<PAGE>
PROSPECTUS AND PROXY STATEMENT
January __, 1996
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 is first being mailed to
shareholders on or about January 29, 1996.
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:
Current 1 Year 3 Years 5 Years 10 Years
Money Market
Portfolio Class O $6 $20 $35 $77
NJ Portfolio $9 $27 $47 $104
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Pro Forma:
Combined PORTFOLIO EXPENSE
COMPARISON Money Market
Portfolio Class O
Shares
Shareholder Transaction Expenses
Sales Load on Purchases None
Sales Load on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
Pro Forma Annual Fund Operating Expenses
- (see below)
(as a percentage of net assets)
Management Fees 0.46%
Rule 12b-1 Fees None
Other Expenses 0.16%
Total Fund Operating Expenses 0.62%
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:
Pro Forma Combined
Money Market
Portfolio Class O 1 Year 3 Years 5 Years 10 Years
$6 $20 $35 $77
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.
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.
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 (1) by mutual consent of the
NJ Portfolio and the Money Market Portfolio, or (2) by either Portfolio,
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)).
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
