIGATIONS, TAXES, AND OTHER
LIABILITIES, ACCRUED OR CONTINGENT, OF THE TRUST AND WHICH MAY INCLUDE SHARES OF
BENEFICIAL INTEREST OR STOCK OF SUCH TRUST OR CORPORATION. UPON MAKING PROVISION
FOR THE PAYMENT OF ALL SUCH LIABILITIES, BY SUCH ASSUMPTION OR OTHERWISE, THE
TRUSTEES SHALL DISTRIBUTE THE NET PROCEEDS OF THE TRANSACTION RATABLY AMONG THE
HOLDERS OF THE SHARES OF THE TRUST THEN OUTSTANDING.
(C) SUBJECT TO A MAJORITY SHAREHOLDER VOTE, THE TRUSTEES MAY AT ANY
TIME SELL AND CONVERT INTO MONEY ALL THE ASSETS OF THE TRUST. UPON MAKING
PROVISION FOR THE PAYMENT OF ALL OUTSTANDING OBLIGATIONS, TAXES AND OTHER
LIABILITIES, ACCRUED OR CONTINGENT, OF THE TRUST, THE TRUSTEES SHALL DISTRIBUTE
THE REMAINING ASSETS OF THE TRUST RATABLY AMONG THE HOLDERS OF THE OUTSTANDING
SHARES.
(D) UPON COMPLETION OF THE DISTRIBUTION OF THE REMAINING PROCEEDS OR
THE REMAINING ASSETS AS PROVIDED IN PARAGRAPHS (B) AND (C), THE TRUST SHALL BE
DISCHARGED OF ANY AND ALL FURTHER LIABILITIES AND DUTIES HEREUNDER AND THE
RIGHT, TITLE, AND INTEREST OF ALL PARTIES SHALL BE CANCELED AND DISCHARGED.
SECTION 5. OFFICES OF THE TRUST, FILING OF COPIES, COPIES, REFERENCES,
HEADINGS. THE TRUST MAY MAINTAIN SUCH OFFICES IN SUCH LOCATIONS AS THE TRUSTEES
MAY FROM TIME TO TIME DETERMINE. THE ORIGINAL OR A COPY OF THIS INSTRUMENT AND
OF EACH DECLARATION OF TRUST SUPPLEMENTAL HERETO SHALL BE KEPT AT THE OFFICE OF
THE TRUST WHERE IT MAY BE INSPECTED BY ANY SHAREHOLDER. A COPY OF THIS
INSTRUMENT AND OF EACH SUPPLEMENTAL DECLARATION OF TRUST SHALL BE FILED BY THE
TRUSTEES WITH THE MASSACHUSETTS SECRETARY OF STATE, AS WELL AS ANY OTHER
GOVERNMENTAL OFFICE WHERE SUCH FILING MAY FROM TIME TO TIME BE REQUIRED. ANYONE
DEALING WITH THE TRUST MAY RELY ON A CERTIFICATE BY AN OFFICER OF THE TRUST AS
TO WHETHER OR NOT ANY SUCH SUPPLEMENTAL DECLARATION OF TRUST HAS BEEN MADE AND
AS TO ANY MATTERS IN CONNECTION WITH THE TRUST HEREUNDER, AND WITH THE SAME
EFFECT AS IF IT WERE THE ORIGINAL, MAY RELY ON A COPY CERTIFIED BY AN OFFICER OF
THE TRUST TO BE A COPY OF THIS INSTRUMENT OR OF ANY SUCH SUPPLEMENTAL
DECLARATION OF TRUST. IN THIS INSTRUMENT OR IN ANY SUCH SUPPLEMENTAL DECLARATION
OF TRUST, REFERENCES TO THIS INSTRUMENT, AND ALL EXPRESSIONS LIKE "HEREIN,"
"HEREOF" AND "HEREUNDER," SHALL BE DEEMED TO REFER TO THIS INSTRUMENT AS AMENDED
OR AFFECTED BY ANY SUCH SUPPLEMENTAL DECLARATION OF TRUST. HEADINGS ARE PLACED
HEREIN FOR CONVENIENCE OR REFERENCE ONLY, AND IN CASE OF ANY CONFLICT, THE TEXT
OF THIS INSTRUMENT, RATHER THAN THE HEADINGS, SHALL CONTROL. THIS INSTRUMENT MAY
BE EXECUTED IN ANY NUMBER OF COUNTERPARTS EACH OF WHICH SHALL BE DEEMED AN
ORIGINAL.
SECTION 6. APPLICABLE LAW. THE TRUST SET FORTH IN THIS INSTRUMENT IS CREATED
UNDER AND IS TO BE GOVERNED BY AND CONSTRUED AND ADMINISTERED ACCORDING TO THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. THE TRUST SHALL BE OF THE TYPE
COMMONLY CALLED A MASSACHUSETTS BUSINESS TRUST, AND, WITHOUT LIMITING THE
PROVISIONS HEREOF, THE TRUST MAY EXERCISE ALL POWERS WHICH ARE ORDINARILY
EXERCISED BY SUCH A TRUST.
SECTION 7. AMENDMENTS. PRIOR TO THE INITIAL ISSUANCE OF SHARES PURSUANT TO
THE SECOND SENTENCE OF SECTION 3 OF ARTICLE III, A MAJORITY OF THE TRUSTEES THEN
IN OFFICE MAY AMEND OR OTHERWISE SUPPLEMENT THIS INSTRUMENT BY MAKING A
DECLARATION OF TRUST SUPPLEMENTAL HERETO, WHICH THEREAFTER SHALL FORM A PART
HEREOF. SUBSEQUENT TO SUCH INITIAL ISSUANCE OF SHARES, IF AUTHORIZED BY A
MAJORITY OF THE TRUSTEES THEN IN OFFICE AND BY A MAJORITY SHAREHOLDER VOTE, OR
BY ANY LARGER VOTE WHICH MAY BE REQUIRED BY APPLICABLE LAW OR THIS DECLARATION
OF TRUST IN ANY PARTICULAR CASE, THE TRUSTEES SHALL AMEND OR OTHERWISE
SUPPLEMENT THIS INSTRUMENT, BY MAKING A DECLARATION OF TRUST SUPPLEMENTAL
HERETO, WHICH THEREAFTER SHALL FORM A PART HEREOF. ANY SUCH SUPPLEMENTAL
DECLARATION OF TRUST SHALL BE SIGNED BY AT LEAST A MAJORITY OF THE TRUSTEES THEN
IN OFFICE. COPIES OF THE SUPPLEMENTAL DECLARATION OF TRUST SHALL BE FILED AS
SPECIFIED IN SECTION 5 OF THIS ARTICLE XII.
SECTION 8. CONFLICTS WITH LAW OR REGULATIONS.
(A) THE PROVISIONS OF THIS DECLARATION OF TRUST ARE SEVERABLE, AND
IF THE TRUSTEES DETERMINE, WITH THE ADVICE OF COUNSEL, THAT ANY SUCH PROVISION
IS IN UNRESOLVABLE CONFLICT WITH THE 1940 ACT, WITH THE PROVISIONS OF THE
INTERNAL REVENUE CODE RELATING TO THE TAX TREATMENT OF A REGULATED INVESTMENT
COMPANY OR OTHER MATTERS CONCERNING REGULATED INVESTMENT COMPANIES, OR WITH
OTHER APPLICABLE LAWS OR REGULATIONS, THE CONFLICTING PROVISION SHALL BE DEEMED
NEVER TO HAVE CONSTITUTED A PART OF THIS DECLARATION OF TRUST; PROVIDED,
HOWEVER, THAT SUCH DETERMINATION SHALL NOT AFFECT ANY OF THE REMAINING
PROVISIONS HEREOF NOR RENDER INVALID OR IMPROPER ANY ACTION TAKEN OR OMITTED
PRIOR TO SUCH DETERMINATION.
(B) IF ANY PROVISION OF THIS DECLARATION OF TRUST SHALL BE HELD
INVALID OR UNENFORCEABLE IN ANY JURISDICTION, SUCH INVALIDITY OR
UNENFORCEABILITY SHALL NOT ATTACH TO SUCH PROVISION IN ANY OTHER JURISDICTION OR
ANY OTHER PROVISION HEREOF IN ANY JURISDICTION.
IN WITNESS WHEREOF, THE UNDERSIGNED HAVE EXECUTED THIS INSTRUMENT ON THE
DATE FIRST WRITTEN ABOVE.
JOHN G. GUFFEY, JR.
D. WAYNE SILBY
BY-LAWS
OF
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
ARTICLE I
SHAREHOLDERS
SECTION 1. MEETINGS. MEETINGS OF THE SHAREHOLDERS SHALL BE HELD AT THE
PRINCIPAL OFFICES OF THE TRUST IN WASHINGTON, D.C., OR AT SUCH PLACE WITHIN OR
WITHOUT THE COMMONWEALTH OF MASSACHUSETTS AND ON SUCH DATES AND AT SUCH TIMES AS
THE TRUSTEES SHALL DESIGNATE.
SECTION 2. NOTICE OF MEETINGS. NOTICE OF ALL MEETINGS OF THE SHAREHOLDERS,
STATING THE TIME, PLACE, AND PURPOSES OF THE MEETING, SHALL BE GIVEN BY THE
TRUSTEES BY MAIL TO EACH SHAREHOLDER AT HIS ADDRESS AS RECORDED WITH THE TRUST
AT LEAST TEN (10) DAYS AND NOT MORE THAN NINETY (90) DAYS BEFORE THE MEETING.
ANY ADJOURNED MEETING MAY BE HELD AS ADJOURNED WITHOUT FURTHER NOTICE. NO NOTICE
NEED BE GIVEN TO ANY SHAREHOLDER WHO SHALL HAVE FAILED TO INFORM THE TRUST OF
HIS CURRENT ADDRESS OR IF A WRITTEN WAIVER OF NOTICE, EXECUTED BEFORE OR AFTER
THE MEETING BY THE SHAREHOLDER OR HIS ATTORNEY THEREUNTO AUTHORIZED, IS FILED
WITH THE RECORDS OF THE MEETING.
SECTION 3. RECORD DATE FOR MEETINGS AND OTHER PURPOSES. FOR THE PURPOSE OF
DETERMINING THE SHAREHOLDERS WHO ARE ENTITLED TO NOTICE OF AND TO VOTE AT ANY
MEETING, INCLUDING ANY ADJOURNMENT THEREOF, OR WHO ARE ENTITLED TO PARTICIPATE
IN ANY DISTRIBUTION, OR FOR THE PURPOSE OF ANY OTHER ACTION, THE TRUSTEES MAY
FROM TIME-TO-TIME CLOSE THE TRANSFER BOOKS, THE TRUSTEES MAY FIX A DATE NOT MORE
THAN NINETY (90) DAYS PRIOR TO THE DATE OF ANY MEETING OF SHAREHOLDERS OR
DISTRIBUTION OR OTHER ACTION AS A RECORD DATE FOR THE DETERMINATION OF THE
PERSONS TO BE TREATED AS SHAREHOLDERS GOVERNED BY THE DECLARATION OF TRUST.
SECTION 4. PROXIES. AT ANY MEETING OF SHAREHOLDERS, ANY HOLDER OF SHARES
ENTITLED TO VOTE THERE AT MAY VOTE EITHER IN PERSON OR BY PROXY, PROVIDED THAT
NO PROXY SHALL BE VOTED AT ANY MEETING UNLESS IT SHALL HAVE BEEN PLACED ON FILE
WITH THE SECRETARY, OR WITH SUCH OTHER OFFICER OR AGENT OF THE TRUST AS THE
SECRETARY MAY DIRECT, FOR VERIFICATION PRIOR TO THE TIME AT WHICH SUCH VOTE
SHALL BE TAKEN. PURSUANT TO A RESOLUTION OF A MAJORITY OF THE TRUSTEES, PROXIES
MAY BE SOLICITED IN THE NAME OF ONE OR MORE TRUSTEES OR ONE OR MORE OFFICERS OF
THE TRUST. ONLY SHAREHOLDERS OF RECORD SHALL BE ENTITLED TO VOTE. EACH FULL
SHARE SHALL BE ENTITLED TO ONE VOTE, AND FRACTIONAL SHARES SHALL BE ENTITLED TO
A VOTE OF SUCH FRACTION. WHEN ANY SHARE IS HELD JOINTLY BY SEVERAL PERSONS, ANY
ONE OF THEM MAY VOTE AT ANY MEETING IN PERSON OR BY PROXY IN RESPECT OF SUCH
SHARE, BUT IF MORE THAN ONE OF THEM SHALL BE PRESENT AT SUCH MEETING IN PERSON
OR BY PROXY, AND SUCH JOINT OWNERS OR THEIR PROXIES DISAGREE AS TO ANY VOTE TO
BE CAST, SUCH VOTE SHALL NOT BE RECEIVED IN RESPECT TO SUCH SHARE. A PROXY
PURPORTING TO BE EXECUTED BY OR ON BEHALF OF A SHAREHOLDER SHALL BE DEEMED VALID
UNLESS CHALLENGED AT OR PRIOR TO ITS EXERCISE, AND THE BURDEN OF PROVING
INVALIDITY SHALL REST ON THE CHALLENGER. IF THE HOLDER OF ANY SUCH SHARE IS A
MINOR OR A PERSON OF UNSOUND MIND, AND SUBJECT TO GUARDIANSHIP OR TO THE LEGAL
CONTROL OF ANY OTHER PERSON AS REGARDS THE CHARGE OR MANAGEMENT OF SUCH SHARE,
HE MAY VOTE BY HIS GUARDIAN OR SUCH OTHER PERSON APPOINTED OR HAVING SUCH
CONTROL, AND SUCH VOTE MAY BE GIVEN IN PERSON OR BY PROXY.
SECTION 5. INSPECTION OF RECORDS. THE RECORDS, ACCOUNTS AND BOOKS OF THE
TRUST SHALL BE OPEN TO INSPECTION BY SHAREHOLDERS TO THE SAME EXTENT AS IS
PERMITTED SHAREHOLDERS OF A MASSACHUSETTS BUSINESS CORPORATION.
SECTION 6. ACTION WITHOUT MEETING. ANY ACTION WHICH MAY BE TAKEN BY
SHAREHOLDERS MAY BE TAKEN WITHOUT A MEETING IF ALL SHAREHOLDERS ENTITLED TO VOTE
ON THE MATTER CONSENT TO THE ACTION IN WRITING AND THE WRITTEN CONSENTS ARE
FILED WITH THE RECORDS OF THE MEETING OF SHAREHOLDERS. SUCH CONSENTS SHALL BE
TREATED FOR ALL PURPOSES AS A VOTE TAKEN AT A MEETING OF SHAREHOLDERS.
ARTICLE II
TRUSTEES
SECTION 1. THE TRUSTEES. THE TRUST SHALL HAVE ELEVEN (11) TRUSTEES, UNLESS
AND UNTIL SUCH NUMBER BE CHANGED BY AMENDMENT OF THE BY-LAWS OR BY RESOLUTION OF
THE TRUSTEES. THE TERM OF OFFICE OF EACH TRUSTEE SHALL EXPIRE UPON THE ELECTION
OF A SUCCESSOR TRUSTEE AT A MEETING OF SHAREHOLDERS.
SECTION 2. MEETING OF TRUSTEES. THE TRUSTEES MAY IN THEIR DISCRETION PROVIDE
OR REGULAR OR STATED MEETINGS OF THE TRUSTEES. NOTICE OF REGULAR OR STATED
MEETINGS NEED NOT BE GIVEN. MEETINGS OF THE TRUSTEES OTHER THAN REGULAR OR
STATED MEETINGS SHALL BE HELD WHENEVER CALLED BY THE PRESIDENT, OR BY ONE OF THE
TRUSTEES, AT THE TIME BEING IN OFFICE. NOTICE OF THE TIME AND PLACE OF EACH
MEETING OTHER THAN REGULAR OR STATED MEETINGS SHALL BE GIVEN BY THE SECRETARY OR
ASSISTANT SECRETARY OR BY THE OFFICER OR TRUSTEE CALLING THE MEETING AND SHALL
BE MAILED TO EACH TRUSTEE AT LEAST TWO DAYS BEFORE THE MEETING, OR SHALL BE
TELEGRAPHED, CABLED, OR PERSONALLY DELIVERED TO HIM AT LEAST ONE DAY BEFORE THE
MEETING. NOTICE BY TELEPHONE SHALL CONSTITUTE PERSONAL DELIVERY FOR THESE
PURPOSES. NOTICE MAY, HOWEVER, BE WAIVED BY ANY TRUSTEE BEFORE OR AFTER ANY
MEETING. NEITHER THE BUSINESS TO BE TRANSACTED AT, NOR THE PURPOSE OF ANY
MEETING OF THE TRUSTEES NEED TO BE STATED IN THE NOTICE OR WAIVER OF NOTICE OF
SUCH MEETING, AND NO NOTICE NEED BE GIVEN OF ACTION PROPOSED TO BE TAKEN BY
UNANIMOUS WRITTEN CONSENT. THE ATTENDANCE OF A TRUSTEE AT A MEETING SHALL
CONSTITUTE A WAIVER OF NOTICE OF SUCH MEETING EXCEPT WHERE A TRUSTEE ATTENDS A
MEETING FOR THE EXPRESS PURPOSE OF OBJECTING TO THE TRANSACTION OF ANY BUSINESS
ON THE GROUND THAT THE MEETING HAS NOT BEEN LAWFULLY CALLED OR CONVENED. THE
TRUSTEES MAY MEET BY MEANS OF A TELEPHONE CONFERENCE CIRCUIT OR SIMILAR
COMMUNICATIONS EQUIPMENT, BY MEANS OF WHICH ALL PERSONS PARTICIPATING IN THE
MEETING CAN HEAR EACH OTHER, WHICH TELEPHONE CONFERENCE MEETING SHALL BE DEEMED
TO HAVE BEEN HELD AT A PLACE DESIGNATED BY THE TRUSTEES AT THE MEETING.
PARTICIPATION IN A TELEPHONE CONFERENCE MEETING SHALL CONSTITUTE PRESENCE IN
PERSON AT SUCH MEETING. ANY ACTION REQUIRED OR PERMITTED TO BE TAKEN AT ANY
MEETING OF THE TRUSTEES MAY BE TAKEN BY THE TRUSTEES WITHOUT A MEETING IF ALL
THE TRUSTEES CONSENT TO THE ACTION IN WRITING AND THE WRITTEN CONSENTS ARE FILED
WITH THE RECORDS OF THE TRUSTEES` MEETINGS. SUCH CONSENTS SHALL BE TREATED AS A
VOTE FOR ALL PURPOSES.
SECTION 3. QUORUM AND VOTE. A MAJORITY OF THE TRUSTEES SHALL BE PRESENT IN
PERSON AT ANY REGULAR OR SPECIAL MEETING OF THE TRUSTEES IN ORDER TO CONSTITUTE
A QUORUM FOR THE TRANSACTION OF BUSINESS AT SUCH MEETING AND (EXCEPT AS
OTHERWISE REQUIRED BY LAW, THE DECLARATION OF TRUST OR THESE BY-LAWS) THE ACT OF
A MAJORITY OF THE TRUSTEES PRESENT AT ANY MEETING AT WHICH THE QUORUM IS PRESENT
SHALL BE THE ACT OF THE TRUSTEES. IN THE ABSENCE OF A QUORUM, A MAJORITY OF THE
TRUSTEES PRESENT MAY ADJOURN THE MEETING FROM TIME-TO-TIME UNTIL A QUORUM SHALL
BE PRESENT. NOTICE OF ANY ADJOURNED MEETING NEED NOT BE GIVEN.
SECTION 4. COMPENSATION OF TRUSTEES. THE COMPENSATION OF THE TRUSTEES SHALL
FIXED FROM TIME TO TIME BY THE TRUSTEES. NO TRUSTEE SHALL BE PRECLUDED FROM
SERVING THE TRUST IN ANY OTHER CAPACITY, AS AN OFFICER, AGENT OR OTHERWISE, AND
RECEIVING COMPENSATION THEREFOR.
ARTICLE III
COMMITTEES
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. THE TRUSTEES BY VOTE OF A
MAJORITY OF ALL THE TRUSTEES MAY ELECT FROM THEIR OWN NUMBER AN EXECUTIVE
COMMITTEE, TO CONSIST OF NOT LESS THAN TWO (2) MEMBERS TO HOLD OFFICE AT THE
PLEASURE OF THE TRUSTEES, WHICH SHALL HAVE THE POWER TO CONDUCT THE CURRENT AND
ORDINARY BUSINESS OF THE TRUST WHILE THE TRUSTEES ARE NOT IN SESSION AND SUCH
OTHER POWERS OF THE TRUSTEES AS THE TRUSTEES MAY, FROM TIME-TO-TIME, DELEGATE TO
THEM EXCEPT THOSE POWERS WHICH BY LAW, THE DECLARATION OF TRUST, OR THESE
BY-LAWS THEY ARE PROHIBITED FROM DELEGATING. THE TRUSTEES MAY ALSO ELECT FROM
THEIR OWN NUMBER OTHER COMMITTEES FROM TIME-TO-TIME, THE NUMBER COMPOSING SUCH
COMMITTEES, THE POWERS CONFERRED UPON THE SAME (SUBJECT TO THE SAME LIMITATIONS
AS THE EXECUTIVE COMMITTEE) AND THE TERM OF MEMBERSHIP OF SUCH COMMITTEES TO BE
DETERMINED BY THE TRUSTEES. THE TRUSTEES MAY DESIGNATE A CHAIRMAN OF ANY SUCH
COMMITTEE; IN THE ABSENCE OF SUCH A DESIGNATION, THE COMMITTEE MAY ELECT ITS OWN
CHAIRMAN.
SECTION 2. MEETING, QUORUM AND MANNER OF ACTING. THE TRUSTEES MAY (1)
PROVIDE FOR STATED MEETINGS OF ANY COMMITTEES, (2) SPECIFY THE MANNER OF CALLING
AND NOTICE REQUIRED FOR SPECIAL MEETINGS OF ANY COMMITTEE, (3) SPECIFY THE
NUMBER OF MEMBERS OF A COMMITTEE REQUIRED TO CONSTITUTE A QUORUM AND THE NUMBER
OF MEMBERS OF A COMMITTEE REQUIRED TO EXERCISE SPECIFIED POWERS DELEGATED TO
SUCH COMMITTEE, (4) AUTHORIZE THE MAKING OF DECISIONS TO EXERCISE SPECIFIED
POWERS BY WRITTEN ASSENT OF THE REQUISITE NUMBER OF MEMBERS OF A COMMITTEE
WITHOUT A MEETING, AND (5) AUTHORIZE THE MEMBERS OF A COMMITTEE TO MEET BY MEANS
OF A TELEPHONE CONFERENCE CIRCUIT.
ALL COMMITTEES SHALL KEEP REGULAR MINUTES OF THEIR MEETINGS AND RECORDS OF
DECISIONS TAKEN WITHOUT A MEETING AND CAUSE THEM TO BE RECORDED IN A BOOK
DESIGNATED FOR THAT PURPOSE AND KEPT IN THE OFFICE OF THE TRUST. ALL ACTION BY
COMMITTEES SHALL BE REPORTED TO THE TRUSTEES AT THEIR MEETING NEXT SUCCEEDING
SUCH ACTION.
SECTION 3. COMPENSATION. THE MEMBERS OF ANY DULY APPOINTMENTED COMMITTEE
SHALL RECEIVE SUCH COMPENSATION AND/OR FEES AS, FROM TIME-TO-TIME, MAY BE FIXED
BY THE TRUSTEES.
ARTICLE V
OFFICERS
SECTION 1. GENERAL PROVISIONS. THE OFFICERS OF THE TRUST SHALL BE A
PRESIDENT AND A SECRETARY WHO SHALL BE ELECTED BY THE TRUSTEES. THE TRUSTEES MAY
ELECT OR APPOINT SUCH OTHER OFFICERS OR AGENTS AS THE BUSINESS OF THE TRUST MAY
REQUIRE, INCLUDING A CHAIRMAN, A TREASURER, ONE OR MORE VICE PRESIDENTS, ONE OR
MORE ASSISTANT SECRETARIES, AND ONE OR MORE ASSISTANT TREASURERS. THE TRUSTEES
MAY DELEGATE TO ANY OFFICER OR COMMITTEE THE POWER TO APPOINT ANY SUBORDINATE
OFFICERS OR AGENTS.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. EXCEPT AS OTHERWISE PROVIDED
BY LAW, THE DECLARATION OF TRUST OR THESE BY-LAWS, THE PRESIDENT AND THE
SECRETARY SHALL EACH HOLD OFFICE UNTIL HIS SUCCESSOR SHALL HAVE BEEN DULY
ELECTED AND QUALIFIED, AND ALL OTHER OFFICERS SHALL HOLD OFFICE AT THE PLEASURE
OF THE TRUSTEES. ANY TWO OR MORE OF THE OFFICERS MAY BE HELD BY THE SAME PERSON,
EXCEPT THAT THE SAME PERSON MAY NOT BE BOTH PRESIDENT AND SECRETARY. THE
CHAIRMAN, IF THERE BE SUCH AN OFFICER, AND THE PRESIDENT SHALL BE TRUSTEES, BUT
NO OTHER OFFICER OF THE TRUST NEED BE A TRUSTEE.
SECTION 3. REMOVAL. THE TRUSTEES, AT ANY REGULAR OR SPECIAL MEETING OF THE
TRUSTEES, MAY REMOVE ANY OFFICER WITH OR WITHOUT CAUSE BY A VOTE OF THE MAJORITY
OF THE TRUSTEES. ANY OFFICER OR AGENT APPOINTED BY ANY OFFICER OR COMMITTEE MAY
BE REMOVED WITH OR WITHOUT CAUSE BY SUCH APPOINTING OFFICER OR COMMITTEE.
SECTION 4. BONDS AND SURETY. ANY OFFICER MAY BE REQUIRED BY THE TRUSTEES TO
BE BONDED FOR THE FAITHFUL PERFORMANCE OF HIS DUTIES IN SUCH AMOUNT AND WITH
SUCH SURETIES AS THE TRUSTEES MAY DETERMINE.
SECTION 5. CHAIRMAN, PRESIDENT, AND VICE-PRESIDENTS. THE CHAIRMAN, IF THERE
BE SUCH AN OFFICER, SHALL, IF PRESENT, PRESIDE AT ALL MEETINGS OF THE
SHAREHOLDERS AND OF THE TRUSTEES AND SHALL EXERCISE AND PERFORM SUCH OTHER
POWERS AND DUTIES AS MAY BE FROM TIME TO TIME ASSIGNED TO HIM BY THE TRUSTEES.
SUBJECT TO SUCH SUPERVISORY POWERS, IF ANY, AS MAY BE GIVEN BY THE TRUSTEES TO
THE CHAIRMAN, THE PRESIDENT SHALL BE THE CHIEF EXECUTIVE OFFICER OF THE TRUST
AND, SUBJECT TO THE CONTROL OF THE TRUSTEES, SHALL HAVE GENERAL SUPERVISION,
DIRECTION AND CONTROL OF THE BUSINESS OF THE TRUST AND OF ITS EMPLOYEES AND
SHALL EXERCISE SUCH GENERAL POWERS OF MANAGEMENT AS ARE USUALLY VESTED IN THE
OFFICE OF PRESIDENT OF A CORPORATION. IN THE ABSENCE OF THE CHAIRMAN, THE
PRESIDENT SHALL PRESIDE AT ALL MEETINGS OF THE SHAREHOLDERS AND OF THE TRUSTEES.
THE PRESIDENT SHALL HAVE THE POWER IN THE NAME AND ON BEHALF OF THE TRUST TO
GRANT, ISSUE, EXECUTE OR SIGN ANY AND ALL DOCUMENTS, CONTRACTS, AGREEMENTS,
DEEDS, MORTGAGES, PROXIES, POWERS OF ATTORNEY OR OTHER INSTRUMENTS AS MAY BE
DEEMED ADVISABLE OR NECESSARY IN FURTHERANCE OF THE INTERESTS OF THE TRUST. THE
PRESIDENT SHALL HAVE THE POWER TO EMPLOY ATTORNEYS AND COUNSEL FOR THE TRUST AND
TO EMPLOY SUCH SUBORDINATE OFFICERS, AGENTS, CLERKS AND EMPLOYEES AS HE MAY FIND
NECESSARY TO TRANSACT THE BUSINESS OF THE TRUST. THE PRESIDENT SHALL HAVE SUCH
FURTHER POWERS AND DUTIES AS, FROM TIME-TO-TIME, MAY BE CONFERRED UPON HIM OR
ASSIGNED TO HIM BY THE TRUSTEES. IN THE ABSENCE OR DISABILITY OF THE PRESIDENT,
THE VICE-PRESIDENT OR, IF THERE BE MORE THAN ONE VICE-PRESIDENT, AND
VICE-PRESIDENT DESIGNATED BY THE TRUSTEES SHALL PERFORM ALL OF THE DUTIES OF THE
PRESIDENT, AND WHEN SO ACTING SHALL HAVE ALL THE POWERS OF THE PRESIDENT,
SUBJECT TO THE DIRECTION OF THE TRUSTEES. EACH VICE-PRESIDENT SHALL PERFORM SUCH
OTHER DUTIES AS MAY BE ASSIGNED TO HIM FROM TIME-TO-TIME BY THE TRUSTEES OR THE
PRESIDENT.
SECTION 6. SECRETARY. THE SECRETARY SHALL KEEP THE MINUTES OF ALL MEETINGS
OF, AND RECORD ALL VOTES OF, THE SHAREHOLDERS, THE TRUSTEES AND COMMITTEES, IF
ANY, IN PROPER BOOKS PROVIDED FOR THAT PURPOSE. HE SHALL BE CUSTODIAN OF THE
SEAL OF THE TRUST; HE SHALL HAVE CHARGE OF THE SHARE TRANSFER BOOKS, LISTS AND
RECORDS UNLESS THE SAME ARE IN THE CHARGE OF A TRANSFER AGENT. HE SHALL ATTEND
TO THE GIVING AND SERVING OF ALL NOTICES BY THE TRUST IN ACCORDANCE WITH THE
PROVISIONS OF THESE BY-LAWS AND AS REQUIRED BY LAW; AND SUBJECT TO THESE
BY-LAWS, HE SHALL IN GENERAL PERFORM ALL DUTIES INCIDENT TO THE OFFICE OF
SECRETARY AND SUCH OTHER DUTIES AS FROM TIME TO TIME MAY BE ASSIGNED TO HIM BY
THE TRUSTEES. THE SECRETARY MAY DELEGATE ANY OF HIS POWER, AUTHORITY OR DUTIES
TO ANY ASSISTANT SECRETARY OF THE TRUST.
SECTION 7. TREASURER. THE TREASURER, IF THERE BE SUCH AN OFFICER, SHALL BE
THE PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER OF THE TRUST. HE SHALL DELIVER
ALL FUNDS OF THE TRUST WHICH MAY COME INTO HIS HANDS TO SUCH CUSTODIAN,
SUBCUSTODIAN, OR SPECIAL DEPOSITORY AS THE TRUSTEES SHALL EMPLOY PURSUANT TO
ARTICLE IX OF THE DECLARATION OF TRUST. HE SHALL RENDER A STATEMENT OF CONDITION
OF THE FINANCES OF THE TRUST TO THE TRUSTEES AS OFTEN AS THEY SHALL REQUIRE THE
SAME, AND HE SHALL IN GENERAL PERFORM ALL THE DUTIES INCIDENT TO THE OFFICE OF
TREASURER AND SUCH OTHER DUTIES AS FROM TIME-TO-TIME MAY BE ASSIGNED TO HIM BY
THE TRUSTEES. THE TREASURER MAY DELEGATE ANY OF HIS POWER, AUTHORITY OR DUTIES
TO ANY ASSISTANT TREASURER OF THE TRUST.
SECTION 8. OTHER OFFICERS AND DUTIES. THE TRUSTEES MAY ELECT SUCH OTHER
OFFICERS AND ASSISTANT OFFICERS AS THEY SHALL FROM TIME-TO-TIME DETERMINE TO BE
NECESSARY OR DESIRABLE IN ORDER TO CONDUCT THE BUSINESS OF THE TRUST. ASSISTANT
OFFICERS SHALL ACT GENERALLY IN THE ABSENCE OR DISABILITY OF THE OFFICER WHOM
THEY ASSIST AND SHALL ASSIST THAT OFFICER IN THE DUTIES OF HIS OFFICE. EACH
OFFICER, EMPLOYEE, AGENT OF THE TRUST SHALL HAVE SUCH OTHER DUTIES AND AUTHORITY
AS MAY BE ASSIGNED HIM BY THE PRESIDENT.
SECTION 9. EVIDENCE OF AUTHORITY. ANYONE DEALING WITH THE TRUST SHALL BE
FULLY JUSTIFIED IN RELYING ON A COPY OF A RESOLUTION OF THE TRUSTEES OR OF ANY
COMMITTEE THEREOF EMPOWERED TO ACT IN THE PREMISES WHICH IS CERTIFIED AS TRUE BY
THE SECRETARY OR AN ASSISTANT SECRETARY UNDER THE SEAL OF THE TRUST.
SECTION 10. COMPENSATION. THE COMPENSATION OF THE OFFICERS SHALL BE FIXED
FROM TIME-TO-TIME BY THE TRUSTEES OR BY ANY COMMITTEE OR OFFICER UPON WHOM SUCH
POWER MAY BE CONFERRED BY THE TRUSTEES. NO OFFICER SHALL BE PREVENTED FROM
RECEIVING SUCH COMPENSATION BY REASON OF THE FACT THAT HE IS ALSO A TRUSTEE.
ARTICLE V
FISCAL YEAR
THE FISCAL YEAR OF THE TRUST SHALL BEGIN ON THE FIRST DAY OF JANUARY IN EACH
YEAR AND SHALL END ON THE LAST DAY OF DECEMBER IN EACH YEAR, PROVIDED, HOWEVER,
THAT THE TRUSTEES MAY FROM TIME-TO-TIME CHANGE THE FISCAL YEAR.
ARTICLE VI
SEAL
THE TRUSTEES MAY ADOPT A SEAL WHICH SHALL BE IN SUCH FORM AND SHALL HAVE
SUCH INSCRIPTION THEREON AS THE TRUSTEES MAY FROM TIME-TO-TIME PRESCRIBE.
ARTICLE VII
WAIVERS OF NOTICE
WHENEVER ANY NOTICE WHATEVER IS REQUIRED TO BE GIVEN BY LAW, THE DECLARATION
OF TRUST OR THESE BY-LAWS, A WAIVER THEREOF IN WRITING, SIGNED BY THE PERSON OR
PERSONS ENTITLED TO SAID NOTICE, WHETHER BEFORE OR AFTER THE TIME STATED
THEREIN, SHALL BE DEEMED EQUIVALENT THERETO. A NOTICE SHALL BE DEEMED TO HAVE
BEEN GIVEN IF TELEGRAPHED, CABLED, OR SENT BY WIRELESS AT THE TIME WHEN IT HAS
BEEN DELIVERED TO A REPRESENTATIVE OF ANY TELEGRAPH, CABLE OR WIRELESS COMPANY
WITH INSTRUCTIONS THAT IT BE TELEGRAPHED, CABLED OR SENT BY WIRELESS. ANY NOTICE
SHALL BE DEEMED TO HAVE BEEN GIVEN IF MAILED AT THE TIME WHEN IT HAS BEEN
DEPOSITED IN THE MAIL.
ARTICLE VIII
SHARES OF BENEFICIAL INTEREST
SECTION 1. BENEFICIAL INTEREST. THE BENEFICIAL INTEREST IN THE TRUST SHALL
AT ALL TIMES BE DIVIDED INTO AN UNLIMITED NUMBER OF SHARES WITHOUT PAR VALUE
WHICH THE TRUSTEES MAY FROM TIME-TO-TIME ISSUE AND SELL OR CAUSE TO BE ISSUED
AND SOLD.
SECTION 2. BOOK ENTRY SHARES. NO CERTIFICATES NEED BE ISSUED TO REPRESENT
SHARES IN THE TRUST. THE TRUST SHALL MAINTAIN ADEQUATE RECORDS TO DETERMINE THE
HOLDINGS OF EACH SHAREHOLDER OF RECORD, AND SUCH RECORDS SHALL BE DEEMED THE
EQUIVALENT OF A CERTIFICATE REPRESENTING THE SHARES FOR ALL PURPOSES.
SECTION 3. CERTIFICATES. ALL CERTIFICATES FOR SHARES SHALL BE SIGNED BY THE
CHAIRMAN, PRESIDENT OR ANY VICE-PRESIDENT AND BY THE TREASURER, SECRETARY OR
ASSISTANT TREASURER OR ASSISTANT SECRETARY AND SEALED WITH THE SEAL OF THE
TRUST. THE SIGNATURES MAY BE EITHER MANUAL OR FACSIMILE SIGNATURES, AND THE SEAL
MAY BE EITHER FACSIMILE OR ANY OTHER FORM OF SEAL. CERTIFICATES FOR SHARES FOR
WHICH THE TRUST HAS APPOINTED A TRANSFER AGENT SHALL NOT BE VALID UNLESS
COUNTERSIGNED BY SUCH TRANSFER AGENT.
SECTION 4. TRANSFER OF SHARES. THE SHARES OF THE TRUST SHALL BE
TRANSFERABLE, SO AS TO AFFECT THE RIGHTS OF THE TRUST, ONLY BY TRANSFER RECORDED
IN THE BOOKS OF THE TRUST, IN PERSON OR BY ATTORNEY.
SECTION 5. EQUITABLE INTEREST NOT RECOGNIZED. THE TRUST SHALL BE ENTITLED TO
TREAT THE HOLDER OF RECORD OF ANY SHARE AS THE ABSOLUTE OWNER THEREOF AND SHALL
NOT BE BOUND TO RECOGNIZE ANY EQUITABLE OR OTHER CLAIM OR INTEREST IN SUCH SHARE
ON THE PART OF ANY OTHER PERSON EXCEPT AS MAY BE OTHERWISE EXPRESSLY PROVIDED BY
LAW.
SECTION 6. LOST, DESTROYED OR MUTILATED CERTIFICATES. IN CASE ANY
CERTIFICATE FOR SHARES IS LOST, MUTILATED OR DESTROYED, THE TRUSTEES MAY ISSUE A
NEW CERTIFICATE IN PLACE THEREOF UPON SUCH INDEMNITY TO THE TRUST AGAINST LOSS
AND UPON SUCH OTHER TERMS AND CONDITIONS AS THE TRUSTEES MAY DEEM ADVISABLE.
ARTICLE IX
AMENDMENTS
THESE BY-LAWS, OR ANY OF THEM, MAY BE ALTERED, AMENDED OR REPEALED, OR NEW
BY-LAWS MAY BE ADOPTED BY (A) VOTE OF A MAJORITY OF THE SHARES OUTSTANDING AND
ENTITLED TO VOTE OR (B) BY THE TRUSTEES, PROVIDED, HOWEVER, THAT NO BY-LAWS MAY
BE AMENDED, ADOPTED OR REPEALED BY THE TRUSTEES IF SUCH AMENDMENT, ADOPTION OR
REPEAL REQUIRES, PURSUANT TO LAW, THE DECLARATION OF TRUST OR THESE BY-LAWS, A
VOTE OF THE SHAREHOLDERS.
ARTICLE X
BOOKS AND RECORDS
THE BOOKS, ACCOUNTS AND RECORDS OF THE TRUST, INCLUDING THE STOCK LEDGER OR
LEDGERS, MAY BE KEPT IN OR OUTSIDE THE COMMONWEALTH OF MASSACHUSETTS AT SUCH
OFFICES OR AGENCIES OF THE TRUST AS MAY FROM TIME-TO-TIME BE DETERMINED BY THE
TRUSTEES.
AS ADOPTED JUNE 16, 1988
BY-LAWS
OF
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
ARTICLE I
SHAREHOLDERS
SECTION 1. MEETINGS. MEETINGS OF THE SHAREHOLDERS SHALL BE HELD AT THE
PRINCIPAL OFFICES OF THE TRUST IN WASHINGTON, D.C. OR AT SUCH PLACE WITHIN OR
WITHOUT THE COMMONWEALTH OF MASSACHUSETTS AND ON SUCH DATES AND AT SUCH TIMES AS
THE TRUSTEES SHALL DESIGNATE.
SECTION 2. NOTICE OF MEETINGS. NOTICE OF ALL MEETINGS OF THE SHAREHOLDERS,
STATING THE TIME, PLACE, AND PURPOSES OF THE MEETING, SHALL BE GIVEN BY THE
TRUSTEES BY MAIL TO EACH SHAREHOLDER AT HIS ADDRESS AS RECORDED WITH THE TRUST
AT LEAST TEN (10) DAYS AND NOT MORE THAN NINETY (90) DAYS BEFORE THE MEETING.
ANY ADJOURNED MEETING MAY BE HELD AS ADJOURNED WITHOUT FURTHER NOTICE. NO NOTICE
NEED BE GIVEN TO ANY SHAREHOLDER WHO SHALL HAVE FAILED TO INFORM THE TRUST OF
HIS CURRENT ADDRESS OR IF A WRITTEN WAIVER OF NOTICE, EXECUTED BEFORE OR AFTER
THE MEETING BY THE SHAREHOLDER OR HIS ATTORNEY THEREUNTO AUTHORIZED, IS FILED
WITH THE RECORDS OF THE MEETING.
SECTION 3. RECORD DATE FOR MEETINGS AND OTHER PURPOSES. FOR THE PURPOSE OF
DETERMINING THE SHAREHOLDERS WHO ARE ENTITLED TO NOTICE OF AND TO VOTE AT ANY
MEETING, INCLUDING ANY ADJOURNMENT THEREOF, OR WHO ARE ENTITLED TO PARTICIPATE
IN ANY DISTRIBUTION, OR FOR THE PURPOSE OF ANY OTHER ACTION, THE TRUSTEES MAY
FROM TIME TO TIME CLOSE THE TRANSFER BOOKS FOR SUCH PERIOD, NOT EXCEEDING NINETY
(90) DAYS, AS THE TRUSTEES MAY DETERMINE; OR WITHOUT CLOSING THE TRANSFER BOOKS,
THE TRUSTEES MAY FIX A DATE NOT MORE THAN NINETY (90) DAYS PRIOR TO THE DATE OF
ANY MEETING OF SHAREHOLDERS OR DISTRIBUTION OR OTHER ACTION AS A RECORD DATE FOR
THE DETERMINATION OF THE PERSONS TO BE TREATED AS SHAREHOLDERS GOVERNED BY THE
DECLARATION OF TRUST.
SECTION 4. PROXIES. AT ANY MEETING OF SHAREHOLDERS, ANY HOLDER OF SHARES
ENTITLED TO VOTE THEREAT MAY VOTE EITHER IN PERSON OR BY PROXY, PROVIDED THAT NO
PROXY SHALL BE VOTED AT ANY MEETING UNLESS IT SHALL HAVE BEEN PLACED ON FILE
WITH THE SECRETARY, OR WITH SUCH OTHER OFFICER OR AGENT OF THE TRUST AS THE
SECRETARY MAY DIRECT, FOR VERIFICATION PRIOR TO THE TIME AT WHICH SUCH VOTE
SHALL BE TAKEN. PURSUANT TO A RESOLUTION OF A MAJORITY OF THE TRUSTEES, PROXIES
MAY BE SOLICITED IN THE NAME OF ONE OR MORE TRUSTEES OR ONE OR MORE OFFICERS OF
THE TRUST. ONLY SHAREHOLDERS OF RECORD SHALL BE ENTITLED TO VOTE. EACH FULL
SHARE SHALL BE ENTITLED TO ONE VOTE, AND FRACTIONAL SHARES SHALL BE ENTITLED TO
A VOTE OF SUCH FRACTION. WHEN ANY SHARE IS HELD JOINTLY BY SEVERAL PERSONS, ANY
ONE OF THEM MAY VOTE AT ANY MEETING IN PERSON OR BY PROXY IN RESPECT OF SUCH
SHARE, BUT IF MORE THAN ONE OF THEM SHALL BE PRESENT AT SUCH MEETING IN PERSON
OR BY PROXY, AND SUCH JOINT OWNERS OR THEIR PROXIES DISAGREE AS TO ANY VOTE TO
BE CAST, SUCH VOTE SHALL NOT BE RECEIVED IN RESPECT OF SUCH SHARE. A PROXY
PURPORTING TO BE EXECUTED BY OR ON BEHALF OF A SHAREHOLDER SHALL BE DEEMED VALID
UNLESS CHALLENGED AT OR PRIOR TO ITS EXERCISE, AND THE BURDEN OF PROVING
INVALIDITY SHALL REST ON THE CHALLENGER. IF THE HOLDER OF ANY SUCH SHARE IS A
MINOR OR A PERSON OF UNSOUND MIND, AND SUBJECT TO GUARDIANSHIP OR TO THE LEGAL
CONTROL OF ANY OTHER PERSON AS REGARDS THE CHARGE OR MANAGEMENT OF SUCH SHARE,
HE MAY VOTE BY HIS GUARDIAN OR SUCH OTHER PERSON APPOINTED OR HAVING SUCH
CONTROL, AND SUCH VOTE MAY BE GIVEN IN PERSON OR BY PROXY.
SECTION 5. INSPECTION OF RECORDS. THE RECORDS, ACCOUNTS AND BOOKS OF THE
TRUST SHALL BE OPEN TO INSPECTION BY SHAREHOLDERS TO THE SAME EXTENT AS IS
PERMITTED SHAREHOLDERS OF A MASSACHUSETTS BUSINESS CORPORATION.
SECTION 6. ACTION WITHOUT MEETING. ANY ACTION WHICH MAY BE TAKEN BY
SHAREHOLDERS MAY A TAKEN WITHOUT A MEETING IF ALL SHAREHOLDERS ENTITLED TO VOTE
ON THE MATTER CONSENT TO THE ACTION IN WRITING AND THE WRITTEN CONSENTS ARE
FILED WITH THE RECORDS OF THE MEETING OF SHAREHOLDERS. SUCH CONSENTS SHALL BE
TREATED FOR ALL PURPOSES AS A VOTE TAKEN AT A MEETING OF SHAREHOLDERS.
ARTICLE II
TRUSTEES
SECTION 1. THE TRUSTEES. THE TRUST SHALL HAVE TWELVE (12) TRUSTEES, UNLESS
AND UNTIL SUCH NUMBER BE CHANGED BY AMENDMENT OF THE BY-LAWS OR BY RESOLUTION OF
THE TRUSTEES. THE TERM OF OFFICE OF EACH TRUSTEE SHALL EXPIRE UPON THE ELECTION
OF A SUCCESSOR TRUSTEE AT A MEETING OF SHAREHOLDERS.
SECTION 2. MEETINGS OF TRUSTEES. THE TRUSTEES MAY IN THEIR DISCRETION
PROVIDE FOR REGULAR OR STATED MEETINGS OF THE TRUSTEES. NOTICE OF REGULAR OR
STATED MEETINGS NEED NOT BE GIVEN. MEETINGS OF THE TRUSTEES OTHER THAN REGULAR
OR STATED MEETINGS SHALL BE HELD WHENEVER CALLED BY THE CHAIRMAN OF THE BOARD OF
TRUSTEES, THE PRESIDENT, OR BY ANY THREE OF THE TRUSTEES, AT THE TIME BEING IN
OFFICE. NOTICE OF THE TIME AND PLACE OF EACH MEETING OTHER THAN REGULAR OR
STATED MEETINGS SHALL BE GIVEN BY THE SECRETARY OR ASSISTANT SECRETARY OR BY THE
OFFICER OR TRUSTEES CALLING THE MEETING AND SHALL BE MAILED TO EACH TRUSTEE AT
LEAST FOUR DAYS BEFORE THE MEETING, OR SHALL BE TELEGRAPHED, CABLED, OR
PERSONALLY DELIVERED TO EACH TRUSTEE AT LEAST THREE DAYS BEFORE THE MEETING.
NOTICE BY TELEPHONE SHALL CONSTITUTE PERSONAL DELIVERY FOR THESE PURPOSES.
NOTICE MAY, HOWEVER, BE WAIVED BY ANY TRUSTEE BEFORE OR AFTER ANY MEETING. THE
BUSINESS TO BE TRANSACTED AND THE PURPOSE OF ANY MEETING OTHER THAN REGULAR OR
STATED MEETINGS SHALL BE STATED IN THE NOTICE OR WAIVER OF NOTICE OF SUCH
MEETING. NO NOTICE NEED BE GIVEN OF ACTION PROPOSED TO BE TAKEN BY UNANIMOUS
WRITTEN CONSENT. THE ATTENDANCE OF A TRUSTEE AT A MEETING SHALL CONSTITUTE A
WAIVER OF NOTICE OF SUCH MEETING EXCEPT WHERE A TRUSTEE ATTENDS A MEETING FOR
THE EXPRESS PURPOSE OF OBJECTING TO THE TRANSACTION OF ANY BUSINESS ON THE
GROUND THAT THE MEETING HAS NOT BEEN LAWFULLY CALLED OR CONVENED. THE TRUSTEES
MAY MEET BY MEANS OF A TELEPHONE CONFERENCE CIRCUIT OR SIMILAR COMMUNICATIONS
EQUIPMENT BY MEANS OF WHICH ALL PERSONS PARTICIPATING IN THE MEETING CAN HEAR
EACH OTHER, WHICH TELEPHONE CONFERENCE MEETING SHALL BE DEEMED TO HAVE BEEN HELD
AT A PLACE DESIGNATED BY THE TRUSTEES AT THE MEETING. PARTICIPATION IN A
TELEPHONE CONFERENCE MEETING SHALL CONSTITUTE PRESENCE IN PERSON AT SUCH
MEETING. ANY ACTION REQUIRED OR PERMITTED TO BE TAKEN AT ANY MEETING OF THE
TRUSTEES MAY BE TAKEN BY THE TRUSTEES WITHOUT A MEETING IF ALL THE TRUSTEES
CONSENT TO THE ACTION IN WRITING AND THE WRITTEN CONSENTS ARE FILED WITH THE
RECORDS OF THE TRUSTEES' MEETINGS. SUCH CONSENTS SHALL BE TREATED AS A VOTE FOR
ALL PURPOSES.
SECTION 3. QUORUM AND VOTE. A MAJORITY OF THE TRUSTEES SHALL BE PRESENT IN
PERSON AT ANY REGULAR OR SPECIAL MEETING OF THE TRUSTEES IN ORDER TO CONSTITUTE
A QUORUM FOR THE TRANSACTION OF BUSINESS AT SUCH MEETING AND (EXCEPT AS
OTHERWISE REQUIRED BY LAW, THE DECLARATION OF TRUST OR THESE BY-LAWS) THE ACT OF
A MAJORITY OF THE TRUSTEES PRESENT AT ANY MEETING AT WHICH A QUORUM IS PRESENT
SHALL BE THE ACT OF THE TRUSTEES. IN THE ABSENCE OF A QUORUM, A MAJORITY OF THE
TRUSTEES PRESENT MAY ADJOURN THE MEETING FROM TIME TO TIME UNTIL A QUORUM SHALL
BE PRESENT. NOTICE OF ANY ADJOURNED MEETING NEED NOT BE GIVEN.
SECTION 4. COMPENSATION OF TRUSTEES. THE COMPENSATION OF THE TRUSTEES SHALL
BE FIXED FROM TIME TO TIME BY THE TRUSTEES. NO TRUSTEE SHALL BE PRECLUDED FROM
SERVING THE TRUST IN ANY OTHER CAPACITY, AS AN OFFICER, AGENT OR OTHERWISE, AND
RECEIVING COMPENSATION THEREFOR.
ARTICLE III
COMMITTEES
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. THE TRUSTEES BY VOTE OF A
MAJORITY OF ALL THE TRUSTEES MAY ELECT FROM THEIR OWN NUMBER AN EXECUTIVE
COMMITTEE, TO CONSIST OF NOT LESS THAN TWO (2) MEMBERS TO HOLD OFFICE AT THE
PLEASURE OF THE TRUSTEES, WHICH SHALL HAVE THE POWER TO CONDUCT THE CURRENT AND
ORDINARY BUSINESS OF THE TRUST WHILE THE TRUSTEES ARE NOT IN SESSION AND SUCH
OTHER POWERS OF THE TRUSTEES AS THE TRUSTEES MAY, FROM TIME TO TIME, DELEGATE TO
THEM EXCEPT THOSE POWERS WHICH BY LAW, THE DECLARATION OF TRUST, OR THESE
BY-LAWS THEY ARE PROHIBITED FROM DELEGATING. THE TRUSTEE MAY ALSO ELECT FROM
THEIR OWN NUMBER OTHER COMMITTEES FROM TIME TO TIME, THE NUMBER COMPOSING SUCH
COMMITTEES, THE POWERS CONFERRED UPON THE SAME (SUBJECT TO THE SAME LIMITATIONS
AS THE EXECUTIVE COMMITTEE) AND THE TERM OF MEMBERSHIP ON SUCH COMMITTEES TO BE
DETERMINED BY THE TRUSTEES. THE TRUSTEES MAY DESIGNATE A CHAIRMAN OF ANY SUCH
COMMITTEE; IN THE ABSENCE OF SUCH A DESIGNATION, THE COMMITTEE MAY ELECT ITS OWN
CHAIRMAN.
SECTION 2. MEETING, QUORUM AND MANNER OF ACTING. THE TRUSTEES MAY (1)
PROVIDE FOR STATED MEETINGS OF ANY COMMITTEES, (2) SPECIFY THE MANNER OF CALLING
AND NOTICE REQUIRED FOR SPECIAL MEETINGS OF ANY COMMITTEE, (3) SPECIFY THE
NUMBER OF MEMBERS OF A COMMITTEE REQUIRED TO CONSTITUTE A QUORUM AND THE NUMBER
OF MEMBERS OF A COMMITTEE REQUIRED TO EXERCISE SPECIFIED POWERS DELEGATED TO
SUCH COMMITTEE, (4) AUTHORIZE THE MAKING OF DECISIONS TO EXERCISE SPECIFIED
POWERS BY WRITTEN ASSENT OF THE REQUISITE NUMBER OF MEMBERS OF A COMMITTEE
WITHOUT A MEETING, AND (5) AUTHORIZE THE MEMBERS OF A COMMITTEE TO MEET BY MEANS
OF A TELEPHONE CONFERENCE CIRCUIT.
ALL COMMITTEES SHALL KEEP REGULAR MINUTES OF THEIR MEETINGS AND RECORDS OF
DECISIONS TAKEN WITHOUT A MEETING AND CAUSE THEM TO BE RECORDED IN A BOOK
DESIGNATED FOR THAT PURPOSE AND KEPT IN THE OFFICE OF THE TRUST. ALL ACTION BY
COMMITTEES SHALL BE REPORTED TO THE TRUSTEES AT THEIR MEETING NEXT SUCCEEDING
SUCH ACTION.
SECTION 3. COMPENSATION. THE MEMBERS OF ANY DULY APPOINTED COMMITTEE SHALL
RECEIVE SUCH COMPENSATION AND/OR FEES AS, FROM TIME TO TIME, MAY BE FIXED BY THE
TRUSTEES.
ARTICLE IV
OFFICERS
SECTION 1. GENERAL PROVISIONS. THE OFFICERS OF THE TRUST SHALL BE A
PRESIDENT AND A SECRETARY WHO SHALL BE ELECTED BY THE TRUSTEES. THE TRUSTEES MAY
ELECT OR APPOINT SUCH OTHER OFFICERS OR AGENTS AS THE BUSINESS OF THE TRUST MAY
REQUIRE, INCLUDING A CHAIRMAN, A TREASURER, ONE OR MORE VICE PRESIDENTS, ONE OR
MORE ASSISTANT SECRETARIES, AND ONE OR MORE ASSISTANT TREASURERS. THE TRUSTEES
MAY DELEGATE TO ANY OFFICER OR COMMITTEE THE POWER TO APPOINT ANY SUBORDINATE
OFFICERS OR AGENTS.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. EXCEPT AS OTHERWISE PROVIDE BY
LAW, THE DECLARATION OF TRUST OR THESE BY-LAWS, THE PRESIDENT AND THE SECRETARY
SHALL EACH HOLD OFFICE UNTIL HIS SUCCESSOR SHALL HAVE BEEN DULY ELECTED AND
QUALIFIED, AND ALL OTHER OFFICERS SHALL HOLD OFFICE AT THE PLEASURE OF THE
TRUSTEES. ANY TWO OR MORE OF THE OFFICES MAY BE HELD BY THE SAME PERSON, EXCEPT
THAT THE SAME PERSON MAY NOT BE BOTH PRESIDENT AND SECRETARY. THE CHAIRMAN, IF
THERE BE SUCH AN OFFICER, AND THE PRESIDENT SHALL BE TRUSTEES, BUT NO OTHER
OFFICER OF THE TRUST NEED BE A TRUSTEE.
SECTION 3. REMOVAL. THE TRUSTEES, AT ANY REGULAR OR SPECIAL MEETING OF THE
TRUSTEES, MAY REMOVE ANY OFFICER WITH OR WITHOUT CAUSE BY A VOTE OF THE MAJORITY
OF THE TRUSTEES. ANY OFFICER OR AGENT APPOINTED BY ANY OFFICER OR COMMITTEE MAY
BE REMOVED WITH OR WITHOUT CAUSE BY SUCH APPOINTING OFFICER OR COMMITTEE.
SECTION 4. BONDS AND SURETY. ANY OFFICER MAY BE REQUIRED BY THE TRUSTEES TO
BE BONDED FOR THE FAITHFUL PERFORMANCE OF HIS DUTIES IN SUCH AMOUNT AND WITH
SUCH SURETIES AS THE TRUSTEES MAY DETERMINE.
SECTION 5. CHAIRMAN, PRESIDENT, AND VICE-PRESIDENTS. THE CHAIRMAN, IF THERE
BE SUCH AN OFFICER, SHALL, IF PRESENT, PRESIDE AT ALL MEETINGS OF THE
SHAREHOLDERS AND OF THE TRUSTEES AND SHALL EXERCISE AND PERFORM SUCH OTHER
POWERS AND DUTIES AS MAY BE FROM TIME TO TIME ASSIGNED TO HIM BY THE TRUSTEES.
SUBJECT TO SUCH SUPERVISORY POWERS, IF ANY, AS MAY BE GIVEN BY THE TRUSTEES TO
THE CHAIRMAN, THE PRESIDENT SHALL BE THE CHIEF EXECUTIVE OFFICER OF THE TRUST
AND, SUBJECT TO THE CONTROL OF THE TRUSTEES, SHALL HAVE GENERAL SUPERVISION,
DIRECTION AND CONTROL OF THE BUSINESS OF THE TRUST AND OF ITS EMPLOYEES AND
SHALL EXERCISE SUCH GENERAL POWERS OF MANAGEMENT AS ARE USUALLY VESTED IN THE
OFFICE OF PRESIDENT OF A CORPORATION. IN THE ABSENCE OF THE CHAIRMAN, THE
PRESIDENT SHALL PRESIDE AT ALL MEETINGS OF THE SHAREHOLDERS AND OF THE TRUSTEES.
THE PRESIDENT SHALL HAVE THE POWER IN THE NAME AND ON BEHALF OF THE TRUST TO
GRANT, ISSUE, EXECUTE OR SIGN ANY AND ALL DOCUMENTS, CONTRACTS, AGREEMENTS,
DEEDS, MORTGAGES, PROXIES, POWERS OF ATTORNEY OR OTHER INSTRUMENTS AS MAY BE
DEEMED ADVISABLE OR NECESSARY IN FURTHERANCE OF THE INTERESTS OF THE TRUST. THE
PRESIDENT SHALL HAVE THE POWER TO EMPLOY ATTORNEYS AND COUNSEL FOR THE TRUST AND
TO EMPLOY SUCH SUBORDINATE OFFICERS, AGENTS, CLERKS AND EMPLOYEES AS HE MAY FIND
NECESSARY TO TRANSACT THE BUSINESS OF THE TRUST. THE PRESIDENT SHALL HAVE SUCH
FURTHER POWERS AND DUTIES AS, FROM TIME TO TIME, MAY BE CONFERRED UPON HIM OR
ASSIGNED TO HIM BY THE TRUSTEES. IN THE ABSENCE OR DISABILITY OF THE PRESIDENT,
THE VICE-PRESIDENT OR, IF THERE BE MORE THAN ONE VICE-PRESIDENT, ANY
VICE-PRESIDENT DESIGNATED BY THE TRUSTEES SHALL PERFORM ALL OF THE DUTIES OF THE
PRESIDENT, AND WHEN SO ACTING SHALL HAVE ALL THE POWERS OF THE PRESIDENT,
SUBJECT TO THE DIRECTION OF THE TRUSTEES. EACH VICE-PRESIDENT SHALL PERFORM SUCH
OTHER DUTIES AS MAY BE ASSIGNED TO HIM FROM TIME TO TIME BY THE TRUSTEES OR THE
PRESIDENT.
SECTION 6. SECRETARY. THE SECRETARY SHALL KEEP THE MINUTES OF ALL MEETINGS
OF, AND RECORD ALL VOTES OF, THE SHAREHOLDERS, THE TRUSTEES AND COMMITTEES, IF
ANY, IN PROPER BOOKS PROVIDED FOR THAT PURPOSE. HE SHALL BE CUSTODIAN OF THE
SEAL OF THE TRUST; HE SHALL HAVE CHARGE OF THE SHARE TRANSFER BOOKS, LISTS AND
RECORDS UNLESS THE SAME ARE IN THE CHARGE OF A TRANSFER AGENT. HE SHALL ATTEND
TO THE GIVING AND SERVING OF ALL NOTICES BY THE TRUST IN ACCORDANCE WITH THE
PROVISIONS OF THESE BY-LAWS AND AS REQUIRED BY LAW; AND SUBJECT TO THESE
BY-LAWS, HE SHALL IN GENERAL PERFORM ALL DUTIES INCIDENT TO THE OFFICE OF
SECRETARY AND SUCH OTHER DUTIES AS FROM TIME TO TIME MAY BE ASSIGNED TO HIM BY
THE TRUSTEES. THE SECRETARY MAY DELEGATE ANY OF HIS POWER, AUTHORITY OR DUTIES
TO ANY ASSISTANT SECRETARY OF THE TRUST.
SECTION 7. TREASURER. THE TREASURER, IF THERE BE SUCH AN OFFICER, SHALL BE
THE PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER OF THE TRUST. HE SHALL DELIVER
ALL FUNDS OF THE TRUST WHICH MAY COME INTO HIS HANDS TO SUCH CUSTODIAN,
SUBCUSTODIAN, OR SPECIAL DEPOSITORY AS THE TRUSTEES SHALL EMPLOY PURSUANT TO
ARTICLE IX OF THE DECLARATION OF TRUST. HE SHALL RENDER A STATEMENT OF CONDITION
OF THE FINANCES OF THE TRUST TO THE TRUSTEES AS OFTEN AS THEY SHALL REQUIRE THE
SAME, AND HE SHALL IN GENERAL PERFORM ALL THE DUTIES INCIDENT TO THE OFFICE OF
TREASURER AND SUCH OTHER DUTIES AS FROM TIME TO TIME MAY BE ASSIGNED TO HIM BY
THE TRUSTEES. THE TREASURER MAY DELEGATE ANY OF HIS POWER, AUTHORITY OR DUTIES
TO ANY ASSISTANT TREASURER OF THE TRUST.
SECTION 8. OTHER OFFICERS AND DUTIES. THE TRUSTEES MAY ELECT SUCH OTHER
OFFICERS AND ASSISTANT OFFICERS AS THEY SHALL FROM TIME TO TIME DETERMINE TO BE
NECESSARY OR DESIRABLE IN ORDER TO CONDUCT THE BUSINESS OF THE TRUST. ASSISTANT
OFFICERS SHALL ACT GENERALLY IN THE ABSENCE OR DISABILITY OF THE OFFICER WHOM
THEY ASSIST AND SHALL ASSIST THAT OFFICER IN THE DUTIES OF HIS OFFICE. EACH
OFFICER, EMPLOYEE, AGENT OF THE TRUST SHALL HAVE SUCH OTHER DUTIES AND AUTHORITY
AS MAY BE ASSIGNED HIM BY THE PRESIDENT.
SECTION 9. EVIDENCE OF AUTHORITY. ANYONE DEALING WITH THE TRUST SHALL BE
FULLY JUSTIFIED IN RELYING ON A COPY OF A RESOLUTION OF THE TRUSTEES OR OF ANY
COMMITTEE THEREOF EMPOWERED TO ACT IN THE PREMISES WHICH IS CERTIFIED AS TRUE BY
THE SECRETARY OR AN ASSISTANT SECRETARY UNDER THE SEAL OF THE TRUST.
SECTION 10. COMPENSATION. THE COMPENSATION OF THE OFFICERS SHALL BE FIXED
FROM TIME TO TIME BY THE TRUSTEES OR BY ANY COMMITTEE OR OFFICER UPON WHOM SUCH
POWER MAY BE CONFERRED BY THE TRUSTEES. NO OFFICER SHALL BE PREVENTED FROM
RECEIVING SUCH COMPENSATION BY REASON OF THE FACT THAT HE IS ALSO A TRUSTEE.
ARTICLE V
FISCAL YEAR
THE FISCAL YEAR OF THE TRUST SHALL BEGIN ON THE FIRST DAY OF JANUARY IN EACH
YEAR AND SHALL END ON THE 31ST DAY OF DECEMBER IN EACH YEAR, PROVIDED, HOWEVER,
THAT THE TRUSTEES MAY FROM TIME TO TIME CHANGE THE FISCAL YEAR.
ARTICLE VI
SEAL
THE TRUSTEES MAY ADOPT A SEAL WHICH SHALL BE IN SUCH FORM AND SHALL HAVE
SUCH INSCRIPTION THEREON AS THE TRUSTEES MAY FROM TIME TO TIME PRESCRIBE.
ARTICLE VII
WAIVERS OF NOTICE
WHENEVER ANY NOTICE WHATEVER IS REQUIRED TO BE GIVEN BY LAW, THE DECLARATION
OF TRUST OR THESE BY-LAWS, A WAIVER THEREOF IN WRITING, SIGNED BY THE PERSON OR
PERSONS ENTITLED TO SAID NOTICE, WHETHER BEFORE OR AFTER THE TIME STATED
THEREIN, SHALL BE DEEMED EQUIVALENT THERETO. A NOTICE SHALL BE DEEMED TO HAVE
BEEN GIVEN IF TELEGRAPHED, CABLED, OR SENT BY WIRELESS AT THE TIME WHEN IT HAS
BEEN DELIVERED TO A REPRESENTATIVE OF ANY TELEGRAPH, CABLE OR WIRELESS COMPANY
WITH INSTRUCTIONS THAT IT BE TELEGRAPHED, CABLED OR SENT BY WIRELESS. ANY NOTICE
SHALL BE DEEMED TO HAVE BEEN GIVEN IF MAILED AT THE TIME WHEN IT HAS BEEN
DEPOSITED IN THE MAIL.
ARTICLE VIII
SHARES OF BENEFICIAL INTEREST
SECTION 1. BENEFICIAL INTEREST. THE BENEFICIAL INTEREST IN THE TRUST SHALL
AT ALL TIMES BE DIVIDED
INTO AN UNLIMITED NUMBER OF SHARES WITHOUT PAR VALUE WHICH THE TRUSTEES MAY FROM
TIME TO TIME ISSUE
AND SELL OR CAUSE TO BE ISSUED AND SOLD.
SECTION 2. BOOK ENTRY SHARES. NO CERTIFICATES NEED BE ISSUED TO REPRESENT
SHARES IN THE TRUST. THE TRUST SHALL MAINTAIN ADEQUATE RECORDS TO DETERMINE THE
HOLDINGS OF EACH SHAREHOLDER OF RECORD, AND SUCH RECORDS SHALL BE DEEMED THE
EQUIVALENT OF A CERTIFICATE REPRESENTING THE SHARES FOR ALL PURPOSES.
SECTION 3. CERTIFICATES. ALL CERTIFICATES FOR SHARES SHALL BE SIGNED BY THE
CHAIRMAN, PRESIDENT OR ANY VICE-PRESIDENT AND BY THE TREASURER, SECRETARY OR
ASSISTANT TREASURER OR ASSISTANT SECRETARY AND SEALED WITH THE SEAL OF THE
TRUST. THE SIGNATURES MAY BE EITHER MANUAL OR FACSIMILE SIGNATURES, AND THE SEAL
MAY BE EITHER FACSIMILE OR ANY OTHER FORM OF SEAL. CERTIFICATES FOR SHARES FOR
WHICH THE TRUST HAS APPOINTED A TRANSFER AGENT SHALL NOT BE VALID UNLESS
COUNTERSIGNED BY SUCH TRANSFER AGENT.
SECTION 4. TRANSFER OF SHARES. THE SHARES OF THE TRUST SHALL BE
TRANSFERABLE, SO AS TO AFFECT THE RIGHTS OF THE TRUST, ONLY BY TRANSFER RECORDED
IN THE BOOKS OF THE TRUST, IN PERSON OR BY ATTORNEY.
SECTION 5. EQUITABLE INTEREST NOT RECOGNIZED. THE TRUST SHALL BE ENTITLED TO
TREAT THE HOLDER OF RECORD OF ANY SHARE AS THE ABSOLUTE OWNER THEREOF AND SHALL
NOT BE BOUND TO RECOGNIZE ANY EQUITABLE OR OTHER CLAIM OR INTEREST IN SUCH SHARE
ON THE PART OF ANY OTHER PERSON EXCEPT AS MAY BE OTHERWISE EXPRESSLY PROVIDED BY
LAW.
SECTION 6. LOST, DESTROYED OR MUTILATED CERTIFICATES. IN CASE ANY
CERTIFICATE FOR SHARES IS LOST, MUTILATED OR DESTROYED, THE TRUSTEES MAY ISSUE A
NEW CERTIFICATE IN PLACE THEREOF UPON SUCH INDEMNITY TO THE TRUST AGAINST LOSS
AND UPON SUCH OTHER TERMS AND CONDITIONS AS THE TRUSTEES MAY DEEM ADVISABLE.
ARTICLE IX
AMENDMENTS
THESE BY-LAWS, OR ANY OF THEM, MAY BE ALTERED, AMENDED OR REPEALED, OR NEW
BY-LAWS MAY BE ADOPTED (A) BY VOTE OF A MAJORITY OF THE SHARES OUTSTANDING AND
ENTITLED TO VOTE OR (B) BY VOTE OF A MAJORITY OF THE TRUSTEES, PROVIDED,
HOWEVER, THAT NO BY-LAW MAY BE AMENDED, ADOPTED OR REPEALED BY THE TRUSTEES IF
SUCH AMENDMENT, ADOPTION OR REPEAL REQUIRES, PURSUANT TO LAW, THE DECLARATION OF
TRUST OR THESE BY-LAWS, A VOTE OF THE SHAREHOLDERS, AND FURTHER PROVIDED THAT NO
BY-LAW MAY BE AMENDED, ADOPTED OR REPEALED BY THE TRUSTEES UNLESS NOTICE OF SUCH
ACTION, INCLUDING THE SPECIFIC WORDING OF THE RESOLUTION OF AMENDMENT, ADOPTION
OR REPEAL, SHALL HAVE BEEN MAILED TO EACH TRUSTEE AT LEAST FOUR DAYS BEFORE THE
MEETING OR TELEGRAPHED, CABLED, OR PERSONALLY DELIVERED TO EACH TRUSTEE AT LEAST
THREE DAYS BEFORE THE MEETING. NOTICE MAY, HOWEVER, BE WAIVED BY ANY TRUSTEE
BEFORE OR AFTER ANY MEETING
ARTICLE X
BOOKS AND RECORDS
THE BOOKS, ACCOUNTS AND RECORDS OF THE TRUST, INCLUDING THE STOCK LEDGER OR
LEDGERS, MAY BE KEPT IN OR OUTSIDE THE COMMONWEALTH OF MASSACHUSETTS AT SUCH
OFFICES OR AGENCIES OF THE TRUST AS MAY FROM TIME TO TIME BE DETERMINED BY THE
TRUSTEES.
AS ADOPTED APRIL 25, 1984
\\SAREK\Legalshr\AGREEMENTS\Multi Fund Agmts\Distrib Agmt amd for Class T.doc
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT, DATED AS OF DECEMBER 2, 1998 BY AND BETWEEN
EACH CALVERT FUND LISTED IN THE SCHEDULE OF FUNDS ATTACHED HERETO AS SCHEDULE I
(EACH A "FUND" AND TOGETHER THE "FUNDS"), AS SUCH SCHEDULE MAY, FROM TIME TO
TIME BE AMENDED, AND CALVERT DISTRIBUTORS, INC., A DELAWARE CORPORATION (THE
"DISTRIBUTOR").
WHEREAS, EACH FUND IS REGISTERED AS AN OPEN-END INVESTMENT COMPANY UNDER
THE INVESTMENT COMPANY ACT OF 1940 (THE "1940 ACT") AND HAS REGISTERED ITS
SHARES, INCLUDING SHARES OF ITS SERIES PORTFOLIOS (THE "SERIES"), FOR SALE TO
THE PUBLIC UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") AND VARIOUS STATE
SECURITIES LAWS;
WHEREAS, EACH FUND WISHES TO RETAIN THE DISTRIBUTOR AS THE PRINCIPAL
UNDERWRITER IN CONNECTION WITH THE OFFER AND SALE OF SHARES OF THE SERIES (THE
"SHARES") AND TO FURNISH CERTAIN OTHER SERVICES TO THE SERIES AS SPECIFIED IN
THIS AGREEMENT;
WHEREAS, THIS CONTRACT HAS BEEN APPROVED AND AMENDED AND RESTATED ON THIS
DAY BY THE TRUSTEES/DIRECTORS IN ANTICIPATION OF THE DISTRIBUTOR OFFERING CLASS
T SHARES;
WHEREAS, THE DISTRIBUTOR IS WILLING TO ACT AS PRINCIPAL UNDERWRITER AND TO
FURNISH SUCH SERVICES ON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH;
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND MUTUAL COVENANTS
HEREIN CONTAINED, IT IS AGREED AS FOLLOWS:
<PAGE>
\\SAREK\Legalshr\AGREEMENTS\Multi Fund Agmts\Distrib Agmt amd for Class T.doc
-3-
1. EACH FUND HEREBY APPOINTS THE DISTRIBUTOR AS PRINCIPAL UNDERWRITER
IN CONNECTION WITH THE OFFER AND SALE OF ITS SHARES. THE DISTRIBUTOR SHALL, AS
AGENT FOR EACH FUND, SUBJECT TO APPLICABLE FEDERAL AND STATE LAW AND THE
DECLARATION OF TRUST OR ARTICLES OF INCORPORATION, AND BY-LAWS OF THE APPLICABLE
FUND AND IN ACCORDANCE WITH THE REPRESENTATIONS IN THE APPLICABLE FUND'S
REGISTRATION STATEMENT AND PROSPECTUS, AS SUCH DOCUMENTS MAY BE AMENDED FROM
TIME TO TIME: (A) PROMOTE THE SERIES; (B) ENTER INTO APPROPRIATE DEALER
AGREEMENTS WITH OTHER REGISTERED BROKER-DEALERS TO FURTHER DISTRIBUTION OF THE
SHARES; (C) SOLICIT ORDERS FOR THE PURCHASE OF THE SHARES SUBJECT TO SUCH TERMS
AND CONDITIONS AS THE APPLICABLE FUND MAY SPECIFY; (D) TRANSMIT PROMPTLY ORDERS
AND PAYMENTS FOR THE PURCHASE OF SHARES AND ORDERS FOR REDEMPTION OF SHARES TO
THE APPLICABLE FUND'S TRANSFER AGENT; AND (E) PROVIDE SERVICES AGREED UPON BY
THE APPLICABLE FUND TO SERIES SHAREHOLDERS; PROVIDED, HOWEVER, THAT THE
DISTRIBUTOR MAY SELL NO SHARES PURSUANT TO THIS AGREEMENT UNTIL THE DISTRIBUTOR
IS NOTIFIED THAT A FUND'S REGISTRATION STATEMENT UNDER THE 1933 ACT, AUTHORIZING
THE SALE OF SUCH SHARES THROUGH THE DISTRIBUTOR, HAS BECOME EFFECTIVE. THE
DISTRIBUTOR SHALL COMPLY WITH ALL APPLICABLE FEDERAL AND STATE LAWS AND OFFER
THE SHARES ON AN AGENCY OR "BEST EFFORTS" BASIS UNDER WHICH A FUND SHALL ONLY
ISSUE SUCH SHARES AS ARE ACTUALLY SOLD.
2. THE PUBLIC OFFERING PRICE OF THE SHARES SHALL BE THE NET ASSET VALUE
("NAV") PER SHARE (AS DETERMINED BY THE APPLICABLE FUND) OF THE OUTSTANDING
SHARES OF THE SERIES, PLUS THE APPLICABLE SALES CHARGE, IF ANY, AS SET FORTH IN
THE FUND'S THEN CURRENT PROSPECTUS. EACH FUND SHALL FURNISH THE DISTRIBUTOR
WITH A STATEMENT OF EACH COMPUTATION OF NAV AND OF THE DETAILS ENTERING INTO
SUCH COMPUTATION.
3. COMPENSATION.
A. DISTRIBUTION FEE.
I. CLASS A. IN CONSIDERATION OF THE DISTRIBUTOR'S SERVICES AS DISTRIBUTOR FOR
THE CLASS A SHARES OF A FUND, EACH FUND MAY PAY TO THE DISTRIBUTOR THE
DISTRIBUTION FEE AS SET FORTH IN SCHEDULE II TO THIS AGREEMENT THAT IS PAYABLE
PURSUANT TO THE FUND'S DISTRIBUTION PLAN.
II. CLASS B. IN CONSIDERATION OF THE DISTRIBUTOR'S SERVICES AS
DISTRIBUTOR FOR THE CLASS B SHARES OF A FUND, EACH FUND SHALL PAY TO THE
DISTRIBUTOR (OR ITS DESIGNEE OR TRANSFEREE) THE DISTRIBUTOR'S ALLOCABLE PORTION
OF THE DISTRIBUTION FEE; (AS SET FORTH IN SCHEDULE II TO THIS AGREEMENT) THAT IS
PAYABLE PURSUANT TO THE FUND'S DISTRIBUTION PLAN IN RESPECT OF THE CLASS B
SHARES OF A FUND. FOR PURPOSES OF THIS AGREEMENT, THE DISTRIBUTOR'S "ALLOCABLE
PORTION" OF THE DISTRIBUTION FEE SHALL BE 100% OF SUCH DISTRIBUTION FEE UNLESS
OR UNTIL THE FUND USES A PRINCIPAL UNDERWRITER OTHER THAN THE DISTRIBUTOR AND
THEREAFTER THE ALLOCABLE PORTION SHALL BE THE PORTION OF THE DISTRIBUTION FEE
ATTRIBUTABLE TO (I) CLASS B SHARES OF A FUND SOLD BY THE DISTRIBUTOR
("COMMISSION SHARES"), (II) CLASS B SHARES OF THE FUND ISSUED IN CONNECTION WITH
THE EXCHANGE OF COMMISSION SHARES OF ANOTHER FUND, AND (III) CLASS B SHARES OF
THE FUND ISSUED IN CONNECTION WITH THE REINVESTMENT OF DIVIDENDS AND CAPITAL
GAINS.
THE DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION FEE AND THE
CONTINGENT DEFERRED SALES CHARGES ARISING IN RESPECT OF CLASS B SHARES TAKEN
INTO ACCOUNT IN COMPUTING THE DISTRIBUTOR'S ALLOCABLE PORTION SHALL BE LIMITED
UNDER RULE 2830 OF THE CONDUCT RULES OR OTHER APPLICABLE REGULATIONS OF THE NASD
AS IF THE CLASS B SHARES TAKEN INTO ACCOUNT IN COMPUTING THE DISTRIBUTOR'S
ALLOCABLE PORTION THEMSELVES CONSTITUTED A SEPARATE CLASS OF SHARES OF A FUND.
THE SERVICES RENDERED BY THE DISTRIBUTOR FOR WHICH THE DISTRIBUTOR IS
ENTITLED TO RECEIVE THE DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION FEE
SHALL BE DEEMED TO HAVE BEEN COMPLETED AT THE TIME OF THE INITIAL PURCHASE OF
THE COMMISSION SHARES (WHETHER OF THE FUND OR ANOTHER FUND IN THE CALVERT GROUP
OF FUNDS) TAKEN INTO ACCOUNT IN COMPUTING THE DISTRIBUTOR'S ALLOCABLE PORTION.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE DISTRIBUTOR
SHALL BE PAID ITS ALLOCABLE PORTION OF THE DISTRIBUTION FEE NOTWITHSTANDING THE
DISTRIBUTOR'S TERMINATION AS PRINCIPAL UNDERWRITER OF THE CLASS B SHARES OF A
FUND, OR ANY TERMINATION OF THIS
<PAGE>
AGREEMENT OTHER THAN IN CONNECTION WITH A COMPLETE TERMINATION (AS DEFINED IN
THE DISTRIBUTION PLAN) OF THE CLASS B DISTRIBUTION PLAN AS IN EFFECT ON THE DATE
OF THIS AGREEMENT. EXCEPT AS PROVIDED IN THE PRECEDING SENTENCE, A FUND'S
OBLIGATION TO PAY THE DISTRIBUTION FEE TO THE DISTRIBUTOR SHALL BE ABSOLUTE AND
UNCONDITIONAL AND SHALL NOT BE SUBJECT TO ANY DISPUTE, OFFSET, COUNTERCLAIM OR
DEFENSE WHATSOEVER, (IT BEING UNDERSTOOD THAT NOTHING IN THIS SENTENCE SHALL BE
DEEMED A WAIVER BY A FUND OF ITS RIGHT SEPARATELY TO PURSUE ANY CLAIMS IT MAY
HAVE AGAINST THE DISTRIBUTOR AND TO ENFORCE SUCH CLAIMS AGAINST ANY ASSETS
(OTHER THAN ITS RIGHTS TO BE PAID ITS ALLOCABLE PORTION OF THE DISTRIBUTION FEE
AND TO BE PAID THE CONTINGENT DEFERRED SALES CHARGES) OF THE DISTRIBUTOR.
III. CLASS C. IN CONSIDERATION OF THE DISTRIBUTOR'S SERVICES AS
DISTRIBUTOR FOR THE CLASS C SHARES OF A FUND, EACH FUND SHALL PAY TO THE
DISTRIBUTOR THE DISTRIBUTION FEE AS SET FORTH IN SCHEDULE II TO THIS AGREEMENT
THAT IS PAYABLE PURSUANT TO THE FUND'S DISTRIBUTION PLAN.
B. SERVICE FEE. AS ADDITIONAL COMPENSATION, FOR CLASS A, CLASS B, CLASS C
AND CLASS T SHARES OF EACH SERIES, APPLICABLE FUNDS SHALL PAY THE DISTRIBUTOR A
SERVICE FEE (AS THAT TERM IS DEFINED BY THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. ("NASD")) AS SET FORTH IN SCHEDULE III TO THIS AGREEMENT THAT IS
PAYABLE PURSUANT TO THE FUND'S DISTRIBUTION PLAN.
C. FRONT-END SALES CHARGES. AS ADDITIONAL COMPENSATION FOR THE
SERVICES PERFORMED AND THE EXPENSES ASSUMED BY THE DISTRIBUTOR UNDER THIS
AGREEMENT, THE DISTRIBUTOR MAY, IN CONFORMITY WITH THE TERMS AND CONDITIONS SET
FORTH IN THE THEN CURRENT PROSPECTUS OF EACH FUND, IMPOSE AND RETAIN FOR ITS OWN
ACCOUNT THE AMOUNT OF THE FRONT-END SALES CHARGE, IF ANY, AND MAY REALLOW A
PORTION OF ANY FRONT-END SALES CHARGE TO OTHER BROKER-DEALERS, ALL IN ACCORDANCE
WITH NASD RULES.
D. CONTINGENT DEFERRED SALES CHARGE. EACH FUND WILL PAY TO THE DISTRIBUTOR
(OR ITS DESIGNEE OR TRANSFEREE) IN ADDITION TO THE FEES SET FORTH IN SECTION 3
HEREOF ANY CONTINGENT DEFERRED SALES CHARGE IMPOSED ON REDEMPTIONS OF THAT
FUND'S CLASS A, CLASS B AND CLASS C SHARES UPON THE TERMS AND CONDITIONS SET
FORTH IN THE THEN CURRENT PROSPECTUS OF THAT FUND. NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS AGREEMENT, THE DISTRIBUTOR SHALL BE PAID SUCH CONTINGENT
DEFERRED SALES CHARGES IN RESPECT OF CLASS B SHARES TAKEN INTO ACCOUNT IN
COMPUTING THE DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION FEE
NOTWITHSTANDING THE DISTRIBUTOR'S TERMINATION AS PRINCIPAL UNDERWRITER OF THE
CLASS B SHARES OF A FUND OR ANY TERMINATION OF THIS AGREEMENT OTHER THAN IN
CONNECTION WITH A COMPLETE TERMINATION OF THE CLASS B DISTRIBUTION PLAN AS IN
EFFECT ON THE DATE OF THIS AGREEMENT. EXCEPT AS PROVIDED IN THE PRECEDING
SENTENCE, A FUND'S OBLIGATION TO REMIT SUCH CONTINGENT DEFERRED SALES CHARGES TO
THE DISTRIBUTOR SHALL NOT BE SUBJECT TO ANY DISPUTE, OFFSET, COUNTERCLAIM OR
DEFENSE WHATSOEVER, IT BEING UNDERSTOOD THAT NOTHING IN THIS SENTENCE SHALL BE
DEEMED A WAIVER BY A FUND OF ITS RIGHT SEPARATELY TO PURSUE ANY CLAIMS IT MAY
HAVE AGAINST THE DISTRIBUTOR AND TO ENFORCE SUCH CLAIMS AGAINST ANY ASSETS
(OTHER THAN THE DISTRIBUTOR'S RIGHT TO BE PAID ITS ALLOCABLE PORTION OF THE
DISTRIBUTION FEE AND TO BE PAID THE CONTINGENT DEFERRED SALES CHARGES) OF THE
DISTRIBUTOR. NO FUND WILL WAIVE ANY CONTINGENT DEFERRED SALES CHARGE EXCEPT
UNDER THE CIRCUMSTANCES SET FORTH IN THE FUND'S CURRENT PROSPECTUS WITHOUT THE
CONSENT OF THE DISTRIBUTOR (OR, IF RIGHTS TO PAYMENT HAVE BEEN TRANSFERRED, THE
TRANSFEREE), WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.
4. PAYMENTS TO DISTRIBUTOR'S TRANSFEREES. THE DISTRIBUTOR MAY TRANSFER
THE RIGHT TO PAYMENTS HEREUNDER (BUT NOT ITS OBLIGATIONS HEREUNDER) IN ORDER TO
RAISE FUNDS TO COVER DISTRIBUTION EXPENDITURES, AND ANY SUCH TRANSFER SHALL BE
EFFECTIVE UPON WRITTEN NOTICE FROM THE DISTRIBUTOR TO THE FUND. IN CONNECTION
WITH THE FOREGOING, THE FUND IS AUTHORIZED TO PAY ALL OR A PART OF THE
DISTRIBUTION FEE AND/OR CONTINGENT DEFERRED SALES CHARGES IN RESPECT OF CLASS B
SHARES DIRECTLY TO SUCH TRANSFEREE AS DIRECTED BY THE DISTRIBUTOR.
5. CHANGES IN COMPUTATION OF FEE, ETC. AS LONG AS THE CLASS B
DISTRIBUTION PLAN IS IN EFFECT, A FUND SHALL NOT CHANGE THE MANNER IN WHICH THE
CLASS B DISTRIBUTION FEE IS COMPUTED (EXCEPT AS MAY BE REQUIRED BY A CHANGE IN
APPLICABLE LAW OR A CHANGE IN ACCOUNTING POLICY ADOPTED BY THE INVESTMENT
COMPANIES COMMITTEE OF THE AICPA AND APPROVED BY FASB THAT RESULTS IN A
DETERMINATION BY A FUND'S INDEPENDENT ACCOUNTANTS THAT ANY OF THE SALES CHARGES
IN RESPECT OF SUCH FUND, WHICH ARE NOT CONTINGENT DEFERRED SALES CHARGES AND
WHICH ARE NOT YET DUE AND PAYABLE, MUST BE ACCOUNTED FOR BY SUCH FUND AS A
LIABILITY IN ACCORDANCE WITH GAAP).
6. AS USED IN THIS AGREEMENT, THE TERM "REGISTRATION STATEMENT" SHALL
MEAN THE REGISTRATION STATEMENT MOST RECENTLY FILED BY A FUND WITH THE
SECURITIES AND EXCHANGE COMMISSION AND EFFECTIVE UNDER THE 1933 ACT, AS SUCH
REGISTRATION STATEMENT IS AMENDED BY ANY AMENDMENTS THERETO AT THE TIME IN
EFFECT, AND THE TERM "PROSPECTUS" SHALL MEAN THE FORM OF PROSPECTUS FILED BY A
FUND AS PART OF THE REGISTRATION STATEMENT.
7. THE DISTRIBUTOR SHALL PRINT AND DISTRIBUTE TO PROSPECTIVE INVESTORS
PROSPECTUSES, AND MAY PRINT AND DISTRIBUTE SUCH OTHER SALES LITERATURE, REPORTS,
FORMS, AND ADVERTISEMENTS IN CONNECTION WITH THE SALE OF THE SHARES AS COMPLY
WITH THE APPLICABLE PROVISIONS OF FEDERAL AND STATE LAW. IN CONNECTION WITH
SUCH SALES AND OFFERS OF SALE, THE DISTRIBUTOR SHALL GIVE ONLY SUCH INFORMATION
AND MAKE ONLY SUCH STATEMENTS OR REPRESENTATIONS, AND REQUIRE BROKER-DEALERS
WITH WHOM IT ENTERS INTO DEALER AGREEMENTS TO GIVE ONLY SUCH INFORMATION AND
MAKE ONLY SUCH STATEMENTS OR REPRESENTATIONS, AS ARE CONTAINED IN THE PROSPECTUS
OR IN INFORMATION FURNISHED IN WRITING TO THE DISTRIBUTOR BY A FUND. THE FUNDS
SHALL NOT BE RESPONSIBLE IN ANY WAY FOR ANY OTHER INFORMATION, STATEMENTS OR
REPRESENTATIONS GIVEN OR MADE BY THE DISTRIBUTOR, OTHER BROKER-DEALERS, OR THE
REPRESENTATIVES OR AGENTS OF THE DISTRIBUTOR OR SUCH BROKER-DEALERS. EXCEPT AS
SPECIFICALLY PERMITTED UNDER THE DISTRIBUTION PLAN UNDER RULE 12B-1 UNDER THE
1940 ACT, AS PROVIDED IN PARAGRAPH 3 OF THIS AGREEMENT, THE FUNDS SHALL BEAR
NONE OF THE EXPENSES OF THE DISTRIBUTOR IN CONNECTION WITH ITS OFFER AND SALE OF
THE SHARES.
8. EACH FUND AGREES AT ITS OWN EXPENSE TO REGISTER THE SHARES WITH THE
SECURITIES AND EXCHANGE COMMISSION, STATE AND OTHER REGULATORY BODIES, AND TO
PREPARE AND FILE FROM TIME TO TIME SUCH PROSPECTUSES, AMENDMENTS, REPORTS AND
OTHER DOCUMENTS AS MAY BE NECESSARY TO MAINTAIN THE REGISTRATION STATEMENT.
EACH FUND SHALL BEAR ALL EXPENSES RELATED TO PREPARING AND TYPESETTING ITS
PROSPECTUS(ES) AND OTHER MATERIALS REQUIRED BY LAW AND SUCH OTHER EXPENSES,
INCLUDING PRINTING AND MAILING EXPENSES RELATED TO THE FUND'S COMMUNICATIONS
WITH PERSONS WHO ARE SHAREHOLDERS OF SUCH FUND.
9. EACH FUND AGREES TO INDEMNIFY, DEFEND AND HOLD THE DISTRIBUTOR, ITS
SEVERAL OFFICERS AND DIRECTORS, AND ANY PERSON WHO CONTROLS THE DISTRIBUTOR
WITHIN THE MEANING OF SECTION 15 OF THE 1933 ACT, FREE AND HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES AND EXPENSES (INCLUDING THE
COST OF INVESTIGATING OR DEFENDING SUCH CLAIMS, DEMANDS OR LIABILITIES AND ANY
COUNSEL FEES INCURRED IN CONNECTION THEREWITH) WHICH THE DISTRIBUTOR, ITS
OFFICERS OR DIRECTORS, OR ANY SUCH CONTROLLING PERSON MAY INCUR, UNDER THE 1933
ACT OR UNDER COMMON LAW OR OTHERWISE, ARISING OUT OF OR BASED UPON ANY ALLEGED
UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN ITS REGISTRATION STATEMENT OR
PROSPECTUS OR ARISING OUT OF OR BASED UPON ANY ALLEGED OMISSION TO STATE A
MATERIAL FACT REQUIRED TO BE STATED IN EITHER THEREOF OR NECESSARY TO MAKE THE
STATEMENTS IN EITHER THEREOF NOT MISLEADING, PROVIDED THAT IN NO EVENT SHALL
ANYTHING CONTAINED IN THIS AGREEMENT BE CONSTRUED SO AS TO PROTECT THE
DISTRIBUTOR AGAINST ANY LIABILITY TO A FUND OR ITS SHAREHOLDERS TO WHICH THE
DISTRIBUTOR WOULD OTHERWISE BE SUBJECT BY REASON OF WILLFUL MISFEASANCE, BAD
FAITH, OR GROSS NEGLIGENCE, IN THE PERFORMANCE OF ITS DUTIES, OR BY REASON OF
ITS RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES UNDER THIS AGREEMENT.
10. THE DISTRIBUTOR AGREES TO INDEMNIFY, DEFEND AND HOLD EACH FUND,
THEIR SEVERAL OFFICERS AND DIRECTORS, AND ANY PERSON WHO CONTROLS A FUND WITHIN
THE MEANING OF SECTION 15 OF THE 1933 ACT, FREE AND HARMLESS FROM AND AGAINST
ANY AND ALL CLAIMS, DEMANDS, LIABILITIES AND EXPENSES (INCLUDING THE COST OF
INVESTIGATING OR DEFENDING SUCH CLAIMS, DEMANDS OR LIABILITIES AND ANY COUNSEL
FEES INCURRED IN CONNECTION THEREWITH) WHICH A FUND, ITS OFFICERS OR DIRECTORS,
OR ANY SUCH CONTROLLING PERSON MAY INCUR, UNDER THE 1933 ACT OR UNDER COMMON LAW
OR OTHERWISE, ARISING OUT OF OR BASED UPON ANY ALLEGED UNTRUE STATEMENT OR A
MATERIAL FACT CONTAINED IN INFORMATION FURNISHED IN WRITING BY THE DISTRIBUTOR
TO THE FUNDS FOR USE IN THE REGISTRATION STATEMENT OR PROSPECTUS(ES) OR ARISING
OUT OF OR BASED UPON ANY ALLEGED OMISSION TO STATE A MATERIAL FACT IN CONNECTION
WITH SUCH INFORMATION REQUIRED TO BE STATED IN THE REGISTRATION STATEMENT OR
PROSPECTUS(ES) OR NECESSARY TO MAKE SUCH INFORMATION NOT MISLEADING.
11. EACH FUND RESERVES THE RIGHT AT ANY TIME TO WITHDRAW ALL OFFERINGS
OF THE SHARES BY WRITTEN NOTICE TO THE DISTRIBUTOR AT ITS PRINCIPAL OFFICE.
12. THE DISTRIBUTOR IS AN INDEPENDENT CONTRACTOR AND SHALL BE AGENT FOR A
FUND ONLY IN RESPECT TO THE OFFER, SALE AND REDEMPTION OF THAT FUND'S SHARES.
13. THE SERVICES OF THE DISTRIBUTOR TO A FUND UNDER THIS AGREEMENT ARE
NOT TO BE DEEMED EXCLUSIVE, AND THE DISTRIBUTOR SHALL BE FREE TO RENDER SIMILAR
SERVICES OR OTHER SERVICES TO OTHERS SO LONG AS ITS SERVICES HEREUNDER ARE NOT
IMPAIRED THEREBY.
14. THE DISTRIBUTOR ACKNOWLEDGES THAT IT HAS RECEIVED NOTICE OF AND
ACCEPTS THE LIMITATIONS UPON THE LIABILITY OF ANY FUND ORGANIZED AS A BUSINESS
TRUST SET FORTH IN SUCH FUND'S DECLARATION OF TRUST. THE DISTRIBUTOR AGREES
THAT THE OBLIGATIONS OF SUCH FUNDS HEREUNDER IN ANY CASE SHALL BE LIMITED TO
SUCH FUNDS AND TO THEIR ASSETS AND THAT THE DISTRIBUTOR SHALL NOT SEEK
SATISFACTION OF ANY SUCH OBLIGATION FROM THE SHAREHOLDERS OF SUCH A FUND NOR
FROM ANY TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF SUCH FUND.
15. THE FUNDS SHALL NOT USE THE NAME OF THE DISTRIBUTOR IN ANY
PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE FUNDS IN ANY
MANNER NOT APPROVED PRIOR THERETO BY THE DISTRIBUTOR; PROVIDED, HOWEVER, THAT
THE DISTRIBUTOR SHALL APPROVE ALL USES OF ITS NAME WHICH MERELY REFER IN
ACCURATE TERMS TO ITS APPOINTMENT HEREUNDER OR WHICH ARE REQUIRED BY THE
SECURITIES AND EXCHANGE COMMISSION OR A STATE SECURITIES COMMISSION; AND,
PROVIDED FURTHER, THAT IN NO EVENT SHALL SUCH APPROVAL BE UNREASONABLY WITHHELD.
THE DISTRIBUTOR SHALL NOT USE THE NAME OF ANY FUND IN ANY MATERIAL RELATING TO
THE DISTRIBUTOR IN ANY MANNER NOT APPROVED PRIOR THERETO BY THE FUND; PROVIDED,
HOWEVER THAT THE FUNDS SHALL APPROVE ALL USES OF THEIR NAMES WHICH MERELY REFER
IN ACCURATE TERMS TO THE APPOINTMENT OF THE DISTRIBUTOR HEREUNDER OR WHICH ARE
REQUIRED BY THE SECURITIES AND EXCHANGE COMMISSION OR A STATE SECURITIES
COMMISSION; AND, PROVIDED FURTHER, THAT IN NO EVENT SHALL SUCH APPROVAL BE
UNREASONABLY WITHHELD.
16. THE DISTRIBUTOR SHALL PREPARE WRITTEN REPORTS FOR THE BOARD OF
TRUSTEES/DIRECTORS OF EACH FUND ON A QUARTERLY BASIS SHOWING INFORMATION
CONCERNING SERVICES PROVIDED AND EXPENSES INCURRED WHICH ARE RELATED TO THIS
AGREEMENT AND SUCH OTHER INFORMATION AS FROM TIME TO TIME SHALL BE REASONABLY
REQUESTED BY A FUND'S BOARD OF TRUSTEES/DIRECTORS.
17. AS USED IN THIS AGREEMENT, THE TERMS "ASSIGNMENT," "INTERESTED
PERSON," AND "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" SHALL HAVE THE
MEANING GIVEN TO THEM BY SECTION 2(A) OF THE 1940 ACT, SUBJECT TO SUCH
EXEMPTIONS AS MAY BE GRANTED BY THE SECURITIES AND EXCHANGE COMMISSION BY ANY
RULE, REGULATION OR ORDER; PROVIDED, HOWEVER THAT, IN ORDER TO OBTAIN FINANCING,
THE DISTRIBUTOR MAY ASSIGN TO A LENDING INSTITUTION THE PAYMENTS DUE TO THE
DISTRIBUTOR UNDER THIS AGREEMENT WITHOUT IT CONSTITUTING AN ASSIGNMENT OF THE
AGREEMENT.
18. SUBJECT TO THE PROVISIONS OF SECTIONS 19 AND 20 BELOW, THIS
AGREEMENT WILL REMAIN IN EFFECT FOR TWO YEARS FROM THE DATE OF IS EXECUTION AND
FROM YEAR TO YEAR THEREAFTER, PROVIDED THAT THE DISTRIBUTOR DOES NOT NOTIFY A
FUND IN WRITING AT LEAST SIXTY (60) DAYS PRIOR TO THE EXPIRATION DATE IN ANY
YEAR THAT IT DOES NOT WISH CONTINUANCE OF THE AGREEMENT AS TO SUCH FUND FOR AN
ADDITIONAL YEAR.
19. TERMINATION. AS TO ANY PARTICULAR FUND (OR SERIES THEREOF), THIS
AGREEMENT SHALL AUTOMATICALLY TERMINATE IN THE EVENT OF ITS ASSIGNMENT AND MAY
BE TERMINATED AT ANY TIME WITHOUT THE PAYMENT OF ANY PENALTY BY A FUND OR BY THE
DISTRIBUTOR ON SIXTY (60) DAYS' WRITTEN NOTICE TO THE OTHER PARTY. A FUND MAY
EFFECT SUCH TERMINATION BY A VOTE OF (I) A MAJORITY OF THE BOARD OF
TRUSTEES/DIRECTORS OF THE FUND, (II) A MAJORITY OF THE TRUSTEES/DIRECTORS WHO
ARE NOT INTERESTED PERSONS OF THE FUND, WHO ARE NOT PARTIES TO THIS AGREEMENT OR
INTERESTED PERSONS OF SUCH PARTIES, AND WHO HAVE NO DIRECT OR INDIRECT FINANCIAL
INTEREST IN THE OPERATION OF THE DISTRIBUTION PLAN, IN THIS AGREEMENT OR IN ANY
AGREEMENT RELATED TO SUCH FUND'S DISTRIBUTION PLAN (THE "RULE 12B-1
TRUSTEES/DIRECTORS"), OR (III) A MAJORITY OF THE OUTSTANDING VOTING SECURITIES
OF THE RELEVANT SERIES.
20. THIS AGREEMENT SHALL BE SUBMITTED FOR RENEWAL TO THE BOARD OF
TRUSTEES/DIRECTORS OF EACH FUND AT LEAST ANNUALLY AND SHALL CONTINUE IN EFFECT
ONLY SO LONG AS SPECIFICALLY APPROVED AT LEAST ANNUALLY (I) BY A MAJORITY VOTE
OF THE FUND'S BOARD OF TRUSTEES/DIRECTORS, AND (II) BY THE VOTE OF THE MAJORITY
OF THE RULE 12B-1 TRUSTEES/DIRECTORS OF THE FUND, CAST IN PERSON AT A MEETING
CALLED FOR THE PURPOSE OF VOTING ON SUCH APPROVAL.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
EXECUTED ON THE DATE FIRST ABOVE WRITTEN BY THEIR OFFICERS THEREUNTO DULY
AUTHORIZED.
ATTEST: EACH FUND LISTED IN THE
ATTACHED SCHEDULE I
BY:__________________________ BY:__________________________
WILLIAM M. TARTIKOFF
VICE PRESIDENT
ATTEST: CALVERT DISTRIBUTORS, INC.
BY:__________________________ BY:__________________________
RONALD M. WOLFSHEIMER
SENIOR VICE PRESIDENT
<PAGE>
SCHEDULE I
THE CALVERT FUND
CALVERT TAX-FREE RESERVES
CALVERT MUNICIPAL FUND
CALVERT SOCIAL INVESTMENT FUND
CALVERT WORLD VALUES FUND
CALVERT NEW WORLD FUND
FIRST VARIABLE RATE FUND
<PAGE>
SCHEDULE II
FEES ARE EXPRESSED AS A PERCENTAGE OF AVERAGE ANNUAL DAILY NET ASSETS, AND ARE
PAYABLE MONTHLY.
DISTRIBUTION FEE
CLASS A* CLASS B CLASS C CLASS I
THE CALVERT FUND
NEW VISION SMALL
CAP FUND N/A 0.75 0.75 N/A
CALVERT INCOME FUND 0.25 0.75 0.75 N/A
CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO N/A N/A N/A N/A
LIMITED-TERM PORTFOLIO N/A N/A N/A N/A
LONG-TERM PORTFOLIO 0.10 0.75 0.75 N/A
CALIFORNIA MONEY
MARKET PORT. N/A N/A N/A N/A
VERMONT MUNICIPAL N/A 0.75 0.75 N/A
CALVERT MUNICIPAL FUND
NATIONAL INTERMEDIATE FUND
N/A 0.75 N/A N/A
CALIFORNIA INTERMEDIATE FUND N/A 0.75 N/A N/A
MARYLAND INTERMEDIATE FUND N/A 0.75 N/A N/A
VIRGINIA INTERMEDIATE FUND N/A 0.75 N/A N/A
CALVERT SOCIAL INVESTMENT FUND
MANAGED GROWTH PORTFOLIO 0.10 0.75 0.75 N/A
EQUITY PORTFOLIO 0.10 0.75 0.75 N/A
BOND PORTFOLIO 0.10 0.75 0.75 N/A
MANAGED INDEX PORTFOLIO N/A 0.75 0.75 N/A
MONEY MARKET PORTFOLIO N/A N/A N/A N/A
CALVERT WORLD VALUES FUND
CAPITAL ACCUMULATION FUND 0.10 0.75 0.75 N/A
INTERNATIONAL EQUITY FUND 0.10 0.75 0.75 N/A
CALVERT NEW WORLD FUND
CALVERT NEW AFRICA FUND N/A 0.75 0.75 N/A
FIRST VARIABLE RATE FUND
CALVERT FIRST GOVERNMENT
MONEY MARKET N/A 0.75 0.75 N/A
*DISTRIBUTOR RESERVES THE RIGHT TO WAIVE ALL OR A PORTION OF THE DISTRIBUTION
FEE FROM TIME TO TIME.
DATED: FEBRUARY 1998
<PAGE>
SCHEDULE III
FEES ARE EXPRESSED AS A PERCENTAGE OF AVERAGE ANNUAL DAILY NET ASSETS
AND ARE PAYABLE MONTHLY.
SERVICE FEE
CLASS A CLASS B CLASS C CLASS I CLASS T
THE CALVERT FUND
NEW VISION
SMALL CAP FUND 0.25 0.25 0.25 N/A
CALVERT INCOME FUND 0.25 0.25 0.25 N/A
CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO N/A N/A N/A N/A 0.25%
LIMITED-TERM PORTFOLIO N/A N/A N/A N/A
LONG-TERM PORTFOLIO 0.25 0.25 0.25 N/A
CALIFORNIA MONEY MARKET PORT. N/A N/A N/A N/A
VERMONT MUNICIPAL N/A 0.25 0.25 N/A
CALVERT MUNICIPAL FUND
NATIONAL INTERMEDIATE FUND 0.25 0.25 N/A N/A
CALIFORNIA INTERMEDIATE FUND 0.25 0.25 N/A N/A
MARYLAND INTERMEDIATE FUND 0.25 0.25 N/A N/A
VIRGINIA INTERMEDIATE FUND 0.25 0.25 N/A N/A
CALVERT SOCIAL INVESTMENT FUND
MANAGED GROWTH PORTFOLIO 0.25 0.25 0.25 N/A
EQUITY PORTFOLIO 0.25 0.25 0.25 N/A
BOND PORTFOLIO 0.25 0.25 0.25 N/A
MANAGED INDEX PORTFOLIO 0.25 0.25 0.25 N/A
MONEY MARKET PORTFOLIO 0.25 N/A N/A N/A
<PAGE>
CLASS A CLASS B CLASS C CLASS I CLASS T
CALVERT WORLD VALUES FUND
CAPITAL ACCUMULATION FUND 0.25 0.25 0.25 N/A
INTERNATIONAL EQUITY FUND 0.25 0.25 0.25 N/A
CALVERT NEW WORLD FUND
CALVERT NEW AFRICA FUND 0.25 0.25 0.25 N/A
FIRST VARIABLE RATE FUND
CALVERT FIRST GOVERNMENT
MONEY MARKET N/A 0.25 0.25 N/A 0.25%
DATED: DEC. 1998
Distributor reserves the right to waive all or a portion of the service fees
from time to time. For money market portfolios, Class A shall refer to Class O,
or if the portfolio does not have multiple classes, then to the portfolio
itself.
Distributor charges the service fee only on assets in excess of $30 million.
Distributor reserves the right to waive all or a portion of the service fees
from time to time. For money market portfolios, Class A shall refer to Class O,
or if the portfolio does not have multiple classes, then to the portfolio
itself.
DEFERRED COMPENSATION AGREEMENT
AGREEMENT ENTERED INTO THIS _____ DAY OF ______________, 19___, BETWEEN CALVERT
VARIABLE SERIES, INC., FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME, CALVERT
TAX-FREE RESERVES, THE CALVERT FUND, CALVERT CASH RESERVES, CALVERT SOCIAL
INVESTMENT FUND, CALVERT MUNICIPAL FUND, INC., CALVERT NEW WORLD FUND, INC.,
AND/OR CALVERT WORLD VALUES FUND, INC.(HEREINAFTER REFERRED TO AS THE FUND OR
FUNDS), AND ______________ (DIRECTOR OR TRUSTEE, HEREINAFTER REFERRED TO AS THE
TRUSTEE).
WHEREAS, THE TRUSTEE WILL BE RENDERING VALUABLE SERVICES TO THE FUND OR FUNDS AS
A MEMBER OF THE BOARD OF TRUSTEES, AND THE FUND OR FUNDS IS WILLING TO
ACCOMMODATE THE TRUSTEE'S DESIRE TO BE COMPENSATED FOR SUCH SERVICES ON A
DEFERRED BASIS;
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. WITH RESPECT TO SERVICES PERFORMED BY THE TRUSTEE FOR THE FUND OR FUNDS
ON AND AFTER THE FIRST DAY OF , 19___, THE TRUSTEE SHALL DEFER % OF THE
AMOUNTS OTHERWISE PAYABLE TO THE TRUSTEE FOR SERVING AS A TRUSTEE. THE DEFERRED
COMPENSATION SHALL BE CREDITED TO A BOOK RESERVE MAINTAINED BY THE FUND OR FUNDS
IN THE TRUSTEE'S NAME TOGETHER WITH CREDITED AMOUNTS IN THE NATURE OF EARNINGS
("ACCOUNT(S)"). THE ACCOUNT MAINTAINED FOR THE TRUSTEE SHALL BE PAID TO THE
TRUSTEE ON A DEFERRED BASIS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
2. THE FUND OR FUNDS SHALL CREDIT THE TRUSTEE'S ACCOUNT AS OF THE DAY SUCH
AMOUNT WOULD HAVE BEEN PAID TO THE TRUSTEE IF THIS AGREEMENT WERE NOT IN EFFECT.
SUCH ACCOUNTS SHALL BE VALUED AT FAIR MARKET VALUE AS OF THE LAST DAY OF THE
CALENDAR YEAR AND SUCH OTHER DATES AS ARE NECESSARY FOR THE PROPER
ADMINISTRATION OF THIS AGREEMENT, AND EACH TRUSTEE SHALL RECEIVE A WRITTEN
ACCOUNTING OF HIS ACCOUNT BALANCE(S) FOLLOWING SUCH VALUATION.
A TRUSTEE MAY REQUEST THAT HIS/HER DEFERRED COMPENSATION BE ALLOCATED AMONG
THE AVAILABLE FUNDS OR PLACED IN A MONEY MARKET DEPOSIT ACCOUNT. THE INITIAL
ALLOCATION REQUEST MAY BE MADE AT THE TIME OF ENROLLMENT. ONCE MADE, AN
INVESTMENT ALLOCATION REQUEST SHALL REMAIN IN EFFECT FOR ALL SUBSEQUENT DEFERRED
COMPENSATION UNTIL CHANGED BY THE TRUSTEE. A TRUSTEE MAY CHANGE HIS/HER
INVESTMENT ALLOCATION BY SUBMITTING A WRITTEN REQUEST TO THE ADMINISTRATOR ON
SUCH FORM AS MAY BE REQUIRED BY THE ADMINISTRATOR OR BY TELEPHONING THE
ADMINISTRATOR (OR HIS/HER DELEGATE). SUCH CHANGES SHALL BECOME EFFECTIVE AS SOON
AS ADMINISTRATIVELY FEASIBLE AFTER THE ADMINISTRATOR RECEIVES SUCH REQUEST.
ALTHOUGH THE FUND INTENDS TO INVEST THE DEFERRED COMPENSATION ACCORDING TO THE
TRUSTEE'S REQUESTS, IT RESERVES THE RIGHT TO INVEST THE DEFERRED COMPENSATION
WITHOUT REGARD TO SUCH REQUESTS. THE ADMINISTRATOR IS THE CALVERT GROUP, LTD.
CONTROLLER.
3. AS OF JANUARY 31 OF THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR THE
TRUSTEE DIES, RETIRES, RESIGNS OR OTHERWISE CEASES TO BE A MEMBER OF THE BOARD
OF TRUSTEES OF THE FUND OR FUNDS; THE FUND OR FUNDS SHALL: (CHECK ONE)
( ) PAY THE TRUSTEE (OR HIS OR HER BENEFICIARY) A LUMP SUM AMOUNT
EQUAL TO THE BALANCE IN THE TRUSTEE'S ACCOUNT ON THAT DATE OR
( ) COMMENCE MAKING ANNUAL PAYMENTS TO THE TRUSTEE (OR HIS OR HER
BENEFICIARY) FOR A PERIOD OF ____ (2 THROUGH 15) YEARS.
IF THE SECOND BOX IS SELECTED, SUCH PAYMENTS SHALL BE MADE ON JANUARY 31ST
OF EACH YEAR IN APPROXIMATELY EQUAL ANNUAL INSTALLMENTS AS ADJUSTED AND COMPUTED
BY THE FUND OR FUNDS, WITH THE FINAL PAYMENT EQUALING THE THEN REMAINING BALANCE
IN THE TRUSTEE'S ACCOUNT. IF THE BALANCE IN THE TRUSTEE'S ACCOUNT AS OF THE DATE
OF THE FIRST SCHEDULED PAYMENT IS LESS THAN $2,000, THE FUND OR FUNDS SHALL
INSTEAD PAY SUCH AMOUNT IN A LUMP SUM AS OF THAT DATE. THE TRUSTEE MAY NOT
SELECT A PERIOD OF TIME, WHICH WILL CAUSE AN ANNUAL PAYMENT TO BE LESS THAN
$1,000. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT THE TRUSTEE CEASES TO
BE A TRUSTEE OF THE FUND OR FUNDS AND BECOMES A PROPRIETOR, OFFICER, PARTNER,
EMPLOYEE, OR OTHERWISE BECOMES AFFILIATED WITH ANY BUSINESS OR ENTITY THAT IS IN
COMPETITION WITH THE FUND OR FUNDS, OR BECOMES EMPLOYED BY ANY GOVERNMENTAL
AGENCY HAVING JURISDICTION OVER THE AFFAIRS OF THE FUND OR FUNDS, THE FUND OR
FUNDS RESERVES THE RIGHT AT THE SOLE DISCRETION OF THE BOARD OF TRUSTEES TO MAKE
AN IMMEDIATE LUMP SUM PAYMENT TO THE TRUSTEE IN AN AMOUNT EQUAL TO THE BALANCE
IN THE TRUSTEE'S ACCOUNT AT THAT TIME.
NOTWITHSTANDING THE PRECEDING PARAGRAPH, THE FUND OR FUNDS MAY AT ANY TIME
MAKE A LUMP SUM PAYMENT TO THE TRUSTEE (OR SURVIVING BENEFICIARY) EQUAL TO A
PART OR ALL OF THE BALANCE IN THE TRUSTEE'S ACCOUNT UPON A SHOWING OF A
FINANCIAL EMERGENCY CAUSED BY CIRCUMSTANCES BEYOND THE CONTROL OF THE TRUSTEE
(OR SURVIVING BENEFICIARY) WHICH WOULD RESULT IN SERIOUS FINANCIAL HARDSHIP IF
SUCH PAYMENTS WERE NOT MADE. THE DETERMINATION OF WHETHER SUCH EMERGENCY EXISTS
SHALL BE MADE AT THE SOLE DISCRETION OF THE BOARD OF TRUSTEES OF THE FUND OR
FUNDS. THE AMOUNT OF THE PAYMENT SHALL BE LIMITED TO THE AMOUNT NECESSARY TO
MEET THE FINANCIAL EMERGENCY, AND ANY REMAINING BALANCE IN THE TRUSTEE'S ACCOUNT
SHALL THEREAFTER BE PAID AT THE TIME AND IN THE MANNER OTHERWISE SET FORTH IN
THIS SECTION.
4. IN THE EVENT THAT THE TRUSTEE DIES BEFORE PAYMENTS HAVE COMMENCED OR BEEN
COMPLETED UNDER SECTION 3 HEREOF, THE FUND OR FUNDS SHALL MAKE PAYMENT IN
ACCORDANCE WITH SECTION 3 TO THE TRUSTEE'S DESIGNATED BENEFICIARY, WHO SHALL BE:
IN THE EVENT THAT BOTH THE TRUSTEE AND THE DESIGNATED BENEFICIARY HAVE DIED
BEFORE THE COMMENCEMENT OR COMPLETION OF PAYMENTS UNDER SECTION 3, AN AMOUNT
EQUAL TO THE THEN REMAINING BALANCE IN THE TRUSTEE'S ACCOUNT (OR THE PORTION
THEREOF THAT WOULD HAVE BEEN PAYABLE TO THE BENEFICIARY) SHALL BE PAID IN A LUMP
SUM. SUCH PAYMENT SHALL BE MADE TO THE ESTATE OF THE TRUSTEE UNLESS PAYMENTS TO
THE BENEFICIARY HAVE ALREADY COMMENCED, IN WHICH CASE THE LUMP SUM PAYMENT SHALL
BE MADE TO THE ESTATE OF THE BENEFICIARY.
5. THE AGREEMENT SHALL REMAIN IN EFFECT WITH RESPECT TO THE TRUSTEE'S
COMPENSATION FOR SERVICES PERFORMED AS A TRUSTEE OF THE FUND OR FUNDS IN ALL
FUTURE YEARS UNLESS TERMINATED ON A PROSPECTIVE BASIS IN ACCORDANCE WITH THIS
SECTION. EITHER THE TRUSTEE OR THE FUND OR FUNDS MAY TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE DELIVERED OR MAILED TO THE OTHER PARTY NO LATER THAN DECEMBER 31
OF THE CALENDAR YEAR PRECEDING THE CALENDAR YEAR IN WHICH SUCH TERMINATION IS TO
TAKE EFFECT. IN ADDITION, THE TRUSTEE MAY ALTER THE AMOUNT OF DEFERRAL FOR ANY
FUTURE CALENDAR YEAR IF THE TRUSTEE AND THE FUND OR FUNDS ENTER INTO AN
AMENDMENT ON OR BEFORE DECEMBER 31ST OF THE CALENDAR YEAR PRECEDING THE CALENDAR
YEAR FOR WHICH THE AMENDMENT IS TO TAKE EFFECT. THE AMENDMENT WILL BE DEEMED TO
SUPERSEDE THE AMOUNT OF DEFERRAL FOR ALL FUTURE YEARS UNLESS OTHERWISE AMENDED
OR TERMINATED. ANY TERMINATION OR NEW AMENDMENT SHALL RELATE SOLELY TO
COMPENSATION FOR SERVICES PERFORMED AFTER THE TERMINATION OR AMENDMENT BECOMES
EFFECTIVE AND SHALL NOT ALTER THE TERMS OF THE AGREEMENT WITH RESPECT TO THE
DEFERRED PAYMENT OF COMPENSATION FOR SERVICES PERFORMED DURING ANY CALENDAR YEAR
IN WHICH THIS AGREEMENT WAS IN EFFECT. NOTWITHSTANDING THE FOREGOING, THE
TRUSTEE MAY AT ANY TIME AMEND THE BENEFICIARY DESIGNATION HEREUNDER BY WRITTEN
NOTICE TO THE FUND OR FUNDS.
6. NOTHING CONTAINED IN THIS AGREEMENT AND NO ACTION TAKEN PURSUANT TO THE
PROVISIONS OF THIS AGREEMENT SHALL CREATE OR BE CONSTRUED TO CREATE A TRUST OF
ANY KIND, OR A FIDUCIARY RELATIONSHIP BETWEEN THE FUND OR FUNDS AND THE TRUSTEE,
ANY DESIGNATED BENEFICIARY OR ANY OTHER PERSON. ANY COMPENSATION DEFERRED UNDER
THE PROVISIONS OF THIS AGREEMENT SHALL CONTINUE FOR ALL PURPOSES TO BE A PART OF
THE GENERAL FUNDS OF THE FUND OR FUNDS. TO THE EXTENT THAT ANY PERSON ACQUIRES A
RIGHT TO RECEIVE PAYMENTS FROM THE FUND OR FUNDS UNDER THIS AGREEMENT, SUCH
RIGHT SHALL BE NO GREATER THAN THE RIGHT OF ANY UNSECURED GENERAL CREDITOR OF
THE FUND OR FUNDS.
7. THE RIGHT OF THE TRUSTEE OR ANY OTHER PERSON TO RECEIVE PAYMENTS UNDER
THIS AGREEMENT SHALL NOT BE ASSIGNED, TRANSFERRED, PLEDGED OR ENCUMBERED EXCEPT
BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION.
8. IF THE FUND OR FUNDS SHALL FIND THAT ANY PERSON TO WHOM ANY PAYMENT IS
PAYABLE UNDER THIS AGREEMENT IS UNABLE TO CARE FOR HIS OR HER AFFAIRS BECAUSE OF
ILLNESS OR ACCIDENT, OR IS A MINOR, ANY PAYMENT DUE (UNLESS A PRIOR CLAIM
THEREFOR SHALL HAVE BEEN MADE BY A DULY APPOINTED GUARDIAN, COMMITTEE OR OTHER
LEGAL REPRESENTATIVE) MAY BE PAID TO THE SPOUSE, A PARENT, OR A BROTHER OR
SISTER, OR TO ANY PERSON DEEMED BY THE FUND OR FUNDS TO HAVE INCURRED EXPENSE
FOR THE PERSON WHO IS OTHERWISE ENTITLED TO PAYMENT, IN SUCH MANNER AND
PROPORTIONS AS THE FUND OR FUNDS MAY DETERMINE. ANY SUCH PAYMENT SHALL SERVE TO
DISCHARGE THE LIABILITY OF THE FUND OR FUNDS UNDER THIS AGREEMENT TO MAKE
PAYMENT TO THE PERSON WHO IS OTHERWISE ENTITLED TO PAYMENT.
9. ANY WRITTEN NOTICE TO THE FUND OR FUNDS REFERRED TO IN THIS AGREEMENT
SHALL BE MADE BY MAILING OR DELIVERING SUCH NOTICE TO THE FUND OR FUNDS AT 4550
MONTGOMERY AVENUE, BETHESDA, MD 20814, TO THE ATTENTION OF THE CONTROLLER,
CALVERT GROUP, LTD. ANY WRITTEN NOTICE TO THE TRUSTEE REFERRED TO IN THIS
AGREEMENT SHALL BE MADE BY DELIVERY TO THE TRUSTEE IN PERSON OR BY MAILING SUCH
NOTICE TO THE TRUSTEE AT HIS OR HER PLACE OF RESIDENCE OR BUSINESS ADDRESS.
10. TO THE EXTENT REQUIRED BY LAW, THE FUND OR FUNDS SHALL WITHHOLD FEDERAL
OR STATE INCOME TAXES FROM ANY PAYMENTS HEREUNDER AND SHALL FURNISH THE TRUSTEE
(OR BENEFICIARY) AND THE APPLICABLE GOVERNMENTAL AGENCY OR AGENCIES WITH SUCH
REPORTS, STATEMENTS OR INFORMATION AS MAY BE REQUIRED IN CONNECTION WITH SUCH
PAYMENTS.
11. THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE
FUND OR FUNDS AND ITS SUCCESSORS AND ASSIGNS AND THE TRUSTEE AND HIS OR HER
HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVE.
12. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF MARYLAND.
<PAGE>
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE EXECUTED AS OF
THE DATE FIRST ABOVE WRITTEN.
CALVERT VARIABLE SERIES, INC.
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
THE CALVERT FUND
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
BY
(PRINT NAME OF TRUSTEE)
(SIGNATURE OF TRUSTEE)
DATE
ACKNOWLEDGMENT:
BY RONALD M. WOLFSHEIMER
(PRINT NAME OF OFFICER)
TREASURER
(TITLE)
(SIGNATURE OF OFFICER)
DATE
<PAGE>
C:\temp\DCAGMT2.DOC
APPLICATION FOR CALVERT GROUP
TRUSTEE DEFERRED COMPENSATION PLAN
1. INSTRUCTIONS
PLEASE COMPLETE SECTIONS 2 THROUGH 4 BELOW. THIS APPLICATION SHOULD BE
SIGNED BY THE TRUSTEE AND RETURNED TO THE ADMINISTRATOR.
2. TRUSTEE INFORMATION (PLEASE PRINT)
NAME OF FUND:
NAME OF TRUSTEE:
ADDRESS OF FUND: 4550 MONTGOMERY AVE., STE. 1000N
BETHESDA, MD 20814
3. INVESTMENT OF CONTRIBUTIONS
CONTRIBUTIONS TO THE CALVERT GROUP TRUSTEE'S DEFERRED COMPENSATION PLAN
SHALL BE INVESTED IN THE CALVERT GROUP FUNDS:
CALVERT FIRST GOVERNMENT MONEY MARKET FUND %
CSIF MANAGED INDEX PORTFOLIO _________%
CSIF MONEY MARKET PORTFOLIO %
CSIF BALANCED PORTFOLIO %
CSIF BOND PORTFOLIO %
CSIF EQUITY PORTFOLIO %
CALVERT INCOME FUND %
CALVERT NEW VISION SMALL CAP FUND %
CALVERT INTERNATIONAL EQUITY PORTFOLIO %
CALVERT CAPITAL ACCUMULATION FUND %
CALVERT NEW AFRICA FUND %
TOTAL %
4. PURSUANT TO SECTION 3, I CHOOSE TO HAVE MY ANNUAL PAYMENTS BE MADE FOR:
A ____ LUMP SUM OR
B ____ YEARS (NO LESS THAN 2 NOR GREATER THAN 15).
5. ACCEPTANCE
TRUSTEE ACCEPTANCE: I HEREBY AGREE TO THE TERMS AND CONDITIONS OF THE
CALVERT GROUP TRUSTEE DEFERRED COMPENSATION PLAN. I HAVE READ THE PROSPECTUS(ES)
OF THE CHOSEN FUND(S).
NAME DATE
FOR OFFICE USE ONLY
FUND NUMBER(S): ACCOUNT NUMBER:
7
CUSTODIAN AGREEMENT
THIS AGREEMENT, DATED AS OF APRIL 1, 1991, IS BETWEEN STATE STREET BANK AND
TRUST COMPANY, A MASSACHUSETTS TRUST COMPANY, HAVING ITS PRINCIPAL PLACE OF
BUSINESS AT 225 FRANKLIN STREET, BOSTON, MASSACHUSETTS, 02110 ("STATE STREET" OR
THE "CUSTODIAN"), AND [FUND], ON BEHALF OF [PORTFOLIO], HAVING ITS PRINCIPAL
PLACE OF BUSINESS AT 4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND,
20814. IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED IN
THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
THE PORTFOLIO HEREBY EMPLOYS STATE STREET AS THE CUSTODIAN OF ITS ASSETS,
INCLUDING SECURITIES. THE PORTFOLIO AGREES TO DELIVER TO THE CUSTODIAN ALL
SECURITIES AND CASH NOW OR HEREAFTER OWNED OR ACQUIRED, AND ALL PAYMENTS OF
INCOME, PAYMENTS OF PRINCIPAL OR CAPITAL DISTRIBUTIONS RECEIVED BY IT ON
SECURITIES OWNED BY THE PORTFOLIO AT ANY GIVEN TIME, AND THE CASH CONSIDERATION
RECEIVED BY IT FOR SHARES OF THE PORTFOLIO. THE CUSTODIAN WILL NOT BE
RESPONSIBLE FOR ANY PROPERTY OF THE PORTFOLIO HELD OR RECEIVED BY THE PORTFOLIO
AND NOT DELIVERED TO THE CUSTODIAN.
UPON RECEIPT OF "PROPER INSTRUCTIONS" (AS DEFINED IN SECTION 4), THE
CUSTODIAN WILL EMPLOY ONE OR MORE SUBCUSTODIANS LOCATED IN THE UNITED STATES,
BUT ONLY IN ACCORDANCE WITH AN APPLICABLE VOTE BY THE BOARD OF
DIRECTORS/TRUSTEES OF THE FUND, AND PROVIDED THAT THE CUSTODIAN WILL HAVE NO
MORE OR LESS RESPONSIBILITY OR LIABILITY TO THE PORTFOLIO ON ACCOUNT OF ANY
ACTIONS OR OMISSIONS OF ANY SUB-CUSTODIAN SO EMPLOYED THAN ANY SUCH
SUB-CUSTODIAN HAS TO THE CUSTODIAN, AND FURTHER PROVIDED THAT THE CUSTODIAN WILL
NOT RELEASE THE SUB-CUSTODIAN FROM ANY RESPONSIBILITY OR LIABILITY UNLESS
MUTUALLY AGREED UPON BY THE PARTIES IN WRITING.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIO
2.1 HOLDING SECURITIES. THE CUSTODIAN WILL HOLD AND PHYSICALLY SEGREGATE
FOR THE ACCOUNT OF THE PORTFOLIO ALL NON-CASH PROPERTY OTHER THAN (A) SECURITIES
MAINTAINED IN A CLEARING AGENCY ACTING AS A SECURITIES DEPOSITORY OR IN A
BOOK-ENTRY SYSTEM AUTHORIZED BY THE U.S. DEPARTMENT OF THE TREASURY
(COLLECTIVELY REFERRED TO AS "SECURITIES SYSTEM;" SEE SECTION 2.10), AND (B)
COMMERCIAL PAPER OF AN ISSUER FOR WHICH THE CUSTODIAN ACTS AS ISSUING AND PAYING
AGENT ("DIRECT PAPER") WHICH IS DEPOSITED AND/OR MAINTAINED IN THE DIRECT PAPER
SYSTEM OF THE CUSTODIAN (SEE SECTION 2.11).
2.2 DELIVERY OF SECURITIES. THE CUSTODIAN WILL RELEASE AND DELIVER
PORTFOLIO SECURITIES HELD BY THE CUSTODIAN OR IN A SECURITIES SYSTEM ACCOUNT OF
THE CUSTODIAN OR IN THE CUSTODIAN'S DIRECT PAPER BOOK ENTRY SYSTEM ACCOUNT
("DIRECT PAPER SYSTEM ACCOUNT") ONLY UPON RECEIPT OF PROPER INSTRUCTIONS, WHICH
MAY BE CONTINUING INSTRUCTIONS WHEN DEEMED APPROPRIATE BY MUTUAL AGREEMENT OF
THE PARTIES, AND ONLY IN THE FOLLOWING CASES:
L) SALE. UPON THE SALE OF AND RECEIPT OF PAYMENT FOR PORTFOLIO SECURITIES;
2) SECURITIES SYSTEM. IN THE CASE OF A SALE EFFECTED THROUGH A SECURITIES
SYSTEM, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.10;
3) TENDER OFFER. TO THE DEPOSITORY AGENT OR OTHER RECEIVING AGENT IN
CONNECTION WITH TENDER OR OTHER SIMILAR OFFERS FOR THE PORTFOLIO'S SECURITIES;
4) REDEMPTION BY ISSUER. TO THE ISSUER OR ITS AGENT WHEN PORTFOLIO
SECURITIES ARE CALLED, REDEEMED, RETIRED OR OTHERWISE BECOME PAYABLE; PROVIDED
THAT, IN ANY SUCH CASE, THE CASH OR OTHER CONSIDERATION IS TO BE DELIVERED TO
THE CUSTODIAN;
5) TRANSFER TO ISSUER, NOMINEE; EXCHANGE. TO THE ISSUER OR ITS AGENT FOR
TRANSFER INTO THE NAME OF THE PORTFOLIO OR INTO THE NAME OF ANY NOMINEE OR
NOMINEES OF THE CUSTODIAN OR INTO THE NAME OR NOMINEE NAME OF ANY AGENT
APPOINTED PURSUANT TO THIS AGREEMENT OR INTO THE NAME OR NOMINEE NAME OF ANY
SUB-CUSTODIAN APPOINTED PURSUANT TO SECTION L; OR FOR EXCHANGE FOR A DIFFERENT
NUMBER OF BONDS, CERTIFICATES OR OTHER EVIDENCE REPRESENTING THE SAME AGGREGATE
FACE AMOUNT OR NUMBER OF UNITS AND BEARING THE SAME INTEREST RATE, MATURITY DATE
AND CALL PROVISIONS, IF ANY; PROVIDED THAT, IN ANY SUCH CASE, THE NEW SECURITIES
ARE TO BE DELIVERED TO THE CUSTODIAN;
6) SALE TO BROKER OR DEALER. UPON THE SALE OF PORTFOLIO SECURITIES TO THE
BROKER OR ITS CLEARING AGENT OR DEALER, AGAINST A RECEIPT, FOR EXAMINATION IN
ACCORDANCE WITH "STREET DELIVERY" CUSTOM; PROVIDED THAT THE CUSTODIAN WILL HAVE
NO RESPONSIBILITY OR LIABILITY FOR ANY LOSS ARISING FROM THE DELIVERY OF SUCH
SECURITIES PRIOR TO RECEIVING PAYMENT FOR SUCH SECURITIES EXCEPT AS MAY ARISE
FROM THE CUSTODIAN'S FAILURE TO ACT IN ACCORDANCE WITH ITS DUTIES AS SET FORTH
IN THIS AGREEMENT.
7) EXCHANGE OR CONVERSION. FOR EXCHANGE OR CONVERSION PURSUANT TO ANY PLAN
OF MERGER, CONSOLIDATION, RECAPITALIZATION, REORGANIZATION, SPLIT-UP OF SHARES,
CHANGE OF PAR VALUE OR READJUSTMENT OF THE SECURITIES OF THE ISSUER OF SUCH
SECURITIES, OR PURSUANT TO PROVISIONS FOR CONVERSION CONTAINED IN SUCH
SECURITIES, OR PURSUANT TO ANY DEPOSIT AGREEMENT PROVIDED THAT, IN ANY SUCH
CASE, THE NEW SECURITIES AND CASH, IF ANY, ARE TO BE DELIVERED TO THE CUSTODIAN;
8) WARRANTS, RIGHTS. IN THE CASE OF WARRANTS, RIGHTS OR SIMILAR SECURITIES,
THE SURRENDER THEREOF IN THE EXERCISE OF SUCH WARRANTS, RIGHTS OR SIMILAR
SECURITIES OR THE SURRENDER OF INTERIM RECEIPTS OR TEMPORARY SECURITIES FOR
DEFINITIVE SECURITIES; PROVIDED THAT, IN ANY SUCH CASE, THE NEW SECURITIES AND
CASH, IF ANY, ARE TO BE DELIVERED TO THE CUSTODIAN;
9) LOANS OF SECURITIES. FOR DELIVERY IN CONNECTION WITH ANY LOANS OF
SECURITIES MADE BY THE PORTFOLIO, MADE ONLY AGAINST RECEIPT OF ADEQUATE
COLLATERAL AS AGREED ON FROM TIME TO TIME BY THE CUSTODIAN AND THE PORTFOLIO.
LOANS MAY BE IN THE FORM OF CASH, OBLIGATIONS ISSUED BY THE UNITED STATES
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES, OR SUCH OTHER PROPERTY AS
MUTUALLY AGREED BY THE PARTIES, EXCEPT THAT IN CONNECTION WITH ANY LOANS FOR
WHICH COLLATERAL IS TO BE CREDITED TO THE CUSTODIAN'S ACCOUNT IN THE BOOK-ENTRY
SYSTEM AUTHORIZED BY THE U.S. DEPARTMENT OF THE TREASURY, THE CUSTODIAN WILL NOT
BE HELD LIABLE OR RESPONSIBLE FOR THE DELIVERY OF SECURITIES OWNED BY THE
PORTFOLIO PRIOR TO THE RECEIPT OF SUCH COLLATERAL, UNLESS THE CUSTODIAN FAILS TO
ACT IN ACCORDANCE WITH ITS DUTIES SET FORTH IN THIS AGREEMENT;
10) BORROWINGS. FOR DELIVERY AS SECURITY IN CONNECTION WITH ANY BORROWINGS
BY THE PORTFOLIO REQUIRING A PLEDGE OF ASSETS BY THE PORTFOLIO, MADE ONLY
AGAINST RECEIPT OF AMOUNTS BORROWED; EXCEPT, WHERE ADDITIONAL COLLATERAL IS
REQUIRED TO SECURE A BORROWING ALREADY MADE, FURTHER SECURITIES MAY BE RELEASED
FOR THAT PURPOSE, SUBJECT TO PROPER INSTRUCTIONS;
11) OPTIONS. FOR DELIVERY IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN AND A BROKER-DEALER REGISTERED
UNDER THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND A MEMBER OF
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD"), RELATING TO
COMPLIANCE WITH THE RULES OF THE OPTIONS CLEARING CORPORATION, ANY REGISTERED
NATIONAL SECURITIES EXCHANGE, ANY SIMILAR ORGANIZATION OR ORGANIZATIONS, OR THE
INVESTMENT COMPANY ACT OF 1940, REGARDING ESCROW OR OTHER ARRANGEMENTS IN
CONNECTION WITH TRANSACTIONS BY THE PORTFOLIO;
12) FUTURES. FOR DELIVERY IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN, AND A FUTURES COMMISSION MERCHANT
REGISTERED UNDER THE COMMODITY EXCHANGE ACT, RELATING TO COMPLIANCE WITH THE
RULES OF THE COMMODITY FUTURES TRADING COMMISSION AND/OR ANY CONTRACT MARKET,
ANY SIMILAR ORGANIZATION OR ORGANIZATIONS, OR THE INVESTMENT COMPANY ACT OF
1940, REGARDING ACCOUNT DEPOSITS IN CONNECTION WITH TRANSACTIONS BY THE
PORTFOLIO;
13) IN-KIND DISTRIBUTIONS. UPON RECEIPT OF INSTRUCTIONS FROM THE
PORTFOLIO'S TRANSFER AGENT, FOR DELIVERY TO THE TRANSFER AGENT OR TO THE HOLDERS
OF SHARES IN CONNECTION WITH DISTRIBUTIONS IN KIND, AS MAY BE DESCRIBED FROM
TIME TO TIME IN THE PORTFOLIO'S CURRENTLY EFFECTIVE PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION, IN SATISFACTION OF SHAREHOLDER REQUESTS FOR REPURCHASE
OR REDEMPTION;
14) MISCELLANEOUS. FOR ANY OTHER PROPER CORPORATE PURPOSE, MADE ONLY UPON
RECEIPT OF A CERTIFIED COPY OF A RESOLUTION OF THE BOARD OF TRUSTEES SIGNED BY
AN OFFICER OF THE FUND AND CERTIFIED BY THE SECRETARY OR AN ASSISTANT SECRETARY,
SPECIFYING THE SECURITIES TO BE DELIVERED, SETTING FORTH THE PURPOSE FOR WHICH
SUCH DELIVERY IS TO BE MADE, DECLARING SUCH PURPOSE TO BE A PROPER CORPORATE
PURPOSE, AND NAMING THE PERSON OR PERSONS TO WHOM DELIVERY OF THE SECURITIES
WILL BE MADE.
IN ALL CASES, PAYMENTS TO THE PORTFOLIO WILL BE MADE IN CASH, BY A
CERTIFIED CHECK OR A TREASURER'S OR CASHIER'S CHECK OF A BANK, BY EFFECTIVE BANK
WIRE TRANSFER THROUGH THE FEDERAL RESERVE WIRE SYSTEM OR, IF APPROPRIATE,
OUTSIDE OF THE FEDERAL RESERVE WIRE SYSTEM AND SUBSEQUENT CREDIT TO THE
PORTFOLIO'S CUSTODIAN ACCOUNT, OR, IN CASE OF DELIVERY THROUGH A STOCK CLEARING
COMPANY, BY BOOK-ENTRY CREDIT BY THE STOCK CLEARING COMPANY IN ACCORDANCE WITH
THE THEN CURRENT STREET CUSTOM, OR SUCH OTHER FORM OF PAYMENT AS MAY BE MUTUALLY
AGREED ON BY THE PARTIES, IN ALL SUCH CASES COLLECTED FUNDS TO BE PROMPTLY
CREDITED TO THE PORTFOLIO.
2.3 REGISTRATION OF SECURITIES. SECURITIES HELD BY THE CUSTODIAN (OTHER
THAN BEARER SECURITIES) WILL BE REGISTERED (A) IN THE NAME OF THE PORTFOLIO OR
(B) IN THE NAME OF ANY NOMINEE OF THE PORTFOLIO OR OF ANY NOMINEE OF THE
CUSTODIAN ASSIGNED EXCLUSIVELY TO THE PORTFOLIO, UNLESS THE PORTFOLIO HAS
AUTHORIZED IN WRITING THE APPOINTMENT OF A NOMINEE TO BE USED IN COMMON WITH
OTHER REGISTERED INVESTMENT COMPANIES HAVING THE SAME INVESTMENT ADVISER AS THE
PORTFOLIO, OR IN THE NAME OR NOMINEE NAME OF ANY AGENT APPOINTED PURSUANT TO
SECTION 2.9 OR IN THE NAME OR NOMINEE NAME OF ANY SUB-CUSTODIAN APPOINTED
PURSUANT TO SECTION 1. ALL SECURITIES ACCEPTED BY THE CUSTODIAN ON BEHALF OF THE
PORTFOLIO UNDER THE TERMS OF THIS AGREEMENT WILL BE IN "STREET NAME" OR OTHER
GOOD DELIVERY FORM.
2.4 BANK ACCOUNTS. THE CUSTODIAN WILL OPEN AND MAINTAIN A SEPARATE BANK
ACCOUNT OR ACCOUNTS IN THE NAME OF THE PORTFOLIO, SUBJECT ONLY TO DRAFT OR ORDER
BY THE CUSTODIAN ACTING PURSUANT TO THE TERMS OF THIS AGREEMENT. THE CUSTODIAN
WILL HOLD IN THE ACCOUNT(S), IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT, ALL CASH RECEIVED BY IT FROM OR FOR THE ACCOUNT OF THE PORTFOLIO,
OTHER THAN CASH MAINTAINED BY THE PORTFOLIO IN A BANK ACCOUNT ESTABLISHED AND
USED IN ACCORDANCE WITH RULE 17F-3 UNDER THE INVESTMENT COMPANY ACT OF 1940.
FUNDS HELD BY THE CUSTODIAN FOR THE PORTFOLIO MAY BE DEPOSITED FOR THE
PORTFOLIO'S CREDIT IN THE BANK AFFILIATE OF THE CUSTODIAN OR IN SUCH OTHER BANKS
OR TRUST COMPANIES AS THE CUSTODIAN MAY IN ITS DISCRETION DEEM NECESSARY OR
DESIRABLE; PROVIDED, HOWEVER, THAT EVERY SUCH BANK OR TRUST COMPANY MUST BE
QUALIFIED TO ACT AS A CUSTODIAN UNDER THE INVESTMENT COMPANY ACT OF 1940. FUNDS
WILL BE DEPOSITED BY THE CUSTODIAN IN ITS CAPACITY AS CUSTODIAN AND WILL BE
WITHDRAWABLE BY THE CUSTODIAN ONLY IN THAT CAPACITY.
2.5 SALE OF SHARES AND AVAILABILITY OF FEDERAL FUNDS. UPON MUTUAL AGREEMENT
BETWEEN THE PORTFOLIO AND THE CUSTODIAN, THE CUSTODIAN WILL, UPON THE RECEIPT OF
PROPER INSTRUCTIONS, MAKE FEDERAL FUNDS AVAILABLE TO THE PORTFOLIO AS OF
SPECIFIED TIMES AGREED UPON FROM TIME TO TIME BY THE PORTFOLIO AND THE CUSTODIAN
IN THE AMOUNT OF CHECKS RECEIVED IN PAYMENT FOR SHARES OF THE PORTFOLIO WHICH
ARE DEPOSITED INTO THE PORTFOLIO'S ACCOUNT.
2.6 COLLECTION OF INCOME, DIVIDENDS. THE CUSTODIAN WILL COLLECT ON A TIMELY
BASIS ALL INCOME AND OTHER PAYMENTS WITH RESPECT TO REGISTERED SECURITIES HELD
TO WHICH THE PORTFOLIO IS ENTITLED EITHER BY LAW OR PURSUANT TO CUSTOM IN THE
SECURITIES BUSINESS. THE CUSTODIAN WILL ALSO COLLECT ON A TIMELY BASIS ALL
INCOME AND OTHER PAYMENTS WITH RESPECT TO BEARER SECURITIES IF, ON THE DATE OF
PAYMENT BY THE ISSUER, THE SECURITIES ARE HELD BY THE CUSTODIAN OR ITS AGENT.
THE CUSTODIAN WILL CREDIT ALL SUCH INCOME OR OTHER PAYMENTS, AS COLLECTED, TO
THE PORTFOLIO'S CUSTODIAN ACCOUNT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE CUSTODIAN WILL DETACH AND PRESENT FOR PAYMENT ALL COUPONS AND
OTHER INCOME ITEMS REQUIRING PRESENTATION AS AND WHEN THEY BECOME DUE AND WILL
COLLECT INTEREST WHEN DUE ON SECURITIES HELD PURSUANT TO THIS AGREEMENT. THE
CUSTODIAN WILL ALSO RECEIVE AND COLLECT ALL STOCK DIVIDENDS, RIGHTS AND OTHER
ITEMS OF LIKE NATURE AS AND WHEN THEY BECOME DUE OR PAYABLE. INCOME DUE THE
PORTFOLIO ON SECURITIES LOANED PURSUANT TO THE PROVISIONS OF SECTION 2.2(10)
WILL BE THE RESPONSIBILITY OF THE PORTFOLIO; THE CUSTODIAN WILL HAVE NO DUTY OR
RESPONSIBILITY IN CONNECTION WITH LOANED SECURITIES OTHER THAN TO PROVIDE THE
PORTFOLIO WITH SUCH INFORMATION OR DATA AS MAY BE NECESSARY TO ASSIST THE
PORTFOLIO IN ARRANGING FOR THE TIMELY DELIVERY TO THE CUSTODIAN OF THE INCOME TO
WHICH THE PORTFOLIO IS PROPERLY ENTITLED.
2.7 PAYMENT OF PORTFOLIO MONIES. UPON RECEIPT OF PROPER INSTRUCTIONS, WHICH
MAY BE CONTINUING INSTRUCTIONS WHEN DEEMED APPROPRIATE BY MUTUAL AGREEMENT OF
THE PARTIES, THE CUSTODIAN WILL PAY OUT MONIES OF THE PORTFOLIO IN THE FOLLOWING
CASES ONLY:
L) PURCHASES. UPON THE PURCHASE OF DOMESTIC SECURITIES, OPTIONS, FUTURES
CONTRACTS OR OPTIONS ON FUTURES CONTRACTS FOR THE ACCOUNT OF THE PORTFOLIO BUT
ONLY (A) AGAINST THE DELIVERY OF SUCH SECURITIES, OR EVIDENCE OF TITLE TO SUCH
OPTIONS, FUTURES CONTRACTS OR OPTIONS ON FUTURES CONTRACTS, TO THE CUSTODIAN (OR
ANY BANK, BANKING FIRM OR TRUST COMPANY DOING BUSINESS IN THE UNITED STATES OR
ABROAD WHICH IS QUALIFIED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
TO ACT AS A CUSTODIAN AND HAS BEEN DESIGNATED BY THE CUSTODIAN AS ITS AGENT FOR
THIS PURPOSE IN ACCORDANCE WITH SECTION 2.9 OF THIS AGREEMENT) REGISTERED IN THE
NAME OF THE PORTFOLIO OR IN THE NAME OF A NOMINEE OF THE PORTFOLIO OR OF THE
CUSTODIAN REFERRED TO IN SECTION 2.3 OF THIS AGREEMENT, OR IN OTHER PROPER FORM
FOR TRANSFER; (B) IN THE CASE OF A PURCHASE EFFECTED THROUGH A SECURITIES
SYSTEM, IN ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTION 2.10 OF THIS
AGREEMENT; (C) IN THE CASE OF A PURCHASE INVOLVING THE DIRECT PAPER SYSTEM, IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTION 2.11; OR (D) IN THE CASE OF
REPURCHASE AGREEMENTS ENTERED INTO BETWEEN THE PORTFOLIO AND THE CUSTODIAN, OR
ANOTHER BANK, OR A BROKER-DEALER WHICH IS A MEMBER OF NASD, (I) AGAINST DELIVERY
OF THE SECURITIES EITHER IN CERTIFICATE FORM OR THROUGH AN ENTRY CREDITING THE
CUSTODIAN'S ACCOUNT AT THE FEDERAL RESERVE BANK WITH SUCH SECURITIES OR (II)
AGAINST DELIVERY OF THE RECEIPT EVIDENCING PURCHASE BY THE PORTFOLIO OF
SECURITIES OWNED BY THE CUSTODIAN ALONG WITH WRITTEN EVIDENCE OF THE AGREEMENT
BY THE CUSTODIAN TO REPURCHASE SUCH SECURITIES FROM THE PORTFOLIO. ALL COUPON
BONDS ACCEPTED BY THE CUSTODIAN MUST HAVE THE COUPONS ATTACHED OR MUST BE
ACCOMPANIED BY A CHECK PAYABLE ON COUPON PAYABLE DATE FOR THE INTEREST DUE ON
THAT DATE.
2) EXCHANGES. IN CONNECTION WITH CONVERSION, EXCHANGE OR SURRENDER OF
SECURITIES OWNED BY THE PORTFOLIO AS SET FORTH IN SECTION 2.2 HEREOF;
3) REDEMPTIONS. FOR THE REDEMPTION OR REPURCHASE OF SHARES ISSUED BY THE
PORTFOLIO AS SET FORTH IN THIS AGREEMENT;
4) EXPENSE AND LIABILITY. FOR THE PAYMENT OF ANY EXPENSE OR LIABILITY
INCURRED BY THE PORTFOLIO, INCLUDING BUT NOT LIMITED TO THE FOLLOWING PAYMENTS
FOR THE ACCOUNT OF THE PORTFOLIO: INTEREST, TAXES, MANAGEMENT, ACCOUNTING,
TRANSFER AGENT AND LEGAL FEES, AND OPERATING EXPENSES OF THE PORTFOLIO WHETHER
OR NOT SUCH EXPENSES ARE TO BE IN WHOLE OR PART CAPITALIZED OR TREATED AS
DEFERRED EXPENSES;
5) DIVIDENDS. FOR THE PAYMENT OF ANY DIVIDENDS OR OTHER DISTRIBUTIONS TO
SHAREHOLDERS DECLARED BY THE PORTFOLIO;
6) SHORT SALE DIVIDEND. FOR PAYMENT OF THE AMOUNT OF DIVIDENDS RECEIVED IN
RESPECT OF SECURITIES SOLD SHORT;
7) LOAN. FOR REPAYMENT OF A LOAN UPON REDELIVERY OF PLEDGED SECURITIES AND
UPON SURRENDER OF THE NOTE(S), IF ANY, EVIDENCING THE LOAN;
8) MISCELLANEOUS. FOR ANY OTHER PROPER PURPOSE UPON RECEIPT OF A CERTIFIED
COPY OF A RESOLUTION OF THE BOARD OF TRUSTEES SIGNED BY AN OFFICER OF THE FUND
AND CERTIFIED BY ITS SECRETARY OR AN ASSISTANT SECRETARY, SPECIFYING THE AMOUNT
OF SUCH PAYMENT, SETTING FORTH THE PURPOSE FOR WHICH SUCH PAYMENT IS TO BE MADE,
DECLARING SUCH PURPOSE TO BE A PROPER PURPOSE, AND NAMING THE PERSON OR PERSONS
TO WHOM SUCH PAYMENT IS TO BE MADE.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
WHERE PAYMENT FOR PORTFOLIO SECURITIES IS MADE BY THE CUSTODIAN IN ADVANCE OF
RECEIPT OF THE SECURITIES PURCHASED IN THE ABSENCE OF SPECIFIC WRITTEN
INSTRUCTIONS FROM THE PORTFOLIO TO SO PAY IN ADVANCE, THE CUSTODIAN WILL BE
ABSOLUTELY LIABLE TO THE PORTFOLIO FOR SUCH SECURITIES TO THE SAME EXTENT AS IF
THE SECURITIES HAD BEEN RECEIVED BY THE CUSTODIAN.
2.9 APPOINTMENT OF AGENTS. AT ITS DISCRETION, THE CUSTODIAN MAY AT ANY TIME
APPOINT (AND MAY AT ANY TIME REMOVE) ANY OTHER BANK OR TRUST COMPANY QUALIFIED
TO ACT AS A CUSTODIAN UNDER THE INVESTMENT COMPANY ACT OF 1940 AS ITS AGENT TO
CARRY OUT SUCH OF THE PROVISIONS OF THIS SECTION 2 AS THE CUSTODIAN MAY FROM
TIME TO TIME DIRECT; PROVIDED, HOWEVER, THAT THE APPOINTMENT OF ANY AGENT WILL
NOT RELIEVE THE CUSTODIAN OF ITS RESPONSIBILITIES OR LIABILITIES UNDER THIS
AGREEMENT.
2.10 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. THE CUSTODIAN MAY DEPOSIT
AND/OR MAINTAIN PORTFOLIO SECURITIES IN A SECURITIES SYSTEM IN ACCORDANCE WITH
APPLICABLE FEDERAL RESERVE BOARD AND SECURITIES AND EXCHANGE COMMISSION RULES
AND REGULATIONS, IF ANY, AND SUBJECT TO THE FOLLOWING PROVISIONS:
L) ACCOUNT OF CUSTODIAN. THE CUSTODIAN MAY KEEP PORTFOLIO SECURITIES IN A
SECURITIES SYSTEM PROVIDED THAT SUCH SECURITIES ARE REPRESENTED IN AN ACCOUNT OF
THE CUSTODIAN IN THE SECURITIES SYSTEM THAT DOES NOT INCLUDE ANY ASSETS OF THE
CUSTODIAN OTHER THAN ASSETS HELD AS A FIDUCIARY, CUSTODIAN OR OTHERWISE FOR
CUSTOMERS;
2) RECORDS. THE CUSTODIAN'S REOCRDS, WITH RESPECT TO PORTFOLIO SECURITIES
MAINTAINED IN A SECURITIES SYSTEM, MUST IDENTIFY BY BOOK ENTRY THOSE SECURITIES
BELONGING TO THE PORTFOLIO;
3) PAYMENT/DELIVERY.
(A) SUBJECT TO SECTION 2.7 (PAYMENT OF PORTFOLIO MONIES), THE CUSTODIAN WILL
PAY FOR PORTFOLIO SECURITIES UPON (I) RECEIPT OF ADVICE FROM THE SECURITIES
SYSTEM THAT SUCH SECURITIES HAVE BEEN TRANSFERRED TO THE ACCOUNT, AND (II) THE
MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT SUCH PAYMENT AND
TRANSFER FOR THE ACCOUNT OF THE PORTFOLIO.
(B) SUBJECT TO SECTION 2.2 (DELIVERY OF SECURITIES), THE CUSTODIAN WILL
TRANSFER PORTFOLIO SECURITIES UPON (I) RECEIPT OF ADVICE FROM THE SECURITIES
SYSTEM THAT PAYMENT FOR SUCH SECURITIES HAS BEEN TRANSFERRED TO THE CUSTODIAN'S
ACCOUNT, AND (II) THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO
REFLECT SUCH TRANSFER AND PAYMENT FOR THE ACCOUNT OF THE PORTFOLIO.
(C) COPIES OF ALL ADVICES FROM THE SECURITIES SYSTEM OF TRANSFERS OF
PORTFOLIO SECURITIES WILL IDENTIFY THE PORTFOLIO, BE MAINTAINED FOR THE
PORTFOLIO BY THE CUSTODIAN AND BE PROVIDED TO THE PORTFOLIO AT ITS REQUEST. THE
CUSTODIAN WILL FURNISH DAILY TRANSACTION SHEETS REFLECTING EACH DAY'S
TRANSACTIONS IN THE SECURITIES SYSTEM FOR THE ACCOUNT OF THE PORTFOLIO;
4) REPORTS. THE CUSTODIAN WILL PROVIDE THE PORTFOLIO WITH ANY REPORT
OBTAINED BY THE CUSTODIAN ON THE SECURITIES SYSTEM'S ACCOUNTING SYSTEM, INTERNAL
ACCOUNTING CONTROL AND PROCEDURES FOR SAFEGUARDING SECURITIES DEPOSITED IN THE
SECURITIES SYSTEM, AND FURTHER AGREES TO PROVIDE THE PORTFOLIO WITH COPIES OF
ANY DOCUMENTATION IT HAS RELATING TO ITS ARRANGEMENTS WITH THE SECURITIES
SYSTEMS AS SET FORTH IN THIS AGREEMENT OR AS OTHERWISE REQUIRED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY AGENCY OR
ORGANIZATION;
5) INDEMNIFICATION. ANYTHING TO THE CONTRARY IN THIS AGREEMENT
NOTWITHSTANDING, THE CUSTODIAN WILL BE LIABLE TO THE PORTFOLIO FOR ANY LOSS OR
EXPENSE, INCLUDING REASONABLE ATTORNEYS FEES, OR DAMAGE TO THE PORTFOLIO
RESULTING FROM USE OF THE SECURITIES SYSTEM BY REASON OF ANY FAILURE BY THE
CUSTODIAN, ITS AGENTS, OR ANY EMPLOYEE OR AGENT OF THE CUSTODIAN OR AGENT, OR
FROM FAILURE OF THE CUSTODIAN OR ANY SUCH AGENT TO ENFORCE EFFECTIVELY SUCH
RIGHTS AS IT MAY HAVE AGAINST THE SECURITIES SYSTEM; AT THE ELECTION OF THE
PORTFOLIO, IT WILL BE ENTITLED TO BE SUBROGATED TO THE RIGHTS OF THE CUSTODIAN
WITH RESPECT TO ANY CLAIM AGAINST THE SECURITIES SYSTEM OR ANY OTHER PERSON
WHICH THE CUSTODIAN MAY HAVE AS ACONSEQUENCE OF ANY SUCH LOSS, EXPENSE OR DAMAGE
IF AND TO THE EXTENT THAT THE PORTFOLIO HAS NOT BEEN MADE WHOLE FOR ANY SUCH
LOSS, EXPENSE OR DAMAGE.
2.11 PORTFOLIO ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. THE
CUSTODIAN MAY DEPOSIT AND/OR MAINTAIN SECURITIES OWNED BY THE PORTFOLIO IN THE
DIRECT PAPER SYSTEM OF THE CUSTODIAN SUBJECT TO THE FOLLOWING PROVISIONS:
L) NO TRANSACTION RELATING TO SECURITIES IN THE DIRECT PAPER SYSTEM WILL BE
EFFECTED IN THE ABSENCE OF PROPER INSTRUCTIONS;
2) THE CUSTODIAN MAY KEEP SECURITIES OF THE PORTFOLIO IN THE DIRECT PAPER
SYSTEM ONLY IF SUCH SECURITIES ARE REPRESENTED IN AN ACCOUNT OF THE CUSTODIAN IN
THE DIRECT PAPER SYSTEM THAT DOES NOT INCLUDE ANY ASSETS OF THE CUSTODIAN OTHER
THAN ASSETS HELD AS A FIDUCIARY, CUSTODIAN OR OTHERWISE FOR CUSTOMERS;
3) THE RECORDS OF THE CUSTODIAN WITH RESPECT TO SECURITIES OF THE PORTFOLIO
THAT ARE MAINTAINED IN THE DIRECT PAPER SYSTEM WILL IDENTIFY BY BOOK ENTRY THOSE
SECURITIES BELONGING TO THE PORTFOLIO;
4) THE CUSTODIAN WILL PAY FOR SECURITIES PURCHASED FOR THE ACCOUNT OF THE
PORTFOLIO UPON THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT
SUCH PAYMENT AND TRANSFER OF SECURITIES TO THE ACCOUNT OF THE PORTFOLIO. THE
CUSTODIAN WILL TRANSFER SECURITIES SOLD FOR THE ACCOUNT OF THE PORTFOLIO UPON
THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT SUCH TRANSFER
AND RECEIPT OF PAYMENT FOR THE ACCOUNT OF THE PORTFOLIO;
5) THE CUSTODIAN WILL FURNISH THE PORTFOLIO CONFIRMATION OF EACH TRANSFER TO
OR FROM THE ACCOUNT OF THE PORTFOLIO, IN THE FORM OF A WRITTEN ADVICE OR NOTICE,
OF DIRECT PAPER ON THE NEXT BUSINESS DAY FOLLOWING SUCH TRANSFER AND WILL
FURNISH TO THE PORTFOLIO COPIES OF DAILY TRANSACTION SHEETS REFLECTING EACH
DAY'S TRANSACTION IN THE SECURITIES SYSTEM FOR THE ACCOUNT OF THE PORTFOLIO;
6) THE CUSTODIAN WILL PROVIDE THE PORTFOLIO WITH ANY REPORT ON ITS SYSTEM OF
INTERNAL ACCOUNTING CONTROL AS THE PORTFOLIO MAY REASONABLY REQUEST FROM TIME TO
TIME;
2.12 SEGREGATED ACCOUNT. THE CUSTODIAN WILL, UPON RECEIPT OF PROPER
INSTRUCTIONS, ESTABLISH AND MAINTAIN A SEGREGATED ACCOUNT OR ACCOUNTS FOR AND ON
BEHALF OF THE PORTFOLIO, INTO WHICH MAY BE TRANSFERRED CASH AND/OR SECURITIES,
INCLUDING SECURITIES MAINTAINED IN AN ACCOUNT BY THE CUSTODIAN PURSUANT TO
SECTION 2.10 OF THIS AGREEMENT; (I) IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN AND A BROKER-DEALER REGISTERED
UNDER THE EXCHANGE ACT AND A MEMBER OF THE NASD (OR ANY FUTURES COMMISSION
MERCHANT REGISTERED UNDER THE COMMODITY EXCHANGE ACT), RELATING TO COMPLIANCE
WITH THE RULES OF THE OPTIONS CLEARING CORPORATION AND OF ANY REGISTERED
NATIONAL SECURITIES EXCHANGE (OR THE COMMODITY FUTURES TRADING COMMISSION OR ANY
REGISTERED CONTRACT MARKET), OR OF ANY SIMILAR ORGANIZATION OR ORGANIZATIONS,
REGARDING ESCROW OR OTHER ARRANGEMENTS IN CONNECTION WITH TRANSACTIONS BY THE
PORTFOLIO, (II) FOR PURPOSES OF SEGREGATING CASH OR GOVERNMENT SECURITIES IN
CONNECTION WITH OPTIONS PURCHASED, SOLD OR WRITTEN BY THE PORTFOLIO OR COMMODITY
FUTURES CONTRACTS OR OPTIONS THEREON PURCHASED OR SOLD BY THE PORTFOLIO, (III)
FOR THE PURPOSES OF COMPLIANCE BY THE PORTFOLIO WITH THE PROCEDURES REQUIRED BY
INVESTMENT COMPANY ACT RELEASE NO. 10666, OR ANY SUBSEQUENT RELEASE, RULE OR
POLICY, OF THE SECURITIES AND EXCHANGE COMMISSION RELATING TO THE MAINTENANCE OF
SEGREGATED ACCOUNTS BY REGISTERED INVESTMENT COMPANIES AND (IV) FOR OTHER PROPER
CORPORATE PURPOSES UPON RECEIPT OF A CERTIFIED COPY OF A RESOLUTION OF THE BOARD
OF TRUSTEES OR OF THE EXECUTIVE COMMITTEE SIGNED BY AN OFFICER OF THE PORTFOLIO
AND CERTIFIED BY THE SECRETARY OR AN ASSISTANT SECRETARY, SETTING FORTH THE
PURPOSE OR PURPOSES OF SUCH SEGREGATED ACCOUNT AND DECLARING SUCH PURPOSES TO BE
PROPER CORPORATE PURPOSES.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. THE CUSTODIAN WILL EXECUTE
OWNERSHIP AND OTHER CERTIFICATES AND AFFIDAVITS FOR ALL FEDERAL AND STATE TAX
PURPOSES IN CONNECTION WITH RECEIPT OF INCOME OR OTHER PAYMENTS FOR PORTFOLIO
SECURITIES AND IN CONNECTION WITH TRANSFERS OF SUCH SECURITIES.
2.14 PROXIES. IF THE SECURITIES ARE REGISTERED OTHER THAN IN THE NAME OF THE
PORTFOLIO OR A NOMINEE OF THE PORTFOLIO, THE CUSTODIAN WILL CAUSE ALL PROXIES
PROMPTLY TO BE EXECUTED BY THE REGISTERED HOLDER OF SUCH SECURITIES, WITHOUT
INDICATION OF THE MANNER IN WHICH SUCH PROXIES ARE TO BE VOTED, AND WILL
PROMPTLY DELIVER TO THE PORTFOLIO ALL PROXY SOLICITING MATERIALS AND ALL NOTICES
RELATING TO SUCH SECURITIES.
2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. THE CUSTODIAN WILL
TRANSMIT PROMPTLY TO THE PORTFOLIO ALL WRITTEN INFORMATION (INCLUDING, WITHOUT
LIMITATION, PENDENCY OF CALLS AND MATURITIES OF DOMESTIC SECURITIES AND
EXPIRATIONS OF RIGHTS IN CONNECTION THEREWITH AND NOTICES OF EXERCISE OF CALL
AND PUT OPTIONS WRITTEN BY THE PORTFOLIO AND THE MATURITY OF FUTURES CONTRACTS
PURCHASED OR SOLD BY THE PORTFOLIO) RECEIVED BY THE CUSTODIAN FROM ISSUERS OF
THE PORTFOLIO SECURITIES BY THE CUSTODIAN, AN AGENT APPOINTED UNDER SECTION 2.9,
OR SUBCUSTODIAN APPOINTED UNDER SECTION 1. WITH RESPECT TO TENDER OR EXCHANGE
OFFERS, THE CUSTODIAN WILL TRANSMIT PROMPTLY TO THE PORTFOLIO ALL WRITTEN
INFORMATION RECEIVED BY THE CUSTODIAN, AN AGENT APPOINTED UNDER SECTION 2.9, OR
SUBCUSTODIAN APPOINTED UNDER SECTION 1 FROM ISSUERS OF THE SECURITIES WHOSE
TENDER OR EXCHANGE IS SOUGHT AND FROM THE PARTY (OR ITS AGENTS) MAKING THE
TENDER OR EXCHANGE OFFER. IF THE PORTFOLIO DESIRES TO TAKE ACTION WITH RESPECT
TO ANY TENDER OFFER, EXCHANGE OFFER OR ANY OTHER SIMILAR TRANSACTION, THE
PORTFOLIO WILL NOTIFY THE CUSTODIAN OF SUCH DESIRED ACTION AT LEAST 3 BUSINESS
DAYS PRIOR TO THE TIME SUCH ACTION MUST BE TAKEN UNDER THE TERMS OF THE TENDER,
EXCHANGE OFFER, OR OTHER SIMILAR TRANSACTION, AND IT WILL BE THE RESPONSIBILITY
OF THE CUSTODIAN TO TIMELY TRANSMIT TO THE APPROPRIATE PERSON(S) THE PORTFOLIO'S
NOTICE. WHERE THE PORTFOLIO DOES NOT NOTIFY THE CUSTODIAN OF ITS DESIRED ACTION
WITHIN THE 3 BUSINESS DAY PERIOD, THE CUSTODIAN WILL USE ITS BEST EFFORTS TO
TIMELY TRANSMIT THE FUND'S NOTICE TO THE APPROPRIATE PERSON.
2.16 REPORTS TO PORTFOLIO BY INDEPENDENT PUBLIC ACCOUNTANTS. THE CUSTODIAN WILL
PROVIDE THE PORTFOLIO, AT SUCH TIMES AS THE PORTFOLIO MAY REASONABLY REQUIRE,
WITH REPORTS BY INDEPENDENT PUBLIC ACCOUNTANTS ON THE ACCOUNTING SYSTEM,
INTERNAL ACCOUNTING CONTROL AND PROCEDURES FOR SAFEGUARDING SECURITIES, FUTURES
CONTRACTS AND OPTIONS ON FUTURES CONTRACTS, INCLUDING SECURITIES DEPOSITED
AND/OR MAINTAINED IN A SECURITIES SYSTEM, RELATING TO THE SERVICES PROVIDED BY
THE CUSTODIAN UNDER THIS CONTRACT; SUCH REPORTS WILL BE OF SUFFICIENT SCOPE AND
IN SUFFICIENT DETAIL, AS MAY REASONABLY BE REQUIRED BY THE PORTFOLIO TO PROVIDE
REASONABLE ASSURANCE THAT ANY MATERIAL INADEQUACIES EXISTING OR ARISING SINCE
THE PRIOR EXAMINATION WOULD BE DISCLOSED BY SUCH EXAMINATION. THE REPORTS MUST
DESCRIBE ANY MATERIAL INADEQUACIES DISCLOSED AND, IF THERE ARE NO SUCH
INADEQUACIES, THE REPORTS WILL SO STATE.
3. PAYMENTS FOR REDEMPTIONS OF SHARES OF THE PORTFOLIO
FROM SUCH FUNDS AS MAY BE AVAILABLE FOR THE PURPOSE BUT SUBJECT TO THE
LIMITATIONS OF THE GOVERNING DOCUMENTS OF THE PORTFOLIO AND ANY APPLICABLE VOTES
OF THE BOARD OF TRUSTEES OF THE FUND PURSUANT THERETO, THE CUSTODIAN WILL, UPON
RECEIPT OF INSTRUCTIONS FROM THE TRANSFER AGENT, MAKE FUNDS AVAILABLE FOR
PAYMENT TO HOLDERS OF SHARES WHO HAVE DELIVERED TO THE TRANSFER AGENT A REQUEST
FOR REDEMPTION OF THEIR SHARES. IN CONNECTION WITH THE REDEMPTION OF SHARES OF
THE PORTFOLIO, THE CUSTODIAN IS AUTHORIZED UPON RECEIPT OF INSTRUCTIONS FROM THE
TRANSFER AGENT TO WIRE FUNDS TO OR THROUGH A COMMERCIAL BANK DESIGNATED BY THE
REDEEMING SHAREHOLDER.
THE CUSTODIAN WILL RECEIVE PAYMENTS FOR PORTFOLIO SHARES ISSUED OR SOLDFROM
THE DISTRIBUTOR FOR THE PORTFOLIO'S SHARES OR FROM THE TRANSFER AGENT OF THE
PORTFOLIO AND DEPOSIT AS RECEIVED INTO THE FUND'S ACCOUNT SUCH PAYMENTS AS ARE
RECEIVED FOR SHARES OF THE PORTFOLIO ISSUED OR SOLD FROM TIME TO TIME BY THE
PORTFOLIO. THE CUSTODIAN WILL PROVIDE TIMELY NOTIFICATION TO THE PORTFOLIO AND
THE TRANSFER AGENT OF ANY RECEIPT BY IT OF PAYMENTS FOR SHARES OF THE PORTFOLIO.
4. PROPER INSTRUCTIONS
"PROPER INSTRUCTIONS" MEANS A WRITING SIGNED OR INITIALLED BY ONE OR MORE
PERSONS AUTHORIZED BY THE BOARD OF TRUSTEES. EACH SUCH WRITING MUST SET FORTH
THE SPECIFIC TRANSACTION OR TYPE OF TRANSACTION INVOLVED, INCLUDING A STATEMENT
OF THE PURPOSE FOR WHICH SUCH ACTION IS REQUESTED, AND MAY BE A BLANKET
INSTRUCTION AUTHORIZING SPECIFIC TRANSACTIONS OF A ROUTINE NATURE OR OCCURING
REPEATEDLY. ORAL INSTRUCTIONS WILL BE CONSIDERED PROPER INSTRUCTIONS IF THE
CUSTODIAN REASONABLY BELIEVES THEM TO HAVE BEEN GIVEN BY A PERSON AUTHORIZED TO
GIVE SUCH INSTRUCTIONS WITH RESPECT TO THE TRANSACTION INVOLVED. THE PORTFOLIO
WILL CAUSE ALL ORAL INSTRUCTIONS TO BE CONFIRMED IN WRITING. UPON RECEIPT OF A
CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY AS TO THE AUTHORIZATION
BY THE BOARD OF TRUSTEES OF THE FUND, ACCOMPANIED BY A DETAILED DESCRIPTION OF
PROCEDURES APPROVED BY THE BOARD OF TRUSTEES, PROPER INSTRUCTIONS MAY INCLUDE
COMMUNICATIONS EFFECTED DIRECTLY BETWEEN ELECTRO-MECHANICAL OR ELECTRONIC
DEVICES PROVIDED THAT THE BOARD OF TRUSTEES AND THE CUSTODIAN ARE SATISFIED THAT
SUCH PROCEDURES AFFORD ADEQUATE SAFEGUARDS FOR THE PORTFOLIO'S ASSETS.
5. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
IN ITS DISCRETION THE CUSTODIAN MAY, WITHOUT EXPRESS AUTHORITY FROM THE
PORTFOLIO:
L) MAKE PAYMENTS TO ITSELF OR OTHERS FOR MINOR EXPENSES OF HANDLING
SECURITIES OR OTHER SIMILAR ITEMS RELATING TO ITS DUTIES UNDER THIS AGREEMENT,
PROVIDED THAT ALL SUCH PAYMENTS WILL BE ACCOUNTED FOR TO THE PORTFOLIO;
2) SURRENDER SECURITIES IN TEMPORARY FORM FOR SECURITIES IN DEFINITIVE FORM;
3) ENDORSE FOR COLLECTION, IN THE NAME OF THE PORTFOLIO, CHECKS, DRAFTS AND
OTHER NEGOTIABLE INSTRUMENTS ON THE SAME DAY AS RECEIVED; AND
4) IN GENERAL, ATTEND TO ALL NONDISCRETIONARY DETAILS IN CONNECTION WITH THE
SALE, EXCHANGE, SUBSTITUTION, PURCHASE, TRANSFER AND OTHER DEALINGS WITH THE
SECURITIES AND PROPERTY OF THE PORTFOLIO EXCEPT AS OTHERWISE DIRECTED BY THE
BOARD OF TRUSTEES OF THE FUND.
6. EVIDENCE OF AUTHORITY, RELIANCE ON DOCUMENTS
THE CUSTODIAN WILL NOT BE LIABLE FOR ACTIONS TAKEN PURSUANT TO
INSTRUCTIONS, NOTICE, REQUEST, CONSENT, CERTIFICATE OR OTHER INSTRUMENT OR PAPER
REASONABLY AND IN GOOD FAITH BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN
PROPERLY EXECUTED BY OR ON BEHALF OF THE PORTFOLIO IN ACCORDANCE WITH PROPER
INSTRUCTIONS AS DEFINED IN SECTION 4 OF THIS AGREEMENT. THE CUSTODIAN MAY
RECEIVE AND ACCEPT A CERTIFIED COPY OF A VOTE OF THE BOARD OF TRUSTEES OF THE
FUND AS CONCLUSIVE EVIDENCE (A) OF THE AUTHORITY OF ANY PERSON TO ACT IN
ACCORDANCE WITH SUCH VOTE OR (B) OF ANY DETERMINATION OR OF ANY ACTION BY THE
BOARD OF TRUSTEES PURSUANT TO THE GOVERNING DOCUMENTS OF THE FUND AS DESCRIBED
IN SUCH VOTE, AND SUCH VOTE MAY BE CONSIDERED AS IN FULL FORCE AND EFFECT UNTIL
RECEIPT BY THE CUSTODIAN OF WRITTEN NOTICE TO THE CONTRARY. SO LONG AS AND TO
THE EXTENT THAT IT IS IN THE EXERCISE OF THE STANDARD OF CARE SET FORTH IN
SECTION 11 OF THIS AGREEMENT, THE CUSTODIAN WILL NOT BE RESPONSIBLE FOR THE
TITLE, VALIDITY OR GENUINENESS OF ANY PROPERTY OR EVIDENCE OF TIT!E RECEIVED BY
IT OR DELIVERED BY IT PURSUANT TO THIS AGREEMENT AND WILL BE HELD HARMLESS IN
ACTING UPON ANY NOTICE, REQUEST, CONSENT, CERTIFICATE OR OTHER INSTRUMENT
REASONABLY BELIEVED BY IT TO BE GENUINE AND TO BE SIGNED BY THE PROPER PARTY OR
PARTIES.
7. RECORDS, INVENTORY
THE CUSTODIAN WILL CREATE AND MAINTAIN ALL RECORDS RELATING TO ITS
ACTIVITIES AND OBLIGATIONS UNDER THIS AGREEMENT IN SUCH MANNER AS WILL MEET THE
OBLIGATIONS OF THE PORTFOLIO UNDER THE INVESTMENT COMPANY ACT OF 1940, WITH
PARTICULAR ATTENTION TO SECTION 31 AND RULES 31A-1 AND 31A-2 THEREUNDER,
APPLICABLE FEDERAL AND STATE TAX LAWS AND ANY OTHER LAW OR ADMINISTRATIVE RULES
OR PROCEDURES THAT MAY BE APPLICABLE TO THE PORTFOLIO. ALL SUCH RECORDS WILL BE
THE PROPERTY OF THE PORTFOLIO AND WILL AT ALL TIMES DURING THE REGULAR BUSINESS
HOURS OF THE CUSTODIAN BE OPEN FOR INSPECTION AND AUDIT BY DULY AUTHORIZED
OFFICERS, EMPLOYEES OR AGENTS OF THE PORTFOLIO AND EMPLOYEES AND AGENTS OF THE
SECURITIES AND EXCHANGE COMMISSION, AND, IN THE EVENT OF TERMINATION OF THIS
AGREEMENT, WILL BE DELIVERED IN ACCORDANCE WITH SECTION 12 OF THIS AGREEMENT.
THE CUSTODIAN WILL, AT THE PORTFOLIO'S REQUEST, SUPPLY THE PORTFOLIO WITH A
TABULATION OF SECURITIES OWNED BY THE PORTFOLIO AND HELD BY THE CUSTODIAN AND
WILL, WHEN REQUESTED TO DO SO BY THE PORTFOLIO AND FOR SUCH COMPENSATION AS WILL
BE AGREED UPON BETWEEN THE PORTFOLIO AND THE CUSTODIAN, INCLUDE CERTIFICATE
NUMBERS IN SUCH TABULATIONS. THE CUSTODIAN WILL CONDUCT A PERIODIC INVENTORY OF
ALL SECURITIES AND OTHER PROPERTY SUBJECT TO THIS AGREEMENT AND PROVIDE TO THE
PORTFOLIO A PERIODIC RECONCILIATION OF THE VAULTED POSITION OF THE PORTFOLIO TO
THE APPRAISED POSITION OF THE PORTFOLIO. THE CUSTODIAN WILL PROMPTLY REPORT TO
THE PORTFOLIO THE RESULTS OF THE RECONCILIATION, INDICATING ANY SHORTAGES OR
DISCREPANCIES UNCOVERED THEREBY, AND TAKE APPROPRIATE ACTION TO REMEDY ANY SUCH
SHORTAGES OR DISCREPANCIES.
8. OPINION OF THE PORTFOLIO'S INDEPENDENT ACCOUNTANT
THE CUSTODIAN WILL COOPERATE WITH THE PORTFOLIO'S INDEPENDENT PUBLIC
ACCOUNTANTS IN CONNECTION WITH THE ANNUAL AND OTHER AUDITS OF THE BOOKS AND
RECORDS OF THE PORTFOLIO AND TAKE ALL REASONABLE ACTION, AS THE PORTFOLIO MAY
FROM TIME TO TIME REQUEST, TO PROVIDE THE NECESSARY INFORMATION TO SUCH
ACCOUNTANTS FOR THE EXPRESSION OF THEIR OPINION WITHOUT ANY QUALIFICATION AS TO
THE SCOPE OF THEIR EXAMINATION, INCLUDING BUT NOT LIMITED TO, ANY OPINION IN
CONNECTION WITH THE PREPARATION OF THE PORTFOLIO'S FORM N-LA, AND FORM N-SAR OR
OTHER REPORTS TO THE SECURITIES AND EXCHANGE COMMISSION OR STATE REGULATORY
AGENCY AND WITH RESPECT TO ANY OTHER LEGAL REQUIREMENTS.
9. COMPENSATION OF CUSTODIAN
THE CUSTODIAN WILL BE ENTITLED TO REASONABLE COMPENSATION FOR ITS SERVICES
AND EXPENSES AS CUSTODIAN, AS AGREED UPON FROM TIME TO TIME BETWEEN THE
PORTFOLIO AND THE CUSTODIAN.
10. RESPONSIBILITY OF CUSTODIAN - INDEMNIFICATION
REASONABLE CARE - NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, THE CUSTODIAN WILL BE HELD TO THE EXERCISE OF REASONABLE CARE IN
CARRYING OUT THE PROVISIONS OF THIS AGREEMENT, BUT WILL BE KEPT INDEMNIFIED BY
AND WILL BE WITHOUT LIABILITY TO THE PORTFOLIO FOR ANY ACTION TAKEN OR OMITTED
BY IT IN GOOD FAITH WITHOUT NEGLIGENCE.
NOTICE TO PORTFOLIO - IN ORDER FOR THE INDEMNIFICATION PROVISION CONTAINED
IN THIS SECTION TO APPLY, IT IS UNDERSTOOD THAT IF IN ANY CASE THE PORTFOLIO MAY
BE ASKED TO INDEMNIFY OR HOLD THE CUSTODIAN HARMLESS, THE PORTFOLIO WILL BE
FULLY AND PROMPTLY ADVISED OF ALL PERTINENT FACTS CONCERNING THE SITUATION IN
QUESTION, AND IT IS FURTHER UNDERSTOOD THAT THE CUSTODIAN WILL USE ALL
REASONABLE CARE TO IDENTIFY AND NOTIFY THE PORTFOLIO PROMPTLY CONCERNING ANY
SITUATION WHICH PRESENTS OR APPEARS LIKELY TO PRESENT THE PROBABILITY OF SUCH A
CLAIM FOR INDEMNIFICATION AGAINST THE PORTFOLIO.
DEFENSE OF CUSTODIAN - THE PORTFOLIO WILL HAVE THE OPTION TO DEFEND THE
CUSTODIAN AGAINST ANY CLAIM WHICH MAY BE THE SUBJECT OF THIS INDEMNIFICATION,
AND IN THE EVENT THAT THE PORTFOLIO SO ELECTS, IT WILL SO NOTIFY THE CUSTODIAN,
AND THEREUPON THE PORTFOLIO WILL TAKE OVER COMPLETE DEFENSE OF THE CLAIM AND THE
CUSTODIAN WILL IN SUCH SITUATION INITIATE NO FURTHER LEGAL OR OTHER EXPENSES FOR
WHICH IT WILL SEEK INDEMNIFICATION UNDER THIS SECTION. THE CUSTODIAN WILL IN NO
CASE CONFESS ANY CLAIM OR MAKE ANY COMPROMISE IN ANY CASE IN WHICH THE PORTFOLIO
WILL BE ASKED TO INDEMNIFY THE CUSTODIAN EXCEPT WITH THE PORTFOLIO'S PRIOR
WRITTEN CONSENT. NOTHING IN THIS SECTION WILL BE CONSTRUED TO LIMIT ANY RIGHT
OR CAUSE OF ACTION ON THE PART OF THE CUSTODIAN UNDER THIS AGREEMENT WHICH IS
INDEPENDENT OF ANY RIGHT OR CAUSE OF ACTION ON THE PART OF THE PORTFOLIO. THE
CUSTODIAN WILL BE ENTITLED TO RELY ON AND MAY ACT UPON ADVICE OF COUNSEL (WHO
MAY BE COUNSEL FOR THE PORTFOLIO OR SUCH OTHER COUNSEL AS MAY BE AGREED TO BY
THE PARTIES) ON ALL MATTERS, AND WILL BE WITHOUT LIABILITY FOR ANY ACTION
REASONABLY TAKEN OR OMITTED PURSUANT TO SUCH ADVICE.
IF THE PORTFOLIO REQUIRES THE CUSTODIAN TO TAKE ANY ACTION WITH RESPECT TO
SECURITIES THAT INVOLVES THE PAYMENT OF MONEY, OR THAT MAY, IN THE OPINION OF
THE CUSTODIAN, RESULT IN THE CUSTODIAN OR ITS NOMINEE ASSIGNED TO THE PORTFOLIO
BEING LIABLE FOR THE PAYMENT OF MONEY OR INCURRING LIABILITY OF SOME OTHER FORM,
THE PORTFOLIO, AS A PREREQUISITE TO REQUIRING THE CUSTODIAN TO TAKE SUCH ACTION,
WILL INDEMNIFY THE CUSTODIAN IN AN AMOUNT AND FORM SATISFACTORY TO IT.
IF THE PORTFOLIO REQUIRES THE CUSTODIAN TO ADVANCE CASH OR SECURITIES FOR
ANY PURPOSE OR IN THE EVENT THAT THE CUSTODIAN OR ITS NOMINEE INCURS OR IS
ASSESSED ANY TAXES, CHARGES, EXPENSES, ASSESSMENTS, CLAIMS OR LIABILITIES IN
CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT, EXCEPT AS MAY ARISE FROM THE
CUSTODIAN'S OR ITS AGENT'S NEGLIGENT ACTION OR OMISSION, OR WILLFUL MISCONDUCT,
ANY PROPERTY HELD FOR THE ACCOUNT OF THE PORTFOLIO WILL SERVE AS SECURITY. IF
THE PORTFOLIO FAILS TO REPAY THE CUSTODIAN PROMPTLY, THE CUSTODIAN WILL BE
ENTITLED TO USE AVAILABLE CASH AND TO DISPOSE OF THE PORTFOLIO'S ASSETS TO THE
EXTENT NECESSARY FOR REIMBURSEMENT. IF THE CUSTODIAN EXERCISES THIS OPTION, IT
MUST GIVE THE PORTFOLIO REASONABLE NOTICE SO AS TO ENABLE THE PORTFOLIO TO REPAY
THE CASH OR SECURITIES ADVANCED. SUCH NOTICE WILL NOT PRECLUDE THE CUSTODIAN
FROM ASSERTING ANY LIEN UNDER THIS PROVISION.
11. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
THIS AGREEMENT WILL BECOME EFFECTIVE AS OF ITS EXECUTION, AND WILL CONTINUE
IN FORCE UNTIL TERMINATED AS PROVIDED IN THIS SECTION. IT MAY BE AMENDED AT ANY
TIME BY MUTUAL AGREEMENT OF THE PARTIES, AND MAY BE TERMINATED BY EITHER PARTY
WITH 60 DAYS WRITTEN NOTICE. THE PORTFOLIO MAY, BY ACTION OF THE FUND'S BOARD
OF TRUSTEES, IMMEDIATELY TERMINATE THIS AGREEMENT IN THE EVENT OF THE
APPOINTMENT OF A CONSERVATOR OR RECEIVER FOR THE CUSTODIAN BY THE COMPTROLLER OF
THE CURRENCY OR A LIKE EVENT AT THE DIRECTION OF AN APPROPRIATE REGULATORY
AGENCY OR COURT OF COMPETENT JURISDICTION.
IN THE EVENT THE AGREEMENT TERMINATES, THE PORTFOLIO WILL PAY THE CUSTODIAN
WHATEVER COMPENSATION IS DUE AS OF THE DATE OF THE TERMINATION, AND WILL
REIMBURSE THE CUSTODIAN FOR COSTS, EXPENSES AND DISBURSEMENTS INCURRED IN
CONNECTION WITH TERMINATION, BUT ONLY TO THE EXTENT THE PORTFOLIO GIVES PRIOR
APPROVAL FOR THE EXPENDITURES. APPROVAL WILL NOT BE UNREASONABLY WITHHELD.
12. SUCCESSOR CUSTODIAN
IF A SUCCESSOR CUSTODIAN IS APPOINTED BY THE BOARD OF TRUSTEES OF THE FUND,
THE CUSTODIAN WILL, UPON TERMINATION, DELIVER TO THE SUCCESSOR CUSTODIAN AT THE
OFFICE OF THE CUSTODIAN, DULY ENDORSED AND IN THE FORM FOR TRANSFER, ALL
SECURITIES, FUNDS AND OTHER PROPERTIES THEN HELD BY IT PURSUANT TO THIS
AGREEMENT, AND WILL TRANSFER TO AN ACCOUNT OF THE SUCCESSOR CUSTODIAN ALL OF THE
PORTFOLIO'S SECURITIES HELD IN A SECURITIES SYSTEM. THE CUSTODIAN WILL USE ITS
BEST EFFORTS TO ASSURE THAT THE SUCCESSOR CUSTODIAN WILL CONTINUE ANY
SUBCUSTODIAN AGREEMENT ENTERED INTO BY THE CUSTODIAN AND ANY SUBCUSTODIAN ON
BEHALF OF THE PORTFOLIO.
IF NO SUCCESSOR IS TO BE APPOINTED, THE CUSTODIAN WILL MAKE THE SECURITIES,
FUNDS AND OTHER PROPERTIES AVAILABLE AS ABOVE TO THE PORTFOLIO UPON RECEIPT OF A
CERTIFIED COPY OF A VOTE OF THE BOARD OF TRUSTEES OF THE FUND.
IF NO WRITTEN ORDER DESIGNATING A SUCCESSOR CUSTODIAN OR CERTIFIED COPY OF
A VOTE OF THE BOARD OF TRUSTEES IS DELIVERED TO THE CUSTODIAN ON OR BEFORE THE
EFFECTIVE DATE OF THE TERMINATION, THE CUSTODIAN WILL HAVE THE RIGHT TO MAKE
DELIVERY TO A BANK (AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940) OR TRUST
COMPANY OF ITS OWN SELECTION HAVING AGGREGATE CAPITAL, SURPLUS, AND UNDIVIDED
PROFITS, AS SHOWN BY ITS LAST PUBLISHED REPORT, OF NOT LESS THAN $25,000,000,
WHICH WILL BECOME THE SUCCESSOR CUSTODIAN UNDER THIS AGREEMENT.
IN THE EVENT THE SECURITIES, FUNDS AND OTHER PROPERTIES REMAIN IN THE
POSSESSION OF THE CUSTODIAN AFTER THE TERMINATION DATE DUE TO FAILURE BY THE
PORTFOLIO TO PROCURE THE CERTIFIED COPY OF THE APPROPRIATE VOTE OF THE BOARD OF
TRUSTEES, THE CUSTODIAN WILL BE ENTITLED TO FAIR COMPENSATION FOR ITS SERVICES
DURING THE PERIOD DURING WHICH IT RETAINS POSSESSION OF THE PROPERTY, AND THE
PROVISIONS OF THIS AGREEMENT RELATING TO THE DUTIES AND OBLIGATIONS OF THE
CUSTODIAN WILL REMAIN IN FULL FORCE.
IF DURING THE TERM OF THIS AGREEMENT THE PORTFOLIO IS LIQUIDATED PURSUANT
TO LAW, THE CUSTODIAN WILL DISTRIBUTE THE REMAINING ASSETS OF THE PORTFOLIO
AFTER SATISFYING ALL EXPENSES AND LIABILITIES OF THE PORTFOLIO. SUCH
DISTRIBUTIONS WILL BE PRO RATA AMONG THE PORTFOLIO'S SHAREHOLDERS AS CERTIFIED
BY THE TRANSFER AGENT, AND WILL BE IN CASH OR, IF THE PORTFOLIO SO ORDERS, IN
PORTFOLIO SECURITIES. SECTION 10 (RESPONSIBILITY OF CUSTODIAN) WILL SURVIVE ANY
TERMINATION OF THIS AGREEMENT.
13. INTERPRETIVE AND ADDITIONAL PROVISIONS
IN CONNECTION WITH THE OPERATION OF THIS AGREEMENT, THE CUSTODIAN AND THE
PORTFOLIO MAY FROM TIME TO TIME AGREE ON SUCH PROVISIONS INTERPRETIVE OF OR IN
ADDITION TO THE PROVISIONS OF THIS AGREEMENT AS MAY IN THEIR JOINT OPINION BE
CONSISTENT WITH THE GENERAL TENOR OF THIS AGREEMENT. ANY SUCH INTERPRETIVE OR
ADDITIONAL PROVISIONS WILL BE IN A WRITING SIGNED BY BOTH PARTIES AND WILL BE
ANNEXED TO TH IS AGREEMENT. NO INTERPRETIVE OR ADDITIONAL PROVISIONS WILL
CONTRAVENE ANY APPLICABLE FEDERAL OR STATE REGULATIONS OR ANY PROVISION OF THE
GOVERNING DOCUMENTS OF THE PORTFOLIO, NOR WILL THEY BE DEEMED AMENDMENTS TO THIS
AGREEMENT.
14. NOTICE
NOTICE WILL BE CONSIDERED SUFFICIENT IF SENT BY REGISTERED OR CERTIFIED
MAIL, OR BY SUCH OTHER MEANS AS THE PARTIES AGREE, TO THE OTHER PARTY AT THE
ADDRESS SET FORTH ABOVE OR AT ANY OTHER ADDRESS SPECIFIED IN WRITING AND
DELIVERED TO THE OTHER PARTY.
15. BOND
THE CUSTODIAN WILL, AT ALL TIMES, MAINTAIN A BOND ISSUED BY A REPUTABLE
FIDELITY INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THE PLACE WHERE THE BOND
IS ISSUED. THE BOND WILL BE ISSUED AGAINST LARCENY AND EMBEZZLEMENT, AND WILL
COVER EACH OFFICER AND EMPLOYEE OF THE CUSTODIAN WHO MAY, SINGLY OR JOINTLY WITH
OTHERS, HAVE ACCESS TO SECURITIES OR FUNDS OF THE PORTFOLIO, EITHER DIRECTLY OR
THROUGH AUTHORITY TO RECEIVE AND CARRY OUT ANY CERTIFICATE INSTRUCTION, ORDER
REQUEST, NOTE OR OTHER INSTRUMENT REQUIRED OR PERMITTED BY THIS AGREEMENT. THE
CUSTODIAN AGREES THAT IT WILL NOT CANCEL, TERMINATE OR MODIFY THE BOND SO AS TO
AFFECT ADVERSELY THE PORTFOLIO, EXCEPT AFTER WRITTEN NOTICE TO THE PORTFOLIO NOT
LESS THAN 10 DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH CANCELLATION, TERMINATION
OR MODIFICATION. THE CUSTODIAN WILL FURNISH TO THE PORTFOLIO A COPY OF EACH
SUCH BOND AND EACH AMENDMENT THERETO.
16. CONFIDENTIALITY
THE CUSTODIAN AGREES TO TREAT ALL RECORDS AND OTHER INFORMATION RELATIVE TO
THE PORTFOLIO AND ITS PRIOR, PRESENT OR FUTURE SHAREHOLDERS AS CONFIDENTIAL, AND
THE CUSTODIAN, ON BEHALF OF ITSELF AND ITS EMPLOYEES, AGREES TO KEEP
CONFIDENTIAL ALL SUCH INFORMATION EXCEPT WHEN REQUESTED TO DIVULGE SUCH
INFORMATION BY DULY CONSTITUTED AUTHORITIES, OR WHEN SO REQUESTED BY THE
PORTFOLIO. IF REQUESTED TO DIVULGE CONFIDENTIAL INFORMATION, THE CUSTODIAN WILL
NOT RELEASE THE INFORMATION UNTIL IT NOTIFIES THE PORTFOLIO IN WRITING AND
RECEIVES APPROVAL IN WRITING FROM THE PORTFOLIO. APPROVAL BY THE PORTFOLIO WILL
NOT BE UNREASONABLY WITHHELD AND MAY NOT BE WITHHELD WHERE THE CUSTODIAN MAY BE
EXPOSED TO CIVIL OR CRIMINAL CONTEMPT PROCEEDINGS FOR FAILURE TO COMPLY.
17. EXEMPTION FROM LIENS
THE SECURITIES AND OTHER ASSETS HELD BY THE CUSTODIAN FOR THE PORTFOLIO
WILL BE SUBJECT TO NO LIEN OR CHARGE OF ANY KIND IN FAVOR OF THE CUSTODIAN OR
ANY PERSON CLAIMING THROUGH THE CUSTODIAN, BUT NOTHING HEREIN WILL BE DEEMED TO
DEPRIVE THE CUSTODIAN OF ITS RIGHT TO INVOKE ANY AND ALL REMEDIES AVAILABLE AT
LAW OR EQUITY TO COLLECT AMOUNTS DUE IT UNDER THIS AGREEMENT. NEITHER THE
CUSTODIAN NOR ANY SUBCUSTODIAN APPOINTED PURSUANT TO SECTION 1 OF THIS AGREEMENT
WILL HAVE ANY POWER OR AUTHORITY TO ASSIGN, HYPOTHECATE, PLEDGE OR OTHERWISE
DISPOSE OF ANY SECURITIES HELD BY IT FOR THE PORTFOLIO, EXCEPT UPON THE
DIRECTION OF THE PORTFOLIO, DULY GIVEN AS HEREIN PROVIDED, AND ONLY FOR THE
ACCOUNT OF THE PORTFOLIO.
18. MASSACHUSETTS LAW TO APPLY
THIS AGREEMENT WILL BE CONSTRUED AND THE PROVISIONS THEREOF INTERPRETED
UNDER AND IN ACCORDANCE WITH LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
19. GOVERNING DOCUMENTS
THE TERM "GOVERNING DOCUMENTS" REFERS TO THE FUND'S AGREEMENT OF TRUST,
BY-LAWS AND REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED FROM TIME TO TIME WITH REGARD TO THE PORTFOLIO.
20. DIRECTORS AND TRUSTEES
NEITHER THE HOLDERS OF SHARES IN THE PORTFOLIO NOR ANY DIRECTORS OR
TRUSTEES OF THE FUND WILL BE PERSONALLY LIABLE HEREUNDER.
21. MASSACHUSETTS BUSINESS TRUST
WITH RESPECT TO THE PORTFOLIO WHICH IS A PARTY TO THIS AGREEMENT AND WHICH
IS ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST, THE TERM FUND MEANS AND REFERS
TO THE TRUSTEES SERVING UNDER THE APPLICABLE TRUST AGREEMENT. IT IS EXPRESSLY
AGREED THAT THE OBLIGATIONS OF THE TRUST UNDER THIS AGREEMENT WILL NOT BE
BINDING ON ANY OF THE TRUSTEES, SHAREHOLDERS, NOMINEES, OFFICERS, AGENTS OR
EMPLOYEES OF THE TRUST PERSONALLY, BUT BIND ONLY THE TRUST PROPERTY.
22. SUCCESSORS OF PARTIES
THIS CONTRACT WILL BE BINDING ON AND WILL INURE TO THE BENEFIT OF THE
PORTFOLIO AND THE CUSTODIAN AND THEIR RESPECTIVE SUCCESSORS.
IN WITNESS WHEREOF, EACH OF THE PARTIES HAS CAUSED THIS INSTRUMENT TO BE
EXECUTED IN ITS NAME AND BEHALF BY ITS DULY AUTHORIZED REPRESENTATIVE AND ITS
SEAL TO BE AFFIXED HEREUNDER AS OF THE DATES INDICATED BELOW.
[FUND]
ATTEST: BY:
STATE STREET TRUST COMPANY
ATTEST: BY
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
CALVERT SHAREHOLDER SERVICES, INC.
AND
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. DUTIES OF THE BANK 1
2. FEES AND EXPENSES 3
3. WIRE TRANSFER OPERATING GUIDELINES 4
4. DATA ACCESS AND PROPRIETARY INFORMATION 5
5. INDEMNIFICATION 6
6. STANDARD OF CARE 8
7. COVENANTS OF THE TRANSFER AGENT AND THE BANK 8
8. REPRESENTATIONS AND WARRANTIES OF THE BANK 9
9. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT 9
10. TERMINATION OF AGREEMENT 10
11. ASSIGNMENT 10
12. AMENDMENT 10
13. MASSACHUSETTS LAW TO APPLY 10
14. FORCE MAJEURE 11
15. CONSEQUENTIAL DAMAGES 11
16. LIMITATION OF SHAREHOLDER LIABILITY 11
17. MERGER OF AGREEMENT 11
18. SURVIVAL 11
19. SEVERABILITY 11
20. COUNTERPARTS 12
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT MADE AS OF THE 15TH DAY OF AUGUST, 1996, BY AND
BETWEEN, CALVERT SHAREHOLDER SERVICES, INC. A CORPORATION, HAVING ITS
PRINCIPAL OFFICE AND PLACE OF BUSINESS AT 4550 MONTGOMERY AVE. SUITE
1000N, BETHESDA, MARYLAND, 20814 (THE "TRANSFER AGENT"), AND STATE
STREET BANK AND TRUST COMPANY, A MASSACHUSETTS TRUST COMPANY HAVING ITS
PRINCIPAL OFFICE AND PLACE OF BUSINESS AT 225 FRANKLIN STREET, BOSTON,
MASSACHUSETTS 02110 (THE "BANK");
WHEREAS, THE TRANSFER AGENT HAS BEEN APPOINTED BY EACH OF THE
INVESTMENT COMPANIES (INCLUDING EACH SERIES THEREOF) LISTED ON SCHEDULE
A (THE "FUND(S)"), EACH AN OPEN-END MANAGEMENT INVESTMENT COMPANY
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AS
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND SHAREHOLDER SERVICING
AGENT IN CONNECTION WITH CERTAIN ACTIVITIES, AND THE TRANSFER AGENT HAS
ACCEPTED EACH SUCH APPOINTMENT;
WHEREAS, THE TRANSFER AGENT HAS ENTERED INTO A TRANSFER AGENCY
AND SERVICE AGREEMENT WITH EACH OF THE FUNDS (INCLUDING EACH SERIES
THEREOF) LISTED ON SCHEDULE A PURSUANT TO WHICH THE TRANSFER AGENT IS
RESPONSIBLE FOR CERTAIN TRANSFER AGENCY AND DIVIDEND DISBURSING
FUNCTIONS FOR EACH FUND'S AUTHORIZED AND ISSUED SHARES OF COMMON STOCK
OR SHARES OF BENEFICIAL INTEREST AS THE CASE MAY BE ("SHARES") AND EACH
FUND'S SHAREHOLDERS ("SHAREHOLDERS") AND THE TRANSFER AGENT IS
AUTHORIZED TO SUBCONTRACT FOR THE PERFORMANCE OF ITS OBLIGATIONS AND
DUTIES THEREUNDER IN WHOLE OR IN PART WITH THE BANK;
WHEREAS, THE TRANSFER AGENT DESIRES TO APPOINT THE BANK AS ITS
SUB-TRANSFER AGENT, AND THE BANK DESIRES TO ACCEPT SUCH APPOINTMENT;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANT HEREIN
CONTAINED, THE PARTIES HERETO AGREE AS FOLLOWS:
1. DUTIES OF THE BANK
1.1 SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS
AGREEMENT, THE BANK SHALL ACT AS THE TRANSFER AGENT'S SUB-TRANSFER
AGENT FOR SHARES IN CONNECTION WITH ANY ACCUMULATION PLAN, OPEN
ACCOUNT, DIVIDEND REINVESTMENT PLAN, RETIREMENT PLAN OR SIMILAR PLAN
PROVIDED TO SHAREHOLDERS AND SET OUT IN EACH FUND'S CURRENTLY EFFECTIVE
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION ("PROSPECTUS"),
INCLUDING WITHOUT LIMITATION ANY PERIODIC INVESTMENT PLAN OR PERIODIC
WITHDRAWAL PROGRAM. AS USED HEREIN THE TERM '"SHARES" MEANS THE
AUTHORIZED AND ISSUED SHARES OF COMMON STOCK, OR SHARES OF BENEFICIAL
INTEREST, AS THE CASE MAY BE, FOR EACH FUND LISTED IN SCHEDULE A. IN
ACCORDANCE WITH PROCEDURES ESTABLISHED FROM TIME TO TIME BY AGREEMENT
BETWEEN THE TRANSFER AGENT AND THE BANK, THE BANK SHALL PROVIDE THE
SERVICES LISTED IN THIS SECTION 1.
(A) THE BANK SHALL:
(I) RECEIVE FOR ACCEPTANCE, ORDERS FOR THE
PURCHASE OF SHARES, AND PROMPTLY DELIVER PAYMENT AND
APPROPRIATE DOCUMENTATION THEREOF TO THE CUSTODIAN OF
EACH FUND AUTHORIZED PURSUANT TO THE ARTICLES OF
INCORPORATION OR ORGANIZATION OF EACH FUND (THE
"CUSTODIAN");
(II) PURSUANT TO PURCHASE ORDERS, ISSUE THE
APPROPRIATE NUMBER OF SHARES AND HOLD SUCH SHARES IN
THE APPROPRIATE SHAREHOLDER ACCOUNT;
(III) RECEIVE FOR ACCEPTANCE REDEMPTION REQUESTS
AND REDEMPTION DIRECTIONS AND DELIVER THE APPROPRIATE
DOCUMENTATION THEREOF TO THE CUSTODIAN;
(IV) IN RESPECT TO THE TRANSACTIONS IN ITEMS (I),
(II) AND (III) ABOVE, THE BANK SHALL EXECUTE
TRANSACTIONS DIRECTLY WITH BROKER-DEALERS AUTHORIZED
BY EACH FUND;
(V) AT THE APPROPRIATE TIME AS AND WHEN IT
RECEIVES MONIES PAID TO IT BY THE CUSTODIAN WITH
RESPECT TO ANY REDEMPTION, PAY OVER OR CAUSE TO BE
PAID OVER IN THE APPROPRIATE MANNER SUCH MONIES AS
INSTRUCTED BY THE REDEEMING SHAREHOLDERS;
(VI) EFFECT TRANSFERS OF SHARES BY THE REGISTERED
OWNERS THEREOF UPON RECEIPT OF APPROPRIATE
INSTRUCTIONS;
(VII) PREPARE AND TRANSMIT PAYMENTS FOR DIVIDENDS
AND DISTRIBUTIONS DECLARED BY EACH FUND;
(VIII) ISSUE REPLACEMENT CERTIFICATES FOR THOSE
CERTIFICATES ALLEGED TO HAVE BEEN LOST, STOLEN OR
DESTROYED UPON RECEIPT BY THE BANK OF INDEMNIFICATION
SATISFACTORY TO THE BANK AND PROTECTING THE BANK AND
EACH FUND, AND THE BANK AT ITS OPTION, MAY ISSUE
REPLACEMENT CERTIFICATES IN PLACE OF MUTILATED STOCK
CERTIFICATES UPON PRESENTATION THEREOF AND WITHOUT
SUCH INDEMNITY;
(IX) MAINTAIN RECORDS OF ACCOUNT FOR AND ADVISE
THE TRANSFER AGENT AND ITS SHAREHOLDERS AS TO THE
FOREGOING; AND
(X) RECORD THE ISSUANCE OF SHARES OF EACH FUND
AND MAINTAIN PURSUANT TO RULE 17AD-10(E) OF THE
SECURITIES EXCHANGE ACT OF 1934 AS AMENDED (THE
"EXCHANGE ACT OF 1934") A RECORD OF THE TOTAL NUMBER
OF SHARES OF EACH FUND WHICH ARE AUTHORIZED, BASED
UPON DATA PROVIDED TO IT BY EACH FUND OR THE TRANSFER
AGENT, AND ISSUED AND OUTSTANDING. THE BANK SHALL
ALSO PROVIDE EACH FUND ON A REGULAR BASIS WITH THE
TOTAL NUMBER OF SHARES WHICH ARE AUTHORIZED AND
ISSUED AND OUTSTANDING AND SHALL HAVE NO OBLIGATION,
WHEN RECORDING THE ISSUANCE OF SHARES, TO MONITOR THE
ISSUANCE OF SUCH SHARES OR TO TAKE COGNIZANCE OF ANY
LAWS RELATING TO THE ISSUE OR SALE OF SUCH SHARES,
WHICH FUNCTIONS SHALL BE THE SOLE RESPONSIBILITY OF
EACH FUND OR THE TRANSFER AGENT.
1.2 (A) FOR REPORTS, THE BANK SHALL:
(I) MAINTAIN ALL SHAREHOLDER ACCOUNTS, PREPARE
MEETING, PROXY, AND MAILING LISTS, WITHHOLD TAXES ON
US RESIDENT AND NON-RESIDENT ALIEN ACCOUNTS, PREPARE
AND FILE US TREASURY DEPARTMENT REPORTS REQUIRED WITH
RESPECT TO INTEREST, DIVIDENDS AND DISTRIBUTIONS BY
FEDERAL AUTHORITIES FOR ALL SHAREHOLDERS, PREPARE
CONFIRMATION FORMS AND STATEMENTS OF ACCOUNT TO
SHAREHOLDERS FOR ALL PURCHASES AND REDEMPTIONS OF
SHARES AND OTHER CONFIRMABLE TRANSACTIONS IN
SHAREHOLDER ACCOUNT INFORMATION.
(B) FOR BLUE SKY REPORTING THE BANK SHALL PROVIDE A
SYSTEM THAT WILL ENABLE EACH FUND OR THE TRANSFER AGENT TO
MONITOR THE TOTAL NUMBER OF SHARES SOLD IN EACH STATE, AND
EACH FUND OR THE TRANSFER AGENT SHALL:
(I) IDENTIFY TO THE BANK IN WRITING THOSE
TRANSACTIONS AND ASSETS TO BE TREATED AS EXEMPT FROM
BLUE SKY REPORTING FOR EACH STATE; AND
(II) VERIFY THE ESTABLISHMENT OF TRANSACTIONS FOR
EACH STATE ON THE SYSTEM PRIOR TO THE ACTIVITY FOR
EACH STATE, THE RESPONSIBILITY OF THE BANK FOR EACH
FUND'S BLUE SKY STATE REGISTRATION STATUS IS SOLELY
LIMITED TO THE INITIAL ESTABLISHMENT OF TRANSACTIONS
SUBJECT TO BLUE SKY COMPLIANCE BY THE FUND OR THE
TRANSFER AGENT AND THE REPORTING OF SUCH TRANSACTIONS
TO THE FUND AS PROVIDED ABOVE.
1.3 PER THE ATTACHED SERVICE RESPONSIBILITY SCHEDULE PROCEDURES AS
TO WHO SHALL PROVIDE CERTAIN OF THESE SERVICES IN SECTION 1 MAY BE
ESTABLISHED FROM TIME TO TIME BY AGREEMENT BETWEEN THE TRANSFER AGENT
AND THE BANK. THE BANK MAY AT TIMES PERFORM ONLY A PORTION OF THESE
SERVICES AND THE TRANSFER AGENT MAY PERFORM THESE SERVICES ON EACH
FUND'S BEHALF.
1.4 THE BANK SHALL PROVIDE ADDITIONAL SERVICES ON BEHALF OF THE
TRANSFER AGENT (I.E., ESCHEAT SERVICES) THAT MAY BE AGREED UPON IN
WRITING BETWEEN THE BANK AND THE TRANSFER AGENT.
2. FEES AND EXPENSES
2.1 FOR THE PERFORMANCE BY THE BANK PURSUANT TO THIS AGREEMENT,
THE TRANSFER AGENT AGREES TO PAY THE BANK AN ANNUAL MAINTENANCE FEE FOR
EACH SHAREHOLDER ACCOUNT AS SET OUT IN THE INITIAL FEE SCHEDULE
ATTACHED HERETO. SUCH FEES AND OUT-OF-POCKET EXPENSES AND ADVANCES
IDENTIFIED UNDER SECTION 2.2 BELOW MAY BE CHANGED FROM TIME TO TIME
SUBJECT TO MUTUAL WRITTEN AGREEMENT BETWEEN THE TRANSFER AGENT AND THE
BANK.
2.2 IN ADDITION TO THE FEE PAID UNDER SECTION 2.1 ABOVE, THE
TRANSFER AGENT AGREES TO REIMBURSE THE BANK FOR OUT-OF-POCKET EXPENSES,
INCLUDING, BUT NOT LIMITED TO CONFIRMATION PRODUCTION, POSTAGE, FORMS,
TELEPHONE, MICROFILM, MICROFICHE, TABULATING PROXIES, RECORDS STORAGE,
OR ADVANCES INCURRED BY THE BANK FOR THE ITEMS SET OUT IN THE FEE
SCHEDULE ATTACHED HERETO. IN ADDITION, ANY OTHER EXPENSES INCURRED BY
THE BANK AT THE REQUEST OR WITH THE CONSENT OF THE TRANSFER AGENT, WILL
BE REIMBURSED BY THE TRANSFER AGENT.
2.3 THE TRANSFER AGENT AGREES TO PAY ALL FEES AND REIMBURSABLE
EXPENSES WITHIN FIFTEEN DAYS FOLLOWING THE RECEIPT OF THE RESPECTIVE
BILLING NOTICE. POSTAGE FOR MAILING OF DIVIDENDS, PROXIES, FUND REPORTS
AND OTHER MAILINGS TO ALL SHAREHOLDER ACCOUNTS SHALL BE ADVANCED TO THE
BANK BY THE TRANSFER AGENT AT LEAST SEVEN (7) DAYS PRIOR TO THE MAILING
DATE OF SUCH MATERIALS.
3. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM
COMMERCIAL CODE
3.1 THE BANK IS AUTHORIZED TO PROMPTLY DEBIT THE APPROPRIATE
TRANSFER AGENT ACCOUNT(S) UPON THE RECEIPT OF A PAYMENT ORDER IN
COMPLIANCE WITH THE SELECTED SECURITY PROCEDURE (THE "SECURITY
PROCEDURE") CHOSEN FOR FUNDS TRANSFER AND IN THE AMOUNT OF MONEY THAT
THE BANK HAS BEEN INSTRUCTED TO TRANSFER. THE BANK SHALL EXECUTE
PAYMENT ORDERS IN COMPLIANCE WITH THE SECURITY PROCEDURE AND WITH THE
TRANSFER AGENT'S INSTRUCTIONS ON THE EXECUTION DATE PROVIDED THAT SUCH
PAYMENT ORDER IS RECEIVED BY THE CUSTOMARY DEADLINE FOR PROCESSING SUCH
A REQUEST, UNLESS THE PAYMENT ORDER SPECIFIES A LATER TIME. ALL PAYMENT
ORDERS AND COMMUNICATIONS RECEIVED AFTER THIS TIME FRAME WILL BE DEEMED
TO HAVE BEEN RECEIVED THE NEXT BUSINESS DAY.
3.2 THE TRANSFER AGENT ACKNOWLEDGES THAT THE SECURITY PROCEDURE IT
HAS DESIGNATED ON THE TRANSFER AGENT SELECTION FORM WAS SELECTED BY THE
TRANSFER AGENT FROM SECURITY PROCEDURES OFFERED BY THE BANK. THE
TRANSFER AGENT SHALL RESTRICT ACCESS TO CONFIDENTIAL INFORMATION
RELATING TO THE SECURITY PROCEDURE TO AUTHORIZED PERSONS AS
COMMUNICATED TO THE BANK IN WRITING. THE TRANSFER AGENT MUST NOTIFY THE
BANK IMMEDIATELY IF IT HAS REASON TO BELIEVE UNAUTHORIZED PERSONS MAY
HAVE OBTAINED ACCESS TO SUCH INFORMATION OR OF ANY CHANGE IN THE
TRANSFER AGENT'S AUTHORIZED PERSONNEL. THE BANK SHALL VERIFY THE
AUTHENTICITY OF ALL SUCH INSTRUCTIONS ACCORDING TO THE SECURITY
PROCEDURE.
3.3 THE BANK SHALL PROCESS ALL PAYMENT ORDERS ON THE BASIS OF THE
ACCOUNT NUMBER CONTAINED IN THE PAYMENT ORDER. IN THE EVENT OF A
DISCREPANCY BETWEEN ANY NAME INDICATED ON THE PAYMENT ORDER AND THE
ACCOUNT NUMBER, THE ACCOUNT NUMBER SHALL TAKE PRECEDENCE AND GOVERN.
3.4 WHEN A TRANSFER AGENT INITIATES OR RECEIVES AUTOMATED CLEARING
HOUSE ("ACH") CREDIT AND DEBIT ENTRIES PURSUANT TO THESE GUIDELINES AND
THE RULES OF THE NATIONAL AUTOMATED CLEARING HOUSE ASSOCIATION AND THE
NEW ENGLAND CLEARING HOUSE ASSOCIATION, THE BANK WILL ACT AS AN
ORIGINATING DEPOSITORY FINANCIAL INSTITUTION AND/OR RECEIVING
DEPOSITORY FINANCIAL INSTITUTION, AS THE CASE MAY BE, WITH RESPECT TO
SUCH ENTRIES. CREDITS GIVEN BY THE BANK WITH RESPECT TO AN ACH CREDIT
ENTRY ARE PROVISIONAL UNTIL THE BANK RECEIVES FINAL SETTLEMENT FOR SUCH
ENTRY FROM THE FEDERAL RESERVE BANK. IF THE BANK DOES NOT RECEIVE SUCH
FINAL SETTLEMENT, THE TRANSFER AGENT AGREES THAT THE BANK SHALL RECEIVE
A REFUND OF THE AMOUNT CREDITED TO THE TRANSFER AGENT IN CONNECTION
WITH SUCH ENTRY, AND THE PARTY MAKING PAYMENT TO THE TRANSFER AGENT VIA
SUCH ENTRY SHALL NOT BE DEEMED TO HAVE PAID THE AMOUNT OF THE ENTRY.
3.5 THE BANK RESERVES THE RIGHT TO DECLINE TO PROCESS OR DELAY THE
PROCESSING OF A PAYMENT ORDER WHICH (A) IS IN EXCESS OF THE COLLECTED
BALANCE IN THE ACCOUNT TO BE CHARGED AT THE TIME OF THE BANK'S RECEIPT
OF SUCH PAYMENT ORDER, OR (B) IF THE BANK, IN GOOD FAITH, IS UNABLE TO
SATISFY ITSELF THAT THE TRANSACTION HAS BEEN PROPERLY AUTHORIZED.
3.6 THE BANK SHALL USE REASONABLE EFFORTS TO ACT ON ALL AUTHORIZED
REQUESTS TO CANCEL OR AMEND PAYMENT ORDERS RECEIVED IF REQUESTS ARE
RECEIVED IN A TIMELY MANNER AFFORDING THE BANK REASONABLE OPPORTUNITY
TO ACT. HOWEVER, THE BANK ASSUMES NO LIABILITY IF THE REQUEST FOR
AMENDMENT OR CANCELLATION CANNOT BE SATISFIED.
3.7 THE BANK SHALL ASSUME NO RESPONSIBILITY FOR FAILURE TO DETECT
ANY ERRONEOUS PAYMENT ORDER PROVIDED THAT THE BANK COMPLIES WITH THE
PAYMENT ORDER INSTRUCTIONS AS RECEIVED AND THE BANK COMPLIES WITH THE
SECURITY PROCEDURE. THE SECURITY PROCEDURE IS ESTABLISHED FOR THE
PURPOSE OF AUTHENTICATING PAYMENT ORDERS ONLY AND NOT FOR THE DETECTION
OF ERRORS IN PAYMENT ORDERS.
3.8 THE BANK SHALL ASSUME NO RESPONSIBILITY FOR LOST INTEREST WITH
RESPECT TO THE RETRANSFER AGENTABLE AMOUNT OF ANY UNAUTHORIZED PAYMENT
ORDER UNLESS THE BANK IS NOTIFIED OF THE UNAUTHORIZED PAYMENT ORDER
WITHIN THIRTY (30) DAYS OF NOTIFICATION BY THE BANK OF THE ACCEPTANCE
OF SUCH PAYMENT ORDER. IN NO EVENT (INCLUDING FAILURE TO EXECUTE A
PAYMENT ORDER) SHALL THE BANK BE LIABLE FOR SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
3.9 CONFIRMATION OF BANK'S EXECUTION OF PAYMENT ORDERS SHALL
ORDINARILY BE PROVIDED WITHIN 24 HOURS NOTICE OF WHICH MAY BE DELIVERED
THROUGH THE BANK'S PROPRIETARY INFORMATION SYSTEMS, OR BY FACSIMILE OR
CALL-BACK. CLIENT MUST REPORT ANY OBJECTIONS TO THE EXECUTION OF AN
ORDER WITHIN 30 DAYS.
4. DATA ACCESS AND PROPRIETARY INFORMATION
THE TRANSFER AGENT ACKNOWLEDGES THAT THE DATA BASES, COMPUTER PROGRAMS,
SCREEN FORMATS, REPORT FORMATS, INTERACTIVE DESIGN TECHNIQUES, AND
OTHER INFORMATION FURNISHED TO THE TRANSFER AGENT BY THE BANK ARE
PROVIDED SOLELY IN CONNECTION WITH THE SERVICES RENDERED UNDER THIS
AGREEMENT AND CONSTITUTE COPYRIGHTED TRADE SECRETS OR PROPRIETARY
INFORMATION OF SUBSTANTIAL VALUE TO THE BANK. SUCH DATABASES, PROGRAMS,
FORMATS, DESIGNS, TECHNIQUES AND OTHER INFORMATION ARE COLLECTIVELY
REFERRED TO BELOW AS "PROPRIETARY INFORMATION". THE TRANSFER AGENT
AGREES THAT IT SHALL TREAT ALL PROPRIETARY INFORMATION AS PROPRIETARY
TO THE BANK AND FURTHER AGREES THAT IT SHALL NOT DIVULGE ANY
PROPRIETARY INFORMATION TO ANY PERSON OR ORGANIZATION EXCEPT AS
EXPRESSLY PERMITTED HEREUNDER. THE TRANSFER AGENT AGREES FOR ITSELF AND
ITS EMPLOYEES AND AGENTS:
(A) TO USE SUCH PROGRAMS AND DATABASES (I) SOLELY ON THE
TRANSFER AGENT'S COMPUTERS, OR (II) SOLELY FROM EQUIPMENT AT
THE LOCATIONS AGREED TO BETWEEN THE TRANSFER AGENT AND THE
BANK AND (III) IN ACCORDANCE WITH THE BANK'S APPLICABLE USER
DOCUMENTATION;
(B) TO REFRAIN FROM COPYING OR DUPLICATING IN ANY WAY
(OTHER THAN IN THE NORMAL COURSE OF PERFORMING PROCESSING ON
THE TRANSFER AGENT'S COMPUTERS) ANY PART OF ANY PROPRIETARY
INFORMATION;
(C) TO REFRAIN FROM OBTAINING UNAUTHORIZED ACCESS TO ANY
PROGRAMS, DATA OR OTHER INFORMATION NOT OWNED BY THE TRANSFER
AGENT, AND IF SUCH ACCESS IS ACCIDENTALLY OBTAINED, TO RESPECT
AND SAFEGUARD THE SAME PROPRIETARY INFORMATION;
(D) TO REFRAIN FROM CAUSING OR ALLOWING PROPRIETARY
INFORMATION TRANSMITTED FROM THE BANK'S COMPUTER TO THE
TRANSFER AGENT'S TERMINAL TO BE RETRANSMITTED TO ANY OTHER
COMPUTER TERMINAL OR OTHER DEVICE EXCEPT AS EXPRESSLY
PERMITTED BY THE BANK, SUCH PERMISSION NOT TO BE UNREASONABLY
WITHHELD;
(E) THAT THE TRANSFER AGENT SHALL HAVE ACCESS ONLY TO
THOSE AUTHORIZED TRANSACTIONS AS AGREED TO BETWEEN THE
TRANSFER AGENT AND THE BANK; AND
(F) TO HONOR REASONABLE WRITTEN REQUESTS MADE BY THE BANK
TO PROTECT AT THE BANK'S EXPENSE THE RIGHTS OF THE BANK IN
PROPRIETARY INFORMATION AT COMMON LAW AND UNDER
APPLICABLE STATUTES.
EACH PARTY SHALL TAKE REASONABLE EFFORTS TO ADVISE ITS EMPLOYEES OF
THEIR OBLIGATIONS PURSUANT TO THIS SECTION 4.
5. INDEMNIFICATION
5.1 EXCEPT AS PROVIDED IN SECTION 6, HEREIN, THE BANK SHALL NOT BE
RESPONSIBLE FOR, AND THE TRANSFER AGENT SHALL INDEMNIFY AND HOLD THE
BANK HARMLESS FROM AND AGAINST, ANY AND ALL LOSSES, DAMAGES, COSTS,
CHARGES, COUNSEL FEES, PAYMENTS, EXPENSES AND LIABILITY ARISING OUT OF
OR ATTRIBUTABLE TO:
(A) ALL ACTIONS OF THE BANK OR ITS AGENT OR
SUBCONTRACTORS REQUIRED TO BE TAKEN PURSUANT TO THIS
AGREEMENT, PROVIDED THAT SUCH ACTIONS ARE TAKEN IN GOOD FAITH
AND WITHOUT NEGLIGENCE OR WILLFUL MISCONDUCT;
(B) THE TRANSFER AGENT'S LACK OF GOOD FAITH, NEGLIGENCE
OR WILLFUL MISCONDUCT;
(C) THE RELIANCE ON OR USE BY THE BANK OR ITS AGENTS OR
SUBCONTRACTORS OF INFORMATION, RECORDS, DOCUMENTS OR SERVICES
WHICH (I) ARE GIVEN TO THE BANK OR ITS AGENTS OR
SUBCONTRACTORS, AND (II) HAVE BEEN PREPARED, MAINTAINED OR
PERFORMED BY THE TRANSFER AGENT OR ANY OTHER PERSON OR FIRM ON
BEHALF OF THE TRANSFER AGENT INCLUDING BUT NOT LIMITED TO ANY
PREVIOUS TRANSFER AGENT OR REGISTRAR EXCLUDING THE BANK;
(D) THE RELIANCE ON, OR THE CARRYING OUT BY THE BANK OR
ITS AGENTS OR SUBCONTRACTORS OF ANY INSTRUCTIONS OR REQUESTS
OF THE TRANSFER AGENT; AND
(E) THE OFFER OR SALE OF SHARES IN VIOLATION OF ANY
REQUIREMENT UNDER THE FEDERAL SECURITIES LAWS OR REGULATIONS
OR THE SECURITIES LAWS OR REGULATIONS OF ANY STATE THAT SUCH
SHARES BE REGISTERED IN SUCH STATE OR IN VIOLATION OF ANY STOP
ORDER OR OTHER DETERMINATION OR RULING BY ANY FEDERAL AGENCY
OR ANY STATE WITH RESPECT TO THE OFFER OR SALE OF SUCH SHARES
IN SUCH STATE.
5.2 AT ANY TIME THE BANK MAY APPLY TO ANY OFFICER OF THE TRANSFER
AGENT FOR INSTRUCTIONS, AND MAY CONSULT WITH LEGAL COUNSEL WITH RESPECT
TO ANY MATTER ARISING IN CONNECTION WITH THE SERVICES TO BE PERFORMED
BY THE BANK UNDER THIS AGREEMENT, AND THE BANK AND ITS AGENTS OR
SUBCONTRACTORS SHALL NOT BE LIABLE AND SHALL BE INDEMNIFIED BY THE
TRANSFER AGENT FOR ANY ACTION TAKEN OR OMITTED BY IT IN RELIANCE UPON
SUCH INSTRUCTIONS OR UPON THE OPINION OF SUCH COUNSEL.
THE BANK, ITS AGENTS AND SUBCONTRACTORS SHALL BE PROTECTED AND
INDEMNIFIED IN ACTING UPON ANY PAPER OR DOCUMENT FURNISHED BY OR ON
BEHALF OF THE TRANSFER AGENT, REASONABLY BELIEVED BY THE BATIK AS BEING
IN GOOD ORDER AND TO HAVE BEEN SIGNED BY THE PROPER PERSON OR PERSONS,
OR UPON ANY INSTRUCTION, INFORMATION, DATA, RECORDS OR DOCUMENTS
PROVIDED THE BANK OR ITS AGENTS OR SUBCONTRACTORS BY MACHINE READABLE
INPUT, TELEX, CRT DATA ENTRY OR OTHER SIMILAR MEANS AUTHORIZED BY THE
TRANSFER AGENT, AND SHALL NOT BE HELD TO HAVE NOTICE OF ANY CHANGE OF
AUTHORITY OF ANY PERSON, UNTIL RECEIPT OF WRITTEN NOTICE THEREOF FROM
THE TRANSFER AGENT. THE BANK, ITS AGENTS AND SUBCONTRACTORS SHALL ALSO
BE PROTECTED AND INDEMNIFIED IN RECOGNIZING STOCK CERTIFICATES WHICH
ARE REASONABLY BELIEVED TO BEAR THE PROPER MANUAL OR FACSIMILE
SIGNATURES OF THE OFFICERS OF THE TRANSFER AGENT, AND THE PROPER
COUNTERSIGNATURE OF THE TRANSFER AGENT OR ANY FORMER TRANSFER AGENT OR
FORMER REGISTRAR, OR OF A CO-TRANSFER AGENT OR CO-REGISTRAR.
5.3 IN ORDER THAT THE INDEMNIFICATION PROVISIONS CONTAINED IN THIS
SECTION 5 SHALL APPLY, UPON THE ASSERTION OF A CLAIM FOR WHICH THE
TRANSFER AGENT MAY BE REQUIRED TO INDEMNIFY THE BANK, THE BANK SHALL
PROMPTLY NOTIFY THE TRANSFER AGENT OF SUCH ASSERTION, AND SHALL KEEP
THE TRANSFER AGENT ADVISED WITH RESPECT TO ALL DEVELOPMENTS CONCERNING
SUCH CLAIM. THE TRANSFER AGENT SHALL HAVE THE OPTION TO PARTICIPATE
WITH THE BANK IN THE DEFENSE OF SUCH CLAIM OR TO DEFEND AGAINST SAID
CLAIM IN ITS OWN NAME OR IN THE NAME OF THE BANK. THE BANK SHALL IN NO
CASE CONFESS ANY CLAIM OR MAKE ANY COMPROMISE IN ANY CASE IN WHICH THE
TRANSFER AGENT MAY BE REQUIRED TO INDEMNIFY THE BANK EXCEPT WITH THE
TRANSFER AGENT'S PRIOR WRITTEN CONSENT.
6. STANDARD OF CARE
6.1 THE BANK SHALL AT ALL TIMES ACT IN GOOD FAITH AND AGREES TO
USE ITS BEST EFFORTS WITHIN REASONABLE LIMITS TO INSURE THE ACCURACY OF
ALL SERVICES PERFORMED UNDER THIS AGREEMENT, BUT ASSUMES NO
RESPONSIBILITY AND SHALL NOT BE LIABLE FOR LOSS OR DAMAGE DUE TO ERRORS
UNLESS SAID ERRORS ARE CAUSED BY ITS NEGLIGENCE, BAD FAITH, OR WILLFUL
MISCONDUCT OR THAT OF ITS EMPLOYEES.
6.2 THE BANK SHALL WORK WITH THE TRANSFER AGENT TO ENSURE THAT A
FUND IS MADE WHOLE BY THE RESPONSIBLE PARTY FOR ANY MATERIAL LOSSES OR
DAMAGES RESULTING FROM ERRORS, MATERIAL UNRECONCILED ITEMS,
CARELESSNESS, NEGLIGENCE, BAD FAITH, OR WILLFUL MISCONDUCT BY THE BANK
OR ITS AGENTS OR SUBCONTRACTORS, OR THAT OF THEIR EMPLOYEES. NEITHER
THE BANK, ITS AGENTS OR SUBCONTRACTORS, NOR THE TRANSFER AGENT MAY
WAIVE FULL LIABILITY FOR LOSSES OR DAMAGES BASED ON THE ABOVE.
6.3 ERRORS IDENTIFIED AS CAUSED BY THE SUB-TRANSFER AGENT WILL NOT
BE CHARGED TO THE FUNDS IN THE MONTHLY BILLING.
7. COVENANTS OF THE TRANSFER AGENT AND THE BANK
7.1 THE BANK HEREBY AGREES TO ESTABLISH AND MAINTAIN FACILITIES
AND PROCEDURES REASONABLY ACCEPTABLE TO THE TRANSFER AGENT FOR
SAFEKEEPING OF STOCK CERTIFICATES, CHECK FORMS AND FACSIMILE SIGNATURE
IMPRINTING DEVICES, IF ANY; AND FOR THE PREPARATION OR USE, AND FOR
KEEPING ACCOUNT OF, SUCH CERTIFICATES, FORMS AND DEVICES.
7.2 THE BANK SHALL KEEP RECORDS RELATING TO THE SERVICES TO BE
PERFORMED HEREUNDER, IN THE FORM AND MANNER AS IT MAY DEEM ADVISABLE.
TO THE EXTENT REQUIRED BY SECTION 31 OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED, AND THE RULES THEREUNDER, THE BANK AGREES THAT ALL
SUCH RECORDS PREPARED OR MAINTAINED BY THE BANK RELATING TO THE
SERVICES TO BE PERFORMED BY THE BANK HEREUNDER ARE THE PROPERTY OF THE
TRANSFER AGENT AND WILL BE PRESERVED, MAINTAINED AND MADE AVAILABLE IN
ACCORDANCE WITH SUCH SECTION AND RULES, AND WILL BE SURRENDERED
PROMPTLY TO THE TRANSFER AGENT ON AND IN ACCORDANCE WITH ITS REQUEST.
7.3 THE BANK AND THE TRANSFER AGENT AGREE THAT ALL BOOKS, RECORDS,
INFORMATION AND DATA PERTAINING TO THE BUSINESS OF THE OTHER PARTY
WHICH ARE EXCHANGED OR RECEIVED PURSUANT TO THE NEGOTIATION OR THE
CARRYING OUT OF THIS AGREEMENT SHALL REMAIN CONFIDENTIAL, AND SHALL NOT
BE VOLUNTARILY DISCLOSED TO ANY OTHER PERSON, EXCEPT AS MAY BE REQUIRED
BY LAW.
7.4 IN CASE OF ANY REQUESTS OR DEMANDS FOR THE INSPECTION OF THE
SHAREHOLDER RECORDS OF THE TRANSFER AGENT, THE BANK WILL ENDEAVOR TO
NOTIFY THE TRANSFER AGENT AND TO SECURE INSTRUCTIONS FROM AN AUTHORIZED
OFFICER OF THE TRANSFER AGENT AS TO SUCH INSPECTION. THE BANK RESERVES
THE RIGHT, HOWEVER, TO EXHIBIT THE SHAREHOLDER RECORDS TO ANY PERSON
WHENEVER IT IS ADVISED BY ITS COUNSEL THAT IT MAY BE HELD LIABLE FOR
THE FAILURE TO EXHIBIT THE SHAREHOLDER RECORDS TO SUCH PERSON.
8. REPRESENTATIONS AND WARRANTIES OF THE BANK
THE BANK REPRESENTS AND WARRANTS TO THE TRANSFER AGENT THAT:
(A) IT IS A TRUST COMPANY DULY ORGANIZED AND EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS;
(B) IT IS DULY QUALIFIED TO CARRY ON ITS BUSINESS IN THE
COMMONWEALTH OF MASSACHUSETTS;
(C) IT IS EMPOWERED UNDER APPLICABLE LAWS AND BY ITS
CHARTER AND BY-LAWS TO ENTER INTO AND PERFORM THIS AGREEMENT;
(D) ALL REQUISITE CORPORATE PROCEEDINGS HAVE BEEN TAKEN
TO AUTHORIZE IT TO ENTER INTO AND PERFORM THIS AGREEMENT;
(E) IT HAS AND WILL CONTINUE TO HAVE ACCESS TO THE
NECESSARY FACILITIES, EQUIPMENT AND PERSONNEL TO PERFORM ITS
DUTIES AND OBLIGATIONS UNDER THIS AGREEMENT; AND
(F) IT IS REGISTERED AS A TRANSFER AGENT UNDO SECTION
17A(C)(2) OF THE EXCHANGE ACT.
9. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
THE TRANSFER AGENT REPRESENTS AND WARRANTS TO THE BANK THAT:
(A) IT IS A CORPORATION DULY ORGANIZED AND EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE;
(B) IT IS EMPOWERED UNDER APPLICABLE LAWS AND BY ITS
ARTICLES OF INCORPORATION AND BY-LAWS TO ENTER INTO AND
PERFORM THIS AGREEMENT;
(C) ALL CORPORATE PROCEEDINGS REQUIRED BY SAID ARTICLES
OF INCORPORATION AND BY-LAWS HAVE BEEN TAKEN TO AUTHORIZE IT
TO ENTER INTO AND PERFORM THIS AGREEMENT.
(D) IT IS REGISTERED AS A TRANSFER AGENT UNDER SECTION
17A(C)(2) OF THE EXCHANGE ACT.
10. TERMINATION OF AGREEMENT
10.1 THIS AGREEMENT SHALL CONTINUE FOR A PERIOD OF FIVE YEARS (THE
"INITIAL TERM") AND BE RENEWED OR TERMINATED AS STATED BELOW.
10.2 THIS AGREEMENT SHALL TERMINATE UPON THE TERMINATION OF THE
TRANSFER AGENCY AGREEMENT BETWEEN THE FUNDS AND THE TRANSFER AGENT.
10.3 THIS AGREEMENT MAY BE TERMINATED OR RENEWED AFTER THE INITIAL
TERM BY EITHER PARTY UPON NINETY (90) DAYS WRITTEN NOTICE TO THE OTHER.
10.4 SHOULD THE TRANSFER AGENT EXERCISE ITS RIGHT TO TERMINATE, ALL
REASONABLE OUT-OF-POCKET EXPENSES ASSOCIATED WITH THE MOVEMENT OF
RECORDS AND MATERIAL WILL BE BORNE BY THE TRANSFER AGENT. ADDITIONALLY,
THE BANK RESERVES THE RIGHT TO CHARGE FOR ANY OTHER REASONABLE EXPENSES
ASSOCIATED WITH SUCH TERMINATION AND/OR A CHARGE EQUIVALENT TO THE
AVERAGE OF THREE (3) MONTHS' FEES.
11. ASSIGNMENT
11.1 EXCEPT AS PROVIDED IN SECTION 11.3 BELOW, NEITHER THIS
AGREEMENT NOR ANY RIGHTS OR OBLIGATIONS HEREUNDER MAY BE ASSIGNED BY
EITHER PARTY WITHOUT THE WRITTEN CONSENT OF THE OTHER PARTY.
11.2 THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND BE BINDING
UPON THE PARTIES AND THEIR RESPECTIVE PERMITTED SUCCESSORS AND ASSIGNS.
11.3 THE BANK WILL, WITHOUT FURTHER CONSENT ON THE PART OF THE
TRANSFER AGENT, SUBCONTRACT FOR THE PERFORMANCE HEREOF WITH NATIONAL
FINANCIAL DATA SERVICES, INC., A SUBSIDIARY OF BFDS DULY REGISTERED AS
A TRANSFER AGENT PURSUANT TO SECTION 17A(C)(2) PROVIDED, HOWEVER, THAT
THE BANK SHALL BE AS FULLY RESPONSIBLE TO THE TRANSFER AGENT FOR THE
ACTS AND OMISSIONS OF ANY SUBCONTRACTOR AS IT IS FOR ITS OWN ACTS AND
OMISSIONS.
12. AMENDMENT
THIS AGREEMENT MAY BE AMENDED OR MODIFIED BY A WRITTEN AGREEMENT
EXECUTED BY BOTH PARTIES.
13. MASSACHUSETTS LAW TO APPLY
THIS AGREEMENT SHALL BE CONSTRUED AND THE PROVISIONS THEREOF
INTERPRETED UNDER AND IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS.
14. FORCE MAJEURE
IN THE EVENT EITHER PARTY IS UNABLE TO PERFORM ITS OBLIGATIONS UNDER
THE TERMS OF THIS AGREEMENT BECAUSE OF ACTS OF GOD, STRIKES, EQUIPMENT
OR TRANSMISSION FAILURE OR DAMAGE REASONABLY BEYOND ITS CONTROL, OR
OTHER CAUSES REASONABLY BEYOND ITS CONTROL, SUCH PARTY SHALL NOT BE
LIABLE FOR DAMAGES TO THE OTHER FOR ANY DAMAGES RESULTING FROM SUCH
FAILURE TO PERFORM OR OTHERWISE FROM SUCH CAUSES.
15. CONSEQUENTIAL DAMAGES
NEITHER PARTY TO THIS AGREEMENT SHALL BE LIABLE TO THE OTHER PARTY FOR
CONSEQUENTIAL DAMAGES UNDER ANY PROVISION OF THIS AGREEMENT OR FOR ANY
CONSEQUENTIAL DAMAGES ARISING OUT OF ANY ACT OR FAILURE TO ACT
HEREUNDER.
16. LIMITATIONS OF SHAREHOLDER LIABILITY
EACH PARTY HEREBY EXPRESSLY ACKNOWLEDGES THAT RECOURSE AGAINST THE
FUNDS SHALL BE SUBJECT TO THOSE LIMITATIONS PROVIDED BY GOVERNING LAW
AND THE DECLARATION OF TRUST OR ARTICLES OF INCORPORATION OF THE FUNDS,
AS APPLICABLE, AND AGREES THAT OBLIGATIONS ASSUMED BY THE FUNDS
PURSUANT TO THE TRANSFER AGENCY AGREEMENT SHALL BE LIMITED IN ALL CASES
TO THE FUNDS AND THEIR RESPECTIVE ASSETS. EACH PARTY SHALL NOT SEEK
SATISFACTION FROM THE SHAREHOLDERS OR ANY INDIVIDUAL SHAREHOLDER OF THE
FUNDS, NOR SHALL ANY PARTY SEEK SATISFACTION OF ANY OBLIGATIONS FROM
THE DIRECTORS\TRUSTEES OR ANY INDIVIDUAL DIRECTOR\TRUSTEE OF THE FUNDS.
17. MERGER OF AGREEMENT
THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES
HERETO AND SUPERSEDES ANY PRIOR AGREEMENT WITH RESPECT TO THE SUBJECT
MATTER HEREOF WHETHER ORAL OR WRITTEN.
18. SURVIVAL
ALL PROVISIONS REGARDING INDEMNIFICATION, WARRANTY, LIABILITY, AND
LIMITS THEREON, AND CONFIDENTIALITY AND/OR PROTECTION OF PROPRIETARY
RIGHTS AND TRADE SECRETS SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT.
19. SEVERABILITY
IF ANY PROVISION OR PROVISIONS OF THIS AGREEMENT SHALL BE HELD INVALID,
UNLAWFUL, OR UNENFORCEABLE, THE VALIDITY, LEGALITY AND ENFORCEABILITY
OF THE REMAINING PROVISIONS SHALL NOT IN ANY WAY BE AFFECTED OR
IMPAIRED.
20. COUNTERPARTS
THIS AGREEMENT MAY BE EXECUTED BY THE PARTIES HERETO ON ANY NUMBER OF
COUNTERPARTS, AND ALL OF SAID COUNTERPARTS TAKEN TOGETHER SHALL BE
DEEMED TO CONSTITUTE ONE AND THE SAME INSTRUMENT.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
EXECUTED IN THEIR NAMES AND ON THEIR BEHALF BY AND THROUGH THEIR DULY
AUTHORIZED OFFICERS, AS OF THE DAY FIRST WRITTEN ABOVE.
CALVERT SHAREHOLDER SERVICES, INC.
BY: /S/ KAREN BECKER
TITLE: VICE PRESIDENT
ATTEST: KATHERINE STONER
STATE STREET BANK AND TRUST COMPANY
BY: /S/ RONALD E. LOGUE
TITLE: EXECUTIVE VICE PRESIDENT
ATTEST: FRANCINE HAYES
<PAGE>
AMENDMENT TO SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
CALVERT SHAREHOLDER SERVICES, INC.
AND
STATE STREET BANK AND TRUST COMPANY
GENERAL BACKGROUND:
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AND STATE STREET BANK AND
TRUST COMPANY ("STATE STREET") ENTERED INTO A SUB-TRANSFER AGENCY AND
SERVICE AGREEMENT ("AGREEMENT") DATED AUGUST 15, 1996.
FOR ACCOUNTING REASONS, CSSI DESIRES TO AMEND THE AGREEMENT BY
ASSIGNING THE CONTRACT FOR THE TRANSFER AGENT FUNCTIONS (EXCEPT FOR
SHAREHOLDER SERVICING) TO EACH CALVERT GROUP FUND. CSSI WILL CONTINUE
TO BE RESPONSIBLE FOR THE SHAREHOLDER SERVICING AND FOR ANY
RESPONSIBILITIES CURRENTLY SHOWN AS TRANSFER AGENT RESPONSIBILITIES IN
FUND SERVICE RESPONSIBILITIES ATTACHMENT TO THE AGREEMENT.
THE AGREEMENT MUST BE ASSIGNED TO THE CALVERT GROUP FUNDS FOR
ACCOUNTING PURPOSES.
CSSI AND STATE STREET MUST EACH CONSENT TO THIS ASSIGNMENT.
CHANGES CAUSED BY THIS ASSIGNMENT:
THE CURRENT SUBTRANSFER AGENT, NATIONAL FINANCIAL DATA SERVICES, INC.
("NFDS"), WILL BILL EACH CALVERT GROUP FUND, RATHER THAN CSSI, AND EACH
CALVERT GROUP FUND SHALL PAY STATE STREET OR ITS BILLING AGENT, NFDS,
ALL FEES AND EXPENSES INCURRED UNDER THE AGREEMENT ON BEHALF OF EACH
RESPECTIVE CALVERT GROUP FUND.
NFDS WILL BE SHOWN IN EACH CALVERT GROUP FUND PROSPECTUS AND STATEMENT
OF ADDITIONAL INFORMATION AS THE TRANSFER AGENT, WHILE CSSI WILL BE
SHOWN AS THE SHAREHOLDER SERVICING AGENT.
STATE STREET (NFDS) WILL CONTINUE TO PERFORM THOSE FUNCTIONS SHOWN IN
THE AGREEMENT AS BANK RESPONSIBILITIES.
CSSI WILL CONTINUE TO PERFORM THE TRANSFER AGENT RESPONSIBILITIES, AS
SHOWN IN THE FUND SERVICE RESPONSIBILITIES ATTACHMENT TO THE AGREEMENT.
THE ASSIGNMENT:
THIS AMENDMENT, DATED AS OF THE FIRST DAY OF JANUARY, 1998, BY AND
AMONG CSSI AND STATE STREET:
NOW, THEREFORE, CSSI AND STATE STREET EACH HEREBY AGREE THAT THE
AGREEMENT WILL BE BETWEEN EACH CALVERT GROUP FUND AND STATE STREET, AND
EACH HEREBY AGREES THAT THE AGREEMENT IS SO ASSIGNED.
IN WITNESS WHEREOF, CSSI AND STATE STREET HAVE CAUSED THIS AMENDMENT TO
BE EXECUTED BY THEIR DULY AUTHORIZED OFFICERS, EFFECTIVE AS OF JANUARY
1, 1998.
CALVERT SHAREHOLDER SERVICES, INC. STATE
STREET BANK AND TRUST COMPANY
BY: /S/ BY: /S/
NAME: KAREN BECKER NAME: RONALD E. LOGUE
TITLE: VICE PRESIDENT, OPERATIONS TITLE: EXECUTIVE VICE PRESIDENT
DATE: FEBRUARY 18, 1998 DATE: FEBRUARY 20, 1998
ACACIA CAPITAL CORPORATION
FIRST VARIABLE RATE FUND
CALVERT TAX-FREE RESERVES
CALVERT SOCIAL INVESTMENT FUND
CALVERT CASH RESERVES
THE CALVERT FUND BY: /S/
CALVERT MUNICIPAL FUND, INC. NAME: WILLIAM M. TARTIKOFF
CALVERT WORLD VALUES FUND, INC. TITLE: SENIOR VICE PRESIDENT AND SECRETARY
CALVERT NEW WORLD FUND, INC. DATE: FEBRUARY 18, 1998
SERVICING AGREEMENT
THIS AGENCY AGREEMENT, EFFECTIVE JANUARY 1, 1998, BY AND BETWEEN CALVERT
SHAREHOLDER SERVICES, INC., A DELAWARE CORPORATION HAVING ITS PRINCIPAL PLACE OF
BUSINESS IN BETHESDA, MARYLAND ("CSS"), AND REGISTERED INVESTMENT COMPANIES
SPONSORED BY CALVERT GROUP, LTD. AND ITS SUBSIDIARIES AND SET FORTH ON SCHEDULE
A ("CALVERT GROUP FUNDS" OR "FUNDS"). THE FUNDS HAVE ENTERED INTO A TRANSFER
AGENCY AND SERVICE AGREEMENT WITH THE STATE STREET BANK AND TRUST OF BOSTON,
MASSACHUSETTS ("STATE STREET") ("STATE STREET AGREEMENT").
1. APPOINTMENTS. THE FUNDS HEREBY APPOINTS CSS AS SERVICING AGENT,
AGENT AND SHAREHOLDER SERVICING AGENT FOR THE FUNDS, AND CSS HEREBY ACCEPTS SUCH
APPOINTMENT AND AGREES TO PERFORM THOSE DUTIES IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT.
2. DOCUMENTATION. THE FUNDS WILL FURNISH CSS WITH ALL DOCUMENTS,
CERTIFICATES, CONTRACTS, FORMS, AND OPINIONS WHICH CSS, IN ITS DISCRETION, DEEMS
NECESSARY OR APPROPRIATE IN CONNECTION WITH THE PROPER PERFORMANCE OF ITS DUTIES
UNDER THIS AGREEMENT.
3. SERVICES TO BE PERFORMED. CSS WILL BE RESPONSIBLE FOR TELEPHONE
SERVICING FUNCTIONS, SYSTEM INTERFACE WITH STATE STREET AND OVERSIGHT OF STATE
STREET'S ADMINISTERING AND PERFORMING THEIR DUTIES PURSUANT TO THE STATE STREET
AGREEMENT. THE DETAILS OF THE OPERATING STANDARDS AND PROCEDURES TO BE FOLLOWED
WILL BE DETERMINED FROM TIME TO TIME BY AGREEMENT BETWEEN CSS AND THE FUNDS.
4. RECORDKEEPING AND OTHER INFORMATION. CSS WILL, COMMENCING ON THE
EFFECTIVE DATE OF THIS AGREEMENT, TO THE EXTENT NECESSARY CREATE AND MAINTAIN
ALL NECESSARY SHAREHOLDER ACCOUNTING RECORDS IN ACCORDANCE WITH ALL APPLICABLE
LAWS, RULES AND REGULATIONS, INCLUDING BUT NOT LIMITED TO RECORDS REQUIRED BY
SECTION 31(A) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940
ACT"), AND THE RULES THEREUNDER, AS AMENDED FROM TIME TO TIME. ALL SUCH RECORDS
WILL BE THE PROPERTY OF THE FUND AND WILL BE AVAILABLE FOR INSPECTION AND USE BY
SUCH FUND.
5. AUDIT, INSPECTION AND VISITATION. CSS WILL MAKE AVAILABLE DURING
REGULAR BUSINESS HOURS ALL RECORDS AND OTHER DATA CREATED AND MAINTAINED
PURSUANT TO THIS AGREEMENT FOR REASONABLE AUDIT AND INSPECTION BY THE SEC, A
FUND OR ANY PERSON RETAINED BY A FUND.
6. COMPENSATION. THE FUNDS WILL COMPENSATE CSS ON A MONTHLY BASIS FOR
THE SERVICES PERFORMED PURSUANT TO THIS AGREEMENT, AT THE RATE OF COMPENSATION
SET FORTH IN SCHEDULE A. OUT OF POCKET EXPENSES INCURRED BY CSS AND NOT
INCLUDED IN SCHEDULE A WILL BE REIMBURSED TO CSS BY THE FUND, AS APPROPRIATE;
SUCH EXPENSES MAY INCLUDE, BUT ARE NOT LIMITED TO, SPECIAL FORMS AND POSTAGE FOR
MAILING THE FORMS. THESE CHARGES WILL BE PAYABLE IN FULL UPON RECEIPT OF A
BILLING INVOICE. IN LIEU OF REIMBURSING CSS FOR THESE EXPENSES, ANY FUND MAY,
IN ITS DISCRETION, DIRECTLY PAY THE EXPENSES.
7. USE OF NAMES. NO FUND WILL NOT USE THE NAME OF CSS IN ANY
PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE FUND IN ANY
MANNER WITHOUT PRIOR APPROVAL BY CSS; PROVIDED, HOWEVER, THAT CSS WILL APPROVE
ALL USES OF ITS NAME THAT MERELY REFER IN ACCURATE TERMS TO ITS APPOINTMENT
UNDER THIS AGREEMENT OR THAT ARE REQUIRED BY THE SEC OR A STATE SECURITIES
COMMISSION; AND, PROVIDED, FURTHER, THAT IN NO EVENT WILL APPROVAL BE
UNREASONABLY WITHHELD.
8. SECURITY. CSS REPRESENTS AND WARRANTS THAT, TO THE BEST OF ITS
KNOWLEDGE, THE VARIOUS PROCEDURES AND SYSTEMS THAT CSS PROPOSES TO IMPLEMENT
WITH REGARD TO SAFEGUARDING FROM LOSS OR DAMAGE ATTRIBUTABLE TO FIRE, THEFT OR
ANY OTHER CAUSE (INCLUDING PROVISION FOR TWENTY-FOUR HOUR A DAY RESTRICTED
ACCESS) THE FUND'S, RECORDS AND OTHER DATA AND CSS'S RECORDS, DATA, EQUIPMENT,
FACILITIES AND OTHER PROPERTY USED IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER
THIS AGREEMENT ARE ADEQUATE AND THAT IT WILL IMPLEMENT THEM IN THE MANNER
PROPOSED AND MAKE SUCH CHANGES FROM TIME TO TIME AS IN ITS JUDGMENT ARE REQUIRED
FOR THE SECURE PERFORMANCE OF OBLIGATIONS UNDER THIS AGREEMENT.
9. LIMITATION OF LIABILITY. EACH FUND WILL INDEMNIFY AND HOLD CSS
HARMLESS AGAINST ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES (INCLUDING
REASONABLE COUNSEL FEES AND EXPENSES) RESULTING FROM ANY CLAIM, DEMAND, ACTION
OR SUIT BROUGHT BY ANY PERSON (INCLUDING A SHAREHOLDER NAMING SUCH FUND AS A
PARTY) OTHER THAN SUCH FUND NOT RESULTING FROM CSS'S BAD FAITH, WILLFUL
MISFEASANCE, RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES, OR NEGLIGENCE
ARISING OUT OF, OR IN CONNECTION WITH, CSS'S PERFORMANCE OF ITS OBLIGATIONS
UNDER THIS AGREEMENT.
TO THE EXTENT CSS HAS NOT ACTED WITH BAD FAITH, WILLFUL MISFEASANCE,
RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES, OR GROSS NEGLIGENCE, EACH FUND
WILL ALSO INDEMNIFY AND HOLD CSS HARMLESS AGAINST ANY LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR EXPENSES (INCLUDING REASONABLE COUNSEL FEES AND EXPENSES)
RESULTING FROM ANY CLAIM, DEMAND, ACTION OR SUIT RESULTING FROM THE NEGLIGENCE
OF SUCH FUND, OR CSS'S ACTING UPON ANY INSTRUCTIONS REASONABLY BELIEVED BY IT TO
HAVE BEEN EXECUTED OR COMMUNICATED BY ANY PERSON DULY AUTHORIZED BY SUCH FUND,
OR AS A RESULT OF CSS'S ACTING IN RELIANCE UPON ADVICE REASONABLY BELIEVED BY
CSS TO HAVE BEEN GIVEN BY COUNSEL FOR THE FUND, OR AS A RESULT OF CSS'S ACTING
IN RELIANCE UPON ANY INSTRUMENT REASONABLY BELIEVED BY IT TO HAVE BEEN GENUINE
AND SIGNED, COUNTERSIGNED OR EXECUTED BY THE PROPER PERSON.
CSS'S LIABILITY FOR ANY AND ALL CLAIMS OF ANY KIND, INCLUDING NEGLIGENCE,
FOR ANY LOSS OR DAMAGE ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM THIS
AGREEMENT, OR FROM THE PERFORMANCE OR BREACH THEREOF, OR FROM THE DESIGN,
DEVELOPMENT, LEASE, REPAIR, MAINTENANCE, OPERATION OR USE OF DATA PROCESSING
SYSTEMS AND THE MAINTENANCE OF A FUNDS' SHAREHOLDER ACCOUNT RECORDS AS PROVIDED
FOR BY THIS AGREEMENT WILL IN THE AGGREGATE NOT EXCEED THE TOTAL OF CSS'S
COMPENSATION HEREUNDER FOR THE SIX MONTHS IMMEDIATELY PRECEDING THE DISCOVERY OF
THE CIRCUMSTANCES GIVING RISE TO SUCH LIABILITY.
IN NO EVENT WILL CSS BE LIABLE FOR INDIRECT, SPECIAL, OR CONSEQUENTIAL
DAMAGES (EVEN IF CSS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES)
ARISING FROM THE OBLIGATIONS ASSUMED HEREUNDER AND THE SERVICES PROVIDED FOR BY
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOSS OF USE OF THE
SHAREHOLDER ACCOUNTING SYSTEM, COST OF CAPITAL, COST OF SUBSTITUTE FACILITIES,
PROGRAMS OR SERVICES, DOWNTIME COSTS, OR CLAIMS OF SHAREHOLDERS FOR SUCH DAMAGE.
10. LIMITATION OF LIABILITY OF THE FUND. CSS ACKNOWLEDGES THAT IT
ACCEPTS THE LIMITATIONS UPON THE LIABILITY OF THE FUNDS. CSS AGREES THAT EACH
FUND'S OBLIGATIONS UNDER THIS AGREEMENT IN ANY CASE WILL BE LIMITED TO SUCH FUND
AND TO ITS ASSETS AND THAT CSS WILL NOT SEEK SATISFACTION OF ANY OBLIGATION FROM
THE SHAREHOLDERS OF THE FUND NOR FROM ANY DIRECTOR, TRUSTEE, OFFICER, EMPLOYEE
OR AGENT OF SUCH FUND.
11. FORCE MAJEURE. CSS WILL 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, CSS WILL TAKE REASONABLE STEPS TO MINIMIZE SERVICE
INTERRUPTIONS BUT WILL HAVE NO LIABILITY WITH RESPECT THERETO.
12. AMENDMENTS. CSS AND EACH FUND WILL REGULARLY CONSULT WITH EACH
OTHER REGARDING CSS'S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT. ANY
CHANGE IN A FUND'S REGISTRATION STATEMENTS UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE 1940 ACT OR IN THE FORMS RELATING TO ANY PLAN, PROGRAM OR
SERVICE OFFERED BY THE CURRENT PROSPECTUS WHICH WOULD REQUIRE A CHANGE IN CSS'S
OBLIGATIONS UNDER THIS AGREEMENT WILL BE SUBJECT TO CSS'S APPROVAL, WHICH WILL
NOT BE UNREASONABLY WITHHELD. NEITHER THIS AGREEMENT NOR ANY OF ITS PROVISIONS
MAY BE CHANGED, WAIVED, DISCHARGED, OR TERMINATED ORALLY, BUT ONLY BY WRITTEN
INSTRUMENT WHICH WILL MAKE SPECIFIC REFERENCE TO THIS AGREEMENT AND WHICH WILL
BE SIGNED BY THE PARTY AGAINST WHICH ENFORCEMENT OF SUCH CHANGE, WAIVER,
DISCHARGE OR TERMINATION IS SOUGHT.
13. TERMINATION. THIS AGREEMENT WILL CONTINUE IN EFFECT UNTIL JANUARY
1, 1999, AND THEREAFTER AS THE PARTIES MAY MUTUALLY AGREE; PROVIDED, HOWEVER,
THAT THIS AGREEMENT MAY BE TERMINATED AT ANY TIME BY EITHER PARTY UPON AT LEAST
SIXTY DAYS' PRIOR WRITTEN NOTICE TO THE OTHER PARTY; AND PROVIDED FURTHER THAT
THIS AGREEMENT MAY BE TERMINATED IMMEDIATELY AT ANY TIME FOR CAUSE EITHER BY ANY
FUND OR CSS IN THE EVENT THAT SUCH CAUSE REMAINS UNREMEDIED FOR NO LESS THAN
NINETY DAYS AFTER RECEIPT OF WRITTEN SPECIFICATION OF SUCH CAUSE. ANY SUCH
TERMINATION WILL NOT AFFECT THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
PARAGRAPHS 9 AND 10 HEREOF. IN THE EVENT THAT A FUND DESIGNATES A SUCCESSOR TO
ANY OF CSS'S OBLIGATIONS HEREUNDER, CSS WILL, AT THE EXPENSE AND DIRECTION OF
SUCH FUND, TRANSFER TO SUCH SUCCESSOR ALL RELEVANT BOOKS, RECORDS AND OTHER DATA
OF SUCH FUND ESTABLISHED OR MAINTAINED BY CSS UNDER THIS AGREEMENT.
15. MISCELLANEOUS. EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTS AND
EXECUTE SUCH FURTHER DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES OF
THIS AGREEMENT. THIS AGREEMENT WILL 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
DAY AND YEAR FIRST ABOVE WRITTEN.
CALVERT GROUP FUNDS
BY:
CALVERT SHAREHOLDER SERVICES, INC.
BY:
<PAGE>
SERVICING AGREEMENT
SCHEDULE A
FOR ITS SERVICES UNDER THIS SERVICING AGREEMENT, CALVERT SHAREHOLDER
SERVICES, INC., IS ENTITLED TO RECEIVE FROM THE CALVERT FUNDS (EXCEPT ACACIA
CAPITAL CORPORATION) FEES AS SET FORTH BELOW:
FUND AND PORTFOLIO ANNUAL ACCOUNT FEE*FOOT1 ACCOUNT FEES ARE
CHARGED MONTHLY BASED ON THE HIGHEST NUMBER OF NON-ZERO BALANCE ACCOUNTS
OUTSTANDING DURING THE MONTH. TRANSACTION FEE
FIRST VARIABLE RATE FUND
FIRST VARIABLE RATE FUND (D/B/A CALVERT FIRST
GOVERNMENT MONEY MARKET) $11.59 $.84
CALVERT TAX-FREE RESERVES
MONEY MARKET 13.35 .97
LIMITED-TERM 3.67 .42
LONG-TERM 2.67 .31
CALIFORNIA MONEY MARKET 12.74 .93
VERMONT MUNICIPAL 3.40 .39
CALVERT MUNICIPAL FUND, INC
CALIFORNIA INTERMEDIATE 3.48 .40
NATIONAL INTERMEDIATE 3.31 .38
MARYLAND INTERMEDIATE 4.64 .53
VIRGINIA INTERMEDIATE 3.35 .38
CALVERT CASH RESERVES
INSTITUTIONAL PRIME FUND 11.83 .86
<PAGE>
THE CALVERT FUND
INCOME 4.22 .48
NEW VISION SMALL CAP 5.90 .67
CALVERT SOCIAL INVESTMENT FUND
MONEY MARKET 11.92 .87
BOND 4.85 .55
MANAGED GROWTH 4.63 .53
EQUITY 5.24 .60
MANAGED INDEX 5.24 .60
CALVERT WORLD VALUES FUND, INC.
INTERNATIONAL EQUITY 5.36 .61
CAPITAL ACCUMULATION 6.26 .72
CALVERT NEW WORLD FUND
NEW AFRICA FUND 3.91 .45
ACACIA CAPITAL CORPORATION FEE IS AS FOLLOW:
.03% (THREE BASIS POINTS) ON THE FIRST $500 MILLION OF AVERAGE NET ASSETS
AND .02% (TWO BASIS POINTS) OVER $500 MILLION OF AVERAGE NET ASSETS, MINUS THE
FEES PAID BY ACACIA CAPITAL CORPORATION TO STATE STREET BANK AND TRUST PURSUANT
TO THE STATE STREET AGREEMENT (EXCEPT FOR OUT OF POCKET EXPENSES).
RESTATED JULY 1998
E:\AGREEMENTS\MULTI FUND AGMTS\CG OF FUNDS SERVICING _AGRMT_.DOC
*
The Calvert Fund
Administrative Services Agreement
March 1, 1999
Page 3 of 5
ADMINISTRATIVE SERVICES AGREEMENT
THE CALVERT FUND
ADMINISTRATIVE SERVICES AGREEMENT, MADE THIS 1ST DAY OF MARCH, 1999, BY AND
BETWEEN CALVERT ADMINISTRATIVE SERVICES COMPANY, A DELAWARE CORPORATION
("CASC"), AND THE CALVERT FUND, ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST (THE
"FUND"), EACH HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 4550 MONTGOMERY AVENUE,
BETHESDA, MARYLAND.
THE PARTIES TO THIS AGREEMENT, INTENDING TO BE LEGALLY BOUND, AGREE WITH
EACH OTHER AS FOLLOWS:
1. PROVISION OF SERVICES. CASC HEREBY UNDERTAKES TO PROVIDE THE FUND
WITH CERTAIN ADMINISTRATIVE SERVICES THAT MAY BE REQUIRED IN THE CONDUCT OF
BUSINESS. SUCH SERVICES INCLUDE, BUT ARE NOT LIMITED TO, MAINTAINING THE FUND'S
ORGANIZATIONAL EXISTENCE, PREPARING THE FUND'S PROSPECTUS(ES), PREPARING
NOTICES, PROXY MATERIALS, REPORTS TO REGULATORY BODIES AND REPORTS TO
SHAREHOLDERS OF THE FUND, AND SUCH OTHER INCIDENTAL ADMINISTRATIVE SERVICES AS
ARE NECESSARY TO THE CONDUCT OF THE FUND'S AFFAIRS. CASC SHALL OVERSEE THE
DETERMINATION OF THE DAILY NET ASSET VALUE OF SHARES, THE AMOUNT OF DAILY
DIVIDENDS OF NET INVESTMENT INCOME PER SHARE, AND THE MAINTENANCE OF THE
PORTFOLIO AND GENERAL ACCOUNTING RECORDS OF THE FUND THROUGH ITS CHOSEN
ACCOUNTING AGENT. THE FUND HEREBY ENGAGES CASC TO PROVIDE IT WITH SUCH SERVICES,
OR TO CAUSE SUCH SERVICES TO BE PROVIDED TO THE FUND BY THIRD PARTIES.
2. SCOPE OF AUTHORITY. CASC IS AT ALL TIMES, IN THE PERFORMANCE OF ITS
FUNCTIONS UNDER THIS AGREEMENT, SUBJECT TO ANY DIRECTION AND CONTROL OF THE
TRUSTEES OF THE FUND AND OF ITS OFFICERS, AND TO THE TERMS OF ITS DECLARATION OF
TRUST AND BYLAWS, EXCEPT THAT IT HAS NO OBLIGATION TO PROVIDE TO THE FUND ANY
SERVICES THAT ARE CLEARLY OUTSIDE THE SCOPE OF THOSE CONTEMPLATED IN THIS
AGREEMENT. IN THE PERFORMANCE OF ITS DUTIES UNDER THIS AGREEMENT, CASC IS
AUTHORIZED TO TAKE ANY ACTION IT DEEMS ADVISABLE. CASC MAY CONTRACT WITH OTHER
PERSONS TO PROVIDE TO THE FUND ANY OF THE SERVICES CONTEMPLATED UNDER THE
AGREEMENT UNDER SUCH TERMS AS CASC DEEMS REASONABLE, AND CASC HAS THE AUTHORITY
TO DIRECT THE ACTIVITIES OF THOSE OTHER PERSONS IN THE MANNER CASC DEEMS
APPROPRIATE.
3. OTHER ACTIVITIES OF CASC. CASC AND ANY OF ITS AFFILIATES MAY RENDER
TO OTHER PERSONS SERVICES SIMILAR TO THOSE IT PROVIDES TO THE FUND UNDER THIS
AGREEMENT. CASC OR ANY INTERESTED PERSON OF CASC MAY INVEST IN THE FUND AS A
SHAREHOLDER, BECOME AN OFFICER OR TRUSTEE OF THE FUND IF PROPERLY ELECTED, OR
ENTER INTO ANY OTHER RELATIONSHIP WITH THE FUND APPROVED BY THE TRUSTEES, IF
NECESSARY, AND IN ACCORDANCE WITH LAW.
4. RECORDKEEPING AND OTHER INFORMATION. CASC WILL, COMMENCING NO LATER
THAN THE EFFECTIVE DATE OF THIS AGREEMENT, OR THE COMMENCEMENT DATE OF ANY
SUBSEQUENTLY-CONSTITUTED SERIES OR CLASSES, CREATE AND MAINTAIN ALL NECESSARY
ADMINISTRATIVE RECORDS OF THE RELEVANT SERIES OR CLASS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS, INCLUDING, BUT NOT LIMITED TO, RECORDS
REQUIRED BY SECTION 31(A) OF THE INVESTMENT COMPANY ACT OF 1940 (THE "1940 ACT")
AND THE RULES UNDER THAT SECTION. ALL RECORDS ARE THE PROPERTY OF THE FUND AND
ARE AVAILABLE FOR INSPECTION AND USE BY THE FUND.
5. AUDIT, INSPECTION AND VISITATION. CASC WILL MAKE AVAILABLE DURING
REGULAR BUSINESS HOURS ALL RECORDS AND OTHER DATA CREATED AND MAINTAINED
PURSUANT TO THIS AGREEMENT FOR REASONABLE AUDIT AND INSPECTION BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION ("SEC"), THE FUND OR ANY PERSON
RETAINED BY THE FUND IF THAT PERSON'S FUNCTION NECESSITATES ACCESS TO SUCH
RECORDS AND DATA.
6. COMPENSATION TO CASC. THE FUND WILL COMPENSATE CASC ON A MONTHLY
BASIS FOR THE SERVICES PERFORMED UNDER THIS AGREEMENT. THE RATE OF COMPENSATION,
BASED ON AVERAGE NET ASSETS, IS SHOWN IN SCHEDULE A. CASC WILL NOT BE
RESPONSIBLE FOR ANY COSTS OR EXPENSES OF THE FUND OTHER THAN THOSE SPECIFICALLY
ASSUMED IN PARAGRAPH 1. EXPENSES INCURRED BY CASC AND NOT INCLUDED IN THE
SERVICE FEE WILL BE REIMBURSED TO CASC BY THE FUND, AS APPROPRIATE. SUCH
EXPENSES MAY INCLUDE EXPENSES INCIDENTAL TO MEETINGS OF SHAREHOLDERS, TAXES AND
CORPORATE FEES LEVIED AGAINST THE FUND OR ITS SERIES, EXPENSES OF PRINTING STOCK
CERTIFICATES REPRESENTING SHARES OF THE SERIES, EXPENSES OF PRINTING, MAILING
NOTICES, PROXY MATERIAL, REPORTS TO REGULATORY BODIES AND REPORTS TO
SHAREHOLDERS OF THE FUND, EXPENSES OF TYPESETTING PROSPECTUSES AND PRINTING AND
MAILING PROSPECTUSES TO SHAREHOLDERS, AND DATA PROCESSING EXPENSES INCIDENTAL TO
MAINTENANCE OF BOOKS AND RECORDS. SUCH CHARGES ARE PAYABLE IN FULL UPON RECEIPT
OF A BILLING INVOICE. IN LIEU OF REIMBURSING CASC FOR EXPENSES INCURRED AND NOT
INCLUDED IN THE SERVICE FEE, THE FUND MAY, IN ITS DISCRETION, DIRECTLY PAY ANY
EXPENSES.
7. USE OF NAMES. THE FUND MAY NOT USE THE NAME OF CASC IN ANY
PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE FUND OR ITS
SERIES OR CLASSES IN ANY MANNER WITHOUT PRIOR APPROVAL BY CASC, SUCH APPROVAL
NOT TO BE UNREASONABLY WITHHELD; PROVIDED, HOWEVER, THAT CASC HEREBY APPROVES
ALL USES OF ITS NAME THAT MERELY REFER IN ACCURATE TERMS TO ITS APPOINTMENT OR
THAT ARE REQUIRED BY THE SEC OR A STATE SECURITIES COMMISSION. CASC MAY NOT USE
THE NAME OF THE FUND OR ITS SERIES OR CLASSES IN ANY MATERIAL RELATING TO CASC
IN ANY MANNER WITHOUT PRIOR APPROVAL BY THE FUND, SUCH APPROVAL NOT TO BE
UNREASONABLY WITHHELD; PROVIDED, HOWEVER, THAT THE FUND HEREBY APPROVES ALL USES
OF ITS NAME OR THE NAMES OF ITS SERIES OR CLASSES THAT MERELY REFER IN ACCURATE
TERMS TO THE APPOINTMENT OF CASC OR THAT ARE REQUIRED BY THE SEC.
8. SECURITY. CASC REPRESENTS AND WARRANTS THAT, TO THE BEST OF ITS
KNOWLEDGE, THE VARIOUS PROCEDURES AND SYSTEMS THAT CASC PROPOSES TO IMPLEMENT
WITH REGARD TO SAFEGUARDING INFORMATION FROM LOSS OR DAMAGE ATTRIBUTABLE TO
FIRE, THEFT OR ANY OTHER CAUSE (INCLUDING PROVISIONS FOR TWENTY-FOUR HOUR
RESTRICTED ACCESS) WITH RESPECT TO THE FUND'S BOOKS AND RECORDS ADMINISTERED
PURSUANT TO THIS AGREEMENT AND CASC'S RECORDS, DATA, EQUIPMENT, FACILITIES AND
OTHER PROPERTY USED IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT
ARE ADEQUATE AND THAT CASC WILL IMPLEMENT THESE PROCEDURES AND SYSTEM IN A
MANNER CALCULATED TO ENSURE THE PERFORMANCE OF CASC'S OBLIGATIONS UNDER THIS
AGREEMENT.
9. LIMITATION OF LIABILITY. THE FUND WILL INDEMNIFY AND HOLD CASC
HARMLESS AGAINST ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES (INCLUDING
REASONABLE COUNSEL FEES AND EXPENSES) RESULTING FROM ANY CLAIM, DEMAND, ACTION
OR SUIT BROUGHT BY ANY PERSON (INCLUDING A SHAREHOLDER NAMING THE FUND OR ANY OF
ITS SERIES OR CLASSES AS A PARTY) OTHER THAN THE FUND NOT RESULTING FROM CASC'S
NEGLIGENCE, OR CAUSED BY ERRORS OF JUDGMENT OR MISTAKES OF LAW COMMITTED BY CASC
IN A GOOD FAITH EFFORT TO CARRY OUT ITS DUTIES UNDER THIS AGREEMENT.
IN NO EVENT WILL CASC BE LIABLE FOR INDIRECT, SPECIAL, OR CONSEQUENTIAL
DAMAGES (EVEN IF CASC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES)
ARISING FROM THE OBLIGATIONS ASSUMED HEREUNDER AND THE SERVICES PROVIDED FOR BY
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOSS OF USE OF
ACCOUNTING SYSTEMS, COST OF CAPITAL, COST OF SUBSTITUTE FACILITIES, PROGRAMS OR
SERVICES, DOWNTIME COSTS, OR CLAIMS OF THE FUND'S SHAREHOLDERS FOR SUCH DAMAGE.
10. LIMITATION OF FUND'S LIABILITY. CASC ACKNOWLEDGES THAT IT HAS
RECEIVED NOTICE OF AND ACCEPTS THE LIMITATION ON THE FUND'S LIABILITY. CASC
AGREES THAT THE FUND'S OBLIGATIONS IN ANY CASE EXTEND ONLY TO ITS SERIES AND
CLASSES AND THEIR ASSETS, AND THAT CASC WILL NOT SEEK SATISFACTION OF ANY
OBLIGATION FROM THE SHAREHOLDERS OR ANY TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF
THE FUND.
11. FORCE MAJEURE. CASC WILL NOT BE LIABLE FOR DELAYS OR ERRORS CAUSED
BY CIRCUMSTANCES BEYOND CASC'S 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, CASC
WILL TAKE REASONABLE STEPS TO MINIMIZE SERVICE INTERRUPTIONS BUT WILL HAVE NO
LIABILITY IN THE EVENT INTERRUPTIONS OCCUR.
12. AMENDMENTS. CASC AND THE FUND WILL CONSULT EACH OTHER REGARDING
CASC'S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT. ANY CHANGE IN THE
FUND'S REGISTRATION STATEMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE 1940 ACT OR IN THE FORMS RELATING TO ANY PLAN, PROGRAM OR SERVICE OFFERED BY
THE CURRENT PROSPECTUSES OF THE SERIES THAT WOULD REQUIRE A CHANGE IN CASC'S
OBLIGATIONS UNDER THIS AGREEMENT WILL BE SUBJECT TO CASC'S APPROVAL, WHICH WILL
NOT BE UNREASONABLY WITHHELD.
13. DURATION, TERMINATION, ETC. NEITHER THIS AGREEMENT NOR ANY OF ITS
PROVISIONS MAY BE CHANGED, WAIVED, DISCHARGED, OR TERMINATED ORALLY, BUT ONLY BY
WRITTEN INSTRUMENT WHICH WILL MAKE SPECIFIC REFERENCE TO THIS AGREEMENT AND
WHICH WILL BE SIGNED BY THE PARTY AGAINST WHICH ENFORCEMENT OF SUCH CHANGE,
WAIVER, DISCHARGE OR TERMINATION IS SOUGHT. THIS AGREEMENT WILL CONTINUE IN
EFFECT UNTIL DECEMBER 31, 1999, AND FOR ONE-YEAR TERMS THEREAFTER OR AS THE
PARTIES MAY MUTUALLY AGREE. THIS AGREEMENT MAY BE TERMINATED FOR CAUSE EITHER BY
THE FUND OR CASC, BUT ONLY AFTER A REASONABLE OPPORTUNITY TO CURE HAS BEEN
PROVIDED TO THE PARTY ACCUSED OF NOT PERFORMING ACCORDING TO THE TERMS OF THIS
AGREEMENT. WHAT CONSTITUTES A REASONABLE AMOUNT OF TIME TO CURE ANY DEFICIENCY
WILL BE DETERMINED BY THE PARTIES IN THE CONTEXT OF ACTION THAT NEEDS TO BE
TAKEN IN ORDER TO CURE THE DEFICIENCY, BUT IN NO EVENT WILL THE PARTY HAVE LESS
THAN 90 DAYS TO ATTEMPT TO CURE THE DEFICIENCY. IN THE EVENT THAT THE CAUSE
REMAINS UNREMEDIED, THE PARTIES HAVE THE OPTION TO TERMINATE THE CONTRACT PRIOR
TO ITS EXPIRATION DATE. ANY SUCH TERMINATION WILL NOT AFFECT THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER PARAGRAPHS 9 AND 10 OF THIS AGREEMENT. IN THE
EVENT THE FUND DESIGNATES A SUCCESSOR TO ANY OF CASC'S OBLIGATIONS UNDER THIS
AGREEMENT, CASC WILL, AT THE EXPENSE AND DIRECTION OF THE FUND, TRANSFER TO SUCH
SUCCESSOR ALL RELEVANT BOOKS, RECORDS AND OTHER DATA ESTABLISHED OR MAINTAINED
BY CASC.
14. MISCELLANEOUS. EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTS AND
EXECUTE SUCH FURTHER DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES OF
THIS AGREEMENT. THIS AGREEMENT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF MARYLAND. THE CAPTIONS IN THIS AGREEMENT ARE
INCLUDED FOR CONVENIENCE ONLY AND DO NOT 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 INDICATED ABOVE.
CALVERT ADMINISTRATIVE SERVICES COMPANY, INC.
BY
TITLE
THE CALVERT FUND
BY
TITLE
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
SCHEDULE A
LISTED BELOW ARE THE SERIES OF THE CALVERT FUND THAT ARE ENTITLED TO
RECEIVE ADMINISTRATIVE SERVICES FROM CALVERT ADMINISTRATIVE SERVICES COMPANY,
INC. ("CASC") UNDER THE ADMINISTRATIVE SERVICES AGREEMENT DATED MARCH 1, 1999,
AND WHICH WILL PAY ANNUAL FEES TO CASC PURSUANT TO THE AGREEMENT.
CALVERT INCOME FUND
CLASS A 0.30%
CLASS B 0.30%
CLASS C 0.30%
CLASS I 0.10%
CALVERT NEW VISION SMALL CAP FUND
CLASS A 0.25%
CLASS B 0.25%
CLASS C 0.25%
CLASS I 0.10%
FOR ITS SERVICES UNDER THIS ADMINISTRATIVE SERVICES AGREEMENT, CASC IS
ENTITLED TO RECEIVE THE FEE INDICATED ABOVE BASED ON AVERAGE NET ASSETS. THE
LIABILITY TO PAY FOR SERVICES UNDER THE AGREEMENT ARISES AT THE TIME A CLASS
COMMENCES OPERATIONS, ABSENT WAIVERS.
EXHIBIT 10
APRIL 27, 2000
SECURITIES AND EXCHANGE COMMISSION
JUDICIARY PLAZA
450 FIFTH STREET, N.W.
WASHINGTON, D.C. 20549
RE: EXHIBIT 10, FORM N-1A
FIRST VARIABLE RATE FUND
FILE NUMBERS 2-56809 AND 811-2633
LADIES AND GENTLEMEN:
AS COUNSEL TO CALVERT GROUP, LTD., IT IS MY OPINION THAT THE
SECURITIES BEING REGISTERED BY THIS POST-EFFECTIVE AMENDMENT NO. 40 WILL
BE LEGALLY ISSUED, FULLY PAID AND NON-ASSESSABLE WHEN SOLD. MY OPINION
IS BASED ON AN EXAMINATION OF DOCUMENTS RELATED TO FIRST VARIABLE RATE
FUND (THE "TRUST"), INCLUDING ITS DECLARATION OF TRUST, ITS BY-LAWS,
OTHER ORIGINAL OR PHOTOSTATIC COPIES OF TRUST RECORDS, CERTIFICATES OF
PUBLIC OFFICIALS, DOCUMENTS, PAPERS, STATUTES, AND AUTHORITIES AS I
DEEMED NECESSARY TO FORM THE BASIS OF THIS OPINION.
I THEREFORE CONSENT TO FILING THIS OPINION OF COUNSEL WITH THE
SECURITIES AND EXCHANGE COMMISSION AS AN EXHIBIT TO THE TRUST'S
POST-EFFECTIVE AMENDMENT NO. 40 TO ITS REGISTRATION STATEMENT.
SINCERELY,
/S/
JENNIFER STREAKS
ASSOCIATE GENERAL COUNSEL
CONSENT OF INDEPENDENT ACCOUNTANTS
WE CONSENT TO THE INCORPORATION BY REFERENCE IN POST EFFECTIVE
AMENDMENT NO. 40 TO THE REGISTRATION STATEMENT OF FIRST VARIABLE RATE FUND FOR
GOVERNMENT INCOME ON FORM N-LA (FILE NUMBER 2-56809 AND 811-2633) OF OUR REPORTS
DATED FEBRUARY 11, 2000, ON OUR AUDITS OF THE FINANCIAL STATEMENTS AND FINANCIAL
HIGHLIGHTS OF CALVERT FIRST GOVERNMENT MONEY MARKET FUND, WHICH REPORTS IS
INCLUDED IN THE ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER
31, 1999, WHICH IS INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT.
WE ALSO CONSENT TO THE REFERENCE OF OUR FIRM UNDER THE CAPTION "FINANCIAL
HIGHLIGHTS" IN THE PROSPECTUS AND "INDEPENDENT ACCOUNTANTS" IN THE STATEMENT
OF ADDITIONAL INFORMATION.
PRICEWATERHOUSECOOPERS LLP
BALTIMORE, MARYLAND
APRIL 27, 2000
E:\AGREEMENTS\12B1_PLANS_AND_SCHED\New BC Plan.doc
THE CALVERT GROUP OF FUNDS
CLASS B AND CLASS C
DISTRIBUTION PLAN
AS APPROVED BY THE BOARDS
IN NOVEMBER 1993 AND AS AMENDED AND RESTATED
FEBRUARY 1998 PURSUANT TO RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
THIS DISTRIBUTION PLAN APPLIES TO CLASS B AND CLASS C IN EACH PORTFOLIO OF
THE CALVERT FUNDS LISTED IN SCHEDULE A (EACH A "FUND" AND TOGETHER, THE "FUNDS")
AND TO ANY FUTURE CLASS FOR WHICH THIS DISTRIBUTION PLAN HAS BEEN APPROVED IN
ACCORDANCE WITH PARAGRAPH 2(A) BELOW. FOR PURPOSES OF THIS DISTRIBUTION PLAN
EACH SERIES PORTFOLIO OF A FUND IS REFERRED TO HEREIN AS A "SERIES" AND
TOGETHER, AS THE "SERIES".
AS PERMITTED BY RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 AND IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS PLAN, AS HEREINAFTER SET FORTH,
A FUND MAY INCUR CERTAIN EXPENDITURES TO PROMOTE ITSELF AND FURTHER THE
DISTRIBUTION OF ITS SHARES.
1. PAYMENT OF FEE
(A) AS COMPENSATION FOR CERTAIN SERVICES PERFORMED AND EXPENSES ASSUMED
BY EACH FUND'S DISTRIBUTOR AND PRINCIPAL UNDERWRITER ("DISTRIBUTOR") EACH FUND
MAY PAY THE DISTRIBUTOR A DISTRIBUTION FEE (THE "DISTRIBUTION FEE"). THE
DISTRIBUTION FEE IS INTENDED TO COMPENSATE THE DISTRIBUTOR FOR ITS MARKETING
EFFORTS, WHICH INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING COSTS: COMMISSIONS
AND OTHER PAYMENTS ADVANCED TO SALES PERSONNEL AND THIRD PARTIES AND RELATED
INTEREST COSTS AS PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. ("NASD"), PRINTING AND MAILING PROSPECTUSES, SALES
LITERATURE AND OTHER RELEVANT MATERIAL TO OTHER THAN CURRENT SHAREHOLDERS,
ADVERTISING AND PUBLIC RELATIONS, TELEMARKETING, MARKETING-RELATED OVERHEAD
EXPENSES AND OTHER DISTRIBUTION COSTS. SUCH DISTRIBUTION FEE IS IN ADDITION TO
ANY NASD SERVICE FEE THAT MAY BE PAID HEREUNDER AND AS DESCRIBED AT SECTION 3(B)
OF THE DISTRIBUTION AGREEMENT BETWEEN THE RESPECTIVE FUNDS AND THE DISTRIBUTOR,
OR ANY FRONT-END OR DEFERRED SALES CHARGES THE DISTRIBUTOR RECEIVES FROM A FUND
WITH RESPECT TO SALES OR REDEMPTION OF FUND SHARES. TOTAL FEES PAID PURSUANT TO
THIS PLAN, INCLUDING THE DISTRIBUTION FEE DESCRIBED ABOVE, AND THE NASD SERVICE
FEE, SHALL NOT EXCEED THE RATE SET FORTH IN THE ATTACHED SCHEDULE B TO THIS
PLAN. ALL AGREEMENTS WITH ANY PERSON RELATING TO THE IMPLEMENTATION OF THIS
PLAN SHALL BE IN WRITING, AND SUCH AGREEMENTS SHALL BE SUBJECT TO TERMINATION,
WITHOUT PENALTY, PURSUANT TO THE PROVISIONS OF PARAGRAPH 2(C) OF THIS PLAN.
<PAGE>
-3-
(B) A FUND WILL PAY EACH PERSON WHICH HAS ACTED AS PRINCIPAL
UNDERWRITER OF ITS CLASS B SHARES ITS ALLOCABLE PORTION (AS SUCH TERM IS DEFINED
IN THE DISTRIBUTION AGREEMENT PURSUANT TO WHICH SUCH PERSON ACTS OR ACTED AS
PRINCIPAL UNDERWRITER OF THE CLASS B SHARES (THE "APPLICABLE DISTRIBUTION
AGREEMENT")) OF THE DISTRIBUTION FEE IN RESPECT OF CLASS B SHARES OF THE FUND.
SUCH PERSON SHALL BE PAID ITS ALLOCABLE PORTION OF SUCH DISTRIBUTION FEES
NOTWITHSTANDING SUCH PERSON'S TERMINATION AS DISTRIBUTOR OF THE CLASS B SHARES
OF THE FUND, SUCH PAYMENTS TO BE CHANGED OR TERMINATED ONLY: (I) AS REQUIRED BY
A CHANGE IN APPLICABLE LAW OR A CHANGE IN ACCOUNTING POLICY ADOPTED BY THE
INVESTMENT COMPANIES COMMITTEE OF THE AICPA AND APPROVED BY FASB THAT RESULTS IN
A DETERMINATION BY THE FUND'S INDEPENDENT ACCOUNTANTS THAT ANY ASSET BASED SALES
CHARGES (AS THAT TERM IS DEFINED BY THE NASD) IN RESPECT OF SUCH FUND, AND WHICH
ARE NOT YET DUE AND PAYABLE, MUST BE ACCOUNTED FOR BY SUCH FUND AS A LIABILITY
IN ACCORDANCE WITH GAAP, EACH AFTER THE EFFECTIVE DATE OF THIS RESTATED
DISTRIBUTION PLAN; (II) IF IN THE SOLE DISCRETION OF THE BOARD OF
TRUSTEES/DIRECTORS, AFTER DUE CONSIDERATION OF THE RELEVANT FACTORS CONSIDERED
WHEN ADOPTING AND/OR AMENDING THIS DISTRIBUTION PLAN INCLUDING THE TRANSACTIONS
CONTEMPLATED IN THAT CERTAIN PURCHASE AND SALE AGREEMENT ENTERED INTO BETWEEN A
FUND'S DISTRIBUTOR AND THE COMMISSION FINANCING ENTITY, THE BOARD OF
TRUSTEES/DIRECTORS DETERMINES, SUBJECT TO ITS FIDUCIARY DUTY, THAT THIS
DISTRIBUTION PLAN AND THE PAYMENTS THEREUNDER MUST BE CHANGED OR TERMINATED,
NOTWITHSTANDING THE EFFECT THIS ACTION MIGHT HAVE ON THE FUND'S ABILITY TO OFFER
AND SELL CLASS B SHARES; OR (III) IN CONNECTION WITH A COMPLETE TERMINATION OF
THIS DISTRIBUTION PLAN, IT BEING UNDERSTOOD THAT FOR THIS PURPOSE A COMPLETE
TERMINATION OF THIS DISTRIBUTION PLAN OCCURS ONLY IF, AS TO A FUND OR SERIES,
THIS DISTRIBUTION PLAN IS TERMINATED AND THE FUND HAS NOT ADOPTED ANY OTHER
DISTRIBUTION PLAN WITH RESPECT TO ITS CLASS B OR OTHER SUBSTANTIALLY SIMILAR
CLASS OF SHARES. THE SERVICES RENDERED BY A DISTRIBUTOR FOR WHICH THAT
DISTRIBUTOR IS ENTITLED TO RECEIVE ITS ALLOCABLE PORTION OF THE DISTRIBUTION FEE
SHALL BE DEEMED TO HAVE BEEN COMPLETED AT THE TIME OF THE INITIAL PURCHASE OF
THE COMMISSION SHARES (AS DEFINED IN THE DISTRIBUTION AGREEMENT) TAKEN INTO
ACCOUNT IN COMPUTING THAT DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION
FEE.
THE OBLIGATION OF A FUND TO PAY THE DISTRIBUTION FEE SHALL TERMINATE UPON
THE TERMINATION OF THIS DISTRIBUTION PLAN AS TO SUCH FUND IN ACCORDANCE WITH THE
TERMS HEREOF. EXCEPT AS PROVIDED IN THE PRECEDING PARAGRAPH, A FUND'S
OBLIGATION TO PAY THE DISTRIBUTION FEE TO A DISTRIBUTOR OF THE CLASS B SHARES OF
THE FUND SHALL BE ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE SUBJECT TO ANY
DISPUTE, OFFSET, COUNTERCLAIM OR DEFENSE WHATSOEVER (IT BEING UNDERSTOOD THAT
NOTHING IN THIS SENTENCE SHALL BE DEEMED A WAIVER BY A FUND OF ITS RIGHT
SEPARATELY TO PURSUE ANY CLAIMS IT MAY HAVE AGAINST SUCH DISTRIBUTOR AND ENFORCE
SUCH CLAIMS AGAINST ANY ASSETS (OTHER THAN ITS RIGHT TO BE PAID ITS ALLOCABLE
PORTION OF THE DISTRIBUTION FEE AND TO BE PAID THE CONTINGENT DEFERRED SALES
CHARGES) OF SUCH DISTRIBUTOR).
THE RIGHT OF A DISTRIBUTOR TO RECEIVE THE DISTRIBUTION FEE, BUT NOT THE
RELEVANT DISTRIBUTION AGREEMENT OR THAT DISTRIBUTOR'S OBLIGATIONS THEREUNDER,
MAY BE TRANSFERRED BY THAT DISTRIBUTOR IN ORDER TO RAISE FUNDS WHICH MAY BE
USEFUL OR NECESSARY TO PERFORM ITS DUTIES AS PRINCIPAL UNDERWRITER, AND ANY SUCH
TRANSFER SHALL BE EFFECTIVE UPON WRITTEN NOTICE FROM THAT DISTRIBUTOR TO THE
FUND. IN CONNECTION WITH THE FOREGOING, EACH FUND IS AUTHORIZED TO PAY ALL OR
PART OF THE DISTRIBUTION FEE DIRECTLY TO SUCH TRANSFEREE AS DIRECTED BY THAT
DISTRIBUTOR.
(C) NOTHING IN THIS DISTRIBUTION PLAN SHALL OPERATE OR BE CONSTRUED TO
LIMIT THE EXTENT TO WHICH THE FUND'S INVESTMENT ADVISOR OR ANY OTHER PERSON,
OTHER THAN THE FUND, AT ITS EXPENSE APART FROM THE DISTRIBUTION PLAN, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF FUND SHARES.
2. EFFECTIVE DATE AND TERM
(A) THIS DISTRIBUTION PLAN SHALL BECOME EFFECTIVE AS TO ANY CLASS OF
ANY SERIES UPON APPROVAL BY MAJORITY VOTES OF (I) THE BOARD OF THE FUND AND THE
MEMBERS THEREOF WHO ARE NOT INTERESTED PERSONS WITHIN THE MEANING OF SECTION
2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940 AND HAVE NO DIRECT OR INDIRECT
FINANCIAL INTEREST IN THE OPERATION OF THE DISTRIBUTION PLAN OR IN ANY
AGREEMENTS RELATED TO THE DISTRIBUTION PLAN ("QUALIFIED TRUSTEES/DIRECTORS"),
CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON THIS
DISTRIBUTION PLAN, AND (II) THE OUTSTANDING VOTING SECURITIES OF THE FUND.
(B) THIS DISTRIBUTION PLAN SHALL REMAIN IN EFFECT FOR ONE YEAR FROM ITS
ADOPTION DATE AND MAY CONTINUE IN EFFECT THEREAFTER IF THIS DISTRIBUTION PLAN IS
APPROVED AT LEAST ANNUALLY BY A MAJORITY VOTE OF THE BOARD OF THE FUND,
INCLUDING A MAJORITY OF THE QUALIFIED TRUSTEES/DIRECTORS, CAST IN PERSON AT A
MEETING CALLED FOR THE PURPOSE OF VOTING ON THE DISTRIBUTION PLAN.
(C) SUBJECT TO PARAGRAPH 1(B) ABOVE, THIS DISTRIBUTION PLAN MAY BE
TERMINATED AT ANY TIME WITHOUT PAYMENT OF ANY PENALTY BY A MAJORITY VOTE OF THE
QUALIFIED TRUSTEES/DIRECTORS OR BY VOTE OF A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES OF THE FUND, OR, WITH RESPECT TO THE TERMINATION OF THIS DISTRIBUTION
PLAN AS TO A PARTICULAR CLASS OF A PORTFOLIO, BY A VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF THAT CLASS.
(D) THE PROVISIONS OF THIS DISTRIBUTION PLAN ARE SEVERABLE FOR EACH
SERIES OR CLASS, AND WHENEVER ACTION IS TO BE TAKEN WITH RESPECT TO THIS
DISTRIBUTION PLAN, THAT ACTION MUST BE TAKEN SEPARATELY FOR EACH SERIES OR CLASS
AFFECTED BY THE MATTER.
3. REPORTS
THE PERSON AUTHORIZED TO DIRECT THE DISPOSITION OF MONIES PAID OR PAYABLE
BY THE FUND PURSUANT TO THE DISTRIBUTION PLAN SHALL PROVIDE, ON AT LEAST A
QUARTERLY BASIS, A WRITTEN REPORT TO EACH FUND'S BOARD OF THE AMOUNTS EXPENDED
PURSUANT TO THIS DISTRIBUTION PLAN OR ANY RELATED AGREEMENTS AND THE PURPOSES
FOR WHICH SUCH EXPENDITURES WERE MADE.
4. SELECTION OF DISINTERESTED TRUSTEES/DIRECTORS
WHILE THIS DISTRIBUTION PLAN IS IN EFFECT, THE SELECTION AND NOMINATION OF
THOSE TRUSTEES/DIRECTORS WHO ARE NOT INTERESTED PERSONS OF A FUND WITHIN THE
MEANING OF SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940 SHALL BE
COMMITTED TO THE DISCRETION OF THE TRUSTEES/DIRECTORS THEN IN OFFICE WHO ARE NOT
INTERESTED PERSONS OF THE FUND.
5. EFFECT OF PLAN
THIS DISTRIBUTION PLAN SHALL NOT OBLIGATE THE FUND OR ANY OTHER PARTY TO
ENTER INTO AN AGREEMENT WITH ANY PARTICULAR PERSON.
6. AMENDMENT
THIS DISTRIBUTION PLAN MAY NOT BE AMENDED TO INCREASE MATERIALLY THE AMOUNT
AUTHORIZED IN PARAGRAPH 1 HEREOF TO BE SPENT BY A FUND FOR DISTRIBUTION WITHOUT
APPROVAL BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SHARES OF SUCH FUND,
EXCEPT THAT IF THE AMENDMENT RELATES ONLY TO A PARTICULAR CLASS OF A FUND, SUCH
APPROVAL NEED ONLY BE BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SHARES OF
THAT CLASS. ALL MATERIAL AMENDMENTS TO THIS DISTRIBUTION PLAN MUST BE APPROVED
BY A MAJORITY VOTE OF THE BOARD OF THE FUND, AND OF THE QUALIFIED
TRUSTEES/DIRECTORS, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING
THEREON.
<PAGE>
SCHEDULE A
THE CALVERT FUND
CALVERT TAX-FREE RESERVES
CALVERT MUNICIPAL FUND
CALVERT SOCIAL INVESTMENT FUND
CALVERT WORLD VALUES FUND
CALVERT NEW WORLD FUND
FIRST VARIABLE RATE FUND
<PAGE>
SCHEDULE B
THE TOTAL FEES PAID BY THE RESPECTIVE CLASS OF EACH SERIES OF A FUND
PURSUANT TO THIS DISTRIBUTION PLAN SHALL NOT EXCEED THE RATE, AS A PERCENTAGE OF
THAT CLASS' AVERAGE ANNUAL NET ASSETS, SET FORTH BELOW:
FUND/SERIES CLASS B CLASS C
DISTRIBUTION SERVICE DISTRIBUTION
SERVICE
FEE FEE FEE FEE
THE CALVERT FUND
CALVERT NEW VISION
SMALL CAP FUND 0.75 0.25 0.75 0.25
CALVERT INCOME FUND 0.75 0.25 0.75 0.25
CALVERT TAX-FREE RESERVES
LONG-TERM 0.75 0.25 0.75 0.25
VERMONT MUNICIPAL 0.75 0.25 0.75 0.25
CALVERT MUNICIPAL FUND
NATIONAL 0.75 0.25 N/A N/A
CALIFORNIA 0.75 0.25 N/A N/A
MARYLAND 0.75 0.25 N/A N/A
VIRGINIA 0.75 0.25 N/A N/A
CALVERT SOCIAL INVESTMENT FUND
MANAGED GROWTH 0.75 0.25 0.75 0.25
EQUITY 0.75 0.25 0.75 0.25
BOND 0.75 0.25 0.75 0.25
MANAGED INDEX 0.75 0.25 0.75 0.25
CALVERT WORLD VALUES FUND
INTERNATIONAL EQUITY 0.75 0.25 0.75 0.25
CAPITAL ACCUMULATION 0.75 0.25 0.75 0.25
CALVERT NEW WORLD FUND
CALVERT NEW AFRICA 0.75 0.25 0.75 0.25
FIRST VARIABLE RATE FUND
CALVERT FIRST GOV.
MONEY MARKET 0.75 0.25 0.75 0.25
RESTATED FEB. 1998
E:\AGREEMENTS\MULTI FUND AGMTS\NEW BC PLAN.DOC
E:\AGREEMENTS\12B1_PLANS_AND_SCHED\Class T FV and CTFR.doc
CALVERT TAX-FREE RESERVES MONEY MARKET
AND
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
CLASS T
AS PERMITTED BY RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 AND IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS DISTRIBUTION PLAN ("PLAN"), AS
HEREINAFTER SET FORTH, THE ABOVE-REFERENCED FUNDS (EACH, "FUND") MAY INCUR
CERTAIN EXPENDITURES TO PROMOTE THE FUND AND FURTHER THE DISTRIBUTION OF SHARES
OF FUND.
1. PAYMENT OF DISTRIBUTION EXPENSES. (A) THE FUND MAY INCUR EXPENDITURES FOR
CERTAIN EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF ITS SHARES. SUCH
DISTRIBUTION EXPENSES INCLUDE, BUT NEED NOT BE LIMITED TO: THE COST OF PRINTING
AND MAILING PROSPECTUSES, SALES LITERATURE AND OTHER RELEVANT MATERIAL TO OTHER
THAN CURRENT SHAREHOLDERS OF THE FUND; ADVERTISING AND PUBLIC RELATIONS; AND
PAYMENTS TO SALES PERSONNEL, BROKER-DEALERS AND OTHER THIRD PARTIES IN RETURN
FOR DISTRIBUTION ASSISTANCE. PAYMENTS FOR DISTRIBUTION EXPENSES INCURRED BY THE
FUND PURSUANT TO THIS PLAN MAY BE MADE DIRECTLY OR INDIRECTLY; HOWEVER, ALL
AGREEMENTS WITH ANY PERSON RELATING TO THE IMPLEMENTATION OF THIS PLAN SHALL BE
IN WRITING, AND SUCH AGREEMENTS SHALL BE SUBJECT TO TERMINATION, WITHOUT
PENALTY, PURSUANT TO THE PROVISIONS OF PARAGRAPH 2(C) OF THIS PLAN.
(B) DISTRIBUTION EXPENSES SHALL BE PAID ACCORDING TO THE ATTACHED SCHEDULE
I.
(C) NOTHING IN THIS PLAN SHALL OPERATE OR BE CONSTRUED TO LIMIT THE EXTENT
TO WHICH THE FUND'S INVESTMENT ADVISOR OR ANY OTHER PERSON, OTHER THAN THE FUND,
AT ITS EXPENSE APART FROM THIS PLAN, MAY INCUR COSTS AND PAY EXPENSES ASSOCIATED
WITH THE DISTRIBUTION OF FUND SHARES.
2. EFFECTIVE DATE AND TERM. (A) THIS PLAN SHALL BECOME EFFECTIVE UPON
APPROVAL BY MAJORITY VOTES OF (I) THE BOARD OF TRUSTEES OF THE FUND AND THE
TRUSTEES WHO ARE NOT INTERESTED PERSONS WITHIN THE MEANING OF SECTION 2(A) (19)
OF THE INVESTMENT COMPANY ACT OF 1940 AND HAVE NO DIRECT OR INDIRECT FINANCIAL
INTEREST IN THE OPERATION OF THE PLAN OR IN ANY AGREEMENTS RELATED TO THE PLAN
(SUCH TRUSTEES ARE HEREINAFTER REFERRED TO AS "QUALIFIED TRUSTEES"), CAST IN
PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON THIS PLAN, AND (II) THE
OUTSTANDING VOTING SECURITIES OF THE FUND.
B) THIS PLAN SHALL REMAIN IN EFFECT FOR ONE YEAR FROM ITS ADOPTION DATE
AND MAY CONTINUE IN EFFECT THEREAFTER IF THIS PLAN IS APPROVED AT LEAST ANNUALLY
BY A MAJORITY VOTE OF THE TRUSTEES OF THE FUND, INCLUDING A MAJORITY OF THE
QUALIFIED TRUSTEES, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING
ON THE PLAN.
C). THIS PLAN MAY BE TERMINATED AT ANY TIME BY A MAJORITY VOTE OF THE
QUALIFIED TRUSTEES OR BY VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES
OF THE FUND OR, WITH RESPECT TO A PORTFOLIO, BY A VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF THAT PORTFOLIO.
3. REPORTS. THE PERSON AUTHORIZED TO DIRECT THE DISPOSITION OF MONIES
PAID OR PAYABLE BY THE FUND PURSUANT TO THE PLAN SHALL PROVIDE, ON AT LEAST A
QUARTERLY BASIS, A WRITTEN REPORT TO THE FUND'S BOARD OF TRUSTEES OF THE AMOUNTS
EXPENDED PURSUANT TO THIS PLAN OR ANY RELATED AGREEMENT AND THE PURPOSES FOR
WHICH SUCH EXPENDITURES WERE MADE.
4. SELECTION OF DISINTERESTED TRUSTEES. WHILE THIS PLAN IS IN EFFECT, THE
SELECTION AND NOMINATION OF THOSE TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE
FUND WITHIN THE MEANING OF SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF
1940 SHALL BE COMMITTED TO THE DISCRETION OF THE TRUSTEES THEN IN OFFICE WHO ARE
NOT INTERESTED PERSONS OF THE FUND.
5. EFFECT OF PLAN. THIS PLAN SHALL NOT OBLIGATE THE FUND OR ANY OTHER
PERSON TO ENTER INTO AN AGREEMENT WITH ANY PARTICULAR PERSON.
6. AMENDMENT. THIS PLAN MAY NOT BE AMENDED TO INCREASE MATERIALLY THE
AMOUNT AUTHORIZED IN PARAGRAPH L(B) HEREOF TO BE SPENT FOR DISTRIBUTION WITHOUT
APPROVAL BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SECURITIES OF THE FUND OR,
WITH RESPECT TO A PORTFOLIO, BY A VOTE OF A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES OF THE PORTFOLIO. ALL MATERIAL AMENDMENTS TO THIS PLAN MUST BE
APPROVED BY A MAJORITY VOTE OF THE BOARD OF TRUSTEES OF THE FUND, AND OF THE
QUALIFIED TRUSTEES, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING
THEREON.
<PAGE>
SCHEDULE I
CLASS T
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
CLASS T DISTRIBUTION PLAN EXPENSES INCURRED BY THE FUNDS SHALL BE PAID ACCORDING
TO THE FOLLOWING ANNUAL RATE, BASED ON THE CLASS T AVERAGE DAILY NET ASSETS IN
THAT FUND:
CALVERT TAX-FREE RESERVES MONEY MARKET PORTFOLIO 0.25%
CALVERT FIRST GOVERNMENT MONEY MARKET FUND 0.25%
18f-3 Multiple Class Plan
As Restated December 1998
Page 3 of 11
THE CALVERT GROUP OF FUNDS
RULE 18F-3 MULTIPLE CLASS PLAN
UNDER THE INVESTMENT COMPANY ACT OF 1940
AS RESTATED DECEMBER 1998
RULE 18F-3 UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940
ACT"), REQUIRES THAT AN INVESTMENT COMPANY DESIRING TO OFFER MULTIPLE CLASSES OF
SHARES PURSUANT TO THE RULE ADOPT A PLAN SETTING FORTH THE DIFFERENCES AMONG THE
CLASSES WITH RESPECT TO SHAREHOLDER SERVICES, DISTRIBUTION ARRANGEMENTS, EXPENSE
ALLOCATIONS AND ANY RELATED CONVERSION FEATURES OR EXCHANGE PRIVILEGES. ANY
MATERIAL AMENDMENT TO THE PLAN MUST BE APPROVED BY THE INVESTMENT COMPANY'S
BOARD OF TRUSTEES/DIRECTORS, INCLUDING A MAJORITY OF THE DISINTERESTED BOARD
MEMBERS, WHO MUST FIND THAT THE PLAN IS IN THE BEST INTERESTS OF EACH CLASS
INDIVIDUALLY AND THE INVESTMENT COMPANY AS A WHOLE.
THIS RULE 18F-3 MULTIPLE CLASS PLAN ("PLAN") SHALL APPLY TO THOSE FUNDS IN
THE CALVERT GROUP OF FUNDS LISTED IN EXHIBIT I (EACH A "FUND" AND COLLECTIVELY,
"FUNDS") AND TO ANY FUTURE FUND FOR WHICH THIS PLAN HAS BEEN APPROVED IN
ACCORDANCE WITH THE ABOVE PARAGRAPH.
THE PROVISIONS OF THIS PLAN ARE SEVERABLE FOR EACH FUND OR SERIES THEREOF
("SERIES") OR CLASS, AND WHENEVER ACTION IS TO BE TAKEN WITH RESPECT TO THIS
PLAN, THAT ACTION MUST BE TAKEN SEPARATELY FOR EACH FUND, SERIES OR CLASS
AFFECTED BY THE MATTER.
1. CLASS DESIGNATION. A FUND MAY OFFER SHARES DESIGNATED CLASS A, CLASS B,
CLASS C , CLASS I, AND FOR CERTAIN MONEY MARKET PORTFOLIOS, CLASS O AND CLASS T.
2. DIFFERENCES IN AVAILABILITY. CLASS A, CLASS B, CLASS C, AND CLASS O
SHARES SHALL EACH BE AVAILABLE THROUGH THE SAME DISTRIBUTION CHANNELS, EXCEPT
THAT (A) CLASS B SHARES MAY NOT BE AVAILABLE THROUGH SOME DEALERS AND ARE NOT
AVAILABLE FOR PURCHASES OF $500,000 OR MORE, (B) CLASS B SHARES OF CALVERT FIRST
GOVERNMENT MONEY MARKET FUND ARE AVAILABLE ONLY THROUGH EXCHANGE FROM CLASS B OR
CLASS C SHARES OF ANOTHER CALVERT FUND, AND (C) CLASS C SHARES MAY NOT BE
AVAILABLE THROUGH SOME DEALERS AND ARE NOT AVAILABLE FOR PURCHASES OF $1 MILLION
OR MORE. CLASS I SHARES ARE GENERALLY AVAILABLE ONLY DIRECTLY FROM CALVERT GROUP
AND NOT THROUGH DEALERS, AND EACH CLASS I SHAREHOLDER MUST MAINTAIN A $1 MILLION
MINIMUM ACCOUNT BALANCE. CLASS T SHARES ARE ONLY AVAILABLE THROUGH CERTAIN
DEALERS.
3. DIFFERENCES IN SERVICES. THE SERVICES OFFERED TO SHAREHOLDERS OF EACH
CLASS SHALL BE SUBSTANTIALLY THE SAME, EXCEPT THAT THE RIGHTS OF ACCUMULATION,
LETTERS OF INTENT AND REINVESTMENT PRIVILEGES SHALL BE AVAILABLE ONLY TO HOLDERS
OF CLASS A SHARES. CLASS I PURCHASES AND REDEMPTIONS MAY ONLY BE MADE BY BANK
WIRE. CLASS T SHARES HAVE LIMITED SERVICES BY CALVERT, RATHER THE SERVICES TO
SHAREHOLDERS ARE PROVIDED BY THE DEALER OFFERING THE CLASS T SHARES.
4. DIFFERENCES IN DISTRIBUTION ARRANGEMENTS. CLASS A SHARES SHALL BE OFFERED
WITH A FRONT-END SALES CHARGE, AS SUCH TERM IS DEFINED IN RULE 2830 OF THE
CONDUCT RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. THE AMOUNT
OF THE SALES CHARGE ON CLASS A SHARES IS SET FORTH AT EXHIBIT II. SALES OF CLASS
A SHARES OF $1 MILLION OR MORE SOLD AT NAV SHALL BE SUBJECT TO A 1.00%
CONTINGENT DEFERRED SALES CHARGE ("CDSC") IF THE SHARES ARE REDEEMED WITHIN ONE
YEAR OF PURCHASE. CLASS A SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN
ADOPTED PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT. THE AMOUNT OF THE
DISTRIBUTION PLAN EXPENSES FOR CLASS A SHARES, AS SET FORTH AT EXHIBIT II, ARE
USED TO PAY THE FUND'S PRINCIPAL UNDERWRITER FOR DISTRIBUTING AND OR PROVIDING
SERVICES TO THE FUND'S CLASS A SHARES. THIS AMOUNT INCLUDES A SERVICE FEE AT THE
ANNUAL RATE OF .25 OF 1% OF THE VALUE OF THE AVERAGE DAILY NET ASSETS OF CLASS
A.
CLASS B SHARES SHALL BE OFFERED WITH A CDSC AND NO FRONT-END SALES CHARGE.
THE AMOUNT OF THE CDSC ON CLASS B SHARES IS SET FORTH AT EXHIBIT II. CLASS B
SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT TO RULE 12B-1
UNDER THE 1940 ACT. THE AMOUNT OF THE DISTRIBUTION PLAN EXPENSES FOR CLASS B
SHARES, AS SET FORTH AT EXHIBIT II, ARE USED TO PAY EACH FUND'S PRINCIPAL
UNDERWRITER FOR DISTRIBUTING AND OR PROVIDING SERVICES TO THE FUND'S CLASS B
SHARES. THIS AMOUNT INCLUDES A SERVICE FEE AT THE ANNUAL RATE OF .25 OF 1% OF
THE VALUE OF THE AVERAGE DAILY NET ASSETS OF CLASS B.
CLASS C SHARES SHALL NOT BE SUBJECT TO A FRONT-END SALES CHARGE, BUT SHALL
BE SUBJECT TO A 1.00% CDSC IF THE SHARES ARE REDEEMED WITHIN ONE YEAR OF
PURCHASE. CLASS C SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN ADOPTED
PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT. THE AMOUNT OF THE DISTRIBUTION PLAN
EXPENSES FOR CLASS C SHARES ARE SET FORTH AT EXHIBIT II. THE CLASS C
DISTRIBUTION PLAN PAYS EACH APPLICABLE FUND'S PRINCIPAL UNDERWRITER FOR
DISTRIBUTING AND OR PROVIDING SERVICES TO SUCH FUND'S CLASS C SHARES. THIS
AMOUNT INCLUDES A SERVICE FEE AT THE ANNUAL RATE OF .25 OF 1% OF THE VALUE OF
THE AVERAGE DAILY NET ASSETS OF CLASS C.
CLASS I AND CLASS O SHARES SHALL BE SUBJECT TO NEITHER A FRONT-END SALES
CHARGE, NOR A CDSC, NOR ARE THEY SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT
TO RULE 12B-1 UNDER THE 1940 ACT.
CLASS T SHARES SHALL BE SUBJECT TO NEITHER A FRONT-END SALES CHARGE, NOR A CDSC,
BUT THEY ARE SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT TO RULE 12B-1 UNDER
THE 1940 ACT.
5. EXPENSE ALLOCATION. THE FOLLOWING EXPENSES SHALL BE ALLOCATED, TO THE
EXTENT PRACTICABLE, ON A CLASS-BY-CLASS BASIS: (A) DISTRIBUTION PLAN FEES; (B)
TRANSFER AGENT AND SHAREHOLDER SERVICING FEES; (C) ADMINISTRATIVE SERVICE FEES;
AND (E) CERTAIN STATE REGISTRATION FEES.
6. CONVERSION FEATURES. CLASS B SHARES SHALL BE SUBJECT TO AN AUTOMATIC
CONVERSION FEATURE INTO CLASS A SHARES AFTER THEY HAVE BEEN HELD FOR THAT NUMBER
OF YEARS SET FORTH IN EXHIBIT II. CLASS A, CLASS C ,CLASS I, CLASS O, AND CLASS
T ARE NOT SUBJECT TO AUTOMATIC CONVERSION.
7. EXCHANGE PRIVILEGES. CLASS A SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A)
CLASS A SHARES OF OTHER FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B)
SHARES OF FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP WHICH DO NOT HAVE
SEPARATE SHARE CLASSES; AND (C) SHARES OF CERTAIN OTHER FUNDS SPECIFIED FROM
TIME TO TIME.
CLASS B SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS B SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
CLASS C SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS C SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP AND CLASS B SHARES OF CALVERT
FIRST GOVERNMENT MONEY MARKET FUND; (B) CLASS A SHARES OF OTHER FUNDS MANAGED OR
ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE CLASS A SHARES
IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN OTHER FUNDS
SPECIFIED FROM TIME TO TIME.
CLASS I SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS I SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
CLASS T SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS T SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
<PAGE>
EXHIBIT I
THE CALVERT FUND
CALVERT TAX-FREE RESERVES
CALVERT MUNICIPAL FUND, INC.
CALVERT SOCIAL INVESTMENT FUND
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
FIRST VARIABLE RATE FUND
<PAGE>
EXHIBIT II
CALVERT SOCIAL INVESTMENT FUND (CSIF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
CSIF BALANCED 4.75% 0.35% 1.00%
CSIF EQUITY 4.75% 0.35% 1.00%
CSIF MANAGED INDEX 4.75% 0.25% 1.00%
CSIF BOND 3.75% 0.35% 1.00%
BALANCED,
CLASS B EQUITY, AND MAXIMUM
CONTINGENT DEFERRED SALES CHARGE MANAGED INDEX BOND 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER
PURCHASE 5% 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4% 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 4% 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3% 1%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS. 6 YRS.
<PAGE>
EXHIBIT II
CALVERT TAX-FREE RESERVES (CTFR)
MAXIMUM MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C CLASS T
FRONT-END 12B-1 FEE 12B-1FEE 12B-1 FEE
SALES CHARGE
CTFR MONEY MARKET N/A N/A N/A 0.25%
CTFR LONG-TERM 3.75% 0.35% 1.00%
CTFR VERMONT 3.75% N/A 1.00%
LONG-TERM MAXIMUM
CLASS B AND CLASS B
CONTINGENT DEFERRED SALES CHARGE VERMONT 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 1%
CONVERTS TO CLASS A AFTER 6 YRS.
<PAGE>
EXHIBIT II
CALVERT MUNICIPAL FUND, INC. (CMF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
NATIONAL INTERMEDIATE 2.75% 0.25% N/A
CALIFORNIA INTERMEDIATE 2.75% 0.25% N/A
MARYLAND INTERMEDIATE 2.75% 0.25% N/A
VIRGINIA INTERMEDIATE 2.75% 0.25% N/A
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CMF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 3% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 2%
MORE THAN TWO YEARS BUT LESS THAN THREE 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 1%
CONVERTS TO CLASS A AFTER 4 YRS.
<PAGE>
EXHIBIT II
THE CALVERT FUND
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1 FEE
SALES CHARGE
NEW VISION SMALL CAP 4.75% 0.25% 1.00%
CALVERT INCOME FUND 3.75% 0.50% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE NEW VISION INCOME 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER
PURCHASE 5% 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4% 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 4% 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3% 1%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS. 6 YRS.
<PAGE>
EXHIBIT II
CALVERT WORLD VALUES FUND, INC. (CWVF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
INTERNATIONAL EQUITY 4.75% 0.35% 1.00%
CAPITAL ACCUMULATION 4.75% 0.35% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CWVF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 5% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4%
MORE THAN TWO YEARS BUT LESS THAN THREE 4%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS.
<PAGE>
EXHIBIT II
CALVERT NEW WORLD FUND, INC. (CNWF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1 FEE
SALES CHARGE
CALVERT NEW AFRICA 4.75% 0.25% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CNWF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 5% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4%
MORE THAN TWO YEARS BUT LESS THAN THREE 4%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS.
<PAGE>
EXHIBIT II
FIRST VARIABLE RATE FUND (FVRF)
MAXIMUM MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C CLASS T
FRONT-END 12B-1 FEE 12B-1 FEE 12B-1 FEE
SALES CHARGE
FIRST GOVERNMENT
MONEY MARKET N/A N/A 1.00% 0.25%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE 12B-1 FEE
CDSC OF ORIGINAL CLASS B FUND PURCHASED 1.00%
IS APPLIED UPON REDEMPTION FROM CLASS B
OF CALVERT FIRST GOVERNMENT MONEY MARKET FUND.
CONVERSION PERIOD OF ORIGINAL CLASS B FUND PURCHASED IS APPLIED.
E:\PROCEDURES\FALL FINAL 1999 CODE of ETHICS REVISIONS.doc
REVISED DECEMBER 1999
CODE OF ETHICS AND INSIDER TRADING POLICY AND PROCEDURES
CALVERT ASSET MANAGEMENT COMPANY, INC.
CALVERT-SLOAN, ADVISERS, L.L.C.
CALVERT DISTRIBUTORS, INC.
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT MUNICIPAL FUND INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT VARIABLE SERIES, INC.
CALVERT CASH RESERVES
CALVERT NEW WORLD FUND, INC.
THE CODE OF ETHICS AND INSIDER TRADING POLICIES AND PROCEDURES ARE DESIGNED TO
PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO MAINTAIN ETHICAL
STANDARDS FOR ACCESS PERSONS WHEN DEALING WITH THE PUBLIC. ACTIVE LEADERSHIP
AND INTEGRITY OF MANAGEMENT DICTATES THESE PRINCIPLES BE DILIGENTLY IMPLEMENTED
AND MONITORED. THE CODE OF ETHICS IMPOSES THE FOLLOWING GENERAL OBLIGATIONS:
- - INFORMATION CONCERNING THE PURCHASE AND SALE OF SECURITIES LEARNED IN
CONNECTION WITH AN ACCESS PERSON'S SERVICE, IS PROPERTY OF THE FUND, ADVISER OR
EMPLOYER AND MAY NOT BE USED FOR PERSONAL BENEFIT.
- - FIDUCIARY DUTIES MANDATE SUITABLE INVESTMENT OPPORTUNITIES BE PRESENTED
FIRST TO THE FUND, ADVISER, OR EMPLOYER AND SHOULD NOT BE EXERCISED EVEN AFTER
FULL DISCLOSURE FOR PERSONAL BENEFIT.
- - MATERIAL INSIDE INFORMATION MUST BE KEPT CONFIDENTIAL AND RESTRICTS
TRADING OF SECURITIES.
- - FRONT RUNNING, MARKET MANIPULATION AND DECEPTIVE TRADING PRACTICES ARE
ABUSIVE TECHNIQUES PROHIBITED BY THESE PROCEDURES AND MAY RESULT, IN FINES,
TERMINATION OR LEGAL ACTIONS BY THIRD PARTIES.
- - ACCESS PERSONS MAY NOT PURCHASE IPOS DUE TO THE HIGH POTENTIAL FOR ABUSIVE
TRADING PRACTICES.
- - ACCESS PERSONS MUST NOT TRADE IN SECURITIES WITH KNOWLEDGE THAT THE FUND,
ADVISER, SUB-ADVISER OR EMPLOYER IS CONSIDERING TO MAKE A SIMILAR PURCHASE OR
SALE OF THE SAME SECURITIES.
- - ACCESS PERSONS SHALL NOT ENGAGE IN TRANSACTIONS THAT CREATE A CONFLICT OF
INTEREST INCLUDING BUT NOT LIMITED TO INAPPROPRIATELY MAKING DECISIONS ON BEHALF
OF A FUND REGARDING SECURITIES OR PRIVATE PLACEMENTS PERSONALLY OWNED BY THE
ACCESS PERSON.
CODE OF ETHICS GUIDELINES
THE LEGAL DEFINITION OF A SECURITY IS VERY BROAD AND INCORPORATES THE PURCHASE
AND SALE OF PUBLIC, PRIVATE, REGISTERED AND EXEMPT FROM REGISTRATION SECURITIES,
AS WELL AS DERIVATIVES. TO EASE THE BURDEN OF FOLLOWING THESE GUIDELINES, THE
CODE OF ETHICS REPORTING AND DISCLOSURE OBLIGATIONS AS WELL AS PRECLEARANCE
POLICIES DO NOT APPLY TO THE FOLLOWING:
1) THE SALE AND PURCHASE OF OPEN-END MUTUAL FUNDS INCLUDING MONEY MARKET
FUNDS.
2) THE SALE AND PURCHASE OF U.S. GOVERNMENT, U.S. GOVERNMENT AGENCY
SECURITIES AND MUNICIPAL SECURITIES IN TRADE AMOUNTS OF LESS THAN $20,000.
3) ACQUISITIONS THROUGH STOCK DIVIDEND PLANS, SPIN-OFFS OR OTHER
DISTRIBUTIONS APPLIED TO ALL HOLDERS OF THE SAME CLASS OF SECURITIES.
4) ACQUISITIONS THROUGH THE EXERCISE OF RIGHTS ISSUED PRO RATA TO ALL
HOLDERS.
5) ACQUISITIONS THROUGH GIFTS OR BEQUESTS.
6) TRADES IN ANY S & P 500 COMPANY OF 500 SHARES OR LESS.
7) TRADES IN REITS AND VARIABLE INSURANCE PRODUCTS.
A. DISCLOSURE OF HOLDINGS & DUPLICATE STATEMENTS AND CONFIRMATIONS FOR THE
PURCHASE AND SALE OF SECURITIES OR OPTIONS ON SECURITIES BY ACCESS PERSONS.
TO ASSURE THAT ABUSIVE OR UNETHICAL TRADING PRACTICES ARE NOT CONDUCTED BY
ACCESS PERSONS, ACCESS PERSONS ARE REQUIRED TO DISCLOSE PERSONAL SECURITIES
HOLDINGS INCLUDING PRIVATE PLACEMENT HOLDINGS AND SEND DUPLICATE BROKERAGE AND
CONFIRMATION STATEMENTS TO THE ATTENTION OF THE COMPLIANCE OFFICER AT CALVERT
GROUP, LTD., 4550 MONTGOMERY AVENUE, BETHESDA, MD 20814. PERSONAL SECURITIES
HOLDINGS MUST BE DISCLOSED AT THE POINT OF HIRE AND UPON ANNUAL ACKNOWLEDGEMENT
OF THESE PROCEDURES. DUPLICATE STATEMENTS AND CONFIRMATIONS ARE REQUIRED FOR
ANY ACCESS PERSON'S ACCOUNT OR AN ACCOUNT OVER WHICH THE ACCESS PERSON HAS
EITHER CUSTODY, CONTROL OR BENEFICIAL OWNERSHIP. ACCOUNT STATEMENTS FOR
IMMEDIATE FAMILY MEMBERS ARE ALSO REQUIRED."BENEFICIAL OWNERSHIP" SHALL HAVE THE
SAME MEANING AS IN RULE 16A-1(A)(2) UNDER THE SECURITIES EXCHANGE ACT OF 1934.
GENERALLY, A PERSON HAS A BENEFICIAL OWNERSHIP IN A SECURITY IF HE OR SHE,
DIRECTLY OR INDIRECTLY, THROUGH ANY CONTRACT, ARRANGEMENT, UNDERSTANDING,
RELATIONSHIP OR OTHERWISE, HAS OR SHARES A DIRECT OR INDIRECT PECUNIARY INTEREST
IN THE SECURITY, [HAS OR SHARES VOTING POWER (THE POWER TO VOTE OR DIRECT THE
VOTING OF THE SECURITY) OR INVESTMENT POWER (THE POWER TO DISPOSE OF OR DIRECT
THE DISPOSITION OF THE SECURITY).] BENEFICIAL OWNERSHIP" INCLUDES ACCOUNTS OF
A SPOUSE, MINOR CHILDREN AND RELATIVES RESIDENT IN THE ACCESS PERSON'S HOME, AS
WELL AS ACCOUNTS OF ANOTHER PERSON IF BY REASON OF ANY CONTRACT, UNDERSTANDING,
RELATIONSHIP, AGREEMENT OR OTHER ARRANGEMENT THE ACCESS PERSON OBTAINS THEREFROM
BENEFITS SUBSTANTIALLY EQUIVALENT TO THOSE OF OWNERSHIP, E.G., AS TRUSTEE,
SETTLOR, BENEFICIARY, POWER OF ATTORNEY.
ALL INFORMATION PROVIDED TO THE COMPLIANCE OFFICER WILL BE CONFIDENTIAL.
STATEMENTS AND CONFIRMATIONS WILL BE REVIEWED BY THE COMPLIANCE OFFICER OR HIS
OR HER DESIGNEE(S) FOR ANY PATTERN OF TRANSACTIONS INVOLVING PARALLEL
TRANSACTIONS (PORTFOLIO AND INDIVIDUAL BOTH BUYING OR BOTH SELLING THE SAME
SECURITY) GENERALLY WITHIN A 15 DAY PERIOD BEFORE OR AFTER THE TRANSACTION DATE.
AMONG THE FACTORS THAT WILL BE CONSIDERED IN THE ANALYSIS OF WHETHER ANY
PROVISION OF THE CODE HAS BEEN VIOLATED WILL BE THE NUMBER AND DOLLAR VALUE OF
THE TRANSACTIONS, THE TRADING VOLUME OF THE SECURITIES IN QUESTION, THE LENGTH
OF TIME THE SECURITY IS HELD BY THE INDIVIDUAL AND THE INDIVIDUAL'S INVOLVEMENT
IN THE INVESTMENT PROCESS. WHILE THE FOCUS OF THIS PROCEDURE OF THE CODE IS ON
"PATTERNS", IT IS IMPORTANT TO NOTE THAT A VIOLATION COULD RESULT FROM A SINGLE
TRANSACTION IF THE CIRCUMSTANCES WARRANT A FINDING THAT THE UNDERLYING
PRINCIPLES OF FAIR DEALING HAVE BEEN VIOLATED. THE COMPLIANCE OFFICER OR HIS OR
HER DESIGNEE(S), WILL SIMILARLY REVIEW THE PERSONAL SECURITIES HOLDINGS REPORTS
PROVIDED TO THE COMPLIANCE OFFICER.
B. PRECLEARANCE POLICY
BECAUSE OF THE SENSITIVE NATURE OF SECURITIES TRADING, THE COMPLIANCE OFFICER
WILL NOTIFY CERTAIN ACCESS PERSONS AND INVESTMENT PERSONNEL ABOUT THE NEED TO
FOLLOW A PRECLEARANCE POLICY. ATTACHMENT A WILL BE USED BY DESIGNATED ACCESS
PERSONS SEEKING PRECLEARANCE FOR SECURITIES TRADES INCLUDING PRECLEARANCE BY
INVESTMENT PERSONNEL FOR PRIVATE PLACEMENT TRANSACTIONS. THOSE INDIVIDUALS
SUBJECT TO THE PRECLEARANCE POLICY WILL NOT BE EXEMPT FROM THE GENERAL
PROHIBITIONS LISTED IN THE CODE OR THE POLICIES AND PROCEDURES DESIGNED TO
PREVENT INSIDER TRADING. THE COMPLIANCE OFFICER WILL REVIEW WITH THE
DIRECTORS/TRUSTEES PERIODICALLY A LIST OF PERSONS WHO ARE SUBJECT TO THE
PRECLEARANCE POLICY AND THE CRITERIA USED TO SELECT SUCH INDIVIDUALS.
THE PRECLEARANCE AUTHORIZATION SHALL BE VALID FOR A PERIOD OF THREE BUSINESS
DAYS UNLESS A FURTHER EXTENSION OF TIME IS INDICATED BY THE COMPLIANCE OFFICER.
<PAGE>
C. NOTIFICATION OF REPORTING OBLIGATION - ANNUAL CERTIFICATION TO BOARD
MEMBERS OF THE LEGAL DEPARTMENT WILL BE RESPONSIBLE FOR NOTIFYING ALL ACCESS
PERSONS ABOUT THE DUTY TO FORWARD TRADE CONFIRMATIONS TO THE COMPLIANCE OFFICER.
ONCE INFORMED OF THE DUTY TO FORWARD TRADE CONFIRMATIONS, AN ACCESS PERSON HAS A
CONTINUING OBLIGATION TO PROVIDE SUCH CONFIRMS, IN A TIMELY MANNER, UNTIL SUCH
TIME AS NOTIFIED OTHERWISE. INFORMATION COMPILED IN COMPLIANCE OFFICER REPORTS
IS AVAILABLE FOR INSPECTION BY THE SEC OR OTHER REGULATORY AUTHORITIES AT ANY
TIME DURING THE FIVE-YEAR PERIOD FOLLOWING THE END OF THE FISCAL YEAR IN WHICH
EACH REPORT IS MADE.
ANNUALLY, THE LEGAL DEPARTMENT WILL PREPARE A WRITTEN " ISSUES AND CERTIFICATION
REPORT" FOR THE BOARD THAT:
- - DESCRIBES ANY ISSUES THAT HAVE ARISEN UNDER THIS CODE OF ETHICS OR ITS
PROCEDURES SINCE THE LAST REPORT, INCLUDING INFORMATION ABOUT MATERIAL CODE OF
ETHICS OR PROCEDURE VIOLATIONS AND SANCTIONS IMPOSED IN RESPONSE TO THOSE
VIOLATIONS; AND
- - CERTIFIES TO THE BOARD THAT THE ADOPTED CODE OF ETHICS AND ITS PROCEDURES
PROVIDE REASONABLY NECESSARY MEASURES TO PREVENT INVESTMENT PERSONNEL FROM
VIOLATING THE CODE AND APPLICABLE PROCEDURES.
THE CODE OF ETHICS AND ANY MATERIAL CHANGES TO ITS PROVISIONS AND/OR PROCEDURES
MUST BE APPROVED BY A MAJORITY OF THE BOARD, INCLUDING A MAJORITY OF THE
INDEPENDENT DIRECTORS.
D. RESTRICTIONS AS TO GIFTS, ENTERTAINMENT, FAVORS AND DIRECTORSHIPS
1. GIFTS, ENTERTAINMENT AND FAVORS. ACCESS PERSONS MUST NOT MAKE BUSINESS
DECISIONS THAT ARE INFLUENCED OR APPEAR TO BE INFLUENCED BY GIVING OR ACCEPTING
GIFTS, ENTERTAINMENT OR FAVORS. ACCESS PERSONS ARE PROHIBITED FROM RECEIVING ANY
GIFT OR OTHER THING OF MORE THAN DE MINIMIS VALUE FROM ANY PERSON OR ENTITY THAT
DOES BUSINESS WITH OR ON BEHALF OF CALVERT ASSET MANAGEMENT COMPANY,
CALVERT-SLOAN ADVISERS, OR CALVERT DISTRIBUTORS INC. INVITATIONS TO AN
OCCASIONAL MEAL, SPORTING EVENT OR OTHER SIMILAR ACTIVITY WILL NOT BE DEEMED TO
VIOLATE THIS RESTRICTION UNLESS THE OCCURRENCE OF SUCH EVENTS IS SO FREQUENT OR
LAVISH AS TO SUGGEST AN IMPROPRIETY. THE PRESIDENT/CEO OF CALVERT GROUP MUST
APPROVE THE ACCEPTANCE OF ANY GIFT, ENTERTAINMENT OR FAVOR WITH A PER GIFT VALUE
OF MORE THAN $100.00.
2. DIRECTORSHIPS.
(A) GENERAL RULE:
NO ACCESS PERSON, OTHER THAN A DISINTERESTED FUND DIRECTOR/TRUSTEE, MAY SERVE ON
THE BOARD OF DIRECTORS OF A PUBLICLY-HELD OR PRIVATE FOR-PROFIT COMPANY ABSENT
PRIOR WRITTEN APPROVAL FROM THE CALVERT GROUP, LTD. BOARD OF DIRECTORS AND/OR
THE APPLICABLE FUND'S BOARD OF DIRECTORS/TRUSTEES. DISINTERESTED
DIRECTORS/TRUSTEES MUST PROVIDE ANNUAL DISCLOSURE ABOUT DIRECTORSHIPS AND OTHER
POTENTIAL CONFLICTS OF INTEREST.
(B) APPLICATIONS FOR APPROVAL:
APPLICATIONS FOR APPROVAL TO SERVE AS A DIRECTOR OF A PUBLICLY TRADED OR PRIVATE
FOR-PROFIT COMPANY SHALL BE DIRECTED, IN WRITING, TO THE OFFICE OF THE GENERAL
COUNSEL FOR PROMPT FORWARDING TO THE CALVERT GROUP, LTD. BOARD OF DIRECTORS AND
THE RESPECTIVE FUND'S BOARD OF DIRECTORS/TRUSTEES. AUTHORIZATION MAY BE GRANTED
WHERE IT IS DETERMINED THAT SUCH BOARD SERVICE WOULD BE CONSISTENT WITH THE
INTERESTS OF THE FUNDS AND THEIR SHAREHOLDERS.
(C) SUBSEQUENT INVESTMENT MANAGEMENT ACTIVITIES:
WHENEVER AN ACCESS PERSON IS GRANTED APPROVAL TO SERVE AS A DIRECTOR OF A
PUBLICLY-TRADED OR PRIVATE FOR-PROFIT COMPANY, HE OR SHE SHALL PERSONALLY
REFRAIN FROM PARTICIPATING IN ANY DELIBERATION, RECOMMENDATIONS, OR
CONSIDERATIONS OF WHETHER OR NOT TO RECOMMEND THAT ANY SECURITIES OF THAT
COMPANY BE PURCHASED, SOLD OR RETAINED IN THE INVESTMENT PORTFOLIO OF ANY
CALVERT GROUP FUND OR CALVERT ASSET MANAGEMENT COMPANY MANAGED ACCOUNT.
E. ENFORCEMENT AND SANCTIONS
EACH VIOLATION OF THIS CODE SHALL BE REPORTED TO THE BOARD OF
DIRECTORS/TRUSTEES OF THE APPLICABLE FUND OR ENTITY AT OR BEFORE THE NEXT
REGULAR MEETING OF THE BOARD. UPON DISCOVERING OR OTHERWISE BEING INFORMED OF A
VIOLATION OF THIS CODE, THE BOARD OF DIRECTORS/TRUSTEES MAY TAKE ANY ACTION IT
DEEMS APPROPRIATE INCLUDING, INTER ALIA, A LETTER OF CENSURE, TERMINATION WITH
RESPECT TO PORTFOLIO MANAGEMENT DUTIES REGARDING THE FUND, OR RECOMMENDING TO
THE OPERATING COMPANIES, SUSPENSION OR REMOVAL FROM OFFICE, IMPOSITION OF A FINE
OR TERMINATION OF EMPLOYMENT OF THE VIOLATOR.
F. RECORDKEEPING
EACH ENTITY SHALL MAINTAIN SUCH LISTS, RECORDS, AND REPORTS AS ARE REQUIRED
BY LAW.
<PAGE>
G. INSIDER TRADING POLICY AND PROCEDURES
1. SCOPE OF POLICY STATEMENT
THIS POLICY STATEMENT IS DRAFTED BROADLY; IT WILL BE APPLIED AND
INTERPRETED IN A SIMILAR MANNER. THIS POLICY STATEMENT APPLIES TO SECURITIES
TRADING AND INFORMATION HANDLING BY ALL ACCESS PERSONS.
THE LAW OF INSIDER TRADING IS UNSETTLED; AN INDIVIDUAL LEGITIMATELY MAY BE
UNCERTAIN ABOUT THE APPLICATION OF THE POLICY STATEMENT IN A PARTICULAR
CIRCUMSTANCE. OFTEN, A SINGLE QUESTION CAN FORESTALL DISCIPLINARY ACTION OR
COMPLEX LEGAL PROBLEMS. YOU SHOULD DIRECT ANY QUESTIONS RELATING TO THE POLICY
STATEMENT TO AN ATTORNEY IN THE CALVERT GROUP LEGAL DEPARTMENT. YOU MUST ALSO
NOTIFY AN ATTORNEY IN THE LEGAL DEPARTMENT IF YOU HAVE ANY REASON TO BELIEVE
THAT A VIOLATION OF THE POLICY STATEMENT HAS OCCURRED OR IS ABOUT TO OCCUR.
2. POLICY STATEMENT ON INSIDER TRADING
CALVERT FORBIDS ANY OFFICER, DIRECTOR\TRUSTEE OR EMPLOYEE FROM TRADING,
EITHER PERSONALLY OR ON BEHALF OF OTHERS, INCLUDING MUTUAL FUNDS MANAGED BY
CALVERT, ON MATERIAL NONPUBLIC INFORMATION OR COMMUNICATING MATERIAL NONPUBLIC
INFORMATION TO OTHERS IN VIOLATION OF THE LAW. THIS CONDUCT IS FREQUENTLY
REFERRED TO AS "INSIDER TRADING." CALVERT'S POLICY APPLIES TO EACH FUND, ITS
INVESTMENT ADVISOR, ITS PRINCIPAL UNDERWRITER, AND EVERY OFFICER, DIRECTOR AND
EMPLOYEE THEREOF, AND EXTENDS TO ACTIVITIES WITHIN AND OUTSIDE THEIR DUTIES AT
CALVERT. EVERY OFFICER, DIRECTOR, TRUSTEE AND EMPLOYEE MUST READ AND RETAIN THIS
POLICY STATEMENT. ANY QUESTIONS REGARDING CALVERT'S POLICY AND PROCEDURES SHOULD
BE REFERRED TO AN ATTORNEY IN THE CALVERT LEGAL DEPARTMENT. AN OFFICER,
DIRECTOR, TRUSTEE OR EMPLOYEE MUST NOTIFY AN ATTORNEY IN THE LEGAL DEPARTMENT
IMMEDIATELY IF THEY HAVE ANY REASON TO BELIEVE THAT A VIOLATION OF THE POLICY
STATEMENT HAS OCCURRED OR IS ABOUT TO OCCUR.
THE TERM "INSIDER TRADING" IS NOT DEFINED IN THE FEDERAL SECURITIES LAWS,
BUT GENERALLY IS USED TO REFER TO THE USE OF MATERIAL NONPUBLIC INFORMATION TO
TRADE IN SECURITIES (WHETHER OR NOT ONE IS AN "INSIDER") OR TO COMMUNICATIONS OF
MATERIAL NONPUBLIC INFORMATION TO OTHERS.
WHILE THE LAW CONCERNING INSIDER TRADING IS NOT STATIC, IT IS GENERALLY
UNDERSTOOD THAT THE LAW PROHIBITS:
A) TRADING BY AN INSIDER, WHILE IN POSSESSION OF MATERIAL
NONPUBLIC INFORMATION; OR
B) TRADING BY A NON-INSIDER, WHILE IN POSSESSION OF MATERIAL NONPUBLIC
INFORMATION, WHERE THE INFORMATION EITHER WAS DISCLOSED TO THE NON-INSIDER IN
VIOLATION OF AN INSIDER'S DUTY TO KEEP IT CONFIDENTIAL OR WAS MISAPPROPRIATED;
OR
C) COMMUNICATING MATERIAL NONPUBLIC INFORMATION TO OTHERS.
I. WHO IS AN INSIDER?
THE CONCEPT OF "INSIDER" IS BROAD. IT INCLUDES OFFICERS, DIRECTORS,
TRUSTEES AND EMPLOYEES OF A COMPANY. IN ADDITION, A PERSON CAN BE A "TEMPORARY
INSIDER" IF HE OR SHE ENTERS INTO A SPECIAL CONFIDENTIAL RELATIONSHIP IN THE
CONDUCT OF A COMPANY'S AFFAIRS AND AS A RESULT IS GIVEN ACCESS TO INFORMATION
SOLELY FOR THE COMPANY'S PURPOSES. A TEMPORARY INSIDER CAN INCLUDE, AMONG
OTHERS, A COMPANY'S ATTORNEYS, ACCOUNTANTS, CONSULTANTS, BANK LENDING OFFICERS,
AND THE EMPLOYEES OF SUCH ORGANIZATIONS. IN ADDITION, CALVERT MAY BECOME A
TEMPORARY INSIDER OF A COMPANY IT ADVISES OR FOR WHICH IT PERFORMS OTHER
SERVICES. ACCORDING TO THE SUPREME COURT, THE COMPANY MUST EXPECT THE OUTSIDER
TO KEEP THE DISCLOSED NONPUBLIC INFORMATION CONFIDENTIAL AND THE RELATIONSHIP
MUST AT LEAST IMPLY SUCH A DUTY BEFORE THE OUTSIDER WILL BE CONSIDERED AN
INSIDER.
II. WHAT IS MATERIAL INFORMATION?
TRADING ON INSIDE INFORMATION IS NOT A BASIS FOR LIABILITY UNLESS THE
INFORMATION IS MATERIAL. "MATERIAL INFORMATION" GENERALLY IS DEFINED AS
INFORMATION FOR WHICH THERE IS A SUBSTANTIAL LIKELIHOOD THAT A REASONABLE
INVESTOR WOULD CONSIDER IT IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS,
OR INFORMATION THAT IS REASONABLY CERTAIN TO HAVE A SUBSTANTIAL EFFECT ON THE
PRICE OF A COMPANY'S SECURITIES. INFORMATION THAT OFFICERS, DIRECTORS AND
EMPLOYEES SHOULD CONSIDER MATERIAL INCLUDES, BUT IS NOT LIMITED TO: DIVIDEND
CHANGES, EARNINGS ESTIMATES, CHANGES IN PREVIOUSLY RELEASED EARNINGS ESTIMATES,
SIGNIFICANT MERGER OR ACQUISITION PROPOSALS OR AGREEMENTS, MAJOR LITIGATION,
LIQUIDATION PROBLEMS, AND EXTRAORDINARY MANAGEMENT DEVELOPMENTS.
MATERIAL INFORMATION ALSO MAY RELATE TO THE MARKET FOR A COMPANY'S SECURITIES.
INFORMATION ABOUT A SIGNIFICANT ORDER TO PURCHASE OR SELL SECURITIES MAY, IN
SOME CONTEXTS, BE DEEMED MATERIAL. SIMILARLY, PREPUBLICATION INFORMATION
REGARDING REPORTS IN THE FINANCIAL PRESS ALSO MAY BE DEEMED MATERIAL. FOR
EXAMPLE, THE SUPREME COURT UPHELD THE CRIMINAL CONVICTIONS OF INSIDER TRADING
DEFENDANTS WHO CAPITALIZED ON PREPUBLICATION INFORMATION ABOUT THE WALL STREET
JOURNAL'S HEARD ON THE STREET COLUMN.
IT IS CONCEIVABLE THAT SIMILAR ADVANCE REPORTS OF SECURITIES TO BE BOUGHT OR
SOLD BY A LARGE, INFLUENTIAL INSTITUTIONAL INVESTOR, SUCH AS A FUND, MAY BE
DEEMED MATERIAL TO AN INVESTMENT IN THOSE PORTFOLIO SECURITIES. ADVANCE
KNOWLEDGE OF IMPORTANT PROPOSED GOVERNMENT REGULATION, FOR EXAMPLE, COULD ALSO
BE DEEMED MATERIAL INFORMATION REGARDING COMPANIES IN THE REGULATED INDUSTRY.
III. WHAT IS NONPUBLIC INFORMATION?
INFORMATION IS NONPUBLIC UNTIL IT HAS BEEN DISSEMINATED BROADLY TO INVESTORS IN
THE MARKET PLACE. TANGIBLE EVIDENCE OF SUCH DISSEMINATION IS THE BEST INDICATION
THAT THE INFORMATION IS PUBLIC. FOR EXAMPLE, INFORMATION IS PUBLIC AFTER IT HAS
BECOME AVAILABLE TO THE GENERAL PUBLIC THROUGH A PUBLIC FILING WITH THE SEC OR
SOME OTHER GOVERNMENTAL AGENCY, THE DOW JONES "TAPE" OR THE WALL STREET JOURNAL
OR SOME OTHER PUBLICATION OF GENERAL CIRCULATION, AND AFTER SUFFICIENT TIME HAS
PASSED SO THAT THE INFORMATION HAS BEEN DISSEMINATED WIDELY
IV. PENALTIES FOR INSIDER TRADING
PENALTIES FOR TRADING ON OR COMMUNICATING MATERIAL NONPUBLIC
INFORMATION ARE SEVERE, BOTH FOR INDIVIDUALS INVOLVED IN SUCH UNLAWFUL CONDUCT
AND THEIR EMPLOYERS. A PERSON CAN BE SUBJECT TO SOME OR ALL OF THE PENALTIES
BELOW EVEN IF HE OR SHE DOES NOT PERSONALLY BENEFIT FROM THE VIOLATION.
PENALTIES INCLUDE:
- - CIVIL INJUNCTIONS
- - TREBLE DAMAGES
- - DISGORGEMENT OF PROFITS
- - JAIL SENTENCES
- - FINES FOR THE PERSON WHO COMMITTED THE VIOLATION OF UP TO THREE TIMES THE
PROFIT GAINED OR LOSS AVOIDED, WHETHER OR NOT THE PERSON ACTUALLY BENEFITED, AND
- - FINES FOR THE EMPLOYER OR OTHER CONTROLLING PERSON OF UP TO THE GREATER OF
$1,000,000 OR THREE TIMES THE AMOUNT OF THE PROFIT GAINED OR LOSS AVOIDED.
IN ADDITION, ANY VIOLATION OF THIS POLICY STATEMENT CAN BE EXPECTED TO
RESULT IN SERIOUS SANCTIONS BY CALVERT, UP TO AND INCLUDING DISMISSAL OF THE
PERSONS INVOLVED.
<PAGE>
3. IDENTIFYING INSIDE INFORMATION
BEFORE A CALVERT EMPLOYEE EXECUTES ANY TRADE FOR HIM/HERSELF OR ON
BEHALF OF OTHERS, INCLUDING INVESTMENT COMPANIES MANAGED BY CALVERT, IN THE
SECURITIES OF A COMPANY ABOUT WHICH THE EMPLOYEE MAY HAVE POTENTIAL INSIDE
INFORMATION, THE FOLLOWING QUESTIONS SHOULD BE CONSIDERED:
A) IS THE INFORMATION MATERIAL? IS THIS INFORMATION THAT AN INVESTOR
WOULD CONSIDER IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS? IS THIS
INFORMATION THAT WOULD SUBSTANTIALLY AFFECT THE MARKET PRICE OF THE SECURITIES
IF GENERALLY DISCLOSED?
B) IS THE INFORMATION NONPUBLIC? HOW WAS THE INFORMATION OBTAINED? TO
WHOM HAS THIS INFORMATION BEEN PROVIDED? HAS THE INFORMATION BEEN DISSEMINATED
BROADLY TO INVESTORS IN THE MARKETPLACE BY BEING PUBLISHED IN REUTERS, THE WALL
STREET JOURNAL OR OTHER PUBLICATIONS OF GENERAL CIRCULATION? IS IT ON FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION?
IF, AFTER CONSIDERATION OF THE ABOVE, IT IS FOUND THAT THE INFORMATION IS
MATERIAL AND NONPUBLIC, OR IF THERE ARE QUESTIONS AS TO WHETHER THE INFORMATION
IS MATERIAL AND NONPUBLIC, THE FOLLOWING STEPS SHOULD BE TAKEN:
A) REPORT THE MATTER IMMEDIATELY TO THE COMPLIANCE OFFICER OR AN
ATTORNEY IN THE LEGAL DEPARTMENT.
B) THE SECURITIES SHOULD NOT BE PURCHASED OR SOLD BY THE OFFICER,
DIRECTOR, TRUSTEE OR EMPLOYEE FOR HIM/HERSELF OR ON BEHALF OF OTHERS, INCLUDING
INVESTMENT COMPANIES MANAGED BY CALVERT.
C) THE INFORMATION SHOULD NOT BE COMMUNICATED INSIDE OR OUTSIDE
CALVERT, OTHER THAN TO THE LEGAL DEPARTMENT.
D) AFTER THE ISSUE HAS BEEN REVIEWED, THE LEGAL DEPARTMENT WILL
INSTRUCT THE OFFICER, DIRECTOR, OR EMPLOYEE AS TO WHETHER TO CONTINUE THE
PROHIBITIONS AGAINST TRADING AND COMMUNICATION, OR ALLOWING THE TRADE AND
COMMUNICATION OF THE INFORMATION.
4. CONTACTS WITH PUBLIC COMPANIES.
FOR CALVERT, CONTACTS WITH PUBLIC COMPANIES REPRESENT AN IMPORTANT PART OF
OUR RESEARCH EFFORTS. CALVERT MAY MAKE INVESTMENT DECISIONS ON THE BASIS OF THE
FIRM'S CONCLUSIONS FORMED THROUGH SUCH CONTACTS AND ANALYSIS OF
PUBLICLY-AVAILABLE INFORMATION. DIFFICULT LEGAL ISSUES ARISE, HOWEVER, WHEN, IN
THE COURSE OF THESE CONTACTS, A CALVERT EMPLOYEE OR OTHER PERSON SUBJECT TO THIS
POLICY STATEMENT BECOMES AWARE OF MATERIAL, NONPUBLIC INFORMATION. THIS COULD
HAPPEN, FOR EXAMPLE, IF A COMPANY'S CHIEF FINANCIAL OFFICER PREMATURELY
DISCLOSES QUARTERLY RESULTS TO AN ANALYST OR AN INVESTOR RELATION REPRESENTATIVE
MAKES A SELECTIVE DISCLOSURE OF ADVERSE NEWS TO A HANDFUL OF INVESTORS. IN SUCH
SITUATION, CALVERT MUST MAKE A JUDGMENT AS TO ITS FURTHER CONDUCT. FOR THE
PROTECTION OF THE COMPANY AND ITS EMPLOYEES, THE LEGAL DEPARTMENT SHOULD BE
CONTACTED IF AN EMPLOYEE BELIEVES THAT HE/SHE HAS RECEIVED MATERIAL, NONPUBLIC
INFORMATION.
5. TENDER OFFERS
TENDER OFFERS REPRESENT A PARTICULAR CONCERN IN THE LAW OF INSIDER TRADING
FOR TWO REASONS. FIRST, TENDER OFFER ACTIVITY OFTEN PRODUCES EXTRAORDINARY
GYRATIONS IN THE PRICE OF THE TARGET COMPANY'S SECURITIES. TRADING DURING THIS
TIME PERIOD IS MORE LIKELY TO ATTRACT REGULATORY ATTENTION (AND PRODUCES A
DISPROPORTIONATE PERCENTAGE OF INSIDER TRADING CASES). SECOND, THE SEC HAS
ADOPTED A RULE WHICH EXPRESSLY FORBIDS TRADING AND "TIPPING" WHILE IN POSSESSION
OF MATERIAL, NONPUBLIC INFORMATION REGARDING A TENDER OFFER RECEIVED FROM THE
TENDER OFFEROR, THE TARGET COMPANY OR ANYONE ACTING ON BEHALF OF EITHER. CALVERT
EMPLOYEES AND OTHERS SUBJECT TO THIS POLICY STATEMENT SHOULD EXERCISE PARTICULAR
CAUTION ANY TIME THEY BECOME AWARE OF NONPUBLIC INFORMATION RELATING TO A TENDER
OFFER.
6. EDUCATION
ANOTHER ASPECT OF CALVERT'S COMPLIANCE PROCEDURES WILL BE TO KEEP CALVERT
PERSONNEL AND OTHER ACCESS PERSONS INFORMED. THIS MEMORANDUM SERVES AS A BASIC
PRIMER ON WHAT CONSTITUTES INSIDE INFORMATION AND PERIODIC MEMORANDA WILL BE
DISTRIBUTED, PARTICULARLY WHEN A SIGNIFICANT CASE DEALING WITH THE SUBJECT HAS
BEEN DECIDED.
ALL NEW EMPLOYEES WILL BE GIVEN A COPY OF THIS STATEMENT AND WILL BE
REQUIRED TO READ IT AND AGREE TO ITS CONDITIONS. ALL EMPLOYEES WILL BE REQUIRED
TO CONFIRM THEIR UNDERSTANDING AND ACKNOWLEDGMENT OF THE STATEMENT ON AN ANNUAL
BASIS.
<PAGE>
ATTACHMENT A
[GRAPHIC OMITED]
MEMO
TO: LEGAL DEPARTMENT; COMPLIANCE
FROM:
RE: PRIOR APPROVAL OF ACCESS PERSON TRADING IN SECURITIES
THE FOLLOWING PROPOSED SECURITY(IES) TRANSACTION(S) WAS (WERE) REVIEWED BY THE
FUND, OR DESIGNATED EMPLOYEE OF THE ADVISOR (CHIEF INVESTMENT OFFICER OR
DIRECTOR OF RESEARCH) PURSUANT TO CALVERT GROUP'S CODE OF ETHICS:
NAME OF ADVISORY PERSON:
SECURITY (IES) TO BE PURCHASED OR SOLD:
BASIS OF APPROVAL OR DENIAL:
FUND OR ADVISOR DESIGNEE SIGNATURE
SIGNATURE PAGE
CODE OF ETHICS AND INSIDER TRADING POLICY AND PROCEDURES
ACKNOWLEDGEMENT FORM
I HAVE READ AND UNDERSTAND CALVERT GROUP'S CODE OF ETHICS AND INSIDER TRADING
POLICY AND PROCEDURES AND WILL COMPLY IN ALL RESPECTS WITH SUCH PROCEDURES.
SIGNATURE DATE
PRINT NAME
<PAGE>
ATTACHMENT B
ACCESS PERSONS SUBJECT TO PRECLEARANCE FOR SECURITIES TRANSACTIONS INCLUDING
PRIVATE PLACEMENTS
MICHAEL ABRAMO
FATIMA BATALVI
SUSAN BENDER
YING-WEI CHEN
TOM DAILEY
IVY DUKE
PATRICK FAUL
VICTOR FRYE
DAVID GIBSON
CEASAR GONZALES
DONNA GOMEZ
GREG HABEEB
DAN HAYES
HUI PING HO
MOHAMMED JAVAID
ANU KHONDOKAR
TRACY KNIGHT
BARBARA KRUMSIEK
EMMETT LONG
RENO MARTINI
GARY MILLER
JOHN NICHOLS
MATT NOTTINGHAM
KENDRA PLEMMONS
CARMEN REID
CHRIS SANTOS
BILL TARTIKOFF
LAURIE WEBSTER
RON WOLFSHEIMER
MIKE YUHAS
INVESTMENT PERSONNEL SUBJECT SOLEY TO PRIVATE PLACEMENT PRECLEARANCE
MEMBERS OF THE SPECIAL EQUITIES COMMITTEE OF THE BOARD OF DIRECTORS/TRUSTEES
The term "entity" will be used for any organization adopting these procedures.
For those organizations which are investment companies as defined under the
Investment Company Act of 1940, the term "Fund" may also be used if applicable.
Access person means any director/trustee, officer, general partner, or employee
of any entity adopting these procedures who participates in the selection of
securities (other than high social impact securities or special equity
securities) or who has access to information regarding impending purchases or
sales [See rule 17 j-1(e)]. The General Counsel or Compliance Officer may
designate any person, including an independent contractor or consultant, as an
access person, who, as such, shall provide signed acknowledgement of the receipt
of these procedures and their applicability. A current list of access persons
and investment personnel subject to preclearance or other requirements shall be
maintained by the Compliance Officer.
For this purpose, "securities" include options on securities and securities that
are convertible into or exchangeable for securities held or to be acquired by a
fund. A security is being considered for purchase once a recommendation has
been documented, communicated and under serious evaluation by the purchaser or
seller. Evidence of consideration may include such things as approved
recommendations in current research reports, pending or active order tickets,
and a watch list of securities under current evaluation.
Disinterested Directors and/or Trustees as defined by the Investment Company Act
of 1940, are excluded from the duplicate statement and confirmation requirement
unless the General Counsel or Compliance Officer imposes a different standard
due to an entity's active trading strategy and/or the information available to
the Disinterested Directors and/or Trustees.
All account information is subject to regulatory review. The trade confirmations
of persons other than disinterested directors or trustees may be disclosed to
other senior officers of the Fund or to legal counsel as deemed necessary for
compliance purposes and to otherwise administer the Code of Ethics.
