25
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Calvert Municipal Fund, Inc.
(Name of Registrant as Specified in Its Charter)
William M. Tartikoff, Esq.
Secretary
(Name of Person Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify previous filing by statement number, or the Form or
Schedule and the date its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
December 28, 1998
Dear Shareholder:
I am writing to inform you of the upcoming special meeting for shareholders of
Calvert Tax-Free Reserves.
A summary of the proposals and the formal Notice of Meeting appears on the
next few pages, followed by the detailed proxy statement. Please take a few
minutes to read the enclosed material and vote on these important issues. The
Board of Trustees/Directors, including myself, believe these changes are in
your best interest and that of your Portfolio.
Regardless of the number of shares you own, it is important that you take the
time to read the enclosed proxy materials, and vote on the issues as soon as
you can. You may vote by mail, by telephone, through the internet, by
facsimile machine, or in person. If you do not cast your vote, you may be
contacted by our proxy solicitation service, Shareholder Communications
Corporation, or by a Calvert Group employee. All shareholders benefit from the
speedy return of proxy votes.
I appreciate the time you will take to review these important matters. If we
may be of any assistance or if you have any questions about the proxy issues,
please call us at (800) 368-2748. Our hearing-impaired shareholders may call
(800) 541-1524 for a TDD connection.
Sincerely,
Barbara J. Krumsiek
President and Chief Executive Officer
Calvert Group, Ltd.
<PAGE>
Quick Overview of Proposals
................................................................................
Proposal 1
................................................................................
To elect the Board of Trustees.
Affected portfolios: All
Reason for Proposal
It has been several years since the Board members have been voted on by
shareholders. Recently, some new members have been added; thus, it is
appropriate for the shareholders to vote on the complete slate.
................................................................................
Proposal 2
................................................................................
To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws or which otherwise need not be fundamental; and (b) to revise the
language of those restrictions that are still required to be fundamental.
Affected portfolios: All
Reason for Proposal
Current investment restrictions and policies are more restrictive than Federal
law. A shareholder vote is required to change the restrictions and policies
because they are considered fundamental. CAMCO has recommended to the Board
that the investment restrictions of the Portfolios be changed to conform to,
but not be more restrictive than, federal law, and changing the policies so
that they can be altered by the Board without a shareholder vote
(nonfundamental policies or restrictions). This would give each of the
Portfolios more flexibility and may help each Portfolio to more easily adapt
to different investment environments.
................................................................................
Proposal 3
................................................................................
To approve a new investment advisory agreement with the investment advisor,
Calvert Asset Management Company, Inc. ("CAMCO").
Affected Portfolios: All
Reason for Proposal
CAMCO is a subsidiary of Calvert Group, Ltd. which is owned by Acacia Mutual
Life Insurance Company ("Acacia"). Acacia plans to merge with another
insurance company, Ameritas Insurance Holding Company. Because of the merger
of the ultimate parent company, the investment advisory contract should be
approved by shareholders.
................................................................................
Proposal 4
................................................................................
To change the fundamental policy concerning credit quality to a nonfundamental
policy allowing Calvert Tax-Free Reserves ("CTFR") Limited-Term, Long-Term,
and Vermont Municipal Portfolios to invest in non-investment grade securities.
Affected Portfolios: Limited-Term, Long-Term, and Vermont Municipal
Reason for Proposal
Limited-Term, Long-Term, and Vermont Municipal (the "Funds") all have the same
fundamental credit quality policies, to invest primarily in investment-grade
municipal obligations. CAMCO proposes to change the credit quality guidelines
to permit the Funds to invest in non-investment grade obligations: up to 15%
for Limited-Term, and up to 35% for Long-Term and Vermont Municipal. CAMCO
believes this will give more flexibility in purchasing securities where there
are no published ratings and where there may be a question of investment grade
rating. In addition, it will bring the credit quality policy of each Fund more
in line with its peers, allowing more accurate comparisons.
................................................................................
Proposal 5
................................................................................
To change Long-Term from a diversified to a nondiversified fund.
Affected Portfolios: Long-Term
Reason for Proposal
CAMCO believes that Long-Term will have greater investment flexibility if it
becomes nondiversified (allowed to invest more than 5% in any one issuer).
This will permit it to acquire larger positions in the securities of
individual issuers, such as hospitals, housing bonds, or utilities, and may
provide opportunities to enhance the investment performance with minimal
additional risk.
................................................................................
Proposal 6
................................................................................
To ratify the Board's selection of auditors, PricewaterhouseCoopers, L.L.P.
Affected Portfolios: All
Reason for Proposal
Periodically, shareholders will be asked to approve independent auditors for
Calvert Funds. The auditors review reports, documents filed with federal and
state governments, and help to ensure that the Funds are complying with
generally accepted accounting principles.
<PAGE>
Calvert Tax-Free Reserves
Money Market Portfolio
Limited-Term Portfolio
Long-Term Portfolio
California Money Market Portfolio
Vermont Municipal Portfolio
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on February 24, 1999
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of the Calvert
Tax-Free Reserves ("CTFR") 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 1:30 p.m. on Wednesday, February 24, 1999 for the
following purposes:
I. For each Portfolio: To elect the board of Trustees.
II. For each Portfolio: to approve amended fundamental investment
restrictions to: (a) delete restrictions that are no longer required
to be fundamental due to changes in state laws or which otherwise
need not be fundamental; and (b) to revise the language of those
restrictions that are still required to be fundamental.
III. For each Portfolio: to approve a new investment advisory agreement
with the investment advisor, Calvert Asset Management Company, Inc.
("CAMCO"), identical to the current investment advisory agreements in
all material respects.
IV. Limited-Term, Long-Term, and Vermont Municipal: To change the
fundamental policy concerning credit quality to a nonfundamental
policy allowing each to invest in non-investment grade securities.
V. Long-Term only: To change Long-Term from a diversified to a
nondiversified fund.
VI. For each Portfolio: to ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
VII. To transact any other business that may properly come before the
Special Meeting or any adjournment or adjournments thereof.
By Order of the Trustees,
William M. Tartikoff, Esq.
Vice President
<PAGE>
Calvert Tax-Free Reserves
Money Market Portfolio
Limited-Term Portfolio
Long-Term Portfolio
California Money Market Portfolio
Vermont Municipal Portfolio
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
PROXY STATEMENT
December 31, 1998
We are sending this proxy statement to you to ask you to approve several
important changes. You may vote by mail, by telephone, by facsimile, through a
secure internet website, or in person. Your vote is important. Please call
800-368-2748 if you have questions about this proxy.
This statement is furnished in connection with the solicitation of proxies by
the Board of Trustees of Calvert Tax-Free Reserves (the "Board") to be used at
the Special Meeting of Shareholders. The Special Meeting will be held in the
Tenth Floor Conference Room of Calvert Group, Ltd., Air Rights North Tower,
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland at 1:30 p.m. on
Wednesday, February 24, 1999, or at such later time or date made necessary by
adjournment for the purpose set forth in the Notice of Meeting.
The approximate date on which this proxy statement and form of proxy are first
being mailed to shareholders is December 31, 1998.
Calvert Tax-Free Reserves ("CTFR") is an open-end management investment
company that was organized as a Massachusetts business trust on October 20,
1980. CTFR has five Portfolios: Money Market, Limited-Term, Long-Term,
California Money Market, and Vermont Municipal.
Summary of Proposals
1. For each Portfolio: to elect the Board of Trustees.
2. For each Portfolio: to approve amended fundamental investment
restrictions to: (a) delete restrictions that are no longer required to
be fundamental due to changes in state laws or which otherwise need not
be fundamental; and (b) to revise the language of those restrictions that
are still required to be fundamental.
3. For each Portfolio: to approve a new investment advisory agreement with
the investment advisor, Calvert Asset Management Company, Inc. ("CAMCO").
4. Limited-Term, Long-Term and Vermont Municipal : To change the
fundamental policy concerning credit quality to a nonfundamental policy
allowing each to invest in non-investment grade securities.
5. Long-Term only: To change Long-Term from a diversified to a
nondiversified fund.
6. For each Portfolio: to ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
PROPOSALS
- --------------------------------------------------------------------------------
Proposal 1
To elect the Board of Trustees.
- --------------------------------------------------------------------------------
Discussion
The purpose of this proposal is to elect the currently serving members of the
CTFR Board of Trustees. All of the nominees listed below have served as
Trustees continuously since originally elected or appointed. Each of the
nominees elected will serve as a Trustee until the next meeting called for the
purpose of electing a Board of Trustees and until a successor is elected and
qualified, or until death, retirement, resignation or removal.
{This will be formatted in tabular format by the typesetter}
Name
Date of Birth, Principal Occupation
& Year Elected During Last Five Years
or Appointed and Other Directorships
Richard L. Baird, Jr.
DOB: 05/09/48
1976
Mr. Baird is Executive Vice President for the Family Health Council, Inc. in
Pittsburgh, Pennsylvania, a non-profit corporation which provides family
planning services, nutrition, maternal/child health care, and various health
screening services. Mr. Baird is a trustee/director of each of the investment
companies in the Calvert Group of Funds, except for Calvert Variable Series,
Inc., Calvert New World Fund, Inc. and Calvert World Values Fund, Inc.
Frank H. Blatz, Jr., Esq.
DOB: 10/29/35
1982
Mr. Blatz is a partner in the law firm of Snevily, Ely, Williams & Blatz. He
was formerly a partner with Abrams, Blatz, Gran, Hendricks & Reina, P.A. He
is also a director of Calvert Variable Series, Inc.
Frederick T. Borts, M.D.
DOB: 7/23/49
1976
Dr. Borts is a radiologist with Kaiser Permanente. Prior to that, he was a
radiologist at Bethlehem Medical Imaging in Allentown, Pennsylvania.
Charles E. Diehl
DOB: 10/13/22
1983
Mr. Diehl is a self-employed consultant and is Vice President and Treasurer
Emeritus of the George Washington University. He has retired from University
Support Services, Inc. of Herndon, Virginia. Formerly, he was a Director of
Acacia Mutual Life Insurance Company, and is currently a Director of Servus
Financial Corporation.
Douglas E. Feldman, M.D.
DOB: 5/23/48
1982
Dr. Feldman is managing partner of Feldman Otolaryngology, Head and Neck
Surgery in Washington, D.C. A graduate of Harvard Medical School, he is
Associate Professor of Otolaryngology, Head and Neck Surgery at Georgetown
University and George Washington University Medical School, and past Chairman
of the Department of Otolaryngology, Head and Neck Surgery at the Washington
Hospital Center. He is included in The Best Doctors in America.
Peter W. Gavian, CFA
DOB: 12/8/32
1980
Mr. Gavian is President of Corporate Finance of Washington, Inc. Formerly, he
was a principal of Gavian De Vaux Associates, an investment banking firm. He
is also a Chartered Financial Analyst and an accredited senior business
appraiser.
<PAGE>
{This will be formatted in tabular format by the typesetter}
Name
Date of Birth, Principal Occupation
& Year Elected During Last Five Years
or Appointed and Other Directorships
John G. Guffey, Jr.
DOB: 5/15/48
1976
Mr. Guffey is chairman of the Calvert Social Investment Foundation,
organizing director of the Community Capital Bank in Brooklyn, New York, and
a financial consultant to various organizations. In addition, he is a
director of Ariel Funds, and the Treasurer and Director of Silby, Guffey, and
Co., Inc., a venture capital firm. Mr. Guffey is a trustee/director of each
of the other investment companies in the Calvert Group of Funds, except for
Calvert Variable Series, Inc. and Calvert New World Fund, Inc.
Mr. Guffey has been advised that the Securities and Exchange Commission
("SEC") expects to enter an order against him relating to his former service
as a director of Community Bankers Mutual Fund, Inc. This fund is not
connected with any Calvert Fund or the Calvert Group and ceased operations in
September, 1994. Mr. Guffey consented to the entry of the order without
admitting or denying the findings in the order. The order is expected to
contain findings (1) that the Community Bankers Mutual Fund's prospectus and
statement of additional information were materially false and misleading
because they misstated or failed to state material facts concerning the
pricing of fund shares and the percentage of illiquid securities in the
fund's portfolio and that Mr. Guffey, as a member of the fund's board, should
have known of these misstatements and therefore violated the Securities Act
of 1933; (2) that the price of the fund's shares sold to the public was not
based on the current net asset value of the shares, in violation of the
Investment Company Act of 1940 (the "Investment Company Act"); and (3) that
the board of the fund, including Mr. Guffey, violated the Investment Company
Act by directing the filing of a materially false registration statement. It
is expected that the order will direct Mr. Guffey to cease and desist from
committing or causing future violations and to pay a civil penalty of $5,000.
The SEC placed no restrictions on Mr. Guffey's continuing to serve as a
Trustee or Director of mutual funds.
*Barbara J. Krumsiek
DOB: 8/9/52
1997
Ms. Krumsiek serves as President, Chief Executive Officer and Vice Chairman
of Calvert Group, Ltd. and as an officer and director of each of its
affiliated companies. She is a director of Calvert-Sloan Advisers, L.L.C.,
and a trustee/director of each of the investment companies in the Calvert
Group of Funds. Ms. Krumsiek is the President of each of the investment
companies, except for Calvert Social Investment Fund, of which she is the
Senior Vice President. Prior to joining Calvert Group, Ms. Krumsiek served as
a Managing Director of Alliance Fund Distributors, Inc.
M. Charito Kruvant
DOB: 12/8/45
1996
Ms. Kruvant is President and CEO of Creative Associates International, Inc.,
a firm that specializes in human resources development, information
management, public affairs and private enterprise development. She is also a
director of Acacia Federal Savings Bank.
Arthur J. Pugh
DOB: 9/24/37
1983
Mr. Pugh is a Director of Calvert Variable Series, Inc., and serves as a
director of Acacia Federal Savings Bank.
*David R. Rochat
DOB: 10/7/37
1982
Mr. Rochat is Executive Vice President of Calvert Asset Management Company,
Inc., Director and Secretary of Grady, Berwald and Co., Inc., and Director
and President of Chelsea Securities, Inc. He is the Senior Vice President of
First Variable Rate Fund, Calvert Tax-Free Reserves, Calvert Municipal Fund,
Inc., Calvert Cash Reserves, and The Calvert Fund.
*D. Wayne Silby, Esq.
DOB: 7/20/48
1976
Mr. Silby is a trustee/director of each of the investment companies in the
Calvert Group of Funds, except for Calvert Variable Series, Inc. and Calvert
New World Fund. Mr. Silby is Executive Chairman of Group Serve, Inc., an
internet company focused on community building collaborative tools, and an
officer, director and shareholder of Silby, Guffey & Company, Inc., which
serves as general partner of Calvert Social Venture Partners ("CSVP"). CSVP
is a venture capital firm investing in socially responsible small companies.
He is also a Director of Acacia Mutual Life Insurance Company.
Executive officers of the Fund not mentioned above include William Tartikoff,
Esq., age 51, Vice President and Secretary, Ronald Wolfsheimer, age 51,
Treasurer, Reno J. Martini, age 48, Senior Vice President, and Daniel Hayes,
age 48, Vice President. Each has been an executive officer for more than five
years.
Trustees marked with an *, above, are "interested persons" of the Funds, under
the Investment Company Act of 1940, because of their affiliation with the
Funds, the investment advisor, or the parent company. As a group, the Trustees
and officers own less than 1% of each Fund's outstanding shares.
The Audit Committee of the Board is composed of Messrs. Baird, Blatz, Feldman,
Guffey and Pugh. The Board's Investment Policy Committee is composed of
Messrs. Borts, Diehl, Gavian, Rochat and Silby and Ms. Krumsiek. Each
committee met three (3) times during the past year, while the Board met four
(4) times this past year. All Trustees attended at least 75% of the committee
or Board meetings held. Trustees of the Fund not affiliated with the Advisor
presently receive an annual fee of $20,500 for service as a member of the
Board of Trustees of the Calvert Group of Funds, and a fee of $750 to $1,500
for each regular Board or Committee meeting attended.
Trustees of the Fund who are not affiliated with the Fund's Advisor may elect
to defer receipt of all or a percentage of their fees and invest them in any
fund in the Calvert Family of Funds through the Trustees Deferred Compensation
Plan (shown as "Pension or Retirement Benefits ACTFRued as part of Fund
Expenses," below). Deferral of the fees is designed to maintain the parties in
the same position as if the fees were paid on a current basis.
Trustee Compensation Table
Fiscal Year 1997 Aggregate Pension or Total Compensation
Compensation Retirement from Benefits
(unaudited numbers) from Registrant Accrued as Registrant and Fund
for Service part of Complex paid to
as Trustee of Registrant Trustee**
Expenses*
Name of Trustee
Richard L. Baird, Jr. $24,466 $0 $34,450
Frank H. Blatz, Jr. $31,031 $31,031 $46,000
Frederick T. Borts $23,515 $0 $32,500
Charles E. Diehl $29,959 $29,959 $44,500
Douglas E. Feldman $23,462 $0 $32,500
Peter W. Gavian $27,736 $12,668 $38,500
John G. Guffey, Jr. $30,451 $0 $61,615
M. Charito Kruvant $26,145 $0 $36,250
Arthur J. Pugh $32,589 $1,038 $48,250
D. Wayne Silby $25,072 $0 $62,830
*Messrs. Blatz, Diehl, Gavian and Pugh have chosen to defer a portion of their
compensation. As of December 31, 1997, total deferred compensation, including
dividends and capital appreciation, was $555,901.79, $545,259.10, $137,436.70
and $187,735.55, for each trustee, respectively.
**As of December 31, 1997. The Fund Complex consists of nine (9) registered
investment companies.
Recommendation
The Board recommends that you vote FOR each of the Trustees listed above.
- --------------------------------------------------------------------------------
Proposal 2
For each Portfolio: To approve amended fundamental investment restrictions to
(a) delete restrictions that are no longer required to be fundamental due to
changes in state laws or which otherwise need not be fundamental; and (b) to
revise the language of those restrictions that are still required to be
fundamental.
- --------------------------------------------------------------------------------
Discussion
The federal and state laws governing mutual funds have been changed numerous
times in the last several years. The Prospectuses and Statements of Additional
Information ("SAIs") for each Portfolio contain investment restrictions that
are more restrictive than the current law. For example, Rule 2a-7 under the
1940 Act (the "Rule") states what types of money market securities can be
purchased for a money market fund. All money market funds must comply with the
Rule. However, the investment restrictions for CTFR Money Market are currently
even more stringent than the Rule. This restricts CTFR Money Market's
investments and could potentially reduce its yield. CTFR Money Market does not
intend to change its investment style but plans to operate under Rule 2a-7, as
may be periodically amended.
Also in the past few years, many state securities laws have changed or have
been superseded by federal securities laws. Each Portfolio, however, must
still comply with the old fundamental restrictions, unless you vote to change
these restrictions to be in line with the changed regulatory landscape.
As explained above, federal law in many cases controls what a mutual fund can
purchase. Federal law also specifies certain investment restrictions that must
be fundamental and cannot be changed without a shareholder vote. The
policies/restrictions that are required by law to be fundamental are those
concerning diversification, borrowing money, the issuance of senior
securities, underwriting of securities issued by other persons, the purchase
and sale of real estate and commodities, the policy about making loans to
other persons, and the concentration of investments in a particular industry
or group of industries.
CAMCO has recommended to the Board that the investment restrictions of the
Portfolios be changed to conform to, but not be more restrictive than, the
federal law. That way, if the federal law changes, the Portfolio restrictions
can change accordingly. This gives each of the Portfolios more flexibility and
may help each Portfolio to more easily adapt to different investment
environments. This is expected to enhance the Advisor's ability to manage a
non-money market Portfolio in a changing investment environment and will
increase investment management opportunities. Further, it is not anticipated
that these proposed changes will substantially affect the way any of the
Portfolios are currently managed.
The current investment restrictions for the CTFR Portfolios, excerpted from
the SAIs, are shown below. After careful consideration, and with the advice of
outside counsel, the Board has approved several changes, subject to
shareholder approval.
...............................................................................
Current Fundamental Restriction
1. The Funds may not purchase common stocks, preferred stocks, warrants,
or other equity securities.
Recommended Change
Management recommends that this restriction be deleted since it is not
required to be fundamental. If shareholders approve deleting this restriction,
the Board intends to adopt a new nonfundamental policy imposing substantially
the same limitations as the deleted restriction. A nonfundamental policy can
be changed by the Board at any time without a shareholder vote.
...............................................................................
Current Fundamental Restriction
2. The Funds may not issue senior securities, borrow money, or pledge,
mortgage, or hypothecate its assets, except as may be necessary to secure
borrowings from banks for temporary or emergency (not leveraging) purposes and
then in an amount not greater than 10% of the value of total assets at the
time of the borrowing. Investment securities will not be purchased while any
borrowings are outstanding.
Recommended Change
Management recommends that the 10% limitation be changed to 33 1/3% for
maximum flexibility. The Board also recommends the use of the standard
borrowing policy recited in other Calvert SAIs. As part of the
standardization, the last sentence above will be replaced by a new
nonfundamental operating policy: The Fund does not intend to make any
purchases of securities if borrowing exceeds 5% of total assets. A
nonfundamental policy can be changed by the Board at any time without a
shareholder vote.
Proposed Fundamental Investment Restriction (with the above changes)
The Funds may not issue senior securities or borrow money, except from banks
for temporary or emergency purposes and then only in an amount up to 33 1/3%
of the value of a Fund's total assets or as permitted by law and except by
engaging in reverse repurchase agreements, where allowed. In order to secure
any permitted borrowings and reverse repurchase agreements under this section,
a Fund may pledge, mortgage or hypothecate its assets.
...............................................................................
Current Fundamental Restriction
3. The Funds may not sell securities short, purchase securities on
margin, or write put or call options, except as permitted for Long-Term and
Vermont in connection with transactions in futures contracts and options
thereon. The Funds reserve the right to purchase securities with puts attached
or with demand features.
Recommended Change
Management recommends that this restriction be deleted since it is not
required to be fundamental. If shareholders approve deleting this restriction,
the Board intends to adopt a new nonfundamental policy imposing substantially
the same limitations as the deleted restriction. A nonfundamental policy can
be changed by the Board at any time without a shareholder vote.
...............................................................................
Current Fundamental Restriction
4. The Funds may not purchase securities which are subject to legal or
contractual restrictions on resale, i.e., restricted securities, or other
securities which are not readily marketable assets, including repurchase
agreements not terminable within seven days, with respect to no more than 10%
of assets.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
5. The Funds may not purchase or sell real estate, real estate
investment trust securities, commodities, or commodity contracts, or oil and
gas interests, but this shall not prevent the Funds from investing in
municipal obligations secured by real estate or interests therein.
Recommended Change
Management recommends that this be changed to the standard policy for other
Calvert Group Funds. The portion of the restriction referring to oil and gas
interests should be deleted, as it was originally required by one or more
states, but no longer applies due to changes in federal laws which supersede
such state-imposed restrictions.
Proposed Fundamental Investment Restriction
The Funds may not invest directly in commodities or real estate, although it
may invest in securities which are secured by real estate or real estate
mortgages and securities of issuers which invest or deal in commodities,
commodity futures, real estate or real estate mortgages.
...............................................................................
Current Fundamental Restriction
6. The Funds may not purchase or retain securities of an issuer if those
trustees of the Funds, each of whom owns more than 1/2 of 1% of the
outstanding securities of such issuer, together own more than 5% of such
outstanding securities.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
7. The Funds may not make loans to others, except in accordance with a
Fund's investment objective and policies or pursuant to contracts providing
for the compensation of service providers by compensating balances.
Recommended Change
Management recommends that this investment restriction be changed to the
standard policy for other Calvert Group Funds concerning the Fund's loan
policy.
Proposed Fundamental Investment Restriction
The Funds may not make loans, other than through the purchase of money market
instruments and repurchase agreements or by the purchase of bonds, debentures
or other debt securities, or as permitted by law. The purchase by a Fund of
all or a portion of an issue of publicly or privately distributed debt
obligations in accordance with its investment objective, policies and
restrictions, shall not constitute the making of a loan.
...............................................................................
Current Fundamental Restriction
8. The Funds may not invest in companies for the purpose of exercising
control; or invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets,
or in connection with a trustee's/director's deferred compensation plan, as
long as there is no duplication of advisory fees.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
9. The Funds may not purchase more than 25% of its assets in the
securities of any one issuer or of issuers located within the same state,
except that each Portfolio may invest more than 25% of its assets in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. For purposes of this limitation, the entity which has the
ultimate responsibility for the payment of principal and interest on a
particular security will be treated as its issuer.
Recommended Change
Management recommends that this investment restriction be changed to the
standard policy for other Calvert Group Funds concerning diversification
policy. Money Market, Limited-Term, and California Money Market are classified
as diversified Funds, meaning that they may not invest significant amounts in
one particular security. The CTFR Long-Term nondiversification proposal is
discussed below in Proposal 5. Vermont Municipal is classified as a
nondiversified Fund. The investment restriction would be revised as shown
immediately below.
Proposed Fundamental Investment Restriction
Money Market, Limited-Term, and California Money Market:
The Funds may not make any investment inconsistent with their classifications
as diversified investment companies under the 1940 Act.
CTFR Long-Term (if Proposal 5 is approved), and CTFR Vermont Municipal:
The Funds may not make any investment inconsistent with their classifications
as nondiversified investment companies under the 1940 Act.
...............................................................................
Current Fundamental Restriction
10. The Funds may not invest 25% or more of its total assets in any
particular industry or industries, except that a Portfolio may invest more
than 25% of its assets in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. Industrial development bonds,
where the payment of principal and interest is the responsibility of companies
within the same industry, are grouped together as an "industry".
Recommended Change
Management recommends that this be changed to a more accurate standard policy
concerning concentration as shown immediately below.
Proposed Fundamental Investment Restriction
The Funds may not concentrate its investments in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities and
repurchase agreements secured thereby), or, for Money Market and California
Money Market, domestic bank money market instruments.
...............................................................................
Current Fundamental Restriction
11. The Funds may not invest more than 5% of the value of its total
assets in securities where the payment of principal and interest is the
responsibility of a company or companies with less than three years' operating
history.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
Recommendation
The Board has voted to change or delete each of these fundamental investment
restrictions as shown above and recommends that you vote FOR the changes or
deletions of each of these revised fundamental investment restrictions for the
Portfolios.
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Proposal 3
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- --------------------------------------------------------------------------------
For each Portfolio: To approve a new investment advisory agreement with the
investment advisor, CAMCO.
- --------------------------------------------------------------------------------
Discussion
The following circumstances affect the terms of the current investment
advisory agreements (the "Current Advisory Agreement"); therefore, Management
proposes that a new advisory agreement be executed:
CAMCO is an indirectly wholly-owned subsidiary of Acacia Mutual Life
Insurance Company ("Acacia"), which subject to certain conditions, plans
to merge with Ameritas Insurance Holding Company ("Ameritas") (such
planned transaction is hereafter referred to as the "Merger"). The
surviving company will be named Ameritas Acacia Mutual Holding Company.
Although the Merger could be considered a change in control of CAMCO,
terminating the Current Advisory Agreement, the Board has received
assurances that it does not cause such a change. Nonetheless, in order to
remove any possible doubt as to the status of the Current Advisory
Agreement, the Board has approved, and recommends that shareholders
approve, one standard investment advisory agreement between CTFR and
CAMCO for each of the CTFR Portfolios (the "New Advisory Agreement").
Despite the importance of the proposed changes, CAMCO anticipates there will
be no effect on the actual investment management operations with respect to
CTFR.
The Current Advisory Agreement
Under the Current Advisory Agreement, CAMCO provides a continuous investment
program for CTFR, subject to the control of the Board. The shareholders of
CTFR approved the current investment advisory agreement (the "Current Advisory
Agreement") at a meeting on December 20, 1983, and it was signed January 3,
1984. Since then, the Current Advisory Agreement has been approved by the
Board on an annual basis, in accordance with the requirements of the
Investment Company Act of 1940.
The terms of the Current Advisory Agreement between CAMCO and CTFR include:
1. The services to be provided (manage assets, place orders for securities
trades and perform other administrative services);
2. General obligations of CAMCO (manage CTFR in accordance with CTFR
guidelines and restrictions, under the direction of the Board);
3. Expenses of CTFR (advisory, legal, audit, registration, transfer agent,
and custodial fees, taxes, printing and postage, mailing prospectuses);
4. Liability issues (CAMCO was not liable for actions unless it was grossly
negligent, acted in bad faith, or in reckless disregard of its duties);
and
5. The fees to be paid to CAMCO (0.60% for the first $500,000,000 of each
Portfolio's average daily net assets, 0.50% for the next $500,000,000,
0.40% for all assets in excess of $1,000,000,000.)
The Current Advisory Agreement provides for automatic termination unless its
continuance is approved at least annually by (i) a majority of the Board,
including those who are not parties to the Agreement or interested persons,
within the meaning of the Investment Company Act of 1940 (the "1940 Act"), of
any such party ("Independent Trustees"), and (ii) the holders of a majority of
the outstanding shares of CTFR. The Current Advisory Agreement terminates
automatically upon its assignment and is terminable at any time, without
penalty, by the Board, CAMCO, or the holders of a majority of the outstanding
shares of CTFR, upon 60 days' prior written notice.
The New Advisory Agreement
The terms and conditions of the New Advisory Agreement are identical to the
terms and conditions of the Current Advisory Agreement, except as to effective
and termination dates. If approved by shareholders, the New Advisory Agreement
will continue until January 1, 2001 unless terminated earlier by either party,
and provided that at least annually thereafter its continuance is approved in
the same manner as prescribed in the Current Advisory Agreement.
Calvert Asset Management Company, Inc.
CAMCO has investment advisory contracts with eight investment companies: First
Variable Rate Fund for Government Income, Calvert Tax-Free Reserves, Calvert
Cash Reserves, Calvert Social Investment Fund, The Calvert Fund, Calvert
Municipal Fund, Inc., Calvert World Values Fund, Inc., and Calvert Variable
Series, Inc. Each has a substantially similar investment advisory contract
with CAMCO, though the actual fees and breakpoints may vary.
Reno J. Martini, Senior Vice President and Chief Investment Officer for CAMCO,
has primary responsibility for rendering advisory services to CTFR. Mr.
Martini oversees the investment management of all Calvert Funds. It is
anticipated that each of the directors and officers of CAMCO will hold the
same position with CAMCO after the Merger. The address of the directors and
officers is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814,
unless otherwise noted. The directors and executive officers of CAMCO are
listed below:
Charles T. Nason, Director. Chairman, President and Chief Executive
Officer of The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Barbara J. Krumsiek, Director. President of CAMCO and President, Chief
Executive Officer and Vice Chairman of Calvert Group, Ltd.
*David R. Rochat, Director and Senior Vice President.
Robert-John H. Sands, Director. Senior Vice President and General
Counsel, The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Reno J. Martini, Senior Vice President and Chief Investment Officer.
*Ronald M. Wolfsheimer, Senior Vice President and Chief Financial
Officer.
*William M. Tartikoff, Senior Vice President, Secretary, and General
Counsel.
Matthew D. Gelfand, Senior Vice President.
*Daniel K. Hayes, Vice President.
John Nichols, Vice President.
Persons marked with a *, above, are also Trustees and/or officers of CTFR.
A. The Merger of CAMCO's parent company
CAMCO is an indirect, wholly-owned subsidiary of Acacia. On September 14,
1998, seeking a strategic affiliation to create a stronger, more diversified
insurance and financial services enterprise, Acacia and Ameritas entered into
an agreement of merger which provides for the merger of their respective
mutual holding companies.
Acacia and its related subsidiaries offer traditional life insurance and
annuity products, as well as variable products, special banking products and
services, and a variety of mutual funds, and operate a full service financial
planning broker dealer, while Ameritas and its subsidiaries specialize in
variable life, fixed and variable annuities, group dental, low-load insurance
products and 401(k) and other investment products. This strategic affiliation
is expected to create a stronger, more diversified insurance and financial
services enterprise, with almost $11 billion in assets under management,
insurance assets of $6 billion, $21 billion life insurance in-force, over $750
million in revenues and approximately $750 million in equity/capital.
The Merger is subject to the approval of the members of both Acacia and
Ameritas and is further conditioned upon approval by the appropriate federal
and state regulatory authorities.
CAMCO will not be directly affected by the Merger and will remain a
wholly-owned subsidiary of Calvert Group, Ltd. As a result of the Merger,
however, CAMCO will become an indirect, wholly-owned subsidiary of Ameritas
Acacia Mutual Holding Company.
Acacia's current address is 7315 Wisconsin Avenue, Bethesda, Maryland 20814.
After consummation of the Merger, Ameritas Acacia Mutual Holding Company's
principal place of business will be 5900 "O" Street, Lincoln, Nebraska
68501-1889.
Recommendation
Based on evaluation of the materials presented, the Board has determined that
the changes reflected in the proposed New Advisory Agreement are in the best
interests of the shareholders of CTFR. The Board, giving equal weight to all
the factors, based this determination primarily upon a review of all materials
related to the Merger. The Board determined to their satisfaction that CAMCO's
services to CTFR would not be adversely affected by the Merger and that such
Merger would not impose an unfair burden on CTFR.
Thus, the Board, including a majority of the Independent Trustees, approved
the New Advisory Agreement (subject to approval by shareholders) and
authorized submission of the New Advisory Agreement to shareholders for
approval. Accordingly, the Board recommend that shareholders vote FOR the
appropriate proposed New Advisory Agreement.
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Proposal 4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Limited-Term, Long-Term and Vermont Municipal: To change the fundamental
policy concerning credit quality to a nonfundamental policy allowing each to
invest in non-investment grade securities.
- --------------------------------------------------------------------------------
Discussion
Over the years, federal laws, bond investment strategies, and public
perception of bonds have changed considerably. Limited-Term, Long-Term, and
Vermont Municipal all have the same fundamental credit quality policy, to
invest primarily in investment-grade municipal obligations, the interest of
which is exempt from federal income tax.
Investment grade securities or obligations are those securities rated within
the four highest rating categories by Standard & Poor's Incorporated ("S&P")
or Moody's Investor Services, Inc. ("Moody's"), or securities determined by
CAMCO to be of equivalent credit quality. Municipal obligations rated below
the four highest rating categories (i.e., below BBB or Baa) are referred to as
non-investment grade.
Non-investment debt securities tend to be more sensitive to adverse economic
changes and developments relating to the issuer's credit quality. This may
affect the issuer's ability to make principal and interest payments on the
debt obligation. There is also a greater risk of price declines due to changes
in the issuer's creditworthiness. Because the market for lower-rated
securities may be less active than for higher-rated securities, it may be
difficult for a Fund to sell the securities. Also, because of a lack of
objective data, a less actively traded market may make it difficult for CAMCO
to value the securities, so that the Board of Trustees/Directors may have to
exercise its judgment in assigning a value.
When purchasing non-investment grade debt securities, rated or unrated, CAMCO
prepares its own credit analysis to attempt to identify those issuers whose
financial condition is adequate to meet future obligations or is expected to
be adequate in the future. Through portfolio diversification and credit
analysis, investment risk can be reduced, although there can be no assurance
that losses will not occur.
CAMCO proposes to change the credit quality guidelines to permit Limited-Term
to invest up to 15% in non-investment grade obligations. CAMCO believes this
will give more flexibility in purchasing securities where there are no
published ratings and where there may be a question of investment grade
rating. As an operating policy, however, subject to change by the Board at any
time (and not subject to a shareholder vote), CAMCO will limit Limited-Term's
investments in non-investment grade securities to 5% of assets.
CAMCO proposes to change the credit quality guidelines for Long-Term and
Vermont Municipal to permit investments of up to 35% in non-investment grade
obligations. CAMCO believes these changes will put these portfolios more in
line with the Funds' peers and make the Funds' more competitive without
changing the risk profiles significantly. The long-term tax-free category has
a wide range of parameters, but CAMCO's research found the vast majority in
that category have the same percentage guidelines recommended now by CAMCO.
This also will limit liability to CAMCO and the Board as mentioned above. As
an operating policy, however, subject to change by the Board at any time (and
not subject to a shareholder vote), CAMCO will limit Long-Term and Vermont
investments in non-investment grade securities to 15% of assets.
If this proposal is approved, Limited-Term will adopt a nonfundamental policy
to permit it to invest up to 15% of its net assets in non-investment grade
debt securities. The policy for Long-Term and Vermont Municipal will be to
allow up to 35% to be invested in non-investment grade securities. CAMCO does
not believe that this will have a negative impact on the Portfolios or,
particularly for Limited-Term, the stability of the share price. CAMCO does
not intend at this time to purchase any securities rated below B.
CAMCO believes that this will provide more flexibility to take advantage of
investment opportunities, including for unrated obligations, and will allow it
to respond more quickly to market changes. CAMCO does not plan to
significantly alter the credit quality of these Funds. The new policies will
be nonfundamental, and may be changed by the Board without a shareholder vote:
Limited-Term only:
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 will invest at least 85% in fixed and
variable rate investment-grade (medium and higher) obligations.
Limited-Term, Long-Term, and Vermont:
Investment-grade obligations are those which, at the date of investment, are
rated within the four highest grades established by Moody's Investors
Services, Inc. (Aaa, Aa, A, or Baa) or by Standard and Poor's Corporation
(AAA, AA, A, or BBB). Securities that are not rated may be purchased by the
Portfolios as part of the 85% (Limited-Term) or 65% (Long-Term and Vermont)
total if CAMCO determines that they are of quality comparable to
investment-grade securities. Bonds rated BBB or Baa, while still considered
investment grade, have certain speculative characteristics and may be more
subject to changes in economic conditions.
The remaining 15% (Limited-Term) or 35% (Long-Term and Vermont) of the
Portfolio may consist of noninvestment-grade municipal obligations (rated
below Baa or BBB), or unrated obligations that CAMCO has determined are not
investment grade. With noninvestment-grade securities there is a greater
possibility that an adverse change in the financial condition of the issuer
may affect the issuer's ability to pay principal and interest. There is also a
greater risk, with noninvestment-grade securities, of price declines due to
changes in the issuer's creditworthiness. Because the market for lower-rated
securities may be less active ("thinner") than for higher-rated securities,
market prices may be more volatile and liquidity in the resale market may be
limited.
Recommendation
The Board recommends that shareholders vote FOR the proposed changes to the
investment credit quality policy.
- --------------------------------------------------------------------------------
Proposal 5
- --------------------------------------------------------------------------------
Long-Term only: To change CTFR Long-Term from a diversified to a
nondiversified fund.
Discussion
The 1940 Act reflects many of the requirements with which a registered
investment company must comply. Each fund is required to state whether it will
have a diversified portfolio or a nondiversified portfolio. Long-Term is a
diversified mutual fund. Being diversified means that a fund must invest in
several different companies and adhere to the federal diversification rule.
The diversification rule is that "at least 75% of the value of total assets is
represented by cash and cash items (including receivables), Government
securities, securities of other investment companies, and other securities for
this calculation limited in respect of any one issuer to an amount not greater
in value than 5% of the value of total assets of such management company and
to not more than 10% of the outstanding voting securities of such issuer."
Long-Term's investment advisor, CAMCO, believes that Long-Term will have
greater investment flexibility if it becomes nondiversified. This will permit
Long-Term to acquire larger positions in the securities of individual issuers,
such as hospitals, housing bonds, or utilities. Theoretically, investing a
larger percentage of a fund's assets in a single issuer's securities increases
its exposure to credit and other risks associated with the single issuer's
financial condition and business operations. The value of shares of a fund may
be more susceptible to any single economic, political or regulatory event than
the shares of a diversified fund. Because Long-Term is a bond fund, however,
CAMCO does not expect that being nondiversified will bring more risk to
Long-Term. CAMCO expects to use this increased flexibility to acquire larger
positions in the securities of a single issuer only when it believes that the
potential return on the securities justifies the additional risk. CAMCO
believes that these risks are somewhat limited by the diversification
requirements of Subchapter M, below, which must be satisfied on a quarterly
basis.
In order to qualify as a regulated investment company ("RIC"), Long-Term must
continue to comply with the diversification requirements of Subchapter M of
the Internal Revenue Code. This requires that Long-Term have, at the close of
each quarter of the taxable year, at least 50% of the value of its total
assets is represented by cash and cash items (including receivables),
Government securities and securities of other RICs, and not more than 5% of
its total assets will be invested in the securities of any one issuer and not
more than 10% of the outstanding voting securities of such issuer. Also, not
more than 25% of the total assets will be invested in the securities (other
than Government securities or the securities of other RICs) of any one issuer,
or of two or more issuers which Long-Term controls and which are determined to
be engaged in the same or similar trades or businesses or related trades or
businesses. Thus, at least quarterly, Long-Term will be limited in its
investments, and therefore, the diversification risks will be reduced for a
portion of the portfolio.
Recommendation
After reviewing the current diversification policy, and considering the
investment objective of Long-Term, the Board concluded that a change to the
diversification policy could be beneficial to the shareholders of Long-Term.
The Board voted to approve the change from diversified to nondiversified,
subject to the oversight of the Board, and subject to shareholder approval.
The Board recommends that Long-Term shareholders vote FOR the proposed changes
to Long-Term 's diversification policies.
- --------------------------------------------------------------------------------
Proposal 6
- --------------------------------------------------------------------------------
For each Portfolio: To ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
Discussion
Shareholders are requested to ratify the action of the Board in selecting the
firm of PricewaterhouseCoopers, L.L.P. ("PricewaterhouseCoopers") as the
independent auditors for the current fiscal year. The Board believe that the
firm is well qualified, and has accordingly selected PricewaterhouseCoopers,
L.L.P. to act as independent auditors, subject to ratification by shareholders.
Coopers & Lybrand, L.L.P. has experience in accounting and auditing and has
served as independent auditors for CTFR since 1994. On July 1, 1998, Coopers &
Lybrand merged with Price Waterhouse, L.L.P. to form PricewaterhouseCoopers,
L.L.P.
Neither PricewaterhouseCoopers, L.L.P., nor any of its partners has any direct
or indirect connection (other than as independent accountants) with CTFR or
any of its affiliates. No representative of PricewaterhouseCoopers, L.L.P.
will be present at the Special Meeting, but a representative will be available
via telephone to respond to appropriate questions from shareholders.
Recommendation
The Board recommends a vote FOR ratification of the selection of
PricewaterhouseCoopers, L.L.P. as independent auditors for CTFR.
- --------------------------------------------------------------------------------
OTHER BUSINESS
- --------------------------------------------------------------------------------
The Board does not intend to present any other business at the meeting. If,
however, any other matters are properly brought before the meeting, William M.
Tartikoff, Esq., and Barbara J. Krumsiek will vote on the matters in
accordance with their judgment.
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The audited Annual Reports to Shareholders of CTFR are incorporated by
reference into this proxy statement. Copies of the most recent Annual Reports
may be obtained without charge if you:
write to
CTFR
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
call (800) 368-2745
visit Calvert's website at www.calvertgroup.com
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- --------------------------------------------------------------------------------
CTFR is not required to hold annual shareholder meetings. Shareholders who
would like to submit proposals for consideration at future shareholder
meetings should send written proposals to the Calvert Group Legal Department,
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814.
- --------------------------------------------------------------------------------
VOTING INFORMATION
- --------------------------------------------------------------------------------
Proxies are solicited initially by mail. Additional solicitations may be made
by telephone, computer communications, facsimile or other such means, or by
personal contact by officers or employees of Calvert Group and its affiliates
or by Shareholder Communications Corporation, a proxy soliciting firm retained
for this purpose. CTFR will bear solicitation costs. By voting as soon as
possible, you can save your Fund the expense of follow-up mailings and calls.
A proxy may be revoked at any time before the meeting or during the meeting by
oral or written notice to William M. Tartikoff, Esq., 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814. Unless revoked, all valid proxies will
be voted in accordance with the specification thereon or, in the absence of
specification, for approval of the proposals.
Each proposal must be approved by a majority of the outstanding shares, which
is defined as the lesser of: (1) the vote of 67% or more of the shares of each
Portfolio at the Special Meeting if the holders of more than 50% of the
outstanding shares of each Portfolio are present in person or by proxy, or (2)
the vote of more than 50% of the outstanding shares of each Portfolio. All
classes of each Portfolio vote together.
Any abstentions and broker non-votes will be counted as shares present for
purposes of determining whether a quorum is present but will not be voted for
or against any adjournment or proposal. A broker non-vote is when a broker
holds the shares and the actual owner does not vote and the broker holding the
shares does not have the authority to vote the shares. This means that
abstentions and broker non-votes effectively will be a vote against
adjournment or against any proposal where the required vote is a percentage of
the shares present.
Shareholders of each Portfolio of record at the close of business on December
7, 1998 ("record date") are entitled to notice of and to vote at the Special
Meeting or any adjournment thereof. Shareholders are entitled to one vote for
each share held on that date. As of December 7, 1998, as shown on the books of
each respective Portfolio, there were issued and outstanding:
1,614,811,450.775 shares of Money Market
51,711,735.774 shares of Limited-Term
3,387,687.663 shares of Long-Term
438,298,843.726 shares of California Money Market
3,131,870.312 shares of Vermont Municipal
As of the record date, the officers and Trustees of CTFR as a group
beneficially owned less than 1% of the outstanding shares of any CTFR
Portfolio. The following shareholders, as of record date, owned more than 5%
of any class of the Portfolio shown:
CTFR Money Market Portfolio
Name and Address % of Ownership
Hillenbrand Industries 14.78%, Class I
Batesville, IN 47006
F. Korbel & Bros. Inc. 12.95%, Class I
Guerneville, CA 95446
Mollanvick Inc. 11.96%, Class I
Wilmington, DE 19810
Florida Power & Light 9.86%, Class I
Miami, FL 33102
FPL Group Inc. 9.86%, Class I
Miami, FL 33102
The Grocers Supply Co. Inc. 8.40%, Class I
Houston, TX 77221
Wilmington Trust Co. 6.80%, Class I
Diebold Inv Co Ac
Wilmington, DE 19890
Desko Family Ltd Partnership 5.02%, Class I
Latrobe, PA 15650
George or Janet Desko 5.01%, Class I
Latrobe, PA 15650
CTFR Long-Term
Name and Address % of Ownership
John Swanson 7.57%
McMurray, PA 15317
CTFR California Money Market
Name and Address % of Ownership
Bruce & Betty Walkup Tr 17.38%
San Francisco, CA 94108
CTFR Vermont Municipal
Name and Address % of Ownership
- --------------------------------------------------------------------------------
ADJOURNMENT
- --------------------------------------------------------------------------------
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled
for the meeting, William M. Tartikoff, Esq., or Barbara J. Krumsiek may move
one or more adjournments of the meeting to permit further solicitation of
proxies with respect to any such proposals. Any such adjournment will require
the affirmative vote of a majority of the shares present at the meeting. Mr.
Tartikoff and Ms. Krumsiek will vote in favor of such adjournment those shares
that they are entitled to vote which have voted in favor of such proposals.
They will vote against any such adjournment on behalf of those proxies that
have voted against any such proposals.
- --------------------------------------------------------------------------------
Investment Advisor
Calvert Asset Management
Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Administrator
Calvert Administrative Services Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
CALVERT TAX-FREE RESERVES
PROXY CARD
The undersigned, revoking previous proxies, hereby appoint(s) William M.
Tartikoff, Esq. and Barbara J. Krumsiek, attorneys, with full power of
substitution, to vote all shares that the undersigned is entitled to vote at
the Special Meeting of Shareholders to be held in the Tenth Floor Conference
Room of Calvert Group, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814 on Wednesday, February 24, 1999 at 1:30 p.m. and at any adjournment
thereof. All powers may be exercised by a majority of the proxy holders or
substitutes voting or acting or, if only one votes and acts, then by that one.
This Proxy shall be voted on the proposals described in the Proxy Statement.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
You may cast your vote using one of the following methods:
1. By internet (through a secure internet site): www.calvertgroup.com
2. By telephone (through a secure telephone system): call 1-800-368-2745
3. By facsimile: fax to ______________
4. By mail: postage-paid envelope enclosed
5. In person: Wednesday, February 24, 1999
NOTE: If you plan to vote by mail or by facsimile, please sign the proxy card
exactly as your name appears on the card. If you have a joint account, either
person may sign the proxy card. When signing in a fiduciary capacity, such as
executor, administrator, trustee, guardian, etc., please sign your name and
indicate your title. Corporate and partnership proxies should be signed by an
authorized person indicating the person's title.
Date: ________________________, 1999
__________________________________
__________________________________
Signature(s) (and Title(s), if applicable)
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, the attorneys shall vote in accordance with their best
judgment.
THE BOARD OF TRUSTEES/DIRECTORS RECOMMEND A VOTE FOR THE FOLLOWING:
1. For each Portfolio: To approve the Board of Trustees for CTFR:
1. Richard L. Baird, Jr.
2. Frank H. Blatz, Jr., Esq.
3. Frederick T. Borts, M.D.
4. Charles E. Diehl
5. Douglas E. Feldman, M.D.
6. Peter W. Gavian, CFA
7. John G. Guffey, Jr.
8. Barbara J. Krumsiek
9. M. Charito Kruvant
10. Arthur J. Pugh
11. David R. Rochat
12. D. Wayne Silby, Esq.
For all [ ] Against all [ ] Abstain on all [ ]
To abstain from voting on or to vote against one or more of the proposed
Trustees listed above, but to approve the others, place an "x" in the box at
left and indicate the number(s) of the person on the appropriate line: I vote
against _____________. I abstain on _____________.
2. For each Portfolio: To approve amended fundamental investment
restrictions to (a) delete restrictions that are no longer required to be
fundamental due to changes in state laws or which otherwise need not be
fundamental; and; (b) to revise the language of those restrictions that are
still required to be fundamental.
1) Purchase of equities
2) Borrowing policy
3) Short sales
4) Restricted securities
5) Real estate
6) Securities and Fund officers or Trustees
7) Loan policy
8) Exercise control
9) Diversification policy
10) Concentration policy
11) New companies
For all [ ] Against all [ ] Abstain on all [ ]
To abstain from voting on or to vote against the proposed changes to one or
more of the specific fundamental investment restrictions, but to approve the
others, place an "x" in the box at left and indicate the number(s) (as set
forth in the proxy statement) of the affected investment restriction(s) on the
appropriate
line: I vote against _____________. I abstain on _____________.
3. For each Portfolio: to approve a new investment advisory agreement
with the investment advisor, Calvert Asset Management Company, Inc. ("CAMCO").
For [ ] Against [ ] Abstain [ ]
4. Limited-Term, Long-Term and Vermont: To change the fundamental policy
concerning credit quality to a nonfundamental policy allowing Calvert Tax-Free
Reserves ("CTFR") Limited-Term, Long-Term, and Vermont Municipal to invest in
non-investment grade securities.
For [ ] Against [ ] Abstain [ ]
5. Long-Term only: To change Long-Term from a diversified to a
nondiversified fund.
For [ ] Against [ ] Abstain [ ]
6. For each Portfolio: to ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
For [ ] Against [ ] Abstain [ ]
