SEC Registration No.____________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Calvert Tax-Free Reserves
(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) 951-4800
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 on
December 31, 1995 pursuant to Rule 488.
The Registrant has registered an indefinite amount of securities
under the Securities Act of 1933 pursuant to Section 24(f) under
the Investment Company Act of 1940; accordingly, no fee is
payable herewith because of reliance on Rule 24f-2. A Rule
24f-2 Notice for the Registrant's most recent fiscal year ended
December 31, 1994 was filed with the Commission on February 28,
1995. Pursuant to Rule 429, this Registration Statement relates
to shares previously registered on Form N-1A.
<PAGE>
Calvert Tax-Free Reserves
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
Item number Part A
1. Cover Page
2. Table of Contents
3. Summary; Portfolio Expenses
4. Summary; Reasons for the
Reorganization; Proposed Transaction;
Tax Consequences; Information about
the Reorganization; Comparative Information
on Shareholder Rights; Information about
the Portfolios;
5. Summary; Comparison of Investment Policies;
Information about the Portfolios; Investment
Objectives and Policies; Distribution Fees
and Expense Ratios; Purchases; Exchange Privileges;
Distribution Procedures; Redemption Procedures;
and Incorporation by Reference to Prospectus
dated 4/30/95
6. Summary; Comparison of Investment Policies;
Information about the Portfolios; Investment
Objectives and Policies; Advisory Fees,
Distribution Fees and Expense Ratios; Purchases;
Exchange Privileges; Distribution Procedures;
Redemption Procedures
7. Voting Information; Adjournment
8. Not Applicable
9. Not Applicable
Part B
10. Cover Page
11. Table of Contents
12. Statement of Additional Information of Registrant
13. Not Applicable
14. Financial Statements included in Statement of
Additional Information of Registrant
15. Indemnification PART C
Incorporated by Reference
to Part A Caption -
"Comparative Information on Shareholders' Rights"
16. Exhibits Exhibits
17. Undertakings Undertakings
<PAGE>
CALVERT TAX-FREE RESERVES
NEW JERSEY MONEY MARKET PORTFOLIO
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Dear Shareholder:
You are cordially invited to attend a Special Meeting of
Shareholders of Calvert Tax-Free Reserves ("CTFR") New Jersey
Money Market Portfolio (the "NJ Portfolio") on ______ ___,
1996. At this important meeting you are being asked to consider
and approve an Agreement and Plan of Reorganization (the "Plan")
between Calvert Tax-Free Reserves- Money Market Portfolio (the
"Money Market Portfolio") and the NJ Portfolio.
The NJ Portfolio will be merged into the much larger Money
Market Portfolio. The expense ratio of the combined Portfolios
is expected to be lower.
The Board of Trustees of CTFR has unanimously approved the
proposed reorganization and recommends that shareholders of the
NJ Portfolio vote to approve the Plan. Approval of the Plan
requires the affirmative vote of a majority of shares of the NJ
Portfolio. We urge you to take the time to consider this
important matter and vote now. In order to make sure that your
vote is represented, indicate your choice on the enclosed proxy
card, date and sign it, and return it in the enclosed postage
prepaid envelope.
YOUR VOTE IS CRITICAL. PLEASE VOTE PROMPTLY BY SIGNING AND
RETURNING THE ENCLOSED PROXY IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED.
Sincerely,
Clifton S. Sorrell, Jr.
President
<PAGE>
INSTRUCTIONS FOR EXECUTING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may help to avoid the time and expense
involved in validating your vote if you fail to sign your proxy
card(s) properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears
in the Registration on the proxy card(s).
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the
Registration on the proxy card(s).
3. ALL OTHER ACCOUNTS: The capacity of the individual signing
the proxy card(s) should be indicated unless it is reflected in
the form of Registration. For example:
REGISTRATION VALID SIGNATURE
CORPORATE
ACCOUNTS
(1) ABC Corp. (1)ABC Corp.
John Doe, Treasurer
(2) ABC Corp. (2) John Doe, Treasurer
c/o John Doe, Treasurer
(3) ABC Corp. Profit Sharing
Plan (3) John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust (1) Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee (2) Jane B. Doe
u/t/d 12/28/78
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. (1) John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith, Jr. (2) John B. Smith, Jr., Executor
<PAGE>
CALVERT TAX-FREE RESERVES
NEW JERSEY MONEY MARKET PORTFOLIO
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on ____ __, 1996
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders
of Calvert Tax-Free Reserves New Jersey Money Market Portfolio
will be held in the Tenth Floor Conference Room of Calvert
Group, Ltd., Air Rights North Tower, 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland at 10:00 a.m. on ___________,
__________ ___, 1996 for the
following purposes:
I. To consider and act on an Agreement and Plan of
Reorganization providing for the transfer of all of the assets
and liabilities of Calvert Tax Free Reserves New Jersey Money
Market Portfolio in exchange for
Class 0 shares of Calvert Tax-Free Reserves Money Market
Portfolio.
II. To transact any other business that may properly come
before the meeting.
Shareholders of record at the close of business on ________ __,
199__ are entitled to notice of and to vote at this meeting or
any adjournment thereof.
By Order of the Board of Trustees
William M. Tartikoff, Esq.
Secretary
Please execute the enclosed proxy and return it promptly in the
enclosed postage-prepaid envelope, thus enabling the NJ
Portfolio to avoid unnecessary expense and delay. No postage is
required if mailed in the United States. The proxy is revocable
and will not affect your right to vote in person if you attend
the meeting.
<PAGE>
PROSPECTUS AND PROXY STATEMENT
December __, 1995
Acquisition of the Assets By and in Exchange for Shares of
of Calvert Tax-Free Reserves--New Calvert Tax-Free Reserves--Money
Jersey Money Market Portfolio Market Portfolio 4550 Montgomery
4550 Montgomery Avenue Bethesda, Avenue Bethesda, Maryland 20814
Maryland 20814 (800) 368-2748 (800) 368-2748
This Prospectus and Proxy Statement relates to the proposed
transfer of all the assets and liabilities of the Calvert
Tax-Free Reserves New Jersey Money Market Portfolio (the "NJ
Portfolio") to the Calvert TaxFree Reserves Money Market
Portfolio (the "Money Market Portfolio") in exchange for Class
"O" shares of the Money Market Portfolio. Following the
transfer, Money Market Portfolio Class O shares will be
distributed to shareholders of the NJ Portfolio in liquidation
of the NJ Portfolio and the NJ Portfolio will be dissolved. As a
result of the proposed transaction, each shareholder of the NJ
Portfolio will receive that number of Money Market Portfolio
Class O shares equal in value at the date of the exchange to the
value of such shareholder's shares of the NJ Portfolio.
The Money Market Portfolio is a series of Calvert Tax-Free
Reserves ("CTFR"), which is an open-end, management investment
company. The investment objective of the Money Market Portfolio
is to earn the highest interest income exempt from federal
income taxes as is consistent with prudent investment
management, safety, preservation of capital and the quality and
maturity characteristics of the Money Market Portfolio. The NJ
Portfolio is also a series of CTFR. Calvert Asset Management
Company, Inc. ("CAM"), is the Investment Advisor for both the NJ
Portfolio and the Money Market Portfolio. The NJ
Portfolio is a non-diversified money market fund that seeks to
earn the highest level of interest income exempt from federal
income tax and the New Jersey Gross Income Tax as is consistent
with prudent investment management, preservation of capital and
the quality and maturity characteristics of the NJ Portfolio.
Both the Money Market Portfolio and the NJ Portfolio are money
market funds investing only in municipal obligations. Although
each Portfolio seeks to maintain a constant net asset value of
$1.00 per share, there can be no assurance that the Portfolio
will be successful in doing so. An investment in the Money
Market Portfolio is neither insured nor guaranteed by the U.S.
Government.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
SHARES OF THE CALVERT TAX-FREE RESERVES MONEY MARKET PORTFOLIO
ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
This Prospectus and Proxy Statement, which should be retained
for future reference, sets forth concisely the information about
the Money Market Portfolio that a prospective investor should
know before investing. This Prospectus and Proxy Statement is
accompanied by the Prospectus of the Money Market Portfolio
dated April 30, 1995 and is incorporated herein by reference. A
Statement of Additional Information dated April 30, 1995
regarding this transaction containing additional information has
been filed with the Securities and Exchange Commission and is
incorporated herein by reference into this Prospectus and Proxy
Statement. A copy of the Statement may be obtained without
charge by writing the Money Market Portfolio at 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland 20814, or by calling
(800) 368-2748.
TABLE OF CONTENTS
Summary...........................................................2
Portfolio Expense
Comparison...................................... 4
Financial Highlights..............................................4
Comparison of Investment Policies.................................4
Information about the Reorganization..............................7
Comparative Information on Shareholder Rights.....................8
Information about the Portfolios..................................9
Voting Information................................................9
Adjournment......................................................10
Exhibit A - Agreement and Plan of Reorganization.......... ......11
SUMMARY
Reasons for the Reorganization. The Trustees of CTFR have been
considering various issues connected with the small size of the
NJ Portfolio. Accordingly, the Trustees have determined that it
would be beneficial to the NJ Portfolio shareholders to combine
with a larger money market fund portfolio with relatively
similar investment objectives and policies. On October 31,
1995, the Money Market Portfolio had net assets of $1.95 billion
compared to $0.03 billion of the NJ Portfolio net assets on that
date.
To this end, the Board of Trustees of CTFR recommends that
shareholders approve the proposed merger of the NJ Portfolio
into the Money Market Portfolio because both portfolios invest
solely in municipal obligations and are managed by the same
portfolio manager. The NJ Portfolio would be merged into the "O"
Class of the Money Market Portfolio. The Money Market Portfolio
hopes to preserve the NJ Portfolio assets while improving the
economies of scale of both portfolios. See "Portfolio Expense
Comparison" below.
Proposed Transaction. The Board of Trustees of CTFR has
authorized an Agreement and Plan of Reorganization (the "Plan")
providing for the transfer of all the assets and liabilities of
the NJ Portfolio to the Money Market Portfolio in exchange for
shares of the Money Market Portfolio. Following the transfer,
Money Market Portfolio Class O shares will be distributed to
shareholders of the NJ Portfolio in liquidation of the NJ
Portfolio and the NJ Portfolio will be dissolved. As a result of
the proposed transaction, each shareholder of the NJ Portfolio
will receive that number of full and fractional Money Market
Portfolio Class O shares equal in value at the date of the
exchange to the value of such shareholder's shares of the NJ
Portfolio. For the reasons stated above, the Trustees, including
the Trustees of CTFR who are not "interested persons" as that
term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act") have concluded that the reorganization
would be in the best interests of the shareholders of the NJ
Portfolio and recommend shareholder approval.
Tax Consequences. The Plan is conditioned upon receipt by the NJ
Portfolio of an opinion of counsel that no gain or loss will be
recognized by the NJ Portfolio or NJ Portfolio shareholders as a
result of the reorganization. The tax basis of Money Market
shares received by a shareholder will be the same as the tax
basis of the shareholder's NJ Portfolio shares. In addition,
the tax basis of the NJ Portfolio assets in the hands of the
Money Market Portfolio as a result of the reorganization will be
the same as the tax basis of such assets in the hands of the NJ
Portfolio prior to the reorganization. See "Information about
the Reorganization."
Investment Policies. The investment policies of the NJ Portfolio
and the Money Market Portfolio are relatively similar. Both the
NJ Portfolio and the Money Market Portfolio invest primarily in
portfolios of high quality short-term municipal obligations.
Each Portfolio's dividends are substantially exempt from federal
income tax. The NJ Portfolio invests in fixed and variable rate
high quality municipal obligations of New Jersey with maturities
of one year or less and an average maturity of 90 days or less
whose interest is exempt from federal income tax and which are
of high quality. The Money Market Portfolio invests in municipal
bonds and notes and taxexempt commercial paper within the two
highest credit ratings categories. For both Portfolios, the
credit quality of municipal obligations is determined by
reference to a commercial credit rating service, such as Moody's
Investors Service, Inc., or Standard & Poor's Corporation. See
"Comparison of Investment Policies."
Purchases. Shares of both the NJ Portfolio and the Money Market
Portfolio are sold on a continuous basis at their respective net
asset value, which is intended to remain stable at $1.00 per
share. The minimum initial investment in each Portfolio is
$2,000 and the minimum subsequent investment is $250 (except in
the case of certain retirement plans).
Exchange Privileges. Shareholders of both the NJ Portfolio and
the Money Market Portfolio may exchange Portfolio shares for
shares of a variety of other Calvert Group Funds by paying the
applicable sales charge, if any. Each such exchange represents a
sale of Portfolio
shares, which may produce a gain or loss for tax purposes. The
NJ Portfolio and the Money Market Portfolio reserve the right to
modify or eliminate this exchange privilege, with 60 days'
notice.
Distribution Procedures. Neither the NJ Portfolio nor the Money
Market Portfolio Class O shares have a Rule 12b-1 Distribution
Fee or a service fee. The Money Market Portfolio also offers
another class of shares, Class MMP shares, which are sold with a
Rule 12b-1 distribution fee of 0.35% of average daily net
assets. Class MMP shares are not offered by this prospectus.
Redemption Procedures. At any time, shares of the NJ Portfolio
and the Money Market Portfolio may be redeemed by writing a
draft or sending a written request by mail. All written orders
for redemption, and all accompanying certificates, must be
signed by the shareholder and may be required to be signature
guaranteed by a commercial bank, savings association, trust
company or member firm of any national securities exchange.
Further documentation may be required from corporations,
fiduciaries, pension plans and institutional investors.
Shares may also be redeemed by telephone or through brokers.
Both Portfolios impose a charge of $5.00 for wire transfers of
less than $1,000. The NJ Portfolio and the Money Market
Portfolio may, after 30 days' notice, close accounts if the
value of shares in the account is reduced by redemptions to less
than $1,000, and the investor fails to purchase sufficient
additional shares.
PORTFOLIO EXPENSE
COMPARISON Money Market NJ Portfolio
Portfolio Class O
Shares
Shareholder Transaction Expenses
Sales Load on Purchases None None
Sales Load on Reinvested Dividends None None
Deferred Sales Load None None
Redemption Fees None None
Exchange Fee None None
Annual Fund Operating Expenses
- Fiscal Year 1994 (see below)
(as a percentage of net assets)
Management Fees 0.46% 0.51%
Rule 12b-1 Fees None None
Other Expenses 0.16% 0.33%
Total Fund Operating Expenses 0.62% 0.84%
C. Example: You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each period:
1 Year 3 Years 5 Years 10 Years
Money Market
Portfolio Class O $6 $20 $35 $77
NJ Portfolio $9 $27 $47 $104
EXPLANATION OF TABLE: THE PURPOSE OF THE TABLE IS TO ASSIST
YOU IN UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT AN
INVESTOR IN THE PORTFOLIOS MAY BEAR DIRECTLY (SHAREHOLDER
TRANSACTION COSTS) OR INDIRECTLY (ANNUAL FUND OPERATING
EXPENSES).
A. Shareholder Transaction Costs are charges you pay when you
buy or sell shares of a Portfolio. If you request a wire redemption of
less than $1,000, you will be charged a $5 wire fee.
B. Annual Fund Operating Expenses. Management Fees are paid by
the Fund to Calvert Asset Management Company, Inc. ("Investment
Advisor") for managing each Portfolio's investments and business
affairs, and include an administrative service fee paid to
Calvert Administrative Services Company, Inc. Each Portfolio
incurs Other Expenses for maintaining shareholder records,
furnishing shareholder statements and reports, and other
services. Management Fees and Other Expenses have already been
reflected in the yield for the Money Market Portfolio and are
not charged directly to individual shareholder accounts.
C. Example of Expenses. The example, which is hypothetical,
should not be considered a representation of past or future
expenses. Actual expenses may be higher or lower than those
shown.
The information set forth above with respect to the Money Market
Portfolio relates only to Class O shares. The Money Market
Portfolio also offers another class of shares, Class MMP shares.
Class O Shares and Class MMP shares are the same except Class
MMP shares are subject to a Rule 12b-1 distribution fee of 0.35%
of average daily net assets.
FINANCIAL HIGHLIGHTS
The following tables provide information about the financial
history of the Money Market Portfolio's Class O shares. They
express the information in terms of a single share outstanding
throughout each period. The tables have been audited by those
independent accountants whose report is included in Calvert
Tax-Free Reserves Annual Report to Shareholders, for each of the
respective periods presented, except the six-month period ended
June 30, 1995 which is unaudited. The tables should be read in
conjunction with the financial statements and their related
notes. The current Annual Report to Shareholders is
incorporated by reference into the Statement of Additional
Information.
Money Market Portfolio Six Months Ended
June 30, 1995 Year Ended December 31,
(Unaudited) 1994 1993
Net asset value, beginning of year $1.000 $1.000 $1.000
Income from investment operations
Net investment income .020 .028 .024
Distributions to shareholders
Dividends from net investment income (.020) (.028) (.024)
Net asset value, end of year $1.000 $1.000 $1.000
Total return<F1> 2.03% 2.81% 2.41%
Ratio of expenses to average
net assets .62%(a) .62% .60%
Ratio of net investment income to
average net assets 4.03%(a) 2.75% 2.37%
Net assets, end of year $1,578,821,440 $1,344,594,922 $1,500,614,262
Number of shares outstanding
at end of year (in thousands) 1,578,904 1,344,668 1,500,557
<F1>Total return has not been audited prior to 1994.
(a) Annualized
Money Market Portfolio Year Ended December 31,
1992 1991
Net asset value, beginning of year $1.000 $ 1.000
Income from investment operations
Net investment income .031 .048
Distributions to shareholders
Dividends from net investment income (.031) (.048)
Net asset value, end of year $1.000 $1.000
Total return<F2> 3.18% 4.96%
Ratio of expenses to average
net assets .59% .61%
Ratio of net investment
income to average net assets 3.10% 4.79%
Net assets, end of year $1,552,105,640.00 $1,382,329,562.00
Number of shares outstanding
at end of year (in thousands) 1,552,061.00 1,382,288.00
<F2>Total return has not been audited prior to 1994.
Money Market Portfolio Year Ended December 31,
1990 1989
Net asset value, beginning of year $1.000 $1.000
Income from investment operations
Net investment income .059 .063
Distributions to shareholders
Dividends from net investment income (.059) (.063)
Net asset value, end of year $1.000 $1.000
Total return<F3> 6.04% 6.47%
Ratio of expenses to average
net assets .63% .62%
Ratio of net investment income
to average net assets 5.85% 6.22%
Net assets, end of year $1,071,718,868.00 $952,346,922.00
Number of shares outstanding
at end of year (in thousands) 1,071,678.00 952,257.00
<F3>Total return has not been audited prior to 1994.
Money Market Portfolio Year Ended December 31,
1988 1987
Net asset value, beginning of year $1.000 $1.000
Income from investment operations
Net investment income .052 .046
Distributions to shareholders
Dividends from net investment income (.052) (.046)
Net asset value, end of year $1.000 1.000
Total return<F4> 5.31% 4.62%
Ratio of expenses to average
net assets .62% .62%
Ratio of net investment income
to average net assets 5.19% 4.56%
Net assets, end of year $823,759,105.00 $688,967,210.00
Number of shares outstanding
at end of year (in thousands) 823,696.00 688,986.00
<F4>Total return has not been audited prior to 1994.
Money Market Portfolio Year Ended
December 31,
1986 1985
Net asset value, beginning of year $1.000 $1.000
Income from investment operations
Net investment income .048 .054
Distributions to shareholders
Dividends from net investment income (.048) (.054)
Net asset value, end of year $1.000 $1.000
Total return<F5> 4.77% 5.39%
Ratio of expenses to average
net assets .67% .71%
Ratio of net investment income
to average net assets 4.66% 5.22%
Net assets, end of year $519,491,108.00 $306,432,253.00
Number of shares outstanding
at end of year (in thousands) 519,399.00 306,411.00
<F5> Total return has not been audited prior to 1994.
COMPARISON OF INVESTMENT POLICIES
The Money Market Portfolio. The Money Market Portfolio
investment objective is to earn the highest level of interest
income exempt from federal income tax. Municipal obligations in
which the Portfolio invests are short-term, fixed and variable
rate instruments of minimal credit risk and of high quality.
Short-term obligations have remaining maturities of one year or
less. The Money Market maintains an average weighted maturity
of 90 days or less.
In pursuing its objective, the Money Market Portfolio invests
primarily in a diversified portfolio of municipal obligations
whose interest is exempt from federal income tax. Municipal
obligations in which the Portfolio invests are short-term, fixed
and variable rate instruments of minimal credit risk and of high
quality. Short-term obligations have remaining maturities of one
year or less. The Money Market maintains an average weighted
maturity of 90 days or less.
The Money Market Portfolio invests in municipal bonds and notes
and tax-exempt commercial paper within the two highest credit
rating categories or, if unrated, are determined by the Advisor
to be of comparable quality. The credit quality of municipal
obligations is determined by reference to a commercial credit
rating service, such as Moody's Investors Service, Inc. or
Standard & Poor's Corporation. In the case of any instrument
that is not rated, credit quality is determined by the Advisor
under the supervision of the Board of Trustees. There is no
limitation on the percentage of the Portfolio's assets which may
be invested in unrated obligations; such obligations may be less
liquid than rated obligations of comparable quality.
The NJ Portfolio. The NJ Portfolio seeks to earn the highest
level of interest income exempt from federal income tax and the
New Jersey Gross Income Tax as is consistent with prudent
investment management, preservation of capital and the quality
and maturity characteristics of the NJ Portfolio.
The NJ Portfolio is non-diversified and invests primarily in
municipal obligations whose interest is exempt from federal and
New Jersey state income tax. Municipal obligations in which the
NJ Portfolio invests are short-term, fixed and variable rate
instruments of minimal credit risk and of high quality.
Short-term obligations have remaining maturities of one year or
less. The NJ Portfolio maintains an average weighted maturity
of 90 days or less.
Under normal market conditions, the NJ Portfolio attempts to
invest all of its assets in tax-exempt obligations of the State
of New Jersey and its political subdivisions ("New Jersey
Municipal Obligations"). If at any time New Jersey Municipal
Obligations become unavailable, the NJ Portfolio could, to the
extent permissible, invest in debt obligations issued by other
states, territories and possessions of the United States, the
District of Columbia and their respective authorities, agencies,
instrumentalities and political subdivisions ("Municipal
Obligations").
Dividends paid by the NJ Portfolio which are derived from
interest attributable to New Jersey Municipal Obligations will
be exempt from federal and New Jersey state personal income
taxes. Dividends derived from interest on tax-exempt
obligations of other governmental issues will be exempt form
federal income tax, but will be subject to New Jersey state
income taxes.
Since the NJ Portfolio is non-diversified, it may invest in
fewer issuers than if it were diversified. Accordingly, the NJ
Portfolio's performance may be more directly impacted by changes
in conditions affecting those issuers than it would be if the NJ
Portfolio were investing in a greater number of issuers.
The NJ Portfolio invests in municipal bonds and notes and
tax-exempt commercial paper within the two highest credit
ratings categories for example, AA and AAA (or Aa and Aaa) for
municipal bonds and A-1 and A2 (or P-1 and P-2) for tax-exempt
commercial paper. These obligations are judged to be of high
quality.
There is no limitation on the percentage of the NJ Portfolio
assets that may be invested in unrated obligations; such
obligations may be less liquid than rated obligations of
comparable quality.
The NJ Portfolio may temporarily borrow money from banks to meet
redemption requests, but such borrowing may not exceed 10% of
the value of the NJ Portfolio's total assets.
Both Portfolios. Both Portfolios may invest in floating rate
and variable rate demand notes. These notes provide that the
holder may demand payment of the note at its par value plus
accrued interest by giving notice to the issuer.
Both Portfolios may invest in structured money market
instruments where the underlying security is a municipal lease.
Generally, such instruments are structured as tax-exempt
commercial or variable rate demand notes, and are usually
secured by an unconditional letter of credit. In the unlikely
event that the letter of credit is not honored, the lease would
present special risks, such as the chance that the municipality
might not appropriate funding for the lease payments. Thus, the
Advisor considers risk of cancellation in its investment
analysis. Certain leases may be considered illiquid. In all
cases, the Money Market Portfolio invests only in high-quality
instruments (rated in one of the two highest rating categories)
that meet the requirements of the Securities and Exchange
Commission's Rule 2a-7 regarding credit quality and maturity.
Both Portfolios may purchase when-issued securities. New issues
of municipal obligations are offered on a when-issued basis;
that is, delivery and payment for the securities normally takes
place 15 to 45 days after the date of the transaction. The
payment obligations and the yield that will be received on the
securities are each fixed at the time the buyer enters into the
commitment. The Money Market Portfolio will only make
commitments to purchase such securities with the intention of
actually acquiring the securities, but it may sell these
securities before the settlement date if it is deemed advisable
as a matter of investment strategy.
For liquidity purposes or pending the investment of the proceeds
of the sale of its shares, each Portfolio may invest in and
derive up to 20% of its income from taxable short-term money
market type investments. Interest earned from such taxable
investments will be taxable to the shareholder as ordinary
income unless the shareholder is otherwise exempt from the
transaction.
Each Portfolio may invest in variable and floating rate
obligations. Variable rate obligations have a yield which is
adjusted periodically based upon changes in the level of
prevailing interest rates. Floating rate obligations have an
interest rate fixed to a known lending rate, such as the prime
rate, and are automatically adjusted when that rate changes.
Variable and floating rate obligations lessen the capital
fluctuations usually inherent in fixed income investments, to
diminish the risk of capital depreciation of investments and
shares; but this also means that should interest rates decline,
the yield of the Portfolio will decline and the Portfolio would
not have as many opportunities for capital appreciation of
Portfolio investments.
Differences in Investment Restrictions. As a state-specific
money market mutual fund, the NJ Portfolio seeks to earn the
highest level of interest income exempt from federal income tax
and the New Jersey Gross Income Tax, as is consistent with
prudent investment management, preservation of capital, and the
quality and maturity characteristic of the NJ Portfolio. The
Money Market Portfolio is a so-called "national" money market
portfolio which seeks to earn the highest interest income exempt
from federal income taxes as is consistent with prudent
investment management, preservation of capital, and the quality
and maturity characteristics of the Money Market Portfolio.
Investments made by the Money Market Portfolio, while generally
exempt from federal income tax, are not exempt from the New
Jersey Gross Income Tax.
One of the more significant differences between the NJ Portfolio
and the Money Market Portfolio is, that as described above, the
NJ Portfolio is not diversified like the Money Market
Portfolio. This means that the NJ Portfolio invests primarily
in municipal obligations whose interest is exempt from federal
and New Jersey state income tax. Since the NJ Portfolio is
non-diversified, it may invest in fewer issuers than if it were
diversified. As a result the NJ Portfolio's performance may be
more directly impacted by changes in conditions affecting those
issuers than it would be if the portfolio were investing in a
greater number of issuers.
INFORMATION ABOUT THE REORGANIZATION
Plan of Reorganization. The proposed Agreement and Plan of
Reorganization (the "Agreement" or "Plan") provides that the
Money Market Portfolio will acquire all the assets and
liabilities of the NJ Portfolio in exchange for Class O shares
of the Money Market Portfolio on the Closing Date (as defined in
Section 2(b) of the Plan). A copy of the Plan is attached as
Exhibit A to this Proxy Statement. The number of full and
fractional Money Market Class O shares to be issued to
shareholders of the NJ Portfolio will equal the value of the
shares of the NJ Portfolio outstanding immediately prior to the
reorganization. Portfolio securities of the NJ Portfolio and
the Money Market Portfolio will be valued in accordance with the
valuation practices of the Money Market Portfolio which are
described in the Money Market Portfolio prospectus. At the time
of the reorganization, the Money Market Portfolio will assume
and pay all of the NJ Portfolio's obligations and liabilities.
The reorganization will be accounted for by the method of
accounting for tax-free reorganizations of investment companies,
sometimes referred to as the pooling without restatement method.
As soon as practicable after the Closing Date, the NJ Portfolio
will liquidate and distribute pro rata to its shareholders of
record as of the close of business on the Closing Date the full
and fractional Class O shares of the Money Market Portfolio at
an aggregate net asset value equal to the value of the
shareholder's investment in the NJ Portfolio next determined
after the effective time of the transaction. This method of
valuation is also consistent with interpretations of Rule 22c-1
under the Investment Company Act of 1940 by the Securities and
Exchange Commission's Division of Investment Management. Such
liquidation and distribution will be accomplished by the
establishment of accounts on the share records of the Money
Market Portfolio in the name of such NJ Portfolio shareholders,
each representing the respective pro rata number of full and
fractional shares of the Money Market Portfolio due the
shareholder.
The consummation of the Plan is subject to the conditions set
forth in
the Agreement. The Plan may be terminated and the reorganization
abandoned at any time before or after approval by NJ Portfolio
shareholders, prior to the Closing Date by mutual consent of the
NJ Portfolio and the Money Market Portfolio, or by either if any
condition set forth in the Plan has not been fulfilled or is
waived by the party entitled to its benefits. In accordance with
the Plan, the NJ Portfolio will be responsible for payment of
expenses incurred in connection with the reorganization.
Description of Money Market Portfolio Class O Shares. Full and
fractional Class Oshares of the Money Market Portfolio will be
issued to NJ Portfolio shareholders in accordance with the
procedures under the Plan as described above. Each share will be
fully paid and non assessable when issued and transferable
without restrictions and will have no preemptive or conversion
rights.
Federal Income Tax Consequences. The Plan is a tax-free
reorganization pursuant to Section 368(a)(1)(C) of the Internal
Revenue Code. The Plan is conditioned upon receipt by the NJ
Portfolio of an opinion of counsel to the NJ Portfolio, to the
effect that, on the basis of the existing provisions of the
Internal Revenue Code of 1986, current administrative rules and
court decisions, for federal income tax purposes: (1) no gain or
loss will be recognized by the NJ Portfolio or the Money Market
Portfolio upon the transfer of NJ Portfolio assets to, and the
assumption of its liabilities by, the Money Market Portfolio in
exchange for the Money Market Portfolio's shares (Section
1032(a)); (2) no gain or loss will be recognized by shareholders
of the NJ Portfolio upon the exchange of NJ Portfolio shares for
the Money Market Portfolio's Class O shares (Section 361(a));
(3) the basis and holding period immediately after the
reorganization for the Money Market shares received by each NJ
Portfolio shareholder pursuant to the reorganization will be the
same as the basis and holding period of the NJ Portfolio shares
held immediately prior to the exchange (Sections 354, 1223(1));
and (4) the basis and holding period immediately after the
reorganization of the NJ Portfolio assets acquired by the Money
Market Portfolio will be the same as the basis and holding
period of such assets of the NJ Portfolio immediately prior to
the reorganization (Sections 362(b), 1223(2)).
Effect of the Reorganization on Capital Loss Carryforwards. The
following tables provide comparative information regarding
appropriate approximate realized capital gains and losses and
net unrealized appreciation or depreciation of portfolio
securities of the Money Market Portfolio and the NJ Portfolio as
of October 31, 1995, and the capital loss carryforwards of each
at the end of its last fiscal year.
The Money Maket Portfolio
Capital Loss Carryforward at October 31, 1995
The NJ Portfolio
Capital Loss Carryforward at October 31, 1995
If the reorganization does not occur, the Money Market
Portfolio's capital loss carryforwards will expire starting in
1996 through 2001 and will be available to offset any net
realized capital gains during the period prior to expiration. It
is anticipated that no distributions of net realized capital
gains would be made by the NJ Portfolio until the capital loss
carryforwards expire or are offset by net realized capital gains.
If the reorganization is consummated, the Money Market Portfolio
will be constrained in the extent to which it can use the
capital loss carryforwards of the NJ Portfolio because of
limitations imposed by the Internal Revenue Code on the
occurrence of an "ownership change." The Money Market Portfolio
should be able to use in each year from 199__ through 2003, a
capital loss Carryforward in an amount equal to the value of the
NJ Portfolio on the date of the reorganization as
limited by section 381. If the amount of such a loss is not used
in one year, it may be added to the amount available for use in
the next year.
It appears that the anticipated benefits, particularly the lower
expense ratio, outweigh the uncertain potential detriment
resulting from the partial loss of capital loss carryforwards,
and the differing consequences of federal and various other
income taxation on a distribution received by each shareholder
whose tax liabilities (if any) are determined by the net effect
of a multitude of considerations that are individual to the shareholder.
NJ Portfolio shareholders who need information as to state and
local tax consequences, if any, should consult their tax
advisers.
Capitalization. The following table shows the capitalization of
the NJ Portfolio and the Money Market Portfolio as of October
31, 1995, and on a pro forma basis as of the date of the
proposed acquisition of assets at net asset value:
The Money Market
The NJ Portfolio Portfolio, Class O Proforma Combined*
Net Assets $32,113,347.00 $1,910,809,093.00 $1,942,922,440.00
Net Asset
Value Per
Share $1.00 $1.00 $1.00
Total Capital
Stock $32,119,688.00 $1,910,919,688.00 $1,943,039,376.00
*The Pro Forma combined net assets does not reflect adjustments with
respect to distributions prior to the reorganization. For each
one share of the NJ Portfolio shares owned, shareholders of the
NJ Portfolio would receive pro forma approximately one Class O
share of the Money Market Portfolio. The actual exchange ratio
will be determined based on the relative net asset value per
share on the acquisition date.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
Both Portfolios are series of CTFR, an open-end management
investment company organized as a Massachusetts business trust
and thus have the same Declaration of Trust and Bylaws.
INFORMATION ABOUT THE PORTFOLIOS
The Money Market Portfolio. Information about the Money Market
Portfolio's Class O shares is included in its current prospectus
dated April 30, 1995, a copy of which is included with this
proxy statements and incorporated by reference into it.
Additional information about the Money Market Portfolio is
included in the Statement of Additional Information also dated
April 30, 1995, which has been filed with the Securities and
Exchange Commission and is incorporated by reference in this
proxy statement. Copies of the Statement of Additional
Information may be obtained without charge by writing to the
Money Market Portfolio at 4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814 or by calling (800) 368-2748. The
Money Market Portfolio files proxy material, reports and other
information with the Securities and Exchange Commission. These
reports may be inspected and copied at the Public Reference
facilities maintained by the Securities and Exchange Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
the material may also be obtained from the Office of Consumer
Affairs and Information Services of the Securities and Exchange
Commission at prescribed rates.
The NJ Portfolio. Information concerning the operations and
management of the NJ Portfolio is incorporated by reference into
this proxy statement from the NJ Portfolio's current Prospectus
and Statement of Additional Information, each dated April 30, 1995.
Copies may be obtained without charge by writing the NJ Portfolio at 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814 or by
calling (800) 3682748. Reports and other information filed by
The NJ Portfolio can be inspected and copied at the Public
Reference Branch maintained by the Securities and Exchange
Commission, located at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of material can be obtained at prescribed rates
from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission,
Washington, D.C. 20549.
VOTING INFORMATION
Proxies from the shareholders of the NJ Portfolio are being
solicited by the Trustees of CTFR for the Special Meeting of
Shareholders to be held in the Tenth Floor Conference Room of
Calvert Group, Ltd., Air Rights North Tower, 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland at 10:00 a.m. on
___________________, 1996, or at such later time or date made
necessary by any adjournment(s). A proxy may be revoked at any
time before the meeting or during the meeting by oral or written
notice to William M. Tartikoff, Esq., Secretary of the NJ
Portfolio, 4550 Montgomery Avenue, Suite 1000N, Bethesda,
Maryland 20814. Unless revoked, all valid proxies will be voted
in accordance with the specification thereon or, in the absence
of specification, for approval of the Plan. Approval of the
Plan will require the affirmative vote of the holders of at
least a majority of the outstanding shares of the NJ Portfolio
entitled to vote at the meeting.
Proxies are solicited by mail. Additional solicitations may be
made by telephone, computer communications, facsimile or other
such means, or by personal contact by officers or employees of
Calvert Group and its affiliates or by proxy soliciting firms
retained for this purpose. The NJ Portfolio will bear the
solicitation costs.
Shareholders of the NJ Portfolio of record at the close of
business on _______ __, 199__ ("record date") are entitled to
notice of and to vote at the Special Meeting or any adjournment
(s) thereof. The holders of a majority of the shares of the NJ
Portfolio outstanding at the close of business on the record
date present in person or represented by proxy will constitute a
quorum for the meeting; however, as noted above, the affirmative
vote of the holders of at least a majority of the shares
outstanding at the close of business on the record date is
required to approve the reorganization. Shareholders are
entitled to one vote for each share held. As of October 31,
1995, as shown on the books of the NJ Portfolio, there were
issued and outstanding _______________ shares of the NJ
Portfolio. The votes of the shareholders of the Money Market
Portfolio are not being solicited since their approval or
consent is not necessary for this transaction.
As of November 29, 1995, the officers and Trustees of the NJ
Portfolio as a group beneficially owned less than 1% of the
outstanding shares of the NJ Portfolio, and no persons owned 5%
or more of the outstanding shares.
ADJOURNMENT
In the event that sufficient votes in favor of the proposals set
forth in the Notice of Meeting and Proxy Statement are not
received by the time scheduled for the meeting, the persons
named as proxies may move one or more adjournments of the
meeting to permit further solicitation of proxies with respect
to any such proposals. Any such adjournment will require the
affirmative vote of a majority of the shares present at the
meeting.
By Order of the Board of Trustees
William M. Tartikoff, Esq.
Secretary
The Trustees of CTFR, Including the Independent Trustees,
Recommend a Vote FOR Approval of the Plan.
<PAGE>
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION, dated as of November
27, 1995 is by and between Calvert Tax-Free Reserves ("CTFR"), a
Massachusetts business trust, on behalf of its New Jersey Money
Market Portfolio series (the "NJ Portfolio"), and CTFR's Money
Market Portfolio series (the "Money Market Portfolio").
In consideration of the mutual promises contained in this
Agreement, the parties agree as follows:
1. SHAREHOLDER APPROVAL
Approval by Shareholders. A meeting of the shareholders of the
NJ Portfolio shall be called and held for the purpose of acting
on and authorizing the transactions contemplated in this
Agreement and Plan of Reorganization (the "Agreement" or
"Plan"). The NJ Portfolio shall furnish to the Money Market
Portfolio such data and information as shall be reasonably
requested by the Money Market Portfolio for inclusion in the
information to be furnished to its shareholders in connection
with the meeting.
2. REORGANIZATION
(a) Plan of Reorganization. The NJ Portfolio will convey,
transfer, and deliver to the Money Market Portfolio all of the
then-existing assets of the NJ Portfolio at the closing provided
for in Section 2(b) of this Agreement (the "Closing"). In
consideration thereof, the Money Market Portfolio agrees to the
following:
(i) to assume and pay, to the extent that they exist on or after
the Effective Time of the Reorganization (as defined in Section
2(b)), all of the NJ Portfolio's obligations and liabilities,
whether absolute, accrued, contingent, or otherwise; and
(ii) to deliver to the NJ Portfolio in exchange for the assets
the number of Class "O" shares of beneficial interest of Money
Market Portfolio ("Money Market Shares") to be determined as
follows: In accordance with Section 3 of this Agreement, the
number of shares shall be determined by dividing the per share
net asset value of Money Market Shares (rounded to the nearest
mill) by the net asset value per share of the NJ Portfolio
(rounded to the nearest mill) and multiplying the quotient by
the number of outstanding shares of the NJ Portfolio as of the
close of business on the closing date.
(b) Closing and Effective Time of the Reorganization. The
Closing shall occur at the "Effective Time of the
Reorganization," which shall be either
(i) the later of receipt of all necessary regulatory approvals
and the final adjournment of the meeting of shareholders of the
NJ Portfolio at which the Plan will be considered, or
(ii) such later date as the parties may mutually agree.
3. VALUATION OF NET ASSETS
(a) The value of the NJ Portfolio's net assets to be
transferred to the Money Market Portfolio under this Agreement
shall be computed as of the close of business day immediately
preceding the Closing Date (hereinafter the "Valuation Date")
using the valuation procedures as set forth in the Money
Market's prospectus.
(b) The net asset value per share of Money Market Shares for
purposes of Section 2 of this Agreement shall be determined as
of the close of business on the Valuation Date by the Money
Market Portfolio's Treasurer using the same valuation procedures
as set forth in the Money Market Portfolio's prospectus.
(c) A copy of the computation showing in reasonable detail the
valuation of the NJ Portfolio's net assets to be transferred to
the Money Market Portfolio pursuant to paragraph 2 of this
Agreement, certified by the Treasurer of the NJ Portfolio, shall
be furnished by the NJ Portfolio to the Money Market Portfolio
at the Closing. A copy of the computation showing in reasonable detail the
determination of the net asset value per share of Money Market
Shares pursuant to paragraph 2 of this Agreement, certified by
the Treasurer of the Money Market Portfolio, shall be furnished
by the Money Market Portfolio to the NJ Portfolio at the Closing.
4. LIQUIDATION AND DISSOLUTION
(a) As soon as practicable after the Closing Date, the New
Jersey Portfolio will distribute pro rata to NJ Portfolio
shareholders of record as of the close of business on the
Closing Date the shares of the Money Market Portfolio received
by the NJ Portfolio pursuant to this Section. Such liquidation
and distribution will be accompanied by the establishment of
Shareholder accounts on the share records of the Money Market
Portfolio in the names of each such shareholder of the NJ
Portfolio, representing the respective pro rate number of full
shares and fractional interests in Class O shares of the Money
Market Portfolio due to each. No such shareholder accounts
shall be established by the Money Market Portfolio or its
transfer agent for the Money Market Portfolio except pursuant to
written instructions from CTFR, and CTFR agrees to provide on
the Closing Date instructions to transfer to a shareholder
account for each former NJ Portfolio shareholder a pro rata
share of the number of Class O shares of Money Market Portfolio
received pursuant to Section 2(a) of this Agreement.
(b) Promptly after the distribution described in Section 4(a)
above, appropriate notification will be mailed by the Money
Market Portfolio or its transfer agent to each shareholder of
the NJ Portfolio receiving such distribution of shares of the
Money Market Portfolio informing such shareholder of the number
of such shares distributed to such shareholder and confirming
the registration thereof in such shareholder's name.
(c) Following the Closing Date and until surrendered, each
outstanding share certificate representing shares of the NJ
Portfolio shall be deemed for all purposes to evidence ownership
of shares of the Money Market Portfolio that the holder is
entitled to receive in exchange for the certificate. The shares
of the Money Market Portfolio that the holder is entitled to
receive with respect to the NJ Portfolio's share certificates
not yet surrendered will be held by the Money Market Portfolio's
transfer agent on behalf of the shareholder, but may not be
transferred or redeemed until surrender of the NJ Portfolio's
share certificates in proper form for transfer to the Money
Market Portfolio's transfer agent or, in lieu thereof, the
posting of a lost certificate bond or other surety instrument deemed acceptable
to the Money Market Portfolio's transfer agent. All of the Money
Market Portfolio's distributions attributable to the shares
represented by the share certificates of the NJ Portfolio
retained by shareholders will be paid to the shareholder in cash
or invested in additional shares of the Money Market Portfolio
at the net asset value in effect on the respective payment dates
in accordance with instructions previously given by the
shareholder to CTFR's transfer agent. Share certificates
representing holdings of shares of the Money Market Portfolio
shall not be issued unless requested by the shareholder and, if
such a request is made, share certificates of the Money Market
Portfolio will be issued only for full shares of the Money
Market Portfolio and any fractional interests in shares shall
be credited in the shareholder's account with the Money Market
Portfolio.
(d) As promptly as is practicable after the liquidation of the
NJ Portfolio, and in no event later than 12 months from the date
of this Agreement, the NJ Portfolio shall be terminated pursuant
to the provisions of the Plan.
(e) Immediately after the Closing Date, the share transfer books
of the NJ Portfolio shall be closed and no transfer of shares
shall thereafter be made on those books.
5. TRUST; BY-LAWS
(a) Declaration of Trust. The Declaration of Trust of CTFR,
which governs the Money Market Portfolio and the NJ Portfolio,
as in effect immediately prior to the Effective Time of the
Reorganization shall continue to be the Declaration of Trust
until amended as provided by law.
(b) By-laws. The By-laws of CTFR, which govern the Money Market
Portfolio and the NJ Portfolio, in effect at the Effective Time
of the Reorganization shall continue to be the By-laws of the
Money Market Portfolio and the NJ Portfolio until the same shall
thereafter be altered, amended, or repealed in accordance with
the Trust Indenture or said By-laws.
6. REPRESENTATIONS AND WARRANTIES OF THE MONEY MARKET PORTFOLIO
(a) Organization, Existence, etc. The Money Market Portfolio
is a duly organized series of the CTFR, validly existing and in
good standing under the laws of the Commonwealth of
Massachusetts, and has the power to carry on its business as it
is now being conducted. Currently, the Money Market Portfolio is
not qualified to do business as a foreign corporation under the
laws of any jurisdiction. The Money Market Portfolio has all
necessary federal, state and local authorization to own all of
its properties and assets and to carry on its business as now
being conducted.
(b) Registration as Investment Company. CTFR, of which the
Money Market Portfolio is a series, is registered under the
Investment Company Act of 1940 (the "Act") as an open-end
management investment company. Its registration has not been
revoked or rescinded and is in full force and effect.
(c) Capitalization. The authorized capital stock of the Money
Market Portfolio consists of an unlimited number of shares of
beneficial interest, no par value, of which as of October 31,
1995, ___________ shares were outstanding and no shares were
held in the treasury of the Money Market Portfolio. All of the
outstanding shares of the Money Market Portfolio have been duly
authorized and are validly issued, fully paid and
non-assessable. Since the Money Market Portfolio is a
series of an open-end investment company engaged in the
continuous offering and redemption of its shares, the number of
outstanding shares may change prior to the Effective Time of the
Reorganization.
(d) Financial Statements. The financial statements of the Money
Market Portfolio for the year ended December 31, 1994 (the
"Money Market Portfolio Financial Statements"), delivered to
CTFR herewith, fairly present the financial position of the
Money Market Portfolio as of December 31, 1994 and the results
of its operations and changes in its net assets for the year
then ended.
(e) Shares to be Issued Upon Reorganization. Money Market Shares
to be issued in connection with the Reorganization have been
duly authorized and upon consummation of the Reorganization will
be validly issued, fully paid and non-assessable.
(f) Authority Relative to this Agreement. CTFR has the power to
enter into the Plan on behalf of its series Money Market
Portfolio and to carry out its obligations under this Agreement.
The execution and delivery of the Plan and the consummation of
the transactions contemplated have been duly authorized by the
Board of Trustees of CTFR and no other proceedings by the Money
Market Portfolio are necessary to authorize its officers to
effectuate the Plan and the transactions contemplated. The Money
Market Portfolio is not a party to or obligated under any
charter, by-law, indenture, or contract provision or any other
commitment or obligation, or subject to any order or decree
which would be violated by its executing and carrying out the
Plan.
(g) Liabilities. There are no liabilities of CTFR on behalf of
its series the Money Market Portfolio, whether or not determined
or determinable, other than liabilities disclosed or provided
for in the Money Market Financial Statements and liabilities
incurred in the ordinary course of business subsequent to
December 31, 1994 or otherwise previously disclosed to CTFR,
none of which has been materially adverse to the business,
assets or results of operations of the Money Market Portfolio.
(h) Litigation. To the knowledge of CTFR there are no claims,
actions, suits, or proceedings, pending or threatened, which
would adversely affect the Money Market Portfolio or its assets
or business, or which would prevent or hinder consummation of
the transactions contemplated by this Agreement.
(i) Contracts. Except for contracts and agreements previously
disclosed to CTFR under which no default exists, the Money
Market Portfolio is not a party to or subject to any material
contract, debt instrument, plan, lease, franchise, license, or
permit of any kind or nature whatsoever.
(j) Taxes. The federal income tax returns of CTFR have been
filed for all taxable years to and including December 31, 1994,
and all taxes payable pursuant to such returns have been paid.
CTFR has qualified as a regulated investment company under the
Internal Revenue Code in respect to each taxable year of CTFR
since commencement of its operations.
(k) Registration Statement. CTFR shall have filed with the
Securities and Exchange Commission (the "Commission") a
"Registration Statement" under the Securities Act of 1933, as
amended ("Securities Act") relating to the shares of capital
stock of CTFR issuable under this Agreement. At the time the
Registration Statement becomes effective, the Registration
Statement
(i) will comply in all material respects with the provisions of
the
Securities Act and the rules and regulations of the Commission
thereunder (the "Regulations"), and
(ii) will not contain an untrue statement of material fact or
omit to state a material act required to be stated therein or
necessary to make the statements therein not misleading.
Further, at the time the Registration Statement becomes
effective, at the time of the shareholders' meeting referred to
in Section 1, and at the Effective Time of the Reorganization,
the "Prospectus" and "Statement of Additional Information"
included therein, as amended or supplemented by any amendments
or supplements filed by CTFR, will not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or
omissions from the Registration Statement or Prospectus and
Statement of Additional Information made in reliance upon and in
conformity with information furnished by CTFR for use in the
Registration Statement or Prospectus and Statement of Additional
Information as provided in Section 7(k).
7. REPRESENTATIONS AND WARRANTIES OF THE NJ PORTFOLIO
(a) Organization, Existence, etc. NJ Portfolio is a duly
organized series of the CTFR, validly existing and in good
standing under the laws of The Commonwealth of Massachusetts,
and has the power to carry on its business as it is now being
conducted. Currently, CTFR is not qualified to do business as a
foreign corporation under the laws of any jurisdiction. CTFR
has all necessary federal, state and local authorization to own
all of its properties and assets and to carry on its business as
now being conducted.
(b) Registration as Investment Company. CTFR, of which the NJ
Portfolio is a series, is registered under the Act as an
open-end management investment company. Its registration has not
been revoked or rescinded and is in full force and effect.
(c) Capitalization. The NJ Portfolio has an unlimited number of
shares of beneficial interest, no par value, of which as of
October 31, 1995, ________________ shares were outstanding and
no shares were held in the treasury of the NJ Portfolio. Since
the NJ Portfolio is a series of an open-end investment company
engaged in the continuous offering and redemption of its shares,
the number of outstanding shares of the NJ Portfolio may change prior
to the Effective Date of the Reorganization.
(d) Financial Statements. The financial statements of the NJ
Portfolio for the year ended December 31, 1994 (the "NJ
Portfolio Financial Statements"), previously delivered to the
Money Market Portfolio, fairly present the financial position of
The NJ Portfolio as of that date, and the results of its
operations and changes in its net assets for the year then ended.
(e) Authority Relative to the Plan. CTFR has the power to enter
into the Plan on behalf of the NJ Portfolio and to carry out its
obligations under this Agreement. The execution and delivery of
the Plan and the consummation of the transactions contemplated
have been duly authorized by the Trustees of CTFR and, except
for approval by the holders of its shares, no other proceedings
by CTFR are necessary to authorize its officers to effectuate
the Plan and the transactions contemplated. CTFR is not a party
to or obligated under any charter, by-law, indenture, or
contract provision or any other commitment or
obligation, or subject to any order or decree, which would be
violated by its executing and carrying out the Plan.
(f) Liabilities. There are no liabilities of CTFR whether or not
determined or determinable, other than liabilities disclosed or
provided for in the NJ Portfolio Financial Statements and
liabilities incurred in the ordinary course of business
subsequent to December 31, 1994 or otherwise previously
disclosed to the Money Market Portfolio none of which has been
materially adverse to the business, assets, or results of
operations of the NJ Portfolio.
(g) Litigation. To the knowledge of CTFR there are no claims,
actions, suits, or proceedings, pending or threatened, which
would adversely affect the NJ Portfolio or its assets or
business, or which would prevent or hinder consummation of the
transactions contemplated by this Agreement.
(h) Contracts. Except for contracts and agreements previously
disclosed to the Money Market Portfolio under which no default
exists, CTFR on behalf of the NJ Portfolio is not a party to or
subject to any material contract, debt instrument, plan, lease,
franchise, license, or permit of any kind or nature whatsoever.
(i) Taxes. The federal income tax returns of the NJ Portfolio
have been filed for all taxable years to and including the
taxable year ended December 31, 1994 and all taxes payable
pursuant to such returns have been paid. The NJ Portfolio has
qualified as a regulated investment company under the Internal
Revenue Code with respect to each past taxable year of the NJ
Portfolio since commencement of its operations.
(j) Portfolio Securities. All securities to be listed in the
schedule of investments of the NJ Portfolio as of the Effective
Time of the Reorganization will be owned by CTFR on behalf of
the NJ Portfolio free and clear of any liens, claims, charges,
options, and encumbrances, except as indicated in the schedule.
Except as so indicated, none of the securities is, or after the
Reorganization as contemplated by this Agreement will be,
subject to any legal or contractual restrictions on disposition
(including restrictions as to the public offering or sale of the
securities under the Securities Act), and all the securities are
or will be readily marketable.
(k) Registration Statement. CTFR will cooperate with the Money
Market Portfolio in connection with the Registration Statement
referred to in Section 6(k) of this Agreement, and will furnish
to the Money Market Portfolio the information relating to the NJ
Portfolio required by the Securities Act and its Regulations to
be set forth in the Registration Statement (including the
Prospectus and Statement of Additional Information). At the time
the Registration Statement becomes effective, the Registration
Statement, insofar as it relates to the NJ Portfolio,
(i) will comply in all material respects with the provisions of
the Securities Act and its Regulations, and
(ii) will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
Further, at the time the Registration Statement becomes
effective, at the time of the shareholders' meeting referred to
in Section I and at the Effective Time of the Reorganization,
the Prospectus and Statement of Additional Information, as
amended or supplemented by any
amendments or supplements filed by Money Market, insofar as it
relates to the NJ Portfolio, will not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in
this subsection shall apply only to statements in or omissions
from the Registration Statement or Prospectus and Statement of
Additional Information made in reliance upon and in conformity
with information furnished by CTFR for use in the Registration
Statement or Prospectus and Statement of Additional Information
as provided in this Section 7(k).
8. CONDITIONS TO OBLIGATIONS OF THE NJ PORTFOLIO
The obligations of the NJ Portfolio under this Agreement with
respect to the consummation of the Reorganization are subject to
the satisfaction of the following conditions:
(a) Shareholder Approval. The Plan shall have been approved by
the affirmative vote of the holders of a majority of the
outstanding shares of the NJ Portfolio.
(b) Representations, Warranties and, Agreements. As of the
Effective Time of the Reorganization, the NJ Portfolio shall
have complied with each of its responsibilities under this
Agreement, each of the representations and warranties contained
in this Agreement shall be true in all material respects, and
there shall have been no material adverse change in the
financial condition, results of operations, business,
properties, or assets of the NJ Portfolio since December 31,
1994 As of the Effective Time of the Reorganization, the NJ
Portfolio shall have received a certificate from the Money
Market Portfolio satisfactory in form and substance to the NJ
Portfolio indicating that it has met the terms stated in this
Section.
(c) Regulatory Approval. The Registration Statement referred to
in Section 6(k) shall have been declared effective by the
Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued; all necessary orders
of exemption under the Act with respect to the transactions
contemplated by this Agreement shall have been granted by the
Commission; and all approvals, registrations, and exemptions
under federal and state laws considered to be necessary shall
have been obtained.
(d) Tax Opinion. CTFR shall have received the opinion of
counsel, dated the Effective Time of the Reorganization,
addressed to and in form and substance satisfactory to CTFR, as
to certain of the federal income tax consequences of the
Reorganization under the Internal Revenue Code to the NJ
Portfolio and its shareholders. For purposes of rendering its
opinion, counsel may rely exclusively and without independent
verification, as to factual matters, on the statements made in
the Plan, the proxy statement which will be distributed to the
shareholders of the NJ Portfolio in connection with the
Reorganization, and on such other written representations as
CTFR and the NJ Portfolio, respectively, will have verified as
of the Effective Time of the Reorganization. The opinion of
counsel will be to the effect that, based on the facts and
assumptions stated therein, for federal income tax purposes:
(i) neither the NJ Portfolio nor the Money Market Portfolio will
recognize any gain or loss upon the transfer of the assets of
the NJ Portfolio to and the assumption of its liabilities by the
Money Market Portfolio in exchange for the Money Market Shares
and upon the distribution (whether actual or constructive) of
the Money Market Shares to its shareholders in exchange for
their shares of capital stock of the NJ Portfolio;
(ii) the shareholders of the NJ Portfolio who receive Money
Market Shares pursuant to the Reorganization will not recognize
any gain or loss upon the exchange (whether actual or
constructive) of their shares of capital stock of the NJ
Portfolio for Money Market Shares (including any fractional
share interests they are deemed to have received) pursuant to
the Reorganization;
(iii) the basis of Money Market Shares received by the NJ
Portfolio's shareholders will be the same as the basis of the
shares of capital stock of the NJ Portfolio surrendered in the
exchange; and
(iv) the basis of the NJ Portfolio assets acquired by the Money
Market Portfolio will be the same as the basis of such assets to
the NJ Portfolio immediately prior to the Reorganization.
9. CONDITIONS TO OBLIGATIONS OF THE MONEY MARKET PORTFOLIO
The obligations of the Money Market Portfolio under this
Agreement with respect to the consummation of the Reorganization
are subject to the satisfaction of the following conditions:
(a) Representations, Warranties, and Agreements. As of the
Effective Time of the Reorganization, the Money Market Portfolio
shall have complied with each of its obligations under this
Agreement, each of the representations and warranties contained
in this Agreement shall be true in all material respects, and
there shall have been no material adverse change in the
financial condition, results of operations, business, properties
or assets of the Money Market Portfolio since December 31,
1994. The Money Market Portfolio shall have received a
certificate from the NJ Portfolio satisfactory in form and
substance to the Money Market Portfolio indicating that it has
met the terms stated in this Section.
(b) Regulatory Approval. All necessary orders of exemption under
the Act with respect to the transactions contemplated by this
Agreement shall have been granted by the Commission, and all
approvals, registrations, and exemptions under state securities
laws considered to be necessary shall have been obtained.
(c) Tax Opinion. The Money Market Portfolio shall have received
the opinion of counsel, dated the Effective Time of the
Reorganization, addressed to and in form and substance
satisfactory to the Money Market Portfolio, as to certain of the
federal income tax consequences of the Reorganization under the
Internal Revenue Code to the NJ Portfolio and the shareholders
of the NJ Portfolio. For purposes of rendering its opinion,
counsel may rely exclusively and without independent
verification, as to factual matters, on the statements made in
the Plan, the proxy statement which will be distributed to the
shareholders of the NJ Portfolio in connection with the
Reorganization, and on such other written representations as
CTFR and the Money Market Portfolio, respectively, will have
verified as of the Effective Time of the Reorganization. The
opinion of counsel will be to the effect that, based on the
facts and assumptions stated therein, for federal income tax
purposes:
(i) neither the NJ Portfolio nor the Money Market Portfolio will
recognize any gain or loss upon the transfer of the assets of
the NJ Portfolio to, and the assumption of its liabilities by,
the Money Market Portfolio in exchange for Money Market Shares
and upon the distribution (whether actual or constructive) of
Money Market Shares to its shareholders in exchange for their
shares of beneficial interest of t he NJ Portfolio;
(ii) the shareholders of the NJ Portfolio who receive Money
Market
Shares pursuant to the Reorganization will not recognize any
gain or loss upon the exchange (whether actual or constructive)
of their shares of capital stock of the NJ Portfolio for Money
Market Shares (including any fractional share interests they are
deemed to have received) pursuant to the Reorganization;
(iii) the basis of Money Market Shares received by the NJ
Portfolio's shareholders will be the same as the basis of the
shares of capital stock of the NJ Portfolio surrendered in the
exchange; and
(iv) the basis of the NJ Portfolio assets acquired by the Money
Market Portfolio will be the same as the basis of such assets to
the NJ Portfolio immediately prior to the Reorganization.
10. AMENDMENTS, TERMINATIONS, NON-SURVIVAL OF COVENANTS,
WARRANTIES AND REPRESENTATIONS
(a) The parties hereto may, by agreement in writing authorized
by the Board of Trustees, amend the Plan at any time before or
after approval of the Plan by shareholders of the NJ Portfolio,
but after such approval, no amendment shall be made that
substantially changes the terms of this Agreement.
(b) At any time prior to the Effective Time of the
Reorganization, any of the parties may by written instrument
signed by it (i) waive any inaccuracies in the representations
and warranties made pursuant to this Agreement, and (ii) waive
compliance with any of the covenants or conditions made for its
benefit pursuant to this Agreement.
(c) The NJ Portfolio may terminate the Plan at any time prior to
the Effective Time of the Reorganization by notice to the Money
Market Portfolio if (i) a material condition to its performance
under this Agreement or a material covenant of the Money Market
Portfolio contained in this Agreement is not fulfilled on or
before the date specified for the fulfillment thereof, or (ii) a
material default or material breach of the Plan is made by the
Money Market Portfolio.
(d) The Money Market Portfolio may terminate the Plan at any
time prior to the Effective Time of the Reorganization by notice
to the NJ Portfolio if (i) a material condition to its
performance under this Agreement or a material covenant of the
NJ Portfolio contained in this Agreement is not fulfilled on or
before the date specified for the fulfillment thereof, or (ii) a
material default or material breach of the Plan is made by the
NJ Portfolio.
(e) The Plan may be terminated by either party at any time prior
to the Effective Time of the Reorganization upon notice to the
other party, whether before or after approval by the
shareholders of the NJ Portfolio, without liability on the part
of either party hereto or its respective trustees, officers, or
shareholders, and shall be terminated without liability as of
the close of business on December 31, 1996 if the Effective Time
of the Reorganization is not on or prior to such date.
(f) No representations, warranties, or covenants in or pursuant
to the Plan (including certificates of officers) shall survive
the Reorganization.
11. EXPENSES
The NJ Portfolio and the Money Market Portfolio will bear their
own expenses incurred in connection with this Reorganization.
12. GENERAL
This Plan supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive
statement of the terms of the Plan between the parties and may
not be changed or terminated orally. The Plan may be executed
in one or more counterparts, all of which shall be considered
one and the same agreement, and shall become effective when one
or more counterparts have been executed by each Portfolio and
delivered to each of the parties hereto. The headings contained
in the Plan or for reference purposes only and shall not affect
in any way the meaning or interpretation of the Plan. Nothing
in the Plan, expressed or implied, is intended to confer upon
any other person any rights or remedies by reason of the Plan.
IN WITNESS WHEREOF, CTFR has caused the Plan to be executed on
behalf of its NJ Portfolio and Money Market Portfolios by the
Chairman, President, or a Vice President, and its seals to be
affixed hereto and attested by the Secretary or Assistant
Secretary, all as of the day and year first above written, and
to be delivered as required.
Attest: CALVERT TAX-FREE RESERVES NEW JERSEY
MONEY MARKET PORTFOLIO
By:
Clifton S. Sorrell, President
Attest: CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO
By:
Clifton S. Sorrell, President
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
____________________, 199___
Acquisition of the Assets of
CALVERT TAX-FREE RESERVES--
NEW JERSEY MONEY MARKET PORTFOLIO
4550 Montgomery Avenue,
Suite 1000N Bethesda,
Maryland 20814
By and in Exchange for Shares of
CALVERT TAX-FREE RESERVES--MONEY MARKET PORTFOLIO
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
This Statement of Additional Information dated _______
___, 199___, relates to the proposed transfer of assets of
Calvert Tax-Free Reserves--New Jersey Money Market Portfolio to
Calvert Tax-Free Reserves Money Market Portfolio. The Statement
consists of this cover page and the Statement of Additional
Information of Calvert Tax-Free Reserves Money Market Portfolio
dated April 30, 1995, and an unaudited balance sheet and
statement of operations for the Calvert Tax-Free Reserves Money
Market Portfolio as of June 30, 1995.
This Statement of Additional information is not a
prospectus.
A Prospectus/Proxy Statement dated ___________ ___, 199___,
relating to the above-referenced matter may be obtained from The
Calvert Group,
Ltd., 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814. This Statement of Additional information relates to, and
should be read in conjunction with, such Prospectus/Proxy
Statement.
The date of this Statement of Information is ____________ ___, 199___.
<PAGE>
CALVERT TAX-FREE RESERVES--
NEW JERSEY MONEY MARKET PORTFOLIO
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby
appoint(s) William M. Tartikoff, Esq. and Clifton S. Sorrell,
Jr. attorneys, with full power of substitution, to vote all
shares of Calvert Tax-Free Reserves-New Jersey Money Market
Portfolio that the undersigned is entitled to vote at the
Special Meeting of Shareholders to be held in the Tenth Floor
Conference Room of Calvert Group, 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814 on _________ __, 1996 at 10:00
a.m. and at any adjournment thereof. All powers may be
exercised by a majority of the proxy holders or substitutes
voting or acting or, if only one votes and acts, then by that
one. This proxy shall be voted on the proposal described in the
Proxy Statement. Receipt of the Notice of the Meeting and the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on the
Proxy. When signing in a fiduciary capacity,
such as executor, administrator, trustee, guardian, etc.,
please so indicate. Corporate and partnership proxies should
be signed by an authorized person indicating the person's
title.
Date ____________________________, 1996
_____________________________________
_____________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
_____________________________________________
Please refer to the Proxy Statement discussion on this matter.
IF NO SPECIFICATION IS MADE,
THE PROXY SHALL BE VOTED FOR THE PROPOSAL.
As to any other matter, said attorneys shall vote in
accordance with their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
1. To act upon a proposal to approve an Agreement and
Plan of Reorganization providing for the transfer of all of the assets
and liabilities of the Calvert Tax-Free Reserves ("CTFR") New
Jersey Money Market Portfolio in exchange for Class O shares
of the CTFR Money Market Portfolio.
FOR-AGAINST-ABSTAIN
<PAGE>
PART C. OTHER INFORMATION
Item 15. 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 eon 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 $3 million in
excess directors and officers liability coverage for the
independent trustees/directors only. Registrant also maintains
a $9 million Investment Company Blanket bond issued by ICI
Mutual Insurance Company, P.O. Box 730, Burlington, Vermont,
05402, and an additional $5 million in excess of $9 million
blanket bond with Chubb Group of Insurance Companies, 15
Mountain View Road, Warren, New Jersey 07061.
Item 16. Exhibits
1. Declaration of Trust (incorporated by reference to
Registrant's
Initial Registration Statement, October 20, 1980).
2. By-Laws (incorporated by reference to Registrant's
Initial
Registration Statement, October 20, 1980).
4. Plan of Reorganization (herewith) (Exhibit A to the N-14
prospectus).
6. Advisory Contract (incorporated by reference to
Registrant's
Post-Effective Amendment No. 29, August 30, 1991).
7. Underwriting and Dealer Agreements (incorporated by
reference to Registrant's Post-Effective Amendment No. 40, February 8,
1995).
8. Trustees' Deferred Compensation Agreement (incorporated
by reference to Registrant's Post-Effective Amendment No. 3-,
January 31, 1992).
9. Custodial Contract (Incorporated by reference to
Registrant's Post-Effective Amendment No. 34, November 30, 1993);
11. Opinion and consent of Counsel as to Legality of
Shares Being Registered (herewith)
12. Tax Opinion (herewith)
14. Consent of Independent Accountants (herewith)
16. Powers of Attorney (herewith)
17.(a) Prospectus of Portfolio Being Acquired
17.(b) Prospectus of Acquiring Portfolio
17.(c) Declaration Pursuant to Rule 24f-2
Exhibits 3, 5, 10, 13 and 15 are omitted because they are
inapplicable.
Item 17. Undertakings
Not Applicable
<PAGE>
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 pursuant to the Securities Act of 1933
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized in the
City of Bethesda, and State of Maryland, on the __ day of
November, 1995.
CALVERT TAX-FREE RESERVES
By: ______________________________
Clifton S. Sorrell, Jr.
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 indicated.
Clifton S. Sorrell, Jr 12/11/95
Trustee and Principal Executive Officer
Ronald M. Wolfsheimer 12/11/95
Principal Accounting Officer
_________________________
12/11/95
Richard L. Baird, Jr.
Trustee
_________________________
12/11/95
Frank H. Blatz, Jr., Esq.
Trustee
________________________
12/11/95
Frederick T. Borts, M.D.
Trustee
________________________
12/11/95
Douglas E. Feldman, M.D.
Trustee
_________________________
12/11/95
John G. Guffey, Jr.
Trustee
_________________________
12/11/95
Arthur J. Pugh
Trustee
________________________
12/11/95
David R. Rochat
Trustee
_________________________
12/11/95
D. Wayne Silby
Trustee
** Signed by Susan Walker Bender, Esq., attorney-in-fact,
pursuant to power of attorney, attached hereto.
_______________________________
1Total return has not been audited prior to 1994.
<PAGE>
Exhibit 11
Ex-99.11
November 8, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Exhibit 11, Form N-14
Calvert Tax-Free Reserves
File Nos. 2-69565, 811-3101
Ladies and Gentlemen:
As Counsel to Calvert Tax-Free Reserves, it is my opinion, based upon
an examination of the Articles of Incorporation and By-Laws and such other
original or photostatic copies of Fund records, certificates of proper
officials, documents, papers, statutes, and authorities as I deemed
necessary to form the basis of this opinion, that the securities being
registered by this registration statement on Form N-14 will, when sold, be
legally issued, full paid and non-assessable. Consent is hereby given to
file this opinion of counsel with the Securities and Exchange Commission
as an Exhibit to the above-referenced Registration Statement.
Sincerely,
Susan Walker Bender
Associate General Counsel
<PAGE>
November 17, 1995
Calvert Responsibly Invested Bond
Portfolio
Calvert Responsibly Invested
Balanced Portfolio
4550 Montgomery Avenue
Bethesda, Maryland 20814
Re: Acquisition of Assets of Calvert Responsibly
Invested Bond Portfolio
Ladies and Gentlemen:
You have asked for our opinion as to certain tax
consequences of the proposed acquisition of assets of Calvert
Responsibly Invested Bond Portfolio ("Selling Fund"), a series of
Acacia Capital Corporation, a Maryland corporation (the
"Company"), by Calvert Responsibly Invested Balanced Portfolio
("Acquiring Fund"), also a series of the Company, in exchange for
voting shares of Acquiring Fund (the "Reclassification").
In rendering our opinion, we have reviewed and relied upon
the draft Prospectus/Proxy Statement dated November 16, 1995 and
the Agreement and Plan of Reclassification (the "Agreement")
dated as of November 17, 1995. We have relied, without
independent verification, upon the factual statements made
therein, and assume that there will be no change in material
facts disclosed therein between the date of this letter and the
date of closing of the Reclassification. We further assume that
the Reclassification will be carried out in accordance with the
Agreement. We have also relied upon the following
representations, each of which has been made to us by officers of
the Company on behalf of Acquiring Fund or of Selling Fund:
The Reclassification will be consummated substantially
as described in the Agreement.
Acquiring Fund will acquire from Selling Fund at least
90% of the fair market value of the net assets and at least 70%
of the fair market value of the gross assets held by Selling Fund
immediately prior to the Reclassification. For purposes of this
representation, assets of Selling Fund used to pay reorganization
<PAGE>
Calvert Responsibly Invested
Bond Portfolio
Calvert Responsibly Invested
Balanced Portfolio
November 17, 1995
Page 2
expenses, cash retained to pay liabilities, and redemptions and
distributions (except for regular and normal distributions) made
by Selling Fund immediately preceding the transfer which are part
of the plan of reorganization, will be considered as assets held
by Selling Fund immediately prior to the transfer.
To the best of the knowledge of management of Selling
Fund, there is no plan or intention on the part of the
shareholders of Selling Fund to sell, exchange, or otherwise
dispose of a number of Acquiring Fund shares received in the
Reclassification that would reduce the former Selling Fund
shareholders' ownership of Acquiring Fund shares to a number of
shares having a value, as of the date of the Reclassification
(the "Closing Date"), of less than 50 percent of the value of all
of the formerly outstanding shares of Selling Fund as of the same
date. For purposes of this representation, Selling Fund shares
exchanged for cash or other property will be treated as
outstanding Selling Fund shares on the Closing Date. There are
no dissenters' rights in the Reclassification, and no cash will
be exchanged for Selling Fund shares in lieu of fractional shares
of Acquiring Fund. Moreover, shares of Selling Fund and shares
of Acquiring Fund held by Selling Fund shareholders and otherwise
sold, redeemed, or disposed of prior or subsequent to the
Reclassification will be considered in making this
representation, except for shares of Selling Fund or Acquiring
Fund redeemed in the ordinary course of business of Selling Fund
or Acquiring Fund in accordance with the requirements of section
22(e) of the Investment Company Act of 1940.
Selling Fund has not redeemed and will not redeem the
shares of any of its shareholders in connection with the
Reclassification except to the extent necessary to comply with
its legal obligation to redeem its shares.
The management of Acquiring Fund has no plan or
intention to redeem or reacquire any of the Acquiring Fund shares
to be received by Selling Fund shareholders in connection with
the Reclassification, except to the extent necessary to comply
with its legal obligation to redeem its shares.
The management of Acquiring Fund has no plan or
intention to sell or dispose of any of the assets of Selling Fund
which will be acquired by Acquiring Fund in the Reclassification,
except for dispositions made in the ordinary course of business,
<PAGE>
Calvert Responsibly Invested
Bond Portfolio
Calvert Responsibly Invested
Balanced Portfolio
November 17, 1995
Page 3
and to the extent necessary to enable Acquiring Fund to comply
with its legal obligation to redeem its shares.
Following the Reclassification, Acquiring Fund will
continue the historic business of Selling Fund in a substantially
unchanged manner as part of the regulated investment company
business of Acquiring Fund, or will use a significant portion of
Selling Fund's historic business assets in a business.
There is no intercorporate indebtedness between
Acquiring Fund and Selling Fund.
Acquiring Fund does not own, directly or indirectly,
and has not owned in the last five years, directly or indirectly,
any shares of Selling Fund. Acquiring Fund will not acquire any
shares of Selling Fund prior to the Closing Date.
Acquiring Fund will not make any payment of cash or of
property other than shares to Selling Fund or to any shareholder
of Selling Fund in connection with the Reclassification.
Pursuant to the Agreement, the shareholders of Selling
Fund will receive solely Acquiring Fund voting shares in exchange
for their voting shares of Selling Fund.
The fair market value of the Acquiring Fund shares to
be received by the Selling Fund shareholders will be
approximately equal to the fair market value of the Selling Fund
shares surrendered in exchange therefor.
Subsequent to the transfer of Selling Fund's assets to
Acquiring Fund pursuant to the Agreement, Selling Fund will
distribute the shares of Acquiring Fund, together with other
assets it may have, in final liquidation as expeditiously as
possible.
Selling Fund is not under the jurisdiction of a court
in a Title 11 or similar case within the meaning of
Section 368(a)(3)(A) of the Internal Revenue Code of 1986, as amended
(the "Code").
Selling Fund is treated as a corporation for federal
income tax purposes and at all times in its existence has
qualified as a regulated investment company, as defined in Section 851
of the Code.
<PAGE>
Calvert Responsibly Invested
Bond Portfolio
Calvert Responsibly Invested
Balanced Portfolio
November 17, 1995
Page 4
Acquiring Fund is treated as a corporation for federal
income tax purposes and at all times in its existence has
qualified as a regulated investment company, as defined in Section 851
of the Code.
The sum of the liabilities of Selling Fund to be
assumed by Acquiring Fund and the expenses of the
Reclassification does not exceed twenty percent of the fair
market value of the assets of Selling Fund.
The foregoing representations are true on the date of
this letter and will be true on the date of closing of the
Reclassification.
Based on and subject to the foregoing, and our examination
of the legal authority we have deemed to be relevant, it is our
opinion that for federal income tax purposes:
The acquisition by Acquiring Fund of substantially all
of the assets of Selling Fund solely in exchange for voting
shares of Acquiring Fund followed by the distribution by Selling
Fund of said Acquiring Fund shares to the shareholders of Selling
Fund in exchange for their Selling Fund shares will constitute a
reorganization within the meaning of Section 368(a)(1)(C) of the Code,
and Acquiring Fund and Selling Fund will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code.
No gain or loss will be recognized to Selling Fund upon
the transfer of substantially all of its assets to Acquiring Fund
solely in exchange for Acquiring Fund voting shares and
assumption by Acquiring Fund of certain identified liabilities of
Selling Fund, or upon the distribution of such Acquiring Fund
voting shares to the shareholders of Selling Fund in exchange for
all of their Selling Fund shares.
No gain or loss will be recognized by Acquiring Fund
upon the receipt of the assets of Selling Fund (including any
cash retained initially by Selling Fund to pay liabilities but
later transferred) solely in exchange for Acquiring Fund voting
shares and assumption by Acquiring Fund of certain identified
liabilities of Selling Fund.
The basis of the assets of Selling Fund acquired by
Acquiring Fund will be the same as the basis of those assets in
the hands of Selling Fund immediately prior to the transfer, and
<PAGE>
Calvert Responsibly Invested
Bond Portfolio
Calvert Responsibly Invested
Balanced Portfolio
November 17, 1995
Page 5
the holding period of the assets of Selling Fund in the hands of
Acquiring Fund will include the period during which those assets
were held by Selling Fund.
The shareholders of Selling Fund will recognize no gain
or loss upon the exchange of all of their Selling Fund shares
solely for Acquiring Fund voting shares. Gain, if any, will be
realized by Selling Fund shareholders who in exchange for their
Selling Fund shares receive other property or money in addition
to Acquiring Fund shares, and will be recognized, but not in
excess of the amount of cash and the value of such other property
received. If the exchange has the effect of the distribution of
a dividend, then the amount of gain recognized that is not in
excess of the ratable share of undistributed earnings and profits
of Selling Fund will be treated as a dividend.
The basis of the Acquiring Fund voting shares to be
received by the Selling Fund shareholders will be the same as the
basis of the Selling Fund shares surrendered in exchange
therefor.
The holding period of the Acquiring Fund voting shares
to be received by the Selling Fund shareholders will include the
period during which the Selling Fund shares surrendered in
exchange therefor were held, provided the Selling Fund shares
were held as a capital asset on the date of the exchange.
This opinion letter is delivered to you in satisfaction of
the requirements of Paragraph III.D. of the Agreement. We hereby
consent to the filing of this opinion as an exhibit to the
Registration Statement on Form N-14 and to use of our name and
any reference to our firm in the Registration Statement or in the
Prospectus/Proxy Statement constituting a part thereof. In
giving such consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
SULLIVAN & WORCESTER
A Registered Limited Liability Partnership
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the following with respect to the registration of securities on
From N-14 under the Securities Act of 1933, relative to the transfer of all the
assets and liabilities of the Calvert Tax-Free Reserves ("CTFR") New Jersey
Money Market Portfolio in exchange for Class "O" shares of Calvert Tax-Free
Reserves Money Market Portfolio. 1. The incorporation by reference of our report
dated February 17, 1995 on our audits of the financial statemtnts and financial
highlights of CTFR Money Market Portfolio, which report is included in the
Annual Report to Shareholders for the year ended December 31, 1994, in the
Statement of Additional Information of CEFR Money Market Portfolio, dated April
30, 1995. 2. The reference to our firm under the heading "Independent
Accountants and Custodians" in the Statement of Additional Infromation of CTFR
Money Market Portfolio, dated April 30, 1995.
COOPERS & LYBRAND, L.L.P.
Baltimore, Maryland November 30, 1995
<PAGE>
Exhibit 16
Ex-99.16
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1995 Clifton S. Sorrell
Date Signature
Donald K. Sorrell Clifton S. Sorrell
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
March 1, 1995 Ronald M. Wolfsheimer
Date Signature
Katherine Stoner Ronald M. Wolfsheimer
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994 Richard L. Baird, Jr.
Date Signature
C.S. Sorrell, Jr. Richard L. Baird, Jr.
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994 Frank H. Blatz, Jr.
Date Signature
Charles E. Diehl Frank H. Blatz, Jr.
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994 Frederick T. Borts
Date Signature
John G. Guffey, Jr. Frederick T. Borts
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994 Douglas E. Feldman
Date Signature
Richard L. Baird, Jr. Douglas E. Feldman
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994 John G. Guffey, Jr.
Date Signature
Frederick T. Borts, M.D. John G. Guffey, Jr.
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1995 Arthur J. Pugh
Date Signature
Sharon H. Pugh Arthur J. Pugh
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994 David R. Rochat
Date Signature
Ronald M. Wolfsheimer David R. Rochat
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
POWER OF ATTORNEY
I, the undersigned Director of Calvert Tax-Free Reserves (the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Beth-ann Roth, and Katherine Stoner my true and
lawful attorneys, with full power to each of them, to sign for me and in
my name in the appropriate capacities, all registration statements and
amendments filed by the Fund with any federal or state agency, and to do
all such things in my name and behalf necessary for registering and
maintaining registration or exemptions from registration of the Fund
with any government agency in any jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things
in my name and behalf to comply with the provisions of all federal,
state and foreign laws, regulations, and policy pronouncements affecting
the Fund, including, but not limited to, the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Internal Revenue Code of 1986, and
all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Fund in
connection with any transaction approved by the Board of Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the
Fund, the signing is automatically ratified and confirmed by me by
virtue of this Power of Attorney.
WITNESS my hand on the date set forth below.
May 4, 1994 D. Wayne Sibley
Date Signature
Frederick T. Borts, M.D. D. Wayne Sibley
Witness Name of Director
PROSPECTUS --
April 30, 1995
CALVERT TAX-FREE RESERVES
CALIFORNIA MONEY MARKET PORTFOLIO NEW JERSEY MONEY
MARKET PORTFOLIO
4550 Montgomery Avenue, Bethesda, Maryland 20814
INVESTMENT OBJECTIVES AND POLICIES
Calvert Tax-Free Reserves California Money Market Portfolio seeks to earn
the highest interest income exempt from federal and California state
income taxes as is consistent with prudent investment management,
preservation of capital, and the quality and maturity characteristics of
the Portfolio. The Portfolio seeks to maintain a constant net asset value
of $1.00 per share. There can be no assurance that the Portfolio will be
successful in maintaining a constant net asset value of $1.00 per share.
An investment in the Portfolio is neither insured nor guaranteed by the
U.S. Government.
Calvert Tax-Free Reserves New Jersey Money Market Portfolio is a
nondiversified money market fund that seeks to earn the highest level of
interest income exempt from federal income tax and the New Jersey Gross
Income Tax, as is consistent with prudent investment management,
preservation of capital, and the quality and maturity characteristics of
the Portfolio. The Portfolio invests in high quality municipal obligations
issued by or on behalf of the State of New Jersey with maturities of one
year or less and an average maturity of 90 days or less. The Portfolio
seeks to maintain a constant net asset value of $1.00 per share. There can
be no assurance that the Portfolio will be successful in maintaining a
constant net asset value of $1.00 per share. An investment in the
Portfolio is neither insured nor guaranteed by the U.S. Government.
TO OPEN AN ACCOUNT
Call your broker, or complete and return the enclosed Account Application.
Minimum initial investment is $2,000.
ABOUT THIS PROSPECTUS
Please read this Prospectus before investing. It is designed to provide
you with information you ought to know before investing and to help you
decide if the Portfolio's goals match your own. Keep this document for
future reference.
A Statement of Additional Information (dated April 30, 1995) for the
Portfolio has been filed with the Securities and Exchange Commission and
is incorporated by reference. This free Statement is available upon
request from the Portfolio: 800-368-2748.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY
THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
<PAGE>
FUND EXPENSES
A. Shareholder Transaction Costs
California New Jersey
Money Market Money Market
Portfolio Portfolio
Sales Load on Purchases None None
Sales Load on Reinvested
Dividends None None
Deferred Sales Load None None
Redemption Fees None None
Exchange Fee None None
B. Annual Fund Operating Expenses - Fiscal Year 1994
(as a percentage of net assets)
Management Fees 0.51% 0.51%
Rule 12b-1 Fees None None
All Other Expenses 0.18% 0.33%
Total Fund Operating
Expenses 0.69% 0.84%
C. Example: You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at the end of
each period:
1 Year 3 Years 5 Years 10 Years
California Money Market Portfolio
$7 $22 $38 $86
New Jersey Money Market Portfolio
$9 $27 $47 $104
Explanation of Table: The purpose of the table is to assist you in
understanding the various costs and expenses that an investor in each
Portfolio may bear directly (shareholder transaction costs) or indirectly
(annual fund operating expenses).
A. Shareholder Transaction Costs are charges you pay when you buy
or sell shares of a Portfolio. If you request a wire redemption of less
than $1,000, you will be charged a $5 wire fee.
B. Annual Fund Operating Expenses are based on the Portfolio's
historical expenses. Management Fees are paid by each Portfolio to Calvert
Asset Management Company, Inc. ("Investment Advisor") for managing each
Portfolio's investments and business affairs, and include an
administrative service fee paid to Calvert Administrative Services
Company, Inc. The Portfolios incur Other Expenses for maintaining
shareholder records, furnishing shareholder statements and reports, and
other services. Management Fees and Other Expenses have already been
reflected in each Portfolio's yield and are not charged directly to
individual shareholder accounts. Please refer to "Management of the Fund"
for further information.
C. Example of Expenses. The example, which is hypothetical,
should not be considered a representation of past or future expenses.
Actual expenses may be higher or lower than those shown.
FINANCIAL HIGHLIGHTS
The following table provides information about each Portfolio's financial
history. It expresses the information in terms of a single share
outstanding throughout each period. The table has been audited by those
independent accountants whose report is included in the Annual Report to
Shareholders for each of the respective periods presented. The table
should be read in conjunction with the financial statements and their
related notes. The current Annual Report to Shareholders is incorporated
by reference into the Statement of
Additional Information.
California Money Market Portfolio
Year Ended December 31,
1994 1993
Net asset value, beginning of period $1.000 $1.000
Income from investment operations
Net investment income .026 .022
Distributions to shareholders
Dividends from net investment income (.026) (.022)
Net asset value, end of period $1.000 $1.000
Total return<F1> 2.62% 2.26%
Ratio of expenses to average net assets .69% .69%
Ratio of net income to average net assets 2.55% 2.22%
Increase reflected in above net investment
income due to expense reimbursement -- --
Net assets, end of period $260,718,589 $296,983,577
Number of shares outstanding at end
of period (in thousands 260,716 296,984
<F1>Total return prior to 1994 has not been audited. Total return for
1994 would have been 2.39% without the Contribution of Capital. See
portfolio note 7 in the PortfolioOs Annual Report.
California Money Market Portfolio
Year Ended December 31,
1992 1991
Net asset value, beginning of period $1.000 1.000
Income from investment operations
Net investment income .030 .045
Distributions to shareholders
Dividends from net investment income (.030) (.045)
Net asset value, end of period $1.000 $1.000
Total return<F1> 3.08% 4.64%
Ratio of expenses to average net assets .68% .60%
Ratio of net income to average net assets 3.01% 4.51%
Increase reflected in above net investment
income due to expense reimbursement -- --
Net assets, end of period $323,928,342 $287,984,273
Number of shares outstanding at end
of period (in thousands) 323,928 287,984
<F1>Total return prior to 1994 has not been audited.
California Money Market Portfolio
Year Ended From Inception
December 31, (10/16/89)
1990 to 12/31/89
Net asset value, beginning of period $1.000 $1.000
Income from investment operations
Net investment income .059 .018
Distributions to shareholders
Dividends from net investment income (.059) (.018)
Net asset value, end of period $1.000 $1.000
Total return<F1> 6.04% 6.51%(a)
Ratio of expenses to average net assets .31% --
Ratio of net income to average net assets 5.83% 6.13%(a)
Increase reflected in above net investment
income due to expense reimbursement .02% .12%(a)
Net assets, end of period $240,469,102 $35,661,953
Number of shares outstanding at end
of period (in thousand 240,468 35,661
<F1>Total return prior to 1994 has not been audited.
(a) = Annualized
New Jersey Money Market Portfolio
Year Ended December 31,
1994 1993
Net asset value, beginning of period $1.000 $1.000
Income from investment operations
Net investment income .022 .018
Distributions to shareholders
Dividends from net investment income (.022) (.018)
Net asset value, end of period $1.000 $1.000
Total return<F1> 2.21% 1.85%
Ratio of expenses to average net assets .84% .79%
Ratio of net income to average net assets 2.15% 1.83%
Increase reflected in above net investment
income due to expense reimbursement -- --
Net assets, end of period $32,472,208 $37,655,026
Number of shares outstanding at end
of period (in thousands) 37,657 37,657
<F1>Total return prior to 1994 has not been audited.
New Jersey Money Market Portfolio
Year Ended December 31,
1992 1991
Net asset value, beginning of period $1.000 $1.000
Income from investment operations
Net investment income .028 .048
Distributions to shareholders
Dividends from net investment income (.0282) (.048)
Net asset value, end of period $1.000 $1.000
Total return<F1> 2.83% 4.95%
Ratio of expenses to average net assets .66% .24%
Ratio of net income to average net assets 2.78% 4.63%
Increase reflected in above net investment
income due to expense reimbursement -- .05%
Net assets, end of period $53,263,691 $61,923,996
Number of shares outstanding at end
of period (in thousands) 53,264 61,924
<F1>Total return prior to 1994 has not been audited.
New Jersey Money Market Portfolio
From Inception
(Dec. 10, 1990)
to Dec. 31, 1990
Net asset value, beginning of period $1.000
Income from investment operations
Net investment income .003
Distributions to shareholders
Dividends from net investment income (.003)
Net asset value, end of period $1.000
Total return<F1> 6.19%(a)
Ratio of expenses to average net assets .39%(a)
Ratio of net income to average net assets 6.19%(a)
Increase reflected in above net investment
income due to expense reimbursement .39%(a)
Net assets, end of period $501,531
Number of shares outstanding at end
of period (in thousands) 502
<F1>. Total return prior to 1994 has not been audited.
(a) Annualized
INVESTMENT OBJECTIVES AND POLICIES
California Money Market Portfolio
The California Money Market Portfolio seeks to earn the highest level
of interest income exempt from federal and California state income taxes
as is consistent with prudent investment management, preservation of
capital, and the quality and maturity characteristics of the Portfolio.
The Portfolio invests primarily in a diversified portfolio of municipal
obligations whose interest is exempt from federal and California state
income tax. Municipal obligations in which the Portfolio invests are
short-term, fixed and variable rate instruments of minimal credit risk and
of high quality. Short-term obligations have remaining maturities of one
year or less. The Portfolio maintains an average weighted maturity of 90
days or less.
California Money Market Portfolio invests at least 80% of its assets in
debt obligations issued by or on behalf of the State of California.
Under normal market conditions, the California Money Market Portfolio will
invest at least 80% of its total assets in municipal obligations whose
interest is exempt from federal and California state income tax, including
those issued by or on behalf of the State of California and its political
subdivisions ("California Municipal Obligations"). The Portfolio will also
attempt to invest the remaining 20% of its total assets in such
obligations, but may invest it in municipal obligations of other states,
territories and possessions of the United States, the District of Columbia
and their respective authorities, agenicies, instrumentalities and
political subdivisions or in short-term taxable money market-type
instruments. See "Temporary Investments" below. Dividends paid by the
Portfolio which are derived from interest attributable to California
Municipal Obligations will be exempt from federal and California state
personal income taxes. Dividends derived from interest on tax-exempt
obligations of other governmental issuers will be exempt from federal
income tax, but will be subject to California state income taxes.
New Jersey Money Market Portfolio
The New Jersey Money Market Portfolio seeks to earn the highest level of
interest income exempt from federal income tax and the New Jersey Gross
Income Tax as is consistent with prudent investment management,
preservation of capital, and the quality and maturity characteristics of
the Portfolio.
The Portfolio is nondiversified and invests primarily in municipal
obligations whose interest is exempt from federal and New Jersey state
income tax. Municipal obligations in which the Portfolio invests are
short-term, fixed and variable rate instruments of minimal credit risk and
of high quality. Short-term obligations have remaining maturities of one
year or less. The Portfolio maintains an average weighted maturity of 90
days or less.
Under normal market conditions, the Portfolio attempts to invest all of
its assets in tax-exempt obligations of the State of New Jersey and its
political subdivisions ("New Jersey Municipal Obligations"). If at any
time New Jersey Municipal Obligations are unavailable, the Portfolio may,
to the extent permissible, invest in debt obligations issued by other
states, territories and possessions of the United States, the District of
Columbia and their respective authorities, agencies, instrumentalities and
political subdivisions ("Municipal Obligations").
Dividends paid by the Portfolio which are derived from interest
attributable to New Jersey Municipal Obligations will be exempt from
federal and New Jersey state personal income taxes. Dividends derived from
interest on tax-exempt obligations of other governmental issuers will be
exempt from federal income tax, but will be subject to New Jersey state
income taxes.
Since the Portfolio is nondiversified, it may invest in fewer issuers than
if it were diversified. As a result, the Portfolio's performance
may be more directly impacted by changes in conditions affecting those
issuers than it would be if the Portfolio were investing in a greater
number of issuers.
Credit Quality
The Portfolios invest in municipal bonds and notes and tax-exempt
commercial paper within the two highest credit ratings categories: for
example, AA and AAA (or Aa and Aaa) for municipal bonds, and A-l and A2 (or
P-l and P-2) for tax-exempt commercial paper. Municipal obligations rated
within these categories are judged to be of high quality by all standards.
The credit quality of municipal obligations is determined by reference to a
commercial credit rating service, such as MoodyOs Investors Service, Inc.
or Standard & PoorOs Corporation. In the case of any instrument that is not
rated, credit quality is determined by the Advisor under the supervision of
the Board of Trustees. There is no limitation on the percentage of each
PortfolioOs assets which may be invested in unrated obligations; such
obligations may be less liquid than rated obligations of comparable
quality. Please refer to the Appendix in the Statement of Additional
Information for a description of the ratings used by these services.
Variable Rate Obligations
Each Portfolio may invest in variable rate obligations. Variable rate
obligations have a yield which is adjusted periodically based on changes in
the level of prevailing interest rates. Floating rate obligations have an
interest rate fixed to a known lending rate, such as the prime rate, which
automatically adjusts when the known rate changes. Variable rate
obligations lessen the capital fluctuations usually inherent in fixed
income investments, which diminishes the
risk of capital depreciation of portfolio investments and Portfolio shares;
but this also means that should interest rates decline, the yield of the
Portfolio will decline, causing the Portfolio and its shareholders to
forego the opportunity for capital appreciation of the portfolio
investments.
Demand Notes
Each Portfolio may invest in floating rate and variable rate demand notes.
Demand notes provide that the holder may demand payment of the note at its
par value plus accrued interest by giving notice to the issuer. To ensure
the ability of the issuer to make payment upon such demand, the note may be
supported by an unconditional bank letter of credit.
Each Portfolio may invest in structured money market instruments, where the
underlying security is a municipal lease. Generally, such instruments are
structured as tax-exempt commercial paper or variable rate demand notes,
and are typically secured by an unconditional letter of credit. In the
unlikely event that the letter of credit is not honored, the lease would
present special risks, such as the chance that the municipality might not
appropriate funding for the lease payments. Thus, the Advisor considers
risk of cancellation in its investment analysis. Certain leases may be
considered illiquid. In all cases, each Portfolio invests only in
high-quality instruments (rated in one of the two highest rating
categories, or if unrated, of comparable credit quality) that meet the
requirements of SEC Rule 2a-7 regarding credit quality and maturity. See
the Statement of Additional
Information.
When-Issued Purchases
New issues of Municipal Obligations are offered on a when-issued basis;
that is, delivery and payment for the securities normally take place 15 to
45 days after the date of the transaction. The payment obligation and the
yield that will be received on the securities are each fixed at the time
the buyer enters into the commitment. Each Portfolio will only make
commitments to purchase such securities with the intention of actually
acquiring the securities, but each Portfolio may sell these securities
before the settlement date if it is deemed advisable as a matter of
investment strategy.
Temporary Investments
For liquidity purposes or pending the investment of the proceeds of the
sale of its shares, each Portfolio may invest in and derive up to 20% of
its income from taxable short-term money market type investments. Interest
earned from such taxable investments will be taxable to you as ordinary
income unless you are otherwise exempt from taxation.
Considerations for Investing in New Jersey or California
Since each Portfolio invests substantially all of its assets in Municipal
Obligations of its state, the performance of each Portfolio may be affected
by local economic conditions, more than other funds. If the local economy
suffers a downturn, the affected Portfolio is limited in its alternative
investment choices. As with any state, you should be aware that certain
proposed state or local constitutional amendments, legislative measures,
executive orders, administrative regulations or voter initiatives, in
addition to local economic conditions, could result in adverse consequences
affecting the ability of the State or its municipalities to meet their
obligations in a timely manner, which, in turn, could affect the
Portfolio's performance. See "Considerations for Investing" in each
PortfolioOs Statement of Additional Information.
Other Policies
The Portfolios may temporarily borrow money from banks to meet redemption
requests, but such borrowing may not exceed 10% of the value of the
Portfolio's total assets. The Portfolio has adopted certain fundamental
investment restrictions which are discussed in detail in the Statement of
Additional Information.
YIELD
Yield refers to income generated by an investment over a period of time.
Each Portfolio may advertise "yield" and "effective yield." Yield figures
are based on historical earnings and are not intended to indicate future
performance. The "yield" of a Portfolio refers to the actual income
generated by an investment in the Portfolio over a particular base period,
stated in the advertisement. If the base period is less than one year, the
yield will be "annualized." That is, the amount of income generated by the
investment during the base period is assumed to be generated over a
one-year period and is shown as a percentage of the investment. The
"effective yield" is calculated like yield, but assumes reinvestment of
earned income. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment.
Taxable Equivalent Yield
Each Portfolio may also advertise its "taxable equivalent yield." The
taxable equivalent yield is the yield you would have to obtain from taxable
investments to equal the Portfolio's yield, all or a portion of which may
be exempt from federal income taxes. The taxable equivalent yield for each
Portfolio is computed by taking the portion of the Portfolio's yield exempt
from regular federal income tax and multiplying the exempt yield by a
factor based on a stated income tax rate, then adding the portion of the
yield that is not exempt from regular federal income tax. The factor used
to calculate the taxable equivalent yield is the reciprocal of the
difference between one and the applicable income tax rate, which will be
stated in the advertisement.
MANAGEMENT OF THE FUND
The Board of Trustees supervises the activities and reviews its contracts
with companies that provide the Fund with services.
The Portfolios are series of Calvert Tax-Free Reserves (the "Fund"), an
open-end management investment company, organized as a Massachusetts
business trust on October 20, 1980. The series of the
Fund include the Money Market Portfolio, Limited-Term Portfolio, LongTerm
Portfolio, Money Management Plus Tax-Free Portfolio, California Money
Market Portfolio, New Jersey Money Market Portfolio, and the Vermont
Municipal Portfolio.
The Fund is not required to hold annual shareholder meetings, but special
meetings may be called for certain purposes such as electing Trustees,
changing fundamental policies, or approving a management contract. As a
shareholder, you receive one vote for each share of a Portfolio you own.
For matters affecting only one Portfolio, only shares of that Portfolio are
entitled to vote.
Calvert Group is one of the largest investment management firms in the
Washington, D.C. area.
Calvert Group, Ltd., parent of each Portfolio's investment advisor,
transfer agent, and distributor, is a subsidiary of Acacia Mutual Life
Insurance Company of Washington, D.C. Calvert Group is one of the largest
investment management firms in the Washington, D.C. area. Calvert Group,
Ltd. and its subsidiaries are located at 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814. As of December 31, 1994, Calvert Group
managed and administered assets in excess of $4.2 billion and more than
200,000 shareholder and depositor accounts.
Calvert Asset Management serves as Advisor.
Calvert Asset Management Company, Inc. (the "Advisor") is each Portfolio's
investment advisor. The Advisor provides each Portfolio with investment
supervision and management; administrative services and office space;
furnishes executive and other personnel to each Portfolio; and pays the
salaries and fees of all Trustees who are affiliated persons of the
Advisor. The Advisor may also assume and pay certain advertising and
promotional expenses of each Portfolio and reserves the right to compensate
broker-dealers in return for their promotional or administrative services.
For fiscal year 1994, pursuant to the Investment Advisory Agreement, the
Advisor was entitled to, and did receive, a fee of 0.50% of each
Portfolio's average daily net assets.
Calvert Administrative Services Company provides administrative
services for the Fund.
Calvert Administrative Services Company ("CASC"), an affiliate of the
Advisor, has been retained by the Fund to provide certain administrative
services necessary to the conduct of its affairs, including the preparation
of regulatory filings and shareholder reports, the daily determination of
its net asset value per share and dividends, and the maintenance of its
portfolio and general accounting records. For providing such services, CASC
receives a total fee from the Fund of $200,000 per year, allocated among
the Portfolios based on assets.
Calvert Distributors, Inc. serves as underwriter to market each Portfolio's
shares.
Calvert Distributors, Inc. ("CDI") is the Fund's principal underwriter and
distributor. Under the terms of its underwriting agreement with the
Portfolio, CDI markets and distributes each Portfolio's shares and is
responsible for payment of commissions and service fees to brokerdealers,
banks, and financial services firms, preparing advertising and sales
literature, and printing and mailing prospectuses to prospective investors.
CDI currently compensates broker-dealer firms at rates up to 0.20% of the
average daily net assets maintained in Portfolio accounts administered by
the respective firms. CDI may also pay additional concessions, including
non-cash promotional incentives such as merchandise or trips, to dealers
employing registered representatives who sell a minimum dollar amount of
shares of the Fund and/or shares of other Funds underwritten by CDI. CDI
may make expense reimbursements for special training of a dealer's
registered representatives, advertising and equipment, or to defray the
expenses of sales contests.
The transfer agent keeps your account records.
Calvert Shareholder Services, Inc. is the Fund's transfer, dividend
disbursing and shareholder servicing agent.
SHAREHOLDER GUIDE
Opening An Account
You can buy shares of each Portfolio in several ways which are described
here and in the chart on the next page.
An account application accompanies this prospectus. A completed and signed
application is required for each new account you open, regardless of the
method you choose for making your initial investment. Additional forms may
be required from corporations, associations, and certain fiduciaries. If
you have any questions or
need extra applications, call your broker, or Calvert Group at 800-3682748.
Net Asset Value
Each Portfolio's shares are sold without a sales charge.
Net asset value ("NAV") refers to the worth of one share. NAV is computed
by adding the value of a Portfolio's investments plus cash
and other assets, deducting liabilities and then dividing the result by
the number of shares outstanding. The NAV is calculated at the close of
each Portfolio's business day, which coincides with the closing of the
regular session of the New York Stock Exchange (normally 4:00 p.m. Eastern
time). Each Portfolio is open for business
each day the New York Stock Exchange is open. Portfolio securities are
valued according to the "amortized cost" method, which is intended to
stabilize the NAV at $1.00 per share.
All purchases of Portfolio shares will be confirmed and credited to your
account in full and fractional shares (rounded to the nearest 1/100 of a
share). Each Portfolio may send monthly statements in lieu of immediate
confirmations of purchases and redemptions.
HOW TO BUY SHARES
Method New Accounts Additional Investments
By Mail $2,000 minimum $250 minimum
Please make yourPlease make your
check payable to the check payable to the
appropriate Portfolio appropriate Portfolio
and mail it withand mail it with
your application to: your investment slip to:
Calvert Group Calvert Group
P.O. Box 419544 P.O. Box 419739
Kansas City, MO Kansas City, MO
64141-6544 64141-6739
By Registered, Certified, or Overnight Mail:
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO
64105-1807
Through Your
Broker $2,000 minimum $250 minimum
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR BROKER OR CALVERT GROUP AT
800368-2745
By Exchange $2,000 minimum $250 minimum
(From your account in another Calvert Group Fund)
When opening an account by exchange, your new account must be established
with the same name(s), address and taxpayer identification number as your
existing Calvert account.
By Bank Wire $2,000 minimum $250 minimum
By Calvert Money Not Available for $50 minimum
Controller* Initial Investment
*Please allow sufficient time for Calvert Group to process your initial
request for this service, normally 10 business days. The maximum
transaction amount is $300,000, and your purchase request must be received
by 4:00 p.m. Eastern time.
WHEN YOUR ACCOUNT WILL BE CREDITED
Before you buy shares, please read the following information to make sure
your investment is accepted and credited properly.
Your purchase will be processed at the net asset value calculated after
your order is received and accepted. Each Portfolio attempts to maintain a
constant net asset value of $1.00 per share. If your purchase is made by
wire and is received by 12:30 p.m. (Eastern time), your account will be
credited and begin earning dividends on the day of receipt. Exchanges are
credited the day the request is received by
mail or telephone, and begin earning dividends the next business day. If
your wire purchase is received after 12:30 p.m. Eastern time, it will be
credited the same business day, and begin earning dividends the next
business day. If the purchase is by check, and is received by 2:00 p.m.,
it will be credited that business day, and begin earning dividends the
next business day.
All of your purchases must be made in U.S. dollars and checks must be
drawn on U.S. banks. No cash will be accepted. Each Portfolio reserves the
right to suspend the offering of shares for a period of time or to reject
any specific purchase order. If your check does not clear, your purchase
will be cancelled and you will be charged a $10 fee plus costs incurred by
the Portfolio. When you purchase by check or with Calvert Money
Controller, those funds will be on hold for up to 10 business days from
the date of receipt. During that period, redemptions against those funds
(including drafts) will not be honored. To avoid this collection period,
you can wire federal funds from your bank, which may charge you a fee.
EXCHANGES
You may exchange shares of the Portfolios for shares of other Calvert
Group Funds.
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 or Portfolio, please note the
following:
Each exchange represents the sale of shares of one Fund and the purchase
of shares of another.
o Call your broker or a Calvert representative for information and a
prospectus for any of Calvert's other Funds registered in your state. Read
the prospectus of the Fund or Portfolio into which you want to exchange
for relevant information, including class offerings.
o Complete and sign an application for an account in that Fund or
Portfolio, 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.
o There is no additional charge for exchanges. However, because
shares of the Portfolios are sold without a sales charge, exchange
purchases into another Calvert Group Fund or Portfolio will be subject to
any applicable sales charge on the shares of the Fund being purchased.
Shares acquired by reinvestment of dividends or distributions may be
exchanged into another Fund at no additional charge.
Shares on which you have already paid a sales charge at Calvert Group may
be exchanged into another Fund at no additional charge.
The Fund reserves the right to terminate or modify the exchange privilege
with 60 days' written notice.
OTHER CALVERT GROUP SERVICES
Calvert Information Network
24 hour performance and prices
Calvert Group has a round-the-clock telephone service that lets existing
customers use a push button phone to obtain prices, performance
information, account balances, and authorize certain transactions.
Calvert Money Controller
Calvert Money Controller eliminates the delay of mailing a check or the
expense of wiring funds. You can request this free service on your
application.
This service allows you to authorize electronic transfers of money to
purchase or sell shares. You use Calvert Money Controller like an
"electronic check" to move money ($50 to $300,000) between your bank
account and your Calvert Group account with one phone call. Allow one or
two business days after the call for the transfer to take place; for money
recently invested, allow normal check clearing time (up to 10 business
days) before redemption proceeds are sent to your bank.
You may also arrange systematic monthly or quarterly investments (minimum
$50) into your Calvert Group account. After you give us proper
authorization, your bank account will be debited to purchase Fund shares.
A debit entry will appear on your bank statement. If you would like to
make arrangements for systematic monthly or quarterly redemptions from
your Calvert Group account, call your broker or Calvert for a Money
Controller Application.
Telephone Transactions
Calvert may record all telephone calls.
You may purchase, redeem, or exchange shares, wire funds and use Calvert
Money Controller by telephone if you have pre-authorized service
instructions. You automatically have telephone privileges unless you elect
otherwise. The Fund, the transfer agent and their affiliates are not
liable for acting in good faith on telephone instructions relating to your
account, so long as they follow reasonable procedures to determine that
the telephone instructions are genuine. Such procedures may include
recording the telephone calls and requiring some form of personal
identification. You should verify the accuracy of telephone transactions
immediately upon receipt of your confirmation statement.
Optional Services
Complete the "Option" sections of the application for the easiest way to
establish services.
The easiest way to establish optional services on your Calvert Group
account is to select the options you desire when you complete your account
application. If you wish to add other options later, you may have to
provide us with additional information and a signature guarantee. Please
call your broker or Calvert Investor Relations at 800-368-2745 for further
assistance. For our mutual protection, we may require a signature
guarantee on certain written transaction requests. A signature guarantee
verifies the authenticity of your signature, and may be obtained from any
bank, savings and loan association, credit union, trust company,
broker-dealer firm or member of a domestic stock exchange. A signature
guarantee cannot be provided by a notary public.
An effort to reduce Fund expenses and save paper and trees for the
environment.
Householding of General Mailings
If you have multiple accounts with Calvert, you may receive combined
mailings of some shareholder information, such as semi-annual and annual
reports. Please contact Calvert Investor Relations at 800-3682745 to
receive additional copies of information.
Special Services and Charges
Each Portfolio 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. You may be required to pay a research
fee for these special services.
If you are purchasing shares of a Portfolio through a program of services
offered by a broker-dealer or financial institution, you should read the
program materials in conjunction with this Prospectus. Certain features
may be modified in these programs, and administrative charges may be
imposed by the broker-dealer or financial institution for the services
rendered.
SELLING YOUR SHARES
You may redeem all or a portion of your shares on any business day. Your
shares will be redeemed at the next net asset value calculated after your
redemption request is received and accepted. See below for specific
requirements necessary to make sure your redemption request is acceptable.
Remember that the Fund may hold payment on the redemption of your shares
until it is reasonably satisfied that investments made by check or by
Calvert Money Controller have been collected (normally up to 10 business
days).
Redemption Requirements To Remember
To ensure acceptance of your redemption
request, please follow the procedures described here and below.
Once your shares are redeemed, the proceeds will normally be sent to you
on the next business day, but if making immediate payment could adversely
affect a Portfolio, it may take up to seven (7) days. Calvert Money
Controller redemptions generally will be credited to your bank account on
the first or second business day after your phone call. When the New York
Stock Exchange 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.
If you sell shares by telephone or written request, you will receive
dividends through the date the request is received and processed. If you
write a draft to sell shares, the shares will earn dividends until the
draft is presented to the Portfolio to be paid.
Minimum account balance is $1,000.
Please maintain a balance in your account of at least $1,000. If, due to
redemptions, the account falls below $1,000, or you fail to invest at
least $1,000, it may be closed and the proceeds mailed to you at the
address of record. You will be given notice that your account will be
closed after 30 days unless you make an additional investment to increase
your account balance to the $1,000 minimum.
HOW TO SELL YOUR SHARES
Draftwriting
You may redeem shares in your account by writing a draft for at least
$250. If you complete and return the enclosed signature card for
Draftwriting, your Portfolio will mail bank drafts to you, printed with
your name and address. Generally, there is no charge to you for the
maintenance of this service or the clearance of drafts, but each
Portfolio reserves the right to charge a service fee for drafts returned
for insufficient funds. As a service to shareholders, each Portfolio may
automatically transfer the dollar amount necessary to cover drafts you
have written on your Portfolio to your Portfolio
account from any other of your identically registered accounts in Calvert
money market funds or Calvert Insured Plus. The Portfolio may charge a
fee for this service.
By Mail To:
Calvert Group
P.O. Box 419544
Kansas City, MO
64179-6544
You may redeem available shares from your account at any time by sending a
letter of instruction, including your name, account and Fund number, the
number of shares or dollar amount, and where you want the money to be
sent. Additional requirements, below, may apply to your account. The
letter of instruction must be signed by all required authorized signers.
If you want the money to be wired to a bank not previously authorized,
then a voided bank check must be enclosed with your letter. If you do not
have a voided check or if you would like funds sent to a different address
or another person, your letter must be signature guaranteed.
Type of Registration Requirements
Corporations, Letter of instruction and a
Associations corporate resolution, signed by
person(s) authorized to act on
the account, accompanied by
signature guarantee(s).
Trusts Letter of instruction signed by
the Trustee(s) (as Trustee),
with a signature guarantee. (If
the Trustee's name is not
registered on your account,
provide a copy
of the trust document, certified
within the last 60 days.)
By Telephone
Please call 800-368-2745. You may redeem shares from your account by
telephone and have your money mailed to your address of record or wired to
an address or bank you have previously authorized. A charge of $5 is
imposed on wire transfers of less than $1,000. See "Telephone
Transactions" on page ___.
Calvert Money Controller
Please allow sufficient time for Calvert Group to process your initial
request for this service (normally 10 business days). You may also
authorize automatic fixed amount redemptions by Calvert Money Controller.
All requests must be received by 4:00 p.m. Eastern time. Accounts cannot
be closed by this service.
Exchange to Another Calvert Group Fund
You must meet the minimum investment requirement of the other Calvert
Group Fund or Portfolio. You can only exchange between accounts with
identical names, addresses and taxpayer identification number, unless
previously authorized with a signature-guaranteed letter.
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 each 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.
Through your Broker
If your account is held in your broker's name ("street name"), you should
contact your broker directly to transfer, exchange or redeem shares.
DIVIDENDS AND TAXES
Each year, each Portfolio distributes substantially all of its net
investment income to shareholders.
Dividends from each Portfolio'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 additional
shares of your Portfolio, unless you elect to have the dividends of $10 or
more paid in cash (by check or by Calvert Money Controller). Dividends and
distributions from your Portfolio may also be invested in shares of any
other Calvert Group Fund or Portfolio, and will not be subject to the
applicable sales charge. You must notify the Fund in writing to change
your payment options. If you elect to have dividends and/or distributions
paid in cash, and the U.S. Postal Service cannot deliver the check, or if it
remains uncashed for six months, it, as well as future dividends and
distributions, will be reinvested in additional shares.
Federal Taxes
Dividends derived from interest on municipal obligations constitute
exempt-interest dividends, on which you are not subject to federal income
tax. However, dividends which are from taxable interest and any
distributions of short-term capital gain are taxable to you as ordinary
income. If the Portfolio makes any distributions of long-term capital
gains, then these are taxable to you as long-term capital gains,
regardless of how long you held your shares of the Portfolio. Dividends
attributable to interest on certain private activity bonds must be
included in federal alternative minimum tax for individuals and for
corporations.
Other Tax Information
To the extent that exempt-interest dividends are derived from earnings
attributable to New Jersey or California Municipal Obligations, they will
also be exempt from state and local personal income tax in New Jersey or
California. The dividends may be subject to New Jersey or
California franchise taxes and corporate income taxes if received by a
corporation subject to such taxes. A letter will be mailed to you in
January detailing the percentage invested in New Jersey or California the
previous tax year. 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 your Portfolio 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. Each Portfolio
reserves the right to reject any new account or any purchase order for
failure to supply a certified TIN.
To Open an Account: Prospectus
800-368-2748 April 30, 1995
Performance and Prices:
Calvert Information Network CALVERT TAX-FREE
RESERVES
24 hours, 7 days a week NEW JERSEY
800-368-2745 MONEY MARKET PORTFOLIO
CALIFORNIA MONEY MARKET
PORTFOLIO
Service for Existing Account:
Shareholders
800-368-2745
Brokers800-368-2746
TDD for Hearing Impaired:
800-541-1524
Registered, Certified or
Overnight Mail:
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery
Avenue Suite 1000N
Bethesda, Maryland
20814
Table of Contents
Fund Expenses
Financial Highlights
Investment Objectives and
Policies Yield
Management of the Fund
SHAREHOLDER GUIDE: Net Asset
Value How to Buy Shares
When Your Account Will Be
Credited Exchanges
Other Calvert Group Services
Selling Your Shares
How to Sell Your Shares
Dividends and Taxes
<PAGE>
PROSPECTUS --
April 30, 1995
CALVERT TAX-FREE RESERVES
Money Market Portfolio
Limited-Term Portfolio
Long-Term Portfolio
4550 Montgomery Avenue, Bethesda, Maryland 20814
INVESTMENT OBJECTIVES Calvert Tax-Free Reserves Money Market Portfolio seeks to
earn the highest interest income exempt from federal income taxes as is
consistent with prudent investment management, preservation of capital, and the
quality and maturity characteristics of the Portfolio.
The Money Market Portfolio seeks to maintain a constant net asset value of $1.00
per share. There can be no assurance that the Portfolio will be successful in
maintaining a constant net asset value of $1.00 per share. An investment in the
Portfolio is neither insured nor guaranteed by the U.S. Government.
Calvert Tax-Free Reserves Limited-Term Portfolio 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 the Portfolio.
The Limited-Term Portfolio invests in investment-grade municipal obligations.
Fixed rate investments have remaining maturities of three years or less;
variable rate investments may have longer maturities. The Portfolio's net asset
value per share fluctuates in response to changes in the value of its
investments. There can be no assurance that the Portfolio will be successful in
meeting its investment objective.
Calvert Tax-Free Reserves Long-Term Portfolio 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 the Portfolio.
The Long-Term Portfolio invests in long-term investment-grade municipal
obligations. Its average maturity is normally in excess of twenty years. Because
of its longer average maturity, its yield and net asset value per share will
generally fluctuate in response to changes in interest rates and other market
factors.
PURCHASE INFORMATION The Limited-Term and Long-Term Portfolios each offer two
classes of shares, with different expense levels and sales charges. You may
choose to purchase (i) Class A shares, with a sales charge imposed at the time
you purchase the shares ("front-end sales charge"); or (ii) Class C shares which
impose neither a front-end sales charge nor a contingent deferred sales charge.
Class C shares are not available through all dealers. Class C shares have a
higher level of expenses than Class A shares, including higher Rule 12b-1 fees.
These alternatives permit you to choose the method of purchasing shares that is
most beneficial to you, depending on the amount of the purchase, the length of
time you expect to hold the shares, and other circumstances. See "Alternative
Sales Options" for further details.
TO OPEN AN ACCOUNT Call your broker, or complete and return the enclosed Account
Application. Minimum initial investment is $2,000.
ABOUT THIS PROSPECTUS Please read this Prospectus before investing. It is
designed to provide you with information you ought to know before investing and
to help you decide if the goals of a Portfolio match your own. Keep this
document for future reference.
A Statement of Additional Information (dated April 30, 1995) for each Portfolio
has been filed with the Securities and Exchange Commission and is incorporated
by reference. This free Statement is available upon request from the Fund:
800-368-2748.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE FEDERAL OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. WHEN INVESTORS SELL SHARES OF THE FUND, THE VALUE
MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY PAID.
<PAGE>
TABLE OF Fund Expenses Alternative Sales Options
CONTENTS Financial Highlights When Your Account Will Be Credited
Investment Objectives and Exchanges
Policies Yield and Total Other Calvert Group
Return Services
Management of the Fund Selling Your Shares
SHAREHOLDER GUIDE: How to Sell Your Shares
How to Buy Shares Dividends, Capital Gains and Taxes
Net Asset Value Exhibit A - Reduced Sales Charges
<PAGE>
FUND EXPENSES
Calvert Money
Market Portfolio
A. Shareholder Transaction Costs
Sales Load on Purchases None
Sales Load on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
B. Annual Fund Operating Expenses - Fiscal
Year 1994
(as a percentage of net assets)
Management Fees 0.46%
Rule 12b-1 Fees None
All Other Expenses 0.26%
Total Fund Operating Expenses 0.62%
Calvert Limited-Term Calvert Long-Term
Portfolio Portfolio
Class A Class C Class A Class C
A. Shareholder Transaction Costs 2.00% None 3.75% None
Maximum Sales Charge
on Purchases (as a percentage
of offering price)
Contingent Deferred Sales Charge None None None None
B. Annual Fund Operating Expenses-
Fiscal Year 1994 (as a percentage
of net assets, net of any
applicable expense
reimbursement/fee waiver)
Management Fees 0.58% 0.58% 0.60% 0.60%
Rule 12b-1 Service and
Distribution Fees None 0.55% 0.09% 1.00%
Other Expenses 0.08% 0.25% 0.12% 0.31%
Total Fund Operating
Expenses 0.66% 1.38% 0.81% 1.91%
C. Example: You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each period:
CTFR Money Market 1 Year 3 Years 5 Years 10 Years
$6 $20 $35 $77
CTFR Limited-Term 1 Year 3 Years 5 Years 10 Years
Class A<F1> $27 $41 $56 $101
Class C
$14 $44 $76 $166
CTFR Long-Term 1 Year 3 Year 5 Years 10 Years
Class A<F1> $45 $62 $81 $134
Class C $19 $60 $103 $223
Explanation of Table: The purpose of the table is to assist you
in understanding the various costs and expenses that an investor
in the Portfolios may bear directly (shareholder transaction
costs) or indirectly (annual fund operating expenses).
A. Shareholder Transaction Costs are charges you pay when
you buy
or sell shares of a Portfolio. If you request a wire redemption
of less than $1,000, you will be charged a $5 wire fee. See
"Reduced Sales Charges" at Exhibit A to see if you qualify for
possible reductions in the sales charge for the Limited- or
Long-Term Portfolios.
B. Annual Fund Operating Expenses. Management Fees are paid
by the Fund to Calvert Asset Management Company, Inc. ("Investment
Advisor") for managing each PortfolioOs investments and business
affairs, and include an administrative service fee paid to
Calvert Administrative Services Company, Inc. Each Portfolio
incurs Other Expenses for maintaining shareholder records,
furnishing shareholder statements and reports, and other
services. Management Fees and Other Expenses have already been
reflected in the share price for the Limited- and LongTerm
Portfolios, and in the yield for the Money Market Portfolio and
are not charged directly to individual shareholder accounts. For
fiscal year 1994, the Investment Advisor reimbursed a portion of
the expenses of the Class C shares of the Long-Term Portfolio.
If the Advisor had not made such reimbursements, the annualized
expenses of the Class C shares of the Portfolio as a percentage
of average daily net assets would have been 5.61%. Expense information for the
LimitedTerm Portfolio Class C, and the Long-Term Portfolio Class
A and C, has been restated to reflect expenses anticipated in
the current fiscal year. Please refer to "Management of the
Fund" for further information.
The Rule 12b-1 fees of the Limited- and Long-Term
Portfolios include an asset-based sales charge. Thus, it is
possible that longterm shareholders in each Portfolio may pay
more in total sales charges than the economic equivalent of the
maximum front-end sales charge permitted by rules of the
National Association of Securities Dealers, Inc.
C. Example of Expenses. The example, which is hypothetical,
should not be considered a representation of past or future
expenses. Actual expenses may be higher or lower than those
shown.
FINANCIAL HIGHLIGHTS
The following tables provide information about the financial
history of the Money Market PortfolioOs shares and the Class A
and C shares of the Limited- and Long-Term Portfolios. They
express the information in terms of a single share outstanding
throughout each period. Information for Class C shares is shown
since inception, March 1, 1994. The tables have been audited by
those independent accountants whose report is included in
Calvert Tax-Free Reserves Annual Report to Shareholders for each
of the respective periods presented. The tables should be read
in conjunction with the financial statements and their related
notes. The current Annual Report to Shareholders is incorporated
by reference into the Statement of Additional Information.
Money Market Portfolio
Year Ended December 31,
1994 1993 1992
Net asset value, beginning of year $1.000 $1.000 $1.000
Income from investment operations
Net investment income .028 .024 .031
Distributions to shareholders
Dividends from net investment income
(.028) (.024) (.031)
Net asset value, end of year
$1.000 $1.000 $1.000
Total return<F1>
2.81% 2.41% 3.18%
Ratio of expenses to average
net assets
.62% .60% .59%
Ratio of net investment income to
average net assets 2.75% 2.37% 3.10%
Net assets, end of year $1,344,594,922 $1,500,614,262 $1,552,105,640
Number of shares outstanding
at end of year (in thousands) 1,344,668 1,500,557 1,552,061
<F1>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
Money Market Portfolio
Year Ended December 31,
1991 1990
Net asset value, beginning of year $1.000 $1.000
Income from investment operations
Net investment income .048 .059
Distributions to shareholders
Dividends from net investment income
(.048) (.059)
Net asset value, end of year
$1.000 $1.000
Total return<F1>
4.96% 6.04%
Ratio of expenses to average net assets
.61% .63%
Ratio of net investment income to
average net assets 4.79% 5.85%
Net assets, end of year $1,382,329,562 $1,071,718,868
Number of shares outstanding
at end of year (in thousands) 1,382,288 1,071,678
<F1>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
Money Market Portfolio
Year Ended December 31,
1989 1988 1987
Net asset value, beginning of year $1.000 $1.000 $1.000
Income from investment operations
Net investment income .063 .052 .046
Distributions to shareholders
Dividends from net investment income
(.063) (.052) (.046)
Net asset value, end of year
$1.000 $1.000 $1.000
Total return<F1>
6.47% 5.31% 4.62%
Ratio of expenses to average net assets
.62% .62% .62%
Ratio of net investment income to
average net assets 6.22% 5.19% 4.56%
Net assets, end of year
$952,346,922 $823,759,105 $688,967,210
Number of shares outstanding at
end of year (in thousands) 952,257 823,696 688,986
<F1>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
Money Market Portfolio
Year Ended December 31,
1986 1985
Net asset value, beginning of year $1.000 $1.000
Income from investment operations
Net investment income .048 .054
Distributions to shareholders
Dividends from net investment income
(.048) (.054)
Net asset value, end of year
$1.000 $1.000
Total return<F1>
4.77% 5.39%
Ratio of expenses to average net assets
.67% .71%
Ratio of net investment income to
average net assets 4.66% 5.22%
Net assets, end of year $519,491,108 $306,432,253
Number of shares outstanding
at end of year (in thousands) 519,399 306,411
<F1>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
Limited-Term Portfolio
Class C Shares Class A Shares
From Inception Year Ended December 31,
(3/1, 1994) to
to December 31,
1994 1994 1993
Net asset value, beginning of period $10.70 $10.72 $10.68
Income from investment operations
Net investment income .27 .39 .38
Net realized and unrealized gain
(loss) on investments (.12) (.13) .04
Total from investment operations .15 .26 .42
Distributions to shareholders
Dividends from net investment
income (.29) (.39) (.38)
Distribution from net realized
gains -- -- --
Total distributions (.29) (.39) (.38)
Total increase (decrease) in net asset
value (.14) (.13) .04
Net asset value, end of period $10.56 $10.59 $10.72
Total return<F2> 1.43% 2.42% 4.02%
Ratio of expenses to average
net assets 1.38%(a) .66% .67%
Ratio of net investment income
to average net assets 3.05%(a) 3.60% 3.59%
Portfolio turnover 27% 27% 14%
Net assets, end of period $31,080,844 $544,821,793 $663,305,354
Number of shares outstanding at
end of period (in thousands) 2,942 51,424 61,861
<F2>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
(a) = Annualized
<PAGE>
Limited-Term Portfolio Class A Shares
Year Ended December 31,
1992 1991
Net asset value, beginning of period $10.65 $10.61
Income from investment operations
Net investment income .49 .64
Net realized and unrealized gain
(loss) on investments .03 .03
Total from investment operations .52 .67
Distributions to shareholders
Dividends from net investment income (.49) (.63)
Distribution from net realized gains -- --
Total distributions (.49) (.63)
Total increase (decrease) in net asset value .03 .04
Net asset value, end of period $10.68 $10.65
Total return<F2> 4.99% 6.46%
Ratio of expenses to average net assets .71% .73%
Ratio of net investment income to average
net assets 4.58% 5.99%
Portfolio turnover 5% 1%
Net assets, end of period $567,419,411 $294,307,700
Number of shares outstanding at end of period
(in thousands) 53,140 27,644
<F2>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
<PAGE>
Limited-Term Portfolio Class A Shares
Year Ended December 31,
1990 1989 1988
Net asset value, beginning of period $10.61 $10.55 $ 10.45
Income from investment operations
Net investment income .67 .67 .60
Net realized and unrealized gain
(loss) on investments .00 .06 .10
Total from investment operations .67 .73 .70
Distributions to shareholders
Dividends from net investment income (.67) (.67) (.60)
Distribution from net realized gains -- -- --
Total distributions (.67) (.67) (.60)
Total increase (decrease) in net asset
value .00 .06 .10
Net asset value, end of period $10.61 $10.61 $10.55
Total return<F1> 6.50% 7.12% 6.82%
Ratio of expenses to average
net assets .77% .78% .81%
Ratio of net investment income to
average net assets 6.35% 6.35% 5.71%
Portfolio turnover 12% 21% 68%
Net assets, end of period $151,580,423 $132,510,320 $145,304,557
Number of shares outstanding at end of
period (in thousands) 14,286 12,487 13,771
<F2>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
<PAGE>
Limited-Term Portfolio Class A Shares
Year Ended December 31,
1987 1986 1985
Net asset value, beginning of period $10.67 $10.48 $10.33
Income from investment operations
Net investment income .59 .64 .72
Net realized and unrealized gain
(loss) on investments (.22) .23 .17
Total from investment operations .37 .87 .89
Distributions to shareholders
Dividends from net investment income (.59) (.64) (.73)
Distribution from net realized gains -- (.04) (.01)
Total distributions (.59) (.68) (.74)
Total increase (decrease) in net
asset value (.22) .19 .15
Net asset value, end of period $10.45 $10.67 $10.48
Total return<F2> 3.54% 8.50% 8.49%
Ratio of expenses to average net assets .76% .81% .88%
Ratio of net investment income to average
net assets 5.59% 6.00% 6.65%
Portfolio turnover 52% 67% 90%
Net assets, end of period $147,741,807 $189,353,846 $77,798,494
Number of shares outstanding
at end of period (in thousands) 14,137 17,748 7,427
<F2>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
Long-Term Portfolio Class C Shares
From Inception Year
(3/1/94) to Class A Shares
December 31, Ended December 31,
1994 1994 1993
Net asset value, beginning of period $16.86 $17.15 $16.32
Income from investment operations
Net investment income .58 .93 .94
Net realized and unrealized gain
(loss) on investments 1.04) (1.33) .83
Total from investment operations (.46) (.40) 1.77
Distributions to shareholders
Dividends from net investment income (.68) (.92) (.94)
Distribution from net realized gains -- -- --
Total distributions (.68) (.92) (.94)
Total increase (decrease) in net
asset value (1.14) (1.32) .83
Net asset value, end of period $15.72 $15.83 $17.15
Total return<F2> (2.24)% (2.30)% 11.12%
Ratio of expenses to average
net assets 2.55%(a) .81% .78%
Ratio of net investment income to
average net assets 3.57%(a) 5.73% 5.59%
Increase reflected in above
net investment income ratio
due to expense reimbursements 3.06%(a) -- --
Portfolio turnover 98% 98% 97%
Net assets, end of period $870,517 $47,266,609 $55,204,143
Number of shares outstanding
at end of period (in thousands) 55 2,985 3,219
<F2>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
(a) = Annualized
Long-Term Portfolio Class A Shares
Year Ended
December 31,
1992 1991
Net asset value, beginning of period $16.11 $15.35
Income from investment operations
Net investment income .98 .97
Net realized and unrealized gain
(loss) on investments .20 .78
Total from investment operations 1.18 1.75
Distributions to shareholders
Dividends from net investment income (.97) (.99)
Distribution from net realized gains -- --
Total distributions (.97) (.99)
Total increase (decrease) in net asset value .21 .76
Net asset value, end of period $16.32 $16.11
Total return<F2> 7.60% 11.77%
Ratio of expenses to average net assets .82% .78%
Ratio of net investment income to
average net assets 6.06% 6.39%
Increase reflected in above net investment
income ratio due to expense reimbursements -- --
Portfolio turnover 196% 276%
Net assets, end of period $45,665,456 $43,773,914
Number of shares outstanding at end of
period (in thousands) 2,799 2,718
<F2>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
Long-Term Portfolio Class A Shares
Year Ended December 31,
1990 1989 1988
Net asset value, beginning of period $15.64 $15.20 $14.75
Income from investment operations
Net investment income .97 1.03 1.01
Net realized and unrealized gain
(loss) on investments (.27) .41 .46
Total from investment operations .70 1.44 1.47
Distributions to shareholders
Dividends from net investment income (.99) (1.00) (1.02)
Distribution from net realized gains -- -- --
Total distributions (.99) (1.00) (1.02)
Total increase (decrease) in net asset value (.29) .44 .45
Net asset value, end of period $15.35 $15.64 $15.20
Total return<F2> 4.74% 9.81% 10.27%
Ratio of expenses to average net assets .82% .85% .85%
Ratio of net investment income to
average net assets 6.60% 6.66% 6.78%
Increase reflected in above net investment
income ratio due to expense reimbursements -- -- .04%
Portfolio turnover 264% 284% 553%
Net assets, end of period $40,181,654 $46,402,039 $43,100,771
Number of shares outstanding at end of
period (in thousands) 2,618 2,967 2,835
<F2>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
Long-Term Portfolio Class A Shares
Year Ended December 31,
1987 1986 1985
Net asset value, beginning of period $16.36 $15.80 $14.70
Income from investment operations
Net investment income 1.15 1.22 1.35
Net realized and unrealized gain
loss) on investments (1.63) 1.45 1.45
Total from investment operations (.48) 2.67 2.80
Distributions to shareholders
Dividends from net investment income (1.13) (1.24) (1.47)
Distribution from net realized gains -- (.87) (.23)
Total distributions (1.13) (2.11) (1.70)
Total increase (decrease) in net
asset value (1.61) .56 1.10
Net asset value, end of period $14.75 $16.36 $15.80
Total return<F3> (2.96)% 17.43% 18.63%
Ratio of expenses to average net assets .83% .85% .84%
Ratio of net investment income to
average net assets 7.32% 7.34% 8.33%
Increase reflected in above net investment
income ratio due to
expense reimbursements -- -- .05%
Portfolio turnover 77% 146% 194%
Net assets, end of period $49,231,039 $81,824,238 $56,836,840
Number of shares outstanding at end of
period (in thousands) 3,338 5,000 3,598
<F3>Total return does not reflect deduction of Class A front-end sales charge,
and has not been audited prior to 1989.
INVESTMENT OBJECTIVE AND POLICIES
Money Market Portfolio
The Money Market Portfolio 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 the Portfolio.
The Money Market Portfolio invests primarily in a diversified
portfolio of municipal obligations whose interest is exempt from
federal income tax. Municipal obligations in which the Portfolio
invests are short-term, fixed and variable rate instruments of
minimal credit risk and of high quality. The Portfolio invests in
municipal bonds and notes and tax-exempt commercial paper within
the two highest credit ratings categories or, if unrated, are
determined by the Advisor to be of comparable quality. Short-term
obligations have remaining maturities of one year or less. The
Portfolio maintains an average weighted maturity of 90 days or
less.
Limited-Term Portfolio
The Limited-Term Portfolio 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 the Portfolio.
The Limited-Term Portfolio invests primarily in a diversified
portfolio of municipal obligations with interest exempt from
federal income tax. Municipal obligations in which the Portfolio
invests are fixed and variable rate investment-grade (medium and
higher) obligations. Fixed rate investments are limited to
obligations with remaining maturities of 3 years or less;
variable rate investments may have longer maturities.
Long-Term Portfolio
The Long-Term Portfolio 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 the Portfolio.
The Long-Term Portfolio invests primarily in a diversified
portfolio of long term, investment-grade municipal obligations,
the interest of which is exempt from federal income tax.
Investments by the Portfolio are not limited as to remaining
maturities.
Municipal Obligations
Municipal obligations in which the Limited- and Long-Term
Portfolios
may invest include, but are not limited to general obligation
bonds and notes of state and local issuers, revenue bonds of
various transportation, housing, utilities (e.g., water and
sewer), hospital and other state and local government
authorities, tax and revenue anticipation notes and bond
anticipation notes, municipal leases, and certificates of
participation therein, and private activity bonds. See further
description below and the Statement of Additional Information.
Credit Quality
The credit quality of municipal obligations is determined by
reference to a commercial credit rating service, such as Moody's
Investors Service, Inc. or Standard & Poor's Corporation. If an
instrument is not rated, credit quality is determined by the
Advisor under the supervision of the Board of Trustees.
Investment grade, as determined by a NRSRO, currently defined as
the top four rating categories, i.e., AAA, AA, A and BBB. Though
still investment grade, securities rated BBB/Baa possess certain
speculative elements and are generally more susceptible to
changing market conditions. There is no limitation on the
percentage of each PortfolioOs assets that may be invested in
unrated obligations; such obligations may be less liquid than
rated obligations of comparable quality. The ratings used by
these services are described in the Appendix to the Statement of Additional
Information.
Variable Rate Obligations
Each Portfolio may invest in variable rate obligations. Variable
rate obligations have a yield that is adjusted periodically based
on changes in the level of prevailing interest rates. Floating
rate obligations have an interest rate fixed to a known lending
rate, such as the prime rate, and are automatically adjusted when
the known rate changes. Variable rate obligations lessen the
capital fluctuations usually inherent in fixed income
investments. This diminishes the risk of capital depreciation of
investment securities in a Portfolio and, consequently, of
Portfolio shares. However, if interest rates decline, the yield
of the invested Portfolio will decline, causing the Portfolio and
its shareholders to forego the opportunity for capital
appreciation of the Portfolio's investments and of their shares.
Demand Notes
Each Portfolio may invest in floating rate and variable rate
demand notes. Demand notes provide that the holder may demand
payment of the note at its par value plus accrued interest by
giving notice to the issuer. To ensure the ability of the issuer
to make payment on demand, the note may be supported by an
unconditional bank letter of credit.
Interest-Rate Risk
All fixed income instruments are subject to interest-rate risk;
that is, if the market interest rates rise, the current principal
value of a bond will decline.
Municipal Leases - Money Market Portfolio
The Money Market Portfolio may invest in structured money market
instruments, where the underlying security is a municipal lease.
Generally, such instruments are structured as tax-exempt
commercial paper or variable rate demand notes, and are typically
secured by an unconditional letter of credit. In the unlikely
event that the letter of credit is not honored, the lease would
present special risks, such as the chance that the municipality
might not appropriate funding for the lease payments. Thus, the
Advisor considers risk of cancellation in its investment
analysis. Certain leases may be considered illiquid.
In all cases, the Money Market Portfolio invests only in
high-quality instruments (rated in one of the two highest rating
categories, or if unrated, of comparable credit quality) that
meet the requirements of SEC Rule 2a-7 regarding credit quality
and maturity. See the Statement of Additional Information.
Municipal Leases - Limited-Term and Long-Term Portfolios
The Limited-Term and Long-Term Portfolios may invest in municipal
leases. A municipal lease is an obligation of a government or
governmental authority, not subject to voter approval, used to
finance capital projects or equipment acquisitions and payable
through periodic rental payments. There are additional risks
inherent in investing in this type of municipal security. Unlike
municipal notes and bonds, where a municipality is obligated by
law to make interest and principal payments when due, funding for
lease payments needs to be appropriated each fiscal year in the
budget. It is possible that a municipality will not appropriate
funds for lease payments. The Advisor considers risk of
cancellation in its investment analysis. The Portfolio may
purchase unrated municipal leases. The Advisor, under supervision
of the Board of Trustees, is responsible for determining the
credit quality of such leases, on an ongoing basis. The
Limitedand Long-Term Portfolios will invest only in municipal
leases that meet its credit quality restrictions. Certain
municipal leases may be considered illiquid and subject to the
PortfoliosO limit on illiquid investments. The Board of Trustees
has established guidelines for determining whether a lease is
illiquid. See the Statement of Additional Information for the
factors considered by the Board in determining liquidity and
valuation of leases.
When-Issued Purchases New issues of municipal obligations are
offered on a when-issued basis; that is, delivery and payment for
the securities normally take place 15 to 45 days after the date
of the transaction. The payment obligation and the yield that
will be received on the securities are each fixed at the time the
buyer enters into the commitment. The Portfolios will only make
commitments to purchase these securities with the intention of
actually acquiring them, but the Portfolio may sell these
securities before the settlement date if it is deemed advisable
as a matter of investment strategy.
Temporary Investments
For liquidity purposes or pending the investment of the proceeds
of the sale of its shares, the Portfolios may invest in and
derive up to 20% of its income from taxable short-term money
market type investments. Interest earned from such taxable
investments will be taxable to you as ordinary income unless you
are otherwise exempt from taxation.
Financial Futures, Options, and Other Investment Techniques
The Long-Term Portfolio can use various techniques to increase or
decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These
techniques may involve derivative transactions such as buying and
selling options and futures contracts and leveraged notes,
entering into swap agreements, and purchasing indexed securities.
The Portfolio can use these practices either as substitution or
as protection against an adverse move in the Long-Term Portfolio
to adjust the risk and return characteristics of the Portfolio.
If the Advisor judges market conditions incorrectly or employs a
strategy that does not correlate well with the PortfolioOs
investments, or if the counterparty to the
transaction does not perform as promised, these techniques could
result in a loss. These techniques may increase the volatility of
a fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. Any instruments determined to be
illiquid are subject to the Long-Term PortfolioOs 10% restriction
on illiquid securities. See below and the Statement of Additional
Information for more details about these strategies.
The Long-Term Portfolio buys certain financial futures contracts
to hedge its investments in municipal bonds. Under certain
circumstances, the Long-Term Portfolio may purchase and sell
certain financial futures contracts and certain options on
futures contracts. A financial futures contract obligates the
seller of a contract to deliver -- and the purchaser of a
contract to take delivery of -- the type of financial instrument
covered by the contract. In the case of index-based futures
contracts, the obligation is in the form of a cash settlement at
a specific time for a specific price.
The Long-Term Portfolio may only engage in futures transactions
for the purpose of hedging its investments in municipal bonds
against declines in value and to hedge against increases in the
cost of securities it intends to purchase. A sale of financial
futures contracts may provide a hedge against a decline in the
value of portfolio securities because such depreciation may be
offset, in whole or in part, by an increase in the value of the
position in the futures contracts. Similarly, a purchase of
financial futures contracts may provide a hedge against an
increase in the cost of securities intended to be purchased,
because such appreciation may be offset, in whole or in part, by
an increase in the value of the position in the futures contracts.
Types of futures contracts purchased.
The Long-Term Portfolio intends to deal in futures contracts
based upon The Bond Buyer Municipal Bond Index, a price-weighted
measure of the market value of 40 large, recently-issued
tax-exempt bonds, and to engage in transactions in
exchange-listed futures contracts on U.S. Treasury securities.
The Long-Term Portfolio may also engage in transactions in other
futures contracts, such as futures contracts on other municipal
bond indexes that become available, if the investment advisor
believes such contracts would be appropriate for hedging its
investments in municipal bonds.
When the Long-Term Portfolio purchases a futures contract, it
will maintain an amount of cash, cash equivalents (for example,
commercial paper and daily tender adjustable notes) or short-term
high grade fixed income securities in a segregated account with
its custodian, so that the segregated amount plus the amount of
initial and variation margin held in the account of its broker
equals the market value of the futures contract, thereby ensuring
that the use of such futures contract is unleveraged. It is not
anticipated that transactions in futures will have the effect of
increasing portfolio turnover.
Closing out a futures position - Risks
The Long-Term Portfolio may close out its position in a futures
contract or an option on a futures contract only by entering into
an offsetting transaction on the exchange on which the position
was established and only if there is a liquid secondary market
for the futures contract. If it is not possible to close a
futures position entered into by the Long-Term Portfolio, it
could be required to make continuing daily cash payments of
variation margin in the event of adverse price movements. In such
situations, if the Long-Term Portfolio has insufficient cash, it
may have to sell portfolio securities to meet daily variation
margin requirements at a time when it would be disadvantageous to
do so. The inability to close futures
or options positions could have an adverse effect on the
Long-Term Portfolio's ability to hedge effectively. There is also
risk of loss by the Portfolio of margin deposits in the event of
bankruptcy of a broker with whom the Long-Term Portfolio has an
open position in a futures contract. The success of a hedging
strategy depends on the Advisor's ability to predict the
direction of interest rates and other economic factors. The
correlation is imperfect between movements in the prices of
futures or options contracts, and the movements of prices of the
securities which are subject to the hedge. If the LongTerm
Portfolio used a futures or options contract to hedge against a
decline in the market, and the market later advances (or
vice-versa), the Portfolio may suffer a greater loss than if it
had not hedged.
Please refer to the Long-Term PortfolioOs Statement of Additional
Information for further information on financial futures
contracts.
Other Policies - Money Market, Limited- and Long-Term Portfolios
Each Portfolio may temporarily borrow money from banks to meet
redemption requests, but such borrowing may not exceed 10% of the
value of its total assets. Each Portfolio has adopted certain
fundamental investment restrictions which are discussed in detail
in its Statement of Additional Information. Unless specifically
noted otherwise, the investment objective, policies and
restrictions of each Portfolio are fundamental and may not be
changed without shareholder approval.
YIELD AND TOTAL RETURN
Yield refers to income generated by an investment over a period
of time for each class.
The Money Market Portfolio may advertise "yield" and "effective
yield" for each class (see "Management of the Fund"). Yield
figures are based on historical earnings and are not intended to
indicate future performance. The "yield" of the Money Market
Portfolio refers to the actual income generated by an investment
in the Portfolio over a particular base period, stated in the
advertisement. If the base period is less than one year, the
yield will be "annualized." That is, the amount of income
generated by the investment during the base period is assumed to
be generated over a one-year period and is shown as a percentage
of the investment. The "effective yield" is calculated like
yield, but assumes reinvestment of earned income. The effective
yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.
Limited- and Long-Term Portfolios
Yield measures the current investment performance for each class;
that is, the rate of income on a PortfolioOs investments divided
by the share price. Yield is computed by annualizing the result
of dividing the net investment income per share over a 30 day period by the
maximum offering price per share on the last day of that period.
Yields are calculated according to accounting methods that are
standardized for all stock and bond funds.
Taxable Equivalent Yield - Money Market, Limited- and Long-Term
Portfolios
Each Portfolio may advertise its "taxable equivalent yield" for
each class. The taxable equivalent yield is the yield that you
would be required to obtain from taxable investments to equal the
yield of the class, all or a portion of which may be exempt from
federal income taxes. The taxable equivalent yield is computed by
taking the portion
of the yield exempt from regular federal income tax and
multiplying the exempt yield by a factor based on a stated income
tax rate, then adding the portion of the yield that is not exempt
from regular federal income tax. The factor that is used to
calculate the taxable equivalent yield is the reciprocal of the
difference between one and the applicable income tax rate, which
will be stated in the advertisement.
The Limited- and Long-Term Portfolios may advertise total return
for each class. Total return is based on historical results and
is not intended to indicate future performance.
Total return is calculated separately for each class. It includes
not only the effect of income dividends but also any change in
net asset value, or principal amount, during the stated period.
The total return for each class shows its overall change in
value, including changes in share price and assuming all of the
dividends and capital gain distributions are reinvested. A
cumulative total return reflects the performance over a stated
period of time. An average annual total return reflects the
hypothetical annual compounded return that would have produced
the same cumulative total return if the performance had been
constant over the entire period. Because average annual returns
tend to smooth out variations in the returns, you should
recognize that they are not the same as actual year-by-year
results. Both types of total return for Class A shares usually
will include the effect of paying the front-end sales charge. Of
course, total returns will be higher if sales charges are not
taken into account. Quotations of "overall return" do not reflect
deduction of the sales charge. You should consider overall return
figures only if you qualify for a reduced sales charge, or for
purposes of comparison with comparable figures which also do not
reflect sales charges, such as mutual fund averages compiled by
Lipper Analytical Services, Inc. Further information about the
PortfolioOs performance is contained in its Annual Report to
Shareholders, which may be obtained without charge.
MANAGEMENT OF THE FUND
The Board of Trustees supervises Portfolio activities and reviews
its contracts with companies that provide it with services.
The Portfolios are series of Calvert Tax-Free Reserves (the
"Fund"), an open-end diversified management investment company,
organized as a Massachusetts business trust on October 20, 1980.
The series of the Fund include the Money Market Portfolio,
Limited-Term Portfolio, LongTerm Portfolio, Money Management Plus
Tax-Free Money Market Portfolio, California Money Market
Portfolio, New Jersey Money Market Portfolio, and the Vermont
Municipal Portfolio.
The Money Market Portfolio offers two classes of shares, Class O,
described in and offered by this Prospectus, and Class MMP (CTFR
MMP Shares), offered by the Calvert Money Management Plus
Prospectus. The two classes represent interests in the same
portfolio of investments and are identical in all respects,
except: (a) the Distribution Plan expenses are payable only by
the Class MMP shares; (b) the classes may have different transfer
agency fees; (c) postage and delivery, printing and stationery
expenses will be separately allocated; (d) the classes will have
different dividend rates due solely to the effects of (a) through
(c) above; and (e) only the Class MMP shares may vote on matters
which pertain to the Distribution Plan. Class MMP Shares are
offered primarily to clients of broker-dealers.
The Fund is not required to hold annual shareholder meetings for
any of the Portfolios, but special meetings may be called for
such purposes as electing Trustees, changing fundamental
policies, and
approving management contracts. As a shareholder, you receive one
vote for each share of a Portfolio you own, except that matters
affecting Portfolios or classes differently, such as Distribution
Plans, will be voted on separately by the affected Portfolio(s)
or class(es).
Portfolio Managers
Investment selections for the Limited- and Long-Term Portfolios
are made by David R. Rochat and Reno J. Martini. Mr. Rochat is a
Director and Senior Vice President of Calvert Asset Management
Company, Inc. He is a Trustee/Director and Senior Vice President
of First Variable Rate Fund, Calvert Tax-Free Reserves, Money
Management Plus, The Calvert Fund, and Calvert Municipal Fund,
Inc., and is primarily responsible for setting the investment
strategy of the trading department, utilizing over 20 yearsO
experience in the securities and investment community. Mr. Rochat
joined Calvert Group in 1981 after establishing and managing the
municipal bond department at Donaldson, Lufkin, & Jenrette
Securities Corporation. Mr. Martini, Senior Vice President and
Chief Investment Officer of Calvert Asset Management Company,
Inc., oversees management of all Calvert Group portfolios. He has
extensive experience in evaluating and purchasing municipal
securities.
Calvert Group is one of the largest investment management firms
in Washington, D.C. area.
Calvert Group, Ltd., parent of the Fund's investment advisor,
transfer agent, and distributor, is a subsidiary of Acacia Mutual
Life Insurance Company of Washington, D.C. Calvert Group is one
of the largest investment management firms in the Washington,
D.C. area. Calvert Group, Ltd. and its subsidiaries are located
at 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.
As of December 31, 1994, Calvert Group managed and administered
assets in excess of $4.2 billion and more than 200,000
shareholder and depositor accounts.
Calvert Asset Management serves as Advisor to the Fund.
Calvert Asset Management Company, Inc. (the "Advisor") is the
Fund's investment advisor. The Advisor provides the Fund with
investment supervision and management, administrative services
and office space; furnishes executive and other personnel to the
Fund; and pays the salaries and fees of all Trustees who are
affiliated persons of the Advisor. The Advisor may also assume
and pay certain advertising and promotional expenses of the Fund
and reserves the right to compensate broker-dealers in return for
their promotional or administrative services. For its services
during fiscal year 1994, the Advisor was entitled to receive,
pursuant to the Investment Advisory Agreement, and did receive, a
fee equal to 0.45% of the Money Market Portfolio's average net
assets, 0.58% of the Limited-Term PortfolioOs average net assets,
and 0.60% of the Long-Term PortfolioOs average net assets.
Calvert Administrative Services Company provides administrative
services for the Fund.
Calvert Administrative Services Company ("CASC"), an affiliate of
the Advisor, has been retained by Calvert Tax-Free Reserves to
provide certain administrative services necessary to the conduct
of its affairs, including the preparation of regulatory filings
and shareholder reports, the daily determination of its net asset
value per share and dividends, and the maintenance of its
portfolio and general accounting records. For providing such
services, CASC receives a total fee from Calvert Tax-Free
Reserves of $200,000 per year, allocated among the Portfolios
based on assets.
Calvert Distributors, Inc. serves as underwriter to market the
Fund's
shares.
Calvert Distributors, Inc. ("CDI") is the Fund's principal
underwriter and distributor. Under the terms of its underwriting
agreement with the Fund, CDI markets and distributes the Fund's
shares and is
responsible for preparation of advertising and sales literature,
and printing and mailing of prospectuses to prospective investors.
The transfer agent keeps your account records.
Calvert Shareholder Services, Inc. is the Fund's transfer,
dividend disbursing and shareholder servicing agent.
SHAREHOLDER GUIDE
Opening An Account
You can buy shares of the Portfolios in several ways which are
described here and in the chart on page ______.
An account application accompanies this prospectus. A completed
and signed application is required for each new account you open,
regardless of the method you choose for making your initial
investment. Additional forms may be required from corporations,
associations, and certain fiduciaries. If you have any questions
or
need extra applications, call your broker, or Calvert Group at
800-3682748. Be sure to specify which class you wish to purchase.
Limited-Term and Long-Term PortfoliosAlternative Sales Options
The Limited-Term and Long-Term Portfolios each offer two classes
of shares:
Class A Shares - Front End Load Option
Class A shares are sold with a front-end sales charge at the time
of purchase. Class A shares are not subject to a sales charge
when they are redeemed.
Class C shares - Level Load Option
Class C shares are sold without a sales charge at the time of
purchase or redemption.
Class C shares have higher expenses Each Portfolio bears some of
the costs of selling its shares under Distribution Plans adopted
with respect to its Class C shares pursuant to Rule 12b-1 under
the 1940 Act. The Class C Distribution Plan provides for the
payment of an annual distribution fee to CDI of up to 0.30% for
the Limited-Term Portfolio and up to 0.75% for the Long-Term
Portfolio, plus a service fee of up to 0.25%, for a total of
0.55% and 1.00%, respectively, of the average daily net assets.
Considerations for deciding which class of shares to buy
Income distributions for Class A shares will probably be higher
than those
for Class C shares, as a result of the distribution expenses
described above. (See also "Yield and Total Return.") The Class A
Shares of the Limited-Term Portfolio have not adopted a
Distribution Plan. You should consider Class A shares if you
qualify for a reduced sales charge under Class A or if you plan
to hold the shares for several years. The Portfolios will not
normally accept any purchase of Class C shares in the amount of
$1,000,000 or more.
Class A Shares - Limited-Term Portfolio
Class A shares are offered at net asset value plus a front-end
sales charge as follows:
Amount of Investment
As a % of Offering Price
As a % of Net Amount Invested Concession to Dealers as a % of
Amount Invested
Less than $50,000 2.00% 2.04% 1.50%
$50,000 but less than $100,000 1.50% 1.52% 1.125%
$100,000 but less than $250,000 1.1125%1.14% 0.90%
$250,000 but less than $500,000 1.00% 1.01% 0.80%
$500,000 but less than $1,000,000 0.80% 0.81% 0.70%
$1,000,000 and over 0.00% 0.00% 0.25%**
Class A Shares - Long-Term Portfolio
Class A shares are offered at net asset value plus a front-end
sales charge as follows:
Amount of Investment
As a % of Offering Price
As a % of Net Amount Invested Concession to Dealers as a % of
Amount Invested
Less than $50,000 3.75% 3.90% 3.00%
$50,000 but less than $100,000 3.00% 3.09% 2.25%
$100,000 but less than $250,000 2.25% 2.30% 1.75%
$250,000 but less than $500,000 1.75% 1.78% 1.25%
$500,000 but less than $1,000,000 1.00% 1.01% 0.80%
$1,000,000 and over 0.00% 0.00% 0.25%*
*For new investments (new purchases but not exchanges) of $1
million or more a broker-dealer will have the choice of being
paid a finderOs fee by CDI in one of the following methods: (1)
CDI may pay brokerdealers, on a monthly basis for 12 months, an
annual rate of 0.30%. Payments will be made monthly at the rate
of 0.025% of the amount of the investment, less redemptions; or
(2) CDI may pay broker-dealers 0.25% of the amount of the
purchase; however, CDI reserves the right
to recoup any portion of the amount paid to the dealer if the
investor redeems some or all of the shares from the Fund within
thirteen months of the time of purchase.
Sales charges on Class A shares may be reduced or eliminated in
certain cases. See Exhibit A to this prospectus.
The sales charge is paid to CDI, which in turn normally reallows
a portion to your broker-dealer. Upon written notice to dealers
with whom it has dealer agreements, CDI may reallow up to the
full applicable sales charge. Dealers to whom 90% or more of the
entire sales charge is reallowed may be deemed to be underwriters
under the Securities Act of 1933.
In addition to any sales charge reallowance, your broker-dealer,
or other financial service firm through which your account is
held, currently will be paid periodic service fees at an annual
rate of up to 0.15% for the Limited-Term Portfolio and, for the
Long-Term Portfolio, up to 0.25% of the average daily net asset
value of Class A
shares held in accounts maintained by that firm.
Class A Distribution Plan
The Long-Term Portfolio has adopted a Distribution Plan with
respect to its Class A shares (the "Class A Distribution Plan"),
which provides for payments, which are currently limited to 0.25%
annually of the average daily net asset value of Class A shares,
to pay expenses associated with the distribution and servicing of
Class A shares. Amounts paid by the Fund to CDI under the Class A
Distribution Plan are used to pay to dealers and others,
including CDI salespersons who service accounts, service fees at
an annual rate of up to 0.25% of the average daily net asset
value of Class A shares, and to pay CDI for its marketing and
distribution expenses, including, but not limited to, preparation
of advertising and sales literature and the
printing and mailing of prospectuses to prospective investors.
During the 1994 fiscal year, the Long-Term Portfolio paid Class A
Distribution Plan expenses of 0.06% of average net assets.
Class C Shares - Limited-Term and Long-Term Portfolios
Class C shares are not available through all dealers. Class C
shares are offered at net asset value, without a front-end sales
charge or a contingent deferred sales charge. Class C expenses
are higher than those of Class A.
Class C Distribution Plan
The Limited-Term and Long-Term Portfolios have adopted a
Distribution Plan with respect to its Class C shares (the "Class
C Distribution Plan"), which provides for payments at an annual
rate of up to 0.55% for the Limited-Term Portfolio, and, for the
Long-Term Portfolio, up to 1.00% of the average daily net asset
value of Class C shares, to pay expenses of the distribution and
servicing of Class C shares. Amounts paid by the Fund under the
Class C Distribution Plan are currently used by CDI to pay
dealers and other selling firms dealerpaid quarterly compensation
at an annual rate of up to 0.50% for the Limited-Term Portfolio,
and, for the Long-Term Portfolio, up to 1.00%, which may include
a service fee as described above under "Class A Distribution
Plan" of up to 0.25% of the average daily net asset value of the
accounts maintained by that firm. For the period from inception
(March 1, 1994) through December 31, 1994, the Class C
Distribution Plan expenses for the Limited-Term and Long-Term
Portfolios were 0.46% and 0.84% of average net assets,
respectively.
Arrangements with Broker-Dealers and Others (all classes)
CDI may also pay additional concessions, including non-cash
promotional incentives, such as merchandise or trips, to dealers
employing registered representatives who have sold or are
expected to sell a minimum dollar amount of shares of the Fund
and/or shares of other Funds underwritten by CDI. CDI may make
expense reimbursements for special training of a dealer's
registered representatives, advertising or equipment, or to
defray the expenses of sales contests. Eligible marketing and
distribution expenses may be paid pursuant to the Fund's Rule
12b-1 Distribution Plan.
Dealers or others may receive different levels of compensation
depending on which class of shares they sell. Payments pursuant
to a Distribution Plan are included in the operating expenses of
the class.
Each of the Distribution Plans may be terminated at any time by a
vote of the Independent Trustees or by vote of a majority of the
outstanding voting shares of the respective class.
HOW TO BUY SHARES
(BE SURE TO SPECIFY WHICH CLASS YOU ARE BUYING)
Method New Accounts Additional Investments
By Mail $2,000 minimum $250 minimum
Please make your check payable Please make your check
payable
to your choice of Portfolios and to your choice of Portfolios
and mail it with your application to: mail it with your
investment slip to:
Calvert Group Calvert Group
P.O. Box 419544 P.O. Box 419739
Kansas City, MO 64141-6544 Kansas City, MO 64141-6739
By Registered, Certified, or Overnight Mail:
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
Through Your
Broker $2,000 minimum $250 minimum
At the Calvert
Branch Office Visit the Calvert Branch Office to make investments
by check. See back cover page for the address.
FOR ALL OPTIONS BELOW, PLEASE CALL YOUR BROKER,
OR CALVERT GROUP AT 800-368-2745
By Exchange $2,000 minimum $250 minimum
(From your account in another Calvert Group Fund)
When opening an account by exchange, your new account must be
established with the same name(s), address and taxpayer
identification number as your existing Calvert account.
By Bank Wire $2,000 minimum $250 minimum
By Calvert Money Not Available for $50 minimum
Controller* Initial Investment
*Please allow sufficient time for Calvert Group to process your
initial request for this service, normally 10 business days. The
maximum transaction amount is $300,000, and your purchase request
must be received by 4:00 p.m. Eastern time.
Net asset value
Net asset value per share ("NAV") refers to the worth of one
share. NAV is calculated at the close of each business day, which
coincides with the closing of the regular session of the New York
Stock Exchange (normally 4:00 p.m. Eastern time). The Portfolios
are open for business each day the New York Stock Exchange is
open. All purchases of Portfolio shares will be confirmed and
credited to your account in full and fractional shares (rounded
to the nearest 1/100 of a share for the Money Market Portfolio
and to 1/1000 of a share for the Limited- and Long-Term
Portfolios). The Money Market Portfolio may
send monthly statements in lieu of immediate confirmations of
purchases and redemptions.
The Money Market Portfolio shares are sold without a sales charge.
Money Market Portfolio: NAV is computed by adding the value of
the Money Market Portfolio's investments plus cash and other
assets, deducting liabilities and then dividing the result by the
number of shares outstanding. The Portfolio's securities are
valued according to the "amortized cost" method, which is
intended to stabilize the NAV at $1.00 per share.
Limited-Term and Long-Term Portfolios: NAV is computed by adding
the value of all portfolio holdings, plus other assets, deducting
liabilities and then dividing the result by the number of shares
outstanding. Portfolio securities and other assets are valued
based on market quotations, except that securities maturing
within 60 days are valued at amortized cost. If quotations are
not available, securities are valued by a method that the Board
of Trustees believes accurately reflects fair value.
When Your Account Will Be Credited
Before you buy shares, please read the following information to
make sure your investment is accepted and credited properly.
All of your purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks. No cash 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. If your check
does not clear, your purchase will be cancelled and you will be
charged a $10 fee plus costs incurred by the Portfolio. When you
purchase by check or with Calvert Money Controller, those funds
will be on hold for up to 10 business days from the date of
receipt. During that period, redemptions against those funds
(including drafts) will not be honored. To avoid this collection
period, you can wire federal funds from your bank, which may
charge you a fee.
Money Market Portfolio
Your purchase will be processed at the net asset value calculated
after your order is received and accepted. The Portfolio attempts
to maintain a constant net asset value of $1.00 per share. If
your purchase is made by wire and is received by 12:30 p.m.
(Eastern time), your account will be credited and begin earning
dividends on the day of receipt. If your wire purchase is
received after 12:30 p.m. Eastern time, it will be credited the
same business day, and begin earning dividends the next business
day. Exchanges are credited the day the request is received by
mail or telephone, and begin earning dividends the next business
day. If the purchase is by check, and received by 4:00 p.m.
Eastern time, it will be credited that day, and begin earning
dividends the next business day.
Limited-Term and Long-Term Portfolios
Your purchase will be processed at the next offering price based
on the next net asset value calculated for each class after your
order is received and accepted. If your purchase is made by wire
or exchange and is received by 4:00 p.m. (Eastern time), your
account will be credited on the day of receipt. If your purchase
is received after 4:00 p.m. Eastern time, it will be credited the
next business day.
Certain financial institutions or broker-dealers which have
entered into a sales agreement with the Distributor may enter
confirmed
purchase orders on behalf of customers by phone, with payment to
follow within a number of days of the order as specified by the
program. If payment is not received in the time specified, the
financial institution could be held liable for resulting fees or
losses.
Exchanges
You may exchange shares of Portfolio for shares of the same class
of other Calvert Group Funds.
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 or Portfolio, please note the following:
Call your broker or a Calvert representative for information and
a prospectus for any of Calvert's other Funds registered in your
state. Read the prospectus of the Fund or Portfolio into which
you want to exchange for relevant information, including class
offerings.
Shares of a particular class of the Portfolio may be exchanged
only for shares of the same class of another Calvert Fund, except
that any class may be exchanged for shares of any money market
fund.
Each exchange represents the sale of shares of one Fund and the
purchase of shares of another. Thus, you could realize a taxable
gain or loss.
Complete and sign an application for an account in that Fund or
Portfolio, 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.
Shares on which you have already paid a sales charge at Calvert
Group and shares acquired by reinvestment of dividends and
distributions may be exchanged into another Fund at no additional
charge.
Limited-Term and Long-Term Portfolios: To protect performance and
to minimize costs, Calvert Group discourages frequent exchanges
and may prohibit additional purchases of Portfolio shares by
persons engaged in too many short-term trades. Shareholders (and
those managing multiple accounts) who make two purchases and two
exchange redemptions of shares of the same Fund or Portfolio
during any 6-month period will be given written notice that they
may be prohibited from making additional investments. These
policies do not prohibit you from redeeming shares of the Funds
and do not apply to trades solely among money market funds.
The Portfolios reserve the right to terminate or modify the
exchange privilege with 60 days' written notice.
Other Calvert GROUP Services
Calvert Information Network
24 hour yield and prices
Calvert Group has a round-the-clock telephone service that lets
existing customers use a push button phone to obtain prices,
yields, performance information, account balances, and authorize
certain transactions.
Calvert Money Controller
Calvert Money Controller eliminates the delay of mailing a check
or the expense of wiring funds. You can request this free service
on your application.
This service allows you to authorize electronic transfers of
money to purchase or sell shares. You use Calvert Money
Controller like an "electronic check" to move money ($50 to
$300,000) between your bank account and your Calvert Group
account with one phone call. Allow one
or two business days after the call for the transfer to take
place; for money recently invested, allow normal check clearing
time (up to 10 business days) before redemption proceeds are sent
to your bank.
You may also arrange systematic monthly or quarterly investments
(minimum $50) into your Calvert Group account. After you give us
proper authorization, your bank account will be debited to
purchase Portfolio shares. A debit entry will appear on your
bank statement. If you would like to make arrangements for
systematic monthly or quarterly redemptions from your Calvert
account, call your broker or Calvert for a Money Controller
Application.
Telephone Transactions
Calvert may record all telephone calls.
You may purchase, redeem, or exchange shares, wire funds and use
Calvert Money Controller by telephone if you have pre-authorized
service instructions. You automatically have telephone
privileges unless you elect otherwise. The Fund, the transfer
agent and their affiliates are not liable for acting in good
faith on telephone instructions relating to your account, so
long as they follow reasonable procedures to determine that the
telephone instructions are genuine. Such procedures may include
recording the telephone calls and requiring some form of
personal identification. You should verify the accuracy of
telephone transactions immediately upon receipt of your
confirmation statement.
Optional Services
Complete the "Option" sections of the application for the
easiest way to establish services.
The easiest way to establish optional services on your Calvert
Group account is to select the options you desire when you
complete your account application. If you wish to add other
options later, you may have to provide us with additional
information and a signature guarantee. Please call your broker
or Calvert Investor Relations at 800-368-2745 for further
assistance. For our mutual protection, we may require a
signature guarantee on certain written transaction requests. A
signature guarantee verifies the authenticity of your signature,
and may be obtained from any bank, savings and loan association,
credit union, trust company, broker-dealer firm or member of a
domestic stock exchange. A signature guarantee cannot be
provided by a notary public.
Householding of General Mailings
An effort to reduce Fund expenses and save paper and trees for
the environment.
If you have multiple accounts with Calvert, you may receive
combined mailings of some shareholder information, such as
semi-annual and annual reports. Please contact Calvert Investor
Relations at 800-3682745 to receive additional copies of
information.
Special Services and Charges
The Portfolios pay 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. You may be
required to pay a research fee for these special services.
If you are purchasing shares of a Portfolio through a program of
services offered by a broker-dealer or financial institution,
you should read the program materials in conjunction with this
Prospectus. Certain features of the Portfolio may be modified in
these programs, and administrative charges may be imposed by the
broker-dealer or financial institution for the services rendered.
SELLING YOUR SHARES
You may redeem all or a portion of your shares on any business
day. Your shares will be redeemed at the next net asset value
calculated after your redemption request is received and
accepted. See below for specific requirements necessary to make
sure your redemption request is acceptable. Remember that the
Portfolios may hold payment on the redemption of your shares
until it is reasonably satisfied that investments made by check
or by Calvert Money Controller have been collected (normally up
to 10 business days).
Redemption Requirements To Remember
To ensure acceptance of your redemption request, please follow
the procedures described here and below.
Once your shares are redeemed, the proceeds will normally be
sent to you on the next business day, but if making immediate
payment could adversely affect a Portfolio, it may take up to
seven (7) days. Calvert Money Controller redemptions generally
will be credited to
your bank account on the first or second business day after your
phone call. When the New York Stock Exchange 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.
Minimum account balance is $1,000.
Please maintain a balance in your account of at least $1,000 per
Portfolio, per class. If, due to redemptions, the account falls
below $1,000, or you fail to invest at least $1,000, your
account may be closed and the proceeds mailed to you at the
address of record. You will be given notice that your account
will be closed after 30 days unless you make an additional
investment to increase your account balance to the $1,000
minimum.
HOW TO SELL YOUR SHARES
Draftwriting
(Money Market Portfolio only)
You may redeem shares in your Money Market Portfolio account by
writing a draft for at least $250. If you complete and return
the signature card for Draftwriting, the Portfolio will mail
bank drafts to you, printed with your name and address.
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
insufficient funds. As a service to shareholders, the Portfolio
may automatically transfer the dollar amount necessary to cover
drafts you have written on the Portfolio to your Portfolio
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.
By Mail To:
Calvert Group
P.O. Box 419544
Kansas City, MO
64141-6544
You may redeem available shares from your account at any time by
sending a letter of instruction, including your name, account
and Fund number, the number of shares or dollar amount, and
where you want the money to be sent. Additional requirements,
below, may apply to your account. The letter of instruction must
be signed by all required authorized signers. If you want the
money to be wired to a bank not previously authorized, then a
voided bank check must be enclosed with your letter. If you do
not have a voided check or if you would like funds sent to a
different address or another person, your letter must be
signature guaranteed.
Type of
Registration
Corporations, Associations
Letter of instruction and a corporate resolution, signed by
person(s) authorized to act on the account, accompanied by
signature guarantee(s).
Trusts
Letter of instruction signed by the Trustee(s) (as Trustees),
with a signature guarantee. (If the Trustee's name is not
registered on your account, provide a copy of the trust
document, certified within the last 60 days.)
By Telephone
Please call 800-368-2745. You may redeem shares from your
account by telephone and have your money mailed to your address
of record or wired to an address or bank you have previously
authorized. A charge of $5 is imposed on wire transfers of less
than $1,000. See "Telephone Transactions" on page ___.
Calvert Money Controller
Please allow sufficient time for Calvert Group to process your
initial request for this service (normally 10 business days).
You may also authorize automatic fixed amount redemptions by
Calvert Money Controller. All requests must be received by 4:00
p.m. Eastern time. Accounts cannot be closed by this service.
Exchange to Another Calvert Group Fund
You must meet the minimum investment requirement of the other
Calvert Group Fund or Portfolio. You can only exchange between
accounts with identical names, addresses and taxpayer
identification number, unless previously authorized with a
signature-guaranteed letter.
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 each 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.
Through your Broker
If your account is held in your broker's name ("street name"),
you should contact your broker directly to transfer, exchange or
redeem shares.
DIVIDENDS AND TAXES
Each year, the Portfolio distributes substantially all of its
net investment income to shareholders.
Dividends from the Money Market Portfolio'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.
Dividends from the Limited- and Long-Term PortfoliosO net
investment income are 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. Each year, the Portfolios
distribute substantially all of their net investment income to
shareholders. Dividend and distribution payments will vary
between classes; dividend payments are anticipated to generally
be higher for Class A shares.
Dividend payment options
Dividends and any distributions are automatically reinvested in
the same Portfolio at net asset value (no sales charge), unless
you elect to have the dividends of $10 or more paid in cash (by
check or by Calvert Money Controller). Dividends and
distributions may be automatically invested in an identically
registered account with the same account number in any other
Calvert Group Fund or Portfolio at net asset value. If
reinvested in the same Fund account, new shares will be
purchased at net asset value on the reinvestment date, which is
generally 1 to 3 days prior to the payment date. You must notify
the Fund in writing prior to the record date to change your
payment options. If you elect to have dividends and/or
distributions paid in cash, and the U.S. Postal Service cannot
deliver the check, or if it remains uncashed for six months, it,
as well as future dividends and distributions, will be
reinvested in additional shares.
"Buying a Dividend" At the time of purchase, the share price
of the Limited- or Long-Term Portfolios may reflect
undistributed income, capital gains or unrealized appreciation
of securities. Any capital gains from these amounts which are
later distributed to you are fully taxable. On the record date
for a distribution, a Portfolio's share value is reduced by the
amount of the distribution. If you buy shares just before the
record date ("buying a dividend") you will pay the full price
for the shares and then receive a portion of the price back
as a taxable distribution.
Federal Taxes
Dividends derived from interest on municipal obligations
constitute exempt-interest dividends, on which you are not
subject to federal income tax. However, dividends which are from
taxable interest and any distributions of short-term capital
gain are taxable to you as ordinary income. If the Portfolio
makes any distributions of long-term capital gains, then these
are taxable to you as long-term capital gains, regardless of how
long you held your shares of the Portfolio. Dividends
attributable to interest on certain private activity bonds must
be included in federal alternative minimum tax for individuals
and for corporations.
If any taxable income or gains are paid, in January, the
Portfolio will mail you Form 1099-DIV indicating the federal tax
status of dividends paid to you by the Portfolio during the past
year.
You may realize a capital gain or loss when you redeem (sell) or
exchange shares of the Limited-Term or Long-Term Portfolios.
If you sell or exchange your Limited-Term or Long-Term Portfolio
shares you will have a short or long-term capital gain or loss,
depending on how long you owned the shares which were sold. In
January, the Fund will mail you Form 1099-B indicating the
proceeds from all sales, including exchanges. You should keep
your annual yearend account statements to determine the cost
(basis) of the shares to report on your tax returns.
Other Tax Information
You may be subject to state or local taxes on your investment,
depending on the laws in your area. A letter will be mailed to
you in January detailing the percentage invested in your state
the previous tax year. Such dividends may be exempt from certain
state income taxes.
Taxpayer Identification Number
Federal law requires that you provide your correct Social
Security or Taxpayer Identification Number ("TIN") on a signed
certified application or Form W-9. If not provided, the
Portfolios may be required to withhold 31% of any dividends or
redemptions, and 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 Portfolios reserve the right to
reject any new account or any purchase order for failure to
supply a certified TIN.
Exhibit a - Limited-Term and Long-Term Portfolios
REDUCED SALES CHARGES (class a only)
You may qualify for a reduced sales charge through several
purchase plans available. You must notify the Fund at the time
of purchase to take advantage of the reduced sales charge.
Right of Accumulation. The sales charge is calculated by taking
into account not only the dollar amount of a new purchase of
shares, but also the higher of cost or current value of shares
previously purchased in Calvert Group Funds that impose sales
charges. This automatically applies to your account for each new
purchase.
Letter of Intent. If you plan to purchase $50,000 or more of
Fund shares over the next 13 months, your sales charge may be
reduced through a "Letter of Intent." You pay the lower sales
charge applicable to the total amount you plan to invest over
the 13-month period, excluding any money market fund purchases.
Part of your shares will be held in escrow, so that if you do
not invest the amount indicated, you will have to pay the sales
charge applicable to the smaller investment actually made. For
more information, see the Statement of Additional Information.
Group Purchases. If you are a member of a qualified group, you
may purchase shares of the Fund at the reduced sales charge
applicable to the group taken as a whole. The sales charge is
calculated by taking into account not only the dollar amount of
the shares you purchase, but also the higher of cost or current
value of shares previously purchased and currently held by other
members of your group.
A "qualified group" is one which (i) has been in existence for
more than six months, (ii) has a purpose other than acquiring
Fund shares at a discount, and (iii) satisfies uniform criteria
which enable CDI and dealers offering Fund shares to realize
economies of scale in distributing such shares. A qualified
group must have more than 10 members, must be available to
arrange for group meetings between representatives of CDI or
dealers distributing the Fund's shares, must agree to include
sales and other materials related to the Fund in its
publications and mailings to members at reduced or no cost to
CDI or dealers, and must seek to arrange for payroll deduction
or other bulk transmission of investments to the Fund. Members
of a group are not eligible for a Letter of Intent.
Other Circumstances. There is no sales charge on shares of any
fund (portfolio or series) of the Calvert Group of Funds sold to:
(1) current and retired members of the Board of
Trustees/Directors of the Calvert Group of Funds, (and the
Advisory Council of the Calvert Social Investment Fund); (2)
directors, officers and employees of the Advisor, Distributor,
and their affiliated companies; (3) directors, officers and
registered representatives of brokers distributing the Fund's
shares; and immediate family members of persons listed in (1),
(2), or (3) above; (4) dealers, brokers, or registered
investment advisors that have entered into an agreement with CDI
providing specifically for the use of shares of the Fund
(Portfolio or Series) in particular investment programs or
products (where such program or product already has a fee
charged therein) made available to the clients of such dealer,
broker, or registered investment advisor; (5) trust departments
of banks or savings institutions for trust clients of such bank
or savings institution; and (6) purchases placed through a
broker maintaining an omnibus account with the Fund (Portfolio
or Series) and the purchases are made by (a) investment advisors
or financial planners placing trades for their own accounts (or
the accounts of their clients) and who charge a management,
consulting, or other fee for their services; or (b) clients of
such investment advisors or financial planners who place trades
for their own accounts if such accounts are linked to the master
account of such investment advisor or financial planner on the
books and records of the broker or agent; or (c) retirement and
deferred compensation plans and trusts, including, but not
limited to, those defined in 401(a) or 403(b)
of the I.R.C., and "rabbi trusts."
Established Accounts. Shares of the Long-Term Portfolio may be
sold at net asset value to you if your account was established
on or before September 15, 1987, or April 30, 1988 for the
Limited-Term Portfolio.
Dividends and Capital Gain Distributions from other Calvert
Group Funds. You may prearrange to have your dividends and
capital gain distributions from another Calvert Group Fund with
a sales charge automatically invested in another account with no
additional sales charge. Dividends and distributions from Calvert Group money
market funds used to purchase shares of the Fund will be
subject to the applicable sales charge.
Reinstatement Privilege. If you redeem Fund shares and then
within 30 days decide to reinvest in the same Fund, you may do
so at the net asset value next computed after the reinvestment
order is received, without a sales charge. You may use the
reinstatement privilege only once. The Fund reserves the right
to modify or eliminate this privilege.
To Open an Account:
800-368-2748 Prospectus
April 30, 1995
CALVERT TAX-FREE RESERVES
MONEY MARKET
PORTFOLIO
LIMITED-TERM
PORTFOLIO
LONG-TERM
PORTFOLIO
Performance and
Prices: Calvert
Information Network 24
hours, 7 days a week
800-368-2745
Service for Existing
Account:
Shareholders
800-368-2745
Brokers800-368-2746
TDD for Hearing
Impaired:
800-541-1524
Branch Office:
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland
20814
Registered, Certified
or Overnight Mail:
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105
PRINCIPAL UNDERWRITER
Calvert Distributors,
Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
February 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: 24f-2 Notice for
Calvert Tax-Free
Reserves File No.
2-69565, 811-3101
Gentlemen,
Pursuant to Rule 24f-2 under the Investment Company act of 1940, the
following Notice is submitted on behalf of Calvert Tax-Free Reserves (the
"Fund"):
(i) fiscal year end December 31, 1995;
(ii) None;
(iii) None;
(iv) $(5,883,722,374.00)**;
(v) $(5,883,722,374.00).
It is my opinion, based on an examination of the Fund's Declaration of
Trust and By-Laws and such other original or photostatic copies of Fund
records, certificates of public officials, documents, papers, statutes,
and authorities as I deemed necessary to form the basis of this opinion,
that the securities whose registration this Notice makes definite were
legally issued, fully paid and non-assessable.
Sincerely,
William M. Tartikoff
Vice President and Secretary
**As authorized by paragraph c of Rule 24f-2, the filing fee has been
computed on the basis of aggregate sales of $(5,883,722,374.00) less
aggregate redemptions of $6,337,599,992.00. Inasmuch as the Fund's
aggregate redemptions exceeded its aggregate sales, no filing fee is
enclosed. No redemptions have previously been applied by the Fund in
reduction of fees pursuant to Rule 24e-2(a) for filings made pursuant to
Section 24(e)(1).
